Brown v Craig and TIPTOP Bakeries

[2007] NSWDC 42

CITATION:	BROWN v CRAIG and TIPTOP BAKERIES [2007] NSWDC 42
HEARING DATE(S):	12-14 March 2007
EX TEMPORE JUDGMENT DATE:	21 March 2007
JURISDICTION:	Civil
JUDGMENT OF:	Sidis DCJ
DECISION:	1. Verdict and judgment for the plaintiff in the sum of $742,107.79. 2. The defendants are to pay the plaintiff’s costs on an indemnity basis from 24.8.07 as to 80% and on an ordinary basis as to 80% prior to that date. 3. Exhibits will be retained for 28 days.
CATCHWORDS:	Effect of future surgery on income loss and domestic care needs
CASES CITED:	Fox v Wood (1981) 148 CLR 438
PARTIES:	Sean Duncan BROWN Dale Russell CRAIG George Weston Foods Ltd t/as TIPTOP BAKERIES
FILE NUMBER(S):	NEWCASTLE 177/05
COUNSEL:	D T Kennedy SC /T R Edwards - Plaintiff P R Cummings - Defendants
SOLICITORS:	Bale Boshev - Plaintiff Sparke Helmore - Defendants

JUDGMENT

HER HONOUR

1 Sean Duncan Brown suffered very serious injury to his right leg in a collision between his motor cycle and a semi trailer driven by the first defendant and owned by the second defendant. The collision occurred at the intersection of Lorna Street and Maud Street Waratah, a suburb of Newcastle, in the early hours of 9 May 2003.

2 Breach of the duty of care and contributory negligence were initially in issue. During the course of the proceedings the parties agreed that the defendants breached their duty of care to the plaintiff, and that the plaintiff contributed as to 20 per cent to the damage caused as a result of the collision. The hearing proceeded therefore to deal only with the assessment of the plaintiff’s damages.

3 No issue was taken concerning the extent and severity of the injuries suffered by the plaintiff. The issues involved the extent to which those injuries have disabled him and will in future disable him, and the extent to which he is to be compensated for non economic loss, out of pocket expenses, care services, and loss of income earning capacity.

4 The plaintiff’s injuries, aside from lacerations and shock, were concentrated on his right upper leg. The injuries were described by the orthopaedic surgeon who treated him at John Hunter Hospital, Dr Verheul, as compound dislocation of the right knee, with extensive degloving of the right thigh, and destruction of the medial, collateral, anterior and posterior cruciate ligaments.

5 The plaintiff underwent several surgical procedures, involving orthopaedic and plastic surgical experts, that were directed at restoring the function of his right knee. Given the essential agreement between the parties, it is unnecessary to deal in these reasons in detail with these procedures. It is sufficient to say that the plaintiff was subjected to a lengthy period of pain and significant disability and immobility.

6 One year after the accident he was reviewed by Dr Verheul, who stated that the plaintiff had made an extraordinary recovery. Dr Verheul explained to the court that this statement was made in the context of an injury which carried a 25 per cent prospect of amputation. He said the plaintiff had avoided this result through the skill of his surgeons and his own work ethic that allowed him to regain a level of independent mobility.

7 The fact is however, that the plaintiff’s current condition is far from full recovery. Assessment of his claim is complicated by medical evidence which established that his condition will deteriorate in future and that he will face up to four knee replacements, increasing his pain and discomfort and increasing his loss of mobility at regular intervals.

8 According to Dr Verheul, the surgery for the plaintiff will involve considerable risk. He suffered a deep venous thrombosis in the course of treatment after the accident, and there is a prospect that this will recur. This provides one complication. The other complication arises from the extensive damage to the ligaments and musculature of the right leg, carrying with it the continued prospect of amputation.

9 At the time of his injury the plaintiff was 27 years old, he is now 31. He was educated to Year 12, and he undertook two years of a computer engineering degree, in which he lost interest. He said his interest was in audio engineering and he undertook a six months course in this field.

10 He obtained work on an employed and a freelance basis in audio engineering. He said the work involved setting up sound systems for bands and public address systems for corporate events. The work involved packing equipment into a van or truck. This equipment included speaker boxes, some of considerable size and up to 100 kilograms in weight. The equipment had to be unloaded and set up. Setting up involved laying out cables on or under stages. After setting up, the work involved operating a sound mixing desk and then, at the conclusion of an event, dismantling the equipment and reloading it into the vehicle to be unpacked at the conclusion of the task.

11 It was evident therefore that the work in which the plaintiff was involved required much physical activity, such as bending, lifting, climbing, crawling and squatting.

12 The plaintiff was employed by a number of parties at the time of his accident. They included Custom Audio, Lake Audio and the Sydney Opera House. For the purposes of the Opera House work, he travelled to and from Newcastle, up to three times a week.

13 On 8 May 2003 he had attended to sound equipment at the Bar on the Hill at Newcastle University. This was a regular Thursday night engagement undertaken as an employee of Lake Audio. He was returning home when the accident occurred.

14 The plaintiff’s evidence was that his ambition had been to build his skills and reputation in sound engineering to the point where he would secure engagements with bands touring in Australia or overseas. He said he believed that he was going well at the time of the accident and that his reputation was building.

15 Prior to the accident he said he enjoyed a number of activities which maintained his fitness level. They included running, skateboarding, snowboarding and basketball. As a result of his injuries, his right upper leg is grossly disfigured by scarring, he is limited as to the weights he can lift, he cannot squat or kneel, and he has regular knee pain. He said his right knee occasionally gives way, he has a problem walking on uneven ground, and he cannot drive for longer than one hour. The sporting activities that he undertook prior to the accident have been relinquished. For fitness he now engages in swimming, cycling, and he is a member of gymnasium.

16 He was certified to return to light work in September 2003. He said he made one attempt to work with Custom Audio but he said that the work was not viable because of the need to employ a second person to do the heavy work.

17 In December 2003 he obtained employment at The Brewery, working 19 to 20 hours a week, over four nights, from Thursday to Sunday. At this venue the equipment is permanently set up so that his work involves only the operation of the sound mixing equipment. He continues with this work, which he said he manages with some difficulties.

18 In March 2004 he returned to work at the Sydney Opera House on one day a week. He was provided with light work, which he continued until the end of 2005, when he said he found the driving to and from Sydney too much to cope with.

19 He also has returned to the Bar on the Hill, from August 2004, for about one month, working for Lake Audio. He said it then became easier for Lake Audio to engage someone who could do the full job at the Bar on the Hill, and he has not worked there since.

20 In March 2005 he obtained a lecturing and tutoring position with the Australian Institute of Music, standing in while a friend took leave for about one year. However, the position was cut by reason of falling enrolments.

21 Currently he works with The Brewery and at occasional events. He continues to look for other work similar to that which he undertakes at The Brewery, where the physical tasks of setting up are not involved.

22 The plaintiff was in a relationship at the time of the accident, which he said ended shortly after. He said he has had some short term relationships since and he expressed some sensitivity to the reaction of girlfriends to the appearance of his leg.

23 There was evidence from two psychiatrists in the case. The plaintiff relied upon Dr Bhandari to argue that psychiatric treatment was required in respect of an adjustment disorder. He was examined also by Dr Selwyn Smith, who found no evidence of any continuing disorder, although he accepted that the plaintiff may have been suffering from an adjustment disorder at a time closer to the accident itself. In his evidence the plaintiff stated that he did not believe that he required psychiatric treatment and he did not intend to obtain any.

24 In assessing the plaintiff’s damages, I turn first to the non economic loss. The assessment that I have made is $200,000. It is based upon the evidence concerning, not only the pain and suffering of the plaintiff to date and his current condition, but on the evidence relating to the likelihood of four further surgical procedures, and the risks which he faces in undertaking those procedures, as well as the deterioration in his condition each time the requirement for a procedure approaches.

25 As far as the plaintiff’s past income loss is concerned, he has claimed the sum of $65,885, based upon a report prepared by Furzer Crestani.

26 The defendants propose a sum of $20,000, inclusive of superannuation at nine per cent, on the basis of an average of the plaintiff’s net earnings for the three years prior to the accident.

27 I have considered the Furzer Crestani report, and against that report I have done a check by calculating the weekly income of the plaintiff, at the time of the accident, by adding back rent and depreciation, claimed as deductions for the purposes of his tax returns.

28 I have taken the figures for the plaintiff’s net income from the schedule prepared by the defendants, Exhibit 7, and to those figures I have added back small sums which represent the amounts deducted for rent and depreciation. On the basis of those calculations, and on the basis that it would be reasonable for the plaintiff to have expected an increasing level of income, up to the $500 net per week which he currently earns, the figure that I arrived at was in fact in excess of the amount propounded by Furzer Crestani. In the circumstances I have decided to allow the amount propounded by Furzer Crestani in the sum of $65,885, extrapolated to date, for past income loss, with superannuation at nine per cent in the sum of $5,930.

29 As to the future, the defendants argued that the plaintiff is now earning in fact a greater sum than he had earned at the time of the accident and that is evident. In my view there were some flaws in the defendants’ proposal. They are as follows:

1. The figures were based upon a three year average when the evidence was that the plaintiff was building a business. As already noted, the figures reflected that his income from his business was increasing to the point where he made a modest profit in the 2003 year.

(2) In calculating 2006 income, the defendants have written back into business income, items for rent and depreciation, claimed as tax deductible expenses, to arrive at a higher return of business income. This was said to indicate that now, even with his limited capacity, his income is greater than prior to the accident. This writing back process has not been done in respect of the prior years’ incomes. If this is done, the figures show that there were greater returns from the business, and that the net income in 2003 was in the region of $460 per week. I have already accepted that the plaintiff could look forward to increasing returns from his business activities in the ensuing years.

(3) The defendants have not taken into account that the figure for 2006 of $500 net per week is the amount earned by the plaintiff over 20 hours a week. Although he has been cleared to work for longer hours and it has been acknowledged by the plaintiff that he could do more, it is one thing to say that he can work and another to find work that he is capable of performing.

The plaintiff impressed me as a person who did not overstate his difficulties and who would take on work if it was within his limits and was available.

(4) The evidence of Mr Kreft, while entirely unhelpful as to his level of income, did establish that work of the type that the plaintiff performed prior to the accident is readily available. According to Mr Kreft he could work twenty four seven . Therefore, even assuming that at his current income earning capacity, the plaintiff worked only 40 hours per week, his income after tax, when adding back depreciation and rent, would be $901 suggesting a loss of $400 per week.

30 I have calculated his income loss on this basis to arrive at a figure of $346,360. In my view a calculation on this basis takes account of the need for the plaintiff to consider training in some less strenuous area of the music industry so as to increase his income.

31 It takes account of inevitable periods when he will be incapable of working because of the deterioration of the condition of his leg and the ongoing treatment that he will require. It also takes account of the need to balance the likelihood that by 2006 he was still building his business to this level of income against the prospect that in future he would have worked for more than 40 hours per week or in areas that were more remunerative. It also allows for an increased level of expenses with increasing income. Superannuation at nine per cent on this figure has been calculated at $31,172.

32 In respect of out of pocket expenses, the past expenses have been agreed in the sum of $32,871.74. For the future I have calculated general expenses at $22 per week, having regard to the plaintiff’s evidence that his cream costs him $2 a week, rather than the $10 estimated by Dr Buckley. The amount allowed is $18,064. Physiotherapy is allowed in the sum of $2,600.

33 The parties agreed that the plaintiff would require four knee replacements at the cost estimated by Dr Buckley, of $35,899.30 on each occasion. The plaintiff assessed the requirement at 10 years from today’s date, the defendants argued for 15 years. I have set the mark at the halfway point, of twelve and a half years for the first interval and at 10 years thereafter. The parties have provided me with an agreed figure for knee replacement surgery in the sum of $44,440.

34 I make no allowance for psychiatric treatment for the reasons already stated.

35 As far as domestic care is concerned, a claim is made on a paid basis. The claim made for the plaintiff, in accordance with Dr Buckley’s report, was five hours a week of housekeeping, and three hours a week for a handyman. Ms McMaster for the defendants suggested four hours a month for housekeeping and 24 hours per annum for a handyman.

36 There is no doubt, based upon the evidence of the plaintiff and the medical evidence, that there is a current need for domestic assistance, that the need will increase as the plaintiff ages, and increase substantially at times when the requirement for surgery approaches and after surgery.

37 It is a difficult exercise to average the plaintiff’s needs. However, in my view his current requirement is three hours a week of housekeeping, and one hour with a handyman. To these four hours, I have added an extra two hours to cover for the intervals of increased need in the future and I have adopted $35 an hour as proposed by Ms McMaster. The amount allowed is $173,413.

38 The Fox v Wood component is allowed in the agreed sum of $6,899.

39 The result is a total sum of $927,634.74, from which the sum of $185,526.95 is deducted to take account of the 20 per cent of contributory negligence.

40 The final figure, and the judgment for the plaintiff therefore is in the sum of $742,107.79.

41 On the question of costs, the plaintiff seeks indemnity costs from the date of an offer of compromise served on 24 August 2006. The amount awarded to the plaintiff is well in excess of the amount offered on that date.

42 The defendants argued that I should take into account, when considering whether to award indemnity costs, the fact that the plaintiff’s claim was expanded shortly prior to the date when the matter was listed for hearing in December 2006 by the service of reports relating to future domestic care.

43 However, even were I to reduce the amount of the award by the amount awarded in respect of domestic care, the plaintiff would still have recovered a figure greater than that which was the subject of the offer of compromise.

44 It has also been put before me that at the outset of the proceedings, issues of liability and contributory negligence was still alive and that these issues were taken into account by the defendants at the time of the offer of compromise.

45 In my view the subsequent resolution of those issues cannot affect the outcome and I am satisfied that the plaintiff is entitled to costs on an indemnity basis. The question is whether he is entitled to only 80 per cent of those costs.

46 Having regard to the agreement reached in respect of contributory negligence, I am persuaded by that argument.

47 The defendants are to pay the plaintiff’s costs on an indemnity basis as to 80 per cent of those costs, from the date of the offer of compromise, that is August 2006, and on an ordinary basis as to 80 per cent prior to that date.

48 The exhibits will be retained for 28 days.

**********