Damages
12 The accident at work on 8 October 1997, in which the plaintiff ruptured the tendon in his finger, gave rise to entitlements to compensation under the Act. The event giving rise to the plaintiff's right to damages against the appellants was the negligent treatment and advice given by the doctor on 25 September 1997.
13 Section 151Z deals with the situation where the injury for which compensation is payable creates a liability in some person other than the worker's employer to pay damages in respect of the injury. It does not apply because the later work injury merely increased the damages payable by the defendants for the earlier non-work injury. As Glass JA said in Kornjaca v Steel Mains Pty Ltd [1974] 1 NSWLR 343, 347:
"It is necessary for the employer to prove … that the injury occurred under circumstances which created a liability in damages to the worker. It does not seem possible to regard a pre-existing liability which became more extensive on the happening of the injury, as one which was then created".
14 As I said in Kempsey District Hospital v Thackham (1995) 36 NSWLR 492 at 507, with reference to the above passage:
"The decision in Kornjaca on the present point has never been disapproved and this Court has since applied similar reasoning in a number of cases".
15 Although s 151Z does not apply to cases such as the present, this Court, in a series of decisions starting with Hood Constructions Pty Limited v Nicholas (1987) 9 NSWLR 60, has held that a worker's damages must be reduced to give effect to the overriding intention of the Parliament, manifest in the section, that a worker should not be entitled to both compensation and damages. See Kempsey District Hospital v Thackham (1995) 36 NSWLR 492; Transfield Pty Limited v Mastrioanni (1998) 20 NSW CCR 193 (CA); and Franklins Self Service Pty Limited v Wyber (1999) 48 NSWLR 249.
16 The trial Judge followed this line of cases when he deducted $37,094 from the plaintiff's damages for past workers' compensation benefits. Because s 151Z does not apply in terms, the worker was not required to repay this compensation out of his damages, and there was no statutory defence in respect of the payments. The Court could only prevent the worker retaining both compensation and damages by reducing his damages by the amount of the compensation.
17 The issues as to damages arising on the appeal concerned the plaintiff's entitlements to further payments of compensation which had not been crystallised. The Judge made no deduction for such entitlements and gave no reasons for refusing to do so, although it is not disputed that the question had been raised in argument. The decisions of this Court in Kempsey District Hospital v Thackham (above at 508), the authorities there cited, and Transfield Pty Limited v Mastrioanni (above), establish that in circumstances such as the present the plaintiff's damages must be reduced to allow for payments of compensation he is entitled to receive in the future.
18 Section 66(1), as in force at the relevant time, provided that a worker who has suffered the loss of a thing mentioned in the Table as the result of an injury is entitled to receive lump sum compensation. Section 65(1) defines "loss" as including a loss of use, or of the efficient use, of the thing. Section 68(1) provided for the worker to receive an appropriate percentage of the relevant lump sum for a partial loss. The assessment of proportionate entitlements under s 66 may involve questions of degree, but cases such as the present do not involve the exercise of a judicial discretion.
19 Dr Edwards, who qualified for the defendants, assessed the plaintiff's loss of use of his right hand at 3% (123). Dr Thomson, who qualified for the plaintiff, assessed his permanent loss of efficient use of his hand at 15% (95), and Dr Tan, who was also qualified for the plaintiff, assessed this loss at 35% (100). If the question was before the Compensation Court one would expect the defendants to be contending for an award based on Dr Harvey's evidence, while the plaintiff would be contending for an award based on the evidence of Dr Tan. In this Court their submissions were inverted, with counsel for the appellants contending for an assessment based on 35%, and counsel for the respondent contending for one based on 3%.
20 Because of the discrepancies between the assessments, averaging is not appropriate, and the figures at both extremes appear excessive in the light of the other evidence. The lump sum compensation for a 15% loss is $10,500, and I would reduce the plaintiff's damages by this amount. The appellant did not seek a further reduction for any interest that might be awarded in the Compensation Court on this figure.
21 Such an award under s 66 would entitle the plaintiff to receive additional compensation for pain and suffering under s 67 because the threshold in sub s (2) is met. Sub section (7) defines pain and suffering as meaning:
"(a) actual pain, or
(b) distress or anxiety
suffered or likely to be suffered by the injured worker, whether resulting from the loss concerned or from any necessary treatment".
22 The loss of enjoyment of life, for which general damages are awarded, at common law, includes losses which fall outside this definition. Section 67(1), as in force at the date of the injury, provided that the compensation for pain and suffering resulting from a loss should not exceed $50,000 and sub s (3) provided that this amount should only be payable "in a most extreme case". In other cases the amount payable should be reasonably proportionate to that maximum. The assessment of that amount calls for the exercise of a judicial discretion which s 67(4) commits to the Compensation Court.
23 Section 67(1A) refers to the distinction between injury and loss resulting from an injury and provides that "the pain and suffering for which compensation is payable under this section does not include pain and suffering that results from the injury but not from the loss". This is an entirely different test for pain and suffering from that sanctioned by the general law. It is not at all clear that the plaintiff has suffered, or will suffer, any appreciable pain and suffering as defined from the loss itself apart from the injury which caused that loss.
24 For these reasons the Judge's award of $50,000 for general damages is no guide to the award that may be made by the Compensation Court under s 67. It seems likely that s 67(1A) will exclude any, or any significant, award under s 67 in the present case.
25 This Court has held that allowances in awards of damages for lump sum compensation payable under s 67, and under s 66 where the Compensation Court would be called upon to make value judgments or exercise a judicial discretion, must be based on an assessment of the amounts the Compensation Court would be likely to award. As I said in Transfield Pty Limited v Mastrioanni (above at 201):
"The question is not what this Court thinks was a proper amount to award in such a case but the amount which the respondent would more probably than not recover if he took proceedings in the Compensation Court".
26 In that case this Court followed its earlier decision in Kempsey District Hospital v Thackham (above) where Meagher JA, whose judgment on this point was endorsed by the other judges, said at 505:
"If over-compensation is to be avoided, both amounts paid and amounts payable ought, so it seems to me, to be deducted … that does mean that within a common law case there must be a trial-within-a-trial so that the Common Law judge must decide what a Workers' Compensation judge would probably determine. However this is hardly a unique feature of the law".
27 A trial-within-a-trial on this issue took place at first instance in Franklins Self Service Pty Limited v Wyber (1999) 48 NSWLR 249. See at 267, 269, 270. There was no trial-within-a-trial in this case because the defendants called no evidence on this issue.
28 For these reasons, I reject the appellants' claim that a further amount should be deducted from the verdict to reflect the respondent's right to lump sum compensation for pain and suffering under s 67.
29 The appellants' final submission was that allowance should have been made for the respondent's rights to future compensation under s 40. The plaintiff returned to full time employment in November 1998, and received his last payment of compensation on 25 February 1999 for the week ending 3 March. The Judge awarded $50,600 as a cushion for future economic loss. The plaintiff was nearly 28 at the date of trial, with a future working life of some 37 years. The Judge found that he had suffered a 5 - 6% interference with his working capacity, although after re-training he had secured employment as a computer draftsman and "his overall economic well being in the future may well have been enhanced by reason of this injury".
30 Section 40 provides that the weekly payment of compensation for partial incapacity shall not exceed the reduction in the worker's weekly earnings, "but is to bear such relation to the amount of that reduction as may appear proper in the circumstances of the case". Sub s (2) provides in a case such as the present that the reduction in the worker's weekly earnings is the difference between "(a) the weekly amount which the worker would probably have been earning … but for the injury and had the worker continued to be employed in the same or some comparable employment", and (b) the average weekly amount that the worker is earning after the injury. Sub s (5) provides that the weekly payment of compensation for partial incapacity is not to exceed that which would be payable for total incapacity. This was relevantly capped by s 37(1)(a)(i) at $235.20 per week.
31 There was no evidence of the amount that the respondent would probably have been earning at the date of the trial but for the injury (s 40(2)(a)), and hence no evidence of the figure referred to in s 40(1), on which an award of weekly compensation would have to be based. The finding that the interference with the respondent's incapacity was only about 5 or 6%, and the evidence that at the date of trial he was in full time employment and had received no payment of weekly compensation for 20 months, make quite problematical the prospects of any award under s 40 in his favour.
32 The section confers a judicial discretion on the Compensation Court ("to bear such relation to the amount of that reduction as may appear proper in the circumstances of the case"), and there was no evidence of the way it would probably be exercised. For all these reasons I reject the appellants' claim for any deduction to reflect the respondent's rights to weekly compensation.
33 This Court has referred on several occasions to the practical difficulties that arise for the parties and the court in the assessment of damages because of the requirement for future compensation payments to be brought to account. It is possible, I say no more, that a defendant who is outside s 151Z could obtain a stay of proceedings until the plaintiff crystallised his compensation rights by award or settlement. No such application was made in this case and the question was not raised during argument.
34 The appellants have succeeded on only one of the issues that were argued but Miss Norton SC, who appeared for the respondent, did not oppose the making of an order that the respondent pay the appellants' costs of the appeal subject to the grant of a certificate under the Suitors Fund Act in favour of the respondent.
35 The following orders should be made: