Fitzgerald v Goonan

FITZGERALD v GOONAN
[2000] SASC 332

Full Court: Prior, Lander and Bleby JJ

1................ PRIOR J:....................... I agree with the reasons given by Lander J. The appeal should be dismissed.

2................ LANDER J. This is an appeal by a defendant to a claim for personal injury brought by a plaintiff arising out of a motor vehicle accident which occurred on 17 May 1996. I will refer to the parties as plaintiff and defendant. The action before the District Court Judge was for the assessment of damages consequent upon that collision, the defendant having conceded liability.

The plaintiff was born on 28 March 1962 and was 34 when the collision occurred and nearly 38 at trial. He suffered C 6/7 left sided unilateral facet subluxation.
The injury caused immediate pain in the area of the neck and he was removed to the Royal Adelaide Hospital wearing a hard collar. The neck injury was diagnosed immediately and he was placed in traction. The traction required the insertion of screws into each of his temples. Weights were then attached to stretch his cervical spine. The traction continued over some days.
He also sustained a fracture of the base of the left thumb which was treated by percutaneous “K” wire fixation and immobilisation in a Plaster of Paris cast. The wires which had been inserted were removed some time later and the plaintiff has been left symptom free in relation to that second injury.
The plaintiff also suffered what might be described loosely as a brain injury.
When he was discharged from hospital he was required to wear a Somi brace to secure his neck whenever he was not lying in a horizontal position.
That Somi brace rested on his shoulders and was tied around his chest and thereby supported his chin. It was impossible to fit and remove the Somi brace without assistance.
The plaintiff and a Ms Aebi formed a relationship in about 1995 although as at the date of the accident they were living separately.
After release from hospital the plaintiff went to live at Ms Aebi’s house and she offered him care and assistance. He was not capable of independent existence early after his discharge from hospital.
The plaintiff undoubtedly suffered severe pain as a result of the neck injury and was seriously disabled.
The Somi brace was worn for about seven weeks after discharge from hospital and at about the same time as removal of the brace the plaintiff returned to work.
The brain injury has left the plaintiff with impairments which Mr Reid, neuro-psychologist, described as “mild and subtle, but significant”.
The plaintiff has been diagnosed as having a degree of adjustment disorder with associated depression. He has a mild degree of cognitive impairment in the form of impaired visual short term memory.
A psychiatrist called by the defendant, Dr Kutlaca, expressed the opinion that the plaintiff’s cognitive complaints were more likely the product of persisting neck pain with associated frustration. By the same token Dr Kutlaca was not able to exclude a discrete brain injury secondary to the collision.
In any event the Trial Judge preferred the opinion of Mr Reid who had had more opportunity for examination and testing of the plaintiff.
The plaintiff is a graduate of the University of Adelaide having obtained an Honour’s degree in Science. His major was Zoology.
He received his degree in 1983 and thereafter worked as a keeper in charge of the native mammal section and nocturnal house at the Adelaide Zoo from 1984 until 1989. He then joined the Department of Environment and Planning where he remained until 1993. He engaged in contract work.
In 1994 he re-entered into a further contractual arrangement with the Department relating to a National Monitoring River Health Initiative project and in 1996 he was made permanent. He is employed as a Senior Aquatic Biologist - Professional Officer - Level 4. That particular project for which he has responsibility will conclude in October 2000.
After the plaintiff returned to his work with the Department he worked three days per week for up to three hours a day but gradually extended his working time until at one stage he returned to full time work five days per week. He was unable to sustain that type of workload and he reverted to working four days per week. He has continued to work only four days per week until trial. The Trial Judge’s finding, which is not under attack, was that that would be the most work the plaintiff would undertake for the rest of his life. There was some possibility, so the Trial Judge found, that he would have to reduce his workload to three days per week.
The plaintiff has remained in the same position which he occupied at the time of the trial. His manager, Mr McLennan, gave evidence that he was happy with the plaintiff’s work, notwithstanding that he worked only four days per week and will continue to recommend the plaintiff’s employment even if he reduced to three days per week.
The evidence indicated that the plaintiff was competent in his employment and therefore likely to remain in full time employment, albeit four days per week, notwithstanding his disability.
The learned Trial Judge concluded it was most likely that the respondent would continue to work four days per week although there was a possibility, he thought, that the plaintiff would be only able to work for less than that time.
Assuming that the plaintiff will work only four days per week rather than the five days per week he previously worked the present value of his loss is $7,500 per annum or $144 per week.
The defendant accepted that the plaintiff’s injuries interfered with his earning capacity and that the plaintiff was entitled to be compensated for a loss of the ability to exercise his future earning capacity.
The defendant accepted that the plaintiff could at best work only four days per week.
However the plaintiff further contended that the injuries not only interfered with his ability to exercise his earning capacity but had interfered and will interfere with his ability to gain more lucrative employment than he is presently in.
The learned Trial Judge found that the plaintiff was qualified by both education and competence to obtain employment significantly better recompensed than the employment which the plaintiff had.
In particular, the Trial Judge found that he could do the work of Chief Executive Officer of the Water Management Board which would presently pay $90,000 per annum which would provide a net income of about $60,000. That could be contrasted with his present gross income of $54,662 which earned him net about $37,500.
The difference is in the order of $22,500, some of which maybe explained by the plaintiff only presently working four days per week. Because he can presently only work four days per week he loses, as I have said, in the order of $7,500 per annum net.
It can be seen therefore that the difference in salary in the two jobs is in the order of $15,000 per annum net.
The Trial Judge assessed damages under the following headings;
Non economic loss          $ 38,000.00
         Past special damage - Workcover  $    8,548.90
         Past special damage - personal  $      632.00
         Past economic loss - Workcover  $ 42,828.35
         Past economic loss - personal  $    3,250.00
         Future economic loss  $300,000.00
         Future gratuitous services  $ 30,000.00
         Future medical expenses  $    5,000.00

The defendant only complains of the damages assessed under the headings of future economic loss and future gratuitous services. In respect of the first the defendant complains that the award is manifestly excessive in general and in particular because the Trial Judge failed to have regard to the present value of money. In respect of the second head of damages the defendant says no sum should have been awarded because of the provisions of s35A of the Wrongs Act and in particular s 35A(1)(g).
In respect of the assessment of “future economic loss” the Trial Judge differentiated between the two circumstances giving rise to the loss. For the plaintiff’s inability to work five days per week, his Honour assessed the loss at $125,000. For his loss of promotional opportunity he allowed $175,000.
In proceeding upon that basis the Trial Judge had to be careful not to over compensate the plaintiff by allowing any duplication of damages.
In assessing both aspects of his loss or future earning capacity he said:
“Overall, I have had regard to positive and negative contingencies likely to come into play for a well qualified and successful professional manager such as the plaintiff who presently has secure employment and no life threatening injuries.”
Unfortunately his Honour has not said what positive and negative contingencies he had regard to and has not indicated whether the positive or negative contingencies outweigh the other.
However in respect of that aspect of the claim for the plaintiff’s inability to work five days per week he said:
“Mrs Aebi thinks that the plaintiff works too hard and that he should only work three days per week. Mr McLennan says that is a possibility with which the Environmental Protection Agency could presently cope. Were that to occur the future for the plaintiff would become even more uncertain, particularly if Mr McLennan were to depart his present position or some other restructure occur. I think it most likely that the plaintiff will continue to work 4 days per week but I acknowledge the contingency as to fewer days. Should there ultimately be any threat to the plaintiff’s permanent Public Service position then separate compensation would no doubt be available and so this contingency must be of marginal weight at the present time.”
I think on the evidence that it was appropriate to take into account the possibility that the plaintiff’s hours would be reduced to three days per week. His Honour could not, on the evidence, have made a finding on the balance of probabilities that such an event would occur but the evidence did, in my opinion, support a positive allowance for the possibility. The Trial Judge was wrong, in my opinion, however, to discount that possibility upon the basis that “separate compensation would no doubt be available” in the event of that occurrence. The plaintiff was entitled to have his damages assessed without reference to the possibility that he would be otherwise entitled to some form of compensation. Indeed I am not sure what ‘separate’ compensation the Trial Judge had in mind. The plaintiff would not be entitled to workers’ compensation, at least on the present state of the law. He may become entitled to some invalid pension but the fact that he is entitled to an invalid pension should not be taken into account in the assessment of damages: National Insurance Co of NZ Ltd v Espagne (1961) 105 CLR 569.
The defendant complains that the assessment of $125,000 is manifestly excessive. The defendant has argued that the plaintiff’s ongoing loss is $144 per week. The agreed multiplicand was $745 which gives rise to a capital loss of $107,280.
It follows, the defendant argues, after taking into account negative contingencies which the defendant argues must outweigh positive contingencies that the figure of $125,000 is too high. The defendant argued that one ought to assume a discount rate of 15 per cent for the negative contingencies which would reduce the capital figure to $91,188.
In my opinion the defendant’s argument wrongly assumes that negative contingencies must always outweigh positive contingencies: Bresatz v Przibilla (1962) 108 CLR 541 per Windeyer J at 543. It may be the case, in particular cases, that negative contingencies do outweigh positive contingencies but it is wrong to assume as a matter of fact that in all cases of this kind some discount should be made for the prospect that the vicissitudes of life are such that they should give rise to a reduction in the assessment of the plaintiff’s earning capacity.
In this case it is not easy to identify negative contingencies which would bear upon the assessment of this aspect of the plaintiff’s loss. It may be that the plaintiff would have suffered some other non compensable injury which would have reduced him to working four days per week or less. It may be that the plaintiff might contract an illness or disease which would disable him from working. He might lose his employment for reasons unconnected with his injury. All of those matters must be put into the melting pot in the assessment of the appropriate capital sum for this aspect of the plaintiff’s claim. But none of those matters would significantly affect the assessment. In particular, for example, the prospects of this plaintiff becoming otherwise unemployed are very very low. He is well educated, well qualified and highly competent.
On the other hand something must be allowed for the possibility that the plaintiff will only be able to work three days per week. If it happened that the plaintiff could only work three days per week in the future then one would expect a further reduction in the plaintiff’s weekly salary of the same kind as is demonstrated by a reduction from five days to four days. If that was so that would capitalise, if the event occurred immediately, at a further $107,280.
That would be to treat that event, however, as a probability. It is only a possibility so any award to compensate the plaintiff such an event has to be reduced substantially: Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 at 643.
However the fact is, it seems to me, that because of that real possibility that the plaintiff may be only able to work three days per week into the future it has to be said that the positive contingencies do outweigh the negative contingencies. Some upward adjustment to the capital sum arrived at for an allowance of one day’s loss of work per week had to be made.
A figure of $125,000 reflects an upward adjustment for contingencies of about 15 per cent. That does not seem to me to be inappropriate. I do not believe that the figure allowed for the plaintiff’s inability to work five days per week of $125,000 is manifestly excessive. It is not ungenerous but it is not manifestly excessive.
Although his Honour recognised that if the plaintiff obtained promotion he would receive a net income of $60,000 compared with a present income of $37,500 (a difference of $22,500), his Honour did not indicate how he calculated the resultant loss of $175,000. It may be assumed that his Honour believed that the plaintiff would not have obtained a promotion for a further five years. He thought thereafter he would have obtained the senior position to which I have referred at the salary to which I have referred.
The defendant attacked that assumption. He said that there was little or no evidence to support a finding, if it be a finding, that such a position was readily available and that the plaintiff, but for this accident, would have taken the position.
In support of this submission the defendant took the Court to the evidence pointing out that the only position proved offered a package of $90,000, not a salary of that figure. In that figure of $90,000 was included superannuation. No evidence was given of his superannuation entitlement on his present salary.
There is no doubt, of course, that if his loss of a chance of promotion is to be calculated by reference to what he might have earned as against what he presently earns, it is necessary to have regard to his superannuation entitlements in both positions. Some allowance must be had for that.
It is also necessary to have regard to the fact that a position he might have obtained was advertised as a package. Being a package that would have some taxation advantages for the plaintiff. On the one hand, therefore, if one was comparing like with like, it would not be appropriate to assume in the employment he might have obtained that he would have been paying the same tax rate over the whole sum of $90,000, as if he was employed simply on a salary. On the other hand some regard would have to be had for his present superannuation entitlement.
However there was no evidence of either of those matters and in a rough and ready way it would be appropriate to consider that they balanced themselves out.
The Trial Judge did not refer to either of those matters but if they balance out that would not invalidate the calculations which he performed in relation to this aspect of loss of future earning capacity.
The plaintiff’s present income includes income for four days actually worked and worker’s compensation for the fifth day. In respect of the income allowed to him for worker’s compensation that reflects only 80 per cent of the income he would have earned for that day. Therefore it is not right to assume that the difference between what he is presently earning and what he could have earned, had he not been injured in five years time, is $22,500. It is probably a little less than that. Indeed strictly the difference would be $22,500 less 20 per cent of one day’s nett wage, in other words about 10 per cent of his nett income. Regard has to be had to that matter because he has already, on the approach taken by the Trial Judge, been compensated for his losses associated with not working the fifth day. In my opinion it would have been appropriate to allow a loss of in the order of $375 per week which would calculate to an annual difference of $19,500. That in fact allows a little less than 10 per cent of his present wage, which must be allowed for the shortfall on the worker’s compensation payment, but I think that is not unfair to the parties having regard to the assumptions which have been made for superannuation and taxation.
The previous multiplicand to which I have referred would not be appropriate in circumstances where the loss is postponed by five years. The multiplicand would therefore necessarily be less than $745.
In five years time the plaintiff will be 43. Using the tables in Luntz, Assessment of Damages, 3rd Edition, and a discount rate of 5 per cent, the appropriate multiplicand for a person aged 43 would be $664. Even that multiplicand would be to overstate the plaintiff’s loss because that multiplicand assumes the plaintiff is presently 43 and the loss is presently operating. There would be some acceleration of benefit to the plaintiff receiving his moneys in relation to that future loss now. The multiplicand assumes that the plaintiff will work to age 65.
In any event applying that multiplicand to a loss of $375 per week a capital figure of $249,000 is arrived at.
That gross figure has to be reduced for the accelerated benefit for the earlier receipt of the capital sum. I think the capital sum would reduce to about $225,000 taking into account the earlier receipt of the moneys.
As well, perhaps, some adjustment needs to be made for both favourable and unfavourable contingencies.
Whilst in respect of the other aspect of his earning capacity I believed that the adjustment should reflect the fact that the favourable contingencies outweighed the unfavourable contingencies, I am not of that view in relation to this aspect of his claim. That is because the capital sum assumes that the plaintiff will, at the age of 43, obtain higher employment and that he will retain the higher employment until age 65.
It does not take into account the prospects that he may have obtained even higher employment. On the other hand it does not take into account the prospects of earlier death, non compensable injury, unpaid sick leave and earlier retirement.
However, even if the unfavourable contingencies outweighed favourable contingencies it could not be said, in my opinion, that a figure of $175,000 for this aspect of the plaintiff’s loss of future earning capacity is manifestly excessive.
For those reasons, in my opinion, the defendant’s complaint in relation to the assessment of damages for loss of future earning capacity must be dismissed.

The defendant also complains that the sum of $30,000 by way of future gratuitous services was manifestly excessive. It was put that the evidence adduced at trial in respect to this head of damage was sketchy in the extreme. At trial no attempt was made to quantify the level of assistance required or the likely cost associated therewith. No evidence, it was submitted, was adduced from a painter as to the cost of the labour component of house painting.
The defendant’s submission was that, in the absence of evidence as to the levels of assistance required and the cost of same, only a modest award, if any, was appropriate.
In respect of this head of damage the Trial Judge said:
“I turn then to future gratuitous services. Presently, and for the past, the plaintiff does not qualify for an award because his relationship with Ms Aebi is not within the provisions of s 35A of the Wrongs Act. That will change if they marry or if the relationship reaches the length of 5 years as referred to in s11 of the Family Relationships Act 1975. Thereafter, for future care the plaintiff will be entitled to an award.”
The defendant took no issue with that aspect of his Honour’s reasoning. In particular the defendant did not argue that the plaintiff was precluded by the provisions of s 35A from receiving any award under this head.
The Trial Judge went on to say:
“He would also be so entitled should the present relationship end. He would then be dependant upon outside help on a regular basis. This is so because I am satisfied from the evidence that, were he living alone, there are several tasks which he could not complete and for which he would require regular assistance in which he would be required to pay.
Were he to live alone I think it likely to be in circumstances which did not require gardening and lawn mowing so that such an allowance should concentrate upon more domestic tasks such as washing, ironing, cleaning and some cooking. This does not need to be skilled assistance.
I allow the sum of $50 per week for these services and after adjusting for contingencies, including that their relationship will become of 5 years duration in 2001, I allow the sum of $30,000.”
I do not think it could be said that the sum of $50 per week is by itself manifestly excessive. If in fact the plaintiff does require assistance in relation to all of the tasks to which his Honour referred the sum of $50 per week would not, in my opinion, be inappropriate.
The multiplicand for someone of the plaintiff’s age to death is $847 and, assuming a sum of $50 is appropriate, the capital sum would compute to $40,350.
A sum of $30,000 therefore, in my opinion, cannot be said to be excessive.
I would dismiss the appeal against that part of the assessment of damages.
In my opinion the appeal should be dismissed.

75.............. BLEBY J.......... I agree that the appeal should be dismissed. I agree with the reasons of Lander J.

[2000] SASC 332

3 November 2000

Key Legal Topics

Areas of Law

Civil Litigation & Procedure

Tort Law

Legal Concepts

Causation

Future Economic Loss

Future Gratuitous Services

Compensatory Damages