Peake v Varnas No. DCCIV-99-1454

PEAKE v VARNAS
[2000] SADC 26

Judge Allan
Civil

The plaintiff claims damages for injury and loss sustained in a road accident which occurred on 24 October 1996. Liability has been admitted and the matter comes on for assessment of damages.
The accident occurred when the defendant’s vehicle ran into the rear of the plaintiff’s vehicle which was stationary in a line of traffic at the time. The impact was sufficient to force the plaintiff’s vehicle into the rear of a vehicle which was stationary in front of it. At the time of impact, the plaintiff was looking to her left, at her son who was in the front passenger seat.
The accident occurred late in the afternoon. It was a Thursday. Later that night, the plaintiff experienced pain and stiffness in her neck. It gradually got worse and, on the following Monday, she saw her general medical practitioner, Dr Lavender, who prescribed some medication and a course of physiotherapy. By the time the plaintiff saw Dr Lavender, her pain was quite severe.
The plaintiff underwent physiotherapy treatment twice a week for about six months and then once per week. In addition to the treatments she received from the phsyiotherapist, she performed exercises prescribed by the phsyiotheraprist. Initially, the phsyiotherapy eased her symptoms of pain and stiffness.
There was a level of improvement in the plaintiff’s symptoms until the middle of 1998, by which time they had stabilised. At that time, she was experiencing pain in the left side of her neck, sometimes extending into her left shoulder, and rotation of her neck to the left was limited: at times, she could hardly turn her head to the left. The pain in her neck fluctuated according to the activity in which she engaged; for example, gardening, vacuuming and reading increased her symptoms.
The frequency of the plaintiff’s visits to the physiotherapist having decreased towards the end of 1997, she began to consult the physiotherapist only when there was an increase in the symptoms; usually brought on by the sort of activity I have mentioned. The treatment she received from the physiotherapist on these occasions reduced the symptoms so that they returned to the state which had existed prior to the exacerbation; a state where she experienced constant pain at a moderate level and restriction of rotation movement to the left.
In the middle of 1998, no further improvement in her symptoms having occurred for some time, the plaintiff returned to see Dr Lavender. X-rays were taken and the plaintiff was referred to Ms Molloy, a neurosurgeon.
The x-rays which had been taken revealed soft tissue calcification and degenerative change in the C2-3 facet joint and there was a suggestion of an old un-united fracture across the left neural arch of C3 with sclerosis at the margins. Ms Molloy arranged for the plaintiff to undergo a CT scan and this was performed on 29 July 1998. The CT scan did not show any evidence of an old fracture, but revealed a severely arthritic joint at the C3-4 level with microcytic changes in the bone.
The plaintiff discussed treatment options with Ms Molloy. There was talk of a single level posterior fusion with plates, but, for the moment, it was decided the plaintiff would have an injection of local anaesthetic and cortisone in the area of the C3-4 joint. The actual joint had disappeared, such was the level of degeneration, and, so, it was impossible to put cortisone into the joint. Ms Molloy also recommended that the plaintiff continue to do regular neck strengthening exercises and be careful about her posture.
The plaintiff had the cortisone injection. It was an unpleasant experience; however, after the injection, she became pain free for the first time since the accident; but it did not last: after about 5 weeks, the pain gradually returned, reaching a stage where it was at the same level as it had been before the injection.
The plaintiff continued to have physiotherapy as required and took medication, Voltaran and Panadol, for pain relief from time to time. She commenced a walking program with a view to strengthening her neck, and keeping down her weight, but found that the exercise involved therein increased her level of pain.
The plaintiff’s pain has gradually increased. She currently experiences constant pain. She has limitation of movement of her neck to the left. Her symptoms are exacerbated by various activities; and, sometimes, the pain gets worse for no apparent reason. During 1999, she had 13 visits to the physiotherapist seeking relief for the increase in her symptoms. It seems she then went for something over 12 months before she felt the need for physiotherapy again. She has been seeing the physiotherapist during the last few days. A visit to her physiotherapist costs her about $35.00. It is hard to be precise, but I think it likely that she will have treatment from her physiotherapist on an average of about once every two to three months for the relief of temporary exacerbations in her condition.
The plaintiff experiences an increase in her symptoms on an average of once per week. She takes medication to ease the pain. She takes Voltaran and Panadol. She spends about $23.00 on Voltaran every twelve months and about $48.00 per year on Panadol. I think her consumption of these medications is likely to remain at this level, at least for the foreseeable future.
In addition to the treatment she receives from the physiotherapist, members of the plaintiff’s family massage her neck from time to time, which gives her some relief.
It will be necessary for the plaintiff to see her general medical practitioner from time to time because of her symptoms and the need for prescriptions for medication, but I do not anticipate that these consultations will be on a frequent basis.
As I have mentioned, there has been some talk of fusion. This seems to be a treatment of last resort. It is an invasive process with attendant risks and any benefits could not be guaranteed. There could be a reduction or, perhaps, a resolution of the plaintiffs pain, but this is by no means certain; and any benefits in the way of pain reduction might be accompanied by an increased reduction in neck movement. Ms Molloy seems quite optimistic about the benefits the plaintiff could expect to receive from a fusion and would be prepared to undertake the surgery. Mr McCulloch, another neurosurgeon, who saw the plaintiff on behalf of the defendant, takes a more conservative view. I think it is not putting it too highly to say that, in the case of the plaintiff, he is opposed to such a procedure; and this is substantially the position of Dr Combe, the plaintiffs current general medical practitioner; at least for the moment. The plaintiffs husband is very wary of her undergoing the procedure. He is conscious of the risks involved and, on weighing them against any possible benefits, I think it is fair to say that his present position is that he would be opposed to the procedure. For her part, the plaintiff has not reached a final view about the matter. She has confidence in Ms Molloy. I think it is possible that she might reach a point where, the physiotherapy and medication having no effect on keeping the pain at a tolerable level, she will seriously consider undergoing the surgery. Presently, such a procedure would cost something in the vicinity of $16,000.
The plaintiff’s injury and symptoms have had a significant impact on her life. It seems she has always been a somewhat proud housekeeper, preferring to attend to the usual domestic duties herself. Since the accident, she avoids vacuuming, ironing and the hanging out of clothes, seeking, and obtaining, the assistance of other members of her family in these chores. Many of these duties have fallen to her husband with the assistance of her children from time to time. She liked gardening before the accident, and participated in it, but now restricts such activity. Her quality of life has been impaired. She was fond of reading, but now finds that she is unable to read beyond about 30 minutes because of an increase in neck pain brought about by holding her head and neck in a static position. The same thing applies with the piano: she likes playing it, but, for the same reason, must restrict her level thereof. She is unable to drive or, for that matter, be a passenger in, a car for prolonged periods without an increase in her symptoms; and the reason is the same: holding her head and neck in a somewhat static position. Prior to the accident, in order to keep her weight down, she walked three times a week for 40 to 60 minutes. She does not walk now because it produces an increase in her symptoms and, as a consequence, since the accident, her weight has increased by about 10 kilograms. She gets depressed and cries easily. She has sometimes had thoughts of suicide, but has not spoken to anybody about it.
There is some controversy about the nature of the injury suffered by the plaintiff in the accident; Ms Molloy being of the opinion that damage to the C3-4 joint, the one which seems to be largely productive of the plaintiff’s symptoms, was caused in the accident and that the degeneration in that joint has occurred since the accident as a result; while Mr McCulloch is of the view that, prior to the accident, the plaintiff had an abnormal degenerative joint at that level and that the trauma of the accident operated on it so as to convert a bad joint which was asymptomatic into one which was symptomatic. Dr Lavender supports the view of Ms Molloy and Mr Williams, an orthopaedic surgeon, supports the view of Mr McCulloch. I prefer the evidence of Mr McCulloch on this topic.
The thing which finally led me to preferring the opinion of Mr McCulloch was the level of degeneration in the plaintiffs cervical spine at the C3-4 level. As I have said, the degeneration is severe; the joint has really disappeared. According to Mr McCulloch, such a level of degeneration, in the absence of a fracture in the joint, could only occur over a period of many years; much longer than the time which has elapsed since the accident. Ms Molloy did not share that view, being of the opinion that such a level of degeneration could, and, in her view, did, occur between the time of the accident and the time she first saw the plaintiff in 1998. I found Mr McCulloch’s evidence persuasive on this point. I should say that each of Mr McCulloch and Ms Molloy was prepared to concede that the view of the other was possible. In the end, I am satisfied, and find, that the injury suffered by the plaintiff in the accident was an aggravation of pre-existing degenerative change at the C3-C4 level.
As a result of her injury, the plaintiff, since the accident, has been incapacitated for work; and such incapacity is permanent. It is not a total incapacity for work, but she is not fit to perform work which requires prolonged sitting, working with her head and neck in a static position for prolonged periods, the pushing or lifting of anything other than light objects, working with her hands above her head and prolonged standing or walking. She is fit for work of a light nature where she can sit, stand, move about and change the position of her head and neck as required; and even then, she is not fit for full-time work: the best she could do is 20 hours per week.
The plaintiff is now aged 45. She was born on 27 March 1955. She completed Year 10 at school, leaving during Year 11. She did clerical work until she married. She was born and educated at Wallaroo and worked there until she married, moving then to Adelaide. As I understand it, since their marriage, her husband has worked in the computer industry, establishing his own business shortly after they were married. The plaintiff has been actively involved in this business, which has become very much a family concern.
The plaintiff has had three children, the youngest of whom is now aged 15 and in Year 11 at school. Since her marriage, the work she has performed outside the home has always been of a clerical nature and in the family business. The plaintiff has been a willing and contributing participant in the business to such extent as she has been able, taking into account the need for her to care for the children of the marriage. It seems that the division of the parenting and domestic tasks has been ordered so as to allow the plaintiff’s husband to devote as much of his time to the business as possible; and the business has been successful. Naturally enough, the plaintiff’s work in and for the business has involved time spent at a computer terminal; the sort of work which, like reading and playing the piano, causes her problems with her neck.
The financial affairs of the family business, at all relevant times, have been organised through a trust, Axis Computing Trust (‘the Trust”). At all relevant times, the trustee of the Trust has been Axis Computing Pty Ltd (“Axis”). The plaintiff and her husband have been, and remain, shareholders in Axis. The business of Axis is the provision of services and advice in the field of information technology. The profit made by Axis is distributed through the Trust to the plaintiff, her husband and three children by way of salaries, superannuation and other distributions as decided by the plaintiff and her husband acting on the advice of their accountant. The plaintiff readily concedes that she is not able to point to any diminution of her income since the accident. The amount she has received through the Trust has not diminished.
At the time of the accident, the plaintiff was working about 10 hours per week for Axis and for an organisation called Coded; an organisation to which Axis supplied services, including technical advice and clerical staff. Axis charged Coded for the plaintiff’s services. About a month before the accident, she had been working about 5 hours per week for Axis. For a period of about 12 months prior to that, she had worked at Coded as part of the services provided by Axis to that organisation. Coded was charged by Axis for her services. She worked about 40 hours per week. She ceased this work because of a change in the domestic arrangements of her family. During the period she was working full-time at Coded, she was also spending about 2 hours per week doing book work for Axis.
After the accident, the plaintiff did not do any work for a week. She then resumed work for Axis, working about 6 hours per week. In July 1997, she commenced working full-time at Colliers Jardine. She did clerical work. Her services were provided to Colliers Jardine by Axis at a price. She ceased this work because her pain increased and she could not cope any longer. She then worked for Axis for about 2 hours per week. She also did some clerical work for a speech pathologist and an accountant on a part-time basis, services which were supplied and charged for by Axis.
The plaintiff and her husband had been keen for some time to expand their business. Early in 1998, Axis entered into a partnership arrangement with others through a company called New Technology Partners Pty Ltd (“New Technology”). This company is in the business of providing services and advice in the field of information technology. Axis has a third share of New Technology. Axis delayed it’s entry into the New Technology venture because of the plaintiff’s health after the accident. There was always a role in the business of New Technology for the plaintiff; and, because she could not exercise that role on account of her health following the accident, the work she would have done was outsourced at a cost to New Technology of $25 per hour. This was full-time work as from July, 1998. Axis would probably have charged $20 per hour for this work if it had been done by the plaintiff.
In about the middle of 1999, the plaintiff commenced work in the New Technology business. Initially, she worked 10 to 12 hours per week, increasing by late 1999 to 20 hours per week. She has continued to work 20 hours per week since that time. She is not able to work any longer because of the symptoms she suffers from the injury sustained by her in the accident; otherwise she would.
The plaintiff’s work for New Technology is charged out at $16 per hour by Axis. The going rate for her work is really $20 per hour. The work being performed by the plaintiff is really part of a full-time job, so that a person is employed part-time to do that part of the job which is not performed by the plaintiff. The person who performs the balance of the job is a junior who is paid at the rate of $16 per hour. It is deemed to be appropriate that the plaintiff’s services be charged out at the same rate as the person who shares the work with her.
The plaintiff ceased doing the book work for Axis for a time after the accident. She resumed doing it in about the middle of 1998. Her husband had been doing it in the meantime.
The plans of the plaintiff and her husband, so far as work is concerned, have changed since the position has become clearer as to the plaintiffs physical condition and fitness for work. Prior to the accident, they intended to operate the business indefinitely: the plaintiff describing her husband as a workaholic. It was the plaintiff’s intention to work until she was about 60. The plaintiff’s husband, who is the one who provides the technical expertise in the business and without whom the business would probably not function, thinks that, because of the plaintiff’s health, they should sell the business in about 3 years and retire. He is concerned about the plaintiff’s quality of life and is keen for her to be as comfortable as possible.
As I said earlier, the plaintiff’s earning capacity has diminished since the accident and will remain that way; and Mr Stanley, for the defendant, conceded that; but he submitted that such diminished capacity should not sound in damages by way of past economic loss because it has not been productive of any financial loss in that, to date, there has been no diminution in the plaintiff’s income from Axis; that her income from the business has borne no relationship to the work performed by her in the business. So far as any damages for future economic loss are concerned, he submitted that there should be an award of damages to compensate her for the possibility that the diminution in her earning capacity would result in actual financial loss; submitting that such figure should be modest because, as he put it, the plaintiff probably would not have worked much longer into the future and the success of the business meant that she was probably going to receive from it an income similar to that which she would have earned if she had sold her labour outside the business. I do not accept these submissions.
The law says that an injured plaintiff who suffers a diminution of earning capacity, past or future, which would be productive of financial loss is to be compensated for that loss by way of an award of damages; and it is not to the point that, as in this case, the person concerned was, or would be, during the period of the loss, in receipt of an income at least equal to that which he or she received prior to the incident productive of the loss; for the loss occasioned by the impairment of earning incapacity, and which is to be compensated, is the loss of what the person concerned would have expected to have under his or her control and at his or her disposal by exercising that capacity, however he or she dealt with those rewards; the measurement of that loss being determined by the circumstances of each case: Cole v Ellis (1993) 60 SASR 481; Husher v Husher 165 ALR 384.
It is clear that, since the accident, the plaintiff has suffered financial loss: as a result of the injuries sustained, the rewards from the exercise of her earning capacity have been less than what they were before the accident, and that will be the position in the future.
In the assessment of the plaintiff’s damages for economic loss, both past and future, I have proceeded on the basis that the plaintiff’s earning capacity reasonably produces $20 per hour. It is true that, currently, she is selling her labour at $16 per hour, but the real value for her work is $20 per hour; the $16 per hour being a rate which has been discounted in the circumstances I have mentioned.

In the assessment of the plaintiff’s damages for past economic loss, I have taken into account the possibility that, for whatever reason, not associated with her injury, she would have had periods of interruption to her work.
In assessing the plaintiff’s damages for future economic loss, I have made allowance for the possibility that her neck would have become symptomatic at some time before she decided to cease work, and that her earning capacity would have thereby been impaired: although Mr McCulloch thought it likely that the pre-existing degenerate condition of her neck would have become symptomatic at about the time she turned 60, the possibility existed that it could have occurred earlier. I have also taken into account the possibility that, for whatever other reason, she would have ceased work before she reached the age of 60.
So far as the plaintiff’s damages for non-economic loss are concerned, I assign a numerical value of 30: her pain and suffering is constant and significant, and it will remain that way.
There will be a lump sum of $13,000 by way of interest on the plaintiff’s damages for past economic loss.
I assess the plaintiff’s damages as follows:
Non economic loss  $    45,600.00
         Past economic loss  $    45,000.00
         Future economic loss  $ 125,000.00
         Future medical expenses  $    15,000.00
         Gratuitous services  $      2,500.00
         Interest  $    13,000.00
         Total  $ 246,100.00

There will be judgment for the plaintiff in the sum of $246,100.00.
I will hear counsel as to costs.

[2001] SADC 26

2 March 2001