Jackson v Adia Centacom Industrial Pty Ltd - [1999] WASCA 159

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: JACKSON -v- ADIA CENTACOM INDUSTRIAL PTY LTD & ANOR [1999] WASCA 159

CORAM: PIDGEON J
IPP J
ANDERSON J

HEARD: 21 JUNE 1999

DELIVERED : 2 SEPTEMBER 1999

FILE NO/S: FUL 147 of 1998

BETWEEN: DENNIS JACKSON
Appellant (Plaintiff)
AND
ADIA CENTACOM INDUSTRIAL PTY LTD
First Respondent (First Defendant)
A GONINAN & CO PTY LTD
Second Respondent (Second Defendant)

Catchwords:

Personal injuries - Damages - Assessment - Loss of earning capacity - Burden of proof - Finding of 60 per cent retained earning capacity upheld - Contingencies - Discount of 25 per cent for contingencies too high - Principles

Legislation:

Nil

Result:

Appeal allowed in part

Representation:

Counsel:

Appellant (Plaintiff)      :  Mr B G Bradley
First Respondent (First Defendant) :                 Mr P P McCann
Second Respondent (Second Defendant) :        Mr P P McCann

Solicitors:

Appellant (Plaintiff)      :  Leonard Cohen & Co
First Respondent (First Defendant) :                 Crisp & Seaman
Second Respondent (Second Defendant) :        Phillips Fox

Case(s) referred to in judgment(s):

Ashford v Ashford (1970) 44 ALJR 195
Australian Coal and Shale Employees Federation v Commonwealth (1953) 94 CLR 621
Black v Motor Vehicle Insurance Trust [1986] WAR 32
Bowen v Tutte [1990] ATR 81-043
Miller v Jennings (1954) 92 CLR 190
Watts v Rake (1960) 108 CLR 158
Yammine v Kalwy [1979] 2 NSWLR 151

Case(s) also cited:

Gardner Bros and Perritt (WA) Pty Ltd v Seat, unreported; FCt SCt of WA; Library No 7318; 13 October 1988

PIDGEON J: I agree with the reasons of Anderson J and with the orders proposed.
IPP J: I have read the reasons to be published by Anderson J. I agree with them and his Honour's conclusions. I have nothing further to add.
ANDERSON J: On 26 June 1995, the appellant was injured in the course of his employment at a work site at Port Hedland by the negligence of the respondents. At trial, liability was denied and the respondents claimed in the alternative that the appellant had been guilty of contributory negligence. The learned trial Judge, Fenbury DCJ, dismissed the claim of contributory negligence and awarded the appellant $296,849.33. The appellant contends that the award is too low and the respondents cross-appeal against the finding that there was no contributory negligence.
The appellant's complaint in respect of the quantum of damages is that the award of general damages for pain, suffering and loss of amenities, the award for past loss of earnings and the award for future loss of earning capacity were each manifestly inadequate.
At the time he was injured, the appellant was 42 years of age and in good health and physical condition. Until 1984, his career had been in the US Marines where he had attained the rank of sergeant. On discharge from the armed forces, he underwent vocational training in the field of welding and obtained full qualifications as a welder. He came to live in Western Australia in 1985 after marrying a Western Australian. There is a history of fairly regular employment as a welder/boilermaker/fabricator in a range of jobs, many of them short-term. The details are set out in exhibit 4, which is the appellant's answer to an interrogatory. In September 1994, the marriage failed and, in June 1995, the plaintiff accepted a contract as a first class welder at the second respondent's works near Port Hedland in the north of the State. The contract was for a 13 week period, working 60 hours per week at the rate of $21 per hour; ie $1,260 per week. Essentially, he was engaged in the repair of heavy duty ore carrying railcars. Eight weeks into this 13 week contract, the appellant sustained an injury to his lower back whilst climbing up to a work level. The learned trial Judge found that the second respondent ought to have provided the appellant with a safer means of access to his work site and the injury which he sustained was caused by the failure to do so.

There was no clearcut diagnosis and his Honour did not make a finding as to the precise injury which was sustained. However, his Honour was satisfied on the whole of the medical evidence that the appellant did suffer a disabling injury and, reading his Honour's judgment as a whole, he appears to have accepted the evidence of some of the doctors that the disabling condition was an "ongoing mechanical lower back pain".
That the appellant suffers from this incapacity was not really contested at trial. Neither does it seem to have been much in dispute that the symptoms which the appellant does have are likely to be permanent. The main dispute concerned the severity of the symptoms and the extent of the appellant's residual working capacity.
As to that, his Honour found that the injury has incapacitated the appellant for work as a first class welder/boilermaker. That finding is not the subject of a cross-appeal and counsel for the second respondent, Mr McCann, very properly conceded that the finding was well and truly supported by the medical evidence.
In fact, at the time of trial, the appellant had given up hope of resuming work as a welder/boilermaker and had commenced vocational retraining. It would appear that, by arrangement with the workers' compensation insurer, the appellant was provided with sufficient funding to enrol in a learning institution to study English and History with a view to gaining entrance to Curtin University. His uncontradicted evidence was that he was regularly attending classes, which, if he had successfully completed them, would have qualified him to sit a tertiary entrance examination for admission to Curtin University. However, before the course was completed, funding was withdrawn and he was not able to continue. He has had no gainful employment since ceasing work shortly after the injury. His case at trial was that he wished to resume his studies with a view to obtaining qualifications in the field of "social welfare". No evidence was led on either side as to what qualifications would be needed or what vocational opportunities exist within that field or as to the level of remuneration he might expect to enjoy should he succeed in obtaining qualifications in the field.
I will now deal with the various aspects of the appeal separately.

Award for past loss of earnings

The appellant stopped working on 10 July 1995. Apart from two unsuccessful unpaid work trials in September 1997 and February 1998, the appellant did not work between 10 July 1995 and the trial on 14 July 1998. That is a period of 156 weeks. The appellant claimed past loss of earnings for the whole of that period at his uninjured earning capacity. The learned trial Judge accepted that the appellant was entitled to recover for past loss of earnings but discounted the claim on the grounds that the appellant had recovered some of his earning capacity prior to trial and therefore ought to have found some employment during that period. This reasoning is attacked by the appellant on the basis that it was not the respondent's case at trial that the appellant should have been in work at any time prior to trial. As counsel for the appellant pointed out, the cross-examination of the appellant was founded on the contention that the appellant should have made a greater effort to complete his vocational retraining and enter university. In short, the respondent accepted at trial that the appellant's conduct in not returning to manual work prior to trial was not unreasonable.
During the course of the appeal, Mr McCann very properly accepted that this was so and formally conceded that the appellant's claim for past loss of earnings ought to have been allowed in full.
This ground of appeal should therefore be allowed and the amount awarded for past loss of earnings should be increased from $89,376 to $96,564. The appellant is entitled to interest on the past loss of earnings. The allowance claimed is $2,102. This claim was not disputed and it should also be allowed in full, in lieu of the amount of $71.02 allowed by the learned trial Judge.

Damages for pain, suffering and loss of amenities

Under this head, his Honour awarded $22,500. It seems to me to be a rather modest award, but the question is whether it is manifestly inadequate. I accept Mr McCann's submission that this Court should not interfere with the award unless satisfied that it is clearly wrong - Australian Coal and Shale Employees Federation v Commonwealth (1953) 94 CLR 621, at 627; Miller v Jennings (1954) 92 CLR 190, at 196. The assessment of general damages is an exercise of a discretionary judgment. No specific error or misapprehension of the facts has been demonstrated. Therefore, before we would interfere with the trial Judge's assessment, this Court would have to be satisfied that the amount awarded is beyond the limits of a proper exercise of discretion, or "much too little", as Barwick CJ put it in Ashford v Ashford (1970) 44 ALJR 195 at 196.
It is reasonably clear from his Honour's reasons that, although he found the appellant to be generally a credible witness, he considered that the appellant was inclined to overstate the severity of his symptoms. What his Honour said was this:
"From time to time the plaintiff stood up in the witness box without explanation by himself or his counsel. The inference is plainly that he has difficulty sitting for long periods. The plaintiff gave his evidence in an unemotional flat kind of way. He was not caught out in cross-examination.
I generally formed a favourable view of the plaintiff's reliability and credibility as to the fact that he has pain but I felt that he was probably overstating it. The plaintiff has a young son aged 10 years and complained to various medical practitioners about his inability to "horse around" with his son the way a father should. The plaintiff has not taken much in the way of analgesics in recent times or indeed, since he was injured. I have no doubt that he has some back pain but I feel he should be able to cope with it better than he has."
His Honour referred to some passing depression suffered by the appellant as a result of the effect of his back injury upon the quality of his life, but considered that the appellant was "very likely to recover much more than he feels he has after this litigation has concluded and this is a view expressed by a number of practitioners".
The learned Judge pointed out that, although the appellant particularised some 20 residual disabilities in his statement of claim, many of them were not the subject of any evidence.
This Court must bear in mind the advantage enjoyed by the court of trial in arriving at an appropriate award of general damages. The trial Judge had the appellant under observation for an extended period in the witness box, heard and saw him give his evidence concerning matters relevant to this head of claim and heard and saw the range of medical practitioners give their evidence on the subject. In a case of this kind, that is a very considerable advantage. All in all, I am not persuaded that the award under this head exceeds the limits of a proper exercise of discretion in the sense of being wholly inadequate. I would not uphold this ground of appeal.

Future loss of earning capacity

Central to the assessment under this head of claim is the finding as to the appellant's earning capacity at the date of trial. His Honour found it to be $45,000 per annum gross. That finding is not challenged. However, how the finding was arrived at affects, or may affect, the question of the appropriateness of the discount which was made for contingencies. That discount was 25 per cent. There were three main reasons why such a large discount was applied. One was that the finding as to the appellant's earning capacity was based on the appellant doing a fair amount of what his Honour described as "heavy work in the isolation of the north west". Not surprisingly, the evidence established that welders working in harsh conditions in isolated areas of the State earn more than welder/boilermakers working under award conditions in and around the metropolitan area. His Honour seems to have been of the opinion that only by doing quite a lot of such work could the appellant earn at the rate of $45,000 per annum and expressed doubt that the appellant would keep up that kind of work right to the end of his working life, especially as the appellant had hitherto worked mainly in the metropolitan area. The other main reason why the learned Judge applied the large discount was that he believed the appellant had a pre‑existing degenerative condition of the spine which "was likely to have become symptomatic prior to the age of 65 in any event". As to when that was likely to happen, his Honour said: "I suspect his symptoms would have surfaced earlier rather than later". The third reason was that because of the nature of everyday welding work - it being what his Honour described as heavy physical work - the learned Judge considered it was unlikely the appellant would have continued as a welder until the age of 65 in any event.
With respect, none of these reasons really finds support in the evidence. As to the finding that to earn $45,000 per annum as a welder/boilermaker the appellant would be required to do a lot of work in isolated regions, the evidence was that contract welder/boilermakers working in fabrication shops in and around the metropolitan area, and at places such as the Collie Power Station, are earning $25 to $28 per hour, working up to 60 hour weeks. That evidence was given by Mr Ferguson, the Assistant State Secretary of the Australian Manufacturing Workers Union. He said that welders working out on construction sites earn even more than that. That evidence is at Appeal Book 291 et seq and it was not contradicted. On the basis of that evidence, I think the finding should have been that the appellant had an earning capacity of $45,000 per annum as at the date of trial, even if he was judged to be a person likely to spend most of the rest of his working life in and around the metropolitan area. This means that no special discount was justified on account of peculiar working conditions attaching to the appellant's assessed earning capacity of $45,000 per annum.
As to the matter of the pre‑accident condition of the appellant's spine, there was no evidence that the appellant had a disabling, or potentially disabling, pre‑existing degenerative condition. The unchallenged and uncontradicted evidence of the medical specialists, Mr Wong and Professor Taylor, was to the effect that the degenerative changes that were noted were of no significance. As Professor Taylor put it, at Appeal Book 233:
"… studies suggest that 80 per cent of the adult population suffer from back pain at some time in their adult lives, so lots of people have little niggles of back pain. I have back pain after I play golf but it doesn't stop me from playing golf. I think it's a question of how much back pain and how incapacitating it would be. I think that in the absence of injury he [the appellant] would have probably had occasional niggles of back pain through his life but it wouldn't have stopped him from working."
As to the matter of early cessation of work as a welder/boilermaker by reason of the heavy nature of that work, there was no evidence that tradesmen in this vocation actually stopped work in the trade at a younger age than 65. No such proposition was put to Mr Ferguson and his evidence was not to that effect. The appellant called a witness, Hughes, who is a qualified welder/boilermaker aged 56 now living and working in the Bunbury area, south of Perth. His evidence was that, in the Bunbury region, he found work for about six months of the year. As I interpret his evidence at AB270-273, this was entirely a matter of choice, dictated to some extent by circumstances personal to him. The particular circumstances were that he had settled with his family in Bunbury and his wife did not like him going away. He therefore took the work that was available in and around Bunbury, which kept him occupied for about six months each year. It was not put to him that age prevented him from working all year round. It would be fair to say, however, that his evidence as a whole was to the effect that he had tended to slow down in his pursuit of contract work. As he put it, age "does make a big factor". (AB270A-B).
In my opinion, the evidence does not justify any large discount on account of the prospect that the appellant would have dropped out of his trade before the normal workforce retirement age of 65. It would be appropriate to recognise, however, that the appellant's work history does reveal a preference for short term contract work. Probably this would have continued. It has already been noted that, at the time he was injured, he was engaged on a 13 week contract.
The discount that is normally applied for usual contingencies ranges between 2 to 6 per cent: Black v Motor Vehicle Insurance Trust [1986] WAR 32 at 34; Bowen v Tutte [1990] ATR 81-043. Accepting that it was proper to allow for the prospect that, with advancing age, the earning capacity of the appellant might tend to decline, still I do not consider a discount above 10 per cent could be justified.
It was agreed that $45,000 per annum before tax was $619 per week net after tax for a person in the appellant's position. At the date of trial, the appellant was aged 45. His Honour took the multiplier to be 616, assuming a retirement age of 65 and there is no challenge on either side to the correctness of the multiplier. It gives an amount of $381,304 for gross loss of earning capacity. It is this amount which should be discounted for contingencies. A discount of 10 per cent produces a figure for gross loss of earning capacity of $343,173.60, which I would round out to $343,174.
There is no dispute that the appellant has a substantial retained earning capacity. The legal onus of proving his loss of earning capacity remained on the appellant. That is, he carried the burden of proving not only that he suffered a loss of earning capacity, but also the quantification of it in money. In Watts v Rake (1960) 108 CLR 158, Dixon CJ said at 159:
"The law … places upon a plaintiff who sues in tort for unliquidated damages the burden of satisfying the tribunal of fact of the damages he has suffered both special and general and of the quantification in money that should be adopted in the sum awarded."
Whilst the legal onus rests on the plaintiff throughout, it is also well settled that there may be an evidential burden on the defendant in such cases. Where a plaintiff shows satisfactorily that he or she has been wholly disabled from continuing in the employment in which he or she was engaged when injured, and where the evidence is capable of supporting an inference that his or her earning capacity has been wholly lost, it is only prudent for a defendant who contends to the contrary to adduce evidence: Watts v Rake (loc cit). Failure to do so may lead to a finding that the plaintiff is indeed totally and permanently incapacitated. This is not such a case. As I have said there is no dispute that the appellant has a substantial retained earning capacity. There was ample evidence of this. The specialist in rehabilitation medicine, Dr John Rosenthal, gave uncontradicted evidence that the appellant was "fit to work in a sales, supervisory or administrative capacity. It would be appropriate to utilise existing skills and relevant experience, perhaps in a technical teaching capacity". The learned trial Judge found the appellant to be "an intelligent person" and "an articulate person" with "some ability to pursue tertiary education" and "significant ability to change direction and pursue [another] career …". This is borne out by events. As has been mentioned already, the appellant has decided to obtain tertiary qualifications in order to pursue a career in "social welfare".

It might have been expected that the appellant would adduce evidence at trial of the qualifications that he hoped to acquire, the vocational opportunities existing within the field that he has chosen for his new career, the levels of remuneration that might be earned by a person capable of obtaining the tertiary qualifications at which the appellant is aiming and the length of time it will take to become qualified. The trial Judge did not have the benefit of such evidence.
There was not a complete absence of evidence as to what the appellant can now earn in alternative occupations. The evidence established that there are a variety of occupations in which the appellant is currently employable. Those occupations include occupations of a clerical type, security work and work of that kind. In the appeal papers at 632 ‑ 633, there is a document headed "Schedule of award rates and gross and net weekly and annual earnings". It refers to a range of occupations. It seems to have been common ground that these were occupations suitable to be more or less immediately undertaken by the appellant if he decided not to resume his pursuit of tertiary qualifications. The schedule sets out the wages and salaries that are laid down in various awards for occupations such as clerk, storeman, security officer, shop assistant, parking attendant and so on. At the top is the award salary for a "Clerk, Grade 3" which is stated to be approximately $23,000 per annum; that is, slightly more than 50 per cent of the appellant's uninjured earning capacity as a tradesman boilermaker/welder.
His Honour found that the appellant's retained earning capacity was 60 per cent of his uninjured earning capacity. His reasoning was expressed quite shortly in the following terms:
"As I have outlined the plaintiff was a qualified welder. That is the occupation he has chosen and pursued for his working life over the last 12 or so years. He has a reasonable work history in that period.
Prior to that period the plaintiff saw service in the United States Marines. He is an intelligent person who has some ability to pursue tertiary education. Indeed as part of his rehabilitation since the accident he was taking steps to bring himself up to tertiary entrance standard so that he could pursue qualifications in the area of social welfare.
The plaintiff is also an articulate person. In my view he has significant ability to change direction and pursue a career that is within his physical and/or mental capabilities.
On all of the evidence I think it fair to assess the plaintiff's loss of earning capacity to be 40 per cent. …."
The question is whether, on the state of the evidence as a whole, it was open to the trial Judge to make that finding. I do not think it can be said that it was not open to him to do so. On the appellant's own evidence he had been progressing satisfactorily with his studies. The first stage of them, that is the course that would qualify him for tertiary entrance, was all but complete when funding was withdrawn. It was the withdrawal of funding which caused him to discontinue his studies, not any difficulty in handling the course. There is no suggestion that the appellant found himself out of his depth in the intellectual sense. There must, therefore, be reason for optimism that he will qualify for tertiary education and, in light of his Honour's finding that the appellant is "intelligent" and "articulate", there is reason for optimism that he will successfully complete his chosen course in the social sciences. It is established that the appellant presently has an earning capacity of at least 50 per cent of his uninjured earning capacity. I cannot say that it was wrong to conclude, as the trial Judge obviously did, that the appellant probably will be able to build significantly on his present earning capacity.
On behalf of the appellant it was submitted that the appellant still had two to three years of study in order to obtain tertiary qualifications, during which he would not be earning at anything like 60 per cent of his uninjured capacity. While this is no doubt true, it is not suggested that the appellant cannot earn at all in that time. No such case was put forward on his behalf. And it is at least possible that, when he has finished his course, his earning capacity will significantly exceed 60 per cent of his pre‑injury earning capacity as a welder. It is, I think, one of those cases in which the difficulty created by the lack of evidence in respect to the matters mentioned leaves a "wide margin within which a trial Judge might properly exercise his discretion in arriving at a verdict …" Ashford v Ashford (loc cit). See also, Yammine v Kalwy [1979] 2 NSWLR 151. The main point in the latter case was that the failure by a plaintiff to prove what he might be able to earn in his injured state should not lead to a verdict of nominal damages only. The court pointed out, however, that a plaintiff who fails to lead such evidence may have to suffer adverse consequences. Reynolds JA said, at 155:
"Of course, in seeking to quantify his damages, a plaintiff could be well advised to offer such evidence in many cases, and likewise a defendant, in seeking to cut down the damage, might similarly be well advised to tender such evidence: neither, in the absence of such evidence could complain, to the same effect, at any quantification arrived at."
In the absence of specific evidence as to what the future holds for the appellant in terms of remuneration within his chosen career of "social welfare", all that was left to the learned trial Judge was to make the best judgment or assessment he could of the value of the lost capacity. Once again, it was a judgment based upon the trial Judge's appraisal of the appellant after seeing and hearing him during the trial. I am not able to positively conclude that the assessment that he made was wrong.
On this basis, the calculation for lost earning capacity would be 40 per cent of $343,174, that is, $137,269.
I would substitute $137,269 for the amount of $114,391 allowed by his Honour under this head.
The adjustment to the discounts require an adjustment to be made to the award for future loss of superannuation benefits. His Honour calculated the base loss to be $26,108 and discounted that by "60 per cent for retained earning capacity and contingencies = $10,440". The appellant concedes that this was more favourable to the appellant than it should have been because there was actually no discount for contingencies in that calculation. The only reduction that is made is on account of the 60 per cent retained earning capacity. In my opinion, the respondent must be given the benefit of the contingency discount of 10 per cent in the calculation of the amount to be awarded to the appellant under this head. The correct calculation would appear to be $26,121 less 70 per cent for retained capacity and contingencies. That would give a figure of $7,836.30 and his Honour's award should be reduced by the difference between the amount awarded by him ($10,440) and $7,836.30.
In my opinion, his Honour's award should be adjusted as follows:
Head of Claim  Amount awarded Adjusted Amount
by trial Judge
Loss of Amenities  $22,500.00        $22,500.00
Past economic loss  89,376.00          96,564.00
Interest on past loss  71.02            2,102.00
Future loss of earning capacity             114,391.00        137,269.00
Special damages  37,110.31          37,110.31
Future loss of superannuation                 10,448.00            7,836.30
Future medical expenses     3,137.00            3,137.00
$277,033.33      $306,518.61
Plus allowance for Fox v Wood              19,816.00          19,816.00
Total  $296,849.33      $326,334.61
In my opinion, his Honour's award should be set aside and an award in the sum of $326,334.61 substituted for it.

Cross-appeal - contributory negligence

At trial, the respondent contended that the appellant was guilty of contributory negligence in failing to procure and use an "access aid" to help him climb up to the work level safely. This came down to a contention that he could have and should have used a ladder or trolley platform instead of clambering up the structure itself - an activity that was admittedly difficult and involved risk.
His Honour rejected the claim of contributory negligence, essentially on the ground that the appellant had requested to be provided with a ladder and his request had been refused by his supervisor. His Honour found that the supervisor positively instructed the appellant to "use the step". The "step" was an element of the structure (an upturned rail car frame), the use of which involved the very risk in question. I am not persuaded that his Honour erred in ruling out contributory negligence, and I would dismiss the cross-appeal.