Renehan, M.P. v Commonwealth of Australia

Re: MICHAEL PAUL RENEHAN
And: COMMONWEALTH OF AUSTRALIA
No. N G332 of 1990
FED No. 631
Damages

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Foster J.(1)

CATCHWORDS

Damages - assessment of damages

HEARING

SYDNEY

#DATE 15:10:1991

Counsel for the applicant: D.A. Wheelahan QC

with A.R.G. Johnson

Instructed by: Patterson, Houen and Commins

Counsel for the respondent: C.C. Simpson QC

with B.J. Knox

Instructed by: Australian Government Solicitor

ORDER

That verdict and judgment be entered for the applicant in the sum of $185,200.

That the respondent pay the applicant's costs.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

I have been greatly assisted by the careful addresses of counsel in this matter. During the course of these proceeding and during those addresses I have been able to come to a firm conclusion as to what my decision should be. In these circumstances I propose to give it and the reasons for it forthwith.

The plaintiff in these proceedings was born on 8 June 1961. He completed his School Certificate in 1977 and immediately joined the Navy. I accept, indeed there is no significant contest, that it was his intention to pursue a career in the Navy and remain in the Navy for at least 20 years. It was his intention to undertake the learning of a trade during his naval service and at the completion of the 20 year period, assuming that he then left the Navy, to be in a position to take that trade with him into the community for his use during the remainder of his working life.
It appears quite clearly that he was an active man. He was intelligent and sociable, and he had a keen interest in sporting activities. He actively enjoyed the work that he did in the navy. He did a naval apprenticeship in fitting and turning and qualified as a maintenance fitter. It was in that capacity that he worked in the navy up until the time of the accident in respect of which he brings these proceedings.
He also achieved promotion through the ranks of the navy at what seems to have been a perfectly normal rate of progression. On the day when he suffered the injuries in respect of which he sues, he had in fact sat for and passed the necessary examination to qualify him for the rank of Petty Officer. I am satisfied, on the balance of probabilities, that, were it not for the accident, he would have been appointed to that particular rank in approximately July of 1986. In the events which happened, however, that promotion did not in fact take place because, I am satisfied, of the disabilities from which he suffered as a result of the accident.
The plaintiff was a member of the crew of HMAS Stalwart. He, like others who have come before the Court, suffered significant injury when there was a release of hydrogen sulphide gas in an area at the rear of the vessel whilst it was at sea on 22 October 1985.
He was not in the immediate area when the release of the gas became evident, but he went to the area which has been described in the case as a part of the ship known as "Two Hotel Flat", where a number of his naval colleagues were in an obviously injured condition. These men had been taken from the area where the primary gas release had occurred. A number of them were most seriously affected. They were suffering convulsions and other immediate and dramatic effects of the inhalation of the gas. I am satisfied that he was confronted with what would have been an appalling scene.
In a most appropriate and commendable way he set about assisting in the relief of the problems being suffered by these men. He exerted himself physically, by manhandling at least two sailors to a higher deck through companion ways and up ladders to a position where they would be away from the noxious atmosphere below.
In the course of so doing, he himself inhaled the gas and fell victim to it. It is quite clearly established that he became unconscious having effected the rescue of a ship mate and that he himself required medical aid. He received medical aid on the ship itself and in a helicopter which was summoned to evacuate him and others to Darwin. He received medical care in Royal Darwin Hospital for a number of days.
He has given detailed evidence of the immediate effect upon him of the inhalation of the gas and of the whole of the episode on the vessel. It very clearly had a significant emotional impact on him. It has also left him with physical injuries.
So far as the emotional effects of the accident are concerned, there is still some residual effect, but the evidence that has been placed before me indicates quite clearly that so far as any serious effects are concerned, these were happily fairly ephemeral. That is not to say that he doesn't at this present time demonstrate to some extent the after effects of feelings of anger and resentment which can take, of course, a significant emotional toll in cases of this kind. I think it is clear enough, however, that with the finishing of these proceedings and with the effluxion of time, he will be able to put those matters behind him.
It is worth noting that he was engaged to his present wife at the time that he undertook the voyage on HMAS Stalwart. He has married since. It is obviously a strong and happy marriage. There are two children and he receives the support of a loving family. These factors themselves will undoubtedly hasten what recovery is still ahead of him in relation to his emotional problems. They were, however, significantly severe for a not inconsiderable period of time and I take them into account in the question of general damages.
The applicant underwent considerable medical care, not only in Darwin but also upon his return to Sydney. That care is set out in the evidence which I accept. There is no point in prolonging these reasons by setting it out again.
The plaintiff experienced difficulties of a physical nature. He suffered pain in his right shoulder and that problem is still with him in a diminished form today. He experienced pain in the knees. The reason for this pain is not clear from the evidence. However, it is perfectly clear that it was occasioned by the accident on board the ship and by the efforts that he put into the rescue operation in which he participated.
Some time after the accident, but in circumstances where there is no doubt whatever that it was the cause of the problem, he developed a significant disability in his lower back. That disability, no doubt aggravated at the time by his emotional reaction to it and to the whole of these events, prevented him from returning to his work as a maintenance fitter in the navy. Efforts in that regard quickly demonstrated that he lacked the capacity to perform the demanding work that is involved in that occupation. He was not able to lift the heavy weights which frequently have to be lifted by maintenance fitters. He was not able to get into confined spaces. He was not able to engage in activities in the work area which required anything in the nature of significant stooping or bending.
There is no conflict of medical evidence as to the nature of the injury or its cause. The effort involved on his part in the rescue operation produced a right-sided L5-S1 intervertebral disc protrusion. That injury has produced very considerable disability in that area of the body together with pain of a sciatic nature.
The pain in itself has produced a significant problem and has limited his capacity for his work and for his ordinary enjoyment of life. Both he and his wife have indicated the effect that it has had upon him in his ordinary affairs. Matters of simple pleasure such as eating in restaurants and attending cinemas are to a large extent denied him. He experiences discomfort if he sits for any lengthy period. The result is that, for practical purposes, he and his wife have been denied those simple pleasures of family outings. The injury to the back has prevented him undertaking the sporting activities that he enjoyed before the accident. It is quite clear that he will not be able to return to them so that he is permanently deprived of those pleasures.
Although matters of a significantly psychiatric kind are not involved in this case there is, however, a significant lowering, in my view, of his ordinary level of happiness; he was from all accounts an easygoing man with a pleasant personality. It is clear that he has not suffered any significant personality change, but, consistent with the type of injury he has suffered and the discomfort which he must now tolerate on a permanent basis, he is irritable from time to time and less pleasant to be with than he would otherwise have been.
It is a significant matter in this case that he is now only 31 years of age and the impairment of his ordinary enjoyment of life must cover the period, not only from when this problem befell him until the present day, but also from the present until the end of his days.
I do not propose, as I said, to set out in any degree the medical evidence involved. I have indicated that there is no significant conflict. The applicant in fact was reviewed by a medical board in the Navy on 20 December 1988. As a result of this review he was discharged as permanently unfit for naval service. That review refers to the injury to the shoulder which is described as a rotator cuff injury. It speaks of psychological sequelae of the accident in the nature of anxiety and depression with irritability, and of the restrictions upon his physical activities which included such fundamental activities as walking, standing, bending, stooping, squatting, climbing, pushing, lifting, throwing and the like.
That those problems still exist and will continue to exist is made quite clear by other medical evidence in the case. I instance the evidence in the report of Dr Selby Brown of 10 July 1991 where the doctor expresses the opinion that he has a clear right sided L5-S1 intervertebral disc protrusion, the doctor adding that he considers:

"...this would restrict him in his capacity to perform physical activities requiring heavy or moderately heavy lifting, handling or bending, prolonged or moderately prolonged walking, standing, climbing or squatting and for activities likely to cause jerking, jolting or jarring of his back."

He said:

"This degree of restriction on his physical ability will remain with him permanently."

So far as the applicant's work history is concerned I have indicated that he stayed in the navy until the beginning of 1989. During that period of time he was employed in various capacities which it is unnecessary to set out. The main feature of that employment in the navy was that it was employment which took account of those restrictions to which I have made reference. It clearly was employment which did not enable him to carry out his chosen work, being the work for which he had qualified, that of a maintenance fitter.
Upon leaving the navy, the applicant showed a commendable degree of zeal in seeking alternative employment. His first two jobs were in the area for which he had trained, where he experienced the same problems that he had experienced in the navy. The first job was that of a diesel maintenance fitter in a local harbour cruise boat operation. He very rapidly found himself unable to do that work, despite his genuine attempts to do so. A subsequent job of the same character produced the same result. He ultimately obtained employment with the MSB Sydney Ports Authority. He was unable to work in his chosen occupation but he did obtain employment in the engineering sphere. This work, although no doubt of a responsible nature, did not involve the physical requirements of the work of a maintenance fitter. He operated a floating crane where the actual activity of operation could be achieved by the manipulation of buttons and levers. This was within his physical capacity and he has successfully maintained that activity up until the present time. There is, however, a very significant question as to whether this work will continue in the future and I will direct some remarks to that later in these reasons.
The applicant's claim can be approached in the usual way by looking at it in particular categories.
The applicant makes no claim for past medical expenses or future medical expenses. This is because it is accepted by both parties that those amounts have been paid for and will be paid for by the Commonwealth as a result of his naval service and as a result of the injuries having occurred to him during that service.
There is a claim for past wage loss. This claim is based upon the submission that he would have in the ordinary course of events, but for his injuries, achieved the rank of Petty Officer in July of 1986 and retained that rank until he left the navy in March of 1989. The difference in pay between the pay of a Petty Officer and the Able Seaman rank that he held produces a net difference of $8100 for that period. Allowing for the fact that there is some necessary uncertainty as to precisely when he would have achieved the appointment, but no uncertainty in my view as to the fact that he would have achieved it, I reduce that figure to $8000. It is necessary to apply an interest factor. The period during which he has been out of pocket is approximately 5 years, the appropriate interest rate is 9 per cent. The result is that a figure of $3600 should be added by way of interest, making a total for past wage loss of $11,600.
It is appropriate that I turn to the question of general damages, the basis for this award being loss of enjoyment of life, past, present and future. I have already indicated the effect that the injuries, particularly that to the lower back, have had upon the plaintiff. It is not an insignificant matter that he devoted so much time and effort to the acquisition of a trade which he enjoyed and which he expected to exercise in the navy, that being an area in which he had hoped to spend the greater part of his earning life, and that that expectation has been denied him. It is obviously a matter of considerable disappointment and a matter properly to be taken into account in seeking to compensate as far as money ever can for this head of damage.
The episode itself was one of a very significant nature having regard to the emotional impact it made upon him and that must also be taken into account.
I bear in mind, of course, the comparatively young age at which he suffered these injuries and the young age that he is now. I think taking all these matters into consideration and looking into the future as it must unfold for this young man with the injuries that he has, I think I would do him less than justice were I to award less than $70,000 for general damages. I make that award. I attribute $30,000 of that to past pain and suffering. A period of six years at 2 per cent I take to be a reasonable approach to an award of interest. That produces a figure of $3600 with the result that the total award for general damages will be $73,600.
The question of an appropriate award for future loss of earning capacity is in this case a very difficult one. The applicant is currently employed at a rate of pay which would be at least equivalent to what he would be earning were he still in the navy. It is reasonable to regard the figure of $500 per week net as representing a current measure of his earning capacity and a measure of the earning capacity he would have exercised had he remained in the navy.
The job that he holds with the MSB Sydney Ports Authority is a job which must be described as a fortunate job from his point of view. It is a job carrying with it sufficient responsibility to attract the wage to which I have referred. The responsibility is one he can measure up to largely because of the training that he had in the navy. It is a job which was within his physical capacity. He has not undergone any re-training in any fields which might lead to future long term employment in clerical or sedentary work or work which would not impose an unacceptable strain upon his injured back. Were the job that he is now in a secure job for the future, it would be possible to approach this case on the basis that although there is a demonstrable loss of earning capacity it would not sound in any particularly large monetary compensation.
However, the job that he currently holds cannot be described as a secure job. Evidence has been given by Ms Leeds, an executive from the MSB Sydney Ports Authority, indicating that restructuring of jobs is occurring within the authority and that as a result of that restructuring the applicant is now a supernumerary officer. This means that he has not been appointed, and will not be appointed, to any new permanent positions. He is currently eligible to be redeployed to another position with his salary being maintained at its present level. He has in fact been redeployed for a period of six months to a position of temporary engineer. That redeployment, however, will cease when the authority ceases its operations from the Goat Island base in Sydney Harbour.
It is difficult, because the situation is not certain in itself, to determine what next year will bring. It may be that the applicant will be maintained in employment on a redeployed basis or in a category as a member of the jobsearch program of the Authority for a period of time which will provide him with his ordinary wage throughout next year and perhaps beyond that. Alternatively there is a very strong possibility on the evidence that he will be offered a redundancy package which will be open to him to accept somewhere about the middle of next year. If he does not accept this package and tries his fortune in effect through the jobsearch program he may run the risk of retrenchment without a job having been found for him.
One can only do one's best in a fluid factual situation of this kind. There is no clear indication on the evidence as to what occupation the plaintiff might follow or could follow in the event that he loses this job. I think on the probabilities he will be out of his employment with MSB Sydney Ports Authority by the end of next year. Whether he will at that point of time have other employment is a matter really for conjecture. Quite clearly, he will be barred from a whole range of areas of employment which would be available to him were he sound physically and able to use the skills that he has acquired and which he can no longer use.
If he does accept voluntary redundancy, that will take with it a payment probably equivalent to 15 weeks of his present salary. This is not in my view a case where one can attempt precision such as would be involved in making some accurate calculation of the amount of a redundancy package that he might receive or a calculation based upon some definite period of unemployment following upon the loss of his present job during which period he would undergo retraining but be in receipt of nil or negligible remuneration. One simply doesn't know what is going to happen in that regard. One thing I am certain about, however, is that this particular applicant, being the type of person he has demonstrated himself to be, will not give up. He has a wife and family to support and to whom he is obviously devoted. He has considerable ability which he will be able to put to good use in the learning of some suitable employment.
I am prepared to accept, however, and do accept that the injuries which he has received and the consequent disabilities flowing from them have reduced to a significant degree his general earning capacity. That fact must be reflected in an appropriate award of damages.
If one takes the figure of $500 per week as a measure of his earning capacity and applies to it the appropriate multiplier of 1119.01, being a multiplier at 3 per cent for 34 years to take him to the end of his ordinary earning life, a figure of $560,000 results. This figure in itself as a measure of loss of earning capacity on a total basis probably suffers from the defect that any total loss of earning capacity does not, of course commence from this point in time but must commence from some point in the future. It does, however, provide a figure which can be used as some sort of a guide. If one takes into account the ordinary discount for vicissitudes of life, that figure with its attendant uncertainties of which I have made mention reduces to $475,000. Doing the best I can and having regard to all the matters to which I have made reference including the likelihood that loss of earning capacity will not commence until some time in the future and taking into account the quite significant residual earning capacity that I consider this applicant to have, I think that the appropriate figure for future loss of earning capacity is $100,000.

The total of the figures that I have awarded is $185,200.
I see no reason to alter that figure upwards or downwards when looking at it as a total sum. That is the figure that I award the applicant.

[1991] FCA 631

15 OCTOBER 1991