Barber, R. v Meadwell, S.J

[1980] FCA 128

Re: ROBERT BARBER and ROBERT WARWICK ELLISTON
And: STEPHEN JOHN MEADWELL
No. NTG 8 of 1979
Damages
32 ALR 162

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NORTHERN TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
St John J.
Toohey J.
Fisher J.

CATCHWORDS

Damages - assessment - personal injuries - tetraplegia Economic loss - apprentice - loss of earning capacity Appropriate interest rate for discounting - use of Australian Savings Bonds rates

Rule in Cullen v. Trappell - income tax notionally payable on award - income and capital components of lump sum award - adjustment confined to allowance for future economic loss

Sustenance - deduction from loss of earning capacity for lost years and set off against cost of institutional care

Future institutional care - effect of award on payment of Commonwealth benefit - s.59 National Health Act Motor vehicle expenses - cost of modification of vehicle or of driver in lieu of vehicle - deduction where services gratuitously provided

Pain and suffering and loss of amenities - limited usefulness of awards in earlier cases - effect of inflation

HEARING

DARWIN

#DATE 22:9:1980

ORDER

1. The appeal is dismissed.

2. The appellants pay the respondent's costs of the appeal.

JUDGE1

I have had the advantage of reading the reasons for judgment of Toohey J. I agree that the appeal should be dismissed. I agree with the reasons therein expressed with the exception of that part dealing with future motor vehicle expenses but as no question of principle is involved I do not propose to comment further.

JUDGE2

This is an appeal from a judgment of the Supreme Court of the Northern Territory awarding the respondent the sum of $498,070 damages for personal injuries.

The respondent is a single man, born on 25 January 1955. On 8 August 1974 he was seriously injured in a collision on the Stuart Highway between a truck and a car in which he was travelling as a passenger.

In the words of the learned trial judge:

"He now has a complete tetraplegia below the neurological level of C6. This means that he has a paralysis which covers all modalities of function, including motor, sensory, autonomic and involving legs, trunk and the hands. There is remaining function in his biceps and a single extensor of his wrists on both sides. There are no wrist flexors. There is no hope of recovery or even improvement. He does, however, have muscle spasms and suffers pain in the legs. Both conditions are permanent and incurable".

His Honour dealt with the components that went to make up the award of damages in this way:

Past economic loss $30,000
Future economic loss $170,000
Future institutional care $130,000
Past and future medical equipment
and supplies $30,000
Special damages $20,000
Parents' expenses $8,070
Motor vehicle expenses $30,000
Pain and suffering and loss of amenities
$80,000

_________ TOTAL: $498,070

A reading of the judgment shows that in drawing together the various components his Honour left out of account a sum of $2000 assessed for loss of expectation of life. The appellants' counsel acknowledged that this was a slip.

In their grounds of appeal, amplified in particulars supplied at the hearing, the appellants challenged as excessive the items relating to past economic loss, future economic loss, future institutional care, motor vehicle expenses and pain and suffering and loss of amenities. Thus the only items not under attack were past and future medical equipment and supplies, special damages (loss of earnings were treated under the head of past economic loss) and parents' expenses. Implicity if not explicity, the appellants approached the appeal on the basis that a lower figure should be substituted in each component challenged and the total award adjusted accordingly. The respondent emphasised that this Court was concerned with a global award, the components being simply an indication of the way that the trial judge arrived at his ultimate figure.

I shall deal with the components, in the order that they were presented to us.

Past economic loss

The respondent had, on 25 January 1971, begun an apprenticeship as a boilermaker with Mawer Engineering Co. Pty. Ltd. at Gladstone, Queensland. At the time of the accident he was in the fourth year of his apprenticeship but because of examination failures had only recently completed second year. In general he had not proved a very satisfactory apprentice. He had taken leave in April 1974 and gone to Mt. Isa but had not returned to Gladstone when his leave was up.

In challenging the learned trial judge's assessment of past loss of earnings and indeed of loss of earning capacity, the appellants attacked findings that the respondent -

(a) would have resumed his apprenticeship not later than 1 October 1974

(b) would have qualified as a boilermaker

(c) would have completed his apprenticeship at the end of 1975

(d) would have been employed "fairly steadily" as a boilermaker from the end of 1975.

Apparently 1 October 1974 was accepted by his Honour, at the invitation of the respondent's counsel, as the date by which the respondent might have been expected to return to Gladstone and take up his former work. There was a certain amount of evidence for and against the likelihood of this happening but it is apparent that his Honour accepted the respondent's own statement that at the time of the accident he was on his way back to Gladstone "to see my boss and see if I still had a job". It was a finding based primarily on credibility, was supported by other evidence and within the principles expressed in Warren v. Coombs (1978-1979) 23 A.L.R. 405 was one with which there is no reason to interfere.

The finding that the respondent would have completed his apprenticeship at the end of 1975 was a generous one, having regard to his rather unsatisfactory apprenticeship during the years 1971, 1972 and 1973 and to his absence in 1974. But I am unable to say that his Honour was wrong in the conclusion he reached and in any event of itself it played little part in the final award.

More important are the probabilities regarding the respondent's employment once he finished his apprenticeship, had that been at the end of 1975 or for that matter at the end of 1976. Those probabilities concern the sort of work the respondent was likely to have done, the appropriate earnings for that work and the extent to which he might have been expected to remain in employment continously.

His Honour approached the matter on the basis that after completing his apprenticeship the respondent would not have been able to continue with Mawer Engineering because it was not the policy of that company to retain its apprentices as tradesmen. However there was evidence of the availability of other work for boilermarkers in the Gladstone area in the years 1976, 1977 and 1978, with some shortage of work in 1977 and in the first half of 1978.

He calculated the respondent's net earnings from 1 October 1974 to 31 March 1979 (about the date the hearing concluded) at $33,532.20. That figure must have been derived from a schedule handed up by the respondent's counsel to support a claim for loss of earnings to trial. It read:

S.J. MEADWELL

TAXATION YEAR GROSS INCOME NET INCOME FOR

A SINGLE PERSON

1974/75 $5,250 $4,490

1975/76 $8,000 $6,280

1976/77 $9,500 $7,395.20

1977/78 $10,500 $8,246.00

1978/79 $8,500 $6,921.00

$41,750 $33,532.20

The schedule contained an error of addition (it should have read $33,332.20), but that does not appear to have been picked up.

The gross income figures came, I think, from evidence as to what tradesmen might have earned during the relevant period, at least after the respondent might have been expected to finish his apprenticeship. His Honour made some allowance for periods of unemployment to arrive at his figure of $30,000. Again, while on the generous side, it is not possible to say that his Honour was wrong in the approach that he took or the figure that he arrived at.

Loss of earning capacity

The sum of $170,000, fixed for loss of earning capacity, requires closer consideration. It is the product of a number of factors - the respondent's life expectancy, the age to which he was likely to have worked, the wages he might have expected to earn, adoption of an appropriate interest rate to calculate a lump sum and the matter of sustenance during the lost years, i.e. the reduction in the respondent's life expectancy.

There is an added complication. The learned trial judge approached the assessment of loss of earning capacity by reference to the respondent's gross earnings, an approach which authority then demanded. But after this Court heard argument on the appeal, the High Court delivered judgment in Cullen v. Trappell (1980) 29 A.L.R. 1, reversing its earlier decision in Atlas Tiles Ltd. v. Briers (1978) 21 A.L.R. 129. Counsel accepted an opportunity to address further argument to this Court in the light of Cullen v. Trappell. Before dealing with this aspect of the appeal it is necessary to say something about the way in which the sum of $170,000 was reached.

His Honour did not say expressly which figure he took as the respondent's gross salary in order to calculate loss of earning capacity but inferences can be drawn. In his reasons he described how -

"At the present time (that is the date of trial) there are positions being advertised for boilermakers in the Gladstone area paying a salary of about $204.00 gross per week".

He continued:

"The evidence also established that having regard to industrial action and hence periods of no wages being paid, balanced against overtime which is readily available in the industry, boilermakers at the present time in the Gladstone area earn in the vicinity of $12,000.00 per annum gross on the power station, $10,000.00 per annum gross at Queensland Alumina and $8,500.00 gross per annum while working in a workshop".

His Honour made this further comment:

"I have calculated the plaintiff's future economic loss as being 40 years or thereabouts from the date of hearing. On this footing there are notionally 4 to 10 years compensation during which the plaintiff would not have to support himself. Allowance must be made for this and for the ordinary travelling and other expenses associated with work".

By "compensation", it seems that his Honour meant that although authority required the assessment of loss of earning capacity to disregard the respondent's reduced expectation of life, it was necessary to offset some amount by way of sustenance for that reduced expectancy when in actuality the respondent would not have to support himself. His Honour did not particularise "the ordinary travelling and other expenses associated with work". Any deduction made in this regard must have been minimal; the evidence did not warrant anything more.

In dealing with sustenance during that "lost period" of 10 years, the learned trial judge appears to have adopted a figure of $12,500, a figure offered to him by the respondent's counsel in a schedule dealing with loss of earnings. The present value of an annuity required to produce $30 a week (the sustenance figure) for 10 years, with a discount rate of 5%, is $1560 x 7.7 = $12,012. So in that respect the appellants have no cause to complain.

With that allowance made for sustenance and dealing with loss of future earnings, his Honour commented that -

"the lump sum figures at 5%, 6% and 7% are $188,640.00, $164,720.00 and $153,470.00 respectively. Taking into account these figures as a guide, adopting a rate of 5% and allowing for the ordinary vicissitudes of life I provisionally fix a sum of $170,000 for loss of earning capacity".

When regard is had to the schedule of lost earnings produced on behalf of the respondent, the inference is that his Honour assessed loss of earning capacity in this way:

$12,000 a year = $230 a week.

$230 a week for 40 years less $15,600 sustenance to age 65, calculated at the rate of 5% = $188,640.

Allow for ordinary vicissitudes of life and fix at $170,000.

The tables I have used produce a slightly different figure, thus:

$230 a week = $11,960 a year, say $12,000

$12,000 x 17.15 (the appropriate multiplier for 40 years at 5%) = $205,800.

$205,800 less $15,600 = $190,200.

But there is little in it and for the purposes of the appeal I shall accept as accurate the figures offered to and accepted by his Honour.

In the appellants' submission, the learned trial judge was in error in taking as the basis of his assessment $230 a week or $12,000 a year since, it was said, this represented the highest level of pay to which the respondent could possibly have attained and that having regard to the sort of work he was likely to have done as a boilermaker and to prevailing rates of pay, a proper basis would have been $10,000 a year or at the most $11,000.

Mr. J.A. Mawer, the managing director of Mawer Engineering, gave evidence that in June 1978 a boilermaker working on the Gladstone power station could earn $12,121 based on a 40-hour week, with loss of work through industrial action balancing overtime. With Queensland Alumina, the second major source of employment in the area, tradesmen were earning $10,170 on a 40-hour week and in a workshop similar to Mr. Mawer's earnings averaged $8,528. His own employees, whether they were working in his workshop or at Queensland Alumina or on the powerhouse, earned about $10,000 in 1977. He commented that in 1978 a trade's assistant at the powerhouse would earn $11,062, at Queensland Alumina $8,728 and in the workshop $7,280. In summary he concluded:

"We find that most people in the Gladstone area last year in the metal trades earned $10,000".

The respondent called Mr. N.C. Goodwin, the State organiser for the Amalgamated Metal Workers and Shipwrights Union, the industrial organisation concerned with fitters, boilermakers, welders and motor mechanics. He thought that work was reasonably available for boilermakers in the Gladstone area and presented figures based on the relevant metal industry award and on what was being paid in the Brisbane area.

A consideration of those figures and of the evidence of Mr. Mawer leads to a conclusion that an amount somewhere in the range of $10,500-$11,000 a year would represent the likely earnings of the respondent at the time of trial had he completed his apprenticeship and remained in the industry as a welder.

Adopting $11,000 as the respondent's likely earnings, the tax payable (1978-1979 was accepted as the relevant fiscal year) was $2380.84, resulting in net annual earnings of $8,620. The appropriate multiplier over 40 years at 5% is 17.15 and at 6%, 15. Thus -

$8620 x 17.15 = $147,833
Less sustenance 15,600

__________ 132,233.

$8620 x 15 = 129,300

Less sustenance 15,600

__________ 113,700.

It may be said that this assumes that the respondent would have remained in continuous employment and that some reduction should be made for likely periods of unemployment, by reason both of the economic situation and the respondent's inclination, at least in his early years, to move around seeking work and enjoying life in the bush. But not all contingencies are adverse (Teubner v. Humble (1962-1963) 108 C.L.R. 491 at pp.508-510, Cullen v. Trappell supra, at p.26) and the amounts of $132,233 and $113,700 provide reasonable starting points.

What must now be considered is the appropriateness of any particular interest rate and the implementation of the aspect of Cullen v. Trappell that has regard to tax payable on the income produced by the lump sum awarded.

Interest rates

To assess the various components of general damages, his Honour adopted for the purpose of lump sum calculations an interest rate of 5%. That rate was attacked by the appellants as too low and this Court was invited to lay down in some authoritative way a direction as to the interest rate to be adopted for such calculations.

Questions of judicial hierarchy and precedent apart, I do not think it is appropriate to attempt this. What the Court may usefully do, perhaps, is examine the principles to be applied.

The adoption of a particular rate is said to be a matter for the discretion of the Court. But it is a judicial discretion, one to be exercised according to some principle. To say that there should be some uniformity

JUDGE3

does not mean that the interest rate is fixed indefinitely. It means only that acceptance of the relevant principle should lead to some predictability in the rate to be applied from time to time.

In any event, what is meant by uniformity? Is it something to be sought within a particular State judicial system or within Australian courts generally? Although in the present case the Court was not provided with any information regarding prevailing interest rates, except in respect of New South Wales, some variation may be discerned in the reported decisions, not only by reference to particular judges but also to some extent from State to State.

In Mallett v. McMonagle (1970) A.C. 166, an appeal concerned with an award under the Fatal Accidents Acts, Lord Diplock discussed the effect of inflation, the extent to which that can be met by prudent investment, and the effect of fiscal policy, concluding:

"In my view, the only practicable course for courts to adopt in assessing damages awarded under the Fatal Accidents Acts is to leave out of account the risk of further inflation, on the one hand, and the high interest rates which reflect the fear of it and capital appreciation of property and equities which are the consequence of it, on the other hand. In estimating the amount of the annual dependency in the future, had the deceased not been killed, money should be treated as retaining its value at the date of the judgment, and in calculating the present value of annual payments which would have been received in future years, interest rates appropriate to times of stable currency such as 4 per cent. to 5 per cent. should be adopted" (at p.176).

The percentages mentioned reflect the situation in England at the time of the various matters referred to by his Lordship. But in its more general statements it represents an approach taken by the Supreme Court of New South Wales in Jackson v. Jackson (1970) 2 N.S.W.R. 454, Lindsley v. Hawkins (1973) 2 N.S.W.L.R. 581 and Beneke v. Franklin (1975) 1 N.S.W.L.R. 571.

In requiring that money should be treated as retaining its value at the date of the judgment, his Lordship anticipated the view adopted by the High Court in O'Brien v. McKean (1968) 118 C.L.R. 540.

Future earnings are discounted -

" . . . because the award of damages results in the immediate payment of a lump sum which, by some form of investment, may earn increments between the time of that payment and the time when the lost earnings would have been paid in the future" (Brennan J. in Armstrong v. Rudd (1978) 21 A.L.R. 166 at pp.170-171).

Some judgments suggest that an appropriate rate for discounting should represent the difference between the inflation rate and the interest the undiscounted sum might be expected to earn.

But I question whether that is the way the discount rate should be approached. Awards of damages are made in terms of and by reference to contemporary currency values. As pointed out by Lord Diplock in Mallett v. McMonagle supra, a plaintiff may, by prudent investment, to some extent offset the effect of inflation.

In any event:

"He can protect himself against the possibilities of continuing or increasing inflation to the same extent as any other citizen with an investible fund" (Barwick C.J. in O'Brien v. McKean supra, at p.547).

I am of the opinion that the proper approach is that mentioned by Mr. L. J. Cohn: "Assessment of Damages in Fatal and Non Fatal Accident Cases" 29 A.L.J. 553 at p.556 when, referring to the rate of interest on Commonwealth loans, he said:

"Some reasonable rate must be used, and to use this rate, assuming as it does the investment of the sum received by way of damages, allows for that investment to be in securities which combine the virtues of maximum security, ability to be readily realised and long term".

As suggested by Professor Luntz: Assessment of Damages p.208:

" . . . the plaintiff generally . . . cannot be expected to take risks by investing in high-interest bearing debentures or even less trustworthy ventures . . . Furthermore, the capital must be drawn on progressively; therefore, the investments must be readily realizable, a virtue which not even semi-Government loans possess. Commonwealth bond rates are easily ascertainable and also vary slightly according to the term of the loan, so that they are readily applicable to an individual case".

Neither this Court nor the learned trial judge was provided with any information regarding Commonwealth loans. And the matter was not argued that way. If one is permitted to take judicial notice of the fact, the Series 15 Australian Savings Bonds current at the hearing of the appeal carried an interest rate of 9.25% a year maturing on 1 July 1987, with an effective interest rate of 7% if redemption is effected before 1 July 1980. At the time of writing these reasons, Series 17 bears interest at the rate of 10.25% a year, maturing on 1 April 1988, with an interest rate of 7.5% if redeemed before 1 April 1981.

There may be other investments combining the virtues described by Mr. Cohn of "maximum security, ability to be readily realised and long term".

In the absence of evidence and argument along these lines, either at trial or on appeal, it is not possible to say that his Honour erred in adopting a rate of 5%. I bear in mind too the remarks of King C.J. (endorsed by the other members of the court) in Rendell v. Paul and Earle (1979) 22 S.A.S.R. 459 at p.466:

"Under current conditions, and bearing in mind the extent to which the rate of interest on long-term Government loans is influenced by inflationary expectations, and the current yield on sound equity stocks which might be thought to provide some limited protection against erosion of the value of the investment by inflation, it must be difficult to justify the use of a rate higher than 5 per cent".

Allowance for income tax notionally payable

In Cullen v. Trappell, Gibbs J., having reaffirmed his view in Atlas Tiles Ltd. v. Briers that British Transport Commission v. Gourley (1956) A.C. 185 (Gourley's case) should continue to be followed in Australia, discussed the method by which damages for economic loss are usually assessed. At p.9 he commented:

"I can see no justification for using a method of an actuarial or mathematical kind in assessing damages, without making the allowances that the method itself requires in order to give the correct result. As a general rule, therefore, the application of this method seems to make it necessary to take into account the tax that would be notionally payable on the income from the invested sum".

It is implicit in Cullen v. Trappell, and this was the view taken by the Court of Appeal in New South Wales in Traecey v. Churchill (5 June 1980), decided shortly afterwards, that in allowing for tax one starts with the interest rate ordinarily thought appropriate for discounting. In Cullen the rate happened to be 6% as it was in Traecey. In the present case it is 5%.

Two questions then arise. The first concerns the method by which the respondent should be compensated for tax notionally payable. The second asks how much of the amount should be taken into account in this computation. Is it only the component attributable to loss of earning capacity?

The method adopted in Cullen was to alter the discounting rate from 6% to 4% to allow for 32c in the dollar income tax. "Adopted" is perhaps too strong a term; rather it was the approach taken by the parties. But the court did not suggest that it was inappropriate.

In Traecey, Moffitt P. examined in great detail the tax implications of an award. It is not enough to determine the tax notionally payable on the income produced by the investment of the lump sum. Based as it is on an annuity calculation, part of the amount produced will come from capital.

In Cullen at p.10 Gibbs J. explained:

"As time goes on, the proportion of capital in the sum notionally drawn each week by the plaintiff will increase, and the income component will decrease. Therefore, the notional tax on the income from the damages awarded for loss of earning capacity can never equal the actual tax which would have been paid out of the plaintiff's pre-accident earnings".

At the same time the gap between the two does diminish the longer the period over which the calculation is made. In the present case it is a period of 40 years.

Whether or not compensation for tax extends to the whole of the award, it is -

"proper to have regard to the actual situation of the plaintiff, in so far as it will affect the rate of the notional tax, provided that the necessary evidence has been adduced". (Gibbs J. in Cullen at p.11).

Having regard to the other components in the award, in particular the allowance of $80,000 for pain and suffering and loss of amenities, the notional income would be taxed at a rate no less than 32c in the dollar.

For the reasons given by Moffit P. in Traecey, which I respectfully adopt, it is appropriate to strike a discounting rate of 3 1/3% to compensate for tax. Applied to the net figure of $8620, this picture emerges:

At 3% over 40 years the multiplier is 23.11
At 4% over 40 years the multiplier is 20.55
$8620 x 23 = $198,260
$8620 x 20 = $172,400.

At 3 1/3% the amount lies in between, somewhere about $180,000. After allowing for sustenance, the figure is about $165,000.

On this approach the amount of $170,000 assessed by the learned trial judge was reasonable, even though arrived at in a different way and with a different base figure.

The appellant submitted that it was only the assessment for loss of earning capacity that should be taken into account for this tax adjustment. In Cullen the amount so assessed was $40,000 out of a total amount of $109,111 for general and special damages. There are passages in the judgment of Gibbs J. that confine the adjustment to future economic loss, see pp.8, 10, 11.

Traecey leaves the point at large. Reference in that judgment to Cullen as deciding that -

"the tax notionally payable on the interest to be earned by investment of the sum awarded" (Moffit P. at p.3, also pp.4, 5)

must be taken as a reference to the sum awarded for future economic loss. And that was the approach taken in Traecey where the amount of future economic loss was $70,000 out of a total award of $104,000.

In the present case the allowance for future economic loss is just over 1/3 of the total award with a substantial allowance for items of future expenditure.

In my view, Cullen must be taken as having decided that the adjustment is confined to the allowance for future economic loss although logically it may be hard to distinguish that component from others, at least those where future expenditure is anticipated. In the absence of a cross-appeal and any suggestion by the respondent that the award should be increased, it is unnecessary to take this aspect any further.

Sustenance

The learned trial judge used $30 a week as a sustenance rate for making a deduction from loss of earning capacity during the lost years and also for making a set off against cost of institutional care. This amount was attacked by the appellants as too low.

In reality it is too low but one has to have regard to the legal principle by which it was reached.

"What is to be avoided is double compensation and, as is apparent from what was said by their Lordships in Shearman v. Folland (1950) 2 K.B. 43; (1950) 1 A11 E.R. 976, it is not a question of estimating the plaintiff's likely future costs for board and lodging and treating them as an outgoing which the consequences of the defendant's tortious act have now spared her from making; that is a notion which is as distasteful as it is misconceived. Rather it is a matter of her already having been compensated for future board and lodging as a component of hospital expenses, so that to disregard this and award the full sum for lost earning capacity, part of which would be used to provide the very item of board and lodging already compensated for, would be to award compensation twice over. Accordingly, "some no doubt fairly arbitrary proportion of the present value of future hospital expenses regarded as attributable to board and lodging must be taken and deducted from the present value of lost earning capacity; it will be quite irrelevant how expensively or how frugally the plaintiff might in fact have lived had she not been injured" (Sharman v. Evans (1976-1977) 138 C.L.R. 563 per Gibbs and Stephen JJ. at p.576).

In Lim Poh Choo v. Camden and Islington Area Health Authority (1979) 3 W.L.R. 44 Lord Scarman, with whom the other members of the House of Lords agreed, referred to the "domestic element" to be deducted from the cost of future care as something to be approached " . . . on the basis of a future actuality (subject to the uncertainties of life)" (at p.56).

In the present case the rate of $30 a week was agreed between the parties as an appropriate deduction to be made from hospital expenses incurred to the date of trial. It was made clear to this Court there had been no agreement that the same rate should apply to items of general damages. But the implication was that this was the source of the figure used by his Honour.

As an "arbitrary proportion", it is not possible to say that his Honour was wrong. If the appellants wished to challenge the sum as being in truth too low, (questions of legal principle aside) I am of the opinion that the evidentiary onus lay upon them. It was one that may have been satisfied by some specific evidence drawn from the respondent or perhaps from some more general figures such as those for C.P.I. calculations. No such evidence was forthcoming and I see no reason why the rate adopted by his Honour should be interfered with.

Future institutional care

The learned trial judge accepted the appellants' submission that future care should be calculated on the basis that the plaintiff would remain in a nursing home. That finding and his Honour's assessment of the present weekly cost of institutional care at about $200 a week were not attacked.

What the appellants did challenge was the interest rate adopted by his Honour for making the appropriate calculation and also the amount deducted for sustenance. The amount awarded was $130,000. Since his Honour used the figure of $30 a week for sustenance, it seems clear enough that he worked on a net figure of $170 a week, compounded at the rate of 5% to produce a figure of $136,000, rounded off to the amount awarded.

I have already dealt with the matter of interest rates and sustenance in regard to loss of earning capacity and for the reasons given there would not interfere with the figure arrived at by the court.

A further attack on the sum of $130,000 turned upon the operation of s.59 of the National Health Act 1953, introduced by amendment No.60 of 1976. In effect that section provides that where a patient in an approved nursing home has received or established his right to receive payment by way of compensation or damages in respect of the injury for which he is being treated, the Minister may make a determination having the effect that no Commonwealth benefit is payable in respect of expenses incurred or likely to be incurred for nursing home care.

There was evidence from an officer of the Department of Health that the Minister would probably make such a determination with the result that the respondent, or more accurately the nursing home, would receive no Commonwealth benefit. In other words the respondent would be left to meet the cost of nursing home care himself. His Honour accepted that evidence and it has not been shown that he was wrong in doing so. The manner in which his Honour calculated damages, with an express allocation to future care based on the assumption that the respondent would be liable for that expense, is likely to ensure such a ministerial determination.

Motor vehicle expenses

Before the learned trial judge the respondent claimed the sum of $4,000 for modification of motor vehicles from time to time so that he might drive himself. However his Honour concluded that, given the extent of the respondent's disability, he was unlikely to obtain a driving licence. His Honour also concluded that such modifications to enable others to drive the respondent "would be on the luxury side rather than on the reasonableness side". Nevertheless, because the respondent was likely to live out his life in an institution he thought it proper to provide for outings and made an allowance on the basis that the cost of a driver for about 10 hours a week at about $4 an hour would amount to $32,500 which his Honour reduced to $30,000.

The appellants approached this matter to a large extent on an evidentiary basis, contending that there was nothing in the respondent's testimony to warrant a conclusion that he might wish to be driven for about 10 hours a week. Nor, incidentally, does there appear to have been any evidence as to an appropriate rate; however $4 an hour is hardly excessive.

In my view the matter should be looked at also as one of principle. Griffiths v. Kerkemeyer (1976-1977) 139 C.L.R. 161 concerned a quadriplegic cared for at home and the matter of an allowance for the cost of nursing services provided by a relative or friend. Gibbs J. held that two stages were involved.

"First, is it reasonably necessary to provide the services, and would it be reasonably necessary to do so at a cost? If so, the fulfilment of the need is likely to be productive of financial loss. Next, is the character of the benefit which the plaintiff receives by the gratuitous provision of services such that it ought to be brought into account in relief of the wrongdoer? If not, the damages are recoverable." (at pp.168-169).

The evidence indicated that the respondent's brothers and a friend took him out in their cars from time to time, as did the nurses at the nursing home. That sort of arrangement was likely to continue and to some extent it must be seen as a "domestic" arrangement not productive of financial loss and for which no compensation is recoverable.

In part too some overlap is involved in that compensation for pain, suffering and loss of amenities has regard to the respondent's inability to move around without assistance.

In my opinion $30,000 is more than can be justified under this head, having regard to the considerations mentioned and to the fact that payment is made as a lump sum. An amount of $10,000 is more appropriate.

Pain and suffering and loss of amenities

Under this head the learned trial judge awarded a figure of $80,000. That was attacked as excessive. To some extent the attack was based upon decisions of the courts in which the plaintiff had no or no true appreciation of the extent of his or her disability; such decisions are no guide in the present case.

Reference was made to Sharman v. Evans supra and in particular to the judgment of Gibbs and Stephen JJ. at pp.77-79 when their Honours concluded that a sum of $80,000 in respect of pain, suffering and loss of amenities of life was too high. But I do not read that decision as setting some sort of a ceiling against which all awards must be measured and necessarily scaled down. In any event inflation makes unsatisfactory a comparison with past decisions.

I would not disturb this allowance.

Conclusions

In Sharman v. Evans, Gibbs and Stephen JJ. commented at pp.589-590:

" . . . while the process . . . of analysing the separate maximum amounts possible under the various heads of damage will be of assistance in a re-assessment, they cannot of themselves lead to a conclusion on the amount proper to be substituted".

But in my view the appellants have not made good the first step of satisfying us that there should be a re-assessment. Although I am of the opinion that the motor vehicle allowance was too high, it may be that in the light of Cullen v. Trappell, the assessment for loss of earning capacity was on the low side. And the $2000 for loss of expectation of life must be brought into account.

If the learned trial judge erred in respect of the motor vehicle allowance, the error was of the order of 4% only in the total award and does not warrant re-assessment. Nor, viewed in its entirety, was the award excessive. In what is fast becoming a mathematical process, it is as well to recognise that an award of this size must truly reflect the exercise of judgment by the trial judge.

The appeal should be dismissed. In this matter I have read in draft form the judgment of Toohey J. I agree with his reasons and his conclusion that the appeal should be dismissed.