Firth v Sutton

LEGISLATION CITED: Supreme Court Act 1970 (NSW) s 94 Workers Compensation Act 1987 (NSW)

CASES CITED: Batchelor v Burke [1981] HCA 30; 148 CLR 448 Haines v Bendall [1991] HCA 15; 172 CLR 60

PARTIES: Stephen Firth (Appellant) Renee Sutton (Respondent)

COUNSEL: G M Watson SC, I R Goodridge (Appellant) K W Andrews (Respondent)

SOLICITORS: Firths - The Compensation Lawyers (Appellant) Brennan Legal (Respondent)

LOWER COURT JURISDICTION: District Court

LOWER COURT JUDICIAL OFFICER: Hungerford ADCJ

LOWER COURT DATE OF DECISION: 12 March, 17 March 2009

LOWER COURT MEDIUM NEUTRAL CITATION: Sutton v Firth (No 2) [2009] NSWDC 53, Sutton v Firth (No 3) [2009] NSWDC 68

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 2009/298149

ALLSOP P MACFARLAN JA YOUNG JA Friday 14 May 2010 FIRTH v SUTTON (No 2)

[This headnote is not part of the reasons of the Court.]

An issue arose in the principal judgment, Firth v Sutton [2010] NSWCA 90, about which the parties had not been heard, namely, whether as part of the calculation of the loss of Ms Sutton, interest should accrue on the value of the lost common law claim.

The submissions of the parties agreed that the judgment sum should be calculated by adding interest to the value of the lost common law action as at 1 July 2000, the date of the posited judgment, being $195,397.61. The disagreement concerned whether, as Ms Sutton submitted, the sums received under the Workers Compensation scheme should be deducted without any adjustment for the timing of their receipt.

Held (per Allsop P, Macfarlan and Young JJA agreeing):

The calculation of compensation for the comparatively worse position of not having a lump sum payment under the lost common law action should not only take into account what benefit under the Workers Compensation legislation was received, but also when it was received.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 2009/298149

ALLSOP P MACFARLAN JA YOUNG JA Friday 14 May 2010 FIRTH v SUTTON (No 2)

Judgment 1 ALLSOP P: On 30 April 2010, the Court published reasons for judgment and stood over the appeal for the making of final orders: [2010] NSWCA 90. 2 The issue dealt with in the principal judgment, about which the parties had not been heard, concerned whether, as part of the calculation of the loss of Ms Sutton, interest should accrue on the value of the opportunity lost on 1 September 1999 calculated by reference to the posited judgment on 1 July 2000. 3 Counsel have filed submissions. An issue of principle has arisen. 4 Ms Sutton submits that the judgment sum should be calculated by adding interest to the value of the lost chose in action as at 1 July 2000, being $195,397.61. The appellant agrees with that. Some minor differences ($469.10) in calculation of that interest arise, notwithstanding that both sides used the long term bond rate. The difference may arise from whether the interest was compounded or not. Given the sum it matters little. I will use a mid-point and attribute interest of $61,000 on the primary value of the lost common law action for the period 1 July 2000 to 17 March 2009. 5 Conformably with the views I expressed in [188] of my earlier reasons, the appellant sought to make adjustment to that interest calculation to take account of the receipt of benefits under the Workers Compensation Act 1987 (NSW) ("WC Act") from time to time after 1 September 1999. It did this by calculating interest at the long term bond rate from the dates of receipt of those funds. The calculation made by the appellant had the effect of adjusting the amount outstanding representing the value of the lost chose in action by reference to benefits received in fact, after 1 September 1999. Ms Sutton submitted that there should be no account taken of the timing of the receipt of benefits under the WC Act. She submitted that she should receive a sum by way of interest on the value of the lost chose in action ($195,397.61), but that the sums received under the WC Act should be deducted without any adjustment for the timing of those receipts. 6 I cannot agree with the submission put on behalf of Ms Sutton. It is contrary to principle and fairness. A not dissimilar issue arose in Haines v Bendall [1991] HCA 15; 172 CLR 60. In that case, the High Court (Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ, Deane and McHugh JJ dissenting) decided that in computing interest under the Supreme Court Act 1970 (NSW), s 94(1) on past general damages there must be taken into account moneys received under the then existing table of maims under the WC Act, s 16. Despite arguments that the receipt of funds under the WC Act was for the fact of injury and that damages at common law were for the consequences of injury, the majority emphasised (see the judgment of Mason CJ, Dawson, Toohey and Gaudron JJ in Haines v Bendall especially at 63) that the cardinal operative concept that must control all else is compensation. What, one asks, has the plaintiff lost? Here, the loss is the comparatively worse position Ms Sutton finds herself in having lost her common law claim and being relegated to her workers compensation rights. Compensation for that comparatively worse position should recognise not only when she would have received the fruit of that common law claim, but also it should give full credit for what she has received so that the comparative position can be analysed. To do so, account must be taken of the nominal sums received under the WC Act and of when they where received. Thus, at 1 July 2000, Ms Sutton did not have the value of the lost chose in action at common law, but she had a little time before received $27,500 and had that money for a period of time. Thereafter, she did not have the value of the lost chose, but she did receive sums under the WC Act that made her comparative position progressively less disadvantageous. 7 The receipts of the amounts under the WC Act were in no way collateral or remote: cf Batchelor v Burke [1981] HCA 30; 148 CLR 448 at 453 and Haines v Bendall at 65. Rather, they were the receipts against which Ms Sutton's loss was calculated. 8 A simplified example illustrates the point. If the common law trial would have taken place on 1 July 2000 and the value lost from that was $100,000 and, as at 1 July 2000, the WC Act benefits received were $100,000, it would make no sense, in any rational method of compensation for the loss of the common law action, to say that the plaintiff has lost the benefit of receipt of the $100,000 for, say, 10 years and ignore the fact that she had received the same sum at or before the same time. To assert a compensable loss in those circumstances would be neither attractive nor rational. 9 Thus, the judgment sum should be calculated adjusting for the timing of the receipt of the benefits under the WC Act. Approaching the matter this way and using the appellant's calculations as a satisfactory mechanism of reflecting the proper adjustment of the value of the loss of the opportunity to sue at common law, Ms Sutton is entitled to damages as follows:

(a) value of the lost opportunity as at 1 July 2000 $195,397 (b) plus interest on this lost opportunity from 1 July 2000 to 17 March 2009 at the long term $ 61,000 bond rate $256,397 minus:

(c) past workers compensation benefits $ 87,193.70 (d) a calculation of interest on these workers compensation receipts at the long term bond rate: (i) $27,500 assessed as received at about 1 July 2000 $ 10,429 (ii) the balance of $59,693.79 being periodic payments, but assessed to have been $ 9,300 received half way through the relevant period (e) the future workers compensation benefits of $121,000 $55,000 and $66,000 $ 28,474.30

10 The question of costs arises. The parties are agreed that by reason of an offer of compromise made by the defendant on 3 February 2009 (of $85,000 plus costs) the costs in the District Court should be differentially ordered such that the defendant pay Ms Sutton's costs on a ordinary party/ party basis up to 11 am on 4 February 2009 and thereafter Ms Sutton should pay the defendant's costs on an indemnity basis, all such costs to be as agreed or assessed. 11 The appellant sought the costs of the appeal and cross appeal. I do not think that is just. Although Ms Sutton has had her judgment reduced, she had considerable success on the issues litigated in this Court. Ms Sutton proposes that each party bear his and her own costs of the appeal and cross-appeal. I think that would be a fair outcome, conformable with the realities of the respective successes and failures of the parties in the appellate controversy. 12 The orders that I would make are:

2. Set aside orders 1 and 2 made by the District Court on 17 March 2009 and in lieu thereof order: (a) judgment for the plaintiff in the sum of $28,474.30 to take effect as at 17 March 2009; (b) the defendant pay the plaintiff's costs on an ordinary party/ party basis up to 11 am on 4 February 2009 and thereafter the plaintiff pay the defendant's costs on an indemnity basis.

3. Each party bear his and her own costs of the appeal. 13 MACFARLAN JA: I agree with Allsop P. 14 YOUNG JA: I agree with Allsop P.

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