Parry v Cleaver

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Reid, Lord Morris of Borth-Y-Gest, Lord Pearce, Lord Wilberforce, Lord Pearson
Judgment Date05 Feb 1969

[1969] UKHL J0205-1

House of Lords

Lord Reid

Lord Morris of Borth-y-Gest

Lord Pearce

Lord Wilberforce

Lord Pearson

Parry
and
Cleaver

Upon Report from the Appellate Committee, to whom was referred the Cause Parry against Cleaver, that the Committee had heard Counsel, as well on Wednesday the 20th, as on Thursday the 21st, Monday the 25th and Thursday the 26th, days of November last, upon the Petition and Appeal of Reginald Parry, of 2 Radnor Close, Congleton, in the County of Chester, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 9th of May 1967, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioner might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of Anthony Cleaver, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 9th day of May 1967, complained of in the said Appeal, be, and the same is hereby, Discharged, and that the Order of the Honourable Mr. Justice John Stevenson, of the 4th day of October 1966, thereby Varied be, and the same is hereby, Restored subject to reducing the sum to be awarded to the Plaintiff by way of damages from £16,580 15s. 2d. to £9,500: And it is further Ordered, That the Respondent do pay, or cause to be paid, to the said Appellant the Costs incurred by him in the Court of Appeal, and also the Costs incurred by him in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Queen's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.

Lord Reid

My Lords,

1

The facts of this case are of a pattern becoming increasingly common. The plaintiff was in pensionable employment. By the negligent driving of the defendant he was disabled from continuing in that employment. So he received a disablement pension. How are damages for his financial loss to be assessed? In particular how is the disablement pension to be dealt with? The authorities are not consistent with each other, so I find it necessary to begin by considering general principles.

2

Two questions can arise. First, what did the plaintiff lose as a result of the accident? What are the sums which he would have received but for the accident but which by reason of the accident he can no longer get? And secondly, what are the sums which he did in fact receive as a result of the accident but which he would not have received if there had been no accident? And then the question arises whether the latter sums must be deducted from the former in assessing the damages.

3

Gourley's case [1956] A.C. 185 did two things. With regard to the first question it made clear, if it had not been clear before, that it is a universal rule that the plaintiff cannot recover more than he has lost. And, more important, it established the principle that in this chapter of the law we must have regard to realities rather than technicalities. The plaintiff would have had to pay tax in respect of the income which he would have received but for the accident. So what he really lost was what would have remained to him after payment of tax. From a technical point of view income tax and surtax were probably too remote. Apart from P.A.Y.E. tax is not payable out of income, its amount depends on a calculation which includes many other factors besides earnings, and standard rate of tax varies from year to year. So a good many lawyers disapproved of the decision of this House. But this House preferred realities to " res inter alios" and "remoteness".

4

But Gourley's case had nothing whatever to do with the second question. It did not arise. None of the noble and learned lords who took part gave it more than a passing reference, and I am satisfied that none of them intended to go out of their way and pronounce upon it. Before Gourley's case it was well established that there was no universal rule with regard to sums which came to the plaintiff as a result of the accident but which would not have come to him but for the accident. In two large classes of case such sums were disregarded—the proceeds of insurance sums coming to him by reason of benevolence. If Gourley's case had any bearing on this matter it must have impinged on these classes. But no one suggests that it had any effect as regards sums coming to the plaintiff by reason of benevolence, and I see no reason why it should have made any difference as regards insurance.

5

I cannot accept the view that disregarding these types of receipt is anomalous. In dealing with damages under Lord Campbell's Act such receipts were not disregarded until the law was altered by recent legislation. There, there was a universal rule. Here, there never was. The common law has treated this matter as one depending on justice, reasonableness and public policy.

6

So I must enquire what are the real reasons, disregarding technicalities, why these two classes of receipts are not brought into account. I take first the case of benevolence. I do not use the word "charity" because, rightly or wrongly, many people object to it. I know of no better statement of the reason than that of Andrews L.C.J. in Redpath v. Belfast and County Down Railway [1947] N.I. 167. There the Company sought to bring into account sums received by the plaintiff from a distress fund. Andrews L.C.J. said that the plaintiff's counsel had submitted "that it would be startling to the subscribers to that fund if they were to be told that their conributions were really made in ease and for the benefit of the negligent railway company. To this last submission I would only add that if the proposition contended for by the defendants is sound the inevitable consequence in the case of future disasters of a similar character would be that the springs of private charity would be found to be largely if not entirely dried up." It would be revolting to the ordinary man's sense of justice, and therefore contrary to public policy, that the sufferer should have his damages reduced so that he would gain nothing from the benevolence of his friends or relations or of the public at large, and that the only gainer would be the wrongdoer. We do not have to decide in this case whether these considerations also apply to public benevolence in the shape of various uncovenanted benefits from the welfare state, but it may be thought that Parliament did not intend them to be for the benefit of the wrongdoer.

7

As regards moneys coming to the plaintiff under a contract of insurance, I think that the real and substantial reason for disregarding them is that the plaintiff has bought them and that it would be unjust and unreasonable to hold that the money which he prudently spent on premiums and the benefit from it should enure to the benefit of the tortfeasor. Here again I think that the explanation that this is too remote is artificial and unreal. Why should the plaintiff be left worse off than if he had never insured? In that case he would have got the benefit of the premium money: if he had not spent it he would have had it in his possession at the time of the accident grossed up at compound interest. I need not quote from the well-known case of Bradburn v. Great Western Railway L.R. 10 Ex. 1 but I may refer to an old Scottish case Forgie v. Henderson (1818) 1 Murray 410 where the pursuer was assaulted by the defender. During part of his resulting illness he received an allowance from a friendly society, and Lord Chief Commissioner Adam said in charging the jury:

"I do not think you can deduct the allowance from the Society, as that is of the nature of an insurance and is a return for money paid" (at page 418).

8

And I would also refer to the judgment of Asquith L.J. in Shearman v. Folland [1950] 2 K.B. 43 where he said (at page 46):

"If the wrongdoer were entitled to set off what the plaintiff was entitled to recoup or had recouped under his policy, he would in effect be depriving the plaintiff of all benefit from the premiums paid by the latter, and appropriating that benefit to himself."

9

Then I ask—why should it make any difference that he insured by arrangement with his employer rather than with an insurance company? In the course of the argument the distinction came down to be as narrow as this: if the employer says nothing or merely advises the man to insure and he does so, then the insurance money will not be deductible; but if the employer makes it a term of the contract of employment that he shall insure himself and he does so, then the insurance money will be deductible. There must be something wrong with an argument which drives us to so unreasonable a conclusion.

10

It is said to make all the difference that both the future wages of which he has been deprived by the fault of the defendant, and the benefit which has accrued by reason of his disablement come from the same source or arise out of the same contract. This seems to be founded on an idea of remoteness which is, I think, misconceived. Remoteness from the defendant's point of view is a familiar conception in connection with damages. He pays damages for loss of a kind which he might have foreseen but not for loss of a kind which was not foreseeable by him. But here we are not dealing with that kind of remoteness. No one has ever suggested that the defendant gets the benefit of receipts by the...

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2 books & journal articles
  • PENSIONS LAW REFORM AFTER MAXWELL: THE POSSIBLE CONTENT OF NEW PENSIONS REGULATIONS FOLLOWING THE MAXWELL CASE
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    • Journal of Financial Regulation and Compliance Nbr. 1-3, January 1993
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