Perez v Reynolds
[2020] VSC 537
•26 August 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
INSTITUTIONAL LIABILITY LIST
S ECI 2019 02972
| DANIEL PEREZ | Plaintiff |
| v | |
| VINCENT REYNOLDS | First Defendant |
| - and - | |
| STATE OF VICTORIA | Second Defendant |
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JUDGE: | Forbes J |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 26 – 29 May 2020, 1 – 4 June 2020 and 10 June 2020 |
DATE OF JUDGMENT: | 26 August 2020 |
CASE MAY BE CITED AS: | Perez v Reynolds & Anor |
MEDIUM NEUTRAL CITATION: | [2020] VSC 537 (First revision 27 August 2020) |
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ASSESSMENT OF DAMAGES – Common law damages – Childhood sexual abuse – Institutional abuse of student in primary school – Ongoing psychiatric and/or psychological consequences of abuse – Damages awarded for pain and suffering, loss of enjoyment of life, economic loss and medical expenses – Assessment of loss of earnings – Self-employed tradesperson - assessment based on average weekly earnings inappropriate – “B” v Reineker [2015] NSWSC 949 – Todorovic v Waller (1981) 150 CLR 402.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M. Wilson QC and Mr J. Gordon | Rightside Legal |
| For the Defendant | Ms M. Britbart QC and Mr B. House | Minter Ellison |
HER HONOUR:
Daniel Perez was a student at Myrtleford Primary School when he was sexually abused by a teacher, Vincent Reynolds. Mr Perez is now aged 47 years. Mr Reynolds was charged and pleaded guilty in relation to indecent assaults of Mr Perez and 37 other children.[1] At the time of the hearing he was serving a custodial sentence.
[1]DPP and Reynolds [2019] VCC 922 (Cannon J).
Mr Perez began a damages claim against Mr Reynolds and the State of Victoria. Mr Reynolds did not file a defence and has not participated in the litigation. The State of Victoria admitted that it employed Mr Reynolds. The claim alleged both direct negligence on the part of the second defendant as well as vicarious liability for the actions of Mr Reynolds. Direct liability was admitted by the State although vicarious liability was not. A claim for aggravated and exemplary damages against the State was not ultimately pursued.
The task for me therefore is to assess the compensatory damages to which Mr Perez is entitled for psychiatric injury arising from the abuse.
For the reasons that follow, I assess the compensatory damages in the sum of $1,552,725 comprising:
General Damages $ 265,000
Future medical and other expenses $ 18,725
Loss of earning capacity
Past $ 640,000
Future $ 416,500
Superannuation $ 212,500
The events at Myrtleford Primary School
The nature of the abuse pleaded involved six occasions where young Danny Perez was touched on his genitals, groin and buttocks. The occasions occurred in the classroom, either when he was called to the teacher’s desk at the front of the class or when the teacher approached the desk where he was sitting. The teacher’s desk while exposed at the front of the classroom nevertheless allowed for his actions to be somewhat concealed from the other students. On the last occasion Danny swore at Mr Reynolds and lashed out hitting him. Danny was told to leave the room. No further sexual abuse of him occurred after that occasion.[2]
[2]Transcript of Proceedings, Perez v Reynolds & State of Victoria (Supreme Court, S ECI 2019 02972, Forbes J, 25 May 2020) (‘Transcript’) 128.
Mr Perez’ evidence was that the abuse had an immediate effect leaving him angry, confused and embarrassed. Mr Perez said that he told no one about the abuse either at the time or subsequently although he said that he was aware of other kids in his class that had been abused by Mr Reynolds as it was something spoken about in the playground.[3] In 2017 he received a phone call from Wodonga police who were then investigating Mr Reynolds for historic sexual offences. It was in the context of this contact that he first disclosed the abuse to his wife. He said in evidence that he had not told anyone because he was ashamed of what happened and he didn’t want to be judged by anyone and have anyone feel pity for him in any way.[4]
[3]Ibid 176.
[4]Ibid 152.
Although the abuse was admitted, there were a number of matters in contest during the hearing. First there was a contest on whether the abuse had occurred while he was in grade 5 or grade 6 and whether it was in 1983 or 1984. Second, while the State accepted that the assaults occurred by touching over the clothes he was wearing, in his evidence Mr Perez also said that on some occasions he was touched on his skin under his clothes. These matters were said by the second defendant to bear upon the reliability of the plaintiff in describing the impact of the abuse.
From the time of the initial statement to police Mr Perez has dated the abuse as occurring when he was ten years old[5] and in 1983. At the time he was in a composite class of Grade 5 and 6 combined.[6] This information has been repeated by him to doctors and in court documents. For example, Dr Entwistle records the abuse occurring in 1983 but was told Mr Perez was in grade 6 at the time. Dr Tagkalidis recorded it most likely occurred in grade 5. Under cross-examination he agreed that given the police statement and other material the abuse most likely occurred in 1983. The departmental records relating to Mr Reynolds’ employment confirm he commenced at Myrtleford Primary School at the start of 1983.[7] Ultimately, although doing his best, I do think that Mr Perez’ own estimate of his age or the year or school grade when these events occurred were unreliable because of the significant passage of time and the complication of pinpointing events within a two year period of being in a composite grade 5/6 class. However the original date of 1983 in the police report was arrived at, it seems to have perpetuated and entrenched a belief in that date.
[5]Ibid 166.
[6]Ibid 280.
[7]Second Defendant’s Exhibit, ‘D2- AF Exhibit’, First Defendant’s Statement of Service, 16 May 2013.
The second defendant submitted that the abuse most likely occurred in 1983 and, although returning to the school through 1984 to complete grade 6, Mr Perez gave no evidence of any fear or upset with what must have been continued contact with the first defendant. The immediate onset of symptoms was relevant in the psychiatric assessment of the impact of the abuse and the reliability of his recollections.
Three class photographs were tendered which to me establish that the sexual abuse probably occurred in 1984 during Mr Perez’ final year of primary school. The first is the class photo of Mr Reynolds’ class in 1983, his first year at the school.[8] It shows him as the teacher of Unit 4R. Danny Perez is not in that class. The second photo shows Grade 5/6R for 1984.[9] Mr Reynolds is the teacher. Danny Perez is not in the photo, though listed as absent. Finally the Myrtleford High School Year 7B class photo for 1985[10] shows Danny Perez standing second from the left in the front row. These three photos are consistent with the Plaintiff’s recollection that the year following the abuse he went to high school.[11]
[8]Plaintiff’s Exhibit, ‘P2’, Photo of Unit 4R, 1983.
[9]Plaintiff’s Exhibit, ‘P3’, Photo of Combined Grade 5/6 grade, 1984.
[10]Plaintiff’s Exhibit, ‘P4’, Photo of Class 7B, 1985.
[11]Transcript (n 2) 166.
The plaintiff described in broadly similar terms six instances of abuse. He said there may have been other similar occasions. In all the abuse spread over a period of months. Whether over clothes or on skin, the plaintiff described shame and confusion, an inability to remove himself from the situation and a sense that he had done something wrong to bring this about. He didn’t seek to differentiate the level of impact by whether it was over or under clothing. I formed the impression that it was the repetition of instances of abuse in the classroom environment that cumulatively bore upon him. He recounted an instance of Mr Reynolds putting his hand down the back of his pants. Then he described that on the last occasion his penis was touched ‘on the skin’[12] and he reacted as described above. I accept his account. It puts his reaction on the last occasion into context.
[12]Ibid 127.
Overview: The course of the Plaintiff’s life
The plaintiff was born on new year’s eve 1972 to parents who emigrated from Spain when his eldest brother was born. His parents settled in Myrtleford with their three sons. He grew up speaking Spanish in the home and through social circles of family and friends also learnt Italian. His father ran his own business as a bricklayer. His mother unfortunately had a disabling stroke when Mr Perez was very young. Even so he recalls a happy childhood attending kindergarten and then primary school. He loved school before the abuse and thought himself a good and likeable student.[13] He described his family as musical. He himself played keyboard as a child, and competed in eisteddfods and performed at Wangaratta Music Festivals.
[13]Ibid 120.
Since the abuse he has lost interest in music. He took up taekwondo at the start of high school. He described starting because ‘I wanted to be able to defend myself so nobody could touch me ever again.’[14] He became quite skilled in the sport winning a Victorian title in Albury at the age of 17. He enjoyed soccer, playing through school and for a club for a year or so after school.[15]
[14]Ibid 131.
[15]Ibid 178.
He said that he did not enjoy secondary school and said he didn’t want to be there. He described difficulty in handing in work. He felt that he was punished when he had to hand in work because that is what happened to him with Mr Reynolds. He said he had poor results in secondary school and failed his first attempt at year 10. He said he passed on the second attempt only because he was leaving to go and work with his father.[16]
[16]Ibid 133.
Mr Perez has no formal qualifications since leaving school and has not attempted to obtain any trade qualifications. He said that the thought of taking up a trade qualification was something he would not want to do.[17] He worked for his father’s business and on his own account, variously describing himself as a bricklayer, stonemason or general labourer and handyman. He continues to do so. The work, and other aspects of his life as a young adult were disrupted by excessive drinking and cannabis use. I will return later in more detail to the course of his working life.
[17]Ibid 134.
Mr Perez began living with his ‘high school sweetheart’ at the age of 22. They had a child together, a son who now lives in Queensland. The relationship ended shortly after their son was born. In 2003 he met Susan and they married in 2006. They live near Wodonga. Susan Perez also gave evidence about the plaintiff’s personality and daily activities. It struck me that theirs is a solid relationship even while weathering a number of difficulties. The plaintiff agreed it is a good relationship and that he is happier since meeting her. Susan is also the person to whom he first disclosed the abuse that he endured, when the call from the police in 2017 brought things to the surface and she has been both a supportive and stabilising presence for her husband.
Mr Perez’ mother passed away recently. His father remains living independently in Myrtleford. He sees his father and, when working in Myrtleford, says he will often stay with him. When there he provides practical support for his father. His older brother, Tony, undertook a fitter and turner apprenticeship and has taken over the father’s business since about the mid 1990’s. Mr Perez does some work for this brother at times. He says that he does not have a close relationship with his eldest brother and that their relationship is ‘complicated’. His other brother began a trade apprenticeship before becoming a professional musician. There was little evidence of the level of engagement between the plaintiff and his musician brother. Both brothers are much older than Danny, both having finished high school by the time he commenced year 7.[18]
[18]Transcript (n 2) 181.
The second defendant raised a number of issues relevant, it submitted, to an assessment of fair and reasonable compensation for the injury loss and damage sustained by Danny Perez. First they submit that the plaintiff was an unreliable witness and there were a number of inaccuracies which in each case served to amplify the effect of the abuse on his life. Four illustrations of this were relied on in final submissions:
(a)his evidence of the circumstances of the breakup of the plaintiff’s first relationship and its effect on him;
(b)the circumstances of his wife ceasing work;
(c)the plaintiff’s evidence about his work life after leaving school; and
(d)his evidence about ongoing work for his brother’s company.
Mrs Perez gave evidence on the issue of ceasing her own work, and of the level of the plaintiff’s work in more recent times. Otherwise the plaintiff gave the only viva voce evidence as to his work history. There was also documentary evidence from tax returns and invoices produced.
Credit of witnesses called and the failure to call witnesses
I will turn first to an assessment of Mr Perez as a witness. My general impression was that he did the best he could to answer truthfully questions that traversed his whole life experience. His memory was, as you might expect, better in some areas than in others. In a number of aspects his oral evidence was at odds with documentation, either as to the timing of particular events or as to the reason for those events. There were some matters upon which he was appropriately, prepared to accept his memory was wrong or incomplete.
An example of this was his evidence that, on the breakdown of his relationship in his twenties after the birth of his son, he retreated to the bush living in seclusion for a time until his brother Tony persuaded him to come back and work in the father’s business. Initially he described these events in response to a question about what he did in 1994. In cross examination he described breaking up with his partner nearly a year after his son was born. His son was born in 1995 so the Plaintiff accepted that the events occurred in 1996 or 1997 and not 1994.[19] I do find the plaintiff to have been unreliable in his estimates of dates and of time periods but I do not think that that reflects adversely on his reliability generally when describing the impact of events.
[19]Transcript (n 2) 187.
Ms Britbart QC, fairly did not criticise him for the difficulty pinpointing times. However, the second defendant was critical of the plaintiff attributing the breakup of the relationship in his evidence in chief to his own anger and trust issues stemming from the abuse and not disclosing the unfaithfulness of his partner as another contributing cause. I do not think that his answer was misleading or demonstrated any even unconscious amplification of consequences. This is because the question that was asked of him was specifically directed at whether there were issues that related to the abuse that caused the failure.[20] He was not asked about other causes until cross examination. When asked, he acknowledged other factors. When looking at how this aspect of his life was relayed to the medico-legal examiners in this case, one examiner Dr Tagkalidis obtained the history of both infidelity and issues related to the abuse, while the other Dr Entwistle did not. In all the circumstances I am not persuaded that the plaintiff’s answers on this question demonstrated any inaccuracy or unreliability.
[20]Ibid 149.
Another illustration was Mr Perez’ estimation of the volume of work he undertook at various times and his estimation of his level of inability to attend reliably and consistently. I accept that taxation returns are likely to be a more accurate record of the volume of work done than a retrospective impression, particularly when the plaintiff says that his ability to recall that part of his life was a blur.[21] However, taxation returns simply record an annual figure and using them to calculate averages over a 12 month period, they do not necessarily reflect erratic periods that might exist with that period.
[21]Transcript (n 2) 211.
Mr Perez was cross examined about gross income earnt in 1993 ($17,002), 1995 ($25,285) and 1996 ($22,331).[22] In those years, and indeed throughout his working life his work in the family business has been as a subcontractor. By reference to the gross income earnt and with the plaintiff’s evidence as to the hourly rate he was charging, Ms Britbart QC put to the plaintiff that in those three years he worked average weekly hours close to or at least full time.[23] He accepted the calculations and the proposition that at times he was able to work fulltime. I note from the tax returns covering the period 1991 to 2002 in other years, not cross examined on, the plaintiff’s gross earnings were variable and ranged between approximately $7,500 and $18,000.[24] This would suggest that at times he was not working full hours. Certainly when the plaintiff returned to the family business under Tony he described it as a ‘great business’ with ‘five guys working for him’ in addition to the plaintiff and ’turning over a lot of work’.[25] Both his brother and earlier his father have provided support and work at times when the plaintiff has wanted or needed it. Whether working in the business or for himself in those years the plaintiff’s gross income between 1998 and 2001 did not reach levels suggestive of regular full-time work. The documents do support a degree of disruption at times to his capacity to work as he described.
[22]There was only a Notice of Assessment and no tax return available for 1994.
[23]Average 41 hours per week in 1993, 46 hours per week in 1995 and 36-43 hours per week in 1996. See Transcript (n 2) 201.
[24]Excluding 2002 ($25,881) and 1997/98 in which the plaintiff agreed he had gone bush and did not work over a full year.
[25]Transcript (n 2) 142.
I will return in more detail to the amount of work that the plaintiff has been able to undertake and the extent to which it was disrupted by the effects of the sexual abuse when dealing with loss of earning capacity.
Finally the plaintiff in cross-examination estimated his wife worked two days a week for the past five years.[26] When asked later why his wife Sue reduced her work in 2013, he said ‘he needed her as his support and I sort of encouraged her to, um not be working as hard…’.’[27] When Sue gave evidence she said that the reason she stopped work in 2013 was that she had a work injury sustained in one of the three jobs she was undertaking at the time. Her evidence was that her own injury meant that she needed the plaintiff’s physical assistance with dressing, showering and personal care.[28] She said that she told her husband about her injury and that ‘Danny did the best he could, but – and again, I don’t – I didn’t want to add more stress and harass him even more…’[29] The second defendant submits that the plaintiff’s evidence in this regard is ‘inexplicable’ and an inaccuracy that amplifies the effect of the abuse on his life.
[26]Ibid 159.
[27]Ibid 220.
[28]Ibid 339.
[29]Ibid 339.
I agree that the plaintiff’s evidence that he encouraged Sue to cease work is wrong and does impact on the reliability of his recollection, at least on that matter of when and why Sue’s work situation changed. However, it was also clear from Sue’s evidence as well as the plaintiff’s, that once Sue was at home rather than at work, her daily presence was something from which he did in fact take support and comfort. Her evidence was that she tried to shield him from additional worry. Their relationship has been strengthened by these circumstances. I accept that at times Mr Perez focused on the role of the abuse in his life without allowance for the part played by other factors. However, overall I formed the view that he made appropriate concessions for the complex factors that have impacted upon his life.
The second defendant also submits that I should draw a negative inference[30] from the failure to call evidence from the plaintiff’s brother Tony and his father. They could have given relevant evidence as to their recollection of the plaintiff before the abuse and their observation of any immediate changes from the time of the abuse, the work circumstances and the breakdown of the relationship that led to the time in seclusion living in the bush.
[30]Jones v Dunkel (1959) 101 CLR 298 (‘Jones v Dunkel’).
It may be that Tony and the father could give evidence about their observations and recollections of the plaintiff in childhood and through his twenties, up until 2003 and beyond. Mr Perez senior’s age and health and the plaintiff’s complicated relationship with Tony were not specifically relied on to explain why they were not called. It would be impossible to speculate as to the reliability of any recollections. Mr Perez’ brother Tony is nine years older than him. Bearing in mind that neither family member was aware of the abuse until after 2017, any recollection of events now twenty to thirty years old may be affected to an unknowable extent by their recent knowledge of the abuse. Observations about why the plaintiff made certain choices would be particularly speculative absent some evidence that the plaintiff discussed such matters either with his father or his brother.
Whether or not such recollections might have fortified the evidence of Danny, I do not consider that in its absence I should draw an inference adverse to the plaintiff as to the effect of their evidence. Their absence, even if unexplained does not leave gaps in the evidence but inaccuracies and issues of reliability. I accept that for periods prior to about 2003, the plaintiff’s own evidence on some matters, standing alone, is based upon impressions that are unreliable. In the absence of other lay witnesses for that period of time, the evidence that is before me both viva voce and documentary must be evaluated itself as to the weight I place on it. Having made such an evaluation, it is not in my view appropriate or necessary in addition to draw some adverse inference to reduce the weight of the plaintiff’s testimony.
The evidence of Sue as to work, study and personal struggles now spans approximately 17 years since they met in 2003. I found her evidence to be straightforward, candid and thoughtful. There was a sustained credit attack on the plaintiff, through the disclosure of Sue’s income in his tax returns, suggesting that income was paid to her from the business, and thereby that income derived from his business was greater than his tax returns suggested. The plaintiff’s evidence was that Sue not only did the books for his business but handled all dealings with the accountant. He was simply unable to provide any meaningful answers to questions based upon his tax returns. However, Sue was able to explain in cross-examination a number of the matters raised with Mr Perez during his evidence and, by reference to her own tax returns in re-examination, adequately explain the source of all income attributed to her. It was clear that she received no income for any time spent doing the books for the plaintiff’s business or any other income associated with his work activities. The effect of this attack, and its failure means that I can be satisfied that the tax returns are a reliable and accurate record of the plaintiff’s actual earnings at least from 2005 onwards. It also satisfied me as to the reliability of her observations generally of the plaintiff throughout their relationship.
Medical Evidence
The plaintiff has not received any medical treatment for psychiatric injury. Therefore the only medical evidence regarding injury comes from two medico-legal evaluations. Mr Perez attended Dr Tagkalidis at the request of his solicitors on 6 August 2019. He attended Dr Entwistle on 24 October 2019 at the request of the second defendant’s solicitors. Dr Tagkalidis was called to give evidence and was cross-examined. The second defendant did not call Dr Entwistle and the plaintiff obtained leave to tender his report pursuant to s 45(3) of the Evidence Act 2008 (Vic).
Sue Perez gave evidence that she has encouraged her husband to seek treatment but without success until recently.[31] Mr Perez gave evidence that Sue has convinced him to seek treatment on the basis that she will go with him.[32] Dr Entwistle thought he appeared open to the possibility of treatment.[33]
[31]Transcript (n 2) 307 and 357.
[32]Ibid 257.
[33]Plaintiff’s Exhibit, ‘P19’, Report of Dr Entwistle, (‘Dr Entwistle report’s’) 4 November 2019.
I accept, as Dr Tagkalidis stated, a medicolegal examination gives less opportunity to assess a patient compared with a clinical engagement. Both doctors formed the view as psychiatrists that Mr Perez gave his information in a straightforward, honest and genuine manner. This reinforces my own view that, although at times his account was unreliable, he was nevertheless doing the best that he could to give a true account as he was able to recall it.
Both Dr Tagkalidis and Dr Entwistle diagnosed a complex Post Traumatic Stress Disorder (‘PTSD’) and a chronic dysthymic disorder (previously called a chronic depressive disorder). The descriptor of ‘complex’ applied to the diagnosis of PTSD was elaborated by Dr Tagkalidis in his viva voce evidence. He said that ‘complex’ indicated that ‘a younger person has been traumatised, and displays the symptoms of trauma over time, but in addition, and very importantly, that their development and particular – in particular, their personality development has been disrupted.’[34]
[34]Transcript (n 2) 412.
Although having different ways of approaching their conclusions, both observe an improvement or abatement of depressive symptoms and drug and alcohol use since the stabilising influence of his wife. Dr Tagkalidis diagnosed periods into the plaintiff’s thirties that would at that time have met the diagnosis of a Major Depressive Disorder and a past diagnosis of Polysubstance Abuse and Pathological Gambling.[35] The continuing dysthymic disorder was in his view of a moderate severity[36] and the PTSD had abated over time with the moderating influence of his wife.
[35]Plaintiff’s Exhibit, ‘P10’, Report of Dr Matthew Tagkalidis, 6 August 2019, 8 ‘P10’ (‘Dr Tagkalidis report’).
[36]Transcript (n 2) 409.
Dr Entwistle did not separately diagnose any resolved conditions but, having described the severity of depressive, drug and alcohol symptoms at times in the past, concluded that the chronic dysthymic disorder was currently in partial remission. He did not express any opinion as to improvement in the PTSD but thought there was the possibility of improvement with the provision of treatment to him as someone who has survived sexual abuse. While the second defendant accepted the diagnoses, it took issue with the extent to which it had affected Mr Perez’ life particularly with the effect on employment activity.
Both doctors agreed that their diagnoses were entirely attributable to the sexual abuse suffered and that the psychiatric conditions had stunted or adversely altered his ‘life trajectory’ resulting in a ‘substantial underachievement’.[37] Dr Tagkalidis described this as ‘a substantial and irretrievable detrimental effect on his developmental trajectory’.[38] Dr Entwistle agreed it had had such an effect on his ‘career trajectory.’[39]
[37]A term used by Dr Tagkalidis and, having assessed Mr Perez, agreed with by Dr Entwistle.
[38]Transcript (n 2) 733.
[39]Dr Entwistle report (n 33) 9 April 2020, 2.
The aim of awarding damages is to fix a sum that as will, as nearly as possible put the injured person in the same position as if he had not sustained the injury.[40] An award of damages for the loss of quality of life is an attempt to recognise the impact that the injury has had and will continue to have on the life that the plaintiff is living. I accept the second defendant’s submission that not meeting the aspirations one hopes to achieve in life is not necessarily a measure of the effects of sexual abuse. Nor would the fact of meeting aspirations negate an impact from abuse. I do accept that the sexual abuse that Mr Perez experienced has deeply affected all aspects of the life that he is living. It has impacted upon family and intimate relationships, as well as leisure and work activities in varying ways. I accept that his young age at the time of the abuse has embedded the events in his mind so they have impacted many of the decisions he has made about the direction of his life. In recognising that impact in monetary terms, I do not find the description of an altered or underachieved life trajectory as a particularly helpful tool to analyse or measure the actual impact on his life.
[40]Todorovic v Waller (1981) 150 CLR 402 (‘Todorovic’).
Pain and Suffering consequences
Mr Perez described feeling anger, frustration and guilt as a result of the sexual abuse. He described experiencing intrusive images of Reynolds persisting into his early 20’s and sporadic since then.[41] He said that his attitude towards teachers changed and that he did not want to go to secondary school.[42] He did not complete school work and did not want to hand in work as he would have to go to the desk at the front of the class.[43] He said that his difficulty with trusting people began from the time of the abuse and has never gone away.[44] He described confusion and shame recalling the words used by Reynolds when he was being abused ‘you like that don’t ya?’[45]
[41]Dr Tagkalidis report (n 35); Transcript (n 2) 406.
[42]Transcript (n 2) 129.
[43]Ibid 130.
[44]Ibid 136
[45]Ibid 128.
When challenged about the immediate onset of his symptoms, he did not accept that he had any ongoing contact with Mr Reynolds after the period of abuse, having gone to Spain with his family later that year and, on his recollection, going to high school on his return. Given the school photos tendered, I am persuaded that this recollection is accurate and I accept that the plaintiff’s symptoms commenced from the time of the abuse.
The plaintiff agreed not only did he undertake taekwondo during his teenage years, he also played tennis from the age of 16 for a couple of years and has taken it up again. He has been playing A grade club tennis now for a number of years. Although describing it as social tennis, his wife described it as a release, and said that he turns up to play but does not stay to attend the social events that accompany the games. It seemed to me that the plaintiff got both enjoyment and a physical release form his sporting activity but not much social engagement.
He described periods through his late teens and twenties of heavy drinking to a point of numbness. At a time which he dates to 1994 he described acting on suicidal thoughts taking a shotgun from his father’s wardrobe. He said that he felt as though everybody would be better off without him. Fortunately his mother was in the house and his sister-in law who were able to talk him out of taking any action.
Of more recent times his wife described occasions when he would arrive home sweating and would say he had come close to riding into a tree.[46] She was aware that such thoughts cross his mind from time to time but that to her knowledge he hasn’t acted on them.
[46]Ibid 308.
Mr Perez described developing a stutter through secondary school and beyond.[47] Although he says he rarely stutters now, it does come on at times of stress when he has trouble expressing himself. As Mr Perez described it, ‘my words don’t come out’.[48] His wife described a stutter that would start when he got angry or upset. She said at the time Danny was contacted by the police and when making a statement for the criminal process and attending the court proceeding against Reynolds, the stutter came back quite badly.[49] During those times he became quite self-conscious and did not want to be around people.
[47]Ibid 130.
[48]Ibid 130.
[49]Ibid 304.
The plaintiff was surprised and disgusted when he learnt the extent of Mr Reynold’s criminal activity and the number of children affected as these matters came to light during the criminal process.[50] This experience reignited his anger at what had occurred and heightened his symptoms.
[50]Ibid 152.
A lack of self-confidence and self-belief pervaded the plaintiff’s estimation of himself and the observations of his wife. He described feeling he had underachieved. The plaintiff did not give evidence of being ridiculed as a child because of what happened. The shame that he internalised was not something that was forced into the public sphere in the schoolyard or even after that time. To the extent Dr Tagkalidis’ opinion was that the response of being ridiculed made everything ‘much bigger’ for the plaintiff, this was not borne out by the plaintiff’s evidence.
The second defendant took issue with the capacity of the plaintiff to provide care for his elderly father. This had two aspects. First, generally it spoke to a greater level of functioning and positive interaction with family members than the plaintiff otherwise described, and second, it was suggested that the level of assistance provided impacted on the plaintiff’s ability to take on work, thereby reducing his capacity for work for reasons unrelated to his psychiatric injury.
Dr Tagkalidis obtained a history from the plaintiff that, ‘He said that he spends much of his time away from his fulltime work caring for his father who is 90km away and visits him 4 days per week.’[51] Dr Entwistle recorded ‘Mr Perez is his father’s carer and is dedicated to him and spends four nights a week with him. Sue is also caring for one of her parents and this is an understanding that they have.’[52]
[51]Dr Tagkalidis report (n 35) 5.
[52]Dr Entwistle report (n 33) 4 November 2019, 2.
Mr Perez agreed that his father was unwell at the moment and, although he lives independently he receives a home care package since his wife passed away. Mr Perez endeavoured to explain that he often stays with his father overnight if he is working in the Myrtleford area rather than drive to and from home. This allows him to spend time and companionship with his father. He will check his medication and see what food he has in the fridge, he said he gave care to his father as he loved him[53] but denied he provided ‘care’ as the home care workers would do when they attended him. He disagreed with the suggestion that his caring responsibilities detracted from the time he had available to work. He thought that early on, after his mother died in May 2018 he was staying with his father more frequently but that of more recent times the frequency varied and depended on whether he had work around Myrtleford.
[53]Transcript (n 2) 158.
The description of Dr Tagkalidis is apt to suggest that caring responsibilities took Mr Perez away from his fulltime work. However, Dr Tagkalidis’ evidence was that he intended to convey that on top of full-time work, the plaintiff spent much of his remaining time caring for his father.[54] That is consistent with what the plaintiff repeatedly said. I accept that caring activities occurred around work commitments rather than causing any disruption to them. However, I also therefore accept that on this history to Dr Tagkalidis, the plaintiff has had periods of substantial, if not full-time employment of recent times as described by him.
[54]Ibid 426.
I accept that the prospect of psychological treatment has with it the possibility of Mr Perez gaining better insight into the effects of the abuse and better strategies for managing the symptoms he experiences. However, I am mindful of the lengthy time without any treatment that has passed and accept that any improvement will have its limitations. In particular Dr Tagkalidis thought that while coping skills could be improved, the underlying vulnerability to react in times of stress or adverse circumstances might not change meaningfully.[55] Overall he thought that people like Mr Perez will struggle to get benefit over time.[56] Dr Entwistle thought the condition was stable without treatment but that there was likely to be improvement with appropriate treatment.
[55] Ibid 468.
[56]Ibid 472.
I would allow for some improvement with treatment if a continued supportive relationship is maintained but recognise that any such improvement might be limited. The plaintiff is still a relatively young man who feels a sense of failure[57] and is poorly equipped to handle adversity.
[57]See for example Transcript (n 2) 198, 289 and 305.
In all the circumstances I assess general damages at $265,000.
Economic Loss consequences
Where a person is injured as a child and those injuries have a long term or lifelong impact, there is inevitably a level of speculation as to the effect on the entirety of their working life. The injury may impact upon the available or likely choice of career or the advancement or success in that career, or both. These matters such as aptitude, academic or otherwise, for a chosen career are necessarily speculative to a greater or lesser extent. Primary school reports, had they been available would likely have given little direction as to choice of career and I do not give great weight to Mr Perez’ own assessment of his academic aptitude as a ten year old. I accept he was a happy, well rounded child who enjoyed school, sport and music and who came from a close and supportive home. The notion of a career trajectory is of limited assistance in determining the type of work that Mr Perez might have undertaken but for his injury or his success in that work.
The use of Average Weekly Earnings is ‘a somewhat crude’ measure[58] which may be appropriate where it is otherwise difficult to assess the potential for and likely path of employment. However, where there is evidence that allows for the refinement of the measure to be used at least as to likely career choice, then earnings reflective of such choice may well be a preferable measure.
[58]As described by Adamson J in “B” v Reineker [2015] NSWSC 949 [64].
In this case I accept that there is evidence that absent the abuse and its sequelae the plaintiff was likely to seek out and obtain a trade qualification. His father’s experience and the choices of his older brothers lend weight to this being the likely path as was his own evidence that after school he wasn’t quite sure what he wanted to be but thought he would become part of the family business.[59] The plaintiff’s brothers both commenced trade apprenticeships. Tony completed an apprenticeship as a fitter and turner and then worked in their father’s business before taking over the business when their father became semi-retired and then retired.[60]
[59]Transcript (n 2) 135 [7] and [14].
[60]Ibid 142 and 209.
The plaintiff has worked either for the businesses run by his father then his brother, or on his own account since leaving school. He has worked as a labourer, largely as a brickies labourer, stonemason or handyman without any formal trade qualifications. He has obviously nevertheless developed a level of skill from those years of experience. The lack of trade qualification is for the plaintiff linked to the sexual abuse in that as a young man he felt ‘going back to school was not going to be an option for me or TAFE or trade school, not something I would want to do.’[61] Even as a mature man, that apprehension remains. Sue gave evidence that she has encouraged him ‘to go to TAFE and he, nah. I can’t face another day. I can’t do it. I can’t be in a room with all those people and not – not achieve what I set out to do. He doesn’t like to set himself up for failure at all.’[62]
[61]Ibid 134.
[62]Ibid 305.
He was unable to reliably estimate the periods of time or the amount of work he did for his father and then brother, as distinct from work he sourced on his own account. However, it is clear that these were the only two sources of income since leaving school.[63] Whether for his family as a subcontractor or on his own account, the plaintiff worked as a self-employed person. His earnings as disclosed by his tax returns do not differentiate between the two sources.
[63]Apart from minimal amounts disclosed as employee earnings in 1991 and 1993 tax returns.
However, I do not accept that in measuring his lost capacity, evidence from Tony as to earnings in the business would be a good or reliable measure of earnings but for the injury. It is only one measure of how Mr Perez might have chosen to exercise his capacity. The shape of any family business would necessarily be different were it supporting and being run by two brothers. The evidence of the father and brother’s work history generally does disclose that in self-employment, with trade qualifications, Myrtleford and its environs is capable of producing regular work and satisfying and productive careers. The task of assessing loss of earning capacity is necessarily speculative. There is no specific data for the earnings of self-employed tradespeople.[64] The fact that Tony might have been able to give evidence as to earnings either of a subcontractor in his business or as the owner of the business, does not remove the speculation associated with what might have occurred had the plaintiff in fact grown the business as a co-owner.
[64]Transcript (n 2) 596.
The plaintiff may have lost the opportunity to become a participant in the family business but to extrapolate from this the measure of the plaintiff’s lost capacity is in my view too narrow a consideration of the lost capacity. Had the plaintiff been uninjured he had the prospect of participating in a family business, but also the capacity to move to other forms of employment, including working for an employer, for others as a subcontractor, for himself or some combination of all of these over his working life.
Mrs Perez said that she encouraged her husband to move away from being dependent on his brother for work.[65] This was because working together, the brothers often clashed and she hoped that at such times Mr Perez could go to other jobs and gain some independence. However, it is clear even in recent years that at times periods of nearly full-time work is undertaken for Tony.[66]
[65]Ibid 295.
[66]For example invoices from 2016 were put to the plaintiff. See Transcript (n 2) 251.
It was clear from the evidence of both the plaintiff and Mrs Perez that the family business had always endeavoured to support the plaintiff by making work available for him when needed.[67] There was no suggestion that the business was limited in its ability to make such work available. Mrs Perez characterised Tony as ‘successful’.[68]
[67]Transcript (n 2) 290.
[68]Ibid 298.
I was impressed by the plaintiff’s work ethic. He said that he has ‘always tried to work and um I don’t believe in taking a handout’.[69] This is borne out. The tax returns, even in years of very low income disclose only two short period of Centrelink payments in the 1994 and 1998 returns. This more than anything persuades me that whatever the accuracy of the plaintiff’s memory of the actual level of disruption to his ability to work in the past, the plaintiff’s earnings as disclosed in his tax returns represent the upper limit of his capacity to work.
[69]Ibid 198.
I accept that there were occasions when the plaintiff was able to sustain full-time or close to full-time work. I also accept that there were other times when that capacity was interrupted such that the plaintiff did not attend work when he was expected and occasions when he would defer work that he had arranged or simply wouldn’t get out of bed and seek out more work. In the circumstances I accept that the tax returns demonstrate his actual earnings over the years from a combination of self-sourced work and work sourced through the family business. I accept that his capacity has not been greater than he has demonstrated by actual earnings. In more recent times the hourly rate that he might earn on various jobs at least as disclosed by the evidence seemed quite variable. I note earnings of $45 per hour when invoicing his brother’s business, $70 per hour for gardening work, other jobs seemingly quoted on a fixed price for labour including a large stonework job in total $14,580 invoiced in August and October.[70]
[70]See Second Defendant’s Exhibit ‘D2-AE’, invoices No. 83, 106 and August 20 and October 18 as illustrations.
Apart from the viva voce evidence about work, I had the plaintiff’s tax returns for the years 1993 to 2018, together with invoices for work done after that time as to actual earnings. In addition I had expert accounting evidence from Mr Mark Thompson. He prepared two reports dated 4 February 2020[71] (‘first report’) and 25 May 2020[72] (‘second report’) and gave evidence based upon those reports. I was asked by the plaintiff to draw an adverse inference[73] from the second defendant’s failure to call the forensic accountant that it had anticipated calling. I do not consider it necessary to do so. The contentious matters between the parties went to the appropriate methodology to assess earnings and to the assumed basis of calculations. Those matters were put to Mr Thompson in cross examination. Having the benefit of Mr Thompson’s opinions, tested as they were in cross-examination on both methodology and assumption, I do not find it necessary to draw any inference from the failure to call the anticipated expert.
[71]Plaintiff’s Exhibit, ‘P 12’, Mr Mark Thompson’s first report with annexures, 4 February 2020 (‘Mr Thompson’s first report’).
[72]Plaintiff’s Exhibit, ‘P 16’, Mr Mark Thompson’s second report, 25 May 2020 (‘Mr Thompson’s second report’).
[73]Jones v Dunkel (n 30).
In the first report Mr Thompson was asked to calculate loss being the difference between actual and projected earnings on the one hand and the ‘but for’ earnings based upon two different assumed scenarios. The first scenario, assumed that the plaintiff would have obtained a trade qualification in the building industry and would have earnt the income of a skilled tradesman over his working life. The second assumed a tertiary education and then average weekly earnings for a tertiary educated Victorian worker over his lifetime. This second scenario was not pressed and I say no more about it.
Mr Thompson provided two calculations for the first scenario; that of a skilled tradesman in the building industry. Both calculations assumed employment as an employee. The first calculation assumed remaining ‘on the tools’ for wages throughout his working life. The second assumed progression to a supervisory role in the construction industry. In his viva voce evidence Mr Thompson described these two scenarios as ‘bookends’ for the earnings of skilled tradesmen.[74]
[74]Transcript (n 2) 489.
In his subsequent report he was asked to provide calculations based upon Mr Perez completing year 12 and thereafter being in employment earning average weekly earnings of a fulltime Victorian male. He was also asked to adjust the expenses incurred in self-employment from 2005 onwards to a figure representing 20% of gross income rather than the actual expenses claimed as tax deductions in the returns.
One of the difficulties in assessing likely earnings of someone who works in a trade is the significant percentage of such people who do so through self-employment rather than as employees. Mr Thompson in evidence referred to data that demonstrated up to 50% of bricklayers are self-employed.[75] The difficulty is that there is little available data about the earnings of self-employed persons from which potential earnings on this basis might be sourced.[76] For this reason Mr Thompson, when asked to estimate the income that the plaintiff could have earned as a skilled tradesman, relied on earnings of employee tradesmen as disclosed by various statistical data. It is this reason rather than any assumption about the plaintiffs choices regarding work that underpinned his methodology. In the absence of any reliable data about income of self-employed tradespeople, I accept that using wage rates is an appropriate measure for a skilled tradesman.
[75]Ibid 487.
[76]Ibid 596.
Although the second report of Mr Thompson calculated loss by reference to average weekly earnings figures maintained by the Australian Bureau of Statistics (‘ABS’), neither party submitted that I should approach loss of earning capacity based upon those broad calculations. Rather the plaintiff submitted that the likely outcome for the plaintiff was a successful career as a skilled tradesman moving into supervisory roles. The second defendant submitted that an assessment of loss based on a career becoming a Construction Site Manager managing multiple sites on an ongoing basis did not fairly reflect what the plaintiff had lost. It pressed the scenario of remaining on the tools as the appropriate starting point for assessing loss. That is, each party pressed for the adoption of one or other ‘bookend’ as best informing the assessment of what has been lost.
It is helpful that the opinion provided ‘bookend’ estimates that reflect the variety of wage rates that might be applicable, from award minimums rates to amounts under union enterprise bargaining agreements and reflect the variety of supervisory roles that might be taken up once experienced in a trade. But ultimately neither bookend produces a fair assessment of loss.
Mr Thompson’s reports used a variety of survey information from which he sourced historic and current earnings of bricklayers, carpenters, forepersons, supervisors and site managers. Those were ‘What Jobs Pay’ Salary Survey from 2004, ‘Job Markets Australia’ Salary Survey from 2019 ‘Hays Salary Guide’ from 2005 and 2019, ‘Michael Page Salary Benchmark’ from 2019. None of the supervisory or manager roles were specific to bricklayers or carpenters. From various salary ranges and estimates in those documents Mr Thompson arrives at current notional earnings of $75,000 per annum and $125,000 per annum respectively under each bookend scenario. He assumes increasing to the maximum employee earnings level or a stepping into a supervisory role after 15 years of work.
The Jobs Market Australia (‘JMA’) survey is said to use earnings figures derived from the ABS’ original statistics.[77] It was the original basis for Mr Thompson’s estimate of the ‘on the tools’ scenario. That survey does include a number of self-employed persons, but only if they pay themselves a wage. However in those cases there is no reporting of business profit (or loss). The JMA average figure used by Mr Thompson in his first report was $1,383[78] applicable to a person aged over 45 years. JMA noted that 50% of jobs are held by employees, 19% in occupation are self-employed and employ others and 30% are self-employed and work alone, 1% of jobs are held by contributing family members. There is no knowing what proportion of self-employed tradespeople might structure their affairs so as to pay themselves a wage and therefore contribute to the JMA data. It is likely that the level of such a wage might be affected by considerations of business structure and taxation advice rather than market forces. It does not take account of tradespeople, like the plaintiff, who do not pay themselves a wage.
[77]Mr Thompson’s first report (n 71) Appendix 7, 2.
[78]Ibid [8.8] Table 8.
In his evidence Mr Thompson referred to two further documents published by the ABS giving average weekly earnings and hours broken down into figures for specific occupation groups. Exhibit 13 was the ABS data for full-time non managerial employees by occupation group published in May 2018. That document lists as an occupation group ‘Bricklayers, and carpenters and joiners’. It disclosed average weekly total cash earnings of $1741.30. This figure included some overtime with average weekly total hours being 42.1. Exhibit P14, published at the same time, recorded average weekly earnings of all employees, identifying ‘bricklayers and stonemasons’ with average earnings of $1844 per week and carpenters and joiners at $1272.50 per week.
The figures from these ABS statistics are slightly higher than generalised average weekly earnings. Mr Thompson said data showed that completion of a trade based qualification resulted in earning about average weekly earnings.[79] The averages for bricklayers as disclosed by Exhibit 13 and 14 are slightly higher than the generalised averages.[80]
[79]Transcript (n 2) 554.
[80]See Mr Thompson’s comments at Transcript (n 2) 517. The figure of $1741 was said to be about $50 per week higher and the figure of $1844 was essentially 10% higher than the general average weekly earnings, Transcript (n 2) 518.
Allowing for 2% increase on the 2018 figures, Mr Thompson said the present annualised rate of between about $94,500[81] and ‘just north of $100,000’[82] by way of average gross earnings for wage earning bricklayers. Mr Thompson also said that in his view self-employed tradesmen usually earnt more than waged tradesmen.[83] Whether or not I accept that as a general proposition, the earnings and expenses of self-employed people are subject to more variables and fluctuations than wage earners. In all the circumstances I have come to the view that using a present figure of $100,000 per annum for notional earnings would be an appropriate salary figure to use as a starting point to assess but for injury earnings of a skilled tradesman.
[81]Transcript (n 2) 517.
[82]Ibid 518.
[83]Ibid 545.
From notional earnings, allowance must be made for the residual earning capacity to date. Mr Thompson was asked to use and did use tax returns to establish actual earnings and to arrive at projected earnings continuing in self-employment. He estimated earnings for 1990 and 2019 financial years for which no tax return was available and adjusted figures for CPI. The actual earnings after tax for each year were set out in schedule G to his first report. Likely earnings from 1 July 2018 onwards are assumed at $24,551 per annum based on an average of the previous ten years’ earnings.
The calculations of Mr Thompson in his first report gave a past loss of $561,670 using the ‘on the tools’ scenario[84] and a past loss of $1,077,186 on the ‘supervisor’ scenario.[85] Both figures were exclusive of superannuation.
[84]See Table 1 (Scenario 1A) of Mr Thompson’s first report (n 71) figures to 26 February 2020.
[85]See Table 1 (Scenario 1B) of Mr Thompson’s first report (n 71) figures to 26 February 2020.
In his second report Mr Thompson was asked to re-calculate actual and anticipated earnings using an assumed level of business expenses. Instead of actual expenses, he was asked to assume that from 2005 expenses were 20% of gross income and not the expenses as claimed in the tax returns. This recognised that from 2005 the proportion of expenses to income was high. Mr Thompson described the expenses as disproportionate to what might be needed to generate the level of income. He explained this as some expenses are fixed such as the cost of a work vehicle or tools of trade or tax incentives provided in particular years.[86] Mr Perez was not able to shed much light on the question when cross-examined about his level of expenses[87] other than to say ‘expenses are expenses’[88] and that he takes all the paperwork to his accountant. No impropriety was suggested in claiming the expenses.
[86]Transcript (n 2) 570.
[87]Ibid 226 and 227.
[88]Ibid 226.
If the adjustment is applied it has the effect of increasing the past income earnt and thereby reducing the past income lost. Likewise it leads to assessing a greater capacity into the future.
Mr Thompson set out the business income and the business expenses as a proportion of income in Schedule A to his second report. The average proportion of expenses to gross income up until 2004 was 19%. By comparison the average between 2005 and 2018 was 45%. If the gross income less 20% business expenses was applied, the present value of estimated nett earnings adjusted for CPI would be $39,607 p/a.[89] The parties agree that using total past actual or estimated earnings calculated on the 20% assumption, would produce a figure of $380,441[90] for past loss of capacity under the ‘on the tools’ scenario. Under the ‘supervisor’ scenario, the past loss amounts to $905,497.[91]
[89]Derived from Mr Thompson’s second report (n 72) at ‘Schedule C’, again as an average of ten years adjusted income.
[90]As at 30 June 2020.
[91]Ibid.
In my view while expenses incurred in the past, as set out in the tax returns do serve as a basis for assessing the income actually derived from the business, I am assessing capacity rather than actual loss calculations. Where notional earnings assume the regularity that comes from wage rates, it may be appropriate to calculate residual capacity in self-employment by a measure that more regularly reflects the capacity of the business to generate income. In this case, given the change in level of expenses before and after 2005, it is appropriate to use a proportion of gross income to fix expenses for the purpose of calculating the loss. Both parties urged this approach in this case. Likely earnings after tax on this basis for 2019 and 2020 are assumed at $35,252p/a.[92] The plaintiff gave evidence that in the last year or two he has struggled more with the impending court case. This is borne out by a drop in his earnings in the past two years.
[92]See Mr Thompson’s second report (n 72), ‘Schedule B’.
Whilst averaging the bookend calculations is a somewhat imprecise method of arriving at a loss based upon notional earnings of $100,000[93], the exercise of determining a fair reflection of lost capacity is necessarily not ‘a mere matter of mathematics’[94]. I will allow a figure of $640,000 for past loss from 1990 to date.
[93]That is taking the average of $380,441 as an agreed calculation and $905,479 as calculated by the plaintiff. See Plaintiff, ‘Submissions on Behalf of the Plaintiff’, Submission in Perez v Reynolds & Anor, S ECI 2019 02972, 10 June 2020, (‘Plaintiff’s submissions’) [230].
[94]Amaca Pty Ltd v Latz (2018) 92 ALJR 579, [92] (Bell, Gageler, Nettle, Gordon and Edelman JJ).
On the notional weekly earnings figures used by Mr Thompson as bookends, an averaging exercise would give a present nett weekly figure of $1354. Using the ten year averaging and the assumed proportion of business expenses, Mr Thompson calculates the plaintiff’s actual weekly earnings at $675.[95] The lost capacity is to earn approximately $679 per week. There is no dispute that the 3% life tables apply. Part VB of the Wrongs Act 1958 (‘the Act’) governs the recovery of damages for personal injury. By section 28I of the Act the applicable discount rate on damages for future economic loss is prescribed to be 5%. However section 28C of the Act provides:
[95]Mr Thompsons’ second report (n 72) ‘Schedule B’.
(1)This Part applies to an award of personal injury damages, except an award that is excluded by subsection (2).
(2)The following awards of damages are excluded from the operation of this Part –
(a)an award where the fault concerned is an intentional act that is done with intent to cause death or injury or that is sexual assault or other sexual misconduct;
…
The personal injury damages to be awarded to Mr Perez comes within the exclusion in paragraph (2)(a). In the absence of legislative prescription, the common law position for discounting the present value of future financial losses remains the application of a discount rate of 3% as determined in Todorovic v Waller.[96]
[96]Todorovic (n 40).
There was a dispute about the appropriate retirement age. The second defendant submitted that the plaintiff, working as a tradesman would likely retire before 65 years of age absent injury. The plaintiff calculated work to retirement to 67 but calculated earnings with injury to 65 only submitting that as a matter of common sense a person with skills for manual work and who has the mental health problems of the plaintiff will retire significantly earlier. I do not accept that this is necessarily true of this plaintiff. He has, as I have said, a prodigious work ethic. His father remained to some degree on the tools throughout his working life and enjoyed it very much, ‘No, no he was still laying bricks. He loved being involved with everybody.’[97] On occasion he described working as much as he possibly could ‘because I have a long way to catch up to where I left off.’[98]
[97]Transcript (n 2) 209.
[98]Ibid 218.
I accept the plaintiff will work as long as possible in his present capacity or to the extent of his capacity. I also accept that the amount of work he could take on into his sixties might reduce as it may well have done had he not suffered psychiatric injury. His injuries don’t impair his physical capacity and it is the prospect of physical injury that would be most likely to impact upon continuing work as a skilled tradesman. In my view that is a matter to be taken into account. I will otherwise not make an allowance for earlier retirement because of his mental health. Future economic loss at $679[99] per week to age 67, would as a matter of arithmetic be approximately $535,000. In broad terms, allowing for a reduction in work taken on in the later years I will allow $490,000 for future loss before considering vicissitudes.
[99]Average nett figure of $1354 less actual earnings of $675.
The plaintiff claims loss of superannuation past and future. The second defendant submitted that a reduction to the superannuation assessment should be made as self- employed persons would not necessarily be making superannuation contributions and would not have the benefit of employer compulsory superannuation. Though not benefitting from the employer compulsory superannuation self-employed persons are nevertheless able to and encouraged to contribute to their superannuation from gross business fees. Superannuation is one of many differences that apply between wage earners and self-employed persons. There are many things at variance between subcontracting or self-employment on the one hand and working as employee on the other of which provision for superannuation is but one. Given it is the lack of reliable data for the earnings of self-employed workers that has led to the use of employee rates it is in my view appropriate to calculate superannuation on the same basis, notwithstanding that different rules apply to provision for superannuation by self-employed persons.
The past superannuation calculated by Mr Thompson on each bookend scenario amounted to $96,726 and $159,834. Doing the same averaging exercise with the superannuation schedules L and M[100] would give a notional past loss of superannuation of $130,311. Applying the same method to future superannuation averaging $90,865[101] and $151,452[102] arrives at a figure of $121,158. I am conscious that these calculations assume retirement at 65 rather than 67. In all the circumstances I will make an allowance for loss of superannuation of $250,000.
[100]Mr Thompson’s first report (n 71). See schedules L and M.
[101]Ibid Schedule R (Scenario 1A). See figures as at 29 Feb 2020. From 1 March 20 – 31 Dec 2039.
[102]Ibid, Schedule S (Scenario 1B). See figures as at 29 Feb 2020. From 1 March 2020 to 31 December 2039.
It is necessary to make an adjustment for the vicissitudes. The plaintiff submitted that I should make no allowance for vicissitudes on past loss and a modest reduction of 5-8%[103] on future losses. The second defendant submitted that a 40% reduction on past losses and a 55% reduction on future losses would be appropriate.[104]
[103]Plaintiff’s submissions (n 93) [389].
[104]Second Defendant, ‘Second Defendant’s Outline of Submissions’, Submissions in Perez v Reynolds & Anor, S ECI 2019 02972, 10 June 2020, [79].
The plaintiff has worked at some level every year, save for the period when he went bush for a time. He has consistently worked so that his business though small never operated at a loss. There are no other factors that would impact on his ability to work fully in a productive career.
The use of averages, both in using wage data and in averaging bookend employment scenarios, has been an attempt to account for vagaries that might apply in self-employment. There are no other health or other factors identified that would require consideration of vicissitudes for past loss. While the calculations of Mr Thompson, particularly the assumption that business expenses will be 20% of gross income, provide an optimistic view of earnings and so a lower assessment of loss, I am also mindful that this is balanced by a regularity in the wage based assessment that does not account for fluctuations; both good years and bad in the industry. I would place ordinary reduction of 15% on vicissitudes for future loss. I would also accept that, in an industry when he may have spent some or even all time in self-employment, he may not contribute to superannuation at the same level as an employee might benefit. I would apply a reduction to the superannuation, past and future of 15%.
Therefore these reasons lead to the following amounts in respect of loss of earning capacity:
Past Loss of Earnings $640,000
Past & Future Superannuation $212,500
Future Economic Loss $416,500
TOTAL ECONOMIC LOSS$1,269,000
Medical and other Expenses
The Plaintiff has not incurred any treatment expenses in the past.[105] However, the evidence supports the Plaintiff’s claim for future medical expenses.
[105]Plaintiff’s submissions (n 93) [395] which provides for $125 per week x 149.8 (multiplier, 3% discount rate).
Dr Tagkalidis recommended fortnightly sessions for 2-3 years with a psychologist at approximately $220-$250 per session.[106] This gives a total of $18,725.00[107]. In evidence Dr Tagkalidis recommended treatment for ‘three-five-seven years, if he could stick at it.’[108] Dr Entwistle also thought treatment for approximately two to three years as appropriate.
[106]Dr Tagkalidis report (n 35) 10.
[107]Plaintiff’s submissions (n 93) [403].
[108]Transcript (n 2) 470 [18].
I will allow future costs of the psychologist as claimed in the sum of $18,725 for future medical expenses.
I will hear the parties on the appropriate orders.
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