Ryan v A F Concrete Pumping Pty Ltd

[2013] NSWSC 113

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Ryan & another v A F Concrete Pumping Pty Ltd & another [2013] NSWSC 113

Hearing dates:

3-8 February 2013; 11-14 February 2013

Decision date:

26 February 2013

Before:

Adamson J

Decision:

1. Judgment for the first and second plaintiffs against the first defendant.

2. Judgment for the second defendant on the plaintiff's claim.

3. Judgment for EML in its cross-claim against the first defendant for amounts paid by way of workers compensation to or for the benefit of the first plaintiff, with interest.

4. All other cross-claims dismissed.

5. Direct the parties to bring in short minutes which calculate the amount of the judgments and cross-claims in accordance with these reasons within fourteen days.

6. Costs of the proceedings and of all cross-claims reserved.

7. Failing agreement on costs, direct the parties to approach my Associate within seven days for a hearing date for argument on costs.

Catchwords:

TORTS-Negligence-Personal Injury-Damages-Loss of Earning Capacity-Husher v Husher TORTS-Per Quod Servitium Amisit-Damages-Availability of loss of profits as measure of damages

Legislation Cited:

Civil Liability Act 2002, s5B, s5C, s5D, s5R, s12, s13, s18 Social Security Act 1991 (Cth), s43 Workers Compensation Act 1987, s34, s151H, s151I, s151Z

Cases Cited:

-Andar Transport Pty Limited v Brambles Limited [2004] HCA 28; (2004) 217 CLR 424 -Attorney-General for New South Wales v The Perpetual Trustee Company Ltd [1952] HCA 2; (1952) 85 CLR 237 -Barclay v Penberthy [2012] HCA 40; (2012) 86 ALJR 1206 -Commissioner for Railways (NSW) v Scott [1959] HCA 29; (1959) 102 CLR 392 -Dib Group Pty Limited trading as Hill & Co. v. Cole [2009] NSWCA 210 -Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88; 67 NSWLR 516 - Husher v Husher [1999] HCA 47; (1999) 197 CLR 138 -Knauer v Transfield Pty Limited [2005] NSWSC 176 -Leveridge v Witten (Court of Appeal, 14 September 1979, unreported) -Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 -Marinovski v Zutti Pty Ltd [1984] 2 NSWLR 571 -Mercantile Mutual Insurance Co Ltd v Argent Pty Ltd (1972) 46 ALJR 432 -Spargo v Haden Engineering Pty Ltd [1993] SASC 3793; 60 SASR 39 -State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536

Texts Cited:

H. Luntz Assessment of Damages for Personal Injury and Death (4th edition)

Category:

Principal judgment

Parties:

Jeffrey Ryan (First Plaintiff) Reliance Pools International Pty Ltd (Second Plaintiff) A F Concrete Pumping Pty Ltd (First Defendant) GIO Limited Ltd (Second Defendant) Employers Mutual NSW Ltd (Cross-Defendant)

Representation:

Counsel First and Second Plaintiff: RA Cavanagh SC and CJ Callaway First Defendant: AB Parker and AR Davis Second Defendant: N Polin Cross-Defendant: S Maybury
Solicitors Gillis Delaney (First and Second Plaintiff) Walker Hedges & Co (First Defendant) Gadens Lawyers (Second Defendant) Edwards Michael Lawyers (Cross-Defendant)

File Number(s):

2010/00408063

Publication restriction:

Nil

Judgment

Introduction

1. Jeffrey Ryan (the plaintiff) was injured when he was working on the 7th floor of a building on Bay Street, Brighton-Le-Sands (the Site) where he was engaged in the construction of a swimming pool. He was injured when he was hit in the head by concrete which had been ejected from a pipe. He claims damages in negligence against the first defendant (AF Concrete) and the second defendant (C & J), who were both subcontractors working on the Site.

1. The defendants have both cross-claimed against Employers Mutual NSW Ltd, the workers compensation insurer (EML), for contribution and indemnity in the event that the plaintiff's employer, Reliance Pools Pty Limited (Reliance Pools), would, if sued, be liable to the plaintiff. EML has been sued directly, as the insurer, because Reliance Pools has been deregistered.

1. EML, in turn, has claimed the amount it has paid to the plaintiff by way of workers compensation payments and expenses it has incurred on his behalf, from AF Concrete or C & J, if either is liable to the plaintiff.

1. Reliance Pools, now in liquidation, purported to assign its chose in action per quod servitium (per quod) against the defendants to the plaintiff. The effectiveness of the assignment need not be considered as the plaintiff no longer presses this claim.

1. The second plaintiff, Reliance Pools International Pty Limited (Reliance Pools International), seeks damages against AF Concrete and C & J on the basis of an action per quod for the loss of the plaintiff's services. Each of the defendants claims contribution and indemnity against EML under the statutory policy under the Workers Compensation Act 1987.

Issues to be determined

1. The following principal questions require determination, to which the short answers are as follows:

(1)   Is AF Concrete liable to the plaintiff in damages for negligence by reference to the Civil Liability Act 2002 (the Act)? Yes.

(2) Is C & J liable to the plaintiff in damages for negligence by reference to the Act? No.

(3) To what extent, if at all, are the plaintiff's damages to be reduced by reference to s 151Z(2) of the Workers Compensation Act 1987 by reason of any negligence by Reliance Pools? Not at all; Reliance Pools would not, if sued, have been found liable to the plaintiff.

(4)   If AF Concrete and C & J are liable to the plaintiff, what are their respective contributions? Not applicable. AF Concrete is 100% liable.

(5)   The quantum of the plaintiff's claim. See reasons for decision.

(6)   Whether Reliance Pools International has made out its claim per quod and the quantum of such claim The claim is made out. The quantum is set out in the reasons.

(7)   Is any defendant found to be liable entitled to indemnity against EML? No, AF Concrete is not entitled to indemnity since Reliance Pools was not negligent.

(8)   The cross-claims for contribution; These are all to be dismissed except EML's cross-claim against AF Concrete for reimbursement of the workers compensation payments. EML is entitled to be fully reimbursed by AF Concrete with interest from the date of payment to or on account of the plaintiff.

The Facts

The circumstances in which the plaintiff was injured

1. The following persons who were on the Site at the time of the accident were called as witnesses:

(a)   The plaintiff;

(b)   Antoine Christian, who was employed by Reliance Pools;

(c)   Glenn Webb, an employee of AF Concrete, who operated the concrete pump on the ground and used the two -way radio and whose nickname was Smiley;

(d)   Glenn Gillan, an employee of AF Concrete, who detached the flexible hose on the 7th floor from the fixed pipe and who operated the two-way radio on the 7th floor;

(e)   Christopher Felton, an employee of C & J, who was a concrete sprayer and was also injured by the movement of the flexible hose;

(f)   Con Poulianos, the managing director of C & J, who operated the air compressor on the ground.

1. Reliance Pools was engaged to construct a swimming pool on the 7th floor of a building on the Site. Reliance Pools contracted with C & J to line the swimming pool with concrete in preparation for the tiler. Reliance Pools had worked with C & J before and the employees of each company knew each other. The owner of the Site, Vecco Holdings Pty Limited, had engaged Uno Constructions Pty Limited as the head contractor, which in turn had engaged AF Concrete to pump concrete to the 7th floor so that it could be sprayed onto the walls and floor of the pool by C & J.

1. AF Concrete had a hopper which was located at ground level on Bay Street and which was attached to a concrete pump. Concrete was delivered to the hopper by trucks. AF Concrete constructed a line of fixed pipes joined with clamps which went up the stairwell of the building to the 7th floor. Since the lay witnesses tended to refer to the size of the pipe in Imperial measurements I shall do the same. The diameter of the fixed pipes was 4".

1. C & J then attached a hose, with a diameter of 2", to the last fixed pipe. The hose was described in the evidence as flexible. It is to be distinguished from the fixed pipes, since it is rubber and capable of bending. In order to spray concrete to the walls and floor of the pool, C & J affixed a nozzle to the end of the flexible pipe. The nozzle was attached to an airline which delivered compressed air to the nozzle to facilitate spraying.

1. From the ground level Mr Poulianos, on behalf of C & J, operated the air compressor from a vehicle which was parked around the corner from Bay Street. It delivered the compressed air through the airline to the nozzle on the seventh floor.

1. On 15 July 2008, the plaintiff was on the 7th floor of the building on the Site. Two other employees of Reliance Pools, Mr Christian and Willie Du Plessis, were also on the roof, as was a tiler whom Reliance Pools had engaged to tile the swimming pool when the concrete had been applied and was firm. Mr Felton had sprayed the walls and most of the floor of the pool with concrete.

1. As the spraying was complete, C & J unfastened the nozzle from the flexible hose and disengaged the airline from the nozzle. The nozzle and the airline were taken down to ground level. Mr Felton then secured the flexible hose with wire to the metal frame on the floor of the pool and covered it with a plywood board. Once he had secured the flexible hose, Mr Felton set about "cutting" the concrete on the steps of the pool, which involved smoothing it while it was still wet, in preparation for the tiler.

1. By this time all the concrete from the hopper had been pumped but there was still a small area on the floor of the pool which needed more concrete. Mr Felton expected that when AF Concrete "blew" the concrete pipes to clear them of concrete, the concrete which remained in the pipes after the hopper was emptied could be used to finish the floor of the pool. Surplus concrete would then be shovelled into a bin and taken down to ground level as waste.

1. The plaintiff was aware of the practice of using the concrete from the pipes to finish the pool which he described in the following terms:

"On the seventh floor, they don't want to be bucketing down bucket loads of concrete downstairs. They want it to be accurate, that they have sprayed to a point and they have left just enough of what I call the residue. The residue will finish the job off and not compromise the pool."

1. AF Concrete began the process of blowing to clean out its pipes. At this time the 2" flexible hose was still attached to the fixed pipe. Mr Webb, from ground level operated the compressor which was incorporated into AF Concrete's pump. He communicated through a two-way radio with Mr Gillan, who was on the 7th floor. In the course of blowing the pipes they discovered that there was some difficulty in moving the concrete within the pipes.

1. Mr Webb then asked Mr Poulianos, whose compressor was more powerful than AF Concrete's for help. Mr Poulianos agreed. He moved his compressor from where it had been parked around the corner from Bay Street so that it stood about 10 ms away from AF Concrete pump which Mr Webb was operating. Mr Poulianos then attached his compressor to the concrete pump. Mr Webb gave him directions about whether to turn the air on or off, with which he complied. This occurred several times. I am satisfied that from the time C & J's air compressor was attached to AF Concrete's pump until after the accident, Mr Poulianos stood beside his compressor, awaiting Mr Webb's instruction.

1. Mr Webb monitored the movement of the concrete by tapping the side of the fixed pipes which led up the stairwell from the ground floor to the 7th floor. AF Concrete was still experiencing difficulties in blowing the concrete, notwithstanding the use of the more powerful compressor.

1. Mr Gillan then detached the flexible hose which C & J had fastened to the formwork from the fixed pipe. He then attached a flexible hose with a larger diameter, 3 ½", to the fixed pipe with a clamp and left it hanging over the edge of the pool.

1. At this point the plaintiff, who was on the 7th floor, followed Mr Gillan down the stairwell to ask him why he had left the replacement flexible pipe unsecured. The plaintiff could recall telling Mr Gillan that it was very dangerous to leave the flexible pipe unsecured.

1. The plaintiff was unable to remember Mr Gillan's response. He did, however, recall that his response did not make sense. Although Mr Gillan did not recall such a conversation with the plaintiff, he did not deny that it occurred. The plaintiff then walked back to the edge of the pool to make sure that someone had secured the end of the flexible hose that had been left hanging over the edge of the pool.

1. In the meantime, Scott, an employee of AF Concrete whose nickname was "Spud", approached Mr Felton, who was still inside the pool cutting the concrete for the stairs and handed him the flexible hose. Mr Felton, who was well aware of the need to secure such a flexible hose, described what occurred in the following terms, which I accept:

. I told him - he asked me, "Pass me a 4-inch hose, a 4-inch whip hose over the edge of the pool." And he said, "Hey, buddy, can you hold onto this?" And I told him, "Get fucked, mate. There's no way I'm holding onto that. You'd better get some massive roidmuncher up here to hold onto that, or tie it down, secure it properly." And that's all I said to him and then I went back to my work.

1. Mr Felton explained the expression "'roid muncher" as:

"A steroid freak, someone that looks like a wrestler."

1. Notwithstanding Mr Felton's vehement response, Scott walked away without taking any steps to secure the flexible hose.

1. I infer that at about this point Mr Gillan communicated to Mr Webb who told Mr Poulianos to turn the air on. Mr Poulianos complied with the direction.

1. Mr Felton then observed concrete pouring out of the unsecured end of the flexible hose. He screamed to warn those in the vicinity to get out of the way. According to Mr Christian, whom I accept, Mr Felton also screamed:

"Turn the air compressor off, turn the compressor off."

1. Felton jumped on top of the hose to control it. The force of the hose lifted Mr Felton up off the ground. He suffered what he described as "chemical sandblasting" on his abdomen and groin area.

1. In the meantime the plaintiff heard a sound coming from the flexible pipe and realised that it was being blown. His immediate thought was that because the pipe was not secured one of the workers might be "flicked" off the roof of the Site. The plaintiff, who was standing on the edge of the pool, saw Mr Felton being struck by the pipe. Shortly afterwards concrete shot out of the end of the flexible pipe and struck the plaintiff's face, causing significant burns. Mr Felton then heard a "sickening murmur" from the plaintiff. Mr Christian heard the plaintiff "moaning".

1. Mr Christian immediately went to the plaintiff's aid. The plaintiff had collapsed onto the wet concrete and appeared to be unconscious. Mr Christian felt the plaintiff's neck for a pulse but could not detect one. Another person grabbed his hand but he could not feel a pulse either. Mr Christian said:

". I was worried that he died because he was so limp. After shaking him for a certain time [five minutes], he kind of coughed up. I don't know if I kick-started him or what."

1. When the plaintiff regained consciousness bystanders informed him that he had been unconscious for about five minutes and that they had thought he was dead. The plaintiff's Glasgow Coma Scale was not tested until at least twenty minutes after the impact by which time it was 14.

1. Parts of the evidence of Mr Webb are not consistent with the findings I have set out above. For example, he gave evidence that he had only asked Mr Poulianos to switch the air compressor on and off once. According to Mr Webb that the process of blowing had been going for some time. His evidence was that Mr Poulianos left his compressor after he had switched the air off for the last time and went around the corner. He also said that he would have given Mr Poulianos the instruction for the air to be released through the valves to reduce the pressure in the fixed pipes and flexible hose but that his instruction could not be implemented because Mr Poulianos had left his post beside his compressor. In giving this evidence he sought to implicate C & J for the accident and exculpate AF Concrete. I do not accept Mr Webb's evidence referred to above and I do not accept his evidence generally unless it is corroborated or against interest.

1. I prefer the evidence of Mr Poulianos to that of Mr Webb. I accept that Mr Poulianos was affronted by the suggestion made in cross-examination that he left his air compressor while the operation was continuing. I consider that Mr Webb's account may have involved some reconstruction so as to minimise the role played by AF Concrete in the accident. Nonetheless Mr Webb conceded the dangers of the work method adopted by AF Concrete and admitted that the accident would not have happened if the flexible pipe had been properly secured, as he agreed it ought to have been.

1. I do not accept Mr Webb and Mr Gillan's evidence that they had a "toolbox" meeting while they were driving along the M5 towards the Site in the course of which they discussed the method they would use to "blow down" the concrete from the roof. I consider that they were trying to give the impression that they were thorough and that what had happened, although not the consequences, had actually been planned by them. I do not accept this. I considered that they were embarrassed about their lack of a system and felt at least partly responsible for what had occurred.

1. The man known as "Spud" was not called. He was no longer employed by AF Concrete, having been dismissed, though not as far as the evidence revealed, as a result of this incident.

The mechanics of transporting and spraying concrete and cleaning concrete pipes

1. Concrete is a material which needs to be kept in motion if it is to remain fluid. Once the motion stops it tends to "go off", or harden.

1. Where concrete is required for construction at a height, it is necessary for it to be pumped up from a concrete truck, or hopper, on the ground level. This is usually done using a fixed pipe. Where concrete is to be sprayed a flexible hose is used, to which a nozzle is attached at the end. The nozzle is supplied with compressed air from a separate air pipe. When the spraying is completed, the nozzle and the airpipe are detached from the end of the flexible pipe. Compressed air, delivered from the pump below, is then pumped through the fixed pipe and the flexible hose to clean the concrete out of them before it hardens.

1. During this process it is essential for the flexible hose to be secured to avoid substantial movement because of the force of the compressed air applied to the concrete. Because of the properties of concrete referred to above, it is necessary that cleaning take place as soon as possible after spraying, lest the concrete harden within the pipe or hose. In this event, the pipe or hose is rendered useless because the compressed air is no longer sufficient to dislodge concrete from the pipe, which adheres to its inner surface.

1. Good work practice dictates that, where circumstances permit, concrete is blown upwards rather than downwards since when concrete is blown upwards the process can be more readily controlled by the application of compressed air, whereas if it were blown downwards, the concrete tends to clog the pipes.

1. The relevant Workcover Code of Practice for Pumping Concrete provides:

3.18 Line Cleaning safety

Line cleaning should only be carried out by experienced and trained pumping personnel. Extreme care should be taken when using compressed air to clean the pipeline. Air pressure will cause anything inside the pipeline to act as a high-velocity projective.

The following safety precautions should be followed:

a. There should always be a connection to atmosphere (air relief valve) as well as the air entry point to the pipeline. This connection is to allow the system to be depressurised before removing any pipeline.

b. Remove the rubber delivery hose at the end of the pipeline. If left on, the hose can whip around dangerously as the line is blown out.

c. A positive catchment device should be attached to the discharge end of the pipeline to safety catch the cleaning device but at the same time allow the concrete to flow.

d. Keep all workers away from the discharge end while the concrete is under pressure.

e. Never attempt to take a line apart to clean out a blockage or to dismantle it until after the pressure has been relieved.

1. I accept that the risk that precaution b. set out above was designed to prevent can be minimised, if not prevented, by securing the end of the flexible hose to make sure that it does not whip around, as it did in the instant case. In any event, there is no suggestion that the accident would have occurred if the flexible hose had been adequately secured.

The expert evidence: Mr Verma and Dr Cooke

1. The plaintiff relied on a report of Mr Verma, who was an expert in concrete. The findings about the properties of concrete set out above are based on his evidence. Although Mr Verma was cross-examined, his evidence in chief was not impugned. I accept his evidence.

1. C & J Concrete relied on a report by Dr John Cooke. AF Concrete objected to Dr Cooke's report on the basis of lack of expertise but I allowed the report on matters germane to the allocation of tasks between trades on a building site, since Dr Cooke was an architect who had been required to act as the builder on major construction sites. I did not, however, allow Dr Cooke to opine on the physical properties of concrete or the way in which concrete pumps ought be cleared since I found this to be outside his expertise.

1. Although I allowed Dr Cooke's evidence, confined as set out above, I did not find the opinions he expressed to be of assistance. The division of tasks between sub-contractors was, in this case, essentially a question of fact to be determined by the lay evidence rather than expert evidence. Dr Cooke's evidence largely mirrored and corresponded with Mr Verma's evidence, which I accept. There were, however, documents annexed to Dr Cooke's evidence which are relevant to the potential liability of Reliance Pools to which I will refer later in these reasons. He also annexed the Workcover Code of Practice for Pumping Concrete referred to above.

Whether AF Concrete was negligent

1. When compressed air is applied to concrete within a pipe, it is foreseeable that the concrete will be emitted at high speed from the end of the pipe. The risk of the concrete coming into contact with someone and causing injury was not insignificant. Where there is a flexible hose through which concrete particles and compressed air will pass it is foreseeable that the flexible hose will whip around violently unless it is adequately secured. The risk of fast-moving concrete projectiles being emitted from the end of the flexible hose and injuring someone is significant unless the flexible hose is secured and people are cleared from the area immediately surrounding the hose. Although the concrete emitted from a pipe which is being blown may still be in liquid form, there may also be solid particles because of the tendency of concrete to set into solid form when it ceases to move.

1. The matters referred to above are all matters which AF Concrete knew or ought to have known. Mr Webb and Mr Gillan agreed in cross-examination that there was a risk of injury if such precautions were not taken and that the process of cleaning the concrete pipes was dangerous unless such precautions were taken.

1. A reasonable person in the position of AF Concrete would have taken the following steps:

(1)   Performed the blowing operation as soon as possible after the concrete pumping had ceased to minimise the risk of the concrete setting within the pipes;

(2)   Secured the end of the flexible hose before commencing the blowing operation; and

(3)   Ensured that there were no persons in the immediate vicinity of the area around the end of the hose.

1. A reasonable person in the position of AF Concrete would not have directed compressed air to be applied to the pipes until reasonable enquires had been made to check that the precautions set out above had been taken.

1. No evidence was adduced that tended to suggest that the taking of such precautions would be onerous or would outweigh the social utility of constructing structures such as swimming pools with concrete at levels above the ground.

1. Accordingly, a finding of negligence is not precluded by s 5B of the Act. None of the principles outlined in s 5C has any particular application here.

1. The evidence established that AF Concrete was negligent; AF Concrete's negligence was a necessary condition of the occurrence of harm and also that it is appropriate for its liability to extend to the harm so caused within the meaning of s 5D of the Act.

1. AF Concrete's witnesses effectively conceded the negligence of AF Concrete, which was amply demonstrated by the evidence which supports the findings I have made above. On the seventh day of the hearing, AF Concrete admitted breach of duty but not liability. In final submissions AF Concrete, maintained its denial of liability although, somewhat anomalously, it conceded duty, breach, causation and damage.

1. It follows that the plaintiff is entitled to judgment against AF Concrete.

Whether C & J was negligent

1. The plaintiffs only faintly pressed their claim against C & J. They submitted that they had only joined C & J as a matter of prudence and because AF Concrete blamed C & J for the accident and had denied breach until the seventh day of the hearing. Once AF Concrete had admitted breach, the plaintiffs left it to AF Concrete to make submissions, on the cross-claim for indemnity, as to C & J's liability.

1. AF Concrete's case against C & J was essentially threefold:

(1)   C & J was negligent in failing to order more concrete because if it had, the concrete could have been blown downwards through the pipes and the accident would not have happened;

(2)   C & J was negligent because Mr Poulianos left his post beside his compressor at a critical time and, had he not done so, the air could have been dumped from the pipes, thereby causing a drop in pressure and the accident would not have happened; and

(3)   C & J was negligent in using its air compressor to blow concrete in circumstances where it knew, or ought to have known, that people, including its employees, were in the vicinity of the end of the pipe where the concrete would be emitted.

1. These three potential bases of liability will be dealt with in turn.

1. The effect of evidence of Mr Verma and the witnesses who worked with concrete, other than those called by AF Concrete, was that it was dangerous to blow concrete downwards. The evidence to support the proposition that concrete could safely be blown downwards came from Mr Webb and Mr Gillan, both of whom said that it was their usual practice to do so. I prefer the evidence of Mr Verma and Mr Felton. I accept Mr Christian's explanation that it is safer to blow concrete upwards because it is easier to control since it is not accelerated by gravity which tends to lead to clogging of the pipes. Accordingly the first submission is rejected.

1. For reasons already given I do not accept Mr Webb's evidence that Mr Poulianos left his compressor at a crucial time or at all. Accordingly I reject the second submission.

1. AF Concrete submitted that the statements of good practice, including cl 3.18.d of the Workcover Practice on Pumping Concrete, meant that all the workers ought to have been cleared from the whole pool area when the concrete was being blown, even if the flexible pipe had been properly secured. The difficulty with this third basis of liability is that it was not put to the witnesses.

1. The plaintiff himself gave evidence that the blowing should not have been done when there was anyone in the pool itself as distinct from in the area around the pool. Mr Verma said in his report that when blowing out a pipeline:

"It must be ascertained that everybody keeps clear from the discharge end of the pipeline in the blowing-out direction."

1. It would be wrong for me to speculate on the distance that would be regarded as a safe distance from the discharge end of the pipe when it was put neither to Mr Verma, nor to any of the witnesses who were in fact on the 7th floor at the time. Indeed the securing of the flexible pipe would tend to suggest that it was safe for others to be in the area as long as they were not in the immediately vicinity of the end of the discharge pipe when the concrete was being blown. When a flexible pipe is not secured, the process of blowing is so dangerous that it should not be undertaken in any event.

1. AF Concrete's submission, if accepted, would result in the absurdity of Mr Poulianos constantly having to climb up to the seventh floor from the ground floor to check that there was no one up there but running the risk that the situation would change between his check and his activation of the compressor when he reached the ground floor again. I reject this submission.

1. I am not satisfied that C & J was in breach of any duty of care that it owed to the plaintiff or to its own employees by using its air compressor to blow the concrete when it knew that there were people on the 7th floor while it was doing so.

1. It follows that C & J is entitled to judgment in its favour on the plaintiff's claim and on the claim by Reliance Pools International. The cross-claim for contribution brought against it by AF Concrete ought be dismissed.

Whether Reliance Pools was negligent

1. Whether Reliance Pools was negligent needs to be determined because it affects whether a reduction to the plaintiff's damages needs to be made to take account of the employer's liability and also the cross-claim by AF Concrete against EML for contribution and indemnity.

1. The question posed by s 151Z(2) of the Workers Compensation Act 1987 is: what damages would the plaintiff have been entitled to recover from Reliance Pools? As the plaintiff has not sued his employer for damages, the question is a hypothetical one to be answered by reference to the circumstances existing at the time of the accident: Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88; 67 NSWLR 516 at [42].

1. There are two aspects to the hypothetical recovery of damages by the plaintiff against Reliance Pools: first, would the employer have been found liable in negligence; and secondly, would the plaintiff have exceeded the threshold of 15% whole person impairment. The second question is dealt with later in connection with damagess.

1. Although the plaintiff, as a director of Reliance Pools, had the capacity to control the company, this has been found to be no impediment to a director who is also an employee recovering damages from an employer for breach of the duty of care the latter owes to him: Andar Transport Pty Limited v Brambles Limited [2004] HCA 28; (2004) 217 CLR 424, at [49]-[50] per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ.

1. Reliance Pools, as the plaintiff's employer, had a non-delegable duty to take reasonable steps to provide the plaintiff with a safe system of work. However this duty will operate differently on another's premises than it does on its own: Dib Group Pty Limited trading as Hill & Co. v. Cole [2009] NSWCA 210, at [54] per Basten JA, with whom Beazley and McColl JJA agreed.

1. I have found the negligence which caused the accident was a casual act of negligence by the employees of AF Concrete. In my view, there was no negligence on the part of Reliance Pools. The defendants have failed to prove that there is any action that Reliance Pools could reasonably have taken to reduce the risk to the plaintiff that ensued. Nor have they proved any relevant omission on the part of Reliance Pools to take reasonable care to provide the plaintiff with a safe system of work. The case that it was negligent for any of the relevant employers, Reliance Pools, AF Concrete or C & J, to permit their employees to be present on the 7th floor when the concrete was being blown has not, for reasons already given, been made out.

1. Although AF Concrete contended that Reliance Pools was negligent in failing to require the plaintiff to wear goggles, there was no relevant injury to the plaintiff's eyes or to the area around his eyes. Accordingly the wearing of goggles was, at best, irrelevant to this accident. Correspondence between Reliance Pools and Workcover dated 21 July 2008 annexed to Dr Cooke's report indicates that the only matters of concern to Workcover, as far as its investigation of Reliance Pools was concerned, were the provision of safety glasses and gloves and a 2-way communication device, neither of which had any causative bearing on the accident.

1. Accordingly, there is no deduction to be made from the plaintiff's damages by reason of any negligence by his employer. It also follows from these findings that EML is entitled to succeed on its cross-claim against AF Concrete and there must be judgment for EML on the cross-claims to which it is a cross-defendant in so far as they seek contribution or indemnity in respect of the plaintiff's claim.

The allegation of contributory negligence

1. The matters pleaded by AF Concrete as amounting to contributory negligence by the plaintiff are that, having observed a worker untie a previously tied hose, he failed to ensure that the hose was secured again before allowing any further concreting activity to be undertaken and failed to move away from the area.

1. I consider that the plaintiff did all that he reasonably could, both to protect himself and to protect others in the vicinity, by challenging Mr Gillan as to why the fixed pipe had been detached from the flexible pipe that was secured to the base of the swimming pool. The conduct of "Spud" was grossly negligent. To expect others to predict and prevent such an act, which immediately preceded its disastrous consequences, is entirely unreasonable.

1. As to the allegation that the plaintiff ought to have moved away from the area, that has been dealt with above. If the process were to be conducted as Spud and Mr Gillan would have conducted it, the whole area would need to be evacuated because of the dangers it created. However, if it had been conducted as C & J proposed to, there was, in my view, no need for those present to move away from the area, as long as they were not in the immediate vicinity of the end of the pipe through which concrete was to be discharged. Indeed, according to the plaintiff, the fact that AF Concrete knew that there were still people inside the pool itself was an indication that the process of blowing up was not about to commence. He said in cross-examination:

". . . for anyone on the roof it wouldn't have entered anyone's mind they were up to blowing out the line because people were still inside the pool."

1. An issue was raised whether the plaintiff was guilty of contributory negligence on the basis that he is alleged to have tipped his helmet at the side of the pool immediately before the accident. Since this was neither pleaded nor particularised and no application for amendment was made, I do not propose to refer to it further.

1. Section 5R of the Act provides that the principles that are applicable in determining whether a person has been guilty of contributory negligence are the same principles which should be applied in determining whether a person has been negligent. That means that, before a finding of contributory negligence can be made, I must be satisfied that the conduct said to amount to contributory negligence caused the particular harm within the meaning of s.5D of the Act. In my view the real cause of the accident was the acts and omissions of AF Concrete referred to above. The plaintiff's conduct was neither negligent nor causative.

The plaintiff's claim for damages under the Act

Facts

1. There is little dispute about the extent of the plaintiff's injuries or their effect although there is a substantial dispute about the extent to which this would have resulted in economic loss either to the plaintiff or to Reliance Pools International.

1. Several witnesses gave evidence about what the plaintiff was like before, and after, the accident:

(1)   Bente Ryan, the plaintiff's wife;

(2)   Dr Warwick Hutton, who has been the plaintiff's general practitioner since 2003;

(3)   Lynette Ryan, the plaintiff's sister;

(4)   Brett Cam, a friend from the Hillsong Church; and

(5)   Russell Garnett, who worked with the plaintiff and designed pools which Reliance Pools constructed.

(6)   None of these witnesses was cross-examined. I accept their evidence.

1. The plaintiff tendered a film which had been produced by Onesteel as a promotional video which showed the plaintiff promoting the quality and capacity of the product which he used in the construction of swimming pools. The film had been produced a few years before the accident and was relied on as evidence of the plaintiff's presentation before the accident. I accept the plaintiff's submission that the man depicted in this film was wholly different from the man depicted in the Misfit films referred to below which were produced since the accident. The confidence and the presence of the plaintiff pre-accident had disappeared by the time the Misfit film was taken. Although physically not dissimilar, he was, intellectually and emotionally, a shadow of his former self.

1. The plaintiff was born on 29 November 1964. He met Bente Ryan in Denver, Colorado in 1987 through a Christian organisation called Youth With A Mission. They married on 1 October 1988. They have two children, Lisa and Tim, who were 17 and 15 at the time of the accident. They purchased a house which was subject to a mortgage. They were personally liable for the debts of Reliance Pools. The plaintiff was 43 when the accident occurred and 48 at the time of the hearing.

1. In December 1997, the plaintiff established a business through a trustee company, Reliance Pools, which constructed swimming pools. The business generated substantial gross income but the net profit of the business was not substantial. Indeed the business was in difficulties in about 2005 which led to the plaintiff's consulting SC&A Wealth Strategies (SC&A) with a view to changing the business model to enhance its profitability. Over the period from 2005 until 2008 the gross sales of Reliance Pools did not alter significantly. However from 2006, the plaintiff adopted the suggestions made by SC & A, which were designed to increase net profits.

1. By the time of the accident, Reliance Pools had developed a good reputation for "high-end" swimming pools. It specialised in constructing so-called unique pools for apparently wealthy clients who preferred to have a swimming pool unlike any other. A book of photographs of such swimming pools entitled "Resort Style Living" was tendered in evidence. Many of the pools depicted were constructed by Reliance Pools.

1. Prior to 2008, the plaintiff sought advice from a friend, Shirlene Suleiman, who recommended that Reliance Pools hire a manager so that the plaintiff could spend more time developing the business. The plaintiff accepted Ms Suleiman's advice and, in about January 2008, hired Mr Christian who, as referred to above, was present at the Site when the accident occurred.

1. Ms Suleiman, who travelled frequently to Dubai, Abu Dhabi and Qatar where her husband worked, also suggested that the plaintiff's business of constructing swimming pools could be developed in the Middle East. Ms Suleiman speaks Arabic and was brought up in the Middle East. In 2008, with the plaintiff's concurrence, Ms Suleiman and her husband attended a trade show in Qatar and brought the "Resort Style Living" book with her in order to demonstrate the quality of the pools which Reliance Pools constructed. She met Wissam Barakat, who was associated with a company based in Qatar called Gemco Pools and Spa (Gemco), who expressed interest in constructing pools, as depicted in the book, for wealthy clients.

1. Ms Suleiman endeavoured to cultivate a relationship with Mr Barakat on subsequent trips to the region with a view to Reliance Pool's engaging in a joint venture for the construction of "high-end" swimming pools in Qatar and elsewhere. Reliance Pools engaged her on a consultancy basis to confer with Gemco and explore various options with a view to negotiating the terms of an agreement between Reliance International and Gemco.

1. In April 2008 the plaintiff accompanied Ms Suleiman to Dubai, Abu Dhabi and Qatar. Together they met with Mr Barakat, who was a cousin of the owner of Gemco. They had prepared an Information Memorandum which they used for discussion purposes. The Memorandum contained photographs of pools that Reliance Pools had constructed and a list of awards that Reliance Pools had won between 1999 and 2007, as well as a description of the proposed joint venture.

1. On 27 June 2008, just over a fortnight before the accident, an application was made to register Reliance Pools International as a proprietary company. Reliance Pools, as trustee, was the original single shareholder of Reliance Pools International. Subsequently its shares were transferred beneficially to Mrs Ryan. Nothing turns on the identity of its shareholders since the claim per quod turns on the loss, if any, suffered by Reliance Pools International.

1. After the accident, the plaintiff endeavoured to return to work for Reliance Pools. He found, on his first attempt in about September 2008, that he was unable to work a full day. He suffered mental fatigue when he applied himself to any task which required some mental effort. According to the unchallenged evidence of his wife, he collapsed when he came home.

1. Notwithstanding the plaintiff's lack of stamina, he accompanied Ms Suleiman on a trip to Qatar in December 2008 with a view to finalising the arrangement with Gemco. They met not only with Mr Barakat, but also with two others associated with Gemco, including a man by the name of Ahmed. Ms Suleiman was reassured by the presence of the two other men because she saw it as an indication that Gemco was serious about the venture.

1. In the course of the trip Ms Suleiman became very concerned that the plaintiff was no longer sufficiently fit to carry out the proposed venture. Ms Suleiman was the principal spokesperson for Reliance Pools International in the course of discussions, because of her fluency in Arabic. Nonetheless the plaintiff became obviously fatigued and could not participate unless well rested.

1. Two documents dated December 2008 entitled "Licence Agreement Proposal Document" were tendered. One was an in-house document for Reliance Pools International; the second was provided to Gemco for discussion purposes. The second document also contained a document entitled "Budget" which set out the expected return from the venture for the Gemco interests in 2009. The following figures extracted from the Budget document are relevant to Reliance Pools International's claim, since they appear to represent the gross income that Reliance Pools International would receive if the venture went ahead as envisaged at that time:

Overhead expenses

Consulting fees- Jeff [the plaintiff] US$45,000

Consulting fees- Shirlene [Suleiman] (first year) $0.00

Licence Agreement fees US $100,000

1. Ms Suleiman gave evidence, which is consistent with the Budget document, that the Qatari company would pay for the plaintiff's expenses of travelling to Qatar for the purposes of consulting. Accordingly, the only expenses that Reliance Pools International would incur, other than general overheads, would be the salaries or fees it paid to the plaintiff and Ms Suleiman.

1. In late January 2009, Reliance Pools International sent by email a document entitled Memorandum of Understanding (MOU) to Mr Barakat which set out the proposed terms in more detail.

1. Emails exchanged between Reliance Pools International and Gemco from April 2008 until February 2009 were tendered. The emails amounted to 14 separate exchanges and evidence the state of negotiations at particular times.

1. Ms Suleiman considered that there was room for substantial growth of the venture throughout Qatar, Dubai and Abu Dhabi. She gave evidence that she expected that once pools were constructed, others would want to have such pools built, the demand for the plaintiff's consulting services would grow and the gross income of Reliance Pools International would increase accordingly. Although her evidence was sufficient to establish this potential I am not satisfied that the plaintiff would have been willing to increase his hours in the Middle East. When explaining the purpose of the licence fee as opposed to the consultancy fee he said with respect to the limitation in the agreement limiting his obligation to thirty days:

I had two kids and a wife and a business in Australia, so there had to be a limitation to how many times [the plaintiff could travel]. I was not on call, Jeff get here tomorrow.

1. As it turned out, the plaintiff did not recover sufficiently to pursue the venture in Qatar which he had intended to operate through Reliance Pools International. Ms Suleiman believed that it was important that the relationship she had fostered with Gemco not be compromised by the plaintiff's poor performance. She said in oral evidence:

A lot of the process in getting things finalised with companies overseas is keeping the relationship, talking to them, staying in touch, following up where they're up to with it. So I just backed off on all of that and let time slip by, hoping that Jeff would get better in the meantime.

1. I am satisfied that as a result of the injuries sustained on 15 July 2008, the plaintiff could no longer operate either Reliance Pools or Reliance Pools International. Mr Christian, whom the plaintiff hoped would be able to supervise the work while he was developing the business further, including in the Middle East, was, as at July 2008, insufficiently acquainted with the clients or the sub-contractors to step into the plaintiff's shoes. The plaintiff received some threats from creditors and felt alarmed for his wife and children.

1. Upon the appointment of the administrator in March 2009, the plaintiff and his family had to leave their family home, since he and Mrs Ryan were relevantly guarantors of the debts of Reliance Pools. They rented a house in Newport, where they continue to reside.

1. Shortly after July 2008 when the plaintiff was, to use his words, "still wrapped up like a bit of a mummy" he met two young surfers over breakfast who suggested that they link aid work with surfing. The plaintiff seized this opportunity and set about trying to do as much as he could to work for the organisation, which was known as Misfit Aid. Misfit Aid is a charitable organisation which runs a café at Newport and also has a foreign aid aspect. The plaintiff commenced working for Misfit Aid in January 2009. From 16 December 2009 until 15 April 2011 the plaintiff was paid a gross income of $600 per week. When he ceased to be paid a wage he continued to provide his services on a voluntary basis. On 9 July 2010, Misfit Aid Limited was registered and the plaintiff was also appointed a director with two others.

1. As part of Misfit Aid's foreign aid arm, it arranged trips whereby Australian surfers with some construction skills travelled to countries which had been affected by natural disasters. The Australian surfers would help the locals to construct houses, or roads, or other building infrastructure as the case may be. They would also surf. The plaintiff has been on several of such trips to locations, which include Peru, Chile and West Timor. The plaintiff has also been filmed describing the projects undertaken by Misfit Aid. These segments are to be found on the Misfit website and are, apparently, designed to encourage people either to donate money to fund the trips, or to offer to go on such trips and make their labour and expertise available to those in need who happen to live near good surf beaches.

1. Lynette Ryan, the plaintiff's sister, has worked for Misfit Aid since September 2012. Her unchallenged evidence is that the plaintiff is only able to work in short bursts before fatigue renders him incapable of continuing. I accept her evidence that he is not able to work in any responsible or managerial role. Although AF Concrete submitted that an exchange of emails which was marked Exhibit 4 demonstrated that he was capable of resolving difficulties that had arisen with the employees of Misfit Aid, I do not consider they establish any such capacity.

1. Hopes that the plaintiff would improve have not been fulfilled. His improvement has, according to Mrs Ryan and Dr Hutton, plateaued. He can work ten hours a week as long as the hours are sufficiently spaced over three days with days off in between. His recovery between bouts of work is enhanced by surfing or sleeping. I accept Dr Hutton's opinion, which is summarised in the following paragraph of his report dated 20 December 2012:

In summary, Jeff Ryan sustained a significant workplace injury in July 2008, with specific SPECT scan evidence of perfusion deficits in his Frontal lobes below the area that bore the impact of the concrete blast and which are matched to measured cognitive impairments which are entirely consistent with the persisting reduced functioning of those specific areas on repeated neuropsychiatric testing.

Those long term cognitive impairments have not improved over the past 2 years despite optimal rehabilitation periodisation management, and these impairments continue to severely and adversely affect all aspects of Mr Ryan's life. None of his treating specialists have indicated that there is any other therapy that will be of value, and therefore his current functional status is at maximal medical improvement.

1. After the accident, the plaintiff was invited by friends who had already been legally married, to conduct a ceremony as a marriage celebrant. He endeavoured to acquire the qualification to perform marriage ceremonies as a celebrant but he was unable to complete the requirements because of his cognitive impairment.

1. After the accident, the plaintiff also tried to work as a business consultant but his cognitive impairment prevented him from concentrating sufficiently to perform effectively.

The plaintiff's injuries

1. As a result of the accident the plaintiff sustained a traumatic brain injury as well as injuries to his face and head, teeth and shoulder. He has substantially recovered from the shoulder injury. He also suffered post-traumatic stress disorder; however that has resolved and it is common ground that he no longer suffers from a psychiatric disorder. The plaintiff did, however, give evidence that I accept that he still suffers from flashbacks and also finds it difficult to go onto construction sites.

The plaintiff's post-accident working capacity

1. I accept the unchallenged evidence of Dr Hutton that the plaintiff has implemented all treatment recommendations, including what has been described as "periodisation", which is a method the plaintiff uses to pace himself so that he can make the most of his limited endurance.

1. The indulgence shown to the plaintiff in the course of his voluntary work for Misfit Aid in Australia and on the trips would not be extended to a paid worker. Furthermore, even jobs which are considered to be menial and therefore not requiring any substantial mental effort might still be beyond him, as Dr Rowe explained in passage set out above.

1. The defendants accepted that the plaintiff has lost some earning capacity but submitted that he had a residual earning capacity and that if his work was less mentally arduous but more physically demanding, he could manage to work for longer hours.

1. The defendants bear the evidentiary onus of establishing that the plaintiff has a residual earning capacity and what jobs are open to him by which he may exploit that capacity. In Rabay v. Bristow [2005] NSWCA 199, McColl JA, with whom Handley and Bryson JJA agreed, said at [73]:

"It is for a defendant which contends that the plaintiff has a residual earning capacity to adduce evidence of what the plaintiff is capable of doing and what jobs are open to such person ... H. Luntz Assessment of Damages for Personal Injury and Death 4th Edition at 118 ..."

1. The defendants' contention that the plaintiff had a residual earning capacity was put to Dr Rowe who responded as follows:

Q. There are jobs where that is the case, where little mental exertion is needed and a lot more physical exertion?

A. It is not as simple as that. You would have to look at the occupation carefully and the nature of his impairments. For example, he comes up quite impaired on a cognitive domain, known as attention.

. . .

But depending on the activity, if there is a high demand of these attentional resources, then we would expect that potential risk of fatigue to be a lot higher. For example, he may participate in a fairly simple job, such as a production line, but it requires careful attention and vigilance. So he may not be able to do that sort of work even though it is a less mentally demanding task. So what you are saying is correct in a general sense, but I think you would have to look at the specifics of the occupation.

1. Counsel for C & J Concrete put to the plaintiff that he could drive a tractor along the beach to plough the sand. The plaintiff disagreed. He explained that if something went wrong, for example a tyre went flat, he would not know what to do. I accept the plaintiff's assessment of his limitations.

1. The defendants tendered reports from persons who considered that the plaintiff had an impaired or substantially unimpaired earning capacity, including Dr Selwyn-Smith and Dr Champion. However, these reports did not take account of the unchallenged evidence of the lay witnesses and Dr Hutton and therefore the opinions cannot be accepted. Furthermore the opinions rest on the premise that the principal impediment to the plaintiff's working is a psychiatric condition, such a post-traumatic stress disorder, rather than a cognitive impairment caused by brain damage. As referred to above, it is common ground that the post-traumatic stress disorder has resolved. No neurologist was called by the defendants to challenge or impugn the opinions of Dr Paul Teychenne, neurologist, or Dr Donald Rowe, neuropsychologist, as to the extent, effect and permanence of the plaintiff's cognitive impairment, which I accept.

1. The vocational report of the Vocational Capacity Centre, relied on by the defendants, suggested that the plaintiff could work as a construction manager or a project manager and would earn in the order of $2,000 per week. Neither defendant had the temerity to put this proposition to Dr Teychenne or Dr Rowe. I do not propose to consider it further.

1. Having regard to the evidence of the plaintiff, the unchallenged evidence of his wife and his general practitioner, and the medical evidence of Drs Teychenne and Rowe, I do not consider the plaintiff to have any residual earning capacity. I accept the plaintiff's submission that he has lost all earning capacity by reason of the cognitive impairment caused by the traumatic brain injury sustained in the accident.

Non-economic Loss: the facts

1. The plaintiff suffered a serious and traumatic event, which affected his life significantly. The immediate aftermath of the incident was painful and excruciating. He was given the choice between having the skin on his face removed, which would necessitate his staying out of the sun for two years, and picking out the pieces of concrete one-by-one by incising his skin and gouging them out. Because of his love of surfing he chose the latter option. The plaintiff applied his considerable determination to the task such that Dr Hutton opined that his conduct approached self-mutilation.

1. His sister, Lynette, who saw him shortly after the accident, was shocked by his appearance. His face was disfigured by the swelling caused by the burns and there were black marks where the concrete pieces had become imbedded in his skin. When he was in the Burns Unit he was fed substantially more than he needed in order to put on weight with a view to assisting the healing of his face. He put on 5 kgs and lost fitness which upset him because he had hitherto prided himself on his physique. The plaintiff said in evidence that it took him "a long time" to regain fitness. He is now fit again and can surf for extended periods.

1. Over time his appearance has improved substantially and there is no obvious disfigurement. Nonetheless he remains self-conscious about the marks on his face, which he endeavours to obscure by not shaving.

1. Several witnesses gave unchallenged evidence as to how the injuries he sustained have changed the plaintiff. Prior to July 2008, the plaintiff was a driven, motivated, hard-working man who was dedicated to his work, his family and his church. He was capable of inspiring and leading others and was well-regarded. He was a loving husband and father. Although he worked long hours, he made time for his family, including his large extended family, surfing and for activities associated with the Hillsong Church in which he was an active leader and participant.

1. He was committed to charitable causes and had the energy, enthusiasm and resources to provide substantial assistance. For example following the tsunami in 2004, he assembled teams of people who travelled to Banda Aceh to assist in rebuilding infrastructure there.

1. In 2007 he completed a Master of Business Administration (MBA) with a distinction average. He studied after hours while he was working full-time. The degree was awarded in 2008.

1. After the accident he could not longer engage socially in large groups, as he had done before. He lost the ability to comprehend the emotions of those with whom he was interacting, which led to frustration on his part and irritation on the part of others. He has become disinhibited and now swears when tired or frustrated. He is verbally abusive to his wife and children, and also to his friends. His stamina is short-lived. Activities that require mental effort deplete his limited energy. When he cannot rest or surf, he becomes irritable and erratic.

1. Mrs Ryan, who is a qualified occupational therapist, described the plaintiff's post-accident tendency to become fixated in the following terms:

He gets stuck now on a concept and then can't shift. It is almost like I have this picture of this wheel, idling, getting stuck in mud, and that's what it feels like. The trick is to try and remove him from that situation, try to address it from a different angle. Sometimes it just demands everything of me.

1. He tends to avoid his former peers because he feels that he can no longer keep up with them. He seeks out the company of men in their twenties who enjoy surfing both because he feels more comfortable with them and because he believes his erstwhile business skills will be respected. Mr Camm, a friend from church, described the difference in the plaintiff occasioned by the accident in the following terms:

I guess he lost his confidence, was the thing that we noted and he felt he wasn't equal with his peers and so after the accident he felt like he wanted to start again and he wasn't 20 years into an occupation like we all were at that age and so he started identifying more with the 20 year olds and spending more time with them. And I guess 20 year olds have got big eyes and the world is their oyster and that kind of thing and so the Jeff that I met at a party in July last year was just really big eyed about, again, the aid work that he was doing overseas, he had just come back from a trip and what he had been doing. So I guess now he spends more time trying to convince you that he's worthy, almost. Whereas before you just knew, he just had a presence. And so the conversation almost feels a bit one sided, justifying what he is, rather than being confident in who he is.

1. The plaintiff no longer attends the Hillsong Church. He attends a small Baptist Church near where he lives.

1. The plaintiff used to play golf but can no longer do so because he lacks the mental stamina that the sport requires. Unlike surfing, which appears to be instinctive, and not mentally demanding, for someone who, like the plaintiff, has been engaging in it since he was very young, golf requires mental effort which is now beyond him.

1. The plaintiff's inability to work is a source of great sorrow for him, as is his inability to take a leadership role in the church, which, prior to the accident, he had done consistently throughout his adult life.

1. He has significant insight into what he has lost. He accepted in cross-examination that he could still enjoy his two passions: surfing and aid work. In re-examination, the following exchange occurred:

Q. Mr Ryan, Mr Polin asked you a question suggesting that you were effectively pursuing your two passions, being aid work and surfing, still able to do both those things?

A. Mm-hmm.

Q. First of all, how do you feel about the limitations that you have at the moment? Are there many more things you would want to do other than aid work and surfing?

A. Absolutely, like provide for my family and other things that I used to do through my life. Just, I mean socially, sportingly, being a good father to my daughter. The list is long and distinguished, the things I would like to be able to do. To be able to do something for more than an hour or two. There are numerous passions that I have, numerous. I would love to- there is many things I would like to do that I can't do any more. I'm a visionary type person. There is so much that I can't do. So yes, in answer to your question, there is a- the list is long.

1. Having seen the videos of the plaintiff giving a commentary on the Misfit Aid trips and heard the evidence of Ms Ryan, I consider that he is unable to make a meaningful contribution to much of the work of the organisation. His inability to understand the reactions of his colleagues means that allowances must constantly be made for him. That he is included on the overseas trips is testament to the generosity and goodwill of the donors and the other participants in Misfit Aid.

Non-economic loss: assessment of a percentage

1. The plaintiff is entitled to non-economic loss against AF Concrete only if I am satisfied that the severity of non-economic loss is at least 15% of a most extreme case: s 16 of the Act.

1. The plaintiff has largely recovered from his physical injuries. Although his face bears some scars, his appearance is substantially unimpaired. He can converse and express himself in an apparently coherent way. However, having seen him in the witness box over a number of days (which was necessary because of the breaks which I am satisfied he needed to take to refresh himself), I consider him to be significantly impoverished as a result of his injuries and that he has lost almost everything of importance to him. This loss is all the greater because he has not been deprived of insight into the effect of the change in him on his wife, his children, his family, his friends and his former colleagues.

1. The plaintiff contended that his non-economic loss should be assessed 65% of a most extreme case. AF Concrete put forward a figure of 40%. I consider the figure of 40% to be wholly inadequate to reflect the consequences of the plaintiff's injuries. I accept the plaintiff's submissions as to the percentage figure by reason of the findings I have made above. Accordingly, the plaintiff is entitled to 65% of $535,000 pursuant to the scale provided for in s 16 of the Act, being $347,750.

Damages for past and future economic loss due to loss of earnings and future earning capacity

1. There was a considerable dispute about the plaintiff's earnings before the accident and the amount the plaintiff would have earned but for the accident.

1. Part of the difficulty in assessing the plaintiff's pre-accident earnings arises from Reliance Pools being effectively under his control. All the earnings of Reliance Pools were a result of his labour and efforts. They were, however, distributed in such a way as to minimise tax. Accordingly the plaintiff's net earnings as disclosed in his tax return did not reflect his true earning capacity.

1. In Husher v Husher [1999] HCA 47; (1999) 197 CLR 138 (Husher) the plurality said, at [23]:

". . . the inquiry is about what could the plaintiff have done in the workforce but for the accident and what sum of money would the plaintiff have had at his or her disposal."

1. I am required, by s 13 of the Act to assess damages on the basis of the plaintiff's most likely future circumstances but for the injury. The plaintiff had been conducting the business of Reliance Pools since 1997, some eleven years before the accident. The undoubted success the plaintiff had enjoyed in winning awards and developing an excellent reputation in the marketplace for high-end pools would make it highly unlikely that he would change direction at the age of 43.

1. I have taken into account the statistics referred to by Mr Ivey which indicate that although the age at which persons are entitled to the aged pension under s 43 of the Social Security Act 1991, the average retirement age is less than that. However, the plaintiff was concerned to preserve his physical fitness and therefore, but for the accident, is likely to have retained sufficient physical and mental capacity to run Reliance Pools. In any event he was not personally engaged in the physical exertion required to construct a pool since he engaged subcontractors for this task.

1. The plaintiff enjoyed running his own business, was very focussed on work and derived considerable satisfaction from it. I am satisfied on the balance of probabilities that, but for the accident, the plaintiff would have continued in the business of Reliance Pools, or a similar business, until the age of 67.

1. The question to be determined is therefore what sum of money plaintiff would have had at his disposal through the business of Reliance Pools. To answer the question requires an analysis of the likely future earnings of Reliance Pools which will be considered further below.

1. I consider, in accordance with what Perry J said in Spargo v Haden Engineering Pty Ltd [1993] SASC 3793; 60 SASR 39 (Spargo) at [40], cited with approval in Husher, at [26], that it is appropriate that the allowance for income tax:

". . . should approximate the amount which he might have paid on the gross earnings if they had been brought to account by him rather than by the family trust."

1. Although the plaintiff did not formally concede in submissions that he accepted that this was the effect of Spargo, he claims in his Schedule of Damages, the maximum gross loss per allowable under s 12 of the Act, adjusted to produce a net figure as if he was earning this amount as a PAYG employee. The way the plaintiff puts his future loss of earning capacity by reference to net weekly income calculated at the tax rate for a PAYG employee is, therefore, consistent with Spargo. This is the approach I shall also adopt.

The business of Reliance Pools

1. There does not appear to be any real dispute that the whole of the net income generated by Reliance Pools was as a result of the plaintiff's efforts and subject to his control.

1. The business was placed into voluntary administration on 23 March 2009. A meeting of creditors held on 29 April 2009 resolved to wind up the company and appoint a liquidator. I am satisfied that the plaintiff's participation in the business was essential to its survival. His particular skills and qualities and his relationships with skilled subcontractors, including Mr Garnett, a pool designer, made the business of Reliance Pools what it was.

1. Mr Richard Ivey, the accounting expert relied upon by the defendants, referred in his report to his suspicion that the plaintiff had worked in the business of Reliance Pools after the accident and that the destruction of the business was related to causes extraneous to the accident. The material on which Mr Ivey based his opinion was necessarily limited. It is no criticism of him that I make the finding of causation set out above, which is to the contrary of Mr Ivey's suspicion.

1. The business of Reliance Pools was started by the plaintiff and his wife in 1997. Reliance Pools was a trustee. The trust deed is not in evidence.

Loans to the company

1. The business was funded, initially and from time to time, by monies advanced to Reliance Pools by the plaintiff, his wife and his father, Larry Ryan. The amount of monies advanced and the time at which they were advanced is not known. The "Statement about the company's business, property, affairs and financial circumstances" (Statement of Affairs), signed by the plaintiff on 31 March 2009, records the following liabilities which were not reflected in the balance sheets prepared for Reliance Pools:

Larry Ryan $180,000 (loan)

Bente Ryan $580,000 (loan)

Jeff Ryan [the plaintiff] $315,265 (wages)

1. The importance of the loans from Mr Ryan senior and Mrs Ryan is that Mr Ivey opined that if the loans were not recorded in the balance sheet but the monies were in fact advanced, their omission would distort the profit and loss statements for Reliance Pools. He reasoned that, by necessary implication, the expenses of the business would have been met at some stage from the loan monies (there being no corresponding assets) and this has not been recorded. Mr Ivey, however, agreed that if the monies were advanced as "start-up" funds, or prior to the profit and loss statements relied upon, it could not be said that the profitability of Reliance Pools had been overstated or indeed misstated.

1. Although there is some evidence of the loans, it does not permit me to find that they were made at any time after 2005. The profitability of Reliance Pools following the accident and into the future was based on an analysis of the financial statements after this date. Had the defendants sought to challenge the reliability of the profit and loss statements on the basis that they did not record loans from the family, it was open to them to establish when the loans were made. That they failed to do so means that the fact that the loans from family members set out in the Statement of Affairs were not recorded in the balance sheets does not otherwise impugn their reliability. In any event, it is understandable that family members who put money into a trust would want their contributions recorded as a proof of debt in the event of a winding up.

Assessment of the funds available to the plaintiff from Reliance Pools

1. The base figures taken from the profit and loss statements of Reliance Pools for the years 2006, 2007 and 2008 were set out in Table 8 of Dr Crouch's report as follows:

Table 8: Financial Performance of Reliance Trust 2006-2008

30-Jun-06	30-Jun-07	30-Jun-08
Additional Income Sales Revenue Cost of Sales Gross Margin Overheads Superannuation expenses Bad Debts Interest Expense Depreciation Expense Motor Vehicle Expense Repairs and Maintenance Advertising & Promotions Donations Salaries All other Expenses Total Overheads Net Profit Tax Adjustments Taxable Income (Loss) for distribution
	1,162,635 1,014,427 148,208 13% 12,421 6,382 9,679 25,090 40,799 8,873 18,706 5,309 46,210 66,731 240,200 (91,992) (1,860) (93,852)	966,320 736,653 229,667 24% 2,932 - 16,155 24,220 33,570 12,037 12,635 10,623 32,876 75,596 220,644 9,023 (9,023) -	1,260,852 752,829 508,023 40% 13,812 - 31,762 26,428 38,819 21,016 27,757 317 160,101 82,780 402,792 105,231 (78,610) 26,621

1. The plaintiff submitted that the years 2006 and 2007 ought be disregarded since they did not represent the profitability of Reliance Pools as at the date of the accident and that 2008 was a more reliable year to indicate what the net profits of Reliance Pools were likely to be in the future. He submitted that the 2009 year would, but for the accident, have been significantly more profitable than earlier years by reason of the involvement of Dr Crouch, referred to below.

1. The business of Reliance Pools was successful in that it had a good reputation for constructing high-quality award-winning swimming pools, the income from which generated a substantial turnover. However in the several years leading up to the accident, its profit margins were insufficient to generate a substantial net profit. There were also cash flow difficulties. For example in 2006 the business was in dire straits.

1. At that time, the plaintiff consulted Dr Crouch, an accountant, and sought advice as to how he could improve the profitability of the business and have more time for business development. To this end Dr Crouch advised him to limit the number of contracts signed per month to two to three; to concentrate on high-end, high-cost pools, and to set the contract price so as to produce a gross profit margin in the order of 40% and a net margin in the order of 30%. The plaintiff implemented Dr Crouch's advice. This had an immediate effect of reducing the gross turnover for 2007 since he was endeavouring to get out of the lower cost part of the market from which much of the turnover of Reliance Pools had been derived.

1. The plaintiff submitted that by 2008 the gross turnover had returned to the levels it had been in 2006 and that the business was, as a result of these measures, on a stronger footing in future years. The plaintiff tendered contracts for swimming pools that had either been concluded prior to the accident but were yet to be performed, or which were concluded after the accident as a result of discussions the plaintiff had had before the accident. The total consideration of these contacts which would be expected to be completed within twelve months of the accident was $1.87m. One such contract, with Vecco Holdings Pty Limited, provided for the construction of two pools at the Site, including the one on the 7th floor, in the course of which the accident occurred. The significance of these contracts will be considered further below.

1. Dr Crouch calculated the net income before tax produced by Reliance Pools, once adjustments were made for benefits under the plaintiff's control, including the provision of a motor vehicle for his father and trust disbursements. He opined that the net income before tax of Reliance Pools in the three years leading up to the accident was, and for the year after the accident would have been, as follows:

2006 $195,318 per annum or $3,756 per week before tax

2007 $158,968 per annum or $3,057 per week before tax

2008 $135,933 per annum or $2,614 per week before tax

2009 $155,780 per annum or $2,995 per week before tax

1. Dr Crouch then adjusted these income figures for tax by applying a tax rate significantly lower than would have applied had the monies been brought to account by him rather than by the family trust. Dr Crouch then calculated a four-year average of these figures to arrive at a figure of $2,565. This calculation is inconsistent with the passage from Spargo which I take to mean, in the circumstances of the instant case, that the tax rate to be applied ought reflect the rate that would have applied had the monies been brought to account by him.

1. If one adopts Dr Crouch's pre-tax figures and applies what I have found to be the tax rate, the net figures are as follows:

30 June 2006	30 June 2007	30 June 2008	30 June 2009
Gross Earnings	$195,318	$158, 968	$135,933	$155,780
Less Tax	$78,279	$54,270	$43,512	$50,649
Net per annum	$117,039	$104,698	$92,421	$105,131
Net per week	$2,251	$2,013	$1,777	$2,022

1. The average of these four figures is $2,016.

1. If one looks at Dr Crouch's adjusted figures set out above, it is not obvious that Reliance Pool's financial well-being had in fact improved over the three years prior to the accident. Indeed the figures from 2006 until 2008 showed an opposite trend. Nor does his calculation for 2009 show any substantial improvement.

1. The difficulty with the inclusion of the 2009 figures in the average is that they do not take account of the accident. I am satisfied that Reliance Pools could not complete the contracts referred to above without the active participation of the plaintiff. I accept Dr Crouch's evidence as follows:

It is a very difficult role because you have got to manage sub-contractors, who are in the business of making money for themselves. And so if you are not a little bit wily, they could take advantage of you, I guess. And also, there is a lot of things that stop jobs from progressing - different trades do not get to the jobs at different times. And it is the consistent execution of the role that Jeff was playing that got jobs started on time or close to time, contractors on site on time. And where those things don't occur, that is when you necessarily have either unfinished jobs or costs blow outs.

1. I am satisfied that the accident was the reason the 2009 figures did not show any substantial improvement. I am persuaded by the evidence of the number and value of contracts that would have been performed but for the plaintiff's accident that the earnings of Reliance Pools were likely to be substantially greater in the 2009 financial year than they were in the previous financial year, both in terms of gross turnover and net profit. The effect of these contracts will be considered in further detail below.

Mr Ivey's evidence

1. Mr Ivey was at a disadvantage because he was not privy to facts about the way in which the business of Reliance Pools was conducted or the measures that had been taken by Dr Crouch. For example he took exception to the inclusion of, for example, payments to Mr Ryan senior, in an assessment of the plaintiff's income since such payments were described as "wages". However, Dr Crouch knew that Mr Ryan senior was retired and enjoyed being present in the business although he was not engaged on a commercial basis. His labour would not have needed to be replaced had he been unable to continue. I accept that the business of Reliance Pools was conducted in such a way so as to benefit the plaintiff's family and minimise tax liability. I am satisfied that purchases of motor vehicles for family members or "wages" paid to Mr Ryan senior reflected both the plaintiff's largesse to his family and his desire to minimise tax, as distinct from a commercial arrangement.

1. In addition, Mr Ivey did not take into account post-accident circumstances in his calculations. He explained his reasons for leaving them out of account in the following passage:

I'm looking at the pre-accident period as being an indication of what the returns would have been, had the accident not occurred. And I might say that that's a very common and correct approach. Normally if you include the post-accident period, that is actually to the- the actual performance is to the plaintiff's disadvantage.

1. While these reasons are understandable and prudent in many cases, it would not, in my view, adequately compensate the plaintiff if one were to disregard what would probably have occurred in the 2009 financial year but for the accident.

1. Nonetheless I accept the reasonableness of Mr Ivey's reservations about some of the adjustments made to the figures shown in the profit and loss statements of Reliance Pools which produce the net before tax figures set out above. In particular I do not consider that the whole of the motor vehicle expenses should be allowed as benefits personal to the plaintiff. Nor do I consider it to be appropriate that the plaintiff's past leave entitlements should be added on to his income as if he had either taken them or accrued a benefit to take them in the future, in circumstances where I consider that he would have continued to run his own business through a trust vehicle, rather than exploit his earning capacity as an arms-length employee. The evidence does not establish the precise numerical effect of reversing these adjustments.

1. I consider that numerical effect of any reduction in the adjustments to give effect to Mr Ivey's reservations referred to above would be substantially outweighed by the income from the 2009 contracts.

Contracts entered into for the 2009 financial year

1. The evidence established that there were fourteen contracts to be carried out between July and December 2008, of which, by reason of the accident, only five were completed. The sum of the contract amounts was in the order of $1m. Mr Ivey accepted that it was likely that, but for the accident, these contracts would have produced an additional net profit of $200,000 for the six-month period which commenced a fortnight before the accident had they been completed. Dr Crouch, who was slightly more conservative about such matters, agreed that the additional net profit but for the accident would have been in the order of $180,000.

1. There was no evidence of the Reliance Pools ever having failed to complete a pool. The number and type of awards is some indication that I should not infer that these contracts would not have been completed. The reputation of Reliance Pools was not in issue. Mr Garnett, whose evidence was not challenged gave the following evidence:

Q. Where would you have placed Reliance Pools in the market generally in terms of ordinary pool builder, or up the top end?

A. Definitely the top end. We have worked with a number of pool builders and I would put him right at the top.

Q. What would you say about Mr Ryan's ability in terms of pool building design and construction?

A. He was probably a pioneer in a lot of aspects in the way that he built pools. It was always top quality, always for the best clients. So, pretty much as good as they came in Sydney.

1. Had these contracts referred to above been completed, the gross turnover and net profit, would, I infer, have substantially exceeded the amounts for previous years and produced an after-tax income in the hands of the plaintiff in excess of the statutory cap. Indeed, Mr Ivey's concession as to the 6-month $200,000 net increase in income would alone, if it were the sign of things to come, produce an income under the plaintiff's control that substantially exceeds the statutory cap.

1. I am satisfied that the pre-tax income that the plaintiff would have had available to him but for the accident for the year following the accident would have exceeded the cap of $3,162.90.

1. It was contended against the plaintiff that this increase would not have been maintainable because of the effects of the Global Financial Crisis (GFC). The difficulty with this submission is that it was not supported by evidence of when the GFC began, what its effects on the building industry in the Sydney metropolitan area were and, in particular, how it affected the high-end swimming pool market in which Reliance Pools operated. Nor were any questions asked of, or propositions put to, witnesses who might be likely to know. In these circumstances I do not propose to discount the plaintiff's damages on that ground.

1. I am satisfied on the basis of the evidence of the plaintiff, Dr Crouch and Mr Garnett, that once Reliance Pools had adopted the new business approach its profitability would probably have continued in future years at least at the level at which it would have been in 2009, had it not been for the accident.

1. I have considered whether it is appropriate to include in the plaintiff's claim the amount of $45,000 for consultancy fees that the plaintiff might have earned from Reliance Pools International as provided for in the draft documents. It would not involve double-counting since it was ultimately accepted by Mr Cavanagh SC who appeared for both the plaintiff and Reliance Pools International that Reliance Pools International would be a mere conduit for that money. However in my view the plaintiff's probable future earnings would have exceeded the statutory cap even without the $45,000 and therefore it would make no difference if the amount were included. Accordingly it is not necessary to calculate the capital sum likely to be represented by these consultancy fees, taking into account my findings on vicissitudes with respect to the per quod claim brought by Reliance International.

1. Had I been required to determine past and future economic loss without reference to the statutory cap in s 12 of the Act to limit an award of damages for past or future economic loss to a gross income of $3,162.90 per week, which equates to a net (after tax) income of $2,175 per week, a nice question would have arisen as to the quantification of the plaintiff's loss and whether the business would have continued to grow and what allowance should be made for vicissitudes over the 24 years remaining of the plaintiff's working life. However, since I am satisfied that the actual figure, for the past and the future, would in the future substantially exceed the weekly cap I am not required to make a hypothetical determination of the amount by which it would do so: see the approach adopted by Studdert J in Knauer v Transfield Pty Limited [2005] NSWSC 176 at [113] with reference to a similar statutory regime created by s 34 and s 151I of the Workers Compensation Act.

1. The plaintiff is entitled to interest on these damages under s 18 of the Act. I request that the parties calculate the applicable interest and bring in short minutes of order reflecting their calculations.

Loss of past superannuation benefits

1. This head is to be calculated by reference to 9% of the gross figure for past economic loss.

Damages for future economic loss due to the deprivation of earning capacity

1. This figure is to be calculated by reference to the s 12 maximum for 19 years less 15% vicissitudes.

Out of pocket expenses: past and future

1. The sum for past out-of-pocket expenses, all of which have been paid by EML is agreed at $40,470.

1. The plaintiff claims the following amounts for future treatment expenses:

Future Treatment Expenses

GP 4 x pa @ $60 per visit

Medication Modafinil @ $200 2 x pa

Cognitive remediation therapy $222 per session 4 weekly

$4,124

$6,873

$49,594

1. These amounts are amply supported by Dr Rowe in his report of 10 October 2012. He was not challenged in cross-examination about the reasonableness of any of those items.

Schedule of damages

1. For the foregoing reasons I assess damages as follows:

Head of damages	Amount
Non-economic loss:	$347,750
Past economic loss: s 12 maximum from 15 July 2008 to date of judgment less $129,030	Parties to calculate
Past loss of superannuation	Parties to calculate
Interest on past economic loss	Parties to calculate
Future economic loss: s 12 maximum for 19 years (646.2) less 15%	$1,194,662
Past out of pocket expenses (agreed)	$40,470
Future treatment expenses
Fox v Wood	Parties to calculate

The application of s 151Z(2) of the Workers Compensation Act

1. Section 151H contains the following limitation on the recovery of damages:

"(1) No damages may be awarded unless the injury results in the death of the worker or in a degree of permanent impairment of the injured worker that is at least 15%.

Note. Section 322 of the 1998 Act provides that the assessment of the degree of permanent impairment is to be made in accordance with WorkCover Guidelines. That section also provides that impairments that result from the same injury are to be assessed together.

...

(4) The degree of permanent impairment that results from an injury is to be assessed as provided by this section and Part 7 (Medical assessment) of Chapter 7 of the 1998 Act.. . "

1. In light of my findings that Reliance Pools would not, if sued, have been liable to the plaintiff it is not strictly necessary to determine whether the plaintiff exceeded the threshold of 15% whole person impairment. However because the assessment of whole person impairment was the subject of oral evidence, it is appropriate that I do so. This determination requires the Court to consider the relevant medical evidence and the WorkCover Guidelines pursuant to which medical assessments are made in accordance with the Workplace Injury Management Act.

1. The evidence germane to the question of whole person impairment was:

(g)   The opinion of Dr Teychenne, neurologist and approved Workcover certifier, who adjudged that the plaintiff had suffered a 29% impairment as a result of the accident;

(h)   The opinion of Dr Rowe, neuropsychologist, who opined in a written report that the plaintiff had suffered a whole person impairment of 12% impairment, with 10% for cognitive impairment but who in cross-examination revised his opinion on the impairment attributable to cognitive impairment to 0%; and

(i)   Dr Harrison, orthopaedic surgeon who opined that the plaintiff suffered 2% impairment as a result of injury to his shoulder.

1. The certification procedure which would have been invoked had the plaintiff sued his employer was not applicable. In these circumstances the Court is obliged to assess the evidence for itself to determine the degree of whole person impairment. Nonetheless I accept the plaintiff's submission that it is not appropriate that I endeavour to interpret the applicable guidelines to come to a finding unsupported by expert evidence, particularly in circumstances where, when the assessment is real rather than actual, the assessor must be duly certified.

1. Although I considered Dr Rowe to be expert in his field of neuropsychology and I have accepted his evidence in other respects, I prefer the evidence of Dr Teychenne on the assessment of the degree of permanent impairment. Dr Teychenne has been a consultant neurologist for about thirty years and is, accordingly, highly experienced. He has substantial expertise in diagnosing, assessing and treating cognitive impairment. He is an accredited assessor of whole person impairment and accordingly is entrusted with the task of performing such assessments when the task is actual rather than, as here, hypothetical.

1. The opinion of Dr Harrison is not contested. The principal impairment suffered by the plaintiff is a cognitive one.

1. The threshold is exceeded in respect of the cognitive impairment. I find that the plaintiff suffered a whole person impairment of 29%. For reasons given in a separate judgment to determine an interlocutory application for leave to rely on expert reports served out of time, this finding is not binding on EML.

The claim by Reliance Pools International

1. This claim per quod is brought separately from the plaintiff's claim. As referred to above, the plaintiff has specifically abandoned any loss of income occasioned by his inability to participate in the business to be conducted by Reliance International.

1. It was common ground that, by reason of the accident, the plaintiff could not engage in the venture proposed to be undertaken by Reliance Pools International. It was not submitted that a per quod claim could not be made in the circumstances; nor was it submitted that a claim for damages that was wholly comprised of future, post-accident, loss could not be made.

1. It was accepted, in accordance with Commissioner for Railways (NSW) v Scott [1959] HCA 29; (1959) 102 CLR 392 (Scott), Attorney-General for New South Wales v The Perpetual Trustee Company Ltd [1952] HCA 2; (1952) 85 CLR 237 (Perpetual) per Dixon J at [13], and Marinovski v Zutti Pty Ltd [1984] 2 NSWLR 571 (Marinovski), that a company whose general manager or executive director is disabled through another's negligence can recover as loss from a wrongdoer.

1. The evidence establishes that at all material times the plaintiff was to be an integral part of the business affairs of Reliance Pools International and was personally responsible in very large measure for the reputation of Reliance Pools itself which Reliance Pools International proposed to exploit. That the proposed agreement between Gemco and Reliance Pools International made specific provision for the plaintiff to provide consultancy services is a powerful indication of the contribution it was considered the plaintiff would make to Reliance Pools International.

1. EML, whose submissions on damages were adopted by AF Concrete, submitted that the loss, if any, to be suffered was speculative since no contract had been concluded and the lack of follow-up by the Qatari interests once Ms Suleiman "backed off" showed that they were not particularly committed to the venture.

Whether damages can as a matter of law be assessed on the basis of loss of profits

1. EML submitted that a per quod claim cannot be based on loss of profits since damages for such a claim are limited to the cost of a replacement servant and associated expenses. EML adopted the analysis of Kiefel J in Barclay v Penberthy [2012] HCA 40; (2012) 86 ALJR 1206 at [156] - [164] (Barclay) and submitted that Mercantile Mutual Insurance Co Ltd v Argent Pty Ltd (1972) 46 ALJR 432 (Argent) is not authority for the proposition that a claim for loss of profits can be made, because only the quantum of damages and not the basis on which they were awarded, was at issue in that decision.

1. EML also submitted, in accordance with Kiefel J's analysis in Barclay, that the decision of the Court of Appeal in Marinovski, by which I am bound, effectively rests on the unstable foundation of Argent and is therefore of no assistance to Reliance International in the present claim.

1. It referred to obiter statements of Fullagar J in Perpetual at [24]-[27] which were referred to by Dixon CJ and Taylor J in Scott at [8] and [4] respectively. It also referred to Leveridge v Witten (Court of Appeal, 14 September 1979, unreported) which was considered in Marinovski by Hutley JA at 575 in the following passage:

The only other relevant authority is Leveridge v Witten (Court of Appeal, 14 September 1979, unreported), where Hope, Reynolds and Glass JJA said:

"There is a paucity of authority on the principles by which damages are to be assessed in such a case and counsel were unable to make submissions which tended to establish a principle of useful application to the present facts. It seems to us that the proper approach to such a problem as the present is that in general damages should be limited to the loss proved to the company in respect of the period during which the company was obliged to pay money for services it did not receive and for such time as the company suffers loss while seeking a suitable substitute employee. It cannot be correct, as a general principle, to award damages to a company where a particular employee as the result of a tortious act has ceased to be employed and the company would throughout the period of the working life of that employee have received greater profits by the application of his particular skills, energy and intellect than is otherwise probable. We are unable to accept that the law would require a comparison between the effectiveness as a revenue producer of the injured employee and his substitute or successor."

This does not exclude a company proving losses in the form of decline in profits or increase in losses from an accident to an employee, but the occasions would be rare. The judgment makes no reference to Argent's case and I find it difficult to reconcile with the last sentence as the very basis of the award of damages in Argent was that the companies were deprived of the services of Box, which loss, in turn, caused a fall in profits. It must follow that

where an employee of unique capacity is lost and replaced by an inferior employee damages resulting from the proved loss will be recoverable. For example, a leader in a new field, such as biotechnology, may be literally irreplaceable and his injury destroy the company. There is no single test for the measure of damages recoverable by an employer for the loss of an employee.

1. Kiefel J's conclusion appears relevantly in the following passage in Barclay at [164]:

Consistency with the purpose and scope of the action per quod servitium amisit requires that damages be limited to the cost of substitute labour. In Cattanach, it was observed that the employer suffers damage only when it is forced to pay a salary or wages to its injured employee when it is, at the same time, deprived of the employee's services. To permit recovery on any wider basis, including for profits lost, would be to transform an exceptional remedy for a particular type of loss into a substantial exception to the general principles which have developed concerning recovery of economic loss in tort. In terms of the coherence of the law, that would be undesirable.

1. Although the passage from Kiefel J's reasons supports the proposition for which EML contends- that loss of profits is not a true measure of damages for a per quod claim- the statements from Scott and Perpetual are less unequivocal. In any event I do not consider myself to be at liberty to depart from what the Court of Appeal said in Marinovski. Further, I consider the obiter statements of the majority in Barclay leave open the possibility of a claim based on loss of profits if it is established, as I consider it to have been in the instant case, that Mr Ryan was irreplaceable in the business structure.

Assessing the quantum of the claim

1. I consider the claim by Reliance International ought be assessed as a claim for the loss of a chance which must be quantified as such, in accordance with the statements of principle contained in Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 at [7] (Malec v Hutton). On this analysis it would, in my view, be unfair to the defendants and EML to treat as certain a prospect which might have had a 51% chance of coming to pass and unfair to Reliance Pools International to ignore the loss of the chance to exploit the reputation of Reliance Pools and the plaintiff's special skills and reputation if it were adjudged to have only a 49% chance of coming to pass.

1. Although Reliance Pools International had not started trading at the time of the plaintiff's accident and never did, some groundwork had been done prior to the accident and further groundwork as set out above was done after the accident to cultivate its relationship with Gemco. It was suggested that I should be sceptical of the plaintiff's and Ms Suleiman's optimism in circumstances where no one from Gemco was called to say what its attitude to the deal was. I do not draw an adverse inference against Reliance Pools International on that ground. The email communications speak for themselves: Gemco appears to have been interested but no binding commitment had been made, although there had been some discussion about the terms of any eventual venture.

1. Although no evidence was given about what, if any, follow up occurred after Ms Suleiman "backed off" it was not suggested to her in cross-examination that Gemco was not interested because they themselves had not followed up Ms Suleiman.

1. There was undoubtedly uncertainty about the terms of Reliance Pools International's remuneration. At one stage a licence fee of $100,000 was proposed; however, in January 2009, there was mention of a fee of 10% of contract fees. The MOU referred to 15% of turnover.

1. There was also a deal of uncertainty about the commencement of the venture and its probable duration. According to the MOU, entry into a Licence Agreement would be conditional upon a trial pool being completed. The trial pool, which had to be for a minimum contract value of $250,000, was to be commenced within 6 months of signing the MOU and completed within 9 months to a standard that satisfied Reliance Pools International. Failure to meet any of these criteria would give Reliance Pools International a right to terminate. The initial term was to be three years with an option to renew. According to the MOU, Gemco was only bound to use the Reliance Pools Qatar brand for pools worth $250,000 or more.

1. Furthermore none of the pools that was designed for Reliance Pools was protected by intellectual property rights. Mr Garnett, the pool designer frequently engaged by Reliance Pools, said that it would not be uncommon in his experience for someone to copy their designs and said that there was nothing to stop someone from doing that.

1. Further, it was submitted that Reliance Pools International had not proved what its actual loss would be as distinct from its loss of gross income since it did not establish what the plaintiff himself would have been paid by Reliance Pools International as a result of services performed for its benefit.

1. Reliance Pools International must prove that it lost something of value and, if so, what its loss is likely to have been as a result of the unavailability of the plaintiff.

1. Reliance Pools International relied on Dr Crouch's calculation of its gross annual income of $266,000 as comprising the following four elements:

Licence fee $100,000

Consulting fee $45,000

Working drawings $25,000

Travel reimbursement $96,000

1. Reliance Pools International properly conceded that if the amount for travel were truly a reimbursement it would not add to its income. It also properly conceded that it had made no allowance for the cost of the plaintiff's remuneration and that it was fair to allow that the plaintiff would earn at least the amount of $45,000 since this amount represents consulting fees which would be a direct result of his labour. Once these adjustments are made the gross income amounts to $125,000.

1. EML contended that the amount referable to working drawings ought also to be disregarded because either the plaintiff would do them, in which case it was, like the $45,000 consultancy fees, properly to be regarded as monies generated by his personal exertion; or Reliance Pools International would have to pay someone to do them and this was not allowed for in the expenses (see below). I do not accept this submission since I consider that there was a real prospect that Reliance Pools International could earn a profit on working drawings and that the monies in the line items for "salary/ consulting" or "all other expenses" may represent payments to persons such as Mr Garnett for the preparation of such drawings.

1. Dr Crouch estimated various expenses to be incurred by the company in the course of earning the gross income. The figures ultimately advanced in oral submissions were:

Motor vehicle expense/ travel $5,000

Repairs and Maintenance $5,000

Salary/ consulting $30,000

All other expenses $10,000

Total $50,000

1. On these figures, the net profit of Reliance International before tax would be $75,000. According to Dr Crouch, a tax margin of 30% is appropriate because of the corporate structure, giving rise, on these figures to a net after tax profit for Reliance Pools International in the order of $52,000 or $1,000 per week.

1. Dr Crouch, in his report, considered that as the company had not traded the best that could be done to quantify future profitability is to use the proposed first year's trading figures.

1. The timing of the negligence by AF Concrete has deprived Reliance Pools International of the opportunity of seeing this venture come to fruition. It has also made it difficult for Reliance Pools International to quantify its claim with any real precision. However, where a wrongdoer has deprived the injured party of the means of more exact proof, a Court will endeavour to assess damages on the material available: see the authorities referred to by Heydon JA in State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 at [72].

1. EML submitted that one approach might be to select a weekly net profit figure and then apply a 5% multiplier for 23 years, being 721.2, to give a starting figure in the order of $720,000 without any reduction for vicissitudes or uncertainty as to how the venture would proceed. EML submitted that I ought allow no more than 25% to 33% of that amount, having regard to the real issues of uncertainty and the need to take account of multiple layers of potential uncertainties as discussed in Malec v Hutton at [7] and [9]. If one adopted this method one would arrive at a figure in the order of $180,000 to $240,000.

1. AF Concrete, which adopted EML's submissions on the per quod claim except as to the calculation of damages, proposed a different calculation which led to a significantly smaller total sum. These calculations, including my own, are necessarily speculative. I do not, however, consider AF Concrete's submissions to take adequate account of the value of the chance lost.

1. Although there are attractions to the approach for which EML ultimately contended, I consider there to be a better chance that Reliance Pools International would gain most of its income from the venture in the first three year term and that thereafter Gemco would have the skills, expertise and reputation to continue without its association with Reliance Pools International or, for that matter, the plaintiff. On this assessment it is somewhat artificial to conceive of a venture that would last 23 years. It follows that the greater part of the loss of Reliance Pools International would already, but for the accident, be in the past.

1. I am inclined to assess the past loss of Reliance Pools International for the period of three and a half years from the latter half of 2009 (being my estimate, and the plaintiff's concession, of when income would first be received) to the date of judgment at 50% of the net profits after tax of $52,000, being an amount in the order of $100,000, inclusive of interest under s 18 of the Act.

1. As for the future, I allow a buffer of $100,000 to reflect the loss by Reliance Pools International of the opportunity to exploit the plaintiff's expertise to make a profit from providing assistance by way of technical knowledge and design skills to entities based in Qatar to construct swimming pools of a higher standard than is generally available there presently. The amount for the future takes account of my view that once the plaintiff had supervised sub-contractors on particular pools, there was a real prospect that his 'niche' would attract local competition. Reliance Pools International's competitive disadvantage because of the plaintiff's location in Australia and his unwillingness to relocate to the Middle East would, in my view, prevent it from making more substantial profits than those allowed for by the buffer.

1. Accordingly I assess damages on the per quod claim in the amount of $200,000.

AF Concrete's cross-claim against EML

1. In its cross-claim against EML, AF Concrete has claimed contribution or indemnity under the statutory workers compensation policy for any damages for which AF Concrete is liable either to the plaintiff or to Reliance Pools International in the following terms:

The Cross-Claimant therefore says that in the event that it is determined that any part of and loss and/or damage suffered by the Plaintiffs, if any, was caused or contributed to by any negligence on the part of the Cross-Claimant (which the Cross-Claimant denies) that the Cross-Claimant in entitled to contribution and/or indemnity from the Cross-Defendant in relation to any verdict entered in favour of the Plaintiffs against the Cross-Claimant pursuant to Section 5 of the Law Reform (Miscellaneous Provisions) Act 1946 as amended on the basis that as insurer of the first Plaintiff's employer it is directly liable to the Cross-Claimant pursuant to Section 601Aag of the Corporations Act 2001 for its insured's negligence.

1. EML contended that AF Concrete's claim for contribution or indemnity relating to its liability to Reliance Pools International is not covered, as a matter of construction, by the statutory policy.

1. Since EML's liability under AF Concrete's claim for contribution depends on a finding that Reliance Pools, the insured, was negligent, AF Concrete's claim for contribution and indemnity does not arise.

1. It is therefore not necessary for me to determine whether EML's contention is correct.

EML's cross-claim against AF Concrete

1. It follows from my findings that AF Concrete is liable in damages to the plaintiffs for negligence and that Reliance Pools was not negligent, that EML is entitled to succeed in its cross-claim against AF Concrete for reimbursement of workers compensation payments made to, and expenses paid for the benefit of, the plaintiff.

1. EML also claims interest on these sums. AF Concrete resisted the claim for interest on the basis that reimbursement was first claimed by way of the cross-claim in the proceedings. EML submitted that this contention should not be accepted because whenever it was first claimed, the claim has always been defended and the monies would not have been reimbursed absent a judgment of the court. It also submitted that AF Concrete has had the benefit of the money in that it was liable to the plaintiff from the date of the accident.

1. I consider it appropriate that interest be awarded on the amount of this cross-claim. The calculation of interest is difficult because the sums were paid over time. I direct the parties to calculate the interest payable on the principal sum referable to this cross-claim.

1. Although the sum of the amounts paid is not in dispute and has been proved, I shall leave it to the parties to incorporate the judgment amount in short minutes in order to take account of any payments made between the end of the hearing and delivery of judgment.

Costs

1. The parties have asked me to reserve the question of costs. However it may be useful if I set out my preliminary views on some aspects of costs, subject to hearing from the parties and in particular from AF Concrete.

1. As the plaintiff and Reliance Pools International have succeeded against AF Concrete, they are entitled to their costs against AF Concrete.

1. The plaintiffs alleged in [30] of the further amended statement of claim:

The first defendant caused the pipes to be blown and cleared of concrete without securing its pipes to the swimming pool floor and without warning the first plaintiff the pipes were being blown

1. In its amended defence to the plaintiffs' further amended statement of claim, AF Concrete alleged, in [12A]:

12A. The first defendant denies paragraph 30 of the said Statement of Claim and further says as follows:

(a) C & J Concrete Sprayers Pty Ltd caused the pipes to be blown over the objection of the first defendant.

(b) C & J Concrete Sprayers Pty Ltd failed to secure the pipes.

(c) C & J concrete Sprayers Pty Ltd failed to warn the Plaintiff.

1. It was, accordingly, in my preliminary view reasonable and necessary for the plaintiffs to sue both AF Concrete and C & J because they were not in a position to resolve the question of fact between the defendants and ought not be put at risk of suing the wrong defendant. My preliminary view is that AF Concrete ought pay the costs of C & J.

1. EML has been wholly successful since it is entitled to reimbursement of workers compensation payments made to or for the benefit of the plaintiff from AF Concrete and is not liable since Reliance Pools would not, if sued, have been liable to the plaintiff. Accordingly, my preliminary view is that AF Concrete should also be liable to pay EML's costs.

Orders

1. I make the following orders and directions:

(1)   Judgment for the first and second plaintiffs against the first defendant.

(2)   Judgment for the second defendant on the plaintiff's claim.

(3)   Judgment for EML in its cross-claim against the first defendant for amounts paid by way of workers compensation to or for the benefit of the first plaintiff, with interest.

(4)   All other cross-claims dismissed.

(5)   Direct the parties to bring in short minutes which calculate the amount of the judgments and cross-claims in accordance with these reasons within fourteen days.

(6)   Costs of the proceedings and of all cross-claims reserved.

(7)   Failing agreement on costs, direct the parties to approach my Associate within seven days for a hearing date for argument on costs.

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Amendments

15 December 2014 - Amended paragraphs: Cover page Case Title amended

05 March 2013 - corrected numbering of orders

Amended paragraphs: 232

Decision last updated: 15 December 2014