Henderson v P and O Resorts Pty Ltd
[1999] TASSC 58
•21 May 1999
[1999] TASSC 58
CITATION: Henderson v P & O Resorts Pty Ltd [1999] TASSC 58
PARTIES: HENDERSON, Jill
v
P & O RESORTS PTY LTD
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 448/1992
DELIVERED ON: 21 May 1999
DELIVERED AT: Hobart
HEARING DATE/S: 16, 17, 18, 19, 22 and 23 February 1999
JUDGMENT OF: Evans J
CATCHWORDS:
Torts - Negligence - Essentials of actions for negligence - Damage - Causation - Plaintiff slipped on wet wooden steps - Slippery surface - Likelihood that steps would become wet and slippery - No preventative measures taken.
Aust Digest Torts [60]
Contract - General contractual principles - Discharge, breach and defences to action for breach - Other matters - Contributory negligence no defence.
Aust Digest Contract [145]
Torts - Contributory negligence - Generally - Mere thoughtlessness or inadvertence - Plaintiff falling on descending slippery steps - Awareness of risk.
Calin v Greater Union Organisation Pty Ltd (1991) 173 CLR 33; Australian Safeway Stores Pty Ltd v Zaluzna (1987) 162 CLR 479; The Council of the Shire of Wyong v Shirt and Others (1979 - 1980) 146 CLR 40; Astley and Others v Austrust Ltd (1999) 161 ALR 155, applied.
Norris v Blake (1997) 41 NSWLR 49, followed.
Aust Digest Torts [63]
REPRESENTATION:
Counsel:
Plaintiff: P E Barker
Defendant: S R Worsley
Solicitors:
Plaintiff: Clerk Walker & Stopps
Defendant: Barker & Worsley
Judgment Number: [1999] TASSC 58
Number of Paragraphs: 99
Serial No 58/1999
File No 448/1992
JILL HENDERSON v P & O RESORTS PTY LTD trading as
CRADLE MOUTAIN LODGE
REASONS FOR JUDGMENT EVANS J
21 May 1999
The plaintiff sues the defendant for damages for personal injuries she suffered on 14 July 1989, when she slipped as she was walking down steps from a cabin at the Cradle Mountain Lodge. The defendant is the operator of the Lodge.
In July 1989, the plaintiff and her husband were holidaying in Tasmania. On the morning of 13 July 1989, they travelled from Hobart to the Gordon River. That evening they booked to stay at the Cradle Mountain Lodge. On arrival they were assigned a cabin and they arranged to go on a walk at 9am the next morning. It was cold. The temperature had been zero that morning. It was not snowing. They had been hoping to see snow.
At about 8.30am the next morning, they left their cabin to go to the Lodge for breakfast. The plaintiff was dressed for bushwalking. She was wearing boots she had bought for the purposes of the trip. The boots had heavy grooved rubber soles.
The plaintiff's husband left their cabin first to put his video camera in the rear of their car. The plaintiff was not far behind her husband.
The plaintiff had a still camera and a small handbag hanging over her left shoulder. Both her hands were free. She noticed that the steps down from the landing of the cabin were wet. She placed her right hand on a rail on the right-hand side of the steps. As she moved from the landing to the first step her feet went straight up in the air in front of her. She landed flat on her back in the middle of the steps, contact being made in three places, between her shoulder blades, on her left hip and on her left buttock. She slid to the bottom of the steps and fell forward on to her knees.
Defendant's obligations to the plaintiff
The defendant, as occupier of the Lodge, having agreed for reward to allow the plaintiff to stay in a cabin at the Lodge, impliedly warranted that the premises were as safe for her use as the exercise of reasonable care and skill could make them. Calin v Greater Union Organisation Pty Ltd (1991) 173 CLR 33. The defendant also owed the plaintiff a duty of care as a lawful user of the premises. Australian Safeway Stores Pty Ltd v Zaluzna (1987) 162 CLR 479 at 488, and The Council of the Shire of Wyong v Shirt and Others (1979 - 1980) 146 CLR 40.
The starting point for a determination of whether there has been a breach of the duty of care is an assessment of whether a reasonable person in the defendant's position would have foreseen that the condition of the steps involved a risk of injury to the plaintiff or other guests of the Lodge. Wyong Shire Council v Shirt (supra) at 47.
The steps were constructed of sawn timber, treated radiata pine. The treads were single boards, 1150mm wide and 250 - 260mm deep. There were six treads from the landing to the ground. The rise from tread to tread was 180mm. There were hand rails on both sides of the steps, 950mm above the treads. The steps were set at what appears to me to be a normal angle from the landing.
The cabin roof extended over the landing, which was otherwise open to the elements. There was no roof over the steps. The landing was made of sawn boards.
Each tread was a single smooth board. The treads were exposed to the weather and at different times they would have been covered with dew, frost, rain, snow and ice. That smooth wet timber is slippery is a matter of common experience. There was an obvious risk that a person using the steps could slip and injure themselves, and this should have been anticipated. The treads should have been constructed with a non-slip surface or such a surface should have been added to them. Some time subsequent to the plaintiff's fall, galvanised chicken wire was stapled to the treads. That action recognised the need to reduce the risk associated with the treads becoming slippery and shows that alleviating action did not involve significant inconvenience or expense.
I am satisfied that at the time of the plaintiff's fall the slipperiness of the treads presented an obvious risk of injury, and as nothing was done to alleviate that risk, the defendant was in breach of its duty of care to the plaintiff. The defendant was also in breach of its implied warranty that the premises were as safe for the plaintiff's use as the exercise of reasonable care and skill could make them.
I turn to causation. The plaintiff's husband, Mr Henderson, gave evidence. He said that on the morning of the plaintiff's fall at about 8.30am he walked down the steps and was placing his video camera in the rear of the car. He had noticed that the steps were slippery. As he was placing the video camera in the car he heard the plaintiff crossing the landing towards the steps. He had his back towards her. He called out to her to warn her of the slipperiness of the steps and as he did so he heard her fall. He turned and "she was airborne coming down the steps."
In her statement of claim the plaintiff alleges that there was ice on the steps and that this caused her to slip. The plaintiff and her husband both gave evidence that the steps were slippery. Neither of them asserted that they saw ice on the steps, although they both gave evidence that it was cold.
The plaintiff's evidence is that she observed that the steps were wet. I accept this evidence. I am not persuaded that there was ice on the steps. I am satisfied that as a consequence of the steps being wet, they were slippery and that this was the cause of the plaintiff's fall. Had the steps been surfaced with a non-slip material, or, as subsequently occurred, had they been covered with chicken wire, it is probable that the plaintiff would not have slipped and fallen. In result, I find that both the defendant's breach of duty and the defendant's breach of warranty caused the plaintiff's injuries.
Contributory negligence
The defendant's breach of its implied warranty as to the safety of the premises was a breach of contract and the plaintiff's damages for this breach cannot be reduced on the basis of contributory negligence. Astley and Others v Austrust Ltd (1999) 161 ALR 155.
Should others form a different view to me on the defendant's breach of warranty, it would still be open to the plaintiff to succeed with her claim based on the defendant's breach of its duty of care. As to that claim, a defence of contributory negligence is open, so I deal with it.
The plaintiff had used the steps to the cabin at least four times before she fell. She sat upon the bottom step as she fed a possum the evening before her fall. She was aware the steps were made of smooth wood and she observed that they were wet as she began her descent. Notwithstanding this, her momentum as she placed her foot on the first step and slipped was sufficient to carry her forward from the steps far enough for her shoulder blades to land on the tread of the steps when she fell.
Under cross-examination, the plaintiff said that having seen that the steps were wet, she knew she needed to be careful and look where she was going. In my view, she should have done more. It should have been obvious to the plaintiff that they were slippery. It was foolhardy of her to descend the steps without taking a firm grip of both rails and testing her way. For her to slip as she did, she must have put her weight on her front foot and released her back foot before testing that her front foot was secure.
In comparing the degree of departure of the parties from the standard of care expected of them, I am conscious that the defendant created the risk and was responsible for alleviating it. I assess the plaintiff's portion of responsibility for her loss at 20 per cent.
General
The plaintiff is 60 years of age. She was born on 23 January 1939. She attended school in Melbourne and described herself as an average student academically. Her main interests at school were sport and art. She represented her school in tennis and swimming.
She joined the Elwood Life Saving Club when 10 years of age, and became actively involved in life saving. She was the women's club captain in 1956, at which time her husband to be was the overall club captain.
At the age of 16 she began full-time employment with the National Bank. She started as a ledger clerk and pursuant to the Bank's then policy in relation to female employees, she was obliged to resign her employment when she married at the age of 18. At that time she was employed as a ledger supervisor.
Her first child, David, was born the following year, 1958. Her daughter, Sharon, was born in 1960, and her youngest son, Philip, was born in 1967.
Between about 1960 and 1967 she taught swimming at the Cheltenham Swimming Pool for two and a half hours four nights a week and on Saturday mornings. She was paid for her services.
The plaintiff's husband was a police officer. In 1971 he left the police force and they purchased a wholesale confectionery business which they ran until 1981. The plaintiff worked two and a half to three days a week in the business, finishing early enough to collect her children after school. She did the office work, books and banking.
In 1976, the plaintiff's youngest son, Philip, developed an interest in athletics. To assist him, the plaintiff undertook an athletics' coaching course. She coached Philip as well as others at the Little Athletics Club. Philip was the Victorian under 10 years of age hurdles champion. As he developed, the plaintiff coached him two nights a week and on Saturdays. Philip's focus turned from hurdling to high-jumping. The plaintiff continued to coach him until he became the Australian high-jump champion in about 1985.
In 1970, the plaintiff and her husband moved to Naree Warren near Berwick to live. Their eldest son and daughter were keen on horses and their five acre property was large enough for the children to have a horse each. The children were involved in pony clubs and this required the plaintiff and her husband to transport the children and their horses to club events and shows about once a month. The plaintiff assisted her husband with this task and did it on her own when he was not available.
After leaving school, the plaintiff continued to play social tennis and on occasions played in a regular competition. She was always conscious of her fitness and exercised regularly. Her main activities were jogging and swimming.
The plaintiff's grandmother was a well known artist. The plaintiff's mother is also an artist, she is 85 years of age and still paints.
As a young girl, the plaintiff regularly entered newspaper art competitions and achieved some success. She won an art prize in her final year at school.
After leaving school the plaintiff maintained her interest in art as a hobby. Her mother discouraged her from endeavouring to pursue art on a commercial basis.
After the plaintiff's children began going to school, she found she had more time available for her own interests and began painting regularly. Between 1971 and 1981, when she was working part-time in the wholesale confectionery business, she was able to paint on her days off. She concentrated on improving her art and began entering art competitions and exhibiting her art at shows. In the early 1970's she sold some paintings to friends and her paintings were displayed for sale in a small art gallery at Mentone. She joined an art group to learn pallet knife painting from Marjorie Boyle. She worked with Mrs Boyle for three to four years until 1977 when she had her first solo art exhibition at the Mentone Gallery. In the mid-1980's she became involved with a group of artists known as the Gippsland Five.
Gallery
The plaintiff had worked for a short time in an art gallery and enjoyed it. She fancied opening her own gallery, and, in December 1987, began looking for an appropriate site in Berwick, a large and growing suburb of Melbourne, about 45 kilometres from the centre of Melbourne. She found a corner block on the Princess Highway on which there was a home and a doctor's surgery. She and her husband purchased the property. She obtained planning permission to change the use of the surgery to a gallery and education centre. The gallery opened on 20 May 1988. When the site was purchased it had a sealed car park for seven vehicles. The plaintiff increased the size of the car park so that it catered for 14 vehicles. Photographs of the interior and entrance to the gallery were put into evidence. The building occupied by the gallery was a substantial structure. The gallery was a serious commercial enterprise, in no sense a backyard operation. Entrance to the gallery was off the Princess Highway. The entrance to the residence was from a side street.
The plaintiff called the gallery the Akoonah Park Gallery rather than the Jill Henderson Gallery as she did not want to give the impression that only her art was available for sale. She aimed to hang about 100 paintings in the gallery. As she developed the business, she included handmade Australian items such as glass works, jewellery, sculptures and pottery. She also sold art supplies. The gallery operated between 10.30am and 5.30pm from Wednesday to Sunday each week. From an early stage the plaintiff arranged for someone else to run the gallery on Thursdays. Her husband assisted her at weekends. The plaintiff also taught art students. She gave two lessons of two and a half hours' duration per week.
She said that her involvement in the gallery did not impact on her painting. She always got up at 6am, which gave her time to paint before the gallery opened at 10.30am. She painted in the gallery whist it was open if she wanted to. She found that customers were interested in watching her paint. If needs be, she was able to paint in a side room to the gallery, which could be closed off. She was also able to paint on Mondays, Tuesdays and Thursdays when she was not involved in the gallery.
Credit
The plaintiff's initial evidence was that in about 1983 she was invited to join four other artists in an art group known as the Gippsland Five. The plaintiff considered herself to be the least experienced member of the group and was honoured to be included. The other members of the group were artists of high standard. She said the regular comments, assistance and criticisms she received from the other members of the group helped her to improve her work. They met on a monthly basis to view and discuss each other's art. Her involvement in the group continued until the time of her accident. The members of the Gippsland Five included Marjorie Boyle, whom I have already referred to, and Gregory Allen, who was called as a witness.
Later in the plaintiff's evidence she said she was not one of the original members of the Gippsland Five, but that she and a number of others had been invited by the original members to join the group. She could not recall how long she had been involved with the group, although it had ceased prior to her accident. She explained her change of evidence on the basis that there were so many art groups that she really could not recall which was which.
Mr Allen's evidence was that the Gippsland Five started in about 1985 or 1986. It was a very informal group which met at one of the member's homes. He said the group may have met once every two months for a while. I accept Mr Allen's evidence about the Gippsland Five. The plaintiff's evidence to the effect that she was one of the original members of the group, that it met on a monthly basis and that she was involved in the group until the date of her accident was wrong.
I turn to some other matters which caused me concern about the plaintiff's credibility. She gave evidence that her husband had spent many years sleeping in a single bed because she could not stand movement in her bed. This evidence was given in the course of explaining the deleterious impact of her injuries on her marital relationship. Mr Henderson's evidence was that he and the plaintiff slept in the same bed except for about a fortnight after an operation she underwent in January 1992. He said that there were times that he would go to another bedroom because of her discomfort. I accept this evidence of Mr Henderson, and where there is conflict between his evidence and that of the plaintiff, I prefer his. He impressed me as a cautious and reliable witness.
A further instance of the plaintiff's tendency to hyperbole in giving evidence on matters which might enhance her claim was her evidence on the circumstances which brought about the sale of her art gallery. The thrust of her evidence was that the gallery was sold because of her inability to cope as a consequence of her injuries. Mr Henderson's evidence was that it was at his insistence they moved from Berwick and the art gallery was sold. I will deal with this evidence in more detail later.
In my assessment of the plaintiff's claim I take into account her apparent willingness to embellish and distort the facts in order to enhance her claim.
Injuries
Following her fall, the plaintiff said she had huge back pain. She could not breath and she had a bad headache. Mr Henderson got her into the front passenger seat of their car. The seat was reclined back. He drove the plaintiff to the Latrobe Hospital where X-rays were taken and she was given pain relieving medication. She remained at the hospital for four hours as there was concern about her having suffered concussion. They were booked to fly from Launceston to Melbourne that evening. They drove from Latrobe to Launceston for the flight. When the plaintiff arrived home that night she went straight to bed. She lay flat on her back. She needed assistance to get out of bed and to shower and the like. As a doctor at the Latrobe Hospital had told her she would be sore and bruised for some time, she assumed she would get better. After ten days she was still suffering from pain in the middle of her back when she tried to breathe and it was difficult for her to walk and move her arms. She consulted her family doctor, who referred her to an orthopaedic surgeon, Mr Harris, whom she saw on 9 August 1989. By the time she saw Mr Harris, the bruising of her buttock was subsiding but she was still having trouble breathing and her neck was extremely stiff and sore. It was established that the plaintiff's sixth thoracic vertebra was fractured. Mr Harris suggested that the plaintiff wear a back brace, or lie flat on her back for a period of three or four weeks. She chose the latter. She was assisted during this period by her husband who took time off work following the accident to look after her. In all, he was off work for about four to five weeks.
After the period of further rest the plaintiff still needed assistance getting out of bed. Her neck was not improved by the bed rest. She found it necessary to wear a neck brace. She was unable to do household chores such as hanging out the washing and vacuuming. She could not raise her arms above her shoulders to hang paintings and was unable to paint. She was taking a lot of analgesic medication. She continually suffered from severe headaches. On one or two occasions they were sufficiently bad to warrant a house call from her doctor who gave her an injection.
Whilst her back pain began to ease after about six to eight weeks, her neck pain and headaches got worse.
Each afternoon she lay flat on her back for about one hour to obtain relief. In the evening she lay on a Jason recliner and went to bed early.
She found prolonged travel in the car or travel on a bumpy or windy road brought on a headache.
As her symptoms did not improve, she consulted a neurosurgeon, Mr Petty. On 28 January 1992 he operated on the plaintiff's cervical spine and fused the C4, C5, C6 and C7 vertebrae. The plaintiff's belief was that within three months after the operation she would be back to painting full-time. Dr Hall, a rheumatologist, who gave evidence said that a triple fusion was not at all common, and the procedure was going out of vogue. He said that he would advise a person contemplating a three level cervical spine fusion that they had less than a 10 per cent chance of some sort of measured improvement. He would strongly counsel them against the procedure.
The triple fusion did not give the plaintiff the relief she had hoped for. Three months after the procedure, her neck was extremely painful, she was still wearing a neck brace, and she could not raise her arms or drive a car.
She saw Dr Hall on 2 July 1992. By that time she was starting to cope a little better, although she was still in a neck brace and could not perform tasks which required her to lean forward. They caused pain and would bring on headaches. She could not lift items such as paintings. She could not stand and raise her arms for the four to five hours necessary to complete an oil painting. Although she could sit to paint a water colour, she was unable to bend over the painting to perform the work because of neck pain. She tried painting in short bursts using pastels, but gave up in frustration at the length of time it took her to complete an item. She persisted with her efforts to paint for a long time because she missed it so much. She is still unable to paint. She has not completed any oil or water colour painting since her operation.
Dr Hall recommended that the plaintiff consider psychological/psychiatric intervention to manage the stress related dimension of her chronic pain problems. The plaintiff consulted a psychologist, Mrs Palmer, who helped her overcome her depression and encouraged her to accept what had happened and get on with her life.
The plaintiff weaned herself off wearing a neck brace and now only wears it when she knows she will be travelling on an unsealed road. She does not wear shoes with high heels as they aggravate her neck and back. Her susceptibility to pain when involved in physical activity has adversely impacted on her relations with her husband. She is reluctant to engage in sexual intercourse as it brings on pain and this has caused her husband to doubt her love for him. She frequently suffers from headaches. Her neck pain interrupts her sleep. She says that she has not had more than four hours continuous sleep since the accident.
Her treatment has involved major surgery, a triple cervical fusion and the wearing of a neck brace for a considerable time. She has explored many avenues in an endeavour to obtain relief from her pain, including consulting a chiropractor, a psychologist and a general practitioner who performed acupuncture and laser treatment. She underwent the laser treatment which was described as being similar to acupuncture. She uses a Tens machine, which she always has with her. Subsequent to her operation she commenced hydrotherapy which she continues to undertake on a daily basis. Her ongoing treatment primarily involves daily medication, physiotherapy, hydrotherapy and the use of a Tens machine.
Prior to the accident the plaintiff was fit, healthy and very active. As a consequence of the accident and its sequelae she is no longer able to participate in serious physical activities such as jogging, lap swimming and playing tennis, all of which were activities she regularly pursued prior to the accident. Her capacity to perform physical activities around the home is reduced. She cannot lift heavy items, and raising her arms above her shoulders causes her discomfort. She can no longer paint and this is an emotional as well as a commercial loss to her.
I allow the plaintiff $30,000 damages for pain and suffering and loss of amenities.
Mr Gregory Allen
Evidence was given by Mr Gregory Allen, a 40 year old artist who specialises in water colours. He has been a professional artist since 1982 when he was 24 years of age. In that year he won a travel grant to Europe and a special prize at the Camberwell Rotary Art Show which was referred to in the evidence as the biggest Rotary art show in Australia and the top exhibition in Victoria. He has won prizes at that show on four separate occasions and was the Victorian Art Society artist of the year in 1987.
His evidence was relevant to the plaintiff's abilities as an artist and her professional and commercial prospects. Evidence adduced of Mr Allen's earnings as an artist was relied upon by the plaintiff as an indication of her likely future earnings. The following figures are extracted from Mr Allen's taxation returns. The gross income represents his income from art, that is, from sales of paintings, art prizes and teaching art. The net profit is his before tax income from art after deducting allowable expenses:
FINANCIAL YEAR ENDED GROSS INCOME NET PROFIT 1985 $45,261 $24,737 1986 $41,854 $18,757 1987 $49,152 $28,965 1988 $60,211 $27,488 1989 $52,880 $13,614 1990 $65,439 $22,636 1991 $79,243 $60,139 1992 $39,940 $7,056 1993 $29,157 $2,939 1994 $29,759 ($-2,337) 1995 $49,337 $18,088 1996 $49,878 $22,350 1997 $90,943 $50,026 1998 $40,059 ($-5,902) $723,113 $268,858
Average $51,650.93 Average $19,204.14
Mr Allen said that his style of painting in water colour was traditional realist as distinct from abstract or any of the other modern movements. The plaintiff also painted in water colour in a traditional realist style.
Mr Allen met the plaintiff in the early to mid-1980's. His first clear recall of the plaintiff's work was in September 1988 when he opened an exhibition for her at the Cheese Factory at Berwick. He considered her to be an equally good artist in oil and water colour. She was a very competent drawer. She was using colour well and had a wide variety of subject matter. She painted very colourfully. From that time to the date of her accident he considered that there may have been improvement in her drawing and colour design. She could see the fundamentals of what a painting was all about and was, in his assessment, an up and coming artist with merit. He did not consider her to be up to his standard in technique and drawing. Whilst he described her as being a tier below him as an artist, he readily accepted that she could paint better horses than he. Horses are a popular subject with buyers. He believed she had the potential to improve because she had skill, talent and determination. He expected that she would have earned an income similar to his as she was much more businesslike than he was. He said he would have been better off financially if he had a more commercial objective. He said that the plaintiff was commercially aware and astute and he particularly praised her work in running her gallery.
Plaintiff's earning capacity
I am not persuaded that the plaintiff was or was likely to become an artist of the calibre of Mr Allen, earning similar income from her art to his. I find, however, that because of her sound business sense, her drive and her love of art it is likely that she would have achieved reasonable earnings from her art in addition to the income she earned from her gallery, and, in part, promoted by her conduct of the gallery.
The following figures extracted from the plaintiff's taxation returns bear testament to her ability to build the gallery from nothing to a business with a turnover of in excess of $250,000 per annum. This occurred over a period of eight and a half years from the opening of the gallery on 20 May 1988 to its sale on 10 December 1996.
FINANCIAL YEAR ENDED
GROSS PROFIT NET PROFIT 1988
(Gallery open from 20 May 1988)$37,898 $302 1989 $125,432 $1,779 1990 $183,055 $4,422 1991 $161,830 $8,908 1992 $131,054 $9,138 1993 $156,048 $9,430 1994 $222,824 $17,902 1995 $236,756 $14,914 1996 $265,023 $38,895 1997
(Gallery sold 10 December 1996)$139,728 $4,582
The sale of the gallery
The plaintiff's husband injured his lower back in a motor vehicle accident in 1961 and as a result he was in traction for three months. In 1966 he severely damaged his right knee in a motor cycle accident and lost 25 per cent of the movement of that knee. Both accidents occurred in the course of his employment with the Victorian Police Force. He left the police force 1971 to run a wholesale confectionery business. In 1981, he resumed employment with the police force as a reservist, this involved working in non-operational areas, such as administration. In 1989, when the plaintiff's accident occurred, Mr Henderson was the property officer at the Dandenong Police Station. Dandenong was the largest property office in Victoria. Mr Henderson found the work demanding. The property he handled included drugs and other potentially contentious items. The amount of property he was required to deal with increased greatly during 1996. On 21 May 1996, Mr Henderson suffered what he described as a bad turn, or a stress attack. He went on sick leave. He was investigated for a stroke, heart attack and brain haemorrhage. He said the ultimate diagnosis was a stress attack. He remained on sick leave until 11 January 1997, when he retired at the age of 60. For some time it had been his intention to retire at that age.
The plaintiff said that following her husband's stress attack, he was very shaky and dithery and did not know what he was doing for a long time. He was like a 6 year old child. He needed her attention and needed her to be with him all the time. He would not come into the gallery. Mr Henderson had been begging the plaintiff to sell the gallery for some years. In these circumstances the gallery was put on the market and a sale was completed on 10 December 1996.
The plaintiff explained the sale of the gallery on the basis that she was unable to cope with running it and it was getting too much for her. She was particularly concerned about pain she was suffering in the winter. She rejected the suggestion that she and her husband had simply decided to retire and said that she sold the gallery because the pain from her injuries was getting too much for her. She also rejected a suggestion that she sold because of her husband's circumstances and said she sold purely because she could not cope.
Mr Henderson said that he was more enthusiastic about moving than the plaintiff. She did not want to leave the gallery. He acknowledged in cross-examination that to a degree he was the one who desperately wanted to go and the plaintiff gave in to him. He said that regardless of the plaintiff's accident, he would have left Berwick as he had had enough.
Following the sale of the gallery, the plaintiff and her husband stayed in a caravan at a friend's home for a couple of months over the Christmas period. They then drove up the east coast of Australia looking for a suitable place to move to. They eventually decided on Port Macquarie.
Insofar as there are inconsistencies between the evidence of the plaintiff and Mr Henderson about the circumstances that precipitated the sale of the gallery and their move north, I accept the evidence of Mr Henderson. I find that the primary reason for the move was Mr Henderson's desire to leave Berwick and the sale of the gallery did not result from the plaintiff's inability to cope. No damages will be awarded on the basis that the plaintiff's disability caused her to sell the gallery prematurely.
Loss of earnings from the date of the accident to sale of gallery
Prior to opening the gallery, the plaintiff derived income from the sale of paintings, art prizes and the provision of art lessons. I will refer to this source of income as her earnings from art. For taxation purposes she does not appear to have made a profit prior to 1986. In the financial year which ended in 1984 she lost $725 and in the following year her loss was $423.
The following figures are extracted from the plaintiff's taxation returns for the financial years which ended in 1986 and 1987.
1986 Gross earnings from art $13,585 Less art and framing materials $7,175 Less other expenses $6,269 Net profit $141
1987 Gross earnings from art $1,3,043 Less art and framing materials $5,649 Less other expenses $4,911 Net profit $642
After the opening of the gallery on 20 May 1988 it is difficult to establish the plaintiff's earnings from art as they are incorporated in the accounts of the gallery. From the documents put into evidence, I calculate her gross earnings from art from 1 July 1987 to 20 May 1988 at $11,103. To that I add $6,641 received for paintings sold in May and June 1988 which makes her gross earnings from art for the financial year which ended in 1988, $17,744.
For the financial year ended 30 June 1989, her gross earnings from art were:
Paintings $18,716 Prints $1,565 Lessons $2,219 Prizes $1,200 $23,700
A benefit to the plaintiff from opening an art gallery was that when she sold her paintings through the gallery she did not incur commission. Galleries normally charge a 30 per cent commission and exhibitions usually charge a 20 per cent commission. The plaintiff sold paintings by her via the gallery for $2,500 during the financial year ending in 1988, and for $11,798 during the financial year ending in 1989. Had the plaintiff been charged commission of 25 per cent on the sales, her return would have been $625 less in 1988, and $2,950 less in 1989. In the following table these amounts have been deducted from her gross earnings during those years in order to compare her earnings from 1986 to 1989 inclusive. To compare her earnings with those of Mr Allen during this period, I have also included his earnings in the table.
Financial Year Ending
Plaintiff's Gross Earnings Mr Allen's Gross Earnings 1986 $13,585 $41,854 1987 $13,043 $49,152 1988 $17,119 $60,211 1989 $20,750 $52,880
Mr Allen's first solo exhibition of his art work was in 1981. In 1982, he travelled overseas on a travel grant which he won at the Camberwell Rotary Art Show. Since that time he has been a full-time professional artist. He turned 24 years of age in 1982. By 1985, his gross earnings from his art were $45,261, and his net profit was $24,737. He has maintained equatable average earnings since 1985.
The plaintiff was not able to commit herself full-time to art at an early stage in her working life. Initially she had children to care for and was involved in activities to assist her children. As she began to apply herself to her art in the early 1970's, she was still caring for a family as well as assisting her husband part-time in the wholesale confectionery business. In 1977, the plaintiff had her first solo art exhibition. In 1981, the wholesale confectionery business was sold, the plaintiff's children were then aged 14, 21 and 23, and she was able to devote more time to her art. By 1986 she was able to earn a gross income from her art of $13,585 and a net profit of $141. By 1989 she had built up her gross income from her art to about $23,700 ($20,750 after allowing for commission on her paintings sold via the gallery). In that year the plaintiff turned 50 years of age.
As I have already said, it is unlikely that the plaintiff would have achieved a capacity to reap rewards for her art which were comparable with that of Mr Allen. In gauging the plaintiff's capacity to earn income from her art, I am however assisted by a comparison between her earnings and those of Mr Allen. Within two to three years of Mr Allen becoming a professional artist, his gross earnings in 1985 were $45,261. That is, about double the earnings the plaintiff was able to achieve from her art by 1989, the year of her accident.
Whilst I am satisfied that there was a reasonable prospect of the plaintiff's earnings from art improving, in assessing that improvement, I am conscious that the time requirements placed on her by running the gallery must have impinged on the time available to her for painting.
The costs the plaintiff incurred in generating her income from art in 1989 formed part of the gallery's accounts and cannot be readily identified. They can be identified in her 1986 and 1987 taxation returns. They were:
1986
Art and framing materials$7,175
Other expenses $6,269 $13,444
1987
Art and framing materials$5,649
Other expenses $4,911 $10,560
The cost of Mr Allen's art and framing materials in 1986 was $8,259, and in 1987 was $6,002. I estimate the cost of art and framing materials used by the plaintiff in 1989 at $6,500.
The other expenses deducted from the plaintiff's income included items such as accountant's fees, bank fees, motor running costs, stationery and postal costs, telephone, and light and power. To varying degrees, these expenses were subsumed in the costs of running the gallery. Taking this into account, I estimate that additional expenses directly referable to the plaintiff's earnings from art in 1989 were about $3,200. In result, I estimate her before tax earnings from art in 1989 as follows:
Earnings from art including commission avoided on sales by the gallery $23,700
Less art and framing materials $6,500 Less other expenses $3,200 Balance $14,000
Allowing for a modest increase in her earnings from art over the period of seven years and five months, between 14 July 1989 and 10 December 1996, the following calculations assist me in my assessment of the plaintiff's likely loss of earnings from her art during this period:
FINANCIAL YEAR ENDED ACTUAL TAXABLE INCOME TAX THEREON ESTIMATED NET LOST EARNINGS FROM ART ADDITIONAL TAX 1990 $4,422 $0 $14,000 $2,859 1991 $8,908 $748 $14,250 $3,490 1992 $9,138 $746 $14,500 $3,427 1993 $9,430 $806 $14,750 $3,576 1994 $17,902 $2,500 $15,000 $4,891 1995 $14,914 $1,902 $15,250 $4,374 1996 $38,895 $9,327 $15,500 $6,838 To 10/12/96 $4,582 $0 $6,600 $1,156 $109,850 $30,611 Less tax $30,611 BALANCE $79,239
The exercise I have undertaken can be an accurate guide to a wage earner's loss of income. It is far less precise in relation to an artist. An artist, like an actor or performer, may, at the whim of the market place, achieve earnings well above those considered likely. Whilst there is a limit on the extent to which the plaintiff's earnings could have been less than my estimate, the extent to which her earnings could have exceeded my estimate is not similarly constrained. The potential downside is not balanced by the potential upside. There is a possibility that as a successful artist, the plaintiff could have made substantially in excess of the amount I have estimated. Consistent with Norris v Blake (1997) 41 NSWLR 49, I take this possibility into account in assessing her loss of income.
As a consequence of the plaintiff's inability to paint, she had more time available to commit to the running of the gallery. I do not propose applying a discount for this as I am not satisfied that it resulted in a financial benefit to her by way of increased profit from the gallery. As a result of her disabilities, her time would have been less efficiently used. Had she been able to produce paintings for sale in her gallery, that may have generated increased interest in the gallery and increased her profit from the sale of other items.
I allow the plaintiff $85,000 for her lost earning capacity from the date of the accident to 10 December 1996.
Loss of earnings from 10 December 1996, the date of the sale of the gallery, to 30 March 1999
Upon the sale of the gallery, had the plaintiff still been able to generate income from her art, she would have lost the benefit of avoiding the payment of commission on her paintings, and, from that point on, none of her painting expenses would have been subsumed in the expenses of the gallery. Had she not been in the gallery in 1989, I estimate that her then pre-tax annual earnings would have been:
Gross earnings from art less commission on paintings sold through the gallery $20,750
Less art and framing materials $6,500 Less other expenses $5,250 Balance $9,000
I estimate that her pre-tax annual earnings would have increased to about $11,000 by December 1996.
I am satisfied that following the sale of the gallery and the plaintiff's move to Port Macquarie, she would have continued to pursue her love of art on a commercial basis. She would have had more time to devote to her painting and may well have increased her output. The plaintiff demonstrated her earning capacity in Berwick, an area which, on the evidence, was a good place to market her art. No evidence was given in relation to the art market in Port Macquarie, the availability of art students in Port Macquarie, or the difficulties, if any, of an artist entering art competitions, or marketing their art from Port Macquarie. The plaintiff may have had difficulty re-establishing herself as a commercial artist in Port Macquarie. I keep in mind the possibility that as a successful artist, the plaintiff may have earned considerably more than my estimate.
For the period of two years and four months from 10 December 1996, to 31 March 1999, I assess the plaintiff's net loss of earnings from her art at about $24,000 and allow an after tax amount of $21,000.
Future loss of earnings
The plaintiff is now 60 years of age. She has a life expectancy of 23.83 years. Accepting, as I do, her love of art and her commercial drive, it is likely that she would have continued to pursue her interest in art for as long as she could. Her mother is 85 and still paints, although not commercially. When the plaintiff would have ceased earning income from her art is pure conjecture. It is likely that her abilities and drive would have waned as time passed, and so would her earnings. I doubt that she would still have made a profit from her art after she turned 70 years of age.
In my assessment of this loss, I proceed on the basis that the plaintiff's current net earnings from her art would have been about $12,000 per annum (that is, $10,700 per annum after tax) and that her earnings would have gradually reduced to nil over the next ten years. Applying a discount rate of 7 per cent compound interest, I calculate the loss of this amount by equal annual increments over a period of ten years at $47,300. Taking into account the matters to which I have already referred to referable to the estimates of her earnings, and the usual discounting factors which apply when assessing lost future earning capacity, I estimate her damages for this loss at $45,000.
Past housekeeping expenses
The plaintiff claims past housekeeping expenses. She engaged a housekeeper shortly after the accident and continued to retain one until she sold the gallery. As a consequence of her disability she needed a housekeeper for such things as ironing, vacuuming and cleaning the bathroom. Initially she paid the housekeeper $6 per hour. Towards the end of her time at the gallery she paid $10 per hour. Her housekeeping expenses between 16 October 1992 and 15 October 1993 were $814. At an hourly rate of $6 per week she engaged a housekeeper for about 136 hours during this 12 month period, that is, 2.6 hours per week. I prefer this as an indication of the extent to which the plaintiff needed the services of a housekeeper to the plaintiff's evidence that she used a housekeeper for four hours per week.
On the basis that she required the services of a housekeeper for 136 hours per year, I calculate this claim as follows:
14 August 1989 - 10 December 1994
725 hours @ $6 per hour $4,350 1 December 1994 -10 December 1995
136 hours @ $8 per hour $1,088 11 December 1995 -10 December 1996
136 hours @ $10 per hour $1,360 $6,798
Whilst the plaintiff's need for housekeeping assistance decreased as her condition stabilised following her operation, I do not propose discounting this item. As a consequence of her disabilities it was reasonable to engage a housekeeper in order that she could harness her energies to run the gallery.
I allow $6,800 for this item.
Future housekeeping expenses
The plaintiff has not engaged a housekeeper since she sold the gallery. She says that she is unable to afford one. She and her husband still have trouble doing work which requires them to lean over. She says the vacuuming waits until she gets visitors to attend to it. I accept that as a consequence of the plaintiff's ongoing disabilities there are some housekeeping tasks for which she requires assistance. I allow $7,000 for this claim.
Past medical expenses
The claim for past medical expenses is itemised at $23,739.50. It is admitted that the expenses were incurred and that the charges were reasonable. Counsel for the defendant submits that they should be discounted in recognition of the possibility that the plaintiff might have needed to incur the expenses in any event because of pre-existing degeneration to her spine. I do not consider a discount to be warranted and allow the claim at $23,740.
Future physiotherapy and related travelling expenses
Since about October 1990 the plaintiff has regularly sought the services of a physiotherapist to alleviate her pain. Her claim for past medical expenses includes claims for physiotherapy and massage totalling $7,200. She says she currently attends a physiotherapist at least once a week. Doctor Hall says he considers this reasonable as physiotherapy very often provides palliative pain relief. The fee she pays for a visit is $33 and this requires a trip of 14 kilometres, for which $7 is claimed. The plaintiff claims these amounts for the period of her life expectancy, 23.83 years. Using the 7 per cent discount table, I calculate this loss at $24,760. I consider it unlikely that the plaintiff will seek the services of a physiotherapist on a weekly basis for the balance of her life. In recognition of this and other contingencies, I allow $12,000 for this item.
Future pharmaceutical expenses
The plaintiff's current intake of Nortab, Digesic and Panadol costs her $6.81 per week. Doctor Dyer's evidence was that her intake was reasonable and he would not press her to reduce it. A loss of $6.81 per week for 24 years, discounted at 7 per cent capitalises at $4,215.39. It is likely that the plaintiff will have a continuing need for medication as a result of her disabilities. I allow $4,000 for this item.
Past pharmaceutical expenses
Records were not provided to substantiate the plaintiffs claim for past pharmaceutical expenses. The claim was put on the basis that her past need for medication exceeded her current need and she should be recompensed at the rate of her current expenditure at $6.81 per week. On this basis, the claim capitalised at $4,092. In the absence of any better means of assessing her claim, I accept this approach. Counsel for the defendant did not challenge the calculation of the claim, but made the same submission about discounting it that he made in relation to a claim for past medical expenses. I reject that submission and allow the claim at $4,090.
Past travelling expenses
The plaintiff's unchallenged evidence was that she travelled on average 14 kilometres per week for treatment since the accident. On this basis her claim is for $7 per week, for 496 weeks, a total of $3,472. I allow the claim at $3,470.
Conclusion
I assess the plaintiff's claims as follows:
Pain and suffering and loss of amenities of life
$30,000 Loss of earning capacity to 10 December 1996
$85,000 Loss of earning capacity from 10 December 1996 - 31 March 1999
$21,000 Future loss of earning capacity
$45,000 Past housekeeping expenses
$6,800 Future housekeeping expenses
$7,000 Past medical expenses
$23,740 Future physiotherapy and related travelling expenses
$12,000 Future pharmaceutical expenses
$4,000 Past pharmaceutical expenses
$4,090 Past travelling expenses $3,470
TOTAL $242,100
No reduction is made for contributory negligence as the plaintiff has succeeded with her claim based on a breach of contract. Judgment will be entered for the plaintiff for $242,100.
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