Kember v Thackrah - [2000] WASCA 198

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: KEMBER -v- THACKRAH [2000] WASCA 198

CORAM: MALCOLM CJ
KENNEDY J
MURRAY J

HEARD: 10 APRIL 2000

DELIVERED : 7 AUGUST 2000

FILE NO/S: FUL 157 of 1999

BETWEEN: CLINTON BRIAN KEMBER
Appellant
AND
ALBERT EDWARD THACKRAH
Respondent

Catchwords:

Personal injuries - Damages - Future economic loss - Discount for contingencies - Superannuation benefits and discount rates - Damages increased

Legislation:

Law Reform (Miscellaneous Provisions) Act 1941, s 5

Superannuation Guarantee (Administration) Act 1992 (Cth), s 20

Result:

Appeal allowed

Representation:

Counsel:

Appellant: Mr S R Sirett
Respondent: Mr B C Sierakowski

Solicitors:

Appellant: Wojtowicz Kelly
Respondent: Brian C Sierakowski

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

Arthur Robinson (Grafton) Pty Limited v Carter (1968) 41 ALJR 327
Black v Motor Vehicle Insurance Trust [1986] WAR 32
Bowen v Tutte (1990) Aust Torts Reports 81 – 043
Bresatz v Przibilla (1962) 108 CLR 541
Burnicle v Cutelli [1982] 2 NSWLR 26
Elia v O'Byrne (1990) Aust Torts Reports 81 ‑ 050
Foyster v Goynich [1984] WAR 80
Koeck v Persic (1996) Aust Torts Reports 81 – 386
Miller v Jennings (1954) 92 CLR 190
Moran v McMahon (1985) 3 NSWLR 700
Nance v British Columbia Electric Railway Company Ld [1951] AC 601
Newcastle Chemical Co Pty Ltd v Dent (1957) 57 SR (NSW) 453
Reynolds v Roche Bros Pty Ltd [1999] WASCA 141
Struthers v Harris [1983] WAR 123
Teubner v Humble (1963) 108 CLR 491
Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485

Case(s) also cited:

Calder v Boyne Smelters Limited [1991] 1 Qd R 325
State Government Insurance Commission v Hitchcock, unreported; FCt SCt of WA; Library No 970089; 11 March 1997

MALCOLM CJ: This is an appeal against a judgment of Fenbury DCJ in the District Court on 21 September 1999 by which the learned Judge ordered that the appellant pay to the respondent damages in the sum of $200,902.45, costs to be taxed. The award was made on account of damages for personal injury suffered by the applicant in a motor vehicle accident on 9 October 1992, when the motor cycle the appellant was driving and a four‑wheel drive vehicle driven by the respondent collided head‑on. They were both travelling in opposite directions on a country dirt road in daylight. Liability was admitted. The appellant conceded that he was guilty of contributory negligence and the parties agreed that they were both negligent and that liability should be apportioned on the basis of equal responsibility. The appellant suffered serious injury in the accident, namely, a compound fracture of the right distal tibia extending into the ankle joint, with an associated fracture of the distal fibula on the same side.
In summary, the damages were assessed as follows:
General damages – loss of amenities  $55,000.00
Past loss of earning capacity  $120,000.00
Loss of past superannuation benefits  $9,228.00
Interest on past loss  $24,984.00
Future loss of economic capacity  $170,534.00
Loss of future superannuation benefits                 $14,879.00
Special damages – past medical expenses              $3,409.00
Future medical expenses  $3,770.90
Total$401,804.90
On the basis of the agreed apportionment of liability, the appellant obtained judgment against the respondent for 50 per cent of the damages as assessed, namely the sum of $200,902.45.
The grounds of appeal raise issues concerning: the assessment of a period of three months instead of six months in assessing damages for future economic loss for the time the plaintiff required to recuperate following a further operation; the application of a 30 per cent contingency discount in the calculation of the appellant's damages for future economic loss; the calculation of future loss of superannuation benefits at the present rate of 7 per cent instead of the increased percentages enacted in the Superannuation Guarantee (Administration) Act 1992 (Cth); and the application of the 7 per cent discount table to the calculation of future loss of superannuation benefits instead of the 6 per cent table.

Ground 1: Period of future economic loss

Ground 1 of the grounds of appeal contended that the learned trial Judge erred in fact by assessing a three‑month period instead of a six‑month period in calculating an allowance of damages for future economic loss to take into account the time that the appellant required to recuperate following a further operation. In the course of his reasons in relation to the assessment of future loss of economic capacity, the learned Judge concluded that the appellant had lost about 30 per cent of his earning capacity, which was assessed in the sum of $162,534.00. Having made that assessment, the learned Judge said:
"I have not taken into account the fact that the plaintiff will be required to undergo substantial surgery in the very near future in the form of an arthrodesis. There was no evidence as to the time the plaintiff might be required to recuperate from this surgery."
Mr Douglas Sneddon, who was the orthopaedic surgeon treating the appellant, gave evidence during cross‑examination that the time for recovery from the further operation would be a minimum of three months and probably six months. This evidence was brought out in cross‑examination after Mr Sneddon had been closely cross‑examined in relation to the costs involved in the necessary operation and associated hospital charges and other expenses. The following questions and answer appear in the transcript of the cross‑examination:
"The anticipated time of recovery from this procedure? What are we looking at? 3 months, 6 months?---I think we're looking at a minimum of 3 months and probably 6 months."
In my opinion, this expression of expert opinion was intended to convey that the period which would be required to recover from an arthrodesis was certainly three months as a minimum, but the actual period would probably be six months. In my view, the proper finding on the basis of that evidence was that an allowance should have been made for a recovery period of six months. Clearly, the learned Judge overlooked this evidence when he said that there was no evidence as to the time the appellant might be required to recuperate from this surgery. His Honour went on to say:
"Obviously during the relevant period he will be totally disabled. Purely as a guess, in the light of the absence of evidence, upon the assumption that he might be off work for, say, 3 months then 3 months' work at $952 net per week ($35 per hour for a 40 hour week) = $11,424. Discounting this by 30 per cent to allow for the award for future economic loss already made results in $7996 rounded up to $8000.
Thus I award the sum of $170,534 for future loss of economic capacity."
It was contended on behalf of the respondent that the fact that the learned trial Judge did not expressly refer to the evidence of Mr Sneddon on this issue did not necessarily render improper his conclusion regarding the requisite recovery period. It was submitted that the assessment of a recovery time of three months was "clearly within the ambit of the evidence given by Mr Sneddon." I am quite unable to accept that submission. The trial Judge was required to make a finding on the balance of probabilities. Mr Sneddon said six months was a probable recovery period. In the absence of any other evidence or any challenge to the evidence of Mr Sneddon, I consider that the only finding open to the learned Judge on the balance of probabilities was that the period of recuperation should be six months.
It follows that the award so made represents only one half of the actual loss which would have been suffered over a period of six months, so that, if the correct period was six months, the figure of $8,000 should have been increased to approximately $16,000. The three‑month calculation, however, was based on 12 weeks at $952 net per week, which yields the sum of $11,424, to which a discount of 30 per cent was applied, reducing the figure to $7,996.80 which was reduced by 50 per cent to $3,998.40 and rounded up to $4,000. The six‑month calculation should be based on 26 weeks at $952 per week, which yields the sum of $24,752, which (subject to ground 2) should be discounted by 30 per cent to $17,326.40, which in turn should be reduced by 50 per cent to $8,663.20.
It was submitted on behalf of the respondent that if the learned Judge was in error, the error was not of such a magnitude as would render erroneous the total assessment of the appellant's damages for loss of earning capacity. In this context, it is well established that the ultimate question is whether, in the result, the global award of damages is inadequate: Struthers v Harris [1983] WAR 123 at 124 – 125; and Arthur Robinson (Grafton) Pty Limited v Carter (1968) 41 ALJR 327 at 330 per Barwick CJ at 329. The point is that, while this single error may not necessarily prompt a variation of the amount awarded by this Court, the ultimate question is whether, in the light of such of the grounds of appeal as may be made out, the global award constituted a reasonable assessment of what is just and fair compensation for the personal injuries received. For present purposes, it is enough to say that ground 1 was made out.

Ground 2: Contingency discount

Ground 2 contended that the learned trial Judge erred in fact and law by applying a 30 per cent contingency discount in his calculation of the appellant's damages for future economic loss. It was contended that there were three errors, namely:
(a)except in special circumstances, a contingency of more than 15 per cent is unreasonable: Struthers v Harris (supra);
(b)the learned trial Judge gave undue weight to the present state of the industry in which the appellant sought employment and failed to take into account the transient impact on that industry of the current downturn in the mining industry in Western Australia; or
(c)based his finding on insufficient and narrow evidence of the nature and extent of the alleged fluctuations in the industry in which the appellant had been employed.
Hence, ground 2 was relied upon as a basis to reduce the contingency applied by his Honour to future economic loss: cf Reynolds v Roche Bros Pty Ltd [1999] WASCA 141.
It was submitted on behalf of the appellant that in Western Australia it has been accepted that, save in exceptional circumstances, a contingency of more than 15 per cent is unreasonable. The standard rate of discount for contingencies in this State has been in the vicinity of 2 per cent to 6 per cent: In Foyster v Goynich [1984] WAR 80 at 81 Burt CJ deducted 2.5 per cent for contingencies generally. The same figure was applied by Wallace J at 84. Brinsden J at 90 applied a discount of 7.5 per cent. See also Black v Motor Vehicle Insurance Trust [1986] WAR 32 at 34 per Wallace J (with whom Burt CJ and Brinsden J agreed); Elia v O'Byrne (1990) Aust Torts Reports 81 ‑ 050; and Bowen v Tutte (1990) Aust Torts Reports 81 – 043 at 68,083 per Malcolm CJ. Furthermore, contingencies should be considered in terms of their likely impact on the earning capacity of the injured plaintiff, not by reference to the work force generally: Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485 at 497 per Dawson, Toohey, Gaudron and Gummow JJ.
In this case, the evidence was to the effect that, prior to the accident, the appellant was a healthy, popular person, embarking upon a career as a boilermaker/welder, for which he was eminently suitable. Even after the accident, whenever he sought work he was able to obtain it. There was nothing to suggest that but for the accident he would not have pursued this career to the age of retirement. In applying a contingency of 30 per cent, the learned trial Judge said:
"The evidence is that the situation in the industry at the moment is characterised by considerable unemployment. Indeed it is an industry which fluctuates."
His Honour went on to say that the lump sum produced by the usual calculation of future earning capacity should be discounted "by as much as 30 per cent which gives $541,783."
It was submitted on behalf of the appellant that industrial fluctuation and the risks or chances of unemployment were not peculiar to the metal fabrication industry. It was submitted also that these contingencies fell within the "usual" contingencies considered in the cases and that a 10 per cent discount would be appropriate.
Finally, it was submitted that the evidence was not sufficient to justify the adoption of a 30 per cent allowance for contingencies. In Teubner v Humble (1963) 108 CLR 491 at 510, Windeyer J was opposed to any arbitrary reduction in damages for loss of earning capacity by:
" … curtailing by one‑third the damages calculated on an assumed working life until sixty‑five. And I see no other ground for making such a deduction. Of course, the contingencies that might in any event have occurred must be allowed for but I see nothing in the evidence to suggest that for the appellant the prospects of the future were such that adversity would be likely so greatly to outweigh prosperity. Against all the risks of adversity must be set the prospects of an increase in wages and the possibility that the appellant's ability and willingness to work in some remunerative occupation might have continued beyond the age of sixty‑five."
In Newcastle Chemical Co Pty Ltd v Dent (1957) 57 SR (NSW) 453, it was said that over a 30 to 40‑year period it is erroneous to purport to arrive at the present value of the loss of earning capacity by multiplying out and then deducting one‑third.
At the trial, evidence was given by Mr J J Phillips, the managing director of Phillips Engineering Pty Ltd, a company which employed boilermakers and welders in fabrication work, particularly in relation to the mining industry. As at 5 August 1999, when he gave evidence, he indicated that at that time the amount of work was fluctuating and, at the time, he said:
" … our business or the whole climate in the business is down on the bottom now. We are battling for work and that. At the moment Phillips Engineering – I will give you a couple of figures. In June we had roughly 114 people working for us. We dropped back to about 30. Last Friday we had four people working only in the shop yet again we are back on – this week we have still got about 35, something like that, back in. So there's a big fluctuation."
He went on to say that for some time the industry had been on a significant downturn. The relevant period was something like a year. Three years previously, the company was battling to obtain the required numbers of good tradesmen.
A Mr G L Porter, a mechanical fitter, boilermaker and welder, gave evidence. As at 30 March 1999, he was undertaking contract work for RGC Mineral Sands at Eneabba. He had been working with the company for approximately 18 years as a contractor. He indicated that while RGC Mineral Sands had a lot of boilermaking work going on, at the moment the employment situation was very tight. There had been retrenchments, but contractors were still working on‑site. There were currently four contractors working on site, whereas previously there had been up to eight or 10 contractors working there. The downturn had occurred only in the past 12 months. A Mr FW Faithful gave evidence by affidavit sworn 26 March 1999, because he was unable to attend the trial as a result of the destruction of his home by Cyclone Vance early in 1999. He indicated that, had the appellant been operating as a boilermaker/welder in Exmouth and had been fit for that type of work, he would have been prepared to employ him at the rate of $35 per hour.
So far as the assessment of future economic loss was concerned, the learned Judge said:
"The assessment of future economic loss in this case is particularly difficult given the amount of variables. The plaintiff may be able to obtain employment fairly soon after his recuperation and he may never suffer unemployment thereafter. On the other hand, he may have some difficulty in obtaining employment because of his ankle problem. Overshadowing either of those possibilities is the state of the industry which, at the present time, is characterised by unemployment. As I have commented the plaintiff is a big strong young man and I have the distinct impression that once he is able to get his ankle problem alleviated by surgery and thereafter come to the realisation that life is worth living, that his young family want him to start supporting them, then I would be very surprised if he is not able to obtain and keep remunerative employment. I emphasise that he should be pain free. He will be able to do heavy work. His only problem will be in squatting and crouching. He of course will present with an accident history, which is a distinct disadvantage, but I think he should be able to get work in the industry, presuming it is available, especially given that he has spent all his time in the country and that is where he wants to remain.
Upon the basis that the plaintiff was totally and permanently incapacitated from earning any income, the following calculation would be appropriate. Utilising the 6 per cent discount tables and assuming retirement at the age of 65 which is in some 41 years this gives a multiplier of 813. Assuming that the plaintiff would be paid at least $35 per week [sic hour] for a 40 hour week this results in a net weekly income of approximately $952. Multiply this by 813 and this results in $773,976.
The evidence is that the situation in the industry at the moment is characterised by considerable unemployment. Indeed it is an industry which fluctuates. It seems to me that the figure of $733,976 [sic $773,976] should be significantly discounted because of this fact and I think by as much as 30 per cent which gives $541,783.
Having regard to all of the circumstances I think that the plaintiff has lost about 30 per cent of his earning capacity which gives a figure of $162,534."
It was to that sum that the learned Judge added $8,000 in respect of additional loss of earnings in respect of the recovery from the arthrodesis over three months, making a total of $170,534.
It was submitted on behalf of the appellant that industry fluctuation and the chance of unemployment are not peculiar to the metal fabrication industry. On the contrary, it was submitted that such contingencies would be the "usual" contingencies and that the discount for contingencies should, at the most, have been 10 per cent.
When the appellant had the accident, he was in the third year of a four‑year apprenticeship. After the accident he returned and completed his apprenticeship. When he completed his apprenticeship, he obtained three different metal fabrication jobs over a period. They did not follow on one from the other in immediate succession because he was giving himself time to recover from the effects of his injuries. This meant that, from time to time, he needed time to recover from the swelling of his foot and leg, so that he would stop work and take some time for the swelling to subside. He then sought work again. When he sought work, he obtained it and had no difficulty in obtaining employment.
In Struthers v Harris (supra) the majority held that a 15 per cent reduction of the amount calculated in respect of future economic loss would have been sufficient and that an allowance of 40 per cent for contingencies should be reduced to 15 per cent. As Burt CJ put it in delivering the judgment of the court, a reduction for contingencies is, "to cover all the vicissitudes of life applicable to him … " The discount was applied by the learned trial Judge in that case, as stated in a passage quoted by Burt CJ at 126:
" … because of his work history, his eyesight, his general health and because of the medical reports which I accept, I come to the conclusion on a balance of probabilities that it would not have taken a very great trauma, physical or mental, for this particular plaintiff to have become incapable of working again, and this, combined with the usual vicissitudes of life, I am prepared to accept that the future loss of earning capacity should be quite heavily discounted in this particular case."

In Bresatz v Przibilla (1962) 108 CLR 541 at 547 – 544 Windeyer J strongly disapproved of the then South Australian practice of reducing awards for loss of future earning capacity by 25 per cent for contingencies. In New South Wales the practice has been to deduct 15 per cent for contingencies, while recognising that there may be circumstances justifying variations from this figure: Burnicle v Cutelli [1982] 2 NSWLR 26 at 30; Moran v McMahon (1985) 3 NSWLR 700 at 706.
In my opinion, a 15 per cent discount is a very heavy discount and quite sufficient to cater for the uncertainties in this case. In this respect I note that in Koeck v Persic (1996) Aust Torts Reports 81 – 386 at 63,359, Miles CJ said at 63,358 – 63,359:
"It is a well established principle that, consonant with the aim being to put the plaintiff in the position he or she would have been in if not injured by the defendant's wrongdoing, the assessment of damages must have regard to relevant events which might have occurred regardless of such wrongdoing. This is most clearly necessary when assessing damages for loss of future earning capacity, in which case if the loss is to be assessed by arithmetical calculation of the present value of a periodic loss over a finite period in the future, that calculation should include a proportionate or percentage reduction for so‑called vicissitudes which, if they were to occur, would reduce the plaintiff's earning capacity in any event. Those contingencies are mainly adverse and fall under the four main heads of sickness, accident, unemployment and industrial disputes. Logically, vicissitudes should also include the possibility of increases in earning capacity by way of such factors as promotion, general economic prosperity and the like. These are somewhat elusive and speculative matters. As a matter of thumb, a figure of 15 per cent is usually applied by way of reduction of the arithmetical calculation of the present value for future periodic loss: see Burnicle v Cutelli [1982] 2 NSWLR 26, Moran v McMahon (1985) Aust Torts Reports 80 – 762; (1985) 3 NSWLR 700. The reduction by such an amount is regarded as applicable to the 'ordinary' vicissitudes, but there is nothing sacrosanct about that percentage and the calculation of the loss may be reduced or increased, as it commonly is, having regard to the particular circumstances of the case: see Djapa v Comalco Aluminium (NSW Court of Appeal, 3 July 1987, No. CA 64 of 1986).
In addition to the 'ordinary' vicissitudes, regard must be had also to other contingencies of a particular kind which occur not infrequently in actions for personal injuries."
Miles CJ went on to say at 63,360:
"However, the question whether a reduction for contingencies is inadequate or excessive in a particular case is one that should be approached with considerable caution by an appeal court. The decision of the trial Judge on the issue of contingencies is essentially an exercise in value judgment or in nature, 'quasi discretionary': See Moran v McMahon, per Priestley JA at Aust Torts Rep 69,586; NSWLR 723. It is an assessment of the impact of hypothetical events which may occur in the future or which may have occurred in the past or both. The trial Judge must base the prediction on the facts as found. In that sense the prediction is an inference, but it is not an inference of fact. It is an inference from fact. Hence whilst the finding as to the plaintiff's capacity to earn immediately before the injury is a finding of fact, any finding as to what the plaintiff was likely to have earned, if not so injured, either in the past between the date of injury and the hearing, and in the future after the date of the hearing, is a prediction and not a finding of fact. Hence, in my view, this Court as a court of appeal is not in a position like that in Warren v Coombes (1979) 142 CLR 531 where it was said that the appellate court is as able to draw inferences from primary facts as is the trial Judge. Rather the position is like that in Gronow v Gronow (1979) 144 CLR 513 where the primary decision being one essentially of discretion, the appellate court will not substitute its own view for that of the trial Judge except in the well established categories of demonstrable error of fact or law or manifest unreasonableness or injustice."
This approach, to a very large extent, is consistent with the principle that, in order to justify a review by an appellate court of an assessment of damages on the ground of inadequacy, the compensation so assessed must be so inadequate as to be beyond the limits of what a sound discretionary judgment could reasonably adopt: Miller v Jennings (1954) 92 CLR 190. In that case, Dixon CJ and Kitto J at 195 approved of the following statement by Viscount Simon, speaking for the Privy Council in Nance v British Columbia Electric Railway Company Ld [1951] AC 601 at 613, describing the function of a court of appeal which is called upon to consider the adequacy of an assessment of damages by a primary Judge. His Lordship said:
"The principles which apply under this head are not in doubt. Whether the assessment of damages be by a Judge or a jury, the appellate court is not justified in substituting a figure of its own for that awarded below simply because it would have awarded a different figure if it had tried the case at first instance. Even if the tribunal of first instance was a Judge sitting alone, then before the appellate court can properly intervene, it must be satisfied either that the Judge, in assessing the damages, applied a wrong principle of law (as by taking into account some irrelevant factor or leaving out of account some relevant one); or, short of this, that the amount awarded is either so inordinately low or so inordinately high that it must be wholly erroneous estimate of the damage."
In my opinion, given that the time frame within which future loss of earning capacity is to be calculated relates to a period in excess of 40 years, it would be an error in the exercise of discretion to assume that what is apparently a temporary downturn in a particular sector of activity would justify doubling a figure which would set apart the occupation of boilermaker and welder as one subject to unusual fluctuations over such a long time span. There was nothing to suggest that there was something about that work which set it apart from any other segment of the construction sector. The evidence did not justify such a departure from the norm.
In my view, given the youth of the appellant at the time of the accident, he had a working life of approximately 40 years ahead of him, assuming retirement at the age of 60. There would be a mixture of good times and bad, but I do not consider that a deduction for contingencies of 30 per cent was justified. In my view, the adoption of a 15 per cent would adequately reflect the documented potential and capacity of the appellant to obtain work in his chosen field. On this basis, the calculation would be $773,976 less 15 per cent on account of contingencies = $657,879.60 less 70 per cent on account of retained earning capacity = $197,363.88 less 50 per cent on account of contributory negligence = $98,681.94. To that sum needs to be added the additional amount in respect of total loss of earning capacity for the six months recovery period for the arthrodesis operation. As previously indicated, the gross figure for six months was $24,752. Discounting that by 15 per cent yields an amount of $21,040. In other words, the assessment for future loss of earning capacity should be:
Future loss of earning capacity $197,363.88
Loss as a result of arthrodesis 21,040.00
$218,403.88
I would round that sum up to $218,404. That sum will be reduced on account of contributory negligence by 50 per cent to $109,202. This in turn would result in an increase in the amount of the award of $23,935 on account of the combination of grounds 1 and 2.
For these reasons, ground 2 succeeds.

Ground 3: Loss of superannuation benefits

Ground 3 was that:
"The learned trial judge erred in law by calculating future loss of superannuation benefits at the present rate of 7% instead of applying the increased percentages enacted in the Superannuation Guarantee (Administration) Act 1992 (Cth). The enactments of 8% and 9% were to take effect in the financial years commencing July 1, 2000 and July 1, 2002 respectively."
By s 20 of the Superannuation Guarantee (Administration) Act 1992 (Cth), an employer's minimum contributions to the employee's superannuation fund are prescribed. Although the minimum contributions have been prescribed for the periods commencing 1 July 2000 and 1 July 2001 at 8 per cent and 9 per cent respectively, the learned trial Judge determined that the calculation for loss of future superannuation benefits should be made based upon the 1999 rate of 7 per cent. The reason for doing this is explained by the learned trial Judge as follows:
"Counsel for the plaintiff invited me to take account of increases in the percentage rate for the purposes of calculation of superannuation benefits in the future. Given that legislation is often subject to change I have decided to assess this loss by reference to the present rate only being 7 per cent."
In this case the learned trial Judge failed to take into account the rates which had actually been prescribed by the legislation. It is not as though there was some developing pattern of uncertainty or change for which provision had to be made. Since 1992 four increments, none of which has been delayed, have come into force as prescribed. There is nothing to suggest that the two further increments which have been prescribed will not come into force on the dates prescribed. The legislation has been amended in terms of the rates of tax, the form of fund that can be utilised, and the type of deductions which are available, but the rates prescribed for the period commencing 1 July 2000 and 1 July 2001 have not been awarded by the trial Judge.
For these reasons, ground 3 has been made out. The parties are agreed that the consequence of ground 3 succeeding is that the total damages should be increased by $9,026.90. The agreed calculation, however, was based on a 70 per cent retained capacity for work. No account was taken of a reduction for contingencies or the six months total incapacity for work as a result of the arthrodesis. In these circumstances, the parties should agree on the appropriate calculation to be made. The calculation would need to take into account a reduction of 50 per cent on account of contributory negligence.

Ground 4: Discount rate for loss of future superannuation

Ground 4 was that:
"The learned trial judge erred in law by applying the 7% discount table to the calculation of future loss of superannuation benefits instead of the 6% discount table."
Section 5.4(1) of the Law Reform (Miscellaneous Provisions) Act 1941 provides:
"Where an award of damages that relates to personal injury or the death of a person is to include compensation, awarded as a lump sum, in respect of damage for future loss that is referrable to –
…
(b)loss or diminution of future probable earnings;
…
the present value of the future loss shall be quantified by adopting –
(d)a discount rate of the percentage fixed by the Governor by Order; or
(e)where no percentage is fixed as referred to in paragraph (d), a discount rate of 6%."
There is no applicable Order made by the Governor.
Section 5.4(3) provides that for the purposes of s 5.4(1):
"'personal injury' includes any disease and any impairment of the person's physical or mental condition."
It follows that the discount rate applicable was not 7 per cent but 6 per cent. For these reasons ground 4 has been made out. The adoption of the correct calculation would result in an addition to the damages assessed in an amount of $3,704.

Conclusions

The total increase in the assessment of damages as a result of the appellant being successful on grounds 1, 2 and 4 result in the following assessment:
General damages – loss of amenities  $55,000.00
Past loss of earning capacity  $120,000.00
Loss of past superannuation benefits  $9,228.00
Interest on past loss  $24,984.00
Future loss of economic capacity  $218,404.00
Loss of future superannuation benefits                 $14,879.00
(agreed adjustment to be calculated)
Special damages – past medical expenses              $3,409.00
Future medical expenses  $3,770.90
$449,674.90

In addition, there is to be added an amount to be agreed to produce the correct amount for loss of superannuation benefits. Leaving aside that additional amount, the total increase in the assessment as a result of the combination of grounds is $47,870. In my opinion, where it is shown that the bases on which the original award is calculated result in a variation of around 13 - 15 per cent or $47,870 plus agreed damages in respect of superannuation, the combination of errors and the magnitude of the difference combine to enable an appeal court to say that the original award of damages was sufficiently inadequate to justify this Court concluding that the amount awarded by the learned trial Judge did not constitute a reasonable assessment of the loss suffered and substituting its own assessment of the damages assessed.

For these reasons I would allow the appeal and vary the assessment of damages to the extent I have indicated with the result that the judgment below should be varied by increasing the damages assessed to $449,674.90 plus such amount as agreed between the parties with respect to loss of future superannuation benefits and increasing the judgment in favour of the appellant to one half of that amount.
KENNEDY J: I have had the benefit of reading in draft the reasons published by the Chief Justice. I am in agreement with those reasons and I would allow this appeal to the extent which his Honour has indicated.
MURRAY J: I am in entire agreement with the reasons published by Malcolm CJ. The cumulative effect of the errors identified is an award of damages below that which would be produced by an appropriate exercise of discretion. I concur in the order proposed.