John Stainton Garnett v Government Insurance Office of New South Wales No. 4199 Judgment No. SCGRG 92/1784 Number of Pages 6 Damages General Principles

[1993] SASC 4199

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA BOLLEN(1), DUGGAN(2) AND MULLIGHAN(3) JJ

CWDS
Damages - general principles - Damages - personal injuries sustained in road accident - appellant aged about 56 years at accident and 60 years at trial - intention to retire at age 60 years - damages assessed at $51,915.94 including $34,980.80 for past economic loss and $3,000 for future economic loss - appeal against awards for economic loss - Trial Judge erred in both assessments - in the circumstances true measure of past economic loss was the amount which the appellant would have earned had he continued in employment until trial less his actual earnings - appeal allowed - award for past economic loss increased to $72,980.80 and for future economic loss to $10,000. Workers' Rehabilitation and Compensation Act 1986; Graham v Baker (1961) 106 CLR 340 and Griffiths v Kerkemeyer (1977) 139 CLR 161 referred to.

HRNG ADELAIDE, 6 September 1993 #DATE 29:9:1993
Counsel for appellant:     Mr M J Kernot
Solicitors for appellant:    Teusner and Co
Counsel for respondent:     Mr J G Cummins
Solicitors for respondent: Elston and Gilchrist

ORDER
Appeal allowed.

JUDGE1 MULLIGHAN J This is an appeal against the amount of damages awarded to the appellant for the injuries sustained and loss suffered by him in consequence of his having been injured in a road accident on 26th June 1988 when the motor vehicle he was driving, whilst stationary at an intersection, was struck from behind by another motor vehicle. 2. Liability was denied but the learned Trial Judge found for the appellant and there is no cross appeal against that finding. 3. The learned Trial Judge assessed the appellant's damages on 23rd July 1992 at $51,915.94 which included $34,980.80 for past economic loss and $3,000 for future economic loss. The appellant challenges the awards for past and future economic loss on the ground that they are manifestly inadequate. 4. The appellant was aged 56 years at the date of the accident and nearly 60 years at the date of the trial of the action. He was employed by the State Transport Authority as a Depot Supervisor at Elizabeth at the time of the accident. He had been employed by the Authority for about 14 years, commencing as a driver and working his way up to an inspector and then to the position which he held as at the date of the accident. He lived at Angaston and worked at Elizabeth and consequently had to travel about 56 kilometres to work each day. He enjoyed living in the Barossa Valley and, with his wife, grew strawberries and kept a garden as a hobby. Prior to the accident, the appellant was a fit and active man who enjoyed good health. He intended to retire from his employment upon attaining the age of 60 years, i.e. in about August 1992, and to travel with his wife around Australia supporting himself by part-time casual work in the soft drink industry in which he had experience or by doing odd jobs of a mechanical nature. He and his wife had purchased a suitable motor vehicle and a caravan for this purpose. 5. There was some dispute in the considerable body of medical evidence placed before the learned Judge at the trial but he concluded that in consequence of the accident the appellant sustained a muscular ligamentous injury to the cervical spine which caused pain and discomfort and headache. His pain and headache did not resolve and the appellant took medication which was prescribed for him in consequence of which he developed a duodenal ulcer. 6. After the accident, the appellant was treated by his general medical practitioner, Dr. Smith. He was not treated in hospital. His immediate symptoms included neck stiffness and tenderness in the neck and shoulder muscles. He returned to work on 2nd July 1988 as his neck pain had resolved with treatment. However, by 19th July 1988 he again had to stop work due to restriction in the movement of his neck and headaches. He was away from work until 18th September 1988 and again from 6th October 1988 until 14th November 1988. Therefore he worked with some variation in his hours and duties and modification of his method of working to take account of the disability in his neck until 30th June 1989 when he retired, having accepted a voluntary retirement package by his employer. He was then aged nearly 57 years. 7. The accident had occurred whilst the appellant was returning home from work. Consequently he was entitled to, and received, benefits, including by way of income maintenance, pursuant to the Workers' Rehabilitation and Compensation Act 1986. The payments by way of income maintenance were for the periods when the appellant was away from work until the date of his resignation. The total amount paid was $12,980.80 and it was accepted that this amount should be regarded as an appropriate award for past economic loss for the period from the date of the accident until the appellant retired from his employment with the Authority. 8. The learned Trial Judge found that it was reasonable for the appellant to have retired from his employment. He continued to suffer pain and discomfort in his neck and the modifications to his method of working had not caused the symptoms to abate. The learned Trial Judge summarised his conclusion as follows:-
    "I am satisfied, and I so find as a fact, that the impact
    upon the plaintiff of driving from Angaston to Elizabeth - the
    modified work which still required some bending down for money
    trays, etc. and the general pressure of working under strain -
    justified the plaintiff's decision to accept the voluntary
    retirement package he was offered ... I reject as fanciful any
    suggestion that the plaintiff was retirement oriented. His
    history of 14 years with the STA, ten years as a supervisor, is
    quite contrary to that personality trait and it would have been
    economic lunacy for him to have taken this package unless he was
    driven to it." 9. A submission that the appellant was required to remain in employment with the Authority in order to mitigate his loss was, not surprisingly, rejected by the learned Trial Judge. The appellant was not totally incapacitated from any employment. After his retirement, he obtained part-time employment as a bus driver with Barossa Valley Buslines. He was able to undertake that work because, usually, he only had to drive for relatively short periods at a time and when required to work for longer hours he had periods of rest after driving for a few hours. It seems that he did not commence that employment until about the middle of 1991. The learned Trial Judge found that he needed a reasonable period away from work to recover sufficiently to re-enter the work force. Prior to trial, the appellant earned $11,187 from his part-time employment as a bus driver. 10. The learned Trial Judge accepted the appellant as a truthful witness, although he found that he had a tendency to exaggerate on occasions. The plan to travel around Australia did not eventuate due to the condition of the appellant caused by the accident. He and his wife sold the vehicle and the caravan. The appellant found that he could not attend to his garden and strawberries to the extent that he would have wished due to the pain and discomfort in his neck. Eventually the appellant and his wife sold their property at Angaston and moved to Goolwa on 3rd May 1992. According to the appellant, they did so for financial reasons. The home they purchased at Goolwa was of less value than the property at Angaston. The appellant applied for work as a bus driver at Goolwa but without success. 11. The basis of the award of damages for past economic loss and future economic loss was expressed by the learned Trial Judge as follows:-
    "On this point counsel for the plaintiff, that is on the
    point of economic loss, has adopted an overly simplistic
    position submitting the plaintiff should be compensated from the
    date of the accident to the date of trial, at STA wages less
    earnings with Barossa Valley Buslines ($11,187). His pre-trial
    earning capacity was, I hold, greater than his actual earnings
    at the Barossa Valley Buslines. It is not a matter capable of
    mathematical calculation and is more one for broad assessment.
     I make the following assessments:
     (1) For the period up to 30 June 1989 as $12,980.80 being the
    weekly payments received from STA.
     (2) From 30 June 1989 to date of trial, some three years,
    $22,000.
     The total past economic (loss) is therefore $34,980.80. As to
    the future I find as a fact that the plaintiff would have
    retired at the age of 60, which is about the trial date. The
    economic effects of the accident have largely disappeared now by
    the effluxion of time. He is entitled to an award for post
    trial economic loss; that should be distinguished by its
modesty, and I award the sum of $3,000 under this head." 12. The appellant also challenges the award for past economic loss on the ground that the learned Trial Judge was in error in finding that the appellant's pre-trial earning capacity was greater than his actual earnings from the Barossa Valley Buslines and in reducing the award for that reason. 13. It is implicit in the conclusions reached by the learned Trial Judge that, but for the accident, the appellant would probably have continued with his full-time employment with the Authority until he attained the age of 60 years, a little after the date of the trial. An injured person is to be compensated for economic loss "not merely because his earning capacity has been diminished but because the diminution of his earning capacity is or may be productive of financial loss: Graham v. Baker (1961) 106 CLR 340 at p 347; see also Griffiths v. Kerkemeyer (1977) 139 CLR 161 per Gibbs J (as he then was) at p 165. The learned Trial Judge accepted that the appellant had suffered a loss of earning capacity and the evidence fully justified the conclusion that it was productive of financial loss. It is not immediately clear what the learned Trial Judge had in mind when he said that the appellant's "pre-trial earning capacity was ... greater than his actual earnings at the Barossa Valley Buslines". I expect he meant that he had the capacity to undertake additional work if it was available. However, that could not be a reason to discount the award for past economic loss unless the appellant had chosen not to utilise his residual earning capacity. There was no evidence to suggest that such was the case. He obtained employment as a bus driver which he could manage. The evidence did not disclose that other work was available to him which he declined. He was in the familiar position of being partially incapacitated for work and he undertook the work which he could manage. He was restricted in the type of work which he could undertake because of the condition of his neck. He could not work with his head down for lengthy periods or undertake work which required twisting movements of his neck. The evidence did not establish that the appellant could have undertaken additional work prior to the trial and the conclusion of the learned Trial Judge to that effect was not, in my view, justified by the evidence. 14. The learned Trial Judge did not say why the submission of counsel for the appellant as to the appropriate basis for assessing damages for past economic loss was "overly simplistic". Furthermore, he did not express his reason for the assessment which he did make. The evidence established that if the appellant had continued to work at the Authority until age 60 he would have earned, after the date of his retirement, a total amount after deduction of income taxation of between $55,489 (based upon his earnings at the date of his retirement) and $67,813 based upon what his earnings would have been at the date of trial, together with overtime, after, in both calculations, deducting his earnings as a bus driver. If overtime was excluded then he would have earned $60,071 on the basis of likely earnings at the date of trial. In my view the learned Trial Judge should have found, in the circumstances, that the true measure of the past economic loss of the plaintiff was the amount which he would have earned to the date of the trial had he not resigned from his employment at the Authority, less the amount of his actual earnings as a bus driver, with some adjustment because of his move to Goolwa which put him out of the work force and with further adjustment on account of adverse and favourable contingencies. The evidence did not permit a precise calculation of the exact amount he would have earned had he not resigned and it is not known if overtime would have been constantly available. I do not think there should have been any significant reduction on account of adverse contingencies because any such contingencies are offset by the award for past economic loss not being made in current money value. Also, there is no reason to increase the award on account of any favourable contingency as the main contingency of that nature has been brought to account in accepting what the appellant would probably have earned had he not retired. 15. In my view, having regard to all of these matters, the appropriate award for past economic loss should have been $60,000 in addition to the amount of $12,980.80 paid by way of income maintenance. In reaching this conclusion I have not overlooked the detailed and helpful submission of Mr. Cummins who appeared for the respondent. He sought to establish that the appellant had under utilised his earning capacity before trial and that he had worked longer hours than he was prepared to admit which justifies the conclusion that his earning capacity was not much affected by his injuries with the consequence that the awards for economic loss were reasonable. 16. Careful perusal of the evidence, including the medical evidence, does not support those contentions. As I have said, the learned Trial Judge accepted the appellant as a truthful witness and the passages of evidence to which our attention was directed do not establish that the appellant had a greater earning capacity than he disclosed. Furthermore, the learned Trial Judge preferred the evidence of Dr. Smith to other contrary medical evidence and was plainly justified in doing so. She was his general practitioner. She saw him much more often than other medical practitioners who saw him for medico-legal purposes and her evidence supported that of the appellant. 17. I now turn to the award for future economic loss. The learned Trial Judge was undoubtedly correct when he concluded that this award should be modest. However, an award of $3,000 is, in my view, manifestly inadequate. But for the accident, the appellant would have retired at age 60 years and it is likely that he would have been fit for the various types of work which he had in mind to undertake. He may not have been successful in obtaining work at times, but he would have been of an age when work could have been available to him, at least in the early years after his retirement. In my view, an award of $3,000 for future economic loss is manifestly inadequate. An award of at least $10,000 is justified by the evidence. 18. I would allow the appeal and increase the awards for economic loss to $72,980.80 for the past and $10,000 for the future. The award of $3,000 by way of interest must also be increased. I would hear the parties as to the amount of interest which should be awarded and as to the total amount of the judgment to be entered in the appellant's favour.

JUDGE2 BOLLEN J I agree with the reasons of Mullighan J and with the order which he proposes.

JUDGE3 DUGGAN J I agree that the appeal should be allowed for the purpose of increasing the award of damages to the extent suggested by Mullighan J. I also agree with the reasons advanced by Mullighan J.