Hanlon v Hanlon Enterprises Pty Limited

[2004] NSWSC 930

CITATION:	Hanlon v Hanlon Enterprises Pty Limited & anor [2004] NSWSC 930
HEARING DATE(S):	03/05/2004 - 07/05/2004, 10/05/2004 - 11/05/2004, 13/05/2004 - 14/05/2004.
JUDGMENT DATE:	8 October 2004
JUDGMENT OF:	Hislop J
DECISION:	1. (a) verdict for the plaintiff against the first defendant in the sum of $ 1,615,090.84; (b) judgment for the plaintiff against the first defendant in the sum of $1,361,521.02; (c) verdict and judgment for the second defendant against the plaintiff; (d) verdict and judgment for the second defendant on the first defendant's cross claim against it; (e) verdict and judgment for the first defendant on the second defendant's cross claim against it; 2. The first defendant to pay the costs of the plaintiff; 3. The plaintiff to pay the costs of the second defendant, but to have a Bullock order against the first defendant in respect of those costs; 4. The first defendant to pay the costs of the second defendant in respect of both cross claims; 5. The parties to have liberty to apply in respect of costs and/or interest within 10 days.
CATCHWORDS:	Employer's liability - Grain auger - Negligence - Breach of statutory duty - Liability of equipment installer - Contributory negligence - Damages.
LEGISLATION CITED:	Factories, Shops and Industries Act 1962 - s 27 Workers Compensation Act 1987 - s 151N
CASES CITED:	Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649 Ghunaim v Bart [2004] NSWCA 28 McLean v Tedman (1984) 155 CLR 306 Medlin v State Government Insurance Commission (1995) 182 CLR 1 Michael Realty Pty Limited v Carr (1975) 2 NSWLR 812 Proctor and Gamble Pty Limited v Australian Slatwall Industries Pty Limited [2001] NSWSC 398 Southgate v Waterford (1990) 21 NSWLR 427 Sullivan v Gordon (1999) 47 NSWLR 319 Suosaari v Steinhardt [1989] 2 Qd R 477 Todorovic v Waller (1981) 150 CLR 402 at 412 Voli v Inglewood Shire Council (1962 - 1963) 110 CLR 74 Williams v Grain Handling Authority of NSW (NSWSC 21 October 1986 unreported) Woolcock Street Investments Pty Limited v CDG Pty Limited (2004) 78 ALJR 628
PARTIES :	Daniel Michael Hanlon - Plaintiff Hanlon Enterprises Pty Limited - First Defendant JR Cleverdon Holdings Pty Limited - Second Defendant
FILE NUMBER(S):	SC 20208/00
COUNSEL:	Mr P Blacket SC with Mr W Walsh - Plaintiff Mr D Feller SC with Mr M Perry - First Defendant Mr M Williams SC with Mr R Cheney - Second Defendant
SOLICITORS:	Turner Freeman - Plaintiff Vardanega Roberts - First Defendant Riley Gray-Spencer - Second Defendant

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Hislop J

8 October 2004

20208/00 Daniel Michael Hanlon v Hanlon Enterprises Pty Limited & anor

JUDGMENT

Introduction

1 The first defendant carried on business as a buyer and seller of grain at premises at Queen Street, Junee. The grain was stored by it at the premises. The premises consisted, relevantly, of offices, a weighbridge and a number of silos on one side of the street and a grain storage shed on the other. The first defendant also conducted a fertiliser business from those premises.

2 The plaintiff was employed by the first defendant to work as a hopper attendant at the premises.

3 The second defendant carried on business as a supplier and installer of storage sheds and associated equipment.

4 The second defendant contracted with the first defendant to supply and erect the grain storage shed and plant and equipment therein including augers. The contract provided that the first defendant was separately responsible for the provision of power, control switches and wiring to the shed.

5 On 1 December 1997, whilst the plaintiff was in the course of that employment, his left hand was traumatically amputated when it came into contact with a revolving grain auger which had been installed in the storage shed by the second defendant pursuant to the aforesaid contract.

6 The plaintiff has claimed damages for this injury from the first defendant as his employer and from the second defendant as the party responsible for the design, manufacture, supply and installation of the storage shed and auger. The defendants have cross-claimed against each other seeking damages, indemnity or contribution in respect of their liability, if any, to the plaintiff.

The storage shed and its operation

7 The storage shed was large and partitioned into two storage areas (“bin one” and “bin two”) by a dividing wall running across the width of the shed midway along its length. The grain stored in bin one was of a different type to that stored in bin two.

8 The grain to be stored in the storage shed was delivered to the premises by trucks. It was discharged from the trucks through a ground-level grate into a pit. It was conveyed by an auger (a screw conveyor located inside a metal tube) from the pit to ground level in front of the shed where it was passed to another auger inclined across the exterior face of the front wall of the shed (“the incline auger”). The incline auger carried the grain from there to near the apex of the shed roof, where it passed onto the first of two horizontal augers (“the roof augers”) which ran end to end along the length of the shed. The first roof auger was located above bin one; the second above bin two.

9 There were a number of discharge chutes located on the underside of the roof augers approximately 3-metres apart. The chutes were 70mm long. A sliding guide was formed along the two longer sides of the bottom edge of each chute, and between those guides was located a flat steel plate (the “draw plate”), enabling the chute to be opened or closed as required.

10 Access to the roof augers was by an external stairway, consisting of forty stairs inclined across the external face of the front wall of the shed. The stairway ran from ground level to an access platform from which entry was gained through a door to the interior of the shed. Access to the roof augers was from an elevated catwalk which ran the length of the shed from that doorway. There was a switch at the top of the stairway which, if operated, would turn off the first roof auger and a similar switch in respect of the second roof auger at the other end of the catwalk.

11 The augers were operated from a control panel in the vicinity of the pit. The panel contained a horizontal row of four push button assemblies. Each button related to a separate auger, which was identified by a caption above it on the panel. The lower section of the button was coloured green and was used for switching the auger on, the upper section was coloured red and was used for switching the auger off. There were no lights on the panel to indicate the button had been sufficiently depressed to commence the desired operation. The augers were switched off in sequence, pit, incline, roof, to avoid grain jamming the augers.

12 The augers were noisy in operation. Mr Peter Hanlon gave evidence that the noise of the roof auger was very distinct to a person standing on the ground at the front of the shed. It would have been greater to a person at the entrance to the shed as the auger’s motor was located just outside the entrance. Mr Peter Hanlon also gave evidence that once inside the shed, it was obvious the auger was still in rotation until the auger came to a complete stop. I accept the evidence of Mr Peter Hanlon in this regard. It is confirmed by the evidence of other witnesses, including Professor Frost and Mr Turner. The plaintiff himself conceded it would be very hard not to hear the motor running as he approached the top of the stairs, or to hear the auger winding down.

13 Once the auger was turned off at the control panel there was a period whilst the auger ran down and the last of the grain was deposited in the bin. The auger continued to be noisy during this period though its sound, to the experienced, was somewhat different to when it was running under a full load.

14 There was some debate in the evidence as to how long the auger took to run down and stop and whether there was sufficient time for a person to run from the control panel up the stairs to the access platform before the auger had stopped. Mr Peter Hanlon and Mr Turner both said there was not. I accept that evidence.

15 The type of grain delivered could vary from truck to truck. Accordingly, the grain was sampled on arrival at the premises to ascertain its type. This determined whether, if it was to be stored in the shed (there were other storage facilities on the premises), it should be stored in bin one or bin two.

16 In the event the preceding load stored in the shed was of a different type to that next to be stored, it was necessary for the operator to turn off the augers, proceed up the stairs, enter the shed from the access platform and, from the walkway, open or close the appropriate chutes of the roof augers as required to enable the grain to flow into the correct bin.

The plaintiff’s employment

17 The plaintiff was 16 years of age at the time of injury. He had just completed year 10 at Junee High School, and had commenced casual summer employment with the first defendant on 24 November 1997. He had not worked there previously. He was to work during the harvest period which extended to about mid January. He was assigned to the job of operating the storage shed. He received instructions as to the work required of him from Mr Turner, an employee of the first defendant. He had engaged in that work for between four and seven days. There was a conflict in the evidence as to the precise number of days he had spent performing that work prior to the accident but it is unnecessary to determine this as, on any view, the plaintiff was an inexperienced worker.

18 Mr Turner instructed the plaintiff never to enter the shed whilst the roof augers were operating. He explained to the plaintiff how the augers were to be operated from the control panel. He showed the plaintiff how to open the chutes. The plaintiff gave evidence he was not told of the switch at the top of the stairs. Mr Turner could not remember whether he had instructed the plaintiff in this regard or not. The plaintiff also stated that he had not encountered a draw plate which would not slide freely prior to the time he sustained injury. I accept this evidence.

The circumstances of the plaintiff’s injury

19 On the morning of 1 December 1997, the plaintiff was engaged in the process of unloading grain from trucks for storage in the storage shed. He was the only employee of the first defendant at the storage shed at the relevant time. The type of grain from the truck which he had just unloaded differed from that of the truck he was about to unload. It was thus necessary for him to open the chutes to the bin to be used and depending on whether the prior delivery had gone into bin one to close the chutes on that bin. The facility had commenced operation at about 7am and a number of trucks had arrived to unload grain by about 8am when the accident occurred.

20 The plaintiff gave evidence he switched off all the augers in sequence and proceeded up the stairs and onto the catwalk. The plaintiff was mistaken in his belief that he had switched off all the augers. Mr Peter Hanlon gave evidence, which was not disputed by counsel for the plaintiff, that he turned the first roof auger off following the accident. It was the only auger running at that time. It was not submitted the first roof auger had continued to run due to any electrical fault in the switching mechanism or that it had been turned on after the plaintiff had purportedly turned it off. I find that the plaintiff had attempted to turn off the first roof auger before proceeding up the external stairway, but such attempt had been ineffective.

21 The plaintiff gave evidence he went to close the second chute from the door on the first roof auger, but the drawplate would not slide freely due to an accumulation of wheat dust in the slide. In attempting to free it, his left hand came off the draw plate and into contact with the auger. Subsequent to his injury, his hand was recovered from under the second chute of the first auger. There was some debate as to whether the plaintiff had been opening or closing the first rather than the second chute. However, I accept the submissions that nothing turns upon the determination of that question and it is unnecessary for me to determine the issue.

22 I find that the plaintiff’s injury was sustained when his left upper limb came into contact with the screw of the first roof auger whilst he was endeavouring to open or close a chute on that auger, the drawplate of which did not slide freely on that occasion.

The liability of the first defendant to the plaintiff

23 The plaintiff alleged in his Amended Statement of Claim that his injury was caused by the negligence and breaches of statutory duty of the first defendant.

24 The first defendant expressly made no submissions in opposition to the plaintiff’s liability claim and indeed argued in support of its cross-claim that there had been a breach of s 27 of the Factories, Shops and Industries Act 1962 (“FSIA”) by it. However, as the first defendant did not in terms admit liability to the plaintiff, and there are issues of contributory negligence and on the cross claims, it is necessary to determine the question of the first defendant’s liability to the plaintiff.

25 The first defendant, as employer, had an obligation to take reasonable steps not merely to provide a safe system of work for the plaintiff, but to maintain and enforce such a system. It also owed a duty to take reasonable care to provide safe plant and equipment and to instruct the plaintiff in its safe use. The standard of care expected requires an employer to take account of the possibility of inadvertent and negligent conduct on the part its employees (McLean v Tedman (1984) 155 CLR 306 at 313).

26 No danger was posed by the auger when the draw plates were covering the chutes as they completely prevented access to the screw. No danger was posed by the auger when a chute was depositing grain as the volume and velocity of the delivery of the grain prevented access to the screw. It was only in circumstances where the auger was operating empty and a draw plate was open that any risk arose. The plaintiff was instructed, and understood, that he should not enter the shed when the auger was operating and that when it was necessary to open or close the chute the auger was to be turned off at the control panel. As I have found it was not possible for a person to turn off the auger at the control panel and reach the access platform before the roof auger had come to a complete stop, the system of work, so far as the plaintiff was concerned, was appropriate and, but for one matter, safe.

27 The deficiency in the system was that the control panel did not indicate that the stop signal had registered and the auger would come to a stop. Thus it was possible, as here, for the operator to believe he had effectively operated the stop switch when he had not, and to proceed up the stairs in the belief that the roof auger was winding down.

28 Thus, if the switch had not been effectively operated, the operator, on reaching the access platform would find the roof auger still running. In the ordinary course the switch located at the access platform could then be operated, the auger would come to a stop and the opening and closing of the chutes could then be performed safely. However in the plaintiff’s case he had not been instructed as to the presence of the switch at the access platform.

29 There was expert evidence, which I accept, that low cost measures could have been taken to provide a visual indicator that the switch had been effectively operated. The plaintiff submitted such measures should have been taken, and if that had occurred, he would not have sustained injury; and the first defendant’s failure to take those measures was the result of negligence on its part.

30 The plaintiff also submitted the first defendant was negligent in that:

(a) the auger was dangerous in that access could be gained to the screw when the auger was running empty. Evidence was given by Mr Peter Hanlon that in the second year of operating the chute he designed a piece of equipment which hooked into the hand rail underneath the chute and enabled the grain to be spread. In order to perform the spreading it was necessary for employees to work in the shed whilst the roof augers were operating. Evidence was given by Professor Frost that it would have been possible to design a mechanical guard to prevent contact between the operator and the auger screw. The evidence of Professor Frost was lead by the first defendant;

(b) it failed to provide an interlock on the shed door, or a cut out switch, such that persons would have been prevented from entering the shed while any roof auger was operating. Mr Carmody, in his report, confirmed the practicality of such a means of avoiding injury, and indeed it was provided after the intervention of the Department of Industrial Relations following the injury to the plaintiff;

(c) the plaintiff had not been adequately trained in the operation of the augers in that he was not instructed as to the manner of manipulating the draw plate if it did not slide freely. However as the plaintiff had been instructed not to enter the shed whilst the augers were running reasonable care in my opinion did not require the first defendant to instruct the plaintiff how to manipulate the draw plate whilst the auger was running;

(d) it allowed the plaintiff to work unsupervised, as, if he had been supervised, his supervisor would have observed that the auger was still running and could have called out to him not to go into the shed until the auger had been turned off. However, as the plaintiff was an apparently sensible young man who had been instructed not to enter the shed whilst the augers were running, I do not consider the failure to provide a person to warn him in the manner suggested was negligent.

31 In my opinion, the plaintiff has established the first defendant was negligent in permitting the use of a control panel which did not indicate, clearly or at all, when the stop button had been effectively engaged, in failing to inform the plaintiff of the presence of the switch at the access platform and in failing to provide an electrical interlock. Additionally the first defendant, by its conduct in calling Professor Frost, appears to have accepted the first defendant was negligent in failing to provide a mechanical guard. These breaches were causative of the plaintiff’s injury. I find the first defendant liable to the plaintiff.

Breach of the provisions of the FSIA

32 The plaintiff also asserted the first defendant was liable by reason of breaches of the FSIA.

33 The provisions of the FSIA have application only in the event that the first defendant’s premises was a “factory” within the meaning of s 4 of FSIA. This was the subject of dispute between the second defendant and the plaintiff and first defendant.

34 “Factory” was defined in s 4 FSIA at the relevant time as:

means -

(a) any building or place other than a farm or rural holding used exclusively for agricultural, horticultural or pastoral purposes in which… -

(iv) mechanical power is used in or in aid of -

(a) a manufacturing process, or

(b) any of the following processes carried out for trade or sale or gain or as ancillary to any business, that is to say, the sorting or packing of goods or articles, the filling of bottles or other containers, the freezing, chilling or storing in cold storage of any goods or articles, or the generation of water power or any other power; or…

35 The plaintiff and first defendant argued, essentially, that the premises was a factory because mechanical power (namely the augers) was used in either:

(a) the sorting of goods, or

(b) the filling of containers which processes were carried out for trade or sale or gain or as ancillary to any business.

36 The second defendant submitted the grain had been sorted prior to its arrival at the premises. The augers were used, not to sort the grain, but merely to convey already sorted grain into the appropriate bin for storage. That the section was not intended to apply to storage, as such, gains some support from the fact that there is an express inclusion of cold storage of goods or articles in the section. The first defendant submitted “sorting” extended to the arranging according to sort, kind or class and the placing in separate bins brought the activity within that definition. In Williams v Grain Handling Authority of NSW (NSWSC 21 October 1986 unreported) Allen J held that the storage of grain in similar circumstances was not a sorting of goods. As a matter of judicial comity I would follow that decision – Michael Realty Pty Limited v Carr (1975) 2 NSWLR 812 at 820 E-F.

37 I would also accept the second defendant’s submission that the word “containers” must be read ejusdem generis with “bottles”. I would construe the section as applying to goods being placed in containers in which they are to be sold rather than purely for the purposes of storage.

38 Accordingly, I find the provisions of the FSIA are inapplicable. However this is not a matter of significance to the plaintiff as he has established liability under common law principles and it is no longer the law that there is no apportionment for contributory negligence in cases of breach of statutory duty - see s 151N Workers Compensation Act 1987 (“WCA”).

39 The plaintiff in its amended statement of claim also relied upon breach of Regulations 4 and 6(2) of the Rural Industries (Machine Safety) Regulations. These allegations were expressly abandoned by the plaintiff at the hearing.

Contributory negligence

40 The plaintiff conceded he was well aware of the risk of serious injury in the event he came into contact with a revolving auger screw. He also conceded he had received and understood instructions that he should not enter the storage shed if either roof auger was running and that he understood the risk involved to anyone who tried to open or shut the slides whilst the roof auger was operating. He gave the following evidence in cross examination:

Q. You see, I’m not asking you now what you remember because you have told us you don’t remember anything about that, but you had worked there for a week, you had been up and down on numerous occasions. Would you agree that if the machine, the motor was running immediately before you entered the shed there is no way that you could not have heard it?
A. No that’s right.
Q. Now, so, and if you had heard the motor you wouldn’t have entered the shed, is that correct?
A. No, that’s correct.
Q. You would have gone back downstairs and turned it off?
A. That’s right.

And:

Q. And if you had noticed that the motor was running you would have certainly not have entered into the shed because you knew how dangerous it was?
A. That’s right.
Q. So what I’m asking you is do you think you were being perhaps somewhat careless for your own safety on that particular occasion?
A. Yes, maybe.

41 The defendants rely primarily upon those concessions to establish contributory negligence on the part of the plaintiff. It was not submitted by the defendants that the plaintiff was guilty of contributory negligence in failing to ensure the button on the control panel had been sufficiently depressed to turn off the first roof auger. However it was submitted the noise from the operation of the first roof auger was such that the plaintiff must have heard it and chosen to proceed to open or close the chute regardless.

42 The plaintiff said that when he reached the top of the stairs he noticed nothing about the augers and he was not conscious the roof auger was still running when he went through the door. He cannot remember if it was making a noise. He conceded his recollection about a lot of things on the day of injury was not clear. He also said he had not been inside the shed when the augers were running on any previous occasion.

43 The issue of contributory negligence is to be approached on the footing the defendant (or defendants, if both were at fault) failed to discharge its obligations to take reasonable precautions against any risk of injury arising from its fault, and the plaintiff failed to observe and avoid any risk so created. The initial question is whether the plaintiff’s failure amounts to negligence, or should be categorised as mere inattention, inadvertence, thoughtlessness or the like, there being a well recognised distinction between the two (McLean v Tedman (1984) 155 CLR 206 at 351).

44 The second defendant has asserted the apportionment for contributory negligence should be 50%. The first defendant characterised the plaintiff’s contributory negligence as “significant” but declined to specify a percentage.

45 It was submitted for the plaintiff that this was a case where the plaintiff’s failure should be categorised as mere inattention, inadvertence, thoughtlessness or the like, and not as contributory negligence.

46 The issue is essentially one of fact. The circumstances and conditions in which the employee has to do his or her work must be taken into account, and the mere fact the employee has knowledge of the danger is not conclusive (Ghunaim v Bart [2004] NSWCA 28).

47 Although the plaintiff gave evidence he had no recollection of the roof auger operating it cannot be doubted that it must have been clearly audible to him even if there was some noise from trucks idling below. It seems to me there are really two possible scenarios: either the fact the auger was operating did not register with him because he was intent upon getting the job done, and his mind was on what was to be done and he believed the auger had been turned off, or alternatively he was aware the auger was still running, though he probably thought it was in a run down phase and entered the shed expecting it to stop but when it did not stop he determined to complete his work in the shed rather than return to the ground to turn off the auger.

48 If the first scenario is what occurred then I would categorise the plaintiff’s failure as a case of mere inattention or thoughtlessness rather than contributory negligence. If the latter is the correct scenario then it would be properly categorised as contributory negligence. The onus is upon the defendants to establish the plaintiff’s failure to avoid injury amounted to contributory negligence.

49 In my opinion the noise of the roof auger was such that the plaintiff must have heard it and realised the auger was still operating. He must have continued to hear the auger operating when he entered the shed and when he was about to adjust the draw plate. In my opinion the proper inference is that the plaintiff was aware the first roof auger had not turned off but decided that rather than return to the ground to turn it off he would proceed to adjust the draw plates as required. Accordingly some apportionment for contributory negligence must be made.

50 The degree of fault attributable to the first defendant far exceeds that of the plaintiff in that the risk situation arose because of the deficiencies in the control panel, the failure to inform the plaintiff of the switch near the door and the absence of an interlock to prevent him entering the shed whilst the auger was running and the absence of a guard over the chute.

51 By contrast the plaintiff was young and inexperienced. He had not encountered difficulty in sliding a draw plate before and the risk of his hands slipping into the auger would at the time have seemed most unlikely. Once he had embarked upon endeavouring to open or close the draw plate and encountered resistance it would have been natural for him to continue with the process without thought of any risk involved. The plaintiff was a conscientious young man. His options were to return to the ground and attempt for a second time to turn off the auger or to proceed notwithstanding the auger was still running. The third option that he should simply turn off the auger at the switch at that level was not known to him. The harvest season was a particularly busy time and the trucks awaiting unloading were beginning to bank up. His action in getting on with the job was an action taken for the benefit of the first defendant. I assess the plaintiff’s contributory negligence at 10%.

The second defendant’s liability

52 It was agreed by the defendants that the contract between them comprised a quotation dated 17 August 1995, a written agreement dated October 1995 and plans referred to therein. The written agreement was prepared by the first defendant’s solicitors.

53 The quotation stated inter alia:

Our quotation for Grain Shed 26M wide x 54M long x 5M high – 1 division wall in centre giving 2 partitions – doors into each partition – 1 auger empty chute in each door – 12 auger chutes in side walls – catwalk along apex of building – stairway to catwalk…Building complete and erected on site at Junee…Auger system giving approx 120 T.P.H capacity (wheat.) Augers from hopper & up to horizontal auger – 11” flight – 12” tube. Tube 3mm plate – 4.5mm flighting on heavy wall pipe. Horizontal Auger – open top trough design – trough 3mm plate. Top covered with removable covers – 10” flight mounted with bearings at 3.0M centres – constructed with special flange plates so bearings can be replaced by removing 1 – 3.0M section only. All joins sleeved for extra strength. Top Auger with 2 motors & slip bearing in centre… Not included :… Power, control switches & wiring. We will require power on site.
TOTAL PRICE :…$399,840.00

54 The written agreement recited:

B. The Supplier has provided the Owner with a quotation to supply and erect a grain storage shed upon the Owner’s land at Queen Street Junee for an agreed price of $399,840.00
C. The Owner has accepted the quotation herein before recited at $399,840.00

and provided inter alia:

2. The construction of the grain storage shed and all plant and equipment contained therein shall be in accordance with the terms of the quotation appended hereto and the plans and specifications of the shed has have been approved by Junee Shire Council. The hot mix option referred to in the quotation shall not apply to the contract.

3. The grain storage shed shall be constructed in a proper and workmanlike manner incorporating all new materials plant and equipment.

4. As stated on the quotation annexed (the first defendant) shall be separately responsible for…the provision of power, control switches and wiring and general provision of power to the site to enable construction work to commence.

6. The Supplier covenants to complete the grain storage shed and the installation of all appropriate plant and equipment in accordance with the timetable set out in this paragraph…

55 The contract did not provide for the provision of guards on the chutes nor did it provide that the second defendant was to give advice to the first defendant in relation thereto. The second defendant had no responsibility for the provision of power, control switches and wiring, such responsibility resting with the first defendant.

56 The only evidence given as to the contract was that of Mr Peter Hanlon. Mr Cleverdon, the principal of the second defendant, and the person with whom Mr Peter Hanlon had dealt, was not called to give evidence, though he was present in Court.

57 Mr Peter Hanlon was a fitter and turner by trade. He and his wife were the sole directors of the first defendant. I accept his evidence that he had been around augers for most of his life and was familiar with them, and he was aware the chutes were not to be guarded; he entered into the contract on behalf of the first defendant with the second defendant after viewing a similar grain storage shed erected by the second defendant; there was no discussion about the augers; he did not discuss any requirement that the auger chutes be guarded; he well understood upon receipt of the quote what the second defendant was to provide; he did not at any time complain about any aspect of the installation and accepted “most definitely” that what the second defendant had built accorded entirely with what he understood the second defendant had contracted to do.

58 Professor Frost suggested that to install the alterations designed by him could cost about $16,000.

59 Mr Peter Hanlon impressed as a man of strong views who was cost conscious. He opted for the shed as it was more economical than a silo. His only complaint about the second defendant was that its price was too dear. I have no doubt Mr Peter Hanlon was a man who would make his own decisions as to all matters.

60 Subsequent to the plaintiff’s injury the first defendant received a notice from WorkCover which read, “You shall ensure the safety of persons operating the auger inside the grain shed by securely fencing all dangerous parts or by other means, in particular access to rotating screw.” Mr Peter Hanlon gave evidence that the auger was not in an unguarded state and that to operate the shed properly, one had to have access to go in when the auger was running. He did not concede that there was an unguarded auger within the grain shed and was offended by that suggestion. He said, “they were suggesting that the auger was in an unguarded state and I strongly protested that. I said that auger is not in an unguarded state and I still don’t believe it is”.

61 Notwithstanding the injury to the plaintiff, the first defendant has taken no steps to place any guard on the chutes, nor has it apparently taken any expert advice in the matter notwithstanding that an expert was retained on its behalf in the proceedings.

62 Mr Peter Hanlon gave the following evidence:

Q. And if Whellan Cleverdon had, in December 1997, suggested to you that those chute openings needed further guarding, or any guarding at all, you would have just dismissed the proposition, would you not?
A. Can you clarify what area you are talking about there?

Q. The chute openings beneath the roof auger.
A. Oh yes, no. I wouldn’t have. What he has built suffices, I wouldn’t have had any comment on that at all.

63 Mr Peter Hanlon also gave evidence to suggest he had no knowledge in relation to the guarding of auger chutes and that he did not raise matters as to applicable standards and legislation as the second defendant was the expert and it was his job to make sure that what he built complied with all necessary statutory requirements. It was suggested to Mr Peter Hanlon that a mechanical guard of the type suggested by Professor Frost could be constructed. The following evidence was given in re-examination:

A. I’d have to see the practicality of it. What you are describing to me sounds great, but the practicality…

Q. Certainly, that is not something you are expert in, nor able to provide any opinion about?
A. True.

Q. And had Mr Cleverdon suggested to you that that was available, would you have accepted his advice?

A. If Whellan had suggested it to me, yes. I mean, yes.

However by reason of the matters to which I have earlier referred I do not accept this evidence insofar as it seeks to establish that there was any reliance by Mr Peter Hanlon upon the second defendant in relation to the guarding of the auger chutes or the redesign of the draw plates.

64 I find that the first defendant did not rely upon the second defendant to provide guards to the chutes of the augers or to advise it in relation thereto. There was no reliance by the first defendant upon the second defendant to redesign the draw plates or to advise in relation thereto. Furthermore, I find that if the second defendant had advised the first defendant prior to completion of the contract that guards could be fitted to the chutes or the draw plates could be redesigned, such advice would not have been acted upon by the first defendant.

Implied Terms of the Contract

65 The first defendant sought to impose contractual liability upon the second defendant. It asserted the following terms were to be implied into the contract as a matter of fact in order to provide business efficacy:

a. That the Cross-Defendant would exercise reasonable care and skill in the design and manufacture of the shed and associated auger systems and equipment.
b. That the auger systems designed, manufactured, supplied and installed by it would be reasonably safe for use by the Cross-Claimant and its employees.
c. That the auger systems designed, manufactured, supplied and installed by it would contain such safety features as were reasonably necessary to prevent accidental contact between operators of the auger and any moving part thereof.
d. That the auger systems designed, manufactured, supplied and installed by it would comply with the requirements of all appropriate standards governing the design, construction, installation and operation of such equipment.
e. That the auger system designed, manufactured, supplied and installed by it would comply with the requirements of the Factories, Shops & Industries Act and the Rural Industries (Machine Safety) Regulations in relation to the use and operation of the said auger system.

66 The first defendant submits these terms were breached by the second defendant essentially in that the drawplate should have been designed so as to prevent it jamming and to reduce the risk of the operator’s hand slipping from it, and a mechanical guard should have been provided.

67 It is settled law that in order for terms to be implied into a contract as a matter of fact the following preconditions must be established:

…(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; (3) it must be so obvious that “it goes without saying”; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract – BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 16 ALR 363 at 376, Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 347, Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 605-6.

68 I find that it was not necessary to give business efficacy to the contract to imply the alleged terms. Nor could it be said that the alleged terms were so obvious that they went without saying. As Mr Peter Hanlon stated, he knew what the second defendant was to provide and what the second defendant built accorded entirely with what the second defendant had contracted to do.

69 It was further submitted that the aforementioned terms should be implied as a matter of law into contracts of this type and thus in the contract between the defendants.

70 I do not accept that submission. The ordinary building contract contains an implied term that the work will be done in accordance with the contractual stipulation, with proper materials, in a workmanlike manner and that the building will be reasonably fit for its purpose. Similarly in respect of the provision of goods there is an implied term that the goods will be reasonably fit for the purpose made known, provided there was reliance upon the vendor. I have found such reliance was absent. The work was done in accordance with the contract stipulations as was acknowledged by Mr Peter Hanlon. The equipment provided was reasonably fit for the contractual purpose. There was no reliance upon the second defendant to provide guards for the auger chutes or to redesign the draw plate or to advise in that regard and no obligation upon it to do so.

71 There was no breach of contract by the second defendant in not providing guards for the auger chutes or in relation to the design of the draw plate nor in failing to advise the first defendant in relation thereto. In any event as I have found the first defendant would not have heeded advice that the chute be guarded or the draw plate redesigned any breach would not have been causative of the first defendant’s loss.

Second defendant’s liability to first defendant in tort

72 The first defendant has also sought to recover damages for breach by the second defendant of a duty of care alleged to be owed by it directly to the first defendant.

73 The first defendant has relied, in support of this submission, primarily upon the decision of the Queensland Full Court in Suosaari v Steinhardt [1989] 2 Qd R 477, where, in not dissimilar circumstances, an employer recovered damages from a manufacturer for the employer’s liability to an employee for damages for injury occasioned to the employee whilst using the manufacturers defective product.

74 The Court in Suosaari categorised the claim by the employer as a claim for pure economic loss. The first defendant accepted this categorisation in its submissions. The High Court has since determined Woolcock Street Investments Pty Limited v CDG Pty Limited (2004) 78 ALJR 628. In that case the High Court found a duty of care was not owed by a builder to the original or subsequent owner of commercial premises in the absence of vulnerability on the part of the first owner and/or known reliance by the owner upon the builder.

75 The High Court held that “vulnerability”, in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, “vulnerability” is to be understood as a reference to the plaintiff’s inability to protect itself from the consequences of a defendant’s want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant. There was no vulnerability in this case as the first defendant could have protected itself by appropriate contractual terms or by installing an electrical interlock. There was no identified element of known reliance or dependence on the part of the first defendant upon the second defendant.

76 Additionally the performance of a duty to provide guarding on the chutes or to redesign the draw plates would have required the second defendant to do more and different work than the contract with the first defendant required or permitted (see Woolcock at [28]) in circumstances where I find the first defendant would not have required the work be done and would not have been prepared to meet the additional cost thereof.

77 In my opinion no duty of care was owed by the second defendant to the first defendant and even if it had been, any breach of that duty would not have been causative of the first defendant’s loss.

Second defendant’s liability to the plaintiff

78 The terms of the second defendant’s contract with the first defendant cannot operate to discharge the second defendant from a duty of care to persons who are strangers to those contracts, nor can they directly determine what it must do to satisfy its duty to such persons. That duty is cast upon it by the law, not because it made a contract, but because it entered upon the work (Voli v Inglewood Shire Council (1962 – 1963) 110 CLR 74 at 85).

79 However the contract is not an irrelevant circumstance as it determines the task upon which the second defendant entered (Voli at 85).

80 The second defendant knew the purpose for which the shed was being built. The second defendant’s duty of care extended to persons who came there to use it in the ordinary way (Voli at 85).

81 It was not established that the second defendant was aware that employees of the first defendant were required to work in the shed when the auger was operating. Indeed, on the evidence, it was probable that this state of affairs first arose in 1997 after Mr Peter Hanlon started to use a spreader which he himself had fabricated. The second defendant was entitled, on the evidence, to believe persons did not, in the ordinary course of operations, enter the shed whilst the augers were in operation.

82 No danger was created by the roof auger when being used in the ordinary way. It was only in the situation where a chute was open and the auger was not discharging grain that injurious contact could occur and then only if, contrary to normal practice the auger had not first been turned off, and unlikely events then occurred to bring a person into contact with the auger screw. It was not established the second defendant was aware of any problem with the control panel though this circumstance was a matter within the knowledge of the first defendant. The injury here was not reasonably foreseeable to the second defendant save in hindsight nor was the plaintiff using the augers in the ordinary way when injured. I am not satisfied the design of the draw plate was a foreseeable cause of injury or that its suggested redesign would have avoided the injury that occurred.

83 In Proctor and Gamble Pty Limited v Australian Slatwall Industries Pty Limited [2001] NSWSC 398 it was held [40]:

A manufacturer is under a duty not to put a product into circulation without bringing to it, in the case of machinery, the mind of a reasonably competent engineer to ascertain whether the design of the product is safe. If a competent engineer would have discovered the defect as one which unreasonably exposed the user to risk then the duty of the manufacturer is twofold: firstly, to actually see the risk, secondly, to take all reasonable steps to eliminate or minimise it, or if it cannot be eliminated or minimised, to clearly warn the user of its existence. A manufacturer who fails to take both of these steps breaches the duty of care owed to the user of the product.

84 There was no evidence that the design of augers generally provided for guards on the chutes, such evidence as there was, was to the contrary and the onus of proof was upon the plaintiff. It was not established that if the second defendant had consulted a reasonably competent engineer in the industry, it would have been advised that a practical guard could be designed and fitted.

85 It is true Professor Frost, when asked to focus after the event upon the possibility of designing a guard came up with a design which was theoretically workable. However neither he nor Dr Shafaghi, who also gave evidence, would have been consulted by the second defendant in the ordinary course of events, as neither had any experience or were active in the field of designing augers or agricultural equipment generally. There was no evidence the suggestions put forward by Professors Frost and Shafaghi had been adopted anywhere in Australia nor were they depicted in any Australian Standard.

86 The second defendant, in supplying and erecting the shed and its equipment, was performing a contract with the first defendant and was bound by the terms of that contract. It was not a case of the second defendant being a manufacturer who was supplying items to consumers generally and who was free to design the equipment as it pleased. The second defendant was not entitled under the contract to add guards to the auger chutes or to change the design of the draw plate without first obtaining the agreement of the first defendant. I have concluded the first defendant would not have agreed to those changes particularly as they would have involved extra cost to it.

87 The first defendant had reserved to itself the obligation to provide electrical controls (and it installed an electrical interlock subsequent to the plaintiff’s accident) and had the responsibility, as employer, to set up and enforce a safe system of work. The risk of injury was remote and non-existent if entry to the shed was not permitted whilst the roof augers were in operation. It was not established the second defendant was aware persons were permitted to enter the shed whilst the roof augers were in operation, or that the control panel may not operate effectively. In the circumstances the action of the second defendant in supplying that which the contract required was not such as to give rise to tortious liability on its part.

88 The plaintiff’s claim against the second defendant fails as do the cross claims by the defendants against each other.

Damages - factual background

89 The plaintiff was born on 22 April 1981. He is right-handed. Prior to the accident he was a well-regarded young man who passed his school examinations but was not a noted scholar. He had a girlfriend and a circle of friends. He enjoyed good health and played some sport (cricket, football, water skiing and golf) though his principal interests lay in wood and mechanical work and working on and riding his motorbike. His ambition was to become a diesel mechanic or, perhaps, a builder. He gave evidence he had hoped to obtain an apprenticeship during the Christmas school vacation and not to return to school. To that end he had done work experience with a builder and a company known as Detroit Diesel and had arranged to do a further week’s work experience with Wagga Motors, a company which was seeking an apprentice diesel mechanic at that time.

90 The injury which the plaintiff sustained in the subject accident was a complete amputation of the left hand through the radiocarpal joint. When examined at the hospital following injury the proximal pole of the scaphoid, lunate, triquetrum and pisiform bones were missing as were the articular surfaces of the radius and ulnar. There was a comminuted fracture of the mid shaft of the left ulnar. The extensor digitorum communis and both the long and short mid extensors were avulsed from the proximal muscle belly.

91 On 1 December 1997 the left hand was replanted. There was open reduction, internal fixation and bone grafting of the left ulna and an arthrodesis of the left wrist. There was split skin grafting to the left forearm.

92 Notwithstanding further operative intervention on 10 and 22 December 1997 the hand became ischaemic and on 24 December 1997 a left mid forearm amputation was performed. The plaintiff gave evidence of his feelings of disbelief, disappointment and sadness at this time. He had nightmares for a few months after the injury.

93 Subsequently the plaintiff was fitted with a manual prosthesis to the use of which he quickly adapted. He later was fitted with a myoelectric prosthesis. Initially he had difficulty in making full use of that prosthesis and preferred the manual one. However, in recent times he has become more aware of the capabilities of the myoelectric arm and prefers it to the other. The prosthesis has a facility to enable tools and other appliances to be attached in place of the hand and is particularly helpful for doing mechanical work.

94 The plaintiff returned to school in 1998 and completed his Higher School Certificate though without obtaining sufficient marks to matriculate to university. He then commenced a four year TAFE course as a parts interpreter which course he completed in the early part of this year. Whilst completing that course he was employed by Detroit Diesel as a parts interpreter. The plaintiff’s employment with Detroit Diesel has continued since completion of the TAFE course and he is now a permanent employee of that company.

95 The plaintiff’s present employment largely involves computer work and whilst engaged in that aspect of the work he does not use the prosthesis. If heavy lifting is required he uses a forklift or obtains manual assistance. He can lift weights up to 20 kilograms using the prosthesis.

96 The plaintiff hopes to progress with Detroit Diesel, an international company with some thirteen branches in Australia. His TAFE certificate also qualifies him for work as a salesman, car and building assessor. The plaintiff does not rule out the possibility of obtaining employment in those areas at some later time or of progressing his career with employers other than Detroit Diesel.

97 The plaintiff drives a motor vehicle using a spinning knob. The plaintiff did not own a motor vehicle at the time of the accident and used his parents’ automatic car, as he still does. He acquired a manual vehicle after the injury and used the prosthesis to change gears. There was evidence a doctor had certified him medically fit to drive with a recommended licence condition, “Automatic only, spinning knob to be fitted”. There was evidence which suggested his licence was endorsed for automatic only, but the licence was not tendered and the plaintiff gave evidence that he was still licensed to drive a manual vehicle, though he was seeking to clarify the position with the Roads and Traffic Authority. He had no preference to drive a manual vehicle over an automatic.

98 The plaintiff played golf socially every couple of weekends prior to his injury. He has not played since. He proposes to resume playing some golf using an attachment to the myoelectric arm. He has a girlfriend and an active social life. His main pastime is the restoration of an EH Holden which he works on most weekday evenings.

99 The plaintiff’s injuries and their effect upon him are not the subject of any serious contest in the medical material placed before me. The stump is well healed; there is normal sensation, no complaint of tenderness, and no evidence of neuroma. The plaintiff complained of phantom pain in the limb in the first stages after amputation for about six months, but since then he has not been troubled by pain save if the stump is bumped or jarred. He has full movement of both shoulders and elbows, requires no medications and there is no need for further surgical treatment. He has some pale scarring at the skin graft donor side on the left thigh and fine scars on the back of the feet from where vein grafts were harvested.

100 The plaintiff gave evidence he was not concerned about the cosmetic appearance of the left arm to a sufficient degree to want to wear the prosthesis to mask the absent hand and he walks about freely with the stump showing. The plaintiff does however complain that he feels awkward when meeting strangers for the first time, although once he gets comfortable with the person, his injury does not faze him at all. He notices people looking at him all the time, and feels embarrassed about that. He does not go out to restaurants much, as he doesn’t like to cut up meals or things like that using the prosthesis or his rocker knife as that would draw attention to him. In fact he does not wear the prosthesis to restaurants, and when out orders something easy to cut. He is self-conscious when photographs are taken, and tends to stand in a position where the absence of the lower part of his arm is obscured. His parents gave evidence they considered the plaintiff was more self conscious than he admitted. The medical evidence indicates the plaintiff has made a good adjustment to his predicament and has a very positive attitude.

101 The plaintiff continues to live with his parents; he mows the lawn and keeps his part of the house tidy. The medical evidence is that he has demonstrated a capacity to carry out all ordinary handyman tasks and ordinary domestic duties. He does not attempt moving heavy furniture, nor using ladders to get onto the roof, though he has used ladders for some purposes. He needs help to tie his shoelaces or a tie and has some difficulty hanging out clothes on the washing line, ironing or making his bed. His mother cooks, does the washing and ironing for him and general housework, just as she did prior to his injury. Immediately after the injury he required considerable additional assistance due to his injury and his mother drove him to medical appointments and the like. However he quickly became independent in his personal care prior to his return to school.

102 The plaintiff hopes to settle down and have a family at some time in the future.

103 Dr Jones, who has had the care of the plaintiff since shortly after the injury, gave evidence as to the possible effect of overuse of the un-injured right arm. She referred to a journal article in this regard, however the study on which the article was based was one of persons using body powered prostheses. The doctor stated the risk was probably still 50% but acknowledged she had no statistics in relation to myoelectric prosthesis users. Whilst there is a risk the plaintiff may suffer some effects of overuse of the right arm, it appears to me unlikely such will occur to any significant degree.

104 The plaintiff is an impressive, personable young man who has dealt courageously and positively with a severe injury and its sequelae. By reason of his injuries he is now best suited to clerical or sales type work.

105 The plaintiff placed before the Court two sets of life expectancy tables. The first was that prepared by the Australian Bureau of Statistics; the second by Cumpston Sargeant Truslove Pty Ltd. The latter tables, which were based upon prognostications as to improvement in mortality rates in the future as opposed to historical data, produce an additional five years life expectancy compared to the Australian Bureau of Statistics tables. The conventional approach of the Courts is to use the tables prepared by the Australian Bureau of Statistics. I consider that, in the absence of any direction to the contrary by a higher court, I should follow that approach. Accordingly, in calculating future loss, the tables prepared by the Australian Bureau of Statistics have been used.

106 It is against this background that I proceed to assess the damages payable by the first defendant.

107 Those damages are to be assessed pursuant to the provisions of the WCA prior to its amendment in 2001.

Non-economic loss

108 Section 151G of the WCA required that the assessment of non-economic loss be proportionate to “a most extreme case”. The use of the expression “a most extreme case” rather than “the most extreme case” avoids any requirement to imagine the most extreme case and put that at the top of some grisly tale of catastrophes (Southgate v Waterford (1990) 21 NSWLR 427 at 434). Nevertheless, some sense of proportion must obtain.

109 The plaintiff submits the appropriate assessment for non-economic loss is 100% of a most extreme case. The first defendant submits the appropriate assessment is 75%, the second defendant, 45%. The plaintiff supports his submission, inter alia, by comparison with the likely award of general damages under common law principles and the stated fact that the damages would not enable the plaintiff to purchase a residence. Such tests are not appropriate. Effect must be given to the intention of the legislature. In my opinion, this is not a most extreme case when the matters outlined in the factual background are weighed and considered, in particular, when regard is had to the fact the injury was to the non-dominant arm, it was a below elbow amputation, the plaintiff has no pain, has good use of his prosthesis and has rehabilitated himself successfully both socially and in the workplace. However, it is a very serious case.

110 The statutory maximum for non-economic loss recoverable pursuant to s 151G of the WCA at the time of injury was $226,650. I award 80% of that sum i.e. $181,320.

Past loss of earnings

111 I accept that, on the probabilities, had the plaintiff not been injured, he would have worked for the first defendant for about 7 more weeks at $362.75 net per week ($2,540 net) and thereafter commenced a four year apprenticeship as a motor mechanic. The net award earnings over the period of apprenticeship would have been $51,348. The plaintiff would then have commenced employment as a qualified mechanic. If one allowed from the completion of the apprenticeship to date (144 weeks) the current average net weekly earnings of the two “comparable” mechanics employed at Detroit Diesel of approximately $841 net per week, a figure of $121,000 results. This would produce net earnings, uninjured, for the period since injury of approximately $175,000.

112 However, there are a number of imponderables. For example, would the plaintiff had obtained an apprenticeship as a mechanic that summer, or would he have returned to school for the next two years, would he have been a mechanic, or would he have followed some other career, would he have obtained employment with Detroit Diesel as a mechanic on completion of his apprenticeship at around the rate earned by the mechanics whose earnings were put forward as comparable or would his employment as a mechanic have been with another employer or less remunerative. These imponderables require some adjustment to the allowance which otherwise might have been made for past loss of earnings. I allow a reduction of 25% to account for these matters thus reducing the $175,000 to approximately $131,000.

113 The plaintiff’s actual earnings post injury were approximately $91,000, comprising actual net post injury earnings to 7 November 2003 ($64,091) and an estimate of $27,744 from that date to 08/10/04 (48 weeks at $578). I allow past wage loss at $40,000 ($131,000 - $91,000). There should be added to that a figure for lost superannuation of approximately $4,000. I assess past loss of wages and superannuation at $44,000.

Impairment of future earning capacity and loss of future superannuation

114 The plaintiff claims damages for impairment of future earning capacity. In order to recover damages for loss of future earning capacity he must establish that his earning capacity has in fact been diminished by reason of the negligently caused injury and the diminution of earning capacity is or may be productive of financial loss – Medlin v State Government Insurance Commission (1995) 182 CLR 1.

115 There is no doubt the plaintiff has suffered diminution of his earning capacity by reason of the negligently caused injury. He is no longer capable of engaging in employment which requires full use of both upper limbs.

116 The task of determining the extent to which the diminution of earning capacity is or may be productive of financial loss is of necessity, imprecise, involving, as it does, assessment of numerous possibilities. It is rendered the more difficult in this case as the plaintiff at the time of injury had not embarked upon his full-time working career and had no prior employment history of significance.

117 The plaintiff’s base rate of pay as a parts interpreter is only marginally less than that of mechanics employed by Detroit Diesel. However, the mechanics whose earnings are put forward as comparable work a very large amount of paid overtime whereas the plaintiff, as a parts interpreter, works no paid overtime. This has resulted in a significant weekly loss to the plaintiff if his present actual earnings are compared to those of mechanics employed by Detroit Diesel. The plaintiff’s present net average weekly earnings were calculated by the parties at $578, the average of the earnings of the two “comparable” mechanics was $841 net or $263 net per week more than the plaintiff. If a comparison is made with the lesser paid of the two “comparable” mechanics the difference is $186 net per week.

118 Whilst I accept the plaintiff, if uninjured, more probably than not would have qualified and obtained employment as a mechanic, such employment need not necessarily have brought him the remuneration earned by the “comparable” mechanics at Detroit Diesel. This is particularly so as the amount of overtime available to those employees greatly exceeds that common in the industry and there is no certainty the plaintiff would have obtained employment with that company as a mechanic or that such employment or those rates of overtime would continue.

119 There is also the possibility the plaintiff would not have followed a career as a mechanic but would have done some other form of work which may or may not have been as remunerative.

120 The plaintiff has the qualifications to obtain higher paying employment as a salesman or car or building assessor and doubtless the capacity to obtain many other jobs. He is keen to progress in his career. It is likely in time he will obtain more remunerative employment. On the other hand he may lose his employment in which event, as the labour market open to him is smaller than would have been the case if he was uninjured, he may have difficulty finding new employment; he may suffer an overuse syndrome of the right arm, he may leave the workforce earlier than otherwise would have been the case, he will also lose days from work by reason of the need for medical checkups, prosthesis fitting and the like.

121 The imponderables in this case are such that the financial loss consequent upon the diminution of earning capacity and future superannuation loss cannot be calculated with any mathematical precision. In my opinion, the appropriate course is to allow a lump sum figure for impairment of future earning capacity and loss of future superannuation. I assess that figure at $200,000.

Griffiths v Kerkemeyer - past

122 The plaintiff claims damages for past gratuitous care between 15 December 1997 and 10 February 1998. The total claim during that period is $4,566.24. I do not understand the first defendant to challenge this part of the assessment and I allow it.

123 The plaintiff claims seven hours per week from 10 February 1998 to 14 February 2000 at $18.12 per hour. I allow this claim at five hours per week for two years i.e. $9,422.

124 The plaintiff also claims 5.25 hours per week from 14 February 2000 to date at $18.12 per hour. The plaintiff’s mother, in her evidence, indicated that she was providing 4 or 5 hours assistance to the plaintiff per week. These figures were an estimate given in the witness box and not the result of figures kept over a period of time. The matters taken into account included services which were not the result of an accident caused need and which were provided for the plaintiff prior to his injury by his mother and which would continue so long as he remained living at his parent’s home. The medical evidence and the evidence of the plaintiff suggests he has required minimum assistance since 14 February 2000. The first defendant has submitted an allowance of 3 hours per week would be appropriate. This, it seems to me, is a not ungenerous assessment and I adopt it. I allow $13,100 for this period and a total of $27,143 for the past Griffiths v Kerkemeyer claim.

Griffiths v Kerkemeyer - future

125 The plaintiff claims damages for future care and assistance at the rate of $18.12 per hour as follows:

(a) 5.25 hours per week to age 45;
(b) 8.25 hours per week from age 45 to age 65;
(c) 10.75 hours from age 65 to death.

126 The increased care claim is sought to be justified on the basis the plaintiff’s needs for assistance will increase as he ages due to excessive wear on his right shoulder and back and muscular wasting in his left shoulder and left side of the back. The first defendant would allow care at the rate of 3 hours per week for the remainder of the plaintiff’s life. It may be accepted that a person’s strength reduces in older age and this is compounded if that person is an amputee. I allow the plaintiff 3 hours care per week to age 60 and 5 hours care per week from age 60 for the balance of the plaintiff’s statistical life expectancy a total of approximately $58,000.

127 The plaintiff also claims the cost of assistance to help him care for two children from birth until each child is four years old at an average of 14 hours per week pursuant to the principles in Sullivan v Gordon (1999) 47 NSWLR 319.

128 At present the plaintiff has no children, is not married, and although he hopes that one day he will be married and raise a family, it is by no means certain that this will occur. The plaintiff is capable of self-care and many other activities. Any difficulties caring for young children resulting from his amputated left limb would be few and mostly capable of solution by appropriate division of labour between the plaintiff and his partner. However there may be, from time to time, some accident caused need. As such need is a possibility only and, if it arises at all it will be at an indeterminate time in the future, it is appropriate to compensate this aspect of the claim by a lump sum which I assess at $10,000. I allow future Griffiths v Kerkemeyer including the Sullivan v Gordon claim at $ 68,000.

Past out of pocket expenses

129 I allow the agreed sum of $181,580.78.

Future out of pocket expenses

130 The relevant legal principles are (a):

…a plaintiff who has been injured by the negligence of the defendant should be awarded such a sum of money as will, as nearly as possible, put him in the same position as if he had not sustained the injuries – Todorovic v Waller (1981) 150 CLR 402 at 412.

And (b):

…yet the sum to be awarded in compensation is not calculable by any mathematical process. At best, it is and must remain a matter of judgment. First, the range of the recurrent amount likely to be reasonably required must be considered. The question here is not what are the ideal requirements but what are the reasonable requirements of the respondent. The jury must be warned, in my opinion, against blindly accepting the views of medical practitioners. What is reasonably required is a matter for the jury – or for the judge if sitting alone - Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649 at 661.

131 The plaintiff has claimed $18,669.23 for future general medical out of pocket expenses. The first defendant has conceded part of that claim but submits the plaintiff should not be allowed therein a claim for possible future psychiatric/psychological consultations of 10 visits at $185 per visit, and that a claim for annual orthopaedic review once per annum at $200 per visit should be reduced to once every four years and that a claim for review by a rehabilitation physician at $200 per annum should be reduced by 50%. I uphold the first defendant’s objections as reasonable save for the allowance for psychiatric assistance. Whilst the plaintiff is a well adjusted young man there is the possibility that at some stage in his life the need may arise for psychiatric care or consultations consequent upon the sequelae of his injury. Such need is deferred and is no more than a possibility. I would allow $1,500 under this head. Accordingly I allow general medical out-of-pocket expenses at $13,572 comprising the first defendant’s assessment plus $1,500.

132 There is also a claim for future non-prosthetic equipment of $2,264.24. However much of this equipment has been supplied though some may need replacement in the future. The first defendant concedes $1,796 in respect of this claim. This in my opinion is reasonable and I allow that sum.

133 However the major claim for future out of pocket expenses relates to the claim for prostheses and related devices. The plaintiff’s needs in this area have been tended to by Mr Doller, who gave evidence in the case. Mr Doller has worked as a prosthetist since 1956 and impressed as a person of considerable experience and knowledge in this area. The plaintiff’s out-of-pockets claim in large part is based upon his evidence and costings.

134 The plaintiff and first defendant have prepared a comparative schedule of prosthetic needs/costs. The total claim made by the plaintiff in his schedule amounts to $1,254,199 to which is to be added a one-off payment of $27,340 for a Hayden Preston tool set and two N-Abler devices. The first defendant’s schedule allowed the plaintiff’s claim at $408,175 together with a one-off payment of $11,340.

135 The first defendant has objected to some items on the basis Mr Doller’s costings were higher than those of Mr Curby who was qualified for the defendant and whose report was tendered. Where the costings differ in this way or Mr Curby’s prices included additional equipment I have preferred Mr Doller’s costings. I have done so principally because, in my opinion, it is important the plaintiff have continuity of care from the prosthetist who has cared for him throughout and that he use the equipment which that person recommends. In my opinion it would not be reasonable to require the plaintiff to change prosthetists or to “shop around” for items elsewhere simply because from time to time a lower price may be available. The need for a number of items and their costs was accepted by the first defendant. The items which remained in issue are discussed hereunder.

136 Maintenance - The plaintiff claims 10 hours maintenance for each of two myoelectric prostheses (20 hours in total) and 5 hours for the body powered prosthesis. The first defendant accepted the claim as to one myoelectric prosthesis and the body powered prosthesis but not the claim for maintenance of a second myoelectric prosthesis. I consider it reasonable the plaintiff have one myoelectric prosthesis and a reserve or back up myoelectric prosthesis. The latter would be used when the other was out of commission. I consider the reserve myoelectric prosthesis would require some maintenance from time to time but considerably less than that claimed. I would allow 3 hours maintenance per annum in respect of the reserve prosthesis. I therefore reduce the plaintiff’s claim to $2,430 per annum.

137 Charger - I allow one charger every two years consistent with one myoelectric prosthesis being allowed, the reserve myoelectric prosthesis being used only when the first myoelectric prosthesis is out of commission. I reduce the plaintiff’s claim to $445.75.

138 Gloves – I reject this claim as I have allowed the plaintiff’s claim for “living skin”.

139 Harness - I allow two spare harnesses (one per year in addition to that supplied with the prosthesis). I reduce the plaintiff’s claim to $130 per annum.

140 Cable - I allow two spare cables (one per year in addition to that supplied with the prosthesis). I reduce the plaintiff’s claim to $314 per annum.

141 Golf grip - I allow a golf grip every four years rather than every two years as claimed by the plaintiff or every six years as submitted by the first defendant. I reduce the plaintiff’s claim to $897 per annum.

142 Myoelectric prosthesis - The plaintiff claims replacement every two years. The defendant concedes replacement every four years. The evidence as to replacement varies, Dr Buckley suggests replacement every year, Dr Jones 18 months to two years, Mr Doller three years to five years, Mr Curby three years. I allow replacement each three years. I reduce the plaintiff’s claim to $7015 per annum.

143 Socket replacement - I allow replacement for one myoelectric prosthesis only. I reduce the plaintiff’s claim to $9027 per annum.

144 Living skin - The plaintiff makes a claim for “living skin”. The first defendant submits the claim should be rejected. This is a difficult area.

(a) The plaintiff has a passive hand which he can fit to the prosthesis if he wishes. There is a glove on the outside of the hand which is “mustard” coloured. Dr Jones described the passive hand as “A cosmetic hand which looks good and has no function”. The gloves cost $279 each and 2 per year are required.
(b) It is submitted the plaintiff needs a “living skin” glove to go over the passive hand. Such a glove would be an alternative to the type of glove which the plaintiff presently has, he would use one or the other.
(c) The “living skin” glove is made of silicone. It is made so as to closely resemble the injured person’s remaining hand in respect of colour, freckles, hair etc such that one would hardly know the difference from the other hand.
(d) Dr Jones has not seen a living skin glove, though she has heard that they are “supposed to be great”.
(e) Mr Doller had seen living skin. He confirmed it “looked great” but he had never fitted it to a hand, though he had to legs. He did not know how long it would last, though the manufacturer estimated 1 to 2 years. The cost of living skin is $34,000 per glove.
(f) The plaintiff agreed in evidence that the only time he would be using the anatomical hand with the living skin would be on the occasions when he actually used the hand for cosmetic purposes. At present such occasions are rare as he considered the cosmetic hand looked unrealistic to the extent he considered it drew more attention to him than not wearing a prosthesis at all. The plaintiff thought that he would probably wear the hand a lot more with living skin as it would look realistic and would not draw attention to him.
(g) The defendant submitted the cost of providing living skin is so disproportionately high that the provision of it in place of the glove the plaintiff now has would be the provision of that which is ideal rather than that which is reasonable. There is force in this argument. However the plaintiff is a young man. His appearance is important to him. The appearance of the stump is not cosmetically pleasing and the gloved cosmetic hand does not look realistic. I accept the evidence of the plaintiff’s parents, particularly his mother, that the plaintiff is embarrassed by the appearance of his left arm and that he has understated the extent of that embarrassment in his evidence. I accept that if the plaintiff had living skin he would wear the prosthetic hand more often and this would spare him considerable embarrassment, widen his areas of activity and promote his feelings of self-esteem. In my opinion the provision of living skin is a reasonable requirement. I allow the plaintiff’s claim.

145 Steeper Greiffer - The first defendant submits the evidence did not establish a reasonable need for this item. However this greiffer permits of finer manipulative movement than a greiffer DMC. I consider the claim reasonable and allow it.

146 Four Otto Bock hand chasses – These facilitate the changeover of tools. I consider the claim for four rather than the two, which the first defendant would allow, is reasonable.

147 Thus the plaintiff’s claim for prosthetic needs is allowed at $54,430.65 per annum which, when capitalised at 5% to his statistical date of death produces a figure of $1,042,974. To this must be added a one-off payment for two Hayden Preston N-Abler devices of $11,340. The plaintiff’s claim for a one-off payment for the Hayden Preston tool set is rejected as that cost has already been met by the first defendant. I allow the claim for future prosthetic needs at $1,054,314 and the total claim for future out of pocket expenses at $1,069,682.

Fox v Woods

148 I allow the agreed sum of $2,819.60.

Modifications to home

149 A claim is made for a buffer to enable modification of any future home of the plaintiff by having shelving and cupboards lowered so as not to have to reach above shoulder height. This claim is quantified at $20,000. There is evidence from the plaintiff that he has full arm movements above the shoulder. His mother gave evidence that the microwave oven is up a bit high and that if the contents to be lifted out are heavy or too hot she would lift them out in preference to the plaintiff. It would be reasonable to avoid situations of that type which may arise when the plaintiff obtains his own accommodation. The claim is a modest one and I allow it.

Future motor vehicle expenses

150 The plaintiff claims $41,091.54 being the difference between the standing and running costs of an older manual vehicle and a new automatic vehicle. The evidence relating to the motor vehicles is set out in paragraph 97 hereof. The evidence does not establish the plaintiff is prevented from driving a manual vehicle or that he prefers that type of vehicle to an automatic. Allowance has been made in the future out-of-pocket expenses for the cost of replacing the spinning knob. Otherwise I reject this claim.

Future dishwasher expenses

151 The plaintiff claims $3,853.65 for the cost of a dishwasher and its replacement every 10 years. The plaintiff gave evidence he could wash up dishes and do things like that with the prosthesis though he would prefer a dishwasher. His mother confirmed he could do wiping up, though he wasn’t very efficient. The evidence does not establish an accident caused need for a dishwasher and I would reject a claim on that basis. I would also accept the first defendant’s submission that these days most homes have dishwashers and it is likely when he obtains his own accommodation it will have one in any event.

Interest

152 Interest is claimed on past economic loss pursuant to s 151M of the WCA at the rate of 7.5% per annum. However the plaintiff has received weekly compensation payments in the sum of $72,194.74. This exceeds the award for past economic loss. Accordingly, even if the requirements of s 151M of the WCA are met, I would not be disposed to make an order for interest. However, as the matter was not argued at the trial, I will permit the parties to make submissions thereon if the plaintiff wishes to pursue the claim for interest. At this stage I make no allowance in the judgment for interest.

153 I summarise my assessment of damages as follows:

Non-economic loss	$181,320.00
Past loss of earnings and superannuation	$44,000.00
Impairment of future earning capacity and loss of future superannuation	$200,000.00
Griffiths v Kerkemeyer – past	$27,143.00
Griffiths v Kerkemeyer – future	$68,000.00
Past out of pocket expenses	$181,580.78
Future out of pocket expenses	$1,069,682.00
Fox v Woods	$2,819.60
Modification to home	$20,000.00
Motor vehicle expenses	Nil
Future dishwasher expenses	Nil
Interest	Nil
TOTAL	$1,794,545.38
Less contributory negligence of 10%	$1,615,090.84
Less total workers compensation payments	$253,569.82
TOTAL	$1,361,521.02

Orders

154 1. There will be:

(a) a verdict for the plaintiff against the first defendant in the sum of $ 1,615,090.84;

(b) judgment for the plaintiff against the first defendant in the sum of $ 1,361,521.02;

(c) verdict and judgment for the second defendant against the plaintiff;

(d) verdict and judgment for the second defendant on the first defendant’s cross claim against it;

(e) verdict and judgment for the first defendant on the second defendant’s cross claim against it.


2. The first defendant to pay the costs of the plaintiff.

3. The plaintiff to pay the costs of the second defendant, but to have a Bullock order against the first defendant in respect of those costs.

4. The first defendant to pay the costs of the second defendant in respect of both cross claims.

5. The parties to have liberty to apply in respect of costs and/or interest within 10 days.

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Last Modified: 10/13/2004