Smith v Montfroy & Anor
[2007] VSC 18
•15 February 2007
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 140 of 2004
| LEIGH MAXWELL SMITH | Plaintiff |
| v | |
| GREGORY PAUL MONTFROY & ROADS CORPORATION | Defendants |
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JUDGE: | WILLIAMS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 31 July, 1-2 August 2006 | |
DATE OF JUDGMENT: | 15 February 2007 | |
CASE MAY BE CITED AS: | Smith v Montfroy & Anor | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 18 | FIRST REVISION 19 February 2007 |
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DAMAGES – Assessment – Motor vehicle accident – Male plaintiff aged 27 at date of accident – Comminuted fracture of right ankle – Arthrodesis of right ankle – Continuing pain requiring significant level of analgesia – Post accident employment
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T.P. Tobin S.C. with D.J.N Purcell | Winn Legal |
| For the Second Defendant | Mr W.R. Middleton with Mr P.G.A. Montgomery | Phillips Fox Lawyers |
HER HONOUR:
The plaintiff (“Mr Smith”) was injured when the vehicle he was driving collided with an oncoming car, driven by the second defendant (“Mr Montfroy”), on 16 August 2000 (“the accident”). He has brought a claim against Mr Montfroy and the second defendant (“Vicroads”) in negligence. The claim against Mr Montfroy has been discontinued. Liability has been admitted and Mr Smith now requests the Court to assess his damages.
Findings of fact
Background
Mr Smith was born in Cohuna on 28 October 1972 and is now 34 years old. He is one of six children and the family moved to a farm near Deniliquin when he was nine years old. His father, who had been a police officer, then worked in a range of jobs including truck driving and farm work, before dying suddenly of a heart attack. Mr Smith’s mother brought up the family which included an elder sister suffering from cerebral palsy. His mother did not cope well with her husband’s death and drank heavily. She worked as a waitress and the family suffered financial difficulties.
Mr Smith attended high school between years 7 and 9 and left in July 1987. Whilst still at school, between the ages of 13 and 15, he worked loading containers from 3am to 7 am in the boning room at the Deniliquin Abattoirs. At the age of 15, he began to work full-time as a labourer at the abattoirs. In addition, he continued the loading work each morning and was employed as a farm hand at weekends up to 1990.
In 1990, he moved to Sale and obtained employment as a band saw operator at the Sale Abattoirs. In Sale, he undertook a 40 hour English and maths “pick up” course at the Sale College of TAFE.
In about 1991, he returned to work in Deniliquin in various jobs including that of a farm hand, a channel attendant with Deniliquin Water Works and a production-freezer manager at the Deniliquin Abattoirs.
In about 1992, he was employed by Electro Dry Carpet Cleaning and went on to work for some six years as a carpet cleaner. In addition to his full-time carpet cleaning work, he worked at weekends as a BP service station attendant in 1995 and 1996 and, from 1998, as a fruit and vegetable manager at an IGA supermarket.
Meanwhile, whilst he was living in Deniliquin in 1997, he met Ms Melissa Eschholz who had two children from a previous relationship. They started living together and have two children, who were aged five and seven on 1 August 2006. Their second child, Bianca, was born after the accident on 31 July 2001.
In March 1999, Mr Smith began to do general cleaning work for Mike’s Cleaning Service. He was subsequently employed by Australian Security and Fire Systems, selling security systems. From June 1999, he managed the firm’s business in Bendigo. He and his family moved to Bendigo. He only worked in that job for a month, finding that there were insufficient staff to assist him in servicing the city.
Mr Smith was very keen to be re-employed and started work on 16 September 1999 at MAME Engineering in Gisborne, making fuel valves for 747s. He described this job as one which he loved. He intended to stay with MAME. He worked shift work and overtime nearly every day. At the time of the accident, his hourly rate was $13.18, but he was earning in excess of $600 per week on average.
Mr Smith was also a sportsman, playing competition Australian Rules football, cricket and golf as well as engaging in fishing. He has been a keen gardener. He also helped Ms Eschholz with the children by doing his share of housework and handyman activities.
The accident
The accident occurred at approximately 4 am on 16 August 2000 when Mr Smith was driving from work at MAME in Gisborne, home to Bendigo along the Calder Highway. He saw the headlights of the car driven by Mr Montfroy which was approaching on his side of the highway. The vehicles collided head-on on Mr Smith’s side of the road, the driver’s side of each car hitting the other.
Mr Smith was wearing a seat belt. His trapped right ankle prevented him from leaving the car after the accident. The blood running down his face made him realise that he had other injuries. He remained caught in the vehicle, mostly conscious, until he was eventually freed by SES personnel who cut him out. Mr Smith describes feeling “horrible” whilst waiting to be released from his own car. He could hear Mr Montfroy screaming in the other car. He wanted to contact Ms Eschholz. He does not know for how long he was trapped.
Mr Smith was taken by ambulance to the Bendigo hospital. He was found to have lacerations to his right cheek and elbow, abrasions on his face and arms and a comminuted fracture of his right ankle. On 16 August 2000 Mr Keith McCullough, an orthopaedic surgeon, performed an open reduction and internal fixation, with screws and a plate, of the comminuted trimalleolar fracture of his right ankle. Three days later Mr McCullough operated upon him again because his ankle was misaligned.
Mr Smith did not like being in hospital and felt that he did not cope well. He was discharged into Ms Eschholz’s care on 22 August 2000, only to find that his leg became infected, swelling inside its plaster casing.
He was readmitted to hospital on 28 October 2000, with cellulitis and wound infection, and stayed for a further period of four days. He was treated with intravenous antibiotics and suffered what he described as “demanding” pain. He said that he did not think he coped emotionally with the treatment.
After a second discharge from hospital he wore a plaster cast on his right leg for some 14 weeks. In December 2000, he was still on crutches and unable to bear weight on his right ankle.
X-rays showed that his fracture had displaced. One of the screws had broken. On 6 February 2001 Mr McCullough operated on his ankle for a third time, performing an osteotomy of the right tibia, a bone graft and an internal fixation. Once again, the wound became infected and Mr Smith suffered a haematoma and what he described as “horrific” pain. He was readmitted to hospital on 13 February, for three more days of intravenous antibiotic treatment.
Severe ongoing pain in Mr Smith’s right ankle and continuing discharge from the medial wound over the plate resulted in Mr McCullough referring him to Mr Andrew Beischer, a Melbourne orthopaedic surgeon. Mr Beischer proposed an arthrodesis, or fusion, procedure. He carried out the first stage, debridement surgery and removal of the metal from the infected ankle, in November 2001 at the Epworth Hospital. Once again, Mr Smith required intravenous antibiotics post-operatively and was an in-patient at The Mount Alvernia Hospital in Bendigo for two and a half weeks. The second stage of the arthrodesis followed in February 2002. Post-operatively, he was in a non weight-bearing plaster cast for six weeks and then a walking fibreglass cast for a further four. X-rays in May 2002 showed union of his fused ankle.
Mr Smith returned to driving a motor vehicle after his foot was removed from plaster. At the time of trial, he was unable to drive for more than 45 minutes without a break.
Mr Smith went on to suffer from osteomyelitis of the right tibia which required his return to the Epworth Hospital in September 2002 for wound debridement. He subsequently had a further two weeks of intravenous antibiotics at The Mount Alvernia Hospital. As a result of the fusion, Mr Smith has no movement in the ankle joints, although he retains full movement in the lower part of his foot and toes. He has an obvious limp.
At the end of 2002, Mr Smith was still suffering from chronic pain on the outer right-hand side of his right foot which was increased by walking, particularly over uneven surfaces. He was obliged to negotiate steps sideways. He could do nothing to ease his pain. He was started on the drug MS Contin in 2003. In March of that year, Mr McCullough referred him to a pain management course at the Anne Caudle Centre in Bendigo. There, he received help related to coping with his limitations, over a six week period.
Up to the commencement date of the trial, on 31 July 2006, Mr Smith continued to take painkillers and morphine. At that point he was taking eight Panadeine Forte and two MS Contin tablets daily. The morphine dosage had been increased from 10 milligrams to 15 milligram tablets early in 2006.
Pain, psychological and other effects of the accident
After the accident Mr Smith suffered from sweats and “tossed and turned” a great deal during his sleep. For at least six months after the accident, his sleep was interrupted by nightmares involving its repetition. He found it hard to get back to sleep after waking during the night. He was frustrated by being required to sleep with his foot elevated. He used marijuana to help him sleep.
When he was discharged from hospital in August 2000 Mr Smith had no income. He was forced to borrow from his sisters to buy food for the family and found this very humiliating. As time went on, he was bored, restless, frustrated and worried about the slow healing of his wound and concerned about his future. Mr Smith became very temperamental, especially in his dealings with his young children. He felt bad about himself and was concerned about his future. He was also upset by the appearance of his right ankle and leg which he considers very ugly.
By February 2001, he didn’t think he was coping psychologically with the effects of the accident. He did not cope with the restrictions upon his ability to do things at home and suffered from the effects of lost sleep and pain. His inability to play with his children caused him to feel depressed. He became very impatient and noticed that his memory became a lot worse. He had suicidal thoughts and was referred to the psychologist, Mr Ivan Honey, by his treating general practitioner, Doctor Gavin Salvador. Mr Smith received treatment from Mr Honey and other psychologists at his practice for approximately two years from the referral in March 2001.
Mr Smith’s frustrations continued after the birth of his daughter, Bianca, at the end of July in 2001. He found that he was only able to pick Bianca up, to hold her, by crawling along the floor to her “bouncer”. This sort of restriction upset him. Ms Eschholz suffered from post-natal depression after Bianca’s birth and Mr Smith was again upset and frustrated, feeling hopeless that he could not care for her without assistance from others.
Mr Smith also suffered from panic attacks which caused him to sweat and shake. When Ms Eschholz was driving the car, he believed that people at give way signs were not going to stop and experienced an attack. He felt depressed afterwards.
By April 2003, Mr Smith concluded that he wouldn’t be able to work in future in the types of employment he had had before the accident. He had been to all the job agencies in Bendigo and had completed a forklift driving course in Melbourne on his own initiative. He had been unable to obtain work as a forklift driver, notwithstanding his attempts to get such a job.
Early in June 2003, however, he obtained work at Hy-Line chicken hatchery (“Hy-Line”), after a one day trial obtained through an agency. The offer of that trial was the only offer of work he obtained from any of the eight Bendigo employment agencies consulted by him over a three month period in 2003. He received no subsequent offers after starting work at Hy-Line.
The Hy-Line job involved sorting chickens by colour. Mr Smith stood throughout the 14 hour working day and found it hard being on his feet. He took medication throughout the day, but was unable to obtain relief from his right ankle pain. He limped badly at the end of the day. He wore and continues to wear a brace to stabilise his ankle. His ankle pain prevents him from going anywhere without the brace.
Mr Smith worked in this way for two to three months, five days a week, before being promoted to the position of leading hand in December 2003. He held that job for some two years. At the end of a working day, his ankle felt 70% more painful than it felt at the end of a day at home. It would swell and he believed that the medication failed to provide him with any relief by the end of the day. Nevertheless, during that two year period, he took no time off work because of his ankle and did not require increased medication.
In November 2005, Mr Smith was promoted again, to the role of hatchery manager. He was made responsible for 38 employees. He had no management experience or training. Since leaving school, he had attempted a 14 week long computer course but had discontinued it after three weeks, believing himself to be inadequate for the task. The hatchery manager’s role involved the provision of a house, car, gas, electricity and telephone and substantially improved Mr Smith’s financial position.
Mr Smith and Ms Eschholz first separated in February 2006.
The subsequent poor performance of the hatchery business was attributed to Mr Smith’s management. His efforts failed to rectify the situation and he was dismissed on 4 July 2006, after some seven months in the position. Meanwhile, he was feeling worse as a result of the stresses at work and once again “took it out” on his family. He and Ms Eschholz separated for a second time on the day of his dismissal and they remained apart at the time of the trial.
In his evidence, Mr Smith said that having a job and working full-time made him feel wonderful and that he had always worked and always wanted to work. In his opinion, proper training would equip him for a future managerial role.
By 1 August 2006, Mr Smith no longer suffered from frequent panic spells or anxious thoughts, although he remained worried about the future. He still felt stressed and sometimes on edge, although he had had lost former anxieties, such as the fear of a terrible event. Mr Smith felt that his appearance had permanently changed, making him look unattractive. He was concerned about exposing his ankle and was unable to wear sandals because of the appearance of the brace which necessitated a closed shoe. Physically, he experienced sweating, unrelated to heat, all over his body. His right foot sweated constantly. He felt less interested in others than he used to be and cried more frequently.
The medical evidence
Mr Smith’s psychological condition
Dr Michael Epstein
In his report to Mr Smith’s solicitors, dated 11 November 2002, the psychiatrist, Dr Michael Epstein, expressed the opinion that Mr Smith had developed symptoms of Post Traumatic Stress Disorder. They were “characterised by recurrent intrusive thoughts about the accident, distress with reminders of it, increased concerns with regard to his own safety and security, hypervigilance, emotional withdrawal, and a sense of bleakness”.
Dr Epstein went on to express the view that Mr Smith had developed Panic Disorder with Agoraphobia and an Adjustment Disorder with depressed mood as a consequence of the physical and psychiatric effects of the accident. He thought that Mr Smith’s condition was stable.
Dr David Weissman
Dr David Weissman provided a psychiatric report to the TAC on 8 December 2003. He found Mr Smith to be experiencing mild residual symptoms of Post Traumatic Stress Disorder, representing a small amount of primary or direct psychiatric impairment resulting from the accident. He also found that Mr Smith had mild residual features of an Adjustment Disorder with depressed and anxious mood, representing a small amount of secondary or reactive psychiatric impairment.
Dr Weissman thought Mr Smith’s psychiatric state had stabilised by 8 December 2003.
Mr Ivan Honey
In his report dated 25 November 2002, Mr Smith’s treating psychologist, Mr Honey, records his initial diagnosis of Mr Smith as suffering from severe Post Traumatic Stress disorder. He stated that Mr Smith had anxiety which he described as being within the “extreme anxiety or panic range”. He found Mr Smith to be suffering from depression within what is characterised as a “potentially serious range”.
Mr Honey concluded that Mr Smith was significantly improved in all areas, when retested on 4 November 2005. The Post Traumatic Stress diagnosis could no longer be maintained, his anxiety was at a more moderate level and he was found to be “at a significantly reduced level of depression”.
Mr Honey’s 8 November 2005 report contained the following :
“6. CURRENT CAPACITY TO WORK AS A RESULT OF THE INJURIES
Mr Smith has always been a highly independent proactive person, with a strong work ethic. In the present situation he continues to work in spite of the pain. This reflects his belief system about himself as an independent worker and his determination to work in spite of any resulting pain. Mr Smith resists any tendency to reduce his level of work because of his work ethic, and as a result it is possible that although work may at times be to his detriment because of the pain, he continues to work in order to meet his very strong need for power and achievement.
8. PROGNOSIS
The prognosis for Mr Smith is positive at present but there are questions as to whether he can sustain his high rate of work of up to 60 hours per week over a long period of time, and the impact this may have on his health and his personal life. There are also questions about the fairly high level of drug use needed to manage the pain, and whether this is likely to have some significant impact on his well being.”
Mr Smith’s physical condition
Reports were obtained from Mr Smith’s treating doctors and other experts: initially in late 2002 and then three years later, in November 2005, when he was still employed by Hy-Line.
Dr Gavin Salvador
Mr Smith’s treating general practitioner, Dr Salvador, expressed the opinion, in an 11 November 2002 report, that the possibility of Mr Smith requiring amputation could not be ruled out. I note that, as counsel for the defendants pointed out, this suggestion is not made by any other doctor, or, indeed, repeated by Dr Salvador.
Dr Salvador noted that Mr Smith’s domestic activities were limited, and that he was, for example, unable to mow his lawns. In Dr Salvador’s opinion, Mr Smith was then suffering from chronic depression.
Dr Salvador’s report dated 10 November 2005 contained the following :
“(f)My Prognosis : -Mr Smith is currently as good as he will ever be. He will continue to have constant daily pain in his right ankle. His requirements for pain killers will increase over time. While his level of function will persist at current level for some time, he will eventually have further deterioration in the function of his right ankle with increasing mobility problems, needing to use walking aids. While this may not happen for some years, it will certainly be much earlier than is he didn’t have the injuries.
(g)Employment prospects: - While Mr Smith is currently able to work, he is limited in his mobility due to the constant right ankle pain. In the future when his pain and immobility worsen, he may be unable to work at all. It is difficult to estimate when this will occur but it would be earlier than if he was never injured.
Domestic & recreational activities : - He is already incapacitated in regards to these, and this will worsen over time. …
(i)(i) Mr Smith’s injuries are causing ongoing daily pain and suffering.
(ii) Mr Smith’s injuries do restrict him in relation to prolonged standing and walking, significant lifting, repetitive bending, climbing up and down ladders, stairs, hills and inclines, and squatting, kneeling and running.”
Dr Salvador also reported increasing Mr Smith’s pain medication from 10 to 15 milligrams of MS Contin twice daily. In Dr Salvador’s opinion Mr Smith’s injuries had stabilised in so far as he continued to have daily pain and walked with a limp. Dr Salvador thought that he would need painkillers indefinitely
Dr Andrew Beischer
Mr Smith’s treating orthopaedic surgeon, Dr Beischer, reported on 9 December 2002 that Mr Smith’s injuries had stabilised, the ankle was arthrodesed successfully and that no further surgery was anticipated. His report stated the opinion that :
“Mr Smith is unlikely to be able to perform employment activities that will require him to be standing or walking for prolonger periods. He would be suited to a sedentary type employment. He would certainly be unable to perform running recreational activities, but should find walking for short to medium distances a reasonable task”.
I note that Mr Beischer did suggest to Mr Smith that he should have an operation to un-fuse his ankle, by taking the plates out. However, Mr Smith said in evidence that he is not sure whether he could put himself through that process.
Mr Moran and Mr Mangos
In a report to Mr Smith’s solicitors dated 13 September 2003, Mr Peter Moran, an orthopaedic surgeon, expressed the view that Mr Smith’s extremely limited mobility and ability to weight-bear meant that his employment options would be “severely limited” and that he should retrain for sedentary work.
These views were echoed by Mr Peter Mangos, a general surgeon, in a report to the same solicitors dated 1 February 2003.
Mr Kevin King
Mr Kevin King, an orthopaedic surgeon, examined Mr Smith at the request of his solicitors on 14 October 2005 and reported to them on 18 November 2005. Mr King had previously seen and reported on Mr Smith on 14 July 2003, just after he had obtained work at Hy-Line and was surprised that he still had the job over two years later.
Mr King thought it more probable than not that Mr Smith’s condition would slowly deteriorate over the next 10 to 15 years. However, Mr Smith’s demonstrated capacity for work over the previous two years indicated that it was possible that he might remain much as he was.
In Mr King’s opinion, Mr Smith would continue to be quite “significantly disabled by a painful, stiff weak and unstable right leg, ankle and foot with significant limitation on his capacity to walk or stand for more than relatively short periods”.
Mr Stephen Doig
The orthopaedic surgeon, Mr Steven Doig, provided a report to Mr Smith’s solicitors dated 17 November 2005. Mr Doig described Mr Smith’s injury as “significant”. He said that Mr Smith had suffered a grossly displaced tibial plafond fracture. Whilst considering that his condition has substantially stabilized. Mr Doig expressed the view that it was certainly possible that Mr Smith would require further surgery to his subtalar and mid tarsal joints. X-ray examination revealed degenerative changes in the talo-navicular joint which would slowly progress.
He noted that Mr Smith had built up muscle mass in the right leg. Mr Doig made a “somewhat guarded” prognosis, stating that it was by no means certain that Mr Smith had completely cleared the infection. Such an injury might give rise to a reactivated infection at a later stage. At the time of the consultation, Mr Smith was working as the manager at Hy-Line. Mr Doig expressed surprise that he had done so well in view of the injuries and his subsequent clinical course. He thought that Mr Smith should be able to kneel but he doubted that he would be able to run at all.
Dr Robyn Horsely
The occupational physician, Dr Robyn Horsley, reported to Mr Smith’s solicitors on 4 January 2005. She found Mr Smith severely disabled by pain, with an ongoing “significant disability” of the right foot.
She expressed the opinion that his employment options had narrowed, as he was clearly unfit for his previous role as a labourer and would be unfit to participate in cleaning duties. Dr Horsley stated that Mr Smith’s prognosis for remaining within the workforce was good. However, his altered gait potentially put him at risk of secondary mechanical dysfunction in the lumbar spine.
Mr Michael Shannon
Mr Michael Shannon, a surgeon, reported to the TAC on 11 December 2003 his opinion that Mr Smith’s condition had stabilised and would remain essentially unchanged. Mr Shannon had noted Mr Smith’s significant ongoing pain requiring narcotic medication and hoped that he could learn to manage his pain without the necessity for such strong medication, given his relatively young age. He also noted his opinion that the ongoing pain at least in part arose from the ankylosing of the subtalar joint and the degenerative change in the mid tarsal joint. He reported that if the ongoing pain became a sufficient problem then further surgery might be considered.
Mr Shannon considered it to be to Mr Smith’s credit that he had resumed employment in light of his “significant ongoing pain” which required narcotic medication.
Submissions - economic Loss
1. Loss of earnings 16 February 2002 - 5 June 2003
There was no dispute between the parties that Mr Smith had been totally incapacitated for employment between the date of the accident and his employment on 6 June 2003. Under s 93(10)(a) of the Transport Accident Act 1986 he is only entitled to loss of earning capacity damages from 16 February 2002 to 6 June 2003. The parties agree that loss of earnings should be calculated on the basis that he would have earned $14.60 per hour during that period of 474 days or 67.7 weeks.
Counsel for Mr Smith submit that he should be compensated on the basis that he would have worked for 50 hours each week, earning 20% of his total remuneration by way of payment for overtime work. Counsel for the defendants urge the Court to the view that it would be reasonable to calculate the amount of loss of earnings on the basis that he would have done some 4 hours of overtime on top of the basic 40 hours work. They argue that the evidence does not go so far as to support a finding that ten hours of overtime would have been available to Mr Smith throughout the relevant period.
Conclusion
The only witness called in relation to the issue of the availability of overtime at MAME during the period between 16 February 2002 and 5 June 2003 was Ms Susan Ellul, an administration assistant, employed by MAME. As counsel for the defendant pointed out, her evidence only went so far as to establish that there was overtime work available throughout the relevant period. Ms Ellul conceded, under cross-examination, that the overtime available was variable and that, possibly, there would be weeks when there would not be any overtime if there had been a downturn in the business. She said that every week “a lot” of employees worked overtime. Under re-examination, Ms Ellul did say that the business had been “pretty constant” in the six year period since the accident.
Mr Smith had been employed at MAME engineering between 16 September 1999 and 16 August 2000. During this 11 month period, he had worked between 50 to 55 hours a week, often working 12 hour shifts. He requested overtime work and regularly took it. He worked overtime nearly every day. He enjoyed his work.
In my view, the evidence establishes that it is highly probable that there would have been overtime work available to Mr Smith throughout the relevant period. However, it does not establish that he would have been able to continue to work at the rate of 50 to 55 hours per week throughout. I will assess his lost earnings between 16 February 2002 and 5 June 2003 on the basis that he would have worked 50 hours per week at the rate of $14.60. Accordingly, his total loss of earnings for the period would be $43,037, calculated as follows:
50 x $14.60 = $ 730 gross per week or $ 570 net per week x 67.7 weeks = $38,589
plus
superannuation : $ 65.70 per week x 67.7 weeks : $4,448
$43,037
This amount of $43,037 should be reduced by 15% to $36,581, to allow for contingencies and vicissitudes of life.
2. Loss of earnings 4 July 2006 – 1 August 2006
Mr Smith was employed to 4 July 2006 at Hy-Line and makes no claim for earnings during this period. He does, however, seek compensation for loss of earnings for the period from 4 July, when he was dismissed from that job, to the date of judgment.
Counsel for Vicroads respond that it should not be held liable for loss of employment, resulting from Mr Smith’s inability to perform as a manager. They contend that, in any event, any allowance should be limited to the four week period between 4 July and 1 August 2006.
As far as that four weeks are concerned, Vicroads submits that it should not be obliged to compensate Mr Smith for any loss of earnings, because it may well have taken four weeks for him to find new employment after any dismissal.
Conclusion
In my view, the loss of earnings during this four week period can properly be regarded as the result of the accident. Mr Smith lost his employment with MAME which would, in all probability, have continued up to 1 August 2006. I assess his loss of earnings for this period on the basis that he would have worked for 50 hours each week for that approximately 4 week period. The evidence as to the current rate of pay for someone in Mr Smith’s former position justifies a calculation on the basis of earnings of $18.98 per hour. Accordingly, that amount would be $2,803 calculated as follows:
50 x $18.98 = say $ 950 gross per week or $ 739 net per week x 4 weeks $ 2,956
plus
superannuation: 9% x $950
=$ 85.50 per week x 4 weeks $ 342
$ 3,298
$3,298 x 85% (discount for vicissitudes) $ 2803
3. Loss of earnings : 2 August 2006 – date of judgment
Mr Smith claims past loss of earnings to the date of judgment, as opposed to the date upon which evidence was given at trial.
Counsel for Vicroads submit that the Court should assess past loss of earnings to 1 August 2006 and calculate the damages for the period from 2 August 2006 on the basis of loss of earning capacity. Counsel argues that the 6% multiplier to be applied is that appropriate to 2 August 2006 and that calculations for the period after the submissions relate to the future from that date.
Conclusion
The Court has heard insufficient evidence to establish any loss of earnings in the period after submissions at trial. In any event, as counsel for Vicroads submit, the compensation for loss of earning capacity for the future includes compensation for this period and the relevant multiplier was determined with reference to Mr Smith’s age at the date of the submissions.
4. Loss of future earning capacity
As far as loss of earning capacity in the future is concerned, the Court is urged to consider compensation calculated with reference to the probabilities that Mr Smith will retire earlier, will have longer periods of unemployment and will work fewer hours of overtime than he would otherwise have done.
Counsel for Vicroads argue that the Court should assess any loss of earning capacity on the basis of the evidence, rather than speculation as to what might happen in the future. They refer to the statement of relevant principle by Sholl J in Victorian Stevedoring Pty Ltd v Farlow[1] and, on the basis that there is no evidence upon which the Court could find Mr Smith will earn less, they urge it to :
“… compensate him to the extent of a reasonable and moderate evaluation in money of the mere chance or risk of future unemployment or less remunerative employment.”[2]
[1][1963] VR 549.
[2][1963] VR 549 at 599.
It is first submitted, on behalf of Mr Smith, that he faces the certainty of a deterioration in the performance of his ankle which will remove him from the workforce much earlier than would otherwise have been the case. This submission is said to be based upon the medical evidence.
Counsel for Mr Smith claim that he should be compensated on the basis that he will retire 10 years before reaching the age of 65. The parties agree that, for the purposes of any relevant calculation using the Australian Life Tables 2001/2003, the 6% multiplier should be 107.7, being the difference between the multiplier to the age of 55 (623.6) and that to the age of 65 (731.3). Counsel for Mr Smith submit that the multiplicand should be determined on the basis that Mr Smith would have continued to work at the rate of 50 hours per week between 55 and 65.
Counsel for Vicroads respond that the possibility of early retirement is just a possibility. They review the medical evidence and submit that the experts have not ventured any opinions as to the likely long term effect of Mr Smith’s disability. They point to the opinions to the effect that his condition has stabilised. They argue that there is insufficient evidence to support the conclusion that Mr Smith will retire earlier than he would otherwise have done. They submit that the treating surgeon has not reported the possibility of future surgery or recurrent infection and says that other doctors have simply pointed out the potential risk.
Counsel for Mr Smith argue that, as he earned 20% of his previous income by way of overtime or second employment, it would be reasonable to allow him an ongoing loss of $200 per week to the age of 55. They claim the sum of $105,000, using 623.6 as the 6% multiplier to age 55, reduced by 15% to allow for vicissitudes.
Mr Smith contends that he is likely to be unemployed for significant additional periods, whilst he looks for work or retrains or because he needs medical attention. He claims $163,000, being net income of approximately the amount of $32,675 per annum for five years, reduced by just more than one third, to $105,000, to reflect present day payment.
Finally Mr Smith submits that the Court might also apply a further small discount to some aspect of the losses claimed under the principles in Malec v Hutton[3] to reflect probabilities in assessments.
[3](1990) 169 CLR 638.
Counsel for Vicroads respond that there is a certain amount of “doubling up” in the claims made against them. They contend that the evidence does not support an assessment on the basis of Mr Smith’s future periods of unemployment between jobs or loss of overtime. Ultimately, in effect, they urge the Court to adopt what they contend is the more common and appropriate approach of assessing the evidence as to loss of future earning capacity on a more global basis.
Counsel for Vicroads put forward two possible calculations of the value of the loss of future earning capacity. They first submit that an appropriate figure for a modest award of damages, calculated with reference to the principles in Farlow and Malec v Hutton[4], would be between $75,000 and $100,000.
[4](1990) 169 CLR 638.
Alternatively, counsel for Vicroads submit that the Court should adopt the approach of Gillard J in Montfroy v Roads Corporation[5] when his Honour was assessing the losses sustained by Mr Montfroy in the accident. Gillard J calculated the loss of earning capacity on the basis that there was a 50% chance that Mr Montfroy, who had not worked since the accident, would remain unemployed to the age of 65. Counsel submit that the Court should calculate Mr Smith’s future loss on the basis that there was a 30% chance of him not receiving earnings to the age of 65. Calculated on the basis of a 40 hour working week, the multiplicand would be approximately $600 and the total loss of income some $125,000, together with superannuation entitlements of $16,500. The total compensation for loss of earning capacity would be some $141,500.
[5][2005] VSC 320.
Conclusion
As far as Mr Smith’s future employment is concerned, I consider that the evidence establishes a number of propositions.
I am satisfied that he could work as he had in the past, as a service station console operator and attendant, if he were able to sit down as needed. He could also perform his former work as a home-based salesperson. He could work as a forklift driver, but has been unable to find such work. It would be unlikely that he would earn more than the amount of his income at MAME in any such unskilled job.
Although he did work as a leading hand at Hy-Line after the accident, it is unlikely that he could continue to do such work in the long-term and even more unlikely that he could do that work for extended overtime hours. Although his income went up as a manager at Hy-Line, I am satisfied that Mr Smith is incapable of doing such work, even if it were to be available to him, without retraining
Had the accident not occurred, I consider it highly probable that Mr Smith would either have retained his employment with MAME, or obtained similar employment and worked to the age of 65. At MAME he was paid $13.18 per hour in 2000 and his current rate of pay would have been $18.98 per hour. In my view, it is also highly probable that Mr Smith would have continued to work overtime at the rate of an average of 10 hours per week up to the age of 55 and that he would have worked overtime for an average of five hours weekly between the ages of 55 and 65.
I note that I have not ignored Mr Smith’s demonstrated potential for leadership or management roles and the fact that, had he not been injured, he might have risen to a managerial role by the age of 55 and have been paid accordingly.
Mr Smith has shown a stoical determination to overcome the hurdles of his pain and disability. His employment history, both before and since the accident, demonstrates his strong motivation to find work, in order to make a useful contribution to his family and his lifestyle. That history will stand him in good stead in finding work. His determination and motivation will also increase his chances of employment.
Nevertheless, it will be difficult for him to re-enter the workforce because of the range of physically demanding unskilled jobs now unavailable to him as a result of his ankle injury. His obvious limp will have the effect of making it more difficult for him to obtain the type of employment for which he is qualified. Mr Smith will be restricted to light work, with a significant sedentary component. Sedentary clerical employment requires basic computer skills. His lack of management skills will prevent him from taking up management roles without re-training. He may be assisted in obtaining employment and retraining by government funded organisations, but any retraining will result in his absence from the workforce.
I am satisfied that it is highly probable that, notwithstanding his strong motivation to work, Mr Smith will now be forced to retire from the workforce by the age of 55, even if he can find an entirely sedentary occupation. The high probability of early retirement should be taken into account when determining the amount of damages for loss of earning capacity. In my view, notwithstanding Mr Smith’s potential for managerial work, it is appropriate to evaluate the loss of future earning capacity on the basis of the amount which he would have been earning at MAME, if he were working in the position he held at the date of the accident.
I am not satisfied that, even with his level of determination and motivation, Mr Smith will be able to work the number of hours of overtime he managed at MAME for any significant period. Working for extended hours at Hy-Line took its toll on him, physically and psychologically. The award of damages should also reflect that aspect of Mr Smith’s loss of earning capacity.
Before the accident Mr Smith had a number of jobs. The longest period for which he had worked in one job before the accident was some six years. As he had some twenty-one years of potential employment ahead at the date of the trial, it is highly probable that he will have a number of jobs in that period. It took Mr Smith some three months to obtain work at Hy-Line. In the circumstances, given his limited education, the relatively unskilled nature of the employment presently available to him, his need to re-skill and his unsuccessful attempt to gain computer skills and his possible need for future medical treatment, I consider it highly probable that Mr Smith will be unemployed on a number of occasions in the future. I consider it appropriate that the award of damages should reflect an allowance for approximately two years and nine months of additional absence from the workforce.
As Gillard J observed in Montfroy v Roads Corporation [6]: “[t]he Court in seeking to determine the future loss for the plaintiff faces a difficult task involving a degree of intuition and guesswork”[7]. His Honour went on[8] to refer to the statement to similar effect made by Lord Diplock in Paul v Rendell[9] and Gibbs J’s caution that the task should be approached methodically in Gamber v Nominal Defendant[10].
[6][2005] VSC 320.
[7][2005] VSC 320 at [127].
[8][2005] VSC 320 at [127] and [128], respectively.
[9](1981) 55 ALJR 371 at 372.
[10](1977) 136 CLR 145 at 148.
I have considered the suggested different ways in which the assessment should be approached in this case. I prefer to use the structured approach urged by counsel for Mr Smith when engaging in the exercise described by Diplock LJ in Paul v Rendell as “prophesying not only what the future holds for the injured [Mr Smith] but also what the future would have held for him had he not been injured”[11].
[11](1981) 55 ALJR 371 at 372.
In my view, Mr Smith should be awarded the sum of $180,000 for loss of earning capacity for the future. I have reached this conclusion after having considered the results of the following calculations :
Allowance for early retirement at age 55
107.7 (agreed multiplier) x $661 (approximate net weekly earnings based on gross income of $855 = $19 x 45 hours)
= $71,189 x 90% (probability of early retirement) $ 64,070
plus
107.7 (agreed multiplier) x $ 76.95 (superannuation : 9% x $855)
= $ 8287 x 90%(probability) $ 7,458
Allowance for loss of overtime to retirement at 55
623.6 x $152 (8 hours overtime per week x $19)
= $94,787 x 90% (probability) $ 85,308
Allowance for additional time out of workforce
2.75 years x $32,675 (net earnings based on approximately 40 hours x $19)
= $89,856 x 66.7% (reduction for early payment) x 90% (probability) $ 53,941 $210,777
210,777 x 85% (reduction for contingencies and vicissitudes[12]) $179,160 (say $180,000)
[12]Montfroy v Roads Corporation [2005] VSC 320 at [133] per Gillard J.
I have undertaken the more structured analysis, suggested by counsel for Mr Smith, in preference to the two different methods of calculation urged by counsel for Vicroads. However, I am mindful of the need to evaluate his loss of earning capacity on the basis of all the evidence as to what might have been and what may now be Mr Smith’s situation.[13]
[13]See: Victorian Stevedoring Pty Ltd v Farlow [1963] VR 594 at 599 per Sholl J.
I am not persuaded that the amounts urged upon the Court by Vicroads of either between $75,000 and $100,000 or $141,500 are sufficient to compensate Mr Smith for the loss of his future earning capacity. I consider that the sum of $180,000 would compensate him on the basis of a moderate evaluation of his chances of future unemployment or receipt of lower remuneration than that which he was receiving or would have been likely to receive.
Pain and suffering
Counsel for Mr Smith urge the Court to award him the sum of $225,000-250,000 by way of general damages for pain and suffering and loss of enjoyment of life. Counsel for Vicroads, on the other hand, argue that the sum of $150,000 would be appropriate compensation.
The Court was again referred to the decision in Montfroy. Mr Montfroy was awarded the sum of $150,000 for general damages for injury, pain and suffering and loss of enjoyment of life, after Gillard J had reduced the initial sum of $155,000 he had thought appropriate.
There was debate between the parties as to the comparative severity and significance of Mr Montfroy’s physical injuries and in relation to the existence of any psychological consequences to him of the accident. I do not propose to try to analyse the similarities and differences between the two fact situations. However, I note Gillard J’s findings that Mr Montfroy was taking no pain killers or anti-inflammatory drugs at the time of the trial, that he had a stiff right ankle and that he experienced some pain after walking “reasonable distances”. I have not ignored the fact that Mr Montfroy also sustained other injuries.
Mr Smith was some twelve years younger than Mr Montfroy at the date of the accident. He suffered significant pain as a result of operations and other procedures. He continues to suffer disabling pain and requires significant analgesic medication on an ongoing basis, with potentially adverse effects on his physical health. His need for morphine has increased in recent times. He fears the possible effects of the medication. Mr Smith also suffered the psychological effects of Post Traumatic Stress Disorder, depression and anxiety, described by Mr Honey in his detailed reports.
Mr Smith’s enjoyment of life has been significantly reduced as a result of the accident. His personal relationships have been affected by his chronic pain. He is a young man who can no longer engage in the same physical way with his young family. He has reduced ability to engage in any recreational activities. He was a keen gardener and even mowing the lawn is now beyond him.
Mr Smith is forced to wear a brace to stabilise his ankle. He finds his ankle ugly and endures sweating in that area. He limps. He may require more surgery and treatment for infection and the state of his ankle is unlikely to improve.
In my opinion, taking into account a reduction to allow for the vicissitudes of life, an award of the sum of $195,000 by way of general damages for the pain and suffering and loss of enjoyment of life which he has experienced and will continue to endure would be appropriate.
Taking this sum into account, the total amount of damages to be awarded would be as follows:
General damages for pain and suffering and loss of enjoyment of life $195,000
Past loss of earnings
16 2.2002 to 5.3.03 $ 36,581
4.8.06 to 31.8.06 $ 2,803
Loss of earning capacity $180,000
$414,384
Finally, bearing in mind that there may be some overlap between the compensation for pain and suffering and loss of enjoyment of life with regard to Mr Smith’s loss of ability to do work for which he has the necessary skills and the compensation for loss of his earning capacity, I consider that the appropriate amount of damages should be $410,000 made up of:
General damages for pain and suffering $190,000
Pecuniary loss damages $220,000.
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