Paff v Speed

High Court of Australia|1961-07-01|Before: Windeyer JJ, McTiernan J, Dovey J

High Court of Australia Dixon C.J. McTiernan, Fullagar, Menzies and Windeyer JJ. Paff v Speed [1961] HCA 14

ORDER Appeal allowed with costs. Order of Full Court of Supreme Court of New South Wales set aside with costs: verdict of jury restored.

I agree, for the reasons given by the other members of the Court, with the view that upon the trial evidence was admissible of the award to the plaintiff on his retirement of a pension of £783 10s. 4d. per annum under the Police Regulation (Superannuation) Act, 1906-1955 N.S.W.. I think that the direction to the jury as to the use of the evidence is one of which the defendant cannot effectively complain. With that evidence before them the jury made an assessment which may seem very large indeed if it is looked at simply from the point of view of compensation for "economic loss" which is certain and without placing sufficient emphasis on the other aspects of the plaintiff's plight. But on the whole case I do not think the assessment is so large that the verdict should be set aside.

This appeal is brought pursuant to leave granted by this Court. It is brought from the judgment and order of the Supreme Court of New South Wales allowing an appeal by the respondent, setting aside the verdict of the jury for £17,500 damages in favour of the appellant in an action for personal injury, and ordering a new trial limited to the issue of damages. Liability was admitted by the respondent and the trial was on the issue of damages only.

The appellant, who was a member of the New South Wales Police Force with the rank of constable, suffered personal injury in consequence of the negligence of the respondent on 5th August 1953. At that time the appellant's age was twenty-four. After the accident he was away from his employment for a period of twelve months but was paid his full salary. He returned to duty but proved to be unfit to remain in the Police Force, and in March 1958 he was retired compulsorily on the ground of physical unfitness. On retirement, he was awarded a pension of £783 10s. 4d. per annum from the Police Superannuation and Reward Fund, the notification of the award being made by letter from the Police Department to the appellant dated 29th April 1958. It would appear that the award was made pursuant to authority conferred by s. 10 of the Police Regulation (Superannuation) Act.

At the trial before Dovey J. counsel for the plaintiff objected to the admission of evidence that the pension had been granted on the ground that such evidence was not relevant to the issue of damages. The learned judge overruled the objection and admitted the evidence principally on the ground that the plaintiff had claimed as a head of damage that he had lost and would lose the pay, emoluments, promotion "and other benefits" which, if he had not suffered the injury, he would have gained as a police officer. His Honour decided that because of this particular claim it would be "unreal not to take into consideration the fact that there is some benefit accruing to him, in the form of this pension, in consequence of the very disablement which gave rise to his cause of action".

The Full Court of the Supreme Court did not consider whether the evidence in question was rightly admitted because the plaintiff had not instituted a cross-appeal on the relevance of such evidence. The Full Court proceeded on the basis that the evidence should not be ruled out, but without expressing an opinion as to whether as a matter of principle such evidence is receivable in order to be taken into account in the assessment of general damages for personal injury. They arrived at the conclusion that the assessment of the damages could not stand. In their view it was reasonable to suppose that the jury considered that the amount of damages recoverable by the plaintiff under all heads of general damages was about £30,000, a figure which the Court arrived at by a computation of the present capital value of the pension which they estimated to be about £13,300 and by the addition of that sum to £17,500. The Full Court considered that, having arrived at the sum of £30,000, the jury deducted from it a sum representing the capital value of the pension and by that way arrived at the verdict of £17,500. The Full Court took the view that the sum of £30,000 was too excessive to be a reasonable amount for a jury to award and, as the sum of £17,500 should be considered to be based on an erroneous assessment, the verdict could not stand.

Mr. Miller argued for the appellant that the evidence regarding the receipt of the pension ought not to have been admitted at the trial but that the verdict of £17,500 should be restored because it could not, in any event, be regarded as excessive having regard to the evidence. Dr. Louat argued on the other hand that the evidence was admissible not only on the ground upon which the trial judge admitted it but also as a matter of general principle and he submitted that the reasons of the Full Court in ordering a new trial were right.

First it is necessary to consider what is the nature of the annual payment of £783 10s. 4d. which the plaintiff was receiving from the Police Department since his retirement. Under the Police Regulation Act, 1899 as amended, a Police Superannuation and Reward Fund is established and provision is made for deductions from the pay of members of the police force at the rate of three per cent per annum, the Fund to be applied for the payment of superannuation or retiring allowances (s. 28). A member of the Police Force is given the right to petition the Governor who may superannuate the member and determine the superannuation or allowance to be paid in the light of age, length of service and considerations provided for in other parts of the Act (s. 29). However the superannuation grant made is defeasible for, under s. 33 of the Act, forfeiture may occur if the recipient should perform or omit to perform any of the acts mentioned in that section. For example, forfeiture may occur if the retired officer should refuse to assist in the suppression of a riot or breach of the peace, or is convicted of any felony or misdemeanour. Further sections of the Act provide for payment into the Fund of money received from sources other than those mentioned above (ss. 34 & 35).

Under the Police Regulation (Superannuation) Act, 1906 as amended, which is to be construed with the Police Regulation Act, provision is made for the determination of the annual superannuation amounts to be paid to a member of the force - amounts which are determined on the basis of length of service (s. 7). By s. 8 no allowance is to be paid to a member under the age of sixty years except in the case of a member who is certified to be incapable of discharging the duties of his office. By s. 9 the retiring age of a member is fixed at sixty years. Section 10 under which it would appear as stated above that the pension in this case was awarded provides that a member of the Police Force who has been disabled by an injury received in the execution of his duty may be granted an annual superannuation allowance which, in the opinion of the Governor, is commensurate with the nature of the injury received. Under s. 16 the Governor is entitled, notwithstanding the grant of any superannuation allowance, to require the recipient to submit himself for medical examination at any time by two doctors, and upon a certificate being issued to the effect that the incapacity of the member has ceased, to cancel or suspend the pension and require him to serve again in the force.

Under s. 12 of the Police Regulation Act the Governor is given power to make rules for the administration of the Superannuation Fund. Pursuant to this power rules have been made establishing a Board which is to make recommendations to the Governor (see s. xx of the Police Regulations, N.S.W. Rules, p. 747 et seq.). Under the second of these Rules the Board "will, subject to the conditions and scales provided in the Act, recommend the amount of allowance or gratuity to be granted". The combined effect of these Acts and Regulations would seem among other things to vest in the Governor a power to grant pensions to members of the force who are compulsorily retired subsequent to receiving some disablement. It seems to me however that the Governor may refuse to make a grant and that he may in certain circumstances rescind or vary a grant that he has made.

In Bradburn v. Great Western Railway Co. [1] it was decided that a sum received by the plaintiff on an accident insurance policy could not be taken into account in reduction of damages for personal injury. Pigott B. said: "He does not receive that sum of money because of the accident, but because he has made a contract providing for the contingency; an accident must occur to entitle him to it, but it is not the accident, but his contract, which is the cause of his receiving it" [2] . In Payne v. Railway Executive [3] , the Court of Appeal held that a disability pension paid to a naval rating could not be taken into consideration to his disadvantage in the assessment of damages for personal injury. In that case, Cohen L.J. (as he then was) considered that just as the wrongdoer could not appropriate to himself the insurance benefits accruing to the injured party so too he could not appropriate benefits arising to the injured party out of the service in which he was engaged. In his Lordship's view, the accident was not the causa causans of such benefits but merely the causa sine qua non and therefore the receipt of the benefits was not relevant. Singleton L.J. attached importance to the fact that the pension payable to the naval rating might be reduced by administrative action following an award of damages. He referred to the power of the Minister to withhold or reduce such a pension and said that he is entitled to bear in mind that the pension arises out of service with the Crown. His Lordship added: "there is in it something over and above the element of injury" [1] . He proceeded to point out the difficulties which would beset a court if it was obliged to take such pensions into account observing that if the case were one which arose before an award of a pension it would be exceedingly difficult for a judge to direct the jury on the likely amount that would be payable by the Minister.

(1874) L.R. 10 Ex. 1. 2. (1874) L.R. 10 Ex., at p. 3. 3. (1952) 1 K.B. 26. 4. (1952) 1 K.B., at p. 40.

Other cases on the question at issue are Judd v. Board of Governors of the Hammersmith; West London and St. Marks Hospitals [2] ; Fraser v. Maxwell [3] .

(1960) 1 All E.R. 607. 2. (1959) Q.S.R. 322.

Reference was made to three decisions in the Supreme Court of New South Wales, each of which was given by a trial judge. These cases are Cook v. Marshall Sawmilling Company [4] , Baker v. Graham [5] ; and Keating v. Cochrane [6] . In the first of these cases it was decided that a Social Services Invalid Pension should not be taken into account in assessing damages for personal injury. It was sought in that case to distinguish between a pension towards which the recipient did not contribute directly and a pension payable under a contributory scheme. Jacobs A.J. (as he then was) decided that the pension in question in that case should be left out of account. In the second case the question concerned a plaintiff who was a beneficiary under the Superannuation Act 1916-1957 N.S.W.. Pensions are payable under the Act as of right except in certain circumstances. Moffitt A.J. considered that even though the Act imposed an obligation to pay the pension in question, it could not be taken into account. He said: "It is a problem of causation, and that being so, whether the right originates from, or the initiating cause be, a contract or the performance of conditions giving rise to statutory benefits, seems to me to be immaterial" [7] . Payne v. Railway Executive [8] was followed in both cases. In the third case Else-Mitchell J. decided that a pension payable under the same Superannuation Act should be taken into account. He distinguished Bradburn v. Great Western Railway Co. [1] on the ground that the payment there in question arose out of a contract with a third party, while in the case before him it was a payment under a statutory scheme; he also distinguished Payne v. Railway Executive [2] , because of the discretion which might affect the naval rating's pension. British Transport Commission v. Gourley [3] was cited. In my opinion the question decided in that case is entirely different from that in the instant case.

(1959) 77 W.N. (N.S.W.) 40. 2. (1959) 77 W.N. (N.S.W.) 42. 3. (1959) 77 W.N. (N.S.W.) 35. 4. (1959) 77 W.N. (N.S.W.), at p. 48. 5. (1952) 1 K.B. 26. 6. (1874) L.R. 10 Ex. 1. 7. (1952) 1 K.B. 26. 8. (1956) A.C. 185.

The question whether an accident in which a person is injured is the causa causans of his receipt of a pension paid to him because he was injured, cannot depend on whether the pension is paid to him as of grace or under a statutory or contractual obligation or is contributory or non-contributory. In all of these cases the accident could be only a causa sine qua non of the payment of the pension.

In the Treatise on Damages by Mayne 11th ed. (1946) p. 151 it is said "Matter completely collateral and merely inter alios acta cannot be used in mitigation of damages". The pension received by the plaintiff in the instant case is a matter as between him and the Police Department: the tortfeasor is another party (alius) so far as that matter is concerned. It seems to me that it would not be just or reasonable that the tortfeasor should claim in the assessment of damages caused by his wrong a credit in respect of a payment received by the injured party from another party towards which the tortfeasor himself has not made nor is liable to make a contribution, and that it would be unexpected that the common law should be found to be otherwise. In my opinion money which has been paid to an injured party or to which he is entitled because he was injured cannot be availed of by the tortfeasor in the contest between him and the injured party as to the quantum of damages, unless the tortfeasor paid or made himself liable to pay such money in discharge of his liability to the injured party for the personal injury. The tortfeasor would seldom if ever be in that situation. He is certainly not as far as the pension in the present case is concerned.

If the word "benefits" in the declaration does not extend to pension or superannuation benefits, in my opinion it could not properly have let in evidence that the pension had been awarded to the plaintiff. Upon the supposition that the word has this reference, I think that it must be taken to refer to the loss of the extra pension which the plaintiff would have enjoyed over and above his £783 had he retired in the ordinary course of events. On the basis that the allegation in the declaration let in the evidence as to the pension it ought only to have been set off against that loss.

However, as already stated, the plaintiff did not raise a cross-appeal complaining of the admission of evidence as to the receipt of the pension on his retirement, or of the directions of the learned trial judge.

The Full Court proceeded upon the assumption that the sum of £30,000 could be regarded as an estimate of the total amount of general damages assessed by the jury in respect of the plaintiff's injury. The Court arrived at this figure upon the following basis. They considered that the jury might have regarded the plaintiff as being likely to live until he was seventy years of age and that it would be reasonable to capitalize his pension on the basis of five per cent and, on that basis, computed the capital value at £13,300. They assumed that, in view of the learned judge's direction, the pension could be taken into account and that the sum of £17,500 damages which the jury awarded was arrived at by deducting such capital amount from £30,000. In the opinion of the Full Court, the sum of £30,000 was a sum too much in excess of that which it was reasonable for the jury to award, taking the view, most favourable to the plaintiff, of the evidence relevant to the heads of loss and damage alleged in the declaration.

Having regard to what the learned trial judge said in his summing-up on the question of what could be the plaintiff's span of life, I cannot reject the assumption which the Full Court regarded as having been accepted by the jury. It is not possible to make an estimate of how much of the sum of £30,000 is to be attributed to bodily injury pain and suffering and loss of amenities on the one hand; and to future economic loss on the other hand, that is, wages and salary as a police officer and superannuation on a higher scale than £783 per annum if he retired on attaining the age of sixty years. Whether the sum of £30,000 is a reasonable amount or not at which to assess the total damages claimed in the declaration depends upon how much of it could be attributed to the loss of benefits by way of pension and superannuation resulting from the plaintiff's early retirement from the Police Force. It must be remembered that the capitalized value of the pension which he received has been regarded as a set-off only against the estimated amount of such loss.

Taking the evidence which is most favourable to the plaintiff, I have some difficulty in seeing how it can be affirmed that a jury could not reasonably find that the sum of £30,000 is a fair and full compensation to the plaintiff in respect of all the items of damage enumerated in the declaration. (See Scott v. Musial [1] ). But I think that it is not necessary to reach a definite conclusion on that question to determine this appeal. The plaintiff is content with the amount of the verdict actually returned by the jury and does not desire that there should be a new trial. Irrespective of how the jury arrived at £17,500, the sum is not in itself too much to be reasonable compensation for bodily injury, pain and suffering; loss of amenities and of future wages and salary suffered by the plaintiff. It is not to be assumed that the plaintiff would raise any claim, if a new trial were ordered, in respect of loss of benefits by way of pension or superannuation which opened the question whether the pension he was awarded could be taken into account against him in the assessment of damages. In my view it is likely having regard to the evidence that if the plaintiff's claim was limited to the heads of damage which have been enumerated other than loss of benefits by way of pension or superannuation, another jury would not find a verdict for a sum substantially less than £17,500. In saying this I do not feel that I am taking the question of the assessment of damages out of the hands of a jury because this is a kind of judgment which it is common for a court on appeal from a jury's verdict to make. (Scott v. Musial [1] ).

For these reasons justice does not require that the verdict be set aside and a new trial granted. The appeal should, in my opinion, be allowed and the verdict restored.

In this case it may be well, elementary though the subject may be, to begin by briefly stating what I conceive to be the general basis on which damages are awarded at common law for personal injuries. The orthodox direction to a jury in such cases begins, even though it may not use those very terms, by drawing and explaining a distinction between "special damages" and "general damages". Special damages are awarded in such cases in respect of monetary loss actually suffered and expenditure actually incurred. Their two characteristics are (1) that they are assessed only up to the date of verdict, and (2) that they are capable of precise arithmetical calculation or at least of being estimated with a close approximation to accuracy. The familiar examples are medical and surgical fees paid or payable, ambulance and hospital expenses, and loss of income. Where the plaintiff has been employed at a fixed wage or salary, his loss of income can commonly be calculated with exactness. Where the plaintiff has not been employed, but is, for example, a professional man, his monetary loss can be estimated without difficulty by reference to his past earnings. In a high proportion of cases the amount of the "special damages" is agreed between counsel for the plaintiff and counsel for the defendant.

"General damages" on the other hand, are, of their very nature, incapable of mathematical calculation, and (although the expression is apt to be misleading) commonly very much "at large". They are at large in the sense that a jury has, in serious cases, a wide discretion in assessing them. Also general damages may be assessed not with reference to any limited period, but with reference to an indefinite future. Damages may be awarded for "pain and suffering", and such damages are assessable for past, present and future pain and suffering. But here calculation is obviously impossible, and damages for pain and suffering should clearly be regarded as "general" and not "special" damages. In fact, the question of general damages is generally, I think, put to a jury under three heads - (1) "economic loss", (2) loss of "amenities" or "enjoyment of life", and (3) pain and suffering.

"Economic loss" may include expenditure (for, e.g., medical expenses) which it is shown that the plaintiff will probably incur in the future as a result of his injuries. But the major item of a claim under this head is usually put as "loss of wages" or "loss of income". It would be more accurately described as "loss of earning capacity": see a recent article Mitigation of Tort Damages for Loss of Wages by Professor Ross Parsons (1955) 28 A.L.J. 563. Actual loss of wages or loss of income will have been already taken into account in assessing special damages, and what the plaintiff must receive in respect of the future is compensation for total or partial incapacity to earn income. The whole system on which general damages are awarded is open to criticism, but the direction to a jury to award a lump sum under each of the three heads is too well established to be now challenged, and the awarding of periodical payments subject to review is, of course, quite impracticable.

The usual method of proving damages under the first head is by calling evidence to show what the plaintiff could probably have earned during the rest of his life if he had not been injured and what, if anything, he is now capable of earning. It would not, I think, be correct to say that this usual method was departed from in the present case, but the jury were invited to make an unusual assumption. With regard to the second factor, there was evidence on which the jury could find that, for practical purposes, the plaintiff was a totally incapacitated man. With regard to the first factor, the plaintiff was a policeman, and the jury were invited to assume that, if he had not been injured, he would have continued to follow that occupation, would have reached the highest rank in the Force, and would have retired on a pension at the age of sixty. A table was prepared showing what he would have received for the rest of his life on this assumption, and the total was something in the vicinity of £44,000. It was not, of course, disputed that this sum would have to be heavily discounted for a variety of probabilities and possibilities, and also because the award would give the plaintiff an immediate lump sum instead of an anticipated series of payments over the years. But the fundamental assumptions invited were that the plaintiff would have continued in his career as a policeman, that a policeman's lot is a very happy one indeed, and that the plaintiff had been deprived of all the benefits attaching to that happy lot. Among those benefits was the pension which has been mentioned.

When the plaintiff puts his case in this way, it seems to me impossible to deny to the defendant the right to adduce evidence to show that in fact the plaintiff has not lost all the benefits attaching to the career which he has had to abandon, but is in fact receiving, and will in all probability continue to receive for the rest of his life, a very substantial benefit which is an incident of that career. The case is an exceptional one, and does not, I think, raise the general question which was the subject of the decision in Payne v. Railway Executive [1] . Here the plaintiff was claiming, although as general, and not as special, damages, for the value of a totality of specific benefits, which he said he had lost. In such a case it must be open to the defendant - just as it would be in relation to any item of special damages - to prove that the plaintiff has lost not that totality but something less. He is not saying that the plaintiff must set off a collateral gain against a loss. He is merely accepting a special basis on which the plaintiff makes his claim, and saying that on that basis the plaintiff has not lost as much as he says he has lost. The direction to the jury on the matter of the pension was, in my opinion, correct.

The remaining question is whether the damages awarded were so excessive as to justify the Full Court in ordering a new trial on that issue. I think they were. We should not, in my opinion, reverse the order of the Full Court.

I do not think that Herron J., with whom Sugerman J. and Else-Mitchell J. agreed, misdirected himself as to the real issue in the case. He said that the task of the Court was to determine "on principles which are well known in this Court" (as indeed they must be) whether "the verdict of £17,500 is or is not an erroneous estimate of the plaintiff's damage". I do think that the answer to that question depended, and depends, entirely on whether, as a matter of law, the jury were bound to take into account by way of mitigation the pension which the plaintiff had received and would in all probability continue to receive. I confess that I do not understand why Herron J. thought that that question of law could not, or should not, be determined on the appeal. It is true that the direction of Dovey J. on the point was favourable to the defendant respondent, and that there was not, and could not be, a cross-appeal on the point. But the defendant respondent was asserting that the damages were excessive, and the question thus raised seems to me necessarily to have involved the question of law with regard to the pension. However, Herron J. dealt with the matter on the assumption (which I think correct) that the jury were bound to take the pension into account, and the fact that the Full Court declined to determine the question is, I think, of no present materiality.

Nor do I think that the Full Court went wrong, or disguised from itself the true nature of the question in hand, when they referred to the present capital value of the plaintiff's pension rights and said that "the jury must be taken to have awarded him, or to have thought his damages to represent, something of the order of £30,000". The jury were not bound to make a gross assessment of damages and then subtract a precise present value attributable to the pension. But I cannot think that their Honours thought that the jury were so bound. All it was intended to convey was, I think, that the practical result of the verdict was that the plaintiff would receive a capital sum of £17,500 and also an annuity of a present value of £13,000 - or, to translate it into terms of income on the assumption that the plaintiff did not break into capital, about £1,660 per annum for life. The unexpressed conclusion was that the jury had not brought into account, or had made a very substantially insufficient allowance for, the plaintiff's pension.

I am not prepared to say that their Honours were wrong in the view which they took. The plaintiff's expectation of life is a matter which does not appear to have received much attention. But I would agree that it was open to the jury to find that the plaintiff was permanently incapable of remunerative employment, and that it would be proper for them to make a very substantial allowance for "pain and suffering". Apart from the pension I do not think that the verdict for £17,500 could have been successfully challenged. But the pension was of very substantial amount, and it must be taken into consideration. I think it was open to the Full Court, without departing from the principles applicable to such cases, to say that, taking it into consideration, the verdict was excessive in the relevant sense. The order for a new trial as to damages should, in my opinion, be allowed to stand.

This appeal from the judgment of the Full Court of the Supreme Court of New South Wales ordering a new trial limited to damages in an action for damages for negligence, where at the trial there had been a verdict and judgment in favour of the plaintiff appellant for £17,500, raises questions about the admissibility of certain evidence and the quantum of damages.

The appellant was a police constable who while on duty on 5th August 1953 was injured by a motor-car. He was then twenty-four years of age and had been for about four years in the Police Force. On 22nd March 1958 when he was nearly twenty-nine he was boarded out from the Police Force because of the rupture of a cerebral aneurism, and there was at the trial a conflict of medical evidence upon the question whether this aneurism was or was not caused by the accident. At this stage it must be assumed that the jury found that it was and that in consequence of his serious injuries the appellant is permanently incapacitated for work. At the trial the declaration was amended to cover a claim for loss of pension benefits and, as part of the plaintiff's case, evidence was led as to the pension under the Police Regulation (Superannuation) Act, 1906 N.S.W., as amended, that he might have expected to receive had he remained in the Police Force until he was sixty; and then at the instance of the defendant evidence was admitted that the plaintiff had at the time of his boarding out been granted a pension of £783 10s. 4d. per annum and that he was still in receipt of that pension. It is this evidence of the grant and receipt of a pension under the Act that the appellant contends was inadmissible.

I think the evidence was admissible and find some difficulty in understanding how it can be maintained that a plaintiff, who to increase his damages alleges and proves what, because of the premature determination of his services, he has lost under a pension scheme can at the same time shut out evidence that upon that determination he was granted benefits under the scheme that would offset, either wholly or in part, the pension loss of which he was complaining. The principle of completeness not only justifies but requires the admission of this evidence.

I consider, therefore, that the appellant's contention that evidence was wrongly admitted should be rejected and that in this case examination is not required of the general question of the admissibility of proof by a defendant that a plaintiff has received or is entitled to receive a pension (in respect of disabilities) which would have to be taken into account in the assessment of damages in the action.

The next question is whether upon the evidence as a whole a verdict of £17,500 was excessive as being a wholly erroneous estimate of the plaintiff's damages. The Full Court decided that it was because of the evidence that the plaintiff was in receipt of a pension of £783 10s. 4d. per annum, to which the Court attributed a present value of £13,000. Thus Herron J. (with whom Sugerman and Else-Mitchell JJ. agreed) said: "In any event, without wishing to adhere too closely to the mathematics of the matter, it seems to me that in assessing the sum of £17,500 the jury has reached a wholly erroneous conclusion on the plaintiff's damages. If one adds, for instance, just for the sake of example, the £17,500 to the present capital value of the plaintiff's pension rights the jury must be taken to have awarded to him, or to have thought his damages to represent, something of the order of £30,000, and on no view of the plaintiff's case can that be supported." This line of reasoning treats the evidence that the plaintiff was in receipt of a pension of £783 10s. 4d. per annum as requiring that the verdict should approximate to the sum which with the present value of the pension would aggregate the amount that could reasonably be regarded as proper compensation for the plaintiff's loss resulting from the accident caused by the defendant's negligence. I do not think that the jury was bound to use the evidence of the plaintiff's pension in any such manner. In The National Insurance Company of New Zealand Limited v. Espagne [1] I have stated in relation to Commonwealth invalid pensions my view that as a general rule pensions do not go in mitigation of common law damages, and I do not think that because in this case evidence of the pension which the plaintiff was receiving became admissible to complete the information about the pension scheme provided by the Act and so to put in its proper setting the plaintiff's evidence of possible loss of benefits thereunder, it was necessary for the jury to go further and reduce damages by the value of the pension granted to the plaintiff. Although, like the members of the Full Court, I would have regarded a verdict of £30,000 as unreasonable, I cannot regard the pension evidence as warranting the conclusion that the jury's verdict was tantamount to assessing the plaintiff's loss at £30,000 and then reducing this sum by £13,000. Had the jury followed such a course it would, I think, have been quite wrong both in assessing the plaintiff's loss at £30,000 and in deducting from its assessment of his loss the present value of his pension. My examination of the provisions of the Act satisfies me that a pension granted thereunder to a member of the Police Force boarded out by reason of incapacity resulting from injuries received through the negligence of another ought not to be used to mitigate the damages payable by that other on account of the injuries caused, and I refer to, without repeating, my examination of the general problem of damages and pensions in The National Insurance Company of New Zealand Limited v. Espagne [1] .

(1961) 105 C.L.R. 569. 2. (1961) 105 C.L.R. 569.

It appears to me that the verdict for £17,500 should be considered without specific reference to the present value of the plaintiff's pension, and so considered it could not be regarded as excessive.

This is an appeal by leave from the Supreme Court of New South Wales. At the hearing before a jury the learned trial judge admitted evidence that the plaintiff, the respondent here, was receiving a pension from the Police Department. The jury found a verdict for the plaintiff and assessed damages at £17,500. On appeal the Full Court, without deciding whether or not the evidence concerning the pension was correctly admitted, said that, for reasons that will appear later, the amount awarded was excessive and directed a new trial. Two questions arise. First, whether the evidence was admissible: secondly, that question being determined, whether the damages were excessive. The essential facts may be very briefly stated.

The respondent was a police constable, a member of the New South Wales Police Force. By the negligence of the appellant he was badly injured while in the execution of his duty. He later became incapable of carrying out his duties as a member of the Police Force and was discharged. The medical evidence was conflicting: but there was evidence on which the jury could find that his incapacity was attributable to the accident and that it would persist and make him permanently unemployable. The declaration in the action alleged that among other damage suffered by the plaintiff, he had lost and would lose the pay, emoluments, position and other benefits which he otherwise would have gained as a police officer. At the trial evidence was called on his behalf of the rates of pay of police officers in senior ranks and grades to which it was suggested he might have advanced had he not been retired from the Force. This evidence included a statement of the superannuation allowances, commonly called pensions, to which police officers of various ranks and grades become entitled, or may under the relevant statutory provisions become entitled, upon retirement at the age of sixty. These pensions vary according to the length of the member's service. This evidence, taken in its context, was directed to showing that the right to a pension was one of the advantages that the plaintiff had lost. The defendant then sought to prove that, in fact, the plaintiff had been granted a pension when he was retired and that he was actually receiving a pension of £783 10s. 4d. a year. This evidence was objected to; but the learned trial judge admitted it, in my opinion rightly. The way in which the plaintiff's case was presented and the damages he sought made it admissible.

The pension was, it seems, given pursuant to s. 10 of the Police Regulation (Superannuation) Act. This provides: "10. (1) Where any member of the police force has been disabled (a) by any wound or injury received in the actual execution of the duty of his office, there may be granted to him such gratuity or annual superannuation allowance, not exceeding the salary of his office at the time of his disablement, as, in the opinion of the Governor, is commensurate with the nature of the wound or injury received, and such grant may be made whatever the length of his services "

That the pension was thus granted in the exercise of a discretion given by the statute, and not as a right, seems irrelevant, in this case, to the question whether evidence that it had been granted and was being received was admissible. The plaintiff claimed damages because he said he had lost all the advantages of being a policeman including the benefit of a pension on retirement. It would have been contrary to common fairness not to allow the defendant to prove the true facts.

We were, however, pressed with the decision of the Court of Appeal in Payne v. Railway Executive [1] , and with theories derived from it. I need not repeat what I have said on this topic in The National Insurance Company of New Zealand Limited v. Espagne [2] , the judgment in which is to be delivered at the same time as this.

(1952) 1 K.B. 26. 2. (1961) 105 C.L.R. 569.

In a useful and suggestive article in the Australian Law Journal (1955) 28 A.L.J. 563 Associate-Professor Parsons points to errors that can arise from the use of the expression "loss of wages". It is, I think, important to distinguish between claims based on a termination of employment with a particular employer and, on the other hand on the destruction of a man's capacity to do work of a particular kind. In the first case the loss is of wages that might have been earned and of other emoluments and advantages, including opportunities of advancement and promotion in that service. In the second case the loss is of earning capacity; and the only relevance of the wages that were earned and of the conditions of employment before the accident is as an aid in assessing damages for that loss.

A servant is entitled, in the absence of an express or implied term to the contrary, to be paid his wages during periods of temporary illness or incapacity (see cases collected in Orman v. Saville Sportswear Ltd. [1] ). So that a plaintiff, who was injured but whose employment was not terminated, cannot recover as lost wages what he was entitled to have from his employer (see Receiver for the Metropolitan Police District v. Croydon Corporation [2] ). In some cases of that kind the wrongdoer may be liable to the employer in an action per quod servitium amisit. But that is an entirely different matter: and in the present case, the injured man being a policeman, no action for loss of service lies (Attorney-General for New South Wales v. Perpetual Trustee Co. (Ltd.) [3] ; cf. Commissioner for Railways (N.S.W.) v. Scott [4] ). A plaintiff entitled to be paid by his employer (whether the payments be called sick pay is immaterial) while incapacitated, and who when he recovered returned to work in his old position, may nevertheless have suffered some compensable loss by his absence. If, for example, he was by the terms of his employment permitted only a certain number of days sick leave on pay during the year, he would incur some loss if those days were used up in an absence caused by the defendant.

(1960) 1 W.L.R. 1055. 2. (1957) 2 Q.B. 154, at pp. 164, 165. 3. (1955) A.C. 457; (1955) 92 C.L.R. 113. 4. (1959) 102 C.L.R. 392.

Where a plaintiff claims damages, not because he has lost the benefits of his engagement with a particular employer, but because he has been deprived of the capacity for employment in a particular trade or calling, payments received from his employer up till the date when his employment ceased are, generally speaking, to be taken into account in assessing his damages up to that time. From the date his engagement ceases, however, his claim is for the destruction of earning capacity.

It is, in my view, a mistake to think that there is some general rule governing the admissibility of evidence of pensions of all sorts in all cases of personal injury. Damages for personal injury are compensatory. The first consideration is what is the nature of the loss or damage which the plaintiff says he has suffered. A defendant can always call evidence that contradicts the case the plaintiff seeks to establish. If, as here, a plaintiff claims that he has been deprived of a pension that was one of the advantages of the particular service in which he was, the defendant can prove that, in fact, he has a pension. If a plaintiff claims that he has incurred expenses for medical treatment or for an artificial limb, the defendant can show that these things were provided for him without charge. But a claim that because of physical injuries the plaintiff's capacity to earn money has been destroyed is not met simply by showing that he has received money or other assistance from a charity, a former employer, a friend or the State. Whether money or other assistance derived by an injured person from such sources is to be taken into account in assessing the defendant's liability is a question on which I have stated my view in Espagne's Case [1] . It is not the question here.

Should the order for a new trial stand? The matter took an unusual course in the Full Court. The Court gave no ruling on whether or not the trial judge had properly admitted the evidence of the pension, but it ordered a new trial on the basis that, taking the evidence of the pension into consideration, the damages of £17,500 given by the jury were excessive. The Court reached that conclusion by calculating that, if the plaintiff lived to the age of seventy and his pension continued, its capital value could be taken, on the basis of interest at five per cent, to be in the region of £13,300. This, it was then said, when added to £17,500 gave a figure of over £30,000; and had the jury returned a verdict for £30,000 that would have been excessive. But, with respect, that approach to the matter can, I think, lead one astray. The evidence that the plaintiff was in receipt of a pension was admissible to show that he had not lost all that it was claimed he had lost. That does not mean that the capital value of what was not lost was to be added to the amount awarded by the jury for what was suffered in order to see whether for that the latter sum was excessive. The jury's task was to assess damages for what the plaintiff had suffered and lost. They did so. They did not have to bring the amount of the pension into account in any arithmetical sense as a set-off. They did not have to determine what would be its value if the plaintiff lived to be seventy, nor to assume that he would do so. They were aware that he had a pension and of its amount. The question is whether a verdict for £17,500 was so unreasonable that it should be set aside. The plaintiff was deprived of a career of presumably useful and satisfying service with prospects of advancement in the Police Force. Left to him from that was a disablement pension of £15 a week. He has very grave disabilities that the jury were entitled to think would make him permanently incapable of remunerative employment. He seems to have many years in front of him during which the range of his activities will be very greatly restricted. His diminished health is precarious. He has had one rupture of an aneurysm near the brain and an epileptic seizure and he may have more. These and the pain and suffering and discomfort and loss of the capacity to live and enjoy a full life that they entail were matters for the jury to consider. I do not think we can say on the material before us that the verdict was one with which a court must interfere. I would therefore allow the appeal.

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