Oliver Davey Glass Pty Ltd v Hallands, G.A.R

Re: OLIVER DAVEY GLASS PTY LIMITED
And: GREGORY ALLEN REGINALD HOLLANDS
No. ACT G65 of 1989
FED No. 313
Damages

COURT

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Neaves(1), Miles(2) and Lee(1) JJ.

CATCHWORDS

Damages - Assessment - Personal injuries suffered in course of employment - Whether award of trial judge in respect of future economic loss occasioned by loss of earning capacity excessive - Principles to be applied.

HEARING

CANBERRA

#DATE 5:7:1990

Counsel for the appellant: Mr A B Parker

Solicitor for the appellant: Julian Oakley and Co.

Counsel for the respondent: Mr T J Higgins QC and Mr R Mildren

Solicitor for the respondent: Pamela Coward and Associates

ORDER

1. The appeal be allowed.

2. Judgment for award of damages in the amount of $164,500 be set aside and judgment in the sum of $136,500 be entered in lieu thereof.

3. Respondent pay appellant's costs of appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is an appeal from a judgment awarding damages to the respondent against the appellant for injuries suffered by the respondent in the course of his employment with the appellant. It was held that the injuries occurred as a result of the appellant's negligence. The finding of liability was not contested in the appeal.

The respondent was awarded damages in the sum of $164,500 of which $103,000 was attributed to future economic loss occasioned by a loss of earning capacity.
The appellant contends that the amount awarded for that component of the judgment was excessive in that either no regard was given to the need to discount that sum to make proper provision for the vicissitudes of life or his Honour's relevant findings of fact did not permit a conclusion that the respondent was entitled to recover such a sum for the future loss likely to be caused by the reduction of the respondent's earning capacity.
At the time of the judgment the respondent was 36 years of age. He had commenced employment with the appellant as a glazier in 1978 when he was 25 years of age. The respondent was a certificated tradesman.
In June 1981, the respondent suffered an injury to his spine whilst assisting a group of fellow employees to carry a heavy sheet of glass weighing 236 kilograms. The injury caused pain and the respondent was obliged to seek treatment and take some days of work. He then returned to his normal work although he sought to avoid jobs involving heavy lifting. The respondent experienced discomfort if he was required to lift heavy objects and he made it known that he wished to avoid such duties.
In June 1983, the respondent was obliged to assist two other employees in carrying 20 sheets of glass up a ramp on a building project. Each sheet of glass weighed approximately 65 kilograms. At the conclusion of that task, the respondent experienced considerable pain in his lumbar spine at the point where pain had occurred two years before.
The respondent sought medical advice from a general practitioner who instructed the respondent to cease work for two weeks. The respondent then returned to his usual employment with the appellant and continued his duties for another seven months. He said he suffered soreness in his back but not sufficient to require medical attention.
In March 1984, the respondent consulted his general practitioner about headaches he was suffering and in the course of that examination the respondent informed his doctor that he still suffered soreness in his back. He was given a certificate to present to his employer stating that he was fit only for light duties. The respondent was not satisfied that the appellant could provide such lighter duties and he resigned from his employment in the same month. During the following three months he obtained employment as a temporary clerical assistant until he obtained a position as a window inspector at Parliament House, Canberra. The remuneration for that position substantially exceeded the pay he would have received in his employment as a glazier. The position ceased in August 1988. In the four years of that employment the respondent's earnings started at $7,000 to $8,000 more than those of a glazier and at the time the position ceased exceeded those earnings by $12,000 to $15,000 per annum.
After August 1988, the respondent sought employment in fields that would not require heavy lifting and, in particular, as a supervisor in construction work. The respondent restricted his field of employment to the Canberra area where his family was settled and his common law wife had employment. Employment as a supervisor would have been at least as remunerative as that of a glazier but was unlikely to be continuous. It was more likely to provide employment for periods of six to eighteen months with intervening periods of unemployment whilst another job was sought.
The medical evidence presented to his Honour suggested that the respondent had suffered muscular ligamentous strain which had duly resolved. There was residual tenderness and continuing diffuse pain in the lower lumbar region, but the respondent had a full range of movement. The backache was aggravated by physical activity such as lawn-mowing or prolonged walking. It was considered that the back pain would be likely to continue indefinitely and that all bending and lifting should be avoided. According to the evidence, if medical advice were followed and appropriate back exercises undertaken there would be no reason to suspect that his back would deteriorate, or that there would be much change in his present condition. There was no suggestion of a disc prolapse or neurological abnormality. No specific medical treatment was recommended.
His Honour accepted that the respondent had suffered a muscular injury with no evidence of any resultant structural abnormality in his spine or nerve root entrapment. His Honour was satisfied that the medical evidence established that the respondent would be unable to carry on work as a glazier, although he would be fit to work as a foreman or manager for an employer glazier.
It would also follow from that finding that his Honour accepted that the respondent was not capable of carrying out work which involved regular physical exertion.
His Honour's finding with respect to the respondent's prospects for future employment was expressed as follows:

"I am satisfied that the plaintiff made adequate attempts to gain work suitable to his condition in the period between 12 August 1988 and the date of the hearing but I do not think that the plaintiff's condition is or has ever been one where he is likely to suffer much loss of economic capacity in the future. It is true that he is not able to do the work of a journeyman/glazier but he struck me as being an intelligent man and I think that in the not too distant future he will be able to gain employment which will return him an income approximately that which he might have expected to receive had he continued in the trade of glazier. The material before me does not enable me to quantify with any precision the loss which he has suffered as a result of the damage to his back but I think it appropriate to assess that loss at a net $100.00 per week. I accept that the plaintiff would have worked until he was 65. I accept also that in his case the contingencies would generally have been favourable given that he expected, reasonably as I think, that he would progress in his chosen trade.

When regard is had to all these matters I think that the appropriate figure to award in respect to future economic loss should be based on the continuing loss of $100.00 per week. That represents a loss to age 65 of approximately $103,000.00."

The appellant contended that the manner of calculation for future economic loss was not consistent with the finding of his Honour that:

"...in the not too distant future he will be able to gain employment which will return him an income approximately that which he might have expected to receive had he continued in the trade of glazier."

It is apparent, however, that in the full context of his Honour's findings and having regard to the nature of the evidence before his Honour, the passage referred to by the appellant was not intended by his Honour to be a firm statement of limitation of the extent of the respondent's future economic loss.
His Honour was expressing a conclusion that the respondent's capacities were such that upon obtaining employment within the limits of his condition, that employment was likely to provide remuneration at least as favourable as that received by the respondent in his trade as a glazier. The unknown factor was to what degree the respondent's employment would be intermittent and what loss would be suffered whilst he sought suitable employment. His Honour noted that the respondent had been unable to obtain employment in the six months prior to the hearing of the action.
His Honour accepted the respondent's evidence that he had intended to carry on employment as a glazier until 65 years of age and assessed the worth of the respondent's loss of earning capacity by using a notional net loss of earnings of $100.00 per week for the rest of the respondent's working life. That weekly amount represented approximately 25 per cent of the net ordinary weekly earnings of a glazier. Such a calculation would normally be predicated upon evidence that there was a real prospect that the respondent would earn significantly less throughout the remainder of his working life than the ordinary earnings received by a glazier.
His Honour made no deduction for unfavourable contingencies because, in his Honour's view, prior to his injury the respondent had a well founded expectation that he would progress to other positions in his trade which would produce higher levels of earnings.
His Honour's approach to the question whether the assessment for loss of earning capacity should have been reduced by having regard to adverse contingencies displayed no error in principle. His Honour did not overlook the matter but, to the contrary, made express reference to it and noted that favourable contingencies had not been provided for in the assessment of the sum to be awarded for the loss of earning capacity. This was not a case of the matter of contingencies not being properly addressed. (See General Motors-Holden's Pty. Ltd. v. Moularas (1964) 111 CLR 234). His Honour considered the question and reached the conclusion he considered to be appropriate. It was not a question to be resolved by a precise calculation but by the exercise of a broad discretion having regard to relevant facts. (See Bresatz v Przibilla (1962) 108 CLR 541 at pp 543-544; Hall v. Tarlinton (1978) 19 ALR 501; Potter v State Government Insurance Commission (1990) Aust Torts Reports 81-015 at pp 67,709-67,710.)
However, the question remains whether that assessment exceeded reasonable limits to such a degree that it should now be reviewed by this Court.
Upon the hearing of an appeal, it may be that an appeal court is as well placed as the trial judge to draw conclusions of fact where the conclusions of the trial judge did not depend upon findings of credibility based upon impressions drawn from the demeanour of witnesses. (See Warren v. Coombes (1979) 142 CLR 531.) Although, in the present case, no issues of credibility were involved and the evidence of medical witnesses was not in dispute, the conclusion of the trial judge was not a simple finding of fact but a composition of inference and estimate, and an appeal court should be slow to interfere with such a conclusion unless an error of principle has been demonstrated or the amount of the assessment is beyond the realms of a sound discretionary judgment. (See Miller v. Jennings (1954) 92 CLR 190 per Dixon C.J. and Kitto J. at pp 195-197; Layton v. Walsh (1978) 19 ALR 594.) To put it another way, the appeal court must be satisfied that the assessment was reached after misapplication of the law, or was so disproportionate to the loss sustained that it must have been a wholly erroneous estimate. (See Jones v. Schiffmann (1971) 124 CLR 303.)
At first sight, the sum assessed does seem to be a high award for the consequences of a ligamentous strain in respect of which there is no prognosis for the development of a major disability and no recommendation for further medical treatment.
However, the evidence was clear that the respondent would continue to experience pain in his spine if required to do any heavy work. It was accepted that he was no longer fit to carry on the employment of his trade and, therefore, that he was equally unfit to do a wide variety of manual work of like nature. Spinal injuries are notorious for their recurrent manifestations and for the disabling consequences that may result from minor events which aggravate the underlying spinal condition introduced by the original trauma.
His Honour had to assess what the prospects were for the respondent to continue to receive wages of the level he had been able to earn prior to his injury having regard to the fact that he could no longer carry out the employment for which he was qualified and that the fields of employment for which he could offer himself were now restricted. His Honour may have had some regard to the possibility of the respondent undertaking further studies, or re-training, to qualify himself for equally remunerative employment which would not demand the physical exertion likely to trouble his spinal condition, although it does not appear that any direct evidence was submitted to his Honour in that regard. However, his Honour's reasons indicate an acceptance that the respondent was still of an age and intelligent enough to be able to take steps to mitigate the effects of the loss of earning capacity occasioned by the injury.
In the absence of any clear evidence on the issue as to when and how the respondent may suffer loss, his Honour made provision for the uncertainty of the respondent's future employment and interference to his earning prospects by attempting to quantify the extent of that loss by representing it as a diminished weekly return of net earnings. In doing so, his Honour did not err in principle but the resulting calculation must be supported by the evidence if it is to be an appropriate sum.
As we have said, the issue before his Honour had many facets and involved the exercise of a discretion founded on experience and it was very much a matter of judgment for his Honour. However, after giving due weight to his Honour's findings of fact we have concluded that the amount awarded exceeded the reasonable sum required to reflect, in monetary terms, the effect of the respondent's loss of earning capacity and did so to the extent that it was entirely disproportionate to the loss sustained.
His Honour's calculation produced a result that was out of proportion to the consequences of the given facts. If the respondent followed medical advice in respect of the care of his back, there was no reason to expect that before the age of 65 years he would be unable to carry on the type of employment he is now able to do. His Honour found that when in employment the respondent would experience no economic loss and that the respondent had sufficient intellectual capacity to obtain such employment in the future. That finding meant that his Honour was satisfied the respondent could expand his employment opportunities if he applied himself to the task and that it was reasonable to expect him to do so.
The assessment of proper compensation to be paid to the victim of a tort involves a question of balance between the entitlement of the victim and the liability of the tortfeasor, and a determination of what is reasonable. (See Farr v. Schulz (1988) 1 WAR 94 per Kennedy J. at pp 122-123.)
It may take some time for the respondent to obtain settled employment and he may be entitled to have regard to family interests which limit the location and range of employment in which the respondent seeks to be engaged, but for the major part of the remainder of his working life it may be anticipated that the respondent will have regular employment of the type his Honour had in mind, although prior to that time there may be periods of unemployment.
In the end a global assessment has to be made as the best estimate of the sum required to provide for the economic consequences to be faced by the respondent as a result of the loss of earning capacity imposed by the consequences of the injury to his lumbar spine. Such a sum should provide adequate compensation for anticipated periods of unemployment either as a result of restricted employment opportunities or from temporary withdrawal from the labour market to acquire better skills or qualifications.
Having regard to the relevant evidence and accepting his Honour's material findings of fact and having regard to favourable and unfavourable contingencies, we consider that a reasonable sum to represent the prospective economic loss sustained by the respondent as a result of his loss of earning capacity would be $75,000. Therefore, we are of the opinion that his Honour's assessment of this component of the award should be reduced accordingly and that the amount of the judgment should be varied by reducing it to $136,500.00. The respondent must pay the appellant's costs of the appeal.

JUDGE2

The factual background of this appeal is set out in the joint judgement of Neaves and Lee JJ., a copy of which I have had the advantage of reading. I adopt his Honour's analysis of the judgment of the learned trial judge and his statement of the principles applicable to an appeal against an award of damages for personal injury. To the list of authorities cited I would add Maylene Hugo Evans v Adams Pilarski (unreported, Federal Court of Australia, 3 June 1988) in which the majority judgement contained the following passage:

"Before this Court interferes with an award of damages it should be satisfied that the trial judge acted on a wrong principle of law or misapprehended the facts or, for these or for other reasons, made a wholly erroneous estimate of the

damage suffered. It is not enough that there is a balance of opinion or preference. The scale must go down heavily against the figure attacked if the appellate court is to interfere either on the ground of excess or insufficiency (Davies v. Powell Duffryn Associated Collieries Limited

(1942) AC 601 per Lord Wright at pp 616-7, cited with approval by Dixon C.J. and Kitto J. in their joint judgement in Miller v. Jennings (1954) 92 CLR 190 at 195-6, and by Barwick C.J. in Gamser v. The Nominal Defendant (1976-77) 136 CLR 145 at 148).

As the Judicial Committee of the Privy Council observed in Paul and Another v. Rendell (1981) 34 ALR 569 per Lord Diplock at p 571, the

assessment of damages in actions for personal injuries is not a science. An assessment of future economic loss involves a double exercise in the art of prophesying not only what the future holds for the injured plaintiff, but also what the future would have held for him if he had not been injured."

An award of damages for personal injuries is complex and contains many diverse elements. In Wilson v. Peisley (1976) 50 ALJR 207 at p 209 Barwick C.J. said:

"The less ponderable the elements of the damages under consideration, the less likely will there be a case for setting aside an award by a judge who has not overlooked any significant fact at the end of a trial not blemished by error or irregularity."

Although other parts of the judgment of Barwick C.J. in that case have been subject to question (see Gamser v. The Nominal Defendant at p 149) that statement, in my respectful opinion, provides a salutary guideline. Some aspects of an award of damages for personal injury involve what has been called a "discretionary judgment" (Miller v. Jennings (1954) 92 CLR 190 at 197 per Dixon C.J. and Kitto J.) or even the exercise of a discretion (Kalnins v. Marshall (1970) 44 ALJR 152 at 152 per Barwick C.J.). The evaluation of those sorts of components of an award of damages requires the court as best it can to place a monetary value on something which does not lend itself easily to such a process. The component which places a monetary value on pain and suffering is a notable example. An appellate court will be slow to interfere with that aspect of the trial judge's award. On the other hand, there are other aspects of an award of damages which involve simple inferences from primary facts found by the trial judge. The calculation of loss of wages for a closed period by a person in regular employment is an example. An appellate court may have very little reluctance in interfering with the trial judge's award where it is shown that there has been a simple arithmetical error in applying figures otherwise established. Where the facts from which the inferences are to be drawn are themselves subject to challenge in the appellate court, the principle is that the appellate court will substitute its own findings of fact except where those of the trial judge are based at least partly on observation of witnesses: Warren v. Coombes and Another (1978-1979) 142 CLR 531. Where the appeal court finds the facts differently it may feel less inhibited about substituting its own assessment of damages based on its own view of the facts.

The distinction was drawn in Moran v. McMahon (1985) 3 NSWLR 700, Priestley J.A., with whom the other members of the New South Wales Court of Appeal agreed, said at p 723:

"There does not seem to me to be anything

discretionary or quasi-discretionary in the calculation of the amount of money lost by a plaintiff between the date of his injury and the date of the hearing of his claim for damages. Difficult questions of fact may be involved particularly when consideration is being given to the extent to which the plaintiff's injuries restricted his capacity to work but these questions are answered by the trial judge's evaluation of the facts. I do not know that it has ever been suggested that once he comes to a conclusion on the factual material before him he has any discretion to act on any other but that conclusion.

Similarly, in regard to the plaintiff's loss of earning capacity from the date of judgment in his case into the future the trial judge is often faced with a difficult question of evaluation. Obviously different minds may evaluate differently the conclusion to be drawn from the factual material. Once again, this type of evaluation seems to me to be of a different kind from the evaluation made of the amount of money appropriate in the

circumstances of the plaintiff's case to be included in his damages for the completely non-pecuniary element in his damages of pain, suffering and loss of the amenities of life."

Nevertheless there are some cases in which inferences, the facts from which they are to drawn, and the evaluation of facts and inferences are difficult to distinguish. This may be so even in the assessment of loss of earning capacity, particularly loss of earning capacity in the future. There the task involves the "double exercise in the art of prophesying" referred to in Paul v. Rendell. In each part of that exercise findings of fact (often based at least in part on the assessment of witnesses), logical inferences, arithmetical calculation, common knowledge, informed guesswork, and ultimately value judgment are all inextricably woven. In my view, this is such a case. The experienced trial judge, who has not been shown to have been in error in fact or law, concluded that $100 per week for the rest of his expected working life was the measure of the plaintiff's future loss of earning capacity. The trial judge made no mistake in his assessment of the medical and lay evidence which supported the proposition that the plaintiff was unfit for work as a glazier but fit for work in some semi-supervisory capacity in that or some allied trade. The trial judge saw the plaintiff, possessed the knowledge of a jury about industrial conditions in the Canberra area and concluded that suitable work would be available to the plaintiff spasmodically and for limited periods of time only. The trial judge contrasted that scenario with the plaintiff's likely steady career path in the glazing industry at the time of his injury. I am unable to conclude that the trial judge was wrong in assessing that the plaintiff's future loss of earning capacity was reduced in effect by about 75 percent, with a present value based on a periodic loss of $100 per week to the age of 65 years.
It was also submitted on behalf of the appellant that his Honour should have applied a discount of 15 percent to the present value of the continuing loss, that being a conventional discount to allow for adverse contingencies or vicissitudes such as early death or illness, industrial disputes and so on: see Todorovic and Another v. Waller (1981) 150 CLR 402. However, the trial judge indicated that he thought the evidence justified taking into account the countervailing factors of the plaintiff's likely progression but for injury in the glazing industry to positions which were more highly paid but physically less demanding and likely to lead to his working through to the age of at least 65. The conventional discount of 15 percent is one which may be increased, decreased or eliminated according to the circumstances of the particular case, so long as proper consideration is given to all relevant matters. Furthermore, contingencies which are favourable to the plaintiff must not be overlooked (see Brennan J. in Todorovic v. Waller at p 460 and Windeyer J. in Teubner v. Humble (1962-1963) 108 CLR 491 at 508).
The trial judge in the present case, in my view, was entitled to balance the contingencies which were adverse to the plaintiff's case against those which he considered were favourable and to arrive at the conclusion that in all the circumstances there should be no discount. It was furthermore open to his Honour to allow for a period which took the plaintiff's expected working life up to the age of 65 years, not so much because there was a positive likelihood that the plaintiff would have worked to that age, but on the basis that a loss of $100 per week from the time of the hearing until age 65 represented the value of the plaintiff's future loss of earning capacity. It is true that the sum ultimately awarded for future loss of earning capacity, namely $103,000.00, appears high having regard to the relatively minor muscular ligamentous injury sustained by the plaintiff but, in my view, this Court should not interfere with that award.
I would dismiss the appeal with costs.

[1990] FCA 313

05 JULY 1990