Leahy v Martin No. Scgrg-00-311

[2000] SASC 383

LEAHY v MARTIN
[2000] SASC 383

Full Court:  Prior, Debelle and Williams JJ

1................ PRIOR J:........................ In the District Court the appellant recovered a total sum of $185160.20 as her damages resulting from injuries sustained when a passenger in a stationary vehicle struck by another driven by the respondent. The appellant was then 18 years of age. At trial she was 21.  In this appeal an award of $120000 for future economic loss is said to be manifestly inadequate.

2      The evidence accepted by the trial judge was that as a result of the accident the appellant suffered injuries to her neck, shoulders, upper mid and lower back. She required extensive medical treatment and has ongoing and permanent difficulties resulting from an annular disc tear and small disc bulge at the L4/5 level of her spine.

3      The appellant was born in October 1978. The accident occurred on 18 December 1996. The assessment complained of was made on 22 March 2000. In July 1996 the appellant had commenced a full-time pre-entry course for a diploma in child care. That was discontinued in September because of appendicitis. It was her intention to return to that course in the following year. The accident intervened.

4      At the time of the accident the appellant was overweight. Her evidence was that at that time her weight was around 120 kilograms. She had experienced difficulties with her weight from an early age. In 1993 she sought medical advice from a general practitioner after which she succeeded in losing some weight with the assistance of appetite suppressants and antidepressant medication.

5      In 1996 she consulted a psychiatrist who had been treating other members of her family. The psychiatrist diagnosed her as being depressed because of the death of her grandfather and problems with her brother who had been admitted to hospital. When she first saw the psychiatrist her weight was about the same as it was at the time of the accident. Her evidence to the trial judge was that she did not see her weight as causing her any difficulties. She described herself as then living a normal life which included baby-sitting and attending to the pre-entry child care course.

6      The appellant’s evidence was that her back condition prevented her from re-entering the course she had begun in the year of the accident. She spoke of considering attending an adult college to complete year 12 studies. In fact, she enrolled for three matriculation subjects. However, she did not attend many lectures because of her back problems.

7      Her evidence was that her condition was deteriorating. She became more and more depressed. She continued to see the psychiatrist she had consulted before the accident. She gained further weight. The neurosurgeon who had treated her for her back conditions recommended a gastric stomach banding procedure. That was carried out in August 1998. Since the accident she has lost some 20 kilograms with her weight being reduced to around 100 kilograms. She spoke of having a target weight of 70 to be achieved in a couple of years. In evidence, she spoke of having to have apronectomy surgery this year. That procedure is related to excessive skin problems, in turn resulting from the stomach banding procedures undertaken in August 1998.  She also spoke of wishing to complete her year 12 studies, although there was some doubt about whether she would have to undertake a full year of five subjects.

8      As for future employment, her evidence was that she did not know what she would be able to do, particularly because of the discussions she had had with her neurosurgeon, who was of the view that the appellant’s original plan for child care was probably lost to her because of her inability to bend frequently.

9      The neurosurgeon spoke of the appellant having a 30per cent permanent impairment of her lumbar spine as well as a slight impairment of the cervical spine. This condition rendered it most difficult for the appellant to involve herself in child care. There has been talk of a spinal fusion, but the neurosurgeon has not recommended that this occur. The neurosurgeon’s opinion was that the appellant was employable, but not in jobs requiring lifting or twisting, as much as ones where the appellant was free to sit or stand as required.  Continuing medical attention and medication is required, degenerative changes could occur earlier as a result of the disc injury. However, the doctor’s hope was that any such change would not increase her level of disability.

10     The trial judge said that he accepted the evidence of the appellant and her medical and associated advisers. He made particular reference to the comments of an occupational therapist. He spoke of her having referred to the almost unemployability of this young woman at this time. His Honour also agreed with the evidence that the appellant would require physical and psychological support to succeed with further weight loss to restore general well-being, and a return to study so that her future working life prospects might be reassessed.

11     I think a proper interpretation of the occupational therapist’s opinion in evidence was that the appellant did have some capacity for work. Her evidence was that the appellant was then capable of doing some part-time work, mostly of a sedentary nature, provided that she was able to get up from a seated position at least every hour and provided that there wasn’t manual handling over 5 to 9 kilos. Counsel for the respondent submitted before us that perhaps his Honour intended to refer to the evidence of another witness.

12     His Honour properly observed that the appellant’s academic record before the accident was poor, and that before the accident she had difficulties stemming from her general health, her overweight condition and family stresses. Further efforts to pursue matriculation or some form of tertiary studies were totally disrupted by her ongoing chronic back condition and, to some extent, her depression. The trial judge said that because of the appellant’s poor academic achievements, he had reservations about her academic ability. His Honour acknowledged that the appellant gave evidence in a forthright and able manner. He awarded her $30400 by way of non-economic loss, and $2000 for past economic loss.

13     As for future economic loss, his Honour considered the material presented to him with respect to the child care workers’ award. He also had a statistical profile of average weekly earnings. Acknowledging the concern he had expressed about the appellant’s ability to complete an academic course at all, his Honour said that even if that was not the case the appellant, without the injuries sustained in the accident, could have undertaken a whole host of menial sedentary type jobs. His Honour said:

“In the event of the appellant being unable to complete any academic child care studies she would have the ability to undertake the work of a basic child care worker. Unfortunately for the appellant, the weekly amount for child care workers is very low, in the order of $100 a week less than the average female employee.”

14     The material before the court did not coincide with respect to rates payable under the child care workers’ award and average weekly earnings. Nevertheless, it did show that, in fact, a person qualified to work at the level the appellant says she was already working at, without qualifications, attracted a weekly rate closer to the average female earnings rate. After five years work as a child care worker the average weekly rate identified in the material before the judge was, in fact, some $40 less than the average female working rate.

15     Against the reservations his Honour had referred to, he spoke of using a capital figure of $233000 as an aid to his assessment of future economic loss. That figure was derived from the net weekly figure in the region of $260 being an amount shown as earnt by a level 1 child care worker under the child care workers’ award.

16     His Honour then referred to the appellant’s evidence of an intention to marry and have a family. He also identified the appellant’s health before the accident as poor, but added that the appellant showed a measure of maturity in her evidence, particularly with her weight reduction and her now stable family situation.  His Honour spoke of a significant factor being the young age of the appellant, no doubt looking forward to a full social and working life. Against those observations, his Honour allowed the sum of $120000 as damages for future economic loss.

17     On the hearing of this appeal, counsel for the appellant submitted that the trial judge erred in selecting the capital figure of $233000. The submission was that that figure did not properly reflect the appellant’s potential earnings, but for the injury sustained in the accident. Nor did it make allowance for future wage increase in promotion and other like contingencies. In any event, the discount of the capital figure of $233000 by almost 50per cent for future contingencies was manifestly excessive. When proper consideration was given to all the circumstances, the amount awarded for loss of future earning capacity was manifestly inadequate.

18     Counsel for the respondent submitted that the modest wages derived by child care workers, the appellant’s residual earning capacity and significant adverse contingencies, meant that the award of $120000 could not be characterised as a wholly erroneous estimate of the appellant’s loss of earning capacity[1].

[1]      Davies v Powell Duffryn Associated Colleries Limited [1942] AC 601 at 617

19     An injured person recovers not merely because that person’s earning capacity has been diminished, but because the diminution of that person’s earning capacity is, or may be productive of financial loss[2]. On the established facts of the past and the probabilities of the future, the damages flowing from the loss of that capacity should be assessed having regard to contingencies favourable and unfavourable[3].  The appellant was on the eve of a working life.  Child care worker salaries would have been more helpful had she been involved in that work for some years after obtaining academic qualifications in that field. In my view, the average weekly earnings figures were of greater assistance to his Honour in the assessment of the loss of future earning capacity in this case than the child care workers’ award.

[2]               Graham v Baker (1961) 106 CLR 340 at 347

[3]               Mann v Ellbourne (1974) 8 SASR 298 at 307: approved in Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 18 and 19

20     The average weekly earning figures for females must be discounted, not just for contingencies, but also against the reality that the appellant was not likely to earn any more than that sum whenever she exercised her earning capacity in the future.

21     Of course, the appellant’s personal circumstances have to be considered, including the matters emphasised before us, particularly the serious disadvantage she now has in the work force because of her injuries. Against submissions put before this Court, I consider that a proper assessment of the appellant’s loss of future earning capacity is of the order of $150000 not the figure arrived at by the trial judge. I would allow the appeal and substitute that sum as the award of damages for loss of future earning capacity.

22.............. DEBELLE J:... The effect of the evidence is that before the accident the appellant would have had difficulty in equipping herself for anything other than menial tasks. The trial judge expressed concern that she could successfully complete any academic course to improve her employment prospects, and the evidence justifies that concern.

23     The accident has diminished the appellant’s prospects of obtaining full employment. It is more likely that she will be fit only for part-time employment and then in menial tasks. However, the possibility that she will at some time be fit for full-time employment cannot be ruled out.

24     Her difficulties suggest that it is unlikely that she would gain promotion or any significant promotion in any employment which she did secure. She will always, it seems, be employed in menial tasks but the range of available jobs is limited by her back injury. In short, she has prospects for future employment, albeit limited.

25     The usual difficulties involved in undertaking an assessment are exacerbated in this case by the fact that the appellant has, to all intents and purposes, no employment history.

26     The trial judge used the weekly wage available for a level 1 child care worker for the purpose of making his assessment of the loss of future earning capacity. The judge was faced with a difficult task. However, with respect, I think he erred in accepting that particular wages as being the base from which to assess the loss of future earning capacity. Given the finding that it is unlikely the appellant would have qualified for that employment, that wage is the more unsuitable. As I have said, she will, in all likelihood, be employed in menial occupations. It is, therefore, more appropriate to use the average weekly wage for female employees.

27     It is common ground that the average wage of female weekly employees was at the relevant time $483 which would reduce to $340 to allow for the incidence of taxation. Using the agreed multiplier, a capital sum of $305660 results. Making all due allowance for proper contingencies, I would allow $150000 damages for loss of future earnings. I, therefore, agree with the orders proposed by my brother Prior.

28.............. WILLIAMS J:. I agree with the order proposed by Prior J. I agree with the reasons which he has given and I agree with the reasons given by Debelle J.

JUDGMENT CITATIONS
LISTED IN ORDER OF APPEARANCE IN JUDGMENT

1      Powell Duffryn Associated Colleries Limited [1942] AC 601 at 617

2      Graham v Baker (1961) 106 CLR 340 at 347

3                Mann v Ellbourne (1974) 8 SASR 298 at 307: approved in Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 18 and 19