IN THE MAGISTRATES' COURT OF VICTORIA AT MELBOURNE
W02582947
B E T W E E N
PETER WILLIAM MILLANE
Plaintiff
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NATIONAL BUS COMPANY (VICTORIA) PTY. LTD.
Defendant
D E C I S I O N
Delivered: 4 September 2008
MR. B. WRIGHT, MAGISTRATE
Mr. M. O’Loghlen QC and Mr. J. O’Brien (instructed by Felipe Tellez) appeared for the Plaintiff.
Ms. M. Tsikaris (instructed by Dibbs Abbott Stillman) appeared for the Defendant.
ACCIDENT COMPENSATION – “TABLE OF MAIMS” – REJECTION - PRIOR DAMAGES CLAIM AGAINST EMPLOYER - SETTLEMENT OF NEGLIGENCE CLAIM AGAINST FORMER SOLICTITORS IN RESPECT OF DAMAGES CLAIM – WHETHER WORKER ESTOPPED BY THAT SETTLEMENT – ACCIDENT COMPENSATION ACT ss. 98, 135A(1),(11),(18)
(TRANSCRIBED BUT NOT RECORDED BY LEGAL TRANSCRIPTS)
LEGAL TRANSCRIPTS PTY LTD
Suite 18, 600 Lonsdale Street, Melbourne - Telephone 9642 0322
R U L I N G
HIS HONOUR: The parties seek a ruling in this matter which is a claim for a lump sum benefit pursuant to s.98 and 98A of the Accident Compensation Act (“the Act”) for the right arm.
The plaintiff alleges that he injured his right arm while working as a bus driver with the defendant on or about 4 June 1997 (“the incident”). He was paid weekly payments and medical and like expenses until 5 August 1999.
A ruling is sought as to the effect of a settlement against his former solicitors of a damages claim arising out of their alleged negligence. It had been alleged that they had negligently dealt with the plaintiff's claim for damages against the defendant pursuant to s.135A of the Act arising out of the incident.
For the purpose of this ruling I had limited information, including the agreed facts. I had a s.98/98A claim form, or at least an original claim form dated 17 June 1997, an Originating Motion between the parties which had been issued in the County Court, a Statement of Claim between the plaintiff and his former solicitors Nowicki Carbone and a Mr Kemp who was apparently employed as a solicitor at that firm.
I also had a Release between the Plaintiff and those solicitors, a s.98/98A claim form dated 8 June 2004 and had other information including an affidavit of the Plaintiff pursuant to the Ministerial Directions for purposes of the s.135A application.
In its Defence the defendant in this action has pleaded that the settlement of the action against his former solicitors precludes the plaintiff from recovering any s.98/98A lump sum benefits as claimed. It says that the plaintiff's original common law claim was struck out by reason of being out of time and that the plaintiff received $95,000 in damages from a consequential damages claim against his former solicitors by way of a settlement of that claim (“the settlement”).
It pleads the plaintiff is estopped from continuing with the s.98/98A claim for a number of reasons based on the settlement. The basis for the defence is particularised on a number of grounds including s.135A(18), unjust enrichment, the receipt of damages itself as well as the allegation that the damages settlement had already restored the plaintiff to his pre-injury position.
It was agreed that the plaintiff had lodged s.98/98A claim forms for the relevant injuries on or about 12 October 1999, 8June 2004 and 1 March 2005.
The first s.98/98A claim form was served at about the time of the initial application for a serious injury certificate pursuant to s.135A of the Act. This may well have been done for the purposes of the common law claim only. However, this is of no real consequence to the present proceedings.
Both parties agreed that the settlement itself is not of a type covered by s.135A(1) of the Act and thus the specific preclusion from later obtaining s.98/98A benefits, that is in s.135A(18), does not apply to the plaintiff.
However, the lack of a specific provision in this Act precluding a plaintiff from obtaining s.98/98A benefits in this situation does not necessarily end the matter.
Senior counsel for the plaintiff puts his client's case simply and relies upon a High Court decision in Manser v. Spry 181 C.L.R. 428, especially at pp.438 and 439. He says that in the absence of a specific legislative intention the normal common law rules should apply. That is, a court in assessing the damages to the plaintiff, or the legal representatives in doing so, would and should have taken into account a later s.98/98A entitlement, being one of the ordinary incidents of a workers employment.
Thus he says there is no double compensation and the plaintiff is entitled to claim s.98/98A benefits despite the settlement. He concedes that there would have been some allowance for pain and suffering in the settlement.
Counsel for the defendant has referred to a number of cases where there is little if any specific legislative guide to situations similar in some ways to the present, and the courts were required to look at the general principles as to double compensation. In short, she submitted that the parties should have and would have assessed the appropriate amount of damages on the basis that the plaintiff would not have had any future right to obtain an s.98/98A benefit.
It seems to me therefore that this case really involves a consideration of the basis upon which the “loss of chance” in the action against the former solicitors was or should have been assessed.
The value of the “loss of chance” was really dependant on the strength of the original action, apart from the issue of negligence of the solicitors.
Working back from the settlement sum of $95,000 the value of the “loss of chance” was obviously worth more than nominal damages and was of some substance, as assessed by the respective parties and their legal advisors. Beyond that statement I make no further comment.
In Johnson v. Perez 166 C.L.R. 351, the High Court in a majority decision set out a number of principles as to the assessment of damages and a loss of value in a claim against solicitors in similar circumstances.
A court in deciding, and the parties in compromising, such a claim should proceed on the basis that the plaintiff's loss crystallises at the date when the cause of action against the solicitors arose. However, the damages should be assessed by reference to the amount which would have been appropriately awarded when the plaintiff's action against the third party would ordinarily have been decided except for the solicitors’ negligence.
That would have involved a judge and the parties taking a broad brush approach to quantification including such issues as the relevant principles of law then governing the assessment of damages. I also refer to Nicolaou v. Papasavas 156 C.L.R. 394 at p.404.
In looking at the settlement from this point of view the parties should have and would have considered quantification on the basis that there had been no s.98/ 98A recovery, and thus no need to apply s.135A(11) in order to deduct such a benefit. Although a s.98/98A claim had been lodged, it appears common that the claim had not been taken any further.
Having regard to s.135A (1) and (18) of the Act, I do not accept the plaintiff's submission that the parties to the original action would have contemplated proceeding with or compromising the claim on the basis that a future s.98/98A claim would remain open.
The “loss of chance” was the loss of the original negligence claim against the employer and assessed on that basis. Thus, I accept the submissions of counsel for the defendant as to the basis of the settlement.
As I pointed out above, the fact that the Act lacks specific provisions governing the situation is not necessarily conclusive. As Kirby P. (as he then was) pointed out in Kempsey Hospital v. Thackham [1995] 36 N.S.W.L.R. 492,
"In default of a clear and simple statutory regime the courts have been forced to construct a common law mechanism designed to achieve the universally accepted objectives, (1) the avoidance of over-compensation and (2) the achievement of justice as between the plaintiff, the tortfeasor liable to pay damages and the remaining employer who is still liable to pay compensation benefits."
Similar observations are later made in that case by Handley JA in referring to another New South Wales Court of Appeal decision in Hood Constructions v. Nicholas [1987] 9 N.S.W.L.R. at p.60.
Similar approaches as to double compensation have been taken in Victorian courts, albeit in damages claims, in Soper v. Melville Orton & Lewis, (per Smith J, Supreme Court del. 19 January 1990) and Boncristiano v. Lohmann [1998] 4 VR 82.
In the present case the parties would have, and should have, assessed compensation payable by way of “loss of chance” on the basis that there would have been no future s.98/98A rights.
I find that the scope of the settlement included pain and suffering damages without any exclusion or allowance for any past or future entitlements to separately claim s.98/98A lump sum benefits.
I therefore seek the assistance of the parties as to the appropriate further disposition of this matter.
(After discussion the proceedings were adjourned by consent to 8 September 2008 when they were further adjourned pending an appeal by the plaintiff.)
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