Judd v Crystal Carwash Cafe Pty Limited

[2010] NSWDC 31

CITATION:	Judd v Crystal Carwash Cafe Pty Limited [2010] NSWDC 31
HEARING DATE(S):	8 March 2010-9 March 2010
JUDGMENT DATE:	12 March 2010
JURISDICTION:	District Court - Civil
JUDGMENT OF:	Sidis DCJ
DECISION:	1. Verdict and judgment for the plaintiff in the sum of $490,625.50. 2. The defendant is to pay the plaintiff’s costs on an ordinary basis up to and including 24 July 2009 and on an indemnity basis thereafter. 3. The exhibits are returned.
CATCHWORDS:	PERSONAL INJURY - Loss of income - Assessment in circumstances where income loss yet to be demonstrated - Effect of tax management structure - Need for voluntary and paid assistance in managing properties
PARTIES:	Ivan Sergei Judd (Plaintiff) Crystal Carwash Cafe Pty Limited (Defendant)
FILE NUMBER(S):	205/08
COUNSEL:	I Roberts SC (for the Plaintiff) D Ronzani (for the Defendant)
SOLICITORS:	W. G. McNally Jones Staff Lawyers (for the Plaintiff) McCabe Terrill Lawyers (for the Defendant)

JUDGMENT

1 Mr Ivan Judd was injured on 11 January 2008 at the Crystal Carwash in Mosman when he slipped on detergent-laden water whilst inspecting his car. He fell heavily onto his left side impacting in particular with his left elbow and injuring his left shoulder. He also injured the right side of his thoracic spine. The defendant accepted liability for his injuries and admitted breach of duty of care.

2 The parties agreed that the injuries suffered by the plaintiff and the ongoing consequences to him were such that his non-economic loss should be assessed at 28 per cent of a most extreme case. There remained at issue the question of his needs for care both on a voluntary and paid basis, his loss of income earning capacity and his future medical requirements.

3 At the time of the accident the plaintiff was 61 years old. He is now almost 64. He practises as a barrister in personal injury matters, particularly in the workers compensation field. This involves him in appearances in the District Court and the Compensation Commission and at mediations and other ancillary appearances.

4 At the time of his injury he was working full time, attending at country sittings as well as before the courts in Sydney. He lived with his wife variously at three properties. When working in Sydney he lived at an apartment in Manly. At the weekends he attended alternately at a 100 acre property in Majors Lane at Lovedale in the Hunter Valley or at a home on Dangar Island.

5 The plaintiff said that after the fall he felt immediate pain in his left shoulder and the right side of his thoracic region. He consulted a local general practitioner and was treated with painkillers and physiotherapy without relief. He was referred to Dr Bathgate in mid February 2008. An MRI indicated that there was damage to his left shoulder. He therefore consulted Dr Tan in March 2008. He was treated initially by CT guided injection. Following a review, surgery was undertaken in May 2008. After a period of recovery and physiotherapy the plaintiff’s condition reached the point in February 2009 where, in Dr Tan’s opinion, his left shoulder would not improve further.

6 The plaintiff had no pre-existing condition affecting his left shoulder or thoracic spine. He conceded that he had a back problem at the time of his injury that he took care to manage. Otherwise he described his general health as good with hypertension and type 2 diabetes, managed without medication.

7 The plaintiff said that in the months immediately following his injury he was significantly disabled by pain in his left shoulder region and his thoracic spine around the right side of the body. He was in further significant pain after the surgery in May 2008. The pain was relieved by morphine and Endone over a three-week period. His left arm was immobilised in a sling for a period of eight to ten weeks. During this period he was totally reliant on his wife for almost all of his activities of daily living.

8 The plaintiff described a gradual improvement in his condition until the plateau was reached in February 2009 to his current condition. He stated that the range of movement in his shoulder remains moderately restricted and he has difficulty in certain aspects of lifting and carrying. He suffers from a constant ache in the shoulder, the intensity of which increases during the course of the day. He stated that he also suffers an ache in the region of his thoracic spine. The pain in this area can become acute, with certain movements causing him sharp pain that lasts for three to four days. This occurs on a regular basis. He complained also of neck stiffness and restriction in certain movements of his neck. He has an area at the top of his thumb in which he has no feeling.

9 The plaintiff’s sleep is disturbed by pain so that after retiring at nine to 9.30pm he wakes at 1am and is unable to sleep for a further two to three hours. As a result he suffers from constant fatigue and finds it necessary to sleep in the afternoons at weekends, something that was not necessary prior to the accident.

10 These ongoing problems have had consequences both domestically and professionally for the plaintiff.

11 In regard to the need for care, the plaintiff’s evidence dealt with his active lifestyle prior to his accident on both the Lovedale and the Dangar Island properties. The Lovedale property extended over 100 acres, part of which was rented as a restaurant, cellar door and smokehouse. Part of the property was planted with vines and olives and part was used as grazing land on which stock was agisted. This area was managed on behalf of the plaintiff by a manager. There were 22 acres remaining on which the house occupied by the plaintiff and Mrs Judd was built. It was surrounded by an enclosed garden and courtyard which was in turn surrounded by trees and shrubs in a park-like setting.

12 The evidence of the plaintiff and Mrs Judd was that they attended at Lovedale on alternate weekends or on about three days a fortnight. They allocated responsibilities for the property so that Mrs Judd undertook housework and care of the enclosed garden and courtyard and the plaintiff took care of the more expansive areas of the 22 acres they occupied as well as attending to most of the cooking.

13 The plaintiff’s obligations involved picking up fallen branches and placing them into piles before loading them into a trailer, sawing them with a chainsaw if necessary before moving them to a stockpile. He mowed the extensive lawn areas of the property using a ride-on mower, or a push mower in less accessible areas. Other tasks involved general house maintenance, splitting, chopping and stacking wood for the house fire in winter months, spraying weeds using a nine-litre spray pack, raising and dropping wires on the vines and using a long-handled saw for pruning trees.

14 The plaintiff and his wife spent two days of alternate weekends at Dangar Island as well as holiday periods at Easter and Christmas. This property was situated on a steep sloping block 820 square metres in area with terraced gardens planted with exotics and native plants and shrubs. The plaintiff said the property was purchased in the early 1990s and the garden was an ongoing project. He and his wife worked in the gardens. The tasks attended to by the plaintiff included mowing, weeding, pool maintenance, planting, hedge trimming, lopping and pruning, chopping and stacking wood. The island was accessible only by boat and therefore it was necessary to carry all items brought to the island up a steep flight of steps to the house.

15 Since the accident the plaintiff stated that his capacity to undertake the tasks he performed at Lovedale and Dangar Island has been severely limited by his pain and fatigue. He described in detail the things he can no longer do and the steps taken, such as acquiring a lightweight mower, to allow him to do some of them in a limited fashion. The result has been that much of the work is now done by Mrs Judd assisted by paid help. The plaintiff said that he is able to drive, but that his body stiffens while he is driving and he has difficulty getting out of his car.

16 The property at Lovedale was put up for sale in mid 2007 with very little response from the market. Only one offer has been received. It was said to be too low to warrant consideration.

17 Mrs Judd gave evidence supportive of the plaintiff’s complaints and of his level of activity both before and after the accident. She described him as man who, prior to the accident, liked to be active. She said they both took pride in their properties, in particular the gardens on those properties. She gave evidence that since the accident she was required to undertake a significant amount of extra work on the outside of the property, at Lovedale on a average for six hours a week and at Dangar Island on an average of seven hours a week.

18 Mrs Judd produced schedules supported by invoices of amounts paid for assistance both at Lovedale and Dangar Island. It was agreed that Mr Franks provided some assistance at Lovedale prior to the accident but it was claimed that since the accident his hours had increased by three hours a week. The claims for past and future care were based on these estimates.

19 The evidence of the plaintiff and Mrs Judd on the assistance required was straightforward and relatively unchallenged. I was persuaded therefore that the amounts claimed were reasonable and for the past I have allowed the figure as claimed, being gratuitous care in the sum of $42,784 and paid care in the sum of $9,257.50.

20 Future care is claimed to the age of 75. Its calculation was complicated by the prospective sale of the Lovedale property. It was suggested that the amount claimed for Lovedale be discounted by 25 per cent to allow for the prospects that the property will be sold in the eleven years to the time when the plaintiff reaches the age of 75. I considered a discount of 50 per cent more appropriate, allowing, in a slow market, a further period of five and a half years for the sale to take place. I therefore allowed for the future on a gratuitous basis for the Lovedale property $30,643, and for Dangar Island $71,500. For the future on a paid basis for Lovedale I allowed $11,658 and for Dangar Island $9,437.

21 As far as the plaintiff’s income earning capacity was concerned, he stated that prior to his accident he carried on practice on a five day a week basis, working at night when necessary. His intention was to continue to work full time to the age of 70. Since the accident his physical pain and sleep deprivation have left him fatigued and he stated that, refreshed by extra sleep at the weekend, he was able to cope with only the first two and a half to three days of the week, by which time he was fatigued to the point where he could not continue. He described a lack of enthusiasm for his work and stated that he had started to make errors. As a result he has reduced his working hours to three days a week. He agreed that he has on occasion worked for more than three days a week but stated that this was when he was led by senior counsel.

22 The defendant suggested that there were other psychological factors causing the plaintiff to lose his enthusiasm for his work. I was pointed to the plaintiff’s evidence of his reaction when told by Dr Tan in February 2009 that he could not expect further improvement and to the evidence of the death of a close friend, colleague and neighbour in the Hunter Valley after which the Lovedale property was placed on the market.

23 There was no evidence before me, however, from either party that the plaintiff suffered from any psychiatric or psychological disorder that affected his capacity to earn income, notwithstanding that the particulars alleged anxiety and depression. On the other hand there was ample medical evidence to suggest that the plaintiff’s claimed ongoing symptoms were the reasonable consequence of his injury. Only Dr Stephens suggested that he was able to work full time and it was not clear what he meant by full time and whether it extended to the full time effort required to sustain practice at the bar.

24 On the basis that the plaintiff’s credit was not challenged and of the medical evidence that his complaints were entirely reasonable, I was satisfied that given his level of discomfort, disability and sleep deprivation his income earning capacity has been affected in the manner that he described.

25 There was significant difficulty in establishing the extent of the plaintiff’s loss because, firstly, no reduction of income has yet been demonstrated in his tax returns. This was said to be because of the lead time experienced by barristers in recovering fees so that the loss will not manifest for some time. Further, the plaintiff established a structure involving a management company through which income was diverted by the payment of salaries to himself and Mrs Judd and there were further tax losses generated from the primary production partnerships.

26 Thus it appeared at first blush that the plaintiff’s income before tax losses were taken into account was about $50,000 per annum. The defendant suggested that his income loss should be assessed on this basis. I was satisfied that this was not the appropriate basis upon which to assess the income loss and I preferred the approached suggested by senior counsel on the plaintiff’s behalf.

27 Mrs Judd is not in income earning employment and I accepted that all of the income that supported the couple’s lifestyle was generated solely by the plaintiff’s efforts. I therefore looked to his gross income. As noted, the reduction of his working hours in the second half of 2009 was not yet reflected in the gross receipts for the 2009 tax years. However, I considered it obvious that the reduction in time devoted to the practice will in due course lead to a reduction in income. It was submitted that I should assess the loss on the basis of a one-third reduction in gross receipts taxed at standard rates without regard to the tax minimisation structure operated by the plaintiff. I considered that this was a reasonable approach. I allowed, therefore, the plaintiff loss of income for the past in the sum claimed of $40,560 and for the future in the sum claimed of $179,938.

28 The plaintiff claimed further that he should be allowed damages against the contingency that he may not be capable of working to the age of 70. That loss was claimed on the basis that he may be forced to retire at 68. I considered carefully the submissions put in support of this part of his claim and reached the conclusion that if the plaintiff paces himself properly by working two to three days a week there was no basis for a finding that early retirement was probable. I ultimately concluded that a further allowance for income earning loss on this head would result in the over compensation of the plaintiff.

29 In relation to medical expenses the plaintiff gave evidence of his ongoing need for painkilling medication that he uses on a daily basis and of the need for intermittent resort to physiotherapy. His claims on this head were considered to be reasonable and they were allowed in the following sums: for the past, $15,562; for the future, $12,786.

30 The result was a verdict in judgment in favour of the plaintiff in the sum of $490,625.50.

31 On the issue of costs the plaintiff relies upon an offer of compromise dated 24 November 2009 in which he offered to accept the sum of $410,000 plus costs in compromise of his claim. The amount awarded has exceeded that sum and therefore prima facie he is entitled to an order for costs on an indemnity basis from 24 July 2009 the date of service of the offer.

32 The defendant resists such an order on the basis that it is claimed that the calculation of the plaintiff’s income loss was complicated by the vagaries of his income as a barrister. Although it was not straightforward, I did not think that the assessment of his loss was complicated to the point where the defendant was not in a position to adequately respond to the offer of compromise and in those circumstances the indemnity order will be made.

33 The orders that I make are as follows:

1. Verdict and judgment for the plaintiff in the sum of $490,625.50.

2. The defendant is to pay the plaintiff’s costs on an ordinary basis up to and including 24 July 2009 and on an indemnity basis thereafter.

3. The exhibits are returned.

34 I am asked to comment on the retention by the plaintiff of senior counsel for the purposes of these proceedings. I note that liability was in issue until very shortly before the commencement of the hearing. I also note that given the particular position of the plaintiff as a regular practitioner in the field of personal injuries, the retention of senior counsel in such a case would be virtually mandatory. I therefore consider it reasonable that senior counsel was retained.

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