69 NSWLR 533]

CHAINA v THE PRESBYTERIAN CHURCH (NSW) PROPERTY TRUST

533

CHAINA v THE PRESBYTERIAN CHURCH (NSW) PROPERTY TRUST

and Others
[2007] NSWSC 353
Common Law Division: Howie J
19 March, 19 April 2007
Damages Personal injuries Economic loss Action for loss of services
Statutory provisions governing awards of personal injury damages
Intended to apply to all forms of compensation Applicable generally to
action for loss of services Provision capping awards for loss of
earnings Inapplicable to such action Civil Liability Act 2002, Pt 2
and s 12.
Negligence Damages Personal injuries Action for loss of services
Statutory provisions governing awards of personal injury damages
Intended to apply to all forms of compensation Applicable generally to
action for loss of services Provision capping awards for loss of
earnings Inapplicable to such action Civil Liability Act 2002, Pt 2
and s 12.
Employment law Rights of employer against third parties Injuries to
employee Action for loss of services Statutory provisions governing
awards for personal injury damages Applicable generally to action for
loss of services Provision capping awards for loss of earnings Not
applicable to such action Civil Liability Act 2002, Pt 2 and s 12.
The Civil Liability Act 2002, Pt 2, was entitled Personal injury damages.
Section 11A, which appeared in Pt 2, provided, relevantly, that that Part applied in
respect of an award of personal injury damages, except an award excluded from
the operation of the Part by s 3B. By s 11, personal injury damages was defined
to mean damages that relate to the death of or injury to a person.
Section 12, which also appeared in Pt 2, set a cap on damages which could be
recovered for past or future economic loss.
Held: (1) Part 2 of the Civil Liability Act 2002 applies generally to a claim for
loss per quod servitium amisit. Apart from the Acts nominated exceptions, which
did not include that tort, parliament intended its provisions to apply to all forms of
compensation arising from the death or injury of a person regardless of how that
injury or death sounded in damages. Its provisions should be read with this
purpose in mind. (542 [35][36], 544 [41][42], 545 [49])
(2) However, it was not the intention of parliament that s 12 should apply to a
claim for loss per quod servitium amisit. The words and concepts used in s 12(2)
of that Act have a clear meaning that is incompatible with a loss of services by an
employer. (545 [50])

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CASES CITED
The following cases are cited in the judgment:
Coco v The Queen (1994) 179 CLR 427
Empire Shipping Co v Owners of Ship Shin Kobe Maru (1991) 32 FCR 78
GIO Australia v Robson (1997) 42 NSWLR 439
Kaplantzi v Pascoe (2003) 40 MVR 146
Kenbrad Pty Ltd v Vakauta (2001) 34 MVR 50
Landon v Ferguson (2005) 64 NSWLR 131
R v Janceski (2005) 64 NSWLR 10
Railways, Commissioner for (NSW) v Scott (1959) 102 CLR 392
State Government Insurance Office (Qld) v Crittenden (1966) 117 CLR 412
Thompson v Australian Capital Television Pty Ltd (1994) 54 FCR 513

NOTICE OF MOTION
This was the hearing of a notice of motion for the determination of issues
separately before trial pursuant to the Uniform Civil Procedure Rules 2005,
r 28.2.
P R Garling SC with A S Bell SC and J H Stephenson, for the plaintiffs.
R R Stitt QC and G L Turner, for the defendants.
Cur adv vult
19 April 2007
Howie J.
1

Background
These proceedings arise from the death of a schoolboy who drowned while
attending a school camp for a weekend in October 1999. It is unnecessary to
say more about the particulars of the plaintiffs claims in order to determine
the notice of motion before me but I note that the defendants admit liability.
The first to third and sixth plaintiffs are the deceaseds two brothers, his
father and mother. The fourth and fifth plaintiffs (the company plaintiffs) are
family companies operated by the father and mother who are the directors and
sole shareholders of the two companies. The sixteen defendants were all
involved in the running of the school or the camp at the relevant time.
The deceaseds parents claim damages as a result of nervous shock or
psychiatric injury occasioned by the death of their son. This is a claim for
personal injury as a result of the negligence of one or more of the defendants.
The company plaintiffs claim for loss of the services of the parents as
principals, directors and managers of the businesses they ran as a result of the
injuries suffered by the parents. The companies allege past and future
economic loss, for example by way of a decline in business and the resultant
loss in profits. This is a claim for loss per quod servitium amisit. It relates to
the loss to an employer, the plaintiff in the cause of action, of the services of
an employee occasioned by the injury suffered by the employee as a result of
the tortious conduct of the defendant to the employee. The action of the
employer is, therefore, derivative.
The proceedings come before me by consent orders made on 7 December
2006. The motion entails the determination of issues separately before the trial

69 NSWLR 533]

5
6

CHAINA v THE PRESBYTERIAN CHURCH (NSW) PROPERTY TRUST

(Howie J)

535

in the proceedings pursuant to r 28.2 of the Uniform Civil Procedure Rules

2005. The motion relates only to the company plaintiffs. The issue for
determination is set out in three questions as follows:
1. But for the Civil Liability Act 2002, does the fourth and fifth
plaintiffs cause of action per quod servitium amisit, on the facts
pleaded, exist?
2. If 1 is answered yes, was the cause of action abolished by the Civil
Liability Act?
3. If 2 is answered no, do the provisions of Pt 2 of the Civil Liability
Act or any of them apply to and in respect to the claims made by the
fourth and fifth plaintiffs?
Mr Stitt QC with Mr Turner appeared for the defendants, the applicants in
the motion. Mr Garling SC with Mr Bell SC and Mr Stephenson appeared for
the plaintiffs.
Mr Stitt did not suggest that I find otherwise than that the answer to
Question 1 is yes. He conceded that there is authority binding on me that
requires that answer: see Commissioner for Railways (NSW) v Scott (1959) 102
CLR 392 and GIO Australia v Robson (1997) 42 NSWLR 439. Similarly he
did not suggest that I should answer Question 2 other than by no. The real
issue litigated before me is whether I find, on the true construction of the
relevant provisions of the Civil Liability Act (the Act), that a claim such as that
made by the company plaintiffs is limited in the way that a claim for damages
for personal injuries made by a personal plaintiff is limited by the provisions of
the Act.
The question arises because there is no direct reference to an action per quod
servitium amisit in any of the provisions of the Act. This is in contrast to the
provisions of two other statutes in this State that limit the liability of a
defendant, or potential defendant, for damages. The Employees Liability Act
1991 contains the following provision:
4 Abolition of action against employee for loss of services of fellow
employee (per quod servitium amisit)
An employee is not liable in tort to his or her employer merely because the
employee has deprived the employer of the services of any other employee of the
employer.

Section 142 of the Motor Accidents Compensation Act 1999 provides:

142 Damages for the loss of services
(1) No damages for the loss of the services of a person are to be awarded in
respect of a motor accident.
(2) Subsection (1) does not apply to the award of damages in an action
brought under the Compensation to Relatives Act 1897.
(3) The provisions of section 128(3)(7) apply to an award of damages
brought under that Act with respect to the loss of the services of the deceased
person in so far as the award relates to attendant care services.

Had the deceased been killed in a motor vehicle accident on his way to the
camp, the company plaintiffs could receive no compensation for loss as a result
of any nervous shock suffered by his parents. Yet they submit that they can
make a claim seeking damages, as I understand it, of over $300 million
because the child died at the camp. This is notwithstanding that provisions of
the Act limit the damages that can be awarded to the personal plaintiffs, here
the parents and the two brothers of the deceased.

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This situation seems on its face to be anomalous and unfair. Why should a
company be able to recover full compensation for economic loss resulting
indirectly from personal injuries suffered by an employee, yet the employee
who has actually suffered the injuries be unable to recover full compensation
for the loss arising directly from the injuries? However, if this is the result that
follows upon a proper construction of the relevant provisions, then so be it.
Anomalies in this area of the law are not unusual. In Landon v Ferguson
(2005) 64 NSWLR 131 at 135 [17], Ipp JA stated:
[17] The statutes in this State relating to workers compensation and common
law damages claims by workers against their employers and others can be
described as a hodge-podge. No consistent thread of principle can be detected. For
example, the caps on damages under the Workers Compensation Act are lower
than the caps under the Motor Accidents Compensation Act. Some workers
injuries occur in circumstances where the workers are required to bring their
claims under the Workers Compensation Act. In other circumstances workers are
required to bring their claims for damages under the Motor Accidents Compensation Act. In yet other circumstances neither Act applies, but other legislation
governs the claims. No detectable rational reason explains the difference in
categories. In some cases it is difficult to discern under which particular statute
the case falls, and difficult and sometimes illogical distinctions have to be drawn.

10

11

The legislation
The Act was assented to on 18 June 2003 but by virtue of s 2 of the Act it is
taken to have commenced on 20 March 2002. Part 2 of the Act is entitled
Personal injury damages. It applies where proceedings were commenced
after 20 March 2002 regardless of whether the injury or death occurred before
or after that date: see Sch 1, cl 2 of the Act. Therefore, if Pt 2 has application
to the company plaintiffs cause of action, it applies to the current proceedings
that were commenced by the company plaintiffs on 23 October 2002.
The relevant definitions of terms used in the Act as a whole are found in s 3
in Pt 1 of the Act. This section defines damages for the purposes of the Act
as follows:
3 Definitions
In this Act:

damages includes any form of monetary compensation but does not include:
(a) any payment authorised or required to be made under a State industrial
instrument, or
(b) any payment authorised or required to be made under a superannuation
scheme, or
(c) any payment authorised or required to be made under an insurance
policy in respect of the death of, injury to or damage suffered by the
person insured under the policy.

12

There are definitions that are applicable to Pt 2 of the Act set out in s 11.
That section is as follows:
11 Definitions
In this Part:
injury means personal injury and includes the following:
(a) pre-natal injury,
(b) impairment of a persons physical or mental condition,
(c) disease.
personal injury damages means damages that relate to the death of or injury
to a person.

69 NSWLR 533]

13

CHAINA v THE PRESBYTERIAN CHURCH (NSW) PROPERTY TRUST

(Howie J)

537

It might be noted that in the original form of the Act the definition of
personal injury damages was means damages that relate to the death of or
injury to a person caused by the fault of another person. The word fault was
also defined. The change to the current definition does not seem to affect the
arguments of either party.
Section 11A of the Act relates to the applicability of Pt 2 of the Act and
provides:
11A Application of Part
(1) This Part applies to and in respect of an award of personal injury
damages, except an award that is excluded from the operation of this Part by
section 3B.
(2) This Part applies regardless of whether the claim for the damages is
brought in tort, in contract, under statute or otherwise.
(3) A court cannot award damages, or interest on damages, contrary to this
Part.
(4) In the case of an award of damages to which Part 2A (Special provisions
for offenders in custody) applies, this Part applies subject to Part 2A.

14

15

Section 3B is in Pt 1 of the Act and sets out various forms of civil liability to
which the whole of the provisions, or particular provisions, of the Act do not
apply. None of those are relevant to the proceedings brought by the company
plaintiffs.
Section 11 and s 11A comprise Div 1 of Pt 2 of the Act. Division 2 of Pt 2 is
entitled Fixing damages for economic loss. Section 12 is headed Damages
for past or future economic loss maximum for loss of earnings etc. Section
13 is headed Future economic loss claimants prospects and adjustments.
Section 14 is headed Damages for future economic loss discount rate. The
Division also contains provisions relating to damages for attendant care
services, damages for loss of capacity to provide domestic services and
damages for loss of superannuation benefits. Division 4 of Pt 2 is entitled
Interest on damages and contains only one provision, s 18.
It is unnecessary to lengthen this judgment by setting out the provisions that
would affect the company plaintiffs damages if their cause of action fell
within the umbrella of the Act. However the defendants contend that ss 12, 13,
14 and 18 would cap the damages that they could recover in the event of their
claim being successful. In order to understand their submissions, it is
convenient to consider s 12. It is as follows:
12 Damages for past or future economic loss maximum for loss of
earnings etc
(1)

This section applies to an award of damages:

(a) for past economic loss due to loss of earnings or the deprivation or
impairment of earning capacity, or
(b) for future economic loss due to the deprivation or impairment of
earning capacity, or
(c) for the loss of expectation of financial support.
(2) In the case of any such award, the court is to disregard the amount (if any)
by which the claimants gross weekly earnings would (but for the injury or death)
have exceeded an amount that is 3 times the amount of average weekly earnings
at the date of the award.

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[(2007)

(3) For the purposes of this section, the amount of average weekly earnings at
the date of an award is:
(a) the amount per week comprising the amount estimated by the
Australian Statistician as the average weekly total earnings of all
employees in New South Wales for the most recent quarter occurring
before the date of the award for which such an amount has been
estimated by the Australian Statistician and that is, at that date,
available to the court making the award, or
(b) if the Australian Statistician fails or ceases to estimate the amount
referred to in paragraph (a), the prescribed amount or the amount
determined in such manner or by reference to such matters, or both, as
may be prescribed.

16

17

18

19

Defendants arguments
Section 12 applies to an award of damages. Damages includes any
form of monetary compensation; see s 3. By reason of s 11A, Pt 2 of the Act
applies to and in respect of an award of personal injury damages, . By
reason of s 11, personal injury damages means damages that relate to the
death of or injury to a person. Injury means personal injury and includes
(b) impairment of a persons physical or mental condition: see s 11.
Therefore, s 12 applies to an award of monetary compensation that relates to
the impairment of a persons physical or mental condition.
The defendants argument runs as follows. If a cause of action would result
in an award of monetary compensation that relates to the impairment of a
persons physical or mental condition, Pt 2 applies and a court is prevented
from making an award of compensation contrary to the Part: see s 11A(3).
Therefore, compensation is to be determined, so far as economic loss is
concerned, in accordance with s 12. The compensation is limited by s 12(2) to
an amount not exceeding 3 times the amount of average weekly earnings at
the date of the award determined in accordance with s 12(3).
As I have already indicated, there is no reference anywhere in the Act to a
cause of action per quod servitium amisit. The defendants seek to bring such a
claim within the ambit of Pt 2 by the use of the words relates to in the
definition of personal injury damages so that the damages caught by Pt 2
relate to the death of or injury to a person. They note that the word relate
has a wide meaning in general parlance so that the damages have an
association with, a connection with or a reference to the death or injury of a
person. It should be noted that the provisions do not use the term award for
the death or injury, see Empire Shipping Co v Owners of Ship Shin Kobe
Maru (1991) 32 FCR 78 at 94 as to the wider meaning to be attributed to the
use of the word relate than to the use of the word for, but cf State
Government Insurance Office (Qld) v Crittenden (1966) 117 CLR 412 where
the word for in the phrase for accidental bodily injury was construed as
meaning in respect of.
The defendants referred to cases where the terms of provisions in both
statutes and insurance policies have been construed in a manner consistent with
that being urged by them. So in GIO Australia v Robson it was held that a
compulsory third party insurance policy providing cover against liability in
respect of the death or injury to a person caused by the fault of a driver
included liability to an injured persons employer under a claim for loss of
services. One of the reasons given by Mason P for this interpretation was that
it gives to the words in respect of their well established amplitude (at 441).

69 NSWLR 533]

20

21

CHAINA v THE PRESBYTERIAN CHURCH (NSW) PROPERTY TRUST

(Howie J)

539

In Kenbrad Pty Ltd v Vakauta (2001) 34 MVR 50, concerning the now
repealed Motor Accidents Act 1988, it was held that a time limit provision
applied to a claim per quod servitium amisit notwithstanding that there was no
reference to such a claim in the Act. This was because a claim for damages in
respect of the death of or injury to a person included a claim for loss of
services.
One of the reasons given by Hodgson JA, with whom the other members of
the Court agreed, for reading the provision considered in Kenbrad Pty Ltd v
Vakauta to cover a claim for loss of services was that it promoted the objects
of the Act including the early investigation and assessment of claims arising
from motor vehicle accidents. The defendants here similarly refer to the objects
of the Act and submit that reading the provisions of Pt 2 as embracing the
company plaintiffs claim would promote them.
The long title of the Civil Liability Act is:
An Act to make provision in relation to the recovery of damages for death or
personal injury caused by the fault of a person; to amend the Legal Profession Act
1987 in relation to costs in civil claims; and for other purposes.

22

23

24

It was submitted that the Act was intended to apply generally to claims for
compensation arising from the wrongful death or injury of a person regardless
of the nature of the proceedings seeking that compensation. It is submitted that
this is the clear intention of the Act because s 3B specifically exempts those
areas of claims for compensation in relation to death or personal injury that are
not to be caught by the provisions of the Act in whole or in part. Further and
in particular, the provisions of Pt 2 apply to and in respect of an award of
personal damages unless excluded by s 3B and regardless of whether the
claim for the damages is brought in tort, in contract, under statute or
otherwise: s 11A(1) and s 11A(2).
Plaintiffs answers
In answer the plaintiffs rely upon the fact that the Act says nothing about a
claim per quod servitium amisit yet argue that, if it had been the intention of
the Parliament to bring about the consequence sought by the defendants, it
could easily have done so. They point to the fact that it had been made
perfectly clear in the Motor Accidents Compensation Act and the Employees
Liability Act that this type of claim had been extinguished under those Acts.
Had the Legislature intended to cap or limit claims for loss of service, it knew
how to do so.
Further, it had an example of what needed to be done in legislation in
Queensland that had some similarities with the provisions of the Act. Section
58 of the Civil Liability Act 2003 (Qld) provides:
58 Damages for loss of consortium or loss of servitium
(1) A court must not award damages for loss of consortium or loss of
servitium unless
(a) the injured person died as a result of injuries suffered; or
(b) general damages for the injured person are assessed (before allowing
for contributory negligence) at $30000 or more.
(2) The court must not assess damages for loss of servitium above the limit
fixed by subsection (3).
(3) The limit is 3 times average weekly earnings per week.

25

The Queensland Act contains the same definition of personal injury

damages as found in the New South Wales Act and yet there the legislature

540

26

27

28

29

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[(2007)

made express provision to cap the damages for loss of services. However this
Act postdates the first version of the New South Wales Act.
The plaintiffs stress the rule of construction that, before a provision will be
taken as interfering with a common law right, there should be clear language
indicating that intention. Such an intention may be displaced where without it,
the provision would be inoperative or meaningless: Coco v The Queen
(1994) 179 CLR 427 at 438. The plaintiffs note that s 12 of the Act has plenty
of work to do even if it did not apply to actions for loss of services. It was
stressed that, even where the intention of parliament to interfere with common
law rights can be clearly seen, it will be presumed that the interference was
only so far as was necessary to address the particular mischief with which the
provision is concerned: Thompson v Australian Capital Television Pty Ltd
(1994) 54 FCR 513 at 526.
The plaintiffs argue that a claim based upon an action per quod servitium
amisit is not one in respect of damages that relate to the death or injury to a
person so that Pt 2 is not engaged. It was submitted that the claim is one for
damages that relate to the loss by the corporation of the services of a
particular employee. The critical question in assessing the damages is the
worth of the services to the corporation and this is not a function of the
employees earnings. The distinction is between the ability of the employee to
earn a salary and the ability of the employee to earn profits for the corporation.
In this regard a distinction is also drawn between the words used in the Act,
being damages in respect of death or injury, and those used in the policy
considered in GIO Australia v Robson, being damages for liability in respect
of the death or injury to a person.
Further, a claim per quod servitium amisit can only be raised in respect of
the injury to, and not the death, of an employee. Therefore, it is argued that, as
personal injury damages for the purposes of Pt 2 relate to the death or injury
of a person, damages for loss of services cannot fall within that definition.
It was submitted by the plaintiffs that, even if it were found that loss of
services could fall within the definition of personal injury damages, s 12
could have no application. This, so it was argued, is because the focus of the
section is on the loss of the earning capacity of the person who is dead or
injured, and not on the economic value of the services rendered to the plaintiff
company or the loss actually sustained through the loss of services. It was
submitted that the section only operates in relation to the damages recoverable
by the person actually injured or recoverable in respect of a deceased person.
The company plaintiffs are not injured and, therefore, so it is argued, the
section is inapt to apply to their claim. Further it is inappropriate to refer to a
company as having gross weekly earnings. Those are words that relate to an
employee not an employer, and especially not a company employer.
Further, it was submitted that the calculus by which the limitation is
determined under s 12 is inappropriate to be used in relation to a claim for loss
of services being based as it is upon the total earnings of all employees in
the State. The plaintiffs point to the distinction between the scheme under
s 12(3) of the Civil Liability Act and s 125 of the Motor Accidents Compensation Act where the net weekly earnings of the injured or deceased person
are limited to a specific amount of $2,500. They also point to the difference
between a reference under that Act to the net weekly earnings of the injured or
deceased person whereas under the Act it is a reference to the gross weekly
earnings of the claimant.

69 NSWLR 533]

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32

33

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CHAINA v THE PRESBYTERIAN CHURCH (NSW) PROPERTY TRUST

(Howie J)

541

The plaintiffs also point to s 15C of the Act that deals with loss of
superannuation entitlements as indicating that the Part is concerned with
injuries or death to employees rather than to the loss to the employer
occasioned by injuries suffered by an employee.
Put succinctly the plaintiffs argue that Pt 2 does not obviously include
compensation by way of lost services but rather the language and concepts
used in the Act are inappropriate to determine the damages suffered by the
companies in respect of the lost services of an employee. Therefore, rather than
the intention of the Parliament being plainly to cap damages for loss of
services, the language used in Pt 2 is inconsistent with such an intention.
Determination
During the course of argument, I raised with Mr Garling the possible policy
that might have been behind the Parliament determining in effect to exempt
actions per quod servitium amisit from the ambit of Pt 2. I appreciate that this
is not a decisive consideration but, if there were a clear policy that might
account for a decision not to bring such a claim within the ambit of the Act,
and Pt 2 in particular, that might give confidence in an interpretation of the
provisions of the Act that produces such a result. The only possible reason that
senior counsel for the plaintiffs could give was the relative rarity of such
proceedings. With respect this is not convincing.
The defendants took me to the second reading speech of the Premier when
introducing the bill as an aid in pursuing a purposive approach to the
interpretation of the relevant provisions: see s 33 of the Interpretation Act
1987. On 28 May 2002, the Premier introduced the bill as follows
(Parliamentary Debates, Legislative Assembly, 28 May 2002 at
2085) (emphasis added):
On 7 May I released a consultation draft of the Governments Civil Liability
Bill. Today, after three weeks of consultation, I introduce the Civil Liability Bill.
The bill will implement stage one of the Governments tort law reforms. Three
weeks ago I was in no doubt that these reforms were vital to the survival of our
community. I have heard and seen the damage that the public liability crisis is
doing to our sporting and cultural activities, small businesses and tourism
operators, and our local communities. On 7 May no further evidence was
required. However, we have had more evidence, such as the damages award
against Waverley Council and news today that local councils across the State face
a 35 per cent rise in insurance premiums from 1 July.
Since I released the consultation draft of the bill I have met with many local
government and community representatives. They have told me that the approach
of the courts to public liability is unsustainable, and the Government agrees with
them. We need to protect our beaches and parks. We need our roads and schools
to operate free from unrealistic standards-standards imposed by the courts with
hindsight and with no regard for the cost to the community.
This bill implements stage one of the Governments tort law reform program. I
will introduce stage two of the Governments tort law reform program next
session
These reforms are urgent and I understand, and share, the sense of urgency. But
stage two will introduce broad-ranging reforms to the law of negligence. Stage
two will reform an area of the law that Parliament has not previously addressed.
The reforms that I am introducing today in stage one are tried and tested: they
have worked in health care liability, in motor accidents and in workers
compensation. In contrast, stage two is uncharted waters. We need to take the
time to get it right. There are fundamental rights involved in what we are drafting

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[(2007)

and no-one wants to deprive the genuinely deserving of compensation. That is

what we risk doing if we rush into stage two. It is more important to take three
months longer and get these reforms than it is to rush in with hasty and piecemeal
changes.

35

36

37

38

He then turned to deal with the specific provisions.

The bill that was being introduced as Stage 1 of the Governments tort law
reforms included the provisions in Pt 2 with which this motion is concerned.
These were the provisions concerned with damages. Stage 2 resulted in the
present Act that contained the then existing provisions relating to damages and
new provisions relating to the law of negligence. The defendants relied upon
the underlined passages to indicate how far-ranging the reforms were intended
to be and that they were designed to limit the amount of compensation payable
under the law of tort. Therefore apart from nominated exceptions stated in the
provisions they were intended otherwise to apply to all forms of compensation
in proceedings based upon tort. It was argued that the provisions should be
read in order to bring about this result.
I believe that the provisions of the Act should be read with this purpose of
parliament in mind. That being the case it is difficult to see why it should have
been decided to intentionally exempt compensation for loss of services
especially when such an exemption is not especially provided for. I accept that
the Act is not a code and there are other areas not covered. But it seems
inconceivable to me that parliament would not have sought to cap such
compensation when dealing generally with compensation relating to death or
personal injuries.
I do not accept the argument of the plaintiffs that, because Pt 2 is dealing
with compensation relating to death as well as injury, it was not intended that a
claim based only on injury should fall within the ambit of the Part. I simply do
not understand why such reasoning should apply to limit a phrase that was
intended to cover compensation whether it arose from either death or injury.
Nor do I accept that the Act should be construed on the basis that there is no
clear intention manifest in the provisions of parliaments intention to interfere
with common law rights. That is no longer a tenet of statutory construction. In
R v Janceski (2005) 64 NSWLR 10 at 23 [61][69], the Chief Justice wrote:
[61] Mr Smith SC submitted that the reasoning in R v Painter reflected the
position at common law and relied on the principle of statutory interpretation, that
Parliament is presumed not to intend to change the common law, unless the
legislation indicates that that was intended with irresistible clearness. Reliance
was placed on the judgment of this Court in R v Downs (1985) 3 NSWLR 312 at
321322 and on the judgment of the Court of Criminal Appeal of the Supreme
Court of South Australia in R v Khammash (2004) 89 SASR 488 at 507509.
[62] The principle of statutory interpretation relied on by the Crown is, in my
opinion, now of minimal weight. It reflects an earlier era when judges approached
legislation as some kind of foreign intrusion. The scope and frequency of
legislative amendment of the common law, including the common law of criminal
procedure, has over many decades been both wide ranging and fundamental.
[63] In Bropho v Western Australia (1990) 171 CLR 1, the High Court
referred to a principle of statutory interpretation that was based on an assumption
that Parliament would not act to achieve a particular result without making its
intention clear. The court said at 18:
if such an assumption be shown to be or to have become ill founded, the
foundation upon which the particular presumption rests will necessarily be
weakened or removed.

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(Howie J)

543

[64] In Bropho, the court concluded that the presumption that legislation did
not intend to bind the Crown had been so modified. The presumption relied upon
by the Crown in the present case has also, in my opinion, come to be modified or,
at least, diminished in significance. The test of irresistible clearness, or
equivalent, to which some authorities refer is too stringent in contemporary
circumstances.
[65] Kirby J has often emphasised the duty of courts to obey a legislative text
and has indicated that it is not permissible to adhere to pre-existing common law
doctrines in the face of a statute. (See, for example, Regie Nationale des Usines
Renault SA v Zhang (2002) 210 CLR 491 at 542 [143][147].) McHugh J has
stated that the presumption that a statute is not intended to alter or abolish
common law rights must now be regarded as weak. (See Malika Holdings Pty Ltd
v Stretton (2001) 204 CLR 290 at 298 [28][30]; Gifford v Strang Patrick
Stevedoring Pty Ltd (2003) 214 CLR 269 at 284 [36].) His Honour has, however,
said that the presumption continues to operate with some strength when
fundamental legal principles or fundamental rights are involved. (See Gifford (at
284 [36]); Malika Holdings (at 298 [28] and see also at 299 [29][30]) and
Gleeson CJ in Electrolux Home Products Pty Ltd v Australian Workers Union
(2004) 78 ALJR 1231 at 1236 [19]; 209 ALR 116 at 123 [19].)
[66] The reasoning of McHugh J reflects a strong line of authority in the High
Court that Parliament does not intend to alter or restrict fundamental rights,
freedoms and immunities. This line of authority commences with Potter v
Minahan (1908) 7 CLR 277 at 304 and is affirmed in Bropho v Western Australia
(at 1718); Coco v The Queen (1994) 179 CLR 427 at 437; Electrolux Home
Products Pty Ltd (at 1236 [21]; 123 [21]); Plaintiff S157/2002 v Commonwealth
(2003) 211 CLR 476 at 492 [30]; Al-Kateb v Godwin (2004) 219 CLR 562 at 577
[19], 616 [150].
[67] In R v Downs, on which the Crown relied in the present case, Lee J
referred to the judgment of Potter v Minahan and noted that OConnor J in that
judgment had referred to passages in J A Theobald, Maxwell on the interpretation
of statutes, 4th ed (1905) London, Sweet & Maxwell. He then quoted, what his
Honour said was, the parallel section in the 12th edition of that work
P St J Langan, Maxwell on the interpretation of statutes (1969) London, Sweet &
Maxwell.
[68] The 12th edition referred to an assumption that Parliament would not
depart from the general system of law without expressing its intention with
irresistible clearness. However, the 4th edition of Maxwell on interpretation of
statutes quoted by OConnor J in Potter v Minahan and which has subsequently
been referred to on numerous occasions with approval, is not the same as the 12th
edition quoted in R v Downs. It referred to the improbability that Parliament
would overthrow fundamental principles, infringe rights or depart from the
general system of law. This provides a quite different focus to that suggested by
the 12th edition. In R v Khammash (at 507508), the Full Court of the Supreme
Court of South Australia relied on the original text and on the judgments of the
High Court in Bropho and Coco which focus on fundamental rights and
principles.
[69] The provisions of the Act under consideration in the present case,
relating as they do to the authority to sign an indictment, do not infringe
fundamental rights and principles and, in my opinion, the principle of statutory
construction upon which the Crown relies does not have any application in the
present case.

39

The right of an employer to claim compensation for the loss of services of

an employee does not seem to me to be a fundamental legal right or principle
of the kind that should be offered the protection of a construction of the Act
such as the plaintiffs claim. To the contrary it seems to me that generally

544

40

41

42

43

44

45

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[(2007)

speaking the intention of parliament was to deal with all common law claims
for damages arising from the application of the law of torts unless specifically
excluded or unless they are so inconsistent with the provisions of the Act that
they cannot in any rational sense be applied to them.
I accept that the parliament could have made it clear that loss of services
was caught by the provisions of Pt 2. But if the intention had been to exclude
that form of compensation, I would have expected to find it in an exclusion
provision rather than for it to be left to the chance construction of the
provisions of the Act.
The use of the words relate to were clearly intended to widen the scope of
the term personal injury damages so there could be no argument as to
whether the class of compensation under consideration fell within the ambit of
the Act or not. So too was the purpose of s 11A(2) by extending the
application of the Part beyond tort law. I believe that it was the intention of
parliament that the Part would apply to all claims for compensation arising
from the death or injury of a person regardless of how the injury or death of
the person sounded in damages.
It may be the case that loss of services can more aptly be described than as
relating to the death or injury of any person. But it cannot be said that it does
not fall broadly within that description. The loss of services arises from or is
caused by the injury suffered by the employee. Therefore, as it seems to me, it
can be fairly said that the loss relates to the injury to the employee in the sense
that it is associated with or connected to the injury. The loss to the employer
may only be indirectly related to the injury to the employee but it is related to
it nevertheless. In my opinion, Pt 2 of the Act applies generally to the company
plaintiffs claims.
The plaintiffs argue that, even if Pt 2 of the Act applies generally, s 12 has
no application to the claim for loss of services. In effect the argument is that
there is no provision in Pt 2 that would operate on the company plaintiffs
claims to limit them. Therefore, the Court could award damages to the full
extent of the claims because the Court would not be awarding damages
contrary to the Part in contravention of s 11A(3). This notwithstanding that the
actual person who suffered the injury could not receive full compensation.
The plaintiffs submit that s 12 is concerned with a claimant seeking
compensation for loss of earnings and this cannot apply to the company
plaintiffs who, as claimants, are seeking compensation for loss of the economic
value of the services rendered to the companies by their employees. They point
to the fact that reference is made to what the claimants gross weekly earnings
would (but for the injury or death) have been. The plaintiffs point to
similarities in the terms used in s 13 as rendering that section also inapplicable
to the company plaintiffs claims.
It must be said that on its face s 12 appears to be dealing with the loss of
earning to a person as a result of the persons injury or death. It is an inapt
way of dealing with a companys loss of revenue, by way of profit or
otherwise, which would not generally be considered as weekly earnings.
Section 12(3)(a) refers to the weekly total earnings of all employees that is
said to indicate that the section is concerned with wages or salaries.
The plaintiffs accepted that in Kaplantzi v Pascoe (2003) 40 MVR 146 at
152 [32], the Court took a wide view of what was encompassed by the term
net weekly earnings on a proper construction of the provisions of the Motor
Accidents Compensation Act to include the generation of assets. But they point

69 NSWLR 533]

CHAINA v THE PRESBYTERIAN CHURCH (NSW) PROPERTY TRUST

(Howie J)

545

out that the Court was still concerned with earnings by an employee and,
therefore, the extension of the term was within a reasonable construction of the
particular provisions.
47

Here the Court would need to construe net weekly earnings to include
something that in no way could be considered as a wage or a salary or as
money earned by a person from his or her employment. Nor could whatever
the company earned be considered as a steady or regular course of payment of
approximately the same amount over a period of time and, therefore, an
appropriate means of calculating economic loss of a person.

48

The defendants submit that while the wording of the section may be inapt to
refer to the income of a company it does not follow that it cannot do so with a
reasonable and rational interpretation of the words of the section. They also
point out that the Queensland provision (quoted at 539 [24] supra) employs the
concept of weekly earnings to formulate a cap on damages for loss of services
in the same way as s 12 would apply.

49

I cannot conclude that it was the intention of parliament that s 12 apply to a

quod per servitium amisit claim notwithstanding the anomalous situation that
would follow such a finding. I have already expressed the view that there
could be no policy that I can see that would justify such a result. I was willing
to find that Pt 2 applied to such a claim because I could not hold that the wide
meaning to be given to the definition of personal injury damages must
exclude compensation for loss of services. I was prepared to read that into
provisions of the Act from a purposive approach and consistently with what I
perceived to be the intention to cover all claims for compensation resulting
from the injury or death of a person.

50

But such an approach can only be extended as far as the terms of the
provisions will reasonably permit such a construction. I find it impossible
however to construe s 12(2) so that it must apply to the company plaintiffs
claims. This is not a result that appeals to me for reasons that I have already
expressed. It seems irrational, illogical and unfair. But the words and concepts
used in s 12(2) have a clear meaning that is incompatible with a loss of
services by a company. I would have been prepared to find that the wording of
s 12(1) might have included a claim for loss of services if the other subsections
could reasonably apply even though those words on their face seem to be
referring to a claim by the injured person.

51

I accept that one way of limiting a per quod servitium claim would be to
base it upon weekly earnings of employees generally and that is what the
parliament in Queensland has done. Another way would be to limit it by
reference to a determined sum of money such as the provision considered by
the Court in Kaplantzi v Pascoe. But that is a decision to be made by
parliament and by a provision that indicates that parliament has considered
whether to limit the claim and how it is to be done. Section 12 does not
convey that intention to me.

52

Because I have decided that s 12 does not apply to a claim for services, it
does not follow that I should revisit my view that Pt 2 does apply generally.
There may be other provisions that can be applied to such a claim for example
the provisions relating to interest rates and discount rates.

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The questions should be answered:

1. Yes
2. No
3. Yes, but not s 12
Advice accordingly
Solicitors for the plaintiffs: Sarvaas Ciappara.
Solicitors for the defendants: Curwoods Lawyers.
M A IZZO,

Barrister.