Tedesco v Sabanovic & Sabanovic No. Scgrg-98-1112 Judgment No. S86
[1999] SASC 86
•24 March 1999
TEDESCO v SABANOVIC & SABANOVIC
[1999] SASC 86Full Court: Millhouse J, Prior and Nyland JJ
1 Millhouse J. The male respondent (the appellant complains only of the award of damages to him) was born in what is at present called Bosnia Hercegovina on 6 August 1964. As he grew up he became fond of boxing and was a successful amateur boxer both within his own country and more widely. He won a silver medal at the Mediterranean Games. He was picked for the Barcelona Olympics but didn't go because of civil war. Apart from his boxing he entered the trade of electrician.
2 In October 1993, having gone to Croatia six months before, he and his wife (the other respondent) and young family came to Australia. They stayed at first with her sister at Ceduna and then came to Adelaide. The respondent almost immediately began training again as a boxer. His trainer was Mr Colin Betty. In the next fifteen or so months six fights were arranged for him. Two of them fell through. Of the four others he drew one, lost one and won two. He was by then ranked number three in the cruiserweight division in Australia. He had earned only about $4,000 from his boxing. He had not done anything in Australia to take up his trade of electrician. He and his family lived on the Social Services.
3 The best though, as he and his witnesses told the trial judge in the District Court, was yet to come. He was to challenge for the cruiserweight championship in May 1995. He was training for the fight. The first purse would be $2,500. He had potential sponsors - $26,000 (to be paid at $500 per week) from four gentlemen, members of the Bosnia Hercegovina Club here in Adelaide and $10,000 from the ship builder Mr Joe Glamocak - all this money was dependent on his winning the fight. Mr Betty's opinion was that the respondent would win - but, as Mr Betty said, no boxer is more than one good punch away from victory - and it follows, I expect, from defeat as well. The favourite doesn't always win. Anyway for one reason or another the fight might have fallen through.
4 However had the respondent won, (perhaps even if he didn't), Mr Glamocak was planning for him to fight overseas in Muslim countries. This would have meant more money.
5 Unhappily ten weeks before the fight was due to take place the respondent was injured, through no fault of his, in a motor accident. His injuries were severe enough to end his boxing career.
6 At accident the respondent was nearly 31. That meant he had only another four years of his boxing career left, the evidence being that, unless an outstanding champion, no boxer goes beyond 35: by law in New South Wales and Victoria he is not allowed to. Indeed at the age of 30 the respondent was in the twilight of his boxing career.
7 On the other hand he might have done very well in those four years. Had he won the fight in May 1995 he would have been expected to defend his title twice in the next twelve months and have gone on defending it, I suppose, until defeated. The purse for each fight would have been at least $2,500 but the four gentlemen from the Bosnia Hercegovina Club were to take 40% of that.
8 Quite obviously all this is speculative and the learned trial judge had to cope with it as best he could.
9 As to earnings from the electrical trade the assessment was a bit easier. On the medical evidence which the learned judge accepted, the respondent had sufficiently recovered by March 1996 to go for his Australian trade qualification to allow him to work as an electrician. By then he had only a residual disability of 15% in his neck. The learned judge said:-
"I find that he has been capable of earning an income as an electrician since mid-1996, albeit that a small allowance must be made for his likely reduced capacity in that field, attributable to the ongoing 15 per cent neck disability from which he suffers."
10 I may mention that until trial in April 1998 the respondent had done nothing about getting his qualification.
11 The learned trial judge assessed damages as follows:-
"Non-economic loss $13,050.00 Past economic loss $30,000.00 Future economic loss $20,000.00 In lieu of interest $ 6,500.00 Voluntary assistance $ 1,000.00 Special damages $ 2,657.70 Total $73,207.70"
12 The appellant (nominally the driver of the car responsible for the respondent's injuries) complains only of past and future "economic loss" arguing that the learned judge did not follow the process of assessment laid down by the majority of the High Court in Malec v J.C. Hutton Proprietary Limited [1990] 169 CLR 638 @ 642-643:-
" 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 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 or 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. ... 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."
13 We talk of the broad axe. This axe must be very broad indeed!
14 Having canvassed the assessment of earning capacity as an electrician the trial judge remarked:-
" It is pertinent to say here, and I find that, but for the accident and had he gone on to attain the cruiserweight title, he would not likely have sought with any vigour to obtain electrical work whilst he held that title."
15 His Honour then turned to the more difficult appraisal of the chances of earnings from boxing:-
" On all the evidence, I am not satisfied that the chance of the first plaintiff becoming the Australian cruiserweight champion was so low as to be regarded as speculative. I thus proceed on the basis that the first plaintiff's loss of a chance to gain that title is to be assessed by having regard to what it is likely that he would have earned had he won it, to the period during which he might have held it, and as to what other fights, purses and benefits might have flown from that victory. Put another way, I must consider the opportunity to attain the title as opening up the prospect, not merely of further successful title defences but of further non-title fights and sponsorship rewards. Of course, his success in any later defences and their associated rewards are remoter chances and there must soon be a point at which that exercise offends the Malec approach and becomes a matter of mere speculation."
16 Having recited the likely financial rewards he said:-
" When those amounts are put together, it follows that, over one year as champion, Mr Sabanovic would likely have grossed $83,500 and netted after tax about $54,000.
I must then adjust that figure to take account of the risks that:
1.. the first plaintiff would not have succeeded to the championship at all - even so, I must allow for the promised payment by Mr Glamocak and the prospect he might still have earned some moneys by continuing in professional boxing and/or by qualifying himself and working as an electrician;
2.. having succeeded to the title, he would not have survived his first defence - even so, there is the prospect that he might still have boxed on and earned other income in that pursuit prior to retiring at 35 and, again, qualified himself and obtained work as an electrician;
3.. having succeeded to the title, he would not have had the expected opportunities for other rewarding bouts and the resulting sponsorship;
4.. his sponsorships would for some reason be lost;
5.. the usual contingencies, including, in particular, the risk of disabling injury in what is a violent sport.
I am cautioned by Malec from seeking to evaluate the true loss as some percentage of what the first plaintiff might have earned.
When all of those matters are put into the balance, however, and allowing for the period during which the plaintiff was prevented from earning income as an electrician, anyway, and for the notional reduction in his work capacity in that field over that period due to his neck injury, I fix a figure for past economic loss of $30,000. I further allow a sum of $6,500 in lieu of interest for that loss."
17 Mr Tom Birchall appeared for the appellant. He argued forcefully that the learned judge had not followed the approach laid down in Malec v Hutton. He took us through in detail the respondent's "ordinary, unremarkable and unprofitable" boxing career since he came to Australia and all the various contingencies and uncertainties relating to what might have happened in the respondent's boxing career in the future.
18 Mr Birchall submitted that $30,000 for past loss of earning capacity was far too much.
19 Mr Sydney Tilmouth QC for the respondent countered by arguing that all the learned judge's reasoning and findings were based on evidence which he had accepted - and the findings could not be challenged on appeal. In particular Mr Tilmouth pointed out that the learned judge had worked on the respondent holding the cruiserweight title only for twelve months whereas by then the respondent would still have had another three years notional boxing life left and might have done well in them. This of itself was a big allowance for adverse contingencies.
20 Certainly $30,000 on first look does seem a lot but the whole thing is so uncertain, such a gamble, both ways. I can see no demonstrable error in the way in which His Honour has gone about the process of assessment.
21 I do not think the respondent's chances of becoming the Australian cruiserweight champion were so low as to be speculative. Mr Betty thought he would win, the respondent thought he would win and two people were prepared to sponsor him on the basis that he could win. In terms of Malec - which the learned trial judge mentions - the respondent did have more than a speculative chance of becoming the champion. His Honour seems to have applied Malec correctly. He made considerable reduction for contingencies. He arrived at $83,500 for gross past earnings, a figure which on the evidence is reasonable. This was reduced to $30,000 - a reduction of approximately 64% for contingencies. His Honour was aware that boxing is an unpredictable sport and assessed accordingly.
22 As for the sponsorships, I accept the learned judge's findings. He described Mr Glamocak as:-
"... a dispassionate and impressive witness. ... that his interests were purely of a business nature: he had a previous history of sponsoring sports people, and boxers in particular: and he had a clear vision as to how his business could exploit the first plaintiff's success and cultural background. He had placed himself at arm's length from the first plaintiff, and felt secure in his sponsorship because he was completely in control of it, on a match-by-match basis.
I had no hesitation in accepting all his evidence ...".
23 His Honour said of Mr Huselic, one of the four gentlemen from the Bosnia Hercegovina Society:-
"Mr Huselic came across as a benefactor, who appeared to have the interests of his ethnic club at heart. He was not emotional in what he said and was quite objective about financial matters. He did not present as a person having a particularly close relationship with the first plaintiff."
24 The learned judge accepted these witnesses. The terms and conditions of the sponsorships were quite clear. They would have followed a win (or even with Mr Glamocak, perhaps a loss); logically the same contingencies apply to the sponsorships as to the win itself. The learned judge has taken into account the contingencies and so I am unwilling to substitute any other assessment for that which he made.
25 As for future loss of earning capacity, the judge has allowed only $20,000 to cover a working life, statistically, of up to thirty years. The appellant complains that this is "excessive".
26 This is what the learned judge had to say as to future loss of earning capacity:-
" As to future economic loss, I accept that there is a slight possibility that between the date of trial and the first plaintiff's thirty-fifth birthday, in August 1999, and but for the accident, the first plaintiff would have earned some income from boxing. It is a slight possibility, however, hence the provision I will make for it is small.
As I have found, the first plaintiff has not realistically been deprived of the opportunity in the future to earn income as an electrician, but I will again allow an amount that reflects his age and his reduced capacity to produce that income, or, indeed, other income in unskilled work, as a result of his permanent neck disability. I also take some account of the likely diminution in his prospects of obtaining employment due that injury. I fix a sum of $20,000 for future economic loss."
27 Even the appellant argued only that the amount awarded was "excessive" - he didn't use the well worn phrase "manifestly excessive"!
28 The learned judge has made meticulous findings, canvassed all the evidence. There is no reason to query them or to suggest that all contingencies have not been adequately taken into account. So far as I am concerned $20,000 looks quite modest; it should not be disturbed.
29 I suggest the appeal be dismissed.
30 PRIOR J In accordance with the basic principle that a plaintiff is to be put back into the position in which he or she would have been but for the defendant’s wrong, it is necessary for a court to consider what that position would have been. Once however the wrong has actually been committed, it can never be known for certain what that position would have been and the court is necessarily thrown back on evaluating the chances.
31 Here, the trial judge had to determine what would have happened if the accident had not occurred. This involved making an estimate as to what were the chances that particular things would have happened and reflecting those chances, whether they be more or less than even in the amount of damages awarded for economic loss[1]. The court had to assess the degree of probability that events would have occurred and adjust its award of damages to reflect the degree of probability[2].
[1] Mallett v McMonagle [1970] 1 AC 166 at 176 cited by Brennan and Dawson JJ in Malec v Hutton (1990) 169 CLR 638 at 640.
[2] See Deane, Gaudron and McHugh JJ in Malec at 643
32 The trial judge found that as a result of the accident the first plaintiff’s chance of continuing his career as a professional boxer was lost to him, albeit that that career would not likely have continued beyond the age of 35 years. In assessing past loss of earning capacity His Honour assumed that the first plaintiff won the title bout scheduled for May 1995, defended it twice and held it for as long as one year. He calculated the plaintiff’s likely earnings had this occurred. In so doing, His Honour spoke of adjusting that figure for “relevant contingencies”, the first of which was in fact a denial of the assumed winning of the title.
33 The trial judge had to consider the chances that but for the accident the first plaintiff would have won the title fight, sponsorships, extra fights and income from boxing up until he was 35, in August 1999. He also had to consider the chance that had the accident not occurred the first plaintiff would have pursued his qualification as an electrician and earnt a living from it. That was not regarded as mere speculation by the trial judge particularly if the boxing career was not as successful as some predicted. The assessment of economic loss had to allow for that loss of earning capacity resulting from the accident.
34 Had the first plaintiff not been injured in the accident he would have been able to pursue his fortune as a boxer for several years. His prospects of success were said to be good. He no longer has any such prospects[3]. He lost the chance of gathering substantial reward in the field of competitive boxing. The chance was more than a poor chance[4].
[3] Leis v Gardner & Anor (1965) Qd R 181 at 189
[4] LeisvGardner & Anor at 188
35 In the particular circumstances of this case, it is understandable that with respect to the plaintiff’s boxing prospects and the assessment of past economic loss, the trial judge did something similar to what is often done for a person in secure employment deprived of earning capacity in the future; - assume that a particular earning capacity would have been exploited to the full, at least until the normal retirement age and then discount the 100 per cent probability by chances of it not being exploited due to contingencies. With respect to future economic loss, the contingencies usually spoken of are premature death, illness and unemployment. They are usually comparatively small and the calculations that this method yields are not unhelpful in the assessment of fair compensation. However, in other instances, where it is much more uncertain that a plaintiff would have gained a benefit if the injury had not been incurred, it is necessary to evaluate the chance more directly as best the court can. In Chaplin v Hicks[5], the loss of a chance to win a beauty contest was involved, in Leis v Gardner, the loss of a chance of winning awards as a professional cyclist. This particular plaintiff’s boxing prospect identifies as much, perhaps more with these cases than the typical case of someone in secure employment likely to pursue that career for a long time.
[5] [1911] 2 KB 786
36 In this case the trial judge had to take into account the substantial chance that the title, sponsorship and winnings would occur over the remainder of the plaintiff’s boxing life. The best case scenario would have been more than the assumptions the trial judge made before he proceeded to make deductions for contingencies. There were difficult features inherent in the approach of the trial judge. For myself, I would not have sought to assess past economic loss by assuming that the plaintiff won the title, defended it twice and held it for as long as one year, adopting that period as “the high end of the prospect because it accords with the evidence that, having won the title, it is likely (the first plaintiff) would have successfully defended it at least once”.
37 It would have been just as appropriate for the trial judge to have assumed the best view of facts occurring in the first plaintiff’s favour and then make allowance for the fact that more than one probability is involved[6], adjusting the award of damages to reflect the degree of probability that the various events identified would have occurred. In such a situation the figure calculated upon the best and most favourable scenario for the first plaintiff has to be reduced for these multiple probabilities. The first plaintiff was entitled to be compensated for the loss of the chance he had to win the cruiserweight title. The extent of the compensation for that depended upon the degree of the chance[7]. Then there was the additional support said to be assured from Mr Glamocak’s sponsorship. That too had to be identified and valued against the possibility that it did not eventuate. There were more contingencies to be taken into account. In particular, in using that process the possibility of alternative employment as an electrician is a relevant consideration for the assessment of both past and future economic loss.
[6] Deane, Gaudron and McHugh JJ in Malec at 645
[7] Szittner v Harriott (1967) 1 NSWR 233 at 237.13
38 I do not share His Honour’s concern that success in any later defences and their associated rewards were remoter chances and matters of mere speculation. The evidence as to likely income and benefits, should things all have gone the plaintiff’s way for the rest of his boxing life, suggests the maximum figure that has to be taken into account and used as a guide for the assessment of fair compensation for the loss of the chances resulting from the accident. The more contingencies, the lower the value of the chances or opportunities of which the plaintiff was deprived[8]. It must never be overlooked that “in real life chances rarely are or can be estimated on mathematical terms”[9]. “Damages founded on hypothetical evaluations defy precise calculation”[10]. Against the evidence accepted by the trial judge, I would not have arrived at a sum much different from that fixed by the trial judge for past economic loss. The reality was that the first plaintiff’s prospects had never been better than they were on the eve of the championship fight. I would not interfere with the assessment of past economic loss.
[8] Hall v Meyrick [1957] 2 QB 455 at 471, Malec at 645
[9] Davies v Taylor [1974] AC 207 at 212
[10] Malec at 640
39 As for the assessment of future economic loss, I must say that I find difficulty with the sum arrived at against a particular indication by the trial judge that he preferred Dr Cain’s opinions against other medical opinions. Dr Cain’s evidence was that “with time and further rehabilitation the first plaintiff would be able to carry out a full range of electrical work”. Against that view the assessment of future economic loss could be seen as generous. Nothing put in argument persuades me that the court should interfere. The appeal should be dismissed.
1 NYLAND J. I agree that the appeal should be dismissed.
JUDGMENT CITATIONS
LISTED IN ORDER OF APPEARANCE IN JUDGMENTMallett v McMonagle [1970] 1 AC 166 at 176 cited by Brennan and Dawson JJ in Malec v Hutton (1990) 169 CLR 638 at 640.
2 See Deane, Gaudron and McHugh JJ in Malec at 643
3 Leis v Gardner & Anor (1965) Qd R 181 at 189
4 Leis v Gardner & Anor at 188
5 [1911] 2 KB 786
6 Deane, Gaudron and McHugh JJ in Malec at 645
7 Szittner v Harriott (1967) 1 NSWR 233 at 237.13
8 Hall v Meyrick [1957] 2 QB 455 at 471, Malec at 645
9 Davies v Taylor [1974] AC 207 at 212
10 Malec at 640
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