Mason v State of Queensland (No. 2)
[2023] QDC 122
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- Unreported Judgment
- Mason v State of Queensland (No. 2)[2023] QDC 122
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Mason v State of Queensland (No. 2)[2023] QDC 122
Mason v State of Queensland (No. 2)[2023] QDC 122
DISTRICT COURT OF QUEENSLAND
CITATION: | Mason v State of Queensland (No. 2) [2023] QDC 122 |
PARTIES: | JUSTIN MASON (plaintiff) v STATE OF QUEENSLAND (defendant) |
FILE NO/S: | D187/19 |
DIVISION: | Civil |
ORIGINATING COURT: | Maroochydore District Court |
DELIVERED ON: | 6 July 2023 |
DELIVERED AT: | Maroochydore District Court |
HEARING DATE: | Heard on the papers |
JUDGE: | Long SC DCJ |
ORDER: | The judgment given on 12 May 2023 be corrected, to be judgment for the plaintiff in the amount of $151,639.80 clear of the statutory refund to WorkCover Queensland. |
CATCHWORDS: | TORTS – NEGLIGENCE – ASSESSMENT OF QUANTUM – INTEREST – Pursuant to r 388(1)(b) of the Uniform Civil Procedure Rules, the judgment awarded in favour of the plaintiff is amended insofar as the interest past economic loss and past special damages, and the allowance for past loss of superannuation entitlements are adjusted – Where s 306N of the Workers’ Compensation and Rehabilitation Act 2003 prescribes a maximum appropriate interest rate to be applied. |
COUNSEL: | S Anderson for the Plaintiff B Charrington KC for the Defendant |
SOLICITORS: | Slater and Gordon for the Plaintiff Crown Law for the Defendant |
- [1]On 12 May 2023, there was an order made granting judgment for the plaintiff in the sum of $148,114.85 (after allowance for the statutory refund to WorkCover Queensland).[1] At that time, directions were made to allow for written submissions to be provided as to the issue of costs.
- [2]However, and prior to the completion of that timetable, the parties brought to the attention of the Court, the necessity to first address, pursuant to r 388(1)(b) of the Uniform Civil Procedure Rules 1999 (“UCPR”), some contended errors in respect of the allowances made for interest on the past components of economic loss and in the rate applied in respect of the allowance for past loss of superannuation entitlements.
- [3]As between the parties, there is agreement as to there being error in the calculation of three components of the award and that there should be correction pursuant to UCPR 388(1)(b). So much may be accepted, where it is appropriate to acknowledge that earlier errors in these calculations may be seen in the acceptance of the largely agreed position of the parties in written submissions, without return to adjustment, as otherwise occurred in respect of other components of the award, for the period which had elapsed before judgment was given. However, there are some disparate contentions as to precisely what adjustments should be made.
- [4]The most critical points of contention relate to the allowance for interest on past economic loss. Attention is drawn to the statutory prescription in s 306N of the Workers Compensation and Rehabilitation Act 2003, which relevantly provides:
“306NInterest
- (1)A court can not order the payment of interest on an award for general damages.
- (2)Interest awarded on damages compensating past monetary loss—
- (a)must not be more than interest at the appropriate rate; and
- (b)must be related in an appropriate way to the period over which the loss was incurred.
- (3)The appropriate rate is the rate for 10 year Treasury bonds published by the Reserve Bank of Australia under ‘Interest rates and yields—capital market’ as at the beginning of the quarter in which the award of interest is made.
Example of calculation of interest for this section—
Suppose that past monetary loss consists of medical expenses that have been incurred at a uniform rate over a particular period. The interest to be awarded would be calculated under the following formula—
A = am/100 x p x 0.5
where—
A is the amount of the award of interest.
a is a percentage rate decided by the court subject to the limit fixed in subsection (2).
m is the aggregate of the medical expenses.
p is the period over which the medical expenses have been incurred (expressed in years).”
The first point to note is that the award allowed in the judgment given on 12 May 2023, in the sum of $2,728.57, was calculated on the basis of $71,255 x 0.745% x 5.14 years.[2] That is, in allowance of a period from the point when the payment of workers compensation entitlement ceased until the date of the judgment. The rate of 0.745% was adopted as being half of the rate identified in the submissions of the parties as the 10 year treasury bond rate on 1 July 2021, of 1.49%.
- [5]Accordingly, it may be seen that this calculation did not have regard to the appropriate statutory reference point, as to “the appropriate rate”, being the published 10 year treasury bond rate as at 3 April 2023, which, as a matter of common ground, was 3.32%.
- [6]However and for the defendant, attention is drawn to the prescription that the award “must not be more than interest at the appropriate rate” and it is contended that there would be an “unfair and unjust outcome” by adoption “of a higher rate than fairly reflects the cost to the plaintiff of being without his relevant losses having regard to the relevant interest rates over the whole of the period in question, due to the present rate of interest being inordinately high after multiple interest rate rises”. From that premise and a contention of further “unfairness when considering the length of time taken to deliver judgment”, an approach is contended on a somewhat arbitrary basis of assessing “the normal timeframe under which judgment would have been anticipated” by averaging the applicable rates for the “court or before the trial and the nine months following”; that is, from July 2021 to and including April 2022, with the consequence of a halved rate of 1.008%.
- [7]The “appropriate rate” adopted pursuant to s 306N is that for the quarter in which the award is made. The prescription that the award must not be at more than that rate has the evident purpose of foreclosing contention as to the application of any higher commercially available rate, at any relevant time. The expedient of adoption of the rate at the time of award also has the virtue of simplicity of approach. Further, there can be no unfairness in the successful plaintiff being awarded interest for the entirety of the relevant period until the award is made. Any delay in delivery of judgment does not change the entitlement of the plaintiff to be compensated for being kept out of his award and in the circumstances where the defendant has had the commensurate benefit of not having to previously meet the payment, neither does this introduce any relevant sense of punishment of the defendant.
- [8]Moreover, any apparent sense of unfairness in the adoption of such simple expediency, as sought to be developed for the defendant, dissipates when contrasted with an alternative scenario of a period of falling interest rates, when the application of s 306N(2)(a) would prevent any comparable approach to accommodate any prior higher quarterly rates. It may be noted that the defendant does not contend that any reference should be made to the applicable bond rates for the entire period for which interest is to be awarded and did not raise any such contention in the submissions made at the conclusion of the hearing.
- [9]It is of importance in considering these contentions and the application of s 306N to understand that it is a provision which has similar effect to s 60 of the Civil Liability Act 2003, as that Act applies to “any civil claim for damages for harm”.[3] Each provision operates as a fetter upon the general power of a court in respect of civil proceedings, to include interest on an award for payment of money, including damages. That general power is now expressed pursuant to s 58 of the Civil Proceedings Act 2011,[4] as follows:
- (3)The court may order that there be included in the amount for which judgment is given interest at the rate the court considers appropriate for all or part of the amount and for all or part of the period between the date when the cause of action arose and the date of judgment.
- [10]In respect of that general power,[5] it has been observed that debt, economic or financial loss should generally be awarded at ordinary commercial rates.[6] That is because the underlying premise is in compensation of the plaintiff for loss or detriment in being kept from money due to him during the relevant period and recognised as “an integral element in the attainment of the object of damages”.[7]
- [11]Some comparison may be made with the rates adopted in Practice Direction 7 of 2013 and made pursuant to s 59(3) of the Civil Proceedings Act, in respect of interest payable on money orders and in the adoption of a uniform national approach to applicable interest rates. The adopted rates applicable to a money order debt (unless a court otherwise orders) are a rate calculated at 6% above the “cash rate last published by the Reserve Bank” before the commencement of any period commencing on 1 January and 1 July, in each calendar year. In Keeley v Horton,[8] it was noted that in the absence of contrary evidence (further noted to be a discouraged practice) “the prescribed rates are generally accepted as satisfying the need for economic loss to be compensated by an award of interest on the principal debt at ordinary commercial rates”. The result of such comparison, by reference to the record of such published rates on the Queensland Courts website is that the applicable rate as from 1 January 2023 was 7.10% and that between 1 January 2018 and 30 June 2023 the applicable rates varied between 6.10% and 7.5%.
- [12]Accordingly, the appropriate rate of 3.32% will be adopted and consistently with the example provided for s 306N,[9] the appropriate way of relating that rate to the period over which the loss was incurred, given the progressive incurrence of that loss, is to half that rate to 1.66%.
- [13]There is also a point of contention as to the period for which interest is to be allowed, with the plaintiff’s contention being for a period from the date of injury. However, and as the defendant contended from the outset and consistently with the approach taken to the assessment of the plaintiff’s past economic loss, from the point at which his WorkCover payments ceased in late March 2018, that was assessed to be approximately 5.14 years to the date of judgment.[10] Such an approach is consistent with that endorsed in Batchelor v Burke.[11]
- [14]Accordingly, instead of the amount $2,728.57, the appropriate allowance for interest on past economic loss is $6,079.76 (calculated as $71,255 x 1.66% x 5.14 years).
- [15]In respect of interest on past special damages, as was allowed on an out-of-pocket amount of $400.52, the same considerations and approach are appropriate, except that it is here more appropriate to allow for a period of 6.1 years,[12] from the date of injury.[13] Accordingly, and instead of the amount of $13.80, the appropriate allowance is $40.56 (calculated as $400.52 x 1.66% x 6.1 years).
- [16]Finally, and as to the allowance for past loss of superannuation entitlements, the contention for the plaintiff is accepted by the defendant.[14] That is, in order to appropriately reflect the increases in employer provided superannuation entitlements, from 1 July 2021 to 10% and from 1 July 2022 to 10.5%. Therefore, the prior allowance of $6,769.23 will be replaced by the award of $6,916.23.
- [17]In these circumstances, the order of the Court is that the judgment given on 12 May 2023 be corrected, to be judgment for the plaintiff in the amount of $151,639.80 clear of the statutory refund to WorkCover Queensland.
Footnotes
[1]Mason v State of Queensland [2023] QDC 80.
[2]Mason v State of Queensland [2023] QDC 80 at [102(d)].
[3]Section 4, Civil Liability Act 2003.
[4]See s 58(3), Civil Proceedings Act 2011.
[5]As it had earlier been recognised in other legislative provisions, such as s 47 of the Supreme Court Act 1995 (Qld).
[6]Gould v Vaggelas (1985) 157 CLR 215 at 275.
[7]Batchelor v Burke (1981) 148 CLR 448 at 455 and Haines v Bendall (1991) 172 CLR 60 at 66.
[8][2016] QCA 253 at [13].
[9]A practice noted in Bulsey v State of Queensland [2016] QCA 158, at [9] and [18], to have been regularly adopted in Queensland and approved in MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657, as appropriate in application to a total loss incurred progressively and at approximately uniform rate over a period.
[10]In the written submissions on these issues, filed by the defendant on 16/6/23, at [10], it is suggested that this period is 5.05 years, but a more approximate calculation is 5.14 years, as was applied in Mason v State of Queensland [2023] QDC 80 at [102(b)].
[11](1981) 148 CLR 448 at 455.
[12]The parties agreed that the duration from the date of injury to the date of judgment is 6.1 years.
[13]See written submissions of defendant, filed 16/6/23, at [12].
[14]See written submissions of plaintiff, filed 13/6/23, at [6] and written submissions of defendant, filed 16/6/23 at [13].