Peter George Preller v Adrian Maurice Tod [1995] ACTSC 41 (1 May 1995)

SUPREME COURT OF THE ACT

PETER GEORGE PRELLER v. ADRIAN MAURICE TOD
No. SC214 of 1990
Number of pages - 9
Damages

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MASTER A HOGAN

CATCHWORDS

Damages - Assessment - Personal Injury - Motor Vehicle Accident - Apprentice electrician - Multiple orthopedic injuries - Retrained as lawyer - Loss of Income Earning Capacity.

Medlin v SGIC (1995) 69 ALJR 118

HEARING

CANBERRA, 8 February 1995
1:5:1995

ORDER

The Court orders that:

1. Judgment be entered for the plaintiff for $598,450.00.

Counsel for the Plaintiff: Mr R. Crowe

Instructing Solicitors: Pamela Coward and Associates

Counsel for the Defendant: Mr C. Branson QC and Mr M. McDonough

Instructing Solicitors: Abbott Tout Russell Kennedy

DECISION

A HOGAN This is an action for damages for personal injury sustained by the plaintiff in a motor vehicle accident on 24 August 1987. Liability is not in issue.

2. The plaintiff is a single man who was born on 11 September 1968. After completing secondary school he began an apprenticeship as an electrician in 1987. He hoped to join his father and brother in their family business. He was very fit, and enjoyed vigorous sport such as triathlons and wave jumping.

3. On the day of the accident he was riding his motor cycle along Southern Cross Drive towards the intersection with Ratcliffe Crescent. His last memory before the accident is of driving away from the previous intersection. His next recollection is of lying on the ground being attended to by ambulance officers. He does not remember the journey to hospital, and next came to in the intensive care ward.

4. He was admitted under the care of Dr. Kitchin who, in a report dated 17 December 1987, recorded his injuries and immediate treatment as follows:

"His injuries were:
- Fracture of the lower third of the shaft of the right femur.
- A comminuted fracture with displacement of the right patella.
- Ligamentous injury to the left knee, including posterior cruciate
partial tear of anterior cruciate and partial tear of the lateral
collateral ligament left knee.
- A segmental fracture of the right radius.
- A fracture dislocation of the right carpal bones.
During the course of his hospital stay the following procedures were
carried out:
- Initial skeletal traction to the right femur and temporary
immobilisation of the right forearm and left leg. He
subsequently
had open reduction of the fractured femur 27/8/87 and internal
fixation via an intra-medullary rod with transverse screw
fixation.
- On 27/8/87 he had open reduction and internal fixation of
segmental fracture of right radius.
- On 27/8/87 he had open reduction and internal fixation of
fractured scaphoid and carpal bones, right wrist.
- On 4/9/87 he had patellectomy for comminuted fracture of the
right patella.
- The left leg injury was treated conservatively in a long leg
cast.
- On 14/10/87 the fixation wires in the right carpal bones were
removed under general anaesthesia.
- On 9/12/87 the proximal transverse femoral screw was removed
from the right hip region.
The patient has been reviewed at intervals and prior to this recent
surgery, which was done as a Day Patient, he had regained a full
range of movement in the right knee, there was an improvement in the
right quadriceps muscle control, right hip movements were
satisfactory, the right forearm showed the fractures of the radius
to have united, he had regained good elbow movement, there was some
restriction in wrist movement, the left knee showed some residual
instability of the cruciate ligaments both posterior and anterior,
and of the lateral collateral ligament. He also complained at the
last review examination of back pain.
His ongoing care will amount to physiotherapy and rehabilitation.
His progress to date for these injuries is very satisfactory. There
will be a need in the future to remove the intra-medullary rod and
screws from the right femur and the plates from the right radius.
He is presently unfit to work to 31/1/88 and then will be reviewed."

5. His time in hospital was extremely painful, and Pethidine was not able to control his agony successfully. During his convalescence at home he needed full time care, which was provided by his mother. The physiotherapy treatment was also extensive, strenuous and painful.

6. By the time he became mobile it was obvious to him that he would not be able to work as an electrician. He enrolled as a student at Canberra University in February 1988, in a course leading to a Bachelor of Arts in Communications. He performed well at his studies, and transferred to Accounting.

7. On 25 July 1988 he underwent an operation to remove the plates from his right arm. He was in hospital for some days, and again the operation was painful.

8. At the end of the year he had performed well enough at his studies to transfer to the Australian National University in Commerce/Law.

9. On 6 February 1989 Dr. Kitchin removed the intra-medullary rod and 2 screws from his thigh at Calvary Hospital, under general anaesthetic. The site of the operation became infected and it was necessary to perform a further operation to drain it, again under general anaesthetic, on 28 February 1989.

10. His studies were affected by his condition in the first part of 1989, but during the year he began to return to physical activity. He still needed physiotherapy, especially for back pain. He managed to pass his exams at the end of the year.

11. During 1990 he tried to extend his physical capacity, but was restricted particularly by the instability in his left knee. In December 1990 Dr. Andrews reported that further surgery might be needed, an opinion shared by Dr. Mann.

12. Dr. Kitchin referred the plaintiff to Dr. Koch in Sydney, and he operated at Rock Castle Hospital on 13 March 1991 to repair the left knee ligaments. The plaintiff spent about 5 days in hospital, and again the process of recovery was extremely painful. A machine was used to restore mobility to the knee joint. It was 2 months before he could start walking without crutches and another 4 months before he could exercise properly. Again his studies were affected, and he barely passed his exams at the end of the year. Unfortunately also the operation had not cured the instability in his left knee.

13. He decided to take a year off from studies, and went to Geraldton in Western Australia, where he worked for some time as a waiter, and then in the administration of ATSIC. He also took the opportunity to improve his skills in English, and was able to enjoy some sailing. While working in the office he suffered discomfort in his neck and back if he stayed in the same position for any length of time.

14. Dr. Kitchin examined him on 22 April 1992. He had no specific complaints about the right femur. There was a catching at the front of the right knee, with some minor discomfort at times. The left knee caused difficulty with squatting and full activity. He had returned to squash and touch football. His right forearm and wrist caused no particular problem. He was receiving chiropractic treatment for his back pain.

15. In May 1992 he consulted Dr. Keenan in Perth, who advised him to proceed with an active exercise program. On review on 20 November 1992 he told Dr. Keenan that his left knee had improved significantly, but still felt unstable, and was painful after activity. Dr. Keenan advised him to consider a further operation, as he then had about 30% functional loss of the left knee.

16. He returned to Canberra, and consulted Dr. Koch in December 1992. He referred him to Dr. O'Brien, who specialises in knee reconstruction. In March 1993 Dr. O'Brien performed debridement and removed the old graft in the left knee, under general anaesthetic. The plaintiff did not regard this as a major operation.

17. During December 1992 he had been examined by Dr. Danta, and in June 1993 by Dr. Corry, at the request of his solicitors. Their reports disclose nothing new, but it is significant that he complained to both of them about chronic and disabling pain in the neck and lower back.

18. On 10 November 1993 he was examined by Professor Jones, rehabilitation specialist, at the request of the solicitors for the defendant. The conclusions reached by Professor Jones were as follows:

"Mr Preller has suffered multiple musculoskeletal injuries as a
result of an alleged motor vehicle accident on 24/8/87. These
injuries have resulted in substantial sequelae and continuing
impairments leading to disability. Overall, I would accept that he
has the discomforts of which he claims, and that whilst he is a
very active person and has done much travelling, hiking and cycling,
these activities are in the main beneficial, although would be
accompanied by a degree of discomfort. There is the matter of gross
instability of his left knee, which has been unsuccessfully treated
by reconstructive surgery, and which is to be the subject of further
operative treatment. Whatever the outcome of that treatment, Mr
Preller would not be capable of working as an electrician, and his
new educational endeavours have been appropriately planned to ensure
that he has the training to enter the workforce. He now is nearing
completion of his legal course and has various vocational plans.
These would seem achievable and deserve encouragement. Degenerative
changes will inevitably occur in the left knee, and may necessitate
arthroplasty in later years. It is probable that he would remain in
full-time employment till his middle 50s and part-time employment to
a normal retiring age."

19. On 14 February 1994 Dr. O'Brien operated to reconstruct the left knee joint. Recovery from the operation was very painful. Movement was controlled by a brace, and he was on crutches for about 2 months. In August 1994 Dr. O'Brien reported that he had had an excellent result, with full range of movement and a stable knee, although there was still some movement in the lateral compartment. He warned the plaintiff not to play any contact sports or perform any twisting on the left knee.

20. In November 1994 his general practitioner, Dr. Sanderson, reported that the prognosis was for a lifetime of moderately reduced physical and work performance, a lifetime of pain from most of his injuries, a reduction in the quality of life due to pain and instability of the neck, knees and dominant wrist, and accelerated development of osteoarthritis and joint failure in all of the injured joints. He also thought that the plaintiff would find it difficult to manage a full working week because of pain that would be caused by prolonged immobility at a desk or terminal.

21. At the end of 1994 he finally passed his law examinations, and is now studying at the Legal Workshop. Although he became quite depressed during 1994, he now feels much better emotionally.

22. Dr. O'Brien thinks that in about 20 years time the plaintiff will need replacement surgery at the left knee. The present day cost of that operation is $16,700.

23. None of the doctors were required to give evidence or be cross-examined. The plaintiff's evidence about his injuries and symptoms were not challenged in cross-examination. The photographs exhibit A clearly show the scars on his right knee, left leg, right arm and right thigh. The only area of real contention in the case was the question of the plaintiff's economic loss.

24. The award of damages for pain and suffering in this case must be unusually high. In addition to the trauma of the accident, the plaintiff has undergone 10 operations under general anaesthetic, most of them involving a very painful process of convalescence. I accept that in about 20 years time he will need to undergo another. At the age of almost 20 he was a superbly fit athlete. Now 27, despite his courageous, painful and vigorous efforts at rehabilitation, he will be restricted by pain and joint instability for the rest of his life.

25. For his pain and suffering and loss of amenity I award $130,000, of which $90,000 relates to the past. I accept that his suffering in the past was concentrated more over the first three years than in the later past, and for interest on general damages I award $20,000.

26. The out of pocket expenses are agreed at $40,500, most of which have been paid by the defendant's insurer, and no claim is made for interest on this item.

27. The value of the services provided by the plaintiff's mother is agreed at $4,800. A claim for interest on that component was made in the statement of particulars, and it was not contested, but there was no discussion about the basis on which it should be calculated. Pending consideration of that matter in another case, I think that interest should be awarded as if the component were a part of general damages, and interest should be awarded at 4%. I allow $1400 on that component.

28. The claim for the past loss of income as set out in the particulars is based upon the proposition that as a result of his injuries the plaintiff was forced to retrain for a career different from his chosen one of electrician.

29. His brother was completing his apprenticeship at about the same time as the plaintiff. His earnings therefore give a fair indication of the plaintiff's capacity to earn income over the same period.

30. The defendant did not contend that he acted other than reasonably in undertaking retraining, nor that his brother's earnings did not give a fair indication of the plaintiff's capacity as an electrician.

31. It was suggested, however, that he could have achieved the same objective at a lesser cost by working over the later part of the period, say from the end of 1992, either by continuing on at Geraldton or by returning to Canberra and obtaining a job, then continuing his studies part-time.

32. In my opinion the plaintiff's responses in cross-examination showed that this was not a course that was reasonably open to him, in that he did not have any permanency at ATSIC, and he would have had to work for a year in the Public Service before he could even begin part-time study. It also seems to me that, although he did get work with ATSIC in the north of Western Australia in 1992, it is fairly unlikely that with his then educational qualifications, and his then state of health, he would have obtained a position leading to permanency in the Public Service in Canberra. I think that in following the course that he did, this plaintiff did all that was required of him, and more, to mitigate his loss of income earning capacity.

33. It is not a conclusive consideration, but the defendant may derive some comfort from my opinion that his future capacity is much greater as a lawyer than it would have been with an economics degree alone.

34. It has recently been re-emphasised by the High Court, in Medlin v SGIC (1995) 69 ALJR 118, that what is involved here is the valuation of a loss of capacity, in so far as it has been or may in the future be productive of financial loss. In some circumstances it may be misleading to concentrate on actual loss of earnings. See especially per McHugh J at 126. So far as the past is concerned, the brother's earnings do not provide an arithmetically accurate method of calculating the loss, but they do provide a just indication of the size of the round figure at which the past loss should be valued.

35. The defendant did not cavil at the figures set out in the particulars. They give a net loss to 7 February 1995 of $147,992. If one takes into account the further 3 months since that date on the one hand and a reasonable discounting for contingencies over a period of nearly 8 years on the other, it seems to me that an award of $145,000 for past economic loss is fair as between plaintiff and defendant.

36. One half of the interest on that sum, calculated in accordance with the Practice Direction, is $82,250, which I award for interest on past economic loss.

37. The plaintiff is also entitled to recover the costs of retraining. As I have indicated, I think that those costs should include the costs of qualifying as a lawyer, and not just obtaining a commerce degree. The amended figures, as agreed, on that basis give an amount of $14,937. That is a debt that the plaintiff has incurred, which he will have to pay over some years in the future as he earns income, and it should therefore be discounted to some extent to take account of that fact. I allow $14,500 for the costs of retraining.

38. The future operation on the left knee must be assessed as a probability, not as a certainty. In addition to the actual cost of the operation there would probably be a loss of income for a period, but in order to avoid double counting I will take that probability into account when assessing future economic loss. The cost of $16,700 must also be discounted for the present receipt of a sum payable about 20 years in the future. The present value, discounted at 3%, of $16,700 payable in 20 years time is $9,246.

39. A claim was also made for future medical treatment, including physiotherapy and chiropractic relief. The plaintiff at present uses only aspirin for pain relief, and is not receiving any other active treatment, but there must be taken into account the likelihood that from time to time over the rest of his life he will need some advice or medication for his pain and disability.

40. Taking all those matters into account I award $10,000 for the cost of future treatment.

41. The issue of future economic loss raises some unusual questions in this case. In broad general terms, the defendant submits, the evidence does not demonstrate that a lawyer will earn less than an electrician. In fact, counsel submitted that it should be borne in mind that what the plaintiff will earn as a lawyer will probably exceed what he would have earned as an electrician, but he did not claim to be entitled to any credit against other heads of damage on account of the excess. He did concede, as I understood his submissions, that the plaintiff behaved reasonably in retraining. However, he submitted that the plaintiff has a very considerable potential earning capacity, which is admittedly impaired, but not to any measurable extent. He conceded that some appropriate buffer might be allowed for the future.

42. I do not agree with the submission by counsel for the defendant that what the plaintiff must demonstrate, to use his words, "is some arithmetically calculable impairment of his new found earning capacity."

43. The decision of the High Court in Medlin (supra) was handed down after the hearing of this action concluded. As I read it, it does not alter the law, but re-emphasises the basic principles. Although the factual context in that case was very different from this one, I think it is relevant to note particularly the passage in the judgment of McHugh J at 126 where he said, "The correct question was whether, as a result of the accident, the plaintiff had been rendered less capable of earning income. In answering that question, his Honour was required to look at the plaintiff's capacity for work beyond the particular employment in which he was engaged at the time of the accident."

44. At the time of the plaintiff's accident he had an undoubted capacity to earn income as an electrician. He also had a capacity to earn income as a lawyer. True it is that had the accident not happened he would probably not have chosen to exercise it. But that does not mean that he is not entitled to damages for the diminution in it that the accident caused. The accident completely destroyed his capacity to earn income as an electrician. In mitigation of his damage in that respect he has retrained as a lawyer. It was the accident which caused him to realise the potential that he always had to do so. But it was also the accident which made that potential less than it would otherwise have been. To the extent that it is less, that diminution in his capacity to earn money as a lawyer, which results from the injuries he sustained in the accident, will be productive of economic loss. It therefore sounds in damages.

45. My task is to value the diminution as best I can on the evidence. The fact that the evidence does not enable an arithmetical calculation to be made results from the circumstances of the case, not from any failure on the part of either party to lead or tender it.

46. However, it seems to me that the comparison that I should attempt is that between what he could have earned as a lawyer, uninjured, and what he can now earn, suffering the disabilities caused by the accident. In other words, in the circumstances of this case, I do not think that the award really depends to any great extent on an estimate of what he might have earned as an electrician, except so far as the period attributable to the retraining is concerned.

47. I do not doubt that he will successfully complete the Legal Workshop course, and will be admitted to practise towards the end of this year.

48. I also think that his chances of getting employment will be better than the average. His marks in his academic course are not good, but most potential employers will realise that it was only by dedication to his studies that he was able to pass at all, and that, had his recovery been sooner and less complicated, his marks would have been much better.

49. The fact that when he needed a year off he did not spend the time sailing and recuperating, but worked for most of the year, should demonstrate to any potential employer what type of person he is. That practical experience of dealing with responsibility and relating to others will also stand him in good stead.

50. It is likely that he would not be suited to a career in one of the larger firms, where remuneration is governed by time costing sheets. The evidence from Mr Purtle indicates that he might hope to achieve a salary beginning at $27,500 gross in the first year after admission, rising to something of the order of $45,000 gross after about 5 years. That is about $33,000 a year net. I think it is unlikely that he would progress much beyond remuneration of that order, even if all goes well.

51. In broad terms, had he not been injured, he could well have progressed to earn substantially more. On re-reading Dr Corry's reports it seems to me that his assessment, of a reduction in his productivity of the order of 20%, is probably the best estimate that could be made. That is a reduction of the order of $125 a week.

52. To indicate the general order of the award for this item, the present value of $125 a week for 38 years at 3% is $148,555. The ordinary discounting factors must be taken into account.

53. On the other hand, some years must pass before he reaches his full earning potential. Then there will be, in all probability, a time when he will be absent from work for some months if the further operation is carried out on his knee. Professor Jones also may turn out to be correct in thinking that he will only be fit for part-time employment after his mid-fifties.

54. In my judgment, the amount that is reasonable as between the plaintiff and the defendant in determining the defendant's liability in damages for causing the diminution in the plaintiff's future capacity to earn income is $150,000.

55. The total award is therefore made up as follows:

Pain and suffering 130,000.00
Interest 20,000.00
Out of pocket expenses 40,000.00
Griffiths v Kerkemeyer 4,000.00
Interest 1,400.00
Past loss of income 145,000.00
Interest 82,250.00
Costs of Retraining 14,500.00
Future treatment 10,000.00
Future loss of income 150,000.00
598,450.00

The total award of damages is therefore $598,450.00. The defendant will be entitled to credit for the sums paid by or on his behalf for medical expenses, but that amount is not in evidence.

56. I direct the entry of judgment for the plaintiff accordingly.