Tector v FAI General Insurance Co Ltd
[2000] QCA 426
•17 October 2000
SUPREME COURT OF QUEENSLAND
CITATION: Tector v FAI General Insurance Co Ltd [2000] QCA 426 PARTIES: GARRY JOHN TECTOR
(plaintiff/respondent)
v
MICHAEL ROY McCAUGHEY
(first defendant)
FAI GENERAL INSURANCE COMPANY LIMITED (ACN 000 327 855)
(second defendant/appellant)FILE NO: Appeal No 7391 of 1999
DC No 130 of 1998DIVISION: Court of Appeal PROCEEDING: General Civil Appeal ORIGINATING COURT: District Court at Maryborough
DELIVERED ON: 17 October 2000 DELIVERED AT: Brisbane HEARING DATE: 9 June 2000 JUDGES: McMurdo P, Pincus JA, White J
Separate reasons for judgment of each member of the Court Pincus JA and White J concurring as to the orders made, McMurdo P dissenting in partORDER: Appeal allowed. Set aside the award of damages made below so far as it relates to pain and suffering and loss of the amenities of life and past and future economic loss and in lieu thereof award $25,000.00 for pain and suffering and loss of the amenities of life (with no interest) and $55,000.00 for past and future economic loss. The new award should be $109, 539.72. Respondent to pay the appellant's costs of the appeal. CATCHWORDS: DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – MEASURE OF DAMAGES – PERSONAL INJURIES – METHOD OF ASSESSMENT – GENERALLY – whether assessment of damages for past economic loss, future economic loss and pain, suffering and the loss of amenities of life was manifestly excessive and beyond the limits of a sound discretionary judgment
DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – MEASURE OF DAMAGES – PERSONAL INJURIES – LOSS OF EARNINGS AND EARNING CAPACITY – LEGAL PRINCIPLES – whether learned trial judge applied correct test in assessment of damages in respect of past economic loss and loss of future earning capacity
Calder v Boyne Smelters Limited [1991] 1 Qd R 325, considered
Elford v FAI General Insurance Company Limited [1994] 1 Qd R 258, followed
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638, appliedCOUNSEL: K N Wilson for the appellant
P J Favell for the respondentSOLICITORS: McInnes Wilson for the appellant
Bell Dixon Butler for the respondent
McMURDO P: In July 1999, at the Maryborough District Court, the respondent was awarded damages of $188,583.12 for injuries arising from a motor vehicle accident on 20 September 1996; liability was not in issue. The appellant submits that the awarded amounts for past economic loss, future economic loss and general damages were manifestly excessive and erroneously calculated.
The facts
The respondent was 37 at trial. He suffered a serious injury to his back at work on 2 June 1994; he was a self-employed cabinet maker with a successful business earning over $70,000 a year. After the accident, he was unable to work and was supported by his accident insurance. He had a spinal fusion performed on his lower spine on 15 December 1994; the respondent, his wife and the respondent's general practitioner, Dr Collins, gave evidence that although he remained incapacitated after the surgery and made much slower than expected progress, he very gradually improved.
General practitioner, Dr McKeon, an approved medical practitioner under the social security legislation, examined the respondent in August 1996 just before the motor vehicle accident, to assess his eligibility for a disability support pension. Dr McKeon found that despite the spinal fusion the respondent continued to have lower back pain which interfered with his function; he was able to perform light duties and had improved since the surgery; he was capable of doing at least eight hours per week of light work which at some stage in the next 24 months may be able to be increased to 30 hours a week; he would never be capable of doing heavy work such as labouring or lifting but would be capable of clerical work or light duties. Dr McKeon noted that the respondent anticipated further study to prepare for such future light work.
On 20 September 1996 the respondent was in a motor vehicle accident which further injured his spine and caused excruciating pain. The collision itself was not violent and the respondent's young daughter walked away from the minor accident unscathed. By contrast, the respondent had to be removed from the vehicle by ambulance officers using special equipment; he was taken to hospital and given pethidine. He returned home but his condition worsened. He was treated by Dr Collins; readmitted to Hervey Bay Hospital for two weeks; returned home and had four-hourly pethidine injections for two weeks.
Dr Collins arranged his transfer to the Royal Brisbane Hospital Pain Clinic which he attended from 11 to 25 December 1996. A report from that institution notes that he was seen by psychiatrists and assessed as having "a very anxious personality with some elements of major depressive illness". The respondent was registered with Queensland Health as therapeutically drug dependent and Dr Collins as his authorised prescriber. He returned home and was largely bed ridden for about five months.
Dr Collins, who had the advantage of being his treating general practitioner both at the time of the work injury and the later motor vehicle accident, saw the respondent's prognosis as very guarded; he will continue to suffer chronic pain so that he will never return to his trade and may never return to gainful employment. She noted that he did not make the recovery usually expected after the work accident although he was very slowly improving at the time of the motor vehicle accident. His symptoms after the motor vehicle accident were worse and more extensive than after the original injury.
The respondent attended the Wide Bay Integrated Mental Health Service on three occasions in March and April 1998. Dr O'Donnell, Registrar in Mental Health, noted the respondent's chronic pain syndrome make it unlikely that he will ever work again for a living; his capacity to engage in normal family activities has been curtailed indefinitely; he is suffering a depressive reaction but his intelligence and sound personality suggest that he may accept and adjust to his impaired function and life style; his only relief from pain is lengthy bed rest or morphine infusion.
Spinal surgeon Dr McPhee also had the advantage of treating the respondent since July 1994 for the lower back problem which caused him to cease work as a cabinet maker; x-rays showed a spondylolysis of L5. As the symptoms did not improve he performed the spinal fusion on 15 December 1994; post-operatively there was only minor improvement; in January 1996, eight months before the motor vehicle accident, the respondent was taking daily analgesics, complaining of lower back and buttock pain of moderate intensity and was able to walk only slowly with pain down the right leg and with bilateral foot pain.
Dr McPhee next examined the respondent on 4 August 1997, almost a year after the motor vehicle accident. He could not then discern any significant difference from the history and clinical findings recorded in January 1996 but the respondent now required daily narcotics; this was not unexpected because of the respondent's response to his initial back pain in 1994 and the subsequent surgery; x-rays did not show any substantial injury to the lumbar spine.
Dr McPhee assessed the disability arising from the motor vehicle accident at 5% of the individual. It was unlikely the respondent had the ability to return to full time employment before the motor vehicle accident; this remained unlikely after the motor vehicle accident.
Orthopaedic surgeon Dr Lee examined the respondent on 10 March 1999 at the request of the appellants' solicitors. Dr Lee thought the respondent had suffered a soft tissue musculo-ligamentous damage and/or bruising in the motor vehicle accident; ample time had passed to allow this to heal; he could find no physical explanation for the respondent's ongoing symptoms which may be more accurately assessed by the specialist practitioners at the Royal Brisbane Hospital Pain Clinic. The respondent's future employment prospects appear unchanged following the motor vehicle accident.
Neurologist Dr Todman examined the respondent at the request of the respondent's solicitors on 1 February 1999. He noted that since the motor vehicle accident the respondent has had a substantial increase in intensity in lumbar and cervical spine pain and developed headaches. His ongoing symptoms suggest he has suffered a muscle and ligament strain to the cervical and lumbar spine and damage to the cervical and lumbar facet joints. The respondent's symptoms are chronic and the ongoing disability is likely to be permanent. He estimated that 10% of the respondent's 15% permanent impairment of the whole person was related to the lumbar spine disorder arising solely out of the motor vehicle accident and a further 10% permanent impairment of the whole person was related to the cervical spine injury arising out of the motor vehicle accident.
Psychologist and occupational therapist, Ms Kennedy, examined the respondent at the request of the appellants' solicitors on 20 May 1999. She noted that prior to the motor vehicle accident the respondent was still recovering from a lower back injury sustained in a work related incident two years earlier and had not been commercially employable since 1994. It was not possible for her to assess his physical and functional capacity because he self-limited his abilities and was over protective of body movements. She assessed him as suffering from a chronic pain disorder which is having a severe impact on his physical and functional capacity at all levels of his personal, domestic, social and occupational life; there was strong evidence that he was suffering from such a mental disorder prior to the motor vehicle accident.
Clinical psychologist, Dr Walsh also examined the respondent at the request of the appellants' solicitors on 11 May 1999. He noted a strong indication that the respondent was attempting to manage the outcome of the test results and reported a level of symptomatology which seems excessive for the physical findings in the medical assessments. He concluded that there were two diagnostic possibilities; either the respondent has a dependent personality and is suffering from a chronic pain disorder with both psychological factors and a general medical condition or he is malingering.
The principal issue both at trial and on this appeal was whether, and if so to what extent, the respondent had any residual earning capacity at the time of the motor vehicle accident and if so to what extent the respondent had the chance of deriving future income from the exercise of that earning capacity.
The learned primary judge accepted the evidence of the respondent, his wife and Dr Todman and concluded that the respondent suffered a musculo-ligamentous strain to the spine at both the cervical and lumbar levels and damage to the cervical and lumbar facet joints in the motor vehicle accident causing a permanent 10% impairment of the whole person related to the lumbar spine disorder and a 10% impairment of the whole person related to the cervical spine injury; there was a 5% impairment of the whole person related to the lumbar spine from the pre‑existing injury suffered at work. His Honour also concluded that the respondent has suffered a chronic pain disorder and will benefit from psychological treatment although his condition is likely to improve over time, especially once the litigation is concluded; the respondent has also suffered from elements of a major depressive illness or reaction but has a chance of adjusting to his impaired functioning and life style.
General damages
The appellant submits the learned trial judge erred in accepting the evidence of Dr Todman rather than that of Drs McPhee and Lee. The primary judge accepted the evidence of the plaintiff as to the truthfulness of his symptomatology before and after the motor vehicle accident as the respondent's evidence was supported by the evidence of his long term general practitioner Dr Collins, Dr McKeon and the respondent's wife. Dr Todman's evidence was at variance with that of Dr McPhee. Dr McPhee's evidence was persuasive as he had the advantage of treating and operating on the respondent for his work injury to the lumbar spine; he examined the respondent eight months before the motor vehicle accident and again eleven months afterwards; Dr McPhee's evidence was also in accordance with that of Dr Lee. But once having accepted the truthfulness of the respondent's evidence (which view was open), his Honour was entitled to accept Dr Todman's evidence, in part also supported by that of Drs Collins and McKeon; Dr Todman's opinion gave a plausible explanation for the respondent's exacerbated symptoms after the motor vehicle accident. In addition to the orthopaedic injuries, the respondent suffered a chronic pain disorder and depression. On those findings, which were reasonably open on the evidence, the award of general damages of $35,000 was not manifestly excessive.
Past economic loss
The appellant submits that the learned primary judge erred in his method of calculating past economic loss in that he did not follow the principles set out in Malec v J C Hutton Pty Ltd[1] which require a court to determine events which have not yet occurred and might or might not yet occur, not as to the probability of whether the event would occur, but as to the degree or percentage of probability of those events occurring. In any case, the appellant argues the award for past economic loss of $9,227.40 is excessive.
[1](1991) 69 CLR 638 at 642-643,
The primary judge did not appear to follow the Malec approach and instead found that it was more likely than not that immediately before the motor vehicle collision the respondent had some earning capacity. He accepted Dr McKeon's assessment that before the accident the respondent was able to work eight hours per week in light duties and that, but for the motor vehicle accident, over a period of two years he would have been capable of working 30 hours per week in light duties. He found that it was more likely than not that the following would occur: the respondent would have built up his capacity to earn income to 30 hours per week over two years; that in the first year the respondent would have earned some income and over time gradually built up to 30 hours per week and that the motor vehicle accident destroyed any actual or potential earning capacity the plaintiff had immediately before the motor vehicle accident. His Honour then assessed past economic loss for the 2.82 years from the motor vehicle accident until trial by determining that the respondent would have earned nothing for the first year and over the remaining 1.82 years would gradually have built up to 30 hours paid work per week; he allowed half the amount of 1.82 years at $13 per hour (a clerk's base wage) to reach a figure of $18,454.80 which he then discounted by a further 50% "for the factors I have mentioned" and assessed $9,227.40 for past economic loss. His Honour's reasons for further discounting must, by inference, relate to the prospect that the respondent may not have physically recovered to perform light duties and even so may not then have been able to obtain such employment.
The evidence is reasonably capable of supporting his Honour's conclusion that the respondent had a possible future earning capacity prior to the accident which was diminished by the motor vehicle accident. Such a conclusion was supported by the evidence of the respondent, his wife, Dr McKeon, Dr Collins and Dr Todman. At the time of the accident the respondent had no immediate realistic plans for gaining employment or earning income but he was improving slowly. Dr McKeon said the respondent may be able to perform 30 hours light work per week within two years but he may not have; the respondent was considering re-training but he may not have; he was considering setting up a business with his wife but he may not have; it was his goal to obtain some alternative employment but, even if physically able, he may not have secured suitable light employment. Dr Collins described his improvement before the motor vehicle accident as very slow and his treating orthopaedic surgeon, Dr McPhee, noted only minor improvement after the surgery eight months prior to the motor vehicle accident.
Because of the many variables and the respondent's very poor health immediately before the motor vehicle accident, the further discount of 50% applied by the judge for past economic loss was insufficient. In any case, it is common ground that his Honour erred in reaching the figure of $18,454.80 which was a gross rather than nett amount; the nett figure was $15,746.20. Even on a generous assessment of the evidence, it was very unlikely that, but for the accident, by the time of trial the respondent would have been physically able to do light work and successfully found such work; nevertheless this was a possibility for which some allowance should be made. An award of $1,500 properly recognises the competing possibilities.
Future economic loss
Nor did his Honour adopt the Malec method in determining future economic loss of $113,970, finding it more likely than not that the motor vehicle accident destroyed the respondent's future earning capacity. It is common ground that his Honour wrongly calculated the respondent's potential weekly wage at $290 per week; the nett weekly wage was $332.76; his Honour then multiplied the weekly amount by 28 years (until the respondent was 65 years of age), discounted that amount on the 5% tables, and then further discounted that figure by 50% to take account of the respondent's circumstances.
On the evidence, there was a very significant prospect that, had the motor vehicle accident not occurred, the respondent may never have recovered sufficiently to work a 30 hour week; he may not have recovered until 2, 5 or 10 years after the trial date; he may have been able to do some work but not as much as 30 hours per week; he may or may not have retrained; even if he did recover and retrained he may not have been able to obtain suitable work; had he established a business it may or may not have been successful. There remains the chance, given that his condition will probably improve post-litigation and he was once a successful self-employed tradesman, that despite the motor vehicle accident injuries he might obtain future, perhaps even lucrative employment, although there was no evidence to suggest this was a substantial chance. Adopting the primary Judge's generous preference for 28 years as the respondent's remaining working life and using the 5% tables the nett future economic loss would be $265,109.89. A realistic assessment of the evidence requires a further very substantial discount to take into account the many variables in this case which go well beyond the usual contingencies because of the respondent's precarious pre-accident health. The respondent's prospects but for the motor vehicle accident of being fit enough to perform and of finding suitable work netting $332.76 per week from the date of judgment until age 65 was real but could be no higher than 30%, in round figures $80,000. I would assess future economic loss in this sum.
The damages awarded should be reduced by $41,697.40, in the circumstances a sum warranting this Court's interference: Elford v FAI General Insurance Company Limited.[2]
[2][1994] 1 QdR 258.
I would allow the appeal with costs to be assessed and amend the order made at first instance to give judgment for the respondent against the second defendant in the sum of $146,885.72.
PINCUS JA: The suit the result of which has produced this appeal involved a point which often causes difficulty, namely the dissection out, from the current complaints of an injured plaintiff, of the results of an injury which pre-dated that which is the basis of the suit. The plaintiff, now respondent, gave evidence that he had trouble with his spine in June 1994 which had greatly improved by September 1996, when he was involved in a motor accident; that, according to his case, rendered him so disabled as to be unemployable. Fortunately there was reliable medical evidence of his condition shortly before the 1996 accident, but nevertheless the task of determining to what extent his state had been worsened by that accident (that being the matter for which he was entitled to be compensated) was not an easy one.
That was largely because, plainly enough, there is a substantial psychological element in the respondent's complaints. There was some discussion in the evidence of the possibility that he is a malingerer, but that appears to be unlikely and is not a conclusion argued for on appeal. Nevertheless, the difficulty of the judge's task was aggravated by the circumstance that there is a gap between the objective signs of disability, which are modest, and the subjective complaints, which amount to a condition of complete disablement. The more one reads of the record, the more evident it seems that the explanation of this gap is the core of the matter.
There is little information available about the severity of the 1996 collision; it would be helpful to know to what extent the vehicles involved suffered damage; I can find nothing in the evidence on that subject. What happened was that a stationary vehicle in which the respondent was sitting, in the driving seat, was hit by another vehicle, from the rear. The respondent was taken to hospital where nothing abnormal was found on physical examination and he was sent home with some pills for pain. It is this event which, according to the respondent's case, reduced him from partial employability to unemployability – a surprising result. The other occupant of the vehicle in which the respondent sat suffered not the slightest injury.
Dr F J Walsh, whose evidence I have found useful, expressed the view that:
"At best [the respondent] has a dependent personality which has resulted in him developing a chronic pain disorder which justifies him adopting a sick role and being dependent on significant others. At worse he is malingering".
As I have indicated, the malingering (i.e. conscious deception) theory appears to me unlikely and is in any event quite inconsistent with the judge's findings. Nevertheless, the fact is that there is a considerable discrepancy between the difficulties the respondent reports and those which one would expect him to experience. The motor vehicle accident which produced no injury whatever to the passenger, and no visible injury to the respondent, is (for example) said by him to have rendered him bed-ridden for 5 months.
The 1994 injury has an oddly uncertain history. Dr McPhee says in his report that the respondent attended "on 19 July 1994 with a history of spontaneous onset of low back and right-leg pain". Dr Lee was told that the low back pain developed shortly after an incident when the respondent was lifting sheets of kitchen board stacked against a wall and some suddenly sprang outwards and threatened to fall against him. In his evidence in this case the respondent agreed that he had been struck across the shoulders, back of the head, lower back and legs by a sheet of pine board. Adding to this apparent discrepancy, there is the fact that the 1994 injury as sworn to by the respondent in the present litigation involved "multiple fractures to my L5 vertebrae". There is nothing in the medical reports to support that.
But accepting, as one must, that the complaints presently made are largely subjective, there is a serious question whether, even subjectively, there was a great increase of disability caused by the 1996 accident. The only independent guide on this subject is provided by the medical evidence of Drs Collins, McPhee and McKeon. All of these doctors saw the respondent before the September 1996 accident.
Dr Collins expressed the opinion, as at 1997:
"It is impossible to define the extent of soft tissue injury except by symptomatology which is completely subjective".
The doctor remarked that the respondent "did not make the recovery usually expected" from his 1994 trouble and:
"He was making very slow progress at the time of his motor vehicle accident but was improving. His symptoms after the accident were worse than after the original injury and were more extensive". (emphasis added)
Dr McKeon saw the respondent only 3 weeks before the September 1996 motor accident. His observations are therefore of particular importance. He noted that the respondent could stand for only 5 minutes and walk for 30 to 40 minutes and sit up for two hours before pain prevented him from remaining in those positions. The respondent was unable to do much physical activity but could do brief stints at housework for 10 to 20 minutes. He could drive and do grocery shopping, but did not do lifting. He had continuous lower back pain radiating to the right knee and moved stiffly. Significantly, Dr McKeon assessed the respondent's employability at that time as only for light work for a limited period – in excess of 8 hours per week.
According to the respondent's evidence, at that stage he could pick his children up and had "virtually no pain". His wife's evidence was that before the 1996 accident the respondent was doing "normal every day stuff". She suggested, a circumstance which reminds one that the McKeon examination was about 3 weeks before the motor accident, that there was a "sudden improvement" two or three weeks before that accident.
Dr McPhee saw the respondent in January 1996, 19 months after the first injury and 8 months before the second. At that stage he "continued to complain of low back and buttock pain ... of moderate intensity". He was able to walk slowly with resultant pain down the right leg and bilateral foot pain. He was continuing to take analgesics daily. The doctor could discern no "significant difference from the history and clinical findings recorded in January 1996 with those found in August 1997".
There is a remarkable difference of view in the medical reports, between the two orthopaedic surgeons who were consulted, Drs McPhee and Lee, and the neurophysician Dr Todman. Both the orthopaedic specialists thought that the 1996 accident had made little or no difference to the respondent's pre-accident condition; Dr Todman on the other hand thought that the degree of permanent impairment was no less than five times as bad after the second accident. A curiosity of Dr Todman's report, in my opinion, is that it includes no discussion of the question which appears on any view of the matter to be a central issue in the case, namely the discrepancy between the objective signs of injury and the respondent's report of disability. It is surely not a common occurrence that a bump in the rear of a vehicle, causing no objective signs of injury on arrival at hospital, can, even years later, have the injured person in "excruciating" pain (which is what the respondent claims to have) with bad migraines, and trouble with bowel and bladder.
I note, as another example of the difficulty of relying upon the respondent's accounts of his troubles, that he told Dr Todman that before the 1996 accident he suffered from no neck pain or headaches, which is quite inconsistent both with evidence the respondent gave before the judge and with Dr Collins' history of his complaints. I also note that the severe neck pain now complained of is unassociated with any loss of range of movement in the neck.
It is hard to see how a mathematical approach to a case of this kind can be justified. The evidence in the case points to the conclusion that there is not a great deal physically wrong with the respondent's spinal area; that the complaints he makes are inconsistent and have little relationship with what is found on examination. At material times the severity of the respondent's complaints has exceeded the physical signs by a wide margin.
His difficulties are largely psychological and it is unpredictable whether, after the case is over he will continue to "hold on" to the picture of himself as being persistently in agony, which he has presented. It is impossible to tell to what extent, if at all, the psychological trouble is due to the motor accident. In my opinion courts should be very cautious in approaching a case of this sort. It makes little sense, in my respectful opinion, to compensate such plaintiffs handsomely, an outcome of which course of action is that plaintiffs of this sort would become even more common. Generosity should ordinarily be reserved for real ailments.
The only complaints made about the award relate to economic loss and pain, suffering and loss of amenities of life. I would allow the appeal and reduce these components to about $80,000 in total. I agree with the substituted award of $109,539.72 proposed by White J. The respondent must pay the costs of the appeal.
WHITE J: After a trial in Maryborough in June 1999 in which quantum was the only issue, the respondent was awarded damages in the sum of $188,583.12 in respect of the injuries sustained by him in a motor vehicle collision on 20 September 1996. The appellant appeals against the amount of damages assessed below for:
· pain, suffering and loss of the amenities of life in the sum of $35,000,
· past economic loss of $9,227.40, and
· loss of future earning capacity in the sum of $113,370
on the grounds that the amounts contained in those components are manifestly excessive and beyond the limits of a sound discretionary judgment. Further, the appellant contends that in making the assessments the learned trial judge applied a wrong principle and this court may interfere in that assessment, Calder v Boyne Smelters Limited [1991] 1Qd R 325 as explained and modified in Elford v FAI General Insurance Company Limited [1994] 1Qd R 258.
The respondent, who was a self-employed cabinet-maker, experienced the spontaneous onset of lower back and right leg pain on about 2 June 1994 when struggling with falling timber at work. He underwent a spinal fusion across the lumbar-sacral disk at L5 performed by Dr B McPhee on 15 December 1994. Post- operatively there was minor improvement and the respondent had not returned to or sought any paid work prior to sustaining injury in the motor vehicle accident on 20 September 1996. From then until trial, because of seriously disabling symptoms, he was unable to work and his prognosis at trial was that he would be unable to work into the future.
The major issue at trial was whether the respondent had any residual earning capacity prior to the motor vehicle accident and, if he did, whether he would have exploited it. The learned trial judge found that he did, not as a cabinet-maker, but rather in some clerical type work and that he would have exploited that capacity in a modest way prior to trial up to thirty hours per week and would continue to do so into the future to age 65 years. His Honour discounted both the past and future amounts so calculated by 50 percent to reflect various contingencies.
The appellant contends that the learned judge erred in his approach to the assessment of damages in respect of both past economic loss and loss of future earning capacity in that he did not apply the correct test in respect of events which might have occurred but for the intervention of the motor vehicle accident. By his regular use of the expression “more likely than not” when assessing hypothetical occurrences his Honour appeared to be applying the balance of probabilities test rather than addressing the degree of probability of the event occurring which might range from a very low to a very high probability. The proper approach is reflected in the well- known passage in the judgment of Deane, Gaudron and McHugh JJ in Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at 642.
“When liability has been established and a common law court has to assess damages, its approach to events that allegedly would have occurred, but cannot now occur, or that allegedly might occur, is different from its approach to events which allegedly have occurred.
A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. Hence, in respect of events which have or have not occurred, damages are assessed on an all or nothing approach. But in the case of an event which it is alleged would or would not have occurred, might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high - 99.9 per cent - or very low - 0.1 per cent. But unless the chance is so low as to be regarded as speculative - say less than 1 per cent - or so high as to be practically certain - say over 99 per cent - the court will take that chance into account in assessing the damages. 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 (9); Davies v. Taylor (10); McIntosh v. Williams (11). 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.”
As mentioned, his Honour made a number of findings expressed to be on the balance of probabilities about certain events which did not occur, for example, that the respondent did have capacity for up to thirty hours work per week of light clerical work which he would have exploited to age 65 years and which his Honour discounted for certain factors. It was submitted by Mr Favell, for the respondent, that in this way his Honour applied the correct test, or, in any event, reached the right outcome.
The appellant contends that, if his Honour had approached the assessment of the chances that certain events might have occurred, had the motor vehicle accident not intervened, correctly, he could not have concluded that there was a 50 percent chance that the respondent would have been remunerated as assessed. This is because each necessary step on the way had to be assessed as to its probability of occurring and on no view of the evidence could there be support for a finding that any one or more of those steps had an 80 to 90 percent chance of occurring. And this must be the finding if a 50 percent probability was to be the end assessment as a matter of mathematical process.
After the respondent sustained the injury to his spine at work in 1994, he was in receipt of income protection insurance. His symptoms were such that he was unable to work at all and had sold his business of cabinet-making. After the insurance ceased he applied for a disability support pension. He was examined by a general practitioner, Dr K McKeon, for this purpose about three weeks before the motor vehicle accident. This evidence was, therefore, significant. Dr McKeon gave evidence that the respondent told him that he continued to experience pain in his lower back despite the operation almost two years previously and that he continued to have continuous lower back pain radiating to the right knee and occasionally experienced left leg pain if he was active. He told Dr McKeon that he took sleeping tablets regularly. This pain interfered with his daily life to the extent that he could walk for only thirty to forty minutes, stand for five minutes before needing to change position, and was unable to undertake much physical activity but could do some limited housework for about ten to twenty minutes. Although the respondent looked healthy to Dr McKeon he had a limited range of spinal movement and a mild degree of irritation in his sciatic nerves. Dr McKeon thought that the respondent was capable of doing light duties, such as clerical work:
“…part-time work which would be at least eight hours per week and provided it was light type of work and light duties and I anticipated that at some stage in the 24 months he may be able to increase that to full time work which - 30 hours a week.” R 48
In filling out the assessment form Dr McKeon indicated that the respondent was not currently medically fit for his usual work and was unlikely to become fit for such work within the following 24 months and that he was not medically fit for work in any of the occupational categories specified for at least thirty hours a week at award wages as at 20 August 1996 when he was examined including light unskilled work. Dr McKeon thought that he might be able to do so within the following 24 months. By this Dr McKeon meant physically he might be capable of light skilled work. He did not assess his aptitude for doing any of those jobs:
“This person is unable to do much physical work because of his painful back condition, although he can do light duties around the house. He could probably progress to part-time work in the next year or two, particularly if he becomes involved in retraining. Further on he anticipates doing external studies which could lead to a clerical career.” R 52
Dr Collins, the respondent’s general practitioner, recorded his complaints of virtually constant pain following the spinal fusion, although she did say that there was some improvement over time. The entry in her records for 19 June 1996 indicated that the respondent was constantly sore and had right buttock and right leg pain to the knee as well as pain to the sole of the foot. The respondent consulted with her every six weeks or so prior to the motor vehicle accident for prescriptions for pain relief and anti-inflammatory medication. He complained of some headaches then which were different from the severe headaches of which he complained after the motor vehicle accident.
The respondent and his wife gave evidence at trial that quite spontaneously in the two or three weeks prior to the motor vehicle accident and after examination by Dr McKeon, the respondent’s symptoms of pain lifted and he became relatively pain free to such an extent that immediately before the motor vehicle accident he ceased taking medication. Indeed, he and his wife were “juggling ideas of different things” that they might do working. The respondent thought that he might be able to manage some supervisory job in a cabinet-making business. He had run his own business for three years successfully. Perhaps, he suggested, he could draw some plans and do some quoting. He said that he knew some people in the industry and that Hervey Bay was fast growing. He had not then thought of doing any course or retraining for any other type of employment and used a computer for entertainment only. His wife had done all of the bookwork for the business. Mrs Tector said that they were “throwing around” a few things that they might do such as “an aquarium shop or something, we just didn’t know” R113, just prior to the motor vehicle accident. But this should be seen in the context of the respondent’s evidence that in carrying out the minor domestic activities that he did, such as cleaning skirting boards or the bath, he sat or lay down on the floor. To replace “little shrubs” he had to sit or lie down in the garden.
There was a conflict of medical evidence about the respondent’s symptoms allegedly caused by the motor vehicle accident. It is unnecessary to examine that evidence in great detail for the purpose of the grounds of the appeal except in so far as it relates to the damages awarded to him for pain and suffering. Dr McPhee, who had operated on the respondent, saw him in January 1996 and on 4 August 1997 after the motor vehicle accident. He concluded that having been unemployed post- operatively for two years it was unlikely that the respondent would have returned to employment even had he not been involved in the motor vehicle accident. He thought that the motor vehicle accident had made little difference to the respondent’s symptoms which existed prior thereto, although he accepted that the respondent may well have been experiencing severe headaches afterwards. Dr D Todman, a neurologist, thought that the motor vehicle accident had aggravated by five times the respondent’s earlier symptoms. His Honour below accepted Dr Todman’s evaluation of the respondent’s condition and rejected the opinions of Drs McPhee and P Lee, another orthopaedic specialist. It is difficult to understand how his Honour reached this conclusion bearing in mind the evidence of those who had seen the respondent prior to the motor vehicle accident.
Ms M Kennedy, a physiologist and occupational therapist, examined the respondent on 20 May 1999 and concluded that there was strong evidence that he was suffering from a clinical and mental disorder associated with his back pain prior to the motor vehicle accident. His Honour did not accept this assessment, largely because the respondent said he had improved immediately before the motor vehicle collision and because he said he was thinking about working and Dr Collins had given no support for this conclusion. His Honour’s approach to the question of the respondent’s capacity for work prior to the motor vehicle collision can best be seen in the following part of his judgment:
“Although I accept immediately before the motor vehicle collision the plaintiff would not have been completely free of symptoms in the future due to his lower back disability, and had a 5% impairment of his lower back, nevertheless I find the motor vehicle collision has had a substantial impact upon the plaintiff. For pain and suffering and loss of amenities of life I allow the plaintiff the sum of $35,000…
With respect to the plaintiff’s claim for economic loss both past and future, I find that it is more likely than not that immediately before the motor vehicle collision the plaintiff had some earning capacity. This was assessed by Dr McKeon at 8 hours per week for light duties, and that over a period of two years the plaintiff would be capable of 30 hours work in light duties. I accept Dr. McKeon’s assessment of the plaintiff’s earning capacity because as a medical practitioner he assessed the plaintiff one month before the motor vehicle collision and had the plaintiff’s earning capacity very much to the fore in his evaluation. That is, that was part of Dr. McKeon’s examination. Dr. McPhee had not seen the plaintiff since January 1996. Although I accept Dr. McKeon’s assessment of the plaintiff’s earning capacity, in my opinion it is necessary to take account of many factors that I find makes it more likely than not that the plaintiff was unlikely to have earned income at the level Dr McKeon’s assessment on its face might indicate may have been earned by the plaintiff. One factor is the plaintiff’s own statement to Dr McKeon about what he was then capable of doing and what the plaintiff said in cross-examination about himself. The plaintiff said immediately before the motor vehicle collision although the plaintiff may have had a goal to get back into work of some kind whether as an employee or self-employed, at best he was only thinking about doing so. He accepted that if he had been offered work at that point in time he would have had difficulty doing it. However, he was in a position to think about the future and look down the track. Another factor is that I find the plaintiff would have required retraining to suit him for clerical work. I do not accept that his previous experience in is business, even though it was a successful business, gave him the experience to do the work of a clerk, particularly the work of a clerk as described in the award in Exhibit 17. Another factor is if the plaintiff had turned towards supervising in a cabinet making business, even though I accept he would have been attractive to an employer, there would have been limited opportunities and competition from other able bodied people who could also make themselves available for some of the heavier duties that might occur from time to time in such a business. Even if the plaintiff had retrained as a clerk or looked for work in a supervisory role in a cabinet making business he would have had to compete with others for work and having been out of work for a long time and having a remaining spinal disability even in light work areas he would have been less attractive to a prospective employer. Although I accept gradually the plaintiff was more likely than not to have built up his capacity to earn income to 30 hours per week over a similar time frame to Dr McKeon’s time frame, I find it is more likely than not initially in the first year the plaintiff would not have earned income and over that time he gradually would have built up to Dr McKeon’s assessment to 30 hours per week over a slightly longer time frame because of the factors I have mentioned above. I find it is more likely than not that the consequences of the motor vehicle collision have destroyed any earning capacity the plaintiff had immediately before the motor vehicle collision or was likely to have in time after the motor vehicle collision. Therefore, for past economic loss there has been 2.82 years since the motor vehicle collision. On my finding in the first year there would not have been any earnings. Over the balance of 1.82 years gradually the plaintiff would have earned income from nil to 30 hours per week over that period. At $13 per hour representing earnings as a clerk over 1.82 years, that is $18,454.80. This figure then, in my opinion, ought to be discounted by 50% for the factors I have mentioned above. I therefore allow the plaintiff $9,227.40 for past economic loss.” R309-312
After dealing with some other amounts not the subject of appeal his Honour assessed the respondent’s future economic loss:
“With respect to future economic loss, at this point in time, some 2.82 years since the motor vehicle collision, I find the plaintiff more likely than not would have reached the stage of having the capacity to earn income from 30 hours per week work. As I have said, I find it is more likely than not the consequences of the motor vehicle collision have destroyed his earning capacity. However, there must be discounting for the factors I have mentioned above in the context of past economic loss, and for the usual contingencies. Thirty hours work would produce $390 gross income per week. After tax, that is approximately $290 per week. Over a 28 year span of working life, a loss of $290 per week on the 5% interest tables produces a lump sum of $227,940. In my opinion, that should be discounted by 50% to take account of the factors I have mentioned above in the context of past economic loss and the usual contingencies of life that would operate over a 28 year period. The factors I have mentioned above in the context of past economic loss in my opinion would have had less impact in the area of future earning capacity of the plaintiff, although still relevant to the plaintiff’s circumstances. This is because 2.82 years after the motor vehicle collision as I have found the plaintiff would then have been capable of 30 hours work and may have retrained or found some work to provide him with some experience to make himself more valuable to prospective employers. I therefore allow the plaintiff $113,970 for future economic loss.”
There were a number of calculation errors in his Honour’s assessment, some in favour of the appellant and others in favour of the respondent but on the approach which I take to the assessment it is unnecessary to detail them.
His Honour appeared to misstate Dr McKeon’s evidence. He did not assert that the respondent “would” be capable of thirty hours work a week in light duties but rather that that he “may” be so capable. Dr McKeon gave this opinion only with respect to the respondent’s physical capacity as was reported to him and as his examination revealed. He did not attempt to assess the respondent’s capacity for retraining if he undertook it or the availability of work of that kind for a disabled person with a back disability in the area. His Honour mistakenly elevated this evidence from mere possibility to something close to certainty. Accepting that his Honour was entitled to believe the respondent and his wife that the respondent had undergone a significant improvement in the couple of weeks prior to the motor vehicle accident and that they were starting to discuss the possibility at some unspecified time in the future that he may be able to engage in some kind of light work, there was nothing in the evidence to support a conclusion that this improvement was likely to continue into the future.
Although his Honour identified the factors which needed to be assessed, in my view he failed to recognise that there were many difficulties for the respondent which could not justify an assessment of the kind which his Honour made.
Dr Collins said that the respondent was making very slow progress at the time of the motor vehicle accident and did not make the recovery usually expected. She thought that his pre-existing back problem would have precluded him from returning to work after the work-related injury. Dr Collins, who knew the area, said that there was “no sedentary work available for untrained, unskilled people.” R 96. A discount of only 50 percent for all contingencies cannot be supported.
It was, in my view, unrealistic to approach the respondent’s income earning capacity on the eve of the motor vehicle collision by reference to precise hourly figures for a clerk and even more unrealistic to predicate the calculations upon a working life, albeit discounted, to age 65. In my view this was the kind of case where a lump sum figure reflecting the respondent’s past and future losses relating to his earning capacity was appropriate. The respondent was completely disabled so that he was unable to leave his bed for five months following, what would appear to have been a not very severe rear end impact. Weight should have been given to the very real possibility that other events of a noncompensable kind may well have brought about the respondent’s present symptoms. In my view, an amount of $55,000.00 for past and future loss of earning capacity is appropriate.
On the question of the appropriate quantum for pain and suffering and loss of the amenities of life, once malingering is excluded, as his Honour did and which the evidence would support, it seems that the respondent was rendered much more incapacitated as a consequence of the motor collision than prior thereto. He attended a residential pain clinic with some benefit. He suffers severe cervical and headache pain which he did not have before and his lower back pain, which is chronic, has increased in intensity. If he did not do so before, he has suffered from and will continue to suffer from a chronic pain disorder. The respondent was a relatively young man being 38 at the time of trial. He is unlikely to recover. The respondent’s counsel had proposed $30,000.00 as an appropriate award of damages under this head. His Honour awarded $35,000.00. Bearing in mind his age and that he is unlikely to get much better I am of the view that $25,000.00 is appropriate compensation, a figure proposed by Mr K Wilson, for the appellant.
No other items of damages are challenged on appeal. Accordingly, I would allow the appeal, set aside the award of damages made below so far as it relates to pain and suffering and loss of the amenities of life and past and future economic loss and in lieu thereof award $25,000.00 for pain and suffering and loss of amenities (with no interest) and $55,000.00 for past and future economic loss. The new award should be $109,539.72. The respondent should pay the appellant's costs of the appeal.
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