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[1975] HCA 32
High Court of Australia
1975-08-21
Original judgment source is linked above.
RUBY v. MARSH [1975] HCA 32; (1975) 132 CLR 642
Barwick C.J.(1), McTiernan(2), Gibbs(3), Stephen(4) and Jacobs(5) JJ.
Practice (Vict.) - Supreme Court - Interest on judgments for debt or damages from commencement of action until entry of judgment - Interest not allowed on amount representing compensation for loss or damage to be incurred or suffered after the date of the award - Lord Campbell's Act - Quality of damages - Whether award of damages under Pt III of Wrongs Act 1958 (Vict.) includes any amount in respect of compensation for loss or damage to be incurred or suffered after date of award - Supreme Court Act 1958 (Vict.), s. 79A.*
* Section 79A of the Supreme Court Act 1958 (Vict.) provides, so far as material, as follows:
"(1) The Judge upon application shall in all actions for the recovery of debt or damages give damages in the nature of interest at such rate not exceeding eight per centum as he thinks fit from the commencement of the action until the entry of the judgment unless good cause is shown to the contrary over and above the debt or damages awarded by the court or jury. . . .
(3) Where the damages awarded by the court or jury include or where the Judge in his absolute discretion determines that the damages as awarded include any amount for -
. . . (b) compensation for loss or damage to be incurred or suffered after the date of the award . . . the Judge shall not allow interest in respect of any amount so awarded or in respect of so much of the award as in his opinion represents any such damages . . . "
BARWICK C.J. Section 79A of the Supreme Court Act 1958 (Vict.) (as amended)
"(1) The Judge upon application shall in all actions for the
recovery of debt or damages give damages in the nature of
interest at such rate not exceeding eight per centum as he thinks
fit from the commencement of the action until the entry of the
judgment unless good cause is shown to the contrary over and
above the debt or damages awarded by the court or jury.
(2) Nothing in this section shall -
(a) authorize the granting of interest upon interest;
(b) apply in relation to any sum upon which interest is
recoverable as of right by virtue of any agreement or
otherwise;
(c) affect the damages recoverable for the dishonour of a
negotiable instrument;
(d) authorize the allowance of any interest otherwise than by
consent upon any sum for which judgment is pronounced
or entered by consent;
(e) apply in relation to any sum on which interest might be
awarded by virtue of section seventy-eight or section
seventy-nine of this Act; or
(f) limit the operation of any enactment or rule of law which
apart from this section provides for the award of interest.
(3) Where the damages awarded by the court or jury include
or where the Judge in his absolute discretion determines that the
damages so awarded include any amount for -
(a) compensation in respect of liabilities incurred which do not
carry interest as against the person claiming interest;
(b) compensation for loss or damage to be incurred or suffered
after the date of the award; or
(c) exemplary or punitive damages -
the Judge shall not allow interest in respect of any amount so
awarded or in respect of so much of the award as in his opinion
represents any such damages.
(4) The Judge may if he thinks fit request a jury to specify in
its verdict any amount included in the verdict in respect of the
matters referred to in sub-section (3) of this section." (at p644)
2. Features of this legislative provision which should be observed for the purposes of resolving this appeal and of considering the proper basis upon which it should be decided are as follows: (1) the section applies to a verdict in an action for damages, irrespective of the cause of action upon which the verdict is founded; (2) the trial judge, if asked, is bound to award interest unless good cause is shown to the contrary: the section does not in terms provide that the interest is to be upon the whole of the verdict but, in my opinion, upon the proper construction of the section as a whole, it makes it mandatory to grant interest upon the full amount of the verdict, subject to the limitations of sub-ss. (2) and (3) and of course to good cause being shown. The assessment of the interest is to be "over and above the
. . . damages awarded by the court or jury": also the presence of the limitations in sub-ss. (2) and (3) strongly suggests that the interest prima facie is to be upon the whole verdict; (3) the rate of interest is within the judge's discretion up to eight per cent; (4) the period for which the interest is to be calculated is fixed, i.e. from the commencement of the action until the entry of judgment, again subject to good cause being shown to the contrary; (5) interest shall not be allowed upon any amount included, or which the judge deems to be included, in the damages awarded by the court or jury as compensation for loss or damage to be incurred or suffered after the date of the award, which I take to mean after the date of the verdict; that is to say, interest is not to be given upon an amount of compensation for a loss or damage which has not already been incurred or suffered at the date of the verdict, but which will or may be incurred or suffered thereafter in the future. (at p644)
3. The respondent, Florence Ivy Marsh, sued the appellant in the Supreme Court of Victoria under s. 16 of the Wrongs Act 1958 (Vict.) for damages by way of compensation for the loss sustained by herself and her infant daughter, Susan Marsh, by reason of the death of the husband and father, Reginald Thomas Marsh, and under s. 29 of the Administration and Probate Act 1958 (Vict.) for the damage suffered by his estate by reason of his death. The action was tried with a jury which returned a verdict against the appellant for the total sum of $29,000 for the benefit of the widow and daughter, and for the sum of $266 for the benefit of the estate of the deceased. The learned trial judge, pursuant to s. 79A and relying on the decision of the Full Court of the Supreme Court of Victoria in East v. Breen [1975] VicRp 2; (1975) VR 19 , included in the amount for which judgment was entered upon such verdicts, sums by way of interest calculated at six per cent upon the whole amount of the verdicts. These sums were $10,418 and $1,667 in respect of the verdict for $29,000 and $111 in respect of the verdict for $266. Judgment was therefore entered for $41,085 for the benefit of the widow and daughter and for $377 for the deceased estate. (at p645)
4. The appellant, before the trial judge had directed the entry of judgment, objected to the inclusion of interest upon the whole of the sum awarded as damages in the action brought for the benefit of the dependants, and submitted, in substance, that interest should be allowed only upon so much of the verdict for them as represented the financial support which the deceased, had he lived, would have provided for the widow and daughter between the date of his death and the date of the verdict. (at p645)
5. In his appeal to this Court from the judgment of the Supreme Court (Gowans J.) [1975] VicRp 20; (1975) VR 191 , the appellant has repeated the submissions which are reported to have been made on behalf of the respondent in the case of East v. Breen [1975] VicRp 2; (1975) VR 19 . It is said that, at the date of the verdict, the widow and daughter had not suffered, but would in the future suffer, the loss of that support by the deceased which he would have provided after the date of the verdict had he lived. It was said that in estimating the financial loss suffered by the respondents by the death of the husband and father, the jury must have included in their total award a sum or sums as compensation for the support of the family which the deceased might reasonably have been expected to have given after the date of the verdict; that support was a loss which the respondents should be regarded as suffering after that date. Thus it was said that the amount of the verdict ($29,000) included an amount of compensation for loss or damage to be incurred or suffered after the date of the award within the meaning of s. 79A (3) (b). (at p645)
6. The principles upon which damages should be assessed in actions under s. 16 of the Wrongs Act, a derivative of Lord Campbell's Act, are well established and call for no citation of authority. They are properly expressed by Pape J. in East v. Breen (1975) VR, at p 33 where he said: " . . . damages under Lord Campbell's Act are for the loss of a reasonable expectation of pecuniary benefits consequent upon death". That expectation of pecuniary benefit, in this case the financial support of the deceased, was destroyed by death and at the moment of death. In my opinion, nothing further of financial benefit than this expectation was lost in this case by the widow and daughter by the passage of time or at any point of time subsequent to the moment of death. This must generally be the case in claims under s. 16 of the Wrongs Act. (at p646)
7. But, of course, in attempting to fix a sum to compensate for the loss of that expectation, there will be included, amongst the facts and circumstances to be weighed, an estimation of what the deceased might have contributed for that future during which it is decided he would have continued to contribute financially to or for the dependants. That estimation, however, is no more than a factor in evaluating in financial terms the loss which has been suffered: it is not in any sense a present determination of damages for a loss yet to be suffered. Consequently, in my opinion, it cannot properly be said that because regard is thus had to the possibilities of the future, particularly as to the sums of money which the deceased might reasonably be expected to have contributed had he lived, there is any amount included in the relevant award of damages as compensation for loss or damage to be incurred or suffered after the date of the award. For that reason, I agree with the conclusion at which the Full Court of the Supreme Court of Victoria arrived in East v. Breen [1975] VicRp 2; (1975) VR 19 . (at p646)
8. Pape J. rightly said (1975) VR, at p 22 that "in a claim under Pt III of the Wrongs Act 1958 the whole of the loss suffered by the claimant dependants of the deceased must be treated as having occurred at the moment of death": and "the damages are restricted to compensation for loss of material benefits or of the reasonable prospect of material benefits which depended upon the continuance of the" deceased's "life. . . . Since the benefits, or the reasonable prospect thereof, were dependant upon the 'deceased's life, they were destroyed by 'his' death, and the loss must be treated as having been incurred at that time". (at p646)
9. However, as, with due respect, I am not able to agree with all that was said in the Full Court's reasons for judgment in East v. Breen [1975] VicRp 2; (1975) VR 19 , and as there is legislation in other States, though not in each case in the same terms, providing courts with an authority to add interest to a verdict or some part of it before entering judgment, it will be proper and convenient to review those reasons and briefly to discuss some of the decisions touching the award of interest on verdicts as distinct from interest on judgments. (at p647)
10. Emphasis is placed in the reasons for judgment in East v. Breen [1975] VicRp 2; (1975) VR 19 upon the circumstance that damages under Lord Campbell's Act and its derivatives are to be determined as at the date of death, whereas it is said that damages in the case of personal injuries are to be assessed at the date of the assessment, i.e. as at the date of the verdict. This circumstance is said to warrant a different practice when awarding interest on damages in a claim under Lord Campbell's Act, to that which is appropriate when awarding interest on a verdict for personal injuries which have caused a loss of earning capacity. With every respect to those who have relied upon it, I find this apparent distinction irrelevant to the problem which the Court faced: but, further, in my opinion, the suggested distinction does not exist. (at p647)
11. It has been said that in the case of a claim under Lord Campbell's Act, death is the cause of action. This, in my opinion, is but a partial statement of the elements of the cause of action: death is an indispensable element: but the presence of circumstances which, had the deceased lived, would have provided him with a cause of action, is also an indispensable part of the cause of action of the representatives or of the dependants of the deceased. But, quite clearly, the damages, the right to which the statute gives, are to compensate for the loss by death of the financial support reasonably expected to have been given by the deceased, had he continued to live. Thus the situation in relation to that financial support, or to its expectation as at the date of death, will be definitive of the loss which has been suffered. It is the financial potential of the continued life and support of the deceased which must be assessed. In this assessment facts actually known at the time when the assessment is made which bear on that potential will be used in the assessment rather than the speculations which might have been made had the assessment taken place on the date of death. Thus, whilst the assessment of damages must be referable to the date of death, the court is bound to use such facts as have come to light since the date of death which are relevant to the assessment, rather than speculations to which recourse would have had to be made had the court been confined to such facts as were known at the date of death. Further, the court will award damages in money of the day of the award, not being deterred therefrom by the fact that in the interval since the date of death the value of money may have changed. See O'Brien v. McKean [1968] HCA 58; (1968) 118 CLR 540, at pp 544-545 . (at p647)
12. I have expressed what I consider to be the reason why it cannot properly be said that a sum awarded to dependants as compensation for the death of the person on whose continuing life they depended for material support includes an amount for compensation for a loss yet to be suffered. It is, of course, inevitable that that sum must be assessed as at the date of death: but that is because the loss was then suffered. But the legal requirement that the assessment should be made as of that date does not itself, in my opinion, afford a reason for the conclusion I have expressed nor, in my opinion, does it afford any relevant discrimen in relation to the award of interest between an award of damages under provisions derived from Lord Campbell's Act and an award of damages for personal injuries which have resulted in "economic loss". (at p648)
13. Having regard to what is said in East v. Breen [1975] VicRp 2; (1975) VR 19 it is necessary that I should say something about the assessment of damages in a personal injury claim where "economic loss" has been caused by the injuries received. (at p648)
14. In my opinion, it would be incorrect to say that damages for personal injuries are to be awarded as at a date other than the date of the receipt of the injury. But the assessment will be made at the time the verdict is returned. In O'Brien v. McKean, in considering whether the verdict should be expressed in the money of the day of its pronouncement, or in the money of some other day, I said (1968) 118 CLR, at p 545 that "the date of the verdict is, in my opinion, the proper date as at which to make the assessment". I concluded that "the assessment will therefore in general be made in relation to the purchasing power of the currency at the date of the assessment of the damages". (at p648)
15. The question, however, with which I am presently concerned is of a different kind. What the plaintiff in an action for personal injuries physically suffers, he suffers at the date of the receipt of the injury, although the full extent and consequence of that injury may not be manifest at that time. In so far as the plaintiff then lost his capacity to earn the money he formerly earned or was capable of yet earning, the loss was complete at the time the injuries were received. The extinction or diminution of his capacity to earn, commonly embraced in the description "economic loss" occurs at the time he is injured. Perhaps, along with other consequences of the injury received, the full extent of the impact of the injury on his earning capacity may not be apparent at the date of the receipt of the injury. But its full manifestation in due course when known is wholly attributable to the time the injury was received and the loss of capacity suffered: that is the time when the cause of action of which damage is the gist arose. The valuation of that lost capacity is quite a separate matter from its loss: the one should not be confused with the other. The money in which that estimation should be expressed is as I have indicated a different question again. (at p648)
16. It may be possible, though I should think unusual and in general unlikely, that where the injured person loses his then earning capacity at the time of the injury, he may at some later time, but by reason of the injuries received, lose some different earning capacity. However, I would point out immediately a distinction relevant to the present discussion. It seems to me that there is a difference between the present loss of earning capacity which, due to the injury, will become increasingly greater with the passage of time and the possibility, or for that matter the probability, that at some time in the future the recipient of the injury will suffer some supervening loss of capacity to earn, a loss which though due to the injury is unrelated to and not a mere further manifestation of a loss of earning capacity which occurred at the time of the receipt of the injury. The former is not, in my opinion, a loss suffered after verdict, whereas the latter might possibly be. I am not presently concerned with a loss of the latter kind. In this connexion I could agree with the remarks of Bray C.J. in Sager v. Morten (1973) 5 SASR 143, at p 156 , if he is referring to the latter kind of situation: otherwise, with due respect I could not. (at p649)
17. I have expressed myself elsewhere as to what I regard to be the proper principle to be followed in the assessment of "economic loss" consequent upon personal injury. I have no need to repeat it. See Arthur Robinson (Grafton) Pty. Ltd. v. Carter [1968] HCA 9; (1968) 122 CLR 649, at p 658 . I may say here that I have reconsidered what I then wrote in the light of what subsequently has been decided in England and said in Australia. I would confirm the view which formerly I have expressed. (at p649)
18. It seems that it has been and still is the practice in claims for damages for personal injury to treat the amount of salary or wages which, but for the receipt of the injury, would have been earned between the date of that receipt and the date of the verdict, as special damages recoverable as such. Indeed, rules of court in some jurisdictions require particulars of such emoluments to be furnished by a plaintiff. The "economic loss" by reason of the loss or diminished capacity to earn salary or wages referable to the injuries received, is thus treated as subdivided; part treated as an accrued loss, and part as a loss yet to be suffered. It is a circumstance favouring an injured plaintiff that the total amount of the wages which he has been unable to earn because of the injury between its receipt and the date of the verdict is awarded him as a separate sum. But this practice, convenient and beneficial to a plaintiff as it might seem to be, is not in accord, in my opinion, with principle. In my opinion, it is incorrect to treat the salary or wages which might otherwise have been earned between injury and verdict as a separate item of loss. The loss of earning capacity suffered at the date of the receipt of the injury resulted in an inability wholly or partially to earn from that time on what had been earned in the past and what might yet have been earned in the future. Neither the practice of requiring particulars nor the fact that they are given and specific amounts awarded for wages or salary, lost between receipt of injury and verdict, should be allowed to obscure what it is that the court is asked to assess when it is to award an amount which will cover the economic loss resulting from the loss of earning capacity and the loss of earning capacity is immediate upon the receipt of the injury: that is the loss. Damages to compensate for it are not what is lost but simply a financial evaluation of the worth of what is then lost. I have already expressed myself as to the propriety of taking a weekly sum and using some multiplier in order to get a total, which will be discounted to cover contingencies, and be reduced to represent the present value of the discounted total sum which the calculation provides: Arthur Robinson (Grafton) Pty. Ltd. v. Carter [1968] HCA 9; (1968) 122 CLR 649 . Of course it cannot be gainsaid that anyone attempting to estimate what total sum should be awarded by way of damages when loss of earning capacity is one of the elements of the loss, will make some conspectus of what the future might reasonably have brought to the injured person by way of financial gain by the exercise of the lost earning capacity. But I am unable to agree that in any sense at all the award is to include a calculation of the wages as such which might in fact have been earned by the injured plaintiff during the remainder of his working life, or that the court by its award is replacing, as such, the wages which might have been earned but for the receipt of injury. (at p650)
19. It seems to me therefore that no relevant distinction can be drawn between the case of an assessment of damages under Pt III of the Wrongs Act and that of the assessment of damages for personal injury where economic loss by reason of the destruction by the injury wholly or partially of the capacity to earn is an element. In each case the loss is wholly suffered at the one time; in the first case at the date of the death, and in the second at the date of the receipt of the injury. Gillard J. would have been right, in my opinion, to have said in Murphy v. Murphy [1963] VicRp 83; (1963) VR 610 , that "the relevant loss or damage", not "might well be" but, was "incurred or suffered once and for all when the plaintiff was injured": see East v. Breen (1975) VR, at p 38 . In each case the possibilities of the future are to be considered. In each case relevant facts known at the date of the assessment, which may be regarded as inherent in the situation created by the death or the receipt of the injury, are to be regarded. In each case the possibilities of the future are examined as part of the process of estimating what sum should be paid now for the loss which has already been sustained. Of course, in the case of a personal injuries claim, there is the possibility to which I have referred of a new loss of earning capacity in the future, whereas in the case of a claim under the Wrongs Act there can be no further loss beyond that suffered by death. (at p651)
20. Pape J. refers (1975) VR, at p 26 to my judgment in Philpott v. Glen (1973) 47 ALJR 555, at p 557 . He quite rightly points out the damages to be awarded under the Wrongs Act are not given for the loss of earning capacity which has been destroyed by death, but for the loss of the expectation of financial support by the deceased. That case had been largely concerned with the earning capacity of the deceased as an element in determining the extent of the likely support of the dependants by him. His Honour's remarks, however, in reference to the expression of my reasons are correct. (at p651)
21. With due deference to the distinguished members of the English judiciary, the course of decision and of practice in Great Britain in the assessment of damages for personal injuries does not accord with what I conceive to be correct principle. The amounts of salary or wages not earned between the date of the receipt of the injury and the date of verdict are as a rule regarded in Great Britain as special damages, and the general damages include a sum to represent the salary or wages which but for that injury would have been earned in the working life-time of the injured plaintiff. (at p651)
22. In Jefford v. Gee (1970) 2 QB 130 the Court of Appeal offered directions to the English courts to the application of a statutory discretion to award interest upon a verdict for damages for personal injuries. The relevant statutory provisions were the Law Reform (Miscellaneous Provisions) Act 1934 s. 3 (U.K.), and s. 22 of the Administration of Justice Act 1969 (U.K.). Recognition of the English course of decision and practice led the Master of the Rolls to treat the amount included in the general damages to represent the present value of the salary or wages which might have been earned in the future less a discount for the hazards of life, as an amount of compensation for loss to be suffered in the future (1970) 2 QB, at pp 146-147 . Consequently, though the statute did not in terms require that course, his Lordship regarded that part of the general damages as compensation for a loss yet to be suffered. (at p651)
23. The statutory provisions there in discussion differed radically from those of s. 79A. As I have indicated, the latter is mandatory as to the whole of the amount of the verdict, subject to the specific limitation and exceptions contained in sub-ss. (2) and (3) . Further, the exception in sub-s. (3) is express. But I would respectfully differ from the relevant directions contained in the Court of Appeal's decision, not because of the statutory differences, important as they are, but because I am unable to accept the view that the economic loss represented by the loss of earning capacity is suffered at any time other than the time of the receipt of the disabling injuries. There is, in my respectful opinion, no basis for dividing that loss so that part of it is suffered between the receipt of those injuries and the date of the assessment of damages, and the other part at some time or times thereafter. (at p652)
24. It is said in Jefford v. Gee (1970) 2 QB, at p 147 , "where the loss or damage to the plaintiff is future pecuniary loss, e.g. loss of future earnings, there should in principle be no interest . . . because the plaintiff will not have been kept out of any money. On the contrary, he will have received it in advance." In my respectful opinion, this statement is unacceptable. Though perhaps not technically accurate, it is just to say that the verdict has established that at the date of the writ the plaintiff ought to have been paid its amount. Where it is shown that part of that amount is in the nature of a provision for future loss or expense, which if it occurs or is made will have been occasioned by the injuries received, it may be necessary where there is a provision in the terms of s. 79A (3) to exclude the amount of that provision from the sum on which interest is awarded, although logically the plaintiff has been kept out of the whole amount of the verdict since the date of the writ. But I am unable to agree that any part of the sum awarded for loss at the time of receipt of the injury of earning capacity can be regarded as a prepayment for a loss yet to be incurred. The damages for the loss of that capacity are not, in my opinion, damages for future pecuniary loss. (at p652)
25. This Court has long since ceased to regard itself as bound by the decisions of the Court of Appeal. In this instance, however, I do not merely feel that we are not bound by the directions in Jefford v. Gee but I am not convinced by the reasoning which led to the conclusion that interest ought not to be allowed upon so much of the award as was attributable to wages which might have been earned in the future but for the injury sustained. (at p652)
26. The purpose of giving courts the power to award interest on damages is to my mind twofold, and neither aspect of the purpose should be lost sight of. In the first place, the successful plaintiff, who by the verdict has been turned into an investor by the award of a capital sum, and whose claim in the writ has been justified to the extent of the verdict returned, ought in justice to be placed in the position in which he would have been had the amount of the verdict been paid to him at the date of the commencement of the action. In the second place, the power to award interest on the verdict from the date of the writ is to provide a discouragement to defendants, who in the greater number of actions for damages for personal injuries are insured, from delaying settlement of the claim or an early conclusion of proceedings so as to have over a longer period of time the profitable use of the money which ultimately the defendant agrees or is called upon by judgment to pay. Each of these reasons, incidentally, in my opinion, calls for the judge to award a rate of interest related to the market place subject to the limit allowed by the legislature. There can be no basis for the award of some nominal rate of interest, unless of course there is good cause for so doing in the special circumstances of the particular case. (at p653)
27. Each of these reasons for the presence of s. 79A and its various counterparts in the relevant legislation will require an award of interest upon the whole of the amount which represented the loss sustained by the receipt of injuries, again subject to good cause being shown warranting a departure in the particular circumstances from the norm. To take the course suggested in Jefford v. Gee (1970) 2 QB 130 or in the group of cases in the Supreme Court of Victoria, namely, De Nitis v. Seekts [1962] VicRp 60; (1962) VR 417 , Vrybergen v. Sides and Son Pty. Ltd. [1963] VicRp 58; (1963) VR 415 and Murphy v. Murphy [1963] VicRp 83; (1963) VR 610 , is, in my opinion, to fail to implement the evident policy of the legislation. To deny the successful plaintiff interest on the whole of the damages to which he is found to have been entitled as at the date of the writ is, in my opinion, and subject of course to the showing of cause, to do an injustice to him: but also it diminishes the effect of the section in its endeavour to make it unprofitable for defendants to delay settlement of or adjudication upon the claim made upon them. (at p653)
28. I should observe at this point that each State of Australia does not have statutory provisions in the terms of s. 79A. (at p653)
29. Section 94 of the Supreme Court Act 1970 (N.S.W.) gives the Court a discretion to order interest on the whole or any part of a verdict, including a verdict for damages, for the whole or any part of the period between the date when the cause of action arose and the date when the judgment in the action takes effect. The exceptions in s. 94 (2) do not include any provision comparable to s. 79A (3) of the Victorian statute. (at p653)
30. Sub-sections (1) and (2) of s. 30C of the Supreme Court Act, 1935-1972 (S.A.), as amended by the Supreme Court Act Amendment Act, 1972, provide that, unless good cause is shown to the contrary, the court shall, if asked, award interest at seven per cent, or such lower rate as the court may fix, upon the whole or part of the verdict in the case of an unliquidated claim from the date of commencement of proceedings until judgment, or for such other period as the court may fix. But s. 30C (3), somewhat akin to s. 79A (3) , provides that there shall be no award of interest in respect of "damages or compensation in respect of loss or injury to be incurred or suffered after the date of the judgment". (at p654)
31. Section 72 of the Common Law Practice Act 1867 to 1972 (Q.) gives the Court a discretion to award interest on the whole or part of a verdict for damages at such rate as the court may fix for the whole or any part of the period between the date when the cause of action arose and the date of judgment. There is no provision comparable to s. 79A (3). Neither the State of Tasmania nor the State of Western Australia authorizes the award of interest upon a verdict for damages. (at p654)
32. There are sums which, where a provision such as s. 79A (3) is present in the relevant legislation, are to be treated as compensation for loss or damage to be incurred or suffered in the future. An amount included in the verdict to cover the cost of an operation which may have to be undergone in the future due to the injuries received can be regarded as compensation for damage yet to be suffered. Likewise, medical and pharmacological expenses to be incurred in the future. These and comparable expenditures yet to be made by reason of the injuries received can be held to fall within the terms of s. 79A (3). It is to such expenditures that provisions such as s. 79A (3) are directed and not, in my opinion, to some part of the compensation for loss of earning capacity. Particularly, the section is not, in my opinion, founded upon or referable to the practice to which I have referred of treating part of the damages for loss of earning capacity as special damages and part as general damages. (at p654)
33. I do not see a logical basis for the exclusion of the items which, in my opinion, fall within s. 79A or its counterparts from the amount to bear interest in the exercise of a discretionary power to grant interest on a verdict. The verdict decides what the plaintiff is presently entitled to be paid and, in substance, what he ought to have been paid at the date of the writ. He has been kept out of the whole of this sum since the commencement of the proceedings. It is interest on that sum which prima facie he should have. This is true whatever the nature of the items of compensation which go to make up the total sum of the verdict. The reason for the inclusion of those items of compensation has no relevance or relation to the purposes of the enactment of the provision to award interest on the verdict from the date of the writ. (at p654)
34. Thus, I should like to add that I agree with the remarks of Bray C.J. in Sager v. Morten (1973) 5 SASR, at p 158 that there is really no logical justification for the exception made by such a provision as s. 79A (3) from the amount on which interest should be granted. They really do not conform to the purposes which I conceive the legislation intends to achieve. As well, they do introduce complications much better avoided in the administration of the law. As a minor matter, it would seem both wrong and impractical to ask a jury to indicate what part of a global award of damages they include to represent future economic loss in respect of the loss of earning capacity: see s. 79A (4); and a judge really in general has no firm basis on which to treat and place a money value upon a part of a total undifferentiated verdict as having been given for "future loss". (at p655)
35. For these reasons, I would dismiss this appeal. (at p655)
McTIERNAN J. In this matter I agree with the Chief Justice and, in the main, in the reasons which he has prepared. I would therefore agree that the appeal should be dismissed. (at p655)
GIBBS J. The question for decision in this appeal is whether interest may be awarded under s. 79A of the Supreme Court Act 1958 (Vict.), as amended, on the whole amount of the damages awarded by a jury in an action brought under Pt III of the Wrongs Act 1958 (Vict.) which re-enacts in Victoria, with some alterations, the provisions of Lord Campbell's Act. (at p655)
2. The material provisions of s. 79A are as follows:
"(1) The Judge upon application shall in all actions for the
recovery of debt or damages give damages in the nature of
interest at such rate not exceeding eight per centum as he thinks
fit from the commencement of the action until the entry of the
judgment unless good cause is shown to the contrary over and
above the debt or damages awarded by the court or jury.
. . .
(3) Where the damages awarded by the court or jury include
or where the Judge in his absolute discretion determines that the
damages so awarded include any amount for -
(a) compensation in respect of liabilities incurred which do not
carry interest as against the person claiming interest;
(b) compensation for loss or damage to be incurred or suffered
after the date of the award; or
(c) exemplary or punitive damages -
the Judge shall not allow interest in respect of any amount so
awarded or in respect of so much of the award as in his opinion
represents any such damages.
(4) The Judge may if he thinks fit request a jury to specify in
its verdict any amount included in the verdict in respect of the
matters referred to in sub-s. (3) of this section." (at p655)
3. Sub-section (1) makes it mandatory for a trial judge to award interest when a judgment is given for debt or damages "unless good cause is shown to the contrary". No question arises on this appeal as to the nature of the discretion given by the words last quoted. However, sub-s. (3) creates an exception to the general rule and forbids the judge to allow interest on amounts within the purview of that subsection. (at p656)
4. Sub-section (3) draws an important distinction between damages which include any amount in respect of the matters mentioned in pars (a), (b) and (c) and damages which the judge in his absolute discretion determines include any such amount. If the damages fall within either of these two descriptions the prohibition against an award of interest applies. However, upon the proper construction of the subsection, the damages awarded will "include . . . any amount" in respect of the matters specified in pars (a), (b) and (c) only if the findings, judgment or verdict of the judge or jury expressly fix a particular amount to be awarded as compensation in respect of one or other of those specified matters. To take an example, if in an action for damages for personal injury the judge or jury awards a specified sum as damages in respect of medical expenses to be incurred in the future, interest cannot be allowed in respect of such sum. However, where the verdict or judgment is for a global sum the case is not one in which "the damages awarded . . . include . . . any amount" of the kind mentioned, unless, perhaps, the award is made solely in respect of one of the matters specified in pars (a), (b) and (c). A global award in respect of loss incurred both before and after the date of the award must necessarily include something in respect of loss incurred after that date but it does not indicate that any particular sum is included in respect of the latter loss. In such a case the judge may proceed to determine whether the global sum includes any amount of the kind specified in pars (a), (b) and (c) or sub-s. (3); if he determines that it does include an amount of that kind, interest may not be allowed upon the amount which in the opinion of the judge represents any such damages, but if he does not make a determination the case is not within the subsection and the award of interest is not forbidden. Any other construction of the subsection would give no weight to the words "where the Judge in his absolute discretion determines that the damages so awarded include any amount". The words "Where the damages . . . include . . . any amount" cannot have the same meaning as "where the Judge . . . determines that the damages . . . include any amount", for that would make the latter words surplusage. (at p656)
5. Section 79A is purely adjectival - it neither creates a new cause of action nor requires a judge or jury to assess damages in any different manner from that which was previously adopted. Subsection (3) proceeds on the well-founded assumption that in some cases it would be appropriate to make a separate assessment in respect of some of the components of the total award of damages whereas in other cases only a global sum might be awarded; where an itemized assessment is made, and it is seen on the face of the award that the damages include a particular amount in respect of one of the specified matters, no interest may be awarded on that amount, but where a global sum is awarded interest will then be allowable in respect of the whole amount of the award unless the judge determines that the global sum includes an amount in respect of one of the specified matters. (at p657)
6. What I have said might be enough to determine this appeal. In the present case damages were awarded in two global sums (for the benefit of the widow and daughter of the deceased respectively) and the judge did not determine that the damages so awarded included any amount for compensation for loss or damage to be incurred or suffered after the date of the award. Subsection (3) did not apply and interest was properly awarded on the whole of the damages. However, having regard to the grounds upon which the learned judges of the Full Court of the Supreme Court rested their decision in East v. Breen [1975] VicRp 2; (1975) VR 19 , and to the arguments submitted to us on this appeal, it seems desirable that I should deal with some wider aspects of the matter. (at p657)
7. In my opinion an award of damages made under Lord Campbell's Act does not include any amount in respect of compensation for loss or damage to be incurred or suffered after the date of the award within s. 79A (3) (b) and a judge who purported to determine that such an award did include any such amount would be in error. It is unnecessary for me to repeat the citation of authority as to the measure of damages in actions under Lord Campbell's Act which was made in the judgments in East v. Breen. The basic rule, which has been reaffirmed in many authoritative pronouncements, is that the damages are to be "calculated in reference to a reasonable expectation of pecuniary benefit, as of right or otherwise, from the continuance of the life" Franklin v. South Eastern Railway Co. (1858) 3 H & N 211, at p 214 [1858] EngR 669; (157 ER 448, at p 449) . To assess the damages, it is necessary to value the expectation, prospect or chance of pecuniary benefit of which the dependant has been deprived: see Davies v. Taylor (1974) AC 207, at pp 212-213, 214, 223 . The manner in which the assessment is to be made is well settled; it is sufficient to refer to the following passage from the judgment of Fullagar and Kitto JJ. in Lincoln v. Gravil where it was said [1954] HCA 24; (1954) 94 CLR 430, at p 441 :
". . . the measure of the damages which the plaintiff is to recover
for her own benefit is the amount of her net pecuniary loss,
ascertained on a balance of the losses and gains accruing to her
by reason of the death. 'The damages are to be based on the
reasonable expectation of pecuniary benefit or benefit reducible
to money value. In assessing the damages all circumstances
which may be legitimately pleaded in diminution of the
damages must be considered: Grand Trunk Railway Co. of
Canada v. Jennings (1888) 13 App Cas 800, at p 804. The actual
loss of each individual entitled to sue can only be ascertained by
balancing, on the one hand, the loss to him of the future pecuniary
benefit, and, on the other, any pecuniary advantage which from
whatever source comes to him by reason of the death': Davies v.
Powell Duffryn Associated Collieries Ltd. (1942) AC 601,
at pp 611, 612." (at p658)
8. In my opinion it is involved in these statements of principle that the damages awarded under Lord Campbell's Act are awarded as compensation for a loss that occurred at the moment of death. What was then lost was a prospect of pecuniary benefit in the future. The expectation of future benefit was destroyed by the death and no subsequent event can increase or diminish the extent of the pecuniary loss then suffered, although it is true that subsequent events may be relevant to the assessment of damages in so far as they render it unnecessary for the court to speculate about possibilities that may have existed at the date of death when the facts themselves have become known. No doubt the effects of such a loss may continue to be felt over a very long period but the loss itself - the loss for which compensation is given - is incurred at the death. (at p658)
9. Viewed solely from the point of view of pecuniary loss, the position of a widow or child whose husband or father has been killed is analogous to that of the owner of a profitable business which has been forced to close; such an owner suffers a loss when the business ceases, and not at some later time when he might have received income from the business if it had continued to remain in existence. Similarly a person entitled to receive income during the life of another suffers a loss when that other dies, and not throughout the period during which he would have continued to receive the income if the other had lived. (at p658)
10. I have not overlooked that in many authorities there are to be found statements which may at first sight suggest that the dependants who succeed in an action under Lord Campbell's Act are entitled to receive damages that will compensate them for loss that they will incur in the future. It is natural to say, as Lord Reid said in Taylor v. O'Connor (1971) AC 115, at p 127 , that they "are entitled to such a sum as will make good to them the financial loss which they have suffered and will suffer as a result of the death". In cases dealing with the measure of damages in cases of fatal accident, there repeatedly appear such phrases as "pecuniary loss, actual or expected" (Franklin v. South Eastern Railway Co. (1858) 3 H & N, at p 214 (157 ER, at p 449) ), "prospective pecuniary loss" (Chief Commissioner for Railways and Tramways (N.S.W.) v. Boylson [1915] HCA 24; (1915) 19 CLR 505, at p 509 ), and "prospective injury" (Willis v. The Commonwealth [1946] HCA 22; (1946) 73 CLR 105, at p 109 ). Sometimes expressions of this kind were intended to convey no more than that in assessing the damages it is necessary to consider whether the dependant had a reasonable expectation of deriving a pecuniary benefit in the future if the deceased had lived; sometimes they were used to indicate that a dependant who had in fact received no benefits from the deceased during his lifetime is not for that reason disentitled to recover. However, in no case that I have seen did any judge use language of this kind in a context that would suggest that he intended to decide that the damages are awarded in part as compensation for a loss to be incurred in the future as a result of the death, rather than in respect of the loss of an expectation, prospect or chance destroyed by the death. (at p659)
11. The view that I have formed is, I think, supported by the circumstance, which I have already mentioned, that it is "the net loss on balance which constitutes the measure of damages" (Davies v. Powell Duffryn Associated Collieries Ltd. (1942) AC, at p 609 ). It seems to me difficult, if not impossible, to say that any particular part of an award represents a loss to be incurred in the future when the amount awarded represents a net loss ascertained by comparing the material benefits dependant upon the life of the deceased with any material gains accruing from his death (cf. Public Trustee v. Zoanetti [1945] HCA 26; (1945) 70 CLR 266, at p 279 ). At least it would require a fundamental departure from established practice to assess separately loss of dependency up to and after the date of judgment and s. 79A contains no warrant to alter the methods by which damages are assessed. (at p659)
12. On behalf of the appellant it was contended before us that if damages under Lord Campbell's Act do not include any amount for compensation for loss or damage to be incurred or suffered after the date of the award the same should be said of damages for personal injury, with the result that there would be no room in practice for the operation of s. 79A (3) (b). This submission cannot be accepted. The principle on which damages are awarded under Lord Campbell's Act is quite different from that governing the award of damages for personal injury. The nature of the distinction between damages of the two kinds was indicated by Windeyer J. in National Insurance Co. of New Zealand Ltd. v. Espagne [1961] HCA 15; (1961) 105 CLR 569, at p 588 . As I have already said, an award under Lord Campbell's Act represents the expectation of pecuniary benefit which depended upon the continuance of a life and which is lost once and for all upon the death. Damages for personal injury, on the other hand, represent compensation for all the consequences of the injury; those consequences may include loss incurred or damage suffered in the future. For example, it may be seen that as a consequence of the injury it will be necessary to incur medical and hospital expenses after the date of the award and an amount awarded in respect of those expenses will be compensation for a loss to be incurred after the date of the award. It is further my opinion that damages for economic loss that will probably be incurred in the future as a result of the injury come within s. 79A (3) (b). It is true that it is often said that what the incapacitated plaintiff has lost is his earning capacity, a loss which is suffered when the injury occurs, but the position is stated more precisely in Graham v. Baker [1961] HCA 48; (1961) 106 CLR 340, at p 347 , where it was said that "an injured plaintiff recovers not merely because his earning capacity has been diminished but because the diminution of his earning capacity is or may be productive of financial loss". When an award includes an amount intended to compensate the plaintiff for the financial loss that is likely to be produced in the future as a result of the diminution of his earning capacity, the words of subs. (3) (b) would appear to me to be satisfied if such amount is specified in the findings, judgment or verdict. If no particular amount is indicated as representing the damages for economic loss to be incurred in the future, I can see reason why a judge should not be able to form an opinion as to what part of the award represents such damages. In deciding such a question the judge is entitled to deal with the matter "in quite a broad way", as Smith J. said in De Nitis v. Seekts [1962] VicRp 60; (1962) VR 417 . (at p660)
13. I have read, with much advantage, the judgments of the Supreme Court of South Australia in Sager v. Morten (1973) 5 SASR 143 , and Honey v. Keyhoe (1973) 6 SASR 466 , but since the statutory provisions upon which those cases were decided are distinguishable in material respects from s. 79 (3) (b) I would not express any view upon the correctness of the conclusions there reached. (at p660)
14. For the reasons I have given I consider that East v. Breen [1975] VicRp 2; (1975) VR 19 was correctly decided and that interest should be allowed on the full amount of a judgment for damages under Lord Campbell's Act, unless of course "good cause is shown to the contrary". I would only add that the exceptions introduced by sub-s. (3) to the general rule enacted by s. 79A (1) seem to me to be illogical and productive of considerable difficulty. However, I consider that the learned trial judge properly awarded interest in the present case and would accordingly dismiss the appeal. (at p660)
STEPHEN J. Reginald Thomas Marsh was killed in a motor car collision and in the particular circumstances of the case his widow and his infant daughter Susan became entitled, pursuant to Pt III of the Wrongs Act 1958 (Vict.), to compensation for the injury to them resulting from the death of the deceased. (at p661)
2. These damages the jury assessed at $25,000 for the widow and $4,000 for the daughter. To these sums the learned trial judge added amounts of $10,418 and $1,667 respectively as damages in the nature of interest pursuant to s. 79A of the Supreme Court Act 1958 (Vict.). He did so in conformity with the decision of the Full Court of the Victorian Supreme Court in East v. Breen [1975] VicRp 2; (1975) VR 19 , the correctness of which the appellant defendant seeks to challenge on this appeal. (at p661)
3. In East v. Breen it was held that awards of damages in actions brought pursuant to Pt III of the Wrongs Act contained no component answering the description, found in par. (3) (b) of s. 79A of the Supreme Court Act, of an amount for "(b) compensation for loss or damage to be incurred or suffered after the date of the award". Accordingly in the present case the learned trial judge held that the injunction in sub-s. (3) (b) against the allowance of interest on amounts of the character there described was inapplicable. The general direction in sub-s.(1) of s. 79A, that in all actions for the recovery of debt or damages, absent good cause to the contrary, damages in the nature of interest should be given from the commencement of the action until the entry of judgment, thus applied to the whole award of damages and, no good cause to the contrary existing, interest at six per cent was given upon the whole of the damages awarded. Because almost seven years had elapsed between commencement of the action and entry of judgment the amounts of interest in question were unusually large. (at p661)
4. The appellant contends that, contrary to East v. Breen, portion of the damages assessed by the jury did consist of "compensation for loss or damage to be incurred or suffered after the date of the award" within sub-s. (3) (b) of s. 79A, and that in exercise of his discretion the learned trial judge should have so determined and should not have allowed interest upon that portion. (at p661)
5. In my view the first part of the appellant's contention is correct; there must have been, in each of the two amounts of damages which were awarded, a component answering the description contained in par. (b). The consequence which the appellant urges does not, however, follow. In the particular circumstances of this case the learned trial judge, bound as he was by East v. Breen, did not have occasion to consider any exercise of the absolute discretion conferred upon him by sub-s. (3). However had proper consideration been given to its exercise that could not, in my view, have led to any determination that any particular amount comprised in either of the two lump sums awarded represented an amount answering the description in par. (b). The obstacles lying in the path of any such determination and the reason for them, arising from the way in which quantification of damages was approached, are made clear in the reasons for judgment of my brother Jacobs. They are such that the exception, created by sub-s. (3), to the general rule as to interest established by sub-s. (1) of s. 79A was rendered inapplicable. Accordingly the judgment sums awarded should not now be disturbed. (at p662)
6. Although I would, therefore, dismiss this appeal it will be apparent from what I have said that I cannot agree with the proposition for which East v. Breen is an authority. I regard awards of damages in Lord Campbell's Act claims as in no relevant respect different from awards in personal injuries claims; in each there will usually be an element which can properly be described by the words in subs. (3) (b) and if an amount is either specified pursuant to sub-s. (4) or is determined by the trial judge in his absolute discretion, as contemplated in sub-s. (3), it will be excluded from allowance of interest. (at p662)
7. Two steps are involved in this conclusion. The first concerns the meaning of the words used in sub-s. (3) (b), the second involves the relevant character of an award of damages under Lord Campbell's Act legislation. As to each of these matters I have had the advantage of reading the reasons for judgment of Jacobs J. and agree with all that he has said concerning them. I accordingly need do no more than state quite shortly certain additional reasons of my own for arriving at a like conclusion. (at p662)
8. First, as to the construction of sub-s. (3) (b); that it is concerned not with the juristic concept of damages but with the practical concept explained by Jacobs J. is, in my view, supported by a variety of considerations. The subsection looks to damages which have been awarded and asks of them whether any part compensates for a particular type of loss or damage, categorized by reference to a temporal factor, namely whether it was incurred or suffered before or after the date of the award. It thus presupposes that awards of damages may be so dissected that parts may be attributed to particular detriments for which the injured party is being compensated, some already suffered and some which may only be suffered in the future. With it may be compared sub-s. (3) (a) which also applies a temporal test, this time to liabilities, but couples it with another criterion, whether the liability, which must have been incurred before judgment, is interest bearing. Each contemplates the dissection of an award of damages into component amounts, identified by reference to those various detrimental consequences to the plaintiff for which they respectively provide compensation. Subsection (3) (b) thus employs the same language as do those reasons for judgment and those charges to juries which, in referring to items calling for compensation by an award of damages, viewed as at the date of the trial, describe them either as having been suffered in the past or as being prospective in character. (at p663)
9. The context in which par. (b) appears bears this out. Interest being the price paid for the use of another's money, pars (a) and (c) of sub-s. (3) disclose the working out of a clear legislative intent to exclude from any award of interest those sums of which it cannot be said, as a practical matter, that a successful plaintiff has been kept out of his money during the time elapsed between institution of proceedings and trial. Paragraph (a), concerned as it is with compensation in respect of non-interest bearing liabilities incurred by a plaintiff, conforms to this pattern and the nature of exemplary or punitive damages, dealt with in par. (c), exhibits the like conformity. So too will par. (b) if given the meaning which I think it bears. It describes a class of loss or damage which is experienced, which manifests itself in a practical way, after date of award. It is not at all concerned with the area of controversy as to whether in personal injuries cases economic loss should be treated conceptually as concerned with loss of earning capacity rather than with loss of earnings. Loss of earning capacity is only compensated for to the extent to which it may be shown to have been or to be likely to be productive of economic loss to the plaintiff - Graham v. Baker (1961) 106 CLR, at p 347 - and it is for actual economic loss already produced and for actual non-economic detriment already suffered that in my view interest should be awarded when for the first time, after verdict, the plaintiff receives his compensation for that past loss or detriment. (at p663)
10. Damages recoverable will provide compensation for all detriments flowing from the wrongful act so long as the law does not treat them as too remote; but in the process of quantifying damages regard must be had, at the date of the trial, to the past and to the future. Past detriments, whether economic, such as earnings, lost or liabilities incurred, or non-economic, as in the case of mental or physical suffering, disability or deprivation, must be evaluated. When their worth as matters for compensation has been assessed the fact that the plaintiff has been kept out of receipt of that worth for some period prior to trial makes it just that they should carry interest; not so with detriments not yet actually suffered, the impact of which has not yet been made manifest. For example, in the ordinary case a loss of earning capacity will not, by the time of trial, have yet involved the plaintiff in financial detriment equal to the total damages required to compensate for that loss of earning capacity; much of his financial detriment will lie in the future and is yet to be experienced and in no real sense has there been any keeping of the plaintiff out of the moneys required to compensate for it. The same may be said of non-economic detriments. In a Lord Campbell's Act action the detriment to the dependants will only be made manifest, so as to be materially sensible to them, by the recurrent deprivation of those benefits, in cash, in kind or in services rendered, which the deceased would have been expected to have provided had he survived. Few if any of these manifestations of loss will occur at the date of death; they will, instead, increasingly manifest themselves in the future and it is to such of these items of loss as may occur after verdict that in my view s. 79A (3) (b) refers. (at p664)
11. That s. 79A is concerned to compensate a plaintiff for being kept out of moneys to which he has become entitled is apparent from the long history lying behind the awarding of interest upon damages, reviewed by Lord Denning M.R. in Jefford v. Gee (1970) 2 QB 130 . Where there has been no such element an award of interest is not called for and each paragraph of sub-s. (3) recognizes and seeks to give effect to this. The fact that damages are awarded as a lump sum once and for all should not obscure the fact that a part of those damages may compensate for detriments not yet actually encountered or come across and should for that reason carry no interest with it. (at p664)
12. Unless sub-s. (3) (b) be given the meaning which I would adopt it will have little, if any, work to do; at the hearing of this appeal counsel were unable to suggest heads of loss or damage which, although proper for compensation by an award of damages, had not been incurred or suffered, in accordance with general juristic concepts, at the time of accrual of the cause of action. Only if the happening of actual detriment which is to be compensated for, for example the actual accident-caused failure to earn or accident-caused incurring of expense, is had regard to will it be possible to apply the temporal test which sub-s. (3) (b) calls for. (at p664)
13. So far as concerns the character of an award of damages under Pt III of the Wrongs Act I would add little to what has been said by Jacobs J. The legislation, in common with its counterparts in other jurisdictions, contains no suggestion that the particular measure of damages which it calls for should be assessed by some approach different from that applicable to other cases. To say of such damages that they are to be assessed at date of death is not to distinguish them from personal injuries claims; it is only because of the practice of not examining economic loss to date as an item in any way distinct from future economic loss that there have arisen curious distinctions associated with the assessment process in Lord Campbell's Act claims. These become more apparent the greater be the interval of time between death and verdict. An instance is provided by the practice of discounting the damages back to date of death despite the fact that the damages may not in fact be received until years later, in this instance eight years later. If only one sum of damages is to be computed it clearly must cover the whole period from date of death onwards and if it is to bear some relationship to the sum of lost pecuniary benefits, including those which would have been received in the future, there must clearly be some element of discounting and because only one sum is available for discounting a discount is applied which assumes, contrary to the fact, that receipt occurred at death and not later, after verdict. (at p665)
14. To seek to compensate a dependant for this excessive measure of discounting by awarding interest from date of commencement of the action until entry of judgment and upon the whole award of damages is only to introduce a further illogicality into the process of compensation. At least in those cases in which a substantial delay has occurred between death and trial a more satisfactory course, in times of changing money values, would seem to be to compute damages in two stages, looking first to the past loss of benefits and secondly to those which lie in the future, discounting only as to the latter. Two further advantages would flow from such a course; first there would then be no reason necessarily to apply to the future any rate of periodical loss, whether weekly or annual, derived from some average benefit, calculated over the period from death to trial, as was done in the present case. If, as was the case in this trial, the evidence shows a progressive increase in the rate of earnings over many years between death and trial, due not to promotion or the like but apparently largely attributable to changes in money values, then, even if no regard should be had to the effects of future inflation, the dependant is nevertheless disadvantaged if future loss of benefits from the deceased are calculated at such an average rate rather than at the higher rate which the evidence suggests would have been attained at the date of the trial. Secondly, if damages are to be awarded in the money of the day of verdict, the past effects of inflation being allowed for in the amount of the award, this may be done by suitably adjusting the monetary amounts of past periodic losses when calculating what present sum should be awarded as compensation for those past losses. (at p665)
15. Although these considerations formed no part of the grounds of appeal I refer to them because they are aspects of the assessment of damages in Lord Campbell's Act claims which appear to owe their origin to the practice of assessing those damages as one single sum instead of viewing them as composed of elements, some relating to the past and some to the future. It is this same practice which would in this case have effectively prevented the learned trial judge from exercising the discretionary power conferred upon him by sub-s. (3) of s. 79A, a discretion which I consider he should have been free to exercise since, contrary to East v. Breen [1975] VicRp 2; (1975) VR 19 , the award of damages did in my view comprise elements falling within the description contained in sub-s. (3) (b). (at p666)
16. For the reasons which I have given, adopting as they do those of Jacobs J., I would dismiss this appeal. (at p666)
JACOBS J. The Supreme Court of Victoria has held that in an award of compensation under Pt III of the Wrongs Act 1958 (Vict.) no part of the award in respect of loss of pecuniary benefit is an amount awarded as compensation for loss or damage to be incurred or suffered after the date of the award and that therefore interest is payable on the whole of the award pursuant to s. 79A of the Supreme Court Act 1958 (Vict.). The question on this appeal is whether that view is correct or at least open within the absolute discretion conferred on the judge by s. 79A (3). That subsection envisages two different cases - that where the court or the jury makes an award which in its terms distinguishes any amount within pars (a), (b) and (c) and the case where the jury brings in a general award of damages and the judge has an absolute discretion to determine whether that general award includes any amount within pars (a), (b) or (c). The award in the present case did not include any amount within the former class of case. It therefore fell to the trial judge in his absolute discretion to determine whether any such amount was included and, if he determined that it was, to reach an opinion on the amount which represented such damages. (at p666)
2. The amount of compensation under Pt III of the Wrongs Act is a sum proper to compensate the dependant or dependants of a deceased person for the pecuniary benefits lost to them by the death. The problem in this appeal arises from the fact that in the assessment of this compensation to the dependants of the deceased person the common practice in Victoria and in other jurisdictions in which there is similar legislation has been to have regard to the fact that the compensation will be presently received as a lump sum but not to have particular regard to that portion of the lump sum which is attributable to the loss of pecuniary benefit between the date of death and the date of the award of compensation. The assessment proceeds as if the compensation were received immediately on death. In this respect the practice differs from that commonly adopted in actions for damages for personal injuries, where pecuniary loss from extinction or impairment of earning capacity is examined separately from prospective loss after the date of the verdict. In the latter case it is comparatively simple as a result of this separate examination to award interest under s. 79A (3) (b) on loss or damage incurred or suffered before trial and to exclude any amount awarded by way of compensation for loss or damage incurred or suffered after the date of the award. But where there is no separate examination of past and future loss and particularly where the assessment of compensation proceeds on the assumption that the compensation is received immediately on death, the question is not so simple. In both cases, of course, the theory of the law is that the right to damages accrues when the act is done or event occurs which occasions liability. A plaintiff recovers on verdict damages in respect of the whole of the loss or damage incurred or suffered by him as a result of the event which occasions liability in the defendant and in theory it makes no difference whether the assessment is made immediately or is delayed. In theory also general damages are an indivisible lump sum to which the plaintiff is deemed to have become entitled on the happening of the event which occasions liability in the defendant. It does not matter that the physical or material consequence of the injury has not been felt at the time of the injury or of assessment. Thus it may be said in some, indeed most, contexts that a plaintiff (or a dependant in an action for compensation under Pt III of the Wrongs Act) on the happening of the event occasioning liability incurs the loss or suffers the damage which is the subject of his or her claim and that what happens thereafter is but the consequence of the loss or damage which he has suffered. Subsequent events only assist in the ascertainment of the amount of those damages. This is the basis of the rules that only one action may be brought in respect of the one cause of action, that consequently damages are assessed once and for all and that the Statutes of Limitation run from the time of the act or event which occasions liability. There is no occasion here to refer to the special cases of continuing causes of action, or to those where a single act may give rise to multiple causes of action or to such a special case as Darley Main Colliery Co. v. Mitchell (1886) 11 App Cas 127 . I refer to the general rules, those applicable to such cases as that with which we are now dealing. (at p667)
3. But it is clear to me that this concept of loss or damage is not that referred to in s. 79A (3) (b). The paragraph refers not to the juristic concept of damages but to the practical concept that a plaintiff receives damages by way of compensation in respect of loss or damage incurred or suffered up to the date of trial and verdict and in respect of loss or damage (if any) which he will incur or suffer in the future. When the consequence of the compensable infringement of his legal rights is actually felt by him materially or physically he incurs or suffers the loss or damage to which the paragraph refers. As I have said, in relation to a claim for damages for personal injuries, the distinction is not a difficult one to apply. Pain and suffering before verdict can be separated from pain and suffering likely to exist after verdict, however difficult the actual qualification may be. Though earning capacity in whole or in part may be lost uno ictu at the time of injury, the consequential pecuniary loss or damage before verdict may be separated from that likely to exist after verdict. (at p668)
4. The real question in this case, as I see it, is whether in the application of s. 79A (3) (b) a claim for compensation under Pt III of the Wrongs Act 1958 (Vict.) is necessarily different or to be treated differently from a claim for damages in other actions, particularly actions for personal injuries. I do not think that the differences in the nature of the actions can supply an answer to the question. Damages in these cases have to be assessed as at the moment of the death of the person whose dependant claims compensation. Many of the cases to this effect are stated in the judgments in the Full Court in the present case. But since, strictly, damages must always be assessed as at the moment of the act or event which occasions liability in the offending party, this feature does not provide a satisfactory basis for distinguishing the cause of action under Pt III of the Wrongs Act from other causes of action. The distinction between the causes of action which has been made, for instance, by Windeyer J. in National Insurance Co. of New Zealand Ltd. v. Espagne (1961) 105 CLR, at pp 587-588 does not touch on the question of the date as at which damages are to be assessed. (at p668)
5. The difference in treatment of the two classes of case is no more than a distinction which has been adopted in common practice. If in a particular case the practice were not followed it would not vitiate the result because in both classes of case the final result is the total sum appropriate to the circumstances disclosed in the evidence. It is not easy to see why it has been assumed that the compensation is received immediately on the deceased's death. I venture to think that, as the loss of pecuniary benefit could more easily be predicated than loss of earnings in the case of injury, it was a way of ensuring that compensation awarded under the Act did not become disproportionate to the compensation awarded in personal injury cases. It is an anomaly but it must be borne in mind that absolute precision in award is unattainable and it is a fair sum which must be found in order to compensate the dependants of the deceased for the loss of the pecuniary benefits which they might have expected to receive. Nevertheless, it is strange that an arithmetical or other calculation should in any case be made on the hypothesis that the money is received at a date when in fact the money is not so received. (at p669)
6. Although no juristic distinction by itself permits the cause of action under Pt III of the Wrongs Act to be treated differently from the cause of action for personal injuries, it does not follow that for the purposes of the application of s. 79A (3) (b) regard should not be had to the fact that it has commonly been treated differently. The common method of calculation of compensation in actions under Pt III of the Wrongs Act and its equivalents elsewhere does not lend itself readily to the application of s. 79A (3) (b), since allowance must in such a case be made for the fact that although the compensation is not received and does not earn interest until the verdict is given the sum of compensation is calculated not only in theory but in practice from the moment of death. Where the common practice is followed and the distinction is not drawn between compensation up to the date of trial and compensation thereafter and where allowance is made either by arithmetical calculation or by application of general principle for the fact that the benefits are received in a lump sum instead of being received over an extended period and where it is further assumed that that lump sum is received at the moment of the death of the deceased it would be unfair to make any simple apportionment. (at p669)
7. If the jury be invited or the trial judge determines to calculate a sum based on the amount required at the date of death to bring in a regular periodical money sum which would have been the pecuniary benefit received by the dependants over the years, before any part of that sum can be regarded as compensation for loss or damage to be incurred or suffered after the date of the award, calculations would need to be made which would follow the lines of those commonly made in personal injury cases. Pecuniary benefits, usually and mainly earnings, would have to be calculated up to the date of trial with any appropriate deductions for contingencies and for benefits received as a result of the death of the deceased, so far as that benefit has accrued and exhausted itself as at the date of the award. However, unless such calculations are able in terms of the award to be made in a realistic way it is not likely that the judge in his absolute discretion would be able to determine that the damages include any amount for compensation for loss or damage to be incurred or suffered after the date of the award. (at p669)
8. In the present case the jury was invited if they saw fit to calculate the damages on the amount required at the date of death to bring in the appropriate sum per week for the appropriate period. It would not then have been correct for the trial judge simply to apportion the total award between the number of years between death and trial and the number of years of life expectancy after trial. If damages had been awarded on the basis of loss to the date of award and loss thereafter the total would have been considerably greater. Take the case of the widow. The evidence was that it would take a sum of $450 to bring in a sum of one dollar per week during the joint life expectancy of the widow and the deceased from the date of death. The jury awarded the sum of $25,000 to the widow. The assumption being that the jury adopted as a basis the arithmetical method of calculation, it would therefore appear that the jury concluded that the average pecuniary benefit to the widow from the date of death during the joint life expectancy would be $55 per week. The period between the commencement of the action and the date of the award was close on seven years so that the amount of the award attributable to the period before the award would be approximately $20,000 and interest would be payable on that amount. But even the limitation of interest to that on such a sum would hardly do justice to the widow. The realization that actual loss of pecuniary benefit to the date of the award amounts to $20,000 makes it clear that the total award of $25,000 does not represent a sum which can be divided into past loss and future loss. When the particular method is adopted of calculating the amount required to bring in a certain sum per week and of assuming that the sum is received and begins to bear interest from the date of death it may become unrealistic, as it has become in the present case, to attempt to divide the award into a sum for past and a sum for future losses. It lay well within the wide discretion given to the trial judge under s. 79A (3) to determine that the damages awarded by the jury could not realistically be divided between past and future loss. As a result of following the decision of the Full Court in East v. Breen [1975] VicRp 2; (1975) VR 19 , the trial judge did not recognize the occasion for exercise of his discretion. It therefore falls to this Court on this appeal to consider the manner in which the discretion should be exercised. For the reasons which I have stated I am of the opinion that it was not practicable fairly to identify within the award the sum awarded as compensation for loss or damage to be incurred or suffered after the date of the award. I would therefore dismiss the appeal. (at p670)
# Ruby
Marsh \[1975\] HCA 32;
(1975) 132 CLR 642
(1968) 118 CLR 540
(1973) 5 SASR 143
(1968) 122 CLR 649
(1973) 47 ALJR 555
(1954) 94 CLR 430
(1915) 19 CLR 505
(1946) 73 CLR 105
(1945) 70 CLR 266
(1961) 105 CLR 569
(1961) 106 CLR 340
(1973) 6 SASR 466