Donald Alexander Day v Janet Day No. SCGRG987 of 1992 Judgment No. 3680 Number of Pages 17 Damages General Principles

[1992] SASC 3680

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA DUGGAN J

CWDS
Damages - general principles - 49 year old man suffering from some brain damage as a result of motor vehicle accident - partial incapacity for work - director and principal shareholder of construction company - claim that consequences of accident induced break-up of business partnership with former director rejected - assessment of economic loss in case of self-employed persons considered. Award before apportionment of $210,000 for past and future economic loss and $65,000 for non-economic loss.

HRNG ADELAIDE, 17-25 February, 16-19 June 1992 #DATE 29:10:1992
Counsel for plaintiff:     Mr R Mellows
Solicitors for plaintiff:    Piper Alderman
Counsel for defendant:     Mr G Muecke
Solicitors for defendant:    Ward and Partners

ORDER
Damages assessed.

JUDGE1 DUGGAN J The plaintiff, who is 49 years of age, claims damages for personal injuries following an accident which took place near Norseman in Western Australia on 6th January, 1984. Prior to trial the defendant accepted an offer to consent to judgment for 90 percent of the plaintiff's damages to be assessed. At the time of the accident the plaintiff was a passenger in a vehicle being driven along the Eyre Highway by his wife. The vehicle rolled over and he was thrown out onto the road. Immediately after the accident the plaintiff was admitted to the Kalgoorlie Regional Hospital. He was suffering from a closed head injury. An x-ray revealed occipital fractures. There was a right occipital laceration and haematomas and abrasions in the vicinity of the temporal and right parietal regions of the skull. There was bruising over the face and later investigations established the probable existence of a broken nose. It would appear that the plaintiff lost consciousness during the accident and remained unconscious for 48 hours. It was decided to transfer him to the Royal Perth Hospital on the day following the accident. After admission to the Neurosurgical Unit of that hospital he was treated with antibiotics and conservative management. No major operative procedures were considered necessary. 2. The plaintiff was discharged from the Royal Perth Hospital on 21st January, 1984. According to the view then held by treating doctors he had almost fully recovered. Whilst in hospital dysphasia developed and continued monitoring of language function was recommended. Upon his discharge from hospital the plaintiff remained for a time in Perth with his family before returning to Adelaide on 4th February, 1984. 3. Over the next few years the plaintiff's condition was reviewed from time to time by Mr Hanieh, a neurosurgeon to whom the plaintiff was referred. Mr Hanieh and various other specialists who examined the plaintiff during this period reported favourably upon his progress. Mr Hanieh first saw the plaintiff on 9th February, 1984 and reported that he was alert and cooperative and that his memory and speech were normal. However the plaintiff complained of general fatigue and difficulty in concentrating. A CAT scan revealed mild left frontal gliosis or brain scarring. 4. On 25th September, 1984 Mr Hanieh again saw the plaintiff who told him he was back at work and managing fairly well. At that time it was thought his condition had stabilised. There was no significant change in the plaintiff's condition when Mr Hanieh saw him again on 4th July, 1986. Then on 17th November, 1989 the plaintiff told Mr Hanieh that his memory was poor and he complained of pain in the lower part of the neck and the upper part of the chest. He also had tender elbows. The plaintiff believed he was unfit and no longer enjoyed playing sports. Nevertheless Mr Hanieh concluded that the plaintiff had made a good recovery. 5. Mr Hanieh's optimism was shared by the plaintiff's general practitioner, Dr Liew. He made a series of reports on the plaintiff's condition beginning with a report dated 25th January, 1985. After seeing the plaintiff on 23rd July, 1985 he reported that the plaintiff had made a significant improvement. He said that his concentration had improved and, although he had some difficulties in this respect, they were experienced only while he was under stress. Dr Liew recorded the plaintiff's comment that his memory had returned to normal although he had occasional difficulty in his choice of words. Dr Liew described the plaintiff's recovery as "very good ... with minimal residual deficit". 6. Mr Anthony Walsh, a psychologist, conducted a number of assessments of the plaintiff beginning on 31st January, 1985. Mr Walsh reported that his tests established some significant though not severe deficits which suggested that the dominant hemisphere of the brain was affected. There was an impairment of the ability to remember more complex verbal information. On 27th October, 1988 Mr Walsh reported:
    "Regarding the overall effects of these injuries on Mr Day's
    cognitive/intellectual abilities, it would be my opinion that for
    a period of approximately 18 months to two years Mr Day suffered
    from the effects of a minor brain injury which affected his
    judgment and business ability. Over this period his abilities
    improved to the point where in May 1986 they were unable to be
    detected by neuropsychological assessment. These problems noted
    on the earlier assessment were consistent with his injuries and
    also consistent with the report from G. Thomas and Associates
    which (sic) have commented on the observed performance of Mr
    Day's Company during that period of time." 7. Other specialists commented upon the extent of the plaintiff's other physical injuries. Mr Sidey examined him on 4th April, 1985. Mr Sidey reported a considerable sensitivity over the infra-orbital region. He said the plaintiff complained of an acute pain down his right leg which first became apparent in November 1984, although it was not present at the time of examination. Mr Sidey said it was difficult to determine the original cause of the pain but said it could well have resulted from the accident aggravating a pre-existing injury. He thought it was unlikely that the soreness which the plaintiff complained of in his right elbow was attributable to the accident. 8. Mr Russell, a surgeon who examined the plaintiff at the request of the plaintiff's solicitors on 6th May, 1986, considered he had made remarkable improvement in all aspects of his injuries, particularly in the preceding six months. In his report on this examination and in a later report dated 27th November, 1989 Mr Russell concluded that although the plaintiff suffered some cerebral effects from the accident, his residual disabilities were a partial lack of smell and tenderness of the right cheek. Although the plaintiff complained of back pain and may have suffered soft tissue injuries to his back in the accident, degenerative changes to the cervical and thoracic spine shown on x-ray were probably consistent with the plaintiff's age. He commented:
    "Undoubtedly soon after the accident, his ability to carry
    out his business was severely affected, and he had physical
    disabilities which have now largely resolved, apart from the
    stated upper limb and upper back aches, which I cannot,
    unfortunately, directly ascribe to the accident in question." 9. Mr G.S. Vercoe examined the plaintiff and was of the opinion that he suffered a major nasal deformity and nasal obstruction as a result of the accident. The obstruction led to snoring as well as other problems. On 16th November, 1986 Mr Vercoe carried out a successful rhinoplasty and other procedures whereby the deformity was corrected. However the plaintiff still suffers from nasal obstruction and congestion from time to time as well as from hayfever. He also has a reduced sense of smell although his sense of taste is unaffected. In Mr Vercoe's view the accident aggravated a pre-existing rhinitis condition and the plaintiff may require further surgery is he continues to have problems with nasal congestion. 10. In August 1990 the plaintiff was seen by Dr Goldney for psychiatric assessment. At Dr Goldney's suggestion the plaintiff underwent a procedure known as Magnetic Resonance Imaging (MRI), a method of x-raying the brain which is more sensitive than the CAT scan which had been performed earlier. This examination revealed an extensive area of brain damage involving the frontal lobe area as well as the left temporal lobe and a small part of the parietal lobe. After interviewing the plaintiff and considering the results of the scan Dr Goldney expressed the view that the head injury has had a profound effect on the plaintiff's ability to cope with life and his business. He said that although there may not be a significant memory disturbance, there has been a marked emotional and personality change due to the brain damage. He referred in particular to the plaintiff's single-mindedness. 11. This view was supported by Mr Carney, the neurosurgeon. He described the potential effects of an injury of this type in the following passage in his evidence:
    "The effects would be in someone of high intellectual
    capacity and demand devastating. I think if I had the injury I
    could not function in my profession. If one looks at focal
    problems I would expect disturbance of personality, inability to
    concentrate, inability to learn new material, difficulty with
    speech function, particularly written material, some mild
    disturbances of production of speech, and a tendency to
    irritability and short temper, with personality change." 12. Mr Carney expressed the view that the brain damage was not likely to deteriorate further and he said the risk of epilepsy was in the order of three or four percent. He advised against participation in sport which involved risk of further brain damage. 13. The evidence of Dr Goldney and Mr Carney throws a different light on the plaintiff's injuries. I accept their evidence with its tendency to establish that some of the earlier opinions were too optimistic, given as they were in the absence of the MRI scan. Dr Goldney's view that a person with brain damage of this type might tend to minimise the effects of the injuries should also be taken into account. Nevertheless it must also be borne in mind that opinions as to the possible or probable effects of an injury, particularly an injury involving brain damage, must be assessed along with evidence as to the actual effects as deposed to by other witnesses. The point was well made by Mr Wood, the psychologist, whose evidence I found to be of considerable assistance. It is expressed in the following passage of his cross-examination:
     "Q. Does what I put to you a moment ago not suggest to you
    that perhaps his cognitive deficits may, in fact, in a business
    work place setting, be greater than the tests appear to show?
     A. I think I prefer to rephrase it, if I may, and say that
    there is no evidence, on the tests which I've administered, of
    any cognitive impairment, apart from those items which I've
    already listed. The point which one might make is that his
    functional abilities are less than they were before the accident,
    and I think that's possibly the point that you're arguing and
    that, I think, is very difficult to test, except by observing him
    in a natural setting.
     Q. What sort of things do you look for to determine the extent
    of such deficits in functioning of the kind you just mentioned?
     A. I would look on the reports of the other people around
    about him, which I think is what you've done, I would look to the
    extent at which he was able to fulfil his role in the work
    setting and the work environment, the extent to which he was able
    to engage socially and interpersonally.
     Q. Those factors are critical to one's assessment?
     A. Yes." 14. The plaintiff and members of his family and friends were called to describe his injuries and their apparent effect upon him. The plaintiff cannot remember experiencing any pain in hospital, except for the soreness to his nose. He felt "fragile" when he was discharged and stayed on for a week in Perth. He found that he tired easily and this tendency continued when he returned to Adelaide. Between February 1984 and July 1984 the plaintiff said he had difficulty getting his views across to people and he became very repetitive. On other occasions he found difficulty in choosing the correct words during conversations. There were some problems with memory. He found difficulty in concentrating. He was not sleeping well and he was aware that his sense of smell had diminished. He also became moody and would argue more readily with the children. 15. The plaintiff found that when he climbed scaffolding he received a shooting pain in the leg. He had not felt that sort of pain before. He went to a chiropractor and found that the treatments he received up until early 1985 remedied this problem. Prior to the accident the plaintiff played in a social volleyball competition and enjoyed rifle shooting. After the accident he experienced pain in his elbows and found it necessary to discontinue these activities. At the present time the plaintiff said he feels quite confident in dealing with people, although he still has some communication problems. In cross-examination the plaintiff agreed that he had given favourable indications of his condition and improvement to Dr Liew, Mr Hanieh and Mr Walsh and that these indications represented how he felt. 16. In my view the plaintiff's wife who was called as a witness gave a frank account of the extent to which her husband's condition after the accident affected their family life. She said that before the accident the family was generally happy. She said her husband related well to people and was firm but fair with the children. He also enjoyed his sport. She said his condition since the accident has improved over time, but that he is not the same in a number of respects. She said his sense of humour has diminished and he is a lot more single-minded. From time to time he shouts her down and does not listen as much as he used to. He has become very short tempered although, now that the children are older, things are a lot better. She said he gets tired more easily and, although he still gets on with people, he tends to dominate the conversation. 17. Martin Day, the plaintiff's twenty-two year old son, corroborated the evidence that the plaintiff had become short tempered and more single-minded since the accident. He stated that in various respects his relationship with his father had changed. Mrs Day's evidence as to the changes in her husband's personality was also supported by evidence from the plaintiff's sister Mrs Tweed and a neighbour, Mrs Melville. I have also taken into account the changes in the plaintiff's personality observed by his accountant Mr Thomas and the evidence given by Mr Toye, the manager of Rapid Metal Developments who, although he did not know the plaintiff before the accident, could give some evidence as to his present personality. 18. I accept the general thrust of the evidence as to these changes in the plaintiff. I have no doubt in attributing them to the injuries suffered in the accident. They have not resulted in a completely changed man and the family unit has survived them. Nevertheless they have affected to a significant degree the plaintiff's enjoyment of life. His relationships with others are more strained, he no longer plays sport, and there has been some impairment of his ability to communicate, although I am of the view that this has not occasioned considerable difficulty. I should add that he had little difficulty in answering questions in the course of his lengthy period in the witness box. In assessing general damages I must also take into account the immediate consequences of his injuries, including the pain resulting therefrom along with the more permanent difficulties such as the injury to his nose. I find that there has been a slight aggravation of degenerative spinal changes. As for the neurological damage and the consequences which have flowed therefrom I rely upon the evidence of Mr Carney and Dr Goldney. These injuries and consequences are permanent and they will continue to have an effect upon the plaintiff's enjoyment of life. In my view the evidence justifies an award of $35,000 for past pain, suffering and loss of amenities of life and a future award of $30,000. 19. The issue of most controversy in the case is concerned with the basis upon which the plaintiff's economic loss is to be assessed. There is no doubt on the evidence that the plaintiff has suffered a permanent injury which has impaired the earning capacity which he possessed before the accident. It becomes necessary, therefore, to ascertain the extent of the impairment and to assess the pecuniary value of that loss to the plaintiff. The plaintiff and his wife are the principal shareholders in a construction company, the history of which is described in detail later in this judgment. I am satisfied on the evidence that the plaintiff's loss of earning capacity is partial in that there is a significant residual capacity to engage in the entrepreneurial activities in which he was involved prior to the accident. But I also have regard to the fact, as I find it to be, that the plaintiff would have difficulties in the future if circumstances were to result in him being thrown onto the employment market. The evidence of Mr Carney and Dr Goldney is important in identifying the deficits in judgment and problems of personality which a person with the plaintiff's injury is likely to develop and Mr Thomas's evidence along with the changes in personality deposed to by the plaintiff's family are relevant in demonstrating the extent to which his injury has affected him in the eyes of those with whom he comes into contact. 20. It is important for the success of the plaintiff's business or any comparable business in which he is likely to become involved, that he exercise certain entrepreneurial skills and business judgment and I accept that there has been some impairment of this ability. Nevertheless I am firmly convinced that these deficits have not had a devastating effect upon the plaintiff's actual performance in business. During the hearing I formed the view that there was a tendency on the part of Mr Thomas to overemphasise the plaintiff's difficulties to the extent of having no regard for residual capacity. In my view Mr Toye's evidence displayed more balance. Mr Toye was called by the plaintiff because of his role as Chief Executive of Rapid Metal Developments Pty Ltd (RMD) a company which deals with the plaintiff's company and which has a significant influence on the prosperity of the latter in that RMD lets out a contract for the erection of certain seating at the Adelaide Grand Prix. This contract has been let to the plaintiff's company from time to time and it has been an important source of revenue in the past. 21. I must take into account the fact that Mr Toye did not know the plaintiff before the accident, but he has had contact with him in the past six or seven years. He said that he thought the plaintiff did a good job on the contract in 1985, but things were a little more strained in 1986 which was one of the wet years. Mr Toye said that in 1987 there was a marked deterioration in the relationship between his company and Mr Day. However he said that on the occasions he dealt with the plaintiff personally during that year he found him quite amiable and satisfactory. In 1988 RMD decided to carry out the contract themselves. Then in 1989 when the plaintiff's company was given the job one again, there was considerable difficulty. Mr Toye said it was a year in which a lot of last minute changes were made by the engineers in charge of the event, but he said he heard that the plaintiff was very difficult to deal with. The witnesses evidence continued:
     "Q. Did you perceive any reason for the delay in the

    schedule?
     A. Yes, as far as I was concerned, the main reason was the
    ineffective management by Alec Day.
     Q. What do you mean by that?
     A. It was a job that I'd seen him perform extremely well on a
    number of previous occasions. He wasn't doing it this time as a
    result of argumentative, short tempered - when you're relying on
    lots of other suppliers and other companies to be able to effect
    a job of this nature, the interpersonal skill is fairly
    important, and it was quite clear that they deserted Alec, which
    was a surprise. Previously I believe they were very good.
     Q. How would you, in specific terms, describe the skills
    'deserting him'. What did you mean by that?
     A. When I very first met him, he struck me as someone that
    could readily enter into quite an engaging conversation, had a
    good technical knowledge and generally the exact opposite of the
    sort of person that would rub someone up the wrong way. In other
    words, most people, I felt, have had a reasonable affinity
    towards him, and he was able to use that to advantage to ensure
    that things flowed on the job. That disappeared.
     Q. In the early years that you dealt with Mr Day, would you
    have had the same involvement that you had with him in the 1988,
    1989 years?
     A. For small periods of time, but otherwise no.
     Q. Your day to day contact in 1988/1989 was more extensive was
    it?
     A. Yes.
     Q. What else was it about his demeanour that concerned you at
    that period in 1989 that you've identified?
     A. To sum up, completely unreliable. I felt very concerned
    that he may well end up doing something that would cause
    permanent damage to our reputation." 22. After 1989 the contract was let out on a three year basis and the plaintiff's company was unsuccessful in its tender. However relationships between RMD and the plaintiff's company have improved subsequently and not long before the trial RMD awarded an important contract to the plaintiff in connection with extensions to the Stirling Hospital. This work was still in progress at the time of trial. 23. As for the future Mr Toye gave the following evidence:
     "Q. What is your current attitude towards dealings with Mr
    Day's company?
     A. If he continues in the same fashion that he has shown in
    his recent form, I would be delighted to continue in the same
    position. Certainly we are in the final year of the three year
    contract for the Grand Prix this year, and it would certainly be
    our intention to invite him to tender for, hopefully, what would
    be a further three year period for ourselves as well.
     Q. Do you have any concerns about dealing with Mr Day?
     A. At this stage no more concerns than I would have in dealing
    with anyone else." 24. There is evidence which I accept that the plaintiff was not a very easy man to deal with before the accident. However it would appear that the accident has resulted in an exacerbation of pre-existing personality problems and I find that this has had an effect upon his earning capacity. The defendant is responsible for any exacerbation. I must take into account the deficits in judgment to which I have already referred. There are also some physical sequelae which will make it a little more difficult for the plaintiff to do work such as the erection of scaffolding which must also be taken into account. 25. It is now necessary to examine the evidence led by the plaintiff as to the financial losses, both past and future, which, it is said, have resulted from these injuries. At the time of the accident the plaintiff, his wife, a Mr Lowey and his wife were the directors and shareholders of a company known as G. and A. Constructions Pty Ltd. The company was involved mainly in concreting and scaffolding work. When the plaintiff returned to Adelaide from Perth in February 1984 there was a breakdown in the working relationship between the Days and the Loweys. It is the plaintiff's case that this breakdown was directly attributable to the accident and the plaintiff's injuries. Some months after the plaintiff's return, he and his wife purchased the shares of Lowey and his wife in the business. The plaintiff continued to operate the company but, according to his case, the business did not achieve the potential it would have realised if it had continued to operate under the direction of Lowey and the plaintiff. Accordingly, I have been asked by the plaintiff to assess damages on the basis that the plaintiff's physical injuries brought about the demise of a "partnership" which was capable not only of maintaining existing profits but increasing them. To this end I have been provided with a projection of profits prepared by an accountant and based upon an estimate of what would have been achieved if the business had continued to operate with the plaintiff and Lowey as principals. 26. The defendant, however, has argued that the termination of the working relationship between the two men was not due to the consequences of the accident, but rather as a result of a serious breakdown in the relationship which had been in existence for some time and which came to a head in February 1984. For these reasons, although it is not disputed that there has been a loss of earning capacity requiring compensation, the defendant challenges the basis for the award put forward by the plaintiff. 27. In broad terms the plaintiff claims that he has suffered a permanent partial loss of earning capacity and that he has already suffered and will suffer in the future a diminution of income from the business. I have been asked by the plaintiff's counsel to assume that if it had not been for the accident and the plaintiff's injuries, the partnership would have continued for many years to come and what has been lost is his share (and a portion of his wife's share) in the projected profits. 28. In order to resolve this dispute it is necessary to consider the history of the partnership and the plaintiff himself in some detail. The plaintiff was born in England on 25th November, 1942. He was trained as an electrician and had no difficulty in obtaining employment after completing his apprenticeship. He worked for a time doing the electrical work involved in the installation and servicing of commercial laundry equipment. He left that employment for a year in order to take up a position as field service engineer to Rank Xerox and then returned to his original employment. He married at the age of 21 and migrated to Australia in March 1973. Upon his arrival he undertook skilled employment with various employers and in August, 1974 he entered into partnership with his wife's cousin to do concrete work. The two men advertised for jobs and in due course the operation became profitable. This partnership was dissolved at the end of 1976 and the plaintiff invited his brother-in-law, Robin Hogan, to work in a new partnership. They were joined a little later by Mr Bill Lowey and in 1977 the business was incorporated. The company was called G. and A. Constructions Pty Ltd and the three "A" class shareholders were the plaintiff, Lowey and Hogan. By 1981 Hogan had left the company and the principal shareholders were the plaintiff and his wife and Lowey and his wife. Both wives worked for the company and the profits were split equally between the four. 29. Originally the company carried out "flat" concreting, but in due course its activities extended to doing form work. In time the company also became involved in the erection of scaffolding. Between 1978 and 1981 an average of four to six workers were employed by the company. The company began selling building materials on a small scale. In 1981 David Ward was appointed as an estimator. The company won contracts to erect scaffolding for the Festival of Arts and Carols by Candlelight. In 1981 it purchased premises at Roxburgh Avenue, Lonsdale for $55,000 and moved its office and building equipment to those premises. As the business grew the plaintiff and Lowey made various investments through the company. They financed a French bakery; they invested in films and at one stage they operated a launderette. These ventures were largely unprofitable. The plaintiff contributed the technical expertise to the business. Mr Lowey had no technical training, but he was said to be a good salesman and would normally provide quotations to customers. Both attended to different aspects of the office work. The plaintiff was the person who had most dealings with the accountant. 30. I accept the evidence that, for a time at least, the two men worked well together and that their respective skills complemented each other. They were also involved in joint social activities. However there is a significant dispute on the evidence as to whether this good working relationship remained in existence for the last 12 months or so of the period they worked together. According to the plaintiff's evidence he had a very good business relationship with Mr Lowey up to the end of 1983. He said that they were not always in total agreement but that when he left to go on his holidays at Christmas, 1983 there was nothing to suggest that the working relationship with Lowey was coming to an end. 31. If this was the true situation, then the events which took place on his return from Perth are quite puzzling. The plaintiff said that on the Monday after his return he visited the bank. The assistant bank manager told him that he was no longer an authorised signatory for the company's account. The plaintiff was upset when he was advised of this. Mrs Day supported her husband's version on this aspect. She said she went to the bank with him and that her husband wanted to sign something. He was told he could not sign because his name was not on the authorisation. There is some doubt as to whether, in fact, the authorisation had been withdrawn. Indeed the preponderance of evidence is against that being the case. However I find that both Mr and Mrs Day were given the clear impression that the authorisation had been withdrawn and that the plaintiff was upset about the matter. 32. The plaintiff said that he and his wife then went to the office of the company. He described what happened as follows:
    "A. We were met, first of all, by David Ward, who came up
    and shook my hand and shook Janet's and welcomed us back and said
    'How are you feeling', and entered into normal conversation. At
    the time, Geraldine Lowey was sitting at the computer and she
    carried on the computer, and Bill Lowey was sitting in his office
    and he carried on writing whatever it was he was writing, which
    left me a little bit bewildered at the time. During the
    conversation, Janet said 'By the way, we have got a form for you
    to sign because Alec's signature is no longer on it'. She gave
    me the form and I took it into Bill and he pointed to the table
    and said 'Just put it down there', which I did. I then went back
    out and stood next to Janet and, after we had finished the
    conversation with David Ward and there was still no movement on
    the side of either Geraldine or Bill, I then said 'What about
    that form, we're about to leave. If you just sign that, we'll
    get it back to the bank', and Geraldine said 'No, I don't think
    so', and that's the end of our meeting at G and A Constructions
    that day.
     Q. Did you ask for an explanation as to why the signatures had
    been altered or the forms had been altered and the name had been
    removed from the company?
     A. No. I was just shattered, I couldn't understand it.
     Q. What thought processes were going through at this stage, if
    any?
     A. I was bewildered, I couldn't clearly think except the fact
    that they perhaps wanted to take over the company and remove us
    from the company, I had absolutely no idea. Just totally
    bewildered." 33. Once again Mrs Day's evidence was to the same effect as that of her husband. She said:
     "A. The day we went back into the office, the morning we
    went back in, we walked in, they didn't even get up and say
    hello. Alec was floored.
     Q. You were too apparently?
     A. Me too. We walked into the office and Geraldine was sat at
    the desk, Bill was in the office at the back and David Ward was
    in the other office. He came in, said 'hello, welcome back, how
    are you'. Nobody else got up and did anything we sort of thought
    well, what's happened, what have we done wrong?
     Q. Did Mr Lowey ever give you any indication of what it was
    you had done wrong?
     A. No, didn't really." 34. A few days later, on 10th February, 1984, the plaintiff wrote a note to Lowey asking that Lowey sign the Commonwealth Bank forms "so that accounts can be met". Lowey replied in writing:
    "The accounts can be met without my signature both on this
    form and on the cheque stub. I would like to thank you on the
    way this was stuffed under our noses when you returned showing
    such great trust in us. It would have been nice to think that
    there was a little trust around. But apparently there is not, so
    I suggest a meeting as soon as possible to evaluate the
    situation." 35. Then on 13th February, 1984 the plaintiff received a letter from Mr and Mrs Lowey's solicitors in the following terms:
"We are the solicitors for Mr. and Mrs. W.A. Lowey.
    We have tendered certain advice to our clients in regard to their
    rights and obligations in the company. Our clients are most
    anxious to have a meeting with both of you as soon as possible.
    It is proposed that the meeting will take place at our office in
    the presence of the writer. You are welcome to bring your own
    solicitor. We nominate a time for the meeting as Wednesday the
    15th February 1984 at 3.30 p.m. Please telephone if this is not
    convenient so that we can arrange an alternative time. At the
    conference it is proposed that the following matters can be
    canvassed.
     a. Whether it is desirable to continue company operations.
     b. If it is desirable to continue company operations, whether
    to do so in the same manner as in the past.
     c. Whether the Loweys should transfer their shares in the
    company to the Days, or vice versa.
     d. Whether it is desirable to wind up the affairs of the
    company and appoint a liquidator." 36. Subsequent negotiations culminated in the Loweys and the Days signing agreements dated 10th May, 1984 and 6th July, 1984 which had the effect of transferring the Loweys' interest in the business to the Days. 37. As I have said, if these events had taken place against the background of a business relationship which had been quite cordial up until Christmas 1983, they would have been quite puzzling. Mr Mellows for the plaintiff put to me that the answer lies in his client's condition after the accident in that the plaintiff perceived antagonism on his return and reacted inappropriately because of the brain damage. One difficulty about that argument is that Mrs Day had the same understanding and reaction as her husband to the events which took place on their return. 38. However the evidence of Mr Lowey who was called by the defendant paints a quite different picture of the relationship between the two men in the months prior to the accident. Mr Lowey stated in evidence that for about five years after he commenced working with the plaintiff they got on well socially and at work. He agreed that their skills complemented each other. But then there was a change in the relationship. In their last 18 months together they argued constantly "over just about everything". Mr Lowey gave examples about the matters over which they argued. He said it was very frustrating to go onto a site and see Mr Day doing the work which staff were being paid to do. There were several arguments over this issue. He said he objected to Mr Day spending considerable time operating the computer when expert advice should have been sought. There were arguments over whether the specifications of particular jobs should be followed. 39. Mr Lowey said that on an occasion in August 1983 he complained that Mrs Day was taking a long time to do the wages. The plaintiff told him that if he thought he could do it better then he should do the job. Mr Lowey then prepared the wage entitlements but the plaintiff refused to sign the wages cheque. Mr Lowey explained that for a company of that size this was a very serious situation and he asked his wife to contact their solicitor. The incident was recorded in writing in their solicitor's office in case it should become relevant in the future. In the end Lowey said he was forced to apologise to Mrs Day and the cheque was signed. According to Lowey - "In the latter days everything was an argument. We would have an argument when I came back into the office and the easiest way for me to defuse the situation was I would just walk out and walk home." 40. He said that the relationship was falling down. Then before Christmas 1983 the company was erecting scaffolding for Carols by Candlelight. Lowey said he complained that the plaintiff was doing the job when employees were idle. Lowey's version of the incident was as follows:
     "A. On that job I remember one occasion when I walked on
    the site and Mr Day was up the top fixing the scaffold and three
    men were down the bottom watching him so when he came down I put
    my point of view over on that and as we walked away from the site
    he passed a comment that this was the last straw, after Christmas
    he was sorting this out and that was it, it was finished, he'd
    have words with David Ward and that would be the end of it.
     Q. Did you respond to that when he said that?
     A. 'Suit yourself', I would have probably said something like
    that. I can't actually remember what I said but to me it
    wouldn't have mattered, it had got to the stage 'Well okay,
    fine', that's the sort of way we used to - it got to a stage how
    we used to answer people back, or ourselves back.
     Q. So what did you expect to happen in the New Year after that
    incident at Christmas?
     A. Well I would've expected him to have come back and we would
    have probably sat down and tried to work something out. It was
    getting very close to that stage.
     Q. Did you expect that the company would continue into the New
    Year, operate as it had previously?
     A. It may well have done.
     Q. Did you expect it to operate continuously over the ensuing
    years?
     A. No, we just couldn't have carried on how we were going, it
    was impossible.
     Q. Did you have any view at the end of 1983 as to how long it
    might take?
     A. No, not really, it could have been a couple of months, 6
    months, you've got to remember I had a lot of money invested in
    this company and it was a very careful treading situation. For
    me to blow and just say 'That's it, finished', could probably
    cost me $100,000 and there's no way I'm going to put that on the
    line.
     Q. So what did you intend to do?
     A. Well just take it steady, and try and work it out to call it
a day." 41. When asked in cross-examination what he understood the plaintiff's comments on this occasion to mean he said: "I understand he meant by that when he came back off the holidays he was going to sit down and we were finally going to get to the crunch." 42. Lowey said that after this incident it was his view, as expressed to his wife, that "after Christmas it will be the parting of the ways". He said that after the plaintiff's return from Perth the relationship between them deteriorated rapidly. He said from that day on they argued continuously "basically as we were doing before Christmas. It didn't change." Eventually, said Lowey, it got to the stage where he said to the plaintiff: "Either you buy me out, I buy you out or we close it." 43. After taking into account Mr Lowey's demeanour, the nature and content of his evidence and the extent to which it fits in with other evidence in the case, I have no hesitation in accepting that he presented a truthful and accurate account of the relevant events. In making this finding I have taken into account the criticisms which Mr Mellows made of his evidence. I have also taken into account the evidence that there had been some discussion about giving Mr John Lowey, Bill Lowey's brother, a job with the company should he decide to migrate from the United Kingdom to Australia and that this matter was discussed shortly before Christmas 1983. Nevertheless the discussion did not seem to rest on a very firm basis as Mr John Lowey's evidence itself would seem to indicate. 44. It is also true that Mr John Lowey thought the two men got on well together. However he was only here for a short time. And although the company's outside accountant Mr Thomas said that the plaintiff and Lowey were willing to overlook the annoying aspects of each other's characters for what they saw as the overall good of the company, I accept Mr Bill Lowey's observation that they were both anxious not to reveal the rift within the company because of the potential damage it could cause to custom. Mr Mellows has drawn attention to the apparently cordial atmosphere in the company before the plaintiff went on his holiday to Western Australia and the assistance which Mr Lowey was prepared to give to the Day family in Perth after the accident. Nevertheless it is my view that these factors do little to displace the strong evidence that before Christmas 1983 the working relationship between the two men had all but run its course. 45. If the dispute which occurred on the plaintiff's return from Perth had not taken place, I am confident that some other incident would have precipitated the demise of the working relationship between the two men at an early stage in that year. But in any event I am of the view that the accident provided no more than a part of the historical setting in which the dispute over the cheque account took place. In all the circumstances I regard it as quite inappropriate to assume that the partnership would have continued and that this should constitute the main plank of the plaintiff's claim for economic loss. 46. Nevertheless, because of the extensive evidence on the topic, I should comment on the method of assessment advanced by the plaintiff and, in particular, the accounting evidence called in support of it. Mr Painter, an accountant, prepared a series of reports containing calculations which the plaintiff tendered as a suggested basis for the assessment of the plaintiff's economic loss. A number of reports were prepared because of changes to the assumptions which were made from time to time, particularly as to the estimate of the maximum sales level which might have been achieved by the company if it had continued to expand after the plaintiff's accident. Mr Painter commenced his analysis by ascertaining the assets and liabilities of the company since 1981 together with the profit and loss figures for the same period. He noted that from 1980 to 1983 there had been an increase in sales revenue as illustrated by the following table: Year Sales Revenue Increase Over Prior Year 1980 $170,551 Not Applicable 1981 $259,924 52.04 per cent 1982 $344,466 32.53 per cent 1983 $483,692 40.42 per cent Mr Painter extracted a continued growth rate of 40 per cent from these figures. He then assumed, after discussions with the plaintiff, that this growth rate was sustainable after 1983 but that it was likely that the business structure and organisation would require alteration after sales reached approximately $1.5m. Accordingly the witness proceeded on the assumption that sales would progress to a level of $1.5m in 1984 and then remain static thereafter, except for inflationary increases which he calculated with the assistance of the Consumer Price Index. After making these assumptions and the adjustments referred to in his final report of 19th February 1992, Mr Painter calculated that the loss to the Day family (ie. the income of both Mr and Mrs Day from the company) from July 1983 to July 1991 could have been approximately $884,170. If a further allowance was made for wages paid to associated persons and superannuation for family members, rental and interest, the loss for the relevant period would come to $829,214. This was the figure which was suggested by the plaintiff as the starting point for the calculation of pre-trial economic loss. Although the plaintiff and his wife took equal shares in the company's profits (25 per cent each of the total profit) Mr Mellows argued that because of the plaintiff's more extensive involvement in the business I should allow approximately 75 percent of the combined income as representing the plaintiff's income for assessment purposes. As for future economic loss it was suggested that I should again look to Mr Painter's calculations as a starting point. I was provided with some actuarial calculations to assist with future economic loss. 47. I was influenced by the evidence of Mr Campbell, an accountant called by the defendant, in the criticisms which he made of these calculations. It can be conceded that Mr Campbell did not criticise the method of extrapolation and it should also be pointed out that each accountant was asked to assume the continued operation of the company in its form at the time of the plaintiff's accident. However in my view Mr Campbell correctly highlighted certain deficiencies in Mr Painter's analysis. 48. Mr Campbell was of the view that insufficient consideration had been given to the fact that a young business may often demonstrate pronounced increases in profits over the first few years of its existence, but that such a rate of growth is difficult to maintain. He pointed out that Mr Painter appeared to have little or no regard for the difficult economic climate, particularly in the building and allied industries, in recent years. Mr Campbell also stated that the question as to whether a particular expense is categorised as fixed or variable can have an important effect on an extrapolation and that Mr Painter appeared to be unrealistic in determining that a number of expenses referred to in the evidence were to be treated as variable expenses. Mr Campbell concluded that if sales were to be extrapolated at the rate used by Mr Painter, then expenses should have been extrapolated at a far higher rate. Mr Campbell also pointed out that in the years 1988 and 1989 the company spent a considerable amount of its effort and resources on improving and developing a building which it owned. He said this would help to explain why a higher level of profits from outside contracts was not generated in these years. The development itself subsequently returned a profit of over $100,000. 49. In my view all these criticisms were well founded and, if Mr Painter's calculations were to be used as a basis for the assessment of the plaintiff's economic loss, then his evidence would have to be viewed in the light of these criticisms and significant adjustments made accordingly. However for reasons which I have already explained I am of the view that the calculations cannot be used in the manner suggested by the plaintiff. 50. A comparative profit and loss was prepared from taxation returns and tendered in evidence. In addition to the figures for the financial year ending 30th June 1984, a breakdown was given of the two six month periods in that year. It is unnecessary to set out all of the detail provided in the chart but I extract some figures which are relevant for present purposes. (see table attached to these reasons for judgment) 51. It is difficult to draw any definite conclusions from these figures. A loss of $57,916 was incurred in 1984, the year in which the accident took place and that was no doubt due in large part to the break-up of the partnership. However the 1985 and 1986 years showed profits which compare favourably with pre- accident levels. From then on a pattern is difficult to discern, with losses in 1987 and 1989 and profits in 1988 and 1990. It must be borne in mind that only two persons, the plaintiff and his wife, shared the profits after 1984, although they were required to purchase Mr Lowey's share. The downturn in the economy in later years is also an important factor. Nevertheless I am of the view that the figures do not support the contention of the plaintiff's counsel that the plaintiff purchased a worthless shell of a company from Mr Lowey. 52. The assessment of the plaintiff's economic loss is one of considerable difficulty. This is not a case in which the cost of replacement labour provides the answer (cf. Szittner v Harriott (1967) 1 NSWR 233 and Dahm v Harmer (1955) SASR 250.) Nor is it possible to quantify post accident losses which can be attributed to the accident. The breakdown in the partnership due to other causes, the downturn in the economy, the changed structure of the company and the haphazard fluctuations in the financial returns of the company since the accident have all contributed to this difficulty. 53. I have reached the conclusion that a broad axe approach is necessary in assessing the plaintiff's economic loss, but I have found it useful to test that approach by having regard to the plaintiff's earnings from the company in the few years before the accident. According to the taxation returns filed in evidence the taxable income of the plaintiff and his wife was as follows:

                 Year Plaintiff Mrs Day 1981 $12,005 $ 8,653
                 1982 $12,430 $13,700
                 1983 $15,168 $16,310
$39,603 $38,663 The combined income before tax is $78,266 giving an average of $26,088 per year. It is clear from the evidence that, although the plaintiff's wife did some work in the business, the share of both of them resulted substantially from the plaintiff's efforts. The particular distribution was the result of convenience. In these circumstances I think it is fair to allocate 75 percent of the combined income to the efforts of the plaintiff. (Taroporewalla v Berkery (1983) 3 NSWLR 28 at 37.) This results in a figure of $19,566 per year or $376.00 per week before tax. Applying the actuarial figures for retirement at 65 years of age achieves a figure of $231,616. Allowance would have to be made for the fact that the starting figure is based upon income before tax. On the other hand the calculations do not take account of other financial advantages available to the plaintiff and obtainable through the company. Difficult economic times have followed since the accident but this factor would be offset to a certain extent by the possibility of some expansion in the work of the plaintiff's company as it became better known. Then there would have to be a deduction for the normal vicissitudes of life. When it is borne in mind that the compensation in this case is for a partial loss I think these figures confirm my view that the award for past economic loss should be $60,000 and that for future economic loss $150,000. 54. A claim is made for compensation for voluntary services provided to the plaintiff by his children. I accept that they assisted him in Perth for the period he was in hospital and subsequently during his recuperation. Some allowance can be made for assistance in the earlier days at work, but a line must be drawn between voluntary services rendered as a direct result of the accident and help which would have been given to the plaintiff in his business in any event. I allow $1,500 under this head of damages. 55. Some allowance must be made for future medical expenses. Mr Vercoe stated in his last report that the plaintiff will need medication and some treatment for his nose. I allow $1,750. 56. Special damages totalling $3,514.56 are agreed between the parties. Three other items are in dispute. I allow $627.32 for rental of a vehicle in Perth after the accident and $105.05 for the cost of transporting luggage back to Adelaide. I disallow the claim for the children's air fares. Accordingly special damages totalling $4,247.38 will be allowed.
                 Summary of Award
   Pre-trial    Post-trial
    Pain and suffering            35,000.00    30,000.00
    Loss of earning capacity     60,000.00 150,000.00
    Voluntary services             1,500.00
    Future Medical References     1,750.00
    Special damages                4,247.38
             100,747.38 181,500.00     100,747.38
            $282,497.38 90 per cent=$254,247.65 I will hear the parties as to interest and costs.