Pene v Murphy
[2004] WASCA 103
•20 MAY 2004
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE FULL COURT (WA)
CITATION: PENE -v- MURPHY [2004] WASCA 103
CORAM: MILLER J
EM HEENAN J
LE MIERE J
HEARD: 19 APRIL 2004
DELIVERED : 20 MAY 2004
FILE NO/S: FUL 77 of 2003
BETWEEN: EDWARD CLAUDE PENE
Appellant (Plaintiff)
AND
KERRIN MURPHY
Respondent (Defendant)
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram :GROVES DCJ
Citation Number : [2003] WADC 96
Catchwords:
Torts - Damages for personal injury - Appeal - Loss of past and future earning capacity - Proper basis for assessment - Whether principles in Bowen v Tutte applicable - Whether trial Judge erred in assessment of retained earning capacity - Whether proper approach to deduct figure for potential retained earning capacity from loss of earned capacity - Turns on own facts
Legislation:
Nil
Result:
Appeal allowed
Damages varied by substituting award of $227,362
Category: B
Representation:
Counsel:
Appellant (Plaintiff) : Mr K S Pratt
Respondent (Defendant) : Mr B C Sierakowski
Solicitors:
Appellant (Plaintiff) : Kott Gunning
Respondent (Defendant) : Brian C Sierakowski
Case(s) referred to in judgment(s):
Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR (NSW) 120
Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649
Bowen v Tutte (1990) Aust Torts Rep 81‑043
Bresatz v Przibilla (1962) 108 CLR 544
Calder v Boyne Smelters Ltd [1991] 1 Qd R 325
De Sales v Ingrilli (2000) 23 WAR 417
Foyster v Goynich [1984] WAR 80
Gamser v Nominal Defendant (1977) 136 CLR 145
Ghunaim v Bart [2004] NSWCA 28
Heather v Vita Pacific Ltd (1996) 6 Tas R 52
Jongen v CSR Ltd (1992) A Torts Rep 81‑192
Koeck v Persic (1996) A Torts Rep 81‑386
Medlin v State Government Insurance Commission (1995) 182 CLR 1
Munce v Vinidex Tubemakers Pty Ltd [1974] 2 NSWLR 235
Nolan v Hamersley Iron Pty Ltd (2000) 23 WAR 287
Roads and Traffic Authority v Cremona (2001) 35 MVR 190
State Government Insurance Commission v Hitchcock, unreported; FCt SCt of WA; Library No 970089; 11 March 1997
Struthers v Harris [1983] WAR 123
Thomas v O'Shea (1989) Aust Torts Rep 80‑251
Vandeloo v Waltons Ltd [1976] VR 77
Villaservil v Pickering (2001) 24 WAR 167
Western Australia v Watson [1990] WAR 248
Wilson v Peisley (1975) 7 ALR 571
Wright v Shire of Albany (1993) Aust Torts Rep 81‑239
Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485
Case(s) also cited:
Australian Coal & Shale Employees' Federation v The Commonwealth (1953) 94 CLR 621
Black v Motor Vehicle Insurance Trust [1986] WAR 32
Brown v Rodrigues, unreported; FCt SCt of WA; Library No 970334; 3 July 1997
Dearman v Dearman (1908) 7 CLR 549
Devries & Anor v Australian National Railways Commissioner & Anor (1993) 177 CLR 472
Edwards v Noble (1971) 125 CLR 296
Eltin Ltd v Dowsett [2001] WASCA 101
Gronow v Gronow (1979) 144 CLR 513
Introvigne v Commonwealth of Australia & Ors (1980) 32 ALR 251
Jackson v ADIA Centrecom Industrial Pty Ltd & Anor [1999] WASCA 159
Malec v J C Hutton Pty Ltd (1990) 169 CLR 638
Miller v Jennings (1954) 92 CLR 190
Paul v Rendell (1981) 34 ALR 569
Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 118
Potter v State Government Insurance Commission (1990) Aust Torts Rep 81-015
Powell v Streatham Manor Nursing Home [1935] AC 243
S S Hontestroom (Owners) v S S Sagaporack (Owners) [1927] AC 37
Warren v Coombes (1979) 142 CLR 531
Whitehouse v Jordan [1981] 1 All Eng 267
MILLER J: This is an appeal from a judgment of Groves DCJ in the District Court at Perth delivered on 2 May 2003. On that date the learned trial Judge awarded the plaintiff the sum of $132,705.40 for damages for personal injury and consequential loss and damage sustained in a motor vehicle accident on 18 August 1999. Liability of the respondent to pay the appellant damages was admitted.
The award made by the learned trial Judge was made up in the following way:
"General damages $ 24,000.00
Past economic loss $ 24,920.40
Interest on past economic loss $ 2,736.26
Past superannuation $ 5,121.00
Loss of future earning capacity $ 64,700.00
Future superannuation $ 5,727.74
Travelling$ 1,500.00
Future medical expenses $ 4,000.00
Total$132,705.40"
Grounds of appeal
The appeal contests only the awards for past and future loss of earning capacity, but any variation in relation to those components of the award would lead to further variations in relation to interest and superannuation.
The grounds of appeal are in the following terms:
"1.With respect to the appellant's (plaintiff's) claims for past loss of earnings and future loss of earning capacity, the learned trial Judge erred, in law, by not making awards under each of those heads in accordance with the principles enunciated by the decision of this Honourable Court in Bowen v Tutte (1990) Australian Torts Reports 81‑043 given that:
(i)decision's applicability to the facts of the District Court action; and/or,
(ii)counsel for both the appellant (plaintiff) and the respondent (defendant) submitted that the decision was applicable to the facts of the District Court action and the learned trial Judge did not, in any manner, indicate that he was considering an alternative 'method' of assessing damages under those heads of damages; thereby depriving the appellant (plaintiff) procedural fairness by not allowing counsel for the appellant's (plaintiff's) to argue the matter during closing addresses.
2.In the alternative to ground 1 hereof, despite having been referred to this Honourable Court's decision in Wright v Shire of Albany (1993) Australian Torts Reports 81‑239, the learned trial Judge erred, in law, in not following that decision in that he made no allowance in his award of damages under the heads of past loss of earnings and future loss of earning capacity for periods of unemployment which the appellant (plaintiff) might suffer because of his injuries.
3.In the alternative to grounds 1 and 2 hereof, the learned trial Judge erred, in law, in that the awards under the heads of damages for past loss of earnings and future loss of earning capacity were outside the range of sound discretionary awards under those heads given the uncontroverted evidence in the District Court Action and as found by the learned trial Judge in his reasons for decision."
There is a problem with grounds 1 and 2. The decisions in Bowen v Tutte (1990) Aust Torts Rep 81‑043 and Wright v Shire of Albany (1993) Aust Torts Rep 81‑239 are not to be taken as setting out principles invariably applicable to assessments of damages for loss of earning capacity. The first of the cases is authority (inter alia) for the proposition that in the absence of any evidence of the availability of suitable employment for, or earnings which could be derived from it by an injured plaintiff, a trial Judge has a wide range of findings open on the issue of loss of earning capacity and may, in an appropriate case, assess residual earning capacity at a percentage of pre‑accident earning capacity. However, the case does not stand for authority that this is required in every assessment of damages for loss of earning capacity.
Where it is clear that an injured plaintiff has suffered a loss of earning capacity, such as a total loss of capacity to earn in an occupation or profession in which he has previously been employed, the Court should do its best to place a value on that loss, notwithstanding the absence of evidence on the availability of employment within the plaintiff's residual capacity and the amount which could be earned in such employment. These propositions are well established and generally applicable to cases in which the central issue is loss of earning capacity.
The decision in Wright v Shire of Albany is authority for the proposition that in an appropriate case, an award of damages for loss of earning capacity should include within it the contingency of future unemployment. The case also deals with the appropriate deduction for contingencies in circumstances where an injured plaintiff is at risk of losing his present employment.
The principles contained within each of the decisions in Bowen v Tutte and Wright v Shire of Albany are important statements by the Full Court of the appropriate basis upon which to assess damages for loss of earning capacity in certain cases, but neither case suggests that these are fixed and inflexible principles upon which damages are always to be assessed in claims for loss of future incapacity. It follows that in this appeal the real question is whether the awards for past and future loss of earning capacity were respectively outside the range of sound discretionary awards under those heads. In this respect it is ground 3 of the grounds of appeal which requires consideration.
The facts
The appellant's injury occurred when he was at the wheel of a Ford Falcon Utility being towed by another vehicle on the Mitchell Freeway. There was a rear‑end collision with the vehicle in which the appellant was travelling and his vehicle was in turn propelled into the towing vehicle. He was taken to Joondalup Hospital experiencing pain in the neck and back. He was x‑rayed but the x‑rays were normal. In due course the appellant saw his general practitioner, who referred him to physiotherapy and hydrotherapy. He was later referred to a number of specialists, including an orthopaedic surgeon. That orthopaedic surgeon was Mr Malcolm McCallum, who first saw the appellant in January 2000. His examination of the appellant revealed (relevantly) tenderness in the thoracic spine and spasm of the neck muscles in the cervical spine. X‑rays revealed significant arthritis of the facet joint at the C4/5 level, with hypertrophic degenerative facet joint changes at that level. A bone scan revealed that the prime cause of neck pain was most probably damage to the right C7 facet joint. This was later assessed by Mr McCallum as constituting a 7 per cent permanent residual disability of the cervical spine.
Trial Judge's reasons
Injuries and disabilities: loss of amenities
The learned trial Judge's findings on the extent of the appellant's injuries included a comprehensive review of all the medical evidence and it is unnecessary to repeat it. His Honour found that the appellant had suffered a whiplash injury causing soft tissue injury of moderate severity to the neck; aggravation of pre‑existing cervical facet joint osteoarthrosis at the C5/6 and C6/7 level; a soft tissue injury of minor severity in the area of the thoracic spine; thoraco lumbar facet joint sprain secondary to flexion/extension injury and minor soft tissue injuries in the area of the chest and ribs. His Honour concluded that the appellant's injuries and symptoms, their progression and treatment, their current status and the effect that they had had and would have on the appellant's enjoyment of life, put the appellant's case at 15 per cent of the most extreme case. This in turn led to an award of general damages for loss of amenities in the sum of $24,000.
Loss of earning capacity
The appellant was born in New Zealand in August 1960 and was 42 years of age at the date of trial. The evidence established that he had left school at the age of 15 years and undertaken an apprenticeship for four years in the meat trade. He gained qualifications in meat retailing and butchering and between 1980 and 1988 was a beef boner at a meatworks. From 1988 to 1994 he was engaged in two abattoir business ventures, supplying meat for the pet food trade but each of them failed and in 1995 he returned to beef boning at an abattoir.
The appellant came to Western Australia in August 1996 and within a matter of days, found a job cutting, lifting and stacking blocks of limestone. It was heavy physical work and the appellant continued in it until January 1999 when he obtained employment with the West Australian Meat Marketing Corporation at Spearwood, boning their carcases. This was lighter work than the appellant had previously done as a beef boner, but it was still heavy work and repetitive. The learned trial Judge found that it required "strength, skill, agility and speed of operation".
The learned trial Judge reviewed the opinions of the various treating doctors and consultants in relation to the appellant's capacity to continue work as a lamb carcase boner, following the motor vehicle accident. His Honour accepted the opinions of the majority of the doctors that by reason of his injuries and resultant disabilities the appellant would not return to work as a meat boner. He did, however, find that from at the latest 1 July 2000 the appellant was fit to engage in lighter type of work in a range of occupations. His Honour noted that Mr McCallum was of the view that the appellant was capable of a number of lighter duty type occupations and the orthopaedic surgeon Mr Anastas had expressed the opinion that he was fit for full‑time lighter boning duties, or full‑time work in the areas of customer service officer, console operator, driveway attendant, courier work, light stores duties, light cleaning duties and spare parts sales.
The learned trial Judge found that although numerous medical and paramedical personnel had recommended to the appellant that he engage in an exercise regime to improve his fitness preparatory to returning to work, he failed to take any steps in that regard and he remained generally unfit. His Honour was somewhat critical of the fact that a injury management consultant had failed to put into effect recommendations by doctors on the appropriate exercise regime and concluded that the appellant had done all that was required of him generally between July and December 2000 to obtain light work, but through no fault of his own was unable to do so. Thereafter, in December 2000 the appellant suffered a fall and injured his left knee, with the result that he could not have engaged in his pre‑accident occupation for at least three months and accordingly, it was a period of time that should be taken out of any allowance for past loss of earning capacity.
Calculation of past loss of earnings
The calculation for past loss of earning capacity was, before deductions, $104,162.40 made up as follows:
"9 August 1999 to 1 July 2000 (45 weeks)
$636.66 gross or $480.32 net weekly $ 21,614.40
1 July 2000 to 30 June 2001
$690 gross or $541.00 net weekly $ 28,132.00
1 July 2001 to judgment 30 April 2003 (95 weeks)
$741.00 gross or $576.00 net weekly $ 54,720.00
Total$104,162.40
The allowance for the period 1 July 2000 - 30 June 2001 incorporated a reduction of 25 per cent to allow for the three‑month period during that year when the appellant was incapacitated by reason of having injured his knee. The allowance for the period from 1 July 2001 until judgment, was adjusted to reflect the fact that the appellant had failed to mitigate his loss during that period. The learned trial Judge said:
"On the evidence he was fit to engage in work involving lighter duties in a range of vocations. His evidence was that over an undefined period he has made thirty or forty telephone calls in response to job advertisements but on no occasion got any further than that. No written applications for employment were made. No other evidence was led which would indicate or confirm the attempts said to have been made to gain employment and the responses to those enquiries. I do not accept such evidence as there was as being sufficient to satisfy me that all reasonable attempts have been made by the plaintiff to obtain employment.
On the other hand I am accepting of the fact that there are a number of matters which will have had an adverse impact upon the plaintiff's attempts to gain employment. He is disadvantaged in the labour market by reason of his limited education and his lack of skills (other than a meat boner) and the fact that he is not a naturally communicative person. The labour market survey indicates that there is keen competition for jobs, he has no previous experience in alternative employment, is a late entrant into any new job market and is a person with a disability. He is not however totally and permanently incapacitated and is employable. I am not satisfied that during this period the plaintiff made all reasonable attempts to gain employment.
To recognise these matters it is appropriate that for the period 1 July 2001 to judgment that the amount proposed be reduced by 50 per cent."
After deducting an advance which the appellant had received ($45,153) the net allowance for past loss of earning capacity was $29,920.40, made up as follows:
"19 August 1999 to 1 July 2000 $21,614.40
1 July 2000 to 30 June 2001 $21,099.00
1 July 2001 to judgment $27,360.00
$70,073.40
Less ICWA advances $45,153.00
$24,920.40"
In my view, the deduction of 50 per cent from the third component of the past loss of earnings, although a substantial deduction to reflect the appellant's failure to take appropriate steps to obtain employment in light duties in a range of occupations open to him, was not so excessive as to justify this Court interfering with it. It was argued on behalf of the appellant that a deduction of 30 per cent would have been more appropriate in the circumstances, but I do not consider error has been shown on the part of the learned trial Judge in the exercise of his discretion in dealing with this head of damages. Accordingly, I do not think that there is any basis for the grounds of appeal insofar as they contest the claim for past loss of earning capacity.
Future loss of earning capacity
The claim formulated by the appellant for future loss of earning capacity was based upon just over 22 years of total loss of earning capacity, from which it was conceded that a deduction for contingencies for retained earning capacity was appropriate. That deduction was suggested by counsel for the appellant to be 30 per cent.
The learned trial Judge adopted as a starting point for calculating future loss of earning capacity the calculations which had been prepared by counsel for the appellant and put before the Court in the form of a Schedule. This Schedule was nothing more than a guide for the assistance of the learned trial Judge with arithmetical calculation. It did not have the status of an exhibit or indeed any particular weight at all. The claim for future loss of earning capacity before any deductions for contingencies was calculated as follows:
"Plaintiff's age - 42 years (43 years on 21.8.03)
Therefore approximately 42.65 years old.
Years to retirement at age 65 - approximately 22.35.
6% multiplier for 22 years = 647, therefore
appropriate approximate multiplier
$590 x $647 = $381,730"
The learned trial Judge rejected the proposition that a deduction of 30 per cent for contingencies and retained earning capacity would be appropriate. Indeed, his Honour rejected the suggestion that what he termed "a global discount of 30 per cent" should be applied in the case, preferring to approach the matter from the point of view of calculating more precisely future economic loss by deducting from the gross figure of $381,730, a figure which could be calculated on material before the Court as properly representing retained earning capacity over the 22.35‑year period. His Honour's approach was as follows:
"As inexact as the science may be in some cases, it is possible in this case to be more precise in the calculation of future economic loss. The plaintiff has a retained earning capacity. He is fit to work in a number of vocations involving lighter duties, those vocations having been identified by Mr McCallum and Mr Anastas and others as including customer service officer, driveway attendant, courier work, light store duties, light cleaning duties, spare part sales and consul operator, etc. The Labour Market Employability Report indicates that there are opportunities as a light process worker. I am satisfied that the plaintiff has the competence and skill to be engaged in a range of work which this category encompasses. Whether or not he has the motivation is a matter for him.
The current average weekly earnings of a light process worker is $619.48 gross per week or $494.48 net per week, that is approximately $100 per week less than the $590 per week being the net weekly amount upon which the plaintiff has calculated future loss. On the sum of $100 per week applying the appropriate multiplier of 647 gives a future loss of $64,700."
The learned trial Judge then considered the question of contingencies. His Honour appreciated that a deduction for contingencies is not called for in all cases and that all contingencies of life are not adverse. Likewise, all vicissitudes of life are not harmful: Bresatz v Przibilla (1962) 108 CLR 541 per Windeyer J at 543 ‑ 544. His Honour concluded:
"The discount for contingencies include the normal vicissitudes of life, including but not limited to, the possibility of retirement earlier than age 65, the lack of continuing work and seasonal factors impacting upon the meat industry and the general fluctuation in income being dependent upon work being available, etc. On the other hand, positive contingencies include the inability to exercise retained earning capacity, the difficulty of obtaining and maintaining alternative work, the evidence of increases in income and the need to take care and prepare for the future.
Until the accident the plaintiff had a history of continuous employment and of high earnings. He was seemingly a reliable employee who was skilled and competent in his field of endeavour. However, he may not have been able to continue in his pre‑accident employment through to retiring age (as to which see Mr McCallum's evidence). As against the plaintiff, now 42 years of age, is thrown onto a job market where there may be limited opportunities for a person of his age, education and skills. In all the circumstances and in weighing up these matters and doing the best one can in looking to the future I decline to 'scale down' the claim for future loss for other contingencies."
I have difficulty with the learned trial Judge's conclusion that this was a case in which it was possible to be precise in the calculation of future economic loss. In my view, the evidence was insufficient to support the conclusion that the appellant was capable of holding down a job as a light process worker at an average weekly earnings of $619.48 gross per week. His Honour's conclusion in that regard was based upon a report entitled "Employability Report" compiled by Ms Lizzie Moyle, a consultant to Labournet Work Focus Australia. In that report, Ms Moyle concluded that in the light of the appellant's physical work capacity he was capable of working as a light process worker, a quality assurance inspector or a retail sales assistant. The remuneration levels for light process workers were set out in a table which read as follows:
"Light Process Worker
Award Rates of Pay
$448.10
Enterprise Bargaining Rates of Pay
$511+
Average Weekly Earnings
$619.48
Employment Prospects
Limited"
Ms Moyle was cross‑examined on the conclusions reached in her report and it became apparent that it would be by no means easy for the appellant with his disability to obtain a job as a light process worker. An extract from her evidence is as follows:
"Let's take light process work first. I heard what you said about, if you like, the different gradings of availability of work from very good, good, average, limited to poor? --- Mm'hm.
I think you grade the job availability in relation to that kind of work, process working, as at the moment average. Is that correct? --- For general process working, yes. For light process working the vacancy level is significantly less, as I have explained.
But you also acknowledge in your report, I think, that even though the outlook is average, the competition for such work is keen? --- It is.
And all things being equal, new entrants to that kind of occupation would - you know, all things being considerable, compete less favourably. Would you agree with that? --- Yes, I would say that it's more competitive for new entrants that for more experienced workers.
Are there any statistics available about people who, say, move into work such as light process work from, say, a manual background, in their forties? Are there any statistics available for that sort of transference in the middle age like or is that just not collected? --- Not that I'm aware of, no.
Are there any statistics which are published or are available to you which deal with what difficulty a person who declares some kind of disability when they apply for jobs generally. Is there anything published about ---? --- Well, I have some information on the number of disabled people employed in various industry sectors. Is that what you would be referring to?
I don't know because that presuppose that they had won a job. Would that be ---?--- This is the number of people with some level of disability employed within a particular industry sector.
Have you got it for light process workers? --- It's not as specific as that. Probably the closest would be - if you would just bear with me for a moment - labourers and related workers within Western Australia. There are 9400 with core activity restrictions, 77,500 with no disability and 14,100 with some level of disability. So that's a reasonable percentage within ---
Are there any studies which you're of which descend to this sort of particularity, and that is how likely is it that someone would get short‑listed for a job after declaring to an employer a disability? --- No. All I have available is the number of people who are registered disabled employed within ---"
In my view, it was too optimistic for the learned trial Judge to conclude that the evidence established that the appellant was capable at the time of trial of obtaining work as a light process worker and at a gross weekly wage of $619.48. They were the average weekly earnings for all light process workers and significantly above the Award Rate and the starting point of the Enterprise Bargaining Rate. The evidence of Ms Moyle made it clear that there was absolutely no assurance that the appellant, even if motivated to do so, could get a job as a light process worker. The market for such work is competitive and light processing work is significantly less available than general processing work. For those with disabilities the problems are even more acute.
In my view, it would have been preferable for the learned trial Judge to have taken as a starting point for calculating future loss of earning capacity the $381,730 calculated for prospective loss of earning capacity, on the basis of a total loss of that capacity. A deduction for contingencies would then have been appropriate.
The principles upon which the contingencies or "vicissitudes" of life are properly to be taken into account are set out by Dawson, Toohey, Gaudron and Gummow JJ in Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485 at 497:
"Calculation of future economic loss must take account of the various possibilities which might otherwise have affected earning capacity. The principle and the relevant considerations were identified by Barwick CJ in Arthur Robinson (Grafton) Pty Ltd v Carter as follows:
'Ill health, unemployment, road or rail accidents, wars, changes in industrial emphasis, so that industries move their location, or are superseded by new and different techniques, the onset and effect of automation and the mere daily vicissitudes of life are not adequately reflected by merely - and blindly - taking some percentage reduction of a sum which ignores them.'
It is to be remembered that a discount for contingencies or 'vicissitudes' is to take account of matters which might otherwise adversely affect earning capacity and as Professor Luntz notes, death apart, 'sickness, accident, unemployment and industrial disputes are the four major contingencies which expose employees to the risk of loss of income'. Positive considerations which might have resulted in advancement and increased earnings are also to be taken into account for, as Windeyer J pointed out in Bresatz v Przibilla, '[a]ll "contingencies" are not adverse: all "vicissitudes" are not harmful'. Finally, contingencies are to be considered in terms of their likely impact on the earning capacity of the person who has been injured, not by reference to the workforce generally."
In this case the relevant contingencies and vicissitudes were that on Mr McCallum's view, the appellant would have been lucky to have stayed in his occupation as a boner for another 10 years; evidence revealed that 80 per cent of boners engaged at meat works are under 40 years of age; seasonal factors often cause closures of meat works and ill‑health generally may have caused difficulties for the appellant working throughout the balance of his working life. In addition, and perhaps most importantly, the appellant had a retained earning capacity which meant that he was at least capable of obtaining employment in other fields if that employment was available to him. Even then, the prospect of periods of unemployment was a factor to be considered in the mix leading to the ultimate calculation of the appropriate discount for (Wright v Shire of Albany (supra)).
The respondent had discharged the evidentiary burden cast upon him of establishing that alternative employment opportunities were open to the appellant. There was evidence of the state of the labour market and the likely earnings which the appellant could earn in a range of occupations: Thomas v O'Shea (1989) Aust Torts Rep 80‑251 per Malcolm CJ and Kennedy J at 68‑701 ‑ 68 702.
This was not a case where the Court had no evidence of the availability of employment within the appellant's residual working capacity or evidence of the amount which could be earned in such employment (Bowen v Tutte (supra) at 81‑043) but it was, in my view, a case where it was appropriate for the learned trial Judge to take account of the existence of the residual earning capacity by the deduction of a percentage amount from the figure calculated for total loss of earning capacity. In my view there were too many uncertainties associated with the prospect of work as a light process worker to enable the precise arithmetical calculation undertaken by the learned trial Judge to be performed.
In the end, the question is one of fairness in the assessment of future loss of earning capacity. This was put by Barwick CJ in Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649 at 657 as follows:
"The facts and circumstances of each case vary infinitely - so often subtly. The application of judgment to them is, in my opinion, preferable to any attempt to apply a rule or to draw a conclusion or discover a norm from awards made in other circumstances.
Too little emphasis it seems to me is usually given to the moderation with which the assessment of damages for personal injuries should be essayed by the jury. Mere statement that the compensation is to be fair does not seem to me to be enough. The concept of fairness, with its concomitant moderation, needs explanation and emphasis and the jury needs to be carefully and specifically warned against attempting a perfect compensation. As I shall later point out, they should also be warned against any pseudo scientific or seemingly mathematical calculations.
It must be remembered that the plaintiff and the injuries are prominent in the trial. However much deficiencies in the evidence as to the extent of the injuries may be thought to be supplied by reliance on the maxim that all things are presumed against the wrongdoer, fairness is denied if in the assessment of damages as well as in the decision as to liability the position of the defendant is ignored and left out of sight. Emphasis on
fairness may well be coupled with a warning against the inclusion of any punitive elements in the assessment."
These observations were made in the context of the assessment of damages by juries in New South Wales, but they remain true in general terms for the assessment of damages for loss of earning capacity.
In my view, the preferred approach to the assessment of damages for future loss of earning capacity would have resulted in a deduction of 60 per cent of the gross sum of $381,730 to account for all contingencies, including retained earning capacity and the problems associated with it, . That is $229,038 leading to a net award for future loss of earning capacity of $152,693. As the award for future loss of earning capacity was only $64,700, it would need to be increased by $87,993. This is a significant increase and one which justifies interference with the award by the Court.
Consequential calculations for future loss of superannuation benefits would mean increasing the sum of $5727.74 allowed by the learned trial Judge to $12,391.34 as follows:
$760 gross per week x 9% = $68.40 per week
$68.40 x 647 (applicable multiplier) = $44,254.80
Less 30% (Jongen v CSR) = $30,978.36
Less 60% (contingencies generally) = $12,391.34
The difference between the assessment made by the learned trial Judge and the recalculation is $6663.60. This is to be added to the $87,993 by which future loss of earning capacity has been increased. The result is an overall increase of $94,656.60.
Accordingly I would allow the appeal in this matter. I would vary the assessment of damages made by the learned trial Judge by substituting for the allowance for loss of future earning capacity the sum of $152,693 in lieu of the sum of $64,700. I would vary the allowance for future superannuation benefits by substituting for the sum of $5727.74 the sum of $12,391.34. The overall award of damages to the appellant should therefore be varied by substituting for $132,705.40 the sum of $227,362.
EM HEENAN J: I have had the advantage of reading in draft the reasons for decision of Miller J. These set out fully the facts of this case, the findings made by Groves DCJ following the trial in the District Court of Western Australia in March and April 2003 and the learned trial Judge's reasons for decision leading to the judgment awarded in favour of the
appellant in the amount of $132,705.40. Miller J also describes the grounds of the present appeal by the appellant (plaintiff), the submissions made at the hearing of this appeal and, in particular, the basis upon which it is contended by the appellant that there were errors in law by the learned trial Judge which led, so it was submitted, to an unduly low award of damages being made below the range of a sound discretionary judgment. I gratefully adopt this outline of Miller J and can, therefore, pass directly to the issues arising on the appeal.
In the grounds of appeal and at the hearing of the appeal the appellant's argument was directed to alleged errors made by the learned trial Judge in the computation of components of the overall award of damages which his Honour had identified as loss of past earning capacity and loss of future earning capacity together with associated derivative alleged errors in the amounts assigned for interest on past loss of earning capacity and loss of past and future superannuation benefits which, clearly, are dependent upon the findings made about the loss of past earning capacity and the loss of future earning capacity as claimed by the appellant. However, this appeal, like any similar appeal, can only be from the total or global award of damages awarded and not from any one or more of the components assigned by the trial Judge when calculating the single award of damages for which judgment is entered.
In such a case where, as is to be expected, the learned trial Judge sets out the details of his reasoning and the amounts forming the main components of the global sum of damages, so that if error has occurred it may be revealed and corrected on appeal: Gamser v Nominal Defendant (1977) 136 CLR 145 at 148 per Gibbs J, this does not mean that any such revealed error will necessarily mean that the overall assessment was wrong or may be varied on appeal. As was said by Burt CJ in Struthers v Harris [1983] WAR 123 at 124:
"But when that is done a revealed error in the calculation leading to the assessment of the pre‑trial loss of earning capacity does not necessarily mean that the total assessment of the claim for loss of earning capacity which was sustained when the injuries were received was erroneous. Still less does it necessarily follow that the global assessment of general damages was erroneous. And that must be the question for this Court to decide and it can only be answered by this Court looking at the global award and forming its own judgment as to whether or not it is a reasonable assessment of what is just and fair compensation for the personal injuries received."
This is a long established principle and reflects the possibility that there may be other counterbalancing errors in the process of calculation of the final judgment or that there is a countervailing proportionality in the judgment as a whole which, though not the subject of direct explanation in the reasons for judgment, may mean that the final figure awarded is within the range of a reasonable discretion for the award of damages in the particular case - see also Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649 per Barwick CJ at 329; State Government Insurance Commission v Hitchcock, unreported; FCt SCt of WA; Library No 970089; 11 March 1997 per Ipp J at 14 and Calder v Boyne Smelters Ltd [1991] 1 Qd R 325 per Cooper J at 346.
The application of this principle in the present case has several consequences. First, as Miller J has explained, it means that it is only the appellant's third ground of appeal which directly addresses the critical legal issue of whether or not the global award of damages is "out of all reason" or "wholly disproportionate to the circumstances". It also means that the first and second grounds of appeal advanced on behalf of the appellant can only be treated as particulars of that third ground identifying what it is submitted are errors in the process of assessment undertaken by the learned trial Judge which led to the result that the overall award of damages is outside the range of a sound discretionary award in this instance.
It follows that, as a consequence of this basic approach, if there are errors in the learned trial Judge's approach to, or computation of, subheadings of the components of the award of damages contained in the judgment under appeal it must be the aggregate effect, if any, of those errors on the overall proportionality of the final award which needs to be evaluated in determining whether or not there has been an award of damages which is so inadequate as to be outside the range of a sound discretionary judgment because, only if this has occurred, would this Court be justified in allowing the appeal and varying the award of damages made.
The approach of the appellant was to rely entirely upon the significance of the alleged errors which he submitted had been made by the learned trial Judge in calculating components of the award of damages for past loss of earning capacity, loss of future earning capacity and the derivative components of interest on past economic loss, past and future superannuation. In doing so he sought to demonstrate that the aggregate of the inadequacies in the amounts allowed for those components of those various headings of damages was so great as to reveal appealable error. The anomaly in this approach is that it leaves out of account the amounts allowed by the learned trial Judge for other independent components in the award of damages which are not the subject of any grounds of appeal or of any notice of contention by the respondent but which, nevertheless, form part of the overall single award. In this case the respondent did not submit that any inadequacy in the components for damages which were the subject of the grounds of appeal were counterbalanced by the magnitude of allowances made in other subheadings but this only demonstrates that the point of comparison for the evaluation of the correctness of the award of damages must first and always be the final global amount for which judgment is entered.
As Miller J has shown, the critical findings of fact by the learned trial Judge were that, by reason of the injuries sustained in the accident caused by the respondent's negligence, that the plaintiff was unable to return to work in his pre‑accident employment as a meat boner. His Honour found that the appellant had, for this reason and because of other consequential factors for which he was not responsible, been unable to work from 18 August 1999 until 1 July 2001 but that, thereafter, he had been and was fit to engage in lighter type of work in a range of occupations. Accordingly, the learned trial Judge found that the plaintiff had demonstrated a total loss of earning capacity during the period 19 August 1999 to 1 July 2000 and for part of the period from 1 July 2000 to 30 June 2001.
During this latter period, however, the appellant was incapacitated for three months because of an injury to his knee and the associated medical treatment and convalescence. Consequently, the learned trial Judge, while accepting that the plaintiff was otherwise unable to be employed during that 2000/2001 year because of the consequences of the injuries sustained in the accident of 18 August 1999, he could only recover damages for the nine month period when he was not disabled because of the later knee injury. The obvious hypothesis is that, had he not been injured in the motor vehicle accident of August 1999 the appellant would still have suffered the knee injury and would have been off work for three months during that year. In those circumstances the question of the probability of whether or not the plaintiff would have been off work for three months because of a knee injury if the accident had not happened should not be brought directly into account but, rather, should be accommodated by an allowance for adverse contingencies in the calculation of past loss of earning capacity in the ordinary way. In my view there is no certainty, or even probability that this knee injury would have occurred, in the absence of the original accident but as its treatment is not the subject of any challenge by the appellant it is unnecessary to pursue its potential significance in this appeal.
When it came to the claim for past loss of earning capacity for the period from 1 July 2001 until 30 April 2003 - the 95 week period immediately preceding the delivery of judgment - his Honour reduced the claim for total loss of earning capacity by 50 per cent to recognise his finding that the appellant had not taken all reasonable attempts to obtain employment from 1 July 2001 onwards when, as a result of an earlier finding, his Honour had concluded he was fit for light work. In this regard the learned trial Judge, however, noticed that the appellant was disadvantaged on the labour market by reason of his limited education; lack of skills; the keen competition existing in the labour market; his absence of previous experience in alternative employment; by the fact that he was a late entrant into any new job market; and that he was a person with a disability.
In my view this 50 per cent deduction for past loss of earning capacity for the period from 1 July 2001 to 30 April 2003 was excessive and paid insufficient regard to the probabilities that, when attempting to return to work, the appellant would experience delays before first obtaining a new position, and would be likely to experience further delays if he ever lost employment and had to seek re‑employment on subsequent occasions. Similarly, I regard the reduction in the claim made by the learned trial Judge in this regard as excessive in failing to take into account the additional risks of unemployment faced by the appellant as a man of his age and disability when competing with others for positions involving lighter work and in retaining any such position if and when successful. On the evidence at the trial, as accepted by the learned trial Judge, I consider that the probabilities are that, during the period 1 July 2001 until 30 April 2003, the appellant was unlikely to have been in continuous employment in a light duties position, or series of positions, for more than a third of that period. The result is that I consider that the facts, as found, mean that during that 95 week period the plaintiff had retained only one third of his pre‑accident earning capacity and, therefore, had lost 66 per cent of that pre‑earning capacity.
It is to be remembered that the reduced earning capacity retained by the appellant during this 95 week period has to take into account, both the reduction in the net wages which he could expect to earn because of his accident caused physical incapacity and the difficulties which he would be expected to have in obtaining and retaining employment throughout the whole of the period or in obtaining fresh employment on any occasion when, for any reason, it may have been necessary for him to move from one employer and attempt to find another. In my view, and with respect, this is an error in the approach to the assessment of damages undertaken by the learned trial Judge. The effect of this error needs to be considered by this Court in determining this appeal as part of the overall assessment of the adequacy of the judgment awarded in the District Court. That can be done as part of the process of re‑examining the quantum of the appellant's claim later in these reasons. That process will also, of necessity, require a re‑examination of the amounts allowed by the learned trial Judge under the headings "interest on past loss of earning capacity" and "past superannuation".
Loss of future earning capacity
The learned trial Judge found, inevitably on the evidence, that the appellant had suffered a permanent loss of future earning capacity in that he was no longer fit for his pre‑accident employment as a boner. However, his Honour also found that he was fit to work as a light process worker at $619.48 gross per week or $494.48 net per week or, approximately $100 per week less than the $590 per week net which would then have been his earning capacity as a boner in his pre‑accident condition. The learned trial Judge identified this $100 net per week differential in the pre‑accident and post‑accident earning capacities as leading to a loss of future earning capacity of $64,700 ($100 per week multiplied by 647 [6 per cent compound discount multiplier for 22 years] = $64,700). It is to be noted that his Honour made no discount for the risk of adverse contingencies in causing or contributing to the losses experienced by the appellant in this regard.
This approach taken by the learned trial Judge necessarily assumes that in his present partially disabled state, on average, over the 22 year period from May 2003 until the appellant attains the age of 65 years, he would continue to earn the equivalent of $490 net in current real value per week without interruption. His Honour did allude to the possibility that, had the appellant not been injured in the August 1999 accident, he may not have been able to continue to earn income at the rate of $590 per week until the age of 65 years because of the possibility that he might have to retire from that lucrative employment early and be unable to obtain alternative employment at comparable remuneration. However, this possibility was not relied upon by the learned trial Judge in the process of assessment of the loss of future earning capacity actually undertaken and the respondent did not seek to rely upon this factor by filing any notice of contention in that regard in the appeal. It follows that that particular contingency need not be directly addressed although it seems appropriate to recognize it as one of the contingencies which should be accommodated, if and when, a re‑assessment of damages is warranted on this appeal.
Like Miller J, I consider that the evidence in this case was insufficient to support the conclusion that the appellant was capable of holding down a job as a light process worker at an average weekly earnings of $619.49 gross per week from May 2003 until retirement 22 years later. Such a conclusion leaves out of account all the difficulties which a man of the appellant's age and background would face when seeking alternative employment for the first time in a competitive labour market of which he had no prior experience. Equally, it leaves out of account the difficulties which the appellant would face if he were unable to retain a position as a light process worker and had to seek another position or positions in that field from time to time. It also leaves out of account the difficulties which he may be expected to experience because of his physical incapacity and all the complications which that might involve. These are factors which, in my opinion, must be recognized in order to make any valid comparison between the appellant's pre‑accident earning capacity and his post‑accident retained earning capacity. It simply cannot be imagined that there is no shadow existing over the ability of the appellant to maintain continuous employment as a light process worker from the date of trial until he attains the age of 65 years.
In these circumstances there is a great deal to be said for the approach that there should be a global reduction of the amount calculated for the appellant's future earning capacity at the date of trial in his pre‑accident uninjured state. In this regard the approach taken by Miller J in discounting that pre‑accident earning capacity by 60 per cent leaving the appellant with 40 per cent of his pre‑accident earning capacity is one which is plainly open in this case. However, one difficulty in that approach is that it does not expressly accommodate the finding by the learned trial Judge that, in his condition at the date of trial, the appellant was fit to work as a light process worker and, if he did so, could earn a wage which would only result in a net loss of $100 per week for him when compared with the net earnings which he could have obtained in his former employment at that date if not injured.
The error which has been revealed in the learned trial Judge's approach is the failure to take into account the increased susceptibilities to unemployment, delays in obtaining re‑employment, difficulties in coping with work, and competitive disadvantage with other workers faced by the appellant in his present partially disabled state. If there is to be a recalculation of the appellant's reduction in future earning capacity it seems to me that it is these particular issues which need to be directly addressed while, at the same time, accepting the unchallenged finding of fact that there is a retained earning capacity to work as a light process worker as found by the learned trial Judge.
In these circumstances I consider that the approach to the appellant's retained earning capacity should proceed on the footing that he has a capacity to work as a light process worker at the remuneration found by the learned trial Judge but that the probabilities are that he will not be able to do so continuously until the age of 65 years because of his accident‑caused disabilities. There are likely to be initial delays and subsequent interruptions in any such future assumed employment and, having regard to the labour market conditions referred to in the evidence of the consultant from Labournet Work Focus Australia, Ms Lizzie Moyle, which was evidently accepted by his Honour, these disadvantages are likely to be significant and enduring. However difficult it may be to estimate these precisely, I see no escape from the conclusion that these are very real factors in diminishing the appellant's future earning capacity as viewed at the date of trial. I do not consider that the evidence would support any conclusion that the appellant, in his present circumstances, would be able to maintain continuous employment as a light process worker from May 2003 until his 65th birthday in August 2025 for more than two thirds of that period. In other words I consider that, in estimating the value of the appellant's retained earning capacity as a light process worker from the date of trial until retirement, there should be a discount of 33 per cent having regard to the disadvantages which the appellant faces as a result of the injuries and disabilities caused by the August 1999 accident.
This approach would mean that the pre‑accident earning capacity viewed at the date of trial, calculated at $381,730 should be contrasted with post‑accident retained earning capacity based on 66 per cent of the capitalised value of the earnings of a light process worker calculated on the figures accepted by the learned trial Judge. In addition, I consider that some allowance should be made for the effect of contingencies both on the pre‑accident and post‑accident future earning capacities for the risk of future adversities. The risk of adverse contingencies for the post‑accident earning capacity is greater because of the increased uncertainties facing the appellant in his partially disabled condition. Calculations to estimate the effect of these conclusions are set out later in these reasons.
The same factors which lead to a re‑examination of the calculation of the plaintiff's retained earning capacity undertaken by the learned trial Judge also necessitate a recalculation of his future entitlement to superannuation. If it can only be concluded that the appellant will be able to earn income as a light process worker for 66 per cent of his remaining working life it follows that he will only receive employer contributions for superannuation, and the accruing benefits of investment in a fund from such contributions, for 66 per cent of that duration.
At this point it should be noted that no challenge in this appeal was made to the method of calculating the current value of the loss of superannuation benefits, whether for the past or for the future, which was adopted by the learned trial Judge by application of the method adopted in Jongen v CSR Ltd (1992) A Torts Rep 81‑192. In the circumstances it is therefore unnecessary to consider whether or not a different approach to the assessment of the value of the loss of superannuation benefits should be adopted which takes into account the probability of growth of the contributions in the tax sheltered superannuation fund together with the compounding effect of investments in those circumstances such as was addressed in Heather v Vita Pacific Ltd (1996) 6 Tas R 52 at 65 ‑ 66. The suitability of the Jongen test, at least in every case, seems with respect to remain an open question in this State: Nolan v Hamersley Iron Pty Ltd (2000) 23 WAR 287 per Ipp J at 288; Villaservil v Pickering (2001) 24 WAR 167; Roads and Traffic Authority v Cremona (2001) 35 MVR 190; [2001] NSWCA 388 at [90] per Sheller JA and Ghunaim v Bart [2004] NSWCA 28. It is enough to say that no submissions were made about whether or not the test in Jongen v CSR Ltd (supra) is suitable in this particular case or generally and that that is a question which may, therefore, be left for future consideration.
Re-assessment of claims for past loss of earning capacity, interest and superannuation
In order to determine whether the approach adopted by the learned trial Judge has led to a judgment which is below the range of a sound discretionary award for this appellant I shall undertake the exercise of quantifying the results of an assessment approached on the basis which does attempt to take into account the greater susceptibility of the appellant to unemployment, interruptions in employment, and delays in obtaining re‑employment over the period of his working life since the accident. Only when that is done will it be possible to determine whether any difference in the ensuing assessment of the appellant's damages is of a magnitude which would justify the allowance of this appeal and the substitution of a greater amount of damages as the appellant seeks.
The appellant presented his claim for loss of past earning capacity on the basis of the wages which he claims he would have earned, but for the injury sustained in the accident, during the period from 9 August 1999 to 30 April 2003 as follows:
•9 August 1999 to 1 July 2000 (45 weeks)
$636.66 gross or $480.32 net weekly $21,614.40
•1 July 2000 to 30 June 2001
$690 gross or $541 net weekly $21,132.00
•1 July 2001 to judgment 30 April 2003 (95 weeks)
$741 gross or $576 net weekly $54,720.00
$104,162.40
Obviously, the above calculation represents the aggregate of the net wages which the appellant would have earned had he worked continuously in his former employment at the wage rates applicable to his position as they increased over time. However there can be no certainty that, had the accident not happened, this is what would have occurred. There is always the chance that, if the accident had not intervened, there may have been some other mishap, illness or unexpected occurrence which would have prevented the appellant from working for the whole of this period. That is often provided for by discounting the aggregate of the wages calculated for the past by an appropriate factor to take into account the risk of such adverse contingencies. But this is not always done in relation to past loss of earning capacity, particularly in cases where the period of lost income is relatively short. Here, however, it extends for over three and a half years and it therefore is appropriate that a modest discount should be made for this purpose. In this case I was initially disposed to discount the claim for loss of past earning capacity by 5 per cent: Struthers v Harris [1983] WAR 123 (FCt) and Koeck v Persic (1996) A Torts Rep 81‑386.
However, as already noted, the learned trial Judge reduced the claim for lost income during the year 1 July 2000 to 30 June 2001 by one quarter because the appellant had been disabled for three months due to a knee injury suffered after the accident and its associated medical treatment. I have already observed that, had the accident not happened, there is no certainty that that second injury would have occurred and that its occurrence, where its inevitability is doubtful, should better be accommodated by the process of discounting for contingencies just outlined. The effect of reducing a claim for loss of past earning capacity by excluding this three month period, is to reduce the total claim under this heading by a factor of approximately 7% of the claim as advanced (or indeed a higher proportion of that part of the reduced claim of $70,073.40 allowed - approximately 10%). This is discounting for contingencies in a different guise but the result is largely the same. As there has been no submission that a different method should have been used in this case I will, therefore, adopt the process followed by the learned trial Judge and refrain from making a specific discount for contingencies in relation to this claim for loss of past earning capacity.
The learned trial Judge reduced the amount of $54,720 claimed for the loss during the period 1 July 2001 to 30 April 2003 (95 weeks), because his Honour was not satisfied that all reasonable attempts had been made by the appellant to obtain employment after he became fit to perform lighter work. That formulation of the position suggests that the onus of proving that reasonable attempts had been made by the plaintiff to obtain employment rested upon him whereas, of course, the onus of proving a failure to mitigate damages rested upon the respondent - Munce v Vinidex Tubemakers Pty Ltd [1974] 2 NSWLR 235 (CA) at 240; Vandeloo v Waltons Ltd [1976] VR 77 and Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR (NSW) 120 (CA) at 139, approved by McHugh J in Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 22. Again, however, no point is made of this by the appellant in this appeal but this line of authority demonstrates that reduction of damages for such a reason can only be justified on facts or circumstances which are established by the respondent on the balance of probabilities and then only to a degree based on the facts or upon inferences which can be drawn from the facts.
The assumption underlying the reduction of 50% made by the learned trial Judge is that the appellant was capable of obtaining net earnings of $27,360 during the whole of that 95 week period - that is an average net weekly wage of $288. There is no evidence or finding to support this hypothesis. The only finding is that the appellant was capable of work (if it were available) as a light process worker and that this work offered remuneration of approximately $100 per week net less than the appellant's former employment. I appreciate that this finding was made by his Honour in relation to the claim for loss of future earning capacity but there does not seem to be any reason why it does not apply to the period after 1 July 2001 in view of the finding that the appellant was by then fit for such light work and assuming always that the relativities between the pre‑accident employment and such light work produced a differential of approximately $100 net per week.
On this basis the loss of earning capacity over the 95 week period should be approached by first calculating the net loss for that period if the appellant had been working full‑time without interruptions as a light process worker and then to take into account the prospects that he might not be able to achieve this. 95 weeks at $100 net per week produces $9,500 net loss for the period. For reasons previously canvassed, I consider that the various handicaps facing the appellant meant that it could not be safely concluded that he would have such constant light employment for more than 66 per cent of that period so there would be a third of the period (whether as a continuum or as a series of interruptions does not matter) where he would not be able to work and would suffer a complete loss of net earnings of $576 per week. Accordingly, the calculation becomes:
95 weeks x $100 x 66% = $6,270.00
95 weeks x $576 x 33% = $18,057.60
$24,327.60
Hence, the assessment of the loss for past earning capacity becomes:
•19 August 1999 to 1 July 2000 $21,614.40
•1 July 2000 to 30 June 2001 $21,099.00
•1 July 2001 to judgment $24,327.60
$67,041.00
For reasons already canvassed I do not consider it necessary to discount that figure further for the risk of adverse contingencies in this instance. This is less than the figure allowed by the learned trial Judge of $70,073.40 for past loss of earnings (before deductions for advances) and therefore illustrates the proposition recognised by the authorities that not every error in a mode of assessment will result in an award of damages itself being erroneous.
The learned trial Judge reduced the allowance for past loss of earning capacity by $45,153 representing the aggregate of advances made against damages by the respondent's insurer. There was no finding made about the date or dates when those advances were made nor the terms, if any, upon which they were made. Usually the whole of the allowance for past loss of earning capacity would be used to calculate the interest which should also form part of the damages pursuant to s 32 of the Supreme Court Act 1935. In this case, however, interest has only been calculated on the allowance for past loss of earning capacity after the advances made by the respondent have been deducted and it is, therefore, much less than it would otherwise have been. For this method to be justified it would need to be shown or accepted that the advances were made progressively at the same times that the lost income which would have been earned would have accrued, because, if not and there was a delay in payment of the advances, there would be an entitlement to interest in respect of that lost income. The approach adopted also depends upon it being accepted that the advances may be set off against this particular component of the head of damages rather than against damages generally or against some other component in the award which would not carry interest. Why this should be assumed is not self evident but again no point about this is made by the appellant in this appeal and I shall therefore simply follow the unchallenged approach adopted by the trial Judge of calculating interest on the reduced component of the allowance for past loss of earning capacity.
The interest calculation becomes:
$67,041
– $45,153
$21,888
$21,888 x 3.66 years x 6% x 0.5 = $2,403.30
Again this is less than the figure allowed by the learned trial Judge and is a further demonstration of the same point about the monetary effect of erroneous approaches.
The same can be said about the claim for loss of past superannuation benefits. On the method adopted by the learned trial Judge, and unchallenged on this appeal, the calculation becomes:
$7,315.78 x $67,041 ÷ $70,073.40 = $6,999
Re‑assessment of claim for loss of future earning capacity
The calculations necessary to give effect to the recognition that it is unlikely that the appellant would be able to obtain or hold positions in which he would be employed for the whole of the period from the date of trial until he attains the age of 65 years at a remuneration equal to the level of a light process worker must now be performed. However, for the purposes of these comparisons, I consider that each calculation should be discounted for the risk of adverse contingencies. This was not done in respect of either calculation by the learned trial Judge. In my view the pre‑accident future retained earning capacity should be discounted by a factor of 4 per cent - Foyster v Goynich [1984] WAR 80; Western Australia v Watson [1990] WAR 248 at 321 ‑ 322; De Sales v Ingrilli (2000) 23 WAR 417.
Earlier in these reasons I have set out why I consider that the evidence in this case does not justify a conclusion that the appellant would achieve earnings equal to those of a light process worker for more than two thirds of the period between the date of trial and attaining the age of 65 years. The calculations are:
(a)$100 x 647 (6% compound discount x 22 years) x 66%
x 0.96% (4% contingency discount) = $40,994
(b)$590 x 647 (6% compound discount x 22 years) x 33%
x 0.96% (4% contingency discount) = $120,931
$161,925
This represents the assessment of the actual prospective loss of earning capacity faced by the appellant.
The future superannuation benefits
The re‑calculation of the loss of future superannuation benefits on the premises adopted for this re‑assessment is a rather complicated exercise made more difficult because of the absence of evidence which would allow the different rates of employer superannuation contribution benefits over the period to be calculated. Having regard to these difficulties and also the absence of any challenge to the method of assessing this loss based on Jongen v CSR (supra), I consider that the best approach to follow, despite its deficiencies, is to take a pro rata apportionment of the figure adopted by the learned trial Judge adjusted for the higher figure of future loss of earning capacity produced by the previous calculation. The calculation is as follows:
$5,727.74 x $161,925 ÷ $64,700 = $14,335
Other heads of damage
It is still necessary to examine the other components of the award of $132,705.40 made by the learned trial Judge in order to consider whether those allowances should be varied, or may be adopted, in this re‑assessment of damages. The only other components included at the trial are:
General damages $24,000
Travelling $1,500
Future medical expenses $4,000
With respect, none of these appears to be disproportionate to the facts established by the evidence in this case and no submissions were offered at the hearing of the appeal to the effect that any of these components was too large or too low in any way which would affect the proportionality of the overall judgment sum. Accordingly, I consider that each can be adopted in this re‑assessment. Adopting the figures outlined in this re‑assessment, the following total sum is reached:
General damages $24,000.00
Past loss of earning capacity $21,888.00
Interest on past loss of earning capacity $2,403.30
Past superannuation $6,999.00
Loss of future earning capacity $161,925.00
Loss of future superannuation benefits $14,335.00
Travelling $1,500.00
Future medical expenses $4,000.00
TOTAL $237,050.30
One must always recognise that any assessment of damages cannot be precise and that, there is likely to be some overlapping between the various heads of damages. In the circumstances, therefore, I would treat the above calculations as indicative and to adopt a figure of $235,000 as a total sum for the assessment of the appellant's damages on this revised approach.
Comparison of this figure of $235,000 reached by the process of re‑assessment with the award of $132,705.40 made by the learned trial Judge shows a large degree of disproportion and one, which indicates that the judgment after trial is for an amount of damages substantially less than the acceptable range of sound discretionary award in this case and that, accordingly, the appellant has made out his third ground of appeal - Wilson v Peisley (1975) 7 ALR 571 and Gamser v Nominal Defendant (supra).
Accordingly I would allow this appeal, set aside the judgment of the District Court of Western Australia entered on 2 May 2003 and substitute a judgment for damages for the appellant in the sum of $235,000. This will mean that the costs of the proceedings in the District Court will remain to be dealt with and I consider that this Court should hear submissions from counsel in that regard as well as hearing counsel about the costs of this appeal.
LE MIERE J: I have had the advantage of reading in draft the reasons for judgment of Miller J. I agree with those reasons and with the orders proposed by his Honour.
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