Tonks v Forestry Tasmania
[2000] TASSC 139
•29 September 2000
[2000] TASSC 139
CITATION: Tonks v Forestry Tasmania [2000] TASSC 139
PARTIES: TONKS, Sally Maree
v
FORESTRY TASMANIA
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 2016/1997
DELIVERED ON: 29 September 2000
DELIVERED AT: Hobart
HEARING DATES: 11 - 15, 18 - 22, 25 - 29 September 2000
JUDGMENT OF: Cox CJ
CATCHWORDS:
Damages -Measure and remoteness of damages in actions for tort - Measure of damages - Personal injuries - Deductibility of specific benefits and amounts - Workers compensation payments - Whether gross or net payments should be deducted where damages for past economic loss are awarded on a net basis.
Fox v Wood (1981) 148 CLR 438, referred to.
Workers' Compensation Act 1927 (Tas), s8G(1).
Aust Dig Damages [53]
REPRESENTATION:
Counsel:
Plaintiff: R J Phillips, S Taglieri
Defendant: D J Gunson, J McDonald
Solicitors:
Plaintiff: Phillips Taglieri
Defendant: Gunson Pickard & Hann
Judgment Number: [2000] TASSC 139
Number of Paragraphs: 8
Serial No 139/2000
File No 2016/1997
SALLY MAREE TONKS v FORESTRY TASMANIA
RULING ON MOTION FOR JUDGMENT COX CJ
29 September 2000
At the conclusion of this trial by jury of an action by the plaintiff against her employer, they answered in the affirmative questions as to whether negligence and breach of statutory duty had been established against the defendant and whether injury had been thereby caused to her. In answer to the question, what award should be made to the plaintiff to compensate her for pain and suffering and pecuniary losses she had sustained, the jury determined a sum of $590,000. They also found contributory negligence on her part which they assessed at 5 per cent. The plaintiff now moves for judgment.
It appears that the plaintiff was paid workers compensation by way of weekly payments, amounting to $70,517 gross, or $57,218 net, after payment of income tax. Payments in respect of medical expenses, and the like, amount to $52,139.61 and there is no dispute that this sum should be deducted from the sum awarded, reduced by 5 per cent for contributory negligence, pursuant to the Workers' Compensation Act 1927, s8G(1) ("the Act"). That provision is, in substance, replicated by the Workers Rehabilitation and Compensation Act 1988, s133(1), which commenced shortly after the cause of action arose. Counsel for the plaintiff submits that the amount of the weekly payments, net after tax, should be deducted, while counsel for the defendant submits that the gross figure received should be deducted.
The Act, s8G(1) reads:
"Except as otherwise provided in this Part, the payment or an entitlement to the payment of compensation in respect of an injury does not affect the right to obtain damages in respect of that injury, but where a liability has been incurred (whether by the employer or any other person) for the payment of damages to a worker in respect of an injury the payment to or to the benefit of that worker of compensation in respect of that injury shall, so far as it extends, be regarded also as a payment in or towards the discharge of that liability, and the amount of the damages shall be reduced accordingly."
The jury were advised that the plaintiff had received payments by way of workers compensation and that those payments would be taken into account by the Court so as to ensure the plaintiff did not receive both damages for economic loss and workers compensation as well. They were specifically instructed by me, with the concurrence of counsel, that they were not to trouble themselves with effecting any deduction in respect of them. The jury were also instructed by me that in calculating any damages for loss of earning capacity, whether past or prospective, they should ignore the incidence of income tax and should use net figures.
In Harvey v Electrolytic Zinc Co of Australasia Ltd [1980] Tas R 167, Everett J, sitting without a jury, took the view that the net amount received by a worker after the employer had deducted the income tax deductions required to be made, was the subject of s8G(1). At 168 - 169, he said:
"… counsel for the defendant submitted that the amount to be deducted pursuant to s8G(1) of the Act should be the total amount of compensation paid by the company, including income tax of $3,528.00, which the plaintiff did not, of course, personally receive. I reject this argument, because, if it was accepted, the plaintiff would be in the position of having been debited with income tax referable to his total accrued economic loss up to the date of the judgment and then, in addition, with income tax paid in respect of compensation under the Act. There is neither logic nor justice in the argument. The sum which should be deducted under s8G(1) of the Act is the amount actually received by the plaintiff in accordance with the company's obligation under the Act ¾ in other words, the net amount received by the plaintiff after the company had paid the appropriate amount of tax to the Australian Taxation Office."
In the later case of Goss v Mount Lyell Mining and Railway Company Ltd 94/1991, Zeeman J felt constrained to disagree with this approach and pointed out that Harvey v Electrolytic Zinc Co of Australasia Ltd (supra) had been decided before the decision of Fox v Wood (1981) 148 CLR 438. In that case, the High Court decided that where a plaintiff would be required to repay compensation, inclusive of tax, after having received damages from a third party, it was reasonably foreseeable by the defendant that the repayment of tax which the plaintiff had not received would increase his or her loss and that as the plaintiff would be compensated for past loss of earnings on a net basis, this increased loss was recoverable from the defendant. Zeeman J took the view that the Act required him to deduct the gross figure of compensation paid from the damages awarded, but he ensured that no injustice was done to the plaintiff in that case by awarding him the gross wages he had lost (which he found were equal to the amount of weekly compensation received) and setting-off the gross compensation received against that figure.
Were I sitting as the tribunal of fact and awarding damages for past economic loss on a net basis, as I have instructed the jury in this case they should do, I would make an allowance pursuant to the principles established by Fox v Wood (supra) so as to ensure that the plaintiff was not penalised by having to pay back a sum inclusive of tax in respect of a period for which she has been awarded damages based on a figure which ignores tax. To do otherwise would be unjust and would fail to put her in the position she would otherwise have been in had she not sustained her injury. Had the task of taking into account in assessing what she has lost the amounts payable under the Act and the requirement to repay them been entrusted to the jury in this case, it would have been incumbent upon me to give directions in accordance with Fox v Wood (supra) so as to ensure that the plaintiff was not thus penalised. But that was not done in this case because the parties chose to leave questions concerning workers compensation to be determined by me, rather than by the jury. In the circumstances of this case, where, with the acquiescence of both counsel, the jury has been told to make an award using net figures and to ignore the incidence of workers compensation payments because the Court will make the necessary adjustments, it would offend my sense of justice to enter judgment for a sum reduced by the gross amount paid when this plainly does not take into account an adjustment to the figure of damages which would represent the additional loss occasioned by the plaintiff having to repay the gross amount of workers compensation when she had the benefit of only the net amount after tax. I regard the conduct of the parties as authorising me to make all necessary adjustments, notwithstanding that strict compliance with the Act, s8G(1), as Zeeman J held in Goss v Mount Lyell (supra) may require, all things being equal, the reduction of the damages awarded on judgment by the gross amount received in weekly payments.
Accordingly, I allow the plaintiff's motion that judgment be entered for her against the defendant in the sum of $451,142 which will put her in the same position as if Fox v Wood (supra) had been applied and the Act strictly complied with by a deduction of the gross weekly compensation paid.
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