Fox v. Wood

148 CLR 438
35 ALR 607

(Judgment by: Murphy J.)

v. Wood

High Court of Australia

Judges: Gibbs C.J.

Murphy J.
Aickin J.
Wilson J.
Brennan J.

Subject References:
Loss of Earnings
Receipt of workers compensation payments
Tax deducted from payments
Statutory liability to repay gross amount
Whether difference between net amount received and gross amount repayable recoverable from tortfeasor

Legislative References:
Workmen's Compensation Act 1971 (SA) - Paragraph 84(b)

Hearing date: 2 April 1981
Judgment date: 7 August 1981


Judgment by:
Murphy J.

Assessment of common law damages in personal injury cases has become complicated by statutory provisions like workers' compensation Acts designed to alleviate losses, also by the impact of the Income Tax Assessment Act 1936 . I agree with Brennan J.'s observations on the inapplicability of Liesbosch, Dredger v. Edison , S.S. (Owners) to personal injury cases. The plaintiff's damage is often aggravated by financial problems which are a result of the accident. Insurance companies, which are almost always the real defendants, could avoid aggravation of damages by advancing moneys to the plaintiff .

To ignore the fact that workers' compensation payments must, on recovery of common law damages, be repaid in full, although the worker is liable to include the payments in his taxable income, would undermine one of the benefits of the Workmen's Compensation Act 1971-1974 and offend the elementary principle of restitution. The injured person should not suffer the loss of income tax paid on compensation repayable in accordance with the Act.

The appeal should be dismissed.