Helen Macdonald v Amy Mailander and RACQ Insurance Limited
[2014] ACTSC 45
•14 March 2014
HELEN MACDONALD v AMY MAILANDER and RACQ INSURANCE LIMITED
[2014] ACTSC 45 (14 March 2014)
DAMAGES – personal injury – assessment of damages for future economic loss – plaintiff injured in motor-vehicle collision – where plaintiff was 69 years of age at the time of the accident and employed full-time – consequential major depression – pre-existing medical conditions – whether and how long the plaintiff would have continued working but for the accident.
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638
State Government Insurance Commission v Hitchcock (unreported, Full Court of the Supreme Court of Western Australia, 11 March 1997)
Van Gervan v Fenton (1992) 175 CLR 327
No. SC 87 of 2013
Judge: Master Mossop
Supreme Court of the ACT
Date: 14 March 2014
IN THE SUPREME COURT OF THE )
) No. SC 87 of 2013
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:HELEN MACDONALD
Plaintiff
AND:AMY MAILANDER
First Defendant
AND:RACQ INSURANCE LIMITED
Second Defendant
ORDER
Judge: Master Mossop
Date: 14 March 2014
Place: Canberra
THE COURT ORDERS THAT:
1. Judgment be entered for the plaintiff against the second defendant in the sum of $345,924.60.
2. The usual order as to interest.
3. The second defendant is to pay the plaintiff’s costs of the proceedings.
4. Order 3 does not take effect if within seven days of this order any party notifies my associate by email that it wishes to be heard in relation to costs.
Introduction
The plaintiff, Helen MacDonald, has sued Amy Mailander and her insurer RACQ Insurance Limited for personal injury arising out of a motor vehicle accident that occurred on 20 June 2009. On that date the plaintiff was the front seat passenger of a Mazda 121 which was going around a roundabout at the intersection of Cotter Road and Lady Denman Drive. The vehicle driven by the defendant collided with the rear left-hand side of the vehicle in which the plaintiff was travelling and the plaintiff suffered injuries as a result. The defendants admitted a breach of duty of care leaving only an assessment of damages causally related to that breach.
The principal issues in the assessment were:
(a) the amount to be awarded for general damages;
(b) the appropriate amount to be allowed for past and future economic loss having regard to the plaintiff’s age and her work intentions;
(c) the appropriate award for Griffiths v Kerkemeyer damages.
Facts
The plaintiff was born in Wagga Wagga and was 69 years old at the date of the accident and 73 years old at the date of the hearing.
She completed her schooling at the age of 16 and worked doing administrative duties for an insurance company and then the Wagga Wagga Base Hospital. In 1966 she married Arthur MacDonald who is known as Ian. He is older than the plaintiff, being 80 at the time of trial. At the end of 1966 they relocated to Canberra and she worked for the Department of Works. Between 1976 and 1983 she was out of the workforce raising her children, two girls called Karen and Fiona. In 1983 she commenced employment at what is now known as the Canberra Hospital doing clerical and administrative work. She initially worked in a variety of areas such as the main reception and the main switchboard. However between 1992 and 1999 she worked in either the neonatal or antenatal wards. From 1999 onwards she worked as the ward clerk in the oncology unit, known as Ward 14B. She worked there full-time.
Since about 1994 she had suffered from pain in her right knee. She saw a surgeon about it who advised her of the possibility of surgery. However she put that surgery off for as long as possible because she did not want to have surgery. The pain had gradually got worse until it was so bad that on 2 February 2009 she underwent a successful right knee replacement arthroplasty. Her rehabilitation after that operation went well. Nevertheless she still required at least three months out of the workforce. During June 2009 she reached the point where she was able to walk up and down stairs without holding onto a rail. She was looking forward to going back to work. She described her knee as giving her no pain. She said that the outcome of the operation was “wonderful” and that she could really recommend it. The motor accident occurred on the Saturday before the Monday on which she was due to return to work.
Following the accident she and her husband contacted her insurer and made a report to the police. She said that she had an achey left side and sore right hip. It was a bit hard to stand. The night after the accident she could not get comfortable in her bed. The next day she found it hard to breathe because of the pain in her left side. She was particularly concerned about this pain because she had a history of pulmonary embolisms arising out of a congenital tendency for a higher than usual rate of blood clotting. Prior to the accident she had suffered episodes of deep vein thrombosis in 1981, 1997 and then in 2007. After the episode of deep vein thrombosis in 2007 she had commenced regular use of warfarin to counteract the tendency of her blood to clot. She also suffered another deep vein thrombosis event in her left leg in January 2013.
Because of this history she attended Calvary Hospital the next day, Sunday 21 June 2009. She chose to attend Calvary because she recognised that the emergency department at the Canberra Hospital would be much busier. She was examined at Calvary Hospital and given Panadeine Forte and told to rest and use heat packs and, if necessary, to see her general practitioner. In the days following and for a period of five or six weeks she was not able to sleep in her bed and needed to sleep in a reclining chair due to the pain in her left side.
She informed her work that she would not be returning to work on the anticipated day. As a consequence, her colleagues, who had decorated her office to celebrate her return had to return it to its usual state.
On the Wednesday following the accident, 24 June 2009, she saw Dr Lawrence, her general practitioner. She described herself as being in agony and suffering from pain in her chest and down her side as well as suffering stiffness in her neck.
Initially she thought it would take a couple of weeks to get better but that, unfortunately, is not how things turned out. Although the pain in her left side subsided the pain in her hip became worse over time. In relation to her pain she has taken painkillers and had two or three cortisone injections administered by Dr Lawrence.
In addition to the pain in her hip she has also, as a consequence, suffered psychiatric consequences as a result of the injury. Although she was referred to Mr Nomchong, a psychologist, the further psychological treatment suggested by Mr Nomchong was not approved by the second defendant and did not proceed.
Her doctors recommended that she participate in hydrotherapy. The second defendant approved hydrotherapy at a pool in Tuggeranong but a more expensive and more convenient hydrotherapy at the Hyatt was not approved by the second defendant and ultimately she did not get any hydrotherapy.
In relation to the psychiatric impact of the injury she has taken no medication. Although the taking of medication has been recommended to her she was not keen to start on that “merry-go-round”.
In about April 2010 the plaintiff was reviewed by a person who she described as “a government doctor”. The result of the assessment, as she understood it, was that she was not able to return to her pre-injury job.
Following that review, in July 2010 she retired from the Canberra Hospital. She explained that she did so in order to be able to access her superannuation and pension entitlements because she did not have any additional leave entitlement and needed money to live on.
She still suffers from pain in her hip which she describes as a burning/hot sensation when she undertakes activities like sweeping or cleaning. She says that it is like somebody grabbing at her right lumbar spine. She said that she would not attempt her ward clerk job because she could not move fast enough. She currently takes Lyrica both day and night as well as Panadol Osteo at the rate of between two and six tablets per day depending on her activities.
Her activities at home are somewhat more restricted. She cannot clean the house as efficiently and quickly as she did before and activities such as vacuuming, sweeping, changing the bedclothes, turning over a mattress or cleaning the bathroom are all activities which aggravate her pain. To a greater extent than prior to the accident her daughter Karen assists with some clean cleaning. She has difficulty with hanging heavier items on the line.
Following the accident, Karen’s partner Neil also provided assistance with gardening and with maintenance of cars which he did not provide previously and now that, due to work commitments, he is unable to do that Karen mows the lawns. Car maintenance and lawnmowing were activities which the plaintiff did not do prior to the accident.
The plaintiff’s ability to walk is limited to a couple of hundred metres. After the accident she had difficulty driving and still has some anxiety and caution associated with driving.
The plaintiff said that had it not been for the accident she would have continued in her work. Her evidence as well as the evidence of her husband and her work colleagues, Jeanette Peterson and Allison Turner, all indicated that she very much enjoyed her work and was good at it. She denied that a desire to see more of her six grandchildren would have led to her ceasing work. She said that as a result of her rostering at work she would, although working full-time, have either two, three or four days off at a time which would allow her to participate in her grandchildren’s lives. She said that she enjoyed the atmosphere at work, liked helping people and enjoyed dealing with the relatives of patients in the ward as well as the other staff. She said she knew she had to build up her superannuation in order to live comfortably. She said she now missed her work and she described her normal day as being boring, with no satisfaction and involving frustration at her loss of independence and capacity to do things.
In addition to her difficulties with blood clotting and deep vein thrombosis, the plaintiff also suffered from osteoporosis. She had been taking Fosamax and most recently the results of a bone scan were “okay”. She also suffered from diverticulitis, gastroesophageal reflux and hypertension.
Her daughter Karen described the plaintiff as being “heaps better after having her knee done”. She said that after the accident she became withdrawn but appeared not to want to ask others for help. She says she now limps and has no stamina, difficulty with activities such as grocery shopping and struggles to cope with the small grandchildren. She also said that her mother was less patient and would lose her cool.
Her husband described the plaintiff before the accident being “quite a normal person”. He said that she was a vibrant person prior to the accident and that she did not have the same vitality because the accident “shook the hell out of her”.
Jeanette Peterson, a fellow ward clerk at the Canberra Hospital, observed that the plaintiff had previously been out going and happy but now appeared more fragile not as happy, bright and sociable and no longer vivacious. She described it as a “massive blow” that the plaintiff’s expected recovery had not materialised.
Medical evidence
The medical evidence was largely uncontroversial.
In date order the medical expert reports, which were tendered without objection or cross examination, were as follows.
The report of Dr Graeme Griffith dated 20 October 2009. This was a report only four months after the accident. Dr Griffith identified a number of conditions which had resolved or were unproven as well as:
(a) acute muscular ligamentous sprain cervical and cervicodorsal soft tissues.
(b) bilateral trauma to trochanteric bursae (the left with the door furniture due to direct impact, on the right from the seatbelt shackle).
He diagnosed the sequelae of the accident as follows:
1.Persistent cervical and cervicodorsal myalgia.
2.Persistent lumbar paravertebral myalgia.
3.Probable aggravation of lumbar spondylosis (unproven in the absence of radiology but suspected clinically).
4.Right shoulder impingement with painful arc syndrome.? SASD bursitis right shoulder.
5.Now chronic adjustment disorder with manifestations of depression and anxiety – untreated.
6.Short term memory dysfunction.
He said “the prognosis should be for gradual improvement. The prognosis should be good if a proactive and aggressive treatment program is undertaken.”
He suggested some further treatment and investigations.
The report of 1 December 2009 by Kieran Step, an osteopath, describes the treatment given between October 2009 and the date of the report.
The report of Dr Aidan Lawrence, the plaintiff’s general practitioner dated 20 October 2010 describes the history of treatment and the complaints of the plaintiff. They included soft tissue myalgic syndrome, a post concussional headache, myalgic pain and stiffness as well as chest wall pain and a restriction of movement of her right hip. He recorded that she also complained of left shoulder pain and mood changes consequent upon the accident. He considered on balance that she was suffering from a prolonged adjustment disorder.
Dr Michael Prior, a consultant psychiatrist produced a report dated 27 January 2012 which was tendered by the defendant. He diagnosed chronic mild post-traumatic stress disorder and chronic adjustment disorder with anxious and depressed mood.
The first condition was caused directly by the accident and the second arose from the pain and physical limitations and change to the plaintiff’s lifestyle arising from her accident.
Dr Raymond Wallace, an orthopaedic surgeon, prepared a report dated 6 November 2012 which was tendered by the defendant. His diagnosis was:
1. Post-traumatic greater trochanteric bursitis right hip.
2. Temporary aggravation of pre-existing degenerative osteoarthritis right hip.
He considered that her right hip condition was due to injuries she sustained as a result of the motor vehicle accident with a proportion being due to pre-existing degenerative osteoarthritis at the joint. He considered that there was a poor prognosis for further recovery of function at the right hip despite ongoing treatment.
He said she had no work incapacity as a result of her right hip condition. In relation to this opinion there is no reasoning other than the one line statement. There is no explanation of the relationship between her pain and her capacity to perform the duties that she was performing as a ward clerk. There is no examination of the nature of that task or what physical activities it involved. The only reference to her employment in the report was to the fact that she worked as a ward clerk doing full-time office duties.
The report of Dr Le Leu dated 5 May 2013 was tendered by the plaintiff. Dr Le Leu diagnosed the plaintiff as having:
1. Exacerbation of pre-existing degeneration of the right hip;
2. Bilateral trochanteric bursitis.
He was of the opinion that the plaintiff would be permanently restricted to work of a light sedentary nature which would make performing all the duties of her ward clerk position impossible. He said that she would be able to perform administrative work consistent with the following restrictions.
(a) no sitting for longer than 30 minutes at a time;
(b) no walking for further than 100 m at a time;
(c) minimise use of stairs or slopes;
(d) no lifting, pushing, pulling or carrying greater than 5 kg.
Dr Griffith reported on the plaintiff again in a report dated 28 May 2013. He substantially repeated his previous statement of the injuries and sequelae except that he said that there was no evidence of continued symptoms of trochanteric bursitis. He was of the view that more active treatment was appropriate and concluded: “I am of the view regarding your client that one thing is certain – a policy of watchful expectancy is entirely inappropriate, notwithstanding the age of your client.”
Mr Lee Nomchong, a psychologist, reported on 31 May 2013. The report was tendered by the plaintiff. He did not consider that the plaintiff’s conditions met the criteria for a diagnosis of adjustment disorder because the plaintiff had come to terms with the physical limitations imposed upon her by her injuries. He therefore did not consider that the plaintiff was continuing to suffer from adjustment disorder although she did previously. His current diagnosis was Major Depression and Chronic Pain.
A report of Dr Matthew Paul, a consultant occupational physician, dated 31 May 2013 was tendered by the plaintiff although the original report was provided to the solicitors for the defendant. His diagnosis was:
Chronic right-sided hip pain due to presumed right sided greater trochanteric bursitis and confirmed aggravation of underlying right hip degenerative disease. She has previously suffered a left-sided chest wall soft tissue injury which has resolved.
He recommended investigation of the plaintiff’s cognitive issues and said given her age there is potential for her to have an underlying and possibly pre-existing age-related cognitive impairment.
In relation to her fitness for work he said:
Ms McDonald is totally unfit for work. Her role required her to sit and stand and mobilise around her ward and she has difficulty performing these tasks given her present right-sided hip pain. She also has ongoing emotional symptoms which would make her unable to return to work. She would not tolerate the return to work process. Without further investigation and treatment I believe her status is permanently unfit for work.”
He recommended a course of physical therapies including multidisciplinary pain management. He did not anticipate much improvement in her condition in the long term.
The plaintiff saw Dr John Saboisky in July and August 2013. His reporting letters to Dr Lawrence were in evidence. The letter of 15 July 2013 accurately records the history of the accident and the period after the accident as well as the effects on the plaintiff. At the conclusion of the letter Dr Saboisky says: “She appeared to me to be very flat and tearful. I think she has had post traumatic stress disorder and residual depression.” He suggested taking an antidepressant drug. It was apparent on her return on 4 August 2013 that she had not filled the script for antidepressants. After that he left management of the plaintiff to her general practitioner.
There does not appear to be significant difference in the medical evidence. I accept the report and opinion of Dr Paul as an articulation of the appropriate diagnosis of the plaintiff-chronic right-sided hip pain. I also accept his opinion as to the her present unfitness for work. I do not accept the opinion of Dr Wallace that is contrary to that of Dr Paul as to her fitness to work. There is no explanation for Dr Wallace’s opinion and it appears to me to be inconsistent with the facts. It is also inconsistent with Dr Le Leu’s opinion which recognised that the plaintiff could only return to any administrative duties with significant limitations.
I accept, based on the report of Dr Prior, that in the past she suffered from mild post-traumatic stress disorder and chronic adjustment disorder with anxious and depressed mood. However I accept the opinion of Mr Nomchong that currently, because she has come to terms with her physical limitations to a more significant extent, she now suffers from Major Depression and Chronic Pain.
How long would the plaintiff have worked?
A fundamental issue for the purposes of assessing damages is the length of time which the plaintiff would have continued working but for the accident. She had a number of medical conditions, most significantly the tendency for greater than usual coagulation of her blood which predisposed her to thromboses and pulmonary embolisms. However the medical conditions, including her hypercoagulable state, were each controlled effectively with medication. There is nothing in her medical history which indicates that she would have been required to cease working as a consequence of those medical conditions but for the accident.
In assessing what the position of the plaintiff would have been but for the accident the Court is necessarily engaging in a hypothetical exercise. The process is described by the judgments in Malec v JC Hutton Pty Ltd (1990) 169 CLR 638. In that case the principal majority judgment of Deane, Gaudron and McHugh JJ described the process (at 642 and 643) as follows:
Assessing Damages for Future or Potential Events
When liability has been established and a common law court has to assess damages, its approach to events that allegedly would have occurred, but cannot now occur, or that allegedly might occur, is different from its approach to events which allegedly have occurred. A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. Hence, in respect of events which have or have not occurred, damages are assessed on an all or nothing approach. But in the case of an event which it is alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high – 99.9 per cent – or very low – 0.1 per cent. But unless the chance is so low as to be regarded as speculative – say less than I per cent – or so high as to be practically certain - say over 99 per cent – the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 per cent probability of occurring, but to ignore altogether a prediction which has a 49 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded. See Mallett v. McMonagle (1970) AC 166, at p 174; Davies v.Taylor (1974) AC 207, at pp 212, 219; McIntosh v. Williams (1979) 2 NSWLR 543, at pp 550-551. The approach is the same whether it is alleged that the event would have occurred before or might occur after the assessment of damages takes place. (footnotes omitted)
Brennan and Dawson JJ agreed generally with the reasons of the other judges but described the process somewhat differently (at 639-640):
By contrast, earning capacity can be assessed only upon the hypothesis that the plaintiff had not been tortiously injured: what would he have been able to earn if he had not been tortiously injured? To answer that question, the court must speculate to some extent. As the hypothesis is false - for the plaintiff has been injured – the ascertainment of earning capacity involves an evaluation of possibilities, not establishing a fact as a matter of history. Hypothetical situations of the past are analogous to future possibilities: in one case the court must form an estimate of the likelihood that the hypothetical situation would have occurred, in the other the court must form an estimate of the likelihood that the possibility will occur. Both are to be distinguished from events which are alleged to have actually occurred in the past. Lord Diplock said in Mallett v. McMonagle (1970) AC 166, at p 176:
“The role of the court in making an assessment of damages which depends upon its view as to what will be and what would have been is to be contrasted with its ordinary function in civil actions of determining what was. In determining what did happen in the past a court decides on the balance of probabilities. Anything that is more probable than not it treats as certain. But in assessing damages which depend upon its view as to what will happen in the future or would have happened in the future if something had not happened in the past, the court must make an estimate as to what are the chances that a particular thing will or would have happened and reflect those chances, whether they are more or less than even, in the amount of damages which it awards.”
In assessing the plaintiff’s earning capacity in the present case what has to be evaluated was the prospect that the deteriorating back condition would have precluded him from engaging in gainful employment had he not contracted brucellosis. An evaluation of that prospect had to be made. To make a finding on the balance of probabilities as though the prospect were something that had occurred in the past was to misconceive the process of evaluation.
Although we agree with the general thrust of the reasoning on this point in the judgment of Deane, Gaudron and McHugh JJ., we think it undesirable for damages to be assessed on the footing of an evaluation expressed as a percentage. Damages need not be assessed by first determining an award on the footing that the hypothetical situation would have occurred and then discounting the award by a selected percentage. Damages founded on hypothetical evaluations defy precise calculation. We should add that we would not favour the use of the term “probability” to describe the possibility of occurrence of a situation when the possibility is minimal.
Subject to these observations, we agree in the order as formulated in their Honours' reasons for judgment. (footnotes omitted)
The plaintiff submitted that given her enjoyment of, and attachment to, her work and the fact that in the years following the accident none of the medical conditions from which the plaintiff suffers has given rise to any disability that would have prevented her from working there was a high probability that she would have continued working until today and a significant prospect of her continuing to work until at least the age of 75.
The defendant on the other hand submitted that a number of aspects of the evidence indicated that had the accident not occurred, the plaintiff would have ceased working prior to the trial in any event. Those matters were:
1. Her state of health prior to the accident. In that regard the defendant pointed to her history of medical consultations in the year prior to the accident indicative of a person who was ageing and suffering an increasing number of minor illnesses and disabilities. The defendant also pointed to the stage reached in her rehabilitation from a knee reconstruction which would still require many months to reach optimal post-operative function. The defendant also pointed to the inference to be drawn from the plaintiff’s request for information on what leave she had available that she had used up all her available sick leave.
2. The defendant relied on the application for long service leave filled out and signed by the plaintiff on 28 June 2009. That was after she had seen her general practitioner on the first occasion but before he had given her a medical certificate for three months. The defendant characterised this as being indicative of a person who was winding down from her employment rather than someone who would, apart from the accident, have been keen to pursue employment for an indefinite period. The defendant submitted that it indicated that getting back to work was not the plaintiff’s highest priority.
3. The defendant also pointed to the reported lack of motivation of the plaintiff to return to a job other than her pre-injury job and the existence of a signed transfer form indicating that she may need to move to a different ward. The submission was that there were other factors to do with the nature of her supervisor and the role that she would be required to perform which either indicated a lack of motivation to return to work or would have been factors which lead to the plaintiff retiring in any event.
In relation to the first issue, the state of the plaintiff’s health, I accept that the records of the general practitioner show a number of attendances in the 12 months prior to the knee operation for a number of relatively minor complaints. It also reflects ongoing management of her medication and, in particular, her blood condition. Clearly enough the plaintiff had reached an age where doctor’s visits for minor complaints and the need for ongoing management of chronic conditions were simply a part of life. However I accept the plaintiff’s submission that now knowing what has occurred in relation to the plaintiff’s health, apart from the effects of the accident it is possible to say that there is nothing in particular that would have required the plaintiff to retire prior to now or indeed for some period in the future.
In relation to the second issue, the completion of the long service leave request, I do not see that as being indicative of a person who did not have returning to work as a priority. The accident occurred on 20 June 2009 which was a Saturday. The first Monday after that date was the 22nd. It was on that day that the plaintiff obtained from a Ms Jo Popp, who worked in the payroll and personnel section of the ACT Government Shared Services, a list of her leave entitlements which described a full-time long service leave balance of three months and nine days, a part-time long service leave balance of four months and five days and an annual leave balance of 216 hours.
The plaintiff saw her general practitioner on 24 June 2009. She was given a medical certificate on that date for the period 21 June 2009 until 3 July 2009. On 28 June 2009 the plaintiff signed an application for long service leave. That application was approved by Jeanette Peterson who held the title Assistant Manager on 9 July 2009. The document sought long service leave from 29 June 2009 until 5 October 2009. That was a period of three months and seven days. On 1 July 2009 the plaintiff attended her general practitioner and the notes record that she was still sore from the motor vehicle accident. On that occasion the doctor certified her unfit for work from the 30 July 2009 until 30 October 2009. The dates on the medical certificate make no sense having regard to the fact that he had previously certified her as unfit until 3 July. There was no reason why he would only certify her unfit from 30 July 2009 when he had seen her on 1 July 2009. In my view, particularly in the light of some other inconsistencies in the medical certificates provided to the plaintiff, this is more likely to reflect an administrative error than any deliberate specification of inconsistent dates.
The reason that I do not consider the long service leave application as being indicative of an intention to wind down before the plaintiff’s retirement or an indication in any other way that the plaintiff was not intending to return to work in a wholehearted fashion are as follows. The plaintiff appears to have run out of available sick leave. Her evidence was that she requested from Ms Popp a statement of the leave which was available to her. The letter dated 22 June does not refer to sick leave. Rather than simply reflecting a failure on the plaintiff’s part to make any enquiries about her sick leave entitlements, I consider it more likely in the light of the fact that she had spent a substantial period off on sick leave as a consequence of the knee operation that she was trying to get information on what other forms of leave she might be able to take. That was important to her on the Monday following the accident because she would have recognised that the accident was of some significance and that she needed to do something in order to ensure continuity of income notwithstanding exhaustion of her sick leave entitlements. While Dr Lawrence only certified her as unfit for two weeks when he saw her on 24 June 2009, the application for approval of substantially the whole of the plaintiff’s full-time long service leave entitlement is consistent with a desire for the plaintiff to confirm that she could take that leave. The position she was in at that time was that she had just reached the point where she would, but for the accident, have been fit enough to return to work. She had just suffered an accident which was reasonably serious although she probably anticipated recovering from it in a relatively short period of time. However the combination of her knee and her accident would have made it clear to her that she needed more than a few days off work. She also had plans at that stage to take some time off and go and visit her brothers who were holidaying on the Gold Coast. In those circumstances I consider it more likely that the application for long service leave was done as an anticipatory measure in the uncertain period in the immediate aftermath of the accident and did not reflect any intention on the part of the plaintiff to wind down her employment regardless of the occurrence of the accident.
In relation to the third submission, the defendant pointed to Exhibit 11 which comprised two pages from a medical report apparently prepared for the benefit of her employer which appears to be directed to assessing the plaintiff’s fitness for continued employment. Although the portions of the document in evidence are not dated, the content of those two pages indicates that it was a report prepared in the first half of 2010. The defendant placed emphasis on those portions of the document which dealt with her “demotivation” in relation to returning to work. The document records:
She said she was not in a position to be motivated towards a graduated return to work in any Ward Clerk or administrative roles with ACT Health and was intending to remain on leave until her planned retirement in the middle of this year. She added that she had dissatisfaction with her dealings predominantly by email with a Director of Nursing that was responsible for supervising proposed work for ward clerks at the Canberra Hospital. She said she had not spoken to this person and she had not been contacted for a phone or face-to-face discussion of her situation. She perceived a negative view of this person’s method of dealing with her situation and this caused her to feel de-motivated in considering any return to work.
In the conclusion of the report it states:
Unless the medical and psychosocial factors can be satisfactorily addressed, it is unlikely that Ms MacDonald will return to work performing her inherent role at ACT Health. She has already expressed her desire to retire from her role in the middle of this year and feels these medical issues to be too difficult to deal with in allowing her to consider a return to work.
In answer to particular questions the report provided:
i) Fitness for continued employment.
In my opinion she is not fit to currently work as a Ward Clerk in a full-time capacity as detailed in the work description supplied.
ii) Fitness for employment on current duties.
Please refer to the response to the first question.
iii) Restrictions placed on her employment and opinion on redeployment prospects in regard to those restrictions.
Ms MacDonald was de-motivated concerning other employment prospects within ACT Health. In my opinion, if she was sufficiently motivated, she could perform a graduated return to work to a sedentary part-time role as an administrator.
In assessing this report it is important to note that it appears to have been prepared in the context of managing an employee who suffered from an ongoing disability as a consequence of the accident. The two points made about this report that are adverse to the plaintiff are that she may in any event have been dissatisfied with the management approach of the Director of Nursing and hence may have chosen to retire in any event or that she was generally unmotivated about work. Both of those points would be good ones if the report was being prepared in circumstances where the plaintiff had not been injured in the accident. The difficulties with the Director of Nursing appear to me to have only arisen because of dissatisfaction with the way the Director of Nursing was dealing with the injured plaintiff in relation to the possibility of returning to work. The email communications between the plaintiff and the Director of Nursing were not in evidence. However, the reference to dissatisfaction with “this person’s method of dealing with her situation” is in my view most likely to be dissatisfaction arising from the plaintiff’s injured circumstances rather than some abstract dissatisfaction with the Director’s management style which would have existed in any event.
Similarly, the plaintiff’s expressed desire to retire from her role and her demotivation with attempting a graduated return to work in some other part-time role are both consistent with the plaintiff suffering ongoing effects of the accident which make a return to her old job more difficult and provide barriers to her returning to a different job through a graduated return to work programme. In my view they do not indicate a general lack of interest or motivation in relation to her job which would have existed even without the accident. (I note that it is not open to the defendant to rely upon the possibility of a graduated return to work in a different job being available as evidence of a failure to mitigate the plaintiff’s losses because that is not an issue raised on the pleadings.)
In summary, the position is that the plaintiff had been happy with her job not only because she enjoyed the work itself but also because she enjoyed the social environment that came with it. She had no particular plans to retire at the time of her knee operation and was intending to return to work on 22 June 2009. Her intention at that stage was to work as long as she was able to.
She did suffer from a series of underlying conditions the most serious of which was a predisposition to blood clotting, however, those conditions were successfully managed with medication and have continued to be managed with medication so as not to provide a specific necessity for retirement.
There are a number of imponderables in assessing what would have happened without the accident. For each period beyond June 2009:
(a) the prediction of what would have occurred becomes more uncertain although in the period up to the date of the trial it is possible to be informed by what has actually occurred in relation to the plaintiff’s personal circumstances in assessing what would have been the case without the accident;
(b) having regard to the plaintiff’s age the likelihood of the plaintiff continuing to work becomes less.
Malec v Hutton determines that the value of this loss must be assessed having regard to the likelihood of there being a loss in the absence of injury. In the present case as each year passed it was, in my view, less likely that the plaintiff would, but for the accident, have continued working. There is the also the possibility which was not specifically considered in the evidence but is consistent with the evidence that the plaintiff would, over time have reduced her hours so as to maintain some of the benefits of remaining in the workforce but without the full-time commitment which would have become increasingly difficult as she aged. (There was no specific evidence that such part time work was available but in an organisation like the Canberra Hospital it is likely that there would be.) Thus any decline in the possibility of her continuing in the employment and hence reduction in her economic loss must take into account both the likelihood that she would have left the workforce completely as well as the prospect of continuing in a part-time role. While there is a utility in a year by year numerical assessment I have taken care not to attempt too great a degree of sophistication in that assessment given that the uncertainties are such as to make the benefits from that sophistication illusory. As Brennan and Dawson JJ pointed out the exercise of assessing damages defies precise calculation. However, in my view, there is some utility in tying the assessment as closely as possible to articulated assessments as to the probabilities as to what would have occurred.
There are two points of reference which are useful in assessing the plaintiff’s economic loss. First, there is a very strong likelihood that in the year ending 30 June 2010, but for the accident, the plaintiff would have been in full-time employment at the Canberra Hospital. I have assessed that likelihood at 90%. Second, having observed the plaintiff in the witness box at almost 74 years old, in the light of her state of health and stated intentions as well as her work history I think there is a reasonable chance that she would be in either full-time or, more likely, part-time employment at the hospital. She appeared to me to be someone who notwithstanding her advanced years would have, in her quiet and friendly way, been able to effectively perform the role of a ward clerk. A reasonable assessment of the chance that she would be working in a part-time role as at 30 June 2014 would be 40%, the equivalent in terms of economic loss of a 20% chance of full-time work. Using these two points as reference points and adopting a straight line decline in the likelihood of the plaintiff continuing working results in the prospect of the plaintiff continuing in full-time employment as follows:
30 June 2010 90%
30 June 2011 72%
30 June 2012 55%
30 June 2013 37%
30 June 2014 20%
30 June 2015 3%.
The apparent precision of these figures is simply generated by the straight line approach that I have adopted. The precision of the percentages should not disguise the fact that the process is necessarily one which defies accurate calculation.
These figures appear to me to reasonably reflect the probabilities having regard to the various aspects of the evidence and my observations of the plaintiff when she gave her evidence.
In the light of this conclusion it is now possible to return to the assessment of individual heads of damage.
General damages
The plaintiff has suffered the immediate effect of quite a serious accident. She has suffered from post-traumatic stress disorder which has gradually resolved. She has also suffering from an adjustment disorder arising out of her injuries and disabilities which has now become major depression with chronic pain. It is likely that the effects of the accident will remain with her for the rest of her life. Life tables indicate that she has a life expectancy of 16 years. The plaintiff suggested an award of general damages of $80,000 and the defendant did not make any submissions that a lesser figure was appropriate. In my view an award of $80,000 is appropriate. I will also award interest on half of that amount representing the past component of those damages. That gives a figure of $3,800 ($40,000 x 2% x 4.75 years).
Past and future loss of wages
The date of the accident roughly corresponded with the end of the 2009 financial years. Exhibit 6 was a forensic accountant’s report which are summarised the plaintiff’s income in the 2008 and 2009 financial years. Her income comprised base pay, what is described as overtime and allowances. What is described in the report as overtime is more likely to be an amount representing the difference between ordinary pay and penalty rates. Penalty rates were payable because the roster of the plaintiff would require her to work on weekends and public holidays on occasions. The fact that the additional amount was penalty rates rather than overtime makes it more likely that it would have remained relatively constant rather than fluctuating based on the needs of the Canberra Hospital.
In relation to the years 2008 and 2009, Table 2 in Exhibit 6 indicates that the relevant figures were:
2008 2009
Base pay $43,942 $49,808
Overtime $9755 $7127
Allowances $3470 $330
Gross $57,167 $57,265
Total remuneration after-tax $46,947 $47,813
The figure for overtime for the 2009 financial year must be assessed in the light of the fact that the plaintiff did not work from the beginning of February until the end of the financial year. During that period when she was on sick leave or other leave she did not get the benefit of the penalty rates. Adjusting for that can be done by adopting the overtime figure for 2008 but then adjusting that proportionally upwards to take into account the increase in her base rate of pay on the assumption that penalty rates increased at the same rate as base rates of pay. Therefore the figure for overtime becomes $9755 x 113% which equals $11,023. This adds approximately $4,000 to her gross income for 2009 compared with the figure set out above and (although the evidence does not provide any exact figure) approximately $3,000 to her net remuneration after-tax for the year ending 30 June 2009. That results in a net figure of approximately $51,000 or $980 per week.
The rates of wage increases for subsequent years are also disclosed in Table 8 of Exhibit 6. By applying these rates of wage increase to the $980 per week derived above and applying to that the percentages representing the chance of continuing in full-time employment the overall loss of wages can be assessed.
In relation to future economic loss (financial years ending 30 June 2014 and 2015), there is no evidence as to likely increases in wage rates however having regard to the past increases in wage rates I will adopt a figure of 2.5% per year.
The result of the application of these wage rates, wage increases, the percentages described above and the resultant award of damages in relation to each financial year is set out in the following table.
Year % increase Resultant weekly rate Annual income Percentage chance working Damages Year ending 30 June 2010 4% $1,019 $52,998 90 $47,699 Year ending 30 June 2011 2.5% $1,045 $54,340 72 $39,125 Year ending 30 June 2012 3.5% $1,081 $56,212 55 $30,917 Year ending 30 June 2013 3.5% $1,119 $58,198 37 $21,533 Year ending 30 June 2014 2.5% $1,147 $59,644 20 $11,329 Year ending 30 June 2015 2.5% $1,176 $61,152 3 $1,835 TOTAL $152,438.00
Recognising that approximately nine months have passed in 2014, that results in past and future economic loss being as follows:
Past loss: $147,771
Future loss: $4667
The plaintiff is also entitled to interest on the past loss which calculated in accordance with the rates under the Court Procedures Rules, is $32,635.
In relation to future loss, having regard to the short period into the future, the modest amount of the damages and the necessary uncertain nature of the award I do not consider it appropriate to then discount to present value.
This assessment takes into account the fact that the plaintiff was actually paid for much of the 2010 financial year as a consequence of being on long service leave. Had she not been injured and had continued working she would have obtained the benefit of her long service leave being paid out on her retirement. Therefore it is appropriate not to reduce the damages which she is otherwise entitled to on the basis of her receipt of long service leave.
Superannuation
The plaintiff was a member of the Public Sector Superannuation Scheme. There was no evidence of the effective percentage rate equivalent that the defined benefits under that scheme would provide to the plaintiff. Notwithstanding that those benefits might have been greater in percentage terms than those routinely permitted to take account of the obligations under the Superannuation Guarantee (Administration) Act 1990 (Cth) the plaintiff submitted that the rates arising from that Act should provide the basis for the calculation of lost superannuation. Understandably, the defendant did not make any submission to the contrary. Given the very modest period in the future for which damages have been awarded I am not satisfied in the absence of some specific explanation that a higher rate than 11% of the net amount is appropriate for that future loss. Allowing 11% of net past and future loss gives an award of superannuation of $16,768.
Complicating matters is the fact that between 22 May 2010 and 1 July 2011 the plaintiff’s employer had no obligation to contribute to her superannuation entitlements. Although the consequences of this are not made clear by the evidence in Exhibit 6, the plaintiff appeared to proceed on the basis that she accepted that there should be a reduction in the superannuation award to accommodate the absence of employer contributions during this period. Proceeding on that basis, the award for superannuation must be reduced by excluding the value of contributions during this period. In relation to the year ending 30 June 2010 this reduces the award for superannuation by $437 (1/12 x $47699 x 11%). In relation to the year ending 30 June 2011 this reduces the award for superannuation by $4304 (11% x $39125). The total reduction is $4,741 resulting in an award for past and future superannuation of $12,027 ($16,768 – $4,741).
Out-of-pocket expenses
Past out-of-pocket expenses are agreed at $4,673.60.
In relation to future out-of-pocket expenses the plaintiff submitted that an amount of $30,000 was appropriate. The defendant submitted that an amount of $10,000 was appropriate. The plaintiff’s statement of particulars claimed as future out-of-pocket expenses:
(a) medication;
(b)swimming pool entry;
(c)hip surgery;
(d)psychological counselling;
(e)cortisone injection;
(f)travel expenses to and from treatment.
(g) an amount to cover future GP attendances, specialist consultations, diagnostic tests, operations, psychological counselling and physiotherapy.
The evidence makes it appropriate to provide an allowance in relation to painkilling medication in the future, psychological services, an increase in attendances at the plaintiff’s GP as well as integrated specialist services relating to pain management.
The plaintiff’s life expectancy is 16 years. The plaintiff’s particularisation of future out-of-pocket expenses was limited to a period of ten years. While that temporal limitation would be appropriate in relation to some of the amounts claimed, I do not consider it appropriate in relation to medication which, on the evidence, is likely to continue indefinitely. In relation medication I will allow $30 per week for 16 years. That gives a figure of $19,959 (multiplier 665.3) which I will round up to $20,000.
Further I will allow a lump sum of $10,000 to cover increase GP attendances specialist consultations, diagnostic tests, psychological counselling and physiotherapy. This amount reflects the likelihood that the plaintiff will have some or all of these including the possibility that she may participate in an integrated pain management course. I do not consider it likely that she will undergo any further surgery. As a consequence, I will accept the plaintiff’s assessment of her future out-of-pocket expenses of $30,000.
Griffiths v Kerkemeyer
There are two issues in relation to Griffiths v Kerkemeyer damages. First what the appropriate rate should be. The defendant submitted that a rate of $25 should be adopted. The plaintiff submitted that was too low and tendered fee schedules which became Exhibit 10 which indicated that the base rate for domestic assistance provided through an agency was between $44 and $50.60. Notwithstanding this evidence, the plaintiff submitted that a rate of $35 per hour would be reasonable.
In many cases the rate to be applied for Griffiths v Kerkemeyer damages is uncontroversial. In the absence of any specific evidence the Court has in the past often adopted a figure of $25 per hour. In the present case the evidence discloses a rate in excess of $44. That amount will incorporate a component of profit for the service provider and overheads such as workers’ compensation insurance. Having regard to the way the matter was argued this is not a suitable case in which to determine the issue of principle as to precisely what is permissible under Griffiths v Kerkemeyer. In Van Gervan v Fenton (1992) 175 CLR 327 at 333-334 (Mason CJ, Toohey and McHugh JJ), 349 (Gaudron J) members of the Court emphasised that the market cost or commercial cost of providing these services is generally the appropriate rate. In Van Gervan itself the rate adopted was that of a nursing agency similar to the agencies referred to in the evidence in this case. In State Government Insurance Commission v Hitchcock (unreported, Full Court of the Supreme Court of Western Australia, 11 March 1997) the Court rejected a submission that an agency rate for Griffiths v Kerkemeyer damages should be reduced so as to take account of the agency fee involved in the hourly figure. (See also Luntz, Assessment of Damages for Personal Injury and Death, 4th ed, 2002 at [4.1.10].) Having regard to the evidence before me and the fact that the plaintiff submitted that a rate of $35 (as opposed to the higher rate disclosed in the evidence) was appropriate and there was no evidence to contradict the evidence in Exhibit 10 I will adopt the rate of $35 per hour.
In relation to the amounts, the evidence was not particularly precise. The defendant appeared to accept that in the month after the accident two hours per day was a reasonable allowance. That gives a figure of $1085 (31 days x $35).
The evidence of the plaintiff was that she has difficulty with some of the heavier activities such as hanging out heavy washing and some of the domestic chores which she is either unable to do or unable to do as quickly as she could in the past. She also reduced her gardening activity although heavy work in the garden including mowing was, prior to the accident, done by her husband. It must also be borne in mind that having regard to the plaintiff’s age she was in any event likely to have a reduced capacity over time to perform heavier work. In my view in relation to the assistance provided by her husband one hour per week on average in the period since the accident is an appropriate award. In relation to the assistance provided by the plaintiff’s daughter Karen, the assistance that she provides is mixed in with assistance and social interaction that she would have provided in any event. In my view an allowance of one and a half hours per week over the period since the accident is appropriate. I recognise that there is some overlap between this and the period immediately following the accident but averaged out it nevertheless appears a reasonable and modest award. This gives a total award for the past of $22,697 ($1085 + (2.5hrs x $35 x 4.75yrs x 52 weeks)).
No claim for interest was made in relation to this component of damages.
In relation to the future counsel for the plaintiff claimed an allowance of two hours per week for a period of three years. This appears to me to be reasonable. It reflects a slightly reduced need for assistance and also the fact that after three years the plaintiff would be at an age where in any event she required that kind of domestic assistance. Discounted to present value this gives an amount of $10,486 ($70/wk, multiplier 149.8).
Summary
In summary, the damages award is comprised as set out in the following table.
General Damages
$80,000
Interest on past component
$3800
Lost income: Past
$147,771
Interest on past
$32,635
Lost income: Future
$1835
Superannuation
$12,027
G v K: Past
$22,697
G v K: Future
$10,486
Out-of-pocket expenses: Past
$4673.60
Out-of-pocket expenses: Future
$30,000
TOTAL
$345,924.60
Orders
The second defendant, the first defendant’s insurer, was named as a defendant as required by s 151 of the Road Transport (Third Party Insurance) Act 2008. That section also requires that any judgment be given against the insurer and not the insured person.
Therefore the appropriate orders are:
1. Judgment be entered for the plaintiff against the second defendant in the sum of $345,924.60.
2. The usual order as to interest.
3. The second defendant is to pay the plaintiff’s costs of the proceedings.
4. Order 3 does not take effect if within seven days of this order any party notifies my associate by email that it wishes to be heard in relation to costs.
I certify that the preceding ninety-six (96) numbered paragraphs are a true copy of the Reasons for Judgment herein of Master Mossop.
Associate:
Date: 14 March 2014
Counsel for the plaintiff: A R Muller
Solicitors for the plaintiff: Maliganis Edwards Johnson
Counsel for the defendant: W L Sharwood
Solicitors for the defendant: Moray & Agnew
Date of hearing: 11 March, 12 March 2014
Date of judgment: 14 March 2014
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