Reynolds v Roche Bros Pty Ltd - [1999] WASCA 141

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: REYNOLDS -v- ROCHE BROS PTY LTD [1999] WASCA 141

CORAM: PIDGEON J
IPP J
WALLWORK J

HEARD: 18 MARCH 1999

DELIVERED : 20 AUGUST 1999

FILE NO/S: FUL 103 of 1998

BETWEEN: MARK GEORGE REYNOLDS
Appellant (Plaintiff)
AND
ROCHE BROS PTY LTD
Respondent (Defendant)

Catchwords:

Negligence - Damages - Loss of future earning capacity - 20 per cent deduction for contingencies - Reduced to 10 per cent - Decided on facts

Legislation:

Nil

Result:

Appeal allowed

Representation:

Counsel:

Appellant (Plaintiff) : Mr D R Clyne
Respondent (Defendant) : Mr A J Power

Solicitors:

Appellant (Plaintiff) : Friedman Lurie Singh
Respondent (Defendant) : Jackson McDonald

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

Abbott v Pacific Industrial Company WA Pty Ltd as trustee for Steelfab Unit Trust T/As Pacific Industrial Company (1979), unreported; FCt SCt of WA; Library No 970079; 4 March 1997
Arthur Robinson (Grafton) Ltd v Carter (1968) 122 CLR 649
Black v Motor Vehicle Insurance Trust [1986] WAR 32
Bowen v Tutte (1990) A Tort Rep 81-043
Broadribb v Hanna (1969) 1 NSWR 35
Clark v Chandler (1973) 5 SASR 416
General Motors - Holden's Pty Ltd v Moularas (1964) 11 CLR 234
Jones v Schiffmann (1971) 124 CLR 303
Lulich v Bell Bros Pty Ltd (1967) 41 ALJR 268
Wynn v New South Wales Insurance Ministerial Corporation (1995) 184 CLR 485

Case(s) also cited:

Bresatz v Przibilla (1962) 108 CLR 541
Malec v J C Hutton Pty Ltd (1990) 169 CLR 638
Miller v Jennings (1954) 92 CLR 190
Thomas v O'Shea (1989) A Tort Rep 80-251
Wade v Allsop (1976) 10 ALR 353
Wilson v Peisley (1975) 7 ALR 571

PIDGEON J: I agree with the reasons to be published by Ipp J and Wallwork J and with the orders proposed by Wallwork J.
IPP J: : I have had the advantage of reading the reasons to be published by Wallwork J. I agree with his Honour's reasons and conclusions and merely wish to add some comments of my own.
The learned trial Judge deducted a discount of 20 per cent for contingencies in arriving at the awards for future economic loss and future superannuation. In my opinion, for the reasons set out below, the discount of 20 per cent was too high.
There were only two factors which arguably warranted a discount rate higher than the usual. Firstly, the appellant had a "pre‑existing degenerative change evident in his spine" (to use the learned Judge's words). This meant, as his Honour put it, that "there may have been breaks in employment", even had the accident not occurred. Secondly, although – prior to the accident - the appellant intended to work until the age of 65 years, he would not have been able to work as a plant operator after the age of 55 years. After 55 years of age he would only have been able to work as a supervisor and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1999] WASCA 141
Decision Date: 20 AUGUST 1999

CaseChat Overview and Summary

Reynolds v Roche Bros Pty Ltd was a case in which the plaintiff, Mr Reynolds, sought damages for personal injury sustained in an accident caused by the defendant, Roche Bros Pty Ltd. The dispute centred on the calculation of Mr Reynolds' loss of future earning capacity and the appropriate discount for contingencies. The case was heard in the Supreme Court of New South Wales.

The primary legal issue before the court was the determination of an appropriate discount to apply to the calculation of Mr Reynolds' future loss of earnings. The court was tasked with deciding whether the standard 20% discount for contingencies was appropriate or if a lesser discount should be applied based on the specific circumstances of the case.

In addressing this issue, the court referred to previous cases such as Wynn v New South Wales Insurance Ministerial Corporation, Bowen v Tutte, and Black v Motor Vehicle Insurance Trust. The court noted that the discount for contingencies should account for factors that might adversely affect earning capacity, including sickness, accident, unemployment, and industrial disputes. The court further emphasised that the discount should be based on the individual circumstances of the plaintiff rather than a generalised approach. The court found that while the usual discount for contingencies ranged between 2% and 6%, each case depended on its own facts. After considering the evidence and submissions, the court determined that a reduction from the standard 20% discount to 10% was appropriate in this case.

The court's final orders included a reduction in the discount for contingencies applied to Mr Reynolds' loss of future earning capacity from 20% to 10%. This adjustment reflected the specific circumstances of the case, including the plaintiff's age, career prospects, and family situation.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

IPP J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: IPP J

In Wynn v New South Wales Insurance Ministerial Corporation (1995) 184 CLR 485 at 497, Dawson, Toohey, Gaudron and Gummow JJ said:"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 (1962) 108 CLR 541 at 544: 'All 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. Even so, the practice in New South Wales is to proceed on the basis that a 15% discount is generally appropriate, subject to adjustment up or down to take account of the plaintiff's particular circumstances." In Bowen v Tutte (1990) A Tort Rep 81-043 at 6803, Malcolm CJ, when discussing the deduction on account of contingencies where it was said that a learned trial Judge had wrongly discounted the appellant's future earning capacity by 25 per cent on account of contingencies, said:"The normal discount rate for the usual contingencies ranges between 2 to 6% although each case depends on its own facts: Black v Motor Vehicle Insurance Trust [1986] WAR 32 at 34 per Wallace J; and see Bresatz v Przibilla (1962) 108 CLR 541. It is necessary to assess the plus factors and the minus factors in the individual case." At 68,086 of that report the Chief Justice said:"Consequently, the basic approach adopted by the learned trial Judge in the present case to take account of the existence of a residual earning capacity by the deduction of a percentage amount from the figure he calculated for total loss of earning capacity was correct. In my opinion, however, for the reasons which I have mentioned, I consider that the learned Judge took a somewhat optimistic view of the appellant's residual capacity. As a result the amount of $126,156 which the learned trial Judge assessed was, in my opinion, disproportionately low." In that case Wallace J agreed with the reasons of the Chief Justice. Rowland J, after discussing the facts, which concerned a plaintiff who, prior to the accident had worked as a nurse and later as an instructor of nurses; who was married and intended to have a large family and to work until she was 60, when referring to the loss of future earning capacity said at 68,092:"It can be seen that his Honour has also discounted the sum he arrived at by 25% to account for contingencies. Counsel submits that this is too high and amounts to a duplication. In normal circumstances of course it would be too high. A discount would not usually exceed 10%. See Black v Motor Vehicle Insurance Trust [1968] WAR 32 and Bishop v Cole, FCt SCt of WA, delivered May 1987; Library No 6744. The circumstances are not normal in this case but his Honour has been committed to this method of assessment, and it is apparent that he has made one discount by adopting a conservative starting point and ignoring the prospects of increased income by way of promotion because of the possible impact of a large family. In the circumstances the deduction of 25% for contingencies which again takes this into consideration is plainly excessive. In my view his Honour is in error and that figure should be reduced from 25% to something in the order of 8%."