STATE RAIL AUTHORITY OF NEW SOUTH WALES V WIEGOLD
Court of Appeal : Kirby P , Samuels JA and Handley JA
6 September, 24 December 1991
Damages — Foreseeability — Personal injuries — Criminal activity — Losses sustained from participation in — Work related injury — Financial problems — Cultivation of indian hemp for sale — Conviction for — Defendant not liable
Negligence — Duty of care — Reasonable foreseeability of damage — Criminal activity — Losses sustained from participation in — Where rational and voluntary participation — Not recoverable — Impecuniosity following work related injury — Cultivation of indian hemp — Conviction — Effect on work prospects
Held: (Kirby P dissenting) (1) A defendant should not be held liable for the
losses which result from a rational and voluntary decision to engage in criminal
Beard v Richmond (1987) Aust Torts Reports 80-129 at 69,006-69,007,
Havenaar v Havenaar  1 NSWLR 626 at 627-628 and Yates v Jones (1990)
Aust Torts Reports 81-009, applied.
(2) Having regard to factual considerations and to considerations of policy, a
defendant/employer should not be liable for the consequences of the conviction
of a plaintiff/employee for cultivating indian hemp, which conduct was induced
by impecuniosity resulting from a work related injury and the cessation of
worker’s compensation payments. (517G)
March v E & M H Stramare Pty Ltd (1991) 171 CLR 506, applied.
A Digest — DAMAGES (3rd ed) ; (2nd ed) ; NEGLIGENCE (2nd
ed) , 
The following cases are cited in the judgments.
Abalos v Australian Postal Commission (1990) 171 CLR 167.
Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301.
Beard v Richmond (1987) Aust Torts Reports 80-129.
Brunskill v Sovereign Marine & General Marine Insurance Co Ltd (1985) 59 ALJR
842; 62 ALR 53.
Chapman v Hearse (1961) 106 CLR 112.
Faulkner v Keffalinos (1970) 45 ALJR 80.
Grey v Simpson (Court of Appeal, 3 April 1978, unreported).
Havenaar v Havenaar  1 NSWLR 626.
March v E & M H Stramare Pty Ltd (1991) 171 CLR 506.
Meah v McCreamer  1 All ER 367.
Meah v McCreamer (No 2)  1 All ER 943.
Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383.
Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALJR 492; 59 ALR 529.
Rowe v McCartney  2 NSWLR 72.
(1991) 25 NSWLR 500 at 501
Saunders v Edwards  1 WLR 116;  2 All ER 651.
W v Meah  1 All ER 935.
Yates v Jones (1990) Aust Torts Reports 81-009.
Zavitsanos v Chippendale  2 NSWR 495.
The following additional cases were cited in argument and submissions:
Beresford v Royal Insurance Co, Ltd  AC 586.
Cleaver v Mutual Reserve Fund Life Association  1 QB 147.
Crippen, In the Estate of  P 108.
Davitt v Titcumb  Ch 110.
Euro-Diam Ltd v Bathurst  QB 1.
Gala v Preston (1991) Aust Torts Reports 81-105.
Gardner v Moore  AC 548.
Gray v Barr  2 QB 554.
Helton v Allen (1940) 63 CLR 691.
K Deceased, In re  Ch 180.
Kirkham v Chief Constable of the Greater Manchester Police  2 QB 283.
Liesbosch, Dredger (Owners) v Edison SS (Owners)  AC 449.
McNeill v Cavallaro (1981) 96 LSJS 292.
R v Secretary of State for the Home Department, Ex parte Puttick  QB 767.
Rance v Mid-Downs Health Authority  1 QB 587.
This was an appeal from a decision of McInerney J in the Common Law
Division awarding damages for personal injuries suffered in the course of
C G Gee QC and R F Wilkins, for the appellant.
J A Crumpton QC and I D Cullen, for the respondent.
Cur adv vult
24 December 1991
KIRBY P. This appeal raises once again the difficult question which is
presented, in the calculation of damages for personal injury, where it is
contended that some of the damages are affected by criminal conduct on the
part of the plaintiff.
Issues of contributory negligence and duration of loss:
The facts are set out in the reasons for judgment of Samuels JA which I
have had the advantage of reading. I adopt his Honour’s statement of the
facts. I agree entirely with his Honour’s reasons for dismissing the
appellant’s appeal against the judgment which McInerney J entered in favour
of the respondent. For the reasons demonstrated by Samuels JA, there is no
substance in the complaint about his Honour’s treatment of the issue of
contributory negligence. The respondent is entitled to hold the judgment
entered in his favour. The issue is whether it has been shown in this Court
that McInerney J erred in the calculation of the respondent’s damages.
I likewise agree with Samuels JA, for the reasons given by him, that no
error has been shown in the approach adopted by his Honour in calculating
the respondent’s future economic loss upon the assumption that, but for the
subject injuries, the respondent would have worked to the age of sixty-five
years. The finding of a 50 per cent loss of economic capacity for the period
(1991) 25 NSWLR 500 at 502
up to the respondent’s sixty-fifth birthday was entirely justifiable in the
evidence. Any doubt in that might have been entertained in that regard is
banished by the discount which McInerney J allowed of 20 per cent for
Criminal temptation: the trial judge’s approach:
That leaves only McInerney J’s treatment of the approach to be taken to
the supervening conviction and sentence of the respondent for the cultivation
and supply of indian hemp. McInerney J, who had the advantage
conventionally ascribed to the judge of trial of seeing the respondent and
assessing his conduct and motivation as evidenced in the witness box,
reached certain definite conclusions about him to which he gave voice. They
were that the respondent was induced into his criminal enterprise by the
impecuniosity which resulted from the accident for which the appellant was
liable and by the appellant’s denial of compensation to which the respondent
Apart from the impression which the respondent made on his Honour
(more important upon such a question than upon most) there were objective
circumstances which lent support to his Honour’s conclusion. There was no
prior history of criminality. To the contrary, the respondent emerged from
the evidence, as his Honour described him:
“… as a man nearly thirty years of age [who] had been a hardworking
person who had made a success of his life, given the fact that his
education was minimal … [H]e was accepting his responsibilities and
working overtime in order to have adequate money to finance his
It was in these circumstances, as his Honour found, that he: “…
succumbed to the temptation because of the financial problems which were
brought about as a result of his injury.”
It is this conclusion which the appellant must dislodge in order to
authorise this Court to disturb the conclusions which McInerney J then
reached concerning the approach which he should take to the calculation of
the respondent’s damages for economic loss over the period which he found
(and which has now been upheld) and with the discount which he allowed
(which is likewise sustained).
Following the supervening criminal conviction for the cultivation and
supply of indian hemp, the respondent was imprisoned for nine months. He
was also dismissed from the service of the appellant. Following such
dismissal, he lost significant accrued superannuation entitlements.
McInerney J’s solution to the problem which these events presented was, in
the light of his conclusion about the respondent and the causal relationship
of the criminal conduct to the subject injury, a practical one. He denied the
respondent damages for the period during which he was incarcerated. But he
approached his entitlement to damages after his release upon the hypothesis
that the respondent would have remained employed by the appellant,
entitled to the wages (as adjusted) which but for injury he would have
continued to receive and to the superannuation benefits which he would
ultimately have drawn.
In this Court, the appellant attacks this approach to the calculation of
damages. The attack is expressed in alternative verbal formulae:
1. That the criminal conviction was not reasonably foreseeable;
(1991) 25 NSWLR 500 at 503
2. That the damage sustained as a result of it was too remote;
3. That the criminal conduct was not caused by the appellant’s negligence;
4. That, if (1), (2) and (3) fail, public policy required the conclusion
opposite to that reached by his Honour in order to avoid the affront to
community opinion which would be occasioned by the notion either that the
criminal conviction should be ignored for the purpose of the calculation of
the damages or, still more, that the appellant should be held civilly liable for
the circumstances which had led to the conviction.
Proportionality in the legal response to illegal conduct:
The problem presented by the appeal in this respect is by no means
unique. A number of cases were cited during argument in which, in England
and in this jurisdiction, a plaintiff has been held entitled to recover damages
where such damages have been caused by a conscious voluntary act which
involved conduct criminal in character or morally reprehensible or both: see
Zavitsanos v Chippendale  2 NSWR 495 (a claim by a widow under the
Compensation to Relatives Act 1897 following the death of her husband by
suicide, then illegal, following injuries to him by the tortious conduct of the
defendant); Grey v Simpson (Court of Appeal, 3 April 1978, unreported)
(addiction to heroin following pain consequential on injuries); Havenaar v
Havenaar  1 NSWLR 626 (over-indulgence in alcohol causing
pancreatitis); Meah v McCreamer  1 All ER 367 (sexual offences and
malicious wounding causing life imprisonment found to be the consequence
of brain damage sustained in a motor vehicle accident).
The foregoing cases and the recent case in this Court where the contrary
result ensued (Yates v Jones (1990) Aust Torts Reports 81-009) simply
demonstrate the need in each case, where a problem of this kind is
presented, for the court of trial to determine the claim in a practical and
The proper approach to be taken is one which was well described by
Bingham LJ in Saunders v Edwards  1 WLR 1116 at 1134;  2 All
ER 651 at 665-666. His Lordship explained the difficulties presented by
adopting absolute positions and the need, consequentially, to resort to
“… Where issues of illegality are raised, the courts have (as it seems to
me) to steer a middle course between two unacceptable positions. On
the one hand it is unacceptable that any court of law should aid or lend
its authority to a party seeking to pursue or enforce an object or
agreement which the law prohibits. On the other hand, it is
unacceptable that the court should, on the first indication of
unlawfulness affecting any aspect of a transaction, draw up its skirts and
refuse all assistance to the plaintiff, no matter how serious his loss nor
how disproportionate his loss to the unlawfulness of his conduct … I
think that on the whole the courts have tended to adopt a pragmatic
approach to these problems, seeking where possible to see that genuine
wrongs are righted so long as the court does not thereby promote or
countenance a nefarious object or bargain which it is bound to
It is true that Bingham LJ was, in that decision, referring to the more
general problem of illegality in the context of a leasehold contract tainted
(1991) 25 NSWLR 500 at 504
with illegality by the inflation of the value of chattels to avoid stamp duty.
But his Lordship’s description of the policy difficulty presented to the law
applies equally to cases where it is suggested that a plaintiff should be denied
recovery of damages considered to be, directly or indirectly, the conse¬
quences of an injury caused by a tort feasor because of supervening criminal
conduct on the injured party’s part.
The difficulty of resolving such cases can be seen by contrasting the
approach taken in this Court to the consequences of heroin use by the
injured plaintiff in Grey v Simpson (on the one hand) and in Yates v Jones
(on the other). Similarly, it could not be doubted that the consequences
flowing from a supervening conviction for jaywalking would be different from
those flowing from negligent driving; different again from the offence of
which the respondent was convicted; and, yet again, from the shocking
offences of which the injured party was convicted in Meah. The lesson of
these cases is that each case must be determined within the four walls of its
own facts, steering carefully to avoid the Scylla and Charybdis which
represent the extreme positions against which Bingham LJ warned in
The suggested error of the “but for” test of causation:
It is also true, as Samuels JA has pointed out, that following his expressed
conclusion “on the balance of probabilities” that the respondent had been
induced into the enterprise of planting indian hemp by the impecuniosity
which was the direct result of his subject injuries and the termination of
workers’ compensation benefits in respect of them, McInerney J went on to
“Whilst it is not a direct result of the accident, one can say that but for
the accident he would not have been involved.” (Emphasis added).
The appellant latched onto this phrase and urged that it demonstrated the
application by McInerney J of an incorrect test for determining the issue of
causation. Reliance was placed upon what the High Court of Australia said
in March v E & M H Stramare Pty Ltd (1991) 171 CLR 506. However, I do
not read the opinions of Mason CJ, Deane, Toohey or Gaudron JJ to forbid
consideration of the “but for” (causa sine qua non) test in determining
causation of damages in negligence cases. McHugh J certainly favoured the
use of that test, indeed as the exclusive test of causation. As I read the other
judgments, the majority merely rejected McHugh J’s opinion that the “but
for” test should be exclusive: see, eg, Mason CJ (at 508); Toohey J (at 524),
and Gaudron J (at 525). The majority view was that there was no such
“definitive test of causation” where negligence was alleged but that each case
presented a question of fact to be determined by applying commonsense to
the facts of the particular case (ibid at 515) and applying a “value judgment”
involving “ordinary notions of language and commonsense” (ibid at 524 per
Deane J); see also loc cit (at 524) per Toohey J.
Far from demonstrating error, when tested against this instruction,
McInerney J’s approach is impeccable. He had advantages which
conventional opinion, and binding authority, require this Court to respect
when reaching the commonsense conclusion in the facts of the particular
case before him. Unless that conclusion is contradicted by incompatible facts
proved incontrovertibly or is otherwise glaringly improbable, this Court
(1991) 25 NSWLR 500 at 505
cannot disturb it: Abalos v Australian Postal Commission (1990) 171 CLR
167 at 171.
For these reasons, I would reject the first, second and third arguments by
which the appellant challenged McInerney J’s approach to the issues of
foreseeability, remoteness and causation which his Honour determined in
favour of the respondent.
The suggested offence to public policy is rejected:
That leaves the argument that it is contrary to public policy to ignore the
supervening conviction for the illegal growing of indian hemp and, still more,
to hold that it was, in its turn, a consequence of impecuniosity resulting from
the subject injuries and their sequelae. On the shifting sands of public policy,
and without the guidance of plain speaking or binding authority, there is
much room for difference of judicial opinion. Relevant to the determination
of this issue is whether the community would be affronted by the conclusion
which McInerney J reached in this case, with the advantages which he had as
the trial judge. I do not believe, at least in the circumstances here, that there
would be any such affront. This is not a case where the respondent was
engaged in the much more serious offence of heroin use, still less trafficking
in that illegal drug. Nor is it a case where the respondent reaped any actual
financial advantage from what he did. It was open to McInerney J to find, as
he did, that the resort to the growing of indian hemp followed, in time, the
termination of workers’ compensation benefits and the consequent actuality
and future prospect of impoverishment of the respondent and his family. It
was open to him to find that the appellant thereby fell victim to temptation.
For that temptation, and the conduct which followed it, he was duly punished
according to the criminal law. His Honour plainly felt that he should not be
punished twice by then being denied the economic consequences which
otherwise flowed from the injuries done to him by the negligence of the
There is no single view in the Australian community concerning the moral
disapprobation of the respondent’s conduct in cultivating indian hemp. In
this regard it is little to the point to criticise the much more controversial
decision of Woolf J in England in Meah which concerned brutal rapes which
everyone would condemn. Although the law speaks with a clear voice about
the cultivation and supply of indian hemp, the repeated reports of discoveries
throughout Australia of huge crops of the plant rather suggest widespread
usage by many otherwise apparently law-abiding citizens. In two States
(South Australia and Victoria) although cultivation of indian hemp and its
supply remain offences, the personal use of it has been either decriminalised
or rendered a minor crime, doubtless out of recognition of the widespread
use of that drug: see Terry Carney et al, An Unwinnable War Against Drugs
(1991) Pluto Press and the figures there cited concerning the use of indian
hemp in Australia (ibid at 12).
McInerney J, in reaching his conclusion as to what legal policy required,
would have been entitled, in a general way, to take into account these
considerations and to draw upon his own not inconsiderable experience in
the conduct of criminal trials involving the cultivation and supply of indian
hemp, the sentencing of offenders for such offences and the sentence which
it was considered appropriate to pass upon the respondent, following his
conviction for his offence (nine months). His Honour was conscious of the
(1991) 25 NSWLR 500 at 506
need to avoid punishing the respondent twice for the offence for which he
had already been imprisoned. In these circumstances, I am far from
convinced that his Honour erred in failing to conclude that legal policy
forbad the pragmatic approach which he took to the calculation of the
This is not a case where the respondent lost his job (and accumulated
entitlement to superannuation) by the act of a third party employer following
a criminal conviction. Here, those losses were caused by the action of the
tortfeasor which (as McInerney J found) had wrongly discontinued
compensation occasioning the loss of adequate money to support his
existence and that of his family which, in turn, led him into criminal
temptation. In such circumstances the approach which McInerney J took
may be regarded as sensible, practical and entirely open to him. It is far from
shocking to the public conscience. It does not shock mine.
Conclusions and orders:
The consequence of the foregoing is that I would reject the appellant’s
complaints against the judgment entered for the respondent at trial, and all
of them. I did not understand the respondent’s notice of contention to be
pressed in the event that such a conclusion was reached. Accordingly, it is my
view that the appeal should be dismissed with costs.
SAMUELS JA. The appellant, the State Rail Authority of New South
Wales, brings this appeal from a judgment of McInerney J given in the
Common Law Division in which his Honour awarded damages in the sum of
$400,305 to the respondent, Leslie James Wiegold, in respect of personal
injuries sustained by him in 1983 during the course of his employment with
The facts were these. The respondent was born on 19 February 1956, and,
in 1983, was employed by the appellant as a maintenance linesman. On
3 October 1983, at about 3 am, he sustained very serious injuries when he
slipped and fell down a rail embankment. At the time he was employed in a
gang on a wiring train south of Waterfall. The gang was carrying out
maintenance work on overhead electrical lines. The work was required to be
carried out at night time so as not to interfere with rail traffic.
Visibility at the time was quite poor. McInerney J described the
circumstances of the accident thus:
“The wiring train consisted of six carriages with flat roofs and on the
roofs were fluorescent lights that shone upwards and outwards to enable
the electric wires to be illuminated. On the side of each carriage were
incandescent lights that lit up the area around the vicinity of the train.
The night was variously described as cold, windy, foggy or with light,
misty rain. It was conceded that there was no other lighting in the area
and from the photographs it appears to be a bushy area. This was the
first time the plaintiff had worked in this area.”
Next to the train was an embankment. At the time, the vehicle that had
conveyed the gang to the site was parked on top of that embankment. After
the respondent commenced work on the train, he asked his foreman,
Mr Glover, whether he could get his wet weather clothing from the truck.
He was given permission to do so. He walked up the embankment to the
truck. Having obtained what he needed, he started to return to the train. At
(1991) 25 NSWLR 500 at 507
this stage, a member of the gang called out to him to get some emery paper
from the truck. He returned to the truck, got the paper, walked down the
embankment a few feet, lost his footing, fell and was injured. The respondent
was supplied with a torch, attached to his neck, but, he said, it was not in
working condition that night.
At the trial, the respondent alleged that he sustained his injuries by reason
of the failure of the appellant, having regard to the poor lighting, to provide
him with a serviceable torch. He alleged that he had complained twice about
his defective torch. The first complaint was said to have been made the day
before the accident to Mr George Mannie, the foreman at the appellant’s
Sefton depot, who told him to continue to use the torch in the hope that it
would work. The second complaint was said to have been made on site to Mr
Glover, who was then unable to make it work. There was also some
suggestion of a transitory stop work meeting about the state of the torches of
other members of the gang.
The learned trial judge accepted that, on the balance of probabilities, the
respondent was not provided with a working torch, and that he had reported
this to the appellant. He also accepted his evidence concerning the poor
lighting conditions at the time. On this basis, his Honour concluded:
“I am of the view that I am entitled to find, and I do, in the
circumstances of this case, having regard to the area, the type of
weather conditions, the plaintiff’s lack of knowledge and lack of light,
that the plaintiff’s accident was brought about by the failure to supply
him with a torch so that he could properly pick his way down the
His Honour also rejected the appellant’s contention that there should be an
apportionment by reason of contributory negligence on the part of the
McInerney J found that, as a result of the accident, the respondent
sustained injuries to his neck, which required a cervical fusion at C5-6, and
included a disc prolapse at C6-7 that was not likely to be remedied by
surgery. He found that the respondent also suffered from psychological
problems, which were likely to improve, but that the disabilities in the neck
constituted a continuing and severe incapacity.
Following the accident, but prior to the trial, the respondent was convicted
of cultivating indian hemp. From 24 May 1985 to 12 February 1986, he
served a sentence for that conviction. Prior to this time, he had continued to
undertake light duties with the appellant. However, he was dismissed by the
appellant on 25 November 1985 because he was in gaol and unable to attend
work. His Honour found that the “plaintiff was induced into this criminal
enterprise by his impecuniosity which resulted from the accident”. He
therefore assessed the respondent’s economic loss on the basis that, if he had
not had the accident, he would still have been employed by the appellant.
Although in its notice of appeal the appellant challenged the finding of
negligence against it, the point was not pressed at the hearing. Rather, it
sought to challenge the judgment for the respondent on three other grounds.
First, it was submitted that the judge was wrong in declining to reduce the
respondent’s damages for contributory negligence. Secondly, it was submit¬
ted that he erred in finding that the respondent’s criminal activity, and
subsequent imprisonment, were consequences of the accident, so that his
(1991) 25 NSWLR 500 at 508
assessment of economic loss was accordingly incorrect. Finally, it was
submitted that his Honour fell into error in making an award for economic
loss on the basis that the respondent would have had a working life beyond
the age of forty years, extending to sixty-five. By his notice of contention, the
respondent seeks to uphold his Honour’s award of damages.
On the appeal the Court called on Mr Crumpton QC for the respondent
on the second ground only, that is, concerning the effect of the respondent’s
conviction. It is convenient, therefore, first to dispose of the appellant’s first
and third grounds of appeal.
McInerney J gave short reasons for rejecting the appellant’s contention
that the respondent had been guilty of contributory negligence. It is
convenient to set out the relevant passage in full:
“In respect of contributory negligence, I am of the view the defendant
has not satisfied the onus that contributory negligence has been
established. The plaintiff had complained about the failure to supply
him with a working torch. There is no evidence it was possible to
borrow a torch. He was not instructed to walk to the end of the train
and up the track and I refer to the lack of evidence as to the state of the
track and the fact that it was unlit. There is no evidence that he was
acting in a foolhardy or careless manner as he descended this
embankment and, in the circumstances, I am not satisfied that there was
a failure on his part to take care for his own safety and there will be
verdict for the plaintiff without apportionment.”
The appellant complains that the learned judge misdirected himself in
requiring to be satisfied that the respondent had been acting “in a foolhardy
or careless manner as he descended the embankment”; and that, in any case,
the respondent as an experienced linesman, aware of the importance of
lighting, as his complaints to his foremen indicate, was in as good a position
as his employer to take care for his safety, and his failure to seek an
alternative route in the poor weather conditions constituted negligence on
his own part.
A brief reference to authority will suffice. In Podrebersek v Australian Iron
& Steel Pty Ltd (1985) 59 ALJR 492; 59 ALR 529, the High Court said
(at 494; 532-533):
“The making of an apportionment as between a plaintiff and a
defendant of their respective shares in the responsibility for the damage
involves a comparison both of culpability, ie of the degree of departure
from the standard of care of the reasonable man … and of the relative
importance of the acts of the parties in causing the damage … It is the
whole conduct of each negligent party in relation to the circumstances
of the accident which must be subjected to comparative examination.”
In Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301, the High
Court considered the application of these principles in the context where
there was a failure by an employer to provide a safe system of work. Mason,
Wilson and Dawson JJ said (at 310):
“… A worker will be guilty of contributory negligence if he ought
reasonably to have foreseen that, if he did not act as a reasonable and
prudent man, he would expose himself to the risk of injury. But his
conduct must be judged in the context of a finding that the employer
failed to use reasonable care to provide a safe system of work, thereby
(1991) 25 NSWLR 500 at 509
exposing him to unnecessary risks. The question will be whether, in the
circumstances and under the conditions in which he was required to
work, the conduct of the worker amounted to mere inadvertence,
inattention or misjudgment, or to negligence rendering him responsible
in part for the damage. …”
Applying these principles to the present case, I am of the view that
McInerney J was correct to find that there was no contributory negligence
on the respondent’s part.
This was, as his Honour found, a “system case”. The negligence found
(and not ultimately disputed) was the appellant’s failure to provide the
respondent with safe means of passage from the train to the truck by
permitting him to make the journey with what was known to be an
inoperative torch. In any true “system case” it will be rare for the worker’s
acquiescence in the unsafe system to constitute contributory negligence. In
such a case it is ordinarily impossible to regard the employer’s failure to take
care for the worker as amounting also to a failure by the worker to take care
for himself. In the present case the appellant allowed the respondent to
move up and down the embankment in the course of his work (which
included, in the circumstances, fetching his wet weather gear and the emery
paper from the truck) without any light. The fact that the respondent did so
(and there was no evidence of any safe or less hazardous “alternative route”)
does not constitute contributory negligence.
I do not consider that in using the phrase “foolhardy or careless” the
learned judge was devising some novel test for contributory negligence. In
the context this was not a misdirection.
The third ground of appeal can also be disposed of shortly. The trial judge
assessed damages on the basis that the respondent would have worked for
the appellant to age sixty-five but for the accident. It was submitted that the
age for calculation of future economic loss could not have exceeded sixty
years of age, having regard to the respondent’s “educational attainments and
limitations”. I cannot accept this contention.
His Honour found:
“As far as the future is concerned, bearing in mind that I believe the
plaintiff is well motivated, and even if he ceases employment at forty he
will have improved his knowledge of the motor repair industry and I
believe that he will be able to obtain other employment in the motor
industry. Nevertheless, he will be considerably disadvantaged on the
open labour market. I think a proper assessment of his loss of economic
capacity is 50 per cent and I consider a period to sixty-five years.”
At the time of the trial he was employed in a job which required him to
attend scenes of motor vehicle accidents and secure the vehicles and cargoes
from pillaging. In calculating future economic loss, his Honour allowed a
discount of 20 per cent for contingencies in order to take into account that
“… present wage includes considerable overtime and that as he ages he
may not work as much overtime as he did before the accident. I have
determined that he will lose his present job at forty. I must allow for the
possibility of him working beyond forty in that position and, further, that
he may retire before sixty-five.”
I am not satisfied that his Honour erred in approaching the assessment of
(1991) 25 NSWLR 500 at 510
damages in this entirely conventional way. At the time of the accident, the respondent was a young, healthy man. He was married, with children. The
trial judge found that “the plaintiff at the time of the accident was a very
young man who had been able to overcome educational disadvantages and
was in constant and safe employment”. His Honour also described him as “a
trier”. In all these circumstances, it seems likely to me that the respondent
would have worked until sixty-five years of age, and that his Honour made
sufficient allowance for early retirement in the 20 per cent discount rate for
contingencies which he applied. There is no error here which justifies this
This brings me, then, to the only remaining ground of appeal, viz, the
effect on the assessment of economic loss of the conviction and sentence of
the respondent for the cultivation and supply of indian hemp. Although it
was none too clear from the appellant’s submissions, it would seem that the
finding of McInerney J is attacked on three cumulative grounds. First, the
appellant submitted that the criminal conviction was not reasonably
foreseeable, and that the damage sustained by the respondent was too
remote. Secondly, it was submitted that the respondent’s criminal conduct
was not caused by the appellant’s negligence. Finally, it was submitted that if
the criminal conduct was reasonably foreseeable and the appellant’s
negligence could be said to have caused the respondent to engage in the
criminal activity, then public policy required that the conviction and sentence
served by the respondent be taken into account in assessing his earning
It was then submitted that his Honour’s failure to take into account the
fact of the respondent’s criminal conviction and sentence resulted in the
following four specific errors in the assessment of damages: (i) he allowed
the respondent full wage loss from the conclusion of imprisonment to the
date of trial without any allowance for the effect of the respondent’s
conviction and imprisonment on his earning capacity; (ii) he allowed the full
difference between the earnings at trial and comparable earnings with the
appellant for the period from trial until age forty without allowance for the
effect of the respondent’s conviction and imprisonment; (iii) he allowed, to
age sixty-five, a 50 per cent reduction in economic capacity upon the basis
that such a reduction was fully attributable to the injuries, and without any
allowance for the effect on future earnings of conviction and imprisonment,
and; (iv) he allowed the claim for loss of superannuation entitlements,
whereas upon dismissal for conviction such future benefit was lost.
The conceptual distinction between reasonable foreseeability as a test for
both remoteness of damage and causation, and which underlies the
appellant’s submissions, is well-founded. It finds its clearest expression in the
well-known passage from Chapman v Hearse (1961) 106 CLR 112, where it
was said (at 122):
“… In effect, the argument of the respondent proceeded upon the basis
that if the ultimate damage was ‘reasonably foreseeable’ that circum¬
stance would conclude this aspect of the matter against the appellant.
But what this argument overlooks is that when the question is whether
damage ought to be attributed to one of several ‘causes’ there is no
occasion to consider reasonable foreseeability on the part of the
particular wrongdoer unless and until it appears that the negligent act or
(1991) 25 NSWLR 500 at 511
omission alleged has, in fact, caused the damage complained of. As we
understand the term ‘reasonably foreseeable’ is not, in itself, a test of
‘causation’; it marks the limits beyond which a wrongdoer will not be
held responsible for damage resulting from his wrongful act.”
Hence, it is convenient to deal first with the question of causation and public
As I understood the appellant’s argument, it treated causation and public
policy as distinct matters. But recent authority demonstrates that it is
erroneous to divorce considerations of public policy from the determination
of issues of causation. Causation is not simply a factual question; it is also a
normative one. This proposition clearly emerges from the decision of the
High Court in March v E & M H Stramare Pty Ltd (1991) 171 CLR 506. In
that case, the High Court rejected the argument that the “but for” test is the
exclusive test for causation. Mason CJ, with whom Gaudron J agreed, said
“… The cases demonstrate the lesson of experience, namely, that the
test, applied as an exhaustive criterion of causation, yields unacceptable
results and that the results which it yields must be tempered by the
making of value judgments and the infusion of policy considerations.”
Deane J indicated (at 524) that “the question whether conduct is a ‘cause’ of
injury remains to be determined by a value judgment involving ordinary
notions of language and common sense”. Toohey J said (at 524):
“Where negligence is in issue, causation is essentially a question of
fact, in the sense explained by the Chief Justice, into which
considerations of policy and value judgments necessarily enter.”
Hence, it follows that the issue whether the appellant’s negligence was a
cause of the respondent’s criminal conduct is to be determined not simply by
reference to factual considerations, but also by reference to considerations of
It is important to be clear about what McInerney J found in relation to
causation. It is convenient to set out his findings in full:
“I am satisfied on the balance of probabilities that the plaintiff was
induced into this criminal enterprise by his impecuniosity which resulted
from the accident. At the time this incident occurred he was nearly
thirty years of age and had been a hardworking person who had made a
success of his life, given the fact that his education was minimal. Prior to
this offence, as far as I am aware, he had not committed any other
offences and he was a married man who was accepting his
responsibilities and working overtime in order to have adequate money
to finance his family. I accept, therefore, that he succumbed to the
temptation because of these financial problems which were brought
about as a result of his injury. I must say, however, in stating this that I
find his explanation about his involvement in the crime somewhat
unsatisfactory and I believe that he knew more about the value of the
crop and how much he expected to receive than he was prepared to
admit in court.
He also confessed at the hearing that he was the principal, but said he
did not want the other person involved to be imprisoned because he was
a public figure. This whole episode is unsavoury and makes one
scrutinise with particular care any evidence he gave in court before me.
(1991) 25 NSWLR 500 at 512
I am satisfied, however, despite the misgivings expressed above, that
on the balance of probabilities, if he had not had the injury he would
not have been involved in the offence. Whilst it is not a direct result of
the accident, one can say that but for the accident he would not have
been involved. In the circumstances I think, therefore, if he had not had
the accident he would have been employed with the defendant and I
propose to use those figures as properly assessing his pre-injury
economic capacity. In any event, I would have thought that the sort of
wages he is earning there would be consistent with the wages he could
have earnt [sic] if he had not been injured in some other occupation.
One must bear in mind that with the disabilities he is suffering at
present, his nett income loss is only $124.55, so one could reasonably
assume that he would have been able to earn a figure approaching that
that he would earn with the defendant.”
I have my doubts as to whether, as a purely factual matter, impecuniosity
resulting from the respondent’s disability was the true reason for his decision
to grow indian hemp.
By his own evidence, the respondent’s worker’s compensation payments
ceased in August 1984. He did nothing to challenge the cessation of these
payments. In the middle of 1984, he moved to a 5-6 acre property in
Londonderry. He says that he started to grow marijuana seven months later.
In his evidence in chief, he said:
“Q. You got into difficulties eventually in relation to this marijuana
that you were growing? A. That’s right.
Q. When was that period, what was that? A. That was about three
months after they stopped paying the payments. I just needed some
money to pay the light bill and feed the kids and clothe them. I was
In his cross-examination, he was asked:
“HALL: Q. Why do you say you grew marijuana? A. Because I didn’t
have any money.
Q. Do you suggest it was because you were not getting money from
the State Rail Authority? A. It sort of contributed, yes.
Q. When was it that you grew marijuana? A. When I moved to
Q. I beg your pardon? A. When I moved to Londonderry.
Q. When did you move to Londonderry? A. About half way through
1984, I think.
Q. How long after you moved there did you start growing marijuana?
A. About seven months, I think.
Q. And you moved there in the middle of the year? A. I think so, I
am not really sure.
Q. How many crops did you grow? A. Only the one.
Q. And you did that of course for gain, did that to make money out of
it? A. Pay for the wife’s food and my food and kids clothing, yes.
Q. How much money did you make? A. Didn’t make much at all.
Q. How much money did you make? A. I didn’t have a price on it at
HIS HONOUR: Q. How long does it take to grow marijuana? A. Three
(1991) 25 NSWLR 500 at 513
Q. You started to make money. Did you have some arrangements
when you grew the crop with some particular person or persons to sell it
to them to get money from them? A. I can’t mention any names but I
did have an arrangement that if it went off all right I would get some
money at the end and if it didn’t, they would look after me if I went to
jail, or I went to court. [Emphasis added.] …
HALL: Q. Is it correct that when you were sentenced it was said in
your presence, and your counsel did not object to the statement, that
there were 3,457 plants. A. He could have, yes.
Q. In addition to the plants, it was alleged against you and not denied
by you that the police found nearly 230 kilos of dried marijuana, isn’t
that right? A. They might have said it but they never found that much.
That was plant stems and leaves that were going to be burned.
Q. In other words, then, at the time you were arrested there were
stems from which leaves had been stripped? Yes.
Q. Certainly, am I not correct, when you dealt with it was said in your
presence there were 230 kilos of dried marijuana and you didn’t deny it?
A. I won’t deny it. It was probably said.”
It is difficult to understand why a person, who claims he engaged in
criminal activity because of dire financial circumstances following the
cessation of worker’s compensation payments, commenced the criminal
enterprise a few months after the cessation of payments. The crop, according
to his evidence, then took three months to grow. He said that the
arrangement with other persons involved envisaged payment “at the end”.
Yet the respondent claimed he needed money to pay the light bill, and to
feed his family and clothe the children. In these circumstances, it seems to
me to be highly suspicious, given the large crop involved, that the respondent
moved to and rented the 5-6 acre Londonderry property in the middle of
1984, which according to his evidence, was a few months before the cessation
of his worker’s compensation payments.
Be that as it may, I believe that the court must accept that McInerney J’s
findings were based in part on his assessment of the demeanour of the
respondent as a witness, and should not be disturbed by this Court, since I
do not think (with some doubt I confess) that it can be said that the findings
were glaringly improbable or inconsistent with established facts: see Brunskill
v Sovereign Marine & General Marine Insurance Co Pty Ltd (1985) 59 ALJR
842 at 844; 62 ALR 53 at 56-57 and Abalos v Australian Postal Commission
(1990) 171 CLR 167.
Nevertheless, it is clear from the passage quoted above from the judgment
of McInerney J that his Honour determined the question of causation by
application of the undemanding “but for” test. Following March, as I have
indicated, this is an incorrect approach. Causation is as much a normative
question as it is a factual one. It seems to me that the application of the “but
for” test, tempered by considerations of policy, lead to the result that the
respondent’s crime cannot be said to have been caused by the appellant’s
There is no doubt that the respondent pleaded guilty to charges of
cultivating and supplying indian hemp, and that he was punished in
accordance with the criminal law. Ex hypothesi, the respondent was found by
a court of law to have voluntarily and intentionally committed the criminal
(1991) 25 NSWLR 500 at 514
acts. It is true that, in Meah v McCreamer  1 All ER 367, Woolf J held
that the disinhibiting effects of brain damage sustained in a motor vehicle
accident entitled the plaintiff to recover damages for the life imprisonment
imposed upon him for a series of brutal rapes committed two years later. But
this decision has been roundly condemned. E K Banakas has said of the
“… Although it is morally irrational to punish a person unable to
account for his actions, it is even less rational to compensate such a
person for his punishment following his unchallenged conviction for a
mens rea offence; if the conviction stands, punishment is a lawful injury,
if not, there should be no punishment at all and no injury of the kind
compensated in this case. Tort law has enough on its plate without
having to play criminal law’s conscience; besides, if lawful injury,
inflicted by the courts themselves, starts being compensated in
negligence, where will it end?”
“Tort Damages and the Decline of Fault Liability: Plato Overruled, But Full
Marks to Aristotle!”  Cambridge Law Journal 195 at 197.
The potentially unlimited scope of the holding in Meah may explain the
decision of Woolf J in Meah v McCreamer (No 2)  1 All ER 943. In
that case Woolf J held that the plaintiff was not entitled to recover an
indemnity from the defendant in relation to compensation for trespass
awarded by his Lordship to two victims of the plaintiff’s crimes in W v Meah
 1 All ER 935. His Lordship declined to allow the plaintiff to recover
because, in his view, the damage was too remote and because it would be
against public policy to indemnify him for the consequences of his crimes
In my respectful opinion, Meah was wrongly decided. If the plaintiff has
been convicted and sentenced for a crime, it means that the criminal law has
taken him to be responsible for his actions, and has imposed an appropriate
penalty. He or she should therefore bear the consequences of the
punishment, both direct and indirect. If the law of negligence were to say, in
effect, that the offender was not responsible for his actions and should be
compensated by the tortfeasor, it would set the determination of the criminal
court at nought. It would generate the sort of clash between civil and
criminal law that is apt to bring the law into disrepute. Hence, the
application of the simple “but for” test to determine causation would be
singularly inappropriate in this case. In all the circumstances, it would be
quite unreal to find that the appellant caused the respondent to engage in
This is not a case like Grey v Simpson (Court of Appeal, 3 April 1978,
unreported). In that case a physician’s negligent failure to treat the plaintiff’s
severe pain resulted in psychological problems that led ultimately to the
plaintiff becoming addicted to heroin. This Court held that the plaintiff was
entitled to recover damages for the addiction. It is true that Samuels JA said
“Once a detriment for which recovery is claimed is seen to be causally
linked to the breach of duty and is of a kind which the defendant ought
reasonably to have foreseen, there is no general principle which denies
recovery because the detriment is in some way connected with anti-
social or even unlawful activity. Mr Brownie argued that the plaintiff’s
(1991) 25 NSWLR 500 at 515
use of heroin and his trafficking in the drug, of which there was some
evidence, were illegal acts of conscious volition and could not be the
subject of compensation. On one view of course they were deliberate
and conscious acts. But the plaintiff is not to be compensated for illegal
activity as such but, if he is entitled at all, for the adverse consequences
of activities causatively linked to the breach of duty and foreseeable as a
not unlikely result of it.”
But in that case the plaintiff was never judged by a court of law to be guilty
of a crime, and punished for it.
It is true that in the present case the learned trial judge did not, as in
Meah, find that the respondent was entitled to compensation for loss of
liberty resulting from imprisonment, or for lost wages during incarceration,
or for any loss in post release earning capacity resulting from his conviction
and imprisonment. Rather, what he did was to refuse to treat the conviction
and imprisonment of the appellant as a vicissitude of life, for want of a better
term, which had crystallised before the date of the hearing, and which
reduced the notional economic loss which could be attributed to the
appellant’s negligence: cf Faulkner v Keffalinos (1970) 45 ALJR 80 at 85, 88.
But in point of principle, I cannot see that there is a relevant distinction
between the two sorts of case. If one cannot get “direct” compensation for
the non-economic or economic loss resulting from imprisonment, one should
not be able to receive “indirect” compensation for lost earning capacity after
imprisonment by treating the fact of imprisonment as irrelevant to the
assessment of economic loss.
It follows from what I have said that McInerney J, in my respectful view,
was wrong to conclude that the appellant’s negligence caused the respondent
to turn to crime, and that, as a consequence, the fact of the respondent’s
conviction and sentence could be ignored in assessing his economic loss after
release from prison. That being so, it is strictly unnecessary for me to express
a view upon the issue of remoteness of damage. Nevertheless, I have formed
a clear view that the consequences of the criminal conviction were not
reasonably foreseeable. As the learned trial judge did not advert to the issue
of reasonable foreseeabilty at all, and the matter was argued, I feel justified
in briefly expressing the reasons for my view.
It may be conceded that the test of reasonable foreseeability as a test for
remoteness of damage is undemanding in that only “the class of injury as
distinct from the particular injury ought to be foreseen as a possible
consequence of particular conduct in order to establish liability for damages
for the particular injury is well established”: see Mount Isa Mines Ltd v Pusey
(1970) 125 CLR 383 at 390. There is, of course, difficulty in determining the
class of injury to which the particular harm belongs. It is, to some extent, a
matter of impression: see Rowe v McCartney  2 NSWLR 72 at 89. That
being said, it is important to appreciate that the test is one of reasonable
foreseeability and not bare foreseeability.
It seems to me that what was said by Ambrose J in the Supreme Court of
Queensland in Beard v Richmond (1987) Aust Torts Reports 80-129 is of
great relevance in the present case. In that case, the learned judge denied
damages to a plaintiff for both heroin and alcohol addiction, substances to
which she had turned to relieve pain flowing from injuries she sustained in a
motor vehicle accident caused by the defendant’s negligence. The plaintiff
(1991) 25 NSWLR 500 at 516
had nursing knowledge upon which she drew in making a conscious and
rational decision to abuse the substances. Ambrose J denied liability on two
bases. First, he found that the accident was the “occasion” of her drug abuse,
and not the “cause” of it since causation involved more than the satisfaction
of the “but for” test. Secondly, he found that the abuse of drugs was not
reasonably foreseeable. His Honour distinguished Grey (at 69,006-69,007) on
“As I read that judgment a crucial observation in it is ‘inclusion of any
damages for the plaintiff’s drug addiction therefore depends on
It does not seem to me that this observation is inconsistent with the
proposition that a plaintiff’s addiction to drugs occurring after injury
causing pain will be foreseeable only in circumstances where the
decision made by the plaintiff to embark upon that course of drug
taking was a reasonable one in all circumstances.”
It is to be noted that in Grey the crucial finding was that “the expert
evidence was unanimous that the plaintiff fell into his addiction as a direct
result of the psychological problems which in his case the injuries and their
consequences entailed”. Ambrose J then proceeded to state what he
understood the law to be (at 69,007):
“In my view it is not the law that a defendant who injures a plaintiff
will be responsible for losses which that plaintiff suffers which result
from an unreasonable although rational and voluntary decision made by
that plaintiff. While accepting that a defendant must take a plaintiff that
he injures ‘as he finds him’ I take the view that there must be a limit
placed upon the voluntary conduct of that plaintiff considered in the
context of his ‘weaknesses, beliefs and reactions as well as his capacities
and attributes, physical social and economic’ to which McHugh JA
referred in Nader’s case at p 537, when determining the limits of
foreseeability. After all there are members of our society whose
personality, reactions and social and economic attributes may be such as
to cause them to react to injury resulting in impairment of earning
capacity in a very antisocial way. Some persons caused financial loss as
the result of injuries inflicted upon them may decide to traffic in drugs
or rob banks or engage in other criminal activity to put them in funds to
make up for losses sustained by reason of their impaired or destroyed
earning capacity. If such persons are apprehended and given custodial
sentences and the proceeds of their criminal activities taken from them
surely it cannot be seriously contended that as a matter of judgment a
court when determining the measure of compensation properly payable
by a negligent defendant ought to regard any custodial sentence
imposed upon such a plaintiff as an event causing the plaintiff financial
loss which in turn has been caused by his reaction in the context of his
social and economic attributes to the injury he has suffered at the hands
of the defendant?”
Hutley JA made much the same point in Havenaar v Havenaar 
1 NSWLR 626, where he said (at 627-628):
“There is no case of which I know that has, as yet, decided that a
foreseeable, though voluntary, subsequent act of an injured person
provides the basis for a claim for damages. The concept of voluntariness
(1991) 25 NSWLR 500 at 517
in a world of universal causation has been challenged, but the legal
system is built upon the retention of some measure of individual
responsibility and it has not been wholly abolished in the law of torts. A
foreseeable deliberate and voluntary act, not part of the treatment
prescribed, recommended or reasonably undertaken, of a victim of an
accident does not, in my opinion, sound in damages because it is not
part of the legal consequences of the accident.”
I share Ambrose J’s surprise that the test of reasonable foreseeability can
extend so far as to encompass the consequences of criminal activity engaged
in by an injured plaintiff on the basis of a voluntary, deliberate and rational
decision. Such a case is quite unlike Grey. I do not think that it could be said
that, on the facts of Grey, the plaintiff’s drug abuse involved a reasonable,
rational and voluntary decision. As the court made clear, his addiction arose
out of his psychological disorder, which was in turn caused by the
defendant’s negligence. In this regard, it is useful to compare that case with
Yates v Jones (1990) Aust Tort Reports 81-009, where the majority of the
court refused to award damages to a woman who claimed that she had
become addicted to heroin first offered to her by an acquaintance while she
was in hospital following a motor vehicle accident caused by the negligence
of the defendant. Samuels JA said (at 67,650):
“In Grey v Simpson … I expressed the view that in that case it would
have been open to a tribunal of fact to find that the plaintiff’s heroin
addiction fell within the boundaries of foreseeability. But in that case
there was very plain evidence that he had fallen into his addiction as a
direct result of psychological problems which the injuries and their
consequences had entailed. Accordingly, there, it was the psychological
problem which was the primary foreseeable consequence and its
particular manifestation was the plaintiff’s subsequent addiction. That
is, I think, a very different case from the present.”
See also Meagher JA (at 67,651).
To my mind, a defendant should not be held responsible for the losses a
plaintiff sustains that result from a rational and voluntary decision to engage
in criminal activity. Such losses, to echo the words of Chapman, fall outside
the limits for which the wrongdoer should be held responsible. There was no
suggestion that the respondent’s criminal conduct in the present case was not
based upon voluntary and rational decisions. Indeed, his conviction and
sentence for the crimes in question necessarily proceed upon the hypothesis
that his conduct was so based. Moreover, in cross-examination in this case he
said that he had entered into an arrangement with others whereby “if it went
off all right I would get some money at the end and if it didn’t, they would
look after me if I went to jail [sic], if I went to court”. Accordingly, he was
fully cognisant of the consequences of his conduct. The criminal conduct and
its consequences were therefore not reasonably foreseeable.
It follows from what I have said that the trial judge fell into error by
refusing to take into account the fact of the respondent’s criminal conviction
and imprisonment in the assessment of economic loss. This brings me to the
question of the re-assessment of damages.
In my opinion, this case is not an appropriate one for the re-assessment of
damages by this Court. I am not confident that, on the present record, and
without seeing the respondent, I would be able to make an assessment about
(1991) 25 NSWLR 500 at 518
the likely effect of the respondent’s conviction and sentence on his future
economic loss; save that it is clear that he was not entitled to recover the
“lost” superannuation which the learned judge awarded.
McInerney J found that the respondent would be engaged in his present
employment until age forty, and that he would work in some other jobs until
he was sixty-five years old. He did so without having regard to the impact of
his conviction on his employability. Although it is true that commonsense
would suggest that a criminal conviction would have some impact on the
employability of the respondent, it is a matter that also depends, to some
extent, upon the impression one can form of the witness after having seen
and heard him give evidence. This Court does not have that forensic
advantage. Also, there was no evidence, so far as I can tell, as to what impact
a conviction had on the statutory ability of state enterprise, in this case the
appellant, to re-employ a convicted criminal. So we are at a loss as to
whether the appellant could have re-employed the respondent following
conviction if he had not been disabled by the accident; or as to what general
disadvantages, if any, a convicted criminal faces in the employment market.
In all the circumstances, it seems to me that the appropriate course is to
send the matter back to the Common Law Division for a re-trial on the issue
Having regard to the somewhat cursory manner in which the legal aspects
were presented of the only point upon which the appellant succeeded, I do
not think that the appellant deserves more than half its costs.
Accordingly, the orders I propose are these:
1. Appeal allowed.
2. Set aside the order of McInerney J entered on 4 September 1989 that
there be judgment for the respondent in the sum of $400,305; and
3. In lieu thereof, order that the proceedings be remitted to the Common
Law Division for a new trial limited to the question of damages.
4. Respondent to pay half the appellant’s costs of the appeal and to have in
respect thereof a certificate under the Suitors’ Fund Act 1951.
5. The costs of the first trial to abide the order of the judge hearing the
HANDLEY JA. I agree with Samuels JA.
Solicitors for appellant: Dexter Healy and Co.
Solicitors for respondent: G J Sharah Henville & Co.