Redding v Lee

151 CLR 117
47 ALR 241

---

(Judgment by: DEANE J)

Between: REDDING
And: LEE
Between: EVANS
And: MULLER

Court:

Judges: Gibbs C.J.
Mason J.
Murphy J.
Wilson J.
Brennan J.

Deane J.Dawson J.

Subject References:
Damages

Judgment date: 19 May 1983 NBERRA

---

Judgment by:
DEANE J

As a result either of statutory compulsion or accepted standards of business prudence, almost all defendants in actions for damages for personal injuries are insured. Given the spread of insurance, the ultimate burden of any liability to pay damages is, to some extent, cast upon the community generally through the direct and indirect burden of insurance premiums. It is the community generally, through direct and indirect taxes, which bears the ultimate burden of invalid pensions paid from consolidated revenue pursuant to the Social Security Act 1947 (Cth) ("the Act"). In these circumstances, I have difficulty in accepting that there is to be discerned in the provisions of the Act a legislative intent that a person, who is, in the relevant sense, an invalid by reason of an injury caused by the negligence of another and who has actually received payment of invalid pension in the period between injury and trial, should, in respect of that period, receive compensation for loss of earnings calculated on the same basis as if the payment of invalid pension had not been received.

It may be that the generalizations contained in the first paragraph of this judgment are more apparent now than in 1961 when National Insurance Co. of New Zealand Ltd. v. Espagne (1961) 105 CLR 569 was decided. By and large however, they were as true then as they are now. As has been stressed in argument in the first of the present appeals (Redding v. Lee), there are some differences between the Act in its present form and the Act in its 1961 form which make the existence of the legislative intent imputed to the Parliament more unlikely in that they reduce the discretionary element in entitlement to an invalid pension. If, however, that intent was properly to be discerned in the Act in its 1961 form, those differences cannot properly be seen as having removed it. In my view, the Full Court of the Supreme Court of South Australia was correct in concluding that the decision in Espagne precluded account being taken in Redding v. Lee of the fact that the plaintiff had received more than $6,000 by way of invalid pension for periods in respect of which he claimed full compensation for lost earnings which, if earned, would have precluded receipt of pension payments. It follows that the real question in the appeal in Redding v. Lee is whether the Court should decline to follow Espagne at least to the extent that it is authority for the proposition that payments of invalid pension which have actually been received at the date of trial should be disregarded in assessing damages for loss of earnings.

Espagne has now stood for more than twenty-one years. It has been referred to in many subsequent cases in this Court without challenge to its authority. It has been followed and applied as a matter of course in innumerable cases by courts responsible for assessing damages as compensation for personal injury in negligence cases. The double benefit which it establishes in cases where payments of invalid pension have actually been received at the time of trial has, no doubt, been accepted as part of the established social structure and as but another anomaly in a field (damages for personal injury) where the existence of an anomaly is far from anomalous. The Act has been amended on more than forty occasions since Espagne without any provision being introduced either to make clear that there should not be read into the Act an intention that receipt of invalid pension should be disregarded in assessing compensation for personal injury or to remove the double benefit by providing for the recoupment by consolidated revenue of payments of invalid pension which a successful plaintiff has received in the period between injury and trial. In the circumstances, it would be wrong for the Court to decline to follow Espagne at this stage.

I would dismiss the appeal in Redding v. Lee solely on the basis that the decision in Espagne is in point and should be followed. I would uphold the appeal in Evans v. Muller for the reasons given by Mason and Dawson JJ. Subject to what has been said above, I agree with the statement of general principle contained in the judgment of Mason and Dawson JJ.

One cannot but be conscious of the unfortunate aspects of a decision that payments received on account of unemployment benefits should be taken into account in the assessment of damages while payments received on account of invalid pensions are not. Quite apart from the obvious appearance of incongruity, the benefit to the insurer resulting from payment of unemployment benefits has almost as little to justify it as the double benefit to the plaintiff in the case of an invalid pension and is liable to constitute a further financial advantage to be obtained by an insurer from delay in the settlement or hearing of a claim. The obvious and commonsense solution - i.e. that payments on account of either invalid pension or unemployment benefits not be taken into account in the assessment of damages but, to the extent appropriate, be recouped to consolidated revenue in much the same manner as payments received on account of workers' compensation are recouped to the workers' compensation insurer - lies, however, in the hands of the Parliament and not of the Court.