Helen Owen v Johnny Musladin

[2010] ACTCA 16

HELEN OWEN v JOHNNY MUSLADIN
[2010] ACTCA 16 (17 AUGUST 2010)

APPEAL AND NEW TRIAL – appeal  from order of the Master – appeal against assessment of damages for loss of earning capacity – action for damages – respondent’s  diminished capacity to perform heavy work significant part of assessment of damages – appeal allowed.
DAMAGES – assessment of past and future earning capacity – proper approach to assessment of damages – requirement for analysis and reasons – appeal allowed.

Johnny Musladin v Helen Owen [2009] ACTSC 2
Gamser v Nominal Defendant (1977) 136 CLR 145
Dessent v Commonwealth (1977) 51 ALJR 482

ON APPEAL FROM THE MASTER OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

No. ACTCA 1 - 2009
No. SC 102 of 2006

Judges:        Refshauge, Penfold and Buchanan JJ
Court of Appeal of the Australian Capital Territory
Date:           17 August 2010

IN THE SUPREME COURT OF THE     )          No. ACTCA 1 - 2009
  )          No. SC 102 of 2006
AUSTRALIAN CAPITAL TERRITORY           )
  )

COURT OF APPEAL  )

ON APPEAL FROM THE MASTER OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:HELEN OWEN

Appellant

AND:JOHNNY MUSLADIN

Respondent

ORDER

Judges:  Refshauge, Penfold, Buchanan JJ
Date:  17 August 2010
Place:  Canberra

THE COURT ORDERS THAT:

1. The appeal be allowed.

1. There be a new trial limited to the assessment of past and future economic loss of the respondent.

1. The parties file any written submissions they wish to make on costs within seven days.

IN THE SUPREME COURT OF THE     )          No. ACTCA 1 - 2009
  )          No. SC 102 of 2006
AUSTRALIAN CAPITAL TERRITORY           )
  )

COURT OF APPEAL  )

ON APPEAL FROM THE MASTER OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:HELEN OWEN

Appellant

AND:JOHNNY MUSLADIN

Respondent

Judges:  Refshauge, Penfold and Buchanan JJ
Date:  17 August 2010
Place:  Canberra

REASONS FOR JUDGMENT

THE COURT:

Background

1. This appeal from a judgment of Master Harper given on 6 February 2009 (Johnny Musladin v Helen Owen [2009] ACTSC 2) is an appeal against the assessment of damages in a personal injury action arising from a motor vehicle accident. Liability was not in issue at the trial.

1. The accident was described (at [4]) by Master Harper in the following way:

At about 9.30 am on Monday 14 February 2000, the plaintiff was driving a tiptruck with a load of sand in the course of his work as a builder.  He was driving east on Southern Cross Drive.  At the T-junction on his left of Florey Drive, Latham, the defendant drove into the intersection across his path, in contravention of a give-way or stop sign.  The impact was a severe one.  The plaintiff’s truck was damaged beyond repair.  The plaintiff’s evidence is that he had his head and neck turned to the right at the time of impact.  Although he was wearing a seatbelt, it appears that parts of his body made contact with the interior of the truck.

1. The proceedings were commenced just under six years later.  By that time the respondent had seen a number of doctors for reasons associated with the accident and also for other reasons.  He had also had some treatment for earlier injuries. 

1. He was, it would appear, not only a young man but a fit and active one with a particular enthusiasm for bicycle and motorcycle riding. 

1. He worked in the building industry and some of that work was heavy.  His diminished capacity to perform heavy work played a significant part in the assessment of damages.

1. Master Harper was required to assess damages in three areas – general damages, compensation for treatment expenses and damages for economic loss, represented by diminished earning capacity.  Each area of damages required the award of amounts for both past and future loss, that is, to the date of judgment and thereafter.

1. Master Harper’s findings about the injury caused in the motor vehicle accident appear from the following extracts (at [100], [103], [106]):

100.     There are two major issues to be determined on the medical evidence. The first is whether the plaintiff suffered a physical injury in the motor vehicle accident which is continuing to produce neck pain and consequential symptoms. Dr Champion takes the view that the plaintiff’s symptoms can be explained by trauma at the left C1-2 facet joint. He generally accepts the plaintiff’s complaints of pain and regards them as consistent with an injury at that level. This is supported by Dr Barnsley. I accept both as having considerable relevant expertise for the purpose of expressing such an opinion. The hypothesis cannot be definitively proved in the present state of medical knowledge. Their opinion is supported by Dr Brooder, a neurologist in private practice of considerable experience though perhaps not the same level of specialist expertise in pathology at the C1-2 level.

…

103.     I accept that the plaintiff has suffered, since the motor accident, neck pain of varying intensity, causing some restriction of movement at times, and causing headaches from time to time.

…

106.     I accept the opinion of Dr Champion and Dr Barnsley as to the source of the plaintiff’s continuing symptoms, and as to the fact that they are likely to continue at their present level indefinitely. I also accept that the injury suffered in the motor accident has reduced the plaintiff’s working capacity to its present level, from a level where he was able to work very long hours with high motivation on redevelopment projects, and to work between projects as a contract carpenter.

1. The amounts awarded and their total were stated by Master Harper, after they had each been identified and explained, as follows (at [134]):

The individual components of the award are:

General damages  $  80,000.00

- interest on past component  $    7,000.00

Treatment expenses – past   $  24,000.00

- interest thereon  $    5,000.00

Treatment expenses – future   $    8,000.00

Loss of earning capacity – past  $200,000.00

- interest thereon  $  70,000.00

Loss of earning capacity – future   $400,000.00

Total  $794,000.00

1. The appeal concerns only the award of damages for loss of earning capacity.  There is no challenge to the award of general damages or compensation for the cost of treatment.

Questions of credibility

1. Master Harper’s evaluation of the respondent’s case for an award of general damages involved a careful weighing of a range of factual elements and a good deal of medical evidence. 

1. He was critical of the respondent’s evidence in a number of respects.  The criticism extended to aspects of the respondent’s evidence about his capacity for work after the accident and the extent to which his ability to undertake heavy work was affected by injuries other than those caused in the accident on 14 February 2000. 

1. The respondent suffered two injuries to his right wrist, in 2001 and 2002 or 2003, and had surgery on the wrist in 2004.  There were other injuries also.

1. Some examples of the care with which Master Harper found the respondent’s evidence should be approached may be found in the following extracts from his judgment (at [51], [55], [57], [59], [75], [78]-[80], [103]-[105]):

51.The plaintiff was subjected to an extensive and searching cross-examination largely directed at his credit. In the course of the cross-examination, counsel for the defendant showed video footage of the plaintiff. I was informed that there would be about five hours of video to be seen. In the event it transpired that much of the video had focused on a man of about the plaintiff’s age who had been staying at his home for a period, and who the investigators, perhaps not surprisingly, took to be the plaintiff. The existence of this video footage of the wrong man perhaps explains in some measure the scepticism of those instructing counsel for the defendant as to the credibility of the plaintiff’s evidence and the strength of his case. An edited digital video disc, with the footage of the wrong man removed, was tendered and I have viewed it carefully in the course of preparing these reasons. The plaintiff is not seen on film to be engaging in any strenuous physical activity. He is seen driving and walking. I am satisfied that, at least on the days when the film was taken, the plaintiff’s range of neck movement was considerably greater than he demonstrated in the witness box. This causes me to suspect that the plaintiff may have been exaggerating the degree of his disability, either consciously or subconsciously, both during his oral evidence and in the histories he gave and the manner in which he presented to the doctors and other health professionals who have seen him over the years.

…

55.The plaintiff then volunteered, in the course of cross-examination, that he had made an appointment to see Dr Reid about his shoulder before the motor vehicle accident. His counsel had put to him in chief that he had been referred to Dr Reid by staff at Calvary Hospital, and he had accepted that proposition. It became apparent as a result of the cross-examination that this was incorrect, and that, coincidentally, the appointment he had made with Dr Reid was for 16 or 17 February 2000, two or three days after the accident. He kept the appointment, by which time his major problems arose from the motor accident rather than from the shoulder injury a year earlier. I am satisfied that this is something the plaintiff was well aware of, and that he would not have told the Court about it in the absence of the cross-examination and the concessions he was forced to make in the course of it.

…

57.He also conceded that he did not mention to Dr Talbot the fact that he had had surgery on his right wrist in November 2004, or that he had injured the wrist initially in Croatia during 2001 and again at the Eastwood building site in 2002 or 2003. The plaintiff explained this by saying that the injury and treatment to the right wrist had nothing to do with the car accident and that in his view there had been no need for Dr Talbot to know about it. He was asked by counsel for the defendant why this was any different to the history he gave Dr Talbot about injuring his right shoulder in a skiing accident in 1997 and falling from his bicycle and grazing his chin in 1999. His answer was that Dr Talbot knew about these incidents from reports which had been provided to him by the solicitors. In contrast, Dr Talbot did not ask him any questions about his wrist injury or surgery. He agreed that he had not told any of the other doctors he had seen for the purposes of the case about his wrist. I cannot avoid concluding that the plaintiff deliberately kept this part of his medical history from Dr Talbot and the other doctors. I cannot accept his explanation that he did not mention his wrist condition because he saw it as unrelated to the claim in respect of which the doctors were assessing him. It seems to me more likely than not that he kept it from the doctors because he thought that disclosing it might damage his case.

…

59.Counsel for the defendant referred the plaintiff to a report by Dr D Billett, an orthopaedic surgeon who had assessed him for the purpose of a report to the defendant’s insurer in April 2002. The plaintiff told Dr Billett that he had been riding his mountain bike and his dirt bike up until about July 2000 but had not done so since then. The plaintiff’s explanation for this history was that he had not been riding his bike “like I used to and...to the same degree”. He said that he had not discontinued riding his mountain bike. He denied that he had given a false history in this regard to Dr Billett. Although Dr Billett did not give oral evidence, the history he records in his report is unequivocal and I think it more likely than not that the plaintiff gave Dr Billett a false history about his cycling when he saw him in April 2002, and that he did so with a view to improving his case.

…

75.I found aspects of the plaintiff’s evidence about the Cube nightclub job implausible. It was plainly a job as a bouncer, at a nightclub where, to his knowledge, some time earlier an incident involving intending customers had led to violence and a death. I accept that he worked only on Sunday nights and that Sunday nights were relatively quiet, but I cannot accept his assertion that he saw his duties as limited to checking of identification and dress code compliance. He had undertaken a course which led to his licensing as a crowd controller. The course included training in physical restraint of intoxicated or violent persons. I accept the plaintiff’s evidence that he was not required to deal with any incidents requiring reliance on this training during his employment at the nightclub, but I do not accept that he was unaware that the work might require him to deal with incidents of that kind. It seems to me more likely than not that the plaintiff took the nightclub job on knowing what might be required of him, and believing that he was physically capable of dealing with confrontations with intoxicated or violent customers if the need arose.

…

78.The opinions of the doctors tended to vary depending upon the extent to which they accepted the plaintiff as a credible patient and historian. Generally it may be said that the treating doctors and the doctors qualified on behalf of the plaintiff for medico-legal purposes took him at face value, whereas the doctors relied on by the defendant did not. It must also be said, as I have pointed out earlier in these reasons, that the plaintiff did not always give an accurate and complete history to the doctors. A plaintiff who consciously adopts this course can hardly complain if the Court is generally a little sceptical about him and about his claim.

79.Dr Billett saw the plaintiff in April 2002. The plaintiff told him that in early 1999 he had fallen off his mountain bike and experienced pain in the right shoulder, but had no treatment and became symptom-free. He also told Dr Billett that he had ceased riding his mountain bike and dirt bike during 2000. In relation to the mountain bike at least this was incorrect, as was the history about the mountain bike shoulder injury.

80.Dr Billett observed that the plaintiff has unrestricted rotation of the neck to the left and right when not specifically demonstrating the degree of rotation. On demonstration he displayed a marked decrease in neck movements.

…

103.I accept that the plaintiff has suffered, since the motor accident, neck pain of varying intensity, causing some restriction of movement at times, and causing headaches from time to time. There is no doubt that he has exaggerated his symptoms to doctors and to the Court. This creates some difficulty in evaluating his evidence generally. There is no question that the level of his pain was such as to permit him to return to work, if largely in a supervisory capacity, about two weeks after the motor vehicle accident, and to engage in mountain bike riding and dirt motorcycle riding in the early months. The plaintiff tended to overplay the effect of the motor accident on him and to downplay the effects of prior and subsequent injuries, including the injuries suffered in May 2000 when he came off his mountain bike and the injuries he suffered in March 2005 when attacked with a baseball bat. I think that he would probably not have told the Court anything about his wrist injuries in Croatia and subsequently on the Eastwood building site if this had not been drawn from him in cross-examination. Certainly he kept it from some of the examining doctors, although it must have been a serious injury.

104. I accept, too, that the plaintiff’s level of pain was not such as to prevent him from working as a laboratory assistant at the Australian National University in 2007 and early 2008, or from working as a nightclub bouncer at the beginning of 2008.

105. He told Dr Eaton and Dr Chandran in December 2003 that he had decided to stop work after finishing the Eastwood project until he had been compensated. I think that he expressed this intention at a time when he expected that his claim would go to trial much earlier than it did. Nevertheless, I have considerable suspicion that the plaintiff retained, after completion of the Eastwood project, a degree of earning capacity which he chose not to exercise because he did not need to, having regard to the profit his company had made on that project. He conceded that by mid-2007 his money had run out and he needed to work to earn money to live on. In an answer in the witness box criticised by counsel for the defendant as unresponsive to the question, he took the opportunity to launch into some rather emotional criticism of the defendant’s insurer because, he said, they had “stopped paying me probably five years ago”. It seems to me that the measure of the plaintiff’s working capacity is probably reasonably reflected by his working on fairly light duties at the Australian National University four days a week, and in addition working a night shift at Cube nightclub each Sunday. It seems likely to me that he could have exercised his earning capacity to about that degree from about the time he finished the Eastwood project, and indeed probably for almost the whole of the period since the motor accident.

General damages

1. Despite the reservations expressed in the foregoing extracts from his judgment, Master Harper accepted that the respondent was entitled to be awarded general damages for pain and suffering, and loss of enjoyment of life, both past and future, arising from the accident.  His Honour awarded $35,000 for the past and $45,000 for the future.  Although the assessment of damages for economic loss required, and was given, separate attention, the appeal must be approached on the footing that no challenge was made to the findings relevant to the award of general damages, namely the conclusions of fact on which the quantum of the award was based. 

1. It must therefore be accepted that the respondent suffered, and continues to suffer, pain and restricted movement as a result of the accident.

Economic loss

The expert report

1. Although a court must do the best it can with the material before it, it remains true that an onus lies upon a plaintiff to make out a case for a measure of damages as well as liability to pay damages. 

1. Before Master Harper, the respondent set out to establish an appropriate measure of damages by providing an expert report from Mr Geoffrey William Davis of Macquarie Reporting Services (dated 25 February 2007).

1. Mr Davis was asked to prepare a report stating his opinion about the respondent’s economic loss to 30 June 2007 and his likely economic loss, thereafter, to age 65.  He was asked to proceed on assumptions which included the following:

Mr Musladin was able to generate income working as a subcontract carpenter for various builders prior to the accident.

In the past Mr Musladin was able to do contract work for extra cash flow which would give added security for when he was borrowing monies to finance a project.  This income was an extra source of cash flow to keep things running until the properties were sold.

…

From 6 March 2000 Mr Musladin has been partially incapacitated for work to date and this continues to be the case.

Since that date, he has been physically unable to carry out contract carpentry work and is restricted in carrying out any heavy physical work required in the redevelopment of properties and houses.

Mr Musladin has lost the capacity to carry out contract carpentry work for the rest of his working life.

Mr Musladin will periodically seek to develop properties as he has done in the past but he will need additional labour to carry out the work he would have done but for his injuries.

1. Mr Davis recorded also:

You have asked us to assume, in relation to the period of past economic loss, that Mr Musladin would have completed one project generating the equivalent net income of the Ainslie project every seven (7) months, but for his accident.  The exception to this assumption is that in one financial year there is no claim so as to make allowance for an actual project undertaken in the Sydney suburb of Eastwood.

…

In addition to the income from development projects you have asked us to assume that a relatively small level of on-going subcontract income from general carpentry work would have been generated sufficient to cover the overhead costs (accountancy fees, motor vehicle expenses etc.) of the business.

You have asked us to assume, in relation to the period of future economic loss, that Mr Musladin’s business will need to employ substitute labour equivalent to one full time employee.

1. The respondent had carried out his project building activities through a company, Innovative Homes (A.C.T.) Pty Ltd (“Innovative Homes”).  The Ainslie project referred to by Mr Davis was commenced in 1999 and completed after the accident suffered by the respondent on 14 February 2000. 

1. Mr Davis calculated a theoretical net profit from the Ainslie project of $68,035 before tax.  Based on the required assumption that such profits would be generated every seven months, Mr Davis calculated a pre-injury ongoing earning capacity of $116,631 per annum before tax from such projects. 

1. It was not necessary, at the rate of project turnover which Mr Davis had been asked to assume, to make any calculation for the possibility that the respondent might substantially supplement his income by working also as a contract carpenter, and Mr Davis did not do so. 

1. The accounts for Innovative Homes included annual amounts for wages taken by the respondent.  In the financial year in which the accident occurred the figure was $29,500.  In earlier years it was less. 

1. The amounts declared matched expenses claimed by Innovative Homes.  It does not appear, from the respondent’s taxation returns for the few years before the accident at least, that he earned declarable income from other employment.

1. Mr Davis used the projected earning capacity he had calculated (after excluding one year to allow for a financial return from one successful post-accident project at Eastwood, New South Wales ) to make a comparison with actual earnings in paid (non-building) employment which the respondent undertook from 2006.  The resultant after‑tax calculation for past economic loss was $504,864.

1. A different approach was taken to the calculation of future economic loss.  In accordance with the instructions to him, Mr Davis made a calculation for future economic loss simply on the basis that for the rest of the respondent’s working life his “business” (then Innovative Homes) would need to employ “substitute labour equivalent to one full time employee” to replace the respondent. 

1. There are obvious difficulties with such an unsophisticated approach.  The factual premise, that the respondent would carry out contract building for the rest of his working life despite his history of more recent employment in non-building work, would clearly need to be proved.  If that could be proved, an estimate would be required of the probable financial result overall for the purpose of comparison with his pre-injury prospects. 

1. The building project at Eastwood, for example, which he had undertaken with a relative after the accident, had been successful.  Taken on its own it did not suggest a diminished earning capacity. 

1. The calculation Mr Davies was directed to perform also proceeded upon an unstated premise that the respondent’s actual contribution would have no economic value to be offset against this additional “cost”.  Mr Davis made the required calculation and produced a figure for future economic loss, based on this single factor, of $832,260.  Ultimately, however, no reliance was placed on that calculation.

The respondent’s submissions at the trial

1. During final submissions at the trial, the respondent’s counsel appeared to abandon reliance on Mr Davis’ calculations of past economic loss.  First, he accepted that the suggested turnover of a project every seven months, as Mr Davis had been asked to assume, was unrealistic.  Counsel suggested that Master Harper should accept, instead, that the respondent could complete a development every 12 months.  There was no evidence to sustain a conclusion that the respondent had been capable in the past of such a consistent outcome, nor that others in his position could have done so or did so in circumstances approximating his.

1. Nevertheless, on the thesis being advanced of a successful development every 12 months, counsel suggested that the respondent (in reality, Innovative Homes) would have made a taxable profit of $50,000 to $60,000 every 12 months.  This estimate  was less than Mr Davis’ theoretical estimate of $68,035 per project but the discrepancy was not explained. 

1. Counsel then suggested that the first estimate should be supplemented by an additional $30,000 to recognise the respondent’s earlier  capacity to obtain additional income as a contract carpenter.  The source of that suggestion was the respondent’s tax returns for 1999/2000 financial year which disclosed a taxable income of $29,500.  That income matched amounts claimed by Innovative Homes as payments made to the respondent.  Those payments, thus, appeared to represent the respondent’s wage-equivalent income from his own company rather than an additional source of income from work as a contract carpenter, although as a cost to the company, this income would still have been additional to the taxable profit made by the company.

1. These submissions were put to Master Harper on the basis that the respondent’s injury had caused a loss of opportunity in both respects, however, no evidence relating to work as a contract carpenter for other employers seems to have been given.

1. As to future economic loss, counsel made no reference to Mr Davis’ calculation, but invited Master Harper to award a “buffer”, saying “that’s probably the only way it can be done in this case”.

1. Effectively, the respondent’s case about loss of earning capacity had been recast between the taking of evidence and making submissions.  There was no longer, as the respondent’s counsel accepted, any mathematical basis for the awards being sought.  Instead, an appeal was made to a broad evaluation of the respondent’s past, present and future circumstances. 

1. In our view, that circumstance emphasised the need for an appropriate explanation for any award made for past or future economic loss.  Any assessment in the respondent’s favour would need to proceed by way of an evaluation of a range of matters calling for judgment about the respondent’s evidence including, his credibility, and whether, at the end of the trial, his case supported the awards sought, or any award, without reliance on Mr Davis’ calculations.

Findings about loss of earning capacity

1. Master Harper stated his approach to this issue as follows (at [123]-[124]):

123.     This brings me to loss of earning capacity. Counsel for the plaintiff conceded that, notwithstanding the evidence of Mr Davis of Macquarie Reporting Services, the evidence did not enable the Court to arrive at figures for past or future impairment of earning capacity by a process of mathematical calculation.

124.    Doing the best I can on the material available, including the tax returns of the plaintiff and the company, I am inclined to the view that the plaintiff’s capacity to earn income but for the injuries he received in the motor accident, averaged over the period since then, equates to something like $90,000.00 to $100,000.00 a year after tax. During the period at the end of 2007 into early 2008 when he was working at the Australian National University and also at Cube nightclub, he was able to earn an amount equivalent to $60,000.00 a year after tax. I take account of the fact that whilst he proved capable of undertaking the university work, it was not available to him on a permanent basis. The evidence does not enable me to find that the plaintiff will be able to find permanent work yielding that kind of annual income. Indeed, the injuries have not simply reduced the annual amount he is capable of earning, but have also limited his chances of finding employment, particularly in an economic downturn.

1. One series of errors is immediately evident and was accepted by both parties on the appeal.  Whatever validity the figures used may otherwise have had, they could not be figures which were “after tax”.

1. It is tempting to assume that the estimate made by Master Harper of $90,000 - $100,000 per annum (assuming it to be before tax) may be explained simply by reference to submissions by counsel for the respondent.  The temptation should be resisted for three reasons.  First, the assumption about the tax position is sufficiently uncertain.  Secondly, the evaluation made by Master Harper exceeded even the rough figures volunteered by counsel.  Thirdly, if it was intended that the calculation should proceed upon the basis of one project (like the Ainslie project) every 12 months, there was no evidence to sustain that approach, as Master Harper pointed out to counsel during submissions. 

1. No other basis for the estimate, arising from the evidence, was identified on the appeal. Accordingly, there was then no reason discernible for the Master’s finding.

1. The estimate of post-injury earning capacity was more seriously in error.  Apart from the confusion about the taxation position, the figure of $60,000 cannot be reconciled with the evidence, even as a before tax figure, as counsel for the respondent accepted on the appeal.  Actual earnings from the Australian National University and the Cube nightclub were considerably less than $60,000, even before tax. 

1. On the appeal we were told that the factors referred to by Master Harper to explain his approach to post-injury earning capacity reflected an amount of $39,076 before tax ($28,780 after tax), less than half the amount attributed by Master Harper.

1. Stephen J said in Gamser v Nominal Defendant (1977) 136 CLR 145 (at 149):

... that so long as awards of damages for personal injuries are to be assessed at first instance by judges rather than by juries, with the accompanying advantage of the existence of stated reasons, those reasons should condescend to some degree of particularity concerning the process by which the particular award of damages has been arrived at ... An award of damages is not, nor should it ever be, arrived at intuitively.  Only if it were would particularity as to its component parts be otiose; and if an award is to be the result of a process of reasoning, often quite complex, that process should be exposed, both for the satisfaction of the parties and for the enlightenment of appellate courts should there be an appeal.

1. See also per Gibbs J (at 147-8); Dessent v Commonwealth (1977) 51 ALJR 482 (at 486-7) per Mason and Aickin JJ.

Past economic loss

1. Based on the brief two‑paragraph statement quoted (at [37]) above, Master Harper awarded $200,000 for past economic loss to the date of judgment and added interest.  That award must clearly be set aside.  It cannot be sustained by reference to the amounts used to introduce and explain it. 

1. Does the appeal bench have sufficient materials to make an assessment of the position for itself?  We think not.

1. If it was clear that no damages should be awarded for past economic loss we would so declare, but it appears that Master Harper was satisfied that a reasonably substantial award was warranted.  This Court does not disagree with that view, even though there are difficulties with the amounts used and the lack of explanation for them.  We could not be independently satisfied on the available material that no damages were warranted, although that remains a possible final outcome.  On the other hand, once reliance on Mr Davis’ report was largely abandoned, or at least heavily qualified, it became necessary to make a less precise assessment, there being no alternative mathematical analysis to that provided by Mr Davis. 

1. In any such assessment, it would be inevitable that judgments be made about the weight to be attributed to statements by the respondent about his intentions and plans.  It is clear that uncritical acceptance of his evidence might not occur.

1. It is therefore not appropriate that any attempt be made to evaluate damages for past economic loss simply by reference to the written record of the earlier proceedings.

Future economic loss

1. The position about the award made for future economic loss is even less clear.  As mentioned earlier (at [29]), Mr Davis’ calculations were not relied upon.  Instead an unquantified “buffer” was suggested.  The basis for it is not apparent.

1. It is also unclear whether Master Harper’s award of $400,000 for future economic loss was based on the notion of a buffer or involved an extrapolation of his earlier approach to the assessment of past economic loss.  It is not clear because no explanation was given beyond the following (at [128]):

In relation to the future, I take account of the fact that the plaintiff is now thirty-five years of age.  I take account of the chance that he would have developed arthritis in the right wrist, having regard to the periods of time and percentages which emerge from Dr Ashman’s evidence.  I take account of the fact that the plaintiff may still have the opportunity to participate, perhaps on a joint venture basis, in building development projects in the future.

1. If Master Harper simply adapted his assessment of past economic loss to the task of assessing future economic loss, then the result is, apart from all else, affected by the difficulties identified (at [37]-[39]) above.  If some freestanding buffer was assessed, some statement to that effect and some further explanation of the parameters which guided the exercise of his discretion was called for. 

1. The award of $400,000 cannot be sustained by the short statement which introduced it.  It must also be set aside.  However, again it is not possible to find that no award was justified or to decide, from the written record, what an appropriate award would be.

Outcome of the appeal

1. The present is not a case where identification of the error itself provides an alternative solution or enables the appeal court, with further diligence, to find the correct solution from the existing materials. 

1. In the circumstances of the present case, since we see no present basis to deny the respondent any award at all for past and future economic loss, it is inevitable that there be a new trial, limited to the assessment of those two matters.

1. The respondent sought an opportunity to be heard on costs. The Court will give the parties seven days within which to make any written submissions they wish to make on costs.

I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Date:    17 August 2010

Counsel for the Appellant:  Ms C Adamson SC and Mr M McDonogh
Solicitor for the Appellant:  Moray & Agnew
Counsel for the Respondent:  Mr B Meagher SC
Solicitor for the Respondent:  Meyer Vandenberg
Date of hearing:  11 August 2009
Date of judgment:  17 August 2010