New South Wales Supreme Court CITATION : Zampetides v State of New South Wales [2000] NSWSC 829 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 20688 of 1997 HEARING DATE(S) : 17 August 2000 JUDGMENT DATE : 23 August 2000 Tassy Zampetides (Plaintiff) PARTIES : v The State of New South Wales (Defendant) JUDGMENT OF : Master Malpass COUNSEL : Mr M McAuley (Plaintiff) Mr P Hall QC/Mr L Gyles (Defendant) SOLICITORS : Paul A Curtis & Co (Plaintiff) Hunt & Hunt (Defendant) CATCHWORDS : modified common law damages - which statutory provision governs the deduction of workers compensation payments - amount to be deducted from awarded damages. Interpretation Act 1987, s 33. Law Reform (Miscellaneous Provisions) Act 1965, s 10, s 10 (1) (c) and (d). Miscellaneous Acts (Workers Compensation) Amendment Act 1987. LEGISLATION CITED : Workers Compensation Act 1926, s 63, s 63 (5). Workers Compensation Act 1987, Pt 5, s 149, s 150, s 151A, s 151B, s 151B (1) (b), s 151N, s 151N (1) and (3), s 151Z, Sch 6. CASES CITED : Kingston v Keprose Pty Ltd (No3) (1987) 11 NSWLR 404. DECISION : See Paragraph 23. THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER MALPASS WEDNESDAY 23 AUGUST 2000 20688 of 1997 TASSY ZAMPETIDES v THE STATE OF NEW SOUTH WALES JUDGMENT 1 In these proceedings, the parties ultimately resolved the question of liability by consent. The plaintiff accepted liability for contributory negligence to the extent of 22.5%. 2 I have already delivered two judgments on questions of damages. These judgments dealt with inter alia those heads of damage which were not resolved by the parties. 3 The defendant was the employer of the plaintiff. He has received payments of worker's compensation. A deduction has to be made from the damages that have been awarded in respect of compensation that has already been paid. 4 There is dispute between the parties as to the amount of the deduction. The defendant says that it should be the full amount of the compensation already paid. The plaintiff says that there should be a pro-rata deduction and that the sum to be deducted would be 77.5% of the payments already made. 5 The court is asked to determine this dispute. It was said to turn on a question of statutory construction. 6 The defendant relies on the provisions of s 151B (1) (b) of the Workers Compensation Act 1987 (the 1987 Act). The section is in the following terms:- " Effect of recovery of damages from employer on payment of compensation (1) If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act: (a) the person then ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and (b) the amount of any compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation. (2) This section does not apply to a person who recovers damages for non-economic loss in respect of an injury if the person does not recover any damages for economic loss in respect of that injury because of the operation of section 151H (No damages for economic loss unless injury serious). (3) A person who recovers damages for economic loss in respect of an injury but does not recover any damages for non-economic loss in respect of that injury because of the operation of section 151G (Damages for non-economic loss) is not prevented from recovering, and is not required to deduct under this section, any compensation under Division 4 (Compensation for non-economic loss) of Part 3 except compensation under section 67 (Compensation for pain and suffering). (4) In applying subsection (2) or (3) to a particular case: (a) the reason for the non-recovery of damages for economic loss or non-economic loss (respectively) must be solely the operation of section 151H or 151G (respectively), and not a combination of reasons (including, for example, a partial settlement or partial compromise of a claim), and (b) the amount of damages for non-economic loss applied in determining the operation of the threshold test in the relevant section must be calculated on the basis of the actual loss, and must not be reduced on the basis of any settlement or compromise or otherwise." The defendant says that the meaning of s 151B (1) (b) is plain and unambiguous and that it requires the deduction of the whole of the amount of compensation already paid. 7 The attention of the court has been drawn to provisions of the Law Reform (Miscellaneous Provisions) Act 1965 (the 1965 Act). The present section 10 thereof is in the following terms:- " Apportionment of liability in cases of contributory negligence 10. (1) Where any person suffers damage as the result partly of the person's own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage: Provided that: (a) this subsection shall not operate to defeat any defence arising under a contract; (b) where any contract or enactment providing for the limitation of liability is applicable to the claim, the amount of damages recoverable by the claimant by virtue of this subsection shall not exceed the maximum limit so applicable; (c) where any payments made to the claimant by way of compensation take effect pursuant to section 63 (5) of the Workers' Compensation Act 1926 to any extent as a defence to the proceedings by the claimant against his or her employer, such payments shall be reduced to the same extent as the damages recoverable by the claimant and shall be a defence to such reduced extent only; (d) where the claimant is liable to repay compensation to his or her employer pursuant to paragraph (a) of subsection (1) of section 64 of the Workers' Compensation Act 1926 or pursuant to section 151Z of the Workers Compensation Act 1987, the amount of compensation so repayable shall be reduced to the same extent as the damages recoverable by the claimant; (e) where the cost of any medical or hospital treatment or ambulance service for which the claimant's employer incurs liability under section 10 of the Workers' Compensation Act 1926 or Division 3 of Part 3 of the Workers Compensation Act 1987 remains unpaid at the time the claimant recovers damages the claimant's liability in respect of such cost shall as between the claimant and the claimant's employer be reduced to the same extent as the claimant's damages and the claimant's employer shall notwithstanding the recovery of damages and the provisions of section 151Z of the Workers Compensation Act 1987 remain liable to pay to the claimant the balance of such cost under section 10 of the Workers' Compensation Act 1926 or Division 3 of Part 3 of the Workers Compensation Act 1987, whichever is applicable. (2) Where damages are recoverable by any person by virtue of the foregoing subsection subject to such reduction as is therein mentioned, the court shall find and record the total damages which would have been recoverable if the claimant had not been at fault. (3) Section 5 of the Law Reform (Miscellaneous Provisions) Act 1946 shall apply in any case where two or more persons are liable or would, if they had all been sued, be liable by virtue of subsection (1) in respect of the damage suffered by any person. (4) No action for damages for the benefit of dependants of a deceased person under the Compensation to Relatives Act 1897–1953 shall be defeated by the fault or breach of statutory duty of the deceased person nor shall the damages recoverable in such action be reduced by reason of such fault or of such breach of statutory duty. (5) Where, in any case to which subsection (1) applies, one of the persons at fault avoids liability to any other such person or the person's personal representative by pleading the Statute of Limitations, or any other enactment limiting the time within which proceedings may be taken, the person shall not be entitled to recover any damages or contributions from that other person or representative by virtue of the said subsection. (6) Where any case to which subsection (1) applies is tried: (a) by a judge sitting without a jury the judge shall make the apportionment under subsection (1); or (b) by a judge sitting with a jury, the jury shall determine the total damages which would have been recoverable if the claimant had not been at fault and the extent to which those damages are to be reduced." 8 The 1965 Act brought about an amendment to the doctrine of contributory negligence (prior thereto contributory negligence was a complete defence to a cause of action founded on common law negligence). It did not apply to actions founded on breach of statutory duty. It enabled recovery of damages even though there had been contributory negligence (the damages were reduced to the extent of the plaintiff's share in the responsibility for the damage suffered). 9 As originally enacted, the 1965 Act gave the employer a defence in respect of payments of worker's compensation and provided that the damages were to be reduced to the same extent as the damages were recoverable by the employee. In effect, there was a proportionate reduction in the worker's compensation that was repayable. 10 The 1987 Act introduced a new regime. (see Part 5 "Common law remedies" ). Initially rights to sue were taken away (s 149). Later, there was a restoration of rights and a regime of modified common law damages was enacted. There were election provisions which required an election to be made between permanent loss compensation and damages from the employer (s 151A). The worker was not entitled to both. The regime of modified common law damages has its own provisions in relation to the matter of contributory negligence (s 151N). Subsection (1) provides that the common law and the enacted law as to contributory negligence apply to awards of damages except as provided by this section. A distinction may be drawn between law as to contributory negligence and the law as to deduction of compensation payments. Subsection (3) makes provision for those cases where the action is founded on breach of statutory duty. 11 The Legislature enacted the Miscellaneous Acts (Workers Compensation) Amendment Act 1987. The express purpose of this Act was to amend certain Acts as a consequence of and in connection with the enactment of the 1987 Act. The amendments effected thereby included an amendment to s 10 (1) (d) of the 1965 Act. This amendment saw the omitting of "-1965" and the inserting instead of "or pursuant to section 150 of the Workers Compensation Act 1987". A subsequent amendment to the 1965 Act saw the omitting of the reference to section "section 150" and the inserting instead thereof of section "section 151Z". This amendment followed the restoration of rights. 12 It is not in dispute that s 10 (1) (c) of the 1965 has application only in cases where the employee is suing the employer for damages and that s 10 (1) (d) has application where a third party tortfeasor is involved. It is not in dispute that s 10 (1) (d) has no present application. The plaintiff looks to s 10 (1) (c) as the provision which governs the present dispute. 13 It is not said that the compensation payments made to the plaintiff take effect pursuant to s 63 (5) of the Workers Compensation Act 1926 (the Act). The plaintiff concedes that a literal construction of the relevant legislation is as is put by the defendant. He says that the position that prevails is the result of oversight and should be overcome by a bold, if strained, construction which promotes the purpose or object had in mind by the legislature (see s 33 of the Interpretation Act 1987). 14 The plaintiff contends that the draftsman has clearly omitted to include in s 10 (1) (c) a reference to s 151B of the 1987 Act and that it should be read as if the words "or pursuant to section 151B of the Workers Compensation Act 1987" appears after the reference to s 63 (5) of the Workers Compensation Act 1926. 15 Section 151B of the 1987 Act is the equivalent of what was s 63 in the 1926 Act. The savings, transitional and other provisions of the 1987 Act (Schedule 6) provide that in the case of an injury received by a worker before 4.00 pm on 30 June 1987, the provisions of inter alia s 63 continue to apply. 16 For completeness, it may be said that over many years there have been amendments both to the 1987 Act and the 1965 Act. If it was a case of an oversight, nothing has been done during that time to rectify it. 17 Counsel have prepared written submissions. These were supplemented by oral argument. Counsel for the plaintiff has referred to a number of decided cases (including cases dealing with the approach to be taken in construing statutes). Although I have had regard to these cases, for present purposes it is not necessary to refer to all of them. However, perhaps I should mention that reliance is placed on the dissenting judgment of McHugh JA (as he then was) in Kingston v Keprose Pty Ltd (No3) (1987) 11 NSWLR 404. 18 The case for the plaintiff is put in a number of ways. It is said that the contention advanced on behalf of the defendant would produce an unreasonable or improbable result that was clearly not intended. It is said to be a clear case of oversight which led to the words "or pursuant to section 151B of the Workers Compensation Act 1987" being omitted. It was said that this approach more closely conformed to the discernible legislative intention and was to be preferred to the literal meaning. 19 The court has been informed that there is nothing in the parliamentary speeches which assists in resolving the present dispute. It is not said that there is any express guidance as to why there has been a change in approach by the legislature. It has been said that it may be part of the policy to put a cap on damages. There was a suggestion that the election requirements of the 1987 Act (s 151A) may be of relevance. The thrust of these provisions is to make the worker elect between compensation and damages recovered. He is not entitled to both. I take this no further as it has not been argued before me. Again, although it was not argued, it would seem that the plaintiff's approach, if correct, would bring about a situation where there were conflicting statutory provisions. 20 In my view, the plaintiff's case is confronted by a number of problems. It seems to me that the approach that is advanced is misconceived. The intent of the legislature was that s 151B (which is headed "Effect of recovery of damages from employer on payment of compensation") would govern the matter of the deduction of compensation from damages awarded under the Part 5 regime. Further, it was intended that s 10 (1) (c) would continue to govern those cases where the compensation payments took effect pursuant to s 63 (5) of the 1926 Act. A reading of s 10 (1) (c) reveals that it still retains the outmoded concept of the payments being a defence. What the plaintiff has in mind is incompatible with the language of s 10 (1) (c). Further, it would bring about a situation where there were conflicting provisions on the question of the deduction of compensation payments. Although it is not necessary to do so, I will for completeness express my views on the construction arguments. 21 There has been no clear identification of purpose or object that can be looked to so as to advance the case. I am not satisfied that a literal construction produces a result that was unintended and/or improbable or unreasonable. I am not satisfied that there was an oversight. 22 If this had been shown to be a case of legislative inadvertence, I am not satisfied that it was one where the court could on the authorities remedy the omission. In my view, to endeavour to do so, would see the court usurping the function of the legislature and require it to effect violence to the language employed in the statutory provision. 23 Accordingly, I do not accept the arguments advanced on behalf of the plaintiff. I consider that the deduction of compensation payments in this case is governed by s 151B. Therefore, in my view, the legislation requires that the full amount of compensation already paid be deducted from the damages awarded to the plaintiff in this case. ********** Last Modified: 09/27/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.