Stead, T.J. v Zdravkovich, D
[1991] FCA 356
•25 JUNE 1991
Re: THOMAS JOHN STEAD
And: DRAGISA ZDRAVKOVICH
No. ACT G52 of 1990
FED No. 356
Damages
COURT
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Davies(1), Neaves(2) and Miles(3) JJ.
CATCHWORDS
Damages - Personal injury - Whether amounts awarded for pain and suffering and for past and future loss of earning capacity excessive - No new point of principle.
HEARING
CANBERRA
#DATE 25:6:1991
Counsel for the appellant: Mr P. O'Connor
Solicitors for the appellant: Crossin Power Haslem
Counsel for the respondent: Mr P. Dent QC and Mr I. Byrne
Solicitors for the respondent: Elrington Boardman Allport
ORDER
The appeal be allowed.
The judgment of the Supreme Court of the Australian Capital Territory be set aside and in place thereof there be judgment for Dragisa Zdravkovich in the sum of $176,076.20.
The respondent pay the appellant's costs of the appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is an appeal from a judgment of a single judge of the Supreme Court of the Australian Capital Territory. His Honour found that Mr Dragisa Zdravkovich had suffered a whiplash injury when a vehicle which he was driving was struck from behind on 6 May 1985. His Honour assessed damages at the sum of $201,956.20. The appeal is limited to the question of damages.
At the time of the accident, Mr Zdravkovich was 47 years of age and was employed as a cleaner. He also worked occasionally as a concrete finisher. In February 1986, Mr Zdravkovich ceased work as a cleaner. It appears that his employer had lost its cleaning contract and no longer had need of his services. In any event, because of his neck problems and the pain he was suffering, he did not seek any further employment as a cleaner. Prior to February 1986, Mr Zdravkovich had worked with his wife as a cleaning team. Thereafter, his son and Mrs Zdravkovich worked together as cleaners. Mr Zdravkovich did some concrete finishing work after February 1986 but, by the time of the trial, he had not done any such work for two years.
The appeal challenges the general damages of $40,000 (apportioned as to 60% to the past), which were said to be too high and interest of $7,500 thereon, particulars of which were not set out in his Honour's reasons. The appeal also challenges the $270 per week net which his Honour found to have been Mr Zdravkovich's "working capacity" in the 1985/6 financial year and to date, and the basis upon which both past and future economic loss were calculated. Counsel further submitted that his Honour failed to take account of contingencies.
This is not an appropriate case in which to discuss the philosophical and conceptual questions involved in an assessment of damages. For the ordinary approach to the assessment of damages in a case such as the present, it is sufficient to refer to Todorovic v. Waller (1981) 150 CLR 402, in which the elements of loss of earning capacity and past and future economic loss were discussed. That case was of course concerned only with the discount rate to be applied to future economic loss but the remarks of their Honours are sufficient for present purposes. As to past economic loss, Aickin J. said at p 457:-
"It is no doubt realistic and sensible to take an actual figure, where one is known, especially when it represents a highly probable loss to the plaintiff, capable of calculation with reasonable certainty, and to confine estimates and guesses to the uncertain, unknown and unknowable."
At pp 412-3, Gibbs C.J. and Wilson J. said of "the loss or diminution of earning capacity in so far as it is likely to cause financial loss in the future":-
"In the case of loss of earning capacity it is necessary to compare what the plaintiff might have earned if he had not suffered the injury with what he is likely to earn in his injured condition. In many cases this means that the court has to engage in `a double exercise in the art of prophesying': Paul v. Rendell (1981) 55 ALJR 371, at p 372; 34 ALR 569, at p 571. Of course in some cases of serious injury it will be possible to say that the plaintiff is probably capable of earning nothing in the future. However, in no case can there be any solid basis on which to determine what the plaintiff would have earned if he had not received the injuries in respect of which he sues. Actuarial tables will show the average number of years which will be lived after a certain age by those alive at that age, but will not show that it is probable that the plaintiff, even if in good health, would have conformed to the average. No evidence can possibly indicate whether the plaintiff, had he not been injured, would have remained in good health, and continued to be employed at any particular rate of earnings. For these reasons, damages for financial loss likely to result from personal injury `can only be an estimate, often a very rough estimate, of the present value of his prospective loss': British Transport Commission v. Gourley (1956) AC 185, at p 212, per Lord Reid. Ultimately the process must always be one of judgment rather than calculation."
At pp 464-5, Brennan J. said:-
"Secondly, although it is inaccurate to describe damages for diminution of earning capacity as damages for loss of earnings, the plaintiff recovers `not merely because his earning capacity has been diminished but because the diminution of his earning capacity is or may be productive of financial loss' (Graham v. Baker (1961) 106 CLR 340, at p 347). The distinction between capacity and the fruit of its employment does not permit the Court to neglect the present value of future earnings in assessing damages for diminished capacity. There was a view, and it was most clearly expressed by Barwick C.J. in Ruby v. Marsh (1975) 132 CLR 642, at p 650, that although it was necessary to `make some conspectus of what the future might reasonably have brought to the injured person by way of financial gain by the exercise of the lost earning capacity', the Court should not undertake `a calculation of the wages as such which might in fact have been earned by the injured plaintiff during the remainder of his working life'. It is now accepted that a calculation of the present value of lost future net earnings is an appropriate measure of damages for diminution of earning capacity (see per Mason J. in Griffiths v. Kerkemeyer (1977) 139 CLR 161, at pp 188-189), and, if it were practicable to ascertain what the plaintiff would have earned during his working life, there is no reason why those amounts should not be taken to be `the financial loss which he will probably suffer', and why the present value of those amounts should not be regarded as an appropriate assessment of damages for diminution of earning capacity."
The above passages set out the usual approach to the calculation of loss of earning capacity insofar as it is or is likely to be reflected in past and future economic loss. However, there are cases in which, because it is difficult to determine what might have occurred but for the accident, or what the future might hold, a judge finds it necessary to make allowance for a possibility. The trial Judge had this point in mind for his Honour referred to the recent decision of the High Court of Australia in Malec v. J.C. Hutton Pty Limited (1990) 169 CLR 638. The Court there held that chances should be taken into account. At p 643, Deane, Gaudron and McHugh JJ. said:-
"Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 per cent probability of occurring, but to ignore altogether a prediction which has a 49 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded. See Mallett v McMonagle (1970) AC 166, at p 174; Davies v Taylor (1974) AC 207, at pp 212, 219; McIntosh v Williams (1979) 2 NSWLR 543, at pp 550-551. The approach is the same whether it is alleged that the event would have occurred before or might occur after the assessment of damages takes place."
Brennan and Dawson JJ. expressed a like view though, at p 640, they warned:-
"... we think it undesirable for damages to be assessed on the footing of an evaluation expressed as a percentage. ... Damages founded on hypothetical evaluations defy precise calculation."
I have referred to these principles for they seem to explain the basis upon which the trial Judge proceeded. Counsel for Mr Stead submitted that his Honour's relevant findings of fact were so brief that it was not possible to understand the basis of his Honour's award. His Honour's assessment of damages is, however, explicable and internally consistent, notwithstanding that it appears to have been written at a time of pressure.
In the motor vehicle accident, Mr Zdravkovich suffered a whiplash injury. There was no specific evidence of cervical spine injury. However, the trial judge held that "There is either undiscovered cervical spine injury, or more probably, soft tissue injury." In any event, Mr Zdravkovich's symptoms followed a pattern seen not infrequently, especially in cases where cessation of work intervenes. Mr Zdravkovich gradually adopted the role of an invalid and did not work in any capacity for some time prior to the trial. Mr Zdravkovich was seen by many medical practitioners. The evidence of Dr Knox, a psychiatrist, adequately set out the position as it was by the time of the trial. The trial Judge said in the course of his reasons:-
"It is clear that when seen by Dr Knox (on or about 21 November 1988), his major complaint was the occipital headache spreading bi-temporally. That he perceived (and still does) as the major reason he cannot work. His history of current disability (irritability, loss of libido, sensitivity to noise, lack of tolerance of physical activity) was consistent with his oral evidence. Dr Knox was of the opinion that chronic pain in the head and neck had caused the plaintiff `secondary mood disturbance' which he describes as a `depressive illness of a modest degree ... along with associated irritability'. He feels this illness has `amplified to an extent the organically-based symptoms complained of ...'.
Dr Knox saw the plaintiff again on 19 December 1989. He did note that the plaintiff had made `several attempts' to return to work (since the 1985 accident) as a concrete finisher. He cited `three days during 1988'. The plaintiff complained of a left hand weakness. He concluded,
`...there continues to be a very significant psychological element to Mr Zdravkovich's disabilities, with him clearly being chronically dispirited and depressed to a degree.' He felt that lack of a positive outlook would further depress the plaintiff's already poor chances of gaining even light unskilled work."
The trial Judge found:-
"From the above material, I am satisfied that following the accident of 6 March 1985, the plaintiff had neck and low back pain. He subsequently developed episodic migraine type headaches of a debilitating nature, a left arm/elbow pain, sometimes radiating further and a leg pain, sciatic in nature, usually manifesting in the knee area. There is also a left ankle weakness."
Of these complaints, his Honour thought that the neck/head disability and his lower back/knee area disabilities were related to the accident. His Honour said that "the plaintiff's perceived level of disability is exaggerated by depression and by a loss of motivation."
It was submitted by Mr P. O'Connor, counsel for the appellant, Mr T.J. Stead, that Mr Zdravkovich was left with a relatively minor disability, episodic migraine type headaches of a debilitating nature, and that the award of damages made by the trial Judge was excessive. However, it is clear that his Honour took a much more serious view of the matter. I would not interfere with his Honour's findings in this respect. When psychological elements intrude, as they obviously did in Mr Zdravkovich's case, a relatively minor incident can so change the personality of a person that he ceases to be an effective worker and takes on the role of an invalid. The life of Mr Zdravkovich changed dramatically. From being the breadwinner and head of the household, he became an invalid. He perceived himself to be ill and unable to work and suffered considerable pain and discomfort. His wife and his son took over the cleaning duties which he would otherwise have performed.
The award of general damages, $40,000, was on the high side for awards in the Supreme Court of the Australian Capital Territory. However, it was not so out of proportion to the general level of damages that an appellate court ought to interfere.
As to his Honour's award of interest thereon of $7,500, Mr P. Dent QC, with whom Mr I. Byrne of counsel appeared for Mr Zdravkovich, conceded that the interest should be calculated at 4% in accordance with the judgment of the High Court in MBP (SA) Pty Ltd v. Gogic (1991) 65 ALJR 203. That sum is $5,120. Accordingly, I would reduce the interest awarded by $2,380 to $5,120.
It was submitted that his Honour gave no explanation as to how he has arrived at the pre-injury working capacity of $270 per week. However, the explanation is not difficult to find. His Honour disregarded the earnings which Mr Zdravkovich had had and might have in the future from work as a concrete finisher. His Honour said:-
"I cannot be satisfied he lost the low level of earnings he historically had from this source."
Such a finding was not inevitable for his Honour went on to say:-
"Nevertheless, he was clearly unfit to perform this work by himself. His sporadic attempts to do so, in my opinion, prevented the plaintiff from exploiting more economically his residual working capacity for, say, cleaning work."
However, this finding favoured the appellant and no challenge is made to it.
The trial Judge was therefore excluding the concrete finishing work from his consideration when he said:-
"The plaintiff's working capacity was approximately $270.00 per week net in the 1985-86 financial year."
The figure of $270 per week was a rounding off of the amount claimed on behalf of Mr Zdravkovich at the trial with respect to cleaning work. The claim made was $274.73 per week. This figure comes from the income of $18,786 which Mr Zdravkovich derived from cleaning work in the 1984/5 year of income, from which $4,500 was deducted for tax. As the accident happened in the 1984/5 year of income and as Mr Zdravkovich stopped cleaning in February 1986, it seems clear that his Honour's reference to the 1985/6 year was simply a misprint. His Honour was correct in taking the net income from cleaning in the 1984/5 year as representing the earning capacity from that source, absent the accident.
The trial Judge referred to a lengthy report which was in evidence which had been prepared by Dr R. Renton and others. Of this report, the trial Judge said, inter alia:-
"A detailed `Vocational and Capability Assessment Report' (exh J) on the plaintiff was submitted on behalf of the defendant. The plaintiff was `deemed highly compatible with eight occupations'.
`... may require higher language skills than the plaintiff was able to demonstrate.'
The janitor, handyman, caretaker category was considered the most hopeful.
In fact, having heard and seen the plaintiff give evidence both with and without the aid of an interpreter and having regard to his age and the length of time he has been in Australia, useful improvement in his language skills, though possible, seems to me improbable.
A Parramatta employment agency is cited as suggesting a 45% success rate in placing disabled persons such as the plaintiff. The plaintiff is, however, currently unplaced and older than the target group referred to (30-45 years of age). Notwithstanding this, the report concludes that the plaintiff has a 60% chance of finding employment in four of the categories of employment deemed suitable for him. The difficulty with this report is that it assumes better English skills will be acquired for some of the four categories to be attainable, ignores the fact that the plaintiff is over 50 and assumes that the episodic neck and head pain is less debilitating than the plaintiff suggests."
Dr Renton concluded that Mr Zdravkovich had "an average probability (60% or higher) of being able to attain a position in the occupations" of kitchen hand, cleaner, janitor and laundry labourer. The trial Judge found as follows:-
"... he (Mr Zdravkovich) could have, particularly as part of a team, worked as a cleaner. Absences could have been covered. A janitor's job was possible. I think loss of earning capacity was and continues at approximately 40%. This is weighted towards the plaintiff by comparison with the Renton report, to take account both of the disadvantage of his history of disability and the reduction in his range of employment opportunities which is, in my opinion greater than the report assumed. It should not be further discounted for other contingencies."
Notwithstanding the reference to 40%, it is clear from his Honour's calculations and from other passages in the reasons for judgment that his Honour intended to say that the loss of earning capacity was 60%. His Honour assessed past and future economic loss on the basis of a 60% reduction.
As to past economic loss, his Honour said:- "Past economic loss (net) I assess at $42,600.00. I award interest thereon at $3,000.00. These figures are, necessarily an approximation reflecting a 60% loss of earning capacity."
Obviously, his Honour did not attempt to assess actual past economic loss but took into account the 60% loss of earning capacity, the 5 1/2 years approximately which had elapsed between the accident and the date of judgment and the $270 per week or $14,040 per annum which his Honour held to be the pre-accident net working capacity from cleaning.
I am not able to arrive at the precise figure which his Honour calculated. However, if one considers the actual loss of earnings during the period up to trial, that loss was considerably greater than that assessed by the trial Judge. If one simply takes 60% of the theoretical net loss of $270 per week from the date of the accident to the trial, one arrives at a figure a little in excess of that selected by his Honour. In either event, there seems to be no ground to find that his Honour's calculation of past economic loss was excessive. If anything, Mr Zdravkovich had grounds for claiming his actual loss of income during the period.
As to the future, His Honour said:-
"Future economic loss I assess on the basis that the plaintiff would have worked to age 65. There is a 40% chance he would have earned at his pre-accident rate. There is a 60% chance he would not. I bear in mind Malec v JC Hutton Pty Ltd (1990) 64 ALJR 316 and, accordingly, assess future economic loss at $102,500.00."
As I have said, in the assessment of future economic loss, it is usual to determine what the injured person would have earned but for the injury and what the injured person could and should be expected to earn in the light of the injury. If the injured person could be expected to find remunerated work as a cleaner or a janitor or the like, the calculation of future economic would ordinarily be made on that basis. If there were a 60% chance that an injured person would not earn in the future, then that fact would be taken into account as would also the possibility that he might obtain remunerated employment.
It was on this latter basis that his Honour made his award for loss of earning capacity, insofar as it was related to the future. Although his Honour had earlier said that Mr Zdravkovich had a residual working capacity for cleaning work and that a janitor's job was possible, it is clear from his Honour's course of reasoning that his Honour concluded that Mr Zdravkovich had only a 40% prospect of obtaining any such work. I see no error in his Honour's finding in this respect. Certainly, his Honour's award was not excessive. His Honour thought it unlikely that Mr Zdravkovich would work again, having regard to his medical condition, his age and the psychological factors such as depression which were making their contribution. His Honour could well have awarded a larger sum.
The important question is whether Mr Zdravkovich's medical and psychological condition were such that there was only a possibility of his returning to work. I see no reason to reject his Honour's findings in this respect. Indeed, Mr Zdravkovich's condition followed a pattern with which courts and administrative tribunals have become familiar. I would not doubt the view taken by the trial Judge that the motor vehicle accident brought about a state of affairs such that it was unlikely that Mr Zdravkovich would in the future be gainfully employed to any material extent.
It will now be apparent that the trial Judge did not make any other allowance for contingencies for he had taken those into account in adopting the 60/40 ratio. His Honour took into account all contingencies and applied the ratio in the manner I have explained. Another judge may have approached the task in a different manner. It seems to me, however, that there was nothing unfair to the appellant in the course which his Honour adopted.
In my view, the totality of the damages awarded was fair having regard to the serious effect which the accident had upon Mr Zdravkovich's life and to the many years of working life to which he would otherwise have looked forward.
There was a mathematical error of $1,000 in that the total damages were overstated.
I would therefore allow the appeal to the extent of reducing the element of interest on the general damages by $2,380 and by adjusting the error of $1,000. The judgment under appeal should be varied by reducing the damages to $198,576.20. I would otherwise dismiss the appeal. The appellant should pay the costs of the appeal.
JUDGE2
I have had the advantage of reading the reasons for judgment of Miles J. I agree in the orders which his Honour proposes and in his Honour's reasons.
JUDGE3
This is an appeal by the appellant defendant against an award of damages in the Supreme Court of the Australian Capital Territory in an action arising out of a motor vehicle collision. The collision occurred on 6 May 1985 when the vehicle driven by the appellant collided with the stationary vehicle in which the respondent was travelling.
The respondent was 47 years old at the time of injury. He was in regular employment as a cleaner and also followed an additional occupation as a part-time concrete finisher with a company controlled by his brother. The trial judge found that as a result of injury sustained in the collision, the respondent developed neck pain and low back pain, leg pain of a sciatic nature usually manifesting itself in the knee, together with episodic migraine-type headaches of a debilitating nature. His Honour found that the neck and leg pain continued until the end of 1989, after which it no longer seriously troubled him. However, his headaches continued and the disability caused thereby was exaggerated by depression and loss of motivation which was to some extent "litigation generated". His Honour did not make any specific descriptive findings about the respondent's ongoing disabilities except to the extent that he found that the respondent was capable of working as a janitor or as a cleaner in a team of cleaners. None of those findings is challenged in the present appeal. Indeed one of the grounds of appeal was that his Honour failed to give sufficient recognition to the respondent's capacity to work as a janitor or as member of a team of cleaners when assessing the respondent's past and future loss of earning capacity.
The impact between the two vehicles does not seem to have been great. However, his Honour rejected the evidence of the appellant which sought to establish that the impact was so slight as to render it unlikely that the respondent suffered the injuries of which he complained. His Honour also rejected the evidence of a neighbour of the respondent which had the respondent carrying out a much wider range of activities than the respondent was prepared to concede in his evidence. His Honour also rejected the conclusions of Professor Tracy, a surgeon who stated in a report an opinion unsupportive of the respondent. Other medical evidence showed that the respondent had complained of lower back pain on the day of the injury, as well as on the day following. He sought medical treatment from his local practitioner and was certified unfit until 20 May 1985. A provisional diagnosis of whiplash injury was made. He did not seek medical attention again until 9 September 1985 when he complained of neck pain radiating to the head and shoulders. Degenerative changes in the cervical spine were detected on x-ray, but no sign of injury. On 20 February 1986 the respondent was seen by a consultant neurologist, Dr Danta, to whom he complained of neck pain. The respondent ceased work as a cleaner at about that date but continued to work as a concrete finisher, apparently on a part-time basis, until about the end of 1988. He conceded in evidence that since being treated by Dr Cassar in 1989 his neck and back no longer troubled him. Radiography still failed to disclose any injury but Dr Cassar's thermorgraphic investigation to some extent confirmed the respondent's complaints during 1987-1989.
The trial judge thought that although the respondent tended to dramatize his disabilities on occasions, there was no conscious exaggeration. The respondent ceased to work as a cleaner on 20 February 1986 when the employer's cleaning contract came to an end. The respondent did not seek further employment as a cleaner because of his "perception" of his disability. His Honour thought that there would be some return of actual capacity in the future but that his chances of obtaining employment, limited by his continuing headaches and depression, would be substantially reduced by his lack of education and restricted skills in the English language. The trial judge appears to have accepted the evidence of Dr Knox, a psychiatrist, that the respondent continues to perceive headaches as the main reason why he cannot work and that is aggravated by a depressive illness of a moderate degree.
The award of damages and interest was as follows:
Pain and suffering, etc. $ 40,000.00 Interest thereon $ 7,500.00 Past economic loss $ 42,600.00 Interest thereon $ 3,000.00 Future economic loss $102,500.00 Agreed out-of-pocket expenses $ 5,356.20 Total: $200,956.20
(The amount for which judgment was directed was $201,956.20, which, in the light of the addition of the sums awarded under the various heads of damage, appears to be an arithmetical error.) Although the award for pain and suffering was challenged, no substantial reason was advanced to justify interfering with it. The trial judge found that the respondent suffered from neck and back pain caused by soft tissue injury up until the end of 1989 but continues to suffer from depression, loss of libido, irritability and the like, which amplify any physical symptoms which continue. On this basis the award for pain and suffering appears to be within the range of a discretionary judgment. A challenge to the award for out-of-pocket expenses was not pressed. There was a good deal of medical evidence and a number of reports was tendered in the case, but nothing turns on any precise medical issue. However, there was a report furnished to the appellant headed "Vocational and Capability Assessment Services" containing over 70 pages and including a medical assessment by Dr Roger Renton, who is therein described as "specialist in physical and rehabilitation medicine". The report also contained psychological, functional and vocational assessments and various appendices containing a wide range of statistics. His Honour does not appear to have attached great importance to the report as a whole, but it appears to be the source of a statement in the judgment that the figure awarded for past economic loss, $42,600, reflects a 60% loss of earning capacity. The report also furnishes a list of wage rates for various occupations, including that of a hospital cleaner ($16,640-$18,447 per annum), and that of a janitor ($18,678-$19,164 per annum).
The award for past loss of earning capacity was attacked on the basis that it does not appear to follow from the various findings that were relevant to that particular head of damage. Those findings were as follows:
1. Until 20 February 1986 there was no actual loss of earnings at all as the respondent continued to work both as a cleaner and concrete finisher.
2. From 20 February 1986 until the end of 1988 the respondent worked only as a concrete finisher, during which period his earning capacity was reduced to one third of what it was prior to injury.
3. The respondent's "earning capacity to date" was $270 per week.
4. The respondent's "working capacity" in the 1985/1986 financial year, the year after his injury and during which he lost no time from work until 20 February 1986, was also $270 per week.
5. The respondent has always been capable of carrying on concrete finishing work as part of a team.
6. The respondent was capable after 20 February 1986 of carrying out the work of a cleaner, again as part of a team, or as a janitor. He was incapable of carrying on two jobs at the same time as he had been doing at the time of injury.
7. The loss of earning capacity continued at the date of hearing at 40%, a figure which his Honour found was "weighted towards the respondent by comparison with the Renton report".
8. The award of $42,600 for past loss of earning capacity was "an approximation reflecting a 60% loss of earning capacity".
There is force in the submission on behalf of the appellant that these findings do not fit easily together and do not explain how the figure of $42,600 was arrived at. However, if one takes that figure as a starting point, then as an exercise in arithmetic, it is not difficult to see that it represents approximately $180 per week in the period from 20 February 1986 to the date of trial. If the exercise further assumes that the respondent retained one third of his earning capacity during that period, then the earning capacity but for injury would have been $270 per week. That indeed is the figure referred to in the judgment in the findings numbered 3 and 4 above. The statement in the judgment that the figure for past loss reflected a "60% loss of earning capacity" is not wide of the mark where the figures are based on a two-thirds loss. If those findings numbered 3 and 4 above are taken to refer to the respondent's earning capacity but for injury and not his earning capacity after injury, then the reference to $270 per week must be to the income he was likely to have earned if he had not been injured and is consistent with the arithmetic.
Again it is not apparent why his Honour fixed upon the figure of $270 per week as the likely earning capacity from all sources but for injury. The only supportive evidence is very meagre. There is a copy group certificate relating to wages received from cleaning work for the period 1 July 1985 to 20 February 1986 which shows a weekly net income of $224 for cleaning work only. An income tax assessment for the year 1984/1985 shows a taxable income of $26,293. A tax return for the same year discloses an income before tax from cleaning of $18,786 and from concrete finishing of $6,789. His Honour said that he took into account the prediction of the Renton report that a person in the respondent's position with lack of language skills had a reduced chance of gaining employment in those jobs which were within his physical capacity. If indeed $180 per week was the ultimate figure chosen by his Honour to reflect the respondent's average loss of earning capacity from 20 February 1986 to the date of hearing, that would not have been an unreasonable figure to select in the light of what evidence there was. Whilst it was submitted on behalf of the appellant that the findings as to loss of earning capacity were inconsistent and not related to any particular aspect of the evidence, so that this Court should order that the appeal be allowed and the matter remitted to the Supreme Court for redetermination, that situation is brought about by the indeterminate nature of the evidence called by the respondent in relation to the assessment of the value of the loss of earning capacity. It has not been shown that if the matter were sent back to the Supreme Court the evidence would emerge more clearly and no reason has been advanced why the appellant, or for that matter, the respondent, should be given another opportunity to augment the evidence or to present yet further argument about it. It has not been shown that the trial Judge's assessment of the amount awarded for loss of past earning capacity is wrong. This Court should not interfere with it.
In relation to future loss of earning capacity, his Honour expressed himself briefly in the following terms:
"Future economic loss I assess on the basis that the respondent would have worked to age 65. There is a 40% chance he would have earned at his pre-accident rate. There is a 60% chance he would not. I bear in mind Malec v. J.C. Hutton Pty. Ltd. (1990) 64 ALJR 316 and, accordingly, assess future economic loss at $102,500.00."
The respondent will attain the age of 65 years on 22 March 2003. For the twelve and a half year period from the date of trial to that future date, applying a discount rate of 3%, the amount of $102,500 awarded now represents a loss of about $188 per week. That is broadly consistent with the basis of the award for loss of earning capacity to the present time. However, assuming that an amount slightly in excess of $180 per week is taken as a proper basis for the continuing loss in the future, the trial Judge has made no allowance for the conventional vicissitudes of life nor, despite the reference to Malec's case, for the contingency that the respondent (who suffered from a degenerative spinal condition and from other symptoms and disabilities in the left arm and left ankle which could not be attributed to the subject injury) may have been incapacitated in any event with or without some subsequent injury. The assessment also appears to ignore the finding that the disability was exaggerated by depression, partly litigation generated, and would be followed by some restoration of earning capacity in the future. The award for future loss is not explained by the reference to a 40% chance that the respondent would have earned at his pre-accident rate and a 60% chance that he would not have done so. The present value of the loss of $180 per week for twelve and a half years into the future at a discount rate of 3% is about $98,000. Reduced by 15% for the conventional vicissitudes, it is brought down to about $83,000.
A further modest deduction for the contingency that the respondent may have been incapacitated by his degenerative cervical condition and other supervening disabilities in any event, and for the contingency that he might have retired before the age of 65 years, and allowing for the likelihood that the respondent's earning capacity would improve in any event, would justify awarding an end figure of approximately $80,000 for future loss of earning capacity.
On the question of interest on past pain and suffering, senior counsel for the respondent agreed that it should be calculated at 4 percent per annum in accordance with the decision of the High Court in MBP (SA) Pty. Ltd. v. Gogic (1991) 65 ALJ 203. The calculation gives a figure of approximately $5,120. Interest on past loss of earning capacity was not disputed at $3,000.
The award then would be as follows:
Pain and suffering, etc. $ 40,000.00 Interest thereon $ 5,120.00 Past economic loss $ 42,600.00 Interest thereon $ 3,000.00 Future economic loss $ 80,000.00 Out-of-pocket expenses $ 5,356.20 Total: $176,076.20
His Honour considered that the total sum which he calculated, amounting to $201,956.20 was a proper sum when viewed globally. His Honour's view in this regard needs to be accorded due respect because he saw the respondent and was in a better position to assess in a general way the effect that the injury had had upon the respondent. That assessment was already reflected in the components of the award of damages, particularly the award for pain and suffering and loss of enjoyment of life, which was a generous one. Nevertheless, the trial Judge's award stands to be adjusted with regard to the assessment of the value of future loss of earning capacity and in this regard his Honour advanced no reasons or at least no convincing reasons why the usual reductions for contingencies should not be made. The adjusted global figure of $176,076.20 for damages and interest is not inappropriate for a man who suffered a soft tissue injury only and lost no earnings from the two jobs that he was able to continue to follow until one of them came to an end nine months later through circumstances that had nothing to do with his injury and on whose own account was by the end of 1989 no longer seriously troubled by the physical consequences of his injury. His Honour acknowledged that the respondent's earning capacity was likely to improve in the future and it is difficult to see that if the respondent's headaches and depression persist into the future then a time will not arrive when they can no longer be said to be causally related to the 1985 injury.
The appeal should be allowed. The judgment set aside and in its place there should be judgment for the respondent in the sum of $176,076.20. The respondent should pay the appellant's costs of the appeal.
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