McGilvray v Amaca Pty Ltd
[2001] WASC 345
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: McGILVRAY -v- AMACA PTY LTD (Formerly JAMES HARDIE & COY PTY LTD) [2001] WASC 345
CORAM: PULLIN J
HEARD: 10, 11 & 12 DECEMBER 2001
DELIVERED : 14 DECEMBER 2001
FILE NO/S: CIV 1817 of 2001
BETWEEN: DAVID McGILVRAY
Plaintiff
AND
AMACA PTY LTD (Formerly JAMES HARDIE & COY PTY LTD) (ACN 000 035 512)
Defendant
Catchwords:
Damages - Assessment of damages - Mesothelioma - Future loss of earnings - Taxation effect - Lost years - Living expenses
Legislation:
Nil
Result:
Damages assessed at $1,077,333, plus interest
Category: A
Representation:
Counsel:
Plaintiff: Mr J R C Gordon
Defendant: Mr B J Goetze
Solicitors:
Plaintiff: Slater & Gordon
Defendant: Minter Ellison
Case(s) referred to in judgment(s):
Bowen v Tutte (1990) A Tort Rep 81-043
Clark v Kramer [1986] WAR 54
De Sales v Ingrilli (2000) 23 WAR 417
Easther v Amaca Pty Ltd (Formerly James Hardie & Coy Pty Ltd) [2001] WASC 328
Husher v Husher (1999) 197 CLR 138
James Hardie & Coy Pty Ltd v Roberts (1999) 47 NSWLR 425
Lawson v Flavell [2001] WASCA 272
Paul v Rendell (1981) 55 ALJR 371
Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 118
Rose v Ford [1937] AC 826
Sharman v Evans (1977) 138 CLR 563
Skelton v Collins (1965) 115 CLR 94
Spargo v Haden Engineering Pty Ltd (1993) 60 SASR 39
Van Gervan v Fenton (1992) 175 CLR 327
Case(s) also cited:
Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649
Conley v Minehan [1999] NSWCA 432
Coulthard v CSR Ltd & Anor, unreported; SCt of WA (Owen J); Library No 920496; 2 October 1992
CSR Ltd v Wren (1998) A Tort Rep 81-461
CSR Ltd v Young (1998) 16 NSWCCR 56
Graham v Baker (1961) 106 CLR 340
Griffiths v Kerkemeyer (1977) 139 CLR 161
Jongen v CSR Ltd & Anor (1992) A Tort Rep 81-192
Kember v Thackrah [2000] WASCA 198
Malec v J C Hutton Pty Ltd (1990) 169 CLR 638
Medlin v State Government Insurance Commission (1995) 182 CLR 1
Napolitano v CSR Ltd & Midalco Pty Ltd, unreported; SCt of WA (Seaman J); Library No 940487; 30 August 1994
Naxakis v Western General Hospital (1999) 162 ALR 540
Neal v CSR Ltd (1990) A Tort Rep 81-052
Nicholson v Nicholson (1994) 35 NSWLR 308
Nolan v Hamersley Iron Pty Ltd [2000] WASCA 304
Purkess v Crittenden (1965) 114 CLR 164
Sigler v Seddon (1984) A Tort Rep 80-633
Simon Engineering (Australia) Pty Ltd v Brieger, unreported; NSWCA; 6 September 1990
Simpson v Midalco Pty Ltd, unreported; FCt SCt of WA; Library No 7421, 7 December 1988
Sturch v Willmott [1997] 2 Qd R 310; (1996) A Tort Rep 81-373
Sullivan v Gordon (1999) A Tort Rep 81-524
The Board of Management of Royal Perth Hospital & Anor v Frost, unreported; SCt of WA; Library No 970069; 26 February 1997
Wallaby Grip Ltd & Anor v Pierce & Ors; James Hardie & Coy Pty Ltd v Pierce [2000] NSWCA 299
Watts v Rake (1960) 108 CLR 158
Western Australia v Watson [1990] WAR 248
Wilke v Astra Pharmaceuticals Pty Ltd [1999] NSWSC 1047
Wynn v NSW Insurance Ministerial Corp (1995) 184 CLR 485
PULLIN J: The plaintiff sues the defendant for negligence arising out of the supply of asbestos products which the plaintiff used in the 1970s. In consequence of that use, the plaintiff is suffering from mesothelioma.
The defendant admitted liability at the commencement of the trial, and on 10 December 2001 judgment was entered for the plaintiff with damages to be assessed. I now proceed to assess damages.
Findings of fact
The plaintiff is 54 years old, having been born on 20 October 1947 in Scotland. He came to Australia in 1969. In 1976, he set up his own small building business in Perth. In 1974, he was married to his present wife. He has three children: two sons aged 21 and 23 and an older daughter who has two children aged three and a half and five.
In 1982, he acquired a 40 per cent interest in a building business called L H Coleman and Co. In 1984, he acquired the whole business. From that time on, he conducted the business in partnership with his wife, who had a 50 per cent interest. There was no written partnership agreement. The partnership continued while the plaintiff wished it to do so. As the plaintiff says, if he had wished to dissolve the partnership at any time, he could have done so and would have done so if the circumstances required it; for example, if his marriage had failed, he would have dissolved the partnership. Happily, that circumstance never arose.
The business carried out insurance repair work necessary after storms, earthquakes, fires, cyclones, burglaries and malicious damage. It also carried out other general building work which often flowed from, or was associated with, the insurance repair work. About 70 to 80 per cent of the insurance repair work came from Defence Service Homes. This was a good customer, which had supplied work for the partnership over many years. Mr Douglas, from Defence Service Homes, was called. He spoke highly of the plaintiff and his business. He said, and I accept, that there was no reason to suppose that the work supplied by Defence Service Homes would not have continued into the future.
The plaintiff's activities were largely to do with quoting, supervising and administering contracts. He would do only minor physical work. The work was largely performed by subcontracting tradesmen. Until mesothelioma was diagnosed, he intended conducting the business for another 11 years until he was 65 years old. He saw nothing which might interfere with his work. He had suffered from a degenerative disease in his hip joint, but hip replacement operations had overcome the effects of this disease. I find that the effects of this disease would not have interfered with his plan to work until he was 65, although it is possible that he would have required another hip operation after 2001 which would have required about three months' rest and recuperation.
The plaintiff was a fit man. For five years until 1992, he would once a year walk about 120 kilometres on the Bibbulman Track. Another trip had been planned for this year. He enjoyed fishing trips with his friends. He regularly holidayed with his family, going camping and caravaning.
The partnership, D and D S McGilvray, earned the following net profits between June 1996 and June 2000:
1996
$ 99,876
1997
$199,382
1998
$104.926
1999
$ 99,254
2000
$151,254
The parties have reached agreement that the average annual net profit earned for the period of just over six years up until the onset of the disease, was $133,500.
The evidence of the plaintiff and Mr Douglas leads me to find that the partnership would have continued to make at least that annual net profit until he turned 65. The existence of the partnership resulted in the net profit being split between the plaintiff and his wife so that the burden of income tax was reduced.
On the basis of a profit of $133,500 per annum, and on the basis that the income continued to be split equally between the plaintiff and his wife, the income tax liability of each partner was $18,751.14 and the Medicare liability was $1,001.25, making a total of $19,752.39 each. The combined after‑tax earnings of the plaintiff and his wife was therefore $93,995.22 per annum.
In September 2000, the plaintiff had an operation on his left hip which successfully dealt with the problems which had developed with it. While he was recuperating and doing pool therapy, he noticed some back pain and tiredness. He saw his general practitioner, Dr Singh, about this. He was referred to a surgeon, Mr Larbalestier, and on 10 November 2000 he was admitted to hospital, where two litres of fluid found on his lungs was drained off. A needle biopsy failed to detect the cause of the fluid on the lungs. Backaches and tiredness continued. Two open biopsies were conducted, and the plaintiff was then informed that mesothelioma was suspected. On 11 May 2001, the plaintiff and his wife were informed by Mr Larbalestier that he had mesothelioma. He was told that his expectation of life was between six to 18 months.
He was then referred to the physician, Professor Bruce Robinson, for ongoing treatment, and to Dr Dean for pain relief treatment. Professor Robinson inquired whether the plaintiff wished to undertake the program of immuno‑therapy, and the plaintiff agreed. This immuno‑therapy is in its experimental stages. No claim is made for the costs associated with this therapy.
Mesothelioma is a ghastly disease. It is the worst of all the cancers. Asbestos fibres cause mesothelioma. The fibres migrate through the lungs to the pleura surrounding the lungs and after a long latency period causes tumours to develop. These tumours cause pain because the area is rich with nerve endings. Possible symptoms include night sweats, pain and breathlessness. The plaintiff suffers all of these symptoms.
A diagnosis of mesothelioma at this stage of medical knowledge is a death sentence. The prognosis is of a painful end to life after a short and painful and stressful illness. The average life expectancy after diagnosis is nine months.
The plaintiff and his wife have a close relationship. Mrs McGilvray has attended every one of the many visits the plaintiff has made to medical practitioners and hospitals. She has always driven him in her vehicle. Up until about three weeks ago the plaintiff could drive, but many of the visits to medical practitioners resulted in unpleasant news being given to the plaintiff, and he was not always capable of driving home. In the last three weeks, the plaintiff has been unable to drive at all because of the drugs that he has been prescribed. Three weeks ago, the plaintiff suffered an acute attack of breathlessness which caused the plaintiff great distress. The pain has been much greater since that attack. The plaintiff says that the pain can be relentless and rise above the effects of pain‑killing drugs. The plaintiff now finds himself often tearful and filled with negative thoughts. His plans for a happy retirement and a caravan trip around Australia have now disappeared forever. Professor Robinson is of the opinion, and I accept, that the plaintiff is only about three weeks from entering the final stage of his illness. Professor Robinson says that the first stage of the illness is characterised by minor symptoms with some pain. The second stage, which the plaintiff has been in now for some time, involves a much greater degree of pain, much greater fatigue, and a limitation on the patient's physical activities. The final stage, or terminal stage, is characterised by great pain, breathlessness and fatigue. In the end, the patient will be completely confined to bed.
The plaintiff has lost weight. Mrs McGilvray must now help him dress and get out of bed to go to the toilet at night. He is largely confined to the house. A trip of 20 metres leaves him breathless.
Both Professor Robinson and Dr Dean gave evidence about the plaintiff's stoical personality. He tends not to complain. This can have an adverse effect on pain treatment, because the treating doctors do not learn enough about the pain that the patient is suffering. Dr Dean said that this can often mean that this type of patient suffers more than a person who complains excessively. A stoical person is less likely to be given full pain‑relief medication. Fortunately, Mrs McGilvray attends all meetings with medical practitioners, and she is able to give a more realistic account of his condition at home. Dr Dean said that it is possible to observe by objective signs that a person is suffering pain. Dr Dean said that he could tell from the way the plaintiff carried himself that he was suffering pain. He noted instances of the plaintiff under‑reporting his symptoms.
In the final stage of the disease, the plaintiff will almost certainly spend time in hospital. This will be necessary in order to treat symptoms, to treat pain and at times to provide respite for Mrs McGilvray, who is keen to keep the plaintiff at home as long as possible.
I accept Professor Robinson's estimation of the costs associated with his future medical treatment, save that in relation to the drugs which will be administered, I accept Dr Dean's estimation.
Ms Gail Sharp, an occupational therapist, also gave evidence about her examination of the plaintiff's home, and she estimated the costs associated with modifications in the home to make living easier, and the costs associated with services for the plaintiff. I accept Ms Sharp's evidence in relation to those costs.
Professor Robinson estimates that after the plaintiff reaches the end stage in three weeks' time, he will then live for about another five or six months. He might live longer; he might live only a couple of months. I will work on the assumption that the plaintiff will be in the end stage for five months. During that five‑month period, there will be an escalating need for medical attention, pain treatment, equipment, and other services.
General damages
The plaintiff submits that general damages should be awarded in the range from $130,000 to $200,000, and the defendant suggests a figure around $130,000. I have decided that $160,000 is the figure which should be awarded. The plaintiff has suffered all of the possible symptoms, and to a considerable degree. His suffering of pain and breathlessness is aggravated by night sweats, the depressing realisation of impending death, and the realisation that he will not enjoy the aspects of his life that he has in the past enjoyed and for which he has worked hard. He was a fit and healthy man before the onset of the disease, and this fact only serves to emphasise the awful aspects of the illness. He was planning to visit his parents in Scotland. They cannot travel. The illness means that the plaintiff cannot now travel. This means that he will never see his parents again. In reaching this decision, I have taken account of what was said by the High Court in Paul v Rendell (1981) 55 ALJR 371 at 372 and in Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 118 at 125. I have also considered, but not been ruled by, awards of general damages in other cases noted by Scott J in Easther v Amaca Pty Ltd(Formerly James Hardie & Coy Pty Ltd) [2001] WASC 328 at [83] to [86].
Loss of expectation of life
Were it not for the disease, the plaintiff, at 54, could have expected to live for another 28.7 years. The award of damages under this head is a conventional additional sum: see Rose v Ford [1937] AC 826 at 847; and see Luntz, Assessment of Damages, 3rd ed, par 3.4. I allow $15,000.
Loss of earning capacity
The plaintiff left school at 15, and his ability to earn a living has come from the development of his skill as a builder and his skill in attracting work and performing it well. The plaintiff and his wife entered into no formal partnership agreement. The partnership was therefore one which could be terminated on notice at any time. The plaintiff was the source of the partnership's income. I find that the income which is derived from his capacity to earn income is earned by the partnership and was at all times under his control.
The plaintiff is to be compensated for his loss of earning capacity. The financial loss occasioned by his loss of earning capacity is the loss of what the injured plaintiff would have expected to have under his control, and at his disposal, by exercising that capacity. The inquiry must be about what the plaintiff could have done in the work force but for the accident, and what sum of money the plaintiff would have had at his disposal. The plaintiff's lost earning capacity is the loss of his ability to control and dispose of income he would have earned if there had been no accident. In this case, that income is the net profit of the partnership. In my view, it would be wrong to make an award on the basis that his damages must be limited to his share only of the profits he would have received from the continuation of the past partnership arrangements: see Husher v Husher (1999) 197 CLR 138.
Loss of earning capacity - taxation issues
The defendant did not argue against that approach but contended that, based on the decision in Spargo v Haden Engineering Pty Ltd (1993) 60 SASR 39, the plaintiff's damages should be calculated by assuming that he earned all the partnership income and was taxed as though he were a sole trader. In other words, his loss of earning capacity should not be calculated by taking the aggregation of the after‑tax income of the plaintiff and his wife, but on the net after‑tax income arrived at by taking the net profit of the partnership and deducting the tax which the plaintiff would have paid if he alone had earned that sum. The Court held in Spargo's case that was the correct approach. The plaintiff in Spargo's case had conducted his business by way of a company which was a trustee for a discretionary family trust. The income from the trust was distributed among family members, and the total tax paid by the family was much less than would have been paid by the plaintiff if he had earned the same total income. The Court held that it was appropriate to regard the total income of the trust as the measure of the plaintiff's gross earning capacity, but that the net earning capacity must be calculated by reference to tax which the plaintiff would pay on the total income. Perry J explained the decision in this way at pages 53-54:
In this case, the starting point in determining the true measure of the incapacity was the total income produced by reason of the plaintiff's exertions in the business, even although by reason of the mechanism of the family trust, that income was distributed, at least in large measure, to other family members.
But it does not follow that if the Court should properly have regard to the total income produced in the business in assessing the plaintiff's loss of earning capacity, in determining the net income for the purpose of calculating the amount to be allowed for loss of earning capacity, only the small amounts of tax, if any, paid by the various family members with reference to the amounts allocated to them, should be deducted. To do so, is to be over‑generous to the plaintiff. If he is to be given the benefit of aggregating the distributed income for the purposes of measuring his earning capacity, the allowance for income tax in determining the net earnings should approximate the amount which he might have paid on the gross earnings if they had been brought to account by him rather than by the family trust."
In Husher v Husher (supra), in the joint judgment, some obiter was expressed about the adjustment to be made for taxation. In the joint judgment at page 149, their Honours noted that the question did not fall for decision in that case. Their Honours, nevertheless, posed the question, "Should any account be taken of the taxation consequences of income‑splitting arrangements like those the appellant had made?" Their Honours explained that assessment of damages involves questions of judgment and estimation and that the process can never be exact, and then said:
"Even so, the assessment of lost earning capacity requires some care in identifying (as best one can) what net income the plaintiff would have had at his or her disposal. That may require some consideration of the taxation consequences of different arrangements."
Their Honours then referred to Spargo's case, referred to part of the passage the case that I have quoted above, and then simply added at page 150:
"We accept that an adjustment of the kind proposed by Perry J was not inappropriate in that case."
That is a clear indication to me that the judgment of Perry J in Spargo's case is not to be applied as a rule in all cases.
In Easther v Amaca (supra), I was informed that Spargo's case was discussed between the bench and counsel appearing for the plaintiff. That case was similar to this case in that the plaintiff's earning capacity produced income which was directed into a partnership which resulted in the sharing of income with his wife. Scott J did not discuss Spargo's case in his reasons for decision, but appears in [91] to have decided against applying Spargo's case. He decided that the income splitting between the plaintiff and his wife would have continued in the same manner as had been the case in the past. I was informed by Mr Gordon, who appeared as counsel for the plaintiff in that case, that the claim for lost earning capacity, which was allowed in full, had been calculated by aggregating the after‑tax income of the two partners.
Counsel for the defendant in this case suggested that I should apply the reasoning in Spargo's case here. I decline to do so. I find that the plaintiff and his wife would have continued to operate the partnership until he retired.
In my view, there is no reason, in principle, why that finding of fact should be ignored. In my view, it is not appropriate to estimate past and future loss of earning capacity by arriving at an after‑tax figure which assumes that the plaintiff earned all of the income of the partnership as a sole trader. I assume that the defendant considers that this would have produced a much lower after‑tax income, brought about by applying personal income tax rates to the net profits of the business on the basis that he earned this himself. In my view, this would not be necessarily so. As counsel for the defendant pointed out in cross‑examination, this plaintiff, if he had dissolved the partnership and earned all the income himself, could have contributed a sum to superannuation which would have given him a tax deduction of approximately $75,000. This contribution, although an expense for tax purposes, would have benefited the plaintiff. The superannuation contribution would have benefited his superannuation fund, and he would have collected the proceeds at retirement or directed them to his wife on his death. This shows - as the cases show - that the facts of the particular case are all important.
In my opinion, I should, in this case, have regard to what had happened over a number of years. The plaintiff chose to direct his earnings into the partnership, and his loss of earning capacity should be calculated, in my opinion, by aggregating the after‑tax income of the plaintiff and his wife. This will form, in my view, the correct foundation for embarking on the calculation to calculate the value of the plaintiff's earning capacity which is lost due to the injury.
Loss of earning capacity - the "lost years" - deduction of living expenses
There is a further issue between the parties concerning the loss of earning capacity. It concerns the calculation of damages for the "lost years". The plaintiff is 54, and he expected to work until he was 65. He is expected to live for only another six months. He is still entitled to be compensated for his lost earning capacity during the 10 lost years: see Skelton v Collins(1965) 115 CLR 94. Sharman v Evans (1977) 138 CLR 563 decided that during the lost years, there should be a deduction for living expenses, that is, expenditure necessary to maintain the plaintiff, which will not be incurred during the lost years: see James Hardie & Coy Pty Ltd v Roberts (1999) 47 NSWLR 425. At that point, there is no difference between the parties.
The difference between the parties is about the amount of the deduction for living expenses which will not be incurred during the lost years. The plaintiff contends for a deduction of about $60 per week, and the defendant contends for a deduction of 20 per cent from the amount calculated as lost earning capacity. The plaintiff has settled upon the figure of about $60 per week because of the evidence given by the plaintiff who, at transcript page 56, was asked a question about what his expenses were "in terms of incurring your income outside of the sorts of expenses that are claimable under taxation". He said that he would buy lunch when he was working, and he would buy socks and shorts and T‑shirts. He said he estimated these expenses at about $3,290 each year. The final question and answer in this series of examination‑in‑chief was:
"And so did you estimate that that was about $3290 each year that you would spend on earning your income?---Yes; for the year, yes."
Counsel for the plaintiff chose to ask those questions because he interpreted the decision in James Hardie & Coy v Roberts (supra) as meaning that only that kind of expenditure would be deducted from the calculation of loss of earning capacity in the lost years. In that case, Shellar JA, whose judgment was agreed with by Spigelman CJ and Stein JA and Giles JA, said at [87]:
"In arriving at the economic value to the plaintiff of the faculty or skill there must be deducted from probable future earnings the expenditure required to enable the future earnings to be earned. This is so whether the plaintiff's life expectancy is reduced or not: see Sharman v Evans (at 577). Even if the life expectancy is not reduced expenditure such as fares and work clothing will be deducted. If the life expectancy is reduced the range of expenditure deducted will be greater and extend to expenditure no longer incurred in maintaining the plaintiff so that his or her earning capacity can be exploited. For that reason living expenses which would have enabled the plaintiff to earn are deducted in a claim for the lost years but not where life expectancy is unaffected. But the deduction goes no further."
Meagher JA also wrote a judgment on this point, and he concluded that in assessing damages for the loss of earning capacity to a living plaintiff whose life has been shortened, that deductions should be confined to the "bare necessities".
In my opinion, the living expenses saved are not confined to expenses associated with what might be called business‑related living expenses. The plaintiff's approach seems to assume that the expenses are only those associated with actually earning a living, whereas, in my view, the correct view is that during the lost years the plaintiff will not have the expense of keeping himself alive in order that he may go out and work. I therefore consider that the figure of $3,290 is an inadequate deduction for "living expenses". On the other hand, I do not agree with the defendant's suggestion that the deduction should be 25 per cent of the calculated figure for lost earning capacity. Counsel for the defendant said that this figure was derived from Table 9.1 at page 396 in Luntz (supra) which had been referred to in De Sales v Ingrilli (2000) 23 WAR 417. In my view, that table does not provide any guidance in these circumstances. It is a table suggesting a range of figures in relation to fatal accident claims. De Sales' case was a fatal accidents case concerned with a dependant's claim.
In my opinion, the plaintiff's evidence provides some guide to the plaintiff's living expenses, but it is too low. I would estimate the costs of living expenses for the plaintiff at $6,500.
As to contingencies, the defendant suggests that I should deduct 15 per cent for contingencies. In my opinion, that figure is too high. The time period under consideration is short - just over 10 years. This is a relevant consideration: see Clark v Kramer [1986] WAR 54 at 62. The plaintiff was a life‑long non‑smoker, and he has had no significant illness. He had always led an active lifestyle. I have already mentioned his treks on the Bibbulman Track. He gave evidence about his fishing expeditions to Exmouth, one of which was shortly before he became ill. I have found that he would have worked until he was 65. The assessment for contingencies involves a consideration of unfavourable contingencies and favourable contingencies. Cases such as Bowen v Tutte (1990) A Tort Rep 81-043 and Lawson v Flavell [2001] WASCA 272 show that the general rule is that the standard rate of discount for contingencies is in a range between 2 per cent and 6 per cent. I note that the figure which is being employed for the calculation of loss of earning capacity is the average of the five years' earnings before June 2000. In a sense, the average reflects the contingencies associated with the business, and net profits of the partnership in earlier years at one stage exceeded $400,000. Mr Douglas explained that this is partly to do with the nature of the insurance repair industry. If there is a natural disaster which causes a lot of damage, then the work the partnership would perform would be considerable. Mr Douglas regards the industry as having gone through a quiet period, so there is a prospect that at some time in the next 11 years, there will again be some natural disaster which would have produced substantial income for the partnership. This is a favourable contingency which might increase earnings.
The deduction for contingencies, however, must take into account the possibility of some other unforeseen circumstance which might have adversely affected the plaintiff's ability to work. His hips in the past have given him trouble, although the operations have repaired the problem. I have already found that this would not have affected his ability to continue working, but it is clear from the evidence that he can develop problems which will mean that time has to be taken off for an operation. In my view, a deduction for contingencies of 5 per cent is appropriate.
Future loss of earning capacity
I now turn to find the amount of future loss of earning capacity. I have found that the plaintiff is expected to live for a further six months. On that basis, his loss for that period will be $45,822.66. For a further 10 years at an annual loss of $93,995.22, applying the weekly multiplier of 395.5 and taking into account living expenses not incurred during the lost years, the result is as follows: ($92,995.22 - $6,500) equals $87,495.22 multiplied by 395.5, divided by 52, equals $665,468. Adding that sum to the loss for the next six months ($45,822.66), produces a total for future loss of earning capacity of $711,291.11. This is reduced by the 5 per cent allowance for contingencies to $675,726.
Past loss of earnings
It is necessary to take into account the hip surgery which was undertaken in September 2000, and the planned right hip surgery. In each case he would have been off work for three months, meaning that during the 2001 financial year he would not have been working for six months. Thus, the partnership earnings would have been $66,750 had it not been for the mesothelioma. As usual, these earnings would have been shared between the plaintiff and his wife, so that each would have earned $33,375 before tax. Tax on that amount, along with the Medicare levy would have reduced their earnings after tax to $26,482.35. Multiplying this by two equals $52,964.70 after tax. This would have been the total of the net after‑tax earnings of the plaintiff and his wife but for the asbestos‑related disease in 2001.
The actual net profit of the partnership was $2,785 (after deducting some rental income). The amount of $50,179.70 therefore represents the earning capacity for the 2001 financial year, assuming there had been no mesothelioma. I find that the plaintiff's ability to work in the financial year 2001, after allowing for the hip operation and the planned hip operation, was reduced by three months.
I therefore find that his loss to 30 June 2001 was $23,697 (ie $52,964.70 divided by two equals $26,482.39, minus $2,785 equals $23,697). The sum of $2,785 which I have deducted, is the amount actually earned by the partnership after deducting some rental income.
From 1 July 2001 until trial (23 weeks), the plaintiff was able to perform some work, but in performing that work expenses of the partnership continued. It is clear that after working for three months in the preceding financial year, produced net profit of less than $3,000. Things have been much worse in the period from 1 July 2001 until trial. In my view, his loss of earning capacity in that period should be calculated on the following basis: $93,995.22 multiplied by 23 weeks, divided by 52, equals $41,574.
Thus, the past loss of earning capacity totals $65,271, which I would round off at $65,000.
Past care and services
Under this head, I have had regard for what was said in Van Gervan v Fenton (1992) 175 CLR 327 at 338. The defendant, by its negligence, placed the plaintiff in the situation where he needs assistance in relation to cleaning, housekeeping, meal preparation and similar services. The calculation of an amount for loss concerning past care and services falls into two parts. The first is from 10 November 2000, when the plaintiff was admitted to hospital and had fluid removed from his lungs, until 11 May 2001, when mesothelioma was positively diagnosed. During this period the plaintiff had many visits to medical practitioners and underwent three procedures requiring admission to hospital. After each bout of surgery, the plaintiff had to be given assistance. Mrs McGilvray drove the plaintiff to and from each doctor's appointment and to and from each of his hospital visits. A fairly modest amount of one hour per day at the personal care rate of $25 has been claimed, and, in my view, that is reasonable. On that basis, over 25 weeks, the amount arrived at is $4,462.
The second part is from 12 May 2001 until the end of the trial which is a period of 30.5 weeks. At the beginning of that period, the tumour was already nearly one centimetre in width. It was causing breathlessness, pain and anxiety, and, in my view, it would be reasonable to allow an amount for personal services at $461.25 per week, as to which there was evidence from Ms Sharp, the occupational therapist, which I accept. This is calculated on the basis of one hour per day personal care, 12 hours per week home management, and garden maintenance one to two hours per week. Those figures seem relatively modest, and I find they are reasonable, as is the weekly rate. The amount produced as a result is $14,068.12.
The total for past care and services is therefore $18,530.12, which I round off to $18,000.
Future care and services
In arriving at the following costings I have taken into account the evidence of Ms Sharp. I accept her estimates of costs. Professor Robinson examined Ms Sharp's report and considered that the requirements she had identified were reasonable. That assessment is of considerable value because Professor Robinson has treated between 600 and 1000 patients with asbestos‑related diseases in his career.
For the next few weeks (say, three weeks) before the end stage begins, I would allow an amount of $621.25 per week. This is the same rate as for past care and services in the period after May 2001, but adding to that weekly rate an amount of $160 per week for transport costs. That gives a total of $1,863.75.
During the end stage of 20 weeks, I would allow the weekly rate, which is taken from Ms Sharp's report, of $4,587.35. That equals $91,747, less an adjustment for four weeks which the plaintiff will spend in hospital and a further three weeks in a hospice. That produced a total of $58,067. It is clear that in the period from trial until the plaintiff's death, the plaintiff will require a considerable amount of home assistance. He already needs help dressing, and progressively will require help to shower, to shave and to carry out daily functions.
The total amount allowed for future care and services is therefore $59,930, say, $60,000.
Loss of ability to sell business as a going concern
The experience of the plaintiff in acquiring the business showed that someone running this type of business needs to locate a person who is suited to the work, and then to sell the business to that person. The difficulty is that the news of the disease came on just when the plaintiff was recuperating from his operation, and the onset of the symptoms has been so rapid that he has not been able to continue conducting the business. This is reflected by the draft 2001 financial statements, which indicate that the partnership's net profit to June 2001 amounts to only $8,379. In effect, the business has collapsed. The plaintiff claims a loss of $50,000. There has been no evidence led to support this figure. All I have to work on, by way of evidence, is the fact that the plaintiff purchased the business in 1982 and 1984 for a total of $10,000. It is clear that most of the goodwill is in the plaintiff's reputation. If he sold the business, that aspect of goodwill would disappear. I would allow $20,000 under this head.
Past medical and out‑of‑pocket expenses
Past medical and out‑of‑pocket expenses are agreed at $21,912.
Future medical and out‑of‑pocket expenses
Future out‑of‑pocket expenses, which will include anticipated pain‑relief procedures, hospital fees, medications, supply of wheelchairs and all of the associated paraphernalia which go to ease suffering at the end of the plaintiff's life, are claimed at $48,195.87. This may be greater if the plaintiff lives longer than six months, and less if he dies sooner. I am acting on the prognosis of six months. The only issue between the parties concerned the possibility of the pain‑relief procedure involving the use of a CADD pump, which is a device which is implanted surgically and which allows the patient to self‑administer drugs close to the spine to combat pain. If this is necessary, and, in my opinion, on the evidence it is likely to become necessary, then the pump costs $7,500 and the hospital fees and medication administered by the pump cost $5,240. (Dr Dean did express a view at one stage in his evidence that the pump would not be necessary, but that was on the hypothesis that the plaintiff would only live weeks rather than months. I have accepted other evidence that he will live for some months.) In my view, the amount for the hospital fees and the medication is reasonable, but the amount claimed for the pump is not reasonable. It is clear from the evidence of the medical practitioners that these pumps have a value. Often, after a terminally ill patient dies, the pump is simply donated to a hospice or hospital. That means that the pump has a value. I would only allow $1,000 for the pump. That therefore reduces the amount to be allowed for future medical and out‑of‑pocket expenses to $41,695.
Result
I award damages of $1,077,333, plus interest on the appropriate heads of damages at 6 per cent. The $1,077,333 is arrived at as follows:
General damages $ 160,000
Loss of expectancy of life $ 15,000
Past loss of earning capacity $ 65,000
Future loss of earning capacity $ 675,726
Past care and services $ 18,000
Past medical and out-of-pocket expenses $ 21,912
Future care and services $ 60,000
Future medical and out‑of‑pocket expenses $ 41,695
Loss of ability to sell business as a going concern $ 20,000
$1,077,333
10
0