Devlaun Pty Ltd v Tapp
[1991] TASSC 43
•25 March 1991
Serial No 14/1991
List "A"
COURT: SUPREME COURT OF TASMANIA (FULL COURT)
CITATION: Devlaun Pty Ltd v Tapp [1991] TASSC 43; A14/1991
PARTIES: DEVLAUN PTY LTD
v
TAPP, Paul Maurice
FILE NO/S: FCA 81/1990
JUDGMENT
APPEALED FROM: Tapp v Devlaun Pty Ltd B49/1990
DELIVERED ON: 25 March 1991
DELIVERED AT: Hobart
JUDGMENT OF: Cox, Underwood and Zeeman JJ
Judgment Number: A14/1991
Number of paragraphs: 45
Serial No 14/1991
List "A"
File No FCA 81/1990
DEVLAUN PTY LTD v PAUL MAURICE TAPP
REASONS FOR JUDGMENT FULL COURT
COX J
UNDERWOOD J (Dissenting)
ZEEMAN J
25 March 1991
Order of the Court
Appeal and Cross Appeal dismissed
Serial No 14/1991
List "A"
File No FCA 81/1990
DEVLAUN PTY LTD v PAUL MAURICE TAPP
REASONS FOR JUDGMENT FULL COURT
COX J
25 March 1990
The facts relevant to this appeal and cross–appeal are stated in the reasons for judgment of Underwood J, and I adopt his statement of them, subject to the reservation noted by Zeeman J.
The first question for consideration is whether it has been shown that the learned trial judge was in error in making an award of $135,517.36 for damages for that part of the plaintiff's (respondent's) loss of earning capacity which he dealt with under the heading "future economic loss". Although a plaintiff's right of action is complete at the time when his injuries are sustained and loss of earning capacity consequent thereon represents a separate head of damages, there are good reasons why it has been found convenient to assess an injured plaintiff's loss by reference to the actual loss of wages which occur up to the time of trial and which can be more or less precisely ascertained, and then having regard to the plaintiff's proved condition at the time of trial, to attempt some assessment of his future loss (Graham v Baker (1961) 106 CLR 340). That being the approach taken in the present case, it is convenient to consider in turn the criticisms made of his Honour's assessments of the plaintiff's future economic loss and of his losses prior to trial (which he allowed in the sum of $35,712.32). This court should not, however, interfere unless the damages awarded are shown to be the result of the judge acting upon a wrong principle of law or as the result of a misapprehension by him of the facts or of a wholly erroneous estimate by him of the damage suffered (Davies v Powell Duffryn Associated Collieries Ltd. [1942] AC 601 at p617 cited with approval in Miller v Jennings (1954) 92 CLR 190 at pp195–196 and Gamser v Nominal Defendant (1977) 136 CLR 145 at pp148–149).
His Honour specifically found that the plaintiff had lost his ability to work as a commercial vehicle driver and that "this loss" represented "say, 90% loss of his income earning capacity, given his other disabilities and his originally poor aggregation of income earning skills", but a few sentences later emphasised that the court was assessing "the destruction of such earning capacity as he had at the time of the accident". His Honour was not therefore confining his finding of lost capacity to that one potential for work as a commercial vehicle driver and indeed his findings that the injuries and sequelae arising out of the accident had had the result that a variety of other manual activities "are now in substance and practical effect closed for the plaintiff" confirms this. Such separate potential for work as a storeman as he possessed prior to and after the accident was not accordingly overlooked by his Honour, who, in any event, found that his obtaining of the opportunity to engage in that kind of work in his last place of employment, namely Bestobel, was "a rather fortunate exception to what would have been likely to be a very poor employment outlook" and had come about "only in the first place through the active assistance of the Commonwealth Rehabilitation Service who paid his wages for the first period of his employment". It is implicit in his Honour's findings that the plaintiff's prospects of future employment are bleak if not almost non–existent. Such a conclusion is, in my view, justified by the evidence. I do not think it can be said that an assessment on the basis that the plaintiff's already limited income–earning capacity has, as a result of the accident, been destroyed to the extent of approximately 90% involves any misapprehension of the facts.
This is not, however, the only factor to be considered in making an award for future economic loss. The court must assess the degree of probability that other events might yet occur, whether adverse or beneficial (Bresatz v Przibilla (1962) 108 CLR 541 at p546) and adjust its award to reflect the degree of probability (Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 at p643). To allow for such contingencies, the learned trial judge adopted the approach of discounting by a percentage the present value of the right to receive 90% of the plaintiff's weekly earnings with the defendant (appellant) over the remaining 23 years until the plaintiff should reach the age of 65. The percentage he selected was 35%. This figure is significantly higher than one would normally expect because of the additional physical, social and psychological disabilities to which the plaintiff, even before the accident, was subject. If error it be, however, to take so high a percentage it is not one which avails the defendant on its appeal. But in respect of the plaintiff's cross–appeal, I do not think it can be said, having regard to the severity of those disabilities and to their potential for disruption of his working life, that the discount is so high that it demonstrates a misapprehension as to the facts or leads to an erroneous estimate of the plaintiff's damage.
Although it may be convenient to approach the assessment of future economic loss on the basis of an estimate of lost future earnings discounted for contingencies, it is the final figure which the court must be satisfied is erroneous before it may interfere. That represents a synthesis of the various relevant factors in any given case. Different fact finders might attribute, perhaps, a lower percentage figure than 90% to the estimate of lost earning capacity, and again a lower percentage than 35% to the contingency factor while producing much the same result. Some may adopt the totally different "lump sum" approach, but at the end of the day it is only if the damages awarded are shown to be an erroneous estimate that an Appeal Court can interfere. I am not persuaded that such error has been demonstrated in this case.
I agree with my brethren that some allowance for contingencies ought to have been made in respect of past economic loss. However, in view of the fact that the plaintiff continued in employment with few interruptions until mid–September 1988, approximately 21 months before the trial, thereby demonstrating the unlikelihood of a loss of or interference with employment from pre–existing causes for a period of four years or so after the accident, I think such an allowance could properly have been quite modest, and in all the circumstances the failure to make it cannot be regarded as a sufficient error to justify our intervention, especially when balanced against the modesty of the award for damages for pain, suffering and loss of amenities of life. In itself that sum ($15,000.00), though at the lower end of the range, has not, in my view, been shown to be erroneous.
I would dismiss both appeal and cross–appeal.
File No FCA 81/1990
DEVLAUN PTY LTD v PAUL MAURICE TAPP
REASONS FOR JUDGMENT FULL COURT
UNDERWOOD J
25 March 1991
The learned trial judge assessed the plaintiff's damages in the sum of $187,701.68 under the following heads:
"Pain, suffering and loss
of amenities of life $ 15,000.00
Pharmaceutical expenses 1,248.00
Cost of recliner chair 199.00
Cost of jacket to fit over
surgical brace 25.00
Economic loss prior to trial 35,712.32
Future Economic Loss
Net weekly loss at $286.70 per
week for 23 years, using 3%
discount tables $286.70 x 808 = $231,653.60
Less 10% discount 23.165.36
$208,488.24
Less 35% 72.970.88 135.517.36
$187.701.68"
On its appeal the appellant (defendant) contended that the amounts allowed for past and future economic loss are manifestly excessive and relied on the grounds that the learned trial judge:
"a)Failed to take into account or give sufficient weight to the evidence of Mr Howard Bye, Orthopaedic Specialist, in relation to the Respondent's physical condition and capacity to work;
b)Failed to take into account or give sufficient weight to:
(i)the Respondent's work history both prior to and after the accident the subject of these proceedings;
(ii)the circumstances in which the Respondent sought and received an invalid pension; and
c)Failed to take into account or to give sufficient weight to the psychiatric evidence adduced at the trial which the Appellant submits established that the Respondent's work capacity was not impaired as a result of any depressive symptoms or similar condition, [and]
d)That such award was against the evidence."
By a cross–appeal, the respondent (plaintiff) claimed that:
"(i)the sum of $15,000.00 allowed for general damages is manifestly inadequate on the grounds that:
aHis Honour failed to take into account or give sufficient weight to the continuing pain and discomfort experienced daily;
bThe amount of general damages awarded is inconsistent with His Honour's finding (which is not disputed) that the Respondent had lost 90% of his earning capacity; and
cAn award of $15,000 fails to recompense the Respondent for the loss of amenity of life suffered by him.
(ii)that the percentage (35%) deducted for contingencies is manifestly excessive on the grounds that:
aHis Honour failed to take into account or place sufficient weight upon the evidence of Mrs Andrea Twell to the effect that the Respondent was virtually unemployable; and
bHis Honour erred in concluding that in any event and without an accident the Respondent would have been subject to a substantially greater chance of having his income earning capacity destroyed."
No finding of fact was attacked and consequently the appeal and the cross–appeal fall to be determined in accordance with the following principles:
"The assessment of damages by a judge is an exercise of a discretionary judgment, and as such must stand unless an appellate court is clearly satisfied that the judge's function has not been duly performed; therefore an appellate court cannot properly interfere with the award merely because it would itself have awarded more or less: it may interfere only if it finds that the award was erroneously reached, whether through mistake of law or misapprehension of the evidence or otherwise; and the largeness or smallness of the amount awarded is not by itself a sufficient reason for being so satisfied unless it is so extreme as to convince the appellate court that the assessment is erroneous to the point of actual unsoundness." [Per Kitto J, Minchin v Public Curator of Queensland [1965] ALR 91 at p96].
See also Miller v Jennings (1954) 92 CLR 190; Davies & Anor, v Powell Duffryn Associated Collieries Ltd [1942] AC 601 at pp 616–619; Walford v Milner FCA 70/87.
With respect to the respondent's credit, the learned trial judge found:
"With his admitted poor memory, and a general air of vagueness and uncertainty about his evidence, I treat little of what he said as to remembered detail as accurate. However, l repeat, l did not regard him as untruthful."
The respondent, a married man, was aged 37 years at the time of the accident and 42 years at the date of judgment. He was employed by the appellant as a storeman/driver transporting goods and fruit from a warehouse or depot in Moonah to various retail outlets around Hobart and suburbs. On 27 July 1984, the respondent was standing on the tray of a truck pulling a bin of fruit into a position convenient for a pallet lifter to unload it. The top rail or plank of the bin gave way and the respondent fell about four feet backwards off the tray of the truck and hit his head on the ground. He was taken to the Royal Hobart Hospital where he remained for a week. He complained of neck, left shoulder and hand pain. Radiological examination showed a fracture of the neutral arch C2–3 with some minor subluxation and a minor fracture of the right occipito–parietal region. Initial treatment was with bilateral sand bags and, when the pain subsided, the respondent was fitted with a neck brace. This he wore for about three months. Repeat x–rays showed the subluxation to be reduced and final x–rays showed that the fractures involved the spinous process and laminae of C2. Dr Bye, orthopaedic surgeon, reported that "from a structural point of view Mr Tapp has settled very well following a potentially disastrous injury." Although the fractures healed well, there is left a little mal–alignment. Since the accident the respondent has complained of worsening neck pain, restriction of cervical movement, almost continuous headaches and pins and needles. The learned trial judge made the following findings of fact:
"The plaintiff gave evidence that he has had nagging neck pain ever since the accident, and in recent times it seems to have been getting worse. This neck pain interferes with everyday activities like gardening or lawn mowing, and prevents him from playing sport or jogging. He used to jog to keep fit and also played indoor cricket, both since the accident, but had to give those activities up because of the neck difficulty. His neck gives him pain just about all the time. It is a nagging pain, and if he moves his head quickly, he seems to get dizzy. The pain is persistent, it wakes him up during the night, and makes it difficult for him to sleep. He keeps waking up through the night with a headache. He will take a couple of tablets, and eventually get back to sleep, but only for short periods and then has to sleep through the day. He gets moody, short tempered and depressed. He also gets pins and needles in his hands, and aches in his knee joints."
The respondent suffered from some chronic problems not associated with the accident. They were described by the learned trial judge as follows:
"He has had a severe hearing disability since he was about 2 years old, probably due to rheumatic fever. He wears two hearing aids. This disability has made it very difficult for him to work in any job which requires communication ability and skills. He believes he has about a 64% loss of hearing in one ear and about 32% in the other. This disability caused him to learn to lip read from about 1986. This was after he had consulted the Commonwealth Department of Community Services and Health, which is concerned with occupational rehabilitation amongst other things. They also advised him about obtaining hearing aids for his deafness. He has a shy and introverted personality, and is a very unconfident person generally. His 64% and 32% hearing defect is without hearing aids, his effective deafness with them is substantially less than that; but there is no specific evidence of how much hearing aids improve that problem.
.....
The plaintiff has had an alcohol problem for most of his adult life. In recent times he has taken a voluntary course at John Edis Hospital for treatment for excessive consumption of alcohol. He has lost his driver's licence on two occasions for that reason. This problem has been present since he was about 16 years old. He has suffered memory blackouts and other adverse effects from this cause. He hopes that his alcohol problem is 'cured now'. He also has a urination problem which causes him difficulty and embarrassment. He has had a minor operation done to improve this problem.... His knee aches and pains began to come on in about 1988. [Four years after the accident]. He suffers from an aching back also, but he has had this also from well before the accident. He did not think that back aches had ever caused him to stay away from work before the accident."
From psychiatric evidence, the learned trial judge found that the respondent's personality was vulnerable with life long problems of confidence associated particularly with his deafness. This state of affairs rendered the respondent less able to cope with his chronic disability than a person with a more robust personality. The imposition of the tortously caused trauma on the vulnerable personality, deafness and alcohol problems contributed to symptoms of depression which aggravated the respondent's perception of pain and disability. The learned trial judge summarised this aspect of his findings in the following manner:
"In summary, the plaintiff has escaped from a potentially life–threatening accident with injuries which although serious, have healed very well, and left him with little in the way of observable structural defects. However, he has been left with persistent chronic nagging neck pain and headaches which afflict him for the greater part of his conscious time, and cause him to sleep poorly. I am not able to find that his 'pins and needles', back and knee pains are on the balance of probability [sic] attributable to the accident, but the chronic neck and shoulder pains and headaches and tinnitus are so attributable. He also has a depressive disorder which is a result of his 'myriad of symptoms', to use Mr Bye's expression, but the largest contributing cause is the effect of the accident. I cannot find, however, that the accident was a precipitating cause of his depression, nor that he would not have been suffering from depressive symptoms had there been no accident. The troubles and separation from his wife, combined with his alcohol, urinary and deafness problems, combined with his lack of confidence may well have produced such symptoms. However, it is reasonable to infer that the chronic pain resulting from his accident contributed substantially to the troubles with his wife. Thus the accident is a substantial factor in his depressed condition."
Mr Sweeney, counsel for the appellant, expressed no complaint about the foregoing findings. His attack on the award for past and future economic loss was based substantially upon the unchallenged evidence of the respondent's work history both before and after the accident. It was submitted that it, coupled with the medical evidence, demonstrated that with respect to past economic loss, the learned trial judge erred in attributing the whole of the sum claimed to the appellant's tort and, with respect to both past and future economic loss, in finding that the respondent's earning capacity had been tortously reduced by 90%.
The respondent left school at the age of 16 having reached grade 9 level. Although literate, he said that he was not a very good student at school, probably due to his hearing problem. Shortly after leaving school the respondent got a job as a storeman with a wholesale company. After a couple of months he left this job and started work with F R Bye Pty Ltd also as a storeman. The respondent's evidence about his work history over the following 21 years prior to the accident was, like much of his evidence, somewhat vague. He commenced his employment with the appellant only a month before the accident in July 1984. During the preceding two months or so he had been unemployed. Prior to that, he had been working with F R Bye Pty. Ltd, for about 8 years. The respondent also said that prior to the period of 8 years there had been other periods of employment with F R Bye Pty Ltd; "I left F R Bye a couple of times and I've gone back".
With respect to his work history between leaving school and the date of the accident the following passage is taken from the cross–examination of the respondent:
"So there's a gap if you life, or a period of 21 years or so. During that period of time were there periods when you were not working?... Yes I believe so yeah.
And were they lengthy periods of time when you were unemployed, unable to obtain a job?... No, I don't believe so, no.
Well what do you think was the longest time when you were not working after you left school?... I'm not sure – roughly a couple of months – I can't remember.
Did you find it difficult when applying for jobs that you had this hearing impairment?... No.
What type of work were you doing during that 20 odd years or so before you had your accident?... Usually stores work.
I'm sorry?... Usually storeman work.
Yes, I see, and was some of that light store work?... Yes."
The respondent left F R Bye Pty Ltd in 1984 over a union demarcation dispute. Although in the passage set out above the respondent said that his work was usually stores work, it is clear from his description of the demarcation dispute that he was not then working as a storeman. He said that he was asked to fill up the shelves, a storeman's job, but he refused because he was a member of the Transport Workers' Union and "I didn't want to do storeman's work".
The respondent's employment with the appellant was of a casual nature although, as the learned trial judge observed, "how casual, the evidence does not show". The respondent returned to work with the appellant in November 1984, four months after the accident, but found that driving a truck made him dizzy and caused neck pains. On his first day back the respondent lost a load off his truck and was told at the end of that day that he was not required to work the following day. After a week, during which the respondent made several enquiries of employees of the appellant company with respect to his future employment, he applied for and obtained unemployment benefits. He remained unemployed for a period of about 16 weeks when he gained employment as a storeman with Saveway Stores, a food wholesaler. In this job the respondent drove a forklift truck in the store moving pallets of boxes. He was able to manage this work, although looking up whilst driving the forklift truck caused neck pain and required the use of analgesics. The respondent lost this job after about 22 months when his employer got into financial difficulties. The learned trial judge found that the respondent might have retained this job indefinitely had his employer not gone into liquidation. Whilst at Saveway Stores, the respondent earned about $20 per week less than he had been paid by the appellant.
There followed a period of about 15 weeks during which the respondent was unemployed and received unemployment benefits. In 1986, the respondent contacted the Commonwealth Rehabilitation Service. The Service helped him to manage his deafness and introduced him to an organisation which taught him to lip read. The service was instrumental in the respondent getting work in March 1987 with Bestobel Engineering. The respondent remained in the employment of this company for almost 17 months until September 1988. Again, the respondent's earnings were about $20 per week less with this company than they would have been had he remained with the appellant. Initially, the respondent was employed by Bestobel doing light store work and occasional office work checking invoices and the like. After about two months a clerical position in the store control section became vacant and the respondent was appointed to that position. During the initial two months the Department of Rehabilitation paid the respondent's wages. Although the respondent experienced some difficulty in communicating over the telephone his employer considered that he was able to do his work satisfactorily. However, in 1988 the respondent's employer required all employees to join a superannuation scheme. The respondent was unable to pass the qualifying medical examination and his resultant inability to join the superannuation scheme resulted in his employment being terminated in September 1988.
The respondent was then unemployed until about the end of 1988 during which time he again received unemployment benefits. He said that during this period he did not try very hard to get work for he had little confidence that he would get a job. However, at the end of 1988 he did get a job as a driver of a bread delivery van but gave it up after three days as he found that driving and repeated bending to get bread in and out of the back of the van caused him too much neck pain. The respondent has not worked since. The learned trial judge found that after the bread delivery van job "the plaintiff gave up actively looking for a job, believing that no suitable employment would be available for him". In his cross–examination the respondent agreed that he did not actively pursue work partially because he thought that it would be a good idea to stay at home with his young son for a little while. Within a few months he made application for an invalid pension which was granted in April 1989. With respect to his economic capacity the learned trial judge said:
"I find that the plaintiff has lost his ability to work as a commercial vehicle driver, and that this loss represents, say, 90% loss of his income earning capacity, given his other disabilities and his originally poor aggregation of income earning skills. It is true that he worked satisfactorily at Bestobel for 12 – 16 months, save for difficulties with telephone communication, and that had not the superannuation difficulty caused his discharge, might have continued to work there for a long time. However, he only obtained that position in the first place through the active assistance of the Commonwealth Rehabilitation Service, who paid his wages for the first period of his employment. I regard his obtaining of that position as a rather fortunate exception to what would have been likely to be a very poor employment outlook at the time he obtained that job."
Although the learned trial judge's finding that the respondent had lost his ability to derive income from work as a commercial vehicle driver was appropriate on the evidence, with respect to his Honour, I am of the view that the inference that such work represented 90% of his total capacity to derive income is contrary to the evidence. According to the respondent's evidence, for most of his working life, he had been employed as a storeman. His post accident work as a storeman with Saveway Stores for nearly two years, albeit with some difficulty, demonstrated that his ability to use this capacity to earn income had not been destroyed by the injuries and their sequelae. As his Honour found, had that employer not gone into liquidation, "he might have stayed at Saveway indefinitely". Further, his subsequent work for over a year at Bestobel demonstrated an ability to earn income in that kind of occupation although, again, it is clear that deafness inhibited the respondent's ability to carry out clerical work. A consideration of the respondent's residual earning capacity must not overlook the fact that his position at Bestobel was only obtained in the first place through the offices of the Commonwealth Rehabilitation Services. It could properly be regarded, as the learned trial Judge did, as "a rather fortunate exception to what would have been likely to be a very poor employment outlook". Nor must the evidence of a counsellor employed by the Department of Community Health Services be overlooked that, whilst partial deafness alone is not a substantial bar to obtaining work, in the case of unskilled persons the employment situation is much more difficult when there is a supervening restriction on manual activities. That evidence, accepted by the learned trial judge, supports the notorious fact that unskilled middle aged men with physical disabilities find it difficult to obtain employment. Although the respondent's capacity to earn income from stores work was not destroyed by the accident, it was curtailed by reason of the fact that heavy manual work, often associated with that occupation was no longer open to the respondent. Accepting that, prior to the accident, the respondent had a "poor aggregation of income earning skills", nonetheless, the respondent's own evidence clearly establishes that to apportion 90% of those skills to commercial vehicle driving was an error. An assessment of damages for future diminution of earning capacity on the basis of a 90% loss of total capacity led to an erroneous award of damages under this head.
In assessing these damages the learned trial judge adopted a mathematical approach. Of course, the method of assessment is not the issue on the appeal. The question is whether the amount allowed is manifestly excessive. The particulars of claim asserted that "at present a truck driver is entitled to a weekly wage of approximately $286.70 net per week". The particulars bear no date other than the year 1990 but at trial, it appears that this assertion was conceded to be correct. Using that figure and a discount factor of 3% the learned trial judge firstly calculated the quantum of damages for future lost earning capacity on the basis that the respondent would have remained in employment as a truck driver until he reached 65 years. This produced a sum of $231,653.60. From this figure his Honour next deducted 10% to calculate the 90% loss of earning capacity, $208,488.24. He then reduced this sum by 35% for contingencies to arrive at a final sum under this head of $135,517.36. With respect to the question of contingencies his Honour said:
"In relation to such contingencies of life, the plaintiff's situation in my view is that his range of employment skills was substantially limited in the first place, and he has now lost the bulk of what remained to him by reason of this accident. However, had there been no accident he would have been subject to a substantially greater chance of having his income earning capacity destroyed or badly affected by a range of adverse possibilities considerably greater than that applying to the average fit person. Therefore, whereas with an average person, 15 – 20% diminution by reason of contingencies of life may have been reasonable, in the plaintiff's case I think the figure should have been put at 35%."
For myself, l would prefer to avoid an arithmetical approach to the calculation of damages for future lost earning capacity in this case. However, if forced to do so, I would conclude that, upon the findings of fact made by the learned trial judge, that the appellant's tort reduced the respondent's ability to utilise his capacity to earn income by something in the order of 60%. The learned trial judge's observation about the contingencies of life are in accord with the evidence although I have some reservations about the appropriateness of reducing damages for future lost earning capacity by a figure as high as 35%, for his Honour found that over a working life of 21 years the respondent "had very little unemployment between leaving school and the date of the accident."
On behalf of the appellant it was submitted that the respondent's evidence established that he chose to apply for and subsequently accepted an invalid pension rather than attempt to utilise his residual earning capacity to produce income. There is some evidentiary support for the submission but even if made out it is not probative of the issue of the actual extent of the respondent's remaining capacity to earn income. Nor is the fact that he was granted an invalid pension probative of the same issue between the parties to this litigation.
For the reasons I have expressed I consider that the sum allowed for damages for diminution of future earning capacity was manifestly excessive and that an appropriate figure is in the order of $100,000.00.
With respect to the claim for damages for diminution of earning capacity between the date of the accident and the date of trial the learned trial judge allowed the figure of $35,712.32. This was the amount claimed by the particulars included in the judge's papers dated the day before the trial commenced. The particulars included in the appeal book concluded with a period ending 20 February 1990 and claim a sum of $30,551.72. It would appear that those particulars were brought up to date immediately prior to trial as the particulars included in the judge's papers conclude with a period ending 26 June 1990, the date the trial commenced. That claim was as follows
"Period 51284 – 26385 (16.5 weeks)
at $227.00 per week 3,745.00
Period 27385 – 9187 (93 weeks)
at $20.00 per week 1,860.00
Period 9187 – 30487 (14 weeks)
at $262.00 per week 3,668.00
Period 1587 – 14988 (69 weeks)
at $20.00 per week 1,380.00
When retrenched:
Period 15988 – 15389 (26 weeks)
at $265.62 per week 6,895.72
Period 15389 – 1789 (15 weeks)
at $270.06 per 4,050.90
Period 1789 – 231189 (19 weeks)
at $275.00 per week 5,225.00
Period 231189 – 26690 (31 weeks)
at $286.70 per week 8.887.70
$35,712.32"
Inferentially, the learned trial judge assessed pre–trial damages for diminution of earning capacity on the basis that, had the accident not occurred, the respondent would have continued to work for the appellant to the same extent as he had been during the few weeks prior to the accident without interruption from the date of the accident until the date of trial. However, the learned trial judge found that the respondent's employment with the appellant was of a casual nature although how casual was uncertain. Such a finding warranted some reduction in the amount claimed for it concedes the likelihood that the employment, even had it continued for the full period, would not have been to the same extent as it had been during the weeks prior to the accident. Whilst employed at Saveway Stores the respondent was paid $20.00 per week less than he would have earned had he continued in full employment with the appellant. The respondent conceded in evidence that this weekly loss was nothing to do with the accident and counsel for the appellant relied upon this concession. However, if the evidence supported the proposition that the respondent probably would have remained in continuous full employment with the appellant had the accident not intervened, that reliance is misplaced. In such a case, the $20.00 per week loss would not have occurred but for the accident. The same comment can be made with respect to the weekly loss of $20.00 claimed whilst the respondent was employed by Bestobel.
Damages for so called pre–trial economic loss are but one aspect of damages for diminution of earning capacity (Arthur Robinson v Carter (1968) 122 CLR 649 at p658) but the assessment can be made with greater precision in that it is based on events past and certain. Nonetheless, a reduction should be made for contingencies except to the extent that the evidence shows certainties rather than contingencies. The failure of the learned trial judge to make any reduction in the amount claimed for financial loss arising out of diminution of earning capacity prior to trial resulted in an over–compensation under this head of damage. This was properly conceded by learned counsel for the respondent. Taking into account the learned trial judge's observations with respect to contingencies I think that the sum of $35,712.32 should be reduced to $30,000.00.
Although counsel for the respondent conceded that there had been an over–compensation with respect to the amount allowed for "economic loss prior to trial" he submitted in support of the cross–appeal, that the amount of $15,000.00 allowed for pain, suffering and loss of amenities of life was manifestly inadequate and should be increased by a sum which would exceed any reduction in the sum for economic loss prior to trial.
The extent of the respondent's permanent disabilities and their effect on his amenities of life are set out in the findings made by the learned trial judge and cited earlier in these reasons. His Honour found that the accident was a substantial factor in the depressive symptoms from which the respondent suffers and contributed substantially to matrimonial problems he experienced and which led to him and his wife separating shortly prior to trial. Having regard to the fact that the respondent suffers from neck pain and headaches on an almost daily basis and that such a disability together with its associated depressive symptoms pervades virtually all aspects of the respondent's life I am of the opinion that the sum of $15,000.00 for general damages can be regarded as being at the lower end of the range of damages appropriate under this head. Were this the only aspect of the award under attack it is doubtful if the sum allowed could be viewed as manifestly inadequate but, as I have reached the conclusion that appellate intervention is warranted with respect to the award for diminution of future earning capacity it is appropriate to re–assess the general damages. I would increase these damages to $20,000.00.
In summary therefore I would allow the appeal and the cross–appeal. I would reduce the sums allowed for diminution of earning capacity (past and future) by a total of $41,229.68 but increase the amount allowed for general damages by $5,000. In result therefore, I would reduce the judgment sum to $151,472 rounded off to $151,500.
File No FCA 81/1990
DEVLAUN PTY LTD v PAUL MAURICE TAPP
REASONS FOR JUDGMENT FULL COURT
ZEEMAN J
25 March 1991
By appeal and cross–appeal the appellant and the respondent each seek to challenge the learned trial judge's assessment of the respondent's damages. I have had the advantage of reading, in draft form, the reasons for judgment prepared by Underwood J. Subject to one qualification, I am content to adopt his statement of the relevant facts. The qualification relates to the employment history of the respondent prior to suffering the injuries which gave rise to the action. Whilst it may be said that on one view of the evidence it is open to conclude that "for most of his working life [the respondent] had been employed as a storeman" there is also evidence to the contrary.
In order to recover damages for loss of earning capacity, it was incumbent upon the respondent to establish what was his earning capacity prior to sustaining the relevant injuries and to what degree (if any) that earning capacity had been diminished by reason of the injuries. The respondent was entitled to be compensated for the loss occasioned by any reduced earning capacity although the quantum of that loss "must depend upon the likelihood that there would have been a future exercise of that earning capacity" (per Gibbs and Stephen JJ, in Sharman v Evans (1976–1977) 138 CLR 563 at p583).
A consideration of the respondent's pre–accident earning capacity necessarily entailed a consideration of his previous employment history. The evidence relating to that was scanty to say the least. Most of it was elicited from the respondent in cross–examination. It appears that for most of his working life the respondent had been employed by F R Bye Pty Ltd, although some aspects of the evidence relating to that employment were obscure. The respondent's evidence–in–chief on the subject of his employment history almost entirely was limited to evidence relating to his employment with the appellant (which had commenced only several weeks prior to the respondent suffering his injuries) and his subsequent employment. The only passing reference to prior employment in the course of evidence–in–chief was as follows:
"QPrior to your injury, what employment and occupations had you carried out in your life before that?
AI was a van driver at F R Boyes (sic) for eight years.
QYes. And prior to that?
AUm – I am not sure.
QHave you done much other than driving jobs for most of your life?
AOh I've done store work.
QYou were working at Saveway in the store?
AYes."
That evidence does not indicate when it was that the respondent was employed as a van driver for a period of eight years. He makes reference to doing store work but, in the context, it is not clear as to whether or not that reference related to a time prior to the accident or a time subsequent to that or both.
The respondent was cross–examined at some length about his prior employment history, although with limited result. Having said that he left school at the age of sixteen (the respondent having been born on 18 September 1947) and that he had been employed in a position with Heritage Wholesale for some months after an initial short period of unemployment, the following exchanges occurred:
"QAnd after that time did you have a period of unemployment?
AThe reasons – I think the reason I left Heritage was to get a job with my brother at – as a storeman with F R Bye Pty Ltd
QYes well you've told us in your examination in chief that you worked for F R Bye for eight years. I think was the period you mentioned?
AI left F R Bye's a couple of times and I've gone back.
QI see. Eight years was eight years straight. Because you left school at about 15 or 16 years of age.
A16.
QAnd at the time of your accident you were approximately 37 years of age?
AYes.
QSo there's a gap there if you like, or a period of twenty one years or so.
During that period of time were there periods when you were not working?
AYes I believe so yeah.
QAnd were they lengthy periods of time when you were unemployed, unable to obtain a job?
ANo I don't believe so no.
QWell what do you think was the longest time when you were not working after you left school?
AI'm not sure – roughly a couple of months – I can't remember.
QDid you find it difficult when applying for jobs that you had this hearing impairment?
ANo.
QWhat type of work were you doing during that twenty odd years or so before you had your accident?
AUsually stores work.
QI'm sorry?
AUsually storeman work.
QYes I see and was some of that light store work?
AYes"
I have found some of this evidence to be confusing. I assume that what the respondent was attempting to convey was that from the age of sixteen or thereabouts (and therefore from about 1963 or 1964) until shortly before he suffered his injuries (which was on 27 July 1984), he had generally been employed by F R Bye Pty Ltd, albeit with certain breaks in that employment (for purposes not clear from the evidence), and that until he finally left that company's employ to take up employment with the appellant, he had been continuously employed by F R Bye Pty. Ltd, for some eight years. The evidence of the respondent to the effect that during the twenty years before the accident he had usually been engaged in the work of a storeman is somewhat difficult to reconcile with his earlier evidence that during the last period of employment with F R Bye Pty Ltd, which he said extended over a period of some eight years, he worked as a van driver. Not surprisingly the learned trial judge found the evidence of the respondent's pre–employment history rather vague and found it difficult to place much reliance on his evidence when he was trying to remember the past. The apparent inconsistency between the respondent's evidence on the one hand that during the period of twenty years preceding the accident he was usually engaged in the work of a storeman and on the other hand that at least for the final period of employment with F R Bye Pty Ltd, extending over some eight years, he was engaged as a driver, was not explored during cross–examination or otherwise. However, the learned trial judge was entitled to proceed upon the basis that for a significant portion of his working life the respondent had been engaged as a driver. He had evidence from the respondent that he left the employ of F R Bye Pty Ltd as the result of an industrial dispute which arose when the respondent declined to perform tasks considered inappropriate for a driver. That evidence was confirmatory of the proposition that the respondent's most recent employment with that company was as a driver.
The learned trial judge found that the respondent had lost his ability to work as a commercial vehicle driver and that that loss represented 90% of his income earning capacity. The appellant does not challenge the finding that the respondent has lost his ability to work as a commercial vehicle driver. However, it submits that the learned trial judge was in error in concluding that that loss resulted in the respondent having lost 90% of his income earning capacity. In considering the basis of the assessment made by the learned trial judge, the deduction for contingencies must not be overlooked. In relation to contingencies, his Honour said this:
"In relation to such contingencies of life, the plaintiff's situation in my view is that his range of employment skills was substantially limited in the first place, and he has now lost the bulk of what remained to him by reason of this accident. However, had there been no accident he would have been subject to a substantially greater chance of having his income–earning capacity destroyed or badly affected by a range of adverse possibilities considerably greater than that applying to the average fit person. Therefore, whereas with an average person, 15%–20% diminution by reason of contingencies of life may have been reasonable, in the plaintiff's case I think the figure should be put at 35%."
An allowance for contingencies is not in the nature of a discount to be applied to the appellant's damages. It is part of the process leading to the ultimate assessment of those damages. An award of damages in the nature of a once–and–for–all assessment necessarily requires some degree of conjecture as to what will occur in the future and as to what might have occurred in the future had the respondent not been injured. The net result of the mathematical exercise performed by the learned trial judge was that he assessed the plaintiff's damages in respect of future economic loss as being the present value of 58.5% of a particular weekly sum payable for a period of 23 years. The weekly sum selected was that which would have been payable to the respondent by way of wages at the time of the trial had he then been employed by the appellant in the same capacity in which he was employed at the time that he was injured. The period of 23 years was selected as representing the period ending at the respondent's normal retiring age.
Reading the learned trial judge's reasons for judgment in their entirety, it is clear that he did not fail to consider the respondent's capacity to perform other types of employment, and in particular, his ability to work as a storeman. His Honour referred to the evidence of Miss Twell, a rehabilitation counsellor employed by the Department of Community Services and Health. Upon the basis of that evidence he was entitled to infer that the respondent's pre–existing hearing difficulties did not substantially affect his ability to perform a wide range of manual activities, including that of a storeman, but that the injuries suffered by the respondent in the course of his employment with the appellant have had the result of substantially closing that type of employment to the respondent. His Honour was fully justified in considering the respondent's position with Bestobel as a rather fortunate exception to a very poor employment outlook. The respondent's employment with Safeway was in the nature of light store work. The learned trial judge concluded that the respondent might have remained in that employment indefinitely had that company not suffered financial difficulties. Nevertheless the evidence as to the respondent's employability generally was such that the learned trial judge was entitled to place little weight on this employment as an indicator of the respondent's future employment prospects. It should also be noted that as late as January 1990 Mr Howard Bye expressed the view "that there is undoubtedly a significant bar to [the respondent] returning to normal employment" and doubted that "this would be likely to recur in the short term". The learned trial judge was entitled to place little reliance on Mr Bye's agreement during cross examination that particular occupations were suitable for the respondent in the absence of evidence of what those occupations entailed.
It might reasonably be argued that taking 90% of a driver's wages as the starting point for the assessment was inappropriate, having regard to the casual nature of the employment of the respondent and to his pre–existing disabilities. However, if such an argument were to be acceded to, it might equally be argued that the discount for contingencies was too high. It is all a matter of categorisation. All matters relating to an assessment of a future loss necessarily rely upon contingencies. Whether a particular matter is encompassed in the traditional allowance for contingencies, or is taken account of in the calculation of the gross figure prior to such allowance, is a matter of approach on the part of the particular judge. That is especially so in relation to making an appropriate allowance for the casual nature of the respondent's employment and for his history of periods of unemployment, perhaps as a matter of choice on his part. I perceive that had I assessed the respondent's damages (assuming that I had not adopted the lump sum approach which has much to commend itself in this case) I would have adopted a percentage somewhat less than 90%, but at the same time one somewhat less than 35% for contingencies. Be that as it may, I consider the learned trial judge's ultimate monetary assessment of the plaintiff's loss of earning capacity to be right. No sufficient reason has been demonstrated so as to justify interference with it. The learned trial judge's conclusions as to the limited significance which ought to be attached to the employment obtained by the respondent subsequent to the accident are fully justified. It ought not to be assumed from that employment that the respondent has any significant chance of obtaining suitable employment in the future. The evidence suggests the contrary. It does appear as though the learned trial judge was in error in attributing the respondent's tinnitus to the injuries which he suffered in the course of his employment with the appellant, but the nature of that error is such that it cannot be said to infect the learned trial judge's reasons for his assessment with error. That assessment proceeded upon the basis that the real diminution of the respondent's earning capacity was the result of the respondent's injuries severely curtailing his ability to perform manual tasks. Miss Twell gave consideration to the work options available to the respondent and could only come up with a position as a parking–meter attendant. Clearly she dismissed stores work as a real option.
For the reasons stated by Underwood J, I consider that some allowance for contingencies ought to have been made in relation to the respondent's claim for past economic loss, I also agree with Underwood J, that the amount assessed by the learned trial judge by way of damages for non–economic loss is very much at the lower end of the scale. To my mind, those two matters may be considered as balancing one another out. The error in relation to past economic loss provides a basis for interfering with the assessment made by the learned trial judge, but if the assessment is to be interfered with (and the assessment is the assessment of the final sum and not its components), then I would increase the damages attributable to non–economic loss by an equivalent amount.
In the result, I conclude that no sufficient reason has been disclosed to interfere with the learned trial judge's assessment. I would dismiss the appeal and the cross–appeal.
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