Allsop v. Petroleum Company of Trinidad and Tobago (Trinidad and Tobago) [2005] ukpc 34 (28 July 2005)

ADVANCE COPY

	Privy Council Appeal No. 33 of 2004

Ancil Allsop	Appellant
	v.
Petroleum Company of Trinidad and Tobago 	Respondent

	FROM

	THE COURT OF APPEAL OF
TRINIDAD AND TOBAGO
	---------------

	JUDGMENT OF THE LORDS OF THE JUDICIAL
	COMMITTEE OF THE PRIVY COUNCIL,
	Delivered the 28th July 2005
	------------------

	Present at the hearing:-
			Lord Nicholls of Birkenhead
Lord Rodger of Earlsferry
Lord Walker of Gestingthorpe
Baroness Hale of Richmond
Sir Andrew Leggatt
		       [Delivered by Lord Rodger of Earlsferry]
	------------------

1.	On 20 October 1995 the appellant, Ancil Allsop, was employed by the respondents, Petroleum Company of Trinidad and Tobago Limited (“Petroleum”), on the Charlie platform on the east coast of Trinidad near Mayaro.  In the course of his employment that day he injured his back.  The effects of the injury were severe and, as was recognised from the outset, they will be permanent.  At the time, the appellant was an adult and a workman within the meaning of section 2(1) of the Workmen’s Compensation Act (Chapter 88:05) (“the Act”).  Petroleum were therefore liable to pay him compensation in accordance with the provisions of section 4(1) of the Act.

2.	Between 19 December 1995 and 23 March 1998 Petroleum made weekly payments of $571.89, amounting in total to some $72,139.81, to the appellant.  For each payment they sent him a statement to which a cheque was attached.  The statement typically said that the cheque was “in payment of compensation for” the relevant period.  These payments were intended to be payments of workmen’s compensation under the Act, although they were not half-monthly nor in the amount envisaged by section 5(1)(d)(i).

3.	On 3 April 1998 the appellant filed the present proceedings for damages for personal injuries and consequential loss as a result of the accident.  On 28 May 1998 Petroleum filed their defence, including a defence that the proceedings were barred by virtue of section 4(3) of the Act, which provides:
“Where compensation payable under this Act for injury by accident arising out of and in the course of employment is received as such by a workman who is an adult, no action shall be brought against the employer for compensation independently of this Act by such workman in respect of such accident after the expiration of one year from the date on which the cause of action accrued.”

In effect, Petroleum contend that proceedings by the appellant for damages for personal injuries arising out of the accident were time-barred as from 20 October 1996.

4.	From 6 April until 9 November 1998 Petroleum continued to pay, and the appellant continued to accept, payments of compensation.  By the end of that period he had received a total of $90,441.09.

5.	The appellant’s injury did not correspond to any of those specified in the Second Schedule to the Act.  That being the case, his situation fell within section 5(1)(c)(ii).  Section 5(1) provides inter alia:
“Subject to this Act, the amount of compensation shall be as follows:
...
(b)	Where permanent total disablement results from the injury –
(i)	in the case of an adult, a sum equal to forty-eight months earnings;
	...

(c)	where permanent partial disablement results from the injury –
...
(ii)	in the case of an injury not specified in the Second Schedule, such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the incapacity permanently caused by the injury ...”

A doctor assessed the degree of the appellant’s permanent partial disability on three occasions between October 1997 and September 1998.  On the last occasion, 25 September 1998, it was assessed at 27%. On 9 November 1998, accordingly, the appellant’s workmen’s compensation was computed on the basis that he was entitled to 27% of a sum equal to 48 months’ earnings estimated at $3,676.40 per month.  That brought out a figure of $47,646.14 as the amount of compensation to which the appellant was entitled in terms of section 5(1).

6.	Section 5(2), which their Lordships must examine shortly, provides for a deduction to be made from that sum:
“As regards subsection 1(a), (b) and (c), there shall be deducted from any sum to which the workman is entitled the amount of any payment or allowance which the workman has received from the employer by way of compensation during the period of disablement prior to the receipt of such sum, provided that the total amount to be deducted does not exceed fifty per cent of the lump sum so payable.”

By virtue of this provision Petroleum could deduct from the sum to which the appellant was entitled ($47,646.14) the amount of the payments already made by way of compensation ($90,441.09) but limited to 50% ($23,823.07) of the sum payable ($47,646.14).  In the result the appellant was entitled to the remaining 50% of $47,646.14, ie $23,823.07.

7.	Section 9(2) provides:
“Compensation payable where permanent disablement has resulted from an injury ... shall be deposited with the Registrar [of the Supreme Court], and any sum so deposited shall be paid to the person entitled to it or be invested, applied or otherwise dealt with for his benefit in such manner as the Registrar or, upon reference to him by the Registrar, a Commissioner, thinks fit.”
In accordance with this provision, on 9 November 1998 Petroleum presented compensation amounting to $23,823.07 for deposit with the Sub-Registrar of San Fernando.  On 23 November 1998 the appellant and Petroleum entered into a memorandum of agreement agreeing the relevant figures and that memorandum was sent to the Sub-Registrar as required by section 40(1).  On 21 December 1998, in accordance with section 9(2), the Sub-Registrar paid the sum deposited to the appellant.

8.	In due course their Lordships will return to the details of the calculation in this case since they help to illustrate how some of the provisions are intended to operate.  The point at issue in the appeal depends, however, on the proper interpretation of the words “compensation payable under this Act” in section 4(3).  The appellant contends that they refer to the sum which is payable for his permanent partial disability in terms of section 5(1) and (2).  So the one-year time-bar applies only where the employer has paid the whole of the sum due to the workman by way of compensation.  If that is correct, then the present proceedings were brought in time, as P Jamadar J held.  Petroleum contend, on the other hand, that the words cover any payment made by way of compensation.  On that interpretation, the one-year time-bar applies if, in the year after the accident, the workman has received any sum, however small, by way of compensation.  On that view, the present proceedings were brought too late, as the Court of Appeal held.

9.	Workmen’s compensation in Trinidad and Tobago was originally modelled on the system which operated in the United Kingdom. Under section 29 of the United Kingdom Workmen’s Compensation Act 1925 a workman had an option between claiming compensation under the Act and taking proceedings independently of the Act at common law or for breach of a relevant statutory obligation.  The idea was that an employer was not to be vexed with both demands concurrently.  A late flowering of the exotic jurisprudence to which that provision gave rise can be seen in the divergent speeches in the House of Lords in Young v Bristol Aeroplane Co Ltd [1946] AC 163.  Those speeches may not have made very much clear, but they did at least highlight the difficulties in holding that a workman had opted irrevocably for compensation under the Act merely because he had accepted a single payment.  A few years later, the Workmen’s Compensation Act 1925 was repealed in the United Kingdom but, in the shape of the Workmen’s Compensation Ordinance 1927, the system continued to apply in Trinidad and Tobago.  In particular, under section 4(3) of that Ordinance the workman had to choose between workmen’s compensation and a claim in the courts.  The courts still had to wrestle with the problems that had troubled the British courts before the legislation was repealed.

10.	In 1960, however, the Workmen’s Compensation Act was passed.  It repealed the 1927 Ordinance, including the old section 4(3), which required the workman to choose between compensation and a claim before the courts.  Now a workman can claim both compensation and damages, but under section 4(4) of the Act any sum recovered as damages is to be taken into account by a Commissioner in awarding compensation under the Act.  As another element in the new package, section 4(3) of the Act introduced a special one-year time-bar on bringing an action for damages where the workman had received the “compensation payable under this Act” for his injury.  Given the background which their Lordships have outlined, it would perhaps be surprising if Parliament had intended this short time-bar to apply irrevocably simply because the workman had received even one payment, however small, by way of compensation under the Act.  More generally, a construction of section 4(3) which has that potential effect is unattractive because it is so obviously capable of producing substantial injustice.  Conversely, it is easy to see that Parliament might have favoured a system where, if the employer had already paid the workman the full sum to which he was entitled under the Act, then, on the expiry of a year from the date of the accident, the employer should be free from any further liability.

11.	In choosing between these alternative constructions, their Lordships have in mind at the outset that, under the general law, the time-bar which applies to proceedings for personal injuries is four years.  Section 4(3) is in the nature of an exception to that rule and, on general principles, an exception which deprives a plaintiff of his right to bring an action for his injuries should be construed narrowly.  If there were any doubt, the Board would therefore tend to favour the narrower construction of the critical words.  In fact, their Lordships regard the position as clear.

12.	A purely linguistic argument supports the appellant’s preferred construction of the critical words, “compensation payable under this Act”.  If, for example, one asks what compensation is payable under the Act to a workman who has been injured in the same way as the appellant, the answer is to be found in section 5(1)(c)(ii) and (2).  By applying those provisions to the relevant facts, it is possible to work out the amount of the compensation to which the workman is entitled and which is payable to him.  When that amount has been duly calculated, the employer’s duty under section 9(2) is to deposit it with the Registrar.  Section 9(2) begins “Compensation payable where permanent disablement has resulted ... shall be deposited with the Registrar ...”. The reference in the opening words of subsection (3) to “Any other compensation payable under this Act” (emphasis added) shows that the corresponding opening words of section 9(2) are also to be understood as “Compensation payable under this Act”.  So in section 9(2) “compensation payable under this Act” refers to the sum which is deposited with the Registrar for payment to the workman – and hence to the whole sum to which the workman is entitled under section 5(1)(b) or (c) and (2).  The provisions of the statute must be construed as a whole.  So, in the absence of any indication to the contrary, in section 4(3) also, the phrase “compensation payable under this Act” must be interpreted as referring to the sum due in terms of section 5(1) and (2) and not just to some periodical payment by way of compensation.

13.	The substance of the measure points to the same conclusion.  As in the case of the appellant, it may not be possible to tell immediately after the accident the extent of any permanent disability which a workman may suffer.  Until the situation can be clarified, the employer may make payments to compensate him for his loss of income during the periods to which they relate.  But the workman is not entitled to such periodical payments for life.  Once the extent of his permanent disability can be ascertained, as section 7(2) and the closing words of section 5(2) make clear, the workman’s entitlement under section 5(1) and (2) is to receive a lump sum of the amount brought out by a calculation in accordance with those provisions.  The lump sum can be regarded as a fund to provide him with some income for the future.

14.	In their written case counsel for the appellant argued that “compensation” in section 5(2) could not refer to compensation under the Act since, otherwise, an employer who had made payments coming to, say, 90% of the sum due in terms of section 5(1) could take credit for only 50% of that sum.  That argument is mistaken.  Section 5(2) does indeed apply to prior payments of workmen’s compensation and the 50% cap on deductions for previous payments is intended to ensure that a workman who is permanently disabled always receives a lump sum of at least 50% of the amount due under section 5(1).

15.	The present case is a good illustration of the way the system, including section 5(2), is intended to work.  As their Lordships have already explained, between October 1995 and November 1998 the appellant actually received weekly payments by way of compensation which totalled $90,441.09 - almost twice the amount (27% of 48 months’ earnings = $47,646.14) to which he was entitled under section 5(1)(c)(ii) for his permanent partial disablement.  None the less, as provided in section 7(2), he was still entitled to a lump sum of that amount and, under section 5(2), Petroleum could not take credit for all the payments they had already made – which would have more than wiped out any capital sum.  They were permitted to deduct no more than an amount ($23,823.07) that did not exceed half of the lump sum to which the appellant was entitled.  The appellant was still entitled to the remaining half.  This arrangement may have the (incidental) effect of encouraging employers to pay workmen their lump sum compensation sooner rather than later.  More importantly, however, the provisions show that, in a case of permanent disablement, Parliament’s overriding concern is that the workman should receive a lump sum to compensate, to some degree at least, for his future loss of earnings.  In their Lordships’ view it would be inconsistent with that legislative scheme to hold that, where a permanently disabled workman had not received his lump sum to provide for the future, section 4(3) meant that he was none the less barred from pursuing his remedies outside the Act.  An employer can purchase immunity from proceedings outside the Act only by performing his obligations under the Act.

16.	In the present case, from the time of his accident, it was known that the appellant would be permanently disabled.  So he was going, ultimately, to be paid a lump sum calculated in accordance with section 5(1)(c)(ii) and (2).  As at 3 April 1998, however, the degree of his permanent disability had not been finally determined.  So the lump sum could not be calculated and he was still receiving weekly payments.  Therefore, as of that date, Petroleum had not discharged their obligation to pay the appellant the appropriate lump sum under the statute.  In those circumstances he had not received the “compensation payable to him under this Act” and so the one-year time-bar in section 4(3) did not apply to him.  The present proceedings were raised in time.

17.	For these reasons their Lordships will allow the appeal and restore the order of P Jamadar J dated 19 December 2000.