Karl Peter Teubracht v Bruce Joseph Low

[1982] FCA 48

Re: KARL PETER TEUBRECHT
And: BRUCE JOSEPH LOW
No. A.C.T. G18 of 1980
Damages

COURT

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Blackburn J.
Franki J.
Keely J.

CATCHWORDS

Damages - quantum - loss of earning capacity - no error of principle by trial judge.

HEARING

CANBERRA

#DATE 8:4:1982

ORDER

1. That the appeal be dismissed.

2. That the appellant pay the respondent's costs to be taxed.

JUDGE1

In this appeal the appellant contends that the damages awarded in February 1980 by the Supreme Court of the Australian Capital Territory were insufficient. The action was for damages for negligence causing personal injury, and liability was admitted. The award of damages was $73,114.45. The learned trial judge arrived at this figure by the aggregation of several amounts representing heads of damage. In this appeal, the award is attacked in only one respect - that insufficient allowance was made for the plaintiff's loss of earning capacity. The amount assessed under this head of damage was $12,000.

The injury to the appellant occurred in October 1970, when he was a school boy aged 11. He suffered severe physical injuries, which do not appear to have been the ones mainly affecting his earning capacity. It is migraine headaches and the severe emotional disturbance consequences of the accident in which he was injured, that have affected that capacity. He suffered, inter alia, a severe head injury and a fractured pelvis.

The principal witness for the appellant was a psychiatrist who first treated him in October 1973 - that is three years after the accident - when he became an in-patient at a psychiatric institution known as Broughton Hall Adolescent Unit. The respondent called no witnesses. The plaintiff spent three months in Broughton Hall under psychiatric treatment for persistent and increasingly severe headaches and depression, loss of physical and intellectual activity, poor school performance and suppressed grief for the death of his brother who had been killed in the same accident. His depression and headaches were to some extent relieved by the time of his discharge from Broughton Hall, but for the rest of his school career he suffered from disabilities which seriously affected his academic achievement. Apart from English, in which he did very well, his examination results were mediocre in fifth and sixth years, so that he failed to qualify for matriculation.

On leaving school he worked in a service station for six weeks, then in another job for a very short time, and then he was unemployed for a period. He later had a job as a truck driver and storeman, but had difficulties in dealing with customers because of his disability caused by migraine headaches. The same troubles occurred in his next job, which was as a shop assistant and driver employed by a newsagent, where he worked for six months. At the time of the trial the plaintiff had worked for 12 months as a delivery driver for a dealer in spare parts for cars. The Manager, Mr Brown, gave evidence and said that the plaintiff was a hard worker and that "we have no hassles with him". However, the manager had found the plaintiff depressed at times and on a few occasions he had complained of migraine headaches. The manager also said that if the plaintiff's condition remained the same he would still be employed as a delivery driver. At the time of the hearing his wages per week were $148.80 gross and $123 after tax.

By 1979 the appellant was in a state of depression, with some suicidal feelings; he had fallen into a pattern of over-indulgence in alcohol and lived a solitary life. In October 1979 he spent a period in a psychiatric clinic in Brisbane, under treatment by the same psychiatrist who had treated him at Broughton Hall in 1973. The psychiatrist gave evidence that at this time the plaintiff was still suffering from the following effects of the accident: persistence of post-traumatic migraine, continued pain in the hip which severely limited exercise, extreme self-consciousness about his hip deformity, and unresolved grief reaction in relation to the loss of his brother. These effects remained after his treatment at the clinic, and in addition, a remaining effect of the accident (at the time of the trial) was "markedly impaired intellectual ability causing abandonment of tertiary education, and extremely unstable work record and poor prospects for regular work or advancement in the future."

The psychiatrist said that it was difficult to forecast whether the appellant would ever be free again from depression and disabling headaches, but that with further therapy those effects should diminish over the next two or three years and he said that ". . . there would be a reasonable chance of getting him back to the intellectual functioning level of his first years of high school when his work was OK". He also said that until these effects diminished the appellant had no prospects whatever of secure employment or future training. However, I note that this assessment of employment prospects is not in accord with Mr Brown's evidence. The evidence of the psychiatrist was that there may be also some residual brain damage.

The trial judge found that but for the injuries caused by the accident, the appellant would have progressed to the stage where he would have taken University or other tertiary courses, and that this level of education might still be open to him if he had further treatment. This is a finding which may be doubtful, but I would be inclined to reach the same conclusion, or at least to conclude that the plaintiff had been seriously prejudiced as a result of the accident in the remuneration which he would be likely to receive from the employment open to him.

As a child the appellant had wanted to be a journalist, but the trial judge declined to find that he would probably have become a journalist; but he found that "his intellectual capacity, unhampered by emotional disorder, fits him for many fields".

The trial judge's calculation of the appellant's loss of earning capacity was not explained in detail. In the first place, he allowed $423 for economic loss to the date of trial, "on the basis that he lost the opportunity to become a cadet journalist". It is not easy to reconcile this with the trial judge's declining to find that the appellant would probably have become a journalist but since this figure was an agreed figure little significance is to be attached to this aspect. The trial judge then allowed a round figure of $12,000 for loss of future earning capacity. His Honour also allowed $4,691.45 for out-of-pocket expenses and $24,000 for "future psychiatric treatment".

The appellant's contentions were that the assessment for loss of future earning capacity did not allow for:

(a) the time which, on the evidence, he would have to spend full-time in hospital in order to have a prospect of recovering his mental health sufficiently to enable him to qualify for professional work of some kind;

(b) the delay in attaining the level of professional earnings which he would have commanded had he not suffered the accident; and

(c) the possibility that the hospital treatment might not be successful, or that the appellant in fact has some organic brain damage, which would permanently impair his earning capacity.

Assessment of the quantitative effect of these matters upon the appellant's earning capacity cannot possibly be precise, and the trial judge evidently did not attempt such a task. (See generally Paul v Rendell (1981) 55 A.L.J.R. 371). He exercised his judgment to produce a round figure. It is important to bear in mind that it is the total amount of damages to which regard must be paid. Aickin J., with whose judgment Barwick C.J., Stephen, Mason, Jacobs JJ. agreed, said in Holley v. Debs (1976) 13 A.L.R. 99 at p.101:

"No criticism was made in this court of the Master in respect of his separate quantification of each item in order to arrive at the total sum awarded. It is still necessary to consider, however, whether that total has been demonstrated to be so excessive, or so disproportionate to the loss suffered, that it cannot stand. Demonstrable error in the determination of the individual items may, though not necessarily, assist the conclusion that the award in total was excessive".

It may therefore be relevant to have some regard to the award by the trial judge of $24,000 "for future psychiatric treatment".

The total damages which the trial judge awarded to the appellant in respect of events after the date of hearing was the sum of $12,000 representing loss of future earning capacity and $24,000 being an amount which was calculated as being the cost of future psychiatric treatment. There appears to be no obligation upon the appellant to undertake this treatment but if he did so undertake it then he gave an undertaking to repay such of the costs of this psychiatric treatment as might be paid pursuant to s.59 of the National Health Act should the Ministers discretion be exercised in favour of such payment.

The question for this court is whether the award of the trial judge was a "wholly erroneous estimate of the damages suffered". In particular the question arises whether the amount of $12,000 is a wholly erroneous estimate of an amount necessary to compensate the appellant for the following disadvantages: the fact that he will attain a level of earnings (if at all), in some professional occupation or at least in an occupation requiring tertiary education, about four years later than he might have done had he not suffered the injuries he received in the accident; that to attain this level he must spend six months under treatment at a psychiatric clinic; that this treatment is not certain to be successful; and that it is possible that organic brain damage may be a permanent limitation to his earning capacity.

The correct approach of an appellate Court in an appeal against the measure of damages awarded by a trial judge in a case such as this has been considered by the High Court on several occasions. In Precision Plastics Pty. Ltd. v. Demir (1975) 132 C.L.R. 362 at p.369 Gibbs J., as he then was, said:

"It is unnecessary to discuss at length the principles that govern an appellate court in the performance of its task when it is called upon to review an assessment of damages for personal injuries. Whether the assessment was made by a judge or a jury the court of appeal will not interfere simply because it would have awarded a different figure had it tried the case at first instance. Where the assessment was made by a judge, and it has not been shown that he acted on any error of principle or misapprehension of the facts, the appellate court will only intervene if satisfied that the judge has made a wholly erroneous estimate of the damages suffered. But where the award was made by a jury, the test is even more stringent".

Stephen J. agreed, and Murphy J. agreed in substance, with the judgment of Gibbs J. Barwick C.J. at p.365 said:

"The function of the appellate court is not to reassess verdicts with which they do not agree".

Again in Davidson v. Howe (1977) 14 A.L.R. 482 Gibbs J., as he then was, said: "I must say that if I, myself, were called upon to quantify the damages in this case, I rather think that I might arrive at a figure somewhat lower than the total which the learned trial judge reached. I would hope that the fact that this court dismisses this appeal does not induce people to treat this award as a standard to be applied in cases such as the present. But the test that we have to apply is clearly settled. We have to ask ourselves whether the award was so inordinately high that it must be a wholly erroneous estimate of the damage suffered. I am unable to answer that question in the affirmative and would accordingly dismiss the appeal".

The High Court in Wade v. Allsopp (1976) 50 A.L.J.R. 643 considered the question of damages in relation to loss of future earning capacity in the case of a school boy aged seventeen and a half years and applied similar principles.

After considerable hesitation, and with respect for the trial judge, I have come to the conclusion that the amount awarded in this case in respect of loss of earning capacity is so inordinately low that it must be erroneous. The matter is affected by the $24,000 which the learned trial judge awarded in respect of the psychiatric treatment, which the plaintiff may or may not undertake. If he does not undertake such treatment, he will have a total of $36,000 in respect of lost earning capacity. $36,000 represents a weekly amount of about $30, discounted at 3% for forty years. On the other hand, let it be assumed that he does spend the whole amount of $24,000 on the treatment. The $12,000 which he would then have in respect of loss of earning capacity represents a weekly amount of about $10, similarly discounted.

The learned trial judge found that had the appellant not received his injuries, he would have progressed to a stage where he could have taken University or other tertiary education courses. It seems to me reasonable to assume that he would have had a reasonable prospect of success in such courses, and that thereafter he would have had a reasonable prospect of employment in an occupation for which tertiary education would qualify him. If he does not undertake the psychiatric treatment, his earning capacity can be assumed to remain as it was at the time of trial - worth just under $150 a week to him. On that assumption, $30 a week seems to be inordinately small as a measure of his loss of earning capacity.

If he does undertake the treatment (which the learned judge was not satisfied would be entirely successful) let it be assumed that it is four-fifths successful, and that after three or four years spent in tertiary education he enters an appropriate occupation or profession. $10 a week for forty years seems to me inordinately low as compensation for the delay in commencement of earning plus the permanent impairment of his earning capacity by one-fifth.

The uncertainties and unstated assumptions involved in these hypotheses are too obvious to need comment, but they do not disturb my conclusion that an error of principle was made in allowing the appellant only $12,000 for his loss of earning capacity.

The Court was asked not to remit the matter for trial. I would, in the performance of an exercise of the same kind as that performed by the learned judge, increase the amount in respect of loss of earning capacity to $25,000. I would therefore propose that the judgment be varied by substituting $86,114.45 for the figure of $73,114.45.

JUDGE2

We have had an opportunity to read the judgment of Blackburn J in draft form. We agree entirely with this judgment to the extent that it sets out the contentions of the appellant, the facts and the relevant law. However, unfortunately we differ from Blackburn J. in the application of the relevant law.

In our opinion it has not been established that the learned trial judge acted on any error of principle or misapprehension of the facts. In calculating the amount which he would allow for the plaintiff's treatment in hospital the learned trial judge allowed the maximum being, as he said, somewhat cautious about the psychiatrist's optimism concerning his own ability to achieve success. It seems to us that the learned trial judge therefore had the first of the appellant's contentions well in mind. The appellant's senior counsel conceded that during any such period in hospital the appellant would be provided with board and lodging. We also consider that the learned trial judge had the second of the appellant's contentions in mind because he refers in his judgment to a loss of seniority and ". . . the problem of explaining his relative-seniority when job opportunities occur". We also consider that the learned trial judge had regard to the third of the plaintiff's contentions because he said: "I propose to adopt the view that a possibility of organic brain damage still remains" and that there might be some residue of emotional disorder after the hospital treatment.

Having reached this conclusion this court should only intervene if it is satisfied that the learned trial judge made a "wholly erronous estimate of the damages suffered". While we would have been inclined to have awarded a somewhat larger amount ourselves, not only the learned trial judge, but both parties on appeal took the view that the measure of damages for loss of future earning capacity was a matter of judgment. As was said by Lord Diplock in the Privy Council in Paul v. Rendell, supra, at p.372: ". . . the assessment of future economic loss involves a double exercise in the art of prophesying not only what the future holds for the injured plaintiff but also what the future would have held for him if he had not been injured." We are not satisfied that the learned trial judge made a wholly erronous estimate of the damages suffered. We would therefore dismiss the appeal and order that the appellant pay the respondent's costs.