Parker v Hill - [2000] WASCA 272

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: PARKER -v- HILL [2000] WASCA 272

CORAM: MALCOLM CJ
WALLWORK J
MURRAY J

HEARD: 11 APRIL 2000

DELIVERED : 22 SEPTEMBER 2000

FILE NO/S: FUL 159 of 1999

BETWEEN: SHANE ELLIOTT PARKER
Appellant
AND
LINDA JOAN HILL
Respondent

Catchwords:

Damages - Appellant worked in Karratha prior to being injured - Received three return air tickets each year from employer - He cashed them in - He also received subsidised rental - After his accident he lived in Walpole - Whether loss of air fares and subsidised rental should be allowed for in damages

Legislation:

Nil

Result:

Appeal allowed
The air fares and subsidised rental were part of appellant's income and their loss was compensable

Representation:

Counsel:

Appellant: Mr T H Offer
Respondent: Mr K N Allan

Solicitors:

Appellant: Evangel Taylor
Respondent: K N Allan

Case(s) referred to in judgment(s):

Bowen v Tutte (1990) ATR 81‑043
Bresatz v Przibilla (1962) 108 CLR 541
Jongen v CSR Ltd, unreported; SCt of WA (Anderson J); Library No 920325; 18 June 1992
Liffen v Watson [1940] 1 KB 556
Medlin v State Government Insurance Commission (1994-1995) 182 CLR 1
Thomas v O'Shea (1989) ATR 80‑251

Case(s) also cited:

Miller v Jennings (1954) 92 CLR 190

MALCOLM CJ: In my opinion this appeal should be allowed for the reasons to be published by Wallwork J with which I agree. It will be necessary for the various heads of damage to be calculated in accordance with those reasons. Hopefully, the calculations can be agreed in the light of the reasons for judgment. If agreement cannot be reached within, say, seven days, the parties should file their respective calculations for the consideration and decision by the Court.
WALLWORK J: The appellant appeals from an award of damages arising from injuries he received on 22 July 1992 in a motor vehicle collision. The appellant was the rider of a motor cycle which collided with a motor vehicle. He was badly injured, mainly in one leg.
At the time he was injured, the appellant was 32 years of age. He was working as a leading hand instrument maker and electrician at Karratha. His employment involved the maintenance of the Hamersley Iron rail line and equipment. He worked in a workshop and along the line in about equal proportions. The work was quite physical and involved electronics, electro‑chemical, hydraulic and other types of work, often in dirty, hot conditions.
I will deal with the grounds of appeal in the order in which they were argued.
The appellant argued grounds 2 and 3 together.
Ground 2 is:
"Having found that the rebate for 'zone allowance' should not be excluded from net income, the learned trial Judge erred in failing to include such rebate in his calculation of net income."
It is apparent from his Honour's reasons that ground 2 is made out and the respondent accepts that it is established.
Ground 3 of the appeal is to the same effect except that it assumes that the appellant's loss of earning capacity should be assessed by averaging the rate of the appellant's earnings for the three years prior to the accident. In my view that assumption should not be accepted.
There was no reason to calculate the damages from the average earnings of the appellant over the three years prior to the accident because the full details of the appellant's earnings in the year prior to the accident, ending on 30 June 1992, were available to the Court. The learned trial

Judge did not give any reasons for averaging the appellant's pre‑accident earnings over the three years, although he referred to the fact that counsel for the respondent had argued that there was no basis for averaging out the appellant's pre‑accident earnings over several years. With respect to that contention his Honour said:
"I disagree about those matters. I consider an averaging of say, the last three years net income prior to the accident a fair way of dealing with quantification of overtime and similar issues."

As stated above, the respondent's contention on this aspect is in my view correct.
Grounds 4 and 5 were argued next. In essence they were that the learned trial Judge had erred in failing to allow in the assessment for loss of earning capacity for the three return economy airfares to which the appellant was entitled each year.
This Court was told that the appellant was given by his employer three return air tickets to Perth per annum and that those tickets were valued at $824 each. At the trial the respondent had argued that those airfares should not be taken into account since the appellant was then no longer living and working in Karratha and no longer needed the rest and recreation represented by the air fares. His Honour did not accept that no allowance should be made for the air fares as he found that they were a form of subsidised holiday allowance, convertible to cash. However, he discounted the value of the airfares and only allowed $500 per annum for seven years. The value of the three air tickets per annum was $2472 per annum. The appellant had given evidence that he had cashed the air tickets in each year.
In Jongen v CSR Ltd, unreported; SCt of WA; Library No 920325; 18 June 1992, Anderson J ruled that an entitlement to three return air trips to Perth per annum between Meekatharra and Perth could not "truly be regarded as productive of any financial loss in the circumstances." In that case the relevant mine site was at a remote location 170 kms from Meekatharra and the airfares which the plaintiff had claimed had allowed him to fly between Meekatharra and Perth three times each year.
In this case the appellant's air tickets were redeemable for cash. The evidence was that the appellant had redeemed them for cash. That situation had not been contemplated in Jongen.
The claim for the air fares in this case was for 6.8 years of past loss and for the 12 years in the future which was the period which the learned trial Judge had found that the appellant would have remained in Karratha but for the accident. The evidence was that prior to the accident the appellant had cashed the air tickets and driven his family down to Perth for holidays.
Evidence had also been given that prior to his accident the appellant had considered taking alternative employment at the Burrup Peninsular which was better paid, but had less "perks". The appellant had decided against taking that employment because overall it would not have been better for him financially. The point was made that if the appellant had taken the Burrup employment, he could have claimed for all his earnings; also that in this case the appellant was able to cash the air fares for money, as if it were his pay. The employer would pay a fringe benefits tax on that allowance. The Tax Office treated the tickets as remuneration. The air fares were income.
A distinction was made between employees who are flown up and down from Perth to places like the oil rigs out from Karratha, and a person who lives in the Karratha township. In the case of the employees on the rigs, the airfares are paid by the employer to transport the employee to his or her place of employment. They are not redeemable in cash.
In previous decisions, it has not been customary with damages claims to take into account moneys which people spend on their holidays, or to consider where they go, or how they travel.
The learned trial Judge did not detail how he had arrived at the sum for the loss of the air fares at $500 per annum for seven years, although he did mention that their value should be discounted, given the appellant's move to Walpole three years after the accident. It was submitted for the appellant that his move to Walpole had not been voluntary but had been because of his accident. That was why he had not remained in Karratha.
When the appellant had lived in Karratha, he had had a long‑term aim to eventually retire to Walpole and grow olives. However, it was submitted for him that that had been a retirement plan and not an imminent change in occupation.
It was submitted for the respondent that in a case like this, the airfares were for rest and recreation because the person lived in a remote area and required relief to go on holidays. Further that there had been no loss demonstrated by the appellant. It was argued that after the appellant had moved down to Walpole or Perth, there had been no requirement for rest and recreation from the arduous conditions of his employment and therefore there was no loss.
The evidence was that whilst he was employed at Karratha, the employer had paid the appellant cash for the air fares. That was an added bonus and amounted to income. The appellant could take the tickets or the cash. He was not bound to go anywhere. He could have spent his holidays fishing off Karratha, or prospecting in the Pilbara or in Bali or at any other holiday destination.
In my view the three return airfares valued at $2472 per year should be treated as income and taken into account as prospective earnings for the full period for which, but for his accident, the appellant would have resided in Karratha.
The next ground of appeal argued was ground 8 which was that the learned trial Judge had erred in failing to compensate the appellant for his loss of subsidised rental or "living out allowance".
At the time of his accident the appellant was entitled pursuant to his employment conditions, at any time to find his own accommodation. If he had done that he would have received from his employer an amount of $260 per week, which by the time of trial had increased to $265.70 per week. If he remained in the company house, he paid a reduced rent at $37 per week. He also received other subsidies.
In Jongen (supra) the plaintiff was allowed $4907 in the calculation for damages for the use of a residence and meals. The value for those items was allowed in full on the authority of Liffen v Watson [1940] 1 KB 556.
The reason such a sum should be allowed for in the damages is because it is part of the employee's salary and conditions. It is the equivalent of income. Usually in other areas of the State, an employee pays his own housing costs. In this case the evidence was that the appellant could have obtained employment at Burrup on a higher salary. In that case he would have had to pay his own accommodation costs. Evidence had been given that he had calculated that he was not financially better off in the Burrup employment and for that reason he had decided to stay in his then employment. In the same way as the airline fares, this allowance was income and was part of the appellant's earning capacity.
The respondent relied on an explanation given by the supervisor of the company employing the appellant that the living out allowance effectively represented the cost to the company of the housing and other subsidies. For this reason it was contended that the relevant sum was not earnings.
The relevant consideration is that the appellant could have taken the $260 (later $265.70) a week and lived somewhere else. It was similar to the annual value for the residence in Jongen's case in which decision Anderson J had allowed for the use of a telephone, meals and a motor vehicle in calculating the plaintiff's earning capacity.
In the decision in Liffen (supra), it was held by the Court of Appeal that the plaintiff was entitled to recover in her damages a sum to compensate for loss of wages plus a sum to allow for the value of the board and lodgings.
It is the financial loss which is caused to a plaintiff due to the injury which is to be compensated for. That includes all the financial loss arising from the loss of the relevant employment: Medlin v State Government Insurance Commission (1994-1995) 182 CLR 1.
A question arises whether there should be any deduction from the loss in this case, due to the fact that after his accident and because of it, the appellant moved to Walpole. The cost of living at Walpole would have been less. Also the appellant would not need the same degree of airconditioning or pay the same rates for water usage as he would in Karratha.
For the appellant it was submitted that if a person who had worked in Sydney had decided to return to Perth where the cost of living is lower after a compensable injury, there would be no deduction from his damages on account of that fact. It was submitted that to try and make such allowances would make the process of calculating damages impossibly complicated. Further there had been no evidence called at the trial concerning the details of the increase in the cost of living at Karratha, whether it would be due to the cost of food, rent, electricity or water.
The respondent submitted that no evidence had been called as to the value of rental accommodation in Walpole. Because of that the trial Judge could not assume that there was a loss. It was submitted that what might be a saving to a big company in Karratha in terms of tax arrangements or any other type of saving by the allowing of such subsidies, was not a measure of the loss to the appellant. It was said for the respondent that the $265.70 had to be measured against what the actual loss was.
If the appellant had lived in a suburb of Perth prior to the injury, there would be no question of working out what his post injury rent would be. Damages are not calculated in that manner. What is measured is the financial loss to a plaintiff: Medlin v State Government Insurance Commission (supra).
The relevant consideration was that the appellant would have been paid an extra $260 increasing to $265.70 a week, if he had chosen to live in a house which was not a company home. It was conceded for the respondent that if it was a rent subsidy, it could be measured. The fact is that due to the injury the appellant was no longer entitled to a payment of $265.70 per week towards the cost of his accommodation.
In my view the loss of the $260 to $265.70 per week should be regarded as a loss of income to the appellant for the time he would have remained in Karratha but for the accident. Ground 8 is made out.
The next ground of appeal argued was ground 7, which is that the learned trial Judge erred in law in finding that the appellant had a continuing earning capacity of $300 net per week. Particulars are given in the ground as to why that error is said to have occurred, included in which particulars are, that the medical evidence had established that the appellant is now unable to return to employment which is similar to his pre‑accident employment. Evidence had been given that the appellant is unable to find work other than that in which he was employed at the time of the trial.
It was submitted for the appellant that the evidence had established that his employment at the time of the trial provided him with an income of $220 gross per week. It was also contended that the respondent had failed to lead any sufficient evidence at the trial that the appellant was physically capable of engaging in employment other than that in which he was employed at the time of the trial; that the respondent had led no evidence as to any alternative employment opportunities available to the appellant, or what remuneration would be available in any such alternative employment. It was also submitted that the appellant's physical capacity would deteriorate over the next 12 years.
This Court was informed that the evidence had been that at the time of the trial the appellant had for some time prior been looking for work in the Walpole area. He had found a number of short term jobs. He had eventually obtained employment at a local sporting club. At the time of the trial he was earning $220 gross per week, or $195 net per week in that employment.
It was contended for the appellant that prior to finding the abovementioned employment, the evidence was that the appellant had made 50-odd applications for employment. He had worked on a herb farm and in other occupations on a short term basis. By the time of the trial he was working about 20 hours per week. The evidence had been that his physical condition was such that he had difficulty with squatting and lifting because of the damage to his knee. He could not bend his knee effectively. When he had to bend and lift, he used his back. The effect of his injuries was that he could not bend his knees to lift. Because of lifting he suffered pain in his back on a daily basis. There was a question as to how long he would be able to continue in the work he was doing without sustaining some permanent back injury. That was said to be a matter of conjecture.
The appellant had said in evidence that if he was standing, in less than an hour he would begin to feel pain in his knees. The length of a shift in his work was some 5 to 6 hours. Evidence was given that at home the appellant's family had to assist him with such tasks as picking up firewood and similar activities.
It was submitted that because of his physical disabilities the appellant's future employment was in considerable jeopardy. It was further submitted that the total absence of any evidence called on behalf of the respondent concerning suitable alternative remunerative work available to the appellant led to the conclusion that it had not been open to the learned trial Judge to find that the appellant had a retained earning capacity of $300 net per week. He was only able to earn $195 net per week. He had not been able to earn anything like that previously after his accident. There was a possibility that if he lost his then employment he would have no remunerative work at all. Further, he would be lucky to retain his employment at $195 per week due to his deteriorating physical condition.
Prior to the trial the appellant had earned some agistment income amounting to $2025. However he was not earning that at the time of the trial. There had been no evidence called concerning the cost of earning the agistment income, for example, the cost of maintenance of fences or whatever other costs might be involved.
It was submitted for the appellant that a primary problem with the learned trial Judge's determination of this aspect of the assessment was that his Honour appeared to have based some of his calculations on evidence that the appellant intended to grow olives or to have some kind of small income from running cattle. However, it was said that a person with a knee injury such as the appellant's would find difficulty with that kind of employment. An orthopaedic surgeon, Mr Witherow, had given evidence that the appellant had told him he was sedentary on his farm. Mr Witherow had said that if the appellant had to do any heavy manual work it would not be ideal either, then or later. The more the appellant did in terms of that type of activity, the more he would have degradation in his knee condition and the more accelerated would be his need for a knee replacement.
It was submitted for the appellant that on the medical evidence direct physical involvement by him in farming activities was not an option; that any farm income should be limited to such income as agistment. The appellant could not work as a manager of a farm for example, because of his knee problem. It was said that in any event the defendant had not effectively discharged its evidentiary onus. The appellant relied on the decisions in Thomas v O'Shea (1989) ATR 80‑251 at 68,701 and Bowen v Tutte (1990) ATR 81‑043.
The respondent contended that the true position was that the appellant was earning $195 net per week working 20 or 30 hours as a barman in the local club. In addition to that he was in the preliminary stages of planting olives and establishing a marron farm on his property. That was what he would have done after he had retired from Karratha if he had not been injured.
Counsel for the respondent submitted that the loss of earning capacity could only be assessed for a future period of 12 years, because after that the appellant had intended to retire and do exactly what he was doing at the time of the trial. That proposition assumes that the appellant was not severely injured.

It was also contended for the respondent that the appellant had not shown that he would have exercised an earning capacity of $525 per week after the 12 year period. It was submitted that the learned Judge had wrongly calculated the loss after the 12 year period because he had assumed that the appellant would exercise that capacity to the age of 65. The evidence did not support that. The 12 year period would take the appellant to the age of 51. That what was his evidence had been. It was submitted that after the 12 years, the appellant's earning capacity from farming activities could only be calculated by means of a global assessment. It could only be held that he would have carried out farming activities after that time by growing olive trees or marron farming.
The appellant had said in evidence that he did not intend to retire at the age of 51. However he had not intended to be working in Karratha after that time. His evidence was that he had intended to work at Karratha for as long as his children were on his hands. Then he was going to come down to Perth.
It was contended for the appellant that it had only been a suggestion that at some unspecified time when he did retire, he intended to grow olives, not after 12 years, or when he was aged 51. It was submitted that the growing of olives had been no more than a distant dream at the time of trial; there had been no financial estimates prepared and no enquiries as to whether the relevant area was suitable for growing olives; that the learned trial Judge had been correct in assessing a further loss of earning capacity from the age of 51 to the age of 65 years in the amount of the pre‑accident earnings plus wage rises.
It was agreed that the learned trial Judge had correctly calculated the appellant's income over the period to the trial at approximately $123,000. It was also agreed between the parties that the zone allowance ought to be allowed in the calculation of past income; further that his Honour had not taken that into account in his calculations.
In his evidence the appellant had told the learned Judge that he did not have any plans for early retirement. When asked what his understanding of the retirement age was, he said 60 years: "The way I was getting ahead in Karratha, I didn't think I would be able to afford early retirement." He was then asked: "If you had been able to work longer than 60 would you have done so? His answer was: "Yes because … Yes I had planned - if I'm fit, I would plan probably working past 60 years of age now, you know." In re‑examination, concerning the idea that he would farm marron in the future, when asked: "… what factors determined when that future came?", the appellant said:
"Probably for me, possibly retirement, you know. What happened - was in the future, effectively, I would have less overheads, you know, and it would be something I would probably look at doing after retirement."
It was contended for the respondent that although the appellant had talked about 60 years being the retirement age, that might mean that there was some other period after 51 when he would work, but it was submitted that there was no evidence about what he had intended to do. The only evidence about what he had intended to do after he left Karratha was that he would go into marron farming.
In my view the appellant is correct in his contention that the learned trial Judge was in error in allowing a retained earning capacity greater than that produced by the appellant's income at trial of $195 net per week.
With respect to the retained earning capacity his Honour said:
"He is capable of working longer hours and may also produce a farm income. I allow $300 net per week to age 65…."
In my view that conclusion was against the weight of the medical evidence and the evidence given by the appellant, including his work history to the time of the trial.
The appellant's retained earning capacity should be allowed at $195 net per week instead of the $300 per week which his Honour allowed in his reasons for judgment. Any sums for agistment fees or from the possible growing of olives or marron would have to be offset against the expenses of setting the farm up. In my view those prospects are too uncertain to be taken into account.
In my opinion it would be fair on the evidence to calculate the damages for loss of future earning capacity on the basis that the appellant would have been employed until he was 60 years of age. It was agreed at the trial that the award rate without overtime for instrument fitters was $605.60 gross per week.
The damages for the appellant's loss of future earning capacity after the relevant 12 year period at Karratha, until he reached 60 years of age, should be calculated on the basis that the appellant would have been employed as an instrument fitter without overtime. The retained earning capacity should be taken as $195 net per week. I would make no deduction for contingencies. They can go both ways. The appellant may have worked longer or earned more: Bresatz v Przibilla (1962) 108 CLR 541 at 544 where Windeyer J said:
"Moreover, the generalisation that there must be a 'scaling down' for contingencies, seems mistaken. All 'contingencies' are not adverse: all 'vicissitudes' are not harmful. A particular plaintiff might have had prospects or chances of advancement and increasingly remunerative employment. Why count the possible buffets and ignore the rewards of fortune? Each case depends upon its own facts. In some it may seem that the chance of good fortune might have balanced or even outweighed the risk of bad."
Ground 6 of the appeal concerned the electricity subsidy which the appellant was receiving in Karratha. Counsel for the appellant said that if the appellant succeeded on the ground concerning the living out allowance, there would be no need for the Court to consider this ground. Because of that, I will say no more about the electricity as the appellant in my view, has made out the ground concerning the living out allowance.
The final ground argued related to the calculation of superannuation. It was submitted for the appellant that the learned Judge seemed to have worked out the loss of earning capacity and then taken superannuation at 9 per cent of that figure rather than looking to gross figures. It was submitted that the appellant's gross pre‑accident income had been $757.99. Then there were wage increases to the date of trial, less the $220 gross per week which the appellant had been earning at the time of the trial.
It was conceded for the respondent that the learned trial Judge had erred in assessing the superannuation on the net figure. It was contended that the appellant would have worked for the next 12 years in Karratha. After that his intention had been to go to his farm. Therefore he would after that time have lost no superannuation benefit. Alternatively, if he had worked part‑time in other areas, he would have been paid the full amount of superannuation.
In my view and after the relevant 12 year period which is conceded, the appellant should be awarded compensation for the loss of superannuation benefits calculated on the difference between his $220 gross retained earning capacity and the gross sum without overtime which he would have earned after his 12 years at Karratha and until he was 60 years of age as an instrument fitter.
Calculations for the various aspects of the damages were kindly supplied to the Court by counsel at the hearing of the appeal. However as those calculations do not accord with the above reasons, the parties should now agree on the calculations in accordance with the reasons and submit

an agreed sum to the Court. If the calculations cannot be agreed the alternatives should be submitted. Judgment will then be given.

MURRAY J: I also agree with the reasons of Wallwork J and with the process of arriving at a final judgment to which his Honour and Malcolm CJ refer.