SAARE v Jenkin - [2002] WADC 36

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: SAARE -v- JENKIN [2002] WADC 36

CORAM: GROVES DCJ

HEARD: 1-2 FEBRUARY 2001

DELIVERED : 1 MARCH 2002

FILE NO/S: CIV 588 of 1999

BETWEEN: ERIC OLAF SAARE
Plaintiff
AND
ROSS ALAN JENKIN
Defendant

Catchwords:

Damages - Assessment - Personal injuries - Cyclist struck by motor vehicle - Fractured left leg at knee joint - Onset of osteoarthritis in left knee - Impact of deteriorating condition on future earning capacity - 45 year old engineer

Legislation:

Motor Vehicle (Third Party Insurance) Act 1943, s 3C

Result:

General damages $23,300.00
Loss of future earning capacity $489,125.00
Future medical treatment $5,000.00

Representation:

Counsel:

Plaintiff: Mr K J Bradford
Defendant: Ms B A Mangan

Solicitors:

Plaintiff: Bradford & Co
Defendant: Phillips Fox

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

Bresatz v Przibilla (1962) 108 CLR 541
Geldenhuys v Soo, unreported; FCt SCt of WA; Library No 990147; 23 March 1999
Hendrie v Rusli [2001] WASCA 249
Husher v Husher (1999) 197 CLR 138
Kember v Thackrah [2000] WASCA 198
Malec v J C Hutton Pty Ltd (1990) 169 CLR 638
McGilvray v Amaca Pty Ltd [2001] WASC 345
Southgate v Waterford (1990) 21 NSWLR 427
Spargo v Haden Engineering Pty Ltd (1993) 60 SASR 39
Thomas v O'Shea (1989) A Tort Rep 80-251
Wylde v 'Arriaza, unreported FCt SCt of WA; Library No 970359; 23 July 1997
Yammine v Kalwy (1979) 2 NSWLR 151
Zappara v Jones, unreported; FCt SCt of WA; Library No 970264; 22 May 1997

Case(s) also cited:

Capponi v Commonwealth of Australia (1970) 44 ALJR 226

GROVES DCJ: The plaintiff claims damages from the defendant for injuries suffered in a motor vehicle accident on 27 May 1998. Liability is admitted and the matter proceeded by way of an assessment of damages.

The accident, injury and effects

At approximately 6.30 am on 27 May 1998 the plaintiff was riding his Trek 9800 mountain bike to work. He was travelling south on West Coast Drive at Sorrento where St Helier Drive intersects West Coast Drive. Traffic on West Coast Drive has right of way through the intersection. As the plaintiff was proceeding through the intersection a Toyota Land Cruiser being driven by the defendant travelling west on St Helier Drive proceeded into the intersection and collided with the plaintiff. The roo bar on the Land Cruiser struck the plaintiff on the left knee. The plaintiff was thrown up onto the bonnet of the Land Cruiser and fell to the side and onto the roadway.
The plaintiff was conveyed by ambulance to the Joondalup Health Campus where he came under the care of Mr Anthony Geddes, an orthopaedic surgeon. He was diagnosed with a comminuted fracture of his left lateral tibial plateau. He was admitted to surgery on the same day for open reduction and internal fixation of the fracture in conjunction with bone grafting of the tibial plateau. The bone graft was taken from the hip. He also sustained a tear of the anterior half of his lateral meniscus in the left knee. This was repaired at the time of the surgery. Following surgery he was in extreme pain. He remained in hospital for six days and was discharged home with a removable splint on his left leg. He remained at home for a week and thereafter went back to work. He was instructed to have no weight bearing for 14 weeks. There was considerable wasting of the leg. When he commenced weight bearing there was good improvement to the stage where after four months he could walk rather than hobble although it was painful and not without some difficulty. He commenced physiotherapy soon after release from hospital and attended twice weekly for approximately six months. He continues to have difficulty with any activity which involves weight bearing on the knee. The only physical activity to which he has returned since the accident is cycling where there is no impact on the knee. He has difficulty in climbing stairs, the action of trying to climb a ladder is difficult, jogging or running because it puts impact on the knee is no longer possible. In his work environment he experiences difficulty in climbing up embankments, walking on rough or loose terrain or climbing stairs or a ladder. He is very much aware of the knee injury and is very conscience of the risk of falling. He is apprehensive that he is going to fall. He also has difficulty now kneeling down to look at road surfaces and concrete structures. Bending of the knee and putting load on the knee results in pain and a great feeling of uncertainty. He is still able to carry out the duties of his employment but has to be very aware of his disability and allow for it in what he does. He is slower and more careful in his activities. Prior to the accident he had no physical problems.

The plaintiff's history

The plaintiff was born at Narrogin on 11 June 1955. At the date of the accident he was 42 years of age. His education was undertaken at Narrogin and he matriculated from Narrogin High School. His father was a draftsman employed with the Main Roads Department and from an early age the plaintiff wanted to be an engineer. During his school holidays he worked with the Main Roads Department on road construction projects. In 1973 he commenced university studies at the University of Western Australia in medicine, however it only took him a short while to realise that his interest was not in this vocation. He withdrew from the course and for the remainder of that year worked as a soils tester for the Main Roads Department in the Kalgoorlie area. In 1974 he returned to University of Western Australia and commenced engineering studies. He did well in the first two years however had difficulty in third year. He took time out and went back to work with the Main Roads Department at Narrogin. He returned to university in 1979 and graduated in civil engineering in 1980. In 1981 he commenced with Westrail and was in charge of a small construction crew that went around the Westrail network installing or replacing culverts underneath railway lines. In October 1982 he joined the Main Roads Department and went to work at Port Hedland. He was a junior engineer with a construction crew building roads around the Newman area. That was for two years and then in his third year he was engaged in designing eleven kilometres of road works on the Great Northern Highway at Newman and in the following year was engaged on the construction of that road. He then sought a transfer to Kalgoorlie and was engaged as the engineer in charge of construction of a road project on the Eyre Highway at Madura. He was engaged on that project for approximately 12 months. Thereafter he was appointed as a construction engineer with the City of Wanneroo. This was again involved in road construction within the City of Wanneroo. He then worked for Silverthorne Bros based in Mandurah who undertook contract work for Main Roads. He was engaged on Main Roads contracts at Arthur River, Eucla, Bindoon and on the Tonkin Highway in Perth. He was also involved with subdivisional roads in the Mandurah area. He was with Silverthorne for approximately three years until approximately 1991. He then went to work for Boral Contracting in Dampier overseeing construction of 22 km of levy banks/roads through salt pans. That contract was approximately six months and he then went to work for Malatesta Hot Mix and Paving in Bunbury for approximately 12 months.
In January 1993 he joined Highway Construction Pty Ltd. He had been approached by Dean Capelli the proprietor/director of Highway Construction. They had previously known each other for some time. That company's business is to tender for road work construction and maintenance in mainly rural and remote areas of Western Australia. It was Mr Capelli's evidence that the purpose of his approaching the plaintiff was that he was aware of the plaintiff's expertise and skill in carrying out project management and administration of road construction work in remote areas. The offer to the plaintiff was a base retainer of $60,000 per annum and 10 per cent of any profit that Highway Construction made from the projects. At the suggestion of Mr Capelli the plaintiff incorporated a company, Alric Pty Ltd, of which he and his wife were the sole directors. Alric then contracted with Highway Construction to provide engineering services. At all times since then the only services on behalf of Alric have been provided by the plaintiff. As will be commented upon later the company was set up for tax reasons which enabled the plaintiff to effectively split what would have been his income, but which became Alric's income, with his wife. Thus Alric is paid by Highway Construction for the services rendered by the plaintiff to Highway Construction. To all intents and purposes however it was the case so far as the plaintiff was concerned that he worked for Highway Construction as if he were an employee of that company.
When he joined Highway Construction the plaintiff worked initially on the Reid Highway project and then on the Great Eastern Highway between Northam and Merredin. He then worked on the site of the Albany Highway, Nicholson Road intersection in Perth. Thereafter he went to Exmouth to oversee construction of 56 km on Burkett Road. He then went to a project at Marble Bar, then Kalbarri, and at the time of this hearing was working on a project at Marble Bar rebuilding 108 km of road east of Marble Bar to Woody Woody Manganese Mine. On all these projects the plaintiff was and is the on site engineer in charge of the projects.
The plaintiff's duties as on site engineer in remote area road construction work involves setting up the camp and sourcing and obtaining plant and equipment from within the immediate region if that is available, engaging contractors who will undertake the construction work, supervising every aspect of the construction work and observing that work, testing of the works during and at the end of construction, and also undertaking administrative duties relating to contract management and handling of progress claims and ordering and receiving supplies to the site. The camps usually work from daylight until dusk seven days per week. It is a physically demanding job in that it involves much walking around the site and negotiating uneven ground, inspecting road works and it involves the physical aspects of climbing ladders and machinery and traversing rough and sometimes loose surfaced terrain, squatting and kneeling to inspect and to take samples and measurements on site, testing materials and observing at close quarters progress of the construction work. The role in remote areas is much different from constructing new road works in the metropolitan area. The logistics and the terrain are invariably more difficult, plant and equipment are not so readily available and it requires being in charge of the camp, work force and construction area 24 hours a day.
The inspection part of his duties entails walking the site, walking up and down embankments, walking up and down gravel pits to inspect the material, observing construction of concrete structures and walking/climbing up and down those structures, placing of rock and testing of materials.
The plaintiff's entire vocational orientation and work history has been involved in the civil engineering aspects of constructing roads and working on site and often in remote areas. He intends to continue in his employment with Highway Construction as long as he is able to despite the fact that he has to work in remote localities.
By being able to generate income through Alric he has also been able to write off expenses against the income and to split the income with his wife. This has enabled him to minimise tax on a legitimate accounting basis.
Since commencement of the contract with Highway Construction the plaintiff has generated for Alric, through his own labour, the following gross income:
1994  $ 55,687
1995  $202,958
1996  $265,902
1997  $262,739
1998  $254,490
1999  $164,772
2000  $140,000
Following the accident the plaintiff returned to work in the offices of Highway Construction at Cottesloe. He remained at work there until approximately August 1999 when he went to oversee the Marble Bar project. Much of his work at the office during that time was involved in working on a joint venture proposal with Boral Contracting.
The reduced income to 30 June 1999 reflects the fact firstly that the plaintiff was not able during that year to work on site supervising construction works and thereby contain costs which blew out and also the fact that Highway Construction was focused upon the work associated with the proposed Boral Contracting joint venture and thereby did not engage in the same level of contracting as it had done in previous years.
The reduced income for the year to 30 June 2000 is the outcome of a substantial loss which Highway Construction had to bear on one of its road construction projects. Generally the profitability of such contracts will be driven by the on site engineer ensuring that work progresses efficiently and that costs are contained. In that way profits will ensue in which the plaintiff will share.
As a consequence of the loss on that project the number of engineers engaged by Highway Construction was reduced from four to two of which the plaintiff is one. As a consequence the financial arrangements changed. As from 1 January 2001 the plaintiff's income changed to a base salary of $84,000 per annum and 20 per cent of the company profits. Previously Mr Capelli received 60 per cent of the profits and each of the engineers 10 per cent. Now Mr Capelli retains 60 per cent and the two engineers have been increased to 20 per cent of the company profits. It is expected that the plaintiff's income will be substantially higher in future years.
It was the plaintiff's stated intention to continue working with Highway Construction until such time as he retired. The work he does is what he enjoys and with it goes a very lucrative income. The plaintiff has three sons aged 14, 12 and 7. The elder two attend Hale School and the plaintiff hopes that he will be able to educate his third son at Hale School also. All boys are doing well educationally and he expects that they will go on to tertiary education. As he sees it he will be supporting his children or at least the youngest of them for probably the next 15 years by which time he will then be 60 years of age. In those circumstances he does not envisage that he will be able to retire before age 65 years.

The issues

That the plaintiff suffered injury is not in issue. He does not claim for any past economic loss, gratuitous services or past medical expenses. The defendants challenge is essentially as to whether the injury is likely to be productive of financial loss in the future. The defendant did not call evidence but was content to cross examine the plaintiff and his witnesses as to the prognosis for the future.
The major issues which emerge in this case involve:
(a)The development of arthritis in the plaintiff's left knee joint;
(b)The impact of any future deterioration on the plaintiff's employment;
(c)The extent of the plaintiff's earning capacity;
(d)The impact of any deteriorating condition on the plaintiff's earning capacity;
(e)The extent to which the plaintiff would have exercised his earning capacity;
(f)Any other residual earning capacity which the plaintiff may possess despite the development of his injury;
(g)The amount of general damages; and
(h)The nature and cost of future treatment.

The development of arthritis

The fracture of the left tibial plateau was treated with open reduction, grafting and internal fixation of plate and screws in the lateral aspect of the tibia in conjunction with bone grafting of the tibial plateau. Post operatively the plaintiff progressed reasonably well with the wounds having healed well and physiotherapy undertaken for assistance with mobilisation. He was reviewed regularly by Mr Geddes who was the only witness to give evidence on medical matters. From an early stage Mr Geddes was concerned that the plaintiff may develop degenerative arthritis as a result of his injury. In his report of 23 April 2000 to the plaintiff's solicitors Mr Geddes expressed the opinion that:
"…there is a greater than 50 per cent chance of him developing osteoarthritis in his left knee and a greater than 50 per cent chance that he would be unfit to carry out all the current duties of his job and be confined to the sedentary duties of his job only. …He may well be able to continue putting up with the aggravating circumstances over the next 10 years but is highly likely to be unable to do so in the last 10 years of his working life."
More recently, radiological findings made on 11 January 2001, when making comparison with the previous study of 11 December 1999, noted:
"There is narrowing of the lateral joint compartment with spurring of the intercondylar eminences which may reflect degenerative change."
In his evidence the plaintiff said that recently, probably in the last three or four months he has noticed that there is always a dull pain when he walks that had not previously been present.
Mr Geddes had taken the opportunity to review the most recent x‑rays done in January 2001. Whereas there was evidence of some small spurring on the original x‑rays in the region of the middle of the knee, the most recent x‑ray shows that this looks like it is more substantial or prominent than was previously the case and its development was consistent with the progression of the arthritic process. The pain or dull ache which the plaintiff has in recent times experienced would, in his opinion, be in keeping with this change. It was Mr Geddes opinion that there is demonstrated signs of early arthritic changes in the knee which will progress. He was not able to be specific as to the rate at which it will progress. He said:
"… I think this man is demonstrating signs of early changes, arthritic changes in his knee and I think that given more time these will progress. Now, at what rate can be variable but I think this could happen within the next 2 or 3 or next 5 years or it may be 10 or 15 years, but I think it would certainly – my feeling is if it has already progressed a small amount now then it is more likely to progress more rapidly as time goes on and I would think that this man would – it would be reasonable to say that within 10 years this man will have developed significant arthritic changes within his knee."
Mr Geddes prognosis was that the symptoms would become progressively worse. The plaintiff's knee would become slowly stiffer and he would find that he will have difficulty in doing the physical components of his occupation like climbing ladders or stairs or squatting. He considers that by that time the plaintiff will be substantially restricted to the point where it would make his job, so far as the physical aspects are concerned, probably untenable.
He acknowledged however that provided the plaintiff maintained good musculature in the leg and remained fit that he may be able to go for a longer period of time before succumbing to the symptoms. The overall chances of succumbing to the arthritis may be put off for a little while. It was essentially the physical aspects of his employment which he would have difficulty with in the years to come. If he were in a sedentary occupation which did not involve the type of physical activity which he is required to undertake on the work sites then he would be able to undertake the sedentary work without such difficulty.
It was Mr Geddes view that the plate and the screws should remain in situ. Nevertheless he considers that there is a small risk associated with that in that if the plaintiff gets an infection or something of that nature then it would be difficult to eradicate the infection without removing the plate and it may act as a source of where an infection can lodge. Again if the plate were removed there is the attendant risk of infection as well as the risk of fracturing through where the screw holes have been if, say, the person twists or does something and the screw hole has not healed up which usually takes 12 to 18 months before it becomes really solid. There is the prospect that further medical intervention will be required in the future. That is dealt with later in these reasons.

The plaintiff's evidence that he is suffering symptoms on an increasing basis associated with the physical activities of his work was not challenged. Mr Geddes found this to be consistent with the changes he had noted on the most recent x-rays. I am satisfied on the evidence and do find that the plaintiff has established that he suffers from progressing osteoarthritis of the left knee joint. Further I am satisfied that the arthritic changes will preclude the plaintiff from undertaking the physical activities associated with his work in the last 10 years of his working life from age 55 to 65. He would nevertheless be able undertake sedentary duties. I am also satisfied that there is the prospect that the osteoarthritic changes could progress rapidly over the next 10 years to the stage that it will impact upon his physical duties even within that time frame.

The impact of any further deterioration upon the plaintiff's employment

Mr Geddes was clear in his opinion that the plaintiff is highly unlikely to be able to continue the physical aspects of his work in the last 10 years of his working life. There is the chance that this may not occur but rather, occur later. However in light of the changes noted over the 13 months between x-rays and accepting the plaintiff's unchallenged evidence I am satisfied that the estimate of 10 years is reasonable.
Additionally there is the prospect that the arthritic changes may progress rapidly "… within the next 2 or 3 years or next 5 years … it would be reasonable to say that within 10 years (the plaintiff) will have developed significant arthritic changes within his knee" (emphasis added). If that prognostication is accepted the arthritic changes would represent a threat to the plaintiff's continued employment over the next 10 years.
In Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 the High Court addressed the approach to be considered in assessing such chance and said:
"The future may be predicted and the hypothetical maybe conjectured. But questions as to the future of hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high – 99.9% - or very low – 0.1%. But unless the chance is so low as to be regarded as speculative – say less than 1% – or so high as to be practically certain – say over 99% – the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51% probability of occurring, but to ignore altogether a prediction which has a 49% probability of occurring. Thus the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded."
On Mr Geddes evidence there is the chance that osteoarthritis will threaten the plaintiff's employment within the next 10 years. Thus at the age of 45 (at the time of trial) through to the age of 55 I find that there is the chance of osteoarthritis developing rapidly and thereby preventing the plaintiff from undertaking his present physical activities throughout that period. The chance is not so low that it can be ignored and allowance has to be made for that very real prospect.

The extent of the plaintiff's earning capacity

Earlier in these reasons I have averted to the income generated by the plaintiff for Alric since commencement of his contract with Highway Construction. The monies were not paid to him personally but were the subject of various financial arrangements but regardless of these arrangements the plaintiff was the sole generator of all the income. On advice and through choice the plaintiff was able to obtain legitimate taxation advantage by:
(a)writing off expenses against this income;
(b)by channelling substantial amounts of superannuation into a fund;
(c)establishing a trust through which he distributed such income;
(d)appointing his wife as a co-director and splitting the income with his wife to minimise tax; and
(e)retaining monies in Alric.
In Husher v Husher (1999) 197 CLR 138 the High Court in dealing with partnership splitting of income said, per Gleeson CJ, Gummow, Kirby and Hayne JJ at p 147:
"The financial loss occasioned by impairment of earning capacity is the loss of what (if there had been no accident) the injured plaintiff would (as opposed to could) have expected to have had under his or her control and at his or her disposal by exercising that capacity. We refer to 'control' and 'disposal' because what the plaintiff has lost are the financial rewards from work that are rewards the plaintiff would have been able to direct to whatever purpose or destination he or she chose."
The Court held that when assessing damages for future earning capacity it is necessary to identify both the capacity which has been lost and the economic consequences which would probably flow from that loss. Only then is it possible to assess the sum that would put a plaintiff in the same position he or she would have been in had the injury not been sustained. In that case a husband and wife carried on business under a partnership at will. Profits were shared equally. The husband's physical labour and skill generated the entire income of the partnership. The wife performed incidental tasks. The husband suffered personal injury as a result of the negligent driving of a motor vehicle by his wife and was unable to continue the physical work needed by the business and the partnership ceased. It was held that the assessment of damages for loss of earning capacity required identification of the capacity that had been impaired or lost and the financial loss occasioned as a result. The husband lost a capacity to earn whatever he could have earned from physical work. Identification of the loss suffered because of the diminution of that capacity required a view to be formed of what would have happened in the future but for the negligent affliction of personal injury. It was held further that the partnership income was produced by exploitation of the husband's earning capacity and he chose to apply the fruits of his labour to the partnership. The financial loss occasioned by the impairment of this earning capacity was the loss of his ability to control and dispose of the income he would have earned if there had been no accident. But for the accident in which he was injured the husband would have had under his control and at his disposal the whole of the fruits of his labour. It was therefore the whole of these fruits that he had lost.
As to the importance of the facts in each case the court said at p 148/149:
"The task is not one to be undertaken by seeking to classify cases as concerning 'sole traders' or 'partnership' or 'wage earners' or 'trading trusts' and then attempting to deduce some rule of general application to all cases falling within the classification thus devised. Rather the inquiry is about what could the plaintiff have done in the work force but for the accident and what sum of money would the plaintiff have had at his or her disposal. Only when those inquiries are pursued can a judgment be made about what capital sum to allow as damages for the impairment of the plaintiff's earning capacity. In doing so regard must be had of course to all those contingencies of life that might reasonably be expected to affect the course of events in the future."
The plaintiff puts his case on the basis that the financial loss occasioned by impairment of his earning capacity should be assessed on the basis of the income which he is currently generating for Alric.
Since the accident the fruits of the plaintiff's labour have continued to be directed through Alric. I accept that this arrangement, advantageous to the plaintiff and his family as it is, would continue so long as the plaintiff is able to be engaged in his current work activities. Clearly it is the fruits of his labour which generates the income for Alric and it is those fruits which constitute the financial loss which will be occasioned by the impairment of his earning capacity. That is the plaintiff is to be compensated upon the basis of his actual capacity to earn income rather than by reference to the income that was actually distributed to him in the accounts of Alric and which are the amounts declared by the plaintiff in his annual income tax returns.
In submissions provided to the court the plaintiff addressed an assessment of his average income as follows:
·The plaintiff's income has been reasonably steady since 1995.
·He earned less in the year 2000 but explained that this was due to a special event, namely a substantial loss in which he had to partake in. It was an unusual loss.
·In view of the fact that the evidence has established that his base salary has increased from $60,000 to $84,000 per annum and that his share in the profits has increased from 10 per cent to 20 per cent for now and in the future it is safe to leave the year 2000 out of the equation.
·His average from 1995 to 1999 indicates that he generated a gross income of $1,150,861 for the period of five years at an average of $230,172 per annum.
·If one was to bring into account the sum of $140,000 generated in the year 2000 the plaintiff's average is $215,143 for a period of six years.
·In determining the plaintiff's reasonable average turnover a sum of $220,000 is conservative but not inappropriate.
I accept the plaintiff's submissions in this regard. Given the basis of remuneration for the plaintiff's services to Highway Constructions there will invariably be fluctuations in income. Averaging out the income across a number of years is the only way to arrive at a reasonable earnings estimate. Accepting as I do that a reasonable annual income is $220,000 that equates to $4,231 gross per week.
The plaintiff's submissions proposed that the matter of taxation should be approached by applying normal income tax on a PAYE basis on this sum, consistent with Spargo v Haden Engineering Pty Ltd (1993) 60 SASR 39 per Perry J at 54. This I will do albeit that it may be less advantageous to the plaintiff than if his loss of earning capacity was calculated by taking the aggregation of the after tax income of the plaintiff and his wife. The difficulty of that approach in this case is the fact that not the whole of the income in Alric has been distributed as between plaintiff and wife but large sums were also contributed to superannuation and profits retained by Alric. That the approach of Perry J in Spargo's case is not to be applied as a rule in all cases was adverted to in McGilvray v Amaca Pty Ltd [2001] WASC 345. Thus on a PAYE basis $4,231 gross per week gives a total tax payable in the sum of $1,810 leaving a net income per week after tax of $2,511. I would round that off to $2,500 net.

The impact of osteoarthritis on earning capacity

Whilst acknowledging that with the progression of osteoarthritis in the knee the plaintiff's disability will become greater defendant's counsel argued that even so the disability is not such as will impact upon his job or his future employability. It was argued that the plaintiff could adapt to his disability by for example making greater use of a motor vehicle to get around road construction sites, that he could use a knee brace and that he could direct other employees to do any work which he was not capable of undertaking. It was said that his value to an employer lies in his years of experience, his familiarity with the environment in which he works, his relationships with contractors and other contacts and in his man management experience. That expertise and skill it was said would be easily transferable to other employers involved in country road construction and could be exercised along with his design and estimating skills and other office skills without the necessity for him to undertake the more demanding physical aspects of the work which he has hitherto been unable to undertake without difficulty.
Implicit in that submission is an acceptance on behalf of the defendant that as the osteoarthritis in the knee progresses the plaintiff will have difficulty in undertaking the physical components of his occupation. That is consistent with Mr Geddes assessment that the plaintiff will be substantially restricted in doing the physical components of his occupation.
For his part the plaintiff acknowledged that his experience and reputation in remote area road construction held him in good stead for future employment but only if he were physically able to carry out the tasks required of him. His experience is in a specialist area and if he were not able to go on site and undertake the physical aspects then he was pessimistic for the future. His expertise and his continued ability to obtain high income is in being on site in a hands on way. Whilst he was recuperating he worked from Highway Construction's Cottesloe office in assisting with preparation of an expression of interest to the Main Roads Department on a joint project proposal with Boral Contracting. In the end result they were not successful in that proposal. Whilst he had some design experience 16 years ago he indicated that with the development in technology since then he would not be able to go back to that form of work and that his age and lack of experience in that field would not make it worth his retraining. He sometimes has had experience in the tendering process but limited to casting his eye over tenders prepared by others.
It was the evidence of the plaintiff's employer Dean Capelli that the plaintiff's value to the organisation was with him continuing as the on site engineer undertaking remote area road construction work. He was emphatic that if the plaintiff was not able to continue in that capacity then he could not see a future for him with the organisation. He would be compelled to seek a suitable replacement for the plaintiff who would be site based. Nor was there a position in an administrative capacity into which the plaintiff could be absorbed if he were not able to work on site.
The plaintiff called a Mr Enzo Biagioni-Froudist a certified professional engineer practicing in the area of civil engineering. His evidence to the extent relevant and allowed over objection was that the plaintiff's experience, specialist as it was, would limit him insofar as future work opportunities are concerned if he were not able to perform the full range including physical activity. With some estimating experience and his experience in contract management and issues arising therefrom it was his opinion that the plaintiff may be employable on a contract rate for say two to three months per year on an income of say $30,000 to $60,000. As much as the evidence demonstrates is that there would be a residual earning capacity in the plaintiff if he is not able to continue and that this contingency must be provided for.
I found the plaintiff to be open and forthright when giving his evidence and he did not shy away from acknowledging or making concessions so far as possible retained earning capacity is concerned. I found him to be an honest and reliable witness and I have no reason to believe that his concern so far as his employability for the future is concerned is valid and well founded. He impressed me as being a person who takes pride in what he does, he is motivated to ensure that what he does is done properly and professionally and he is most loyal and hard working for Mr Capelli. He also acknowledges his responsibility to his family insofar as being able to meet expectations so far as the boys' schooling and further education is concerned.
On the evidence I am satisfied to the requisite standard that if Mr Geddes prognosis comes to fruition then the plaintiff will no longer be able to continue in his currently lucrative employment when he becomes unable to carry out the physical aspects of that job. To simply suggest that he could make greater use of a vehicle, wear a knee brace or direct other employees to do physical work is not realistic when the job as overall site supervisor requires a hands on approach particularly when working in remote locations. Furthermore that contention was not supported by any evidence. I accept that the plaintiff's ability to continue to undertake those physical aspects of his job is essential in carrying out his tasks.

The extent to which the plaintiff would have exercised his earning capacity

It was the plaintiff's uncontroverted evidence which I accept that he did not plan to retire before the age of 65. He observed that his youngest son would be 22 when he was aged 60 and it was his expectation that that son would then be at University. Two of his sons were in private school and it was expected that the youngest would also attend that school. They were all orientated towards tertiary studies. Undoubtedly the extent of his income would of itself be a persuasive factor to continue as long as possible in his employment given his obligations to his family and no doubt the lifestyle to which they are living. Thus he has both the incentive and the imperative to maintain his income.
I have no hesitation in accepting that the plaintiff would against that background have exercised his earning capacity through until age 65.

The assessment of loss of future earning capacity

There are two time frames to be considered. First a loss of earning capacity should be made in relation to the chance that the plaintiff will become disabled within 10 years, viz age 45 to 55 years. Secondly is the assessment of loss of earning capacity beyond 10 years, viz age 55 to 65 years. As to the first period of time see Malec v J C Hutton Pty Ltd (supra).
On the evidence of Mr Geddes and the plaintiff I accept that there is the chance that the osteoarthritis may progress to a stage within the next 10 years and possibly as early as two or three years time where the plaintiff is not able to continue the physical aspects of his job
Having regard to the extent of change over the period of 13 months between the x-rays and the plaintiff's complaint in that time of dull pain increasing in the knee which as Mr Geddes said was consistent with the onset of arthritis I am satisfied that these demonstrate early signs of arthritic change. That process being underway will continue and progress with the passage of time. In these circumstances I would assess the possibility that the plaintiff will not be able to continue in his present employment for the next 10 years as being a 10 per cent chance. It would be appropriate to reflect this chance by a lump sum representing one year's net income, that being $130,000.
The second aspect of the assessment involves the assessment that the plaintiff will not be able to carry out his duties between the ages of 55 and 65.
For the reasons indicated I am satisfied that the plaintiff will not be able to carry out the physical aspects of his occupation between the ages of 55 and 65. On the sum of $2,500 net per week the deferred loss would be:
20 years (multiplier 616.6) – 10 years (multiplier 395.5) = multiplier 221
Total loss is therefore: 221 x $2,500 = $552,500.
This amount however needs to be discounted for contingencies. As was said in Bresatz v Przibilla (1962) 108 CLR 541 per Windeyer J at 544:
"All contingencies are not adverse: all vicissitudes are not harmful."
The discounting contingencies include the normal vicissitudes of life, the value of the plaintiff's retained earning capacity in a sedentary capacity, the possibility of retirement earlier than age 65, the lack of continuing work with Highway Contracting and the general fluctuation in income being dependant upon work being available and the profitability or losses made on such work. On the other hand positive contingencies include the inability to exercise retained earning capacity, the difficulty of obtaining and maintaining alternative work, the evidence of increases in income and the need to take care and prepare for the future.

It was the defendants contention that as much as might be allowed would be a modest global allowance for the possibility of deterioration of the knee after 10 years. I do not accept this as the appropriate method to make an assessment in this case. The future prospects of the plaintiff have been demonstrated with reasonable clarity having regard to the findings of fact which I have made. In my view the assessment of this aspect of the award should be made by proceeding in the ordinary way upon the basis that for the years 55 to 65 the plaintiff will have lost all reasonable prospect of being able to continue in his current employment (see Zappara v Jones, unreported; FCt SCt of WA; Library No 970264; 22 May 1997; Geldenhuys v Soo, unreported; FCt SCt of WA; Library No 990147; 23 March 1999; Yammine v Kalwy (1979) 2 NSWLR 151).
As to the residual earning capacity, ie between the ages of 55 and 65 there is an evidentiary burden upon the defendant to establish what alternative employment opportunities are open to the plaintiff, the state of the labour market and the likely earnings he would receive. Although the plaintiff assisted the defendant in regard to alternative employment and likely earnings through his own evidence and that of Mr Cappeli and Mr Biagioni-Froudist there was a complete lack of evidence as to the likelihood of him obtaining such work on the current labour market or for that matter in the future (as to which see Thomas v O'Shea (1989) A Tort Rep 80-251 at 68, 701).
The plaintiff has a history of continuous employment. He was described by Mr Capelli as being resourceful and adaptable, he has extensive experience in a specialised field of contracting and he has been shown to be a reliable employee able to manage and oversee all aspects of major road construction contracts. That expertise together with his knowledge of contract management and to a lesser extent in estimating and design all suggest that there would be reasonable prospects for sedentary employment. However against that is the fact that he will be of age 55 years and thrown on to a job market where there may be limited opportunities for a person of his age. Having regard to the paucity of relevant evidence as to other types of employment and what remuneration he could expect to receive and the obvious handicaps that the plaintiff will face in attempting to obtain any other work at that age I consider that the discount for retained earning capacity should be 20 per cent.
Having regard to the remaining contingencies (that is other than the discount for the plaintiff's retained earning capacity) regard might also be had to the isolation of the remote area work and the prospect that the plaintiff may wish to spend more time with his family particularly as the boys complete their schooling and move into tertiary education. Further the plaintiff may not have worked to age 65. In all the circumstances I would assess the discount to be applied for contingencies other than loss of retained earning capacity at 15 per cent (as to which see Kember v Thackrah [2000] WASCA 198). Therefore the total discount to be applied (including that for loss of retained earning capacity) is 35 per cent.
As calculated earlier the total loss for the years age 55 to 65 is $552,500. If 35 per cent is deducted from that for contingencies the sum arrived at is $359,125. That sum together with the sum of $130,000 (being the loss of earning capacity in relation to the chance that the plaintiff will become disabled between age 45 and 55) gives an award of ($359,125 + $130,000) $489,125.

General damages for loss of amenities

The plaintiff is entitled to general damages for the accident itself and for the consequent pain, inconvenience and other matters generally referred to as the loss of amenities.
The award of damages for loss of enjoyment of life and amenities generally requires a consideration of s 3C of the Motor Vehicle (Third Party Insurance) Amendment Act 1994 ("the Act"). This section imposes limitations upon an award of damages for non-pecuniary loss and it applies to the present case. Section 3C(3) provides that the maximum amount of damages that may be awarded for non-pecuniary loss is, at the present time, $232,000 and that that amount may be awarded "only in a most extreme" case.
In Wylde v 'Arriaza, unreported FCt SCt of WA; Library No 970359; 23 July 1997 the court adopted the same approach to the Act as the New South Wales Court of Appeal did to the Motor Accidents Act 1988 (NSW). In Southgate v Waterford (1990) 21 NSWLR 427 at 440 the court said:
"There are a number of ways by which trial Judges could approach the task of apportionment required by s 79(2) and s 79(3). It is inappropriate in this case for this court to mandate any particular way of arriving at the 'proportion' required by s 79(2). But clearly because the task in hand is that of awarding damages for 'non-economic loss' it is appropriate for the trial Judge to consider and make findings on those elements in the evidence which are relevant to such loss. This will require the Judge to consider and make findings on the evidence relevant to those heads of damage formally considered in the award of general damages. Then it is necessary for the Judge to conceive 'a most extreme case'. Only for such a case may the maximum amount provided by s 79(3) be awarded. The use of the indefinite article 'a' has already been noted. Opinions of what constituted 'a most extreme case' will doubtless vary. But clearly quadriplegia would fall into that class. The amount to be awarded must then be apportioned somewhere between nil and $180,000; but in a ratio which the Judge fixes keeping in mind that the cap of a statutory maximum is retained for a 'most extreme case'."
As to what might constitute a most extreme case see also Murray J in Hendrie v Rusli [2001] WASCA 249.
For the purpose of this assessment I repeat all of my findings in relation to the nature of the plaintiff's injuries, the diagnosis and prognosis. The accident was undoubtedly a traumatic experience. The injury was substantial and required immediate surgical repair. The plaintiff was unable to weight bear for 14 weeks and he had rib injuries which healed after six weeks. Over a period of 18 months the plaintiff's movement in his leg improved considerably and was assisted by vigorous and dedicated adherence to an exercise programme with physiotherapy treatment. Over the past few months symptoms have increased and in the future they are likely to increase to the extent that further surgical treatment may be required. During the progression of symptoms the plaintiff will experience pain and discomfort in carrying out his work.
I find that the plaintiff's initial injuries and symptoms, their progression and treatment, their current status and the effect that they have had and will have on the plaintiff's enjoyment of life puts the plaintiff's case at 15 per cent of a most extreme case. This percentage of the maximum amount that may be awarded of $232,000 equates to $34,800. The provisions of s 3C(5) of the Act requires an assessment in this amount to be reduced by $11,500.
Accordingly I award the plaintiff general damages in the sum of $23,300.

Future special damages

Mr Geddes gave evidence as to the prospect of future medical and surgical intervention. The treatment required will depend upon the severity of the arthritis at the time. Initially treatment may be non-operative including physiotherapy, use of a knee brace and an exercise programme. It may then go on to require surgical intervention including arthroscopic assessment of the knee, possible arthroscopic debridement and if the arthritis was severe enough ultimately a total knee replacement. The range of cost for future surgery by his estimate was $3,000 to $15,000. Post‑operatively physiotherapy would also be required. The plaintiff's submissions indicate that a nominal amount to reflect the likelihood for future medical intervention in the order of $5,000 would be appropriate and I will award that sum.

Conclusion

Accordingly the plaintiff is entitled to the following award:
Loss of future earning capacity                 $489,125.00
General damages  $ 23,300.00
Future medical treatment   $    5,000.00
TOTAL  $517,425.00