Scrimegour v Dennis

[1992] QCA 32

IN THE COURT OF APPEAL	[1992] QCA 032
SUPREME COURT OF QUEENSLAND	No. 2245 of 1976
BETWEEN:

GRAEME BARRY SCRIMEGOUR

(Plaintiff) Respondent

AND:

GERARD GORDON DENNIS

(Defendant) Appellant

JUDGMENT OF THE COURT

The respondent was seriously injured in a head-on collision between two vehicles on 11 March 1975. By a judgment of Mr Justice Derrington on 16 May 1991, he was awarded $297,410 damages for the injuries and disabilities suffered in that collision. The defendant has appealed to this Court against that award.

The respondents's most serious injury in that collision was to his right leg. It was not disputed on appeal that that injury was very severe and the respondent's disability in consequence very serious. The learned Trial Judge's assessment of general damages for pain, suffering and loss of amenities of $65,000 was put in issue by the notice of appeal but was not contested before us. In this Court two complaints only were made about the award.

The first was that the interest assessed on special damages, loss of earning capacity before trial and general damages for pain and suffering and loss of amenities was too high.

The second was that the assessment of $90,000 for loss of earning capacity before trial was too high.

It was agreed by the parties at the outset before us that His Honour had made an error of $19,400 in calculating interest on general damages and that the correct amount in that respect was $12,000, not $31,400 which he had awarded.

However, that concession had apparently been made some time beforehand and it was not disputed by the appellant that that error could have been corrected without the necessity for this appeal.

Two complaints were made about the interest sums assessed. First it was said that His Honour, in concluding that $50,000 of the sum of $65,000 awarded for general damages for pain, suffering and loss of amenities should be apportioned to that loss prior to trial was in error and interest calculated on that apportionment should consequently be reduced. Secondly, it was said that the calculation of interest on each of special damages, loss of earning capacity before trial and general damages over a period of 12 years was in error, and that that period should have been reduced to five years because of the respondent's delay in prosecuting his action.

It is convenient to consider those questions in that order.

At the time he was injured the respondent was only 37. By the time of trial he was 53. His main injury, which was a compound comminuted fracture dislocation of his right ankle, caused him severe pain which continued notwithstanding a triple arthrodesis of the ankle in November 1977. Though, as His Honour, and many of the medical witnesses who saw him said, he was a man who made light of his pain, it was so severe and so constant when he saw Dr Gray in October 1978 that he told Dr Gray he wondered if he would be better off with an amputation and Dr Gray himself thought that might be the correct decision. Not only did the respondent endure this constant pain, but he went back to work with it and, as His Honour found, this would no doubt have increased his pain and discomfort. Given His Honour's finding of the respondent's willingness to engage in physical work notwithstanding that it significantly increased his pain and discomfort, those years, at least until he suffered his strokes in 1989, would no doubt have been extremely active years, particularly whilst the respondent was still engaged in running the business of Northern Autos Pty Ltd. When one has regard as well to the extensive treatment which he underwent for his injury and the pain and discomfort associated with it, we do not think it was inappropriate for His Honour to apportion by far the majority of his pain and suffering and loss of amenities to this period.

Accordingly, we would not disturb His Honour's apportionment in this respect.

This action took almost exactly 16 years from issue of writ to trial. That is an inordinately long time. A good deal of the delay was caused by neglect on the part of the respondent's solicitors. During the whole of this time the appellant had the benefit of the money which it ultimately paid as damages. That benefit was substantial. On the other hand, it has been said that the public policy of having claims brought and determined promptly justifies an exercise of discretion against allowing interest, at least for part of the period during which the respondent has delayed in bringing his action to trial. His Honour allowed interest on each of special damages, loss of earning capacity before trial, and general damages for 12 years.

The appellant's contention is not that His Honour made any error in principle but that a period of five years would have been appropriate. Two other facts should be mentioned.

The first is that the respondent's injuries took some years to stabilise and the action could not have been brought on for trial or settled before that occurred. It is not clear from the evidence how long that was. The other is that the appellant seemed happy enough to stand by and let the action drift on. He, or more accurately his insurer, made no attempt to strike it out. The discretion here is a wide one and not one with which this Court should readily interfere.

We would not interfere with His Honour's judgment in this

respect.

In order to demonstrate that the assessment of loss of earning capacity before trial was too high, Mr Williams Q.C. for the appellant divided this period into four; from the date of the accident to the date of the respondent's arthrodesis in November 1977; from that date until the sale of the business in 1984; from that date until the date on which the respondent suffered the first of his strokes in May 1989; and from that date until trial.

The first two of these periods must be taken together. During the whole of the period from the date of the accident until November 1984 the respondent was employed by a company, Northern Autos Pty Ltd. Notwithstanding that during the whole of that period the respondent was a one- half shareholder in that company and that until 1 December 1976 his wife held the other one-half share, there is a real question, which was not fully argued before us, as to whether whatever loss, apart from salary, was suffered during the period was the company's loss only. It is not necessary to consider this question which, in any event, we would be reluctant to do in the absence of full argument. But it may be wrong to assume, as seems to have been assumed by the respondent in argument before us, that a company structure may be completely ignored or that shareholders' loss may be recovered from a tortfeasor against the company.

The position may be complicated where, as here, there is more than one substantial shareholder, so that something other than a "one-man" company is involved.

However, as Mr Williams Q.C. has pointed out, the company prospered during this period except during the 1975 income year when, like most businesses in Darwin, it suffered from the aftermath of the cyclone at the end of 1974.

After the 1975 income year, notwithstanding that Northern Autos' gross income, and presumably its net income, increased in each income year until its sale, the respondent's salary decreased in 1977, the first year after Mr Nendick became an equal shareholder and again in 1978.

Thereafter it continued to increase but it was not until 1980 that it passed his 1976 salary. It reduced again in 1982. Before us the appellant contended that what the respondent was paid by way of salary by Northern Autos Pty Ltd was a matter for his accountant who, in effect, manipulated the figures, presumably for tax purposes. No evidence was cited to support this contention. Mr Tilley, the Northern Autos Pty Ltd accountant, agreed in evidence that the company's affairs were structured to minimise tax.

But that says nothing specifically of the respondent's salary and no other explanation was given for those reductions in salary.

Until his arthrodesis in November 1977, as His Honour found, the respondent's work was interrupted by his need to go away for treatment from time to time and throughout the whole of the period his capacity to do work on the workshop floor was diminished. Even after the respondent's injury stabilised His Honour found that "there was work for him to do as a mechanic which he had to forego, probably at some loss; but the extent of the loss while not small was not dramatically large, considering his alternative activities". The alternative activities referred to by His Honour were management and public relations resulting in work for the business. His Honour also referred to the respondent's "hobby business" of mining, prospecting and promotion which was profitable.

On the state of the evidence, His Honour was justified in concluding that there was probably some loss of income from salary over this period though it was impossible to quantify this with any accuracy.

The contract of sale to Repco contained a restraint clause which prevented the respondent from working as a motor mechanic, even as an employee, within the area of a circle having a radius of 50 kilometres from the Darwin post office within 5 years from the date of settlement. However, before the accident and even after it with his disability, the respondent was an energetic man. Had he been fit he would probably have used his mechanical ability to some effect, even if it had involved moving from Darwin. His Honour was therefore justified in concluding that "there was some loss from his being unable to work as an employed mechanic but the level of this is doubtful and should be treated conservatively".

From May 1989 for some time the respondent had been incapacitated from work in consequence of his strokes. Moreover, his wife shortly after this required his care for a terminal illness. His Honour concluded that from this date until trial the respondent suffered no compensible loss relating to his reduced earning capacity.

His Honour's award of $90,000 for loss of earning capacity was thus for a period of 14 years. It is likely that the loss would have been greater in the latter part of that period than in the former.

His Honour's assessment in this respect is, in my opinion, high. But when one has regard to the capacity which the respondent had for physical work before the accident and his expertise as a mechanic and his very serious disability in that respect, and as well to the conservative amount which His Honour assessed for loss of future earning capacity, not the subject of appeal, we do not think that it was beyond the limits of a sound discretionary judgment.

We would allow the appeal as to $19,400 substituting a judgment for the respondent for $278,010 with costs of the action and of the appeal.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	No. 2245 of 1976
BETWEEN:

GRAEME BARRY SCRIMEGOUR

(Plaintiff) Respondent

AND:

GERARD GORDON DENNIS

(Defendant) Appellant

Before the Court of Appeal

The Chief Justice
Mr Justice McPherson

Mr Justice Davies

JUDGMENT OF THE COURT

Delivered the 23rd day of March 1992

CATCHWORDS:  DAMAGES - MEASURE OF - APPEAL from assessment of damages for injuries sustained in head-on collision - whether assessment for past economic loss too high - whether trial judge erred in allowing interest for 12 years given 16 year delay between issue of writ and trial

Counsel: Mr. S. Williams Q.C. and with him Mr W.A. Martin

for the Appellant
Mr. R.R. Douglas Q.C. and with him Mr. J.A.

McDougall for the Respondent

Solicitors:	Quinlan Miller & Treston for the Appellant Morris Fletcher & Cross for the Respondent
Hearing date(s):	13 and 14 February 1992

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	No. 2245 of 1976
BETWEEN:

GRAEME BARRY SCRIMEGOUR

(Plaintiff) Respondent

AND:

GERARD GORDON DENNIS

(Defendant) Appellant

_______________________________________________________

THE CHIEF JUSTICE
MCPHERSON JA
DAVIES JA

_______________________________________________________

Reasons of the Court delivered on the 23rd day of March
1992
_______________________________________________________

"APPEAL ALLOWED AS TO $19,400. JUDGMENT BELOW IS SET ASIDE AND A JUDGMENT FOR THE RESPONDENT FOR $278,010 IS SUBSTITUTED WITH COSTS OF THE ACTION AND OF THE APPEAL."