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	United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Parry v Cleaver [1969] UKHL 2 (05 February 1969) URL: http://www.bailii.org/uk/cases/UKHL/1969/2.html Cite as: [1969] 2 WLR 821, [1969] 1 All ER 555, [1969] UKHL 2, [1969] 1 Lloyd's Rep 183, [1970] AC 1

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Die Mercurii, 5° Februarii 1969

Upon Report from the Appellate Committee, to
whom was referred the Cause Parry against Cleaver, that
the Committee had heard Counsel, as well on Wednes-
day 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 Parlia-
ment, 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 Honour-
able 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.

Parry v. Cleaver.

34876) Dd 197023 35 2/69 St.S.

HOUSE OF LORDS

PARRY

v.
CLEAVER

Lord Reid
Lord Morris of Borth-y-Gest

Lord Pearce

Lord Wilberforce

Lord Pearson




Lord Reid

MY LORDS,

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.

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 acci-
dent? And then the question arises whether the latter sums must be
deducted from the former in assessing the damages.

Gourley's case [1956] AC 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 pay-
able 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 ".

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 benevo-
lence, and I see no reason why it should have made any difference as
regards insurance.

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.

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 contributions
" 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 wrong-
doer. 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.

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 Com-
missioner 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).

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."

Then I ask—why should it make any difference that he insured by arrange-
ment 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.

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



2

defendant gets the benefit of receipts by the plaintiff after his accident if
they are of a kind which he could have foreseen, but not if they are of a
kind which he could not have foreseen, or vice versa. That the plaintiff
may, in consequence of the defendant's fault, receive benefit from benevo-
lence or insurance is no more or no less foreseeable or remote than that
he may get a benefit from a pension to be paid by his employer. If remote-
ness has any relevance here it is quite a different kind of remoteness—the
connection or absence of connection between the source of the benefit and
the source of the wages. But what has that got to do with the defendant?
It is rational to make the extent of the defendant's liability depend on
remoteness from his point of view—on what he knew or could or should
have foreseen. But it is, to my mind, an irrational technicality to make that
depend on the remoteness or closeness of relationship between the plaintiff's
source of loss and source of gain. Surely the distinction between receipts
which must be brought into account and those which must not must depend
not on their source but on their intrinsic nature.

Let me illustrate this by two examples. Suppose that a man is injured a
few days before his employment is to terminate and that it is a term of that
employment that he shall get a disablement pension for life if disabled during
that employment. He gets his pension. But in such a case his loss is not
being deprived of wages from that employer. His loss is the wage which he
would have got if he had been able to go into the market and obtain new
employment from a new employer. The source of the pension and the
source of what he would have got if he had not been disabled are quite
different. But surely that can make no difference.

Or, again, suppose that the man had been employed some years before
the accident on work likely to injure his health and that it was a term of
his old contract that if he became disabled from any cause within ten years
of leaving that employment he would get a pension for life. When the
accident happens he is working for a new employer and what he loses by
reason of the accident is the wages which, but for the accident, he would
have continued to receive from the new employer. Again, no connection
between the source of the pension and the source of the wages which he has
lost. Can that make any difference? Surely it must be either that a pension
is something which by its intrinsic nature is deductible or that by its nature
it is not deductible.

What, then, is the nature of a contributory pension? Is it in reality a
form of insurance or is it something quite different? Take a simple case
where a man and his employer agree that he shall have a wage of £20 per
week to take home (leaving out of account P.A.Y.E., insurance stamps and
other modern forms of taxation) and that between them they will put aside
£4 per week. It cannot matter whether an insurance policy is taken out for
the man and the £4 per week is paid in premiums, or whether the £4 is
paid into the employer's pension fund. And it cannot matter whether the
man's nominal wage is £21 per week so that, of the £4, £1 comes from his
" wage " and £3 comes from the employer, or the man's nominal wage is
£23 per week so that, of the £4. £3 comes from his " wage " and £1 comes
from the employer. It is generally recognised that pensionable employ-
ment is more valuable to a man than the mere amount of his weekly wage.
It is more valuable because by reason of the terms of his employment money
is being regularly set aside to swell his ultimate pension rights whether
on retirement or on disablement. His earnings are greater than his weekly
wage. His employer is willing to pay £24 per week to obtain his services,
and it seems to me that he ought lo be regarded as having earned that sum per
week. The products of the sums paid into the pension fund are in fact
delayed remuneration for his current work. That is why pensions are
regarded as earned income.

But the man does not get back in the end the accumulated sums paid into
the fund on his behalf. This is a form of insurance. Like every other kind
of insurance what he gets back depends on how things turn out. He may
never be off duty and may die before retiring age leaving no dependants.

3

A2

Then he gets nothing back. Or he may by getting a retirement or disable-
ment pension get much more back than has been paid in on his behalf.
I can see no relevant difference between this and any other form of insurance.
So, if insurance benefits are not deductible in assessing damages and remote-
ness is out of the way, why should his pension be deductible?

Then it is said that instead of getting a pension he may get sick pay for
a time during his disablement—perhaps his whole wage. That would not
be deductible, so why should a pension be different? But a man's wage
for a particular week is not related to the amount of work which he does
during that week. Wages for the period of a man's holiday do not differ
in kind from wages paid to him during the rest of the year. And neither
does sick pay ; it is still wages. So during the period when he receives sick
pay he has lost nothing. We never reach the second question of how to
treat sums of a different kind which he would never have received but
for his accident.

A pension is intrinsically of a different kind from wages. If one confines
one's attention to the period immediately after the disablement it is easy
to say that but for the accident he would have got £X, now he gets £Y, so
his loss is £X-Y. But the true situation is that wages are a reward for
contemporaneous work but that a pension is the fruit, through insurance,
of all the money which was set aside in the past in respect of his past work.
They are different in kind.

Now I can come to the authorities. In Payne v. Railway Executive [1952]
1 K.B. 26 a sailor in the Royal Navy, being disabled by a railway accident,
was awarded a disability pension of £2 16s. 3d. per week. Sellers J.
held that the principle in Bradburn's case applied so as to prevent deduction
of the value of the pension. If it had been deductible that would have
reduced the damages for loss of earnings from £3,000 to £750. In the
Court of Appeal Cohen L.J. agreed with him and said that the accident
was not the causa causans of the receipt of the pension. Singleton L.J.
said (at page 40) " if there were no pension rights it is reasonable to assume
" that the pay would be higher. Why then should the pension enure to
" the benefit of a wrongdoer? " But he based his judgment on the fact that
the Minister had power to withhold or reduce the pension. Birkett L.J.
concurred with both judgments.

I do not agree with the ground on which Singleton L.J. based his judgment.
If it is right to deduct a pension which the plaintiff receives as of right, it
cannot be right to disregard the whole of a discretionary pension. To begin
with, the man has in fact received his pension between the date of the
disablement and the date of the trial. So how could that be disregarded?
It is true he might not have received it if the Minister had chosen to with-
hold it, but in fact he did receive it. And then with regard to the future
after the trial, allowance would have to be made for the fact that the pension
might be reduced. But if it was a virtual certainty that it would not be
reduced by more than a quarter surely the other three quarters would have
to be brought into account. I agree with the view expressed by Bankes L.J.
in Baker v. Dalgleish S. S. Co. [1922] 1 K.B. 361 where he said:

" The fact that the continuance of the pensions is in the discretion
" of the Minister does not, in my opinion, exclude them from con-
" sideration. The reasonable expectation of their continuance must, I
" think, be taken into account."

It is true that was a case under Lord Campbell's Act but the principle
cannot be different.

In Judd v. Hammersmith Hospital Board of Governors [1960] 1 W.L.R.
328 Finnemore J. followed the decision in Payne's case. The plaintiff had
been a local government officer and his pension was paid under a super-
annuation scheme which had required him to make compulsory contribu-
tions. Finnemore J. said (at page 331) " it is the contributions made by him
" during the 32 years' service with the Council which entitled him to the



" money he is now enjoying. The causa causans of the pension was the
" service of the plaintiff with the borough council and, incidentally, his
" payment of contributions towards the scheme ".

In Monmouthshire County Council v. Smith [1956] 1 W.L.R. 1132 at page
1152 Lynskey J. expressed the opinion that a pension must be taken into
account but the point does not appear to have been argued. So down to that
point the weight of authority was that pensions should not be brought into
account. But then in a case where the sums involved were very large the
law took a new turn.

In Browning v. War Office [1963] 1 Q.B. 750 the plaintiff had been a
technical sergeant in the United States Air Force: his pay had been $450
per month and after his injuries caused by the negligence of the defendant's
driver he received "veterans benefit" of $217 per month. Lord Denning
M.R. said (at page 759) that he should " give credit for all sums which he
" receives in diminution of his loss, save in so far as it would not be fair
" or just to require him to do so ". He said that it would " obviously not
" be fair to reduce his damages by reason of charitable gifts made to him
"... or by reason of insurance benefits which he has bought with his own
" money ", and he referred to these as " exceptional cases ". Then he said
that he saw the force of the argument against deducting a contributory pen-
sion, but discarding analogies he asked himself the " simple question "—" is it
" fair and just that . . . regard should be had to the fact that Sergeant
" Browning is already, as of right, in receipt of nearly half his pay. And
" my answer is ' Yes' ". Donovan L.J. dissented. Diplock L.J. appears to
have thought that Gourley's case was an authority for taking the pension into
account: he distinguished Bradburn's case on the ground that the right to
receive insurance money " is not sufficiently closely connected with the
" actual loss for which the defendant is liable to compensate him ".

I cannot regard this as a satisfactory authority. When Lord Denning asked
himself the simple question, is it fair and just, the context rather suggests
that he was only dealing with the case before him. If that is so, I am not
surprised that Donovan L.J. thought that we must seek for a principle. But
Browning's case has since been regarded as laying down a rule that pensions
received as of right must be brought into account. On the other hand, it
has not been regarded as having that effect where the pension is discretionary.

In Carroll v. Hooper [1964] 1 W.L.R. 345, and in Elstob v. Robinson
[1964] 1 W.L.R. 726 the question was whether a service pension should be
taken into account. In the former case Veale J. disregarded the pension
on the ground that it was discretionary, founding on some of Lord Denning's
observations in Browning's case. In the latter case Elwes J. followed the
decision of Veale J. in the former case.

I do not think that the matter can rest there. If Browning's case is to be
regarded as having been decided on its peculiar facts we need not consider
whether the decision was right or wrong. But if it did lay down a new
rule which ought to be followed, then I do not think that Carroll and Elstob
can be supported for I have already said that it cannot be right to bring all
pensions receivable as of right into account but to disregard completely all
discretionary pensions.

Australian authorities do not support the majority view in Browning's
case. I shall not quote from lengthy and closely reasoned judgments in the
High Court. It is, I think, sufficient to quote a short passage from the most
recent to which we were referred. Jones v. Gleeson [1965] 39 A.L.J.R. 258.
In a joint judgment the High Court stated:

" In recent years, however, the relevance or otherwise to the issue of
" damages of the fact that an injured person is entitled to a pension has
" been considered by this Court on several occasions (see Paff v. Speed
" [1961] 105 C.L.R. 549; National Insurance Co. of New Zealand Ltd.

5

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" v. Espagne [1961] 105 C.L.R. 569, and Graham v. Baker [1961] 106
" C.L.R. 340) and a very different view has been taken from that
" which is expressed in the majority judgments in Browning's case."

I must also notice two other cases although they are not directly relevant.

In Parsons v. B.N.M. Laboratories [1964] 1 Q.B. 95 it was held that in
assessing damages for wrongful dismissal unemployment benefit must be
deducted. Sellers L.J. said (at page 121):

" I find it difficult to appreciate, as I have said, that it can be in any
" way regarded as punishing a wrongdoer because the Courts do not
" give him the benefit of an injured party's prudence or thrift or con-
" tractual provision."

Harman L.J. said (at page 131) that " it is just as if his employer continued
" to pay part of his wages" and Pearson L.J. said (at page 143) that " one
" comes back to the question ; Is the plaintiff's receipt of unemployment
" benefit a matter too remote to be taken into consideration in ascertaining
" his net loss resulting from the wrongful dismissal? "

In Foxley v. Olton [1965] 2 Q.B. 306 John Stephenson J. followed Parson's
case in taking unemployment benefit into consideration, but refused to take
national assistance grants into consideration following a decision of Veale J.
in Eldridge v. Videtta 108 S.J. 137. I find it difficult to draw a distinction
between unemployment benefit and national assistance. The former could
be regarded as a combination of insurance and national benevolence while
the insurance element is absent from the latter. But there are here other
considerations besides those with which I have dealt. There has been no
full argument about them and I do not propose to express any concluded
opinion on this matter.

There is, however, one other matter which I regard as of great importance
here. It appears to me that public policy most enter largely into our decision
and that therefore it is very relevant to see what policy Parliament has
followed in dealing with a closely related subject. Under Lord Campbell's
Act plaintiffs were much worse off than they were at common law with
regard to the deduction of benefits received by them. But this has been
progressively altered by legislation.

The Fatal Accidents Act, 1959, provides in section 2—

" In assessing damages in respect of a person's death in any action
" under the Fatal Accidents Act, 1846, or under the Carriage by Air
" Act, 1932, there shall not be taken into account any insurance money,
" benefit, pension or gratuity which has been or will or may be paid as
" a result of the death."

Subsection (2) defines benefit as meaning benefit under the National Insurance
Acts, and payment by a friendly society or trade union.

If public policy, as now interpreted by Parliament, requires all pensions to
be disregarded in actions under the Fatal Accidents Acts, I find it impossible
to see how it can be proper to bring pensions into account in common law
actions. Plaintiffs were formerly worse off under Lord Campbell's Act and
I can think of no reason why the position should now be reversed so as
to make them worse off at common law. In my judgment, a decision that
pensions should not be brought into account in assessing damages at com-
mon law is consistent with general principles, with the preponderating
weight of authority, and with public policy as enacted by Parliament and I
would therefore so decide.

I can deal very shortly with the facts of the present case.

The Appellant was a Police Constable. While directing traffic he was
injured by the Respondent's negligence in 1963, and as a result of his
injuries he had to be discharged from the Force on 30th June, 1964. In



October 1964, he was able to obtain employment as a clerk. His wage
as a constable was £21 16s. 3d. per week out of which he contributed
£1 3s. 1d. under the Police Pensions Regulations. Under these Regulations
there is no pension fund but no point is made of that: it is agreed that
the case is to be treated as if there had been a fund to which he had con-
tributed that sum, the remainder necessary to pay the benefits under the
Regulations being paid by the authority. As a result of his discharge he
receives under the Regulations on ill-health pension of £3 18s. 4d. per week
for life. If he had served his full time as a constable he would have
received a retirement pension of £682 per annum. In his new employment
he received between £13 and £14 per week.

So by having to leave the Police Force the Appellant lost two things:
first the wage which he would actually have received until his retirement
from the Police Force if he had not been injured i.e. his gross wage of
£21 16s. 3d. minus the sum which would have been retained as a con-
tribution £1 3s. 1d.; and secondly the opportunity, by continuing to serve
and to make this contribution, to obtain his full retirement pension. On the
other hand, he gained two things, the wage which he received as a clerk,
which must admittedly be set off against the wage which he lost, and the
ill health pension. The main question in the case is whether this pension
must be brought into account, and for the reasons which I have given I am
of opinion that it must not. That is the position up to the retiring age
from the Police Force. Thereafter the position is different.

For a time after retirement from the police force he would still have been
able to work at other employment, so allowance must be made for that. As
regards police pension his loss after reaching police retiring age would be
the difference between the full pension which he would have received if he
had served his full time and his ill health pension. It has been asked why
his ill health pension is to be brought into account at this point if not brought
into account for the earlier period. The answer is that in the earlier period we
are not comparing like with like. He lost wages but he gained something
different in kind, a pension. But with regard to the period after retirement
we are comparing like with like. Both the ill health pension and the full
retirement pension are the products of the same insurance scheme; his loss
in the later period is caused by his having been deprived of the opportunity
to continue in insurance so as to swell the ultimate product of that insurance
from an ill health to a retirement pension. There is no question as regards
that period of a loss of one kind and a gain of a different kind.

John Stephenson J. awarded as damages a sum of £16,580 but it is
now admitted that that is too much. The Court of Appeal brought the
ill health pension into account and reduced this figure to £7,937. If the
pension is disregarded in the way I think right that figure would be £8,876.
But it was argued, I think rightly, that the Court of Appeal went too far
in scaling down the original calculation. The method of calculation was
to assume that the plaintiff will survive for the allotted span and then simply
to add up all future losses. Obviously the total so reached must be reduced
for two reasons. First, the plaintiff may not live so long and, more important,
the total must be discounted so as to represent the present value of a series
of future payments. The Appellant was 38 years of age at the date of the
trial and the Court of Appeal reduced the total by one half. I think this
is rather too much and I would propose that the appeal be allowed and
damages assessed at £9,500.

Lord Morris of Borth-Y-Gest

MY LORDS,

When the plaintiff brought his action against the defendant he claimed
damages for personal injuries and for the " consequential loss and damage "
which he had sustained as a result of having been knocked down by the de-
fendant's motor car on the 4th January, 1963. This claim for loss and



7

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damage, his economic loss, began as from the 1st July, 1964. Down to that
date he had received his full pay and allowances. His claim for economic
loss was twofold. Firstly, he claimed that he had been deprived of his pay
and allowances since the end of June, 1964, when owing to his injuries he
ceased to be a member of the Police Force. He later (as from the 10th
October, 1964) obtained other paid employment. Bringing into consideration
his pay in that employment he claimed his " net annual loss ". Secondly,
he claimed that, if he had remained in the Police Force he would, on retire-
ment, if that were on the 13th December, 1975, have received a pension of
£515 per annum. He claimed that he had been deprived of his right to
receive that amount. He did, however, as from the 1st July, 1964, receive
and will at all times receive a Police Pension of £3 18s. 4d. per week (or £204
per annum). In his Statement of Claim he claimed that in the assessment
of his damages he need not bring his receipt of that amount into consideration
at all. That meant that it need not be regarded either in reference to his
later years when he would in any event have retired from any kind of em-
ployment and would in any event have a Police Pension or in reference to
his middle years when in any event he would have retired from the Police
Force and would have a pension but would be in civilian employment or in
reference to his earlier years when but for the accident he would be in the
Police Force and would receive his pay but no pension. Though this con-
tention succeeded in its entirety at the trial it has now been modified.

The only compensation which the Plaintiff can receive from the Defendant
and the only compensation which he seeks and claims is compensation in
money. No question arises in the present case in regard to the Plaintiff's
damages for his physical injuries. To compensate in money for pain and for
physical consequences is invariably difficult but it is recognised that no
other process can be devised than that of making a monetary assessment. No
sort of arithmetical calculation is possible. Money cannot really compensate
for the loss of a limb or for any permanent deprivation of physical abilities
or indeed for pain and suffering. There can be no equation between purchas-
ing power and those things which cannot be purchased. But a money award
is all that is possible. It is the best that can be done. When, however,
economic loss is being assessed the position is quite different. The financial
loss or the financial gain resulting from a changed situation can generally
be ascertained. When receipts in money before an event are known and
when receipts in money after an event are known, the difference between the
two becomes a matter of easy calculation.

in my view, the general principle and the general approach in calculating
monetary loss in a case such as the present is that an injured person should
receive such an amount of money as will put him in the same position as he
would have been in if he had not received the injuries (see British Transport
Commission v. Gourley [1956] AC 185, 197.) A plaintiff should get such
a sum in money as will represent the actual loss which has resulted to him
in consequence of the defendant's negligence. This was described by Diplock
L.J. in Browning v. The War Office [1963] 1 Q.B. 750, 766, as " the differ-
" ence between the money which the plaintiff would have received had he
" been able to continue in the gainful occupation which he would have fol-
" lowed if he had not been physically injured, and the money which he has
" received or will receive (on the assumption that he has acted or will act
" reasonably) while his ability to carry on that occupation is extinguished or
" reduced by his physical injuries."

Before examining the general principle more closely it will be helpful to
have in mind the facts and features of the present case to which general
principle falls to be applied.

The plaintiff was aged 23 when on the 14th December, 1950, he joined the
Police Force. The accident was on the 9th January, 1963. His pay to-
gether with various allowances amounted to £1,139 8s. 7d. per annum or
£21 18s. 3d. per week. That included a sum of £60 3s. 0d. per annum (or
£1 3s. 1d. per week) which he was obliged to contribute to a contributory pen-
sion scheme: that sum would be deducted from his pay. There was no
pension fund as such and no actual employers' contribution to any fund and



8

no one had any policy of insurance. There was an actuarial calculation that
the cost falling on the employers (I use the term as a convenient general term)
of honouring the service obligations in regard to pensions would in the case
of the plaintiff be equivalent to a weekly allocation of about £3. In this
particular case that would be a cost falling on public funds, but that is an
immaterial consideration. After the accident he received his full pay (with
allowances) down to the 30th June, 1964, the date when owing to his
injuries he was discharged from the Police Force. On his discharge from
the Police Force he received a pension (invalid pension) of £3 18s. 4d. per
week. That is a pension to which he became as of right entitled. It is a
pension for life. There is no discretionary power which could be exercised
to reduce it. Then on the 8th October, 1964, he obtained civilian employ-
ment. His work is clerical. In his civilian employment, as in his Police
employment, he contributes to a pension scheme. His civilian pay was at
first £13 2s. 6d. per week and as from the 19th July, 1965, was £13 16s. 0d.
per week. He pays 14s. 8d. per week in respect of the pension scheme
and his employers contribute 5s. a week. He is likely to continue in his
civilian employment until he is 65 when, on retirement, he will receive
a pension of £5 13s. 6d. a week for life. If he had remained in the Police
Force until December, 1975, (as the learned judge held that he would have
done) his definite pension thereafter for his life would have been £515 per
year.

Once these facts are ascertained it would seem to be a relatively simple
matter to ascertain the plaintiff's monetary loss subject only to making such
suitable adjustment to cover contingencies and the circumstance that a lump
sum would now be received as the equivalent of and so as to produce certain
annual sums payable in the future. Apart from that there is no difficulty
in making a calculation. As money is the reward of work the relevant
comparison of like with like involves taking on the one hand the money
that the plaintiff would in respect of his work have received had he remained
in the Police Force and, on the other hand, the money that he has received
and will receive in respect of his work in the period since he left the Police
Force. I use the words " in respect of his work " so as to exclude sums,
if any, which he might have received or might receive in a purely private or
personal capacity.

The financial consequences for the Plaintiff which have resulted from the
negligence of the Defendant have conveniently been looked at by reference
to four periods: —

Period 1: This was the period between the date of the accident and
the date of trial—which was the 19th July, 1966. As I have stated,
within the first part of this period the plaintiff received his full pay and
allowances. As there was no monetary loss during that part of the
period it is agreed that no claim could result. Within the later part of
the period the plaintiff received money from his Police Pension and he
received money from his new employment. Figures as figures are agreed
in reference to Period 1 which show that his monetary loss was
£661 14s. 6d. If, however, his pension receipts are left out of considera-
tion the figure would be £1,080 15s. 2d. That £1,080 15s. 2d. was the
amount awarded by the learned judge.

Period 2 is from the date of trial to the date when, as found by the
learned judge, the plaintiff would in fact have retired in any event from
the Police Force. That would have been in December, 1975 (when the
plaintiff would be 48). Had there been no accident or, stated otherwise,
had the Defendant not been negligent, the plaintiff during this period
would have continued to receive £21 18s. 3d. per week (apart from
deductions for National Insurance contributions his actual receipt would
further be less by the sum of £1 3s. 1d.; in these figures this deduction
of £1 3s. 1d. has, however, in the plaintiff's favour, been ignored just
as the deduction of 14s. 8d. per week from the civilian pay of
£13 16s. 0d. has been ignored). Instead of receiving £21 18s. 3d.
he received his Police Pension of

£3 18s. 4d. per week and also his pay from his hew employment of
£13 16s. 0d. per week. He was, therefore, getting less money. Is he to
receive such amount of money as will compensate him for his loss or
is he to receive such higher sum as will result if his pension receipts are
left out of calculation? The total loss for the period on the higher
basis would be £4,059 and on the lower basis £2,131. The learned judge
awarded on the higher basis.

Period 3 is the period from December, 1975, when, but for the
defendant's negligence, he would have retired from the Police Force,
to the year 1992, when he would in any event have retired from civilian
employment. During this period he would, but for the accident, have
had his Police Pension of approximately £10 per week (£515 per annum)
and he would have been free to earn what he could in any capacity.
The learned judge found that he would in those circumstances have
earned what in fact in the events that happened he did, after leaving
the Police Force, earn (£13 16s. 0d. per week) and that he would have
retired at the age of 65. This, therefore, is a period of some 17 years.
In that period he would have had his Police Pension of £515 a year and
his civilian pay of £717 12s. 0d.: in fact he received his Police Pension
of £204 a year and his civilian pay of £717 12s. 0d. Acceding to the
argument on behalf of the plaintiff that his receipt of the £204 was to
be ignored the learned judge held that the loss of the plaintiff was
about £515 per year and for that period he said that he would fix the
sum of £7,500. On the figures, as was stated in the Court of Appeal,
if the pension of £204 that was received is taken into account the
plaintiff's total loss for Period 3 comes to £5,252 but if it is ignored it
comes to £8,170.

Period 4 is from the period of retirement (at 65) from civilian employ-
ment until the assumed age of 75. In this period he would have received
his Police Pension of approximately £10 per week and possibly a
pension, on retiring from civilian employment. In fact he received his
Police Pension of £3 18s. 4d. per week and his civilian pension of
£5 13s. 6d. per week. Again acceding to the contention that the
receipt of the £3 18s. 4d. per week was to be ignored the learned judge
held that for this ten year period the plaintiff's total loss would be
£2,200 (or £220 a year). That was because he held that the Plaintiff
was entitled to " the difference between his pension on retiring from the
" Police and his pension on retiring from his present job ".

In the Court of Appeal it was held that the actual receipt by the Plaintiff
of the weekly amount of £3 18s. 4d. was at all times to be taken into
consideration. For Periods 2, 3 and 4 the Court of Appeal held that the
respective amounts of total loss were £2,131, £5,252 and £170, a total of
£7,553. To allow for contingencies and for the benefit of immediate receipt
of money the Court of Appeal scaled that sum down by a half to £3,776.
On the basis of taking the pension into account and on a concession that
the civilian pension was also to be taken into account the Court of Appeal
held that in Period 4 the loss was £170. This figure is now accepted and
for that reason I do not proceed to examine it or to consider whether its basis
is correct. The plaintiff now agrees that the pension of £3 18s. 4d. is to be
taken into consideration for this period (Period 4). For Period 3 the Court
of Appeal fixed the figure of the loss—on the basis of taking the £3 18s. 4d.
into consideration—as £5,252. The plaintiff now agrees this figure also, and
agrees likewise that for Period 3 his receipt of his pension (by the weekly
sum of £3 18s. 4d.) is to be taken into consideration. He still asserts, how-
ever, that for Periods 2 and 1 the receipt need not be taken into considera-
tion. If what is being ascertained is the monetary loss which the plaintiff
sustained I can see no valid reason whatsoever for distinguishing between
the periods nor for saying that pensions are at some times but not at other
times to be taken into consideration. Furthermore, if the plaintiff is really
contending for a rule (on the analogy of the statutory provision made in
respect to claims for damages in an action under the Fatal Accidents Act,



10

1846) that no sum which is received as a pension is to be taken into account
in assessing damages at common law then the admissions made in regard to
Periods 3 and 4 would have to be disregarded and much higher sums than
those now agreed would have to be assessed. It has been enacted by section
2 of the Fatal Accidents Act, 1959, that in assessing damages in respect of
a person's death in any action under the Fatal Accidents Act, 1846, there
shall not be taken into account any insurance money, benefit, pension or
gratuity which has been or will or may be paid as a result of death.

There are manifest differences between claims under the Fatal Accidents
Act and claims by a living person for damages which he has sustained. It
might be said that as Parliament in 1959 legislated to exclude pension
receipts in reference to claims under the Fatal Accidents Act, 1846, but did
not exclude them in other cases the inference could be drawn that it was
recognised that the receipts were not to be excluded in assessing damages.
But I would not regard any such approach as sound. The only approach, in
my view, in the absence of any statutory enactment, should be that of
applying principle. But the fact remains that if the plaintiff is urging that
no pension which has been or will be paid is to be taken into account then
for Periods 3 and 4 he should on that basis have far larger amounts than
those now accepted as appropriate.

If, as I think, there is a firm and rational principle that in a case such as
the present damages should be assessed so that an injured person will receive
such sum of money as will represent the actual loss that has resulted to him
as a consequence of the negligence of the person who caused the injury, I
pass to consider whether there is any rule or principle that in arriving at the
monetary calculation any receipt by way of a pension is to be ignored and
is not to be taken into consideration. Reliance is placed upon Payne's case
[1952] 1 K.B. 26 which it is said should not have been superseded in
Browning's case. Then it is said that the receipt of money by way of pension
should be equated with the receipt of money under a personal contract of
insurance and should by the authority of Bradburn's case be ignored.

The plaintiff in Payne's case was a sailor in the Royal Navy who when
travelling home on leave was injured in a train accident. When he came
out of hospital he was invalided out of the Royal Navy and as an interim
award he was in October, 1949, given a disability pension of £2 5s. a week.
Later, (in the early part of 1951) the disability percentage was slightly
reduced and the pension was fixed at £2 0s. 6d. per week. He had by then
married and become entitled to a weekly addition of nine shillings and on
his first child being born to a further 6s. 9d. At the time of the action
there was only an interim assessment and no final determination of the
amount of the pension. The provisions of the relevant Article of the Order in
Council were of the highest relevance. Article 52 (1) was as follows:

" Where the Minister is satisfied that compensation has been or will
" be paid to or in respect of a person to or in respect of whom a pension
" or gratuity is being or may be paid or that any compensation which
" has been or will be paid will benefit such a person, the Minister may
" take the compensation into account against the pension or gratuity
" in such manner and to such extent as he may think fit and may with-
" hold or reduce the pension or gratuity accordingly."

Under the Order in Council compensation included any lump sum in respect
of injury which was recoverable as damages at common law. It followed,
therefore, that if the amount of the damages to be awarded was assessed
on the basis that the plaintiff was receiving £2 16s. 3d. a week that weekly
amount might later be reduced or withheld because damages had been
awarded to the plaintiff. The Minister had a duty to consider whether a
pension should be reduced. There was evidence given in the case as to
the practice that was then being followed by the Minister. It was that on
an award of damages being made a disability pension was abated or reduced
by the annuity value of 25 per cent, of the total damages (less special
damages) awarded calculated at the purchase price of 21/2 per cent, consols
at the date of the judgment. The plaintiff was awarded £2,500 for pain and



11

suffering and the loss of some of the pleasures of life and £3,000 for loss
of future earnings. The Special Damages (awarded to the plaintiff's father)
were £100 17s. No question was raised in the Court of Appeal in regard
to this amount. I would suppose that it would not be sought to give retro-
spective effect to any future withdrawal of a pension. Singleton L.J. pointed
out that the Minister had the right and the duty to consider each case on its
merits. So according to the established practice it would seem that Payne's
pension would certainly fall to be reduced. If the Minister varied his
practice he might abate or reduce a pension by the annuity value of a higher
percentage of the total damages awarded than 25 per cent. So where a
pension is not a fixed and certain one (as it is in the present case) but one that
may be reduced to a nominal amount, it would seem to be rational and
fair to leave it out of consideration. On the facts in Payne's case in view
of the uncertainty as to the future and inasmuch as any future pension would
in any event be likely to be small the result was probably not unfair. The
case has, however, often been regarded as authority for the view that if a
pension is discretionary it need not be taken into consideration. I do not
think that the matter is to be stated so rigidly. Where what is being
ascertained is the amount of a loss which has been caused this means that
the net loss is to be ascertained. If instead of a monetary income called
pay there is substituted a monetary income called pension then normally and
unless there is some statutory provision the amount of the loss is the differ-
ence between the two figures. But it would be unfair to bring into considera-
tion the monetary income called pension if it is not going to be received.
So if the payment of it is purely discretionary so that it might not in the
future be received at all injustice would result if the calculation was made
on the basis that it would be received and if in the result it was not received.
There might, however, be circumstances in which it could fairly and properly
be accepted that some part at least of the pension would definitely be
received. If that were so then it would be reasonable to take that part into
consideration when calculating the net loss.

Though I consider that on its facts the result reached in Payne's case
was probably not unfair, I do not consider that the reasoning was valid.
It would have been quite sufficient to have said that in ascertaining the loss
sustained by the plaintiff it would be unfair to assume that he would in
the future receive a weekly sum when according to the evidence he might
not receive any weekly sum or at best would only receive 'quite a small
sum and one which might at any time be reduced or withheld. Alterna-
tively an estimate based upon the evidence should have been made as to
the pension which it could fairly be said would in all probability be received
by Payne in the future. Even that course has the difficulties that were
pointed out by Singleton L.J. in his judgment at page 41 when he said:

" Consider the position of a judge who had to direct a jury on the
" assessment of damages, if the pension had not been awarded, and there
" was uncertainty as to the degree of disablement and as to the amount
" of pension as well as to reduction which the Minister might think
" it right to make later on account of the damages given. It will be
" seen at once that this would give rise to uncertainty, if not to impossi-
" bility, in arriving at a measure of justice. And a plaintiff cannot come
" back to court and ask for a further award on the ground that his
" pension has been assessed at a lower figure than was anticipated.
" The same or like considerations apply if, in assessing damages, regard
" is paid to a pension without knowledge of the reduction in pension
" which the Minister will make because of the damages awarded."

Singleton L.J. also pointed out that a defendant could not "be heard to
" to say: ' Reduce the damages because of the pension ' when the Order
" in Council gives the Minister the right to withhold or reduce the pension
" because of the award of damages ". This reasoning seems to me to be in
accord with the reasoning of the Court of Appeal in Baker v. Dalgleish
Steam Shipping Co. [1922] 1 K.B. 361. That case dealt with the position
where, before the Act of 1959, there had to be an assessment of damages
in an action under the Fatal Accidents Act, 1846, in a case where a plain-



12

tiff was in receipt of a pension from the Crown. Notwithstanding that the
pension was dependent on the voluntary bounty of the Crown it was held
that it should be taken into consideration subject however, to giving due
weight to the circumstance that it was voluntary and would be likely to be
reduced by an amount corresponding to the amount of damages awarded.
Scrutton L.J. thus expressed the matter:

" Just as in assessing the loss by the death the probability of volun-
" tary contribution destroyed by the death of the contributor may be
" included to swell the claim, so the probability of voluntary contribu-
" tion bestowed in consequence of the death may be used to reduce
" the claim by showing what loss the claimant has in fact sustained
" by the death. Less weight will be given to voluntary contributions
" than to those made under legal obligation, just because they are
" voluntary. Still less weight will be given to voluntary contributions
" in instalments, because they are obviously terminable; and still
" less weight if the contributor announces that he will reduce his contri-
" bution by the amount of compensation obtained from a wrongdoer
" who causes the death."

One part of the reasoning in Paynes' case was expressed in the words " the
" accident in this case was not the causa causans of the receipt by the plain-
" tiff of the disability pension but the causa sine qua non. The causa
" causans was his service in the Royal Navy ". I do not find the use of
these terms helpful. An illuminating analysis of them is contained in the
judgment of Windeyer J. in The National Insurance Co. of New Zealand
Ltd. v. Espagne 105 C.L.R. 569 at pages 592 to 596. In reference to the
passage from Payne's case which I have quoted Windeyer J. said:

" The Admiralty paid the pension because he was disabled while
" serving in the Navy. But why was service in the Navy the causa causans
" of its payment or of its receipt by the plaintiff? Was not the disability
" there the causa causans as in Baker's case [1922] 1 K.B. 361 the death
" was? These distinctions between causes can be elusive. They may
" be unreal. But they have been resorted to by courts for the solution
" of questions such as arise in this case. I have dealt with them at such
" length out of respect for those who find them helpful, and to show why
" I do not."

These observations are equally apposite in reference to one part of the
judgment of Pigott B. in Bradburn's case.

In Espagne's case the High Court of Australia in upholding the Supreme
Court of Queensland decided that, in assessing the damages to be awarded
in an action for personal injuries caused by negligence, the award of an
invalid pension, including one for permanent blindness to the injured plain-
tiff pursuant to the Commonwealth Social Services Act, 1947-57, was to be
disregarded. The grant of the pension was discretionary: its rate was dis-
cretionary. The accident caused the plaintiff to become totally blind. A
pension under the Act could be reviewed or reduced if a pensioner recovered
damages—but that could not be done in the case of a blind person. For in-
valid pensions under the Act there was in general a means test but there was
no means test in the case of blindness. A blind person's pension could not
be cancelled, suspended or reduced on account of his income or the value
of his property. Sir Owen Dixon C.J. pointed out in his judgment that no
legal rule exists that can be applied to every case where an advantage accrues
to an injured person which but for the injuries he would not have obtained.

" To inquire whether the advantage is collateral or not seems to me
" to ignore the fact that ex hypothesi the advantage arises because the
" plaintiff suffered the injuries. To say it is res inter alios acta
" appears difficult when the very man injured is one of the parties
" between whom the thing is done; how can he come within the word
" ' alios'? To say the injury is only a causa sine qua non, while the
" precedent or additional conditions whence the advantage arises form
" a causa causans seems to me simply to be the expression of a volun-



13

" tary preference for one of two essential factors which must combine
" in producing the result and to bring it forward at the expense of the
" other which is correspondingly pushed back." (see page 572).

After pointing out that the Court is concerned with the consequences to the
plaintiff, the Chief Justice said:

" The consequences must be traced out and so far as they lie in the
" future they must be pre-estimated and the result assessed together with
" consequences which have already accrued and translated into money."

Having said that it is not possible to work out any principle that would apply
to every case the Chief Justice gave his reasoning why he considered that the
pension under the Social Services Act in that case had an additional character-
istic which lead him to the conclusion that it should not be taken into account
in reduction of damages. He said (at page 573):

" The reasoning begins with a distinction which I think is clear enough
" in general conception. There are certain special services, aids, bene-
" fits, subventions and the like which in most communities are avail-
" able to injured people. Simple examples are hospital and pharma-
" ceutical benefits which lighten the monetary burden of illness. If
" the injured plaintiff has availed himself of these, he cannot establish
" or calculate his damages on the footing that he did not do so. On
" the other hand there may be advantages which accrue to the injured
" plaintiff, whether as a result of legislation or of contract or of benevo-
" lence, which have an additional characteristic. It may be true that
" they are conferred because he is intended to enjoy them in the events
" which have happened. Yet they have this distinguishing characteristic,
" namely they are conferred on him not only independently of the
" existence in him of a right of redress against others but so that they
" may be enjoyed by him although he may enforce that right: they
" are the product of a disposition in his favour intended for his enjoy-
" ment and not provided in relief of any liability in others fully to
" compensate him. This is readily seen in the case of benevolence.
" If a fund is raised by subscription for the benefit of a badly injured
" neighbour obviously this cannot operate in relief of the liability of
" a man who negligently caused the injury. So in a contract of
" accident insurance; where in the absence of special stipulation the
" insurer will not succeed by subrogation or otherwise to the insured's
" right of recourse against others in the case of injury by their negligence.
" But for the reason given it does not follow that the negligent parties can
" treat the insurance as operating in relief of their liability. It was
" effected by the money of the plaintiff for his own benefit in the event
" of an accident, a benefit both independent of and cumulative upon
" whatever right of redress against others might arise out of the cir-
" cumstances of the accident.

" The invalid pension conferred under the provisions of Pt. III of
" the Social Services Act 1947-57 of the Commonwealth is within the
" conception which it has been attempted to explain. An invalid pen-
" sion is granted in the exercise of an administrative discretion, though
" doubtless a discretion exercisable on grounds which are not at large,
" and it is granted as a benefit to the person after a consideration of
" his general situation. It is true that there are very special provisions
" concerning a pension to a blind person: see ss.22 (g), 24 (a). 25 (1)(f)
" and (2). 27 (l)(a), 28 (2)(a), 36 and 46 (2). But a grant even of such
" a pension cannot be obtained as of strict right and it is plain that it is
" granted after a consideration of the position or situation in which
" the applicant stands and entirely for his use and benefit and not in
" relief of any person antecedently liable to him to compensate him in
" any way for his loss of vision."

There is no feature in the present case which yields to the pension any
" additional characteristic " such as that described by Sir Owen Dixon. As
the pension is fixed and certain its receipt is a fact which becomes one of the
consequences to be taken into account in making the calculation as to the



14

economic loss that the plaintiff sustained. After the plaintiff left the Police
Force he obtained other employment which yielded him a salary and will
later give him a pension. It is accepted that these are facts which must be
taken into account in calculating the plaintiff's loss. If the language of
Payne's case is accepted it would have to be said that the accident was not
the causa causans of the receipt by the plaintiff of his salary in his new
employment. But for the reasons I have set out I think that it does not
advance matters to employ such terms. The simple fact remains that the
defendant by his negligence knocked the plaintiff down and the plaintiff has
very properly sought damages in respect of his personal injuries and also in
respect of his loss and damage. If we look for cause—it is found in the negli-
gence of the defendant. If we look for consequence—it lies in the fact that
the plaintiff was physically injured and in the fact that in terms of money he
was made worse off. There is no punitive element in the damages. The
matter is not advanced by using the emotive term " wrongdoer " in regard
to the defendant nor by stigmatising circumstances as being for the relief of
a wrongdoer. When the plaintiff, after leaving the Police Force, very
properly obtained the best employment that he could get his successful
efforts were in one sense in relief of the wrongdoer. Yet it is beyond question
that the new earned salary is a relevant fact to be taken into account in
calculating the plaintiff's economic loss. Nor is anything achieved by saying
that the plaintiff's Police pension is something that he had earned. So he
had. Most good positions and good entitlements have been earned. The
arrangements concerning the pension were essentially a part and an integral
part of his condition of employment. By his work and his labour he earned
both his pay and his prospects of having a pension or of having other bene-
fits. But it is with earnings and receipts that we are concerned. In his new
employment the plaintiff earned his money. Yet regard must be had to
that money in deciding as to economic loss. In his new employment he has
a pension scheme and in future he will have a pension: that he will have
earned by his work and by entering into a contract which provides for a
pension. But all these matters are the facts in the economic situation.
Though in advancing the claim of the Plaintiff reference is made to the terms
of his service in the Police Force in order to base a claim for loss it is never-
theless said that certain sums which he received pursuant to those terms of
service and which offset his loss are to be ignored. In my view, that is
quite unwarranted. As Lord Denning M.R. said the contract for a contribu-
tory pension was " part and parcel of his employment". I agree also with
Winn L.J. when he said:

" In my judgment where a plaintiff asserts that a tort has deprived
" him of the whole or part of what he formerly earned from an employ-
" ment, we must reduce his claim to the extent not only of all he is
" earning or able to earn in another employment but also of all that his
" former employment still produces in the form of pension as a set-off
" against lost earnings, no less than against loss of potential pension."

The view which I have accepted does not in any way conflict with or
diminish acceptance of Bradburn's case and does not involve that gifts from
benevolent persons need be brought into consideration. If someone makes
a purely voluntary and personal decision to insure himself against accidents
he is choosing to use some of his money or some of his savings in a particu-
lar way just as he would be doing if he saved some of his money and
invested it. If he insures against accidents he will hope that no accident
will befall him and he will be well content to have no return from the ex-
penditure which is involved in the payment of premiums. He may be one
in whose case there is already some provision against sustaining economic
loss. He may feel that in the event of accident befalling him he would
welcome the receipt of a sum of money to compensate him in ways that
would not be possible as a result of a successful claim at law. He may
contemplate situations in which no claim against anyone would be possible
or would succeed. I think that it would seem to most people, as it seemed
to Baron Bramwell and Baron Pigott, that there would be neither reason
nor justice in any suggestion that money received under such a



15

contract of insurance should be taken into consideration. So also would it
seem to most people to be contrary to reason and justice if the impulses
of sympathy and of concern which prompt gifts or benevolent arrangements
lead to the result that a claim against a defendant has to be diminished. All
these matters are purely the personal and private affairs of a plaintiff, it is
not for a defendant to inquire what use a plaintiff has in the past made of his
own money. If a defendant who is sued asks the plaintiff whether or not
he had had a gift from a friend or whether or not he had saved money and
invested it and whether his investments had prospered and if so to what extent
or whether or not he had taken out any insurance policies the reply, firm
though courteous, could well be that the defendant should only concern him-
self with his own affairs. The position will be entirely different if the plain-
tiff in asserting his loss himself stated that he had a contract
with an employer and claims that he has lost the remuneration for
which that contract provided. If a plaintiff sets up a contract of employment
as the basis of his claim and asserts that he has lost his salary under the
contract he must for the sake of completeness acknowledge, if it be the fact,
that under the very same contract he is receiving some sum less than his
salary. If under the contract he continues, in the events that have happened,
to receive half his pay he cannot assert that he has lost all his pay. If he
receives part of his pay, even if it is given the name of sick pay, he cannot
assert that he has lost all his pay. Nor can he say that, because he had the
wisdom to obtain a contract under which it was provided that he would get
his half pay or sick pay, he may ignore their receipt and claim the amount
of his full pay. Nor can he say that it was because of his service in the
past or because he had earned them that his half pay or his sick pay came
to him with the result that he could claim his whole pay as lost pay. He
would not have lost his whole pay. If under the terms of a contract of
employment the time comes when instead of having full pay or half pay
or sick pay a person retires with a pension, the loss which he suffers is the
difference between the amount of his pay and the amount of his pension.
If it is said that a pension is neither pay nor insurance benefit then I would
say that where there is no discretionary element and where the arrangements
leading to a pension are an essential part of the contract of employment
then the pension payments are very much more akin to pay than to anything
else. Indeed, it is often asserted that a pension is a form of deferred pay
and is taken into account in fixing remuneration. A man would measure his
loss by comparing what he used to get under his contract with what he now
gets under his contract. That is the financial loss that he has suffered. That
is the loss which the defendant should make good.

In Admiralty Commissioners v. S. S. Volute [1922] 2 A.C. 242 Lord
Dunedin (at page 248) referred to the pecuniary sum which will make good
to the sufferer, so far as money can do, the loss which he has suffered as
the natural result of the wrong done to him. In Gourley's case (supra)
Lord Jowitt at page 197 referred to such award of money " as will put him
" in the same position as he would have been in if he had not sustained the
" injuries": Lord Reid (at page 212) spoke of making good to a plaintiff
the financial loss which he has suffered and will probably suffer. Whatever
language is chosen the conception is of making good a loss. If the con-
sequence of a defendant's negligence has been that a plaintiff instead of
being on pay is on pension then prima facie the loss is the difference between
the two figures but subject always to the circumstance (as in the present
case) that the loss was reasonably mitigated by an ability to earn in new
employment.

For the above reasons I consider that the Court of Appeal approached
the issue correctly. I agree with their decision subject to one matter. An
adjustment of figures had to be made because a present sum is being awarded
to meet varying amounts of loss at varying future dates and because there
must be some allowance for contingencies. I think that the scaling down
was somewhat too severe and I would have arrived at a total figure of £8,600.
Subject to that adjustment I would dismiss the appeal.

16

Lord Pearce

MY LORDS,

The Appellant was discharged from the Police Force as a result of his
injuries. He took civilian employment at a lower wage. There is no dispute
that the Respondent must recompense him for the difference between the
wages he would have earned and the wages which he did in fact earn for
the period until he would in any event have retired from the Police Force,
But from that time onwards he will no longer be losing any wages as a
result of the accident since he would, in any event, have ceased to earn
them. But owing to his having had to leave the Force early his pension
will be lower than it would have been if he had continued in the Force until
his proper retiring age of 48. There is no dispute that he is entitled to
recompense from the age of 48 for the difference between the pension which
he would have got but for the accident and the pension which he will in
fact receive. That is a simple comparison of pensions. Since he is claiming
for that period in respect of a diminution of pension it is obvious that he
must give credit for the smaller pension which he will get against the
larger pension which he would have got.

The problem here is whether, during the period when he is under the age
of 48 and is still claiming a loss of wages, he must give credit for the pre-
mature pension which he receives from his employers during what should
have been, but for the accident, his working time on full pay in the force.
The fact that he must give credit after the age of 48 for his actual pension
during the period when he is claiming, as a pensioner in any event, in respect
only of a diminution of pension, does not shed light on the problem.

The cases on this subject show a conflict of view, each side of which has
been attractively presented to us. One may summarise the two points of
view in this way. On behalf of the Appellant it is said that an insurance,
or a pension, are the product of a man's service or a man's thrift. Their
character, like that of charitable gifts, is such that it was never intended, nor
is it just, that a tortfeasor should take over the benefit of them by getting
a credit for them in the account of damages that he must pay. And it is
they rather than the accident which are the true source of the benefit. For
the Respondent it is said that damages are not to be punitive; that Gourley's
case [1956] AC 185 has laid down that only a plaintiff's actual loss to his
pocket can be recovered ; that since the accident caused the pension as well
as the losses both must be taken into account; and that for good or ill, the
smooth with the rough, a defendant takes a plaintiff as he finds him; so
that if he knocks down a pensionable plaintiff he gets the benefit of the
pension.

The word "punitive" gives no help. It is simply a word used when a
Court thinks it unfair that a defendant should be saddled with liability for a
particular item. There is nothing punitive in calling on a defendant to pay
that which the law says is a just recompense for the injury the plaintiff has
caused. Nor does causation, I think, really provide an answer. The pension
could not have arisen had not the man by the terms of his employment
earned it or by his own thrift provided for it outside his employment. That
is the real source of the pension. On the other hand, the potential pension
thus provided would not have come into play had not the accident occurred.
Each is certainly a causa sine qua non and probably each is entitled to be
called a causa causans. Strict causation seems to provide no satisfactory
line of demarcation. It would only lead one to a compromise like that
contained in the National Insurance Act, 1948, whereby both a plaintiff
and a defendant were given some advantage from National Insurance bene-
fits. This was quite a sensible compromise, but it is difficult to find any
legal principle to justify it.

Again. Gourley's case (supra) does not. nor was it intended to, throw light
on this problem. By a convention (rather than any clear principle) which



17

B

the weight and idiosyncracies of modern taxation had made obsolete, tax
was disregarded in assessment of damages. Gourley's case corrected this and
laid down that in a plaintiff's claim for damages it was his actual net loss
of wages, not his theoretical gross loss which must be regarded. The real
loss must be measured. But that case was not directed to considering
how far adventitious payments received by a plaintiff must be introduced
into the credit side of his account. In dealing with the point before them
in Gourley's case their Lordships relied on the dominant rule that there
should be restitutio in integrum. A man should be put financially in the
position in which he would have been but for the accident. But if they
were intending to say that that general rule applied strictly to all benefits
from every source received by a plaintiff, then the plaintiff must clearly bring
into account all benefits from public subscription or kindness of relatives
or private insurance. Clearly they had no such intention. Such an intention
would have necessitated a close study of a long line of cases on that point
and a consideration of the difficulties inherent in overruling them all. Thus
Gourley's case did not apply nor was it intended to apply to the point before
us. The most that the Respondent can get from Gourley in the present case
is that in claiming that he has lost something a plaintiff must prove a genuine
factual loss not a technical unreal loss of something of which he would
never in fact have had an actual benefit, since the court is looking for
restitutio in integrant. And this, it can be argued, may have some indirect
bearing on the things which he brings into account on the other side of the
ledger.

The maxim that a defendant must take a plaintiff as he finds him does
not solve this problem. True, if he knocks down a high wage earner he
must take the consequences; and if he knocks down a low wage earner or
a man of character who will go on earning wages in spite of disabilities, a
defendant gains thereby. But, if pressed to its logical conclusion, that maxim
would entitle the defendant to say that he takes the plaintiff as he finds him
in respect of generous relatives who will subsidise him in misfortune and
thrifty private insurances which have cancelled out the losses caused by the
defendant. One may cut down the maxim by saying that a defendant takes
a plaintiff as he finds him in respect of all potential benefits from the
defendant's employment. There is no inherent logic in this. It may provide
a convenient line to draw if, but only if, the line is one which there is reason
to draw at that particular point. And on which side of that line does one
put gifts of a generous employer?

One must, I think, start with the firm basis that Bradburn v. Great Western
Railway Company (L.R. 10 Ex. 1) was rightly decided and that the benefits
from a private insurance by the plaintiff are not to be taken in account.
That case was accepted in this House in the British Westinghouse case [1912]
A.C. 673, a case on a different point. Viscount Haldane L.C. there said
(at page 690):

" The reason of the decision was that it was not the accident,
" but a contract wholly independent of the relation between the plain-
" tiff and the defendant, which gave the plaintiff his advantage."

Again it was approved by Lord Sumner in the case of s.s. Amerika [1917]
A.C. 38, at page 61, where the Admiralty were trying to recover as an item
of loss the pensions payable to the widows of sailors killed in an accident
to a submarine:

" Just as the damages recoverable by an injured man cannot be
" reduced by the fact that he has effected and recovered upon an accident
" policy (Bradburn v. G.W.R. Co.) ... so conversely a master cannot
" count as part of his damage by the loss of his employee's services
" sums which he has to pay because his contract of employment binds
" him to pay wages to the servant while alive and a pension to his
" widow when he is dead."

18

The Australian cases have accepted Bradburn's case as correct. So, too,
the Canadian cases. It has never been criticised in our courts. It accords
with the view of the American Restatement. And Mr. Comyn has not
assailed it here.

One may put the justification of Bradburn's case (31 L.T.N.S. 465)
on various grounds. Pigott B. in deciding it said:

"... there would be no justice or principle in setting off an amount
" which the plaintiff has entitled himself to tinder a contract of insur-
" ance such as any prudent man would make on the principle of, as
" the expression is ' laying by for a rainy day'. It is true that there
" must be the element of accident in order to entitle him to the money ;
" but it is under and by reason of his contract with the insurance
" company that he gets the amount, and I think it ought not, upon
" any principle of justice, to be deducted from the amount of the
" damages proved to have been sustained by him through the negligence
" of the defendant."

In Shearman v. Folland [1950] 2 K.B. 43 the court in a judgment given
by Asquith L.J. (at 46) in discussing what benefits were merely " collateral"
said of Bradburn's case:

" 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 premiums paid by the latter and
" appropriating that benefit to himself."

In Payne v. Railway Executive [1952] 1 K.B. 26, Bradburn's case was
followed and applied to the plaintiff's pension from the Royal Navy. The
court held that the plaintiff became entitled to the pension by reason of his
naval service, it being one of the benefits of such service. Just as a wrong-
doer cannot appropriate to himself insurance moneys, the benefit of
premiums paid by the injured party to cover accident risks, so he cannot
appropriate benefits arising from the service of the injured party which
similarly entitled him to those benefits. The causa causans of the receipt
by the plaintiff of his disability pension was his service in the Royal Navy;
the injury was but the causa sine qua non.

This extension held good for ten years. In Browning's case [1963]
1 Q.B. 75 however, the Court of Appeal by a majority (with a powerful dis-
senting judgment by Donovan L.J.) felt able to take a different view of an
Army disability pension ; declined to follow Payne's case ; and took the
pension into account when assessing damages. The broad question is
whether Payne's case or Browning's case was correct.

No help can be derived from various cases where courts have drawn
a distinction between pensions where there was a discretion to withhold
the pension and pensions where there was no such discretion. If pensions
in general are to be taken into account, then such a discretion does not
take them out of the account. It merely calls for some large or small
or negligible discount in the value to be attached to the pension, according
to whether the withholding of it is a real practical danger or (as in most
cases) a mere theoretical danger.

Nor do I think that a dividing line can be drawn between contributory
and non-contributory pensions. It would be unreal. The present case is an
example of the unreality. There was no pension fund and the employers
did not pay their contribution. The whole arrangement was merely a part
of the wage structure, and no doubt for bargaining about wages it was
useful to allocate notional contributions to employer and employed. What
the employer pays actually or notionally to a pensions fund is part of the
total cost which he is prepared to pay in respect of the employee's service.
Only as a last resort should one try to differentiate between contributory and
non-contributory pensions as a dividing line between that which should and
that which should not be brought into account. The Saskatchewan case
of Smith v. Canadian Pacific Railway 45 W.W.R. 170 provides a tempting
halfway house by taking into account the amount attributable to the



19

employer's contribution while omitting that which is attributable to the
employee's own contributions. But in my view the employer's contribu-
tions are earned by the employee's service just as much as those which
the employee himself contributes, and I see no justification for a difference
in principle between the two contributions.

In the American Restatement the general principle is stated: " Where
the defendant's tortious conduct has caused harm "to the plaintiff or his
" property and in so doing has conferred upon the plaintiff a special benefit
" to the interest which was harmed, the value of the benefit conferred is
" considered in mitigation of damages where this is equitable". In the
paragraph (e), however, dealing with " benefits received from third persons "
it is stated that " the rule does not apply where, although a benefit is
" received because of the harm, such benefit is the result of the forethought
" of the plaintiff or of a gift to him by a third person. . . . Where a
" person has been disabled and hence cannot work but derives an income
" during the period of disability from a contract of insurance or from a
" contract of employment which requires payment during such period, his
" income is not the result of earnings but of previous contractual arrange-
" ments made for his own benefit not the tortfeasors." Throughout the whole
subject as there set out, run equitable considerations. It seems to me possible
that on those grounds there might be some difference of approach where it
is the employer himself who is the defendant tortfeasor, and the pension
rights in question come from an insurance arrangement which he himself
has made with the plaintiff as his employee.

If one starts on the basis that Bradburn's case, decided on fairness and
justice and public policy, is correct in principle, one must see whether there
is some reason to except from it pensions which are derived from a man's
contract with his employer. These, whether contributory or non-contribu-
tory, flow from the work which a man has done. They are part of what the
employer is prepared to pay for his services. The fact that they flow from
past work equates them to rights which flow from an insurance privately
effected by him. He has simply paid for them by weekly work instead of
weekly premiums.

Is there anything else in the nature of these pension rights derived from
work which puts them into a different class from pension rights derived
from private insurance? Their " character " is the same, that is to say, they
are intended by payer and payee to benefit the workman and not to be a
subvention for wrongdoers who will cause him damage.

In National Insurance Co. of New Zealand Ltd. v. Espagne [1961] 105
C.L.R. 569 Dixon C.J. said of pension rights that they had " the additional
" and distinguishing characteristic namely that they are conferred on him not
" only independently of the existence in him of a right of redress against
" others but so that they may be enjoyed by him although he may enforce
" that right: they are the product of a disposition in his favour intended
" for his enjoyment and not provided in relief of any liability in others fully
" to compensate him ". This view was accepted by the High Court of
Australia in Jones v. Gleeson [1965] 39 A.L.J.R. 258 and Browning's case
was not accepted ; a police disability pension was there disregarded as
irrelevant to damages.

Moreover one of the aspects of a Service pension, and even more so of a
policeman's pension, is that they are not intended necessarily as any sub-
stitute for the capacity to earn. The familiar pattern is that a man may
can in a civilian employment when his service ends (whether prematurely
or not) and thus enjoy both his pension and his civilian wage. His pension is
thus a personal benefit additional to anything that he may be able to earn
by way of wages. In this case the plaintiff would from the age of 48 be
receiving his full pension as well as earning civilian wages.

In my opinion, the character of the pension rights in this case brings them
within the general principle of Bradburn's case, and there is no adequate
equitable reason to exclude them from it.

20

Parliament in 1959 has by implication expressed a similar view on the fair-
ness and justice of the matter and the question of public policy inherent in
it. The cases under Lord Campbell's Act had taken a different turn and,
unlike the cases under the common law, had brought pensions into account
in assessing damages. The Fatal Accidents Act, 1959, directed that pensions
should not be taken into account. It may have done this regardless of what
should be the fair and just principle, simply in order to bring cases under that
Act into line with common law cases. If so, it would be unfortunate that the
common law cases should now change direction and get out of line once
more. It is, however, far more likely that Parliament excluded the taking
into account of pensions because it thought that the principle of exclusion
laid down in common law cases was fairer and more in accordance with
public policy and that therefore cases under Lord Campbell's Act should
be brought into line with it. If this be so, it is some confirmation of the
view which I have expressed.

I would, therefore, allow the appeal and make the order proposed by my
noble and learned friend, Lord Reid.

Lord Wilberforce

MY LORDS,

The law as to damages for personal injury may fairly be said to be in a
transitional stage. In the nineteenth century, a man injured by another's
negligence had to prove his damages, special and general, and he would
recover the amount so proved from the negligent defendant. In relation to
death claims, Lord Campbell's Act in 1846 was based on a simple equation
under which what was recoverable by the injured dependant was the loss
caused by the death less the amount of any accruing benefit. A foretaste
of complications to come was provided in 1874 by Bradburn's case L.R. 10 Ex.
1, 31 L.T.N.S. 464. A passenger suing a railway company had insured
himself against railway accidents and the Queen's Bench Division firmly
rejected the suggestion that the proceeds of the insurance policy should be
deducted against his damages. Branwcll B. said that, if it should be deducted,
he would be a loser by insuring and Pigott B., or more likely Cleasby B.
(see 31 L.T. 465) said there would be no justice or principle in setting the
amount off.

That was, we may now think, a simple case in itself. Certainly at the
present time the position is likely to be far more complex. The injured
plaintiff is liable to taxation on his earnings. He may be protected by an
elaborate structure of social welfare arrangements entitling him to industrial
injuries benefit, unemployment pay, sickness benefit and other payments of
constantly changing nature and amount. Apart from any private insurance
he may have taken out, he may be covered by an " insurance " scheme in his
employment. This may be voluntary or compulsory, contributory or non-
contributory ; it may be partly transferred from a previous employment and
may be transferable to a future employment: the true element of insurance
in the arrangements may be considerable or very slight. If he is injured in a
large-scale catastrophe, and sometimes even when he is not, a fund may be
raised by public subscription out of which he may receive very large sums
indeed. He may receive help from private benefaction. So on the happening
of an accident, a man may become entitled to a number of payments from
different sources which will substantially mitigate his loss. In many cases
even now, and possibly in most cases in the future, the whole of his loss,
so far as measurable in money terms, may be covered, independently of any
claim against the " wrongdoer ".

But what of the defendant? How should these arrangements affect his
liability to pay? The law still regards him, in most contexts, simply as a
wrongdoer who has to pay out of his own pocket for the loss he has caused
although the reality is that he seldom does so. in many cases takes no part in



21

the proceedings even if he knows of them at all, and that often any payment
on his account to the plaintiff is ultimately, like the plaintiff's benefit payments,
borne by the public at large. If, when a sum of money is awarded against
him, often an undissected lump sum, he is bold enough to ask on what
principle it has been calculated, he is hardly likely to understand, or to
appreciate, the rule that he must take the plaintiff as he finds him, or to be
consoled by hearing that the damages are not punitive. Neither of these
expressions tells him whether, or how far, he is liable to compensate a
plaintiff who is able to draw on various types of benefit or assistance.

As regards some of the social protections which injured plaintiffs may
enjoy, Parliament has intervened with a compromise solution, providing
that half of certain payments over a period are to be deducted in assessing
the loss—see Law Reform (Personal Injuries) Act, 1948, section 2, but this
type of solution is not open to the Courts. They have to grapple with each
type of benefit as it arises, and they have done so sometimes by setting
themselves to ascertain what is " fair ", sometimes by attempting to squeeze
the appropriate answer from, or to explain the answer arrived at by reference
to, such words (and I do not wish to depreciate their utility) as " compensa-
" tory ", " loss ", " collateral " or " caused ". On the whole reasonably
consistent results have been achieved. As regards private insurance policies
taken out by the injured man, the Courts have adhered to Bradburn's case—
it has been approved in this House and in other common law jurisdictions:
as regards receipts from voluntary funds it has been decided in Northern
Ireland that no deduction should be made (Redpath v. Belfast and County
Down Railway [1947] K.B.D. N.I. 167). The decision was put either on
public policy or on the intention of the subscribers, see per Andrews L.C.J.
at page 170. Decisions have been given regarding some forms of social
benefit (e.g. Parsons v. B.N.M. Laboratories [1964] 1 Q.B. 95): I do not
think that we ought to consider these at this time. As regards pensions, or
similar benefits, the Court of Appeal in Payne's case [1952] 1 Q.B. 26 decided
against deduction of a naval disability pension. Two of the Lords Justices
regarded the pension as analogous to an insurance policy and as earned by
the injured man's service, and so followed Bradburn. Singleton L.J. while
saying that he was prepared to accept this reasoning relied on the circumstance
that there was a discretion to reduce the pension—surely a bad reason for
disregarding it, though it might be a good one for reducing the deductible
amount. The case was at any rate a direct decision against deduction of a
disability pension arising out of the terms of service which, subject to review
by this House, clearly enough stated the law.

Although in Monmouth County Council v. Smith [1956] 1 W.L.R. 1132,
[1957] 2 Q.B. 154 the deductibility of a police pension was conceded, in
Judd's case [1960] 1 W.L.R. 328 Payne's case was followed and applied by
Finnemore J.; it was again followed by John Stevenson J. in the present
case. But in Browning's case [1963] 1 Q.B. 750, under pressure of some
" hard " figures, a new departure was made. The Court of Appeal, con-
cerned with a veteran's disability pension payable to a United States Air
Force Sergeant, by a majority discarded Payne's case and held his pension
deductible, Lord Denning M.R. on grounds of " fairness" and justice,
Diplock L.J. partly on the ground that Payne's case had been impliedly over-
ruled by Gourley. Donovan L.J. dissenting, held that the Court was bound
by Payne's case and independently would have held that the pension, being
earned by past services, was equivalent to insurance money payable under
an accident policy and should be excluded from the computation of loss.
This decision did not in terms overrule Payne's case so the judges were there-
after faced with conflicting decisions: in some cases they continued to follow
Payne, on the ground that the pension was discretionary, a means no doubt
of escaping from Browning but not in itself satisfactory as a principle (see
Carroll v. Cooper, Elstab v. Robinson [1964] 1 W.L.R. 345 and 726).

Your Lordships are free now to consider the whole matter, whether Payne
or Browning is right or wrong, so there is not much profit in an examination
of the process by which the majority in Browning justified their departure
from Payne. But I cannot agree that what was decided by this House in



22

Gourley's case is decisive or indeed has any bearing on the matter. Gourley
was concerned with the question how the plaintiff's loss was to be calculated
having regard to his liability for tax; Payne and the present case with the
totally different question whether, after the loss has been so computed, any
gain or benefit is to be deducted against it. Learned counsel, arguing in
Gourley, disclaimed any desire to argue this question and their Lordships
did not pronounce upon it. This was clearly perceived by Finnemore J. in
Judd's case (u.s.)

In the search for a solution of some of these problems I have found much
assistance in the three decisions of the Australian High Court to which some
reference has already been made (Paff v. Speed 105 C.L.R. 549; National
Insurance Co. of New Zealand Ltd. v. Espagne ib. 569; Graham v.. Baker
106 C.L.R. 341). I would cite three passages. In Paff v. Speed, Windeyer J.
said:

" It is, in my view, a mistake to think that there is some general rule
" governing the admissibility of evidence of pensions of all sorts in all
" cases of personal injury. Damages for personal injury are compensa-
" tory. The first consideration is what is the nature of the loss or damage
" which the plaintiff says he has suffered. A defendant can always
" call evidence that contradicts the case the plaintiff seeks to establish.
" If, as here, a plaintiff claims that he has been deprived of a pension
" that was one of the advantages of the particular service in which he
" was, the defendant can prove that, in fact, he has a pension. If a
" plaintiff claims that he has incurred expenses for medical treatment or
" for an artificial limb, the defendant can show that these things were
" provided for him without charge. But a claim that because of physi-
" cal injuries the plaintiff's capacity to earn money has been destroyed
" is not met simply by showing that he has received money or other
" assistance from a charity, a former employer, a friend or the State.
" Whether money or other assistance derived by an injured person from
" such sources is to be taken into account in assessing the defendant's
" liability is a question on which I have stated my view in Espagne's
" Case."

In Espagne's case the same learned justice had said :

" Damages are given as compensation for the consequences of a
" tortious act when the harm is of a kind that a reasonable man could
" have foreseen. Consideration of cause and consequence are thus
" necessarily involved in the assessment of damages. But in cases such
" as this the question is not whether a harm that the plaintiff has suffered
" is, in the relevant sense, a consequence of the defendant's negligence,
" but whether an advantage that the plaintiff has gained is to be re-
" garded as mitigating that harm. Causal considerations cannot be
" decisive of the latter question, unless there be a general rule of law
" that all benefits, or foreseeable benefits, received by an injured person
" because of, or as a consequence of, his injury are to be set-off against
" the damages he can recover from a wrong-doer. In my view, there is
" no such rule."

And again:




" The benefits of benevolence do not reduce damages recoverable.
" That may be accepted. Why is this? It is not the result of a distinc-
" tion between benefits given voluntarily and benefits paid for. Indeed
" one reason given for disregarding insurance moneys is just the oppo-
" site, namely that they have been paid for by premiums: and, relying
" on this as an analogy, a distinction has in some cases been made be-
" tween contributory and non-contributory pension schemes that are
" incidents of contracts of service. That distinction, however, seems
" unsound, for the right to have a pension or the chance of having a
" pension from his employer is part of what a servant earns by his
" labour. Brereton J. has discussed this. I think convincingly, in
" Watson v. Ramsay."

23

C2

As the learned justices in the High Court are careful to state, it is im-
possible to devise a principle so general as to be capable of covering the
great variety of benefits from one source or another which may come to an
injured man after, or because, he has met with an accident. Nor, as was
said by Dixon C. J. in Espagne's case (u.s.) is much assistance to be drawn
from intuitive feelings as to what it is just that the wrongdoer should pay.
Moreover, I regret that I cannot agree that it is easy to reason from one
type of benefit to another. One cannot argue from non-deductibility of gifts
to non-deductibility of the proceeds of insurance, nor from the non-deduc-
tibility of insurance to the non-deductibility of pensions. Accident insurances
are not gifts or like gifts, they are essentially wagers pensions, if insurance
at all, are not insurance in the same sense as accident insurance and mere
use of the common word is not enough to produce a common principle.

The Appellant's pension, called an " ill health award " is payable, under
the Police Pensions Regulations, to a regular policeman who retires from the
force on the ground that he is or was permanently disabled. He must, if
he is to receive a pension, reckon at least ten years' pensionable service, and
must have been disabled as the result of an injury received in the execution
of duty. Disablement, in this context, must mean disablement which pre-
vents him from continuing to work as a policeman, and it must often be the
case, and be contemplated, that such disablement does not prevent him
taking other paid employment. This may be for a wage which falls short of,
equals, or exceeds his former policeman's pay, but there is nothing, in any
of these events, to prevent him from drawing both his new wage and his
pension. If, therefore, his earning capacity is reduced by his injury, there
would seem no good reason why he should not recover damages for any
loss of earning capacity as well as receiving his pension. This line of argu-
ment is consistent with, and supported by, that view of the matter which, I
think rightly, regards the pension as representing the earnings, or reward
of past saving, to the extent of his own contribution and his past service,
as to the rest. For this reason I do not feel able to accept the, at first sight
attractive, solution adopted in the Saskatchewan case of Smith v. Canadian
Pacific Railway 45 W.W.R. 170.

Lastly I see no inconsistency between (i) not bringing the police pension
into account against the civilian wages (periods 2 and 3) and (ii) bringing
the reduced police pension into account against the greater he would have
received if he had not been injured (period 4). These are two quite different
equations and the difficult legal questions which relate to the earlier period
never arise in relation to period 4, where all that is needed is an arithmetical
calculation of pension loss. On the two related grounds, each of which would
separately justify the conclusion, namely (a) that the police pension is payable
in any event and is not dependent on loss of earning capacity and (b) that the
pension is to be regarded as the reward or earning of pre-injury service and
therefore not entering into the computation of lost post-injury wages, I
would reach the conclusion that it should not be deducted against damages
recoverable from a third person for a proved loss of earning capacity. This
makes it impossible for me to follow Browning v. War Office (u.s.). I must
disagree with the majority decision and adopt that of Donovan L.J. The
actual figures can, thanks to the careful breakdown and explicit calculation
of each ingredient in the courts below, in my opinion indispensable in this
type of case, easily be determined. I agree with my noble and learned
friend Lord Reid as to the measure of discount to be applied as regards
future payments and with the resulting figure of £9,500 which is to be
awarded.

I would allow the appeal.

Lord Pearson

MY LORDS,

This appeal is concerned with the assessment of the financial loss as part
of the damages for personal injuries caused to the plaintiff, who is now the

24

Appellant, in a traffic accident by the negligence of the defendant, who is
now the Respondent. By reason of the injuries the plaintiff was permanently
disabled and had to retire from the Cheshire Police Force with a pension,
but he was able to obtain other employment of a clerical nature at a lower
salary. There are three questions involved, namely,

1. whether, in computing the amount of the lost Police salary, the
   apparent salary should be increased by the inclusion of a notional
   contribution by the employers to a notional pension fund ;

2. whether, in computing the nett loss of income, there should as
   against the lost Police salary be taken into account the Police pen-
   sion received as well as the salary from the new clerical employment;
   and

3. to what extent should the figure ascertained for future financial loss
   be scaled down both to allow for contingencies and because the
   plaintiff is to be paid a lump sum now.

I will now state the actual or assumed facts and figures which are needed
to show how the plaintiff's financial loss has been or will be suffered and
how the first two questions arise. For convenience only weekly figures will
be given, and they will be given for the four periods referred to by Lord
Denning M.R. in his judgment. The assumptions are based on probabilities
as found by the learned judge at the trial. I am not setting out any adjust-
ments or allowances which may be ultimately required but are not material
for the consideration of the first two questions.

By the time of the accident, which occurred on the 4th January, 1963, the
plaintiff had been employed in the Cheshire Police Force for approximately
12 years, and his salary (consisting of the basic salary and certain allowances)
was at the rate of £21 18s. 3d. per week subject to a deduction of £1 3s. 1d.
per week as his contribution towards his possible future pension.

Period 1 is from the date of the accident (4th January, 1963), to the date
of the trial (taken to be the 19th July, 1966). The plaintiff was retained as
a member of the Cheshire Police Force, drawing the full salary, up to the
30th June, 1964. So far there was no loss of income. On the 30th June,
1964, he was by reason of his permanent disability compulsorily retired
(discharged) from the Force with an ill-health pension of £3 18s. 4d. per
week. On the 6th October, 1964, he obtained clerical employment at a salary
of £13 2s. 6d. per week, and on the 19th June, 1965, this salary was increased
to £13 16s. 0d. per week. On a simple view, which accords with the defen-
dant's contention, the plaintiff's nett loss of income per week in the last
year of period 1 was as follows:

£ s. d. £ s. d.

Lost Police salary 21 18 3

Income: Salary in clerical employment 13 16 0
Ill-health pension under Police Pensions
Regulations 3 18 4

Total income 17 14 4

Nett loss of income ... 4 3 11

The plaintiff, however, contends (1) that the figure of £21 18s. 3d. should
be increased by adding in £3 as the notional contribution of the employers
towards the notional pension fund, and (2) that the ill-health pension of
£3 18s. 4d. under the Police Pensions Regulations should be disregarded.
If only the first of these contentions were accepted, the effect would be that
the lost Police salary would be deemed to be £24 18s. 3d. and the nett
loss of income would be deemed to be £7 3s. 11d. If only the second of
these contentions were accepted, the effect would be that the actual income
would be deemed to be only £13 16s. 0d. and the nett loss of income would
be deemed to be £8 2s. 3d.

25

Those figures, relating to the last year of Period 1, are sufficient to show
how the questions arise in the sphere of special damages, which are calculated
on the basis of what has actually happened up to the date of trial and an
assumption as to what would have happened but for the accident (i.e. that
the plaintiff would have remained in the Police employment at the same
salary). Period 2 is in the sphere of general damages, which involve assump-
tions both as to what will happen in the future and as to what would have
happened but for the accident. It has been assumed for the purposes of the
action and this appeal that throughout Period 2, extending from the 19th
July, 1966, to about the 14th December, 1975, the plaintiff will continue to
receive his salary of £13 16s. 0d. per week from his clerical employment
and his ill-health pension of £3 18s. 4d. per week under the Police Pensions
Regulations. It is also assumed that but for the accident he would through-
out Period 2 have remained in the Police employment receiving the salary of
£21 18s. 3d. per week. Then the relevant figures are exactly the same as
those set out above for the last year of Period 1, and the plaintiffs contentions
are the same.

Period 3 is from about the 14th December, 1975, to a date in 1992. It
is assumed that the plaintiff will throughout this period retain his clerical
employment and be receiving his salary of £13 16s. 0d. per week, and also
his ill-health pension of £3 18s. 4d. per week. It is assumed that but for
the accident the Plaintiff would at the beginning of this period (at the age
of 48 and after 25 years' service in the Police force) have retired from the
Police Force with an ordinary pension (as distinct from an ill-health pension)
of £10 per week and would then have obtained the clerical employment
at the salary of £13 16s. 0d. per week and would have held it throughout
this Period 3 until he reached the age of 65 in 1992. Thus the accident
makes no difference to the salary from clerical employment in this period,
but in consequence of the accident the plaintiff will in this period have
only an ill-health pension of £3 18s. 4d. per week instead of the ordinary
pension of £10 per week. The plaintiff's claim for this period is based on
the difference between the larger and the smaller pension, and this claim is
not now disputed.

Period 4 is a concluding period of 10 years from 1992 to 2002. It is
assumed that the plaintiff will retire from his clerical employment in 1992
and will throughout this period draw a pension of £5 13s. 6d. per week
from that employment as well as the ill-health pension of £3 18s. 4d. per
week under the Police Pensions Regulations. It is also assumed that but
for the accident the plaintiff would throughout this period have been drawing
an ordinary pension of £10 per week under the Police Pensions Regulations.
He would still have retired from his clerical employment in 1992, and might
have had some pension from that employment though less than £5 13s. 6d.
owing to the shorter period of service in that employment. I am not sure
of the details of the figures but there is no dispute about them. The
plaintiff's claim for this Period 4 is for the difference between the amount
of pension or pensions which he would have received but for the accident
and the lower amount of the pension or pensions which (it is assumed) he
will in fact receive. This claim is not now disputed.

The first question is whether, in computing the amount of the lost Police
salary for the last year of Period 1 and the whole of Period 2, the apparent
salary of £21 18s. 3d. should be increased by the inclusion of a notional
contribution of the employers to a notional pension fund. The plaintiff was
presumably receiving a lower salary than he would have received if no
pension rights had been accruing. If no provision were being made for
payment of his future pension, the employers would have been able to
afford and he would have expected a larger salary. That Ls true, but it
does not alter the amount of his salary, which was his current remuneration.
The reward for his services was in two parts, the then present salary, which
was his current remuneration, and the prospective pension, which would come
to him as deferred remuneration on his retirement. He would have the
benefit of his then present salary so long as he remained in the Service.



26

He would have the benefit of his pension rights after retiring from the
Service. It is conceivable that some special and artificial method of com-
putation by adding in a notional contribution by the employers to a notional
pension fund might be necessary for doing justice in some other case having
a different character. But in this case there is no reason for departing from
the natural sequence of events according to the probable assumptions. In
the last year of Period 1 and the whole of Period 2 the Plaintiff loses the
benefit of his salary—the current remuneration—as it would have been but
for the accident, and in Periods 3 and 4 he loses the benefit of his ordinary
pension as it would have been but for the accident. At this stage I am
speaking of the gross loss, not considering the nett loss after deducting the
substitute income.

Before leaving the first question, I should mention a further point which
arises out of it. In setting out the weekly figures, I have taken £21 18s. 3d.
as being the amount of the lost police salary and £13 16s. 0d. as being the
amount of the present salary in the civilian employment. In fact, however,
the plaintiff while in police employment did not receive and take home
£21 18s. 3d. per week but only £20 15s. 2d. because there was a deduction
of £1 3s. 1d. as his contribution towards his prospective pension, and
similarly in his present civilian employment he does not receive and take
home £13 16s. 0d. per week but only £13 1s. 4d. because there is a deduction
of 14s. 8d. as his contribution towards his prospective pension. I think
it would be more correct to take the figure of the nett " take-home pay "
in each case: £20 15s. 2d. for the lost police salary and £13 1s. 4d. for
the present salary in the civilian employment. As Salmon L.J. said in his
judgment: —

" If £y is what a man takes home as wages, it can make no real
" difference under any compulsory pension scheme whether a contribu-
" tion of £x a week towards a pension is described, say, as to 1/4 £x as
" the servant's contribution, and as to |£x as the master's contribution,
" or whether the whole of £x is described as the master's contribution,
" or vice versa. At the end of the week the servant receives exactly the
" same amount of money. In no circumstances can he receive more
" than the amount of his net salary during his employment. He receives
" nothing more until his employment ends and then only in accordance
" with the provisions of the pension scheme."

The second question is the one to which the greater part of the argument
has been directed. It is whether, in computing the nett loss of income for
the last year of Period 1 and the whole of Period 2, there should as against
the lost Police salary be taken into account the Police pension received (the
ill-health pension) as well as the salary from the new clerical employment.
The weekly figures have been set out above. The lost Police salary is
£21 18s. 3d. The actual income is the salary of £13 16s. 0d. from the clerical
employment and the ill-health pension of £3 18s. 4d., making £17 14s. 4d. and
the actual nett loss is £4 3s. 1 1d. If under some rule of law the ill-health
pension is to be disregarded the actual income will be deemed to be only
£13 16s. 0d. and the nett loss will be deemed to be £8 2s. 3d. Is this
departure from the real position required by any rule of law?

A very important decision as to the proper method of assessing damages, a
landmark of this branch of the law, was the case of British Transport Com-
mission v. Gourley [1956] AC 185. I will extract what I think are the main
principles to be derived from the opinions of their Lordships in that case.

(1) The dominant principle is that the damages are compensatory. Earl
Jowitt said at pages 197-8:

" The broad general principle which should govern the assessment
" of damages in cases such as this is that the tribunal should award the
" injured party such a sum of money as will put him in the same position
" as he would have been in if he had not sustained the injuries: see per
" Lord Blackburn in Livingstone v. Rawyards Coal Co. . . . The prin-
" ciple can . . . afford some guidance to the tribunal in assessing com-
" pensation for the financial loss resulting from an accident, and in such



27
C*2

" cases it has been referred to as ' the dominant rule of law': see per
" Lord Wright in Liesbosch (Owners) v. Edison (Owners). There are. no
" doubt, instances to be found in the books of exceptional cases in
" which this dominant rule does not apply, as for instance, in cases of
" insurance, or cases calling for exemplary or punitive damages, or in
" certain cases dealing with the loss of use of a chattel: but, as Lord
" Sumner said in Admiralty Commissioners v. Chekiang (Owners): ' The
" ' measure of damages ought never to be governed by mere rules of
" ' practice, nor can such rules override the principles of the law on
" ' this subject'."

There are also statements of the dominant principle in the speech of Lord
Goddard at page 206 and in the speech of Lord Reid at page 212.

(2) The assessment of damages for financial loss should be realistic, so
as to make good to the plaintiff what he has really lost. Earl Jowitt said
on page 203:

" I agree with Lord Sorn in thinking that to ignore the tax element
" at the present day would be to act in a manner which is out of touch
" with reality. Nor can I regard the tax element as so remote that it
" should be disregarded in assessing damages ... I see no reason why in
" this case we should depart from the dominant rule or why the respon-
" dent should not have his damages assessed upon the basis of what he
" has really lost, and I consider that in determining what he has really
" lost the judge ought to have considered the tax liability of the
" respondent."

Lord Reid said at page 215:

" In considering the importance of practical difficulties I would weigh
" them against the importance of the element of tax liability, with tax
" at modern levels, in determining the real loss which the plaintiff has
" suffered "

(3) The suggestion that the tax element should be disregarded lest the
wrongdoer might benefit was not accepted. Earl Jowitt said at page 202:

" My Lords, it is, I think, if I may say so with the utmost respect,
" fallacious to consider the problem as though a benefit were being
" conferred upon a wrongdoer by allowing him to abate the damages for
" which he would otherwise be liable. The problem is rather for what
" damages is he liable? and if we apply the dominant rule, we should
" answer: 'He is liable for such damages as, by reason of his wrong-
" ' doing, the plaintiff has sustained '."

There was no similar passage in the opinion of Lord Goddard in Gourley's
case, but in another case (Receiver for Metropolitan Police District v. Croydon
Corporation, Monmouthshire County Council v. Smith [I957] 2 Q.B. 154)
Lord Goddard at page 162 cited in full the passage from Earl Jowitt's
speech, and at pages 163-4 he said :

" The obligation of the defendants here was to compensate the
" injured men, and to pay them the damage which they had sustained.
" If a man's employer has agreed to pay him wages, whether he is well
" or whether he is ill, it seems to me that that affords a benefit in one
" sense to a defendant, because he does not have to pay the damage
" which he would have had to pay if that agreement had not been made.
" That simply means that he does not have to compensate the plaintiff
" for an injury which he has not suffered. The obligation is, in the
" words of Earl Jowitt, simply to pay ' such damages as, by reason of his
" ' (the defendant's) wrongdoing, the plaintiff has sustained'. Having
" paid that, his obligation seems to me to be at an end."

Morris L.J. at page 164 and Vaisey J. at page 169 agreed with Lord
Goddard's judgment.

(4) The maxim res inter altos acta alteri nocere non debet is not applicable,
or not fully applicable, in cases of this kind. Earl Jowitt said at page
199:

28

" I confess to some difficulty in defining the limits of this principle
" in cases concerning the assessment of damages in personal injury
" cases. The contract which the injured person has made, which gives
" him the right to the salary for the loss of which he claims to recover
" damages, may surely also be said to be res inter alios acta from the
" point of view of the wrongdoer, and yet this contract obviously forms
" the basis upon which damages for loss of earnings are to be assessed.
" In all such cases the real issue seems to be whether the facts relied
" upon as affecting the measure of damages are too remote to be taken
" into consideration."

Similarly Lord Goddard said at page 207:

" A plaintiff may seek to increase or a defendant to diminish damages
" by items which are held to be too remote. The mere fact that the
" item arises as between the plaintiff and a third party would not seem
" to be the test. In a wrongful dismissal or personal injuries action
" the fact that a plaintiff has obtained remunerative employment with
" a third party is normally relevant, though it would fall within the
" words res inter alios acta. The question is whether taxation is or is
" not too remote to be taken into account."

(5) The test for determining whether an item can properly be taken into
account as increasing or diminishing damages is to consider whether it is
too remote. Statements to this effect from the speeches of Earl Jowitt and
Lord Goddard have already been cited. Lord Reid said at page 212:

" But the general principle is subject to one qualification. A loss
" which the plaintiff has suffered, or will suffer, or a compensatory gain
" which has come or will come to him following on the accident, may
" be of a kind which the law regards as too remote to be taken into
" account."

At page 214 he said:

" I do not think that it is possible to formulate any principle by
" which it can be determined what is and what is not too remote. Mayne
" on Damages, llth edition, page 151, refers to a 'matter completely
" ' collateral' and for a general description of what is too remote I
" cannot find better words, but I do not think that every case can be
" solved merely by applying those words to it."

It seems to me that Gourley's case affords ample guidance for the decision
of (he present question. One has to consider whether the ill-health pension
is " too remote" to be properly taken into account in determining the
plaintiff's net loss of income in Periods 1 and 2. Possible synonyms or
variants of the phrase " too remote" are " completely collateral",
" independent" and " not sufficiently connected " and no doubt several
others can be suggested. The phrase is meant to be imprecise, and should
continue to be imprecise, because it needs to have flexibility in order to be
justly applied to the greatly varying facts of particular cases. I think it is
useful to enquire, what is the thing from which the item must not be
too remote, to which it must not be completely collateral, of which it must
not be independent or with which it must be sufficiently connected? The
speeches in Gourley's case did not embark on this enquiry and I have not
found any clear answer in other cases. Obviously there must be some con-
nection with the accident, and I think also with the head of damages,
category of damages, into the calculation of which the item is sought to be
introduced. I think the mental picture is this: here on one side is the
accident with its train of direct and natural consequences happening in the
ordinary course of events, and all these consequences are solely or pre-
dominantly caused by the accident: there on the other side is some com-
pletely collateral matter, outside the range of such consequences, having the
accident as one of its causes but on a fair view predominantly caused by some
extraneous and independent cause. It is clear from the decided cases that



29

causation is an important factor in determining whether an item is too
remote or not, though aspects of fairness and public policy also have a
bearing. I think the suggested "mental picture" will account for the
decisions in the following cases.

Bradburn v. Great Western Railway Co. [1874] LR 10 Exch 1. The
plaintiff was involved in a railway accident, and suffered injuries and was
prevented from attending to his business. The damages prima facie were
£217 but the defendant claimed to deduct £31 received by the plaintiff under
a policy of insurance against accidents. The insurance money was held to
be not deductible. Bramwell B. referred to a case Dalby v. India and
London Life Assurance Company where it was decided that one who pays
premiums for the purpose of insuring himself pays on the footing that his
right to be compensated when the event insured against happens is an
equivalent for the premiums he has paid: it is a quid pro quo larger if he
gets it, on the chance that he will never get it at all. Pigott B. said:

" The plaintiff is entitled to recover the damages caused to him by
" the negligence of the defendants and there is no reason or justice in
" setting off what the plaintiff has entitled himself to under a contract
" with third persons, by which he has bargained for the payment of a
" sum of money in the event of an accident happening to him. He does
" not receive the sum of money because of the accident, but because
" he has made a contract providing for the contingency; an accident
" must occur to entitle him to it, but it is not the accident, but his
" contract, which is the cause of his receiving it."

In my view, those judgments were saying, in effect, though the phrases were
not used, that the item of insurance money was too remote and collateral to
be properly deductible from the damages payable for the plaintiff's injuries
and detriment to his business which arose directly and naturally from the
accident.

Liffen v. Watson [1940] 1 K.B. 556: As the result of receiving personal
injuries in an accident a domestic servant was unable to continue in her
employment in which she received £1 a week wages and board and lodging.
After the accident she went to live with her father to whom she made no
payment for board and lodging. It was held that she was entitled to receive
damages, not only in respect of her loss of wages, but also in respect
of the board and lodging. I must confess that I do not find the judgments
stating any clear principle, but the decision could be based on the principle
that the father's kindness in taking his daughter into his house was an
extraneous and independent matter and too remote to affect the damages.

Redpath v. Belfast and County Down Railway (1947) Northern Ireland
Reports 167: In a railway accident caused by the negligence of the rail-
way company's servants a number of passengers were killed or injured, and
in order to relieve the resulting distress a fund was established which was
voluntarily supported by the public. In an action for damages for personal
injuries brought by one of the passengers the railway company adminstered
interrogatories directed to ascertain the amount of the sums received by him
from the fund. Held, that the interrogatories were directed to a matter
irrelevant to the issues in the action. In his judgment Andrews L.C.J. con-
sidered Bradburn's case and later cases in which it had been cited or referred
to, and at page 172 he said:

" The important consideration to my mind, common to all these
" cases, is that the circumstance relied upon in mitigation of damages
" arose independently of the cause of action, and was not naturally
" attributable to it. Whilst admittedly a sequence it was not a conse-
" quence. It arose really as a result of a novus actus interveniens and
" was not the outcome of the relations between the plaintiff and the
" defendants which gave rise to the cause of action. The defendants
" wrongful act may in each case have been a causa sine qua non, but in



30

" true sense was it the causa causans of the circumstance relied upon
" in mitigation of damages. In the present case the causa causans of the
" Fund was not the accident but the bounty or charitable motives of
" the subscribers."

Peacock v. Amusement Equipment Co. Ltd. [1954] 2 Q.B. 347: As a
result of an accident occurring while she was a passenger on a minature
railway owned by the defendants the plaintiff's wife sustained injuries which
caused her death. The defendants admitted liability and the plaintiff
claimed damages as a dependant under the Fatal Accidents Acts. The wife's
estate consisted of a grocery shop with living accommodation attached, in
which she and the plaintiff resided. By her will she left the property to a
son and married daughter by a previous marriage, who after administra-
tion sold the business and voluntarily paid to the plaintiff a sum representing
approximately one-third of the value of the estate. It was held that the
generous decision of the beneficiaries under the will to make a voluntary
gift to the plaintiff was a " nova causa interveniens which makes the pay-
" ment not in consequence or as a result of the death within the meaning
" of the statements which have been made with regard to this problem ".
per Somervell L.J. at page 352.

Those cases seem uncontroversial. There are now three cases which to a
greater or less extent involve the present controversy, namely, Payne v.
Railway Executive [1952] 1 K.B. 26; Browning v. The War Office [1963]
1 Q.B. 750; Parsons v. B.N.M. Laboratories Ltd. [1964] 1 Q.B. 95 (in so
far as it was concerned with the question whether unemployment relief should
be taken into account).

I agree with the reasoning and decision of the majority of the Court of
Appeal in Browning's case, and therefore do not agree with the dissenting
judgment in that case or with those parts of the reasoning in Payne's case
which are inconsistent with the reasoning of the majority in Browning's
case. I would adhere to the decision in Parson's case and to the passage in
my judgment at pages 141-144 of the report, but I have endeavoured in this
case to investigate further what is involved in the phrase " too remote "
and have come to understand how the distinction between causa causans
and causa sine qua non, though logically difficult, has some practical

utility for this purpose.




There were substantially three grounds of decision in Payne's case. The
first was based on causation. The second was based on the supposed
principle that the wrongdoer must not benefit from what the plaintiff has
achieved for himself (or, if this wider formulation is preferred, from the
plaintiff's advantages). The third was based on the discretionary aspect
of the pension. There is no need to go into the details of Payne's case,
but I will consider these grounds in relation to the present case.

As to causation, was the pension in the present case too remote in the
sense that it was caused by something remote from and wholly collateral
to the accident and its direct and natural train of consequences? The
accident disabled the plaintiff, and it caused his compulsory retirement, and
as the employment was pensionable—had pension rights attached to it—
his retirement was not a retirement with nothing to live on but a retirement
on pension. By reason of the accident his salary ceased and his pension
began. The pension was intended to take the place pro tanto of his salary.
I do not see how you can reasonably separate the cessation of the employ-
ment from the commencement of the pension. Both salary and pension
were payable under the same contract, both were derived from the same
employment, the one being current remuneration for present services and the
other being deferred remuneration for past services, but each being part of
the reward for his services under that contract in that employment. The
plaintiff claims that the cessation of salary was caused by the accident,
and it must follow in my opinion that the commencement of the pension
was equally caused by the accident, because the two events coincided in time
and were linked together. In the circumstances it is grievously artificial



31

to contend that the loss of salary is admissible and to be taken into account
but the receipt of the pension is to be excluded and disregarded. Moreover,
it is conceded that the salary earned in the new clerical employment under
a different employer is to be taken into account and deducted from the lost
salary in ascertaining the nett loss. That clerical employment is a new
employment coming into existence under a new contract made some time
after the old salary had ceased. If that new salary is not too remote, how can
the pension under the old contract be too remote? Also in Periods 3 and 4
the very same pension, the ill-health pension of £3 18s. 4d. per week,
is taken into account against the lost ordinary pension of £10 per week.
Thus the ill-health pension, which was too remote and outcast and taboo
for purposes of comparison with the lost salary in Periods 1 and 2, becomes
sufficiently proximate and acceptable and admissible for purposes of com-
parison with the lost ordinary pension in Periods 3 and 4. I do not under-
stand how the ill-health pension, running continuously and unchanged, can
be too remote to take into account at one stage and not too remote at
another stage.

Another ground of the decision in Payne's case was that given in the
judgment of Sellers J. in a passage which was cited and adopted by
Cohen L.J. at pages 35-36:

" The plaintiff has become entitled to the pension by reason of his
" naval service, it being one of the benefits such service affords. The
" pension would have been paid if the accident had been without any
" negligence on the part of the railway's servants. It was argued for the
" plaintiff that a pension must be disregarded in making the assessment
" just as insurance is to be disregarded, and that as a matter of principle
" a wrongdoer should not get the benefit of the fortuitous circumstance
" that the plaintiff was serving in the Royal Navy at the time and had
" consequently received a pension. I agree with that contention. Just
" as the wrongdoer cannot appropriate to himself the benefit of the
" premiums paid by the injured party to cover accident risks so he
" cannot, I think, appropriate the benefits accruing from the injured
" party's service which similarly entitles him to those benefits."

In my opinion, this ground of decision cannot be maintained after Gourley's
case, which showed very clearly that the dominant principle in assessing
damages is the compensatory principle, and it should be so applied as to give
to the plaintiff in respect of his financial loss the amount that he has really
lost and he is not entitled to a profit or bonus or windfall. The fallacy
involved in this ground of decision was exposed in the passage of Earl
Jowitt's speech in Gourley's case at page 202 which I have already cited.
As I have said, that passage was cited in full and applied by Lord Goddard
in the Monmouthshire case [1952] 2 Q.B. 154 at pages 161-2 and 163
in a judgment with which the other members of the Court agreed. It
is not right to speak of the wrongdoer gaining a benefit. He has to pay the
amount which the plaintiff has really lost, and he takes the plaintiff as he
finds him with whatever the advantages or disadvantages may be. I will
give four examples. The plaintiff A is an ailing or unfit man, who is
disabled and rendered unemployable by an injury which would not have
disabled an ordinary man: the defendant is unlucky and has to pay for the
lost wages. The plaintiff B has by temperance and regular exercise and
avoidance of stress kept himself as a fit and vigorous man, and he is not
disabled and retains his employment in spite of an injury which would have
disabled an ordinary man and put him out of employment: the defendant
is lucky and does not have to pay for any lost wages. The plaintiff C
has been a thrifty man, and had saved enough to retire before the accident
and did not at the time of the accident have any gainful occupation: if he is
disabled there is no loss of earnings and the defendant is lucky. Then I take
the case of the plaintiff D who by thrift or inheritance or successful speculation
has built up a fortune which brings in a very large investment income, but he
likes working and has an important post at a salary of £10,000 a year. If he is
disabled by accident and has to give up his post, the lost salary will by



32

reason of the incidence of tax and surtax and the application of the Gourley
principle be assessed for purposes of damages at a comparatively low figure,
say £1,000 a year. That is in a sense a benefit to the defendant, but he
cannot be deprived of it.

I agree with Diplock L.J.'s criticism of this ground of decision in
Browning's case [1963] 1 Q.B. 750 at page 764 et seq., except that in my
opinion at page 771 he dealt too harshly with the distinction between causa
causans and causa sine qua non, which has some utility as shown by the
reasoning in previous cases.

I think also that this ground of decision has a flaw in it in relation to
causation. The contention agreed with by Cohen L.J. in Payne's case at
pages 35-36 was " that as a matter of principle a wrongdoer should not get
" the benefit of the fortuitous circumstance that the plaintiff was serving in
" the Royal Navy at the time and had consequently received a pension ".
But the allegedly fortuitous circumstance that the plaintiff was serving in
the Royal Navy was also the cause of the plaintiff receiving a salary for the
loss of which he was suing. If the salary for that service was to be taken
into account, the pension from it also should be taken into account.

It seems to me that this ground of decision is a rhetorical argument which
cannot be elevated into a principle without contradicting the compensatory
principle and the principle of mitigation of damages and substituting fiction
for fact in a number of cases.

In the four examples given above the defendant would still be unlucky
in the case of plaintiff A, but in the other three cases fiction would have to
be substituted for fact in order to deprive the defendant of his benefit from
what the plaintiff has achieved or from the plaintiff's advantages. Thus
plaintiff B must be deemed not to have kept himself fit and vigorous and to
have lost the employment which in fact he retained. Plaintiff C must be
deemed not to have retired on his savings but to have retained the employ-
ment from which in fact he had retired. Plaintiff D must be deemed not to
have had any investment income or not to have had any tax to pay or at
any rate to have been in some position quite different from his actual position.
It seems to me that the case of plaintiff D brings out clearly the conflict be-
tween this ground of decision (the supposed principle that the wrongdoer
must not benefit from what the plaintiff has achieved for himself or from
the plaintiff's advantages) and the basic principles which were stated in
Gourley's case.

I agree with the passage in the judgment of Winn L.J. in the present case
where he said:

" In my judgment where a plaintiff asserts that a tort has deprived
" him of the whole or part of what he formerly earned from an employ-
" ment, we must reduce his claim to the extent not only of all he is
" earning or able to earn in another employment but also of all that his
" former employment still produces in the form of pension as a set-off
" against lost earnings, no less than against loss of a potential pension."

I should add that in the Monmouthshire case [1965] 1 W.L.R. 1132
Lynskey J. at page 1152 said that the pension in such a case would be deduc-
tible and on appeal Morris L.J. and Vaisey J. expressly agreed with his
judgment [1957J 2 Q.B. 154 at pages 164 and 169.

The third ground of decision in Payne's case was based on the discretionary
character of the pension. It is conceivable that the discretion might be so
complete that the award of a pension could be held to be caused by the
decision of the authority as an extraneous and independent cause, though
more usually one would think of a discretion as affecting chances and so
justifying some percentage deduction. However, in the present case the
pension is receivable as of right, and so this ground of decision does not in
any case apply.

33

Finally as to the scaling down of the figure ascertained for future financial
loss, there must be some scaling down both to allow for contingencies and
because the plaintiff will receive a lump sum now. The learned judge having
reached a figure of £13,500 reduced it to £12,000 and that seems to me an
insufficient reduction. The Court of Appeal made a 50 per cent reduction
and that seems to me too great. No question of legal principle is involved,
and it is not desirable to add to the length of this opinion by discussing the
figures. On the basis (which I think right) that the ill-health pension is to
be taken into account against the loss of salary, I would agree with the scaling
down proposed by my noble and learned friend, Lord Morris of Borth-y-Gest.
Subject to that adjustment, I would dismiss the appeal.

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(323918) Dd. 197022 150 2/69 St.S.