Pauline Joan Sherwood v Ismail Guneser [1992] ACTSC 124; (1992) 110 FLR 459 (11 December 1992)

SUPREME COURT OF THE ACT

PAULINE JOAN SHERWOOD v. ISMAIL GUNESER
No. SCA 99 of 1991
Number of pages - 15
Appeal from Master - Damages
[1992] ACTSC 124; (1992) 110 FLR 459

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Miles C.J.(1), Gallop(1) and Higgins(1) JJ.

CATCHWORDS

Appeal from Master - excessive damages - interference with Master's findings of fact - functions of appellate court - where inferences of fact involved - existence of degenerative condition rendering plaintiff vulnerable to injury.

Damages - measure of damages - personal injuries - medical and hospital expenses - adjustment for contingency of supervening incapacity - loss of earning capacity - residual earning capacity of plaintiff during pre-trial period - adequacy of discount on past economic loss - adjustment of future economic loss for contingency of supervening incapacity.

Moran v. McMahon (1985) 3 NSWLR 700

Warren v. Coombes and Another [1979] HCA 9; (1979) 142 CLR 531

Gronow v. Gronow [1979] HCA 63; (1979) 144 CLR 513

Oliver Davey Glass Pty Limited v. Gregory Allen Reginald Hollands (unreported, Federal Court of Australia, 5 July 1990)

Ralevski v. Dimovski and Another (1986) 7 NSWLR 487

Burden v. Rath (1986) Aust. Torts Reps. 80-050

Malec v. J.C. Hatton Proprietary Limited [1990] HCA 20; (1990) 169 CLR 638

Abalos v. Australian Postal Commission [1990] HCA 47; (1988) 171 CLR 167

S.S. Hontestroom v. S.S. Sagaporack (1927) AC 37

HEARING

CANBERRA, 21 and 22 September 1992
11:12:1992

Counsel for the appellant: Mr A. Leslie, QC

Solicitors for the appellant: Crossin Barker Gosling

Counsel for the respondent: Mr B. Salmon, QC with

Mr S. Wilcox

Solicitors for the respondent: Gallens Crowley and Chamberlain

ORDER

THE COURT ORDERS THAT:
1.The appeal be dismissed.

2. The appellant pay the respondent's costs.

DECISION

MILES C.J., GALLOP AND HIGGINS J. This is an appeal by the defendant appellant against an award of damages by the Master in an action by the plaintiff respondent for damages for personal injuries sustained in a motor vehicle collision. Liability was not in issue. On 28 April 1992 the Master awarded the respondent the sum of $204,927.52 made up as follows:

Pain and suffering $ 30,000.00
Interest $ 3,400.00
Out-of-pocket expenses $ 31,527.52
Past loss of income $120,000.00
Future economic loss $ 20,000.00
Total: $204,927.52

2. The nature of the appeal challenges the Master's award in respect of each of the components. However, at the hearing of the appeal the challenges to the award for pain and suffering and for interest were withdrawn and ultimately the Master's findings on the primary facts were not a matter of real dispute except as indicated below.

3. The respondent was born in Turkey on 1 January 1947. He had qualifications as a chemical engineer from a university in Turkey and had experience in laboratory work and as a teacher in Turkey before coming to Australia with his wife and four children in 1983. He spoke no English on arrival and he obtained work as a security officer at the Turkish Embassy shortly after his arrival. That was the only job he ever held in Australia. He had some understanding of English by the time of the hearing, but gave his evidence through an interpreter.

4. The respondent sustained his injuries on 27 June 1985. A vehicle driven by the appellant collided with the rear of the vehicle driven by the respondent. Both vehicles were apparently travelling slowly. It was not a violent collision. The respondent was able to drive his wife and his mother home and then go on to work at the Embassy. Gradually, over the following weeks, he noticed pain, initially and mostly in the lower back, but also in the neck and shoulder areas, together with headaches. He continued to work at the Embassy despite the pain for five or six weeks. He consulted a chiropractor who took x-rays and told him to see his family doctor. He saw Dr Nancy Griffiths and Dr Robert Griffiths of Red Hill. The first visit to their practice was on 23 August 1985, and he was referred then to Dr K. McGonigal, an orthopaedic surgeon.

5. Dr McGonigal saw the respondent on one occasion only, on 29 August 1985, but for the purposes of the case it was an important consultation. The respondent and Dr McGonigal conversed through the respondent's 14 year old daughter, who acted as an interpreter. Dr McGonigal said that he obtained a history to the effect that the respondent had suffered prior to the motor vehicle collision symptoms similar to those of which he was complaining, including numbness over the whole of the left leg. Dr McGonigal concluded from this history, from the minor nature of the impact, and from examination of the x-rays, that the respondent was suffering from long-standing congenital spondylolisthesis at the L5/S1 level and possible disc degeneration in the cervical spine. Dr McGonigal's advice, which he relayed to the Drs Griffiths was that the respondent should wear a lumbo-sacral corset, take medication and return to work. Dr Robert Griffiths said in evidence that he accepted that advice on the assumption that the respondent had given Dr McGonigal a correct history of pre-existing symptoms.

6. However, the respondent did not return to work. He took a month's leave from the Embassy, was dismissed and moved to Sydney. He came under the care of Dr Tsamoglou, who was able to converse with him in Turkish. Dr Tsamoglou prescribed conservative treatment without success and referred him to Dr John Bannister, an orthopaedic surgeon. Dr Bannister at first also continued conservative treatment and put the respondent in traction between 22 and 29 May 1986, without lasting relief. A discogram was performed on 31 August 1987, followed by more traction a year later when the respondent was complaining of no improvement. Dr Bannister eventually performed major surgery on 28 June 1990 with fusion at L5/S1 and laminectomies at L3/4 and at L4/5. The operation has given the respondent long-lasting but not total relief of the leg pain and some relief of the lower back pain. Otherwise at the hearing he remained in much the same condition as when he first sought treatment. He said that he would look for light work when he feels that his symptoms have sufficiently improved. He strongly denied any suggestion that he was intending to go back to Turkey as soon as the case was over. In the meantime he and his wife live in Melbourne, receiving social security payments. Neither of them work, two of the children are at university receiving tertiary living allowances.

7. The Master had before him evidence from a number of doctors and reports from others, no less than ten in all. The resolution of the medical issues depended on two factors which were ultimately matters for the Master as the tribunal of fact. First, had the respondent experienced pre-existing symptoms in either the lumbar or cervical areas as Dr McGonigal had recorded? The Master answered that question in the negative, as on the evidence he was entitled to do. Indeed, it would have been against the weight of evidence to decide to the contrary, because all other doctors who addressed the matter were given a history of absence of pre-existing symptoms. The second question was whether and to what extent the respondent could be believed on two matters, one relating to the continuity of symptoms between the time of the accident and first seeking medical attention and the other relating to the persistence of symptoms to the time of hearing. The doctors who supported the appellant's case took the view, broadly speaking, that in the light of the respondent's delay in seeking medical attention for some six to eight weeks from the time of injury and the unlikelihood of a minor vehicle collision such as that described producing incapacitating symptoms over such a long period, the respondent could not be believed, and that he had been fit for work from some time in the past, which time varied according to the doctor expressing the opinion.

8. However, the Master considered that the respondent was essentially a witness of truth, and that, apart from the account given to Dr Mcgonigal about pre-existing symptoms, he was otherwise consistent in his evidence and in his statements to the various doctors. In relation to the lumbar and cervical conditions, the Master found that the injury made the pre-existing conditions symptomatic, that the symptoms continued until the date of hearing and were likely to continue thereafter. Again, these conclusions were well open to the Master.

9. The remaining question was whether the pre-existing conditions would have produced some symptoms in any event, and if so, when. The Master answered this question, as it related to the respondent's lower back condition by applying what he called a "broad common sense view". This was:

".... that it is possible that the plaintiff might have
spent the rest of his life without symptoms, but it is
unlikely. It is probable that at some time he would have had
a problem with his lower back, either as the result of a
relatively minor trauma such as this accident, or natural
progression of the disease. It is impossible to pinpoint a
date when that might have happened, but it could possibly
have happened by now, and would probably have been within the
not too distant future."

10. The Master went on to review the medical evidence in relation to the lower back condition. Ultimately he accepted the view of the treating surgeon, Dr Bannister, that "if the pain became constant after the accident" then the aggravation caused by the injury continued until the time of the hearing. The Master's finding was that the aggravation continued to the date of hearing but "mitigated by the surgery" as already noted.

11. As far as the neck condition was concerned, the complaint to Dr Griffiths on 23 August 1985 was of a whiplash-type injury and headache, and that was followed by a continuing and consistent history of neck pain and headache. There were also the x-rays of the cervical spine taken in August-September 1985 showing a narrowing of the C6/C7 disc space, with degenerative change, although minimal. In relation to the neck condition the Master found that the effect of the whiplash injury had subsisted for no more than six months and was overtaken before the end of six months by normal degenerative change processes. The Master's finding on that precise issue is not challenged at all.

12. The Master's overall conclusion was as follows:

"In summary, before this accident, the plaintiff had a
congenital defect of the spine in the lumbo-sacral area,
which by the time of the accident had led to a grade 1
spondylolisthesis of L5 on S1. He was not then suffering
from any symptoms as a result of that pathology. It is
likely that, at some time, perhaps in the past, but in any
event in the not too distant future, that pathology would
have become symptomatic to some greater or lesser extent.
The accident, relatively minor though it was, caused that
pathology to become symptomatic, and also caused a mild
whiplash injury to the neck.
The effects of the accident on his lower back continued,
certainly in my mind until the date of his operation,
probably until the present day, and will continue for some
time into the future which it is not possible to specify, but
which is not long. But at some time in the relatively near
future it will probably be correct to attribute the
plaintiff's condition to the underlying pathology, rather
than to the effects of the accident."

13. Indeed, none of these findings is really challenged in the appeal. Where the Master erred, according to the submissions put on behalf of the appellant, was in failing to give sufficient recognition to the contingency that the pre-existing condition of spondylolisthesis rendered the respondent vulnerable to an injury like the one he sustained in 1985. Accordingly, so it was submitted, the amount for past loss of earning capacity, and for out-of-pocket expenses, should have been the subject of a greater discount than that allowed by the Master. A similar criticism was made of the calculation of loss of future earning capacity and for future out-of-pocket expenses. It was also submitted that the Master failed to allow for the respondent's residual earning capacity as it was at the time of the hearing and as it was likely to be in the future.

14. We deal with the submission that the Master was in error in finding as a fact that the respondent had no income-earning capacity between the date of injury and the date of hearing. The Master's conclusion on this aspect was as follows:

"The plaintiff's evidence that his employment at the
Embassy was terminated because of his condition was not
challenged. His physical condition and his lack of facility
in English have combined to make it most unlikely that he
could have obtained any suitable employment, no matter how
light the duties."

15. It was submitted that the Master was in error in not finding that the respondent had a residual capacity to earn income during the pre-trial period. It might not have been surprising if, in view of the respondent's work history and experience as a teacher and chemical engineer in Turkey, the Master had found that there was some residual capacity to earn income. Nevertheless, the Master gave as a reason for his conclusion that he was relying not only on the evidence as to the respondent's physical condition but on his own observation of the respondent and in particular on what he perceived as the respondent's inadequate command of the English language. For reasons expanded upon below, the Master had the advantage of seeing the respondent before him and was entitled to rely upon that further reason in order to exercise his own knowledge and experience of local conditions. From that knowledge and experience, and his assessment of the evidence, he concluded that for practical purposes the respondent's income-earning capacity had been of no value during the period in question. As the appellant was obliged to take the respondent as he found him, the respondent's total loss of earning capacity was something for which the appellant was responsible.

16. The further submission was made that the Master erred in not sufficiently allowing for the contingency that the respondent might have been incapacitated during the pre-trial period even if he had not received the injury perpetrated upon him by the appellant. There is an initial question as to the extent to which this Court sitting as a court of appeal should seek to interefere with the Master's findings in this regard.

17. In Moran v. McMahon (1985) 3 NSWLR 700 at 723-733, Priestley J.A. (with whom McHugh J.A. agreed) referred to the majority judgment in Warren v. Coombes and Another [1979] HCA 9; (1979) 142 CLR 531 where it was said that an appeal court is "obliged to reach its own conclusions as to the inference to be drawn from the primary facts found by the learned trial judge". Priestley J.A. referred to the subsequent decision of the High Court in Gronow v. Gronow [1979] HCA 63; (1979) 144 CLR 513 where the majority held that nothing in Warren v. Coombes was intended to lead to a departure from the settled principles of law governing appeals from the exercise of a discretionary judgment. Priestley J.A. then went on to distinguish, for the purpose of considering the function of the appeal court, the various components of an award of damages. The component of pain and suffering and loss of enjoyment of life he considered to be "in the discretionary area". As to the component of economic loss, his Honour said at 723:

"There does not seem to me to be anything discretionary
or quasi-discretionary in the calculation of the amount of
money lost by a plaintiff between the date of his injury and
the date of the hearing of his claim for damages. Difficult
questions of fact may be involved particularly when
consideration is being given to the extent to which the
plaintiff's injuries restricted his capacity to work but
these questions are answered by the trial judge's evaluation
of the facts. I do not know that it has ever been suggested
that once he comes to a conclusion on the factual material
before him he has any discretion to act on any other but that
conclusion. Similarly, in regard to the plaintiff's loss of
earning capacity from the date of judgment in his case into
the future the trial judge is often faced with a difficult
question of evaluation. Obviously different minds may
evaluate differently the conclusion to be drawn from the
factual material. Once again, this type of evaluation seems
to me to be of a different kind from the evaluation made of
the amount of money appropriate in the circumstances of the
plaintiff's case to be included in his damages for the
completely non-pecuniary element in his damages of pain,
suffering and loss of the amenities of life."

18. The approach of Priestley J.A. has been applied in the Federal Court of Australia: see Oliver Davey Glass Pty Limited v. Gregory Allen Reginald Hollands (unreported, Neaves, Miles and Lee JJ., 5 July 1990). It has been the subject of further consideration in the Court of Appeal in New South Wales: see Ralevski v. Dimovski and Another (1986) 7 NSWLR 487, Burden v. Rath (1986) Aust. Torts Reps. 80-050. In the latter case Kirby P acknowledged the distinction between the "discretionary" and the "inferential" approaches to the evaluation of future economic loss, but held that for the purposes of the case before the Court of Appeal, either approach led to the same result. Priestley J.A. reiterated succinctly what he had said in Moran. However, Glass J.A. said:

"... an assessment of damages for impaired economic
capacity, although it may depend on some finding of fact,
will necessarily be discretionary in nature so far as
concerns those elements that lie in the future."

19. Up to this point then, it may be concluded that there is nothing in the Moran approach which inhibits an appeal court from drawing its own inferences from the primary facts found by the trial judge in relation to the assessment of damages for past economic loss.

20. However, there are two subsequent High Court decisions which, in our view, need to be taken into account. In Malec v. J.C. Hatton Proprietary Limited [1990] HCA 20; (1990) 169 CLR 638, the High Court considered the assessment of damages where questions arose as to the future or hypothetical effect of physical injury or degeneration. The conclusion was that where there is found to be a probability (something more than a minimal possibility) that the injured respondent would have suffered, or will suffer, incapacity of the nature complained of in any event, without the injury for which the appellant is responsible occurring at all, then the assessment of damages must be adjusted according to the court's view of the degree of probability. In the words of the majority (Deane, Gaudron and McHugh JJ.) at 643:

"Thus, the court assesses the degree of probability that
an event would have occurred, or might occur,
and adjusts its award of damages to reflect the degree of
probability. The adjustment may increase or decrease the
amount of damages otherwise to be awarded. .... The approach
is the same whether it is alleged that the event would have
occurred before or might occur after the assessment of
damages takes place."

21. In a separate joint judgment Brennan and Dawson JJ., reached the same conclusion as the majority. Their Honours said at 639:

"Hypothetical situations of the past are analogous to
future possibilities: in one case the Court must form an
estimate of the likelihood that the hypothetical situation
would have occurred, in the other the Court must form an
estimate of the likelihood that the possibility will occur.
Both are to be distinguished from events which are alleged to
have actually occurred in the past."

22. The judgment of Glass J.A. in Burden v. Rath is consistent with the decision in Malec, as the above passages indicate. Those passages support the view that, where the assessment of economic loss, whether past or future, depends, as it does in this case, upon comparing a factual finding as to what has happened with an established hypothesis as to what might have happened, a substantial element of discretionary judgment is contained in the ultimate assessment.

23. Furthermore, there is the principle recognized by McHugh J., with whom the other Justices agreed, in Abalos v. Australian Postal Commission [1990] HCA 47; (1988) 171 CLR 167 at 178, approving the statement by Lord Sumner in S.S. Hontestroom v. S.S. Sagaporack (1927) AC 37 at 47, that the advantage enjoyed by the trial judge is such that:

"If his estimate of the man forms any substantial part of
his reasons for his judgment the trial
judge's conclusions of fact should, as I understand the
decisions, be let alone."

24. In our view, the Master, in comparing what he found to have happened (that the respondent had not earned income since his injury) with what was likely to have happened (that he might have been incapacitated from earning income by degeneration or some other injury) was bound to take into account his estimate of the respondent as he saw him, both as a result of his own observation of the respondent in the witness box and of the rest of the evidence before him. In this respect the Master enjoyed an advantage which this Court does not have. The appeal is not one in which the Court is free simply to substitute its own assessment of the hypothetical evaluation of the respondent's past earning capacity since the date of injury. The difficulty inherent in putting a monetary value on these factors is reflected in the course of events in Malec. There the High Court, after deciding that the Full Court of the Supreme Court of Queensland was in error in reducing to nil the award for past loss of earning capacity, did not proceed to evaluate that past loss for itself but remitted the matter to the Master for reassessment.

25. In the present case the Master found that the respondent's likely earnings but for injury were $443.00 net per week and that a loss in that amount from the date of injury to judgment was $157,800. The Master measured against that amount a discount, which he described as "the real possibility that some other incident might have disabled him just as easily as the subject accident", and came to the conclusion that $120,000 should be awarded for past economic loss. That conclusion involved a discount of $37,800 on $157,800, slightly over 25 percent. There clearly had to be a discount. In our view, the extent of the discount has not been shown to be inadequate and the Master's approach not contrary to what was laid down in Malec.

26. In relation to out-of-pocket expenses, it was submitted that some of those must have related to medical treatment and the like which the respondent would probably have incurred in any event. It is not clear whether the point was taken before the Master. On the one hand it would appear consistent with the reasoning in Malec that if an award for loss of earning capacity is to be reduced for the contingency that the respondent might have suffered part of the loss because of events that would have occurred in any event and without the appellant's wrongdoing, then the award under other heads of damage should be reduced also. However, the reduction will vary according to the circumstances of the case. There was a schedule before the Master to indicate the dates at which the various expenses were incurred and to whom the expenses were paid or are owed. However, on the material in the schedule it is impossible for us to arrive at any firm conclusion about how the award for out-of-pocket expenses should be reduced for the contingency of supervening incapacity caused by degeneration of the spondylolisthesis. We reject the submission that the award for out-of-pocket expenses of $31,527.52 should be reduced by one half. We have considered remitting this matter to the Master for reassessment but it appears to us that the amount of the discount is not likely to be so substantial that it would justify that course. Overall the total award of $204,927.52 does not appear to be excessive having regard to the factors we have already discussed. We are not convinced that it should be set aside. The appeal is dismissed, the appellant to pay the respondent's costs.