Savkoski v Wingfoot Aust Partner Pty Ltd
[2009] VCC 104
•25 February 2009
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
DAMAGES – COMPENSATION
GENERAL DIVISION
Case No. CI-07-02208
| KIRO SAVKOSKI | Plaintiff |
| v | |
| WINGFOOT AUSTRALIA PARTNER PTY LTD | Defendants |
| (formerly known as PACIFIC DUNLOP TYRES PTY LTD) & ANOTHER |
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| JUDGE: | HIS HONOUR JUDGE MORROW |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 2-6 and 9-13 February 2009 |
| DATE OF RULING: | 25 February 2009 |
| CASE MAY BE CITED AS: | Savkoski v Wingfoot Aust Partner Pty Ltd & Anor |
| MEDIUM NEUTRAL CITATION: | [2009] VCC 0104 |
RULING
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Catchwords: s.134AB, s.s.(22) Accident Compensation Act 1985 – whether appropriate to add interest to pecuniary loss damages before making the comparison with the threshold under s.s.(22)(1)(a) – interest assessed under s.s.(c) not to be awarded unless threshold exceeded.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G Lewis SC and | Patrick Robinson & Co. |
| Mr R Forsyth | ||
| For the Defendants | Mr M Titshall QC and | Wisewoulds |
| Ms R Annesley | ||
| HIS HONOUR: |
1 The jury having assessed the plaintiff’s claim for pecuniary loss in the sum of $45,000 and the threshold in respect of pecuniary loss damages under s.134AB of the Accident Compensation Act 1985 (“the Act”), sub-section (22)(a)(i) now being $49,460.00, the question arises as to whether it is appropriate to add damages by way of interest to the award when making the comparison between the award and the threshold.
2 At common law a plaintiff was always able to add interest to his award when a payment into court was being considered. Does the Act, however, allow it in the case of the threshold?
3 After argument about how much of the jury’s award should carry interest, I ruled that it was reasonable to infer from the jury’s verdict that all of this sum related to the past. For the sake of completeness, I will outline my reasons for so ruling.
4 I did so because Mr Lewis, Senior Counsel for the plaintiff, had gone to the jury with two different scenarios in respect of economic loss. It is probably not necessary to go into all of the matters that led to Mr Lewis putting to the jury that it was reasonable to award the plaintiff $190,000 for past wage loss under his Scenario A, or $144,000 for past wage loss under his Scenario B, but suffice to say that his calculations were based on a net wage of $45,000 a year, and it was common ground that the defendant’s factory, where the plaintiff was employed, closed in 2002, the plaintiff having claimed he was injured in February 2001. Mr Lewis’s claims in respect of past wage loss was based on eight years at $45,000 per annum or $360,000, but he conceded that discounts would need to be made to the sum of $360,000 for the fact that the plaintiff had pre-existing low-back problems as distinct from his cervical injury and that in fact the factory closed in 2002, and that it may have been difficult for the plaintiff to get work elsewhere following that.
5 It was agreed that the sum of $45,000 awarded by the jury would need to be reduced by the amount of compensation paid to the plaintiff, following the relevant accident in February 2001, by the sum of $8,500, leaving interest to be calculated on the figure of $36,500. Mr Lewis argued that that should attract a penalty interest under the Supreme Court Act at the rate of 12 per cent for 1.5 years, giving a sum of $6,570 for interest.
6 Mr Titshall, Senior Counsel for the defendant, subsequently argued that this amounted to a progressive loss over the years since the plaintiff ceased work and that the proper approach should be to calculate interest at 50 per cent of the figure, allowing for the progressive loss. If that approach was right, then the interest would be $3,285, and when that was added to the award of $45,000, the total amount payable to the plaintiff would be $48,285. If that submission was correct, then, on any view, the plaintiff would not have reached the threshold under the Act and there would be no judgment for the plaintiff in respect of pecuniary loss. It seemed to me, however, that the jury’s award of $45,000 suggested that they had thought that the only loss that the plaintiff had suffered in the past was for a period of one year, and as Mr Lewis submitted, all this loss had occurred prior to the issue of the plaintiff’s writ. In all the circumstances, it seemed to me that adopting a broad-brush approach, that the proper amount to be assessed for interest was the $6,570, as claimed by the plaintiff.
7 If in fact that amount is added to the jury award, then the plaintiff has succeeded in crossing the threshold and is entitled to judgment in the sum of $43,070. This is so because the sub-section provides that the comparison is to be made without having regard to any reduction for contributory negligence or weekly payments that the plaintiff is obliged to repay under the Act.
8 Subsection (22) of s.134AB of the Act is in the following terms:
“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 *$44 730 or that amount as varied in accordance with section 100 as at the date of the award; or
(ii)
in excess of $1 006 760 or that amount as varied in accordance with section 100 as at the date of the award; or
(b) pain and suffering damages—
(i)
if the total pain and suffering 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 *$43 190 or that amount as varied in accordance with section 100 as at the date of the award; or
(ii)
in excess of $438 320 or that amount as varied in accordance with section 100 as at the date of the award; or
(c)
damages of any other kind, other than damages in the nature of interest.”
*As I said above, it is agreed that this figure is now $49,460.
9 The original version of the Act, in s.135(3A), only provided for a cap in relation to the damages that could be awarded to a worker for pain and suffering. That section provided as follows:
“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 not exceed $140 000, less any amounts of compensation paid under s.98.”
10 In Neville Smith Timber Industries Pty Ltd v Alen (1991) 2 VR 1, the Appeal Court was faced with the question of whether or not interest could be paid in relation to an award obtained where the amount of the award together with the interest exceeded $140,000. The Court decided that damages in the nature of interest could be allowed where the maximum damages of $140,000 had been reached. In reaching that decision, the Court made a number of observations in relation to damages in the nature of interest. His Honour Mr Justice Kaye said, at page 5 of the report, that because subsection (3A) spoke of “damages in respect of injury (et cetera)” that the cap did not apply to damages in the nature of interest. His Honour said:
“There is a wealth of authority establishing that damages in the nature of interest is procedural, being compensation to a plaintiff for being kept out of the damages to which he has proved he has been entitled since the action commenced.”
11 His Honour went on to say, at page 6:
“It is clear therefore that an award of damages in the nature of interest is
not of the kind of damages with which s.135(3A) is concerned.”
12 It is interesting to note that His Honour looked at the provisions of the Transport Accident Act and went on to say:
“Furthermore, it is significant that s.135(3A) does not include any provision in terms similar to those enacted by s.175 of the Transport Accident Act 1986, prohibiting the making of an order for the payment of interest in relation to an award of damages in proceedings under Div. 3 of Pt X of that Act.”
13 I note that in s.93(7) of the Transport Accident Act the relevant threshold provision is in the following terms:
“Damages of any kind in respect of an injury cannot be recovered in proceedings in accordance with subsections (2), (3) and (4) other than damages
(a) for pecuniary loss but only if –
(i) the assessment of damages . . . is more than $30,520 . . . .”
14 It seems to me that the opening passage of that subsection, i.e., “damages of any kind” would take into account damages in respect by way of interest. Parliament obviously decided not to following this wording in s.s.(22) of the Act.
15 Mr Justice Kaye went on to say:
“For these reasons . . . damages in the nature of interest may be allowed
on the maximum damages of $140,000 limited by s.135(3A) of the Act.”
16 I have not been able to find any authority directly on the point that I need to decide, but I have been referred to the Court of Appeal decision in Esso Australia Ltd v Victorian WorkCover Authority & Anor [2000] VSCA 74, where the matter in issue was whether or not damages in the nature of interest should be paid or taken into account when a notional assessment of damages was being made pursuant to a recovery under sections of the Act at s.138(3)(b).
17 In paragraph 23, President Winneke said:
“. . . the formula in s.138(3)(b) for calculating the notional common law damages for pecuniary loss is confined to an amount which the negligent third party ‘would have been liable to pay in respect of the injury’ and, in my view, damages in the nature of interest are not ‘pecuniary loss damages’ paid ‘in respect of the injury’. Rather interest is awarded under the Supreme Court Act for an entirely different purpose; namely for the plaintiff being held out of his entitlement to damages between the date of commencement of the action and the date of judgment. If it been intended that such loss should be taken into account in the calculation required by the subs(3)(b), then no doubt the legislature would have said so.”
18 His Honour was therefore clearly drawing a line between damages in respect of injury and damages by way of interest because the plaintiff had been kept out of his money. His Honour was of the view that if interest could be said to be pecuniary loss which derived from other pecuniary loss payable in respect of an injury, and thus could be “indirect pecuniary loss”, it had no place in the calculation of notional damages. His Honour said to introduce speculative factors “foreign to the intent of the legislature” would not be appropriate. It would involve factors such as when the injured worker would have already brought his proceedings and the length of time between the commencement and the date of judgment or settlement et cetera.
19 His Honour said, at paragraph 29 of the judgment:
“. . . the [recovery] scheme contained in the Act . . . suggests . . . that it is
not contemplated that such interest should be paid [on these amounts].”
20 His Honour said:
“There are a number of sections in the Act, to which we were referred by counsel, which specifically confer a right to recover ‘interest as prescribed’ on sums claimed. . . . Not surprisingly no such right is attached to claims to establish indemnity entitlements pursuant to s.138.”
21 Mr Lewis submits that the word “assessed” in subsection (22)(a)(i) means as assessed not only by the jury but also by the Judge when looking at whether or not interest is properly payable.
22 Pecuniary loss damages are defined in the Act in subsection (37) as follows:
“pecuniary loss damages means damages for loss of earnings, loss of earning capacity, loss of value of services or any other pecuniary loss or damage.”
23 It could be argued that interest comes within the definition of “any other pecuniary loss or damage” as referred to in subsection (37).
24 In subsection (34), the question of interest is dealt with insofar as:
“(16) A court must not, in relation to an award of damages in accordance with this section, order the payment of interest, and no interest shall be payable, on any amount of damages, other than damages referable to loss actually suffered before the date of the award, in respect of the period from the date of the death of or injury to the person in respect of whom the award is made to date of the award.”
25 Mr Lewis submits that if interest was not thought to be part of pecuniary loss damages then the subsection would have said so. He says that it is restrictive legislation and hence any interpretation must be a narrow one and there are no grounds for widening or broadening the prohibitions contained in it. Whilst I agree that the legislation must be approached narrowly, I do not believe that will necessarily help the plaintiff here.
26 Mr Titshall submits that subsection (22) limits an award to three specific types of damages:
• under subsection (a) pecuniary loss damages; (as regulated) • under subsection (b) pain and suffering damages; (as regulated)
• under subsection (c) damages of any other kind are prohibited other than “damages in the nature of interest”. 27 He argues that since damages in the nature of interest are specifically provided for in subsection (c), it is clear that Parliament did not intend that they be lumped in with either pecuniary loss damages or pain and suffering damages. He further submits that the attitude of the courts in relation to the Neville Smith Case and the Esso Case show that damages by way of interest were treated differently from actual damages awarded in respect of pecuniary loss. And, further, he submits that if in fact under the present provisions of the Act that damages by way of interest are to be included as part of the “total pecuniary loss damages assessed” then what work does subsection (c) have to do? And to use the words of President Winneke in the Esso Case, at paragraph 23:
“Subsection (c) would be otiose to the structure and purpose to the rest of
the section.”
28 The opening words of subsection (22) speak of “a court must not . . . make an ‘award’”. However, subsection (a)(i) talks of the damages being “assessed”, not awarded.
29 It seems to me that unfortunately for the plaintiff this is a telling argument because it seems to me that the structure of subsection (22) is such that the “Court” (which must refer to the Judge who in fact makes the award) must first look at the total pecuniary loss damages as “assessed”, then make the comparison between that amount and a threshold figure before in fact making the award. A Judge, of course, will not make “the award” unless the provisions of subsection (a)(i) has been complied with. Once the comparison exercise is completed then an award can be made under subsection (c) for interest, in appropriate cases.
30 Whilst it is open to say that an unfair result would be had if, on one hand the threshold is indexed and on the other hand the damages are not (unless interest is to be added) one is compelled to follow the law as Parliament has enacted it. Further, whilst it is true that legislation of this type is to be narrowly construed, it is also true that one must look at the section as a whole. When one looks at s.s.(22) as a whole, it suggests to me on one hand Parliament was making sure that what was intended was a pure comparison between damages as assessed simpliciter and the threshold. Unlike the common law, contributory negligence was not to be taken into account, nor weekly payments – both matters which would impact on assessing interest and ultimately affect a comparison with a payment into court.
31 It must be borne in mind, of course, that really the common law has no place in ss.(22) which is concerned with limiting and restricting a worker’s rights to damages, not to the awarding of costs.
32 It seems to me therefore that the plaintiff has not succeeded in crossing the threshold of $49,460 and no award of pecuniary loss damages can be made. It seems to me that there is no point in making or awarding any damages in the nature of interest because one cannot get to that point unless one has first cleared the threshold.
33 I believe that subsection (34) contemplates this scenario by, firstly, prohibiting a court from making an award of damages, and then making “an order in relation to the payment of interest” and then limiting the amount of such interest to loss actually suffered “before the date of the award”.
34 It follows then that the judgment in favour of the plaintiff must be limited to the award of $60,000 for pain and suffering and loss of enjoyment of life.
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