FAI General Insurance Co Ltd v Green and Green
[1996] QCA 107
•19/04/1996
| IN THE COURT OF APPEAL | [1996] QCA 107 |
| SUPREME COURT OF QUEENSLAND |
Appeal No. 195 of 1995
Brisbane
[FAI v. Green]
BETWEEN:
FAI GENERAL INSURANCE COMPANY LIMITED
(Defendant by Election) Appellant
AND:
CHRISTOPHER LESLIE GREEN
and MAUREEN JEANETTE GREEN
(Plaintiffs) Respondents Davies J.A.
McPherson J.A.Ambrose J.
Judgment delivered 19/04/1996
Joint reasons for judgment of Davies J.A. and Ambrose J; separate concurring reasons of McPherson
J.A.
APPEAL ALLOWED. JUDGMENT BELOW SET ASIDE. IN LIEU, JUDGMENT
ENTERED FOR THE PLAINTIFF IN THE SUM OF $902,076.04. OF THAT SUM:
1. $21,791.17 MUST BE PAID TO THE DEPARTMENT OF SOCIAL SECURITY WHOSE RECEIPT THEREFOR SHALL BE A SUFFICIENT DISCHARGE;
2. $7,960.00 MUST BE PAID TO BUNDABERG BASE HOSPITAL WHOSE RECEIPT THEREFOR SHALL BE A SUFFICIENT DISCHARGE;
3. $231,220.00 MUST BE PAID TO THE RESPONDENT'S MOTHER MAUREEN JEANETTE GREEN TOGETHER WITH THE INTEREST THEREON AND HER RECEIPT THEREFOR SHALL BE A SUFFICIENT DISCHARGE;
4. THE BALANCE IS TO BE PAID TO THE PUBLIC TRUSTEE OF QUEENSLAND WHOSE RECEIPT THEREFOR SHALL BE A SUFFICIENT DISCHARGE FOR THE DEFENDANT BY ELECTION FOR PAYMENT OF THE SAID SUM.
THE PUBLIC TRUSTEE OF QUEENSLAND IS TO HOLD THE SUM PAID TO IT PURSUANT TO THIS ORDER AND THE INCOME THEREOF AND APPLY THE SUM IN SUCH MANNER AS THE PUBLIC TRUSTEE SHALL THINK FIT FOR THE MAINTENANCE, EDUCATION OR OTHERWISE FOR THE BENEFIT OF THE RESPONDENT.
A PROTECTION ORDER IS MADE IN RESPECT OF THE RESPONDENT IN
RELATION TO THE SUM OF MONEY PAID TO THE PUBLIC TRUSTEE OF
QUEENSLAND PURSUANT TO THIS ORDER.
THE RESPONDENT IS TO PAY THE APPELLANT'S COSTS IN THE APPEAL.
CATCHWORDS: | PERSONAL INJURIES - quantum - past and future loss of earning capacity - voluntary assistance and services - interest on past Griffiths v. Kerkemeyer: Brown v. Hale - hourly rate to be awarded for future Griffiths v. Kerkemeyer - general damages. |
| Counsel: | Mr. P. R. Dutney Q.C. for the appellant Mr. S. G. Jones Q.C. with him Mr. R. C. Morton for the respondents |
| Solicitors: | Baker Johnson & Partners for the appellant Carswell & Company for the respondents |
Hearing Date: 22 March 1996
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 195 of 1995
Brisbane
| Before | Davies J.A. McPherson J.A. Ambrose J. |
[FAI v. Green]
BETWEEN:
FAI GENERAL INSURANCE COMPANY LIMITED
(Defendant by Election) Appellant
AND:
CHRISTOPHER LESLIE GREEN
and MAUREEN JEANETTE GREEN
(Plaintiffs) Respondents
JOINT REASONS FOR JUDGMENT - DAVIES J.A. AND AMBROSE J.
Judgment delivered the 19th day of April 1996
This is an appeal by the defendant by election against, in effect, the amount of damages
awarded in a matter referred to the District Court by the Supreme Court for assessment of damages.
The damages assessed amounted to $1,633,894.03 made up as follows:
Pain and suffering $ 150,000.00 Interest on the above 8,415.00 Past economic loss 75,000.00 Interest on the above 15,080.00 Future economic loss 365,000.00 Future superannuation 33,000.00 Special damages 15,673.88 Interest on the above 5,097.10 Past care 247,076.00 Interest on the above 83,160.00 Future care 564,000.00 Future dental 632.00 Future pharmaceuticals 12,760.05 Public Trustee expenses 59,000.00
After allowing for an agreed apportionment against the plaintiff of 20% the Supreme Court gave
judgment for $1,307,115.20. In its appeal the appellant focused its attack on five of the above sums
being those for pain and suffering, past and future economic loss and past and future care.
The plaintiff respondent, who was born on 19 June 1974, was injured about a fortnight prior
to his 10th birthday on 3 June 1984. His injuries caused him serious brain damage which destroyed his
earning capacity and caused the need for some care. The questions of how that loss of earning
capacity, past and future should have been assessed by the learned trial Judge and the basis upon which
past and future care should have been assessed were the main questions in this appeal.
Past and future loss of earning capacity
Because the plaintiff was permanently disabled at such a young age it was impossible to predict
with any semblance of accuracy what his earning capacity would have been had he not been injured.
His father worked as a farm labourer on cane farms in the Childers area where the family lived.
Sometimes he was unemployed because of the seasonal nature of that work. When working he earned
a take-home pay of $360.00 a week. The plaintiff had four siblings, all younger than he. The eldest
of these, William, since the accident, continued his schooling to Grade 12 though he did not complete
it. After school he obtained full-time casual work as a labourer in a factory. After a time he was laid
off and was unemployed for some months. By the time of trial he had obtained employment as a farm
labourer and had worked as such for about two months. The plaintiff's uncle was also a farm labourer
and, it was said in evidence, most of the male members of his wider family lived in the area and did farm
labouring type work. The plaintiff's mother did domestic work, mainly cleaning and ironing, as did his
aunt. No evidence was produced of the annual incomes of the plaintiff's father or of any other male
members of his extended family.
The plaintiff's mother said of her children: "I wouldn't say they were overly bright, but they are
average." Mr. Salzman, a psychologist who examined the plaintiff, said that it was reasonable to assume
that if the plaintiff had not sustained brain damage his intellectual level would have been in the low
average to average range and that he would have been able to work as a semi-skilled to skilled
tradesman.
The plaintiff's claim for loss of earning capacity was put on four possible bases; the first that he
would work as a labourer until age 65, the second that he would work as a labourer assisting a
tradesman on award rates until age 25 and thereafter on the average male rates of pay to age 65, the
third that he would work as a tradesman plumber at award rates until age 65 and the fourth that he work
initially as a tradesman plumber and then as a contract plumber from age 35. These four possibilities
gave a range for pre-trial loss of earning capacity of between $75,900.00 and $93,800.00 and of future
loss of earning capacity from $337,000.00 to $432,000.00 on the assumption that he would have
continued to work to age 65.
The learned trial Judge's assessment of $75,000.00 for pre-trial loss of earning capacity
assumed that he would have worked as a labourer in uninterrupted employment until trial. His
assessment of $365,000.00 for future loss of earning capacity assumed that he would have continued
in uninterrupted employment until age 65 as a tradesman plumber or at an equivalent rate.
Both of these assessments are in our view manifestly excessive when one has regard to the
following matters:
1. that based on the experience of the male members of his family both before and after his
accident the plaintiff's most likely occupation would have been as a farm labourer in the Childers
area;
2. the poor prospects of employment for labourers in general and especially labourers in the rural community;
3. the seasonal nature of farm labouring work and the consequential likelihood that, in each year,
there would for that reason be substantial periods of unemployment; and
4. the likelihood that, in labouring work of this kind, the chances of finding and retaining work
decrease with age with the result that an assumption of working, even in interrupted
employment, to age 65 is unduly optimistic.
The first of these factors makes a farm labourer's income the starting point for assessment of
past and future loss of earning capacity which would then require substantial reduction in consequence
of the second and third matters referred to. Unfortunately there was no evidence of what the plaintiff
would have earned as a farm labourer although there was evidence that his father's take-home pay was
$360.00 per week.
Consequently the amount which his Honour awarded for past loss of earning capacity should
have been about the starting point from which the second and third matters referred to above would
have required deduction. Making deductions for those matters, on the assumption that the respondent
would have left school in order to seek employment at 17 we think an appropriate amount for past loss
of earning capacity was $50,000.00.
Notwithstanding the fourth factor referred to above we have calculated the component for the
respondent's loss of future earning capacity, in the first place, on the basis that the respondent would
have continued to earn at the rate of $360.00 until age 65. On the 5% discount tables, this amounts to
$340,020.00. This sum should be heavily discounted, not just for the usual contingencies, but also to
take into account the seasonal nature of the employment and the peculiar problems associated with the
rural industry. Accordingly we would substitute for the amount which his Honour allowed under this
head the sum of $230,000.00.
Past and future care
The learned trial Judge allowed $247,076.00 for past care. He calculated this sum by
multiplying 26,008 hours by $9.50. 26,008 hours was the total hours contained in a schedule of past
care tendered on the plaintiff's behalf. That schedule showed that between the date of the accident and
30 June 1985 the number of hours per day said to have been spent on the plaintiff's care by his mother
or his mother, father and family members varied between eight and 18 hours; and that from then to the
date of trial the number of hours spent per day was six. $9.50 was the amount shown as the current
daily rate for domestic care paid to a domestic care provider by Domicare, a commercial home care
specialist. The appellant did not seek to attack this rate but questions the number of hours allowed by
his Honour especially since 1 July 1985. That was the date when the need to take the respondent to
hospital in Bundaberg was reduced to about one day a month.
The appellant points to the evidence of the plaintiff's mother that if someone were engaged to
take care of the plaintiff they would take about four to five hours a day attending to his needs which
would involve domestic work like cooking, cleaning and washing, organizing his personal hygiene and
habits and spending time talking to him and calming him down. However her evidence also was that,
until December 1990 when the plaintiff finished school she spent between an hour and two hours a day
with the plaintiff helping him with his homework. However from December 1990 the amount of time
which the plaintiff's mother has spent with him appears to have remained unaltered; and as she deposed
to in her evidence his need for care amounted to four to five hours a day.
It is unlikely that, at least at about the time of trial, the plaintiff's mother spent more than that time each day on his care because, as the appellant has pointed out, her evidence as to her own working schedule was that she worked two hours a day up to seven days a week at the local bowls club and
between three and six hours a day relief cleaning at schools for unspecified and therefore uncertain
periods. In addition she did domestic work for other families for two to three hours four times a week
and also took in ironing.
We would therefore reduce his Honour's assessment for past care by one hour a day for the
period from 1 January 1991 to the date of trial. This reduces the total number of hours spent to 24,339
and the total award under this head to $231,220.50. Such a reduction in the total award would not
alone justify interference but does so in the event that the total award must, for other reasons, be
reduced.
The learned trial Judge allowed interest at 3% in respect of past care, rather than 2% as is
usually allowed. He did so, he said, for two reasons: first, because it seemed to him that that was one
way in which he could properly reflect the fact that a large part of the care was performed in the early
days; secondly, because this type of work was very exhausting for the respondent's family, particularly
his mother.
As to the first it is true that the extent of work required to be done on the plaintiff's behalf
gradually decreased to a time since which, as mentioned above, it has become stable at about four to
five hours a day. Shortly after his injury his mother and father were spending 18 hours a day looking
after him and even as late as 1984 and 1985 they were spending up to 10 hours a day on his behalf.
On the other hand, most of the care for which the award is made was provided since February 1985.
Moreover in most cases personal care will be more intensive in the early stages. Nevertheless the
Court has held that, in such cases, 2% is the appropriate rate: Brown v. Hale (C.A. No. 140 of 1994,
judgment delivered 3 February 1995, unreported). We do not think that the first reason justifies a
departure from this practice.
The second reason ignores the rationale for such damages; to compensate the plaintiff for the
need for such services. It does not justify a departure from the general practice. His Honour should
have awarded interest at 2%. That amounts to $51,885.88.
For future care the learned trial Judge said that he accepted the evidence before him that the
plaintiff's current need was for assistance for six hours a day. However there was no evidence to that
effect. The evidence was, as we have indicated, that his current needs were for four to five hours care
a day. Reference was made by the appellant's mother to the possibility that this might increase in the
future although she does not say why that might be so. On the other hand there was evidence from Mr.
Salzman a clinical psychologist that the plaintiff may need to go into a hostel when he is in his early
forties. Balancing these considerations we think it reasonable to allow five hours a day for the balance
of the plaintiff's life.
As to the rate, the learned trial Judge rightly said that he should assume that care in the future
will be provided by someone furnished by the market place. There was no evidence of the market price
in and around Childers for domestic services. However it appeared that the plaintiff's mother and his
aunt provided such services in that area and it would be surprising if there were not other women, of
similar means and ability, who provided such services. No evidence was given of the rates which they
charged for their services. The only evidence of a rate charged by domestic service providers was the
rate which Domicare paid its domestic service providers; that is $9.50 per hour.
The learned trial Judge fixed the rate at $13.50 per hour, that is the charge-out rate of Domicare
including its $4.00 per hour administration fee. There was no evidence that Domicare operated in the
Childers area or that any other organization of that kind operated in that area. On the other hand, as we have mentioned, there was evidence that there were domestic service providers who provided those
services in that area. We therefore think it much more likely that, for the future, domestic services will
be provided by a person providing such service in that area rather than by a commercial home care
company like Domicare and that, in the absence of evidence of what rates were actually charged in that
area, a rate of $9.50 per hour should have been adopted.
The learned trial Judge assessed damages for future care at $564,000.00 by allowing six hours
a day at $13.50 an hour for the balance of the plaintiff's life expectancy which he accepted at 55 years.
That sum should be reduced to $331,303.00 being five hours a day at $9.50 an hour over that period.
Damages for loss of future superannuation benefits
The appellant did not argue against the inclusion in the award of damages of a component for
loss of future superannuation benefits. His Honour awarded under this head 7.5% of the amount which
he awarded for past and future loss of earning capacity. No issue was taken with this method of
calculation. Accordingly the amount under this head should be reduced to $21,000.00, being 7.5% of
$280,000.00.
General damages
Finally the appellant asserts in its notice of appeal that the sum of $150,000.00 assessed for
general damages was excessive. However in his written outline of submissions Mr. Dutney Q.C. who
appeared for the appellant, quite properly did not put his submission as highly as that. He described
the above amount as "at the extreme upper end of the range of awards for this type of injury". His
complaint was that generally his Honour appeared to have adopted component amounts which were
excessive and that this was another example of his Honour simply accepting the amount claimed by the
plaintiff. In our view this amount is at the very high end of the range of damages for the injuries and
consequent disabilities suffered by the plaintiff in this action. A somewhat lower amount would, in our view, have been more appropriate. But it is not the function of this Court, even when interfering, as it
must in this case, with the total award of damages, to reduce component amounts of that award unless
those components are manifestly excessive. And although this amount is plainly very high we cannot
be satisfied that it is beyond the permissible range for this component of damages.
The appeal should therefore be allowed and the judgment below set aside. In lieu there should
be judgment for the plaintiff in the sum of $902,076.04 made up as follows:
Pain and suffering $ 105,000.00 Interest on the above 8,415.00 Past economic loss 50,000.00 Interest on the above 8,108.40 Future economic loss 230,000.00 Future superannuation 21,000.00 Special damages 15,673.88 Interest on the above 5,097.10 Past care 231,220.00 Interest on the above 51,885.88 Future care 331,303.00 Future dental 632.00 Future pharmaceuticals 12,760.05 Public Trustee expenses 59,000.00 Total 1,130,095.31 80% of that sum $ 904,076.24
Of that sum:
1. $21,791.17 must be paid to the Department of Social Security whose receipt therefor
shall be a sufficient discharge;
2. $7,960.00 must be paid to Bundaberg Base Hospital whose receipt therefor shall be
a sufficient discharge;
3. $231,220.00 must be paid to the respondent's mother Maureen Jeanette Green
together with the interest thereon and her receipt therefor shall be a sufficient discharge;
4. the balance is to be paid to the Public Trustee of Queensland whose receipt therefor shall be a sufficient discharge for the defendant by election for payment of the said sum.
The Public Trustee of Queensland is to hold the sum paid to it pursuant to this order and the
income thereof and apply the sum in such manner as the Public Trustee shall think fit for the
maintenance, education or otherwise for the benefit of the respondent.
A protection order is made in respect of the respondent in relation to the sum of money paid
to the Public Trustee of Queensland pursuant to this order.
The respondent is to pay the appellant's costs in the appeal.
REASONS FOR JUDGMENT - McPHERSON J.A.
Judgment delivered the 19th day of April 1996
I agree that this appeal should be allowed and the judgment amount reduced to the
extent and for the reasons given by Davies J.A.
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