Arnott v Choy

Case [2010] NSWCA 259

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Arnott v Choy [2010] NSWCA 259

FILE NUMBER(S):
2009/298214

HEARING DATE(S):
22 April 2010

JUDGMENT DATE:
6 October 2010

PARTIES:
Demetrious Arnott - Appellant
Henry Choy - Respondent

JUDGMENT OF:
McColl JA Basten JA    

LOWER COURT JURISDICTION:
District Court

LOWER COURT FILE NUMBER(S):
DC 07/1647

LOWER COURT JUDICIAL OFFICER:
Levy SC DCJ

LOWER COURT DATE OF DECISION:
4 March 2009

LOWER COURT MEDIUM NEUTRAL CITATION:
[2009] NSWDC 17

COUNSEL:
PJ Deakin QC with J Turnbull for the Appellant
CS Leahy SC for the Respondent

SOLICITORS:
Holman Webb Lawyers for the Appellant
Ron Kramer Associates for the Respondent

CATCHWORDS:
DAMAGES – motor vehicle accident – past and future economic loss – diminution of earning capacity – whether finding that plaintiff had no residual earning capacity sustainable – whether finding open having regard to medical evidence
DAMAGES – excessive – attendant care – where evidence of some capacity for independent living – where damages awarded under separate heads encompassed same services/facilities
DAMAGES – mitigation – s 136, Motor Accidents Compensation Act 1999 (NSW) – whether “reasonable steps” taken to pursue “alternative employment opportunities” – where plaintiff failed to seek employment for two years prior to hearing of case

LEGISLATION CITED:
Civil Liability Legislation Amendment Act 2008 (NSW)
Motor Accidents Act 1988 (NSW)
Motor Accidents Compensation Act 1999 (NSW)
Motor Accidents Amendment Act 1995 (NSW)
Workers Compensation Act 1987 (NSW)

CATEGORY:
Principal judgment

CASES CITED:
Brogan v McGeary (1995) Aust Torts Reports 81-342
Choy v Arnott [2009] NSWDC 17
Fazlic v Milingimbi Community Inc [1982] HCA 3; (1982) 150 CLR 345
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Graham v Baker [1961] HCA 48; (1961) 106 CLR 340
Lewis v Shimokawa [2008] NSWDC 244
Mahony v Watson [2003] NSWCA 259
Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705
Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234; (2009) 261 ALR 382
Miller v Galderisi [2009] NSWCA 353
Munce v Vinidex Tubemakers Pty Ltd [1974] 2 NSWLR 235
New South Wales v Fahy [2007] HCA 20; (2007) 232 CLR 486
Saleh v The Nominal Defendant [2009] NSWDC 1
Strinic v Singh [2009] NSWCA 15; (2009) 74 NSWLR 419
State of New South Wales v Fahy [2006] NSWCA 64; (2006) 155 IR 54
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 73 ALJR 306
Tuncel v Renown Plate Co Pty Ltd [1976] VR 501
Watts v Rake [1960] HCA 58; (1960) 108 CLR 158
Wiki v Atlantis Relocations (NSW) Pty Ltd [2004] NSWCA 174; (2004) 60 NSWLR 127
Wilson v Peisley (1975) 50 ALJR 207

TEXTS CITED:
Mayne and McGregor on Damages 12th ed (1961) Street & Maxwell

DECISION:
1. Appeal allowed in part. 2. Set aside the verdict and judgment entered for the respondent in the amount of $2,154,131.60, being orders (a) and (c) made…

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Arnott v Choy [2010] NSWCA 259
Case
[2010] NSWCA 259
Decision Date

CaseChat Overview and Summary

McColl and Basten JJA of the Court of Appeal of New South Wales heard an appeal concerning damages awarded to the respondent following a motor vehicle accident. The respondent, who was 19 at the time of the accident and 23 at trial, suffered cognitive, emotional, and behavioural effects from a head injury, including damage to his frontal lobes. The primary judge awarded substantial damages, including for past and future economic loss, and attendant care. The appellant contended that the primary judge erred in several aspects of the damages assessment, particularly regarding the respondent's residual earning capacity and the quantum of attendant care.

The central legal issues before the Court of Appeal included whether the primary judge's finding that the respondent had no residual earning capacity was sustainable, given the medical and lay evidence. The court was also required to determine if the damages awarded for attendant care were excessive, particularly where evidence suggested some capacity for independent living and potential overlap with damages awarded under other heads. Furthermore, the court considered whether the respondent had taken "reasonable steps" to mitigate his loss by pursuing alternative employment opportunities, as required by section 136 of the *Motor Accidents Compensation Act 1999* (NSW), given his failure to seek employment for two years prior to the hearing.

The Court of Appeal allowed the appeal in part. While acknowledging the respondent's significant cognitive and behavioural impairments stemming from the head injury, which the primary judge had accepted as permanent and impacting his ability to work, the court found that the primary judge's conclusion that the respondent was, and would remain, unemployable was not sustainable. The appellant argued, and the court accepted, that the evidence, including the respondent's own testimony and medical reports, indicated a residual earning capacity, albeit diminished. The court also found that the award for attendant care was excessive, noting the respondent's capacity for independent living and the potential for duplication of services. Consequently, the court set aside the primary judge's verdict and judgment.

The Court of Appeal directed the parties to recalculate the revised heads of damage in accordance with the court's reasons and to file short minutes of order for a substituted judgment within seven days. The court also ordered the parties to file written submissions concerning costs in both the Court of Appeal and at trial.

Orders

Orders of the court

1. Appeal allowed in part. 2. Set aside the verdict and judgment entered for the respondent in the amount of $2,154,131.60, being orders (a) and (c) made by Judge Levy on 4 March 2009. 3. Direct the parties to calculate the revised heads of damage in accordance with these reasons and file short minutes of order setting out the substituted judgment within seven days of these reasons. 4. (a) Appellant to file and serve written submissions limited to five pages in length concerning costs (in this Court and at trial) within seven days; (b) respondent to file and serve written submissions also limited to five pages in length concerning such costs within 14 days.

Background

Background to the litigation

The primary judge first made general findings regarding the respondent’s background, education, pre-and-post-injury mental functioning, family and other interpersonal relationships and emotional capacity. His Honour then assessed each head of damages separately.Background findings The respondent was 19 at the time of the accident and 23 at the time of trial. After having performed well in the School Certificate, he lost interest in school and left in year 11: primary judgment (at [9] - [14]). He was living at home at the time of the accident with his mother, stepfather and two younger siblings. He was working in a junior capacity in a food supply business, Green Star Enterprises Pty Ltd, operated by his mother and stepfather, as well as part time as a pizza delivery boy (at [7]). The primary judge made the following unchallenged findings about the respondent’s disabilities consequent on the accident at the time of trial:“54. The Plaintiff will continue to adversely suffer from the cognitive, emotional and behavioural effects of his head injury. That injury has caused gliosis or scarring of the brain from the shearing forces involved with his head injury. The post-haemorrhage scarring of his brain has affected both of the Plaintiff’s frontal lobes. At page 14 of his report dated 28 June 2006 Dr Smith’s neuropsychiatric opinion was that the initial injury caused the Plaintiff to suffer compromise bilaterally to the long motor fibres that emanate in the frontal lobes and traverse the brain stem to terminate in the contra-lateral aspect of the spinal cord. Whilst the initial disturbance to the Plaintiff’s motor function improved, Dr Smith’s summation was that the Plaintiff suffered from damage to the right frontal lobe and its connections.55. Dr Smith summed up his neuropsychiatric assessment in the following terms:‘He told me that it was in mid 2005, when he realised that he had changed, that he started to become depressed. He then started thinking about killing people and harming himself. He started to neglect his hygiene and he started drinking on a daily basis. In September 2005 Dr. Veerabangsa started him on Avanza but it would seem that he has taken it sporadically. Nevertheless he told me that his depression is now much better so that he feels down only for a few hours at a time and about two or three times a week. Fortunately he stopped using alcohol some months ago.Of concern, however, is the fact that he started gambling after the accident. His disinhibition and depression may have contributed to this tendency. He admits that it is an addiction and he has not been able to control it. He apparently has not told anybody else about this but I would advise that (sic) see a behavioural psychologist who could help him overcome this habit.His IQ did not change after the accident. Testing shortly after the accident showed that he had mild memory problems, particularly of a visual type which is consistent with his right cerebral hemisphere damage; he told me that his memory has improved since. However, it would seem that his mentation is slower and he has difficulty coping with too much information at once, and during his Driving Assessment it was noted that he lacked insight and reasoning. This constellation is consistent with damage to the frontal lobes but the degree of cognitive impairment is mild.’56. The description of the Plaintiff’s impairments as being ‘mild’ must be seen to be a relative one. Of greater relevance is the practical impairment to the Plaintiff’s day to day functioning which adds meaning and context to the medical description of his condition. In this regard I have taken into account and accept the evidence of the Plaintiff’s problems as he described them, as his mother, aunt and stepfather have described them and I have also taken into account the histories of the Plaintiff’s problems as were provided to the various medical examiners whose opinions are in evidence.57. Dr Smith reviewed the results of psychological testing carried out by Dr Gilandas and made the following comment:‘Dr. Gilandas’ testing indicated that Mr. Choy has an above average IQ but his memory functioning remains impaired, especially for non-verbal tasks, and this is consistent with his right cerebral hemisphere damage. There is also evidence from other sources that he has difficulty coping with too much information at once and has some problems with insight and reasoning and such features are consistent with a mild degree of damage to the frontal lobes.’58. I accept that the Plaintiff has the limitations that I have summarised and which are described in the evidence I have summarised. The Plaintiff’s neck and shoulder pain has resolved about a year after his injury and this has left him without problems in these areas. I accept that the remaining cognitive, emotional and behavioural problems cause the Plaintiff considerable difficulty and frustration. I accept that these problems are permanent and will prevent him from working in the capacity of manager in the family business. I accept that he could not take on the stresses and pressures of managing the family business or its equivalent. I also accept that they will adversely operate on any attempts the Plaintiff may make in seeking to exercise an earning capacity in the future.”Earning capacity

Evidence

Evidence Before The Court

The respondent’s general practitioner, Dr La, whose assessment of the respondent’s depression and emotional problems the primary judge accepted (at [88]) as reasonable, also expressed the opinion in his report of 9 April 2008 that physically, the respondent was “well and independent”. The lay evidence Before the accident the respondent’s parents had done the majority of cooking in the home. That was still the position at the time of trial, although his sister also did some of the cooking. The respondent said he could cook instant noodles, fried eggs and “simple stuff” and although he was not responsible for washing his own dishes, he could and did wash his own dishes if he wished. The respondent’s mother, Wai Ling Lo, gave evidence through an interpreter. Mrs Lo said that before the accident the respondent cooked for himself if she came home late. He also did his own laundry and cleaned his room in a “generally OK fashion”. Sometimes he made his bed and sometimes he did not. It is unnecessary to refer in any detail to Mrs Lo’s evidence concerning the first three or four months after the respondent’s discharge in respect of which it is common ground he was still in the recovery process. Indeed, Mrs Lo said that the slow reactions she noticed in that early period were “getting a little bit better” as was his bad memory. The respondent gave evidence that if he lived on his own without his mother and others being available to assist him, he could vacuum, mop and sweep his own room. He said he would be able to carry out those activities in relation to the whole house. While he had not cleaned his own bathroom for a while, he said he had cleaned it before. He agreed, that if he lived by himself, he could cook simple meals, but said he would prefer to get take-away because he did not like cooking. He also agreed that if he lived on his own without parental assistance, he would be able to clean floors, mop and vacuum, but would take his washing to a laundromat because he regarded washing as “very time consuming and boring”. The respondent said he did not touch his bed after he woke up, but did change his own sheets from time to time. He agreed that physically there was nothing to stop him mowing a lawn. It appears the respondent’s father mowed the lawn at the family residence. In re-examination, the respondent said he had washed his own clothes before the accident, but did not clean his own bathroom and before the accident only used a vacuum cleaner or cleaned his bathroom “once in a blue moon”. He had rarely washed dishes or cleaned up after a meal and only sometimes cooked himself a meal. Mrs Lo said she did not think the respondent could manage on his own because he sometimes forgot to take his medication and “sometime he is under pressure, there’s just no-one to console him.” Mrs Lo thought that the respondent could feed himself simple meals for breakfast, lunch and dinner, could shop for himself, do his own laundry and wash his clothes. She did not know whether he would be able to clean his house or his flat. She said he sometimes remembered to keep appointments with doctors and sometimes she had to remind him. He was bad at finding his way. However, she accepted he was capable of driving a car, and could drive himself to places like the BIRU. Mrs Lo agreed that the respondent washed his own clothes. Future attendant care services

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

It will be convenient to set out the parties’ submissions when dealing with the relevant head of damages.CONSIDERATIONEarning capacity Damages for both past loss and future economic loss are allowed to an injured plaintiff “because the diminution of his earning capacity is or may be productive of financial loss”: Graham v Baker [1961] HCA 48; (1961) 106 CLR 340 (at 347) per Dixon CJ, Kitto and Taylor JJ. The appellant complains that the primary judge erred in approaching the issue of past economic loss because he failed to address both the extent to which the respondent’s earning capacity had been impaired, and the extent to which that impairment was productive of financial loss. The appellant accepts that for the period up to March 2005, the respondent suffered a complete loss of income and that the figure of $10,500 the primary judge awarded up to 30 June 2004 should be carried forward to that date. However, he contended that the Court should conclude that from March 2005, the respondent had the capacity to earn the net average wage for a full-time storeman of $540 per week. The primary judge did not, with respect, expressly address the issue of the impairment of the respondent’s earning capacity prior to trial. However it is apparent from his Honour’s conclusion that the respondent’s condition stabilised at June 2006, coupled with his statement (at [83]) when dealing with future loss of earning capacity that “the [respondent] has suffered a severe diminution in his future earning capacity such that from a practical perspective he is and will remain, unemployable” (emphasis added) that, in his Honour’s opinion, the injuries the respondent had suffered as a consequence of the accident had rendered him unemployable both in the past and for the future. I would reject the appellant’s complaint in this respect. The appellant also submits the primary judge failed to comply with the dictates of s 126 of the MAC Act in assessing the respondent’s claim for damages for future loss of earning capacity because he did not set out the assumptions upon which his assessment was based (s 126(3)), and took an erroneous approach to the evidence. The appellant’s challenge to the primary judge’s assessment of the evidence about the respondent’s earning capacity is fundamental to his challenge to the awards for lost earning capacity and has implications for his challenges to the other heads of damages. In short, the appellant submits that the primary judge’s finding (at [83]) that the respondent was, and would remain, unemployable was not sustainable. He contends that both the respondent’s evidence, and the overwhelming weight of the medical evidence, supported the conclusion that while the respondent had a reduced earning capacity, he was capable of working full time in jobs such as that of a motor mechanic or carrying out simple labouring duties. The appellant submits this residual earning capacity can be quantified at $540 per week.