Sadi Mustafa Karabay v Malcolm Carr t/as Forshaws Neill Solicitors
[2012] NSWSC 1386
•07 November 2012
Supreme Court
New South Wales
Medium Neutral Citation: Sadi Mustafa Karabay v Malcolm Carr t/as Forshaws Neill Solicitors & Anor [2012] NSWSC 1386 Hearing dates: 22 August 2011 - 26 August 2011 Decision date: 07 November 2012 Jurisdiction: Common Law Before: Hidden J Decision: Judgment for plaintiff against first defendant
Catchwords: PROFESSIONAL NEGLIGENCE - proceedings against two solicitors - dismissal of District Court proceedings for personal injury - one solicitor found liable - assessment of damages Legislation Cited: Civil Liability Act 2002
District Court Rules 1973
Uniform Civil Procedure Rules 2005Cases Cited: Firth v Sutton [2010] NSWCA 90
Johnson v Perez (1988) 166 CLR 351
Nikolaou v Papasavas (1988-89) 166 CLR 394
Torrac Nominees Pty Ltd v Karabay; UWS Macarthur Sports and Recreation Association Inc v Karabay [2007] NSWCA 96Category: Principal judgment Parties: Sadi Mustafa Karabay (plaintiff)
Malcolm Carr (t/as Forshaws Neill Solicitors) (1st defendant)
Ron Egon Kramer (t/as Ron Kramer Associates) (2nd defendant)Representation: Counsel:
L Stephens (plaintiff)
P Braham SC with M Smith(1st & 2nd defendants)
Solicitors:
Paul Clough Solicitor (plaintiff)
Bruce Alexander Yeldham - Yeldham Price O'Brien Lusk (1st & 2nd defendants)
File Number(s): 2008/289658
Judgment
These are proceedings brought by the plaintiff, Sadi Mustafa Karabay, against two solicitors for professional negligence. The defendants are Malcolm Carr (trading as Forshaws Neill) and Ron Egon Kramer (trading as Ron Kramer Associates). The proceedings arise out of their conduct at different times of an action by him for damages for personal injury.
In July 1999, Mr Karabay went to the Northern Territory on what was termed a Central Australia Camping Safari organised by UWS Macarthur Sports and Recreation Association Incorporated. The excursion took him to the MacDonnell Ranges Tourist Park at Alice Springs, which was owned and occupied by Torrac Nominees Pty Ltd, trading as MacDonnell Ranges Tourist Park. On 21 July 1999, he was injured while playing basketball at the tourist park. The circumstances of the injury and its sequelae will be examined later in this judgment.
On 26 June 2002, he commenced proceedings in the District Court against the Sports and Recreation Association, as the organiser of the tour, and Torrac Nominees, as the occupier of the tourist park, alleging that his injury was the result of the negligence of both of them. At that time his solicitor was the first defendant, Mr Carr. In September 2002, directions were made for the preparation of the matter. In January 2003, those directions not having been complied with, Mr Karabay was ordered to show cause why the matter should not be dismissed. On 25 March 2003, cause not having been shown, Acting Judge Boyd-Boland dismissed the proceedings pursuant to the provision then applicable, Pt 18, r 3 of the District Court Rules 1973. (The order his Honour made was that the proceedings were struck out but, in fact, an order under that rule was a dismissal.)
In April 2005, Mr Carr ceased to act in the matter and it passed into the hands of the second defendant, Mr Kramer. On 21 October 2005, a motion to set aside Acting Judge Boyd-Boland's order was filed in the District Court. In the meantime, on 15 August 2005, the Uniform Civil Procedure Act 2005 came into force, as did the Uniform Civil Procedure Rules, which substantially repealed the District Court Rules. On 31 March 2006, Judge Duck granted the motion, so as to reinstate the proceedings. However, an appeal against that order was successful, and on 2 May 2007 it was set aside: Torrac Nominees Pty Ltd v Karabay; UWS Macarthur Sports and Recreation Association Inc v Karabay [2007] NSWCA 96.
It is unnecessary to consider the court's decision in detail. It is sufficient to say that the District Court motion of 21 October 2005 had been determined by the application of Pt 1 r7A of the District Court Rules. That rule defined the expression "preliminary dismissal order" and, among other things, provided for an application to set such an order aside. Acting Judge Boyd-Boland's order under Pt 18 r3 was a preliminary dismissal order. Judge Duck noted that, at the time the motion before him was filed in October 2005, Pt 1 r7A was no longer in force because of the introduction of the Uniform Civil Procedure Act and Rules. However, his Honour relied upon a transitional provision in a schedule to the Act to apply the rule.
It was in this respect that the Court of Appeal found him to be in error. It was held that, because the motion to set aside Acting Judge Boyd-Boland's order had been filed after the Uniform Civil Procedure legislation came into effect, the transitional provision did not preserve Pt 1 r7A for the purpose of the case. It was common ground that there was no equivalent rule in the Uniform Civil Procedure Rules, and that there was no other source of power to set aside the preliminary dismissal order in the Uniform Civil Procedure Act or the Rules. In the result, then, the District Court proceedings had been brought to an end and could not be revived. By then, any fresh proceedings in the District Court would have been statute barred, in this case under the law of the Northern Territory which, it is common ground, was the substantive law applicable to Mr Karabay's claim.
Put shortly, in the present proceedings the case against Mr Carr, as it was crystallised at the hearing, focused upon his failure to take timely steps to make an application to set aside Acting Judge Boyd-Boland's order dismissing the District Court proceedings. Certain admissions were made by Mr Carr's solicitors in a letter to Mr Karabay's solicitors of 2 March 2011. Because of those admissions, it became unnecessary to consider the circumstances in which the proceedings were dismissed by Acting Judge Boyd-Boland, or why an application to set that order aside was not made promptly. The admissions were that Mr Carr failed promptly and accurately to tell Mr Karabay what had transpired at the show cause hearing on 25 March 2003, and had failed to advise Mr Karabay to take urgent steps to have the matter restored to the list. In the light of these admissions, it was accepted that Mr Carr's liability was established and the matter proceeded against him as one for the assessment of damages.
Again put shortly, the case against Mr Kramer was that he also had failed to take timely steps to pursue an application to set aside Acting Judge Boyd-Boland's order. The result of that failure was that the District Court proceedings could not be revived, although it is not pleaded against Mr Kramer that he should have been aware that the introduction of the Uniform Civil Procedure legislation would have the effect which the Court of Appeal found it did. Mr Kramer's liability is in issue.
A statement from Mr Kramer concerning his conduct of the matter is in evidence, together with a volume of accompanying documentary material, and he gave oral evidence. Mr Karabay gave him instructions to take over the carriage of the matter on 12 April 2005. On 19 April he wrote to Mr Carr's firm, Forshaws Neill, seeking their file and undertaking to meet their outstanding costs and disbursements from the amount recovered in the claim. Forshaws Neill responded on 28 April, saying that they were not prepared to make the file available until their bill of costs had been assessed. Further correspondence ensued, and Mr Carr received the file on or about 8 June 2005.
However, Forshaws Neill's letter of 28 April noted that they were "aware that a notice of motion seeking orders to restore the matter to the list has to be filed and there is urgency about the whole matter." Enclosed with the letter was such a notice of motion, together with supporting affidavits and a cheque for the filing fee. It was explained in the letter that the motion had not been filed because counsel briefed at that time had advised that it should not be filed until all the evidence to be relied upon at the hearing had been served. The view was taken that at the time the motion came to be dealt with it should be clear that Mr Karabay was in a position to proceed to hearing. In particular, evidence needed to be gathered in support of a substantial claim for future economic loss that Mr Karabay wished to pursue but which the author of the letter described as "challenging."
Mr Kramer was of the same view. On 6 May 2005 he advised Mr Karabay by letter that, while a motion to "restore the matter to the list" should be filed as soon as possible, that should not be done "until we are able to tell the court at the hearing of that motion that the matter is fully prepared and ready to proceed to hearing on your part." It seems that he was later advised to the contrary by counsel whom he engaged. On 21 June he briefed counsel in the matter generally and, in particular, to prepare a motion to set aside the order of Acting Judge Boyd-Boland and any affidavit in support. In the observations in that brief he noted that counsel had "recommended that we apply to restore the matter to the list without delay rather than wait until the matter is ready to proceed to hearing." He went on to observe that the case was not ready to proceed and to note a number of matters about which further evidence was required.
Like his predecessor, Mr Kramer was troubled about Mr Karabay's claim for future economic loss. It will be necessary to examine that claim later but, in brief, it was that Mr Karabay's injury had put paid to his ambition to become an airline pilot. Prior to the accident he had held a commercial pilot's licence, but had not secured a position with an airline. It was his case that, for reasons which I shall explain later, his injury prevented him from flying certain multi-engine aircraft. Evidence was required about his prospects of having realised his ambition but for that injury.
To this end, in June 2005 Mr Kramer sought the opinion of an expert with appropriate qualifications and experience in civil aviation, Mr John Chesterfield. He arranged a preliminary conference between Mr Chesterfield and Mr Karabay on 16 June, part of the purpose of which was to ascertain from Mr Chesterfield what information he would need to assess and report upon the proposed claim for diminution in Mr Karabay's earning capacity. Following that conference Mr Chesterfield told Mr Kramer by phone that he thought Mr Karabay would have had good prospects of securing a position as an airline pilot in the future. He recommended that Mr Karabay renew his aviation licence and obtain the necessary medical certificate, saying that this would be necessary for him to make his assessment. Mr Kramer passed this on to Mr Karabay at a conference with him on 24 June 2005, and on the same occasion obtained detailed instructions about the issue so as to prepare a proof of evidence.
There was a conference with counsel on 25 July 2005. Around that time, in late July, Mr Karabay told Mr Kramer that he had pursued the renewal of his pilot's licence. He had attended a medical examination with a doctor accredited by the Civil Aviation Safety Authority (CASA), and the doctor was to report to that organisation so that the outcome of his renewal application could be determined. That was Dr Graeme Maclarn, who later prepared several reports for the purpose of these proceedings.
Thereafter, in August, CASA wrote to Mr Karabay to obtain his authority so that reports could be obtained from a doctor who had treated him for his injury and another doctor who had provided a medico-legal assessment in respect of it. That process was delayed because those doctors required pre-payment of the report fee by Mr Karabay. He sent copies of reports by those doctors which were in his possession to CASA. Mr Kramer did not become aware of this correspondence until the end of September. On 6 October he sent copies of the doctors' reports to CASA, expressing the hope that they provided the information that that organisation needed and seeking some indication of when the outcome of the assessment of Mr Karabay's medical fitness might be determined.
In the meantime Mr Kramer was waiting on counsel to finalise the motion to set aside Acting Judge Boyd-Boland's order and affidavits in support. He briefed that barrister in a number of matters, and in his statement he said that he thought he may have enquired about the progress of this matter in telephone conversations about other matters. On 8 September 2005 he wrote to counsel asking him to settle the documents as soon as possible. He received them on or about 21 September.
As I have said, the motion and supporting affidavits were filed on 21 October 2005. Mr Kramer took further steps to prepare the matter for hearing after that date, including obtaining reports from Dr Maclarn and from Mr Chesterfield. I shall refer to those reports later.
For the purpose of the present proceedings, the conduct of the matter by Mr Carr and Mr Kramer was assessed by Mr David Trainor, an experienced solicitor and an accredited specialist in personal injury litigation. Mr Trainor provided a report, which is in evidence. He did not give oral evidence. Set out in the report are the assumed facts upon which it was based. Most of the report is directed to the conduct of Mr Carr. In respect of Mr Kramer, the assumed facts simply record that he was instructed in April 2005, that he appeared to have taken a number of steps "to resurrect the matter", including seeking counsel's opinion, but that no application "to extend the time and bring the matter back before the court was made before 15 August 2005." There is also recorded the fact of the motion having been filed in October 2005, together with its disposition by Judge Duck and by the Court of Appeal.
Mr Trainor addressed questions concerning the approach of a prudent solicitor to the show cause hearing of 25 March 2003, which were clearly directed to the conduct of Mr Carr. In answer to the question what a prudent solicitor would have done "after the proceedings were struck out", Mr Trainor dealt with the responsibility of both the defendants without distinguishing between them. Among other things, he wrote that it was "incumbent on those acting for the Plaintiff to move quickly in relation to the answering of any outstanding particulars and taking whatever other steps were necessary in order to get the Plaintiff's case back on the rails." He noted that at the time the application to restore the matter was filed, it was "over 2 ½ years from the date of the strike out order." He observed that, although Mr Karabay had been overseas for part of the intervening period, he had been in Australia for "an extensive period of time", and that there was "every opportunity to prepare the matter and file the re-listing application well before October 2005."
Mr Trainor expressed his conclusion as follows:
"If I had been in the shoes of the Defendants I believe that I would have been aware of the need to move as quickly as possible, particularly in circumstances where in effect the Plaintiff was seeking an indulgence from the Court in order to permit the restoration of the matter to the list.
I believe that reasonable peer practice would require that steps should have been taken to file the motion for the restoration of the matter to the list well before October 2005.
...
In my opinion, the Defendants' conduct in relation to the preparation of the Plaintiff's case, particularly in relation to the Show Cause Hearing and the failure to promptly apply to have the matter restored, fell short of what I believe would be widely accepted as constituting competent professional practice."
Liability of Mr Kramer
As I have said, it was not put against Mr Kramer that he should have been aware that the introduction of the Uniform Civil Procedure legislation would mean the end of the District Court proceedings. That was the result of the new legislation, introduced on 15 August 2005. It was on that date that the irrevocable damage was done. While it is true that Mr Kramer did not file an application to set aside the dismissal of the District Court proceedings until some two months later, his liability stands to be judged upon his conduct up to 15 August.
Mr Karabay was represented by Mr Llewellyn Stephens of the Queensland Bar. In written submissions filed after the hearing, he argued that Mr Kramer should have filed the notice of motion before the August date. He noted that Mr Kramer had been advised by counsel to do so promptly, and not to wait until the matter was ready for hearing. He also noted that at the end of April Mr Carr's firm had forwarded him a draft notice of motion and supporting affidavits, which could have been filed at an earlier stage. He was critical of the steps which Mr Kramer had taken towards preparation of the case prior to mid-August. He relied generally on Mr Trainor's opinion that the motion for restoration of the matter should have been filed well before October 2005, and that the conduct of both defendants fell short of accepted competent professional practice.
These arguments, in my view, are met convincingly by the submissions, also in writing, of counsel for the defendants, Mr Peter Braham SC and Mr Martin Smith. Mr Braham developed these submissions orally. In large part, the criticisms of Mr Kramer urged by Mr Stephens were not put to him in cross-examination. That includes the timeliness of Mr Kramer's preparation of the matter, which was not part of the case against him in any event. True it is that counsel advised him to file a motion before the matter was prepared for hearing. However, it was open to Mr Kramer to make his own judgment about that matter, and this was another question about which he was not cross-examined. Given the length of time which had already passed since the proceedings had been dismissed, I am not persuaded that that judgment was unreasonable. I should add that it was also not unreasonable for Mr Kramer to brief counsel to settle a motion and accompanying affidavits, rather than relying upon those forwarded to him by Mr Carr's firm.
As I have said, Mr Trainor's report made no distinction between the two defendants in his generic opinion that a motion to restore the matter should have been filed well before October 2005. The assumptions he was invited to make for the purpose of his report did not address the evidence concerning Mr Kramer's conduct between his receiving instructions in the matter in April 2005 and 15 August of that year. It may be that Mr Kramer could have advanced matters faster than he did. However, accepting that it was legitimate for him to prepare the case for hearing before filing the motion, it does appear that there was a significant amount of work to be done, particularly on the issue of future economic loss. On the whole, Mr Kramer's conduct appears to me to have been acceptable. I am certainly not persuaded that negligence on his part has been established.
Accordingly, the issue remaining to be decided is the quantum of damages against Mr Carr.
The law
In the written submissions of counsel for the defendants is a useful summary of the law governing the assessment of damages in a case such as this. In Johnson v Perez (1988) 166 CLR 351, Wilson, Toohey and Gaudron JJ said (at 366-7):
"When an action has been dismissed for want of prosecution due to the negligent conduct of a solicitor, the client has lost the opportunity to bring that claim to trial and recover damages in respect thereof. As already indicated, in some cases it may be appropriate to describe the loss as the loss of a chance for there may be various contingencies bearing on the likelihood that the plaintiff would have recovered judgment against the defendant and further that any such judgment would have been met. When those contingencies have been foreclosed by agreement or by the decision of the primary judge in the trial of the claim against the solicitor, the way is open for the judge to proceed to the assessment of damages for the loss flowing to the plaintiff by reason of the negligence of the solicitor. The first component in that assessment is the amount of damages likely to have been awarded by the court before whom the action against the employer (as in this case) would have come. That loss crystallizes when the action is dismissed for want of prosecution and is then capable of assessment."
Their Honours added that, while damages for the loss of an action are to be assessed at the date of its dismissal for want of prosecution, evidence of events since that dismissal may be relevant. Pertinent to the present case are their observation that such evidence "may assist the court in placing itself in the position of the trial judge at the notional trial when a judgment was to be made of the likely losses that will be suffered" by the plaintiff in the future, for which the defendant in the dismissed action was to be held responsible (at 368). Their Honours continued (at 369):
"Secondly, in a case where witnesses have died or there is a paucity of evidence (perhaps because of the negligence of the solicitor) touching the condition of a plaintiff at the time of a notional trial, the evidence relating to subsequent events (including, for example, later medical reports on a plaintiff) may assist a court in piecing together the case that could, but for the negligence of the solicitor, have been made out in the trial of the earlier action ... . In each of these two respects, the evidence is received for the purpose of assessing the damages that the plaintiff was likely to have been awarded had the action gone to trial."
Brennan J said (at 372-3):
"The plaintiff's loss being whatever monetary compensation he would have received at the time he would have received it but for his solicitor's negligence, the court must find whether or not he has lost something of value. If he would have failed in the original action, he has lost nothing; if he would have succeeded, he has lost what he would have received at the time he would have received it; if the action would have been compromised, he has lost what he would have been paid in settlement at the time when he would have been paid. Or, if it is doubtful whether or not he would have succeeded in the action and it is not probable that the action would have been compromised, the court assessing the damages must determine as best it can on the balance of probabilities whether the plaintiff would have succeeded (and, if so, to what extent) or failed. In making that determination, the court may need to estimate the extent to which a successful plaintiff's damages would have been reduced because of contributory negligence.
A plaintiff who loses a valuable cause of action loses not merely the nominal amount for which a verdict would have been given or for which the original action would have been compromised; he also loses the benefit of having received that amount in due time. Though the plaintiff ultimately receives that amount, he has suffered a delay in receiving it."
In Nikolaou v Papasavas (1988-89) 166 CLR 394, a decision of the Full Court of the Supreme Court of Victoria allowing an appeal in a solicitors' negligence matter and ordering a new trial limited to the issue of damages was upheld. In that case the solicitors had allowed a claim for damages to become statute barred. Mason CJ said (at 400):
"This matter must, as the Full Court ordered, be remitted to the County Court for a proper assessment of damages. The court must ascertain the value of what the appellant lost as a result of the solicitors' negligence. It will need to determine what the appellant would have recovered but for that negligence and will need to discount that amount by the chance that he would not have been successful in that claim ... ."
Wilson, Dawson, Toohey and Gaudron JJ, speaking of the trial judge in the case, said (at 404):
" ... his Honour should first have focused on Mr Nikolaou's situation when his claim for damages for personal injuries became statute barred. He should have assessed damages by reference to the loss at that date of the right to claim damages. That loss would ordinarily be quantified by the trial judge taking a broad brush approach to the several matters that in a particular case may require to be resolved - the likely date when in the absence of the negligence of the solicitor the action would have come to trial, the evidence that would or should have been available to the plaintiff at that time, the relevant principles of law then governing the assessment of damages, the question of contributory negligence, and (an issue which would not be a problem in the present case) the prospects of any judgment given in favour of the plaintiff being satisfied - in order to arrive at a figure representing the loss suffered by the plaintiff when his action against the defendant was dismissed.
The approach to the assessment of damages in cases of this kind was recently revisited by the Court of Appeal in Firth v Sutton [2010] NSWCA 90. The effect of the judgment of Allsop P, with whom Macfarlan and Young JJA agreed, at [159] ff is succinctly summarised in the submissions of Mr Braham and Mr Smith as follows:
(a)arrive at a notional award;
(b)apply a discount for the contingency of obtaining a judgment;
(c)deduct the cost of obtaining the notional award (non-recoverable costs);
(d)deduct for receipts such as social security;
(e)add interest (under the Civil Liability Act 2002).
It was the opinion of Mr Trainor that in the present case the notional trial date for the District Court proceedings, had they not been struck out or had they been promptly reinstated, would have been November 2004. That is the notional trial date upon which the parties have agreed.
As I have said, the substantive law governing Mr Karabay's personal injury claim was the law of the Northern Territory. The relevant law is summarised in a report of Mr David Alderman, a barrister in the Territory, which is in evidence. The law to be applied was that in force at the time of Mr Karabay's injury and, put shortly, the issues of liability and damages would have been governed by the common law. Statute law provided for apportionment of liability in the event of contributory negligence.
The injury
Mr Karabay suffered his injury while playing basketball in the late afternoon of 21 July 1999. The court was half the usual size of a basketball court. It was a concrete slab, raised a little above the surrounding earth. There were baseline and sideline markings around the edge of the slab but there was no runoff area, so that there was a direct drop from the edge to the earth below. The surrounding earth was uneven, so that the distance from the playing surface to the earth was variable.
Mr Karabay's account of the incident and of its sequelae was provided in an affidavit, and he gave oral evidence before me. Although the game took place in the late afternoon, the area was bathed in sunlight. He did not pay particular attention to the layout of the court and, in particular, did not notice that there was no runoff area or that there was a roughly 10cm drop from the edge of the court to the ground. About 5 or 10 minutes into the game he and an opposing player were pursuing the ball, which was heading towards the edge of the court. He managed to get to the ball, he bounced it and jumped, apparently in an effort to pass it to another player on his side. He landed on the edge of the court on his right foot and immediately experienced severe pain. He fell onto the earth below.
In evidence is a statement of Ms Vanessa Less, who did not give oral evidence. She was a member of the tour group and one of the people participating in the basketball game. It may be that she was the opposing player referred to by Mr Karabay, but that is not clear. She stated that, as she was "defending", Mr Karabay was bouncing the ball, while gradually moving backwards to get a better position. He went too far back and, as he was "about to make a play", he fell over the edge of the court. He yelled out, and it was apparent to her that he was in severe pain. She also stated that on the previous day she fell "near the edge of the court." Fortunately, she fell in such a way as not to sustain any serious injury.
Also in evidence is the report of a consulting civil engineer, Mr Warwick Keirnan. It is unnecessary to examine that report in any detail. It is sufficient to say that it established that the lack of a runoff area around the court failed to meet the requirements of the International Basketball Federation and Basketball Australia. The boundary lines should have been located to provide such a runoff area and, in addition, there should have been a warning sign "to advise players of a likely drop-off at the edge of the concrete slab." He expressed the view that a playing surface "that does not provide a runoff area outside the marked playing surface is a potential hazard to the players." He added that the "variable height step-down from the edge of the concrete playing surface was a fundamental breach of general safety requirements for playing surfaces."
Mr Karabay had ruptured his right Achilles tendon. He was taken to Alice Springs Hospital, where a general practitioner put his leg in a half plaster cast and gave him analgesic tablets. He was provided with crutches. He made arrangements to return by air to Sydney and on the following day, 22 July 1999, he was admitted to Liverpool Hospital. There he underwent surgery for repair of his Achilles tendon, the orthopaedic specialist in charge of his care being Dr John Ireland.
Mr Karabay was born on 2 January 1970, and was 29 years old at the time of the accident. He had previously enjoyed good health. He had played soccer professionally between 1985 and 1995. He gained his Higher School Certificate. From the age of 10 he had been fascinated by flying and, as I have said, his goal was to gain a position as a pilot with a passenger airline. In 1988 he undertook an aviation course at the Sydney Institute of TAFE, and undertook flight training in 1991. In 1993 he obtained a Commercial Pilot's Licence, which enabled him to work as a pilot for reward. In 1998 he began a Bachelor of Aviation Degree at the University of Western Sydney, and it was as a student at that University that he took part in the excursion during which he was injured. It will be necessary later to examine the development of his career as a pilot, both before and after the accident.
It is necessary to examine the effects of Mr Karabay's injury as they were, and as they could be predicted, at the time of the notional trial in November 2004. In his affidavit he deposed that he was in plaster and on crutches for a period after his discharge from Liverpool Hospital. He underwent physiotherapy and was prescribed painkilling medication. While on crutches, he could not drive and needed assistance with daily tasks, including showering and dressing. Notwithstanding the medication, he experienced continuing pain in his right leg. While he was living with his mother, he was in a relationship with a woman to whom he was engaged to be married. However, the pain and the medication affected him psychologically, changing him from "a calm and cool-headed person to being a person always on the edge, always angry, agitated and throwing things around in frustration." The relationship came to an end in November 2000, when his fiancée broke off the engagement.
There was wasting of his right calf and weakness in the leg. He had hoped that there would be recovery, but from the end of 2002 his condition appeared to be worsening. Sporting activity remained out of the question. He could walk or run for only about 200 metres before he experienced pain. On 24 November 2004, he was involved in a car accident. A car in front of him stopped suddenly and he had to brake quickly. He was unable to apply sufficient pressure to the brake with his right leg to avoid a rear end collision.
I received a number of medical reports in evidence. None of the doctors was required to give oral evidence. There were four reports of Mr Karabay's treating doctor, Dr Ireland, and three reports of Dr Peter Giblin, another orthopaedic surgeon, engaged by Mr Carr. Over objection, I admitted a report of Dr Ireland of 10 December 2004 and a report of Dr Giblin of 7 December 2004. Even though they were prepared after the notional trial date, they were so close to it that I considered that they reflected the position as at that date. A number of reports of Dr Graeme Maclarn, to whom I have referred earlier, were also received. The effect of them was encapsulated in a comprehensive report of 19 May 2009, expressly directed to the position as at November 2004. Also in evidence is a report of another surgeon, Dr Richard Deveridge, engaged by Mr Kramer, but it may have been admitted in error. It was prepared on 27 September 2005, following an examination of Mr Karabay on the previous day, well after the notional trial date. It was not referred to by counsel in final submissions, and I have had no regard to it.
Dr Ireland's first report, of 11 January 2000, was optimistic about Mr Karabay's prognosis. He was of the opinion that he could return over the next few months "to his primary occupation as a pilot...". However, after further examinations in December 2001 and early 2002, the doctor reported on 4 April 2002 that he complained of being still very weak and of aching after the use of his leg. Persistent wasting of his calf with some weakness was noted, although he was not then having any problems with walking or driving. On the other hand, he spoke of an episode where he had difficulty with the rudder pedals in an aircraft. The doctor reported that there would be "further improvement over time", but that he "was likely to have some ongoing degree of discomfort and restriction from his leg." The prognosis was described as "guarded." In a report of 18 June 2002, Dr Ireland expressed the view that he remained fit to fly aircraft but that he was "unlikely to return to his pre-injury condition."
In his first report, of 8 May 2000, Dr Giblin saw Mr Karabay's "general prognosis" as "reasonable," but anticipated that he would "always have a degree of diminution of musculo-skeletal activity involving his right leg...". He also noted wasting of the right calf, and assessed the "permanent loss of efficient use of his right leg as a whole" at 15%. In a report of 18 October 2004, the doctor maintained "the general thrust" of the previous report, although he expanded upon it. He noted a history of continuing pain in the leg and, in particular, "cramps in his right calf when he is pushing on the rudders when he is flying a plane." Generally, the doctor found that his condition had remained stable but he had this to say in that report:
"Given the prominent loss of muscle in his right calf, and given the attendant symptoms, especially the cramps when the leg is used, it is likely that these will persist indefinitely, and as he gets older, and his muscle strength starts to fade, the cramps and associated disability will become an increasing symptom interfering with ability to use his right leg in a controlled fashion for prolonged periods. This has the potential to limit his ability to fly in the future, by virtue of progressive muscle weakness in his right calf."
It was Mr Karabay's car accident on 24 November 2004 which led to the supplementary reports of Dr Ireland and Dr Giblin in December 2004. Upon examination of him on 10 December, Dr Ireland noted a history of "ongoing weakness in the foot and at times an inability to exert pressure," exemplified by his inability to brake sufficiently at the time of the accident. The doctor noted a marked wasting of the calf, concluded that Mr Karabay suffered "from ongoing pain and weakness as a result of a ruptured right tendo-Achilles", and reported that his prognosis "remains poor." Dr Giblin, after an examination of 1 December 2004, noted a "loss of normal use of his leg, associated with cramps", demonstrated by the recent car accident. He considered that there was "an area of concern in terms of the reliability of his right leg for use, such as pushing on pedals or rudders."
As I have said, although these reports were written in December 2004 following consultations in that same month, I admitted them because it is likely that they described the position as it would have been at the time of the notional trial in November 2004. The question remains whether those reports could have been available in the course of that trial, given that they were the result of a car accident late in November. However, there is force in the submission of Mr Stephens that the accident, having occurred during the course of the notional trial, may have led Mr Karabay's legal advisers to seek supplementary reports and further evidence might have been admitted even at a late stage of the trial.
Dr Maclarn's reports are lengthy, but their effect can be stated relatively briefly. As one would expect, fitness to fly commercially is subject to medical standards to be found in Australian regulations, together with standards imposed by a prospective employer and its insurer. Prospective employers, of course, include passenger airlines. In the event of engine failure in an aircraft, the pilot has to be able to maintain directional control. In the case of the single-engine plane this does not require strength in the leg, ankle or foot. However, in the case of failure of one engine in a multi-engine aircraft, directional control is maintained through operation of the rudder pedals, for which a certain amount of strength in the leg is required. This can be assessed in the course of an aircrew medical examination.
Mr Karabay presented for such an examination in June 2000 and again in September 2003, and on both occasions was found fit to fly aircraft of a certain classification, that is, having a maximum take-off weight of 5700 kilograms. Dr Maclarn had regard to relevant medical reports over the period from 1999 to 2004, noting that at both those aircrew medical examinations Mr Karabay had failed to disclose his surgery, his treatment and his course of medication.
The doctor concluded that, in the light of Mr Karabay's injury and its sequelae, he would have failed to meet the regulatory standard for flying multi-engine aircraft within that classification in the period 1999 to 2004. He noted that this is a matter to which an airline would have regard as part of its medical recruiting process. An airline would examine Mr Karabay's injury and its long-term prognosis, based on the available medical reports, the effect of significant medication, and the fact that he did not disclose his condition to the regulator in earlier examinations. It may be that, as of November 2004, he might have been issued with an appropriate medical certificate for light twin-engine aircraft within the classification for which he was authorised. However, he could not have secured a position with an airline.
In his comprehensive report, Dr Maclarn noted that a well trained aviation medical examiner, aware of the safety implications of Mr Karabay's condition, would have conducted an assessment, based on the use of a simulator, of his ability to control an aircraft which was having a left engine failure. He was of the opinion that Mr Karabay would have failed that medical examination, and would have been "unemployable in the airline environment." As he put it in the conclusion of that report:
"At the notional time of trial, [Mr Karabay] would have been fit to fly single and multi-engine airplanes of maximum take-off weight not exceeding 5700 kilograms. He would not have been fit for airline employment."
Whether that position would have endured, however, is another matter. Speaking generally of the regulatory fitness requirements, Dr Maclarn reported that it was feasible that Mr Karabay might "suffer periods in which he fails to meet the standard and is grounded to periods where he may return to full fitness to fly, depending on the nature of flying undertaken within the period of validity of the medical certificate." He added that, accordingly, it was "unsafe to apply the rationale for periodical certification" in assessing whether he would be fit for a 20 to 30 year flying career.
I should record that at a late stage of the trial the physiotherapist who had been treating Mr Karabay, Mr Adrian Vidaic, was called to give evidence. His evidence was confined to some tests of the strength of Mr Karabay's injured leg conducted by one of his employees. A Post-it note on which the employee had made some notes of the tests was admitted provisionally. In the event, I have not had regard to that evidence. The employee who conducted the tests was not called, and it is unclear when in relation to the notional trial date they were conducted. In any event, the evidence is relevant only to Mr Karabay's case about his reduced ability to control the rudder of an aircraft, which I accept.
Employment
From the early 1990s, while he underwent flight training and pursued further qualifications as a pilot, Mr Karabay's primary source of income was from contract IT work, in which he had become skilled. Upon obtaining his commercial pilot's license in 1993, he applied for work in that capacity with Qantas, Ansett and various regional Australian airlines. He could not secure a position because the flying hours he had obtained were well below the minimum required. In that same year, he travelled to Turkey, the country of origin of his parents, where he obtained a position as a pilot with the Turkish Aeronautical Association for 3 months. That organisation then offered him an 8 year contract, but he would have had to enter into a bond for that purpose and he did not wish to stay in the country for that long. He declined the position, because it was his intention to become a pilot with a major passenger airline.
Upon returning to Australia in 1994, he continued to apply for positions with commercial airlines, without success. He resumed IT work, which was booming and which paid well, but he had no interest in that work as a career. He continued to apply for a position as an airline pilot in Australia and overseas. In December 1997, he was invited by an airline owned in partnership by Turkish Airlines and Lufthansa to go to Germany for testing for a position. A number of other prospective pilots were involved in the selection process and, in the event, he was not given an interview.
As I have said, he commenced study for the aviation degree in 1998. He had been pursuing IT work upon his return from Germany, but decided that he should not seek a further contract in that area until he finished the degree. By then he had chalked up about 500 hours of flying. This was how matters stood at the time of the accident in July 1999.
After the accident, in late September 1999, he resumed contract IT work for a company for whom he had previous performed work of that kind. That work continued until mid-January 2000. It was difficult for him initially, as he was still on crutches and needed to be driven around. His concentration was also affected by the medication he was taking. Late in 1999, at the company's suggestion, he set up his own IT business and performed work for them at an hourly rate. He was not able to work for 8 hours a day during this period because of his condition, his need to undergo physiotherapy, and also the demands of his University studies.
When that contract ended, he remained unable to drive himself until about February or March 2000. His concentration was still affected by the medication. At the end of March 2000 Dr Ireland told him that he was fit to return to work, but he concentrated on his studies in preparation for his final exams in the middle of that year. He graduated in the aviation degree in October 2000. At about that time he accepted a short-term IT contract with another company, and he entered into yet another contract in that field between September 2001 and February 2002.
In the meantime, he sought to further his flying career. After completing his exams in June 2000, he looked for work with charter companies in northern Australia, without success. In March 2001, he secured a position as a pilot with a charter airline in Darwin. He worked for that company for about 5 months on what he described in his affidavit as "slave wages", but he resigned in August 2001 and returned to Sydney. He had plans to go to the United States to find work as a pilot but, as a result of the tragic events of 11 September 2001, he believed that there would be little prospect of obtaining such a position at that time.
He flew regularly on weekends, organising scenic flights for customers who would contribute to the cost of chartering the aircraft. He continued to look for work as a pilot until September 2002. He then decided to travel back to Turkey to seek opportunities in that country and generally in Europe. He remained in Turkey until 2004, without obtaining a position with a passenger or cargo airline. Upon his return to this country, he remained unsuccessful in obtaining work as a pilot.
In his affidavit he deposed that, while flying single-engine aircraft, he had been experiencing difficulty with his right leg, suffering cramps and pain at times. On the few occasions that he flew multi-engine aircraft, he said, he experienced severe pain after an hour or so. He acknowledged, as noted by Dr Maclarn, that he had not told CASA of his physical impairment when he renewed his medical certificate. He added that he did not "immediately declare to CASA" that he had had surgery and follow-up medical treatment, because he had been told by a number of doctors that he would recover completely.
As I have said, prior to the accident Mr Karabay had completed about 500 hours of flying. His pilot's logbook is in evidence. That book is a flight record in which is recorded, in columns, the date of each flight, its route, whether Mr Karabay was in control of the aircraft or was under instruction, and the number of hours flown on each occasion, divided into daylight and nighttime hours. Also disclosed is whether the flight was in a single-engine or a multi-engine aircraft. At the bottom of each page the hours flown under these various categories are totalled, and a grand total is disclosed.
An important part of Mr Karabay's cross-examination was directed to his logbook. It discloses that over the 10 years since he undertook flying training in 1988 until late September 1998, he had flown for, in round figures, 520 hours. For the greater proportion of that time he had been in command of the aircraft, and for a little over 100 of those hours he had been in command of a multi-engine aircraft. The logbook records the date of his next flight as 3 June 2000, and a note on the relevant page explains that he had not flown between the date of his injury, 21 July 1999 and that date. Some entries in 1993 and 1994 relate to his flying in Turkey.
From June 2000 to the end of September 2003 the total flying time had increased, again in round figures, to 1460 hours, about half of them in multi-engine aircraft, and all of them shown as being while he was in command of the aircraft. However, included in that total is the figure of "268.1" hours in command of multi-engine aircraft. This is a curious entry, described as a "correction" and said to be attributable to "ad hoc flying overseas" between 1993 and 2004.
Mr Karabay claimed that this arose from occasions, while he was in Turkey in 1993 and 1994 and again between 2002 and 2004, when he was in the cockpit of aircraft being flown by friends, assisting them. On these occasions, he said, he was simply building up flying time and was not being paid. The assistance constituted such things as making radio calls, changing the radio frequencies and calculating fuel levels. He added that, because on these occasions both he and his friend held commercial pilot's licenses, it was legitimate to describe each of them as being in command of the aircraft. It was his evidence initially that he did not record the hours of these flights at the time, but he later said that they "might have been scribbled down somewhere" and left in Turkey. The "correction" entry, he said, was an estimate of the time he had spent in the air on those occasions.
This entry in the logbook, and Mr Karabay's explanation for it, strain credulity. The figure of 268.1 hours, which I understand to mean 268 hours and 10 minutes, has a measure of precision about it which is hardly consistent with an estimate of flying hours said to have been chalked up over two separate periods of years in the past. The matter was raised in cross-examination of Mr Chesterfield, the aviation expert to whom I have referred earlier who was relied upon in Mr Karabay's case. Mr Chesterfield described the requirements for filling out a logbook as "very precise." It was to represent "a true record of the pilot's aeronautical experience in various capacities as either pilot in command or co-pilot; and each and every flight has to be recorded... ." He contradicted Mr Karabay's evidence that, in the circumstances described, he could properly have been described as being in command of the aircraft. To be the pilot in command, he said, one "must be in full control of the aircraft and making all the decisions associated with its operation."
He said he had never before seen an entry such as the one in question and that, in the absence of a written record of the detail of all the flights, it was inappropriate for Mr Karabay to include it in his flight record. Asked what the response of a prospective employer would be to such an entry, he said that it "invalidates the total aeronautical experience." In assessing the minimum flying hours required for engagement as a pilot it would have to be discounted. He further agreed that it would "raise serious questions" in his mind whether a person who made such an entry could be trusted to keep accurate regulatory records. Indeed, he agreed that it was likely that an applicant with such an entry in his logbook would be "shown the door" by a prospective employer. Asked whether such a person might be the subject of disciplinary action by the regulator, he said that at the very least "he'd be counselled, but it could go further than that."
Mr Karabay could not say when the entry was made, but thought that it was "2004 probably, at the end of 2004... ." It is reasonable to conclude that the entry would have been in the logbook, and would have been available to the cross-examiner, at the time of the notional trial in November of that year. It would have reflected poorly on his credit. As Mr Braham put it in final submissions, the entry was, at best, hopelessly misguided and, at worst, a deliberate falsehood. Mr Braham also raised with Mr Karabay in cross-examination an application he had made in September 2000 for employment in Turkey, in which he had exaggerated his flying hours in multi-engine aircraft. The exaggeration, however, was not marked and, while the document might show a somewhat cavalier attitude to detail, I would not place much significance upon it.
The District Court Claim
Mr Braham acknowledged that in the District Court Mr Karabay had a reasonable case on liability, although he argued that the claims against each of the defendants in those proceedings were not straightforward. They were, of course, defended and contributory negligence was raised.
The better case would have been that against the occupier of the tourist park, Torrac Nominees. Mr Braham pointed out, however, that Mr Karabay's allegation was that the basketball court was unsafe as built. It was not alleged that it had become unsafe by reason of a failure to maintain it, and the claim might have been defeated by proof that it was designed and built by independent contractors, or that it had been in place when Torrac Nominees acquired the park and the cost of making it safe was excessive in the light of the potential for injury. He also pointed out that Mr Karabay's account of how he suffered his injury was somewhat different from that given by Ms Less. Moreover, as the incident occurred in broad daylight and the condition of the court was observable, there was a basis for a finding of contributory negligence.
Mr Braham also argued that there was scope for a spirited attack upon Mr Karabay's credibility, particularly based upon the logbook entry to which I have referred. No doubt that is so, but it seems to me that the primary focus of that attack would be upon the evidence relating to future economic loss. It would have been well open to the trial judge to accept not only that Mr Karabay suffered the injury, but also that it had the enduring effects described in his evidence and in the medical reports.
Mr Braham submitted that the contingencies of Mr Karabay's obtaining judgment should be recognised by a 40 per cent discount of the notional award. On behalf of Mr Karabay, Mr Stephens acknowledged that a 30 per cent discount would be appropriate. The difference is not great, but I do not suggest that it is insignificant. As best I can assess it, I think that the claim, at least against Torrac Nominees, had fairly good prospects of success and that, even if contributory negligence were found, it would not have reduced the damages awarded to a marked degree. I would discount the notional award by 30 per cent.
Mr Braham also submitted, correctly, that it is appropriate to take into account advice provided to Mr Karabay during the currency of the District Court proceedings upon the likely range of damages. As he pointed out, those contemporary assessments had the advantage "of being unhampered by the hindsight which inevitably colours retrospective assessments." Mr Karabay had given evidence that he had been prepared to heed advice about the amount he was likely to recover and to modify his expectations accordingly.
There is in evidence advice on this aspect from a number of sources. In October 2001, Mr Brian Ralston of counsel thought the likely range to be between $45,000 and $75,000 (plus costs and medical expenses.) In June 2002, Ms Cathy Pinkerton put it at less than $100,000. In June 2005, Mr Kramer assessed general damages as between $50,000 and $100,000, past economic loss at about $15,000 and past out of pocket expenses at roughly $9,000. At that stage he thought that future treatment expenses would be only a nominal amount. All these advices proceeded upon the basis that there was no substantial claim for future economic loss.
In September 2006, Mr Paul Stockley of counsel furnished an advice to Mr Kramer. By then, early reports of Dr Maclarn and the report of Mr Chesterfield had been received. Mr Stockley assessed general damages at $80,000 and past economic loss at roughly $30,000. He also could see no basis for a substantial claim of future economic loss, and assessed it at $20,000.
There is evidence of settlement negotiations in 2002, when the matter was still in the hands of Mr Carr, and it is appropriate also to have regard to this material. At that stage Mr Karabay was prepared to settle for $400,000. However, at a mediation in August 2002 the defendants' best offer was $75,000, while Mr Karabay instructed that he would not accept any figure below $175,000. Mr Carr thought that an offer of $110,000 was "achievable," but it appears that negotiations did not continue. Based on this, Mr Braham submitted that a likely settlement figure would have been between $110,000 and $175,000, probably about $150,000. This, he argued, was an appropriate value of the cause of action.
Mr Stephens in his written submissions did not address the issues of advices on quantum and settlement negotiations. He put Mr Karabay's case by reference to notional awards under the relevant heads of damages, an approach also addressed by Mr Braham. While acknowledging the relevance of the views of practitioners in the early stages of the District Court proceedings, evidenced by advices and by settlement negotiations, I am content to approach the matter in this way.
General Damages
On the issue of general damages the parties took very different positions, Mr Braham conceding a relatively modest award and Mr Stephens pursuing a substantial one. The appropriate measure lies somewhere between the two. In my view, the evidence which might have been available at a trial in November 2004 established that Mr Karabay had suffered a significant injury which, in the event, had quite serious effects, properly seen as of indefinite duration.
Whether or not the injury eliminated his prospects of becoming an airline pilot, it certainly reduced them significantly. Whether that consequence caused him economic loss is a matter which I shall consider later. However that may be, it is apparent that he was passionate about flying and saw it as his life's work. A significant reduction of his prospects in that endeavour, particularly in becoming an airline pilot, would be very disappointing for him. That is a matter properly reflected in an award of general damages. However, in doing so, the possibility that he might have frustrated his ambition by his own conduct in failing to disclose his condition when he sought medical certificates in 2000 and 2003, and in making the highly questionable entry in his logbook, cannot be ignored.
Having regard to his injury and its effects, including a small allowance for the effect upon his career as a pilot, I would arrive at a notional award of general damages of $120,000. Mr Alderman's report on Northern Territory law deals with interest on general damages. I would appreciate it if the parties would make the appropriate calculation and, if agreement cannot be reached about the matter, I will accept further submissions about it.
Out-of-pockets
Out-of-pocket expenses from the date of the accident to 16 December 2005 have been agreed at, in round figures, $4,500. It will be seen that the period extends beyond the notional trial date, so as to provide for past and, to some extent, future out-of-pockets. In the schedule to Mr Stephens' written submissions there is a further claim for future expenses, based upon some oral evidence of Mr Karabay, but that evidence was imprecise and, in any event, was not supported by any medical evidence. I would not make any further allowance for this item, and would assess out-of-pocket expenses at the agreed amount.
Past Economic Loss
Mr Stephens sought to make out a case that, as a result of the injury, Mr Karabay had lost the income he might have earned through employment by a passenger airline. The claim is founded upon the report of a forensic accountant, Mr David Williams. As will be seen, I find that claim to be untenable. It is convenient to deal with it when I consider the evidence relating to the claim for future economic loss, to which I shall turn next.
Mr Braham's submissions acknowledged a claim for past economic loss based upon Mr Karabay's inability to earn income from his IT work for about 3 months after the accident. Mr Braham assessed that claim, rounded off, at $30,000 which, on the material before me, seems reasonable. Mr Stephens put no argument to the contrary. Indeed, his submissions did not address this aspect of Mr Karabay's wage loss at all.
Mr Alderman's report also deals with interest on past economic loss. Again, I would request the parties to make the appropriate calculation and, in the absence of agreement about the matter, I will accept further submissions about it.
Future Economic Loss
Mr Chesterfield supplied a report of 17 April 2006 and a brief supplementary report on 23 May 2009. Despite the dates of those reports, he was able in oral evidence to relate what he had to say to the position in November 2004.
The 2006 report, based upon his interview with Mr Karabay, was optimistic about his prospects of securing a position with an airline. He was impressed by Mr Karabay's "obvious commitment", and thought that he would have had "an excellent chance" of gaining a position as first officer in an Australian or European airline in 2002 or 2003. He noted Dr Maclarn's evidence about the effects of the injury upon his prospects of employment, saying that if he had not been injured he would have had "an excellent chance of gaining employment as an airline pilot post-2004."
He considered that as a first officer Mr Karabay would have earned $60,00-$80,000 per year, increasing as he gained seniority. He might have progressed to the command of an aircraft after 10 or 12 years, with an expected salary of about $160,000. He added that Mr Karabay could gain employment as a commercial pilot in single-engine aircraft. He noted, however, that single-engine operations were relatively restricted, and that a pilot could expect a salary of only about $20,000-$30,000 per year. Many of those operations, he added, were seasonal and might not offer full-time employment.
However, in his supplementary report Mr Chesterfield said that pursuing a career as an airline pilot can be "extremely difficult", observing that the demand for pilots fluctuates with the economy and that success is very much a matter of "the right place at the right time." Moreover, his optimism about Mr Karabay's prospects was significantly modified in his oral evidence.
I need not repeat his evidence about the suspect logbook entry. At the time he prepared his report he had not seen the logbook. He described the number of flying hours disclosed in the logbook at the time he had interviewed Mr Karabay, in June 2005, as "very low." He was referred to the evidence about Mr Karabay's employment as a pilot, in Turkey in 1993, in the Northern Territory in 2001, and in scenic flights (and parachute drops) between late 2001 and September 2002. He said that he would have suggested to Mr Karabay "that he would have to demonstrate a greater commitment...to becoming an airline pilot and flying almost continuously to accumulate the minimum hours required." For an airline, he said, that minimum would normally be 2,500 hours. It was his experience that a pilot had to be prepared to take work at a low rate of pay and in poor conditions to achieve those hours.
The statement of a seasoned airline pilot, John Tillotson, was received in evidence and he also gave oral evidence. His airline experience extended from the mid-1960s until about October 2000, although from 1989 he worked out of Australia with Singapore Airlines. At the end of his flying career he was employed as an instructor on a particular Boeing aircraft. He maintained that position until his retirement in 2007.
In his statement he described employment demand in the industry, particularly since the terrorist attack of September 2001. He said that the market for airline pilots throughout the world at that time was "steady". However, after 2001 demand for pilots in Australia increased significantly as a result of the entry into the field of Jetstar and Virgin Airlines. As he described it, their arrival "acted as a vacuum cleaner" for pilots "with airline experience to return to Australia to well paid positions." Like Mr Chesterfield, he said that in the early years of a pilot's career it was necessary to take whatever work was available to build up flying hours, even though the pay might be low and the conditions poor.
Also received in evidence were the statements of two other pilots, Terence Seedsman and Michael Slater. Mr Seedsman had developed his flying skills while with the RAAF between 1966 and 1976, by which time he had 5,500 hours flying experience. Thereafter, he worked in a number of positions in general aviation, including a period out of Australia in the 1990s. He first obtained a position with a passenger airline in England in 1998, as a captain on a salary of about AUD130,000. He returned to Australia in 2000, and obtained a position as a captain with Virgin Blue Airlines in the following year. His initial salary was $85,000, although it had increased to $202,000 by the time he retired from that position in 2010.
Mr Slater, whose experience was more recent, was a pilot with Virgin Airlines. He obtained a private pilot's license in 1986, and pursued further training, while he was in the army, until 1995. At that stage he had chalked up about 400 hours flying experience. Thereafter, he accepted a number of low paid positions in general aviation and with a commuter airline until 1996, when he was 29 years old. By then he had about 1,200 hours flying experience.
Thereafter he flew until 2002 with a regional airline in Queensland as a first officer, at a salary of about $50,000 per annum. On leaving that airline, he had about 5,200 hours experience. He then took up his position with Virgin Airlines as a first officer, on a salary of about $100,000. That salary gradually increased and, 5 years later, he obtained a position in command of an aircraft on an annual salary of $170,000. At the time he made the statement, in March 2011, his salary was about $195,000, the amount depending upon his variable work roster.
Mr Karabay's claim for future economic loss is very substantial, also based upon the report of the accountant, Mr Williams. Mr Williams produced two reports, but it is the first of them, dated 28 April 2011, which is significant. A supplementary report, dated 19 August 2011, can be put aside. It was prepared in response to an accountant's report prepared on behalf of the defendants but, in the event, that report was not admitted into evidence.
Given the view I have taken about this issue, it is unnecessary to analyse Mr Williams' report of 28 April in any detail. It is sufficient to say that his calculations were based upon two scenarios for Mr Karabay's airline employment but for his injury. The first was his employment with Qantas as a first officer in mid-2002, being promoted to captain four years later. The second was his being employed as a first officer with Virgin Blue in mid-2002, again rising to the position of captain four years later.
Some support for his appointment as a first officer with an airline - not necessarily Qantas or Virgin Blue - is to be found in Mr Chesterfield's report. However, as I have said, Mr Chesterfield significantly modified the opinions expressed in that report when he gave oral evidence. Otherwise, there is no evidence supporting either of those postulated trajectories. Mr Braham's submissions put forward a more modest alternative scenario for Mr Karabay's advancement in airline employment. However, it is not necessary to examine that scenario because I am persuaded by Mr Braham's primary submission that all that should be awarded for future economic loss is a buffer. This, in fact, is what was claimed in the statement of claim issued in the District Court in 2002.
No doubt, Mr Karabay is to be commended for the academic work he has undertaken in aviation. The fact remains, as Mr Chesterfield pointed out, that the flying hours he had achieved up to the time of the notional trial were low and did not demonstrate the energy and commitment required from a person aspiring to be an airline pilot. His flying hours were still well short of the minimum which, according to Mr Chesterfield, would be required. Moreover, he had a history of unsuccessful applications for employment in the industry generally, both before and after the accident. Why those applications were refused is unknown, but it is not suggested that any refusal after the accident was a result of his injury.
The evidence of the three pilots does not assist him. Plainly enough, the career paths of all three of them are very different from those which he has demonstrated thus far or might reasonably have expected. The experience of Mr Slater and Mr Seedsman, in particular, is worthy of note. Before achieving their positions with an airline both of them had demonstrated a measure of energy and determination over a long period which Mr Karabay cannot claim. Moreover, as Mr Chesterfield pointed out in his supplementary report, he would face the inherent difficulty of pursuing employment as an airline pilot in a volatile market.
To this, of course, must be added the possible effect upon his career in aviation of the troubling logbook entry. In the light of all of this evidence, there is not a reasonable prospect that Mr Karabay would have been able to pursue a career as an airline pilot in the manner predicated in Mr Williams' report. Indeed, no assessment of that kind is possible. This is not to say that, but for the injury, he would have had no prospect of employment by an airline. It is merely to say that such prospect as he might have had is properly compensated by a cushion or buffer. I would allow $50,000.
I should add that since the accident he has retained a satisfactory earning capacity, given his skill in IT work and the work which might remain available to him in general aviation.
Domestic Assistance
There is a claim for domestic assistance provided to Mr Karabay by his mother over a period of roughly 3 months after the accident. This is uncontroversial and an hourly rate was agreed. An appropriate award, in round figures, would be $5,000.
However, there is an additional claim for about $20,000 for a period, referred to in the mother's affidavit, during which she said that she "was guarding" him during bouts of depression. Mr Karabay deposed in his affidavit to having been depressed for a long time as a result of his injury, but there was no psychiatric evidence about that condition (or about his need for his mother's support to deal with it). In her affidavit his mother attributed the depression not to the injury but to "the activities of various solicitors handling the case." However, nothing of that kind was pursued as a head of damage against the present defendants. The evidence does not support this additional claim for domestic assistance. I would allow $5,000 only.
Deductions
As I have said, the total notional award should be discounted by 30 per cent. There should also be deducted the unrecoverable costs of the District Court proceedings and the Social Security preclusion. Unrecoverable costs have been agreed at $30,000. The Social Security amount has been calculated in Mr Braham's submissions at $9,000. The basis of that calculation is set out in the submissions. Mr Stephens has made no submission to the contrary, and I take it that that amount is uncontroversial.
Interests and Costs Liabilities
Mr Karabay is entitled to interest from the date of the notional trial under section 18 of the Civil Liability Act. Yet again, I would request the parties to calculate that amount. Agreement has been reached upon costs liabilities in respect of the motion in the District Court and the Court of Appeal proceedings at $118,247.77, less a Suitors Fund contribution of $20,000.
I request the parties to bring in short minutes to give effect to my decision. As I have said, I will hear further submissions if agreement cannot be reached as to the calculations which I have left to be made. If necessary, I shall also hear the parties on the costs of these proceedings.
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Decision last updated: 16 November 2012
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