Dunstan v the Meeting Place Inc
[1996] QSC 53
•12 April 1996
IN THE SUPREME COURT
OF QUEENSLAND
No. 1860 of 1992
[Dunstan v. The Meeting Place Inc & Anor]
BETWEEN:
ROBERT CLAUDE DUNSTAN
Plaintiff
AND:
THE MEETING PLACE INC
First Defendant
AND:
STATE OF QUEENSLAND
Second Defendant
JUDGMENT - DERRINGTON J.
Delivered:12 April 1996
CATCHWORDS: Damages - quantum - injury to cervical and lumbar spine - acceleration of symptoms - compression fracture thoracic vertebra - disability to total function 30-35% - employment as a pilot - acceleration of disability to perform heavy work on farm - farming projects postponed - 53 years age - resigned during pilots' strike prior to accident - Award $116,000 - Pain and suffering $35,000
Counsel:Mr A. Hayworth-Smith for the Plaintiff
Mr D. Tait for the First Defendant
Mr J. Griffin QC and Mr E. Morzone for the Second Defendant
Solicitors:Windsor Craig for the Plaintiff
O'Mara Patterson and Perrier for the First Defendant
Crown Solicitor for the Second Defendant
Hearing date : 25-27 March 1996
IN THE SUPREME COURT
OF QUEENSLAND
No. 1860 of 1992
[Dunstan v. The Meeting Place Inc & Anor]
BETWEEN:
ROBERT CLAUDE DUNSTAN
Plaintiff
AND:
THE MEETING PLACE INC
First Defendant
AND:
STATE OF QUEENSLAND
Second Defendant
JUDGMENT - DERRINGTON J.
Delivered 12 April 1996
The plaintiff was injured on 27 May 1991 when the railing of a landing on premises owned by the second defendant and occupied as lessee by the first defendant gave way. He fell about three metres to the ground below and suffered spinal injuries.
Liability
The landing was badly affected by dry rot which should have come to the attention of the defendants and they do not resist a finding of their liability. They have agreed between themselves as to contribution and have indicated that judgment should be given against both. Although contributory negligence was pleaded, it was not pursued at the hearing.
Damages
The plaintiff was born on 1 January 1938 so that at the time of the accident he was fifty-three years of age and is now fifty-eight.
He had been a commercial airline pilot for some twenty-five years, latterly as a captain, but in August 1989 he resigned from his employment with Australian Airlines because of what was known as the pilots' strike, and took a large pay-out of superannuation. He did not have employment between that date and the time of his accident. He applied to overseas airlines and was signally unsuccessful, without even any reliable indication of prospects for an interview. This is consistent with his pre-strike history, for during a period of about two years prior to that event he had made similar applications for employment and the only offer he had received was from an undesirable employer.
For tactical purposes in relation to the strike, in concert with the other pilots he had registered with the Commonwealth Employment Service for employment. This was a sham but he did not receive nor expect to receive unemployment benefits. On the date of the accident he was attending a meeting to discuss training for other work under threat that his status with the service would be withdrawn if he did not attend. He says that he would have been interested in some training in computers for management purposes to qualify himself for other earning activities, and by that time and in his circumstances that may well have been so, for it is consistent with his recognition that his prospects of employment as a pilot were poor, though he does not admit to that fact.
In early 1991 he had returned to Queensland with his wife and had purchased a farm at Kenilworth where he decided to undertake aquaculture in breeding redclaw crayfish and agriculture in growing macadamia nuts. Soon after that purchase, there was a breakdown of his marriage which subsequently led to a divorce. There was a property settlement on his wife which must have seriously interfered with his financial planning, with the results that will be referred to shortly.
Between then and the time of his accident, he used part of his superannuation moneys to develop the property with substantial improvements for the projected aquaculture. Because he was running out of funds, this was not completed at the time of his injury, and apart from some relatively minor additions it has remained in that state to the present time. The remaining improvements would have cost about $110,000 and before long he would probably have needed a new tractor and a hoist costing in all about $25,000; but at the time of his accident he had only about $50,000 in liquid assets, and no job.
While he may have been able to borrow against his other assets to fund these unfinished improvements, he did not do so, possibly due to his need to conserve such resources to carry him through assured losses during the early years of production; but it is unlikely that, even if he had not been injured, he could have sustained all this outlay without other resources. When he first found himself in this position he probably hoped to resume his former job as a means of funding the venture, but this in turn would have forced him to employ a manager at a cost of at least $35,000 per annum. Alternatively he had the option to seek other work in the district to fund the works and early production years. This would have obliged him to work the property in his spare time and with the help of cheaper unskilled labour working under his general supervision. Realistically, and particularly because he had little chance of obtaining work as a commercial airline pilot, at best he would still have been obliged to borrow heavily, and at worst he would not have been able to proceed with the venture. Unfortunately the exercise prepared by his expert witness, Mr Cooper, purporting to show the expected profitability of the venture makes insufficient provision for this adverse state of affairs.
He was also facing another impediment that would have become enlarged by delay. He was already suffering from progressive spinal degeneration that, while asymptomatic at the time, would have seriously interfered with his capacity for heavy physical work after four or five years. This will be fully discussed below.
The plaintiff still proposes to bring the project to completion, presumably by the injection of any sum he may receive by way of damages. On this basis he claims that one of the components of his damages under this head is the postponement of the enterprise by reason of his injuries; but as it has been shown, if he had not been injured the project would have been postponed in any case by reason of his shortage of funds. Some allowance to him must be made under this head but it would be wrong to assume that but for this accident the project would have advanced to the production stage expeditiously.
His other relevant pre-accident activities were the preparation of a plantation for one thousand macadamia trees and, in the financial year in which the accident occurred, his trading in hay by buying and selling it at a profit. The planting of the trees was reasonably postponed because of his injuries, but has not proceeded even yet because he has not been physically able to do it himself and his shortage of money prevents the purchase of trees and his employment of labour for that purpose. He proposes to continue with the project when he can pay for labour for the planting. He can carry on the maintenance and harvesting himself, so he claims only for losses due to the postponement of profits of the project. The position however is again confused by the questions whether in the absence of this injury he would have been able to do all the planting work himself and whether his financial position would have delayed his employment of labour and purchase of trees in any case. These issues will be discussed later.
Apart from a relatively short period of convalescence, there seems to have been no reason why he should not have continued to deal in hay if that trade had remained open to him. He had been making a profit in excess of $2 per bale and the cost of labour for the limited help that he would have required as the result of his injured state would have been no more than fifty cents per bale. Therefore, despite his injuries it would still have been profitable for him to have continued the trade with such hired labour, and in his financial position he needed any additional income available from this source. The only reasonable conclusion is that no further profit could be made from it, which is consistent with the well-known vagaries of that trade. It is also consistent with his failure to lead reliable evidence of buying and selling prices in the market since his accident. He probably took advantage of a special market opportunity in the year before his accident and it well may be that it has not since been repeated. He should be allowed some damages for the hire of labour if similar opportunities arise in the future but this must be reduced because his deteriorating natural state would have required the employment of some labour for this purpose in any case. It will be included in the general component for hire of labour, and subject to the further qualifications discussed there.
With this pre-trial history it is now suitable to discuss his injuries and their consequences. He sustained compression fractures of one thoracic vertebra with slight displacement of a fragment and possible compression fracture of two others. There was some traumatic injury of the cervical and lumbar parts of his spine, accelerating by four to five years the arrival of symptoms that would have appeared naturally. He also suffered a fractured sternum and left lower ribs with some pulmonary contusion, but these quickly healed without permanent consequences. There was also severe bruising to his back and neck. He was treated in hospital conservatively with bed rest and discharged on 6 June 1991, that is, ten days after admission, with a brace. He then underwent physiotherapy. The permanent residual disability from his injuries amounts to about thirty to thirty-five percent of his total function mainly due to his incapacity to put heavy stress on his back. In addition to pain and suffering, he also suffered some emotional stress from that cause and from his inability to work for some time. Although he is now unable to perform heavy physical work, he can engage in light work, maintenance and administration. He can drive a tractor for about an hour before he is required to rest. He has discomfort if he sits or stands for long periods, and experiences other mild symptoms. Most of these sequelae are due to his thoracic injuries.
However, prior to the accident he had rotator cuff syndrome of the left shoulder which caused him occasional pain and discomfort and would have restricted its use for heavy work. He also had a fifteen percent disability in each leg as the result of knee-cap injuries in an accident many years ago. As a man of fifty-three years of age who had led a sedentary occupation and had not engaged in heavy exercise, and having ordinary degenerative changes in his whole spine and a spondylolisthesis of his lumbar spine, he would have been at risk with heavy exertion in his farming work. In any case the progress of the degenerative changes of his spine and accompanying symptoms within four or five years would have seriously reduced his capacity for heavy work. He would then have had to employ relatively inexpensive unskilled farm labour for these purposes.
Immediately prior to his accident his chances of reemployment as a pilot were, as it turned out, very low. The major Australian airlines refused to reemploy any former employee with the rank of captain; and his prospects of employment overseas are demonstrated by the results. Over a period of about four years he had been unsuccessful in eliciting even one satisfactory response to his applications, even though more than half of that period was prior to the pilots' strike when the competition was not as fierce as it later became. He has still received no offers, even for interviews, though it is unlikely that any of the airlines to which he had made application would have known of his injuries.
This unsuccessful result is not surprising. Although he was well qualified, his age was closely approaching the cut-off point at which pilots were not usually engaged by the major overseas companies, and he would have required further training to fly the aircraft used by them. Further, by the date of the accident, he had neglected to keep up some of the current qualifications that were necessary, and although this may have been remedied with some trouble, it was not propitious for his employment, and possibly further betrayed his misgivings as to his prospects. It is consistent with his awakening interest in training for other work outside the industry.
Another factor against his employment by an overseas airline was the large number of other displaced pilots competing for the available work, many of them with the advantage of being younger than he. Of the 1647 who resigned, hundreds failed to find work as pilots and, it is said, some are still driving taxis. One who did find work, the witness Stacey, was a few years younger but less qualified than the plaintiff. He secured employment with Singapore Airlines, which was the plaintiff's preference, but it proved to be unsatisfactory and was terminated prematurely and, Mr Stacey says, unfairly. It would seem that some foreign airlines who employed the Australian applicants at the time took advantage of them to secure their services only until their own nationals were trained for the positions.
The plaintiff claims that before his accident in a telephone conversation with an unnamed person employed by Singapore Airlines he was told that he had the prospect of an interview in Sydney some months later. As it turned out, this would have made it after his accident. No evidence was advanced from any responsible person from that airline to support this suggestion and, on the contrary, it seems that no interviews took place in Sydney. Further, as it has been pointed out, the plaintiff received no further communication about the matter though his injuries were probably unknown to the airline. For these reasons, his prospects of employment overseas should be rated at no more than a ten percent chance.
In the assessment of the total potential loss of which this represents a part, an amount must be set off from his earnings to allow for the cost of a suitable manager for his farm while he was away. Further, if he had been employed, having regard to the experience of Mr Stacey and the airline's option under the contract to terminate it at any time for a pilot over the age of fifty-five, the period of the hypothetical employment should be limited to three years as a mean figure. Because there was no prospect of its earlier commencement, it should be deemed to have run from 1 January 1992.
The assessment by the expert, Mr Cooper, of the plaintiff's losses as a pilot notionally employed by Singapore Airlines, including superannuation and bonuses, shows a calculation for the first three years of about $300,000 net after tax. The resulting figure should be reduced to about $275,000 for factors used which were unduly favourable to the plaintiff. After an allowance of about $100,000 for the cost of a manager at the time, the net benefit to the plaintiff would have been of the order of $175,000. Therefore a figure of $17,500 should be allowed to him for his loss of a ten percent chance to earn that sum. Interest should be allowed for three years, that is, commencing at about the median point of the hypothetical employment, and rounded off to $6000.
There is no serious evidence of his prospects as a commercial pilot in any other position. He applied unsuccessfully to be an instructor at an aero club, and it is not suggested that any other flying work is available that would provide better earnings than the other work that remains within his capacity.
In argument his learned counsel stressed that it was his injuries that lost to him the capacity to earn income as a pilot: Graham v. Baker (1961) 106 CLR 340; Hocking v. The Commonwealth (1961) 35 ALJR. This is undoubtedly correct so far as it goes, but fully stated it should include the qualification - so far as that prospect had been open to him. The defence does not contend otherwise. The only issue is his then prospect of employment as a commercial pilot that would have been open to him had he not been injured; and the degree of that chance is what must be applied in order to compensate him for his lost opportunity: Malec v. J.C. Hutton & Co Pty Ltd (1990) 169 CLR 639, 642. In that respect, it does not matter, except as going to the degree of chance, that the plaintiff had formerly been engaged in this occupation. As in this case, other circumstances may severely restrict the prospects of even such a person, just as they might enlarge his chances of success of a venture of which he had no antecedent experience.
If he had not been employed as a pilot, the plaintiff would probably have eventually undertaken some course of training to acquire business skills, for he would have been forced to find alternative employment. At his age and because of his lack of experience, he would probably have attracted only a modest wage, but he is an intelligent person who should have been able to obtain employment in a clerical or low managerial position, if not in some position associated with flying. That has also been open to him since his recovery from the accident but he has not availed himself of it. The only reason for this seems to be his wish to maintain his farm in the hope of continuing with his projects with the funding provided by his damages in this action. That does not mean that he would not have taken steps to obtain such employment if he had not been injured. Indeed the loss of this employment, rather than flying, is the more likely consequence of his injuries. In those circumstances he would have still had the opportunity to carry on with some light work on his farm in his spare time until he amassed sufficient funding to resume his developments and subsequent production.
As his injuries should have caused the postponement of this alternative employment by no more than six months, it is impossible to assess his net loss from that as greater than the amount of $17,500 arrived at under the first notional exercise. A figure of that order, with the same interest, would be suitable under this head also. Because these alternative hypotheses are mutually exclusive, they cannot be added together.
It is proper however to add a component for the loss suffered by reason of the delay in the advancement of his farming projects. However, even in the absence of injury the employment that he would have taken to fund the development would have been delayed while he was trained and found work; and his involvement with that work would have delayed his project further. Accordingly it cannot assumed that it would have proceeded to completion at once. The delay in the aquaculture project caused by the injury for all reasons should therefore be limited to three years, and, in the case of the planting of macadamia trees, to twelve months. This will be more fully explained in respect of his need to employ additional labour.
Because when the production begins the plaintiff must still sustain the losses of the early years, it would not be right to compensate him for the relevant loss by reference to that time. Rather, the compensation should be assessed by reference to the delay in his receipt of the normal maximum profits and, where appropriate, that result must be reduced to the present value of that loss.
The principal difficulty lies in assessing the profitability of the venture. Crayfish farming is a financially hazardous business with about half of those attempting it dropping out because of losses. This is partly due to its novelty and in some cases to the lack of capacity or commitment of the farmer. Although the plaintiff is totally inexperienced in such matters, he has read widely and deeply on the subject and would seem to have the intelligence and commitment necessary to a realistic chance of success. However, he was undercapitalised and allowance must also be made for the other ordinary hazards of the venture. A suitable allowance for the chance of failure in the early years is twenty-five percent.
The next step is to assess the ordinary profitability of the venture in the event of reasonable success. In that respect, the evidence of Mr Barlow should generally be accepted. He was the only expert called, but some material was also produced from the Department of Primary Industries. That too should be given some weight although it was not subjected to cross-examination. Mr Barlow was very knowledgeable and appeared to be fair in his evidence. Certainly he betrayed no adverse attitude towards the plaintiff, and on the contrary appeared reasonably sympathetic to a prospective participant in the industry.
However, other evidence which he accepted does reveal the potential for higher prices than the average to which he referred, and allowance must be made for the general quality of the plaintiff's approach to the business. Competing figures have been proffered, based on the assumption of a variety of factors, but having regard to the profitability that does exist in the better parts of the industry, it is reasonable to conclude that after about three or four years a profit would have appeared, and in about six or seven more years it would have grown to the order of about $10,000 net per annum. This may have gone even further if the development had been enlarged, but that is too remote a possibility to be relevant here. The present value of that loss, which on the average will appear after five years from now, is $24,000.00. After allowance for the chance of failure, this part of the award should be $18,000.00. Because the loss is in the future and is discounted only to present-day value, interest is not appropriate.
Similar economic loss was suffered by the postponement of his receipt of the profits of the macadamia crop. Apart from the cost of employing labour for the heavy work that he would have done himself, which will be considered below, it has been explained that the plaintiff's loss in this venture due to the effects of his injuries was a delay of one year in the receipt of profits. It is not established on the evidence that he can attribute any greater period of his inactivity in this endeavour to his injuries. His shortage of funds would have postponed the work in any case because he still had to spend a large amount of funds he did not yet have on the aquaculture side.
On the evidence he will in time have been deprived of $6,600.00, being the proceeds of one year's full crop, but loss to that degree will occur no earlier than 2001. Its present value is about $5,250 but this should be reduced to $5,000.00 to allow for risks. Again, because it is discounted only to the present date, it attracts no interest.
Next is the cost to the plaintiff of employing labour to perform the heavier work associated with the entire venture which but for his injuries he could have done himself. This must be offset by the benefit that will accrue to him by receiving as damages the funds to engage such additional labour. It will provide him with the time and opportunity to attend to light work and administration which he would not otherwise have had. Moreover, even if he had not been injured, because the development, and with it the heavy work, would have been delayed by his limited financial means, some allowance must be made for the strong but not absolute prospect that his shoulder syndrome, knee disability and progressive natural spinal deterioration would have prevented him from doing part of it. This would have been a gradual problem.
It has been explained how, even if he had not been inured, it would probably have been months before he could have begun to fund any work that required heavy labour on his part and the progressive stages of labour-intensive works would have been reached only slowly as he divided his time between them and the employment necessary to fund them. Even if then he could have funded the commencement of production by borrowing, it is doubtful whether he could have survived without an income from outside employment so that he may have had to slow down the progress of this stage also. All of this would have postponed the heavy work required of him. Meanwhile, the passage of time would have seen the advance of the natural degenerative process of his spine.
He may not then have been able to attend to the venture sufficiently alone while at the same time providing an income from outside employment. His best course was to have taken employment and in turn to have employed part-time unskilled labour to supplement the work that he could do in his spare time. In those circumstances he could, and probably would, have used his employee to do at least some of the heavy work, as his degenerating spinal condition would have recommended. In those circumstances he would not have suffered loss from his disability to do what he would not have done in any case.
This is all very speculative, but it is the only reasonable way that he could have acted in his circumstances. Of course there is some chance that in some way he may have been able to keep to himself the opportunity to perform the heavy work required by the project, but that is offset by the chance that he may not have been able to find work or other means to fund the development and the commencement of production during its unprofitable years.
His loss therefore is reflected in the amount he will now have to pay for the labour to do the work that he would have done himself. As he will not be incurring that expense immediately, the amount of the award must be discounted to its present value. The result is a matter of impression encompassing all the relevant factors. He should be compensated in the sum of $20.000.00 for, in a brief and not entirely accurate summary, the present value of what it will cost him in the future to pay for the labour that he would have done over five years if he had not been injured but will not now be able to do when the postponed activities are resumed. Interest is not appropriate in these circumstances.
He should also be compensated for the period during convalescence when he was not even able to perform light work on his farm which he would otherwise have done. This must exclude times when he would have been employed elsewhere for which compensation is otherwise provided. There is little evidence of the value of this lost labour to his farm and he may well have replaced it since the accident; so a nominal amount of $2,000.00 should be awarded to permit him to pay for that work now. Again, interest is not appropriate.
This whole component of damages for loss of his capacity to have used his labour to achieve a valuable benefit for himself is not a duplication of damages already assessed in respect of the loss caused by the postponement of the venture or of the loss of general earning capacity, for it is a different and additional loss that was not included in this assessment. Nor, conversely, does it disadvantage the plaintiff, in the assessment of his loss through his incapacity to perform heavy work, by having no regard to the loss suffered by the postponement of the project, for that part of the loss is compensated for in the other assessment referred to. By the inclusion of both assessments, all features of the loss are accommodated.
On the measure of damages for a plaintiff's loss of capacity to perform work for his own benefit, learned senior counsel for the second defendant referred to Spargo v Greatorix (1992) 59 SASR 1 but it does not apply here.
The plaintiff's pain and suffering have already been described. His symptoms will continue to be unpleasant and to interfere with his enjoyment of life. He is disabled from his former recreations of golf and scuba-diving, but it is doubtful whether he would have participated in them very much as most of his energies were to be spent on his farm. It was his recreation as well as a potential business. His enjoyment of that is probably diminished by his inability to perform the harder work, but the same result would have come about a little later even if he had not been injured. He probably still derives considerable enjoyment from the work he can do.
It is said that he is deprived of the pleasure of flying which was very important to him. This was seriously exaggerated. From the commencement of the strike to the time of his accident he did less of it than was necessary for the maintenance of his qualifications; and while some of this was due to his farming interests, he would have had the opportunity to indulge himself if he really had retained any serious feeling for it. While he would probably enjoy some flying, it was not a serious attraction to him by the time of his accident.
He has suffered and will continue to suffer substantial pain and suffering, but he did not need surgery and has made a reasonable recovery which permits him to carry out and enjoy many activities. The award for this component is $35,000.00 of which $25,000.00 should be apportioned to the past, attracting interest of $2,500.00
Special damages are agreed at $10,000.00 including interest.
SUMMARY
Loss of earning capacity in employment $17,500.00 Interest thereon 6,000.00 Loss on aquaculture 18,000.00 Loss on macadamias 5,000.00 Loss of capacity to work on his property 22,000.00 Pain suffering and loss of amenities 35,000.00 Interest thereon 2,500.00 Special damages (including interest) 10,000.00
TOTAL $116,000.00
There is judgment for the plaintiff against the defendants for ONE HUNDRED AND SIXTEEN THOUSAND DOLLARS ($116,000.00) together with costs including reserved costs (if any) to be taxed.
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