New South Wales Court of Appeal CITATION : Commonwealth of Australia v Elliott (No 2) [2004] NSWCA 403 HEARING DATE(S) : (On written submissions) JUDGMENT DATE : 9 November 2004 JUDGMENT OF : Giles JA; Hodgson JA; Tobias JA DECISION : Note that order 3 made on 8 October 2004 did not result in a substituted judgment. Order that in lieu of the judgment for the plaintiff against the defendant in the sum of $1,448,271.67 there be judgment for the plaintiff against the defendant in the sum of $1,031,685.80, such judgment taking effect on 26 November 2003. CATCHWORDS : Recalculation of damages following increase in discount for contingencies - no question of principle. ND CASES CITED : Brown v Falzari [2001] Tas SC 46; Goode v Thompson [2002] QCA 138. PARTIES : Commonwealth of Australia - Appellant Craig Andrew Elliott - Respondent FILE NUMBER(S) : CA 41195/03 COUNSEL : R E Williams QC & B Skinner - Appellant H Shore SC - Respondent SOLICITORS : Australian Government Solicitor, Sydney - Appellant Thomas & Company, Sydney - Respondent LOWER COURT Supreme Court - Common Law Division JURISDICTION : LOWER COURT SC 20467/99 FILE NUMBER(S) : LOWER COURT Foster AJ JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41195/03 SC 20467/99 GILES JA HODGSON JA TOBIAS JA Tuesday 9 November 2004 COMMONWEALTH OF AUSTRALIA v ELLIOTT (No 2) Judgment 1 THE COURT: Judgment in the appeal was given on 8 October 2004. It was necessary that the damages be recalculated, and the orders provided for agreement and liberty to apply in the event of disagreement. There was substantial agreement, but disagreement on two matters, one of which was in truth not a matter of recalculation. Loss of superannuation benefits 2 The judge arrived at damages of $460,000 for future economic loss after deduction of 15 per cent for contingencies. We held that the reduction should be 35 per cent. 3 The judge said - "18 A claim is also made for loss of superannuation benefits. It is not easy to arrive at an appropriate figure. However, the report of the defendant's expert arrives at a calculated loss of $63,758.00 which is based upon a future loss of income of $217,103.00. This figure is, of course, lower than the figure I have awarded for future loss of earnings. In all the circumstances, I think it appropriate to allow $70,000.00 under this heading." 4 The appellant submitted that in the recalculation the damages for loss of superannuation benefits should be reduced by 35 per cent to $45,000. It acknowledged that the way his Honour arrived at the $70,000 was not clear, but said that in principle adjustment of future economic loss required concomitant adjustment of loss of superannuation benefits. The principle is correct, and was recognised in two cases to which the appellant drew attention, Goode v Thompson [2002] QCA 138 at [11] and Brown v Falzari [2001] Tas SC 46 at [95]. 5 The respondent first submitted that we did not say in our reasons that there ought to be a reduction in the damages for loss of superannuation benefits, and that the appellant's submission went beyond the liberty to apply. The respondent's submission is not correct. In [87] of our reasons we stated the increased deductions for contingencies for specific heads of damages, including future economic loss, and added that "[o]ther items will need consequential adjustment …". Loss of superannuation benefits is such an item. 6 The respondent secondly submitted that the appellant did not at the hearing of the appeal contend that there should be a reduction in the damages for loss of superannuation benefits, and that the appellant's submission was not open to it. The appellant did not specifically so contend, but it was plain that adjustment would be required if the damages for economic loss were adjusted. The respondent's submission is without either substance or merit. 7 The respondent thirdly submitted that in any event a consequential adjustment should not be made. He said that the judge's global amount of $70,000 was approximately half that which would have followed mathematically from substitution of $460,000 in place of $217,103, and that the judge must have taken other matters into account including a significant amount for contingencies. He said that the $70,000 remained an appropriate global amount notwithstanding that, consequent upon this Court's decision, future economic loss was reduced to $355,090.45. 8 Neither the appellant nor the respondent essayed a principled recalculation of loss of superannuation benefits. The judge's approach was undoubtedly global, not least in restriction to future economic loss (although that may have been because of the way the respondent put his case). There is no reason to think that the judge made a greater allowance for contingencies in coming to the $70,000 than the 15 per cent in coming to future economic loss. In the absence of a principled recalculation, we think that the increase in the reduction from 15 per cent to 35 per cent should be carried through into the judge's $70,000. 9 That does not mean, however, a reduction from $70,000 to $45,500. The reduction should reflect the increased 20 per cent. The recalculated amount is $53,529.41. Interest 10 The judgment at trial was given on 26 November 2003. Section 95 of the Supreme Court Act 1970 provides for interest on a judgement unless the Court otherwise orders. The disagreement was over interest under s 95 from 27 November 2003 to date. 11 The appellant submitted that interest should not be payable on the judgment for that period. It said that the respondent's cause of action accrued approximately 16.75 years before judgment, that the judge awarded interest for 15 years only, and that the judge presumably considered that in the exercise of his discretion the respondent's entitlement to interest should be cut short. So, it said, this Court should exercise a discretion not to disturb the previous award of interest by declining to allow interest from 27 November 2003 to date. 12 In our opinion, the appellant's submission should not be accepted. His Honour was dealing with interest to the date of judgment. He did not order that interest should not run on the judgment. So far as we are aware he was not asked to do so, and none of the grounds of appeal alleged that he was in error in failing to do so. As it happened, the respondent did not seek to enforce the judgment pending the determination of the appeal, and the appellant did not pay the whole or any part of the amount of the judgment to the respondent. Thus the appellant had the benefit of keeping the judgment sum, and the respondent had the corresponding detriment. The substituted judgment should take effect on 26 November 2003, and we see no reason why it should be ordered that interest not run under s 95. 13 The appellant further submitted that if we awarded interest under s 95 the interest should only be on non-refundable amounts. The submission was not elaborated, in particular by exposition of what non-refundable amounts were involved. The interest follows from s 95, and is not awarded by us: the submission should be treated as a request for an order otherwise. Presumably by non-refundable amounts the respondent meant those losses or expenses which had in fact been made up to or paid for the respondent, for example by ComCare (see the judge's reasons [126] – [129]) but which, if part of the damages, the respondent was not obliged to refund to ComCare. It is not clear that there were any such amounts. It is not appropriate to raise this matter purportedly as one of recalculation, and we decline to enter into any dissection of parts of the judgment on which interest should run. The substituted judgment 14 The recalculated damages are - General damages $112,500.00 Interest on general damages $16,875.00 Past economic loss $268,316.00 Interest on past economic loss $14,653.85 Future economic loss $355,090.45 Long service leave entitlement $5,689.00 Interest on long service leave entitlement $3,156.00 Loss of superannuation benefits $53,529.41 Fox v Wood $58,776.00 Past domestic assistance $40,000.00 Future domestic assistance $24,000.00 Past out of pocket expenses $133,475.14 Future out of pocket expenses $75,000.00 Total $1,031,685.80 15 We note that order 3 made on 8 October 2004 did not result in a substituted judgment. We order that in lieu of the judgment for the plaintiff against the defendant in the sum of $1,448,271.67 there be judgment for the plaintiff against the defendant in the sum of $1,031,685.80, such judgment taking effect on 26 November 2003. ********** Last Modified: 11/10/2004 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.