17 His Honour concluded:
"Hence, the Federal Court need not engage in calculating the interest in essence as provided for in s94 of the Supreme Court Act 1970 (NSW); but may include in the sum for which judgment is given a lump sum in lieu of any such interest. This reinforces the view that in a case of damages for personal injuries the element of pre judgment interest included in the amount of the judgment is itself a head of compensation, of a capital nature."
18 I find nothing in those words to suggest characterisation of pre-judgment interest as "damages for non-economic loss".
19 Greatest emphasis was placed on some passages in the judgment of Burchett J. His Honour said: 82 FCR at 282-3
"…'Prejudgment interest is normally designed to make the plaintiff whole and is part of the actual damages sought to be recovered'. In my opinion, it follows from the principle upon which pre-judgment interest is awarded in respect of past pain and suffering and loss of the amenities of life that it is not in any sense of an income character. It does not replace any actual income lost, and the statements of principle in the High Court and in the Court of Appeal of New South Wales make it clear that it does not replace notional income lost either. Whether by the adoption of a commercial interest rate or, as has been the practice since Gogic , by the adoption of a conventional interest rate, the use of an interest rate is no more than a guide to the determination of an appropriate figure. When determined, the figure is part of the total amount awarded by the judgment in order to achieve the law's object - to put the plaintiff back, so far as money can do so, in the position he would have been in but for the injury. That cannot be done without making up in some way for the fact that some parts of the award compensate the plaintiff for losses suffered, perhaps years previously. But to do that it is not necessary to assume, contrary to human experience that if moneys had been received earlier they would necessarily, or even probably, have been invested at interest. It is more likely that a solace for pain and suffering would have gone into immediate expenditure to relieve a pressing need, or to provide some comfort. The law is not so foolish as to suppose otherwise. It compensates the plaintiff for not having been able to do what he would have done, not what he would not have done."
20 Later his Honour said 82 FCR at 285
"Since, as the authorities cited earlier make clear, the allowance of interest in respect of past economic loss is wholly ancillary to the assessment of the proper measure of damages in respect of that loss, the application of an interest rate being merely by way of estimation, the inclusion of the resulting sum in the total award cannot alter its nature. The total award is received in the character of damages , including the destruction or impairment of the injured person's earning capacity at a date preceding the date of the assessment. Accordingly, I think the dictum of Davies J in Commissioner of Taxation v Northumberland Development Co Pty Limited (1995) 59 FCR 103 at 106 is correct:
'A court in this country would be unlikely to hold that an award of pre-judgment interest, included in an award of damages for personal injury, constituted a receipt in the nature of income'."
21 Mr Leslie sought to elevate these remarks to submit that as Burchett J had said "the total award is received in the character of damages for a personal injury", that meant that interest, being an ingredient in those damages, should be regarded as "damages for non-economic loss". It is apparent, in my view, that a fair reading of the passages in Burchett J's judgment did not so intend.
22 The correct characterisation of pre-judgment interest, on whatever it is awarded, is that derived from Gogic and Haines v Bendall. It is a sum to compensate the plaintiff for being deprived of damages, of whatever nature, to which, in legal theory, he is entitled at the date of injury and in consequence thereof.
23 I would reject the submission that interest payable on general damages ceases to be a payment of an aspect of economic loss but absorbs the character of the item of damage for which it is awarded.
24 The second submission was that the decision of this court in James Hardie & Co Pty Limited v Newton was wrongly decided. The contention was that where money payments, such as pension payments under the Act, are to be offset against damages awarded, they could only be offset against damages awarded for economic loss. Like could only be offset against like.
25 No application was made to re-argue the decision in Newton, and, it being a recent decision of this Court, is binding upon this Court until reviewed or overruled.
26 In my view the appeal should be upheld, the judgment of O'Meally P set aside and in lieu thereof judgment in the sum of $125,000 be entered, such judgment to date from 5 May 1999. The respondent should pay the appellant's costs of appeal, but should have, if qualified, a certificate under the Suitors Fund Act 1951.
27 FOSTER AJA: This is an appeal from one aspect of the judgment of O'Meally P given in the Dust Diseases Tribunal of New South Wales on 5 May 1999. The respondent, Robert William Royal (Royal), succeeded in an action for damages brought against Pacific Power and Babcock Australia Limited for injuries, disabilities and consequent losses arising from his having been subjected to high concentrations of asbestos dust and fibre in the course of his employment.
28 His Honour found damages in the total sum of $173,000, which, after deductions irrelevant to this appeal, was reduced to $145,000, for which judgment was given. Part of this award consisted of $100,000 given for general damages and $20,000 for "interest on past general damages". It appears that this latter figure was arrived at by his Honour's allocating half of the amount of general damages, namely $50,000, to the period up to the date of judgment and applying thereto an appropriate interest rate in conformity with the decisions of the High Court in MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657 and of this Court in Metropolitan Meat Industry Board v Williams (1991) 24 NSWLR 54.
29 It had been submitted to his Honour on behalf of the defendants that it was inappropriate to make this award of interest. It was contended that because of payments already made to Royal by the Dust Diseases Board and because of the provisions of s12D of the Workers' Compensation (Dust Diseases) Act 1942 (the Dust Diseases Act), this amount could not be awarded. It was, in effect, eliminated by the level of deductions required to be made from the total amount awarded, by virtue of the amounts already paid to Royal.
30 His Honour held that, as a matter of construction of s12D, the award of $20,000 was not susceptible to deduction. He entered judgment for the plaintiff but granted a stay on so much of it as related to the interest on past general damages, namely the sum of $20,000. It is the appellant's contention on this appeal that that figure should not have been allowed and that the amount of the judgment should be reduced by $20,000.
31 Before I turn to the submissions of the parties to this appeal, it is convenient to set out, briefly, the events which led to the enactment of s12D.
32 In Harris v Commercial Minerals Ltd (1996) 186 CLR 1, the High Court considered (inter alia) the effect of benefits payable under the Dust Diseases Act to an injured worker upon the amount of damages awarded to him at common law, in respect of injuries and disabilities occasioned to him by exposure to dust during the course of his employment. The respondent worker was in receipt of weekly payments of compensation which the Court considered to be "compensation for economic loss suffered as the result of work injuries falling within the scope of the Dust Diseases Act". The purpose of the payment was "to remedy the loss of earning capacity" of the injured worker (Redding v Lee (1983) 151 CLR 117 at 125). Accordingly the payments should be regarded as "a substitute or partial substitute for wages lost". The Court concluded (at 18):
"Because the fundamental rule in an action for damages for tort is that a plaintiff cannot recover an amount more than he or she has lost, payments under that Act are deductible from any award of damages payable in respect of injuries that give rise to those benefits. Benefits receivable under the Dust Diseases Act are therefore deductible from any common law damages otherwise payable by an employer for injuries compensable under that Act."