Kirkwood v K P E Pty Ltd
[1999] WADC 113
•22 NOVEMBER 1999
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: KIRKWOOD -v- K P E PTY LTD [1999] WADC 113
CORAM: FENBURY DCJ
HEARD: 1-4 NOVEMBER 1999
DELIVERED : 22 NOVEMBER 1999
FILE NO/S: CIV 4743 of 1998
BETWEEN: JOHN PHILLIP KIRKWOOD
Plaintiff
AND
K P E PTY LTD (008 867 490)
Defendant
Catchwords:
Employer's liability - Bobcat operator employed by defendant company - Ran over plaintiff director - Contributory negligence - Turns on own facts.
Legislation:
Workers Compensation and Rehabilitation Act 1981
Result:
Judgment for the Plaintiff.
Representation:
Counsel:
Plaintiff: Mr K N Allan
Defendant: Mr A Power
Solicitors:
Plaintiff: David Rawlinson
Defendant: Jackson McDonald
Case(s) referred to in judgment(s):
Graham v Baker (1961) 106 CLR 340 at 347
Jongen v CSR (1992) A Tort Rep 81-129
Case(s) also cited:
Boyle v Kodak Ltd [1969] 1 WLR 661
March v E & M H Stramare Pty Limited and Anor (1991) 171 CLR 506
Ginty v Belmont Building Supplies Ltd and Anor [1959] 1 All ER 414
McMath v Rimmer Brothers (Liverpool) Ltd [1962] 1 WLR 1
Nicol v Allyacht Spars Proprietary Limited (1987) 163 CLR 611
Ross v Associated Portland Cement Manufacturers Ltd [1964] 1 WLR 768
Shedlezki v Bronte Bakery Pty Ltd [1970] 2 NSWR 588
FENBURY DCJ:
The claim
This is a claim for damages for personal injuries sustained by the plaintiff when he was run over by a bobcat driven by an employee of the defendant company. The plaintiff with his wife were the two directors of the defendant company. Liability and quantum are in dispute.
Background facts
The plaintiff was born on 22 April 1947. Having obviously married at a very young age, he and his wife Sandra moved from the Eastern States to Karratha in 1968. The plaintiff was qualified as a carpenter, quantity surveyor and "clerk of works". He and his wife went to Karratha lured by the plentiful work opportunities and "good money" offered in the infant town at that time.
Initially upon arrival the plaintiff engaged in the sort of work for which he was qualified, various contracting jobs and general work relating to some of the mining sites in the area. He took on a partner and in due course incorporated the defendant company. After some time the plaintiff discovered that large contracting companies were moving into the area and he was not able to compete. Consequently he decided to cease doing contracting work, dissolved the partnership and, having surveyed the opportunities, he and his wife commenced a nursery business. Although neither of them had any relevant experience they had a strong work ethic, worked as a team, and learnt as they went along. Thus the defendant commenced the business known as the Poinciana Nursery.
Business boomed and the couple diversified their interests through the defendant into landscaping, garden maintenance for big mining companies, rent‑a‑plant services and house maintenance and security work for big mining companies.
In due course land was pegged and a soil supply and sand mixing business was commenced. Again the plaintiff's obvious business acumen stood the company in good stead and demand, especially for mixed sands, far exceeded supply.
All of this business success came at a price which was paid in working hours. The business operations of the defendant were conducted from the office of the nursery. Up to 15 people were employed. The plaintiff typically worked 6½ days per week. So did his wife. She sometimes worked 13 hours per day. Both of them clearly enjoyed their success, enjoyed the Karratha lifestyle and thrived on their business which seems to have provided for all their needs. Both the plaintiff and his wife were fit. They had only one child during the period. The business interests of the two of them conducted through the defendant company was their whole life.
As to the contributions of each of them there is no doubt, and there was no dispute, that both worked extremely hard. It was not a case that the plaintiff's wife was a partner for "tax purposes". Clearly she worked as hard as the plaintiff. The plaintiff's skills were more physically inclined. He did anything and everything, whatever was required, filling in when there was a need for labour and busying himself constantly in furtherance of the businesses. I got the impression that neither he nor his wife ever stopped working.
A special feature of their businesses and a reason for their success was the plaintiff's emphasis on service. Jobs were performed quickly and delays limited. This was also an essential requirement when the defendant became involved in the maintenance of houses owned by big local mining companies such as Woodside. A big company like that might ring up and request that a manager's house needed to be beautified urgently because a new manager was soon to arrive. Thus there was frantic mowing, whipper‑snipping, soil filling, house checking and the like. This had to be done forthwith because Woodside was a "big client".
None of the evidence of the plaintiff or his wife concerning these matters was disputed.
Another feature of the way in which the plaintiff and his wife conducted the defendant's business was their attention to and emphasis upon safety issues. This appears to have been a side effect from the defendant company's involvement with big mining companies such as Woodside. Woodside, according to the uncontested evidence of the plaintiff, had very strict demands concerning safety and insisted upon adherence to similar standards by companies, such as the defendant, with whom Woodside did business. Thus the defendant company through its directors, one of which was the plaintiff, had a strong safety ethos. There was a safety manual prepared by the plaintiff's wife. There were safety meetings. A protocol for J S A (Job Safety Analysis) was in place and workers were encouraged constantly to keep an eye on the safety aspects.
Again none of this general evidence was disputed. I have no hesitation in accepting it.
The bobcat
A bobcat is a skid steered vehicle. This means that instead of wheels being turned by a steering wheel in order to turn the vehicle, the wheels on the left can be stopped whilst the wheels on the right continue and the vehicle is turned in that way. Indeed, the vehicle being a 4‑wheeled vehicle, if the wheels on opposite sides are made to go in opposite directions, so that for example, the wheels on the right go forward and the wheels on the left go in reverse, then the vehicle can turn on the spot, within its own length.
This sort of manoeuvre can be wearing on tyres, but it is commonly performed by an operator when wishing to check for obstacles out of his line of vision. He simply spins the vehicle around, or half way around, within its own length, so that he can see.
At one of the soil supply/sand mixing locations leased by the defendant company a bobcat was used to load trucks that came out to fill orders for sand or soil. The bobcat was supplied by a company in Perth called Lift Right Toyota. It was identical to those used by the big mining companies in the area. The machine had a sealed cabin, airconditioning and a pressurising unit which ensured that the pressure of the air inside the cabin was marginally higher than the outside atmosphere so that dust would not seep in. The reason for the airconditioning was twofold. It was to keep the operator cool but also to filter out potentially harmful silicone dust. I accept the plaintiff's unchallenged evidence that he was concerned about the potential harmful effects of dust and that was one of the reasons why he insisted upon airconditioning.
Photographs adequately depict the appearance of the bobcat. The plaintiff ensured that as much of the cabin was glazed as possible so as to maximise vision for the driver. This was done for safety reasons and again his evidence about this was undisputed. There was also a window at the back of the cab of the machine visible over the driver's left shoulder. This was a glass panel some six inches or so wide and about 20 inches in length.
It appears from photographs, exhibits 4, A1, A2, that the view outside the rear glass window is partly obstructed by the dog leg pipe supporting the air filter for the bobcat's engine. However the operator of the bobcat can still get a reasonable view at the rear of the machine if he wishes to look (exhibit 1). The machine has very little "rear end" extending behind the driver. It travels at a slow speed (operationally something like 4‑5, perhaps 6km/h at the most) and although there is some obstruction caused by the pipe it is obvious that one can see if one wishes to do so.
The particular bobcat was also provided with a warning alarm which was activated on reversing. When the plaintiff spent 6 months operating the machine prior to April 1993 the alarm used to work on reversing. He was never advised and never became aware, and never noticed, whether the alarm ever ceased to work.
The bobcat driver
On about 5 April 1993 the defendant employed a man named Mr T Russell as a bobcat operator. He operated the defendant's bobcat at one of its soil leases. Prior to being engaged to do the work Mr Russell demonstrated his competence in operating the machine to the plaintiff.
On the occasion of his employment the plaintiff said that he gave Mr Russell specific instructions about loading procedures. One of these related to the direction of approach to a tip truck when loading. The plaintiff had previously noted that if a tip truck was loaded by a bobcat from the rear then damage often occurred to the rear gate. The gate was designed to swing out on a vertical hinge if required or, alternatively, when tipping, to swing horizontally from the top. Loading by a bobcat damaged the mechanisms and made it very difficult for the gate's designed functions to be performed.
Consequently the plaintiff instructed his employees, and Mr Russell on the date when he commenced, that trucks were to be loaded only from the side. The bobcat was capable of loading approximately half a cubic metre per bucket. Thus six cubic metres would require about twelve buckets. Six of these could be put in the front half of the truck tray and six in the rear half, all being loaded from the one side. According to the plaintiff there was no need, in order to carry out the job adequately, for the bobcat ever to approach and load the truck from the rear.
In his evidence Mr Russell said that he knew the defendant's policy about not loading tip trucks with the bobcat from the rear. He said however that his preferred method was to do so and, by reason of "arrogance", as he put it, he followed his own preferred procedures.
There were also some obvious safety requirements for operation of a bobcat which the plaintiff said he discussed with Mr Russell when he was employed. One of the cardinal rules was not to drive the vehicle in a direction which was unsafe. Most often this related to reversing. Because of the limitations of visibility, the plaintiff was specific and strict in his instructions that reversing should not take place unless the driver was satisfied it was safe to do so.
This is one of the few areas in dispute in this case. The defendant maintains that Mr Russell was not given regular instructions about the need for special care when reversing.
In my view it is self‑evident that an operator of such a machine should not reverse unless it is safe to do so. Indeed Mr Tim Russell, who was the driver of the bobcat on the relevant occasion, agreed as much in his evidence. He said it was a matter of common‑sense.
The accident
On 22 May the plaintiff drove a Mitsubishi 8 tonne tip truck with a single rear axle to the soil lease to be loaded with soil or sand. Mr Russell worked alone at the lease operating a sand screening machine. He did that by keeping a hopper filled with sand through use of the bobcat. The plaintiff drove the truck onto the lease and parked it with the front cab against or very close to a bank of desirable dirt. The truck was facing north and it was perpendicular to the bank of dirt which ran roughly east west. The wind was coming from the east and thus the procedure was that the truck would be loaded by the bobcat from the east to avoid dust being blown over the bobcat during the process.
Consequently the truck was to be loaded from the right hand side.
The procedure was that the bobcat would nose into the dirt bank by travelling north along the right hand side of the truck until it reached the dirt bank. The bobcat would then get a load on the bucket and reverse, and whilst reversing, it would arc around until its rear was facing east. It would then proceed forward and load the truck on the eastern or right hand side. It would then reverse the procedure by travelling in reverse in an easterly direction and then forward arcing around until it was running in a northerly direction and again biting into the dirt bank.
This loading procedure occurred on about eight occasions with eight buckets of dirt being loaded over the side into the truck. Mr Russell said that his procedure was then to load the remaining four buckets into the truck from the rear. Thus on the ninth bucket load, after having loaded the bucket as I have described by the bobcat travelling north until it hit the bank, Mr Russell reversed the bobcat along the right hand side length of the truck in a southerly direction and instead of arcing to the east he continued to go south until he cleared the end of the truck when he then arced the rear of the bobcat towards the west then intending to go south again thus lining up on the rear of the truck.
It was common ground that in executing this manoeuvre Mr Russell did not look to the rear of the bobcat to see whether it was safe for him to reverse in this fashion. He had done much work on the site alone and felt that the only creatures that might be in danger from such a manoeuvre were any stray kangaroos in the area.
At about the time he commenced his first loading of the truck, Mr Russell was aware that the plaintiff had got out of the truck and that he was on foot in the area. He thought that he had gone over to the south west to inspect the sand screening plant which was some 30m away. Mr Russell was not sure whether the plaintiff went around the front of the truck or whether he walked down the right hand side but, in any event, it was only a short time before the plaintiff was out of sight.
The plaintiff's evidence was that he walked around the front of the truck down the left or western side to the rear for the purpose of inspecting whether the tailgate lever was properly operational. Having satisfied himself that it was he stood about 4 feet from the left hand corner of the truck, being well away from the loading procedure taken by the bobcat, when his attention was attracted by unusual noises coming from the sand screener. He turned around and was looking at the sand screener, whilst standing some 4 feet or so from the left hand rear corner of the truck. Without warning he was knocked down from behind and run over by the bobcat.
It is common ground that Mr Russell did not see the plaintiff at all until after he had been run over. It is common ground that Mr Russell did not look to see where the plaintiff was when he reversed the bobcat around the rear of the truck. It is common ground that Mr Russell knew the plaintiff was on foot out of sight somewhere on the other side of the truck, the side which Mr Russell was approaching.
The plaintiff's view was that by standing near the left rear corner of the truck in the knowledge that the truck was being loaded from the right hand side, that he was in a safe position having regard to the company rule, which he assumed was being followed, that trucks only be loaded from the side. It did not occur to him, apparently, that he was in any danger. The plaintiff was not aware of Mr Russell's habit of loading the truck from the rear for the last four of the twelve bucket loads that would be required for a 6m load.
Mr Russell was not able to say whether he had ever loaded a truck from the rear when the plaintiff was on site. Mr Russell said that when he had finished loading the eighth bucket he did not know where the plaintiff was and he had not seen him for a short while. Indeed he never saw the plaintiff until for some reason or other, which he cannot specify, he stopped his vehicle in the loading process and saw the plaintiff laying on his back behind the truck. Mr Russell said that he did not use the rear window of the bobcat to look where he was going because in order to do so he had to turn his entire body and, by implication, that was too inconvenient a process. His evidence was that he loaded the truck in the way he did because he followed his habit and because that was his preferred process. Mr Russell agreed that he knew the plaintiff was on the other side of the truck, he agreed that he did not look out for him, and he said he assumed the plaintiff was some distance away at the screening plant.
Liability
Having regard to the evidence of the plaintiff and to Mr Russell it is plain that the allegation that Mr Russell was negligent in his operation of the bobcat and thus caused injury to the plaintiff has been made out. Mr Russell was in charge of a heavy mobile machine and he reversed it without looking where he was going and ran over the plaintiff.
Contributory negligence
The defendant asserts that the plaintiff was one of two directors and the person who carried the executive responsibility for the company. There is no real dispute about this.
The defendant alleges that "if the plaintiff was injured as pleaded in para 6 of the statement of claim, any such injury, loss and damage was caused or alternatively contributed to by the plaintiff's negligence."
Particulars are given as follows:
"The plaintiff was negligent in that he;
(a)by requiring the defendant's employee, Tim Russell (Russell) to load 6 cubic meters of soil into the defendant's tip truck, caused or permitted Russell or alternatively did not instruct Russell not to reverse the bobcat towards the rear of the defendant's tip truck and towards the plaintiff when the plaintiff knew or ought to have known that ‑
(i)Russell's view to the rear of the bobcat when reversing would be obscured by an airconditioning unit which had been installed on the rear of the bobcat;
(ii)the bobcat had no or no adequate reversing mirrors to improve Russell's view to the rear of the bobcat; and
(iii)the bobcat had no reverse warning signal or warning lights to alert persons in the vicinity of the bobcat reversing;
(b)remained or positioned himself to the rear of the defendant's tip truck without keeping a proper lookout for the bobcat and without informing or warning Russell of his position behind the defendant's tip truck when the plaintiff knew or ought to have known that ‑
(i)Russell's view to the rear of the bobcat would be obscured as pleaded in sub paragraph (a) herein;
(ii)Russell was not aware of the plaintiff's position behind the bobcat;
(iii)the bobcat had no or no adequate reversing mirrors to improve Russell's view to the rear of the bobcat; and
(iv)the bobcat had no reverse warning signal or warning lights to alter (sic) persons in the vicinity, of the bobcat reversing."
In the light of Mr Russell's evidence that he knew he was only meant to load a truck with a bobcat from the side, and not from the rear, and by implication he would therefore not need to reverse the bobcat towards the rear of the truck then I think the allegation of negligence alleged against the plaintiff particularised in para 6(a) falls away. It may be that the plaintiff had not recently stated to Mr Russell that he must not load over the rear but Mr Russell knew he was not meant to do so. I have no doubt that that knowledge came as a result of instructions from the plaintiff on behalf of the defendant on one or more previous occasions. This was not something that Mr Russell had forgotten. Nor was it a bad habit the defendant through its executive director the plaintiff, had failed to notice. It was the way Mr Russell operated by preference in spite of his instructions. Furthermore it was not dangerous to load over the rear. It simply increased the risk of tailgate damage.
As to the detailed assertions about the bobcat itself it is true that the view to the rear was obscured by an airconditioning pressurisation unit but there was a window that enabled some vision. Of course the onus is on a driver to ensure that he reverses such a machine safely and if he cannot see out the back, for any reason, then he should take appropriate remedial measures. The bobcat had no adequate reversing mirrors because apparently they do not last in the rigours of the job. It had no warning light although it was equipped with a warning signal. Nobody has stated the warning signal was not operational. All I am told is that nobody could remember hearing it operate. I am told that there was considerable noise emanating from the sand screening machine. I do not know whether such a signal would have been heard in any event.
The allegation of negligence against the plaintiff particularised in para 6(b) asserts blame for the plaintiff placing himself near the truck without keeping a proper lookout for the bobcat and without informing Russell of his position. Given that the plaintiff had no reason to think the bobcat would be coming around that side of the truck because of the procedural rules about loading on the side, and given Mr Russell's concession that he was aware of that rule, then this allegation also seems to me to fall away. When all is said and done, the plaintiff was on foot and in an area where he could not have reasonably expected the bobcat to be present. The plaintiff would have been aware that the bobcat driver had seen him leave the truck and would have been aware that the bobcat driver saw him go out of sight somewhere on the opposite side of the truck to where the bobcat driver, Mr Russell, was initially working.
I am quite unable to see where the plaintiff has in any way been guilty of a failure to take reasonable care for his own safety.
In my view Mr Russell was negligent in his operation of the bobcat and his employer, the defendant, should bear responsibility. Having regard to all of the evidence I think that the defendant, through its directors one of whom was the plaintiff, was a very safety conscious company and had taken reasonable steps to maintain a safe system of work. There should be no apportionment of liability against the plaintiff.
Damages
The evidence adduced by and on behalf of the plaintiff under the head of damages for non‑pecuniary loss was uncontested. The injuries suffered by the plaintiff in the accident as pleaded were:
"A crush injury to his left foot, ankle and lower shin with multiple fractures, lacerations, soft tissue injuries and sural nerve injury with consequent infection, ulceration, unstable skin, swelling, stiffness and loss of function."
The seventeen medical reports of Dr A J Prosser, orthopaedic surgeon (exhibit 11A‑Q) and covering a period of treatment from 26 June 1995 to 19 September 1999, detail the plaintiff's injuries and treatment. Mr Prosser helpfully summarises the plaintiff's treatment in his report of 2 June 1998 which was exhibit 11P. In his report Mr Prosser states:
"In summary, Mr Kirkwood's left foot and ankle were crushed under a bobcat wheel on 22.5.95. X‑rays showed a fracture of the lateral malleolus of the ankle, which was impacted but undisplaced. There were fractures in at least the fourth and fifth toes. There were no obvious injuries to the mid foot. Later x‑rays on 28.4.97 showed a good shape to the ankle and subtalar joint, but persistent disuse osteoporosis. The main initial problems were soft tissue injuries. There was extensive soft tissue bruising and swelling initially, and swelling has been an ongoing problem. A large laceration extended from the lateral aspect of the calcaneum or heel bone, across the front of the ankle to the medial malleolus. The laceration was shallow, just involving the skin and subcutaneous tissues. Closure of the wound did require an external fixator to bring the ankle into dorsi flexion, and may have contributed to ongoing stiffness in the ankle and hind foot. There were small wounds over the medial aspect of the lower shin, which were slow to heal, and the area has been subject to recurrent infections and unstable skin. A split skin graft was tried in December 1995, but in the end, healing was by secondary intention. Mr Kirkwood advises that the skin has broken down again recently, with an ulcer forming after the area was struck by a grasshopper. It has taken 2 months for the consequent wound to heal. There was also an injury to the sural nerve, giving persisting burning pain, numbness and tingling along the lateral dorsal aspect of the foot. In general, Mr Kirkwood has had ongoing pain at the anteromedial aspect of the ankle, with persistent reduction of movement, with both the ankle and subtalar joint having half range. Pain and swelling and limited tolerance for walking and intolerance for jarring, have restricted Mr Kirkwood to supervisory activities."
On 25 May 1998 at the time of interview prior to preparation of exhibit 11P, Mr Prosser examined the plaintiff and made the following physical findings which he also sets out in his report.
"He has a mild limp. Pigmentation was noted over the lower shin, especially medially, in the area of unstable skin. The scar across the front of the ankle is quiet. Movements in the ankle are restricted, with extension 5˚ and flexion 15˚, and there is moderate tenderness across the ankle, especially the anterio medial aspect. Passive range of movements in the subtalar joint, mid tarsal joint, and tarsometatarsal joints of the mid foot are normal in range and are pain free. The toes are normal. Sensation is reduced and dysaesthetic in the sural nerve distribution and is normal over the rest of the foot."
When asked for his opinion Mr Prosser stated as follows:
"2.Mr Kirkwood has sustained a permanent disability, which I consider is a 20 per cent loss of use of the leg below the knee, noting the restricted movements at the ankle and the sural nerve injury. The foot is not assessed separately.
3.The general prognosis is that Mr Kirkwood will have continuation of his present symptoms and disabilities. There may be gradually progressive arthritic changes in the ankle. He will remain prone to recurrent ulceration over the medial shin.
4.I have noted above the effect of the injuries on Mr Kirkwood's recreational activities, which were outdoor in nature and have been markedly curtailed."
Mr Prosser's final report, exhibit 11Q, was dated 19 September 1999 and relates to an interview 2 months before. Mr Prosser states that the plaintiff reported "no real change" since his previous report a year earlier.
"He still has good and bad days with his leg. Whilst in Albury, Mr Kirkwood saw a podiatrist, who fitted hard insoles, which have provided better balance to his foot, and has improved some of the previous burning pain experienced while standing. A buzzing sensation continues into the fourth and fifth toes, in the sural nerve distribution. Aching in the ankle is at times severe. At night Mr Kirkwood is troubled by tremor and spasms in the foot. There are ongoing problems with unstable skin, as recorded above. …his tolerance for walking is 200-300m. …swelling can be a problem, with over activity, and Mr Kirkwood now restricts his walking."
On examination Mr Prosser reported the following physical findings:
"Mr Kirkwood had a moderate limp in keeping with pain. In the lower left shin there was extensive pigmentation in keeping with venous insufficiency. Good arterial circulation was present. There is dermatitis over a large area of the lateral aspect of the ankle. There is some restriction of mobility with ankle extension 5˚ and flexion 25˚, subtalar joint is 50 per cent and midtarsal joint passive movements are satisfactory. dysaesthasia is present in the lateral toes."
In his section devoted to opinion Mr Prosser writes:
"He does not require any further definitive treatment, but Mr Kirkwood will have ongoing problems with the unstable areas of skin, which will continue to need treatment on a preventative basis with cream, and on a periodic basis when ulcers develop. The other problems of pain and stiffness and swelling, are controlled by Mr Kirkwood modifying his activities."
I viewed Mr Kirkwood's foot and ankle in Court and saw for myself that Mr Prosser's description of the appearance of the foot was accurate. I watched the plaintiff walk with and without shoes and he has a limp. He walks carefully as if concerned about breaking something under foot.
Mr Kirkwood's evidence was consistent with his history as related by Mr Prosser. The plaintiff has continual pain in his ankle especially on activity. He does not now take much in the way of medication because he does not like the various side effects.
There is no doubt whatsoever that the plaintiff has sustained a very serious injury to his left foot and ankle which has severely affected his lifestyle, which continues to cause pain, which is unsightly, which significantly impedes his ability to move about. This situation will continue permanently. It is notable that the site of the plaintiff's difficulties, being at the area of his ankle and foot, is an area which he is not able to "spare" in his every day physical activities and movements. Added to this is the possibility of surgery if he develops arthritis.
Non‑pecuniary loss
Counsel for the plaintiff submitted that, having regard to the provisions of s93A and E of the Workers' Compensation and Rehabilitation Act 1981, I should determine the appropriate award for damages for non‑pecuniary loss as a proportion of the maximum amount allowed for the most severe case. I am advised that the present sum for the purposes of the exercise is $219,000. In my view the plaintiff's injuries and permanent disabilities justify an assessment at 25 per cent of the most extreme case which is $54,750 which I award under this head.
Past gratuitous services
This sum was agreed at $19,697 inclusive of interest. I award that sum.
Future gratuitous services
This amount was agreed at $5000 and I award that sum.
Future medical expenses
It was common ground that the plaintiff would require to purchase five pairs of shoes per year at a cost of between $100 and $150 per pair which can reasonably be averaged at $125 = $625 per annum.
It was common ground that the plaintiff would require steroid creams for skin problems. The defendant asserted that the plaintiff would require 2‑3 tubes of cream per year at a cost of $25 per tube ‑ say $62.50.
Mr Prosser's evidence at T128 was as follows:
"And there would be the cost of dressings, ointments and so on and then it would depend who did the dressings, whether he did them himself or he had them done professionally by a nurse or a doctor as to what the cost would run out, but probably each dressing if you did it properly is probably a few dollars and probably done say at least every second day so say $20 a week $80 a month, 3 months, so it might be $250. I might be underestimating it so it might be up to say double that, $500 for an episode particularly by the time he went and saw a GP a few times. …maybe once or twice.
And occurring how often roughly?---Maybe once or twice a year."
I note that on one occasion the plaintiff suffered ulcerative problems for 2 months merely following being struck in the affected area by a grasshopper.
I accept the defendant's assessment concerning the cost of creams at $62.50 per year.
However I also accept the calculations advanced on behalf of the plaintiff as follows:
Ulcerations: 1‑2 ulcerations per annum at $250‑$500 (Dr Prosser says 1.5 ulcerations pa x $375 = $562)
Total future medical expenses for shoes, steroid cream and ulcerations = $1,249.
There is also the possibility of the plaintiff undergoing surgery following the development of arthritis. The cost of this would, if the plaintiff underwent such a procedure, be in the region of $10,000 according to Mr Prosser. I got the impression from Mr Prosser and the plaintiff that it was not likely, really, that the plaintiff would come to surgery given that much of his discomfort is the result of the sural nerve difficulty which is not operative. This is really very much a matter of conjecture but it would seem to me that the plaintiff should be entitled to some allowance under this head for the possibility of future surgery and I think a figure in the region of $2000 would be appropriate.
Thus the calculation for future medical expenses is:
$1,249.50 ÷ 52 = $24.03 per week x 698.7 (multiplier for 26 years) = $16,789.76 + $2000 = $18,789.76.
I allow the sum of $18,789.76 for future treatment.
Special damages
The plaintiff claims special damages for the cost of shoes and inserts during the past 4½ years which he formulates on the basis of 5 pairs per annum at $125 per pair for 4 years = $2,500. I would allow this sum given that for the first 6 months or so following the accident the plaintiff had no use for such shoes.
The plaintiff claims airfares for his wife travelling to Perth from Karratha following his accident which was estimated by her at between $600 and $700 for which the plaintiff claims $650. Given the absence of any disputation about this and concluding that it does not appear unreasonable I would also allow this sum.
The plaintiff also claims for the cost of a trip to Tasmania for himself which is asserted to have cost $3000. The plaintiff's evidence was that he went to Tasmania primarily for the cooler climate so as to facilitate the healing of the skin around his wound which was continually suffering from break‑down and infections in the hot and more tropical climate of Karratha.
The evidence suggests to me that there were other reasons also for this trip. As counsel for the defendant also pointed out in cross‑examination there are areas in the south of this State which could have provided a similar climate. I am not persuaded that it would be reasonable for the defendant to bear the total cost of that trip even though it appears to have speeded up the healing of the plaintiff's ulcers. However given the apparent benefit of the trip it would not be unreasonable for some proportion to be borne by the defendant and I would assess this at 20 per cent and allow $600 towards that trip.
Special damages = $3750. Interest on $3750 @ 4% = $360 x 4.5 years = $1,620.
I allow the sum of $3,750 for special damages and $1,620 for interest.
Past loss of earning capacity
The plaintiff was born on 22 April 1947 and at the date of delivery of this decision he will be exactly 52 years 7 months of age. It will also be exactly 4½ years since the accident on 22 May 1995. Differing bases for the calculation of past economic loss were asserted by both counsel at the conclusion of the hearing. According to the plaintiff the calculation should assume a net average annual income prior to the accident of $52,000. This figure is taken from the average of the total sums calculated for the years 1993 to 1995 inclusive set out on exhibit 16A being $51,619 plus $37,008 plus $67,771 equals $156,398 divided by 3 equals $52,132 or rounded down to $52,000. This was the sum which represents the average total net benefits received by the plaintiff for the 3 years prior to the accident includes salary, dividends, imputation credit, net superannuation and net share of the company's profit. It was agreed between the parties that in order to ascertain the plaintiff's pre‑accident earning capacity reference should be confined to the years I have mentioned.
The major dispute between the parties was the rate of tax which should be applied to that portion of the net benefits received by the plaintiff which refer to the share of the plaintiff in the defendant company's net profit. In calculating that amount the expert witness called on behalf of the plaintiff asserted that company tax should apply, whereas the expert called on behalf of the defendant said that the rate of tax should be the marginal rate which was slightly higher.
Having heard both the accountants give their explanation and opinion I prefer the approach of Mr Farrbo called on behalf of the defendant. It seems to me that if the point of the exercise is to try and work out what the plaintiff's net income was in all its aspects then it should be the income tax rate he would have been likely to pay if he received it that applies. The difference in dollars is, as Mr Allan put it, "twopence halfpenny" in any event. I think the difference between the figures is something of the order of $2500 net income per annum.
Both the plaintiff's counsel in exhibit 16C and the defendant's counsel in exhibit D ran out their calculations including an allowance for superannuation which took account of the approach laid down by the case of Jongen v CSR (1992) A Tort Rep 81-129.
By reference to exhibit D it can be seen that for the three relevant years the defendant's accountant's figures were $48,787 plus $36,815, plus $63,159 equals $148,781 divided by 3 equals $49,593.67. That is the average net benefit per annum which gives $953.72 net per week. I accept the defendant's figures on these issues as a fair basis for proceeding.
As I have mentioned it is now exactly 4½ years since the accident during which period, for the purpose of calculation, I assume the plaintiff would have earned at least $49,593.67 net per annum multiplied by 4.5 equals $223,171.51.
By reference to exhibit D, the defendant's schedule of net benefits (which has calculations very similar to those advanced on behalf of the plaintiff in exhibit 16A, save for the rate of tax applied to the plaintiff's net share of the profit of the company) it can be seen that for the period since the accident up until the 1997/98 year the plaintiff received:
"1996 $63,675
1997 $40,497
1998 $32,478
$136,650"
It appears that this sum includes the weekly payments of workers compensation. The gross amount of weekly payments was apparently the sum of $20,068.45. I was invited by the plaintiff to assume that the tax paid upon that sum would have been of the order of $3000 and thus some $17,000 was in fact received by the plaintiff. As this sum has been included, allowance will need to be made for it in the award.
The defendant's schedule of damages makes no reference to any income the plaintiff has received for the financial year 1998/1999 nor for the period 1 July 1999 to 22 November 1999. Indeed the schedule for calculation appears to assume that no income was received during the period and invites me to calculate past economic loss upon the basis of the difference between what the plaintiff earned for the 3 years I have mentioned and the sum the plaintiff could have earned had he been receiving benefits from 22 May 1995 to 22 November 1997 (4 November in fact in the schedule) at the average pre‑accident rate of $49,593.67 per annum. Following the defendant's method of calculation then the figure for past economic loss is $223,171.51 less $136,650 equals $86,521. I am then asked to add interest at the rate of 4 per cent for 4½ years which equals $15,573.87.
The plaintiff's schedule makes no account whatsoever of any income received by him. It also invites me to make an award in the form of a global amount having regard to the circumstances of the case and in particular the "entrepreneurial talents and vitality" of the plaintiff.
It seems to me that it is fair and reasonable to deduct from what the plaintiff might have earned in the relevant period the figure that he in fact did earn. However I must say that having regard to the evidence the method of calculation of the past loss of the plaintiff is necessarily conservative. Apart from his undeniable "entrepreneurial talents and vitality" there would appear to be some basis for concluding that, but for the accident, his benefits would have continued to increase. The plaintiff netted far more benefits in the year of the accident and the year after than he ever had before. In 1997 of course the figures fall away but it is obvious that his disabilities had commenced to have effect.
There is also some merit in the argument that although the plaintiff and his wife worked extremely hard in the business it was the plaintiff who was the primary mover, planner, "shaker" and it was the plaintiff who was the source of ideas and business proposals. Without wishing in any way to minimise the plaintiff's wife's contribution, which I emphasise was extremely significant, she was placed in the position of being required to work as hard as she did because of the success of every venture into which the plaintiff guided the family.
Some regard needs to be had to the conservative features of making a calculation based upon a strict equal division of benefits. As a family the loss of the plaintiff's earning capacity had far greater financial implications than the mere loss of his net benefits. A purely arithmetic approach to calculation might result in too conservative a view.
On the other hand I also think that some reference should be made to the fact, although neither counsel touched upon it, that the plaintiff through the defendant company having sold his businesses, has benefited either directly or indirectly by the accelerated receipt of the proceeds of sale of assets. I accept that he was required to take the steps of selling his businesses because of his inability to carry on as a result of his disabilities (this not being in dispute) but it seems to me that some account should also be taken of the benefit he received from those sales. How that is to be done is unclear, given the absence of submissions or argument, but it is a relevant factor.
Taking all these matters into account I allow $85,000 for past loss and I would allow interest at 4 per cent for a period of 4.5 years = $15,300.
Future loss of earning capacity
As I have mentioned the plaintiff is 52 years and 7 months of age. Evidence was led that the plaintiff said to one of the defendant's medical practitioners that he had planned to retire at about the age of 60 prior to the accident. He said this after the accident. The plaintiff's evidence was that he had not any specific plans about retirement. In these cases I think that the preponderance of authority and practical precedent is to the effect that calculations are made on the basis of retirement at the age of 65 in the absence of clear evidence to the contrary. The evidence on the point could hardly fit into that category and I think a fair basis for calculation is to follow the commonly held view. Consequently the 6 per cent multiplier for the period of 12 years and 5 months is approximately 460.
For the same reasons as I mentioned in the previous calculations concerning past economic loss it is unrealistic simply to make an assessment based upon the plaintiff's earning capacity quantified as being the average pre‑accident annual income of $49,593.67 which equates to $953.72 net per week. Upon the basis that the plaintiff was totally and permanently incapacitated for all forms of employment then his loss would be $953.72 x 460 = $438,711.
However, although there was no dispute that the plaintiff was totally and permanently unfit for his pre‑accident employment, he has retained all his mental powers, his experience, and some ability to engage in remunerative employment. The evidence of Dr Prosser was that the plaintiff could manage clerical work. But he said no matter what the plaintiff did he would still have problems with skin ulceration.
The calculation for future loss of earning capacity asserted by the defendant assumes that the plaintiff has lost about 70 per cent of that capacity. The defendant also asserts that the plaintiff would have some ability to carry out the work of a grade 3 clerk which would entitle him to modest award wages. Of course having been self‑employed for so long the plaintiff would have difficulty working for others. Even assuming that a prospective employer was prepared to take him on. He has never had a sedentary occupation.
The plaintiff asserts that in reality he is totally and permanently incapacitated. His earning capacity has been destroyed and thus he has sustained substantial economic loss which has also greatly reduced his wife's ability to produce income it being dependent upon his earning capacity ‑ and that this has occurred to the substantial detriment of both. I am invited to make a global award under this heading also taking into account the likely success of the ventures which the plaintiff would have undertaken had he been able.
Having regard to all of the evidence I accept that the plaintiff would be likely to have continued his remarkable business success in Karratha but for the accident. It is highly probable that he would have been achieving greater net benefits than the figures that have formed the basis for calculation.
"An injured plaintiff recovers not merely because his earning capacity has been diminished but because the diminution of his earning capacity is or may be productive of financial loss" ‑ Graham v Baker (1961) 106 CLR 340 at 347.
I think it is reasonable to assume that the plaintiff has lost about 70 per cent of his earning capacity. Thus $438,711 less 30 per cent = $307,097.
Having regard to the matters I have mentioned I think that that sum less a small discount, would be reasonable and fair. I award $300,000 for future loss of earning capacity.
Thus I award the following amounts.
Non‑pecuniary loss $54,750.00
Past gratuitous services $19,697.00
Future gratuitous services $5,000.00
Future medical expenses $18,789.76
Special damages $3,750.00
Interest on special damages $1,620.00
Gross amount of weekly payments $20,068.45
Past loss of earning capacity $85,000.00
Interest on past loss of earning capacity $15,300.00
Future loss of earning capacity $300,000.00
Total $523,975.21
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