Graham John Woodforde v Eugene Charles Victor Martinot No. 4204 Judgment No. SCGRG 93/968 Number of Pages 6 Damages General Principles

[1993] SASC 4204

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA MULLIGHAN(1), BOLLEN(2) AND DUGGAN(3) JJ

CWDS
Damages - general principles - road accident - respondent a cabinetmaker - itinerant worker not in full time employment for any substantial period prior to the accident - serious injuries - substantial recovery - assessment of damages included awards of $60,000 for past economic loss and $30,000 for future economic loss - appeal against former and cross-appeal against latter - award for past loss made on incorrect basis - assessed on appeal at $30,000 - appeal allowed - award for future economic loss justified - cross-appeal dismissed.

HRNG ADELAIDE, 8 September 1993 #DATE 29:9:1993
Counsel for appellant:     Mr M G Steele
Solicitors for appellant:    Ward and Partners
Counsel for respondent:     Mr P J Humphries
Solicitors for respondent: Reilly Basheer Downs
   and Humphries

ORDER
Appeal allowed.

JUDGE1 MULLIGHAN J This is an appeal and cross-appeal against the amount of damages awarded to the respondent at the trial of his action for damages for personal injuries sustained and loss suffered by him as a result of a road accident at near Port Augusta on 4th May 1989. The respondent was riding his motor cycle when it came into collision with a motor vehicle driven by the appellant and he sustained serious injuries. 2. The learned Trial Judge assessed the respondent's damages at $123,332.68, including interest of $2,400, and entered judgment in favour of the respondent in the sum of $104,832.78 in accordance with the agreement between the parties that the respondent is to receive 85 per cent of his damages to be assessed which reflects the proportion of responsibility for the accident which is to be borne by him. In assessing the damages, the learned Trial Judge allowed $60,000 for past economic loss and $30,000 for future economic loss. The appellant appeals against the award for past economic loss on the grounds that it is manifestly excessive and is against the weight of, and is not supported by, the evidence and also that the learned Trial Judge erred in relying upon actuarial evidence in making his assessment. The respondent acknowledges that the learned Trial Judge fell into error in the assessment of his past economic loss but cross-appeals against the award for future economic loss on the ground that it is manifestly inadequate. The appellant has not appealed against that award but contends that it is generous and that a higher award cannot be justified by the evidence. The findings of fact by the learned Trial Judge are not challenged by either party and the factual basis for the assessment of the respondent's damages may be summarised as follows. At the time of the accident the plaintiff was aged 33 years. He sustained fractures to the eighth to tenth ribs on his left side, a sub-trochanteric fracture of the left femur and a sprain of the medial ligament of the left ankle. He was admitted to hospital and treated by appropriate surgery. It is unnecessary to mention the details of the treatment which he received. It is sufficient to say that he had to undergo further surgery in August 1990 to remove metal which had been used to fix the hip and that he has made a good recovery although he has some residual symptoms and disabilities which I mention shortly. 3. After leaving school the respondent obtained qualifications as a tradesman cabinet maker in Brisbane, Queensland. Thereafter he travelled extensively within Australia and worked in various jobs in many places usually as a cabinet maker but during one period he worked as a deck hand on a prawn trawler. He liked to travel and although he had many different jobs he was usually employed. However, there were some periods of unemployment. He formed a close personal relationship with a woman which existed for some years before the accident and for a time thereafter. She had ties at Port Augusta and before the accident was expecting their child. The respondent obtained work at Port Augusta in November 1988 for a contractor, G.F. McMahon, at the Power Station. After about a month, he was unemployed for a time but then obtained work with another employer and then again worked for G.F. McMahon until the accident. 4. It is not clear to me how the learned Trial Judge made his assessment of damages for past economic loss. In his reasons for judgment he correctly stated that the measure of the respondent's past loss of earning capacity is what he would have earned in his employment had he not been injured, less what he had earned. It is plain that the learned Trial Judge acknowledged that he also had to take into account appropriate contingencies. However, what he did was to use, in some unspecified way, the value of $1 per week for a man of the age of the respondent to age 65 years at a discount rate of 5 per cent. That value, according to the evidence in writing of an actuary is $779.10. It would appear that he must have made some calculation of what the respondent would have been earning at some date before the trial, if he had not been injured, and then used the multiplier of $779.10. Having done so, he reduced the capital sum by one-third "for the contingencies attendant on past economic loss in the circumstances of the plaintiff". He did not specify the contingencies which he brought to account but they must have all been adverse contingencies. He allowed $60,000. 5. It was properly conceded by Mr. Humphries, who appeared for the respondent on this appeal, that the approach of the learned Trial Judge in the assessment of past economic loss was erroneous and that the award could not be justified by the evidence. Clearly, the multiplier of $779.10 could have no application to the assessment of past economic loss. Furthermore, the reduction of an award for past economic loss by one-third on account of "contingencies" could not in the circumstances be justified. The respondent had a proven history of regular employment, with some periods of unemployment. He was a keen and hard working employee always anxious to work and, but for the accident, it was very likely that he would have worked for many years as he had in the past subject to one matter. The evidence justified the finding that, but for the accident, it was probable that the respondent would have remained in Port Augusta working for G.F. McMahon who had a contract to do work at the Power Station for some time. Even though the respondent was keen to travel, it is likely that the responsibility of fatherhood and other domestic influence would have caused him to remain in Port Augusta for a longer period than otherwise would have been the case, with the result that he would have endured less periods of unemployment than had previously been the case, at least during the immediate future. 6. In view of the wrong approach of the learned Trial Judge to the assessment of damages for past economic loss that assessment must now be made on appeal. In order to measure the past economic loss of the respondent by what he would have earned had he not been injured, an appropriate starting point is to consider his history of employment for an appropriate period prior to the accident in order to determine what would probably have occurred if he had not been injured. A period of four years is appropriate. 7. The evidence does not enable a precise calculation to be made of all of the earnings of the respondent during those years, however, the evidence does suggest that the net earnings of the respondent in those financial years were, at least, as follows: 1986 - $14,210; 1987 - $7,143; 1988 - $13,749; 1989 - $10,865. The figures exclude unemployment benefits received by the appellant and probably do not include all income from employment received by him, particularly in 1989. 8. I have not been able to discern in the evidence the reason for low earnings in the financial year 1987. In the financial year 1989 he had periods of unemployment. The evidence discloses that if the respondent had not been injured in the accident, it is likely that he would have continued to be employed by G.F. McMahon at the Power Station for a considerable period as a further contract had been secured. Of course, he may have resumed an itinerant lifestyle but domestic influences, the new responsibility of parenthood and the availability of steady work at Port Augusta, suggest otherwise. The history of his past earnings justifies the conclusion that had he not been injured, the respondent is likely to have utilised his earning capacity to the extent of about $15,000 per year net, even allowing for some periods of unemployment. If he had continued to work for G.F. McMahon for an extended period, his earnings would have exceeded that amount. 9. The period from the accident to the judgment is about four years and it is reasonable to accept that, but for the accident, the net earnings of the respondent during that period would have been about $60,000. It is accepted that for a time after the accident he was totally incapacitated for work, until about late in 1989. On 23rd October 1989 Workcover had received a certificate to the effect that he was fit for light duties not involving heavy lifting and climbing. The respondent was keen to resume work and made many attempts to do so. It appears that he did obtain work on 27th November 1989 and thereafter there were periods when he was working and some periods when he was not. He commenced working one day a week and gradually reached full time employment. Eventually he obtained work in Western Australia as a deck hand and continued that employment thereafter. He had that job at the trial and proposed to continue working as a deck hand. He intends to obtain an appropriate licence to operate the boat and thereby improve his earnings. This work is seasonal and there is a lengthy period each year when the respondent is not required for that work. During some of those periods he worked as a cabinet maker. The information contained in taxation returns and other documents admitted into evidence does not permit a finding as to the precise amount of net earnings of the respondent since the accident, excluding social security payments and income maintenance which he received from Workcover. The latter payments were received because the accident occurred whilst the respondent was on his way home from work. Careful consideration of this evidence leads to the conclusion that the respondent probably had total net earnings between the accident and the trial of about $30,000. 10. In my view, the true measure of the past economic loss of the respondent is the amount of his likely earnings less his actual earnings which amounts to $30,000. I do not think there are any favourable contingencies of sufficient significance to increase that amount. There are some unfavourable contingencies but they are, in my view, offset by the award not been made in current money value. I would assess the respondent's damages for past economic loss at $30,000. 11. I now turn to the cross-appeal. By the time of the trial the respondent's net earnings as a deck hand were about what he would have been earning had he not been injured, which, on my calculations, are about $15,000 per annum. However, the learned Trial Judge accepted that the respondent had suffered a loss of future earning capacity because of his residual disability. As a cabinet maker he could not work at the same speed as was the case before the accident. He is a little unsteady, particularly on ladders and trestles and he cannot undertake some heavy tasks, such as requiring the use of a heavy hammer. He still suffers some pain in his hip during cold weather and whilst at sea he suffers pain in windy conditions. 12. The respondent is able to continue working as a cabinet maker and has plans to operate his own business at times when he is not working on the fishing boat. He would be able to work at his own pace and it is to be expected that such a business will be profitable to some extent. 13. Mr. Humphries contended that the evidence justifies a finding that, in consequence of the accident, the respondent has a future economic loss which may be assessed in present day terms of not less than $100 per week. Using the multiplier and deducting one-third for contingencies would result in an award of at least $52,000. Mr. Humphries contended that his loss could be more than $100 per week which would result in a bigger award if calculated on an actuarial basis. He did not suggest that this is the type of case where that type of calculation should be used, but that it is a guide and the evidence does justify an award of $50,000 with the consequences that the award of $30,000 is manifestly inadequate. That is the amount Mr. Humphries argues which should have been awarded for future economic loss. 14. I do not think the evidence justifies the conclusion that, but for the accident, the respondent's earnings would have been more than is presently the case, let alone to the extent of not less than $100 per week. On the contrary, the evidence established that the respondent is now earning, as a deck hand, about what he would probably have earned had he not been injured and had continued the lifestyle and type of employment which he pursued prior to the accident. There is no basis for an actuarial calculation in determining the true measure of any future economic loss. 15. The learned Trial Judge accepted that the respondent had sustained a loss of future earning capacity. It appears that he assessed that loss at $30,000 after making a reduction of one-third for contingencies. Consequently, his starting point was $45,000. 16. In my view, it cannot be said that the learned Trial Judge was in error in his approach to the assessment or that it is a totally erroneous estimate of the future economic loss of the respondent. True it is that the respondent intends to obtain a Masters ticket so that he can operate the fishing boat which will probably result in additional earnings but his disability will restrict his capacity to work as a cabinet maker during the off season and in the event that he ceases to work on the fishing boat. Also he has a long working life ahead of him and it is possible that the diminution of his earning capacity may increase as time goes by. Even though he has been able to utilise his residual earning capacity in recent years without any significant reduction in the income which he probably would have earned if he had not been injured, the fact remains that he has suffered a future loss of earning capacity and a significant award is justified. In my view, it cannot be said that the award of $30,000 is manifestly inadequate. 17. I would allow the appeal and reduce the award of damages for past economic loss to $30,000. I would dismiss the cross-appeal. 18. I would hear the parties as to the amount of interest which should be awarded.

JUDGE2 BOLLEN J I agree with the orders proposed by Mullighan J and with his reasoning.

JUDGE3 DUGGAN J For the reasons given by Mullighan J. I am of the view that the appeal should be allowed for the purpose of reducing the award for past economic loss to $30,000 and that the cross-appeal should be dismissed.