Zahra v Brown

[2006] NSWCA 162

New South Wales

Court of Appeal

CITATION:	Zahra v Brown [2006] NSWCA 162
HEARING DATE(S):	21 March 2006
JUDGMENT DATE:	29 June 2006
JUDGMENT OF:	Beazley JA at 1; Santow JA at 73
DECISION:	1. Appeal allowed; 2. Set aside the verdict and judgment of the trial judge; 3. Order that the matter be remitted to the District Court for the assessment of economic loss; 4. The respondent is to pay the appellant’s costs of the appeal but is to have a certificate under the Suitors Fund Act 1951 if so entitled; 5. The costs of the trial are to abide the outcome of the rehearing.
CATCHWORDS:	MOTOR ACCIDENTS – assessment of compensation – necessity to give adequate reasons for assessment - DAMAGES – assessment of economic loss – past and future economic loss –business conducted in partnership – principles applicable - JUDGMENT – adequacy of reasons – trial judge must review all relevant evidence in support of factual finding – trial judge must make relevant factual findings - EVIDENCE – medical evidence – preference of particular medical experts over others – trial judge must state where preference, if any, lies and adequate reasons for so preferring
LEGISLATION CITED:	Motor Accidents Compensation Act 1999 (NSW) ss 61(1), 126, 131, 133
CASES CITED:	Beale v GIO (1997) 48 NSWLR 430 Eckersley v Binnie (1988) 18 Con LR 1 Flannery v Halifax Estate Agencies Ltd [2000] 1 All ER 373 Forbes v Selleys Pty Ltd [2004] NSWCA 149 Husher v Husher (1999) 197 CLR 138; [1999] HCA 47 Moylan v Nutrasweet Co [2000] NSWCA 337 Waterways Authority v Fitzgibbon (2005) 79 ALJR 1816; [2005] HCA 57 Wiki v Atlantis Relocations (NSW) Pty Limited (2004) 60 NSWLR 127
PARTIES:	Carmel Zahra (Appellant) Albert Brown (Respondent)
FILE NUMBER(S):	CA 40231/05
COUNSEL:	S Norton SC; M M Fraser (Appellant) I D Cullen (Respondent)
SOLICITORS:	Bryden's Law Office (Appellant) Ferguson Lawyers (Respondent)
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 4967/03
LOWER COURT JUDICIAL OFFICER:	Sorby DCJ
LOWER COURT DATE OF DECISION:	1 March 2003

- 1 -

CA 40231/2005

BEAZLEY JA
SANTOW JA

29 June 2006

ZAHRA v BROWN

Headnote

Facts

The appellant claimed damages under the Motor Accidents Compensation Act 1999 (NSW) for injuries sustained in a motor vehicle accident. Liability was admitted and the claim proceeded in the District Court by way of assessment of damages only. Damages were limited to economic loss as the appellant’s whole person impairment was assessed as less than ten per cent: as prescribed by ss 131, 133 of the Motor Accidents Compensation Act 1999 (NSW).

The trial judge found that the appellant had a sustained a number of injuries that impeded his work capabilities in relation to both the chicken farm owned and run by the appellant and his wife and the brake welding work that the appellant did on a contractual basis. His Honour found that the appellant had exaggerated his injuries and thus held that the extent of the appellant’s continuing disabilities was such that he was able to continue the welding work and that his farming work was restricted only in that he could not consistently perform heavy lifting. His Honour awarded damages by way of a cushion in the sum of $45,000 for the appellant’s economic loss. His Honour did not differentiate between past and future economic loss in making this award.

The appellant appeals against the award on two grounds:

1. The trial judge failed to give adequate reasons for his decision.

2. The award for past and future economic loss was grossly inadequate.

Held per Beazley JA (Santow JA agreeing):

(i) A trial judge is required to give adequate reasons for decision.

Beale v GIO (1997) 48 NSWLR 430 (followed); Waterways Authority v Fitzgibbon (2005) 79 ALJR 1816; [2005] HCA 57 (followed)

(ii) Where there is conflicting medical evidence, a trial judge is required to review all of the relevant evidence. The trial judge failed to do so, and thereby erred in the fact-finding process.

Wikiv Atlantis Relocations (NSW) Pty Limited (2004) 60 NSWLR 127; Flannery v Halifax Estate Agencies Ltd [2000] 1 All ER 373 (discussed); Moylan v Nutrasweet Co [2000] NSWCA 337; Forbes v Selleys Pty Ltd [2004] NSWCA 149

(iii) The trial judge failed to state which medical evidence he accepted. A party should not be left to speculate as to which evidence, and if relevant, to what extent the evidence, was accepted.

Economic loss

(iv) The trial judge failed to adequately assess the contribution of others to the farming business.

(v) The trial judge failed to make any finding as to the extent the wife assisted the appellant in the business.

(vi) The trial judge failed to deal with the relevance of the business being conducted in partnership with the appellant’s wife. That the business was a partnership is relevant in determining the economic loss resulting from the interference with economic capacity, but not the extent of the interference itself.

Husher v Husher (1999) 197 CLR 138; [1999] HCA 47 (applied)

(vii) It is incumbent upon the trial judge to consider the evidence and make an assessment of the incapacity of the appellant (if any) and the extent to which the found incapacity resulted in past and future economic loss. The trial judge did not do so.

(viii) His Honour erred in failing to comply with the obligation contained in s 126 of the Motor Accidents Compensation Act 1999 (NSW) to state the assumptions on which the award of future economic loss was based.

CA 40231/2005

BEAZLEY JA
SANTOW JA

29 June 2006

ZAHRA v BROWN

Judgment

1 BEAZLEY JA: The appellant brought proceedings against the respondent claiming damages for injuries sustained in a motor vehicle accident which occurred on 15 November 1999. Pursuant to the provisions of the Motor Accidents Compensation Act 1999 (NSW), the appellant was assessed as having a whole person impairment of less than ten per cent. Accordingly, his claim for damages was limited to economic loss: see ss 131, 133.

2 The respondent admitted breach of duty of care so that the appellant’s claim in the District Court proceeded by way of assessment of damages only. The matter was heard by Sorby DCJ, his Honour delivering judgment on 1 March 2005. His Honour found that the appellant had injured his lower back in the accident, having sustained an annular tear at L3/4, that imposed some limited work restrictions on him, both in relation to the chicken farm that the appellant conducted in partnership with his wife, as well as in respect of brake welding work that the appellant did on a contractual basis. His Honour awarded the sum of $45,000 by way of a "cushion" for economic loss. His Honour also awarded the appellant an agreed amount of $5,383.45 for past medical expenses and an allowance of $1,000 for future medical treatment.

3 The appellant appeals against his Honour’s award of economic loss. He contends, first, that his Honour failed to give adequate reasons for decision. Secondly, he contends that the award for the appellant’s past and future economic loss was grossly inadequate.

Background

4 The appellant is a chicken farmer who was driving his truck in the course of his business when he collided with two other vehicles. The impact was severe. The appellant’s truck rolled onto its side and the appellant was thrown around inside the cabin of the vehicle. He was not wearing a seatbelt at the time. The respondent alleged contributory negligence due to the failure to wear a seat belt, however, the trial judge found that the respondent had failed to discharge the evidentiary onus of establishing that had the seat belt been worn it would have prevented the appellant’s injury. There is no cross-appeal on this issue.

5 An ambulance attended the scene of the accident and the appellant was conveyed to Nepean Hospital. He was admitted overnight. He said that immediately after the accident he felt pain in his neck, left shoulder and lower back. The ambulance notes do not record any complaint of neck pain. However, the appellant was conveyed to the hospital in a neck brace and at hospital x-rays of his neck, as well as his left shoulder, lumbar spine, abdomen, pelvis and chest were taken. No abnormalities were detected. He was discharged into the care of his general practitioner, Dr Cywinski.

6 The appellant has conducted a chicken farm at Austral since 1988. The enterprise involved the appellant buying chicks that were one day or so old and then raising them in cages for 59 days, at which stage they were sent to the processor. At the time of the collision, the appellant had 200,000 chickens in four sheds.

7 Prior to each delivery of chicks the sheds had to be cleaned out, the sawdust and chicken manure on the shed floor from the previous group being removed with a bobcat and a backhoe. Some sweeping and shovelling around the edges and in the corners of the sheds was also involved. The sheds were then pressure cleaned, fresh sawdust laid down and then papered over to prevent the chicks eating the sawdust. The chicks were handfed initially until mature enough to be fed via an automatic hopper. The mortality rate was between 20 to 50 chickens per day. The dead chickens had to be removed daily.

8 At the time of the accident the appellant was also doing contract welding on brakes for Futuris on a rate per piece basis.

First issue on appeal: adequacy of reasons

9 The extent of the obligation of a trial judge to give reasons for decision is well traversed territory: Beale v GIO (1997) 48 NSWLR 430. In that case, Meagher JA said at 443:

“First, a judge should refer to relevant evidence. There is no need to refer to the relevant evidence in detail, especially in circumstances where it is clear that the evidence has been considered. However, where certain evidence is important or critical to the proper determination of the matter and it is not referred to by the trial judge, an appellate court may infer that the trial judge overlooked the evidence or failed to give consideration to it …
Secondly, a judge should set out any material findings of fact and any conclusions or ultimate findings of fact reached …
Thirdly, a judge should provide reasons for making the relevant findings of fact (and conclusions) and reasons in applying the law to the facts found.”

10 The obligation to give reasons was more recently considered in Waterways Authority v Fitzgibbon (2005) 79 ALJR 1816; [2005] HCA 57. There Hayne J said:

“129. Reference was made in argument to the "sufficiency" of the primary judge's reasons. When it is said that a judge did not give "sufficient" reasons for a decision there may be some doubt about what principles are engaged. Reference may be being made to the duty of a judicial officer "to make, or cause to be made, a note of everything necessary to enable the case to be laid properly and sufficiently before the appellate Court if there should be an appeal [including] not only the evidence, and the decision arrived at, but also the reasons for arriving at the decision". To fail to make or cause to be made such a note may invoke principles of procedural fairness and constitute a failure to exercise the relevant jurisdiction.
130. In the present case, however, reference to the "sufficiency" of the primary judge's reasons is not to be understood as seeking to invoke only those principles. Rather, because the primary judge was bound to state the reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Understanding the reasons given at first instance in that way, the error identified in this case is revealed as an error in the process of fact finding. In particular, it is revealed as a failure to examine all of the material relevant to the particular issue.” (Footnotes omitted)

11 There are also a series of cases in this Court and elsewhere in which the extent of the obligation of a judge to give reasons for accepting the evidence of one expert rather than another is discussed. These cases are reviewed by Ipp JA in Wikiv Atlantis Relocations (NSW) Pty Limited (2004) 60 NSWLR 127. It is sufficient for the purposes of this matter to refer in detail only to Flannery v Halifax Estate Agencies Ltd [2000] 1 All ER 373, adopted by this Court in Moylan v Nutrasweet Co [2000] NSWCA 337 and the other cases in this Court following Moylan to which Ipp JA refers in Wiki. In Flannery Henry LJ said at 377:

“It is not a useful task to attempt to make absolute rules as to the requirement for the judge to give reasons. This is because issues are so infinitely various. For instance, when the court, in a case without documents depending on eye-witness accounts is faced with two irreconcilable accounts, there may be little to say other than that the witnesses for one side were more credible … But with expert evidence, it should usually be possible to be more explicit in giving reasons: see Bingham LJ in Eckersley v Binnie (1988) 18 Con LR 1 at 77–78:

‘In resolving conflicts of expert evidence, the judge remains the judge; he is not obliged to accept evidence simply because it comes from an illustrious source; he can take account of demonstrated partisanship and lack of objectivity. But, save where an expert is guilty of a deliberate attempt to mislead (as happens only very rarely), a coherent reasoned opinion expressed by a suitably qualified expert should be the subject of a coherent reasoned rebuttal, unless it can be discounted for other good reasons …’ ”

And at 378:

“… where the dispute involves something in the nature of an intellectual exchange, with reasons and analysis advanced on either side, the judge must enter into the issues canvassed before him and explain why he prefers one case over the other … .”

12 That statement has to be read in context. I will return to that later in these reasons. It needs also to be remembered that the underlying principles that govern appellate review of fact finding where expert evidence is involved are not different from those that govern “ordinary” factual disputes: see Forbes v Selleys Pty Ltd [2004] NSWCA 149.

13 In the present case there were essentially two matters in dispute that required resolution by the trial judge. The first was what injuries the appellant sustained in the accident and the extent of his continuing disabilities attributable to those injuries. The second was the extent to which he had suffered an impairment of his economic capacity as a result of those injuries together with the related question of how that impairment should sound in damages.

The trial judge’s reasons

14 The trial judge first set out the preliminary background to the matter and dealt with the issue of contributory negligence. He referred briefly to the appellant’s medical condition, noting that the appellant had not had specialist medical care, having only been under the care of a general practitioner, first Dr Cywinski and then Dr Galea and that apart from physiotherapy had had no other treatment (he was intolerant of analgesics).

15 His Honour did not expressly refer to the medical evidence of Dr Cywinski or Dr Galea. Dr Cywinski had provided an undated medical report to the respondent’s solicitors, that was tendered by the appellants. Dr Cywinski diagnosed a traumatic supraspinatus tendonitis of the left shoulder, a muscular ligamentous injury to the lumbar spine and a possible meniscus injury to the left knee. He reported that, as at 7 December 1999, the appellant had improved but not sufficiently to return to work. He referred him for physiotherapy for his back and left shoulder. In mid-January 2000, Dr Cywinski referred him for further x-rays of his back and left shoulder as well as his left big toe following an incident in which the appellant dropped an RSJ on his foot. He recorded that the appellant was off work until 5 May 2000 at which time he was still unable to perform his usual occupation.

16 Dr Galea’s clinical notes were in evidence. They reveal, amongst other things, complaint of back pain in June, August and December 2000.

17 His Honour commenced his review of the medical evidence by noting that the x-ray evidence did not reveal any abnormality and that an MRI taken of the left shoulder and cervical spine on 12 March 2001 also revealed no abnormality. An MRI of the lumbar spine on that date revealed a left posterolateral annular tear at L3/4 but no nerve root compression was noted.

18 His Honour then turned to the medical reports of the medico-legal experts, commencing with Dr Selby Brown who provided four medico-legal reports for the appellant. His Honour stated that in the first report, dated 22 November 2000, Dr Selby Brown recorded that the appellant told him that he was "by and large able to perform most of his previous work activities” (Judgment 4) (emphasis added). His Honour misreported this part of Dr Selby Brown's report, which records that the appellant had told Dr Selby Brown that "by and large [he was] not able to perform most of his previous work duties" (emphasis added).

19 His Honour next referred to Dr Selby Brown's report of 2 April 2001, stating "Dr Selby Brown made a similar observation in [that] report” (Judgment 4). This comment is correct if it refers to Dr Selby Brown's reference in the first report to the lack of specialist treatment. The grammatical sense of his Honour’s remark is such that it is more probable that this sentence was intended to refer to the statement about work capacity. It not only repeats the error his Honour made in that respect when reviewing the first report, but compounds the error as there is no such comment in the report of 2 April 2001.

20 His Honour next referred to Dr Selby Brown’s report dated 24 July 2002. His Honour noted the history taken by Dr Selby Brown of lower back pain radiating into the appellant’s left leg and Dr Selby Brown’s conclusion that the appellant was restricted

“… in his ability to perform physical activities requiring heavy or moderately heavy lifting, handling or bending, prolonged or moderately prolonged walking or standing, any activity above shoulder height level with his left upper limb and for activities likely to cause jerking, jolting or jarring of his back and that these restrictions on his physical ability are going to remain permanently”.

His Honour also noted Dr Selby Brown’s finding linking the annular tear identified in the MRI scan of the lumbar spine to the accident.

21 Finally, his Honour reviewed Dr Selby Brown’s final report dated 24 May 2004. In that report, Dr Selby Brown recorded that the appellant “continues to be able to only do advisory work on his poultry farm …” and that his wife and two of his children did the manual work. Dr Selby Brown also recorded that the appellant continued to do some bobcat and tractor driving. His Honour referred to both these matters.

22 His Honour then made the observation that there was no mention of the appellant’s neck and that the appellant gave little evidence of continuing problems with his left shoulder. It is unclear what his Honour meant in making this comment. If his Honour meant that Dr Selby Brown had made no mention of the appellant’s neck in his last report that is correct. However, there was evidence in relation to his neck in the earlier reports, although it should be recorded at this point that the appellant makes little complaint in his claim for ongoing problems with his neck, so that the error, if any, has little practical consequences. The point the appellant sought to make, however, was that this was another inaccuracy in his Honour’s review of the medical evidence. In so far as it related to the shoulder, his Honour’s comment demonstrated that his Honour failed to appreciate the evidence of Dr Selby Brown, regardless of whether or not he accepted it.

23 In his report of 24 July 2002, Dr Selby Brown had referred to a complaint of pain in the left scapular area with painful restriction to the ranges of motion in his left shoulder. Dr Selby Brown also recorded the result of his physical examination of the left shoulder, noting that he had significant restriction of four of the six ranges of motion, including the ability to extend and abduct to only 40 degrees, to flex to 100 degrees, internally rotate to 60 degrees and externally rotate to 70 degrees. This was important evidence for two reasons. First, it demonstrated a significant degree of impairment of the shoulder. Secondly, at the time of this examination, the appellant was more specific in his complaints compared to earlier examinations when his presentation was complicated by a significant emotional component. His Honour did not refer to this evidence at all.

24 His Honour next referred to "another medical legal report on behalf of the [appellant], that of Dr Peter Conrad 17.12.04" and quoted from a portion of it, including relevantly Dr Conrad’s opinion that the appellant was restricted in his work capacity (Judgment 6).

25 There were, however, four reports of Dr Conrad. The report dated 17 December 2004 to which his Honour referred was the last. Dr Conrad’s opinion in each of the reports was that the appellant had a restricted work capacity. Dr Conrad also reported that the appellant had loss of movement and objective physical signs of impairment (report of 12 July 2002) and was critical of the assessment of the respondent’s medical experts, Professor Marsden and Dr Oakeshott. In relation to Dr Oakeshott Dr Conrad says:

“I totally disagree with Dr Oakeshott’s assessment of workability and totally reject his statement that Mr Zahra could do fulltime heavy work without restrictions indefinitely. He does not provide any convincing reasons for this. In particular, Dr Oakeshott does not make any reference of calculations according to the 4th Edition AMA Guides and as a result of this I do not believe that his assessment is credible or consistent.”

26 His Honour next referred to a report of Dr Memon dated 15 November 2001. His Honour accurately set out the relevant part of Dr Memon’s report in which he recorded that the appellant had definite clinical signs and symptoms of discogenic lumbar pain and left sided sciatica as a result of the motor vehicle accident. Dr Memon also reported that initial neck and shoulder pain appeared to be resolving and that his main problem was ongoing low back pain and left leg pain. Dr Memon stated that the appellant must avoid heavy lifting and excessive bending and repetitive use of the left arm.

27 His Honour then moved to consider the medico-legal expert reports obtained by the respondent. In this regard, his Honour referred to the reports of Dr Oakeshott and in particular to his report of 9 June 2000. This report had particular relevance as it included comments upon a video taken of the appellant over approximately a one hour period on three occasions in May 2000.

28 His Honour also referred to a later report of Dr Oakeshott dated 29 January 2004. In that report Dr Oakeshott referred to the injury to the appellant’s big toe caused when the appellant dropped an RSJ. His Honour commented upon this in the following terms:

"There is no history recorded of the [appellant's] evidence that he dropped the RSJ on his left big toe when his low back went into spasm, by Dr Oakeshott or any other doctor." (Judgment 7)

This is incorrect. The appellant had complained of this incident to Dr Selby Brown who refers to it in his report of 22 November 2000. There is also a reference to it in a report provided by Dr Cywinski.

29 His Honour next referred to a report of Dr Pierides, a specialist in occupational medicine, of 14 December 2000. Dr Pierides expressed the view in that report that the appellant would have no future impairment of his earning capacity. There was also a later report of Dr Pierides, not referred to by his Honour, which was to the same effect.

30 His Honour made no reference to a report of Professor Marsden, although this may be explained by the fact that Professor Marsden provided a certificate under s 61(1) of the Motor Accidents Compensation Act 1999 (NSW). Professor Marsden commented upon the considerable inconsistency in the appellant’s presentation, considered his presentation might be questionable, considered there was minimal, if any impairment of the low back and neck but, giving him the benefit of the doubt, accepted that there was some impairment of the shoulder.

31 Except in the limited respects to which I have referred, his Honour, up to this point in his judgment, had made no findings in respect of the medical evidence. He then moved to consider the material in a video taken of the appellant on 3, 4 and 12 May 2000. His Honour observed that the video “was unremarkable” – by which I understand his Honour to mean that there was nothing in it to indicate disability – as he went about his activities on the farm, driving the bobcat, tractor and four wheel motor bike. His Honour commented that the video revealed that the appellant “walked without [a] limp or obvious discomfort and he bent down – on the few occasions that he did – without restriction” (Judgment 8-11). His Honour also observed that the video did not show the appellant working in the shed, although it showed his wife sweeping up at one stage.

32 His Honour recognised that the video was a snapshot of a certain time only and that it had to be viewed in context. His Honour considered that the relevant context was that the video was exposed a few weeks prior to the examination of the appellant by Dr Oakeshott on the one hand, and five months before the examination by Dr Selby Brown in November 2000 on the other.

33 His Honour set out part of Dr Oakeshott’s report of 9 June 2000 in which he reported that the appellant had not shown any observable disability during the interview stage of the consultation, whereas, during clinical examination, the appellant had stiffened and would not move his neck in any direction or bend forward beyond knee level. Dr Oakeshott concluded that the appellant had made a complete recovery.

34 Dr Oakeshott provided a second report of the same date, after he had viewed the video, in which he confirmed his opinion expressed in the first report.

35 His Honour then set out a significant portion of the report of Dr Selby Brown of 22 November 2000 in which Dr Selby Brown reported that the appellant appeared to have a moderate limp and that he walked cautiously when walking in and out of the consultation room. Dr Selby Brown at this examination reported a marked but variable degree of voluntary muscle guarding and restriction of movement. In this report Dr Selby Brown commented upon the “considerable degree of emotional reaction to examination” that made it difficult to assess his real level of disability.

36 Having set out portions of the reports of Drs Oakeshott and Selby Brown to which I have referred, his Honour said:

"When comparing this evidence with that of the video I conclude that the [appellant] has markedly exaggerated his symptoms, restrictions and ongoing incapacity. Having reached that conclusion I accept that the annular tear at L3-4 has some clinical significance, although I further conclude that the soft tissue (sic) to the [appellant's] left shoulder and neck have almost entirely resolved, the [appellant] giving virtually no evidence about neck and left shoulder problems." (Judgment 11)

37 His Honour was entitled to make a finding, by a comparison of the video with other evidence, that the appellant had exaggerated. However, a trial judge intending to make such a finding needs to review the evidence in sufficient detail to demonstrate why the finding was made. In my opinion his Honour failed to do so in a number of relevant respects.

38 First, his Honour failed to do any relevant comparison of what was revealed in the video with the complaints made by the appellant. In his history to all the medical experts, including Dr Oakeshott, the appellant said that he could drive a truck, tractor and bobcat and walk around but that he avoided the heavy work on the farm. He had said that he avoided the heavy lifting work and that lifting aggravated his pain. He also complained of “bending too much”. Nothing in the video contradicted this material.

39 Secondly, and this is related to the first point, his Honour failed to consider whether the video falsified the conclusions of the appellant’s medical witnesses who said that the appellant should not engage in heavy lifting, excessive bending and repetitive activity.

40 Thirdly, his Honour did not refer to those parts of the medical reports in which the appellant had himself, from time to time, reported minimal problems. For example, his Honour did not refer to the history that the appellant gave to Dr Oakeshott in which he informed Dr Oakeshott that he had no pain in his neck but that he “gets a bit” when he turns his head. The appellant also informed Dr Oakeshott that he has a feeling of “pressure” over his lower back that, relevantly, was made worse by working, walking up and down stairs and with bending activities. Nothing in the video contradicted this material, although the appellant was shown bending on isolated occasions. The appellant’s complaint however, was not that he could not bend, but that if he did it made his back worse.

41 Finally, his Honour failed to compare the video evidence with the appellant’s non-legal medical consultations. Dr Galea’s notes record that the appellant attended upon him with complaint of back pain on 1 June, 21 August and 11 December 2000. At the last consultation, he complained that the back pain was “worse”. The appellant was not cross-examined to suggest that his attendances upon Dr Galea, especially the one on 11 December 2000 complaining of worse back pain at that time, were contrived. This consultation was close in time to the medico-legal consultation with Dr Selby Brown and could have accounted for the difference in presentation to that presented to Dr Oakeshott. Even in relation to the consultation with Dr Oakeshott in June 2000, it is to be observed that eight days earlier, the appellant had attended upon Dr Galea complaining of back pain in a complaint not inconsistent with his report to Dr Oakeshott that he felt “pressure” over his lower back. Admittedly, it is inconsistent with the appellant’s reaction to Dr Oakeshott’s physical examination. However, Dr Selby Brown had a similar difficulty with the appellant’s emotional response to examination, making it difficult for Dr Selby Brown to assess his level of real disability. Notwithstanding this exaggerated presentation, his Honour needed to give these matters some consideration. It was not sufficient to have regard to only some of the evidence, as he did. His failure to consider all of the relevant evidence was an error in the process of fact finding in the sense identified by Hayne J in Waterways Authority v Fitzgibbon.

42 In addition to these omissions, the appellant complains that his Honour’s finding, set out at [36] above, itself contains an error. The appellant accepts that the appellant’s complaints about his neck were minimal but contends that he had maintained his complaints about his left shoulder. A review of the transcript and of the medical reports indicate that the appellant’s assertion is correct. In this regard, the appellant made complaints about his left shoulder during his evidence in chief (Transcript 41) and there were references to the complaints about his shoulder in the following medical reports: Dr Cywinski (undated); Dr Memon, 15 November 2001; Dr Conrad, 14 November 2000 (inferentially), 12 July 2002, 6 April 2004 and 17 December 2004; and Dr Selby Brown, 24 July 2002 and 24 May 2004. In particular, Dr Selby Brown undertook a detailed examination of the appellant’s shoulder upon which he commented in his report of 24 July 2002 (see [20] above). His Honour’s error amounts to another error in the fact finding process.

43 Another complaint made by the appellant is that his Honour failed to make any findings as to what material evidence he accepted. Counsel for the respondent initially submitted that his Honour must have accepted the respondent’s medical evidence because he found the appellant had minimal ongoing disability. This, it was said, was in accordance with the views of Dr Oakeshott. Counsel conceded that his Honour did not expressly make any such finding. However, contrary to the respondent’s submission, his Honour could not have accepted Dr Oakeshott’s evidence because he found that the annular tear was attributable to the accident. In this regard, he found:

“However I do accept that the [appellant] did injure his low back in the motor vehicle collision and that injury – a annular tear at L3-4 – does impose some limited physical restrictions upon him while working on his chicken farm and while doing the welding. This injury is permanent according to the medical evidence.” (Judgment 12-13)

44 Dr Oakeshott had expressly rejected any attribution of the annular tear to the accident or any disability flowing from it, whereas Dr Selby Brown found that it was caused by the accident and to a certain extent explained the level of his complaints. His Honour did not state why he accepted that the annular tear was attributable to the accident. Presumably, it was because he accepted Dr Selby Brown’s evidence on this point. However that presumption is, at most, an educated guess. It is possible that his Honour could have decided to accept that the annular tear was attributable to the accident without reference to Dr Selby Brown’s opinion.

45 It is convenient to also note at this point that there was other evidence of clear clinical signs to which his Honour made no reference at all.

46 I have referred above to the principles that govern a trial judge’s obligations to give reasons where there is conflicting medical evidence. In this case, his Honour did not have the benefit of oral evidence from any of the medical witnesses. This made his Honour’s task of assessing the medical evidence particularly difficult, given the challenge to the appellant’s credit, based in part on the video evidence and in part on the evidence of the appellant’s emotional responses to the medical examinations by the medico-legal experts.

47 Notwithstanding this and notwithstanding that the parties had not provided his Honour with the forensic assistance that the case called for, it was incumbent upon his Honour, at the very least, to state which medical evidence he accepted, the extent of the acceptance and the reasons for so doing. There were a number of bases upon which his Honour could have come to the conclusion that Dr Selby Brown’s evidence or that of the other medical experts whose reports were tendered on behalf of the appellant should not be accepted at all, or only in part. There were also reasons why his Honour could have preferred their evidence – including that the respondent chose not to cross-examine the appellant’s medical witnesses or seek to have them reconsider their views in light of the video and the fact that there was actual pathology that they considered explained his symptoms, particularly in relation to his back.

48 However, regardless of the bases upon which evidence could have been accepted or rejected, it should not be a matter of speculation as to what evidence a trial judge did accept, let alone what the trial judge’s reasons were for coming to a particular conclusion.

Conclusion on medical evidence

49 It follows, in my opinion, that his Honour’s failure to make findings as to the medical evidence that he accepted and why he did, notwithstanding the inadequacies in the presentation of the evidence, amounted to a failure to give adequate reasons for decision. In addition, his Honour failed to consider other medical evidence that was relevant to an overall assessment of the appellant’s disability. He also made a number of factual errors, some of little significance, but others which may have affected his overall determination. These matters in themselves are sufficient to allow the appeal. However, as the claim for economic loss was significant, it is appropriate to also deal with that issue.

Economic loss

50 In dealing with the appellant’s loss, his Honour referred first to the period of time that the appellant was off work following the accident, including the period that related to the fracture of the plaintiff's toe. He said: “The evidence suggests the [appellant] was off work for 6 to 12 weeks totally following the collision including in that period a period of 3 weeks off work as a result of the fracture of the [appellant’s] toe” (Judgment 11). In the normal course it might have been expected that that period, at least, (regardless of whether it was six or 12 weeks) should have resulted in a specific award of damages for economic loss. To the extent that his Honour made reference to the period off work due to the injured toe, his Honour should have made a finding as to whether it was causally linked to the accident.

51 His Honour then stated that the appellant's evidence was that “prior to the collision he did everything as far as the chicken business was concerned as well as the welding in his spare time” (Judgment 11). His Honour does not directly make a finding on this, although he appears to accept it, as he compared it with the appellant's evidence as to what he did after the accident. His Honour’s comment is not, however, quite accurate. The appellant said that prior to the accident he had done 90 per cent of the work (Transcript 11). He said that his wife assisted with preparing the shed, such as laying the paper down and spreading the feed. His adult son and daughter also helped. It appears his son would help for a couple of days at a time, in total about two months a year. It is difficult, however, to know whether his Honour’s factual error had any, or any significant, effect on the outcome.

52 His Honour then referred to the appellant’s assertion that, after the collision to the time of the hearing, he required casual labour and the help of his wife and two adult children to do the heavy work involved in preparing the sheds for new batches of chickens and picking up the dead chickens. His Honour accepted that the shed preparation work and picking up the dead chickens was heavy work but said:

"Having heard from the [appellant’s] children I am not convinced that they contribute to the heavy shed work before and after their work as they describe. I do find they make some contribution. The [appellant’s] son, Mr Shaun Zahra assists in the brake welding part of the [appellant’s] business. There are a number of unanswered questions, particularly as to why it took so long first to have Mr Azzopardi start work and, then when he finished, why it took so long before the children filled in, although there may be an explanation for this by their need to repay to their father his generous loans to them. For this reason together with the findings I have made as to the [appellant’s] ongoing incapacity I do not intend to make an allowance for past economic loss claimed of $253,328 or a future claim at the rate of $500 net per week till the age of 65... .” (Judgment 12)

53 Two comments are to be made about this passage. First, it is not at all clear whether his Honour found that the appellant’s children made “some contribution” because he required assistance as a result of his disability flowing from the accident or only because they were working to pay off their debt to the appellant. This was relevant, as was the extent of the assistance.

54 Secondly, his Honour made no finding as to Mrs Zahra’s assistance to the appellant on the chicken farm after the accident. In particular, he failed to refer to Mrs Zahra's evidence that she had taken over much of the work on the farm following the accident. For example she said when examined:

"Q: Can you tell me what things you took over doing?
A: Practically everything. I’ve done drive in buckets, just about everything, I do everything around the farm. Some people say to me ‘you the man, not your husband’ because I do everything there.” (Transcript 116)

She said that she continued to do that until Mr Azzopardi came to help. She identified that as being a period of about two years. She said that she took over again after Mr Azzopardi left until their daughter started.

55 Having made no reference to this evidence, all of which was relevant, it is unsurprising that his Honour then made no finding as to the extent of Mrs Zahra’s contribution. However, that was relevant evidence that his Honour needed to assess and his failure was not only an error in the process of fact finding: Waterways Authority v Fitzgibbon at [130], it also appears to have led him into error in thinking there were unanswered questions. Contrary to his Honour's finding that it was unexplained as to why it took so long to have Mr Azzopardi start work, Mrs Zahra explained that she did the work during that period. She said however that she became very busy with the other things and became cranky doing the work on the farm (Transcript 117). There thus became a need to employ someone to assist. Mrs Zahra was not cross-examined, nor was the appellant, as to why they did not employ Mr Azzopardi or some other person in the period of time that Mrs Zahra was doing the work. His Honour failed to appreciate the effect of Mrs Zahra’s evidence. Further, it appears his Honour used this perceived omission in the appellant’s case to make an inferential finding that the appellant must have been doing the work in this period and thus must not have been incapacitated as alleged. This involved a credit finding, which, however, was based on an erroneous understanding of the evidence.

56 Further, his Honour appears to have misunderstood what task he was undertaking in assessing Mrs Zahra’s contribution. I have already pointed out that he failed to make any reference to her evidence or to make any finding as to the extent of the assistance she provided. His only comment was, “As his wife shares the partnership there can be no claim for her labour" (Judgment 23). There was no such claim. But in any event, his Honour failed to deal with the relevance of the business being conducted in partnership.

57 A claim for economic loss requires the Court to determine the extent of any interference in earning capacity caused by the injury sustained in the accident. Having made that assessment, the Court is then required to determine the economic loss that a plaintiff has suffered and will suffer as a result of that interference with economic capacity. The fact that Mrs Zahra was in partnership with the appellant is a relevant consideration in determining the extent to which interference with economic capacity has resulted in economic loss. It is not a relevant consideration in determining the extent of the interference with the economic capacity. His Honour did not make that distinction. In fact, he did not deal with the income earned from the farm at all. The principles to be applied in assessing the award for economic loss in such circumstances were stated by the High Court in Husher v Husher (1999) 197 CLR 138; [1999] HCA 47. The trial judge made no reference to those principles.

58 Having made the findings as to the extent of assistance that the appellant had on the farm, his Honour then stated that he accepted that the appellant injured his lower back and that an annular tear at L3/4 imposed some limited physical restrictions upon his working on the chicken farm and doing the welding. He commented that the injury was permanent according to the medical evidence. His Honour then said:

"I consider that the most appropriate approach to economic loss, given my findings above, is to allow a cushion. The welding work is essentially bench work and not heavy and on the basis of the medical evidence and the video evidence I consider the [appellant] can continue to perform that work with little restriction. The restrictions that he does have preclude him doing consistent heavy work and for this restriction an allowance must be made in monetary terms. I consider the sum of $45,000 appropriate to reflect the [appellant’s] economic loss from the date of accident to date of trial for the future in the overall circumstances." (Judgment 13)

59 The appellant complains that his Honour failed to explain the basis upon which he did so and in any event the sum allowed was inadequate. Senior Counsel for the appellant informed the Court that if the sum of $45,000 was extrapolated over the period of the appellant’s working life, it amounted to an award of about $100 per week. Counsel for the respondent did not disagree with this computation.

60 His Honour was entitled to make an award by way of a “cushion”. However, in doing so his Honour was not thereby relieved of his obligation of giving adequate reasons for decision. The appellant’s claim for economic loss was both substantial and detailed. It was for his Honour to determine the extent to which it was made out, even if, in the end result, an appropriate award was by way of a “cushion”.

61 The appellant claimed a past and future economic loss based on a loss of actual income as well as an increase in expenses from the date of the accident. The appellant’s evidence was that in the three months preceding the accident he had earned approximately $17,500 by way of contract welding and approximately $21,500 by the sale of chicken manure. In the three months following the accident the earnings from the contract welding work, $10,500, were paid to his son who had undertaken the work for him. There were no sales of chicken manure in this period.

62 The appellant contends that he had thereby demonstrated a loss in this period of $38,855 or nearly $3000 per week. These figures did not need to be taken at face value by his Honour. For example, the evidence demonstrated that substantial cleaning out of chicken manure occurred at the end of each growing period and that the contract welding work was sporadic. However, the evidence does disclose that the appellant had significant earnings from both and some attempt should have been made by the trial judge to quantify those earnings and determine to what extent the appellant’s incapacity resulted in economic loss.

63 In this regard there was evidence to which I have referred that the appellant had been unable to work for a period of six to 12 weeks following the accident. His Honour failed to deal with any of this evidence and failed to make any differentiated award for past economic loss, even for this period. In circumstances where his Honour accepted that the appellant had an annular tear that was attributable to the accident and there was no cross-examination of the appellant to the effect he was not off work during this period, nor incapacitated, or that he did not suffer the economic loss alleged, there appears to have been no good reason not to have awarded a full economic loss for this period. It was a matter for his Honour to determine whether the period of total incapacity and consequential loss was six or 12 weeks or some other period.

64 Quite apart from the closed period of total incapacity, it was incumbent upon his Honour to consider the evidence and make an assessment, as best he could, as to the extent, if any, of incapacity and the extent to which that was reflected in economic loss both past and future. In so far as past economic loss is concerned, it cannot be discerned from his Honour's judgment whether he simply overlooked this matter, whether he intentionally made no award for past economic loss, or whether he intended it to be included in the “cushion” award of $45,000.

65 There was substantial evidence in relation to the appellant’s economic loss, which although not necessarily presented as clearly as might have been the case, did provide a basis upon which his Honour could make an assessment of past economic loss. In particular, there was specific evidence based upon the amounts that the appellant paid to others to undertake work because of his inability to undertake his previous work load on the farm. For example, there was evidence derived from the appellant's income-tax returns that he had paid Mr Azzopardi a total sum of approximately $11,000 to work on the farm from the period 1 July 2002 until 30 June 2002. In addition, there was evidence that he had paid his son and daughter for the work that they had undertaken.

66 In a comparative table provided to the Court, derived, it seems, from the appellant’s income tax returns which were in evidence, it was claimed that in the five years following the accident, the partnership had paid by way of additional expenditure on labour the sum of $166,865 over and above what had been expended in the same period prior to the accident. This converted to an average additional expenditure of approximately $32,000 per year more than the expenditure on additional or casual labour prior to the accident. It was not suggested that the economic base of the farm had expanded over this period. To that extent, the increased expenditure represented a loss to the partnership income and formed a basis upon which the appellant’s past economic loss could be assessed. Although his Honour was not required to accept that the interference with the appellant’s earning ability was affected to the extent claimed, he was required to express his reasons why no award was made, or why this material did not provide a basis upon which past economic loss could be assessed. However, none of this evidence was considered by his Honour in his reasons.

67 I have already referred to the comments made by his Honour about the assistance provided by the appellant's son and daughter. His Honour made a finding that the children contributed to the heavy shed work but not to the extent that they had described. He did not find to what extent they did contribute. In order to be able to make a reasonable assessment of the extent to which the appellant was unable himself to carry out the heavy work, it was necessary for his Honour to make some assessment of the assistance that he actually required having regard to his ongoing incapacity. That task was not undertaken. His Honour made a gratuitous remark about the possibility that the children may have "filled in", undertaking the heavy work after Mr Azzopardi left in order to repay the "generous loans" the appellant had made to them (Judgment 12). I say that this was a gratuitous remark because it was not the subject of evidence or, more particularly, any cross-examination. The most that the cross-examination established was that the loan to the son was repaid, in part at least, out of the moneys he earned for doing the welding work, which was also part of the appellant’s claim for economic loss.

68 His Honour made a finding that the appellant could continue to perform the brake welding with little restriction. His Honour did not identify the extent of the restriction, or the economic impact of the restriction. Presumably, his conclusion was that there was no economic loss. However, his Honour failed to deal with the medical evidence relating to this activity insofar as it related to repetitive bending. There was nothing in the video evidence that established that the appellant was able to undertake repetitive bending, which contradicted the medical evidence that the appellant was unfit for work that involved repetitive bending. Accordingly, if his Honour was proposing to reject a case that the appellant was unable to engage in repetitive bending, specific reference to that needed to be made and the reasons for such finding.

69 Finally, his Honour did not state the assumptions on which the award of future economic loss was made, other than that the appellant had some restrictions. That is not sufficient compliance with s 126 of the Motor Accidents Compensation Act 1999 (NSW), which provides:

“126 Future economic loss—claimant’s prospects and adjustments
(1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant’s most likely future circumstances but for the injury.
(2) When a court determines the amount of any such award of damages it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events concerned might have occurred but for the injury.
(3) If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.”

70 It is unlikely that the obligation in s 126(3) is different from the general law obligation to give reasons. However, even if there is some difference, his Honour failed to comply with either obligation.

71 The failure to give reasons, together with the mistakes made within the body of the judgment to which I have referred, are such that, in my opinion, the Court has no option but to order that the verdict for the appellant in the sum of $45,000 be set aside. Given the significant credit issues involved, and the failure of his Honour to address the claim made by the appellant, it is not appropriate for this court to itself determine the appellant's economic loss. Accordingly, the matter must be remitted to the District Court for redetermination.

72 Accordingly, I propose the following orders:

1. Appeal allowed;

2. Set aside the verdict and judgment of the trial judge;

3. Order that the matter be remitted to the District Court for the assessment of economic loss;

4. The respondent is to pay the appellant’s costs of the appeal but is to have a certificate under the Suitors Fund Act 1951 if so entitled;

5. The costs of the trial are to abide the outcome of the rehearing.

73 SANTOW JA: I agree with Beazley JA.

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