Alldinger v Du Ranot

[2023] NSWCA 271

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Alldinger v Du Ranot [2023] NSWCA 271

Hearing dates:

2 November 2023

Decision date:

10 November 2023

Before:

Gleeson JA at [1]; Leeming JA at [2]; Adamson JA at [3]

Decision:

(1)   Dismiss the appellant’s notice of motion filed on 4 October 2023.

(2)   Appeal dismissed.

(3)   Appellant to pay the respondent’s costs of the appeal, including the costs of the appellant’s notice of motion filed on 4 October 2023.

Catchwords:

APPEALS — TORTS — DAMAGES — motor vehicle accident — successful plaintiff appealing judgment sum — application to adduce further evidence available at time of hearing in Court below — damages calculated based on actual earnings where plaintiff had not paid tax for several years — future economic loss based on past performance of business and unchallenged forensic evidence — whether future projections ought be accepted in an assessment of future economic loss

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 56

Motor Accidents Compensation Act 1999 (NSW), Part 4.5, ss 94, 95, 111, 151

Motor Accidents Injuries Act 2017 (NSW)

Supreme Court Act 1970 (NSW), s 75A

Cases Cited:

Akins v National Australia Bank (1994) 34 NSWLR 155

Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

Minister for Immigration and Ethnic Affairs v Guo; Minister for Immigration and Ethnic Affairs v Pan (1997) 191 CLR 559; [1997] HCA 22

Penrith City Council v Parks [2004] NSWCA 201

R v Birks (1990) 19 NSWLR 677

Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127

Category:

Principal judgment

Parties:

Michael Alldinger (Appellant)
Donovan Du Ranot (Respondent)

Representation:

Counsel:
Appellant (Self-represented)
B Kelleher SC / F Salama (Respondent)

Solicitors:
Not applicable (Appellant)
Moray & Agnew (Respondent)

File Number(s):

2023/91369

 Decision under appeal 

Court or tribunal:

District Court

Jurisdiction:

Civil

Citation:

Alldinger v Du Ranot [2023] NSWDC 37

Date of Decision:

28 February 2023

Before:

Levy SC DCJ

File Number(s):

2022/222975

HEADNOTE

[This headnote is not to be read as part of the judgment]

Michael Alldinger (the appellant) was struck by a motor vehicle driven by Donovan Du Ranot (the respondent) when riding his bicycle in June 2017. He received judgment in his favour in the sum of $1,103,234.45 ordered by Levy SC DCJ (the primary judge) in the District Court on 28 February 2023, following a three-day hearing, during which the only issue was the quantum of damages. Mr Alldinger appeals against the judgment and challenges the assessment of damages on a number of grounds.

In 2013, Mr Alldinger purchased a café business in Moss Vale and operated it as a sole trader until his accident. He admitted in this Court and the Court below that there was a discrepancy between the income which he declared on his tax returns and his actual income because he could not afford to pay tax. The café was closed from the date of the accident until August 2018 after he renovated. He received an advance of his damages so that he could pay for the renovation. After 2019, he sold the café business.

At trial, Mr Alldinger submitted that he was entitled to future economic loss of $804,122.81, comprising lost earnings of $654.122.81, on the basis that he would continue to operate the café and replicate the financial results of his best year (2019), and a buffer of $150,000 for the prospect that the performance of the café could be improved in future. The primary judge did not accept this figure because Mr Alldinger had not lost all his earning capacity, the earnings in 2019 may not have been maintainable and there was a significant risk that the tax authorities would investigate which would lead Mr Alldinger to be bankrupted. The primary judge awarded $450,000 for future economic loss.

Mr Alldinger sought, via notice of motion, to tender fresh evidence in this Court in support of his challenge to the award for future economic loss. In support of this application, he submitted, in effect, that his legal representatives ought to have tendered this evidence and that he was not bound by their conduct as they were, in this respect, incompetent. Mr Alldinger submitted that he had no choice about not paying tax, that it was unfair for the primary judge to hold his dishonest tax returns against him, that he would have paid tax once turnover increased after the renovation, that he would have employed staff and the business would thereby be more profitable. He ultimately submitted that his damages ought be assessed on the basis of significantly increased future profits.

In other grounds of appeal, Mr Alldinger also made challenges regarding the awards for future out of pocket expenses and future domestic assistance, alleged errors in the primary judge’s reasons relating to causation, duty of care and the insurance advances. He alleged a failure by the respondent’s insurer to not call certain evidence.

The Court held (Adamson JA, Gleeson and Leeming JJA agreeing), dismissing the notice of motion and appeal:

Application to adduce further evidence

1. The establishment of “special grounds” on which the Court may receive further evidence (ss 75A(7) and (8) of the Supreme Court Act 1970 (NSW)) requires the appellant to show that the evidence could not have been obtained with reasonable diligence for use at the trial, that it is such that it can be inferred to a high degree of probability that the result would have been different and that it is credible: [30]. The appellant has failed to establish that the evidence could not have been obtained with reasonable diligence for use at the trial. Almost all the documents pre-date the hearing and were either within the appellant’s possession or accessible to him for use at the trial: [31].

Akins v National Australia Bank (1994) 34 NSWLR 155 at 160, applied; Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127, considered.

1. It cannot be inferred that, if the documents had been before the primary judge, the result would have been any different: [32]-[33].

2. To admit further evidence on appeal would be a denial of procedural fairness to the respondent: [41].

3. If the Court had considered the material capable of materially affecting the claims assessment by the Personal Injury Commission of New South Wales, it would have been required to adjourn the proceedings to the Commission. The evidence does not meet this description: [45].

Alleged incompetence of legal representatives

1. A party to proceedings is ordinarily bound by the conduct of his or her counsel unless that counsel has been shown to be incompetent, leading the Court to conclude that there has been a miscarriage of justice. Far from being incompetent, the appellant’s legal representatives appear to have advanced his interests as well as possible under the circumstances: [35]-[36].

Future economic loss

1. The primary judge’s approach and reasons accorded with legal principle and with the evidence. His Honour was correct to use the evidence of the past as a guide for the future. His Honour was correct not to accept the prospect of any substantial increase in profitability of the appellant’s business, particularly as the potential for bankruptcy when the tax fraud was discovered was ever-present and would have brought the appellant’s business to an end. The primary judge was entitled to take into account his adverse findings of the appellant’s credit in assessing the most likely future circumstances but for the accident. The appellant’s criticisms of the primary judge’s approach to the assessment of damages for past and economic loss are without merit: [50]-[54].

Minister for Immigration and Ethnic Affairs v Guo; Minister for Immigration and Ethnic Affairs v Pan (1997) 191 CLR 559; [1997] HCA 22, discussed.

Other grounds

1. In relation to future out of pocket expenses and future domestic assistance, the appellant has not identified any error in the primary judge’s approach or result and is bound by the case he put at trial. The submission that he would have preferred a higher award is not a sufficient basis to warrant the Court’s intervention: [56]-[58].

2. It is not open to this Court to consider breach of duty or causation as this was not before the primary judge: [61].

3. In relation to the alleged error concerning the reason for the advances made by the insurer, the appellant has failed to address how this finding was material to the outcome in the Court below and to the calculation of damages: [62].

4. The appellant has failed to identify any basis on which the insurance case manager ought to have been called: [63].

JUDGMENT

1. GLEESON JA: I agree with Adamson JA.

2. LEEMING JA: I agree with Adamson JA.

3. ADAMSON JA: Michael Alldinger (the appellant) appeals against the judgment in his favour in the sum of $1,103,234.45 (the judgment sum) ordered by Levy SC DCJ (the primary judge) in the District Court (the Court below) on 28 February 2023, following a three-day hearing on 15, 16 and 17 February 2023. The judgment comprised his Honour’s assessment of the damages suffered by the appellant when he was riding his bicycle in the Moss Vale area and was struck by a motor vehicle driven by Donovan Du Ranot (the respondent) on 19 June 2017. The respondent’s compulsory third party motor vehicle insurer admitted liability by reason of the respondent’s negligence in the use or operation of the motor vehicle. By reason of the admission of liability, the only issue in the Court below was the quantum of damages to which the appellant was entitled.

4. The Motor Accidents Compensation Act 1999 (NSW) (the Act) relevantly applied to the assessment of damages as the accident preceded the commencement of the Motor Accidents Injuries Act 2017 (NSW).

The judgment sum

5. The judgment sum comprised separate awards under a number of heads of damage. The amounts ultimately claimed by the appellant, the amounts accepted on behalf of the respondent, the primary judge’s finding and the challenge made by the appellant on appeal are set out in the following table.

Head of damages	Appellant’s claim at trial	Respondent’s response at trial	Primary judge’s assessment	Appellant’s claim on appeal
Non-economic loss	$400,000	$300,000	$300,000	No challenge.
Past economic loss	$258,408.75	$249,600	$225,000	Challenged in general way.
Future economic loss	$804,122.81 (comprising loss of earnings of $654,122.81 and loss of opportunity to enlarge business of $150,000)	$325,000	$450,000	$2,808,000 (earnings) $230,000 (earnings from investment $140,400 (other) $3,178,400 (total)
Past domestic care	No claim	Credit for amounts paid by insurer	Credit to be given for payments for past care	No challenge.
Future domestic care	$125,000	$50,000	$80,000	$291,720
Future treatment expenses	$30,000	$15,000	$20,000	$70,000
Past out-of-pocket expenses	$28,234.45	Agreed	$28,234.45	No challenge.

6. As can be seen from the table set out above, the appellant’s challenges were limited to the assessment of past economic loss, future economic loss, future domestic care and future treatment expenses. In these circumstances, it is necessary to address the evidence and the primary judge’s findings about these two matters. Further, the appellant, by notice of motion filed on 4 October 2023, sought leave to adduce further evidence (which was contained in a supplementary blue book) pertaining to economic loss, which he submitted ought to have been relied on by his legal representatives in the Court below. As the fate of that application is affected by the evidence that was adduced in the Court below, I propose to set out the challenge to the award first before turning to the additional evidence.

The grounds of appeal

7. The appellant appeals on the following ten grounds:

“1    The decision was unreasonable, regarding the assumptions made that   would cause loss of business in the future.

2    Judge erred to properly deal with the question of causation.

3    The judge erred in part, in not seeing the duty of care owed to the plaintiff by the defendant in assessments.

4    The judge erred in not recognising or questioning the financial position of the plaintiff in life when assessing for damages and reductions.

5    Judge erred not seeing the inadequate investigations into the actual business taken by the defendant.

6    Judge erred in part not seeing a similarity in the history of employment and self-employment.

7    Judge erred with the reasons given for the financial advances from the defendant.

8    Judge erred in not accommodating for the plaintiffs restricted movement regarding alterations to future accommodation in future out of pocket expenses.

9    Judge was unreasonable to assume that the plaintiffs future place of residence and current living conditions would affect his future domestic assistance needed.

10   Judge failed to acknowledge there was no appearance of questioning of the defendant or insurer case manager.”

8. The appellant was represented in the Court below by counsel and a solicitor. He represented himself in this Court. I understand grounds 1, 4, 5 and 6 to be a challenge to the awards for economic loss (and principally future economic loss); ground 8 to be a challenge to the award for future out-of-pocket expenses; and ground 9 to be a challenge to the award for future domestic assistance. The remaining grounds will be addressed at the conclusion of these reasons.

Relevant background and financial records

9. In 2011, the appellant moved to the Southern Highlands of NSW to work as a chef in a hotel in Bowral. Between 2011 and 2013, he worked as a chef in various businesses in that area. The appellant tendered an expert report of Lance Kahler, who was not required for cross-examination. In his report, Mr Kahler summarised the appellant’s pre-tax earnings as an employed chef in his report.

Financial year	Income before tax, as shown in Notice of Assessment
2010	$38,298
2011	$47,351
2012	$53,323

10. On 18 December 2013, the appellant purchased a café business in Moss Vale, the Courthouse Café, for $30,000. He operated it as a sole trader until his accident on 19 June 2017. It was ultimately common ground that there were significant differences between his actual earnings (which included cash receipts and EFTPOS receipts), the earnings shown in his bank statements (which comprised EFTPOS receipts) and the earnings he declared in his tax returns. Mr Kahler’s evidence included the following table.

Comparison of trading results between various records
2015	2016	2017	2018	2019
Gross Income
Tax Returns	68,222	72,800	68,000	-	67,000
Weekly Trading Results	137,556	141,985	105,536	-	170,481
Bank Statements	106,989	91,934	81,404	-	174,173
Net Business Income Before Tax
Tax Returns	8,269	19,016	30,046	(105,339)	20,390
Weekly Trading Results	81,511	83,945	55,622	(21,025)	87,512
Bank Statements	66,606	57,056	39,914	n.c*	87,832
*not calculated

11. The café was closed from the date of the accident until August 2018. The appellant accepted in cross-examination that in October 2017, he applied to the Council to obtain its consent to the proposed renovation of the café. In November and December 2017, the appellant did the preparatory work for the renovation, which included removing the woodwork which was to be replaced in the renovation and taking away the rubbish in his utility. He did this work himself. The Council approved his application in February 2018. The appellant performed some of the renovation works on the café himself but for other tasks, such as plumbing, tiling and installing the grease trap, he engaged others to do the work. In June 2018, the appellant approached the respondent’s insurer for an advance of his damages so that he could pay for the renovation (the amounts are set out below). As can be seen from the above table, the appellant’s most profitable year was the 2019 financial year, which post-dated his accident and the renovation. After that year, the appellant sold the café business and transferred the lease for $70,000 (having purchased it for $30,000).

12. Mr Kahler’s unchallenged evidence was that, if the appellant’s weekly trading results were accurate, he should have been registered for Goods and Services Tax (GST), because the annual turnover of the business was well in excess of the $75,000 threshold (see the above table). The line item showing the appellant’s gross income as recorded in his tax returns indicated that in no year of its operation did the appellant’s declared gross income exceed the threshold, although in each year, the gross income as shown in his weekly trading results and bank statements significantly exceeded the threshold. The appellant accepted in this Court that he ought to have paid GST and had failed to do so. However, he maintained that, but for the accident, his income would have increased to a level where he would have been able to pay both income tax and GST.

13. The respondent’s insurer made advances to the appellant which totalled $100,000: $15,000 was paid on 8 June 2018; $25,000 was paid on 2 July 2018; $20,000 was paid on 11 October 2021 and $40,000 was paid on 6 May 2022.

Past economic loss

The appellant’s claim in the Court below and the primary judge’s findings

14. The primary judge noted the slight difference between the appellant’s and respondent’s figures for past economic loss. Whereas the respondent had calculated past economic loss by reference to a rounded net figure of $1,200 per week over a four-year period (leading to a total of $249,600), the appellant contended for a staged approach, which led to an almost identical figure ($258,408.75). Neither party made an allowance for vicissitudes. However, the primary judge considered that some discount was required to take account of the downtime during which the appellant would have renovated his café or the need for hired help (which may not have been available as he was paying casual staff well below award rates); and the potential that the tax authorities would have investigated him and bankrupted him (since, on the appellant’s own admission, he could not have repaid the outstanding tax). For these reasons, the primary judge discounted the parties’ figures by about 10% to arrive at a figure of $225,000 for past economic loss ([117]-[130]).

The appellant’s challenge to the award for past economic loss

15. The appellant submitted that the primary judge erred in accepting Mr Kahler’s evidence when finding that the appellant’s most likely earning capacity from operating the café was approximately $1,200 net per week. For the reasons given in more detail with respect to the challenges to the award for future economic loss, the appellant was bound by the way the case was conducted on his behalf in the Court below. In large measure, his case was based on the figures in the report of Mr Kahler and depended on his actual earnings (as distinct from his declared earnings). Accordingly, this Court ought not disturb the primary judge’s acceptance of the range proposed by the parties as the pre-discount starting point. The modest discount applied by the primary judge to the award for past economic loss was consistent with the evidence. No error in the assessment has been demonstrated.

Future economic loss

The appellant’s claims in the Court below and the primary judge’s findings

16. Appendix 10 to Mr Kahler’s report set out the appellant’s claim for future economic loss, based on projected net profit for the future café business of $3,817,948, calculated as follows:

Gross Profit

Breakfast

Lunch

Dinner   

Function

Less Annual Outgoing Increase

Annual Outgoing increase 3%

[Sub-total]

Super cont

Less Super Contribution

Less PAYE

PAYE    

Net Profit

$2,322,170.34

$2,639,113.97

$3,141,081.18

$852,904.80

$8,955,270.28

$1,213,546.49

$7,741,723.79

$800,000.00

$6,941,723.79

$3,123,775.70

$3,817,948.08

17. However, by final submissions in the Court below, this figure had been substantially reduced. The appellant, through his counsel, ultimately submitted that he was entitled to future economic loss of $804,122.81, comprising lost earnings of $654,122.81 and a buffer of $150,000. The amount of $654,122.81 was calculated as follows:

$1,231.29 x 65 (multiplier for 18 years, until the appellant turns 67)

=   $769,556.25

x 85% (to allow for a discount for vicissitudes of 15%)   

=   $654,122.81.

18. The figure of $1,231.29 represented the appellant’s net (after tax) weekly earnings from the café in its most profitable year, where the annual gross income was $170,481 and the annual pre-tax after expenses income was $87,512 (see the above table). Thus, the appellant’s claim under this head of damages was calculated on the basis that his most likely circumstance was that he would continue to operate the café, as he had done in the past, that its financial results would, in subsequent years, be able to replicate the 2019 financial year and that there would be no ramifications from his having failed to pay tax on the actual earnings of the café since he began to run it in 2013.

19. The appellant also claimed a “buffer” of $150,000 for the prospect that the performance of the café could be improved in the future, had the appellant not been injured, which the primary judge rejected (for reasons given further below). In support of the claim for $150,000, the appellant’s counsel submitted in writing to the primary judge:

“While the plaintiff’s calculations for the expected growth were, somewhat, aspirational, the hope was not entirely misplaced given the level of dedication and effort he had put into the business before the accident.”

20. The primary judge found:

“12   Following the plaintiff's accident his business did not develop in accordance with his plans and ambitions. Ultimately, in August 2019, he found it necessary to dismantle and dispose of it for $70,000, which resulted in him incurring a capital loss of about $230,000, after accounting for the funds he had expended to develop the business.

13    This included loss of the benefit of the sum of $100,000 which the defendant's CTP insurer, QBE, had advanced to him in order to assist him to resume operating his cafe business pending the determination of this present claim for damages. In November 2019, following the earlier closure of his business in August of that year, he became homeless. He now leads a nomadic unemployed existence living in a van which has been fitted out to enable him to sleep in that vehicle.”

21. The primary judge did not accept that the figure of $654,122.81 was an appropriate award for future economic loss. There were three reasons for this:

1. the figure of $654,122.81 presupposed that the appellant had totally lost his earning capacity, which was contrary to the primary judge’s finding that he retained some earning capacity (as was evident from his post-accident capacity to run the café from 9 July 2018 until 23 August 2019, from which the figure was derived);

2. the earnings in the 2019 year were significantly higher than in previous years and therefore may not have been maintainable; and,

3. there was a significant risk that the tax authorities would investigate the appellant’s café business with the inevitable result that outstanding tax would be levied and penalties and interest would be charged. As the plaintiff did not have the financial wherewithal to pay these sums, he would be bankrupted. In these circumstances, he would have been obliged to work as an employee, where his earnings could be expected to revert to the level (adjusted for inflation) shown in the notices of assessment for the years 2010, 2011 and 2012 set out above.

22. The primary judge’s award of $450,000 as a buffer for future economic loss represented a discount of about 30% to take account of the three factors referred to above. The appellant did not submit that the primary judge’s decision to award a buffer was erroneous. Rather, he submitted that the sum awarded should have been higher to take account of the prospect of increased profits which the café would have produced but for the accident.

23. The primary judge’s reasons for rejecting the claim for an additional $150,000 were as follows:

“145    In addition, to a calculation along those lines, the plaintiff seeks an economic buffer sum of the order of $150,000 for the post-accident loss of the opportunity to work in his own cafe and grow that business into a successful undertaking. Counsel for the plaintiff correctly acknowledged that element of the claim as being aspirational.

146    It is not only aspirational, but it is unacceptably based on a series of untenable assumptions such as a continued viability of the business despite the plaintiff's tax problems earlier described , and because the schedules and assumed working hours, and anticipated patronage numbers re lied upon by the plaintiff involved unwarranted speculation which cannot form a reasonable basis for making an allowance for a buffer of that kind .

147    ln my view, the plaintiff's cafe business was destined to fail at some point once his tax evasion came to the attention of the authorities, as was inevitably the case. For those reasons, I decline to award a buffer for the loss of opportunity to continue and profitably develop the cafe business.”

The appellant’s application for leave to adduce further evidence in support of his challenge to the award for future economic loss

The further evidence

24. In support of his challenge to the award for future economic loss, the appellant sought to tender “fresh evidence”, being the 278 pages in the supplementary blue book. The index to the supplementary blue book indicates that each of the documents contained in it pre-dated the hearing before the primary judge and are, accordingly, neither fresh, nor new. The documents were grouped in the following categories:

1. evidence before the accident (which comprised photographs of the café; documents from Moss Vale Council concerning a liquid trade waste approval which was granted to the café in 2014; evidence of improvements carried out in the café; menus that were used at the café; up-to-date photos of the café and sketches of the layout of the café);

2. evidence from the date of the accident (19 June 2017) to 8 July 2019, when the café re-opened as “Café Amoeba” (which comprised colour photographs of the renovation of the café and the dishes served; menus of the food and drinks offered and sketch plans of the design of the café);

3. evidence from 23 August 2019 (the date on which the appellant closed the café) pending its sale (which comprised photos of the renovated arcade in which the café was located; evidence of the development of Moss Vale; the appellant’s financial statements; loan documents relating to the loan which the appellant took out in 2018 to refinance the commercial lease of the kitchen equipment used in the café; and correspondence with the respondent’s solicitor concerning his financial statements and the disparity between them and his tax returns);

4. evidence of jobs for which the appellant applied and the curriculum vitae he used to record his past experience;

5. documents from rehabilitation providers;

6. letters/statements from:

1. Baedon Terry, the purchaser of the café, about the turnover of Mr Terry’s business dated 1 September 2022;

2. T Porter, the licensee of the Moss Vale Hotel, dated 10 September 2022; and

3. Ian Scandrett, a Councillor on the Wingecarribee Shire Council between 2012 and 2022, concerning the growth in Moss Vale and his impressions of the appellant’s café;

7. photographs of the appellant’s current accommodation in a caravan; and

8. invoices from erstwhile suppliers to the café when the appellant was operating it.

25. The appellant also read two affidavits sworn by him on 9 October 2023 and 24 October 2023. The documents annexed to these affidavits comprised some of the documents contained in the supplementary blue book as well as correspondence between the appellant and his solicitor (in respect of which he can be taken to have waived legal professional privilege) or his solicitor and the respondent’s insurer’s solicitor. I have reviewed these documents. The appellant has not established the relevance of these communications. To the extent to which he has replicated documents contained in the supplementary blue book, these are addressed below.

26. In support of his application, the appellant submitted, in effect, that his legal representatives in the Court below ought to have tendered this evidence and that he was not bound by their conduct as they were, in this respect, incompetent. He submitted that, had the primary judge seen the evidence in the supplementary blue book, his Honour would have “believed in him” and been convinced of the future potential for the café when operated by the appellant in assessing damages for future economic loss.

27. The appellant submitted that the primary judge ought to have accepted the following narrative, which was said to be bolstered by the further evidence:

1. the appellant had no choice about not paying tax because he could not afford to pay it (or, as he put it in oral submissions, “If I ran my café honestly, I would have nothing.”);

2. it was unfair for the primary judge to hold his dishonest tax returns against the appellant because he had only done what any reasonable person in his circumstances could be expected to do;

3. once he had renovated the café, including by installing a grease trap (a matter which the appellant emphasised in his submissions as an essential and significant renovation), his turnover would have increased to a level where he could have paid tax;

4. once he was able to pay tax, he would have done so and could therefore have employed staff, whose assistance would have enabled the business to expand;

5. the business would have been much more profitable than it had been; and

6. his damages ought to be assessed on the basis of significantly increased future profits.

28. The appellant submitted that his grievances against the award of damages for past and future economic loss were not only justifiable, but also constituted errors which warranted this Court’s intervention. In oral submissions, he said:

“I would have paid tax in the future. But in the future - he doesn't see my future. All he sees is the past, the low turnover.”

“[The income] wasn't low because I didn't want to pay staff because I wanted to cheat, cheat the tax. I[t] was low because I couldn't attract the people.”

“I tried everything … I could not make money with what I had.”

29. The respondent, for whom Mr Kelleher SC appeared with Mr Salama, opposed the appellant’s application to adduce this evidence on appeal.

Consideration of application to adduce further evidence

30. This Court may only receive further evidence on “special grounds”: ss 75A(7) and (8) of the Supreme Court Act 1970 (NSW).

31. In general, the establishment of “special grounds” requires the appellant to show, first, that the evidence could not have been obtained with reasonable diligence for use at the trial; second, that the evidence is such that it can be inferred to a high degree of probability that the result would have been different; and, third, the evidence must be credible: Akins v National Australia Bank (1994) 34 NSWLR 155 at 160; see also Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127 at [174]-[175] (Bell P, Bathurst CJ and Basten JA agreeing).

32. As referred to above, all the documents in the supplementary blue book (with the possible exception of documents relating to the development of the Southern Highlands area) pre-date the hearing in the Court below and were either within the appellant’s possession or accessible to him for use at the trial. Accordingly, the appellant has failed to establish that it could not have been obtained with reasonable diligence for use at the trial.

33. Having reviewed the evidence in the supplementary blue book, I am not persuaded that any of it would have assisted the appellant to obtain a better result. Evidence of the earnings of the café (which was tendered in the Court below) was relevant to the appellant’s earning capacity pre- and post-accident with a view to assessing damages for the diminution of his earning capacity caused by the accident. Thus, photographs of what it looked like, what was on the menu or what was happening in Moss Vale generally were of peripheral, if any, relevance. Further, the fact that the purchaser of the appellant’s café may be able to operate it more profitably (a proposition which has not been tested) does not establish that the appellant could have operated it at the same level. The appellant’s strategy of lying on his tax returns (including keeping the declared turnover below the $75,000 threshold for GST) and rarely engaging staff to help him imposed significant constraints on the profitability of the business. On his own admission, the business did not generate sufficient funds to cover its costs and pay the tax liability which accurate declaration of earnings would have created.

34. In these circumstances, it cannot be inferred that, if the supplementary blue book had been before the primary judge, the result would have been any different.

35. It is also necessary to address the appellant’s implicit submission that his legal representatives were incompetent and his assertion that he lacked any understanding of the process and had no say in what was put forward on his behalf.

36. A party to proceedings is ordinarily bound by the conduct of his or her counsel unless that counsel has been shown to be incompetent, leading the Court to conclude that there has been a miscarriage of justice. The submission is more commonly made following a conviction in criminal proceedings: see, for example, R v Birks (1990) 19 NSWLR 677 at 683-685 (Gleeson CJ). Thus, unless the appellant can show that his representatives were incompetent, he is bound by the concessions they made in the Court below, including as to the amounts claimed and the forensic choices they made as to the evidence to be tendered. His legal representatives were bound by s 56(4) of the Civil Procedure Act 2005 (NSW) not to put the appellant in breach of his own duty as a party to civil proceedings “to assist the court to further the overriding purpose [to facilitate the just, quick and cheap resolution of the real issues in the proceedings].” They were, accordingly, obliged not to tender irrelevant evidence or prolong the hearing by tendering evidence which was only marginally relevant.

37. Far from being incompetent, the appellant’s legal representatives in the Court below appear to have advanced his interests as well as was possible under the circumstances. The judgment sum was, in my view, at the higher end of the range of awards open to the primary judge. The appellant’s legal representatives were faced with the blatant and dishonest disparity between their client’s actual earnings and his declared earnings. They submitted to the primary judge that the appellant ought be compensated on the basis of the reduction in his capacity to earn his actual earnings. The way in which they chose to do this was to rely on the report of Mr Kahler which set out the actual receipts and compared them with the bank statements, the appellant’s own records and his tax returns. This submission was largely accepted, in that the claim of $654,122.81 based on lost future earnings was reduced to an award of $450,000.

38. Although there was scant, if any, basis for an additional buffer of $150,000, the appellant’s legal representatives nonetheless claimed it, with the rider extracted above. The claim for $150,000 was, correctly, rejected by the primary judge. Further, they persuaded the primary judge that the respondent had not discharged his onus of proving that the appellant had failed to mitigate his loss.

39. The appellant’s legal representatives also had to accommodate within the appellant’s case in the Court below damaging admissions made by the appellant in his evidence, which included the following:

1. he only occasionally engaged others to perform the work in the café because he did not want to attract the attention of the tax authorities and did not want to pay tax;

2. he ensured that the declared turnover was below the $75,000 threshold for registration for GST; and

3. he under-declared his income to the Australian Taxation Office by about $200,000 over four years (the financial years 2013-2017).

40. For these reasons, I would refuse the appellant’s application to re-open his case to adduce further evidence.

41. As Mr Kelleher submitted, there are two further reasons why such evidence ought not be admitted on appeal. First, to admit it on appeal would occasion a denial of procedural fairness to the respondent because he would be deprived of the opportunity of testing it and cross-examining the appellant about it. Thus, in a case where incompetence of an appellant’s legal representatives to adduce relevant evidence has been established, the relief granted would usually be to order a re-trial to accord procedural fairness to the opposing party.

42. Second, Part 4.5 of the Act relevantly provides that a person is not entitled to commence court proceedings in respect of a claim unless and until certain pre-conditions have been fulfilled. These conditions included that a certificate of assessment has been issued in respect of the claim under s 94 of the Act. The certificate was not binding on the appellant, because he did not accept the amount specified in the certificate in settlement of his claim within 21 days after the certificate was issued: s 95(2)(b) of the Act. The appellant was thus entitled to commence the proceedings in the Court below on 29 July 2022, the date on which he filed a statement of claim.

43. Of present relevance, s 111 of the Act provides:

“Matter to be remitted for further claims assessment where significant new evidence produced in court proceedings

(1) This section applies to court proceedings in respect of a claim for which the Commission has issued a certificate under section 94.

(2)    If significant evidence is adduced in the court proceedings that was not made available to the Commission, the court is required to adjourn the proceedings until—

(a)     the party who has adduced the evidence has referred the matter for further assessment under Part 4.4, and

(b) the Commission has issued a further certificate under section 94 in respect of the claim.

(3)     For the purposes of this section, significant evidence is evidence that the court considers may have materially affected the assessment made by the Commission if it had been made available to the Commission when the initial claims assessment was made (whether or not it was available at that time).”

44. Section 151 of the Act provides for the prospect of adverse costs consequences where a party to proceedings has adduced significant evidence that was not made available to the Personal Injury Commission of New South Wales (the Commission).

45. The consequence of s 111(3) of the Act is that, if the Court had considered the material contained in the supplementary blue book capable of “materially affecting” the assessment by the Commission, this Court would have been required to adjourn the proceedings to the Commission. For the reasons given above, the further evidence does not meet this description.

46. Accordingly, the appellant’s notice of motion filed on 4 October 2023 ought be dismissed.

Consideration of the challenge to the award of damages for future economic loss

47. While a basis for the appellant’s challenge to the award for future economic loss is removed, having regard to my refusal to allow him to adduce further evidence, it is still necessary to address the ground as a matter of substance.

48. The primary judge was obliged to assess damages for future economic loss in accordance with s 126 of the Act, which provides:

“126   Future economic loss—claimant’s prospects and adjustments

(1)     A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant’s most likely future circumstances but for the injury.

(2)     When a court determines the amount of any such award of damages it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events concerned might have occurred but for the injury.

(3)     If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.”

49. Thus, the primary judge was obliged to determine the appellant’s “most likely future circumstances but for the injury”, state the assumptions on which the award was based and adjust the amount by reference to the chance that the events might have occurred but for the injury. As set out above, the primary judge considered that the appellant would have continued to operate the café but that, eventually, his tax fraud would have been discovered, he would have been bankrupted and he would have had to work as an employee.

50. Rather than work out a weekly amount for the future (which would have been highly artificial having regard to the findings about the most likely future circumstances), the primary judge adopted the approach of awarding a buffer. This Court has authorised such an approach in cases such as the present: see, for example, Penrith City Council v Parks [2004] NSWCA 201 (particularly at [58]) and Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13.

51. The approach taken by the primary judge and the reasons given by his Honour accorded with legal principle and with the evidence. The primary judge’s assessment of damages for future economic loss was favourable to the appellant but realistic.

52. The primary judge was obliged to decide the case on the basis of the evidence. The assessment of damages required the primary judge to make a comparison between the position the appellant is in as a consequence of the accident and the position he would have been in but for the accident. Assessment of the latter position required inferences to be drawn from the evidence before his Honour. The primary judge was correct to use the evidence of the past as a guide to the future. As the High Court (Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ) said in Minister for Immigration and Ethnic Affairs v Guo; Minister for Immigration and Ethnic Affairs v Pan (1997) 191 CLR 559 at 575; [1997] HCA 22:

“Determining whether there is a real chance that something will occur requires an estimation of the likelihood that one or more events will give rise to the occurrence of that thing. In many, if not most cases, determining what is likely to occur in the future will require findings as to what has occurred in the past because what has occurred in the past is likely to be the most reliable guide as to what will happen in the future. It is therefore ordinarily an integral part of the process of making a determination concerning the chance of something occurring in the future that conclusions are formed concerning past events.”

53. The primary judge aptly described the appellant’s hopes for the future of his business as “aspirational”. His Honour was correct not to accept the prospect of any substantial increase in profitability of the appellant’s business, particularly as the potential for bankruptcy when the tax fraud was discovered was ever-present and would have brought the appellant’s business to an end. The primary judge was entitled to take into account his adverse findings of the appellant’s credit in assessing the most likely future circumstances but for the accident. The appellant’s criticisms of the primary judge’s approach to the assessment of damages for past and economic loss are without merit.

54. For the reasons given above, none of the appellant’s grounds 1, 5 and 6 has been made out.

Future out of pocket expenses (ground 8)

55. The primary judge noted that the appellant contended that an award of $30,000 ought be made for future out of pocket expenses, whereas the respondent contended for $15,000. His Honour’s reasons for the award of $20,000 were as follows:

“162   The plaintiff made it clear that he avoids taking medication. The medical evidence suggests that the potential sources of future treatment expenses will firstly involve surgery for possible removal of the multi-level pedicle screws in the plaintiffs spine, as they have served their purpose to achieve fusion of the segments involved, and secondly, there may be a need for stabilisation surgery at the levels above and below the affected level of the plaintiffs fusion surgery, in the event of instability or accelerated deterioration at those adjacent levels. The latter surgery may involve separatee procedures on separate occasions.

163    The evidence does not suggest a present need for surgical treatment but instead suggests those procedures are possibilities that might arise within an uncertain time frame.

164    The initial laminectomy and fusion procedure performed by Dr McKechnie in a public hospital setting on 23 June 2017 involved a surgical fee of $15,706: Exhibit "A", p 259. This did not include the cost of a surgical assistant anaesthetist's fees, hospital theatre fees and recuperative accommodation, rehabilitation or physiotherapy, pain relief and general practitioner monitoring, all of which seem to be likely elements of expense on each occasion of future surgical treatment. In addition, pain management treatment may be required, as was suggested by Dr McKechnie: Exhibit "B".

165    In light of those uncertainties as to need, timing, and expense, I consider that a discounted buffer approach to this head of damage is appropriate. Accordingly I assess the plaintiffs damages for future treatment expenses in the discounted buffer amount of $20,000.”

56. In support of ground 8, the appellant submitted in this Court that he would need substantial modifications to his living space to accommodate his disabilities. The modifications sought included kitchen cupboards being built between waist and eye level; an oven, fridge and freezer would need to be at eye level and his bed would need to be elevated. These submissions were at odds with the case the appellant put at trial, by which he is bound. The only basis for out of pocket expenses put on his behalf in the Court below was an allowance for the possibility that the appellant would need to have surgery to his back. The appellant put that the figure allowed for this head of damages was “a bit short”. That the appellant wanted more than was awarded may be accepted but it is insufficient to establish error.

57. As a result, no error has been shown in the primary judge’s approach or award. Ground 8 has not been made out.

Future domestic assistance (ground 9)

58. The primary judge noted that the appellant sought $125,000 for future domestic assistance, whereas the respondent submitted that $50,000 would be reasonable. The primary judge identified that the appellant’s figure was based on a putative need of 3 hours per week of domestic assistance, which his Honour described as “problematic” ([158]) because the appellant did not live in “conventional premises where heavy duty tasks such as moving furniture and cleaning in awkward-to-reach places would be required on a regular basis” (as he lived in a van). However, the primary judge accepted that the appellant would need some help of that nature “when he eventually moves to suitable premises.” His Honour, accordingly, applied a “discounted buffer approach” and ordered $80,000 for this head of damages: [160]. As Mr Kelleher pointed out, the medical evidence did not support a need for care.

59. The appellant has not identified any error in the primary judge’s approach or the result. In oral submissions, the appellant submitted only that he would have preferred a higher award. Again, this is not a sufficient basis to warrant this Court’s intervention. Ground 9 has not been made out.

Remaining grounds

Ground 2: alleged error in dealing with causation

60. In ground 2, the appellant alleges that the primary judge did not “properly deal with the question of causation.” As referred to above, liability was admitted by the respondent’s insurer and the only issue before the primary judge was the assessment of damages. In so far as ground 2 includes a complaint about the kinds of loss caused by the accident, this has been addressed in the grounds regarding specific heads of damage above.

Ground 3: alleged error concerning duty of care

61. Ground 3 concerns the duty of care owed to the appellant by the respondent, which the respondent’s insurer admitted had been breached and is in a similar category. It is not open to this Court to consider breach of duty as this was not before the primary judge. Neither ground 2, nor ground 3 has been made out.

Ground 7: alleged error concerning the reason for the advances of $100,000

62. Ground 7 seeks to challenge the primary judge’s reasons for the advances made by the respondent’s insurer, referred to above, which totalled $100,000. It was common ground in the Court below and in this Court that the respondent’s insurer had advanced a total of $100,000 pending determination of the appellant’s damages. Whether the monies were advanced to assist him with renovating the café or with general living expenses is not to the point. The appellant has failed to address how this finding, even if erroneous, was material to the outcome in the Court below and to the calculation of damages which the appellant ultimately received. Accordingly, it has not been made out.

Ground 10: alleged error arising from the respondent’s insurer’s failure to call the case manager

63. Ground 10 would appear to amount to a criticism of the respondent’s insurer for not calling the insurance case manager to give evidence in the trial. The appellant has failed to identify any relevant evidence which such a person could have given. Further, it is for a party to civil proceedings to decide which witnesses to call in the party’s case. If a relevant witness is not called, there may be room for a so-called Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 inference that the witness’ evidence would not have assisted the party’s case. The appellant has failed to identify any basis on which the insurance case manager ought to have been called. Ground 10 has not been made out.

Proposed orders

64. For the reasons given above, I propose the following orders:

1. Dismiss the appellant’s notice of motion filed on 4 October 2023.

2. Appeal dismissed.

3. Appellant to pay the respondent’s costs of the appeal, including the costs of the appellant’s notice of motion filed on 4 October 2023.

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Decision last updated: 10 November 2023