York t/a York Pastoral Co v Marsden

[1998] QCA 95

IN THE COURT OF APPEAL	[1998] QCA 095
SUPREME COURT OF QUEENSLAND
Appeal No. 7543 of 1997.
Brisbane
[York & Ors. v. Marsden]
BETWEEN:

DAVID ALFRED YORK, GEORGE ALFRED YORK,
GRAHAM GEORGE YORK and LYNETTE MARY YORK

(trading as YORK PASTORAL CO")

(Defendants) Appellants

AND:

STEPHEN LINDSAY SAMUEL MARSDEN

(Plaintiff) Respondent

___________________________________________________________________________

Davies J.A. Pincus J.A. Shepherdson J.

___________________________________________________________________________

Judgment delivered 19 May 1998

Joint reasons for judgment of Pincus and Davies JJ.A.; separate reasons of Shepherdson J. concurring
as to the orders made.
___________________________________________________________________________

APPEAL ALLOWED WITH COSTS. JUDGMENT BELOW SET ASIDE AND IN LIEU THEREOF JUDGMENT ENTERED FOR THE RESPONDENT FOR $134,070.63 AND COSTS TO BE TAXED.

___________________________________________________________________________

CATCHWORDS: NEGLIGENCE - personal injuries - whether primary judge’s assessment

of damages for economic loss, past and future, was excessive - where

respondent was very badly burned when a generator exploded.

Counsel:	Mr P R Dutney Q.C. with him Mr M D Hinson for the appellants. Mr S J Given for the respondent.
Solicitors:	Ebsworth & Ebsworth for the appellants. Morton & Morton for the respondent.
Hearing date:	3 April 1998.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 7543 of 1997.

Brisbane

Before Davies J.A. Pincus J.A. Shepherdson J.

[York & Ors. v. Marsden]

BETWEEN:

DAVID ALFRED YORK, GEORGE ALFRED YORK,
GRAHAM GEORGE YORK and LYNETTE MARY YORK

(trading as YORK PASTORAL CO")

(Defendants) Appellants

AND:

STEPHEN LINDSAY SAMUEL MARSDEN

(Plaintiff) Respondent

JOINT REASONS FOR JUDGMENT - PINCUS and DAVIES JJ.A.

Judgment delivered 19 May 1998

Judgment was given in favour of the respondent in the District Court for $166,831.63 for

damages for negligence. The appellants, defendants below, contend that the primary judge’s

assessment of damages for economic loss past, and future, was excessive.

In December 1992, when the respondent was 23 years of age, he was working near a small

generator when, while it was being refuelled, the generator exploded, with the consequence that the

respondent was very badly burned, principally on the back, on the backs of his legs, on the right arm

and the right hand. He was treated with skin grafts and in other ways, enduring a stay of about a month

in hospital, and went back to work about another month later. The judge took the view that his injuries were intensely painful and left him with significant scarring both physical and emotional; non-economic

loss was assessed at $50,000 and that is not challenged. The physical disabilities from which the

respondent suffers are, fortunately, not very great; the same may not be said of the respondent’s

difficulties as to confidence and attitude to himself and to others. The injury was of such a kind that

especially as regards a young person one might expect to have an effect beyond physical disability.

When the respondent suffered this injury he had been employed by a company, Hyne & Son

Pty Ltd, for some years, starting with what was called a cadetship. The respondent gave evidence that

the cadetship was run by a body called the Queensland Timber Board and completion of it earned the

respondent a diploma. There were two other cadets indentured to the company at the same time as the

respondent and they completed their cadetships when he did. The respondent’s case was that the two

other cadets we have mentioned had been promoted in preference to him and it was argued that this

was a consequence of the respondent’s injury. The judge found on the evidence that the respondent

was "held back" because of his disabilities consequent upon the incident in which he was burned by the

explosion. His Honour said:

"I find that as a result of his injuries and consequent disabilities he, including, of course, emotional problems, was not considered favourably for positions which otherwise he may have been favourably considered for."

He accepted evidence that the other cadets were now earning $8,000 - $10,000 a year more than the

respondent.

Mr Dutney Q.C. who led Mr Hinson for the appellants, did not contest the findings that the

other cadets were earning $8,000 - $10,000 more than the respondent, but pointed out that the

evidence was that this situation subsisted for only about 18 months; so, it was said, the amount of
money lost prior to trial was in the range of $12,000 to $15,000, at most.

The judge, however, allowed $25,000, in addition to an uncontested sum allowed for the period

when the respondent was unable to work - about 2 months. Mr Dutney said in effect that there was

no proper basis proved in the evidence for an award of more than $12,000 to $15,000 in respect of

past economic loss; the argument was that there was only a chance, although a substantial one, that the

respondent would achieve the promotion which the other two employees obtained and the damages

should have been proportional to this chance. As to the future, the judge assessed a sum of $80,000

and it was said that this figure, too, was unsupported by evidence.

The first step is more closely to examine the extent of the respondent’s disabilities. The judge

accepted him as "an honest witness and a reliable historian"; no submission was made challenging that

view. The area burnt was initially estimated at 25%-30% of the body surface area but subsequently,

at Royal Brisbane Hospital, an estimate of 35% "full thickness burn" was made. The process of

improvement of his condition continued for some time - apparently, the best part of 3 years after he left

hospital. When last seen by Dr Pegg, a professor of burn surgery, in August 1995, the respondent’s

scars were said to have been slow to settle, but ultimately to have "settled well". The doctor said that

the scars on the arm were still noticeable and those on his legs "still constituted definite cosmetic defect".

Dr A M Jenkins,, a plastic surgeon who saw the respondent in 1996, said that his appearance had been

"profoundly changed" and that this had been a concern to the respondent. Dr Jenkins remarked:

"His self-esteem has suffered as a result. He is gradually regaining his confidence."

Although the respondent has been badly scarred, by the initial burns and also by what is described as "harvesting" of skin for skin grafts, the scarring, except for that on his right hand, is not manifest if he wears long trousers and long-sleeved shirts. It does not appear to us, therefore, that the

scarring would from the cosmetic point of view be a great handicap in any employment the respondent

might undertake, as long as it was practicable to dress in the way we have mentioned. There are,

however, other aspects of the respondent’s injury which are relevant to his economic future. They

emerge from the detailed report of an occupational therapist, Ms Coles, who saw the respondent in

mid-1996 and again a year later. In a report relating to the latter date, Ms Coles said in effect that the

respondent then had some pain in the hamstrings and calves and tingling "pins and needles" and itchiness,

apparently in the legs. The problem was aggravated by heat; the respondent, Ms Coles said, "wears

slacks and the heat aggravates, especially in the tropics". The respondent complained to Ms Coles of

some stiffness in the knees, apparently because of the grafted skin, and some discomfort in the back,

especially in summer caused by a lack of sweating from the scarred areas. The respondent complained

of psychological changes in himself, from having been of a cheerful and mostly happy-go-lucky

disposition to feeling pressured, moody and so forth. He complained to Ms Coles, as he had done to

Dr Jenkins, of a loss of a feeling of self-esteem. As to movement, he said that he avoids "unpredictable

surfaces" and "hurries in a hop-a-long manner" rather than by running.

It appears to us that on the evidence before the primary judge a rather pessimistic view of the

respondent’s prospects was open. Unfortunately for the respondent, however, his Honour’s findings

suggested a fairly good future, at least in some respects. The judge referred to "emotional scars"

described in the evidence and went on:

"Having said that it does seem to me that the plaintiff is perhaps fortunate in that he has the resources to, in fact, have made what appears to me to be a remarkably good recovery from this very serious incident, but, nonetheless, as I say, I am satisfied that he still has the emotional problems which are described . . . ".

A little later in his Honour’s reasons there was discussion of a claim for lost earnings from coaching in

sport; the respondent is qualified as a rugby league coach and as a cricket coach. In the course of

discussing that the judge said:

"I certainly accept that the plaintiff, had he not been injured, would have turned to coaching. It seems to me it is more likely that he would have done that later in life rather than in his younger years . . . [i]t seems to me that the only moneys earned from coaching that he might have earned to date probably would have been largely swallowed up by expenses . . ."

With respect to the respondent’s claim for future economic loss the judge discussed the evidence that,

as mentioned above, two other cadets were appointed to higher positions; the judge said:

". . . I find, that the plaintiff was held back because of the disabilities that he suffered following the incident that I am concerned with and . . . I find that as a result of his injuries and consequent disabilities he, including, of course, emotional problems was not considered favourably for positions which otherwise he may have been favourably considered for".

The judge then held in effect that he would not accept that the respondent would have "anywhere like

the coaching career that he might otherwise have had" and that:

". . . the plaintiff has suffered a disadvantage because of his injuries and the sequelae so
far as his promotion within Hyne & Sons company is concerned.

I should add to these findings that my impression of the plaintiff is a highly favourable one. He strikes me as being a very determined and, I suspect, a very ambitious man. As time goes on I am confident that he will make up a large part of the ground that he has lost". (emphasis added)

A little later the judge reiterated this notion:

". . . it seems to me that with time the plaintiff will catch up with the other young men with whom he went through the cadet course, but I must allow for the losses that he will suffer in the interim". (emphasis added)

As we have mentioned, the award for future economic loss was $80,000. Mr Dutney pointed out for

the appellants that on the 5% tables that is equivalent to a weekly loss of $97 for 30 years.

It is difficult to reconcile this figure with the findings. If one accepts the judge’s findings to the

effect that given time the respondent, being a very determined man, would catch up with the other

cadets, treating him as having a permanent loss of close to $100 per week seems excessive. And we

cannot see how the loss of earnings from coaching, some time in the future, could overcome the

depressing effect, on the assessment of future economic loss, of the findings about the respondent’s

likely future to which we have referred. There was evidence to which the judge made reference of

worsening of the respondent’s personal qualities as a result of his injuries; it was said that he had

become moody, lacked confidence and the like. But the judge’s favourable assessment of the

respondent’s personality and prospects must be given due weight; his Honour had no doubt ample

opportunity to assess that and was, one would think, in as good a position to do so as any of the

witnesses.

To return to the question of past economic loss, it appears to us that the judge should in the

particular circumstances of this case have made some small allowance for the chance that, apart from

the specific loss of promotion complained of, opportunities might have been lost which, whether the

respondent knew it or not, might have come his way had he not been injured. But a generous approach

to that as well as some allowance for loss of coaching activity could not take economic loss from the

date of return to work up to trial to the sum of $25,000. It is our opinion that the award for economic

loss in the period mentioned should have been $15,000 only. That would necessitate a reduction of

$10,000 in the award. As to future economic loss, we agree with the conclusion of Shepherdson J.,

whose reasons we have had the advantage of reading, that a reduction of $20,000 should be made.

We would allow the appeal with costs and reduce the judgment below to one for $134,070.63.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 7543 of 1997

Brisbane

Before Davies J.A. Pincus J.A. Shepherdson J

[York & Ors. v. Marsden]

BETWEEN:

DAVID ALFRED YORK, GEORGE ALFRED YORK
GRAHAM GEORGE YORK & LYNETTE MARY YORK

(trading as “YORK PASTORAL CO”)

(Defendants) Appellants

AND:

STEPHEN LINDSAY SAMUEL MARSDEN

(Plaintiff) Respondent

REASONS FOR JUDGMENT - SHEPHERDSON J.

Judgment delivered 19 May 1998

I have read the joint reasons for judgment of Pincus and Davies JJA. I accept the facts as stated

by them.

As to the component for past economic loss (apart from an uncontested sum referred to by the

learned trial judge) I agree with Pincus JA and Davies JA that for the reasons they have given this should

have been in the region of $15,000 rather than the $25,000 assessed by the learned trial judge.

I I turn now to the component assessed for future economic loss.

I now refer to and quote from part of the learned trial judge's reasons for judgment:- goes on I am confident that he will make up a large part of the ground that he has lost. As I say, quantification of these heads of damages is extraordinarily difficult. Counsel for the plaintiff has urged upon me that I accept Mr Dunham' s evidence that the other men who were cadets with the plaintiff are now earning 8 to $10,000 a year more than he. He suggested that I should approach matters on the basis, that, therefore, the plaintiff has suffered and will continue to suffer an ongoing loss of about $200 net per week. With respect to counsel I do not think that such an approach is justified in this case. I do not think that one can quantify this head of damage with pretence to that type of precision. This is, I think, yet another type of case where a broadbrush approach is called for. It seems to me at the end of the day I must try to find some figure which appears to me to give some justice between the plaintiff and the defendants.

"I should add to these findings that my impression of the plaintiff is a highly favourable one.

Doing the best I can I have decided that for past economic loss in addition to the $3,510 I have mentioned I will allow a further $25,000. For the future I think it most likely, of course, that the plaintiff will remain with Hyne & Sons Pty Ltd, although one must allow for the possibility that for one reason or another he might cease working for that company in which case, as Ms Coles points out, he will be at a significant disadvantage seeking alternative work with other employers.

As I have said, it seems to me that with time the plaintiff will catch up with the other young men with whom he went through the cadet course, but I must allow for the losses that he will suffer in the interim. Doing the best I can I have decided to allow $80,000 for future economic loss."

I point out that the above extract does not mention the matter of coaching and I shall come to this

later - it was a matter which the learned trial judge took into account in his assessment of $80,000.

In his reasons the learned trial judge did not give any indication as to how he arrived at the

$80,000 other than applying "a broad brush approach".

As can be seen his Honour found the assessment "extraordinarily difficult" and he rejected an

approach by the respondent plaintiff’s counsel that he assess the component for future impairment of

earning capacity on the basis of an ongoing loss of about $200 per week. This figure it appears may

well have derived from the earnings of fellow former cadets, then still in the employ of Hyne & Son Pty

Ltd which were $8,000 - $10,000 a year in excess of the plaintiffs earnings. Whether these figures were cross or net of tax is not known. If these figures were net of tax the $200 per week does not take

account of any future loss of earnings from coaching rugby league and cricket.

Towards the end of the passage which I have above set out, his Honour found that with time the

plaintiff would catch up with the other young men with whom he went through the cadet course. I

assume that he meant the gap of $8,000 - $10,000 would no longer exist and all would be earning at

about the same rate.

This seems to me to have been the type of finding referred to in the High Court by Deane,

Gaudron and McHugh JJ in Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at pp.642-3, where their

Honours dealt with the matter of assessment of damages for future or potential events. I regard the

finding as to catching up as being a finding of a fact which will occur at some time in the future.

However, although his Honour made another finding, namely, that the plaintiff is most likely to

remain with Hyne & Son Pty Ltd in the future, he did - "allow for the possibility that for one reason or

another he might cease working for that company".

Because the learned trial judge used the word "possibility" I infer that the risk of the appellant

ceasing to work for Hyne & Son Pty Ltd is comparatively low. It is perhaps unfortunate that his

Honour did not assess the degree of probability of that occurring. (See the following statement by the

above three Judges in Malec (at p.643):-

"Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51% probability of occurring but to ignore altogether a prediction which has a 49% probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred or might occur and adjusts it award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded."

I bear in mind that "an injured plaintiff recovers not merely because his earning capacity has been

diminished but because the diminution of his earning capacity is or may be productive of financial loss."

(Graham v Baker (1961) 106 CLR 340 at 347).

In my view the component (unidentified in amount) in the $80,000 attributable to the possibility that

for one reason or another the respondent plaintiff might cease working for Hyne & Son Pty Ltd and be

disadvantaged in the labour market must be comparatively small. If it occurred well in the future the loss

then must be discounted to a present value. I add it was open to his Honour to find, as he did, that in

that event the respondent plaintiff will be at a significant disadvantage seeking alternative work with other

employers, but as I've said there is no indication in his Honour's reasons for judgment as to how much

if any of the $80,000 he allowed as compensation for the possibility that the respondent might cease

working for the company and thereby be placed at a disadvantage on the open labour market.

In light of his Honour's finding that with time the plaintiff will catch up with the other former cadets

who are presently in a superior earning position to him and in light of the finding that it is most likely that

the plaintiff will remain with his present employer for the future, the $80,000 allowed for future economic

loss appears excessive notwithstanding the possibility of the respondent ceasing to work for his present

employer and being disadvantaged on the labour market. However one must consider also the aspect

of future loss of income from coaching cricket and rugby league - this must be part of the $80,000.

In respect of a claim for loss relating to his inability to coach cricket and rugby league, the learned

trial Judge made the following findings:- (p.53-54)

"I certainly accept that the plaintiff, had he not been injured, would have turned to coaching. It seems to me it is more likely that he would have done that later in life rather than in his younger years. He may have, of course, coached junior teams in his younger years, but it seems to me more likely that the bulk of his coaching would have been left till later. So it seems to me if there is a loss there it is more prospective than retrospective.

It seems to me that the only moneys earned from coaching that he might have earned to date probably would have been largely swallowed up by expenses incurred in playing the game and other associated costs.

Of far greater moment is a claim that because of his accident he has been prejudiced in his employment... ."

The following quote comes from p.57 of the record:-

"I should say that it seems to me that although perhaps physically the plaintiff may be able to do some coaching in the future he will have significant problems in our climate with sensitive skin and with the problems he has with an inability to perspire through parts of his body. So it does seem to me that any suggestion that he could have anywhere here like the coaching career that he might otherwise have had is not one that I should accept."

His Honour had some evidence as to earnings by cricket and rugby league coaches and these

depended on the grading level of the coaches. This evidence showed that a top graded cricket coach

(aged over 40 years and disabled at the time he coached) earned at $25 per hour for 15-20 hours per

week coaching plus travelling expenses in the season between August and the end of March. Lower

graded coaches earned at $15 and $12-50 an hour. The evidence also showed that the captain of

Hervey Bay Seagulls Rugby League team earned $6,000 as captain coach and was paid $500 for

coaching Wide Bay A Grade for a couple of games.

Prior to his accident the respondent had what he called his cricket coaching degree and had

coached cricket in the Bundaberg region. He also had his rugby league coaching qualifications and said

he had these degrees so that he could in effect coach after his playing days were over.

It is apparent from his Honour's reasons and use of the phrase "Of far greater moment" (set out

above) that he regarded the loss from future coaching as minor in comparison to loss of earnings from

day to day work. No amount has been attributed to the loss from future coaching. No finding has been

made as to the degree of probability that the plaintiff would have earned income in future as a rugby

league coach. A finding was made as to future coaching of cricket albeit in rather vague terms. Thus,

the $80,000 is a broad brush figure containing at least two minor components to which no figures have

been assigned.

That the $80,000 is excessive can be fairly demonstrated by calculating the present value on the

5 per cent tables of a weekly loss of $200 continuing for 30 years. The present value of that loss is

$164.140. His Honour rejected such an approach as a basis for calculating loss for future impairment

of earning capacity. Obviously then the $80,000 allowed must be equated to an approximate loss of

$100 per week (nett after tax) due to impairment of earning capacity for the rest of his working life. He

is now 29 years old. It is very difficult to see that this plaintiff will in effect suffer a continuing loss equal

to about $100 per week for the rest of his working life in day to day employment and coaching.

This case in my view is a good illustration of the difficulties which may be encountered by trial

judges asked to assess the present value of future impairment of earning capacity. Although the

respondent plaintiff is presently behind the fellow former cadets in terms of his salary that is something

which will as his Honour found, be caught up. It is not possible to say when he will have caught up the

salary deficit. One would expect any catching up to be gradual but it may not be so.

It seems to me that this Court is in as good a position as the learned trial judge was to assess the

component for future impairment of earning capacity despite the rather sparse material. In my view, a

reading of his Honour's reasons which are not as full as I should have liked them to have been, certainly

does not justify a figure of $80,000. In my view, the amount which should have been assessed for

future impairment of earning capacity is of the order of $60,000.

I would reduce the components for past and future impairment of earning capacity by $30,000.

The $6,810 interest awarded by the learned trial judge on the component designated for past economic

loss must be reduced to $4,049.

I would allow the appeal, set aside the amount of the judgment and in lieu give judgment for the

respondent plaintiff against the defendant for $134,070.63.

I would order the respondent to pay the appellants' costs of the appeal to be taxed.