Herbert Koeck v Vera Persic [1996] ACTSC 13 (26 March 1996)

SUPREME COURT OF THE ACT

HERBERT KOECK v. VERA PERSIC
No. SCA 32 of 1995
Number of pages - 24
Negligence - Damages - Appeal

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MILES(1) CJ, GALLOP(2) AND FOSTER(3) JJ

CATCHWORDS

Negligence - damage - causation - whether Master correct in concluding plaintiff's spinal condition resulted from motor vehicle collision - inherent unlikelihood of serious consequences resulting from trivial injury - totality of evidence - inconsistency of complaints - conflicting histories given to different doctors - factual bases for doctors' opinions - whether Master substituted history given to doctors for evidence given by plaintiff - Master did not - Master not shown to have been in error - no question of principle.

Damages - personal injuries - vicissitudes - reduction of damages for adverse contingencies - whether reduction to be applied to heads of damage other than loss of earning capacity - appropriate rate of reduction - whether different rates for past and future contingencies - whether different rates for different heads of damage.

Appeal - quantum of damages - vicissitudes - whether appeal court is in as good a position as trial judge to evaluate reduction of damages for adverse contingencies - whether findings as to contingencies are findings of fact - quasi-discretionary nature of trial judge's evaluation.

Appeal - quantum of damages - whether total award should be reduced by small proportion to allow for error in calculating one item of damages to be awarded.

Burnicle v. Cutelli (1982) 2 NSWLR 26,

Moran v. McMahon (1985) 3 NSWLR 700
Djapa v. Comalco Aluminium Ltd (NSW Court of Appeal, 3 July 1987, No. CA64

of 1986)

Wilson v. Peisley (1975) 50 ALJR 207
Wynn v. NSW Insurance Ministerial Corporation [1995] HCA 53; (1995) 70 ALJR 147 at 154
Watts v. Rake [1960] HCA 58; (1960) 108 CLR 158
Australian Aluminium Co. Ltd. v. Goulding (1964-5) NSWLR 1718
General Motors-Holden's Pty Ltd v. Moularas [1964] HCA 39; (1964) 111 CLR 234
Malec v. J.C. Hutton Pty Limited [1990] HCA 20; (1990) 169 CLR 638 at 645
Luntz, Assessment of Damages for Personal Injuries and Death, 1990 3rd ed.,

para.2.2.5
J.H. King, Causation, Valuation and Chance in Personal Injury Torts Involving Pre-existing Conditions and Future Consequences (1981) 90 Yale Law Journal 1353

Warren v. Coombes [1979] HCA 9; (1979) 142 CLR 531
Gronow v. Gronow [1979] HCA 63; (1979) 144 CLR 513
Hall and Another v. Tarlington (1978) 19 ALR 501 at 503
Fox v. Wood [1981] HCA 41; (1981) 148 CLR 438
Mallett v. McMonagle (1970) AC 166 at 176

HEARING

CANBERRA, 20 July 1995
26:3:1996

Counsel for the appellant: Mr. L. Morris, QC,
with Ms. C. Adamson

Solicitors for the appellant: Abbott Tout Harper and Blain

Counsel for the respondent: Mr. G. Lunney

Solicitors for the respondent: Snedden Hall and Gallop

ORDER

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The cross-appeal be allowed.

3. The award of damages be increased by $9,718 so that the
total award will be $337,276.

4. The appellant pay the costs of the appeal and the
cross-appeal.

DECISION

MILES CJ This is an appeal by the defendant and a cross appeal by the plaintiff from a decision of the Master who found for the plaintiff in an action for damages for personal injury. The plaintiff claimed that she suffered injury on or about 12 August 1988 when the vehicle she was driving was struck in the rear by timber planks falling from the vehicle driven by the defendant. The incident occurred when both vehicles were travelling north along Yamba Drive towards the roundabout providing access to Melrose Drive. The plaintiff stopped her vehicle, a Volkswagen sedan, in order to allow traffic on the roundabout to proceed ahead of her. The defendant stopped his Holden utility behind the plaintiff's vehicle. The defendant's attention was still concentrated on the roundabout, to his right and slightly to his rear, when he moved off, believing that the plaintiff had done likewise. When he realised that she was still stopped he braked sharply, causing the planks on top of his vehicle to be dislodged and to fall forwards.

The issue of causation
2. There is no issue that the incident occurred as a result of the defendant's failure to exercise reasonable care in the manner in which the planks were attached to the vehicle. The planks were over five metres in length and each weighed between 15 and 26 kilograms. There were several planks which came off but only two of them struck the Volkswagen. The area of impact was just above the cover of the light over the number plate and just below the air intake. The ends of the two planks rested on the plaintiff's vehicle, the other ends remaining on the rack on the utility to which they had been fixed. The defendant said that he had travelled forward in first gear for about 2 to 2.5 metres at about 6 to 7 kilometres per hour before braking. The Master appears to have accepted this evidence as he was entitled to do. It was sufficiently consistent with some evidence in the nature of expert opinion given by Mr. Colin Simpson, an engineer, who estimated the speed to be ten kilometres per hour on an assumption that the weight of the planks was 26 kilograms each. The Master concluded that the impact was relatively minor and remarked that relatively minor collisions often cause very serious injuries, particularly to the cervical spine, and that it is less common for minor rear end collisions to cause lumbar injury. The Master drew that conclusion from a combination of notoriety, common sense and the evidence of Mr. Simpson. That approach was entirely open to the Master and one with which I would agree, although I think that it was hardly a matter for Mr. Simpson.

3. The defendant's case relied upon the essential unlikelihood that the force of the impact was sufficient to cause the injuries of which the plaintiff complained. The defendant claimed that this unlikelihood was raised on the medical evidence and also on the facts as found by the Master relating to the relative absence of movement on the part of the plaintiff and of the Volkswagen at the time of impact. As to the latter, it is relevant to note that there was no finding by the Master as to the length of the planks, but, a sketch plan in evidence showed them to be about the same length as the utility, about five metres. The rack to which they were attached before being projected forward was described by the Master as "a steel rack secured to enable planks to be carried above the roof of the cabin". The rack was referred to by the Master more than once as a roof-rack. The sketch plan shows the rack extending from above the cabin roof to the rear of the tray of the utility and the planks extending from about halfway along the cabin roof to a metre or so beyond the rear of the utility. In any event the evidence was sufficient to show that the planks were not fixed securely enough to prevent their moving forward when the vehicle was stopped abruptly. That fact of itself did not enable the Master to reach a conclusion about the speed of the vehicle. There was no evidence about the distance between the Volkswagen and the utility after the utility came to a stop. Whatever the force of the impact of the planks striking the Volkswagen, it did not cause the vehicle to roll forward, the wheels being held by the plaintiff's foot on the brake. As the Master found, the force of the impact would have been absorbed by the mass and structure of the Volkswagen itself on its suspension system, and by the shock absorption of the seat, before the force was transmitted to the plaintiff's body.

4. The plaintiff said that immediately before impact, with her foot on the brake, she looked into her rear vision mirror and saw the planks flying through the air towards her car. Instinctively she "ducked" forward against her seatbelt. Her body did not make contact with the steering-wheel nor was her chest found to be bruised afterwards. She agreed that the car did not roll forward after impact. Although she did not say so, it may be inferred that she kept her foot on the brake.

5. The Master remarked that the evidence relating to the impact was such that it was "inherently unlikely" to have caused the type of injury of which the plaintiff complained, but that it was not impossible that it did so. This was, on the Master's part, a commentary on the state of the evidence so far surveyed by him and this observation of the Master is not, in my view, to be regarded as a finding of fact as to what actually happened. The Master also noted that it was unnecessary for the plaintiff to demonstrate "the precise mechanism by which the injury was caused".

6. Whilst, as I understand the submissions on behalf of the defendant, the defendant does not cavil with these observations, it is nevertheless submitted that the degree of possibility of the impact causing the injury was so low that causation could not be established on the balance of probabilities. The ultimate finding, however, as the Master said and the parties accept, depends on an assessment of the whole of the evidence, including the medical evidence. The weight of the medical evidence in turn depends to some extent on how far the plaintiff was acceptable as a witness on several matters apart from the circumstances of the impact. There were several inconsistencies in her evidence as to certain aspects, particularly the symptoms that she experienced from time to time and of which she continues to complain. The Master was of course in a better position than this Court to evaluate the credibility of the plaintiff and this Court is bound by those of his findings which are affected by credit unless the findings are insupportable by reference to matters other than credit.

7. It should also be borne in mind that the plaintiff's account was given in somewhat broken English and has to be considered in the light of all the circumstances.

8. The state of the plaintiff's spine immediately prior to the incident is a matter of particular relevance. She said in evidence that the only prior trouble she had was when she pulled some muscles and was off work for three days in 1981 or 1982. The Master did not accept her denials of complaining to Dr Ferguson on 19 February 1984 of intermittent back pain over the previous two weeks and again on 22 May 1985 of four days of lower back pain radiating to the right thigh. Nor did he accept her protestation that she had never seen a chiropractor in her life. The independent evidence clearly showed that she was incorrect on both counts. In the light of this, the Master observed that the medical opinion which rests on her assertion that she had no prior symptoms of significance did so "on insecure foundations".

9. Although shocked immediately after the impact, the plaintiff continued her journey home. She did not see a doctor until 23 August, but again independent evidence confirms that she was sent home from work on 13 and 22 August and, as the Master held, that tends to confirm that she was experiencing debilitating symptoms during that period. By the time she saw Dr Cleary she was complaining of neck pain and paraesthesia in the left arm, together with lumbar pain radiating to the left leg. Her complaints of pain persisted.

10. In a report dated 23 November 1989, Dr Cleary stated that in addition to the "presenting symptoms" there was reduction of movement both in the neck and low back with restricted straight leg raising on the left. Dr Cleary did not establish how long the symptoms had been in existence. A CT scan performed on 28 November 1988 showed positive disc bulging at L5/S1 suggestive of pressure on the nerve root. Dr Robson, a neurosurgeon to whom the plaintiff was referred, noted that when he saw the plaintiff on 9 January 1989 "the back pain, or rather the pins and needles in the right leg (sic) began about a week after the accident". The plaintiff accepted Dr Robson's advice to undergo surgery. On 10 May 1990, at operation, Dr Robson found a bulge much larger than he had expected and in his evidence he said that he could not imagine that it would not have led to operation "at some reasonable time" after it occurred. The issues of when and in what circumstances and with what consequences the bulge occurred became important in the case and in the appeal.

11. It was submitted on behalf of the defendant that the Master was in error in rejecting the evidence of Dr Ferguson and Dr Robson that the injuries were unlikely to have been sustained by the movement described by the plaintiff in her evidence. However, the effect of Dr Robson's evidence was not that at all, as the above indicates. Dr Robson tended to support the plaintiff's case although he was candid in conceding other possibilities.

12. Dr Ferguson's opinion was not so clear. He did not see the plaintiff after the incident until 7 April 1992, although he had seen her in 1984 and 1985. His report of 12 June 1992 states that the plaintiff told him that in the interval between the "subject accident and the lower spinal condition" she had suffered from pain in her lower limbs but had no back pain. That part of her history is entirely in the face of her evidence and her complaints to the treating doctor and the operating surgeon. It would be surprising if Dr Robson had advised operation and the plaintiff consented to it if she had not had pain in the area where operation took place and where there was found to be extraordinary lumbar disc bulge. However, the possibility does remain that there was no lumbar back pain until some time subsequent to the injury but before the plaintiff saw Dr Cleary on 23 August. As I understand it, the defendant does not seriously suggest that there were no lumbar symptoms by 22 August. Dr Ferguson also raised the possibility that the operation itself contributed to the plaintiff's subsequent condition, but that possibility was not relied upon by either party, it was not put to the surgeon, Dr Robson, and it does not form any part of the Master's findings.

13. Dr Ferguson, in his report, concluded that the plaintiff's remaining low back and lower limb complaints are genuine and consistent with having resulted from the accident, but the report is marred by a lack of any description of the accident or its immediate aftermath. Dr Ferguson was cross-examined and agreed that "with this sort of back" one would expect the onset of pain to "accompany" the trauma which aggravated it and that the trauma would cause pain immediately. Later in his evidence, however, he withdrew substantially from such a hard and fast position and said that the period of time between an assumed accident and the onset of pain could vary and the condition may be "sequential", that is to say, the disc damage caused by the impact could be aggravated over weeks or months by the events of everyday life. He added that it is not uncommon for pain to commence after an interval between days and months because of "the sequential nature of the injury". He agreed in further cross-examination that instinctively moving forward in a motor car or just moving the head forward whilst wearing a seatbelt is as unlikely to cause disc rupture as leaning forward rapidly to stop a glass falling off the edge of a coffee table.

14. However, it is hardly necessary to say that this latter observation by Dr Ferguson did not exclude the possibility of injury to a susceptible spine by an incident as trivial as any of those described including the sort of incident described by the plaintiff in her evidence. The defendant argued that the plaintiff has not proved that the impact on the vehicle was a more likely cause than anything else that might have occurred between the impact and the later onset of pain and that the later the onset, the further remote the possibility of a causal connection. A consideration of the whole of the evidence left it open to the Master to find that upon impact the effect on her body was more than simply to cause her to "just put my head down" or "just moved my head". In the light of the plaintiff's evidence, with its limitations, and of the medical evidence, it was well open to the Master to conclude that the plaintiff was likely to have sustained injury in the manner described by her.

15. The above is sufficient to reject grounds 1, 7 and 8 in the notice of appeal.

16. Grounds 3, 4, 5 and 6 may be dealt with together. In essence, they contend that the Master substituted the history given to certain doctors for the account given by the plaintiff in evidence and then impermissibly applied the doctors' opinions to the plaintiff's account. Conversely, the argument was put that the Master failed to properly apply the medical evidence to the facts as they should have been found.

17. It was argued to the same end that the Master should not have accepted the opinions of Dr Cory and Dr Chase in their reports that the incident caused an exacerbation of the plaintiff's lumbar condition because each described the impact in terms somewhat different and more dramatic than the plaintiff in her evidence. It is true that the reports and opinions of Dr Cory and Dr Chase were untested by cross-examination and the Master was explicit that he accepted their opinions. Yet, in my view, it was open to the Master to come to the same conclusion on the evidence of Dr Robson and Dr Cleary.

18. Finally, on the issue of causation, ground 2 which asserts that the medical evidence rested on foundations not proved must fail. Although the Master remarked that insofar as the medical evidence established an assumption that the plaintiff had no prior symptoms, it did so on "insecure foundations", the Master accepted sufficient of the plaintiff's evidence to establish a factual basis for the assumptions essentially underlying the medical evidence. Although the facts found by the Master did not coincide exactly with the assumptions made by some of the doctors, those assumptions were sufficiently similar to the facts actually found for the Master to apply the medical evidence to those facts as found.

Damages
19. I turn now to the appeal and cross-appeal on the quantum of damages. The issues are limited to the challenges made to the discount applied by the Master to certain components of the award by reason of contingencies. In essence the defendant says that the discount was too little and the plaintiff says it was too much.

Scope of the discount for contingencies
20. It is a well established principle that, consonant with the aim being to put the plaintiff in the position he or she would have been in if not injured by the defendant's wrongdoing, the assessment of damages must have regard to relevant events which might have occurred regardless of such wrong doing. This is most clearly necessary when assessing damages for loss of future earning capacity, in which case if the loss is to be assessed by arithmetical calculation of the present value of a periodic loss over a finite time in the future, that calculation should include a proportionate or percentage reduction for so-called vicissitudes which, if they were to occur, would reduce the plaintiff's earning capacity in any event. Those contingencies are mainly adverse and fall under the four main heads of sickness, accident, unemployment and industrial disputes. Logically, vicissitudes should also include the possibility of increases in earning capacity by way of such factors as promotion, general economic prosperity and the like. These are somewhat elusive and speculative matters. As a matter of thumb, a figure of 15 percent is usually applied by way of reduction of the arithmetical calculation of the present value of future periodic loss: see Burnicle v. Cutelli (1982) 2 NSWLR 26, Moran v. McMahon (1985) 3 NSWLR 700. The reduction by such an amount is regarded as applicable to the "ordinary" vicissitudes, but there is nothing sacrosanct about that percentage and the calculation of the loss may be reduced or increased, as it commonly is, having regard to the particular circumstances of the case: see Djapa v. Comalco Aluminium Ltd (NSW Court of Appeal, 3 July 1987, No. CA64 of 1986).

21. In addition to the "ordinary" vicissitudes, regard must be had also to other contingencies of a more particular kind which occur not infrequently in actions for personal injuries. Such contingencies relate to some disabling or defective physical (or even mental) condition in the plaintiff which precedes the injury and which might have continued beyond the date of the plaintiff's injury. Thus it has been said that the damages must bring into account the possibility that events, not of an unusual or unlikely kind, could and might in the ordinary course of life, have evoked the plaintiff's post injury condition had not the defendant's negligence intervened: Wilson v. Peisley (1975) 50 ALJR 207. It is a matter of judgment, not capable of precise medical or arithmetical evaluation, depending upon the nature of the condition, the inevitability or otherwise of its progression, the degree of possibility of external events which might contribute to its progression and so on.

22. The High Court has recently said in relation to damages for loss of earning capacity that the only contingency of this nature which must be disregarded is the possibility of further tortious injury, whether at the hands of the defendant or anyone else, for, in the event of further tortious injury, damages would be assessed by allowing for any precondition resulting in or having the possibility of resulting in impaired earning capacity. "Only by disregarding the possibility of further tortious injury does the law ensure full compensation": Wynn v. NSW Insurance Ministerial Corporation [1995] HCA 53; (1995) 70 ALJR 147 at 154.

23. Watts v. Rake [1960] HCA 58; (1960) 108 CLR 158 is an example of a plaintiff suffering from a disease which would have crippled him within ten years or so of his injury. The injury, however, accelerated the development of the disease. Because of the inevitability of the disability in any event, the defendant was liable only in respect of its acceleration. On the other hand, where the plaintiff's pre-existing condition is latent and the chance of it leading to disablement in the absence of the defendant's negligence is very slight, the Court will disregard such a contingency. Where the chance of a plaintiff being injured or disabled had the defendant's negligence not occurred, is neither small enough to be disregarded, nor large enough to be regarded as inevitable, it is treated as are other contingencies in the assessment of damages: Australian Aluminium Co. Ltd. v. Goulding (1964-5) NSWLR 1718.

24. No authority was cited on the question whether allowance for vicissitudes or contingencies should be made in components of an award of personal injury damages other than for future loss of earning capacity. Logic would suggest that such a course would be appropriate, although in practice it is probably done intuitively. It has, as far as I am aware, never been suggested that 15 percent should be deducted from the component of future pain and suffering because of ordinary vicissitudes. Logic also suggests that regard should be had also to past vicissitudes if there is an appreciable time between the injury and the hearing, as there almost always is. The submission was made, and experience suggests that, in practice, awards for pain and suffering, whether past or future, and awards for loss of earning capacity, both past and future, are commonly discounted for contingencies which arise on the evidence in a particular case or which are applicable to a particular plaintiff. Although there appears to be no direct judicial authority on the subject, there are several authoritative statements which support the practice. In Wilson v. Peisley Barwick CJ said at 209 that the trial judge was "not in error" in taking the plaintiff's pre-existing condition into account in connection with the assessment of total economic loss, past and future and further at p.210 that there was "nothing unreasonable" in doing so when estimating compensation for loss of amenities. Stephen J said at 212-213 that the apparent inadequacy of the award was explained by the trial judge making allowance for the plaintiff's pre-injury condition and for the likelihood of injury precipitating the disease which the plaintiff contracted as a result of the defendant's negligence. These contingent factors, his Honour said, played no less a part in the assessment of heads of damage other than loss of earning capacity.

25. In a case where the plaintiff was predisposed to hysterical reaction, the High Court regarded as a misdirection by the trial judge to omit to give specific instructions to the jury of the need to have in mind the contingencies to which the plaintiff might be peculiarly liable, but the High Court appears to have been concerned only with the jury's use of actuarial figures relating to future loss of earning capacity: General Motors-Holden's Pty Ltd v. Moularas [1964] HCA 39; (1964) 111 CLR 234.

26. In Malec v. J.C. Hutton Pty Limited [1990] HCA 20; (1990) 169 CLR 638 at 645, the majority judgment expressed the view that damages for pain and suffering were to be awarded on the basis that the plaintiff's neurotic condition was the direct result of the defendant's negligence. The majority judgment added:

"Those damages must be reduced, however, to take account of
the chance that factors, unconnected with the defendant's
negligence, might have brought about the onset of a similar
neurotic condition. Likewise, the plaintiff is entitled to
compensation for the care and attention provided by his wife.
Again that award must be reduced to take account of the chance
that factors, unconnected with the defendant's negligence, would
have necessitated similar care and attention."

27. The majority acknowledged at p.643 that the need to adjust the damages to reflect the degree of probability of a relevant hypothetical event arises and 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".

28. In the same case Brennan J (as he then was) and Dawson J in the minority, warned at p.640 that it was undesirable for damages to be assessed on the footing of evaluation expressed as a percentage. Damages need not be assessed by first determining an award on the footing that a hypothetical situation would have occurred and then discounting the award by a selected percentage. Their Honours added that damages founded on a hypothetical situation defy precise calculations.

29. Luntz, in Assessment of Damages for Personal Injuries and Death, 1990 3rd ed., para.2.2.5 endorses the view that reduction for adverse contingencies should apply to all heads of damages but adds that allowance should be made only for "triggers" that would not themselves give rise to compensation. For example, if a hypothetical injury were likely to give rise to recovery of fully compensatory damages, or a right of limited recovery under a statutory compensation scheme, the discount should reflect the nature of the hypothetical loss, whether partial or total: see J.H. King, Causation, Valuation and Chance in Personal Injury Torts Involving Pre-existing Conditions and Future Consequences (1981) 90 Yale Law Journal 1353.

30. With respect I think that Luntz's view is consistent with the authorities and is to be accepted. It is also in accordance with the Master's approach in the present case. However, the question whether a reduction for contingencies is inadequate or excessive in a particular case, is one that should be approached with considerable caution by an appeal court. The decision of the trial judge on the issue of contingencies is essentially an exercise in value judgment or, in nature, "quasi discretionary": see Moran v. McMahon, per Priestley JA at 723. It is an assessment of the impact of hypothetical events which may occur in the future or may have occurred in the past or both. The trial judge must base the prediction on the facts as found. In that sense the prediction is an inference, but it is not an inference of fact. It is an inference from facts. Hence whilst the finding as to the plaintiff's capacity to earn immediately before the injury is a finding of fact, any finding as to what the plaintiff was likely to have earned, if not so injured, either in the past between the date of injury and the hearing, and in the future after the date of hearing, is a prediction and not a finding of fact. Hence, in my view, this Court as a court of appeal is not in a position like that in Warren v. Coombes [1979] HCA 9; (1979) 142 CLR 531 where it was said that the appellate court is as able to draw inferences from primary facts as is the trial judge. Rather the position is like that in Gronow v. Gronow [1979] HCA 63; (1979) 144 CLR 513 where the primary decision being one essentially of discretion, the appellate court will not substitute its own view for that of the trial judge except in the well established categories of demonstrable error of fact or law or manifest unreasonableness or injustice.

31. The Master's award was as follows:

General damages $27,000.00
Interest 3,500.00
Out-of-pocket expenses 14,577.00
Past loss of income 120,000.00
Fox v. Wood 25,352.00
Future loss of income 126,000.00
Loss of superannuation benefit 11,129.00

Total: $327,558.00

32. Both the plaintiff and defendant challenge the Master's discount of the amount assessed for loss of earning capacity and it is convenient to take that as a reference point in relation to the awards under other heads of damage. The Master found as to the past that the aggregate of the earnings of a person working in a position similar to that of the plaintiff between the date of injury and the date of hearing was about $126,000. The Master reduced that figure to $120,000 to reflect the loss of past earning capacity. That involved a discount of less than 5 percent on the total notional loss of actual earnings, a small discount it is true, but one that may be seen reasonably to reflect the actuality that the plaintiff had not in fact received any further injury during the period, but that she still stood a chance of receiving incapacitating injury had she not been injured on 12 August 1988 and had continued at her work, which involved stressful activities like the pushing of trolleys.

33. For future loss of earnings the Master accepted evidence in the form of a letter from financial loss analysts that the present value of the future periodic loss from the date of hearing to the plaintiff's 60th birthday based on actual earnings at the date of injury is just over $252,000. That much is not challenged. The Master proceeded to discount that figure by 40 percent for what he called for convenience the existing pathology in the plaintiff's spine and further, for the ordinary contingencies of life which, taken together, he considered justified an overall reduction of 50 percent. On any view this discount rate was substantial.

34. Counsel for the defendant on the appeal submitted that in order to assess properly the value of past loss of earning capacity, the notional loss of earnings should have been discounted by the same rate as that applied to the arithmetical calculation of the present value of a periodic loss in the future. It was submitted that the Master did not give any reason for differentiating between the discount for contingencies as applied to pre-trial damages for loss of earnings and that applied to post-trial loss of earning capacity. The submission is misconceived, in my view, in that the component of damages representing loss of earning capacity in the past is not necessarily identical with the mere aggregation of what the plaintiff would have earned if continuously employed at the same rate of earnings as at the date of injury, although that sum is commonly taken as a convenient yardstick which may or may not need to be discounted (or according to the circumstances increased): see for example Hall and Another v. Tarlington (1978) 19 ALR 501 at 503. In any event, it is clear from the Master's reasons that he regarded the contingency that without the defendant's negligence the plaintiff might have suffered a disabling condition in her spine after the hearing as substantially more likely than the contingency that she might have so suffered in the six years preceding the hearing. It would be difficult, in my view, to come to any other conclusion, having regard to the events themselves (it not being shown that during those six years the consequences of the defendant's negligence have been overtaken or exacerbated by further injury), the plaintiff's cessation of employment involving stress and risk to her back and the likelihood that the degenerative process in the plaintiff's spine would continue making her more prone to injury as she grew older.

35. The same considerations apply to the discount of 50 percent which the Master applied for the purpose of assessing damages for the loss of her employer's future contributions to superannuation and no error, in my view, is displayed in that regard.

36. It was submitted further on behalf of the defendant that the Master was wrong in not discounting the damages awarded in accordance with Fox v. Wood [1981] HCA 41; (1981) 148 CLR 438. This is a somewhat difficult matter, not the subject of any reasons on the part of the Master nor of any submissions made to him and not the subject of any authority cited to this Court. However, I think that the Master was correct as a matter of law in not reducing the damages under this head by reason of contingencies. The loss represented by those damages is a loss which, having regard to the very nature of the loss, is so unlikely to be affected by contingencies that in practical terms contingencies may be disregarded. The High Court in Fox v. Wood recognized that a plaintiff will suffer loss as a result of the negligence of the defendant if the plaintiff, in respect of the same injury, is required to pay tax on worker's compensation received and, in the event of a successful action against the defendant, is also required to refund the gross amount of worker's compensation received. The loss is represented by the amount of tax paid on the worker's compensation received and is recoverable as a component in an award of damages.

37. The recovery of tax paid on workers' compensation received by the plaintiff as a result of the injury in respect of which the defendant is liable in damages is in accordance with the overall compensatory principle of damages. No possibility of double payment to the plaintiff arises. If there is a contingency against which recovery of the tax paid on workers' compensation is to be measured, it is not the wide contingency that the plaintiff may have been incapacitated in any event, but the possibility that the plaintiff stood to be incapacitated in circumstances which gave rise to receipt of worker's compensation, indeed the possibility that the plaintiff stood to receive workers' compensation in the amount she actually received, or at least in some ascertainable amount. Mr. Lunney, for the plaintiff, submitted that the contingency is too remote to be taken into account. I agree that for practical purposes, this is so. If it were taken into account, the amount of discount would have to be so speculative or, in my view, so small as to be negligible. It follows that there should be no discount for contingencies on that component of the award of damages which represented tax paid by the plaintiff on workers' compensation in respect of the subject injury.

38. In relation to the cross appeal, Mr. Lunney submitted that the discount of 50 percent on the arithmetical calculation of the present value of the plaintiff's pre-injury earnings continuing to age 60 was excessively high. High it certainly is, but a high figure was well justified on the state of the evidence, particularly the evidence of the operating surgeon, Dr Robson, to which reference has already been made. It was well open to the Master and this Court should not interfere with it.

39. In relation to "general damages" the Master said that taking into account a discount of about 40 percent he awarded $27,000 for general damages. This means that without discount the Master would have allowed $45,000 for "general damages". The latter figure appears to be in accord with proper compensatory damages for the element of pain and suffering and the effect of the injury on the plaintiff's enjoyment of life generally.

40. As remarked above, an arithmetical discount on an award for pain and suffering and loss of enjoyment of life appears to be in accordance with principle and although there is, as far as I am aware, no precedent for it and despite its apparent conflict with the practice recommended in the minority judgment of Brennan and Dawson JJ in Malec at p.640, I would not regard the application of an arithmetical discount as an error of law. It may be significant that the discount applied by the Master to the award for pain and suffering and loss of enjoyment of life, 40 percent, was less than that applied to future loss of earning capacity, 50 percent. This suggests that the Master recognized, correctly, that damages for that loss in the future should attract a higher discount than a global loss for past and future.

41. Finally, it was submitted on behalf of the plaintiff that the Master should not have discounted the award for past out-of-pocket expenses at all. On the contrary, it was submitted for the defendant that the discount should have been at a rate of 50 percent (although the notice of appeal contained no such ground). Again the Master did not advert to the reasons why he applied to the out-of-pocket expenses the same rate of 40 percent as he had applied to his award for general damages. There is this distinct difference between those two heads of damages, that the out-of-pocket expenses were all in the past whereas the award for pain and suffering and loss of enjoyment of life covered both past and future. It does not appear that counsel addressed the Master on the matter. Hence, whilst there is no apparent reason why the same discount rate should have been applied to the award for past out-of-pocket expenses as was applied to the overall award for pain and suffering and loss of enjoyment of life, there is, in my view, no reason why the out-of-pocket expenses should not have been discounted at the same rate as the notional past loss of earnings. It is not to the point, in my view, that the expenses concerned represent sums already and actually expended by the plaintiff or on his behalf. The degree of likelihood that liability for such sums would be incurred without the defendant's negligence is not shown to be any different from the degree of likelihood that he would have suffered the loss of earning capacity which he did in fact suffer in the past. There was, for the reasons already given, an expectation that the likelihood of incurring the past out-of-pocket expenses in any event was substantially less than the likelihood of suffering future loss of earning capacity. I would reject both the plaintiff's submission that there be no discount and the defendant's submission that this part of the damages should have been discounted by 50 percent. It should have been discounted at the same rate as the award for past loss of earning capacity, namely 5 percent.

42. The result is that the Master is shown to have been in error only with regard to the discount rate to be applied to the past out-of-pocket expenses of $24,295. Correction of the error would result in an increase of the total damages of $327,558 by no more than $8,503. For this Court to adjust the overall award by such a small proportion, in my view, would be inappropriate, having regard to the overwhelmingly discretionary nature of the various components of damages which the Master had to consider and which successfully withstood attack in this Court. The overall total figure bears no obvious sign of being disproportionate to the plaintiff's injuries and disability. In my opinion, the appeal and cross appeal should be dismissed with costs and the appellant ordered to pay one half of the respondent's costs.

GALLOP J This is an appeal against the whole of a judgment of the Master given on 31 March 1995 in an action for damages for personal injuries sustained by the respondent due to the negligence of the appellant. The total award in favour of the respondent was for $327,558, composed as follows:

General Damages $ 27,000.00
Interest 3,500.00
Out of Pocket Expenses 14,577.00
Past loss of income 120,000.00
Fox v Wood 25,352.00
Future loss of income 126,000.00
Loss of superannuation benefit 11,129.00
TOTAL $327,558.00

2. The respondent has cross-appealed against the Master's assessment of damages in accordance with his findings of fact that the subject injury was one which might have occurred due to other causes.

3. The respondent's cause of action arose out of a motor vehicle accident at about 3.30 pm on 12 August 1988. The respondent was on her way home from work at the Woden Valley Hospital driving her Volkswagon sedan. She came to the round-about at the intersection of Yamba Drive and Melrose Drive and stopped to give way to traffic already on the round-about. As she was stopped she looked in the rear vision mirror and saw some planks flying through the air towards the back of her car. She was wearing a seat belt. She bent forwards toward the steering wheel and felt a bump as the planks hit the back of her car. She said in her evidence in chief that she had her foot on the brake but her car was moved forward, how far she could not say.

4. There was no dispute that the appellant had been driving his 1969 Ford utility in the same direction as the respondent. The utility had a steel rack secured above the roof of the cabin to enable planks to be carried. On the roof rack were about six Oregon planks about 5.5 metres long. They were about eight inches by two inches with metal edging at the ends. The appellant's estimate given in evidence was that each plank weighed 15-20 kilograms. They were secured to the rack by a bungee strap and a piece of rope.

5. The appellant's evidence before the Master was that he stopped behind the respondent's Volkswagon and observed the traffic on the round-about. The body of traffic for which they had stopped passed by. The appellant saw another car coming about 100 metres away. He thought that it was so far away the Volkswagon would have gone. Not realising that the Volkswagon was still there, he drove on again and stopped his utility suddenly without hitting the Volkswagon. His sudden stopping caused the planks to move forward from the rack on top of the utility and two of the planks hit the Volkswagon in the rear. So far as he could see, the Volkswagon did not move when it was struck.

6. At the trial, counsel for the appellant effectively conceded that the appellant had failed to exercise reasonable care in the manner in which the planks were attached to the roof rack. The Master found that they should have been more securely attached and that it was likely that someone would be injured if they came off the utility in the way that they did. The appellant's case, however, was that the force of the impact on the respondent's Volkswagon was not sufficient to cause the injury of which she complained, and that her disabilities were caused by factors other than the accident.

7. After a consideration of all the evidence, the Master posed for himself the following question:

"The question still remains whether the nature of the 1988
incident was such as to have caused the exacerbation which
undoubtedly occurred shortly thereafter, or whether the natural
progression of the disease would have brought about the same
result, even had there been no accident."

8. His ultimate finding of causation against the appellant was expressed in the following terms:

"I am persuaded on the balance of probabilities that the
condition of the plaintiff's (respondent's) lumbar spine was
such that this seemingly minor accident did cause an
exacerbation of her condition."

9. The thrust of the appeal is that the Master erred in finding a causal nexus between the appellant's negligence and the respondent's injuries. There was a final ground of appeal on the issue of damages to the effect that the Master erred in failing to discount: (a) the damages referable to past economic loss; and (b) the Fox v Wood component, by the same discount rate as he had applied to other heads of damage.

Appeal against finding on causation
10. It was submitted on behalf of the appellant that a causal connection between the respondent's injuries alleged to have been sustained in the collision on 12 August 1988 and the appellant's negligence could only be established by evidence which proved:

(a) that the impact between the motor vehicles caused the
respondent to be moved in a fashion which caused injury;
(b) that the respondent's movement was capable of causing the
injury said to have been inflicted; and
(c) that it was more probable than not that the injuries were
inflicted in that way.

11. It was submitted that in the light of the Master's findings of fact he failed to apply proper principles relating to the respondent's onus. The findings of fact to which particular attention was drawn were that it was apparently a relatively minor incident which was inherently unlikely to have caused the type of injury of which the respondent complained, and that the Volkswagon was not forced forward at all by the impact. Having made those findings, the Master said that he was not persuaded that it was impossible that the collision could have caused the type of injury of which the respondent complained, and that the respondent did not have to demonstrate the precise mechanism by which the injury was caused.

12. Counsel for the appellant contended that the respondent herself was the only possible source of evidence that the impact between the motor vehicles caused the respondent to be moved in a fashion which caused injury. Her own evidence in chief was that after she had stopped she was waiting for traffic to come in "from City to Plaza" and she was standing a few seconds, looked in the rear vision mirror and saw planks flying towards her. She bent down on the steering wheel and was pushed against her seat belt by the impact of the planks.

13. Because of language difficulty, her evidence in cross-examination is difficult to understand, but what she said was:

"I just want to ask you about this Volkswagon car. You
didn't strike your stomach or any part of your body on the
steering wheel in this accident, did you?---No.

You didn't actually reach as far forward as the steering wheel,
did you?---It's pushed me up in - - -

You just bent forward didn't you?---After pushed me against my
seat belt.

The seat belt stopped you going any further, did it?---I can't
remember that second what.

But your movement forward was brought about by you leaning
forward, was it not?---That's how is impact pushed me I was
pushed I was bent and that pushed me against the even my seat
belt.

But when you saw the planks coming you leant forward, didn't
you?---Yes, I just put my head down because I was thinking chop
my head off that's only second what I was thinking.

What I am suggesting to you is that you moved yourself in the
car you leant forward?---I never moved forward I just moved my
head.

Just moved your head forward?---Yes.

So you instinctively ducked your head, is that right?---I just
was careful to going to cut my head off.

But you just ducked your head, didn't you?---That's was second,
you know.

I know it happened very quickly but you saw in the rear vision
mirror the planks coming?---Was flying like rocket.

Yes, and you leant forward, is that right?---Yes, just pushed my
head down.

But you weren't forced against the steering wheel were you?---
That's impact after pushed me and pushed me against my seat
belt.

But you didn't touch the steering wheel, did you? You had your
hands on the steering wheel and you leant forward, didn't you?
---I cannot remember

Is this a correct description of what happened to you? You saw
the planks coming towards you and you crouched forward to avoid
them coming through the rear window, that's what happened isn't
it?- - -

Could I repeat that for you?---Yes, please.

You saw the wood coming towards you - - -?---Yes.

- - - and you crouched forward to avoid it because you thought
it was coming through the rear window?---Yes.

That's what happened?---Yes.

You did not hit your head?---No, if wood through that's kill me.

You didn't get any seat belt bruising?---No."

14. In his judgment, the Master set out that passage of evidence and said:

"Those answers must be understood in the light of her lack
of facility in the English language, and also of her desire to
put her case in what she perceived to be the best light, even if
that meant an occasional deliberate inaccuracy. I think that
the probabilities are that she did not just duck her head, but
did in fact move the upper part of the body towards the steering
wheel, though she did not collide with it. I do not think that
the car was forced forward at all on impact."

15. The appellant's submission was that the Master's finding as to the cause of injury did not correspond with the respondent's own evidence in chief and in cross-examination.

16. I do not agree with that submission. There are difficulties in comprehending precisely what the plaintiff did say. The Master's finding really amounts to a conclusion that she saw the load coming and threw herself forward to protect herself. That is the way Dr Corry recorded the history of the incident in his report and the fact that the Master adopted that description as being fairly close to what happened is not inconsistent with the respondent's own evidence. Dr Chase recorded the history in terms to the effect that she had seen the load of wood coming from behind towards her and "crouched forward to avoid it coming through the window (it did not)".

17. I am not persuaded that the Master failed to decide the matter on the respondent's evidence rather than on the history given by the respondent to Dr Corry and Dr Chase. That disposes of grounds 1-4 and 7-8 in the Notice of Appeal.

18. In grounds 5 and 6 the appellant contends that the Master erred in preferring the opinion evidence of Drs Corry and Chase to the other medical practitioners when the opinions of Drs Corry and Chase were based on factual foundations which were not proved, and erred in rejecting the evidence of Drs Ferguson and Robson that the injuries were unlikely to have been sustained in the manner described by the respondent in her sworn evidence.

19. It is apparent from the judgment that the Master regarded the accident as a relatively minor one. He went on to observe that it is notorious that injuries in motor vehicle accidents are not proportionate to the violence of the impact, that relatively minor collisions have many times caused injury with very serious consequences, especially injury to the cervical spine, and that people have walked away from mangled wrecks with only a few abrasions. He approached the respondent's case, therefore, on the basis that the collision was of a type that was inherently unlikely to have caused the injuries of which the respondent complained.

20. The Master had regard to the respondent's evidence that after she gave the usual information to the police at the scene, she went home. She did not seek any medical attention that day "because I was thinking I am alright". At home she felt shocked and did not sleep well, and the next morning claimed to have pain in her back. Nevertheless, she went to work. She said that after an hour she was in worse pain and the supervisor sent her home. For the next four days she was rostered off. She did not seek medical attention during those four days. She returned to work. She claimed to be in worse pain over that period. She still did not seek medical attention. Other evidence confirmed that her supervisor reported that she was suffering sufficient discomfort to be sent home from work on 13 and 22 August.

21. On 23 August 1988 she consulted Dr Cleary, who at that time had taken over Dr Ferguson's practice. He made a diagnosis which was set out in the Master's judgment and prescribed certain treatment, including a CT scan which was performed on 28 November 1988. This showed some disc bulging which was probably compressing the L5/S1 nerve root. He referred her to Dr Robson, who saw her on 9 January 1989. It was clear to him that an operation would be needed and he arranged a myelogram. That was performed on 22 March 1989. It confirmed his diagnosis. On 10 May 1990 he performed a fusion operation of L4 to S1. His evidence was that he was surprised at the extent of the pathology at L4/5.

22. Dr Robson gave evidence and was cross-examined. In his evidence in chief he said that he felt that the motor car accident contributed a change, superimposed on what was almost certainly a degenerative problem beforehand. The Master thought it was significant that Dr Robson was so sure about a pre-existing degenerative problem, since he had not been given any history of any prior low back problems, and went on to say that when the history of the incidents in 1981, 1984 and 1985 (which had been proved by other evidence) were put to Dr Robson he was not inclined to change his view. Nor did he concede that the type of accident involved could not have caused the extensive extrusion of disc material that he had observed at the operation.

23. Dr Ferguson also gave evidence and was cross-examined. His evidence is extensively set out in the Master's judgment and includes the expression of opinion by Dr Ferguson that the accident was the cause of the respondent's disc injury.

24. Having considered all that evidence, the Master found on the probabilities that before the accident in August 1988 the respondent had a degenerative condition of the lumbar spine. That condition had been symptomatic certainly on two occasions in January 1984 and May 1985, neither of which had involved significant trauma. He further found that there had also probably been an incident in 1981 or 1982 when the staff clinic doctor allowed her thee days off work because of pain resulting from twisting as she pulled a trolley at work. He said the symptoms of pain down the right leg in May 1985 indicated that there was already some degree of nerve root involvement. Accordingly, in 1988 her back was obviously susceptible to further trauma.

25. Notwithstanding those pre-accident conditions, the Master was persuaded on the balance of probabilities that the condition of the respondent's lumbar spine was such that "this seemingly minor accident did cause an exacerbation of her condition as described by Dr Corry and Dr Chase".

26. There were medical expressions of opinion given in evidence to support that conclusion. The appellant called no medical evidence to the contrary. On his findings of fact, the Master was correct in reaching a conclusion in the respondent's favour on the issue of causation by reference to the reasoning of Barwick CJ in Wilson v Peisley (1975) 7 ALR 571 at 574:

"the trauma of the accident for which the defendant was
responsible no doubt made a present reality out of that which
was ever a real possibility."

Appeal and cross-appeal against award of damages
27. The Master concluded that, because of the nature of the finding that a seemingly minor accident caused an exacerbation of a pre-existing condition, he would have to apply a substantial discount for the chance that the pre-existing condition could have been triggered by some other event to produce similar symptoms. He considered the types of incident that might have triggered the condition that followed the relatively minor accident and concluded that the most likely trigger, other than the subject accident, would have been a work accident and that if she did suffer anything like her present injury at work, she would have received compensation. Further, he concluded that if the triggering incident resulted from negligence of her employer, the compensation would have included damages for pain and suffering. If it did not, which he found to be the more likely, she would have received compensation only for her economic loss.

28. He found that an injury at work attracting only Comcare benefits was a real possibility that had to be taken into account by reducing the discount to be applied to damages for loss of earning capacity, both past and future. He noted that the time-frame within which an injury at work or any injury reducing her income earning capacity was limited to her working life, about 15 years. The time within which she might have suffered the same sort of pain and suffering extended over her whole life, about 35 years. The Master did not find sufficient reason to differentiate between general damages and financial loss.

29. Taking into account the discounting factors which he had identified, he applied a discount rate of about 40% and awarded $27,000 for general damages. He also discounted the out of pocket expenses, agreed at $24,295, to $14,577. He discounted the past economic loss from $126,000 in round figures to $120,000. No discount was applied to the Fox v Wood component, agreed at $25,352.

30. In regard to future economic loss, he discounted the actuary's calculation of $252,052 to $126,000, taking into account the discounting factor arising from the pre-existing pathology in the respondent's lumbar spine and the ordinary contingencies of life, noting that those factors overlapped to some extent. He also discounted the loss of the benefit to be derived from future employer-funded superannuation, calculated by the actuary at $22,257, to the same extent as the discount for future income earning capacity, and allowed $11,129 for loss of the superannuation benefit.

31. The submission on behalf of the appellant was that the Master's failure to apply the same discount rate to the award of past economic loss and the Fox v Wood component as he applied to other components of damages constituted an error of law. The submission was that there is no basis expressed in the Master's reasons for judgment to differentiate between the pre-trial damages for loss of earnings and the post-trial loss of earning capacity. The likelihood of the respondent having been injured in any event and sustaining a like incapacity would not change over time. Further, so the submission went, there is no basis on which the Master could find that the hypothetical disabling event (in the absence of the defendant's negligence) would not have occurred in the six years prior to the hearing, or that the probability of it occurring was different before the trial than after it. Accordingly, it was submitted, the components for past economic loss and Fox v Wood should be reduced by 40%.

32. By her cross-appeal, the respondent seeks a lesser discount rate than 40% in respect of general damages, a discount rate of not more than that which was found appropriate for general damages to be applied to future economic loss and superannuation loss, and no discount be applied to the out of pocket expenses.

33. It is clear from the Master's reasons that he decided that there must be a quite substantial discount for the chance that the pre-existing condition could have been triggered by some other event to produce similar symptoms. The difficulty which arises is that he appears to have applied a discount to some pre-trial components of damages which are different to some post-trial components of damages and, in the case of the Fox v Wood component, he applied no discount at all. However, the premise upon which damages for the various components were assessed is that the respondent was entitled to damages, but that those damages had to be reduced to take account of the chance that factors unconnected with the appellant's negligence might have brought about the onset of the disabling symptoms.

34. In Malec v JC Hutton Pty Limited [1990] HCA 20; (1990) 169 CLR 638, the majority of the High Court ( Deane, Gaudron and McHugh JJ) said in relation to assessing damages for future or potential events (at pp.642-543):

"When liability has been established and a common law court
has to assess damages, its approach to events that allegedly
would have occurred, but cannot now occur, or that allegedly
might occur, is different from its approach to events which
allegedly have occurred. A common law court determines on the
balance of probabilities whether an event has occurred. If the
probability of the event having occurred is greater than it not
having occurred, the occurrence of the event is treated as
certain; if the probability of it having occurred is less than
it not having occurred, it is treated as not having occurred.
Hence, in respect of events which have or have not occurred,
damages are assessed on an all or nothing approach. But in the
case of an event which it is alleged would or would not have
occurred, or might or might not yet occur, the approach of the
court is different. The future may be predicted and the
hypothetical may be conjectured. But questions as to the future
or hypothetical effect of physical injury or degeneration are
not commonly susceptible of scientific demonstration or proof.
If the law is to take account of future or hypothetical events
in assessing damages, it can only do so in terms of the degree
of probability of those events occurring. The probability may
be very high - 99.9 per cent - or very low - 0.1 per cent. But
unless the chance is so low as to be regarded as speculative -
say less than 1 per cent - or so high as to be practically
certain - say over 99 per cent - the court will take that chance
into account in assessing the damages. Where proof is
necessarily unattainable, it would be unfair to treat as certain
a prediction which has a 51 per cent probability of occurring,
but to ignore altogether a prediction which has a 49 per cent
probability of occurring. Thus, a 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. See Mallett v. McMonagle
(1970) AC 166, at p 174; Davies v. Taylor (1974) AC 207, at
pp 212, 219; McIntosh v. Williams (1979) 2 NSWLR 543, at
pp 550-551. 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."

35. On the hearing of the appeal there was no argument on behalf of the respondent that some discount in respect of general damages was appropriate, but contrary to the argument on behalf of the appellant, the respondent contended that the rate of 40% was excessive. The Master likewise applied a discount rate of about 40% to out of pocket expenses, and the respondent contended that that rate was excessive.

36. Having concluded that on the evidence there was no sufficient reason to differentiate between general damages and financial loss, the Master has not distinguished those factors which sound in general damages and which happened in the past from the same factors which are yet to happen. He took account of pain and suffering past and future and, it may be assumed, loss of enjoyment of life past and future. The discount was applied to all aspects of general damages past and future. Applying the same discount of 40% to the out of pocket expenses, which are all in the past, would be consistent with that approach. But the question raised by the appeal and cross-appeal is whether the out of pocket expenses should have been discounted at all.

37. The Master did not apply a similar discount in the order of 40% to past economic loss. The rounded off figure of $126,000 was only reduced to $120,000. The Master did not state why he reduced the $126,000 figure to $120,000. Nor did he state why he did not apply the 40% discount rate to past economic loss and the Fox v Wood component.

38. It is usual for past economic loss to be discounted to some extent to reflect the chance that income loss to the date of hearing may have been due to causes other than disabilities resulting from the subject accident. The standard discount is 15%, and it is said that this accounts for the vicissitudes of life. The discount allows for the possibility that other causes may have resulted in the loss, or some loss, to the date of trial.

39. In my opinion, the Master was correct in not applying any greater discount than he did to the component of past economic loss. The fact that the respondent did not work for some time before the trial is a matter of history. The Master was satisfied to the requisite degree on the evidence that the respondent did not work due to the accident. He found that as an historical fact. In my opinion, he was correct not to apply the 40% discount rate to past economic loss. But some adjustment was not unreasonable.

40. Similarly, the Fox v Wood component, which is the amount of tax that was paid by the respondent on her workers' compensation payments between accident and trial, is likewise an historical fact, and the Master was correct in not applying any discount to that component upon some hypothesis that even though the accident caused disabilities which resulted in the respondent not being able to work between accident and trial, there remained some chance that her pre-existing back condition may have brought about that result without the subject accident.

41. That disposes of the appeal against the failure to apply the same discount rate as was applied to general damages to the award for past economic loss and the Fox v Wood component.

42. I turn to the cross-appeal whereby the respondent seeks a lesser discount rate than 40% in respect of general damages, a discount rate of not more than that which was found appropriate to be applied to future economic loss and the superannuation loss, and no discount to be applied to the out of pocket expenses.

43. Dealing first with the out of pocket expenses, they were incurred and they arose directly from the appellant's wrongful act. There was no contingency or uncertainty about either their amount or the causal relationship with the appellant's wrongful act. Therefore, there was no basis for discounting the out of pocket expenses from the agreed figure of $24,295 to $14,577. The difference is $9,718 and I would increase the award of damages by that amount.

44. That leaves only the amount of the discount on future economic loss and future superannuation entitlement. It was not contended on behalf of the respondent that some discount for those components was not appropriate. The task which the Master had to perform was to evaluate the chance of some other event triggering off the respondent's back condition and incapacitating her for work.

45. Lord Diplock identified the task in Mallett v McMonagle (1970) AC 166 at p.176:

"...in assessing damages which depend upon its view as to what
will happen in the future or would have happened in the future
if something had not happened in the past, the court must make
an estimate as to what are the chances that a particular thing
will or would have happened and reflect those chances, whether
they are more or less than even, in the amount of damages which
it awards."

That passage was cited by Brennan and Dawson JJ in Malec v JC Hutton Pty Limited, supra. at p.640. Their Honours went on to say that they thought it undesirable for damages to be assessed on the footing of an evaluation expressed as a percentage. They said:

"Damages need not be assessed by first determining an award on
the footing that the hypothetical situation would have occurred
and then discounting the award by a selected percentage.
Damages founded on hypothetical evaluations defy precise
calculation."

46. The majority of the Court did not criticise the application of a percentage. Which ever way the damages are assessed, it is clearly stated that 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.

47. The submission on behalf of the respondent that the adoption of 40% is unreasonably high is based upon the Master's finding that the most likely cause of low back pain in the future, other than the subject accident, would be a work related injury linked to some of the heavier duties involved in the respondent's work and that any work incident producing an aggravation of the respondent's condition could be regarded as compensible regardless of and independent of any consideration of fault.

48. There is some force in that argument, but I am not persuaded that the Master was wrong to adopt a discount rate of 40% in all the circumstances of the case.

49. The orders I propose are that:

(1) the appeal be dismissed;
(2) the cross-appeal be allowed;
(3) the award of damages be increased by $9,718 so that the
total award will be $337,276; and
(4) the appellant pay the costs of the appeal and cross-appeal.

FOSTER J I have had the advantage of reading in draft form the judgments of Miles CJ and Gallop J in this appeal. I agree with their Honours' reasons for the dismissing of the appeal on the question of liability.

2. As to damages, I note their Honours' agreement as to all heads of damages canvassed in the appeal except out-of-pocket expenses. I agree with their Honours' decision in relation to those heads of damage.

3. In relation to out of pocket expenses, I am of the view that the Master erred in applying a discount figure of 40% to the agreed figure of $24,295.00. I agree with their Honours that this discount rate was, in the circumstances, demonstrably too high. Whilst it is certainly arguable that a discount rate equivalent to that applied by the Master to past loss of earnings, a rate of approximately 5%, could realistically have been applied to the agreed figure for out-of-pocket expenses, I consider, that in all the circumstances, this Court should approach the matter by eliminating the 40% discount rate applied by the Master from the calculation of these damages and refraining from substituting any other discount rate. The result is that this head of damages should not be subjected to any discount. The award should, in my opinion, be increased by the amount which the Master had deducted, namely $9,718.00.

4. In the result I agree with the orders proposed by Gallop J.