Mountford v State of South Australia A18/2001 [2002] HCATrans 190 (19 April 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A18 of 2001

B e t w e e n -

DAVID JOHN MOUNTFORD

Applicant

and

STATE OF SOUTH AUSTRALIA

Respondent

Application for special leave to appeal

GAUDRON J

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 19 APRIL 2002, AT 10.12 AM

Copyright in the High Court of Australia

MR D.E. CLAYTON, QC: May it Court please the Court, I appear with my learned friend, MR R.L. PROUD, for the applicant. (instructed by Proud & Company)

MR B.M. SELWAY, QC: Solicitor-General of the State of South Australia. May it please the Court, I appear with my learned friend, MR W.I. LINES, for the respondent. (instructed by the Crown Solicitor for the State of South Australia)

GAUDRON J: Yes, Mr Clayton.

MR CLAYTON: If the Court pleases, this application is primarily concerned with the interpretation of section 25(1)(b) of the South Australian Wrongs Act 1936 , but it raises a single question which is the question of what is meant by the term "damage" which appears in that section. At the outset I am obliged to inform the Court that section 25 of the South Australian Act has now been repealed but that repeal has no consequences so far as this case is concerned and legislation which is the equivalent of section 25 still exists in other States and other places and so with the point raised by this appeal still has general application.

There is a second provision which is raised by the application, that is, section 54 of the Workers Act. That section, in our submission, is only of secondary importance because that section had the effect of limiting the amount of recovery by the plaintiff.

Section 25 is set out in the application book at page 14, and the relevant provision of the section provides:

Where damage is suffered by any person as a result of a tort -

Just pausing there, the application involves the interpretation of that word "damage" appearing in section 25(1), and so the section reads:

Where damage is suffered by any person as a result of a tort -

And then in paragraph (b):

if more than one action - - -

GAUDRON J: What can it mean other than an injury compensable by damages, given that a tort is not complete until there is some injury?

MR CLAYTON: In our submission, your Honour, "damage" includes the injury itself and the foreseeable consequences of the injury. It is our submission that the Full Court confined the expression "damage" to the injury itself and disregarded the consequences of the injury.

GAUDRON J: I do not understand that. The consequences of the injury are matters which go to the calculation of damages. There must be an injury before there is a tort.

MR CLAYTON: Yes. In this case the worker suffered serious burns and that was the injury. Support for the proposition that damage includes both the injury itself and other foreseeable consequences is to be found in the reasons in Mahony v J Kruschich (Demolitions) Pty Ltd, the relevant passage set out at page 32 of the application book, at about line 23. What the Court said in that case was that:

Dillingham makes it clear that "damage" in s 5(1)(c) is not to be equated to the "damages" awarded by a court. In negligence, "damage" is what the plaintiff suffers as the foreseeable consequence of the tortfeasor's act or omission. Where a tortfeasor's negligent act or omission causes personal injury, "damage" includes both the injury itself and other foreseeable consequences suffered by the plaintiff.

We would respectfully submit that that definition of "damage" is the correct definition of "damage" - - -

GAUDRON J: But that does not advance your case, does it?

MR CLAYTON: It does, your Honour, in that in the present case the injury suffered by the worker gave rise to pain and suffering and non-economic loss but also to a loss of earnings, which was the economic loss and, in our submission, "damage" for the purposes of the section includes both the non-economic loss and the economic loss, but the Full Court took a different view of "damage" and - - -

GAUDRON J: But how does that advance your case? I would have thought that there was a lot of force in the respondent's submission that the only way you could bring yourself outside section 25(1)(b) is by establishing that what was recovered in the earlier proceeding was not within the concept of "damage" in paragraph (b), is that not right? I mean, would you not have to go so far?

MR CLAYTON: The requirement of the section is that the second action should be an action in respect of that damage which was the subject of the first action. In this case the first action was commenced for damages which were limited by section 54 of the Workers Act - - -

GAUDRON J: But what sort of damages?

MR CLAYTON: The damages recoverable pursuant to the Workers Act were damages for non-economic loss only and those damages were confined by a percentage which is set out in section 54. The damages recoverable under section 54 were not full compensatory damages. In the second action the plaintiff claims full compensatory damages, which include damages for the economic loss which he has suffered. That damage could not be recovered in the first action and because the second action - - -

GAUDRON J: It could not be recovered against that tortfeasor, but you could, could you not, have proceeded against both tortfeasors in the one action?

MR CLAYTON: Yes.

GAUDRON J: Subject to the working out of the Wrongs Act and having an eye to the provisions of that statute, you could have recovered full damages on your - - -

MR CLAYTON: Yes and, in our submission, in that event, there would have been two judgments, one against the employer for an amount limited by section 54 and the other against the third party for compensatory - - -

GAUDRON J: But you did not do that.

MR CLAYTON: That did not happen, your Honour, no.

GAUDRON J: No, and prima facie you come within the exact terms of section 25(1)(b) unless you can say that the action was not for damage of the kind referred to in that paragraph - or was it in respect of the damage - I think it must be the "damage" referred to in subsection (1).

MR CLAYTON: Yes, with respect, we agree with that interpretation, your Honour.

GAUDRON J: But that is what you have to say.

MR CLAYTON: Yes, and, in our submission, "damage" includes the injury and the foreseeable consequences of the injury. In this case the injury is the burns, the foreseeable consequences of the injury was, first, non-economic loss and, secondly, economic loss. In the first action the plaintiff claimed damages which were restricted to non-economic loss.

GAUDRON J: Yes.

MR CLAYTON: In the second action, the plaintiff claims economic loss, and so - - -

GAUDRON J: But do you not have to go back to the "damage suffered" in subsection (1)?

MR CLAYTON: Yes, your Honour.

GAUDRON J: And what do you say that refers to?

MR CLAYTON: In my submission, the "damage" referred to in subsection (1) is the injury itself - the burns - and the non-economic loss matters giving rise to pain and suffering and matters of that ilk, and the economic loss, which was not - - -

GAUDRON J: But was your action not in respect of that damage? You see, paragraph (b) does not say, "where action is brought to recover compensation for that damage". It says, where it is brought "in respect of that damage".

MR CLAYTON: In our submission, your Honour, the economic loss was different damage from the non-economic loss. The first action was in respect of non-economic loss. The current action is in respect of economic loss, in our submission, in respect of different damage - - -

GAUDRON J: Economic loss only? Only restricted to economic loss?

MR CLAYTON: No, it is not, your Honour. It includes some aspects of non-economic loss, which were not taken up by the first proceedings: a psychological injury and some other components which did not form part of the first action. But the simple point is that the first action was for non-economic loss; the second action is for economic loss. Because of that, the two actions have not been brought in respect of that damage, and accordingly the actions do not fall within the ambit of section 25(1)(b).

The question of damage is, of course, one of wide application. It is an expression which appears in many different contexts. In our submission, the effect of the judgment of the Full Court is to interpret the word "damage" in a way which was unduly restrictive. The court, in effect, confined the word "damage" so that it referred only to the injury and did not include the foreseeable consequences of the injury. The Chief Judge at first instance had held that the only damage for which the first action could have been brought, and was brought, was for non-economic loss. His Honour held that it could not be said that in the first action the plaintiff brought an action for the damage he suffered in the accident. His Honour said, perforce, the plaintiff's claim is:

limited to that portion of damage or loss for which he was permitted to bring an action against an employer.

He concluded that:

this action was not one in respect of the same damage that was the subject of -

the earlier action.

With respect, we submit that the learned Chief Judge came to the correct conclusion, and that when the Full Court rejected the findings of the Chief Judge, the Full Court erred. In particular, the definition of "damage" applied by the Full Court is contrary to the definition in the passage in Mahony which I read to the Court earlier. Our submission is that the Full Court took an approach which was far too narrow and fell into error when it interpreted the word "damage" in the way that it did.

What the Full Court did was to look at the injury itself rather than the injury and the consequences and our submission is that the expression "damage" should include both, the injury and the consequences. They are our submissions, if the Court pleases.

GAUDRON J: Yes, thank you, Mr Clayton. Yes, Mr Solicitor.

MR SELWAY: Your Honours, there are two arguments that could arise in this. The first of them, which is the one that the applicant puts, relates to the meaning of the word "damage". We agree with the applicant as to that meaning and also rely upon Mahony's Case for that. We disagree as to the effect of that. The applicant argues that damage appearing in paragraph (b) means all damage, so that one would read it as saying:

if more than one action is brought in respect of that damage by or on behalf of the person -

We say that that is unnecessary and inappropriate, in the context. We say that the word should be construed in its normal sense as appears in subsection (1), the preamble, and in the other paragraphs, and when construed that way all that is necessary is that there is an action brought in respect of that damage, being the injury - any foreseeable parts of the injury and so forth, a question of fact in each case.

In this case there is no doubt, we would say, that the claim is brought in respect of the same damage, meaning injury and foreseeable consequences. Your Honours should have with you the - which is a separate probably four sheets which were the proceedings in the first action, the action against the employer, headed, "South Australian District Court Between David John Mountford and Scotsbuilt Pty Ltd". Do your Honours have that? It is not in the book. It was left out but it was an extra. It was before the Full Court and in the Full Court's appeal book.

GAUDRON J: Yes, we have that.

MR SELWAY: Your Honours can see at paragraph 10 and following are the:

Particulars of injury loss and damage -

Your Honours can see it is:

suffered severe burn injuries to his body . . . to travel to Fregon Mission . . . left with severe and embarrassing scarring -

and so forth. Your Honours can see from the application book on pages 4 to 5 the particulars of injury in respect of this claim and your Honours will see that it is fundamentally the same injury and the same damage. It is true that it has added to it "a post traumatic disorder" in 11.3 and 11.4, but our submission would be that it is a case involving the same damage as the first case.

The applicant's submission has the effect that if the applicant had voluntarily sought only loss of wages from his employer he could subsequently sue the state for non-economic loss. That is to say, ignoring the Workers Act entirely, section 25(1)(b) would have no application unless in the first action the person had sued for all of the damage. We say that that is not the purpose and effect of section 25(1)(b) for the reasons set out by the Full Court. Our submission, then, is that the Full Court was plainly right on that question.

GAUDRON J: I think we need not trouble you further, Mr Solicitor.

MR SELWAY: Thank you, your Honour.

GAUDRON J: Anything in reply, Mr Clayton?

MR CLAYTON: There are no submissions in reply, if the Court pleases.

GAUDRON J: Yes, thank you.

We are of the view that the proposed appeal does not enjoy sufficient prospects of success to justify the grant of special leave. Moreover, we note that the provision which is central to the proposed appeal, namely, section 25(1)(b) of the Wrongs Act has since been repealed. Accordingly, special leave is refused with costs.

We will adjourn briefly to reconstitute.

AT 10.32 AM THE MATTER WAS CONCLUDED