Vukancic v Velcic - [2007] NSWSC 1001

No judgment structure available for this case.

CITATION: Vukancic v Velcic [2007] NSWSC 1001
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 7 - 15 August 2007

JUDGMENT DATE :
6 September 2007

JURISDICTION: Common Law Division
Professional Negligence List

JUDGMENT OF: Brereton J

DECISION: Judgment for plaintiff for $84,994

CATCHWORDS: NEGLIGENCE – employer’s liability – lifting – whether worker had viable cause of action arising from injury suffered when supporting 10kg beam. - NEGLIGENCE – professional liability – whether solicitor retained to advise on workers compensation claim obliged to advise on potential common law rights and effect of accepting permanent loss compensation – where common law claim had fair prospects only and might have left worker better or worse off – content of appropriate advice. - DAMAGES – personal injuries – whether Griffiths v Kerkemeyer damages available for provision of support and encouragement. - DAMAGES – economic loss – loss of a chance – where first solicitor failed to advise worker of common law potential and consequences of accepting permanent loss compensation – where second solicitor failed to commence proceedings against first solicitor within time – evaluation of prospects of success of employer liability claim – whether value of workers compensation benefits to be deducted before or after discount for risk – date as at which workers compensation benefits to be valued – whether known facts in respect of workers compensation benefits subsequent to valuation date may be considered – vicissitudes to be applied to future workers compensation benefits – whether workers compensation top-up insurance payments to be deducted – evaluation of prospects of success of professional liability claim against first solicitor – risk factors – risk that properly advised plaintiff would not have brought employers liability claim

LEGISLATION CITED: (NSW) Civil Liabilities Act 2002
(NSW) Uniform Civil Procedure Rules 2005, r 42.15
(NSW) Workers Compensation Act 1987 ss 66, 67, 151A, 151B, 151G

CASES CITED: Chamberlain v Ormsby [2005] NSWCA 454
Charles v Hugh James Jones & Jenkins [2000] 1 All ER 289
Clayton v Kearsey (1935) 79 SJ 180
Feletti v Kontoulas [2000] NSWCA 59
Green v Berry [2001] 1 Qd R 605
Gregory v Tarlo (1964) 108 SJ 219
Griffiths v Evans [1953] 2 All ER 1364
Hamze v Bradstreet [2007] NSWDC 54
Malec v J C Hutton Pty Ltd (1990) 169 CLR 638
National Insurance Company of New Zealand Limited v Espagne (1961) 105 CLR 569
Quevillon v Lamoureux (1975) 52 DLR (3d) 476
Ren v Mukerjee (ACTSC, Miles CJ, 12 December 1996, unreported)
Rotumah v New South Wales Insurance Ministerial Corp (NSWSC, Donovan AJ, 6 April 1998, unreported)
Scott v Echegaray (1991) Aust Torts Reports 81-120
Tipper v Williams (No 2) (NSWCA, 6 May 1994, unreported, BC9404994)
Yardley v Coombes (1963) 107 SJ 575

PARTIES: Zoran Vukancic (plaintiff)
Nikola Velcic t/as Nikola Velcic & Associates (first defendant)
Martin Bell t/as Martin Bell & Co Solicitors (second defendant)

FILE NUMBER(S): SC 20205/04

COUNSEL: G B Hall QC w A Lakeman
J Downing (second defendant)

SOLICITORS: Hall Partners (plaintiff)
Yeldham Lloyd Associates, Lawyers (second defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
PROFESSIONAL NEGLIGENCE LIST

BRERETON J

Thursday, 6 September 2007

20205/04 Zoran Vukancic v Nikola Velcic & Anor
JUDGMENT

1 HIS HONOUR: Between 24 and 27 May 1996 the plaintiff Zoran Vukancic, in the course of his employment with Dalma Formwork Pty Limited, suffered a serious injury to his back, which occasions him ongoing disabilities. In August 1996 he retained the first defendant firm of solicitors, Velcic & Associates, to act for him on a claim for compensation in respect of that injury. On 11 March 1998, Mr Vukancic settled his claim for compensation under (NSW) Workers Compensation Act 1987, ss 66 and 67, for $37,500, thereby electing, pursuant to Workers Compensation Act, s 151A(3)(b), to accept permanent loss compensation under that Act and ceasing to be entitled to recover damages at common law in respect of his injury. He claims, but Velcics dispute, that he was not advised properly or at all as to his rights at common law, and as a result lost a valuable cause of action against his former employer. Subsequently, on 16 May 2001, he retained a second firm of solicitors, Martin Bell & Associates, to act for him. They instituted these proceedings against Velcics on 2 June 2004, more than six years after Mr Vukancic had elected to give up his common law rights on 11 March 1998. Velcics pleaded that the limitation period applicable to the claim against them had expired. Compelled to change solicitors yet again, Mr Vukancic joined Bells as second defendants, claiming that as a result of their failure to commence proceedings against Velcics within time, he had lost a valuable cause of action.

2 The proceedings as against Velcics have been settled on the basis of a consent judgment for Velcics, it being accepted that their limitation defence would succeed. Accordingly, the remaining major issues are:

· Were Bells negligent as alleged?

· What damages would Mr Vukancic have recovered from Dalma if he had succeeded in a common law employers’ liability claim in respect of his work injury?

· What were Mr Vukancic’s prospects of success in such a claim against Dalma?

· What damages would Mr Vukancic have recovered from Velcics if successful against them in a claim for breach of professional duty?

Were Bells negligent as alleged?

3 Mr Vukancic retained Bells on or about 16 May 2001 to advise him in respect of remedies available to him generally. Bells do not dispute that they owed Mr Vukancic a duty to use reasonable care, skill and diligence in and about the performance of their professional duties pursuant to the retainer.

4 The possibility of a professional negligence action against Velcics was under consideration by Bells and counsel briefed by them not later than 28 October 2002. Bells admit that they did not commit proceedings against Velcics, nor advise Mr Vukancic to do so, within six years from the date of Mr Vukancic’s election under s 151A. At the commencement of the trial, Bells’ counsel announced that it was not in dispute that the proceedings against Velcics were statute-barred, nor that in failing to commence proceedings before they were statute-barred, or at least advising their commencement, they were in breach of their professional duty to Mr Vukancic.

5 Such a concession recognised the inevitable and obvious, that failure to commence proceedings within time, or at the very least to warn of the limitation period and its consequences before it expires, is a breach of duty [Clayton v Kearsey (1935) 79 SJ 180; Yardley v Coombes (1963) 107 SJ 575; Gregory v Tarlo (1964) 108 SJ 219; Quevillon v Lamoureux (1975) 52 DLR (3d) 476; Scott v Echegaray (1991) Aust Torts Reports ¶81-120; Feletti v Kontoulas [2000] NSWCA 59, [21]].

6 It follows that Bells were negligent as alleged, and as a result Mr Vukancic lost his cause of action for damages for breach of professional duty against Velcics. On the probabilities, Mr Vukancic would have prosecuted that cause of action, had it not become statute-barred; the contrary is scarcely arguable since Mr Bell, on instructions, instituted these proceedings against Velcics, which were terminated only when it became apparent that they were out of time. The difficult issues remaining in these proceedings pertain to the valuation of that lost cause of action – a lost chance – which itself is founded on another lost cause of action – namely the employers’ liability claim against Dalma, of which Mr Vukancic contends he was deprived by Velcics’ negligence. Accordingly, this is a case about the loss of a chance of a chance.

What damages would Mr Vukancic have recovered from Dalma if successful in an employers’ liability claim?

7 The starting point is to consider what damages Mr Vukancic would have recovered had he succeeded in a common law employers’ liability claim against Dalma. This assessment is to be made as at the date on which the hypothetical claim against Dalma would have come to trial, in the absence of negligence on the part of Velcics.

8 Had Mr Vukancic proceeded with a claim at common law rather than for workers compensation, it is likely that the claim would have been instituted a little later than the workers compensation proceedings were in fact instituted, since some further investigation would have been undertaken and counsel’s advice obtained before common law proceedings were commenced. The workers compensation proceedings were commenced on 21 May 1997; the hypothetical common law proceedings would have been commenced before the end of 1997. However, Mr Vukancic’s condition was not stable and he came to surgery for a surgical decompression, laminectomy and fusion of L4/5 and L5/S1 by Dr New on 25 September 1998. In June 1999, Dr New reported that Mr Vukancic’s condition had not yet stabilised and would not be known for another twelve months. He provided a further report, suggestive that Mr Vukancic’s condition had sufficiently stabilised, and expressing opinions as to the extent of his permanent losses, on 14 August 2000. I am unpersuaded that a prudent solicitor would not have filed a Notice to Set Down for Trial, so as to place the matter in the queue of cases awaiting callover for hearing, promptly after pleadings were closed, but – having regard to the evidence of Mr Larry King SC, who has much experience in the conduct of litigation in employers’ liability cases – a prudent solicitor would probably not have taken a hearing date when the matter was called over while the medical position remained unstable, but would have done so promptly after 14 August 2000. This would not involve a waiting time of twelve to eighteen months while the matter was in the queue, but only until the next callover, and then until the allocated hearing date. In my view, the case would probably have come to trial in early 2001. For convenience, I will adopt 1 March 2001.

9 Mr Vukancic was born on 13 August 1963; he was 32 at the time of his injury, and would have been approaching 37.5 at the date of the hypothetical trial. As at 1 March 2001 he had 27.5 years remaining in the workforce (to age 65), and a life expectancy of 41 years according to the Australian Life Tables for a 37-year-old male.

10 He was born in Bosnia, whence first his wife (in 1992) and their first child – she was then pregnant with their second – and later he (in 1993) fled as refugees to Germany. He had eight years primary schooling and three years at a trade school, and was a qualified motor mechanic; he had been employed in Bosnia as a motor mechanic during 1982-3, in the army as an aircraft mechanic maintaining helicopters during 1983-5, and again as a motor mechanic form 1985 until the Civil War in 1992. The family came to Australia in 1994. He obtained employment as a builder’s formwork labourer with Dalma, commencing on 11 January 1995. He played soccer socially. He then had, and still has, very poor English, although his wife is much more fluent in English.

11 Mr Vukancic was in great pain immediately after the injury on 27 May, and remained in considerable pain for three weeks, until on 21 June 1996 he was admitted to Jamison Private Hospital, from which he was transferred on 2 July to Royal Rehabilitation Hospital. However, at the time of his admission to Jamison he was (according to a questionnaire completed on admission) at least usually able to attend to all activities of daily living himself, and was certainly (according to the nursing notes) able to do so by the time of his discharge from the Royal Rehabilitation Hospital on 25 July 1996.

12 On 24 October 1996, Dr Jakovac (to whom he was referred by Velcics) assessed his permanent loss of use of the back at 25%, and 10% loss of use of both legs. The workers compensation proceedings settled in March 1998 on the basis of agreed findings of 25% permanent impairment of the back, 5% loss of efficient use of the left leg above the knee, 2.5% loss of efficient use of the right leg above the knee, and $10,213.12 for pain and suffering. On 28 January 2003 he settled a workers compensation claim for further lump sum compensation on the basis of a further 10% (total 35%) loss of efficient use of the back, a further 15% (total 20%) loss of efficient use of his left upper leg; 15% loss of use of his sexual organ; and a further 2.5% (total 5%) loss of use of his right upper leg, together with a further $3,825 for pain and suffering in respect of those losses.

13 His wife described his condition after the injury until his operation in September 1998 as follows: “After injury he was, he couldn't do anything. He couldn't work the way he used to be able to. He was in pain. He was going to see the doctors. He was going to physiotherapy, but he couldn't do things he could do before, and he was in a lot of pain. … He couldn't, of course, go back to work. He couldn't play with the children the way he used to play with the children. He couldn't help me around the house, anything that he would have done normally”. He could not sleep as he did before, and had to get up quite frequently and take a sleeping pill. He became easily upset, sad and more reclusive, and lost motivation. He became depressed.

14 He had a surgical decompression, laminectomy and fusion of L4/5 and L5/S1 by Dr New on 25 September 1998. For a month after the operation he was very weak. He remained irritable, much more so than before the injury. His pain decreased, and he controlled it with Panadeine Forte. He began to try to do some of the things he previously had, but was very limited. Over the last twelve months or so his condition has been stable. His wife described him as trying hard to help around the house. He does some of the mowing. He can lift furniture if he has to, but avoids heavy lifting. He now drives a motorcar again, although not for long distances. He assesses his back pain now, when it occurs, at about 2-3 on a pain scale of 10; he takes Panadeine Forte two to three times a week to control it. He sleeps better now, though he takes sleeping pills a couple of times in some weeks and not at all in others. His sexual relationship with his wife has deteriorated and he requires Viagra, although they have had a further two children since the operation. Although the operation has provided some benefit for him, and he does more around the house now than he did before the operation, he retains considerable disabilities. He remains unable to play soccer, which he did before his injury. He is less depressed than he was before the operation, but is still depressed relative to his pre-injury condition.

15 It is uncontroversial that Mr Vukancic’s injuries and disabilities are the result of his work accident in May 1996.

16 Mr Hall QC, for Mr Vukancic, submitted that in terms of non-economic loss, the case was 46% of a most extreme one; Mr Downing, for Bells, submitted that it was 35%. I agree with Mr Downing’s submission. Mr Vukancic’s ability, almost throughout, to attend to all activities of daily living himself; his ability since the operation to drive a motor car, to use a lawn-mower, to help around the house, and even to lift and move furniture; and his current pain level of 2-3 on a few occasions each week controlled by Panadeine, do not justify an assessment of greater than 35%. This is confirmed by his GP Dr Oon’s certification that he is fit for suitable duties, 4 hours a day 3 days per week, lifting up to 10 Kg, walking sitting and standing up to 30 minutes each, and having the ability to change posture as required. I would therefore assess general damages for non-economic loss (under Workers Compensation Act, s 151G) as at 1 March 2001 at 35% of a most extreme case, which corresponds to $77,000.

17 Past lost wages to 1 March 2001 (at the date of injury he was earning $598.45 net per week) amount to $147,817. Gross workers compensation weekly payments received to that point would have been repayable, but he would have been entitled to recover the amounts deducted for income tax; for present purposes the convenient way of approaching this is to deduct the net compensation payments totalling $84,825, which reduces the net benefit of common law damages in this respect to $62,992, interest on which at 5% from 27 May 1996 to 1 March 2001 is $14,960.

18 It is not seriously in dispute that the combination of Mr Vukancic’s back injury and his very poor English renders him practically unemployable. He has no training experience or qualification for work that would not involve manual labour or, at the least, bending and moving in confined spaces (as would a mechanic). For practical purposes, he is disabled from employment in any vocation for which he is reasonably suited. Dr Evans, who was qualified by the employer’s workers compensation insurer, said in a report dated 27 November 1996, that he was not and would not in the future be fit to return to the construction industry and that given his poor English he was not suited for work other than manual work; the ideal employment would be light mechanical work such as fixing lawnmowers but even that would require some lifting unless special arrangements were made. Dr Bodel, who was also qualified by the employer’s workers compensation insurer, said in September 1997 that he was not fit to return to his pre-injury employment but was fit for alternative duties. Dr Ganora, Rehabilitation Consultant, said, in September 2002, that his condition could not be expected to improve and that he remained unfit for work. Realistically, fitness for suitable duties, 4 hours a day 3 days per week, lifting up to 10 Kg, walking sitting and standing up to 30 minutes each, and having the ability to change posture as required, does not make him employable in ordinary employment, particularly given his poor English. The possibility that he might obtain employment in which he did not need English, with those limitations, is not one of reality and substance.

19 The evidence establishes that his earning capacity as at 1 March 2001 was about $600 net per week. The 5% multiplier for his remaining 27.5 work years from 1 March 2001 is 790, producing $474,000, less 15% for vicissitudes, resulting in a present value of $402,900 as at 1 March 2001.

20 Lost superannuation, calculated as 8% of gross past economic loss ($822pw x 4.75 years) and 9% of future gross economic loss ($822pw x 790 – 15%), amounts to $65,919.

21 Mr Vukancic would also have been entitled to his past and future out-of-pocket expenses, but as he recovered these by way of workers compensation in any event, they would have been repayable out of any damages, and would have resulted in no net benefit.

22 A claim is made for past and future gratuitous care and handyman assistance, for 6 hours (at $16 per hour) per week care and 2 hours (at $18 per hour) handyman assistance for the past – a total of $28,074; and 3 hours care and two hours handyman assistance per week for the future – a total of $77,381. Mr Downing’s submissions allow 10 hours (at $16 per hour) care for six weeks following the injury, and for another six weeks following the operation, plus “buffers” of $5000 for the past, and $10,000 for the future – a total of $17,080.

23 Mrs Vukancic said that after the injury she had to help Mr Vukancic with having a bath or washing, but less and less as he improved and now not with much: “He does it by himself”. For about a month or two after the injury, and again for a month after the operation, she made special efforts to cook healthy food for him (but she would have cooked for him, though not perhaps with the same special effort, in any event). After his operation she worked a night shift for three months in order to be able to help him as much as possible during the day, spending up to six hours a day with him. Before his injury she had always done the greater share of the domestic duties, although he had helped. For about a month after the operation, she had to do extra washing for him. She drove him quite often to physiotherapy and to the doctors, but nowadays he drives. At one point, she estimated that from the time of the accident until after his operation she spent perhaps 20 to 30 hours a week looking after her husband, bathing and washing him, sometimes dressing him, extra cooking and so on, but it is fair to say that she was not at all confident about her estimate.

24 According to the Jamison Private Hospital records, when he was admitted to hospital on 21 June, he was able to bath, wash and dress himself. When he was in hospital, the nurses provided assistance to the extent that it was required, although when Mrs Vukancic visited she would help him, for example, having a bath:

Q. You agree that the nurses at Jamieson Private Hospital could help him with day-to-day things if he needed help?
A. Yes.

Q. You didn't need to do those things because the nurses were there to assist him if he needed help?
A. I didn't have to do it, but when I was there, my husband felt more confident for me to help him when he was having a bath.

Q. You wanted to help him because he was your husband? A. Yes.

25 According to the Royal Rehabilitation Hospital records, when he was discharged Mr Vukancic was fully independent in all activities of daily living. In cross-examination, Mrs Vukancic conceded that for a period of about a month after the accident she gave him “a fair bit of help with things around the house”, but that after he was discharged from the Royal Rehabilitation Hospital, most of the time he was independent in all self-care activities although sometimes when he was not well she would help him.

26 Mrs Vukancic said that since his operation she had also spent time looking after him, but that this had reduced to two to three hours per week. Although Dr Giblin said in June 2007 that Mr Vukancic no longer did any heavy handyman work or furniture moving, Mr Vukancic said that he sometimes assists with moving furniture. Sometimes he, sometimes the children and sometimes Mrs Vukancic mows the lawn. They all also take turns putting out the garbage. Their children, who are now teenagers, are expected to help around the house and over time had started doing things that she and her husband would have done before. Both Mr and Mrs Vukancic said that he also now performed some tasks (such as taking the children to school, which they now share), which relieves her of tasks she used to do. Mrs Vukancic said that as they are living in a villa house, in which they have resided since before his operation, there was not much work to be done.

27 Damages in respect of gratuitous services are recoverable only to the extent that care is required over and above that which would have been required but for the plaintiff’s compensable injuries. Such damages are recoverable in respect of services in the nature of attendant care, not ordinary “mothering”, or “being on-call” [Ren v Mukerjee (ACTSC, Miles CJ, 12 December 1996, unreported), [85]; Rotumah v New South Wales Insurance Ministerial Corp (NSWSC, Donovan AJ, 6 April 1998, unreported), [103]]. Nor does providing encouragement or support or motivation fall within the scope of an award of this type. In my view the only period in respect of which the evidence supports a claim of this type is for the period culminating in his initial hospitalisation, and the period following his operation, although I accept that there may have been, and may in the future be, other incidental occasions on which assistance was and will be required, all of which are amply provided for by the total amount of $17,080 allowed in the defendants’ submissions.

28 The foregoing may be summarised follows:

Head

Amount $

Para

General damages
77,000

16

Past lost wages
62,992

17

Interest on past lost wages
14,960

17

Future economic loss
402,900

19

Lost superannuation
65,919

20

Past and future domestic assistance
17,080

27

Total
640,851

29 Although, as well as weekly payments, Mr Vukancic also received a payment of permanent loss compensation, and a top-up insurance payment, prior to 1 March 2001, he would not have received any permanent loss compensation had he elected for common law damages, and there would have been no deduction from his damages on that account. Although it will be necessary, ultimately, to bring to account the benefits he did receive, the appropriate point at which to do that is when assessing the damages Mr Vukancic might have been awarded against Velcics.

30 Accordingly, in my view, had Mr Vukancic succeeded in an employers’ liability claim against Dalma, he would have received net damages, after paybacks, in the order of $640,000 as at 1 March 2001.

What were Mr Vukancic’s prospects of success against Dalma?

31 It is not for me to decide definitively whether Mr Vukancic would or would not have succeeded against Dalma, but rather to assess the value of his cause of action having regard to his prospects of success. To do this one needs to bear in mind that Mr Vukancic would have borne the burden of proving his case, but only on the balance of probabilities; and that his claim might well have been settled, at some discount from full value, in order to avoid the risks of a trial. One also needs to take into account that evidence may have been available at the hypothetical trial that was not before me, but in doing so the court should not excessively speculate, nor substitute speculation for what is proved by evidence adduced in this trial [Feletti v Kontoulas, [48], [55]].

32 A full picture of how the injury occurred did not emerge until Mr Vukancic was recalled to give supplementary evidence late in the case. His ultimate version of the circumstances of his injury was that in May 1996 he was working on the Sydney Casino site, and on 24 May had some pain, not very strong, in his low back; on a pain scale of ten he rated it “close to zero”. He was not entirely sure what he was doing at the time, though it was “possibly stripping” – that is, removing the formwork after a concrete pour. Nor could he say whether he was standing, crouching or kneeling at the time, “you do everything”. He continued working until 27 May, when he was doing formwork, closing a lift well. He was working with a workmate Ziad Gradenicic, a carpenter. He was on a scaffold, the deck of which was 180 cm above the concrete floor below, and had headroom of 120 cm to the ceiling formed by the floor above. [There was some confusion in the evidence as to whether the scaffold deck on which he stood was 120cm or 180 cm above floor level, with Mr Vukancic often agreeing that it was 120cm, but reading his evidence as a whole – including his description of the available headroom – a court would very probably have accepted that the scaffold was at a height of 180cm, leaving about 120cm only of headroom]. Being 185 cm tall, he had to crouch when on the scaffold. The carpenter, who was standing on a lower level of scaffold, about 60 cm below him and to his left, passed him a length of timber (called a waler – about 3 metres by 10 cm by 5 or 7 cm). He then, with his left arm, pressed the proximate end of the waler – about 30cm from the right hand end – against the plywood formwork, using the fingers of his left hand to hold a nail in place, while using a hammer in his right hand to fix the waler to the plywood. Meanwhile, the carpenter was holding the remote (left hand) end of the waler, which was horizontal, and fixing it to the formwork in a similar manner. While Mr Vukancic was doing this, he noticed very strong pain in his back and on the anterior and posterior of both thighs, which he rated at up to 10 on the pain scale – so strong that he could not move. He sat down on the scaffold, then his workmate helped him get down, and he went to first aid, by which time he felt a bit better; the pain reduced to a level of about 5. He ceased work and went to see his GP Dr Oon, accompanied by Mr Gradenicic.

33 This version derives some corroboration from Mrs Vukancic’s evidence. She can recall no mention of any problem with his back prior to 27 May, when he arrived home from work, and she noticed that he was not walking normally but was stooped over. He told her that he was working with his mate Ziad, and was on the scaffold, holding the timber in his left arm in a crouching position and using a hammer with his right arm to nail it to close a lift, and that when he was working he could not stand up and work normally but had to work in a crouching position because of the location. He told her that while he was nailing the timber he felt a very strong pain in his back that went into his legs, so that he could not move properly and could not continue working; that they took him to first aid and then he went to see a doctor. He demonstrated to her the movement with his arms; although at one stage I thought her evidence suggested (quite improbably in the light of the pain in which he claims then to have been) that he also demonstrated the crouching and bending, I accept, on reviewing the transcript, that she suggested only a demonstration of the arm positions and movements. There have been many subsequent opportunities for Mr and Mrs Vukancic to discuss what transpired, and in the light of the much less detail he gave in contemporaneous medical histories, I doubt that he then gave Mrs Vukancic so detailed a description; it is likely that her present recollection is the product of numerous discussions over the years.

34 Mr Downing drew attention to numerous, more contemporaneous, versions, lacking the detail of what Mr Vukancic ultimately described. Analysis is assisted by a chronological examination of those previous accounts.

35 Dr Oon’s note of 27 May 1996 records “c/o back while lifting timber > Pain straight away and ^ pain now”. Dr Oon’s certificate of the same date describes the cause of the injury as “lifting timber”. Mr Vukancic says that Ziad Gradenicic accompanied him to Dr Oon and acted as his interpreter.

36 A workers compensation “Employee’s Compensation Claim” form, filled out on behalf of Mr Vukancic and signed by him on 29 May, records “While lifting a piece of timber it was passed to me by another worker while I was on the [scaffold]. As I went to take the timber in this position I felt straining in the back”. Ziad Gradenicic was identified as a witness. The “Employer’s Report of Injury” form, completed on behalf of Dalma on 5 June, records “The worker felt strain at his back while lifting a piece of timber”. An accident report completed by the site engineer on 6 June records “Worker felt pain on his lower back when he lifted the timber” and attributed the accident to “lifting timber in a wrong manner”.

37 On 21 June, Dr New, orthopaedic surgeon, obtained from Mr Vukancic a history of “an accident on 27/5/1996 when he experienced quite severe low back pain and leg pain in the left side, going as far as his knee”, but “The rest of the history is very difficult to obtain because there was not a formal Croatian interpreter available, and I was obtaining the history through a family friend who accompanied him”. On 1 July, Dr Ganora, rehabilitation consultant, obtained a history of “sudden onset of severe lumbar pain on 27 May 1996 when he was lifting at work in the course of his employment as a labourer. He developed severe pain in the lumbar region whilst working on scaffolding, supporting heavy timber. The pain radiated into both legs”.

38 On 2 July 1996, the following history was recorded in handwriting in the Royal Rehabilitation Hospital notes: “Acute Back Pain since 24/5/96. Heavy lifting. Sudden onset [with] worsening [?] until 27/5/96. 27/5/96 > ceased work”. An additional note records: “interview confirmed 3/7/96 – with Croatian interpreter”, and in the same handwriting (different from of the 2 July entry) “Injury: 24/5/96 lifting with another worker. He received a timber beam from this workmate when the accident occurs“. This record is significant, because it seems that a serious attempt was being made to obtain a history and check that it was accurate via a Croatian interpreter. The Royal Rehabilitation Hospital discharge report, presumably based on those notes, and apparently dated 25 July 1996, reports: “He complained of sudden onset of acute lower back pain since the 24th May 1996 after heavy lifting at work. The pain increased in severity and he went to consult doctors on the 27th May 1996”. In one copy, the reference to 24th May has been altered in hand to 27th May, but the hospital notes suggest that the original reference to 24th May was a correct reflection of the information then obtained from Mr Vukancic as to the date of the initial incident.

39 Mr Vukancic first saw Mr Velcic (who is fluent in Croatian) on 14 August 2006. According to Mr Velcic’s note, Mr Vukancic told him that the accident occurred on 24 May and that he had been lifting a piece of timber when he felt pain in his back; he was unable to say whether there was any witness. Although Mr Vukancic denies that anything was said at this consultation about how the accident occurred, I much prefer Mr Velcic’s contemporaneous note, which shows that at least that much was said.

40 On referral by Mr Velcic, Mr Vukancic saw Dr Jakovac (who is also fluent in Croatian) on 24 September 1996; she recorded the following history: “He says that he has low back pain since 24th May, 1996. He was at work obtaining closing of the lift space with another labourer. His every day job for over one year was to lift frames and timber for formwork. On particular day, 24th May, 1996, he was giving to man the timber 3 x 6 meter long, 10 x 10 cm. He continued the work till 27th May, 1996 even with the back pain. At about 11.00am the pain started to be very strong and he left work at lunch time, about 1.00pm. He said that he attended the first aid and then Dr Oon at Rooty Hill”.

41 On 30 October, Dr Giblin – to whom he was referred by Mr Velcic – obtained this history: “He alleges, that five months ago he developed acute low back pain after receiving some timber from another worker. At the time he was standing 2.5 metres high and as he bent down to receive the timber he developed acute low back pain. He denies any significant previous low back pain that has required treatment in any way. He did have a minor episode of sharp stabbing pain three days before, but this was only slight and fleeting”.

42 On 27 November 1996, Dr Evans, to whom he was sent by Dalma’s workers compensation insurer, obtained a history that on 27 May Mr Vukancic had developed low back pain after lifting some timber, but had had some back pain over the previous three days.

43 On 10 December 1996, Dr New provided a supplementary report, aided by an interpreter, reporting: “He states with the assistance of the interpreter, that below a lift well he was being passed some heavy timber and that whilst bending forward he experienced this discomfort”.

44 At a further, more thorough, consultation with Mr Velcic on 29 January 1997, Mr Velcic’s file note records: “Client lifting piece of timber about 3-4 m when sharp pain in low back. Demo. Lift part of timber – nailed into place. Witnesses – not sure ?? … D.O.I – 27/5/96”. This is the first reference to the nailing of timber.

45 In the Application for Determination filed in the Compensation Court on 21 May 1997, the date of accident was alleged to be 27th May 1996, and “Injury occurred whilst the applicant was lifting a piece of timber”.

46 On 13 September 1997, Dr Bodel, to whom Mr Vukancic was referred by Dalma’s workers compensation insurer, obtained the following history: “The patient suffered an injury at work on 27.5.96. The patient was at the time placing some wooden beams and plywood sheets, closing off an opening in a lift shaft. On one occasion he bent down to pick up the next piece of timber when he injured his back. He was unable to rise from the bent position and had to stop work immediately. The patient was seen by the First Aid people at work and later by his own local doctor”. This report was served on Mr Velcic on or about 24 December 1997.

47 On 10 March 1998, Mr Vukancic had a conference with Ms Mundey of counsel, who was briefed to appear for him in the Compensation Court the following day. Ms Mundey was not called, due to illness, and it was agreed that no inference should be drawn from that circumstance. Following a further conference on the morning of 11 March, the matter was listed in the Compensation Court at Parramatta that day, when it was settled.

48 In November 1999, after some endeavours to explore the possibility of a commutation of his on-going rights to weekly payments of compensation, Mr Vukancic terminated Velcics’ retainer and instead instructed Stacks.

49 On 15 November 2000, Dr Lowy, sexual health physician, obtained a history: “On 27.5.96 Mr Vukancic was lifting a particularly heavy object though he describes his work in general as involving much heavy lifting. He was lifting whilst bending. He could not straighten up and attended physiotherapy”.

50 On 15 March 2001, Dr Wines obtained a history: “This man suffered an alleged injury on 27.5.1996. While inserting formwork he needed to bend his back and nail formwork in place when he developed severe pain in his back and “couldn’t move”. He went to first aid and was unable to complete his work. …”. This is the first recorded history – other than that obtained by Mr Velcic on 29 January 2001 – which contains a description that closely corresponds with the ultimate version. It was to be followed by others to much the same effect.

51 On 28 March 2001, Dr Kuzmanski obtained the following history: “He said that on Monday, 27 May 1996 while working on the Casino as a form worker for Dalma Form Work he was nailing some timber while holding the plywood with the left elbow he felt sudden onset pain in the back and he couldn’t move. The pain was severe and he went to the first aid counter and from there he went and saw a general practitioner …”.

52 In May 2001, Mr Vukancic instructed Martin Bell & Associates.

53 On 22 January 2002, Dr Lawson obtained a history: “He sustained an injury while working on the Sydney Casino project on 27th May 1996. He was working on a scaffolding close to where another man was working on the lift. He was working with heavy timber in a bent over position. While working in this position he experienced severe lower back pain at waist level which began to spread to involve his legs”.

54 On 25 February 2002, Dr Zepinic, psychologist, obtained the following history: “Mr Vukancic reported of being involved in work-related accident while being employed as a form-worker with Dalma Formwork P/L. On the accident day he was doing his normal duties with another co-worker staying at the platform and fixing some plywood to wooden beam. He described his work in general included much heavy lifting and bending. Whilst fixing plywood being in bending position, he felt immediate sharp pain in his low back that immobilise him for a while and he was unable to move. After sometime, he left platform and asked for help in first aid at building site. …”.

55 On 8 April 2002, Dr Bray, orthopaedic surgeon, obtained a history that Mr Vukancic “was at work on scaffolding and helping to support some plywood while nailing a structure up and while doing so strained his low back”.

56 On 28 August 2002, Dr Ganora reviewed Mr Vukancic and “confirmed the previous history of his injury”; the previous history obtained by Dr Ganora was one of sudden onset of severe lumbar pain on 27 May 1996 when lifting at work.

57 On 13 February 2003, Vukancic was interviewed by Mr Tozer, a consulting construction engineer retained on his behalf as an expert, who recorded: “He commenced work on the Star City Casino construction site at Pyrmont NSW about the beginning of 1996. His employer was contracted to erect and strip formwork for the builder, Leighton Contractors. At about 10am on 27 May 1996, he and a co-worker, the carpenter, Ziad Gradenicic, were working together closing the formwork to a wall adjacent to the lift shaft in the Entertainment Area above the casino floor. The formwork deck above had already been erected on framed scaffolding. To assemble the external form to the 3 metre high wall, Mr Vukancic was directed by the carpenter with whom he was working, to stand on a working platform erected about 1.8 metres above the floor. The headroom was less than 1.2 metres in this space below the formed deck above. His co-worker passed up the timber walers, 100mm x 50mm in section and about 3 metres long, to be fixed horizontally to the face of the plywood. Mr Vukancic crouched in the space holding a timber in position horizontally with his left hand whilst he nailed it to the plywood sheet using the hammer in his right hand”.

58 On 8 November 2006, Dr Stephen, orthopaedic surgeon, who saw him on behalf of the present defendant, obtained this history: “On 27/5/96 he was working on scaffolding. He was hammering timber, crouching and bending forward. As he did this he had sudden low back pain. He described his back as going stiff with pain. …”.

59 While the discrepancies in the histories to which I have referred undoubtedly would have provided material for cross-examination, none is fatally inconsistent or irreconcilable with the ultimate version. Although, until the end of 2000, each account described an injury occurring while lifting – which may be thought to be a distinct concept from holding or supporting while nailing – and the suggestion of the injury occurring while supporting a timber beam and nailing it to plywood while bending or crouching first appears consistently in the medical histories in March 2001, significantly there is a reference “Lift part of timber – nail into place” in Mr Velcic’s note of 29 January 1997, and the task being performed by Mr Vukancic involved lifting before supporting and nailing. For present purposes, I should assume that the solicitor acting for Mr Vukancic would have made proper inquiries, and that the ultimate version would have emerged in the hypothetical trial; there is all the more reason to make this assumption when Mr Velcic himself, at a relatively early stage, obtained what appears to be a history, via a demonstration, of an injury suffered while lifting part of the timber and then nailing it into place. While until late 1996 the initial incident was attributed to 24 May, with subsequent deterioration culminating on 27 May, and after late 1996, the significance of 24 May in the histories was diminished or disregarded, it is clear that he was not disabled on 24 May as he was able to continue to work, but was on 27 May when he ceased working.

60 Mr Gradenicic was not called before me, and when approached by Bells had indicated firm reluctance to be involved, but there was nothing to support the allegation contained in Mr Bell’s defence that Mr Gradenicic denied Mr Vukancic’s version of the accident. There is no reason to regard Mr Gradenicic as being more in the camp of one party than the other, and I am disinclined to draw any inference from the failure of either party to call him. Assuming that he would not have been called before the hypothetical trial court, I do not think that would have impacted significantly on the likely acceptance of Mr Vukancic’s ultimate version of the incident in which he was injured.

61 In my view there is a high degree of probability that the trial court would have accepted Mr Vukancic’s ultimate version. There was certainly a likelihood that it would have been found that there was an initial injury on 24 May, but the disabling injury must have been on 27 May, when he ceased work. As it transpired, the version ultimately revealed by Mr Vukancic was less favourable to his own case than that which had been assumed by Mr Tozer (which involved Mr Vukancic supporting the whole weight of the waler himself, unassisted, whereas on the ultimate version half its weight was supported by Mr Gradenicic). The ultimate version is probably the least unfavourable to the employer, because it involves him supporting only half the weight of the waler. The alternative versions are not without their own risks as to liability for Dalma. Accordingly, while an element of risk attended acceptance of Mr Vukancic’s ultimate version, and the discrepant histories would have been a factor inclining his advisers towards a cautious approach, I do not think there was much risk that, absent negligence on the part of Velcics, Mr Vukancic’s ultimate version would not have been accepted at the hypothetical trial; moreover, if it were not accepted, the available alternative versions would likely have had no less potential for liability on the part of the employer. I therefore do not consider more than a very modest discount would be warranted on this account alone.

62 However, acceptance of Mr Vukancic’s ultimate version would not necessarily involve a finding of breach of duty against Dalma. Mr King SC – whose opinion was given on an assumed state of affairs that had more potential for common law liability than Mr Vukancic’s ultimate version – was of the view that it was a case that a solicitor would not recommend be litigated without expert opinion to support it, but that an opinion such as that proffered by Mr Tozer would indicate that a common law claim had reasonable prospects of success.

63 Mr Tozer, in his report, referred to literature that indicated that the risk of back injury increased significantly when weights greater than 16-20 kg are to be lifted from the standing position, and to recommendations that the maximum weight to be lifted by males single-handed was about 10 kg, or 8 kg if sitting and 9 kg if squatting or kneeling. He explained that the weight of a timber beam of the dimensions in question was about 9 kg. He opined that the weight being held in the left hand alone was close to the maximum that could safely be handled without risk of injury, and that this weight combined with vigorous hammering using the right arm to produce body-twisting under high stress, resulting in excessive forces on Mr Vukancic’s lower back. He suggested that the physical effort required to perform this task could not have been exerted safely from a crouched position on a working platform, and that it would have been a simple matter to provide a working platform at a level where the work could be undertaken with adequate headroom, so that the labourer would have a straight back: he said that the risk of back injury could have been reduced by locating the scaffold deck 1.2 metres above the floor rather than 1.8 metres, providing increased headroom and a reduced lift.

64 Contrary to Mr Tozer’s original assumption, the evidence did not show that Mr Vukancic was supporting the whole weight of the beam at about chest height with his left hand about a metre from its left end while hammering nails about a metre from its right end, as it emerged that Mr Vukancic was supporting only about half of the weight of the beam, while Mr Gradenicic supported the other half. Mr Vukancic accepted that the beam was not particularly heavy. Mr Tozer, when recalled to deal with this development, opined that the confines of the working space were still such as to render the system unsafe. But Mr Vukancic said that it had nothing to do with the headroom; it was the task and not the available headroom that required him to crouch.

65 I accept that the requirement to work in a confined space for a sustained period while supporting a timber beam and applying force to it raised some prospect of establishing liability. Mr Tozer’s evidence demonstrates that there would have been expert opinion available to support Mr Vukancic’s case at the hypothetical trial, but it is far from compelling. A requirement to perform a simple lift of a manageable beam weighing 8 to10 kg would not bespeak negligence on the part of the employer. On the other hand, a requirement to crouch or bend in a confined working space and to exert force while bearing the weight of a large beam involving some twisting of the body might attract liability. In my view, there is nothing to suggest that the materials that Mr Vukancic was required to handle were other than of a size and weight that could be manually handled with safety. The issue would have been whether the method of handling required of the worker was a safe one. In cross-examination, Mr Tozer accepted that builders often had to work at or near the ground, and that crouching was an everyday aspect of building work, regardless of headroom constraints. Mr Tozer really offered no more than his own opinion, as the literature to which he referred does not suggest that a requirement to lift such a weight as was here involved is unsafe. His opinion involves hypothesising that a weight which should ordinarily have been able to be lifted with safety was unsafe because of the posture, and the physical activity of hammering, required to accompany it. It is far from apparent to me that the physical activity of hammering in the requisite manner would involve significant forces on the lower back. The absence of evidence of opinion contrary to Mr Tozer’s view is much less significant than would have been the case had Mr Tozer’s ultimate and relevant opinion not been tendered pursuant to leave to reopen, after the defendant’s case had been closed.

66 In my view, despite Mr Tozer’s opinion, there was a very substantial risk, closely approaching 50%, that on his own version, Mr Vukancic would not establish liability against Dalma. When added to the general risks inherent in even the strongest cases, and to the modest risk for which I would allow in respect of acceptance of Mr Vukancic’s version, I consider that the 50% discount proposed by Mr Downing is reasonable. Mr Vukancic’s prospects of success in an employers’ liability claim against Dalma did not exceed 50%.

What damages would Mr Vukancic have recovered from Velcics if successful against them in a claim for breach of professional duty?

67 This issue requires consideration of what damages Mr Vukancic would have recovered against Velcics, upon assumption that Mr Bell prosecuted that claim with appropriate skill care and diligence. That assessment is to be made as at the date of the hypothetical trial of the claim against Velcics. Although it was in these present proceedings that the claim against Velcics was instituted, it does not follow that, absent negligence, they would not have come to trial and determination until now. These proceedings were themselves commenced out of time (for that purpose), and have been delayed by the limitation issues and the need to join Mr Bell. Assuming reasonable skill, care and diligence on the part of Mr Bell, the proceedings against Velcics should have been commenced by mid 2002, and would have been heard by about 1 September 2005.

68 In those proceedings, Mr Vukancic’s damages would have been the amount required to put him in the position in which he ought to have been but for Velcics’ negligence (which I will assume for present purposes, though it will be necessary to return to it) in advising or allowing him to elect for permanent loss compensation under the Workers Compensation Act rather than for common law damages. Although at first this seemed to require no more than applying to his potential common law damages ($640,000) the prospects of that claim succeeding (50%) and deducting the workers compensation benefits received and to be received, closer consideration convinces me that such an approach does not accord with the complexity of the position. It would have been necessary for the court hearing the claim against Velcics to consider, first, whether, properly advised, Mr Vukancic would have elected to claim common law damages, and secondly, if so, whether and to what extent he would have been better or worse off than his actual position as it had transpired. For present purposes I will assume (again, it will be necessary to return to this issue) that, properly advised, Mr Vukancic would have elected to bring a common law claim. Whether and to what extent he would have been better or worse off as a result requires analysis of (1) his actual position in the events which have happened, against (2) his hypothetical position had he elected to claim damages, which involves (as I have accepted) a 50% chance that he would have succeeded, and conversely a 50% chance that he would have failed.

69 This does not mean that the full value of the workers compensation and top-up insurance benefits that Mr Vukancic has received must be deducted from the value of his common law claim after the hypothetical damages have discounted by 50% for risk of failure. I confess that I was initially of the view that the deduction ought to be from the discounted value of the common law claim, because what was involved was a comparison of the chance of success on the common law claim with the certainty of receipt of the workers compensation benefits. But on closer reflection I am convinced that this would be incorrect. Ultimately, the purpose of an award of damages is to put the plaintiff so nearly as money may do in the position in which he or she would have been but for the relevant act or omission. For present purposes, the relevant act or omission is that of Velcics, in permitting Mr Vukancic to elect against a claim for common law damages, and what Mr Vukancic lost as a result was the chance of obtaining benefits more valuable than his workers compensation rights. Valuing that loss requires comparing his hypothetical position had he not elected against damages (which involves the possibilities that a common law claim may or may not have succeeded) against his actual position, having elected against damages (that he has received and will continue to receive workers compensation). The value of the loss is informed by the extent to which he would have been better off if successful; the extent to which he would have been worse off if unsuccessful; and the probability of success, which determines what point on the scale between those two positions reflects the value of his chance. That is an exercise which requires a comparison of the actual and hypothetical positions before any discount is made for the risk that the hypothetical position would not have been achieved.

70 Moreover, while the commencement of proceedings for damages would have operated as an election against any claim for permanent loss compensation under Workers Compensation Act, ss 66 and 67 (by reason of Workers Compensation Act, s 151A(3)(a)), only the actual receipt of damages would have disentitled him from other workers compensation payments, including weekly payments (by reason of Workers Compensation Act, s 151B). Thus, had Mr Vukancic brought an unsuccessful common law claim, he would not have lost his right to weekly payments. Accordingly, it is fallacious to see the potential outcomes in terms of a dichotomy between a chance of a successful common law claim (and no workers compensation) on the one hand, against the certainty of full workers compensation benefits on the other.

71 In Scott v Echegaray, the Court of Appeal held, without elaboration, that the trial judge, assessing damages in similar circumstances, did not err in deducting the total value of the plaintiff’s workers compensation rights from the discounted (50%) value of his common law claim, but that was in a context in which the matter was to be remitted for retrial on damages for other reasons, and it does not appear that the present issue – whether the deduction should be before or after the discount – was considered. However, the Queensland Court of Appeal did address the precise question, in Green v Berry [2001] 1 Qd R 605; Jones J (at [97]-[99]) observed that it had not been considered in Scott v Echegaray, and Pincus JA (at [38]) said that if Scott was authority for the proposition that damages should be assessed on a 50% chance of success but reduced on the basis of a 100% chance of losing a workers compensation payment, he disagreed [see also Chamberlain v Ormsby [2005] NSWCA 454, [143] (Basten JA)]. If Scott were authority for that proposition I would be bound to follow it, but I share the view of Jones J that it is not; the issue appears not to have been argued, and a re-assessment of damages was ordered for other reasons. In the Court of Appeal, Mahoney J (with whose judgment Gleeson CJ and Kirby P agreed), having set out the relevant portion of the judgment of the trial judge, simply said “I do not think that the learned judge erred in this portion of his judgment”. The relevant portion of the judgment of the trial judge did not consider whether the value of the workers compensation benefit should be deducted before or after the 50% risk discount of the common law damages, and there is nothing in the judgment of Mahoney JA to indicate that that issue was argued in the Court of Appeal.

72 To deduct 100% of his future workers compensation benefits as at the date of assessment from the value of his employers’ liability claim discounted for the risk of failure would therefore be erroneous on at least two grounds: first, it would treat his loss of workers compensation benefits as a certainty, when (as with success at common law) there was only a corresponding 50% prospect of their loss; secondly, it would be wrong to suppose that he would receive no workers compensation payments in the event of an unsuccessful common law claim, when in fact in that event he would continue to be entitled to weekly payments.

73 The actual position: As things transpired, Mr Vukancic elected, by reason of Workers Compensation Act, s 151A(3)(b), to claim permanent loss compensation, thereby extinguishing any claim that he had for damages for employers’ liability. As a result he recovered weekly payments (which he continues to receive), permanent loss compensation, and top-up insurance benefits. It is necessary to adopt a conventional date as at which the workers compensation benefits he has received and will in the future receive can be valued, in order to compare them with the potential benefits he would have received had he elected for common law damages. In Tipper v Williams (No 2) (NSWCA, 6 May 1994, unreported, BC9404994), the trial judge used for that purpose the date on which the common law damages would have been recovered had the claim not become statute-barred, and the Court of Appeal adopted the same approach. Accordingly, damages for future economic loss were assessed as at the hypothetical trial date of the employers’ liability claim. In the Court of Appeal, the value of the benefits already received as at that date, and the value as at that date of (then) future workers compensation benefits, were deducted. Similarly, I adopt as the valuation date the notional date of trial of the employers’ liability claim (1 March 2001), when the common law damages would have been received.

74 First, Mr Vukancic continued after 1 March 2001 to receive weekly payments, and continues to do so today. It is foreseeable that he will continue to receive such payments indefinitely. The quantum of those payments has increased by reason of the birth of two further children, which he always anticipated and intended to have.

75 Contrary to the submissions made on behalf of Mr Vukancic, I do not understand the Court of Appeal in Tipper v Williams to have enunciated any rule that, for the purpose of determining – as at the date of the hypothetical trial of the employers’ liability claim – the value of future workers compensation benefits actually received, known facts which have occurred since the valuation date that have affected the quantum of workers compensation benefits must be disregarded. The purpose of the exercise is to ascertain to what extent the plaintiff’s actual position (after the relevant act or omission) is inferior to his hypothetical position (absent the relevant act or omission). So far as ascertaining the actual position is concerned, in this context courts prefer knowledge to speculation [Malec v J C Hutton Pty Limited (1990) 169 CLR 638; Charles v Hugh James Jones & Jenkins [2000] 1 All ER 289]. The present exercise is not analogous to ascertaining an exchange value in a market, in which case the knowledge of the market at the date of valuation is determinative; rather, it involves ascertaining the value at the valuation date of a future income stream which is liable to vary from time to time, for the purpose of identifying so far as practicable the true value of the workers compensation rights that Mr Vukancic has retained. This involves determining the value, as at the valuation date, of what he has actually received between then and the hearing of the professional negligence claim (against Velcics), and what he will probably receive thenceforth. Accordingly, while the value of Mr Vukancic’s workers compensation benefits is to be ascertained as at the hypothetical trial date of the employers’ liability claim for purposes of comparison with common law entitlements, that does not mean that in ascertaining the value of those benefits, the Court hearing the professional negligence claim against Velcics should ignore events that had happened since. To the extent that subsequent events inform the true value of his compensation benefits, they may be taken into account whenever they happened. The Court hearing the hypothetical case against Velcics would have been entitled to have regard to circumstances up to the date of the trial before it in evaluating the benefits that Mr Vukancic had actually received. It follows that the increase in workers compensation benefits attributable to the birth of two additional dependant children must be taken into account.

76 I do not agree with the submission for Mr Vukancic that it is a corollary that his economic loss should be calculated by having regard to increases in wages after the notional trial date of the employers’ liability claim, based on known increases in the wages of comparable employees subsequent to that date. There are at least two reasons for this. The first is that the applicable discount rate is struck to take into account the impact of inflation and interest. While it is necessarily imperfect in achieving that balance, it is a conventional way of taking into account prospective routine increases in wages. The second is that the exercise involves comparing what Mr Vukancic would have received but for the relevant act or omission, with what he has in fact received. What he would have received is the chance of an award of common law damages, assessed according to what was known and provable at the notional trial date of the employers’ liability claim. That could not be influenced by changes in circumstances after that date (1 March 2001). What he has in fact received, however, can be informed by circumstances known up to the hearing of the professional negligence claim against Velcics (1 September 2005).

77 Mr Vukancic has a dependent wife and four children, three of whom are still dependent. In 3 years this will reduce to two dependent children, after 13 years this will reduce to one dependant child and after 15 years to none. Between March 2001 and September 2005 (4.5 years), Mr Vukancic received weekly payments totalling $103,965. The mid-point (2.25 years) was June 2004, and the value as at 1 March 2001 of a sum of $103,965 deferred for 2.25 years is $93,048.

78 As at 1 September 2005, Mr Vukancic was in receipt of $489.75 net per week, which he would have continued to receive until 29 October 2010 when Marko attains 18, a period of about 5.2 years; the lump sum required to produce $489.75 net per week for 5.2 years is $117,540, and its value at 1 March 2001 (deferred for 4.5 years to 1 September 2005) is $94,032. From October 2010 he would be entitled to the statutory rate for a worker with a dependant spouse and two dependant children which, as at September 2005, was $455 net per week (based on $563 gross per week) until February 2020 when Marin attains 18, a period of 9.25 years; the lump sum required to produce $455 net per week for 9.25 years is $176,540, and its value at 1 March 2001 (deferred for 9.7 years to October 2010) is $110,337. From February 2020 until Patrick attains 18 years of age in May 2022, a period of 2.25 years, he would be entitled to the statutory rate for a worker with a dependant spouse and one dependant child, which as at September 2005 was $400 net per week, (based on $485.10 gross per week); the lump sum required to produce $400 net per week for 2.25 years is $44,400, and its value at 1 March 2001 (deferred for 19 years to February 2020) is $17,582. After May 2022 until retirement at age 65 in August 2028, a period of 6.25 years, he would be entitled to the statutory rate for a worker with a dependant spouse which as at September 2005 was $364.50 net per week (based on $422.20 gross per week); the lump sum required to produce $364.50 net per week for 6.25 years is $102,060, and its value at 1 March 2001 (deferred for 21.25 years to May 2022) is $36,027. Thus the value (as at 1 March 2001) of Mr Vukancic’s future (as at 1 September 2005) workers compensation rights, totalled $257,978.

79 It is necessary to discount the future workers compensation benefits for vicissitudes, including that they may be reduced or terminated in the future, and that they may be commuted for a lump sum. Although they are to be valued on a basis similar to future economic loss (as the present value of a future income stream) and not according to the value for which they might be commuted to a lump sum, the circumstance that if commuted only a sum significantly less than their discounted present value would likely be obtained is a relevant consideration. In Tipper v Williams, Clarke JA thought that in valuing future workers compensation rights there was no constant deduction and different rates would be appropriate for different cases and circumstances. In that case, his Honour applied an allowance of 30%, saying:

Scott & Ors v Echegaray

80 In the present case, although no award for weekly payments has been made by the Compensation Court – those payments having been made voluntarily – there are awards in respect of permanent loss compensation, which establish eligibility for compensation. However, there have been some negotiations for a commutation, which demonstrate that if he accepted a commutation Mr Vukancic would receive a sum much less than the true value of his entitlement to periodical payments. There is also evidence, in the form of periodical medical certificates, that he has some capacity for light duties; on the other hand there is no indication that the workers compensation insurer has taken any step towards reviewing his entitlements to receive weekly payments indefinitely. In my view, his entitlement is not so precarious as was the case in Tipper v Williams, and I will allow a discount of 22.5% for vicissitudes in this respect.

81 Such a discount reduces the value as at 1 March 2001 of Mr Vukancic’s future weekly compensation benefits from $257,978 to $199,932. As at the date of the hypothetical trial against Velcics he would have already received weekly payments up to 1 September 2005, no allowance for vicissitudes is warranted in respect of the sum of $93,048. Accordingly, as at 1 March 2001, Mr Vukancic retained entitlements to weekly compensation payments worth $292,980.

82 As well as weekly payments, Mr Vukancic received, for permanent loss compensation, $37,500 paid to him on 25 March 1998 pursuant to the settlement on 11 March 1998, and a further $30,000, pursuant to the settlement on 28 January 2003. In addition, he received the proceeds of a “Top Up” insurance benefit from Cover Force Insurance, of $37,467.15 on 7 December 1998, and a further $20,838.75 on 5 May 2003. Perfection would require allowing interest on the earlier payments until February 2001, and discounting the later payments for deferral after that date, but the amounts are distributed in a manner on each side of the valuation date that sufficient justice is attained by neither allowing interest on the earlier payments, nor discounting the later ones, before bringing them to account.

83 The “top up” insurance payments were pursuant to a policy which provided, inter alia, “workers compensation top up cover” for employees of the Policyowner, including in the case of permanent injury an amount equal to 100% of the Lump Sum Benefits under s 66 and s 67 of the Workers Compensation Act, subject to certain exceptions. Clause 20(a) of the Policy provided that no benefit was payable for workers compensation top up cover where the employee was not entitled to compensation under the Workers Compensation Act, except where a loss of entitlement was solely a consequence of an unsuccessful common law action in accordance with Workers Compensation Act, s 151A. Accordingly, had Mr Vukancic brought a successful common law claim, he would not have been entitled to the “top up” benefits he in fact received. But had he brought an unsuccessful common law claim, he would still have been entitled to those benefits, though not to lump sum compensation under ss 66 or 67.

84 For Mr Vukancic it was submitted that the factors referred to in National Insurance Company of New Zealand Limited v Espagne (1961) 105 CLR 569, 573, indicated that the proceeds of the top-up cover were not to be deducted from his damages. There are several answers to this submission. First, the present issue is simply not that which arose in Espagne. Here, the relevant loss is not that against which the employee was insured, and the question is not whether an insurance benefit should be deducted from damages recoverable in respect of the injuries for which the plaintiff was insured, but measuring the economic loss which the plaintiff has suffered by being deprived of a cause of action against his former employer. Necessarily that involves comparing his hypothetical financial position, absent the relevant act or omission, with his actual financial position consequent upon the act or omission, and credit must be given for the financial benefits he has received, but would not have received but for the relevant omission. Such benefits include the proceeds of the top-up cover, as much as the lump sum compensation and periodical payments. In valuing economic loss, these countervailing economic benefits must be brought to account. Secondly, clause 20(a) of the Policy makes transparently clear that Mr Vukancic could not have received a top-up benefit if he had recovered common law damages. Thirdly, even if Espagne were relevant, the relevant indicia show that it was never intended that an employee receive both common law damages and “top-up” insurance benefits: (1) the policy was taken out by the employer, and (2) it made specific provision, in clause 20(a), to the effect that benefits were not payable if the employee brought a successful common law claim.

85 Accordingly, in the events that have happened, Mr Vukancic having brought no claim for damages for employers’ liability and having elected for permanent loss compensation, he retained entitlements to weekly compensation payments worth (as at 1 March 2001) $292,980, and to permanent loss compensation worth a total of $67,500. He also retained an entitlement to top-up insurance payments worth in total $58,305.90. The total value of those benefits is $418,786.

86 The hypothetical position: If Mr Vukancic had brought a claim for damages for employers’ liability and failed, he would (as at 1 March 2001) have retained entitlements to future weekly compensation payments worth $292,980. He would also have retained an entitlement to top-up insurance payments worth in total $58,305.90. But he would have had no entitlement to permanent loss compensation. The total value of those rights is $351,286. He would therefore have been $67,500 worse off than had he elected for permanent loss compensation, and in addition he would have had a potential exposure to liability for solicitor-client and party-party legal costs. If, on the other hand, Mr Vukancic had succeeded, he would have received common law damages of net $640,000, and would have been better off by $221,214 than had he relied exclusively on his workers compensation rights.

87 The lost chance. It follows that the scale of possible outcomes, based on values as at 1 March 2001, was from negative $67,500 (plus costs) to positive $221,214, relative to Mr Vukancic’s actual position. The conclusion that the prospects of success were 50% dictates that the value of the chance that Mr Vukancic lost is at the midpoint of that scale, which is positive $76,857, before allowing for any risk in respect of costs. There is no evidence to suggest that Mr Vukancic had any assets of significance, the risk as to costs may for practical purposes be regarded as not a significant factor. Interest would have been allowed on that sum from 1 March 2001 to judgment on 1 September 2005, which at the rates applicable for the purposes of prejudgment interest amounts to $32,395.75, and results in a total of $109,253.

88 In my view, therefore, if successful against Velcics, Mr Vukancic would have recovered damages in the order of $110,000 as at 1 September 2005.

What were Mr Vukancic’s prospects of success in his claim against Velcics?

89 It is not in issue that, having been retained by Mr Vukancic to advise and act for him in respect of remedies available to him as a result of his work injury, Velcics owed him a duty to exercise reasonable skill, care and diligence in and about the performance of the retainer, including in advising Mr Vukancic and commencing and maintaining proceedings on his behalf. The contentious issue is the solicitors’ discharge of that duty, and causation. Again, it is not for me to resolve that issue definitively, but to evaluate Mr Vukancic’s prospects of establishing liability, as a step in valuing the lost cause of action for damages for breach of professional duty against Velcics.

90 Although it was once the case that a solicitor consulted to advise on a workers compensation claim may not have been obliged to advise also on common law rights [Griffiths v Evans [1953] 2 All ER 1364, (Somervell and Romer LJJ; Denning LJ dissenting)], it is plain that in this State nowadays a solicitor must, in the context of an election between workers compensation and common law rights, advise the client of the impact of an election on common law rights [cf Scott v Echegaray]. In Chamberlain v Ormsby, Tobias JA expressed it this way:

[111] The simple fact is that the appellant was entitled to have his common law entitlements properly investigated, appropriate medical evidence obtained and advice, if appropriate, as to how his case might be affected by his drug taking and other aspects in respect of which the solicitor expressed concern. All these matters would need to have been explained to him in a manner that enabled him to come to a rational and informed decision. He was deprived of that opportunity.

91 Accordingly the following view of Denning LJ, expressed in dissent in Griffiths v Evans (at 1369-70), now prevails:

On those quite simple facts, the question is wheter the solicitor did his duty by the client. In particular, ought he to have considered whether the man had a claim at common law? I am clearly of opinion that he should have done so. When a workman goes to a solicitor and tells him he has had an accident and wants the solicitor to take on the case, the very first question the solicitor ought to put to himself is this. What is the man's legal position? Every solicitor ought to know that there is all the difference in the world between a case where the employer is to blame and a case where he is not. If the employer is not to blame, the man only gets workman's compensation. If the employer is to blame, either for negligence or for breach of statutory duty, the man gets the much higher award given by common law. I cannot think it is right for the solictor to escape by saying: “You only consulted me about workman's compensation, not about common law damages”. That attributes to the workman a legal knowledge of the difference between them. Many workmen do not in fact know the difference, and it would be most unfair to attribute such knowledge to them. This workman certainly did not. All he knew was that he was receiving weekly payments from his employers or their insurance company and that he was receiving them as compensation for his accident. It was not for him to know the difference between compensation under the Acts and compensation at common law, but it was the business of the solicitor to know it, and to know also, in those days, that the workman had an option to claim one or other which, once exercised, could not be retracted.

92 According to Mr Vukancic, at no time did Mr Velcic ask him how he suffered his injury, let alone referred to the potential for damages at common law if fault could be established.

93 Although Mr Velcic professes no recollection at all of Mr Vukancic or any consultation with him, with recourse to notes of the consultations on 14 August 1996 and 29 January 1997, and his “usual practice”, he maintains that he did seek particulars of the accident, and did provide advice as to common law rights. His note of 14 August 2006 records that Mr Vukancic told him that the accident occurred on 24 May, and that he had been lifting a piece of timber when he felt pain in his back; he was unable to say whether there was any witness. Mr Velcic’s file note of 29 January 1997 records: “Client lifting piece of timber about 3-4 m when sharp pain in low back. Demo. Lift part of timber – nailed into place. Witnesses – not sure ?? … D.O.I – 27/5/96”.

94 At least in respect of the first consultation, on 14 August 1996, Mr Vukancic’s version is corroborated by his wife. However, I am unpersuaded that his recollection of these consultations is reliable. While I do not necessarily accept that Mr Velcic’s reconstruction is entirely accurate, I see no reason to doubt that his file notes are accurate records, so far as they go, of the consultations. They record information about the incident, which could only have been provided by Mr Vukancic. In the light of those notes, the suggestion that Mr Velcic asked nothing about the accident is quite implausible. So is the suggestion that Mr Vukancic was never consulted about settlement negotiations that took place.

95 On the other hand, I am unpersuaded that Mr Velcic’s reconstructions should be accepted where they go beyond the contents of his notes. The notes do not show on their face any reference to consideration of common law potential. Mr Velcic says that a reference to “liability” in the note of 29 January 1997 is such a reference, but in my view it could equally well refer to liability under the Workers Compensation Act. There is no note, which one would expect, of an explanation of the consequences of electing for workers compensation or for damages. There was at least a reasonable prospect of establishing that Mr Vukancic was given no adequate explanation of his common law rights and the consequences of election.

96 Moreover, according to Mr Velcic, at the 29 January 1997 consultation, he says he would have had the medical reports of Dr Jakovac and Dr New; by that date he had also received (and should have read) that of Dr Giblin of 30 October 1996, and possibly that of Royal Rehabilitation Hospital of 25 July 1996. He also had the claim form, and said that (according to his invariable practice) he would have read to Mr Vukancic the account of the accident contained in the claim form, either before or after having him demonstrate the incident. He says that he would have advised Mr Vukancic that day to the effect “Nothing you have told me so far would cause me to think you have rights at common law. You need to choose whether to proceed at common law or workers compensation, but there is nothing to suggest you have any common law rights. Is there anything else you can tell me about the accident that could cause me to think differently?”, and that the absence of any notation of a response indicates that there was none of substance.

97 Mr King SC, assuming that a solicitor was given a history that included less than 1.2m of headroom, taking lengths of timber and affixing them horizontally to the face of a plywood structure, holding the lengths of timber horizontally with his left hand while nailing them with a hammer in his right hand, it being necessary to adopt a cramped and awkward position to do this with regular bending and twisting, that the solicitor ought to have advised that expert opinion be obtained from a consultant engineer, of the type that was ultimately obtained from Mr Tozer: the solicitor should have advised of the potential availability of a common law action, the implications of the election provisions, the limitation period, the need for expert evidence on liability, and the applicable thresholds, and sought out the names of witnesses.

98 In cross-examination, Mr King – asked to assume that the history given to the solicitor was that the client had hurt his back while lifting a not particularly heavy piece of timber perhaps 8 to 10 kg in weight, and when asked to demonstrate the accident demonstrated a simple bending and lifting motion, and was unable to provide the name of any witness, and said nothing about working in an area with reduced headroom, nor about holding up the timber with one hand and nailing with the other while in a bent and cramped position – said that if it was just a simple lift of a manageable length of timber weighing only 8 to 10 kg, a solicitor of ordinary prudence and competence would not pursue the matter from a common law perspective, “but if there is anything more to it than a simple lift, even if you take out the cramped situation, if you have got absolutely repetitive work involving a lot of bending and lifting, that may make a difference”.

99 I do not accept that Mr Velcic was presented with a “simple lift” scenario. First, he knew or ought to have known that Mr Vukancic was working on scaffolding. This was apparent from the claim form, and from Dr Giblin’s report which provided information that he was working up to 2.5 metres above the floor. Together these at least called for further investigation of the location. Secondly, from the variation in dates – 24 and 27 May – there was at least an indication that the injury was aggravated by continuing to work over three days; this called for some investigation of what he was doing over those three days. Thirdly, he also had information, from the claim form, that Mr Gradenicic was a potential witness. Fourthly, he also had information – in the second consultation, quite probably from a demonstration performed at his request by Mr Vukancic – that he was lifting and nailing the timber into place – thus raising the question of exerting force while lifting or holding the timber. Despite the submissions to the contrary, in my view the sequence and arrangement of Mr Velcic’s note suggests that Mr Vukancic demonstrated to him the act of lifting a part of the timber and nailing it into place, much as he ultimately described it to the Court. Fifthly, he was or ought to have been aware that back surgery was in contemplation, which would have been considerable comfort that the applicable thresholds for non-economic loss could be satisfied, and should have resulted in an elevated sensitivity to the need to explore common law potential.

100 In his evidence in chief, Mr Velcic himself said that had he been told Mr Vukancic was working in an area with reduced headspace, he would have recorded it and made inquiries in respect of common law rights, since the circumstances would suggest some common law potential. He said that had he been told that the injury occurred when Mr Vukancic was crouched in a confined space holding up a timber beam and nailing it, he would have seen obvious common law potential; when asked why, he identified (1) that he was working in an elevated position, and (2) that he was crouching and being asked to exert force while holding a large piece of timber, a “clearly inappropriate” system of work which offered clear common law potential and called for further investigation.

101 In my judgment, Mr Velcic was not justified in saying that there was nothing to suggest any common law potential, but ought to have recommended obtaining expert and/or counsel’s opinion, or at the least further investigating the facts, while pointing out that the case was not a clear cut one. Such an investigation would have produced the facts that emerged at the trial before me. I do not accept that Mr Vukancic was not forthcoming with information about his accident: there was no difficulty in eliciting it if the appropriate questions were asked, and Mr Velcic’s note of 29 January 2001 suggests that he obtained a version very similar to that which was ultimately given in Court.

102 What advice should Mr Velcic have given in those circumstances? Having regard to the conclusions reached above, the appropriate advice would have been that Mr Vukancic had fair – about 50/50 – prospects of succeeding in an employers’ liability claim; that if he succeeded he would be better off than otherwise (perhaps by in the order of $200,000); that if he failed he would be worse off (perhaps by in the order of $75,000) and be exposed to liability for costs, because he would recover no permanent loss compensation, but that he would remain entitled to weekly payments; accordingly, that while there was probably more upside than downside to electing for common law damages, such a course was not without significant risk. I recognise that it would not be possible, at the relevant time, to be precise about the potential differences in position, but it should have been possible to recognise that, if successful, there would have been a substantial advantage, and, if unsuccessful, some but a significantly lesser disadvantage, than if he were to rely on his workers compensation rights.

103 In my view, in the context of those matters, reasonable opinions might well differ, between solicitors and potential plaintiffs, as to whether or not it was worthwhile or prudent to elect for common law damages, and Mr Velcic would not have erred in recommending that Mr Vukancic rely on his workers compensation rights; but if he were to do so it was necessary that he provide Mr Vukancic with an analysis and explanation that enabled him to form his own view as to whether or not the risk was worth taking [cf Chamberlain v Ormsby, [111]; Hamze v Bradstreet [2007] NSWDC 54, [92]-[93] (Rein DCJ)]. It was in advising Mr Vukancic that there was nothing to suggest that he had any common law rights that Mr Velcic fell short of his duty to his client.

104 If that view prevailed at the hypothetical trial, Mr Vukancic would have succeeded against Velcics. Of course, it is possible that that view might not have prevailed; as I have concluded that common law employers’ liability was far from clear cut, a court might have accepted that it was reasonable for Mr Velcic to form the view that there was no common law potential – but the much more likely outcome was that it would have held that he ought to have concluded that there was at least an arguable case, and there was some prospect that the court would find that there was no advertence to common law potential at all. There are, however, further reasons to discount the prospects of success, and why Mr Vukancic would have been well advised to settle his claim for less than full value. His (and his wife’s) versions of the consultations with Mr Velcic were demonstrably inconsistent with contemporaneous records, and there was a risk that Mr Velcic’s version would be preferred. While the basis on which I think Velcics was likely to be found liable does not depend on acceptance of Mr Vukancic’s evidence, the risk as to his credibility would nonetheless have made settlement at a slight discount prudent.

105 There was also the risk that, in the proceedings against Velcics, the Court would have found that, properly advised as to the costs and other risks of common law proceedings, Mr Vukancic may have decided in any event to rely only on his workers compensation rights. Evaluation of this issue is not assisted by the absence of any evidence addressing what Mr Vukancic would have done if given such advice, although it is accepted (and indeed obligatory in cases to which the (NSW) Civil Liabilities Act 2002 applies) that inferences of reliance may be drawn objectively from the circumstances without sworn assertions of what the plaintiff properly advised would have done. As Basten JA observed in Chamberlain v Ormsby:

Rosenberg v Percival

106 As his Honour also pointed out, again in Chamberlain v Ormsby:

Dunn v Firth

107 Mr Vukancic might have been risk averse, and he might have preferred the certainty of permanent loss compensation to the risk. But his determination in suing first Velcics and then Bells does not suggest that he is faint-hearted when it comes to litigation. And the logic of the figures is telling: although he may have had even prospects of winning and losing, the prospective benefit of a win exceeded, by about 200%, the prospective detriment of a loss. In my view, the probabilities favour the view that properly advised, he would have elected for common law damages, although I allow for a significant element of risk that the court hearing the hypothetical claim against Velcics might have concluded otherwise.

108 Mr Downing submitted that a total discount of 40% – assessing Mr Vukancic’s prospects against Velcics at 60% – was appropriate. My conclusion that Velcics’ liability would be established on his own version, even if Mr Vukancic’s evidence were disbelieved, reduces the risk and increases the prospects. I conclude that Mr Vukancic’s prospects of success in his lost claim for damages for professional negligence against Velcics were about 65%. While this is a matter of broad assessment and not mathematical calculation, it is unsatisfactory to give no explanation of how it is derived. As a broad indication, I have treated the reduction of the general and miscellaneous vicissitudes of litigation, exacerbated by the credit difficulties that Mr Vukancic would encounter, as a risk of 7.5%; the relatively slight possibility that the hypothetical trial court would have found Mr Velcic justified in concluding that the case against Dalma had no common law potential as a risk of 7.5%; and the much more substantial risk that it would have found that properly advised, he would have elected to rely on his workers compensation and not common law rights, as one of 25%. When these risks are compounded (92.5% x 92.5% x 75%) the result is overall prospects of success of 64.17%, which I round to 65%.

Conclusion

109 Bells were negligent as alleged. As a result, Mr Vukancic was deprived of his cause of action for damages for breach of professional duty against Velcics. Mr Vukancic would have prosecuted that cause of action had it not become statute-barred. The value of what he lost depends on how much better off Mr Vukancic would have been had he elected for common law damages rather than workers compensation rights against Dalma.

110 If successful in an employers’ liability claim against Dalma, Mr Vukancic would have recovered, when it came to trial on or about 1 March 2001, net damages, after paybacks, of about $640,000, as follows:

Head

Amount $

Para

General damages
77,000

16

Past lost wages (after payback)
62,992

17

Interest on past lost wages
14,960

17

Future economic loss
402,900

19

Lost superannuation
65,919

20

Past and future domestic assistance
17,080

27

Total
640,851

111 Although Mr Vukancic’s ultimate version of how he suffered his injury would likely have been accepted, and he would probably have had some expert evidence to support his case on liability, whether breach of duty was established would have been highly contentious, and his overall prospects of success in an employers’ liability claim against Dalma were no better than 50%.

112 Assuming reasonable skill, care and diligence on the part of Mr Bell, the proceedings against Velcics should have been commenced by mid 2002, and would have been heard by about 1 September 2005.

113 Valuing what Mr Vukancic lost by that claim becoming statute barred requires comparing his hypothetical position in the event he had not elected against damages (which involves the possibilities that a common law claim may or may not have succeeded), with his actual position that he did elect against damages and has received and will continue to receive workers compensation. The value of the lost chance of being better off is informed by the extent to which he would have been better off if successful; the extent to which he would have been worse off if unsuccessful; and the probability of success, which determines what point on the scale between those two positions reflects the value of his chance.

114 Had Mr Vukancic brought an unsuccessful common law claim, he would not have lost his right to weekly payments, and it is fallacious to see the potential outcomes in terms of a dichotomy between a chance of a successful common law claim (and no workers compensation) on the one hand, against the certainty of full workers compensation benefits on the other. The comparison of his actual and hypothetical positions is to be made before any discount of the hypothetical position for risk, and to deduct 100% of his future workers compensation benefits as at the date of assessment from the value of his employers’ liability claim discounted for the risk of failure would be erroneous.

115 While the value of Mr Vukancic’s workers compensation benefits is to be ascertained as at the hypothetical trial date (of the employers’ liability claim), that does not mean that in ascertaining the value of those benefits, the Court hearing the hypothetical claim against Velcics ignores events that have happened since. To the extent that subsequent events inform the true value of his compensation benefits, they may be taken into account whenever they happened, because the purpose is to value what he has actually received, the employers’ liability claim not having proceeded. But it is not a corollary that his economic loss should be calculated by having regard to increases in wages of comparable employees subsequent to the hypothetical trial date (of the employers’ liability claim), because in that respect the purpose is to ascertain what he would have received had the case proceeded to trial on that date.

116 Mr Vukancic’s actual position, as at the hypothetical trial date against Velcics on 1 September 2005, having brought no claim for damages for employers’ liability and having elected for permanent loss compensation, was that he retained entitlements to weekly compensation payments worth (as at 1 March 2001) $292,980, to permanent loss compensation worth $67,500, and to top-up insurance payments worth $58,305.90, a total of $418,786.

117 Mr Vukancic’s hypothetical position, as at the hypothetical trial date against Velcics on 1 September 2005, had he brought a claim for damages for employers’ liability and failed, was that he would have retained entitlements to future weekly compensation payments worth (as at 1 March 2001) $292,980, and to top-up insurance payments worth in total $58,305.90. But he would have had no entitlement to permanent loss compensation. The total value of those entitlements is $351,286. He would have been $67,500 worse off than had he elected for permanent loss compensation, and he would also have had an exposure to liability for solicitor-client and party-party legal costs. On the other hand, had he brought such a claim and succeeded, he would have received common law damages of net $640,000, and would have been better off by $221,214 than had he relied exclusively on his workers compensation rights.

118 The scale of possible outcomes, based on values as at 1 March 2001, was from negative $67,500 (plus costs) to positive $221,214, relative to his actual position. The conclusion that the prospects of success were 50% dictates that the value of the chance that Mr Vukancic lost is at the midpoint of that scale, which is positive $76,857, before allowing for any risk in respect of costs. As there is no evidence to suggest that Mr Vukancic had any assets of significance, the risk as to costs for practical purposes may be regarded as not a significant factor. Interest would have been allowed on that sum from 1 March 2001 to judgment on 1 September 2005, amounting to $32,395.75, and producing a total of $109,253.

119 Accordingly, if successful against Velcics, Mr Vukancic would have recovered damages in the order of $110,000 as at 1 September 2005.

120 Having regard to the general and miscellaneous vicissitudes of litigation, exacerbated by the credit difficulties that Mr Vukancic would encounter; the relatively slight possibility that the hypothetical trial court would have found Mr Velcic justified in concluding that the case against Dalma had no common law potential; and the substantial risk that it would have found that, properly advised, Mr Vukancic would have elected to rely on his workers compensation and not common law rights; Mr Vukancic’s overall prospects of success in his lost claim for damages for professional negligence against Velcics were about 65%.

121 It follows that the value of what Mr Vukancic has lost by reason of his claim against Velcics becoming statute-barred due to Mr Bell’s negligence is 65% of $110,000, namely $71,500, as at 1 September 2005. Interest at court rates to date is $13,444, amounting to a total of $84,944.

122 I give judgment that the second defendant pay the plaintiff $84,944.

123 I order that the second defendant pay the plaintiff’s costs, including the costs of the proceedings against the first defendant.

124 I reserve leave to all parties to apply within 7 days:

(1) to set aside or vary the costs order;

(2) to correct any mathematical error.

[Counsel addressed on costs]

125 Set aside the costs order contained in paragraph 123 of the judgment just published.

126 The defendant served an offer of compromise on 5 July 2007 in an amount which would have been substantially more favourable to the plaintiff than the amount in the judgment given. In those circumstances operation of (NSW) Uniform Civil Procedure Rules 2005, r 42.15 is attracted.

127 I order that the second defendant pay the plaintiff’s costs, including the costs of the proceedings against the first defendant, up to and including 5 July 2007, such costs to be assessed on an ordinary basis.

128 I order that the plaintiff pay the second defendant’s costs, assessed on an indemnity basis, from 6 July 2007.

129 I order that exhibits be returned at the expiration of 28 days if no appeal or application for leave to appeal has by then been filed.

**********

26/09/2007 - Correction to File Number - Paragraph(s) Judgment Title

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Citations

Vukancic v Velcic [2007] NSWSC 1001

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Mullens v Sydney West Area Health Service [2011] NSWSC 346

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1

Mullens v Sydney West Area Health Service [2011] NSWSC 346

Cases Cited

6

Statutory Material Cited

3

Feletti v Kontoulas [2000] NSWCA 59

Mount Isa Mines Ltd v Pusey [1970] HCA 60

Chamberlain v Ormsby t/as Ormsby Flower [2005] NSWCA 454

CITATION:	Vukancic v Velcic [2007] NSWSC 1001 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	7 - 15 August 2007
JUDGMENT DATE :	6 September 2007
JURISDICTION:	Common Law Division Professional Negligence List
JUDGMENT OF:	Brereton J
DECISION:	Judgment for plaintiff for $84,994
CATCHWORDS:	NEGLIGENCE – employer’s liability – lifting – whether worker had viable cause of action arising from injury suffered when supporting 10kg beam. - NEGLIGENCE – professional liability – whether solicitor retained to advise on workers compensation claim obliged to advise on potential common law rights and effect of accepting permanent loss compensation – where common law claim had fair prospects only and might have left worker better or worse off – content of appropriate advice. - DAMAGES – personal injuries – whether Griffiths v Kerkemeyer damages available for provision of support and encouragement. - DAMAGES – economic loss – loss of a chance – where first solicitor failed to advise worker of common law potential and consequences of accepting permanent loss compensation – where second solicitor failed to commence proceedings against first solicitor within time – evaluation of prospects of success of employer liability claim – whether value of workers compensation benefits to be deducted before or after discount for risk – date as at which workers compensation benefits to be valued – whether known facts in respect of workers compensation benefits subsequent to valuation date may be considered – vicissitudes to be applied to future workers compensation benefits – whether workers compensation top-up insurance payments to be deducted – evaluation of prospects of success of professional liability claim against first solicitor – risk factors – risk that properly advised plaintiff would not have brought employers liability claim
LEGISLATION CITED:	(NSW) Civil Liabilities Act 2002 (NSW) Uniform Civil Procedure Rules 2005, r 42.15 (NSW) Workers Compensation Act 1987 ss 66, 67, 151A, 151B, 151G
CASES CITED:	Chamberlain v Ormsby [2005] NSWCA 454 Charles v Hugh James Jones & Jenkins [2000] 1 All ER 289 Clayton v Kearsey (1935) 79 SJ 180 Feletti v Kontoulas [2000] NSWCA 59 Green v Berry [2001] 1 Qd R 605 Gregory v Tarlo (1964) 108 SJ 219 Griffiths v Evans [1953] 2 All ER 1364 Hamze v Bradstreet [2007] NSWDC 54 Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 National Insurance Company of New Zealand Limited v Espagne (1961) 105 CLR 569 Quevillon v Lamoureux (1975) 52 DLR (3d) 476 Ren v Mukerjee (ACTSC, Miles CJ, 12 December 1996, unreported) Rotumah v New South Wales Insurance Ministerial Corp (NSWSC, Donovan AJ, 6 April 1998, unreported) Scott v Echegaray (1991) Aust Torts Reports 81-120 Tipper v Williams (No 2) (NSWCA, 6 May 1994, unreported, BC9404994) Yardley v Coombes (1963) 107 SJ 575
PARTIES:	Zoran Vukancic (plaintiff) Nikola Velcic t/as Nikola Velcic & Associates (first defendant) Martin Bell t/as Martin Bell & Co Solicitors (second defendant)
FILE NUMBER(S):	SC 20205/04
COUNSEL:	G B Hall QC w A Lakeman J Downing (second defendant)
SOLICITORS:	Hall Partners (plaintiff) Yeldham Lloyd Associates, Lawyers (second defendant)

Head	Amount $	Para
General damages	77,000	16
Past lost wages	62,992	17
Interest on past lost wages	14,960	17
Future economic loss	402,900	19
Lost superannuation	65,919	20
Past and future domestic assistance	17,080	27
Total	640,851