Miller v Galderisi

[2009] NSWCA 353

New South Wales

Court of Appeal

CITATION:	Miller v Galderisi [2009] NSWCA 353
HEARING DATE(S):	14 October 2009
JUDGMENT DATE:	10 November 2009
JUDGMENT OF:	Allsop P; Basten JA; Macfarlan JA
DECISION:	(1) Appeal allowed. (2) Set aside the verdict and judgment, in the sum of $152,403.11, of Delaney DCJ of 16 April 2009. (3) Judgment for the respondent in the sum of $9,111.11. (4) The respondent to pay the appellant’s costs of the appeal. (5) The respondent to have a certificate under the Suitors’ Fund Act 1951, if qualified.
CATCHWORDS:	DAMAGES - motor vehicle accident - damages for commercial domestic assistance - gratuitous assistance currently provided - only slight chance of plaintiff needing commercial assistance as a result of injuries suffered in the accident - whether damages for commercial assistance warranted - Motor Accidents Compensation Act 1999, s128 - DAMAGES - future economic loss - loss of earning capacity - speculative possibility only of plaintiff having earned significant income but for the accident - whether damages for loss of capacity warranted
LEGISLATION CITED:	Evidence Act 1995 Motor Accidents Compensation Act 1999 Suitors' Fund Act 1951
CATEGORY:	Principal judgment
CASES CITED:	House v The King [1936] HCA 40; (1936) 55 CLR 499 Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 Nominal Defendant v Lane [2004] NSWCA 405 State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 Wynn v NSW Insurance Ministerial Corporation [1995] HCA 53; (1995) 184 CLR 485
PARTIES:	Sheryl Jennifer Miller (Appellant) Rocco Galderisi (Respondent)
FILE NUMBER(S):	CA 40140/09
COUNSEL:	S E McCarthy (Appellant) A McSpedden (Respondent)
SOLICITORS:	McLachlan Chilton (Appellant) Napier Keen (Respondent)
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	150/06 Parramatta Registry
LOWER COURT JUDICIAL OFFICER:	Delaney DCJ
LOWER COURT DATE OF DECISION:	16 April 2009

CA 40140/09

ALLSOP P
BASTEN JA
MACFARLAN JA

10 NOVEMBER 2009

MILLER v GALDERISI

Judgment

1 THE COURT: The respondent was injured in a motor vehicle accident which occurred on 24 November 2004. The appellant admitted liability for the accident. Accordingly, the hearing of an action brought by the respondent for damages proceeded as an assessment only. The issues which arise on this appeal relate to awards of damages made by the primary judge, Delaney DCJ, in respect of domestic assistance and past and future economic loss, as well as to a decision of his Honour to admit into evidence a statement of a prospective employer of the respondent.

2 The respondent was aged 61 at the time of the trial in 2008. He had qualified in Italy as an auto electrician before coming to Australia in 1970. His work history thereafter was chequered, as a result of injuries and illnesses which he suffered. He sustained a lower back injury at work in 1973 which continued to cause him lower back pain at the time of the subject accident, in November 2004. He suffered further injuries to his neck and back in motor vehicle accidents which occurred in 1989 and 1998. He had heart attacks in 1997 and 1999 and a stroke in 2004. The primary judge found that these events seriously affected his ability to work and that at the date of the accident in 2004 he had significant residual disability as a consequence of the events.

3 The judge held that as a result of the 2004 accident, the respondent suffered “soft tissue injuries to his neck, low back and [left] hip and that such injuries aggravated pre-existing degenerative changes in his cervical and lumbar spines”. He found that such aggravation was permanent and that the accident had given rise to an anxiety state in the respondent to a degree that was not present before. This was held to have sapped the respondent’s confidence and to have interfered with his ability to carry on his life “in a reasonable manner”. The judge found that it reduced such capacity as the respondent had for work to nil.

4 Although he had undertaken no significant work since 1998, the respondent claimed that immediately prior to the accident his health had improved to such an extent that he was able to return to work and that he had arranged part-time employment with Hitech Auto Electrics. In a letter of 1 September 2005 the respondent’s solicitors described the arrangement differently. They said that their client had “made enquiries as to a possible position undertaking light duties” and Hitech Auto Electrics had agreed to provide a position for the respondent “to see if he was able to undertake that work”.

5 Over objection, the judge admitted a statement of Mr Peter Papapetros from Hitech Auto Electrics. Mr Garry Papapetros was the owner of the business but Mr Peter Papapetros, his father, asserted in his statement that he had authority to make decisions on the “hiring and firing of” staff. By the time of the trial Mr Peter Papapetros was deceased. Paragraph 6 of the statement was in the following terms:

“I can’t remember the exact date but a short time prior to the accident I suggested to Rocco for him to come in and talk to me about a possibility of starting. On the day of the accident he was due to see me and we were to discuss what hours he would be interested in working, what pay he was to receive, what conditions of employment and so on.”

6 Mr Papapetros’ statement said that he had in mind paying the respondent something in the order of $17 to $20 per hour and that he was going to offer him full-time employment.

7 The judge made the following comments about the statement:

“74. The defendant submitted that this statement was so ambiguous and/or inconclusive that the court could not accept that it constituted a firm offer of work. There is much force in this submission. However, the statement provides some evidence of the availability of work as an auto electrician and the likely income one could gain from it if one was fit and well enough to undertake the work. It is not insignificant that Garry Papapetros was not called to give evidence about the capacity of his business to have employed Mr Galderisi at the time of the accident or to confirm any of the material contained in his late father’s statement” (Judgment [74]).

8 As to the respondent’s earning capacity the judge said that “[t]aking into account the plaintiff’s pre-accident medical condition and the inconclusive nature of the proposal by Mr Papapetros, I find that it is unlikely that Mr Galderisi would have ever worked on a full-time basis or even 30 hours per week, having regard to his medical history”.

9 As to past economic loss, his Honour said:

“76. … I am … satisfied that he did have at the date of the accident some slight theoretical residual earning capacity that would depend upon his heart condition stabilising and him being able to sit and stand for a sufficient period to be able to carry out his duties. It had already been demonstrated that heavy work was beyond him. Counsel for the plaintiff suggested that he had the capacity to earn $250 net per week. In my opinion, it is unlikely that that capacity would have exceeded $100 per week to supplement his disability pension. The accident was almost four and a half years ago. I propose to allow the plaintiff the amount of $25,000 for past loss of opportunity to take up part-time work as an auto electrician” (Judgment [76]).

10 As to future economic loss, the judge said:

“77. Turning now to the claim that the plaintiff has lost future economic capacity, I consider the provisions of section 126 of the Act and make the following assumptions:
(a) That, uninjured by the 2004 accident, the plaintiff had a theoretical capacity, due to his knowledge and experience in the industry, to work as an auto electrician.
(b) Because he had not worked since 1998 and had serious medical problems his prospects of obtaining full-time work were very low.
(c) He may have obtained some casual part-time work but not on a continuous basis.
(d) I find that but for the accident he would have continued to have pain, discomfort and restriction of movement from his pre accident back condition and been at risk of further heart problems. The accident has made his back and neck worse.
78. I reject the submission that he would have obtained a full time job and retained it to age 65. His future prospects were uncertain due to his previous employment history and the uncertainty of the job offer. I therefore allow a cushion or buffer for lost opportunity to exercise the plaintiff’s small residual earning capacity in the sum of $15,000, including any superannuation component”.

11 As to the respondent’s claim in respect of domestic assistance, the judge found that the respondent had a need for domestic assistance which had been increased by the accident. He found however that that increased need did not reach “the threshold of six hours and six months” for the award of damages in respect of the provision of gratuitous domestic assistance (see Motor Accidents Compensation Act 1999 s 128). Nevertheless the judge awarded damages for future domestic assistance “based on commercial rates”. He allowed “four hours per week permanently to deal with the additional need created by the effects of the accident”. On the basis that the respondent had a life expectancy of a further 24 years, he awarded damages of $103,292 under this head.

12 The judge also allowed amounts for past and future medical expenses and treatment totalling $9,111.11 which are not in issue on the appeal.

13 We turn to consider the grounds of appeal.

Ground 1 – Damages for Commercial Domestic Assistance

14 The appellant contended that the award made by the primary judge under this head was unwarranted as there was no evidence that as a result of the injury suffered by the respondent in the 2004 accident, or indeed for any reason, he required, or would require, commercial domestic assistance.

15 The evidence indicated that such domestic assistance as the respondent needed was being provided at the date of trial by his wife, and to a limited extent by his adult son who lived with him. The appellant pointed out, correctly, that there was no evidence that this gratuitous assistance would cease at some time in the future.

16 In our view, the award made by his Honour cannot be justified. It was made upon the assumption that the respondent required commercial domestic assistance immediately and would continue to do so for the rest of his life. However, it is clear that he did not require it immediately because it was being provided gratuitously, though to the extent that it could be attributed to the accident, not at a level of intensity that permitted recovery from the appellant.

17 As the assessment made by the primary judge cannot be justified, it is necessary for this Court to make an assessment.

18 There is no reason in principle why, if the evidence justifies it, damages may not be awarded in respect of a need for commercial domestic assistance likely to arise in the future after the availability of gratuitous assistance ceases. Such an award of damages was, for example, made in Nominal Defendant v Lane [2004] NSWCA 405. Giles JA (with whom Ipp and Tobias JJA agreed) said in that case:

“75 …. It was for his Honour to find what was likely to occur after the respondent’s mother reached 65. He was evidently not satisfied that the respondent would be cared for, in an appropriate manner, by some combination of other family members and the townsfolk; hence he made allowance for professional care. It was well open to his Honour to take that view. The judge was looking ten years and more ahead. The respondent’s sister and brother, and no doubt the cousins, had their own lives, and with due regard to familial and cultural responsibilities in my view it was open to the judge to think it unrealistic to assess damages on the basis that, when the respondent’s mother was unable properly to do so, the respondent would receive the requisite care from other family members. Nor could the townsfolk be expected to contribute in any significant way to the requisite care”.

19 The evidence accepted by the primary judge at the additional domestic assistance required as a result of the accident, assessed at four hours per week, was, since the accident and at the time of trial, being provided by the respondent’s wife, with limited assistance from his son. Whether that assistance would continue to be provided by them on a gratuitous basis was a factor which the primary judge was entitled to take into account. If that circumstance were to change in the future, domestic assistance would, foreseeably, be required from a commercial provider. However, that expense was neither immediate nor inevitable. No doubt the likelihood of the contingency would increase with time, but other factors would have a contrary tendency.

20 There are four relevant variables, three of which relate to the condition of the respondent and the fourth to the circumstances of the carers. First, the calculation undertaken by the primary judge assumed a life expectancy of 24 years (the respondent was 61 years of age at the time of the trial). The respondent’s medical history, as set out in the judgment of the primary judge, demonstrated a significant possibility that he would not survive until the age of 85 years. Any amount awarded must be discounted accordingly. Secondly, the greater proportion of his disabilities resulted from his pre-existing condition and not from the accident. Having suffered a stroke and two heart attacks, there was a significant possibility that further ill health would overwhelm the needs created by the accident. Thirdly, though perhaps less significant in this case than in others, due to the respondent’s state of health, age alone is likely to create a similar need for domestic assistance, in later years, to that created by the accident.

21 The fourth factor concerns the ability and willingness of family members to provide assistance. The primary carer was the respondent’s wife. At the date of trial, she was 51 years of age. She was sufficiently fit and healthy to be providing the assistance he required at that time and, indeed, was in receipt of a carer’s pension for that purpose. Undoubtedly age will weary her, but, apart from the usual contingencies, there was no reason to suppose that she would not continue to be able and willing to assist him for many years to come. Similarly, there was no evidence of likely inability on the part of the son, although he might relocate to an area too distant from his parents’ home to permit him to provide regular assistance. However, his assistance was largely with lawn mowing and constituted a small part of the domestic assistance required. The likelihood that he would not be in a position to visit his parents on a sufficiently frequent basis to help in that regard was a contingency which should be taken into account, but was far from a certainty, both as to the event and its timing.

22 In Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 at 643, Deane, Gaudron and McHugh JJ accepted that future events “may be predicted and the hypothetical may be conjectured” and required that the Court take its assessment of chance into account unless a particular chance was “so low as to be regarded as speculative – say less than 1 per cent”. However, in most cases prediction and conjecture do not in practical terms allow for such precision. As explained by Brennan and Dawson JJ at 640, damages founded on “hypothetical evaluations defy precise calculation”. In most cases, the exercise is better described as a form of speculation guided by knowledge of the plaintiff’s past and expectations, derived from general experience, as to the future.

23 In Malec, the question was whether the damages caused by the accident would have occurred in any event. In the present case, the question is whether the damage which has occurred will result in a compensable loss at some future time, taking into account the contingencies referred to above. The possibility of such a loss is perhaps not entirely fanciful, but the chance of it occurring is slight.

24 In awarding damages for loss of earning capacity, allowance is routinely made for contingencies or vicissitudes which may, absent the tortious injury, have caused loss in any event. Conventionally, a figure of 15% is allowed for such contingencies: see State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 at [31]-[33] (Mason P) and the authorities referred to, including Wynn v NSW Insurance Ministerial Corporation [1995] HCA 53; (1995) 184 CLR 485 at 497-498 (Dawson, Toohey, Gaudron and Gummow JJ). There is no conventional allowance for the provision of domestic assistance on a commercial basis at some future point in time, against the possibility that the gratuitous carer may no longer be able or willing to provide such care. If any such convention were to be adopted, it would, as with vicissitudes, require the plaintiff’s particular circumstances to be taken into account. The respondent’s circumstances in this case militate against any such allowance. Accordingly, it is not appropriate in this case to simply pluck a figure out of the air because there is a remote, though not entirely fanciful, chance of the need for commercial domestic assistance in the future.”

25 The appellant contended that an award under this head was not permissible because the respondent’s case at trial did not include a claim for commercial domestic assistance. We do not accept this submission. The respondent’s particulars of his claim expressly sought an award at commercial rates for the period after gratuitous care had ceased to be available to the respondent. Further, an agreement was made between the parties, and announced to his Honour, as to the hourly cost of commercial domestic assistance. The judge was informed of this agreement upon the second, and final, day of the trial. The announcement by counsel for the respondent of the agreement clearly indicated that the claim made in the particulars was still on foot.

Ground 2 – Statement of the Late Mr Papapetros

26 The appellant objected to the tender of this statement (as to which see [5] above) upon the basis that its probative value was “substantially outweighed by the danger that the evidence might … be unfairly prejudicial to” the appellant (Evidence Act 1995, s 135). The appellant asserted that there were significant inconsistencies between the statement and other evidence in the proceedings and that the appellant would be unfairly prejudiced if the statement were admitted into evidence because he would not have the opportunity to cross-examine the maker of the statement. These objections were considered by the primary judge. They were rejected essentially upon the basis that the appellant’s position would be sufficiently protected by the court’s ability to determine the weight to be accorded to the statement, once in evidence. In our view, it was open to the judge to take this approach and the appellant has not shown that the judge committed any error which vitiated the exercise of his discretion (see House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-5).

27 In his final judgment, the judge accorded only limited significance to the statement. As pointed out in [7] above, he indicated that it provided some evidence of the availability of work as an auto electrician and of “the likely income one could gain from it if one was fit and well enough to undertake the work”. The qualification made by his Honour as to fitness for the work was an important one. It is difficult to imagine that there would not have been work available for a qualified (as the respondent was) and fit auto electrician. The major issue in the proceedings was whether the respondent was in fact fit for any work prior to the 2004 accident. The statement of the late Mr Papapetros was not of significance as to this question. As his Honour anticipated when the statement was admitted into evidence, admission of the statement did not unfairly prejudice the interests of the appellant.

Grounds 3 and 4 – Economic Loss

28 The appellant contended that there was no basis in the evidence for concluding that the respondent retained a residual earning capacity immediately prior to the accident of 2004.

29 The primary judge described the residual earning capacity as “slight” and “theoretical” (see [9] above). The word “theoretical” seems to have been a reference to the qualification as an auto electrician that the respondent had. It is significant that the judge said that the “slight” residual capacity to which he referred was dependent “upon [the respondent’s] heart condition stabilising and him being able to sit and stand for a sufficient period to be able to carry out his duties” (see also [9] above). However his Honour did not make any findings that these conditions were satisfied, or would be likely in the future to be satisfied. Nor has the respondent been able to point on the appeal to evidence which would justify an affirmative conclusion to this effect.

30 The judge went on to say in respect of past economic loss that “it is unlikely that [the respondent’s] capacity would have exceeded $100 per week to supplement his disability pension”. Neither in that statement nor elsewhere does the judge affirmatively conclude that the respondent’s capacity to earn would have produced income of that magnitude, or indeed any income. In our view the evidence did not warrant the conclusion that he had any significant residual capacity at the date of the 2004 accident.

31 In considering future economic loss, the judge stated that the respondent “may have obtained some casual part-time work but not on a continuous basis” (see [10] above; emphasis added). The judge did not express any affirmative conclusion as to the likelihood of the respondent obtaining some casual part-time work. The “cushion or buffer” of $15,000 which the judge awarded assumed that the respondent would work for about three out of the four years remaining until he reached the age of 65 and that, in so doing, he would earn $100 per week. In our view the judge’s conclusion that the respondent “may have obtained some casual part-time work” fell short of justifying this assumption, particularly when the judge appears to have regarded that weekly amount as the, or close to the, maximum rate at which the respondent might have been able to earn (see the reference in [9] above to it being unlikely that the respondent’s capacity “would have exceeded $100 per week”).

32 In these circumstances, the judge’s awards in respect of past and future economic loss cannot stand. In our view, the evidence does not justify substituting any award under these heads in favour of the respondent.

33 In the six and a half years prior to the 2004 accident the respondent had not, due to his various accidents and illnesses, been able to work for more than three days. That three days represented an attempt by him to work as an auto electrician which culminated in him giving up the job because the work was too heavy. At the time of the accident he was in receipt of a Disability pension (and had been in receipt of it since 1997) and his wife was in receipt of a Carer’s pension to enable her to look after the respondent. The possibility that the respondent would, but for the 2004 accident, have been well enough to work, and to earn a significant amount of money, was in our view too speculative even to justify the award of a buffer.

Grounds 5 and 6

34 These were abandoned by the appellant.

Ground 7 – Inadequate Reasons

35 The appellant’s contention that the primary judge failed to give adequate reasons for his determinations as to domestic assistance and economic loss does not arise as the appellant has been successful in challenging those determinations.

Orders

36 The orders of the Court are as follows:

(1) Appeal allowed.

(2) Set aside the verdict and judgment, in the sum of $152,403.11, of Delaney DCJ of 16 April 2009.

(3) Judgment for the respondent in the sum of $9,111.11.

(4) The respondent to pay the appellant’s costs of the appeal.

(5) The respondent to have a certificate under the Suitors’ Fund Act 1951, if qualified.

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