Karko v Greer
[1995] QSC 144
•7 July 1995
IN THE SUPREME COURT
OF QUEENSLAND
TOOWOOMBA DISTRICT REGISTRY No. 4 of 1991
[Karko v. Greer & Anor]
BETWEEN:
JERZY ANTONI KARKO and
LOUETTA MARIE FARRAR-KARKO
Plaintiffs
AND:
LINDSAY GERARD GREER
Defendant
AND:
SUNCORP INSURANCE AND FINANCE
Defendant by Election
REASONS FOR JUDGMENT - THOMAS J.
Delivered 7 July 1995
CATCHWORDS: Damages - Husband and Wife - Partnership - professional entertainer ‑ Wife principal income earner - Profit Sharing ratios - Seymour v. Gough (App 293 of 1993 14 December 1994) discussed - factors applicable in calculating past economic loss - factors applicable in calculating future economic loss - damages for loss of consortium.
Counsel:J.A. Innes for the plaintiffs
K. Geraghty for the defendant by election
Solicitors:Hede & Byrne for the plaintiffs
Shine Roche McGowan for the defendant by election
Hearing Dates: 21-23 June 1995
IN THE SUPREME COURT
OF QUEENSLAND
TOOWOOMBA DISTRICT REGISTRY No. 4 of 1991
[Karko v. Greer & Anor]
BETWEEN:
JERZY ANTONI KARKO and
LOUETTA MARIE FARRAR-KARKO
Plaintiffs
AND:
LINDSAY GERARD GREER
Defendant
AND:
SUNCORP INSURANCE AND FINANCE
Defendant by Election
REASONS FOR JUDGMENT - THOMAS J.
Judgment delivered 7 July 1995
The two plaintiffs in this action are husband and wife. They are musicians and entertainers of superior ability and have at all material times earned their living in what might be called the entertainment industry. They were injured in a serious head-on collision on 15 April 1988, and particularly serious injuries were sustained by the female plaintiff, especially to her face.
Liability has been admitted and it is my task to assess the plaintiffs' damages. The female plaintiff, who in public retained her name of Louetta Farrar, was born on 7 October 1940. Her husband Jerzy Karko, usually known as George, was born in March 1948. It will be convenient to refer to the female plaintiff and the male plaintiff respectively by their Christian names of Louetta and George.
Louetta was born in the United States and received extensive early training in song and dance. She has been working in music-oriented entertainment ever since the third year of her college. Her American CV includes operatic roles, musical roles, concerts, television and radio (including appearances in the Jackie Gleason Show and Andy Griffith Show) and many nightclub engagements. In 1975 she came to Australia where she has remained ever since. She immediately took the position of lead soprano with the Western Australian Opera Company. This was a full-time appointment and she participated in productions including Pagliacci, Cosi fan tutte, L'Elisir d'Amore, The Medium, The Rape of Lucretia and The Gondoliers. Her work included country tours. She also made solo appearances with the Western Australian Symphony Orchestra until 1979 when she moved east. During her period in Western Australia she met George who held a managerial position in the ABC in Perth. They married in 1977.
Between 1979 and 1983 she was a feature artist in three eight-part series produced by the ABC known as The Saturday Show. Each series of eight shows took six months to produce. The productions were relatively lavish, and only four series were made. I was shown excerpts from a video containing extracts from these shows (ex. 10). It is an exhibit worth watching, and it has helped to satisfy me of the artistry and musicality of this plaintiff, and to accept other evidence which describes her as possessing an outstanding musical talent. I also accept that she was of exceptionally pleasing appearance and that her abilities included dancing, body movement and the ability to grip the attention of an audience. In short, she was an all-rounder with an uncommonly wide range of abilities.
During the period 1979 to 1985 the plaintiffs were living in Victoria. At first they lived in Melbourne, but in 1983 moved to St Arnaud where they lived in a rural setting, travelling when necessary to fulfil engagements. During this period she performed engagements with the Melbourne, Adelaide, Tasmanian and Queensland Symphony Orchestras. Other engagements included four two-week P&O tours as an entertainer, three of these with George and one alone. They also performed tours for the Victorian Arts Council. In 1983 she performed a lead role in Die Fledermaus in the Victorian production.
On 5 July 1985 both plaintiffs suffered fairly serious injuries in a head-on collision in Victoria. George suffered injuries to the nose, sternum and right ankle, the latter injury resulting in a permanent disability of 25 percent of the leg. Louetta suffered a deep laceration to the forehead, injury to the left clavicle, crush fracture of L5 and three fractured metatarsals in the right foot. Despite the seriousness of these injuries (which involved seven weeks in hospital for Louetta) they were back at work within three months.
Her facial scars from this accident are, in her word, "flat", and are not particularly noticeable unless at close range. They are easily concealable by make up, and the forehead scar is also concealable by appropriate hairstyling. A number of photographs, forming part of ex. 7, demonstrate her then appearance, that is to say after the first accident and before the second. This scarring would not have had any severe inhibiting effect upon her career.
In 1986 the plaintiffs moved to Toowoomba which has been their base ever since. This move perhaps evidences their desire not to live in a large metropolis, and their preference to live in a place from which they can fairly comfortably perform their engagements. She was successful in obtaining the lead role in the Queensland Light Opera Company production in the Lyric Theatre of Kiss Me Kate which ran in Brisbane from 9-18 July 1987. Photographs and critiques of this production show that she participated very successfully.
She regards herself as effectively having overcome disabilities of her 1985 accident by 1986 or 1987. Her performance in Kiss Me Kate and other engagements supports this. I do not underestimate the severity of the injuries sustained in the first accident, and note that for the purposes of settling her claim, an adverse effect upon her further career was suggested. The claim of both plaintiffs arising from that accident was settled in about January 1989 for the combined total of about $66,000. I consider that to be a fairly modest settlement, and it does not reflect any belief on the plaintiffs' part that their joint or several careers were substantially impaired by reason of the first accident. I accept that to a very large extent the plaintiffs had by 1988 overcome the disadvantages resulting from the 1985 accident and that they still had good prospects of developing their careers to a high level.
The plaintiffs had established a satisfactory relationship with the Queensland Arts Council as early as 1983, and this was further developed after their move to Queensland. They were hopeful that Louetta would obtain enough high profile engagements to lead to her to become a household name in the entertainment industry in this country. She continued to take symphony orchestra engagements and continued looking for contacts and engagements. The Arts Council contracts were regarded as bread and butter work while they searched for higher stream or better paid engagements. They augmented their equipment and worked towards further development of their careers.
This then was the position immediately before the second accident of 15 April 1988 upon which the present proceedings are based. Louetta was then aged 47 and George 40. She had a good record. However despite a lengthy career during which she impressed those with whom she had come into contact, she had not to that time become a household name. They had recently purchased a vehicle, caravan, piano, sound-mixer and other equipment to promote their capacity to give shows and to take engagements of various kinds. They were versatile, and the evidence of Mr Brookes persuades me that even if she had failed to become a regular member of the top stream of show business personalities, she and George would have at least been successful competitors in what he described as the corporate circuit and in other work. Corporate circuit work slowly emerged in Australia in the early 1980s and has more recently developed into a very good source of income for entertainers of calibre. It may loosely be described as special floor-shows to climax a conference, promotion or other corporate event. It is a growing phenomenon, with high remuneration for performers.
In this accident (which was also a head-on accident), Louetta suffered very serious injuries principally to the face and neck. Her concussion has also resulted in probable brain damage which occasionally causes her to forget lines, even in songs or parts which she knows well. This causes her considerable distress, and of course it has a direct impact upon her capacity to be an effective performer.
After initial treatment at Toowoomba General Hospital she was transferred to the Princess Alexandra Hospital where she remained an in-patient until 17 May 1988. She suffered severe facial fractures (Le Forte type I and II with gross displacement) as well as complex fractures of the mandible. There were fractures of both the lower and upper jaws extending into the mid and probably the upper facial areas as well as extensive facial lacerations. The neck injury included a fracture of the odontoid peg in the area of C2 and there were pulmonary contusions. She required a tracheotomy and was managed in the intensive care unit for two weeks. Extensive facial surgery was necessary to reduce the Le Forte fractures. Her neck fracture was of a kind that has an unacceptably high rate of non-union, and a halo brace was necessary. Several attempts were necessary to position the peg fracture satisfactorily. Ultimately this was achieved. The halo brace defies description, but virtually immobilises the head and neck and inter alia involved painful clamping to parts of the forehead.
Union of the upper jaw was not so successfully effected. Despite extensive surgical treatment, the upper jaw reunited in an upward arch so that the central part of her upper jaw (and teeth) were displaced upwards. The first part of ex. 9 shows this grotesque result. This photograph also shows the tracheotomy scar and the results of the clamps to the forehead necessitated by the halo brace. She had to wear this for some months after discharge from the hospital. She then was placed in a hard collar.
The operations included a tracheostomy to secure her airway, repair her facial lacerations (on 16 April); the application of a levant frame to stabilise the middle third of her face fracture, and the wiring of her mandible and the wiring together of the jaws on 18 April.
The condition of the upper jaw was unacceptable, and a further operation was undertaken on 16 December 1988. This was described as Le Forte I maxillary osteotomy with extrusion of the maxilla and advancement of the maxilla one centimetre in each direction, with a bone graft from the hip. In other words the unsatisfactory union had to be broken and re‑positioned with the aid of bone tissue taken from another part of the body. Some nerve damage occurred in the taking of the hip graft and this caused her considerable additional discomfort.
In the 12 month follow‑up period after this operation, sinusitis became a persistent cause of trouble. An attempt was made by Dr Houston to improve the maxillary sinus anatomy in an operation on 5 March 1990, and at that stage the inter‑osseous wires from the right and left maxilla were removed. The attempt to reduce the sinusitis was however unsuccessful. Some scar tissue in the region of the tracheostomy was excised at the same time.
Dr Houston, an oral and maxilla-facial surgeon, who conducted these two operations reported as follows:"This patient has undergone a considerable period of pain repeated operations emotional and psychological upsets as a result of this accident. She is a lady whose occupation involves television appearance and repeated public exposure, and apart from the initial functional disability of impaired breathing, inability to masticate her food properly, her ability to sing which is her livelihood has been interfered with because of these ongoing problems ...".
The osteotomy achieved a very significant improvement in the lower mid-facial profile and projection. However her face remains somewhat flattened in the region and this is confirmed by Dr Monsour, by photographs and by other witnesses including Mr McLean.
There was extensive damage to her teeth, and dental repairs have been necessary. Considerable dental work remains to be performed.
The sinusitis involved a constant post‑nasal drip with mucosal discharge. This, along with the other disabilities so far described, tends to affect her performance as a singer. Dr Harrington has observed a severe septal deviation to the right with fibrous adhesions and a thick carpet of infected mucus. The attempt to correct the condition surgically failed. The most successful treatment available for curing such a condition is a procedure known as functional endoscopic sinus surgery (FESS). The success rate of such surgery is no better than fifty/fifty, but an unsuccessful operation is unlikely to make her condition any worse. A successful procedure would not eliminate the nasal congestion entirely, but would have the benefit of clearing the chronic infected material which currently passes down her throat. It is probable that she will undertake this surgical procedure.
Her facial scarring is described by Dr Catt, a plastic surgeon. This includes a number of fine scars on her lower lip and chin which are obvious on casual inspection. He considers that no worthwhile improvement would be achieved by surgical treatment. Some improvement to the appearance of her nose could be achieved by a septo-rhinoplasty, and that could be undertaken at the same time as the FESS procedure. Of more importance, from the plaintiff's point of view, is the altered shape of her face since her bone structure was changed by the accident. Even allowing for the wear and tear that age usually produces, the before and after appearance of the plaintiff reveals a significant destruction of good looks. This is difficult to describe, but it is a very genuine complaint. It is fair to say that the plaintiff's good looks have been very severely affected by the accident. A face-lift procedure has produced only marginal improvement. There are also multiple small vertical lines surrounding the mouth, and Dr Robinson considers that these may have been accentuated by the bony injuries. He describes her facial scarring as a significant long-term cosmetic disability.
She also suffered a severe closed head injury with post-traumatic amnesia. She occasionally suffers dizziness and loss of balance, but even more troubling to her is the deterioration in her memory. She now has a tendency to forget the names of familiar people and places, and, significantly, her lines. Psychiatrically she is remarkably normal considering the stresses to which she has been subjected. Although she suffered waves of depression she has managed to resolve much of this and has once again devoted herself to her career, although the level of that career is considerably reduced. She and her husband are of the Bahai faith and this has assisted her to make the most of an adverse situation. She revealed a very positive attitude towards her future and in her evidence made rather less of her disabilities than might have been expected. I accept the evidence of Dr Bryant and of Dr Senior that she suffers from a post-concussional disorder, from a diminution of her ability to produce words easily and in processing verbal information efficiently. The anxiety that this engenders increases the likelihood of failure. I accept the following observations of Dr Senior:"She has made, on the whole, a remarkable recovery from her injury and is left with what in most cases would be a mild disability in the ability of word finding and verbal fluency. In Ms Farrar-Karko's particular case, however, these minor difficulties constitute a much greater problem with regard to her chosen profession."
George Karko suffered a broken arm, but was not disabled for very long. He also tended to understate matters. He suffered a fracture of the right olecranon. It required treatment under general anaesthetic by means of compound scrubbing and internal fixation of the fracture. It was reduced and held with K-wires and tension-band wiring. Post-operatively he suffered significant swelling of the hand and forearm, requiring management by antibiotics. He was an in-patient for ten days.
There was limitation of movement, and three months later X-rays showed that a fracture-line was still visible. The hospital report records significant pain up to that stage. He was readmitted on 17 August 1988 for removal of wires and discharged on 19 August 1988. Thereafter his recovery was uneventful. There is a prospect of some arthritic degeneration as a result of this injury, but it will not produce any substantial functional effects. Overall he may be regarded as having suffered a five percent impairment of the use of the right arm.
He is a pianist, but does not claim that the injury has produced any long-term effects upon his capacity to perform.
He also has a claim for damages for loss of consortium and this will be considered in discussing the various heads of damage.
Career activity since 15 April 1988
George returned to active work in October 1988. He would have returned sooner, but his assistance was needed to assist Louetta's recovery. It is in my view quite remarkable that in November/December 1988, only seven months after the accident, they both participated in an Arts Council tour. They were at all times anxious to resume their careers and to return to their chosen professions. It was a particularly brave return by Louetta whose appearance at that stage was dreadfully affected. Very soon after that tour she underwent the osteotomy operation.
The plaintiffs accepted whatever work they were able to obtain, and reestablished their business up to a point. They are still able to get occasional concerts at venues such as bowling clubs and other sporting clubs, and they have increasingly relied upon the Arts Council contracts. Without that work they would not break even. I accept the evidence of Mr Peter Dent, the general manager of the Queensland Arts Council, that there is a serious risk that this work will diminish next year and diminish or disappear in 1997. He admires their courage, dignity and tenacity, recognises Louetta's talent, and regards them as dependable people who have fulfilled the educational function that the Arts Council is endeavouring to fulfil. However the scene is changing. The competition for such work is increasing as numerous graduates emerge from the Conservatorium and other music schools throughout Australia. Mr Dart has only a limited discretion capable of assisting them. The plaintiffs are currently delivering a programme which they devised some time ago and it may be necessary for them to devise a new programme if they are to continue obtaining work of this kind. The advent of Music Viva upon this particular market will make competition even stiffer. There will be between eight and fourteen weeks' work for them in 1996, but the position in 1997 and after will be problematical.
In my view any prospect of Louetta reentering the top stream of entertainment has been completely destroyed.
DAMAGES
Pain Suffering and Loss of Amenities
The destruction of quality of Louetta's life, and of her career will be apparent from the facts already stated. Although there has been partial recovery her self-image is lowered and so is her enjoyment of life. Her marriage has been placed under strain, but it has survived and seems to me to be extremely strong. The destruction of an artist's career, and her diversion into a lower, less rewarding and less satisfying stream is a serious matter, especially for someone who has throughout her adult life lived for her work. She was forty-seven at the time of accident and is now fifty-four. She has lost much of her attractive appearance, and in Mr Dent's description has lost her panache, her enchantment and the ability to take her audiences that extra step.
She has been subjected to numerous painful and unpleasant surgical operations, and a further operation and substantial dental treatment still lies ahead. Her pain and suffering had been of a high level. Objectively there has been a very great loss. Her inner strength and values have minimised it. One of the things that most terrifies her is the fear of losing her lines. She goes to great lengths to avoid this happening, but has lost spontaneity in the process.
I assess damages under this head at $75,000.
Mr George Karko's loss under this head is not a serious one, although it was an unpleasant injury and he has a slight permanent disability as a result. The submissions by counsel were in the range of $10,000 to $15,000. It seems to me that $10,000 is the more appropriate figure and I shall award this.
Griffith v. Kirkemeyer damages
It is now agreed that the value of the care voluntarily provided for Louetta is $4000 and this will be included in her assessment of damages.
Economic Loss
The submissions of counsel were very disparate on this issue, partly because of different submissions on a point of law, and also on the appropriate level of loss to be projected.
At material times the plaintiffs worked in partnership recognising that the exceptional talent of Louetta was its most valuable asset, and that the promotion of her personal career was likely to be the best source of their combined income. In addition to her solo activities, they performed shows together and also worked jointly on Arts Council projects. However the major earning capacity resided in Louetta. As is the case in many good partnerships, they were also able to achieve some things together that they could not achieve individually. However the reality was that the great bulk of future earning power resided in Louetta whose activities were aimed to include professional musicals, Pro/Am musicals (e.g. Kiss me Kate), TV guest spot engagements, TV commercials, guest appearances on major live shows, cabaret performances and roles in locally produced movies. The only activities in which George would be a direct participant would be the school tours and some of the cabaret performances.
Mr Geraghty's submission is that George's loss should be assessed only during the period when he was physically unable to provide his services to the partnership, namely for the first six months after the accident, and that he should receive fifty percent of the partnership losses over that period. The submission continues that whilst Louetta's loss has continued up to the present time and is ongoing, she is only entitled to fifty percent of the profits that the partnership can be shown to have lost, and that this fifty percent must also apply to all future losses. This submission would produce a remarkable windfall for the defendant, because when the damages of both plaintiffs were added together it would come to considerably less than the damage that the partnership (if it continued) would have sustained as the direct result of the defendant's negligence. However Mr Geraghty submits that this is the inevitable consequence of the Court of Appeal decision in Seymour v. Gough (App. 293 of 1993, 14 December 1994).
I am unable to find any such requirement in the judgments in that case. In the first place it assumes facts as to the future of their careers and of the partnership that I do not regard as realistic. The basis of the decision in Seymour with respect to pre-trial economic loss may be taken from the following statement of Fitzgerald P:"I agree that the Full Court's decision in Lego v. Lego [1983] 2 Qd.R. 29 is to be preferred to its slightly later decision in Batt v. Wilkinson [1983] 2 Qd.R. 659 with respect to the proper method of ascertainment of pre-trial damages when a plaintiff's injuries necessitate the employment of extra labour in a family partnership or company of which the plaintiff is a member."
The decision with respect to future economic loss recognises that the uncertainties are greater and that a wider discretion is available to the Court according to its view of the facts. Fitzgerald P stated:
"The position in relation to the respondent's future economic loss is different. He is entitled to be compensated for any financial loss suffered because of the loss or diminution of his earning capacity: Graham v. Baker (1961) 106 CLR 340, 347; Griffiths v. Kerkemeyer (1977) 139 CLR 161, 165. This is a matter of estimation, related to the amount which he could have earned if he had not been injured, taking into account all appropriate contingencies, including the circumstance that he was not obliged to continue to work for the family company or to split his income with his wife."
Pincus JA's assessment, whilst limiting the pre-trial award to what would presumptively have been earned having regard to the plaintiff's entitlements under the partnership deed, would have assessed future economic loss substantially on the basis that the plaintiff would not have remained burdened with the deduction of his wife's share of the profits. His Honour discounted the full measure of the plaintiff's presumed personal earning capacity by only ten percent. Davies JA agreed with the statement of principle by Pincus JA and with Fitzgerald P's application of it with respect to pre-trial loss, and with Pincus JA's application of it with respect to future loss. There was no specific evidence that any change of the husband-wife's business relationship was contemplated but in the two years preceding trial the wife had received only a small proportion of the profits. The full measure of the working partner's future loss was allowed with a discount of only ten percent to allow for the wife's share.
One cannot ignore the legal structure of a partnership to which plaintiffs have bound themselves, usually for some form of tax advantage, and I accept that in cases where extra labour has to be employed to replace the plaintiff's labour, the plaintiff's loss is to be reckoned in accordance with his actual loss of profits from the partnership. This means that in the ordinary case when replacement labour is a factor in the assessment, a partner with a fifty percent entitlement will recover something like fifty percent of the cost of replacement labour.
In this case the plaintiffs provided all the labour themselves, and still do. Their talents were not replaceable by hired labour. It is a case of direct loss of income that cannot be retrieved by paying someone else. They have mitigated their losses so far as it has been possible to do so. They are both plaintiffs in the one action, and were it necessary, even at this stage, I would permit them to sue as a firm. However it is not a partnership claim - the rights that are asserted are personal. The partnership is only relevant as the vehicle by which George and Louetta have regulated their rights in relation to one another and to third parties. But there is no legal relationship between the partnership and the defendant.
The partnership loss of income is however a source of evidence demonstrating the combined loss of these two plaintiffs. All partnership losses flowing from this accident are shared by Louetta and George, no-one else. It might be thought that at least for the period over which the partnership would have continued to govern their activities the total of their damages for economic loss should be the same as the total of the partnership losses, whether the partnership arrangements are for the division of profits fifty/fifty, eighty/twenty or in any other proportion. Unfortunately it is not true. Some of George's loss, especially that after his own recovery, is attributable to the partnership's failure to earn in consequence of Louetta's injuries. If she had been an employee, or if they had formed a company that employed them, all such damages would be recoverable. But there is a gap in the law that I am not allowed to fill. A partner is not a servant, and no per quod claim is available (Dahm v. Harmer [1955] S.A.S.R. 250; cf. Mankin v. Scala Theodrome Co Ltd [1947] 1 K.B. 257). To the extent that the partnership arrangement causes part of the loss attributable to Louetta's injury to be his loss that loss is recoverable neither by her nor by him. This is a surprising conclusion, and I have resisted reaching it. It highlights the strange results that follow from the absence of any right of action per quod in favour of partners as distinct from companies, and from the absence of any legislative remedy such as s.34 of the Wrongs Act 1936 (South Australia). Under that section a spouse may recover for his or her loss due to an injury to the other spouse impairing the participation of the latter in a business in which they are both engaged. The need for some such provision should be drawn to the attention of the authorities concerned with law reform.
The reasoning in Seymour v. Gough constrains me to give effect, so far as reasonably necessary, to partnership entitlements (in this case fifty/fifty) in assessing the individual losses of each plaintiff.
It is necessary to consider over what period, but for the accident, the partnership would have continued to govern the parties' individual rights. It is also necessary to address the actual exercise of the respective earning capacities since the accident, and take into account their individual earnings. It seems correct, as was submitted, that damages for George's lost capacity can be assessed only during the period when his personal injuries produced disability, namely the first six months. Once he was able to return to work he could perform as well as before, and he could organise business as well as before. The problem was that the main partnership source of income, Louetta, was damaged. One way of looking at the matter might be to identify a substantial loss of good will but the evidence was not so directed, and one would not expect books to be kept in this way. The reality was that after George overcame his physical disability, the vast majority if not all of the partnership losses were in fact attributable to the continuing inability of Louetta to perform and to bring in higher paid contracts. In my view the vast majority of partnership loss over and above that which can be identified as George's loss is prima facie Louetta's loss. I must however allow for a period during which the partnership would have continued to divert some of Louetta's earning capacity to the benefit of George.
Applying what I regard as the most realistic view of this case, for the first six months when both were unable to work, the loss should be shared equally in accordance with the partnership agreement so that each will recover fifty percent of the lost profits for that period. I do not understand Seymour v. Gough (above) to require damages to be assessed in the long term by slavish application of partnership profit ratios, although that decision certainly curtails the fairly wide discretion that Batt v. Wilkinson formerly suggested. The importance of the profit-sharing ratio in assessing a partner's loss has been re-affirmed by Seymour. But questions of fact will arise from case to case. In Taroporewalla v. Berkery (1983) 3 N.S.W.L.R. 28, which I do not understand to have been disapproved in Seymour, Mahoney JA identified a number of matters capable of requiring the prima face apportionment of profits to be varied to enable the reality of the situation in the particular case to be given effect to. Such factors may include some allowance for the good will or other assets of the partnership business (p.38), the circumstance that a partnership may be easily dissolved (in which case it may be unrealistic to assume its continuation, at least on those profit levels, for a substantial period), and many other factors. In Taroporewalla an injured plaintiff entitled to only fifty percent of the partnership profits was held entitled to damages representing eighty percent of the potential earnings of the partnership business. It, like the present case, was one where replacement labour had not been engaged. In Seymour, with respect to future economic loss, damages were assessed at ninety percent of full capacity to earn. These results proceed from inferences of fact.
In the present case there is no evidence of the terms of the partnership other than that it is a fifty/fifty partnership between two cooperative people. I am prepared to infer that it was easily dissoluble and that if one wanted to dissolve it, the other would have been likely to agree. Without any rift between them at all, it could easily have eventuated that Louetta's successful career left so little place for cooperative activities that separate careers would have become the reality and the partnership no longer relevant. The prospect of Louetta's career taking off and George becoming in effect her manager was by no means an unrealistic one but for the accident. One way of viewing such a situation, mentioned in some of the cases, is that the excess contribution of the partner of superior earning ability is in effect a gift to the other partner which that partner can by one means or another take back at any time. I shall act on the footing that the partnership would have continued to regulate the rights of the parties for a further three years after the accident but no longer.
In the circumstances of this case damages will be assessed for the first six months after the accident on the footing that both Louetta and George are entitled to fifty percent of the reduced income of the partnership. For the next two and a half years, on the footing that the partnership would have continued, Louetta's loss must be assessed at only fifty percent of the lost partnership income. George cannot recover any partnership loss for this period because he has no right to sue for loss caused by injury to a partner. Thereafter up to the date of trial there will be no damages for the male plaintiff, and Louetta's loss will be assessed at what I regard as the likely level of her own earnings, discounted by ten percent for the contingency that the partnership had continued to reduce her personal entitlements.
For future economic loss I shall do the best I can to assess the reduced value in economic terms of Louetta's career. There will be no assessment in favour of George.
Because of this accident, the plaintiffs have actually been forced to be dependent upon each other commercially, and function as a unit instead of as solo personalities. The partnership has therefore become more necessary to them. Without the accident their respective careers would probably have been very different. For the purpose of measuring their residual earning capacity so that it may be deducted from the damages, there is little doubt that they will now remain in partnership and that Louetta's income will be only one half of it. But had their capacities remained unaffected by the accident, it is more realistic to think that their earning capacities would within a few years (I have adopted three years) have been exercised in terms of individual careers. It is true that the partnership existed under various names such as Trinity Music Enterprises and Soundstage International between 1981 and the date of the accident, except for 1982 as to which there is no evidence. Its continuity may have been assisted to some extent by the 1985 accident. In any event, in a volatile profession such as professional entertainer I do not think that the partnership was likely to endure in the long term unless Louetta fell upon hard times.
In assessing the strength of the plaintiff's chance of going on to higher profile productions and into top-stream work, I have been considerably assisted by the evidence of Mr Brookes and of Mr Norman Yemm and also to some extent by Mr Dent and Ms Pearle May. Mr Brookes described her as having immense potential and stated his view that she was a world-class singer without any doubt. She also had the other necessary talents to perform major roles. However the potential to convert this into income depends upon obtaining a role or roles that give the performer a national name. There is a considerable element of luck in this, and whilst good management may play a part, it is not necessarily a decisive factor. The casting of Marina Prior, a singer with little previous public success, as Christine in The Phantom was cited as an example. There is a limited number of roles capable of raising a performer's status and income to this level ($5000 per week for a production running into years) with the added capacity to command high fees thereafter. There is also a modest number of roles in other productions, including secondary roles, where the performers are paid $4000 per week. I do not propose to mention the names of the female artists referred to in evidence as possible points of comparison, but I accept that there are many roles available, and always will be, for talented women of middle-age and beyond. Once established, such persons tend to continue in high profile roles well into their sixties, and some beyond this.
The plaintiff herself mentioned her personal interest in The Phantom prior to her accident. She felt she had everything necessary for the female lead role. It had not at that stage reached Australia and she was waiting for the time when production arrangements would call for auditions in this country. In the event, this happened approximately a year after the 1988 accident. She knew that she was disabled and that she was indeed incapable of sustaining such a strenuous role. Her voice was "rusty" but she practised an aria and presented herself for audition. She was actually short-listed. This was good for her self-esteem. Although it was not a serious exercise I can understand her reasons for presenting herself. Of course it cannot be safely postulated that she would have obtained this role or any other particular role if unaffected by the accident. The incident does however suggest a capacity to achieve even when so severely afflicted, and emphasises her calibre.
I accept that she would have been a worthy contender for high-level performance roles, and that her lost opportunity to achieve such work should be regarded as the loss of a valuable opportunity that was by no means remote. Even if she obtained only a few medium to high-level roles her position would have been greatly enhanced. If she had obtained none at all, she still had opportunities to earn income at a far higher level than that which she can now earn. Mr Brookes describes her as well fitted for the corporate circuit which on the whole produces better remuneration than more traditional outlets such as nightclubs, cabarets, clubs and other avenues for solo performance. He instanced a fee of $10,000 for forty-five minutes performance (although the preparation for the performance would require more time than that) and said that a well-known artist might supplement his or her income in this way four or five times over twelve months, even if engaged in other running shows.
Assuming, contrary to the plaintiff's higher hopes, that she would have completely failed to obtain higher level work, Mr Brookes expressed the view that from medium-level engagements she could have expected to earn on a continuous basis a gross income exceeding $50,000 per annum. He added that "if she had a stroke of luck or was in the right place at the right time that could be anything ... up to $400,000 or $500,000 a year". At a level of ability lower than the plaintiff, he confirmed that a "normal non-name not particularly special artist" was capable of earning $600 or $700 per night eight times a month in the Sydney area.
I interpret Mr Brookes' evidence as showing a potential range of gross earnings, but for the accident, of between $50,000 and $500,000 although of course the upper part of the range is very speculative. On his evidence however her earning capacity would have to be rated at considerably higher than $50,000 gross per annum.
Mr Normal Yemm, an actor and musician, who regarded the plaintiff as comparable in talent with Ms Jill Perriman and others, seems to have rated her capacity at between $1000 and $1500 per week and "the sky is the limit". The basis of the lower estimate is not completely clear, but it seems to have been given on the basis that it is a net estimate on the assumption that she performed a number of miscellaneous medium-level engagements. He mentioned the possibility of boosting income on the part of persons who are "in a show" who can supplement their income by taking such further engagements on days or nights when they are not committed to performance.
Counsel for the defendant submitted that according to the partnership returns for the period 1981 to 1994, expenses were on average sixty-five percent of gross fees, and that any projected gross earnings ought to be reduced by sixty-five percent. Such an approach was rejected by the accountant Mr Walker, and I am inclined to agree with him. In practically every year since 1985 the gross earnings have been significantly reduced by reason of the consecutive accidents thereby making the expenses a much greater proportion of the total earnings than otherwise. Furthermore, the likely careers after 1988 but for the accident would probably have been of a different kind to that which the partnership accounts now reflect. Furthermore, although no evidence was directed to the point, it is obvious that some of the expenses (including motor-vehicle and accommodation) have an element of private benefit. Although they are legitimate tax deductions, the balance-sheets may tend to deflate to some extent the true value to the plaintiffs of the returns. I do not place much store by this particular point, but it has at least a minor relevance.
I think it safer to act on the view that the expenses would not be likely to have varied substantially whether the income was very large or very low. This is reflected in the balance-sheets, showing that between 1986 and 1994 the range of total expenses for the partnership never fell below $20,805 nor rose above $32,865. The average annual expenses over that period were about $26,000, of which half might be regarded as attributable to each partner. In projecting Louetta's separate career after the first three years, it would not be reasonable, for the purpose of illustrative calculations, to assume her annual business expenses to exceed $20,000.
What level then should be assumed for earning capacity after 15 April 1988? The plaintiffs were starting to emerge successfully from the setback of the 1985 accident and Louetta in particular had obtained promising engagements whilst George was fostering relevant points of contact. Louetta was forty-seven years old and in my view had a capacity to continue her career to age sixty-five, although one should assume some diminution in earnings after sixty. If I were to adopt a figure of $60,000 net as Louetta's likely earnings for most of this period, it would accord with Mr Yemm's opinion, and be something more than the lower level of expectation expressed by Mr Brookes, especially if her business expenses were assumed to be $13,000 per annum for the first three years and $20,000 thereafter. However when one gives some effect to the loss of a chance of a much higher income, it seems to me that a projection of $60,000 net per annum as Louetta's probable earnings during the remainder of her productive years would be on the conservative side. Where the uncertainties are so great, it is appropriate to assess conservatively and this I think is the appropriate figure to project. It may be slightly too high for the first few years during which the plaintiffs were still to some extent reestablishing themselves; it may also be too high during the last years of her projected career; but it is probably too low in the middle years.
I turn now to the calculation of the loss. For the purposes of this calculation I note that the accident occurred two months before the end of a financial year, and will act principally on figures commencing 1 July 1988.
For the first year I shall act on the footing that the joint net income before tax would have been $50,000, for the second year $60,000 and for the third $60,000. These figures are based primarily upon Louetta's earning capacity of which the partnership would have had the benefit during the first three years. Whilst joint income is under examination, it may well have been increased to some extent by George's contribution.
First Year
| Male Plaintiff | |
| Probable net income before tax | $ 25,000 |
| Tax | 6,000 |
| Net earnings | 19,000 |
| Loss limited to first six months | 9,500 |
| Less one half of male plaintiff's actual receipts from partnership | 103 |
| Damages | $ 9,397 |
| Female Plaintiff | |
| Probable net income before tax | $25,000 |
| Tax | 6,000 |
| Less actual receipts from partnership | 205 |
| Damages | $18,795 |
Second Year
This example assumes the continuation of the partnership and that the male plaintiff is entitled to no damages. It further assumes that the female plaintiff is entitled to only fifty percent of the diminished partnership income.
| Female Plaintiff | |
| One half of net partnership income before tax | $30,000 |
| Tax | 8,000 |
| Less actual receipts from partnership | 8,690 |
| Damages | $13,310 |
Third Year
| Female Plaintiff | |
| One half of net partnership earnings | $30,000 |
| Tax | 8,000 |
| Less actual receipts from partnership | 9,522 |
| Damages | $12,478 |
Fourth Year
From this period on, the examples are based on the premise that the female plaintiff would have earned $60,000 net before tax but that her ultimate entitlement should be discounted by ten percent for the contingency that the partnership may have continued, and therefore have reduced her personal entitlement.
| Net income before tax | $60,000 |
| Tax | 22,250 |
| Net income after tax | 37,750 |
| Less actual income after tax | 5,510 |
| Loss | 32,240 |
| Less ten percent | 3,224 |
| Damages | $29,016 |
Fifth, Sixth and Seventh Years (up to date of trial)
The losses in these years should be assessed similarly to the fourth year, totalling $87,048. The projection of $29,016 for years five, six and seven errs slightly against the defendant because the total of actual receipts by the female plaintiff during those years was probably slightly more than the average of $5,510. However no reliable figures are available for 1995 and the projection of the 1992 figure into the following years probably yields a reasonably close result.
The above calculations are approximate and are illustrations of the level of loss based upon my view of the facts. Among other potential defects, they leave the plaintiff two months short of the actual period between accident and trial (seven years and two months).
All this results in the following assessments for pre-trial loss:
Male Plaintiff
$ 9,397
Female Plaintiff
$ 163,871
In testing this result, it may be noted that had the plaintiffs been entitled to recover the whole of notionally lost partnership earnings over the whole period on the basis of a fifty/fifty division, the total losses of the two plaintiffs would have come to $231,472. (See ex.14.) The effect then of the legal point relied on by counsel for the defence is not inconsiderable.
Future Economic Loss
A net income before tax of $60,000 over the next eleven years represents a median figure. Tax reduces it to $41,200 per year, or $792 net per week. From that figure there must be taken a figure representing her actual residual earning capacity. That figure is probably at present approximately $200 per week, but this is unlikely to be able to be sustained over the whole relevant future period. In determining a figure I note that the average total profit of the partnership (before tax) up to now has been $14,100, and if this were to be used as the basis of the projection, Louetta's share after tax would be $6,720 per annum ($129 per week net). However the last year for which records are available, 1994, reveals a higher profit than this. In the light of Mr Dent's evidence current earnings are likely to abate steeply in 1996 and beyond. I have earlier stated why I think that the parties are now virtually locked into their partnership, with joint activities very much the principal source of income. There is no longer a marked superiority in earning capacity in one rather than the other. With all these matters in mind I shall assume that Louetta's residual earning capacity over the next eleven years will be $192 per week, which will reduce future loss to $600 per week.
Applying the 5% tables, this produces a figure of $266,400. Such a projection already takes account of some upwards and downwards contingencies, but not all. There should be a further discounting for possible unforeseen events such as illness or accident. In this respect evidence was given that a few years ago Louetta was diagnosed as suffering from a parathyroid tumour, but it seems to have abated with conservative treatment. The evidence does not satisfy me that this particular factor calls for undue pessimism as to the future but it is a reminder that contingencies of this kind are sometimes underestimated. I shall therefore discount the provisional assessment by a further ten percent, leaving $239,760.
The awards may now be summarised.
Damages for Loss of Consortium
These damages are to be assessed not only for the loss of the services of the wife, but also for loss of her comfort and society and for losses of a temporal kind (Toohey v. Hollier (1955) 92 C.L.R. 618; Johnson v. Nationwide Field Catering Pty Ltd [1992] 2 Qd.R. 494). The male plaintiff's loss was a serious one for several years, and there remains a permanent loss at a less serious level. Damages under this head will be assessed at $8000.
Special Damages
Substantial medical expenses were incurred, much of it in connection with surgical procedures. These are now admitted at $20,900.68 in respect of the female plaintiff and $3,265 in respect of the male plaintiff.
Future Medical Expenses
These are now also agreed as follows:
| (a) | Dental Work | $ 4,800 |
| (b) | FESS procedure to address chronic sinusitis, including correction of deviated septum | 2,470 |
| TOTAL: | $ 7,270 |
SUMMARY
The awards may now be summarised.
Male Plaintiff
| Damages for pain, suffering and loss of amenities | $ 10,000 |
| Past economic loss | 9,397 |
| Damages for loss of consortium | 8,000 |
| Special damages | 3,265 |
Interest will be awarded on each of these sums. Seven and a quarter years have elapsed since the accident and I shall round this down to seven years. No submission was made on behalf of the defendant suggesting that the period over which interest should be allowed should be limited.
The first item was suffered substantially over the first twelve months, although there is a small level of permanent disability. $8000 will be apportioned to pre-trial damage and interest will be allowed at two percent for six years - $960.
The second item was complete within twelve months and interest will be allowed at ten percent for six years - $5638.
The third item is ongoing but most of the damage was sustained in the early part. I shall allow interest on $6000 for seven years at two percent - $840.
The fourth item would have been substantially incurred during the first year. Interest will be allowed on $3265 for six years at five percent - $980.
The total of the male plaintiff's damages and interest is $39,080.
Female Plaintiff
| Damages for pain, suffering and loss of amenities | $ 75,000 |
| Griffiths v. Kirkemeyer | 4,000 |
| Past economic loss | 163,871 |
| Special damages | 20,900 |
| Future medical expenses | 7,270 |
| Future economic loss | 239,760 |
Interest will be allowed on $40,000 of the first item for seven years at two percent - $5,600; on the second item for five years at four percent, as the damage was sustained during the first two years - $800; on the third item for seven years at five percent - $57,355; and on the fourth item, as agreed, $4780.
The total of the female plaintiff's damages and interest is $579,336.
ORDERS
Judgment for the male plaintiff for $39,080 with costs to be taxed.
Judgment for the female plaintiff for $579,336 with costs to be taxed.
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