Treloar v Wickham

High Court of Australia|1961-07-01|Before: Windeyer JJ, Collins J, Herron J, Brereton J

High Court of Australia Dixon C.J. Fullagar, Kitto, Menzies and Windeyer JJ. Treloar v Wickham [1961] HCA 11

This is an appeal as of right from an order of the Full Court of the Supreme Court of New South Wales dismissing an application for a new trial in an action which had been tried before Collins J. The action was for the recovery of damages for personal injuries caused by the defendant's negligent management of a motor car. A verdict passed for the plaintiff for £15,000. The appeal by the defendant from this verdict did not contest the defendant's liability but was based on the single ground that the damages awarded to the plaintiff were excessive. The appeal was heard before Evatt C.J., Herron J. and Brereton J. who were of opinion that having regard to the character of the plaintiff's injuries and his sufferings the assessment of damages was not excessive and who therefore dismissed the appeal. From their Honours' decision the defendant now appeals to this Court.

At the time of the accident the plaintiff was thirty-eight years of age, his salary was little more than £18 a week before the deduction of tax and no reason appeared for thinking that, but for his injuries, his future would have been one of easy opulence. On the other hand, his condition now makes it impossible for him to choose freely among employments he might have pursued and indeed forbids him to seek any but a few very restricted types of employments or indeed of occupations. His "economic" outlook is in truth a grim one. As to his health and bodily condition the jury might very reasonably have concluded that he would have much to endure in the future and many disabilities and limitations of his capacity to meet. But it is not a case where the "economic" loss, which obviously is a very serious consideration, should be allowed to divert attention from the title to heavy compensation which in itself the long period of very great suffering he has already endured must inevitably give to the plaintiff. The great length of time during which he necessarily underwent repeated tests of endurance ought not to be lightly regarded in the assessment of compensation. For myself I feel no hesitation in holding that in this case it was reasonably open to the jury to assess the damages at £15,000. There is, however, a subordinate difficulty in the case and with that it remains to deal.

The Farmers and Graziers' Co-operative Company etc. Ltd. by which the plaintiff was employed continued to pay him a weekly amount equivalent to his wages or salary for a long period after the date of the accident, viz. 14th June 1957, even to the time of the trial. It went on at least until 23rd May 1959, by which time the company had paid him £2,015 16s. 0d. The local manager of the company at Albury described it as an advance payment which the company expected to get back when the case was concluded. He said it was the policy of the company with respect to employees injured. The plaintiff in his evidence in chief said, in answer to a leading question, that he had undertaken to pay the company the whole amount back after the verdict. In cross-examination he identified the officer to whom he had given the undertaking as the accountant but he could not identify the time or occasion. Counsel for the defendant in his cross-examination seemed to be suggesting that no obligation to repay the company out of the damages rested on the plaintiff, a suggestion which, as one may suppose, could be made profitably only because the servant driving the car had been sued by the plaintiff and not the master in whose name it was registered. The plaintiff had, so far as appears, never claimed workers' compensation, and, although the weekly equivalent of wages in fact paid might have been considered to cover the liability to weekly payments of compensation had a claim to workers' compensation afterwards been made, in fact there is nothing to suggest that the company paid any part of the amounts as and for workers' compensation. Nevertheless, before the trial opened counsel do not seem to have been free from fear that the question of workers' compensation would obtrude itself. Section 64A of the Workers' Compensation Act, 1926-1960 contains provisions calculated to cause in the mind of any counsel appearing for a defendant in an action by an employee to recover damages from anyone for personal injuries a nervous dread of his being held to have made some incautious reference to the subject of workers' compensation. The section provides that in the course of a jury action to recover damages for injury to a worker no reference express or implied to any benefit under the Act shall be made by or on behalf of the defendant in the presence of the jury and that if such a reference is made the plaintiff shall be entitled to his costs in the action up to the time the reference is made and the action shall, if the plaintiff so requires, be heard before another jury. Had the plaintiff sued his employer, Farmers and Graziers' Co-operative etc. Company Ltd., the defendant's counsel need not have felt himself embarrassed by this prohibition, because under s. 63 (5) the amounts paid for workers' compensation are ipsa lege treated as a satisfaction of the judgment pronounced for damages. The payments for workers' compensation are therefore to be ignored in the assessment of damages. But in the case of actions against third persons for damages the provision is necessarily different. Section 64 includes a provision that if the worker recovers firstly compensation and secondly such damages, he shall be liable to repay to his employer out of such damages the amount of compensation which the employer has paid in respect of the worker's injury under the Act and the worker shall not be entitled to any further compensation. Of course, if the plaintiff were obliged by the undertaking which he said he gave to the accountant to repay the entire sum he received (apparently £2,015 16s. 0d.) from his employer, this provision would cause no difficulty. But if he were not so obliged the question might arise whether what he had received did not incorporate workers' compensation to which s. 64 applied; and yet s. 64A seemed to require the defendant to remain silent as to workers' compensation. Feeling this or some such difficulty counsel took the course of going to the learned judge in his chambers before the trial. It seems that in effect they told him that the plaintiff would state in his evidence that the payments made to him by his employer would have to be refunded and that would avoid any reference to workers' compensation. What occurred in his Honour's chambers may explain the course that the learned judge took and indeed that which the parties followed, but needless to say the necessity of ordering a new trial must depend on what took place before the jury. If the defendant had accepted the view that the amount of £2,015 16s. 0d. received by the plaintiff must be repaid to the Farmers and Graziers' Co-operative etc. Company Ltd., it would have been unnecessary to take its receipt into account in assessing damages. If on the contrary none of it was repayable plainly, to that extent, the plaintiff had not lost the remuneration of which otherwise he would have been deprived by his incapacitation from work and the jury would not be justified in assessing the damages as if he had lost that remuneration by reason of his injury. When counsel for the defendant directed his cross-examination to throwing doubt on the plaintiff's statement that he had undertaken to repay the moneys out of the damages and must do so, it evidently struck the learned judge that if the jury were to find the plaintiff was not obliged to repay the moneys by his undertaking or by the imposition of a condition when the moneys were paid, there must still remain the question whether a part of each weekly payment did not represent workers' compensation, a question needless to say which had not been gone into. His Honour considered it unfair that it should be left open for a claim to be made under s. 64 that pro tanto a repayment should be made to the Farmers and Graziers' Co-operative etc. Company Ltd. thinking no doubt that as a matter of indemnity the liabilities of that company in respect of the plaintiff's injuries and of the defendant fell under the same insurance cover and might accordingly be identified. Before commencing his summing-up the learned judge in the absence of the jury put the position to counsel. In answer to his questions counsel for the defendant said (1) that he did desire that the jury should be told that if they did not believe the plaintiff's statement that he was obliged to refund the payments he had received they should not award him any amount for wages because it had already been received; (2) that to the best of counsel's knowledge the plaintiff had not received workers' compensation payments: he had received his salary; (3) that he agreed that it would be most unjust if afterwards the plaintiff were obliged to refund part of the moneys as compensation payments, scil., if the jury in assessing damages acted on the view that none of the moneys he had been paid were repayable, but (4) that it should be left to the jury to disbelieve the plaintiff when he said he had agreed to refund the payments out of the damages. The learned judge ended the dialogue by informing the defendant's counsel that he was now quite clear on his attitude and would give such directions to the jury as he thought proper in the matter. In his summing-up his Honour at first directed the jury that the plaintiff had been entitled to workers' compensation and that he was obliged by law to refund out of the verdict anything he had received by way of workers' compensation, a thing about which no details had been given. As to the balance of the payments, the difference between workers' compensation and salary, the plaintiff had said that he received this on an understanding or agreement that, if he received a verdict, he could pay those sums back altogether. His Honour told the jury that he had asked the defendant's counsel what his attitude was and counsel had said that it was a matter for the jury to decide whether or not they accepted the plaintiff's evidence on the point of the agreement. Before he finished his summing-up the learned judge was informed that the amount of workers' compensation payable to the plaintiff would be £9 15s. 0d. a week. His Honour then directed the jury as follows: "By operation of law he has to refund so much of the payments as amount to £9 15s. 0d. a week to his employer, if you find that they were made by way of workers' compensation. As to the balance, the plaintiff tells you that he has arranged with his employer that he should refund this money out of any verdict he may get. Mr. Bagot [the defendant's counsel] asks you not to accept that. You have the evidence of the plaintiff and Mr. Collins [a witness, Manager of the branch] on this point. There is no evidence to the contrary. It is for you to say whether you are satisfied or not. If he has to refund the whole of the money then he should be compensated for the loss of wages to date to bring the matters to balance. However, if you are not satisfied he has to refund the excess above the workers' compensation, then that amount of money has not been lost to him." At the conclusion of his charge his Honour asked the plaintiff's counsel was there anything else and obtained a somewhat indefinite response to the effect that he, counsel, had presented the evidence that a firm arrangement had been come to and for the jury to believe otherwise "apart from all this talk of workers' compensation" would mean disbelieving the Manager of the branch and the plaintiff. The defendant's counsel said there was nothing he sought. Then a juryman asked about the Workers' Compensation Act in relation to the medical expenses. Apparently the foregoing moved his Honour to reconsider the direction he had given and after dealing with the medical expenses he said: "Except for the extraordinary way in which this case has turned, workers' compensation would never have been mentioned; workers' compensation is really irrelevant. When a man gets a verdict, all his rights to any further workers' compensation cease, and, what is more, he has to refund all the benefits that he has received up to date, not only by way of weekly payments but by way of hospital and medical expenses, too. I am sorry this question of workers' compensation ever came up. You assess the damages putting the refund of workers' compensation out of your minds, or any future benefits under the Workers' Compensation Act out of your minds. Just assess the damages on the principles I have given you." No objection to this was taken by either counsel. The verdict was a simple finding for the plaintiff for £15,000. The notice of appeal to the Full Court of the Supreme Court did not mention the point. In the argument of that appeal something appears to have been urged on the subject by the defendant's leading counsel, we do not know precisely what, but the plaintiff's counsel, so we are told, was not called upon to deal with it. The learned Chief Justice of New South Wales disposed of the matter thus: "The company advanced the plaintiff approximately £2,015 salary from the date of the accident to May 1959, and the manager stated, and it was agreed between the parties and laid down by the judge, that this sum of £2,015 was to be regarded as an advance payment, to be returned to the Farmers & Graziers when the case was finalized" [1] . His Honour later in his judgment treated the verdict as amounting in substance to £13,000 [2] . Brereton J. in his judgment said that the plaintiff's actual loss of earnings amounted to some £2000. "He had in fact been paid by his employers by way of an advance but had undertaken to repay them" [3] . It is evident that their Honours took the view that the jury had accepted the evidence that the plaintiff had undertaken to repay the amount paid to him representing wages. In the notice of appeal to this court there was no specific reference to the matter and no ground of misdirection or nondirection was included.

(1961) S.R. (N.S.W.) 7; (1960) 77 W.N. 350, at p. 351. 2. (1961) S.R. (N.S.W.), at p. 15; (1960) 77 W.N., at p. 356. 3. (1961) S.R. (N.S.W.), at p. 16; (1960) 77 W.N., at p. 357.

In all the circumstances of the case I think that on the foregoing there is no ground upon which a new trial should be ordered. Whatever sources of confusion may be discovered in the course which the trial took and the charge to the jury followed, it is reasonably certain that the jury understood that the Workers' Compensation Act should be dismissed from their consideration and that whether they included or excluded from their assessment the £2,015 16s. 0d. depended on their acceptance or rejection of the view that it was repayable out of the verdict. We are not here dealing with the recovery by a plaintiff as part of his damages of some expenses contingently payable by him: cf. Blundell v. Musgrave [1] . The case is one where his prima facie loss is treated as standing unreduced by a payment contingently received. It appears to me that the issue was put to the jury and presumably decided by them. It might have been better if a precise question had been put to the jury as to the repayability of the £2,015 16s. 0d. but such a thing is seldom done in New South Wales. No proper objection to the charge was taken at the time nor in the notice or notices of appeal and if the potential elements of confusion attending the matter really did jeopardize a proper understanding by the jury of the question, the danger might have been removed there and then had counsel sought a further elucidation. I think that the appeal should be dismissed.

This is an appeal against an order of the Full Court of the Supreme Court of New South Wales, which dismissed an application by the defendant for a new trial of an action in which the plaintiff was awarded damages for personal injuries suffered by him in a motor car accident. The action was tried with a jury, which assessed the plaintiff's damages at £15,000. The only ground taken in the notice of appeal to the Full Court, and the only ground taken in the notice of appeal to this Court, is that the damages were excessive.

The verdict must be taken, I think, to have included an amount of approximately £3,000 as special damages. Having considered the evidence of the plaintiff and the medical evidence, I am of opinion that an award of £12,000 by way of general damages was not so excessive as to justify an appellate court in setting it aside. I think I should have awarded a somewhat smaller sum myself, but that is as far as I can go, and that, of course, is not far enough. A question has been raised, however, as to one item of the special damages claimed by the plaintiff. If I have understood counsel for the defendant aright, he says that the jury could not, on the evidence, make any award in favour of the plaintiff in respect of this item. In any case, he says, the learned trial judge misdirected the jury on this matter.

The special damages claimed by the plaintiff in his declaration consisted of hospital and medical and other incidental expenses. It was agreed at the trial that these amounted to a sum of a little less than £900. No question arises as to these. But the plaintiff at the trial appears to have claimed a further sum of £2,015 in respect of salary or wages lost by him between the date of the accident and the trial. The defendant's answer to this claim was that the plaintiff, although he had done no work or practically no work, had in fact received from his employer, the Farmers & Graziers' Company, the full amount of his salary, amounting to the sum of £2,015, in respect of that period. It was not disputed that this sum had in fact been paid to the plaintiff by his employer, but the plaintiff maintained that he was nevertheless entitled to have that sum included in his damages because he was bound by agreement to repay it to the company.

The evidence with regard to the alleged agreement was certainly unsatisfactory. The plaintiff in examination in chief was asked: "Have you undertaken to pay that whole amount back to them out of the verdict?" He answered: "I have undertaken that." In cross-examination he said that he had not signed anything, but the matter had been discussed with Mr. Webster, the company's accountant. He said: "It is absolutely definite that I will have to pay it back." Mr. Webster was not called as a witness. There was, of course, only one way in which the alleged agreement could be properly proved, and that was by a narration of the relevant conversation between the plaintiff and Mr. Webster, but the plaintiff's statement, in answer to a leading question, that he had given an undertaking - inadmissible but made without objection - was evidence on which the jury could act.

At the end of the case the matter fell into great confusion. Before the learned judge charged the jury, counsel sought and had an interview with the judge, the real object of which seems to have mystified his Honour as much as it mystifies me, but there was a reference to the possibility that the payments made to the plaintiff might be regarded as, in part, made by way of workers' compensation, and the drastic provisions of s. 64A of the Workers' Compensation Act, 1926-1958 seem to have been in counsel's mind. The maximum amount payable to the plaintiff by way of workers' compensation (£9 15s. 0d. per week) was not much more than half of the sums actually paid. After counsel had addressed the jury there was further discussion in the absence of the jury between counsel and his Honour, and his Honour then proceeded to charge the jury, dealing at the outset with the matter of the payments in question

The effect of the relevant part of his Honour's charge can, I think, be stated as follows. To the extent (£9 15s. 0d. per week) to which the payments made to the plaintiff represented workers' compensation, the plaintiff was required by law to repay them out of the amount of any verdict. To that extent, therefore, he was entitled to include in his damages an amount representing salary lost by him. With regard to the balance (i.e. the difference between £9 15s. 0d. per week for the period and the sum of £2,015) it was a question for them to decide whether the plaintiff had entered into an agreement that, "if he received a verdict", he would repay that balance to the company. If, but not unless, he was found to have entered into such an agreement, he was entitled to include in his damages the amount of that balance.

At the close of his Honour's charge one of the jurors said: "I am a little bit in the dark as regards the medical expenses. Would worker's compensation in any way apply there?" His Honour then said: "Probably, yes, but they, by operation of law, are deducted from this verdict, so they must be included otherwise the plaintiff will lose out. However, payments under the Workers' Compensation Act will have to be refunded out of this verdict. Except for the extraordinary way in which this case has turned, workers' compensation would never have been mentioned; workers' compensation is really irrelevant. When a man gets a verdict, all his rights to any further workers' compensation cease, and, what is more, he has to refund all the benefits that he has received up to date, not only by way of weekly payments but by way of hospital and medical expenses, too. I am sorry this question of workers' compensation ever came up. You assess the damages putting the refund of workers' compensation out of your minds, or any future benefits under the Workers' Compensation Act out of your minds. Just assess the damages on the principles I have given you. Is that clear, sir?" To this the juror answered "Yes".

It may be thought that the juror was easily satisfied. But I think the jury would understand that his Honour was really withdrawing all that he had said about workers' compensation and the £9 15s. 0d. per week. His Honour was, of course, right in thus withdrawing what he had said, for there had never been any justification whatever for introducing the subject of workers' compensation at all. There was nothing whatever in the evidence to suggest that what the company had paid to the plaintiff, or any part of it, had been paid by way of worker's compensation. I think too (though with less confidence) that the jury would understand his Honour's final direction to them to mean that they were to regard the question of the plaintiff's right to the whole sum of £2,015, and not merely that part of it which was in excess of £9 15s. 0d. per week, as depending on whether the plaintiff had promised to make a repayment to the company. I think that this is what his Honour really intended to convey, and I think, on the whole, that the jury would so understand what he said. He had previously said: "If he has to refund the whole of the money, then he should be compensated for the loss of wages to date." This was a central and simple proposition, which the jury would, I think, be likely to keep in mind. He had also said: "If you find those amounts have to be refunded, then it is a heading of damages that the plaintiff is entitled to have you take into account, namely his earnings up to date". It is only reasonable, I think, to suppose that the jury would, after his Honour's final direction, accept those two statements uncomplicated by the references to workers' compensation, which he was withdrawing.

If the case had been conducted differently, his Honour's direction, even if understood as I think it should be understood, might have been inaccurate or inadequate. For in cases of this type it will sometimes be necessary, in charging the jury, to have regard to the case of Blundell v. Musgrave [1] . In that case there was a difference of opinion as to the result, but not, I think, as to the law. In cases of the present type there is a distinction to be drawn between, on the one hand, a promise to pay or repay out of damages if damages are recovered, but not otherwise, and, on the other hand, a promise to repay out of damages if damages are recovered, but to repay in any event. In Blundell v. Musgrave [2] the majority thought that the plaintiff was entitled to recover special damages in respect of a sum which he was under an unqualified obligation to pay by way of medical expenses, and that it made no difference that it was probably contemplated that the obligation would not be enforced if damages were not recovered in an intended action. The minority thought that the plaintiff's obligation to pay the sum in question was conditional on his recovering that sum by way of special damages in the intended action, and that an obligation so conditioned could not provide a basis for the recovery of that sum in the action. If, as in Blundell v. Musgrave [1] the obligation depends on documentary evidence, the effect of the documents is a matter for the Court. If it depends on oral evidence, the effect of the evidence may be a matter for the jury, if the action is tried with a jury. All this, however, appears to me to have no bearing on the present case, because the question which arose in Blundell v. Musgrave [1] was never raised from beginning to end in the present case.

(1956) 96 C.L.R. 73, especially at pp. 79, 80, 93. 2. (1956) 96 C.L.R. 73. 3. (1956) 96 C.L.R. 73. 4. (1956) 96 C.L.R. 73.

The position then, as I see it, is simply this. There was evidence that the plaintiff had entered into a binding agreement to repay to the company the sum of £2,015 which he had received. It is impossible to maintain that there was no such evidence. It was given in a form which was open to objection, but no objection was taken. The precise terms of the undertaking alleged by the plaintiff were never investigated. Counsel for the defendant contented himself with asking the jury to disbelieve the plaintiff and to find that no promise to repay had ever been made. The learned judge said in his charge: "I have asked Mr. Bagot his attitude about this question of a refund, and he has said that it is a matter for you to decide whether or not you accept this evidence on the point of this agreement". No objection was taken to this or any other part of the charge. The learned judge misdirected the jury in what he said about workers' compensation, but, thanks to the intervention of the juror, he withdrew what he had said on that subject, and the effect of this withdrawal was, I think, to leave to the jury simply the question whether an undertaking to repay the company had in fact been made or not. No objection, as I have said, was taken to any part of the charge.

In these circumstances it seems to me to be out of the question that the defendant should now have a new trial in order to raise what I may call the Blundell v. Musgrave [1] point, and I can find no other reason for ordering a new trial. The cross-examination on the relevant aspect of the case was mainly directed to suggesting that there was no binding agreement but at most a tacit understanding. The learned judge was not asked to leave anything to the jury except the question whether an agreement had in fact been made. If the point had been taken at the trial, other evidence might have been adduced by the plaintiff. The point was not raised by the notice of appeal to the Full Court, and there is nothing to suggest that it was ever really raised in that Court. It was not raised in the notice of appeal to this Court, and indeed I do not think it was fairly and squarely raised in argument before this Court. I am clearly of opinion that it ought not now to be allowed to be raised.

I do not feel at all confident that the confusion which developed at the trial concerning the sum of £2,015 did not result in the jury's being given inadequate guidance as to what their duty was. I have read several times the relevant portions of the transcript of the proceedings, and while I can see the possibility that the jury may have picked up the right parts of what was said to them, and therefore may have assessed the damages upon a correct understanding of the legal position, I do not think it very likely that they did. It is true that the learned trial judge, having made a statement to the jury in response to a question which they asked, inquired of the foreman whether it was clear, and that the foreman replied "Yes". But reading this in its context, I am not greatly reassured by it. I am not myself clear as to what it was that the foreman thought was clear. I should doubt very much whether the jury found themselves able to sort out from all that was said to them what the real problem was in regard to the £2,015.

However, those who were present were in the best position to judge whether the case was left to the jury in a sufficiently understandable form, and it seems to me that in the end no such objection was maintained against the learned judge's directions as should entitle the defendant to complain of them after the verdict. Moreover, no point as to the £2,015 was specifically raised in the notice of appeal to the Full Court or so developed before that Court as to evoke substantial discussion in their Honours' judgments.

In the circumstances I think it would not be right to order a new trial, unless the amount of £15,000 was excessive in the sense of being a higher sum than a properly instructed jury could reasonably have awarded. I am not satisfied that it was excessive in that sense.

Although the verdict of £15,000 damages for personal injuries caused the respondent in a motor accident seems to me to have bordered upon the unreasonable, I have reached the conclusion that the only sound ground for this Court's interfering with it is that an error was made with regard to a sum of £2,015 16s. 0d. which the respondent's employer had paid to him between the date of the accident and the date of trial. The learned trial judge's direction as to this was in effect that in part it could be found to be workers' compensation and in so far as it was, it must be disregarded, and that in so far as it represented payment of wages, it should be disregarded if the jury found that the plaintiff had undertaken to repay it.

That periodic payments totalling £2,015 16s. 0d. were made up to 23rd May 1959 (the trial took place on 19th and 20th May 1959) was proved; that this is the amount that the respondent would have been entitled to as wages for the period was proved; that the respondent did some, but not very much, work for his employer during the period was proved; and there was evidence upon which the jury could find that the respondent had undertaken to pay back either out of the verdict or absolutely the amount paid to him by his employer.

The evidence about the payments, which was far from satisfactory, was given by two witnesses in the plaintiff's case. In the examination of the plaintiff in chief, the following evidence was given: -

Q. Did you get a figure of the amount that you have actually been paid by Farmers & Graziers' since the accident? A. No, I have not got the corrected figure yet.

Q. I will get you to get it over the luncheon adjournment. Have you undertaken to pay that whole amount back to them out of the verdict? A. I have undertaken that.

This was expanded in cross-examination as follows: - Q. How old are you? A. 41.

Q. And in fact you have been paid your salary? A. Yes.

Q. And your job is still open to you? A. I would not say that.

Q. It is a fact, is it, that you are still an employee of Farmers & Graziers'? A. Oh, they are paying me my salary.

Q. What as, for doing nothing? A. For doing nothing.

Q. They pay you your salary, and that is the word they use, is it not? A. They are paying me that until such time as this case is concluded.

Q. They pay you a salary - that is right, isn't it? [Objected to; rejected.]

Q. They call the payments "salary" don't they? A. Wages.

Q. Before you went to Ballarat you had been going into the Farmers & Graziers'? A. Yes.

Q. But since your last hospitalisation on - do you understand me? A. Yes.

Q. - You have not done clerical work? A. I have not.

Q. But you have been paid your wages just the same? A. I doubt if you could call it wages. It is an allowance they are making to me.

Q. You call it wages. I put it as salary but you called it wages yourself. It is the full amount of your pay, isn't it? A. The full amount of my pay, that is correct.

Q. Who was present when you promised to pay the money back - "I have undertaken to pay the whole amount back". Who was present when you made that promise? A. It was the accountant.

Q. When did you make the promise to Mr. Webster? A. It was the general -

The respondent was employed at the Albury Branch of the Farmers & Graziers' Co-operative Society Ltd., through which the payments in question were made to him. Mr. Webster, with whom the plaintiff discussed the matter with which we are now concerned, was not called but the manager of the Branch, Mr. Collins, with whom the plaintiff had no conversation about the matter, gave evidence as follows: - Q. I think you have seen him since the accident. You have seen him on and off since the accident? A. Yes I have.

Q. And I think your firm has advanced certain moneys to him? A. Yes.

Q. Have you got the total of the moneys advanced to him since? A. Yes, his total amount advanced up to 23rd May 1959, £2,015 16s. 0d.

Q. In regard to that amount, has something got to be done about that? A. Oh yes. Well, that is an advance payment and we expect to get that back when the case is finalized.

Q. And has that been the policy of your firm in regard to people injured? A. That is the policy of the firm, yes.

Mr. Bagot: Q. It is a fact that your branch paid, up to the 21st February this year, 1959, as salary - as salary - the sum of £1,760? [Objected to as a matter of law.] His Honour: Q. Is this amount equivalent to the amount of salary he would have earned if he had remained in your employ? A. Yes.

The position in which this unsatisfactory evidence left the matter was, it seems, aggravated by a further circumstance which appears from the following discussion between the learned trial judge and counsel: -

His Honour: Gentlemen, I have asked the jury to be taken out of Court for a short time because, frankly, on one aspect of this matter my mind is in a state of confusion. My recollection is that both counsel saw me in my private chambers yesterday morning before this case started and informed me, in order to avoid any reference to workers' compensation payments, that a statement would be made by the plaintiff that he had been paid his salary since the time of the accident - that a statement would be made and it would be said that these sums would have to be refunded. Then, however, when the plaintiff went into the witness box he was cross-examined at some length as to his statement that this sum would have to be refunded. The only duplication [sic] that I could get from that cross-examination was that the jury were being invited to disbelieve the plaintiff as to his evidence about the agreement to refund. These questions were again asked of Mr. Collins this morning. Although they were not persisted with when Mr. Nagle objected, in the course of your address, Mr. Bagot, you have made use of this expression: "Gentlemen, I will have to leave the question of this refund to you. His Honour will direct you on the matter." What directions do you ask me to give the jury on this matter?

Mr. Bagot: Your Honour, I speak subject to correction, my friend and I had no agreement in regard to the matter. I had indicated to my friend that there was a large sum of money which was not workers' compensation. My friend hinted that it was, in his belief, workers' compensation but there was no agreement between us in regard to the matter, otherwise I would not have asked any questions of Mr. Wickham.

His Honour: What was the object of the conversation that counsel had with me yesterday morning?

Mr. Bagot: In point of fact so that your Honour would understand, when I did ask some questions about it, that my friend was going to state that he had an obligation to repay.

His Honour: You did not understand there to be an agreement between you?

Mr. Nagle: I am not suggesting anything to the contrary of Mr. Bagot other than that he is mistaken. My view of the matter is entirely as your Honour said from the bench.

His Honour: Be that as it may, it was a misunderstanding. It was my understanding of what took place. You say there was not an agreement, Mr. Bagot, and I accept your word when you say you did not understand there to be an agreement. What issue do you want me to leave to the jury on the question of this refund? Do you ask me to tell the jury that [if] they do not believe the plaintiff on that matter, they should not award him any amount of anything for wages because it has already been received?

Mr. Bagot: Yes, your Honour. That is the way it occurs to me. He has not lost anything.

His Honour: Now I want to know has this man received workers' compensation payments?

Mr. Bagot: To the best of my knowledge, no. He has received his salary.

His Honour: If he had received workers' compensation payments that would amount to a great proportion of this money and he would be forced to repay that to his employer as a matter of law.

Mr. Bagot: Yes, but that would be less than the total amount.

His Honour: Anyway, you ask me to leave it to the jury that they should disbelieve the plaintiff when he says there is an agreement to refund this money? They should not be satisfied; is that what you say, on the evidence?

Mr. Bagot: It is a matter for them to be satisfied upon.

His Honour: Do you agree with me, Mr. Bagot, that that attitude is most unjust to the plaintiff if he has to refund moneys paid to him in the way of workers' compensation?

Mr. Bagot: If he has to refund it, your Honour, by all means.

His Honour: I am quite clear now on your attitude. Bring the jury back. Mr. Bagot, I am going to give such directions to the jury as I think proper in this matter.

His Honour thereupon directed the jury that they could infer that of what had been paid £9 15s. 0d. per week was refundable workers' compensation, and that if they found the balance to be refundable the plaintiff should be compensated for loss of wages to date.

To my mind the extracts from the transcript that I have made show that the result of the parties taking at the trial what perhaps seemed to them a series of excusable short cuts, was confusion out of which the real issues with regard to loss of wages as an item of special damages did not emerge, and the difficulty which his Honour felt in directing the jury can readily be understood. It is clear, however, that not only was there no evidence that part of what had been paid was workers' compensation but the evidence was entirely inconsistent with this and showed that what was paid was either wages or an advance. His Honour, having accepted the situation that there was no agreement between counsel but a misunderstanding about describing workers' compensation as wages, should not have made any reference to workers' compensation, and the direction that so much of what had been paid as was found to be workers' compensation at the rate of £9 15s. 0d. per week was repayable by operation of law had no foundation whatever. Moreover, because the direction that workers' compensation had been paid and would have to be refunded remained, I do not think the error in direction was corrected when in response to a juror's question about medical expenses under the Workers' Compensation Act, his Honour advised the jury to put out of their minds the refund of workers' compensation and future benefits under the Workers' Compensation Act. The direction about the payments should have contained no reference to workers' compensation and should have made three things clear. First, that if the employer had not paid the plaintiff his wages for the period in question but had merely advanced or lent him a sum the equivalent of his wages, then the plaintiff's lost wages were recoverable and the advance or loan should be entirely disregarded. Secondly, that if the employer had paid the plaintiff his wages, nothing could be allowed for the loss of such wages. Thirdly, if the plaintiff had unconditionally bound himself to repay whatever was paid to him as wages, his liability to do so should be taken into account in assessing damages; but if the plaintiff's obligation to repay was conditional and depended upon prior recovery from the defendant, then that conditional liability should be disregarded in assessing damages. The second part of the third proposition is, I think, justified by what was said by the Chief Justice in Blundell v. Musgrave [1] . In that case the majority of the Court decided that a naval rating could, as part of his damages, recover the cost of medical attention provided by the Navy in respect of injuries caused by the defendant's negligence. There was a difference of opinion, the majority holding that it had been shown that the plaintiff had become legally liable to pay the Naval Board for such medical attention while the minority decided that the plaintiff had not proved this. It appears to me, however, that the decision of the majority is in no way inconsistent with the following statements of law made by Dixon C.J., who with Fullagar J. formed the minority. His Honour said: "The basis on which a plaintiff recovers expenses as special damages is that he will have to pay them whether he obtains the amount from the defendant as damages or not. The question here must therefore be whether the plaintiff really stands in a situation in which he must pay the expenses which apparently now stand debited to his pay account whether he recovers from the defendant or not. For it cannot be enough to entitle a plaintiff to recover from a defendant in respect of money still to be paid that the plaintiff is liable to pay it if and only if he recovers a corresponding amount from the defendant" [1] . About the earlier part of the third proposition as I have stated it, I have entertained some doubt. In a case where an employee is injured and his employer continues to pay his wages, the law provides a simple solution for the problem that seems to have vexed the Farmers & Graziers' and the plaintiff. This solution is that if wages are not paid, then lost wages up to the hearing are recoverable as special damages in an action by the injured employee from the negligent third party; but if wages are paid they are recoverable not by the employee but by the employer in his own action for damages for loss of service: Commissioner for Railways (N.S.W.) v. Scott [2] . I have not been able to find any authority upon the question of how the respective rights and obligations of the employee, employer and third party are affected by payment of wages coupled with a binding, unconditional promise on the part of the employee to repay them, but I am disposed to think that the result of such an arrangement is in substance that wages have been advanced rather than paid.

(1956) 96 C.L.R. 73. 2. (1956) 96 C.L.R., at pp. 79, 80. 3. (1959) 102 C.L.R. 392.

For the foregoing reasons I consider that the learned trial judge's directions about the £2,015 16s. 0d. were wrong. I consider, further, that in the discussion between judge and counsel preceding the directions, counsel for the defendant having made it clear that his case was that what had been paid was not workers' compensation but wages and that loss of wages could not be taken into account in assessing damages, there was sufficient compliance with the requirements of O. XXII, r. 15, of the Supreme Court Rules to enable the appellant to rely upon that misdirection upon appeal and that this is so notwithstanding that the appellant's counsel does seem to me to have concurred in too general a question about the undertaking to repay being submitted to the jury. The circumstance that counsel's submission was made before and not after the judge's direction cannot matter.

In the Full Court the assumption was made that the payments were not workers' compensation or wages but were advances. Evatt C.J. said, " it was agreed between the parties and laid down by the judge, that this sum of £2,015 was to be regarded as an advance payment, to be returned to the Farmers & Graziers' when the case was finalized" [1] . Brereton J. said, " as at the date of the trial his actual loss of earnings amounted to some £2,000. He had in fact been paid by his employers by way of an advance but had undertaken to repay them" [2] . My reading of the transcript is that the parties did not agree that what had been paid was an advance and that the judge did not lay it down that the payments were by way of an advance. It appears, therefore, that the Full Court was under a misconception as to what was done both by the parties and by the judge. It seems to me that neither at the trial nor in the Full Court was there any detailed analysis of the position arising from the payments and the evidence relating to repayment, and that no attention was given to the significance of an undertaking to repay "out of the verdict".

(1961) S.R. (N.S.W.) 7; (1960) 77 W.N. 350, at p. 351. 2. (1961) S.R. (N.S.W.), at p. 16; (1960) 77 W.N., at p. 357.

The notice of appeal to this Court does not deal with the points I have discussed with the precision required by the Rules, but it does assert that the verdict was excessive, and as at the trial and in the Full Court there was some discussion about the character of the payments and of the promise to repay, I think the whole matter may properly be treated as open to the appellant in this Court.

Because I consider that this verdict would have been excessive had it included an item of £2,015 16s. 0d. for lost wages unless wages had not been paid or there was an unconditional promise to repay the sum paid, and because I think that it is highly probable that the verdict included this item on a different and wrong basis, I consider there should be a new trial limited to the question of damages.

Brereton J. said in the Supreme Court: "In a large measure the damages were calculable" [1] . They were not calculable in any precise sense: but his Honour meant that a large element in the damages is what is commonly called "economic loss": and that up to a point that could be calculated by reference to the wages earned before the accident and the extent of the respondent's incapacity and its expected duration. His Honour went on: "As to that part which was not calculable, namely the damages for pain and suffering, disability and restricted enjoyment of life, it is impossible to say that the amount awarded differed in any marked degree from what one finds in the common run of verdicts in comparable cases. It is impossible to say, therefore, that the verdict of itself demonstrated that the jury acted on any wrong principle, that the verdict was wholly disproportionate to the injury suffered or grossly excessive or that the award was one which no reasonable men could have made" [1] . This, I think, was a correct statement of the position. It does not appear then that the learned judges who sat in the Full Court departed from the proper principles to be applied in the review by a court in banc of the verdict of a jury. They considered that in the light of evidence which it was open to the jury to accept, the amount the jury awarded was not beyond the bounds of reason; and I do not think that we should say that their Honours could not reasonably take that view.

(1961) S.R. (N.S.W.), at p. 17; (1960) 77 W.N., at p. 358. 2. (1961) S.R. (N.S.W.), at p. 17; (1960) 77 W.N., at p. 358.

The accident occurred when the respondent was travelling on his employer's business in a car owned by it and driven by the appellant, who was also an employee and who was driving the car in the course of his employment. The reason for the selection of the appellant as the party to be sued, rather than the employer on whose business the plaintiff was, is discernible when one remembers the incidence and effects of insurance. But a question arose at the trial, because after the accident the employer continued to pay the respondent what, at the trial, were described as his wages, although it seems he had not after the accident done any work, or any regular work. The sums so paid amounted to £2,015. The way in which this matter was dealt with by the learned trial judge in his directions to the jury has been described in other judgments just delivered. I need not repeat this.

The jury returned a general verdict for the plaintiff for £15,000. It was argued before us that there was no evidence that would justify a finding that the respondent had received the £2,015 described as wages on condition that he would refund it. Therefore, on the assumption that it was to be regarded as part of the assessment of £15,000, it was argued that the verdict for that amount was excessive as it included a sum for loss of wages that in fact the plaintiff had not lost. Concerning the objection that there was no evidence, it is enough to say that the local manager of the Farmers & Graziers' Co-operative Society gave evidence and spoke of the money as "an advance payment"; and said: "we expect to get that back when the case is finalized": and the respondent himself said that he had promised to pay it back and "It is absolutely definite that I will have to pay it back." In view of this, and there being no objection to the way in which his Honour put the matter to the jury, we should not say that the amount of the verdict contains an element that ought not to have been included. In my opinion the appeal should be dismissed.

At a glance

Court

Decision date

Before

Source

Judgment (78 paragraphs)

Parties