Stork ICM Australia Pty Ltd v Hill
[2002] WASCA 132
•16 MAY 2002
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE FULL COURT (WA)
CITATION: STORK ICM AUSTRALIA PTY LTD -v- HILL [2002] WASCA 132
CORAM: WALLWORK J
MURRAY J
WHEELER J
HEARD: 16 APRIL 2002
DELIVERED : 16 MAY 2002
FILE NO/S: FUL 155 of 2001
BETWEEN: STORK ICM AUSTRALIA PTY LTD
Appellant (Defendant)
AND
BRYAN RICHARD HILL
Respondent (Plaintiff)
Catchwords:
Torts - Negligence - Personal injuries - Damages - Economic loss - Earning capacity - Contingencies - Turns on own facts
Legislation:
Nil
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
Appellant (Defendant) : Mr D R Clyne
Respondent (Plaintiff) : Mr M E Herron
Solicitors:
Appellant (Defendant) : Pynt McKay
Respondent (Plaintiff) : Gibson & Gibson
Case(s) referred to in judgment(s):
Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649
Husher v Husher (1999) 197 CLR 138
Case(s) also cited:
Graham v Baker (1961) 106 CLR 340
Lend Lease Employer Systems Ltd v Lydon, unreported; FCt SCt of WA; Library No 980088; 27 February 1998
WALLWORK J: I agree with the reasons for judgment and the conclusions of Wheeler J.
There is nothing I wish to add.
MURRAY J: I am in complete agreement with the judgment of Wheeler J. The appeal should be dismissed.
WHEELER J:
Background
The respondent was a pipe fitter by trade and worked on the fire water pump station at a nickel refinery. He was injured in an accident on 25 June 1997. At the time the appellant had a contract to upgrade the pump station. While working on one of the pipes, the respondent tripped over one of the bolts protruding from the concrete base and injured his shoulder and right knee as he fell to the ground, sustaining a rotator cuff tear and trauma to the right biceps muscles and ligaments. The disabilities were permanent and prevented him from resuming his pre-accident occupation. The appellant appeals against the learned trial Judge’s assessment of damages in the sum of $374,427.50 on the basis that the figure that his Honour used in his calculation for economic loss was wrong. The grounds of appeal are as follows:
"1.The learned trial Judge's assessment for past loss earnings in the sum of $167,459.00 is wrong and is excessive and in making that award the learned trial Judge erred in fact and in law in that His Honour calculated past economic loss on the basis of an earning capacity of $750 net per week when there was no proper or rational basis on the evidence for doing so in that:
(a)the Respondent's (Plaintiff's) net average weekly earnings as found by His Honour for the nine years prior to the accident were $496.32;
(b)the Respondent's (Plaintiff's) evidence was that he ordinarily worked approximately only eight months per year; and
(c)to the extent the finding relied on the evidence of other pipe fitters and boilermakers called by the Respondent (Plaintiff), was wrong as the Respondent (Plaintiff) had rarely, if ever, earned a comparable income to those witnesses.
2.The learned trial Judge was wrong in awarding past loss of earnings for the entire period from the date of the accident until trial (save for the period when his wife was terminally ill and save for the period when employed by Clough – a total of 25 weeks) as such finding overlooks the evidence of the Respondent (Plaintiff) that ordinarily he only ever worked approximately eight months per year. As a consequence the appropriate calculation should have been based on the Respondent (Plaintiff) working eight months per year and not for the whole of that period.
3.In finding that the Respondent (Plaintiff) had a pre-accident earning capacity of $750 net per week and consequentially calculating past economic loss on that basis His Honour has erred in fact and in law in that he has failed to properly consider the extent to which the injuries suffered by the Respondent (Plaintiff) had been productive of economic loss.
4.The learned trial Judge's assessment for future loss of earnings in the sum of $144,637.50 is wrong and excessive and in making that award the learned trial Judge erred in fact and in law. In this regard the Appellant (Defendant) repeats [submissions 1 to 3].
(a)the usual rate to be applied for the ordinary vicissitudes of life;
(b)the Respondent's (Plaintiff's) other health problems and in particular two arthritic knees.
5.The learned trial judge's assessment of damages for past and future loss of superannuation is excessive and wrong in that it is based on the calculations for past and future loss which are the subject of Grounds 1-5 hereof."
The respondent filed a notice of contention with respect to the assessment of damages being subject to the future pecuniary loss provisions of the repealed s 93D of the Workers Compensation and Rehabilitation Act 1981 (WA). It is unnecessary to consider this further for the reasons I now give for dismissing this appeal.
The respondent conveniently summarises the findings of the trial Judge in his submissions:
"1.As at the date of the trial he was 58 years old and had worked as a pipe fitter all his working life. Since arriving in Australia in 1983, he had worked in the construction and mining industries in WA and Northern Australia. The respondent could not resume his pre-accident occupation as a pipe fitter.
2.In the 11 weeks immediately preceding the accident when the respondent worked for the appellant he earned between $537 net per week and $972 net per week (the most being $1,194 net per week. The average weekly net earnings were $788.18 net per week.
3.For the nine years up to and including the year of the accident on 25 June 1997 the respondent's average net weekly earnings calculated using current tax scales was $536.01.
4.The respondent’s wife died of cancer in October 1998 having suffered her illness for many years as a result of which the respondent did not work or declined work away from home so as to be able to care for her.
5.Prior to the accident the respondent had not been fully employed as a pipe fitter for reasons including, the nature of the industry, the desire on his part to build a house, the need to take time off after a knee reconstruction and because his wife was suffering from cancer.
6.The learned trial judge found that on the basis of the evidence of four pipe fitters the income earned from 1998 to 2000 was between $789.04 net per week and $1,098.04 net per week."
The trial Judge proceeded to assess the respondent's claim for past and future economic loss on the figure of $750 net per week.
Assessment of Economic Loss
The appellant argued that on the historical evidence the respondent was only ever going to work eight months of the year, and on that basis the learned trial Judge erred in not relying upon that evidence as to the respondent’s loss of earnings as a measure of the amount of that loss. The argument was that the respondent’s capacity may have been to earn $750 per week but as he only ever applied it 8 months of the year, that calculation should have been adjusted to $500 - in the appellant’s submission, the figure his Honour should have used.
The appellant cites Husher v Husher (1999) 197 CLR 138 as an authority for the principle that consideration of the respondent’s historical earnings is prima facie evidence of the respondent's earning capacity (see also Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649). At par 8 of Husher decision, and citing the Arthur Robinson case, the Court said that the past may provide important evidence about the plaintiff's earning capacity and what economic consequences will probably flow from what has happened:
"What a worker earned in the past may provide very useful guidance about what would have been earned if that worker had not been injured. But the inquiry is an inquiry about the likely course of future events and the evidence of past events does not always provide certain guidance about the future. There may be many reasons why an injured plaintiff’s past work history provides no assistance in deciding what that plaintiff has lost through diminution of future earning capacity … Important as evidence of the past may be, that evidence is not determinative of an issue about loss of future earning capacity."
In my opinion the learned trial Judge did not err in his approach to the use of historical evidence. The plaintiff was not fully employed as a pipe fitter in the years before the accident, but his Honour noted that that there were a number of reasons for this: the nature of the industry (being one of casual contracting at varying locations), a desire on the respondent's part to build a house, his knee reconstruction, and primarily, that his wife suffered from cancer for many years and that it was necessary for him to be with her for long periods. The respondent’s work history was disjointed and not reflective of the measure of his working capacity. His Honour recognised that the evidence allowed for a number of different approaches to the assessment of the respondent's pre‑accident earning capacity and it is to this question that I now turn.
In Husher the High Court held that the assessment of damages for loss of earning capacity requires identification of the capacity that has been impaired or lost and the financial loss occasioned as a result. Identification of the loss suffered because of the diminution of that capacity requires the Judge to form a view of what would have happened in the future but for the negligent infliction of personal injury.
The fact that at the time of the injury a person is not in the paid workforce or is not working to full capacity does not prevent or limit a claim for loss of earning capacity or loss of earnings: plaintiffs who can show that but for their injuries they might have worked and earned in the future are entitled to compensation. Thus, workers out of a job, part‑time workers who intend to increase their hours later, people who intend to earn in their retirement or from second jobs, are all entitled to damages, at least to the extent that there was a chance that they would in the future have used their capacity to earn more money. Assessment of damages may be difficult in such cases but must be attempted.
The appellant argues that it would be proper to take into account that, on his evidence, the respondent worked only two-thirds of each year over the previous nine years. Accordingly the average net weekly earnings of $750 should be proportionately reduced to $500 and in support of that assertion counsel for the appellant draws the attention of the court to the following passage of cross‑examination:
"You told his Honour yesterday - and I don't think there's any doubt - that you're lucky if you get 8 months' work a year?"
To which the appellant responded:
"I think that's the nature of construction, but some of it is because you don't want to work. If you're working away 12‑hour days, 7 days a week for 8 weeks at a time, when you come home, you’re not likely to look for a job for the first 2 weeks because you need the rest and repatriation. I mean, you're doing a lot of hours in the short period of time."
However that is one aspect of the evidence in respect of the average weekly earnings and the question must be considered against the background of the whole of the evidence.
There was also evidence to the following effect:
•In the construction industry, when one works in a remote location where the work is considered harder and more demanding, there is the potential to earn a higher income. The shifts are long, and breaks between them relatively brief. It was work of this kind which the respondent said could not be sustained for more than about 8 months per year. In the metropolitan area, where the work is considered easier, the income is in general terms less lucrative. Historically the respondent did not work away from home because he was caring for his wife who had cancer. His evidence was to the effect that he had decided to desist from taking remote location work and only on one occasion while his wife was ill after her relapse did he work away.
•There was evidence called as to the incomes earned by other pipe fitters in the construction industry whose circumstances could be compared and contrasted with those of the respondent. These pipe fitters were essentially exercising the same earning capacity as the respondent but without the factors that affected the respondent's work history. Their average earnings were $789 ‑ $1098 per week, for various periods of metropolitan and remote work.
His Honour referred to the factors which had, on the respondent's evidence, historically affected his ability to exercise his earning capacity; reviewed his past earnings, both immediately before the accident and over the preceding nine years; and referred to the evidence of the other pipe fitters. He then said: "In my view in the light of all the evidence the plaintiff had a pre‑accident earning capacity of $750 net per week".
In my view, his Honour's view above is a conclusion which rolls together two factors, they being the amount of money the respondent would have been able to earn per week, and the extent to which he would have, but for the factors already mentioned, exercised that capacity to earn over sustained periods. The result is an average figure. A figure of that kind is able to be supported either on the assumption that the respondent's pre‑accident average earnings of $788 per week would have continued throughout the year, or on the assumption that he would have worked parts of the year only, but at remote sites at a higher rate of pay. In either case, if the earnings of the other pipe fitters are taken as a guide, the figure adopted by his Honour is a conservative one.
Contingencies
At trial counsel for the appellant submitted that this sum should be discounted by 10 per cent to allow for adverse contingencies including the likelihood of problems affecting the respondent's knees but the trial Judge considered this to be too pessimistic. The respondent managed to work as a pipe fitter after surgery in 1995 and experienced no problems with his left knee notwithstanding the fitting of an artificial joint. His Honour accepted that the practitioner who treated the respondent was of the opinion that his knees would not have prevented him from working until retirement age. In my view, balancing the favourable and unfavourable contingencies to which his Honour referred, the trial Judge made no error in applying a discount of 5 per cent in all of the circumstances.
Superannuation
As the success of this ground is dependent upon the success of the other grounds relating to economic loss, and as it is my opinion that they should be dismissed, it is unnecessary to deal with the trial Judge’s assessment of superannuation.
Accordingly I would order that this appeal be dismissed with costs.
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