Alan Stott v David Michael Paulin [1996] ACTSC 30 (19 April 1996)

SUPREME COURT OF THE ACT

ALAN STOTT v. DAVID MICHAEL PAULIN
No. SC 540 OF 1992
Number of pages - 9
Damages

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MASTER T CONNOLLY

CATCHWORDS

Damages - Assessment - Personal Injury - Motor Vehicle Accident - Plaintiff Run Over by Motor Vehicle - Multiple Injuries to Both Lower Limbs - Post Traumatic Stress Disorder - Member of Partnership - Partnership Losses - Loss of Earning Capacity - Financial Loss of Plaintiff - Vicissitudes of Life - No Issue of Principle.

Luntz, Assessment of Damages for Personal Injury and Death, 1990 3rd ed., at 250-253
Taroporewalla v Berkery (1983) 3 NSWLR 28
Zachopoulos v State Government Insurance Commission (1986) Aust. Torts Reports 80.023

Contributory Negligence - Plaintiff's Stationary Trailer Protruding onto Carriageway - Failure to Take Due Care - Failure to Keep Proper Lookout - No Issue of Principle.

Law Reform (Miscellaneous Provisions) Act 1955 Part V
Purcell v Watson (1979) 26 ALR at 240
March v Stramare [1991] HCA 12; (1991) 171 CLR 506

HEARING

CANBERRA, 9 and 10 April 1996
19:4:1996

Counsel for the Plaintiff: Mr R Crowe

Instructing Solicitors: Pamela Coward and Associates

Counsel for the Defendant: Mr F G Parker

Instructing Solicitors: Abbott Tout Harper and Blain

ORDER

THE COURT ORDERS THAT:
1. Judgment be entered for the plaintiff in the sum of $361,905.80.

2. The question of costs be reserved with liberty granted to apply in respect of costs on 2 days' notice.

DECISION

MASTER T CONNOLLY This is an action for damages arising from a motor vehicle accident on 4 May 1992. The plaintiff, Alan Stott, was run over by the defendant David Paulin while inspecting his trailer when his vehicle was parked in the breakdown lane of Adelaide Avenue opposite the Prime Minister's Lodge. Mr Stott suffered severe injuries to his legs as a result of this accident, and while he has been able to return to the workforce into full time employment, he has not been able to resume the various active small businesses that he was running at the time of the accident in partnership with his wife. Liability for the accident was admitted by the defendant. The issues in the trial before me were the extent of the economic loss suffered by the plaintiff, and the presence or extent of any contributory negligence on behalf of the plaintiff.

2. The plaintiff was born in 1949, and educated to the level of the New South Wales Intermediate Certificate. In 1966 he commenced work with the New South Wales Railways as a storeman, but in 1968 he moved with his family to Canberra. He worked for a while as a service station attendant, and then again found employment as a storeman, first with the C.S.I.R.O. and then, in 1971, with Triffetts, a Canberra furniture store. He enjoyed his work with this firm, and was obviously a very hard and conscientious worker. He obtained various promotions and ended up as the Warehouse and Stores Manager.

3. In about 1980 the plaintiff decided to chance his arm as an independent businessman, and commenced his own cleaning business, which grew with some success over the next three years. In this and in later businesses he worked in partnership with his wife, but there is an issue between the parties as to the extent to which each spouse contributed to the various ventures. In 1984 the plaintiff and his wife decided to move from Canberra, and sought a new life in the Clare Valley of South Australia. Despite the obviously pleasant nature of life in such a location, this move only lasted for twelve months. While the plaintiff, who is obviously a very hard worker, was able to obtain some employment, he realised that opportunities were limited, both for himself, and for his children, who were approaching school leaving age. As a result the family moved back to Canberra in 1985.

4. The plaintiff again obtained employment at Triffetts, this time as Warehouse Supervisor while he settled back into Canberra, but he said that it was his intention to again commence a small business. In 1989 he realised this ambition, again in partnership with his wife.

5. Mr and Mrs Stott operated a series of businesses, and it is clear that Mr Stott was a very hard worker who, on the evidence of a family friend, "lived for his work". They conducted cleaning contracts for the ACT Housing Trust. This involved complete cleans of premises upon a change of tenant, involving both inside work and yard work. Mrs Stott would do the lighter inside duties, and duties such as cleaning outside windows, while Mr Stott would do the heavy work, which could involve moving rubbish up to and including car wrecks from the yard and demolition of unapproved structures such as sheds.

6. The Stotts also conducted contracts to do the final clean on houses that had had asbestos removed. They contracted with one of the principal asbestos removal companies, Gardner Perrott, to do the final dust and vacuum type clean of a house when the asbestos had been removed and the asbestos contractors had moved out. They also moved into office cleaning, with a range of clients including Gardner Perrott.

7. As a sideline to the yard cleaning business the Stotts moved into "Trashpak" supply, and gradually built up this business by purchasing additional runs from established suppliers, and also building up their own business through reputation and referral. On the evidence of the plaintiff, which I accept, the position prior to the accident was that he was working solidly during the week on the various cleaning contracts, and conducting the trashpak business on weekends, often with some hired help, as this involved quite heavy lifting. As well as the actual physical work, which typically involved very long days, Mr Stott was responsible for preparing the tender documentation to bid for new cleaning contracts and renewals, and for the general planning and oversight of the ventures.

8. On the morning of the accident Mr Stott was driving along Adelaide Avenue in the direction of Parliament House from Woden. He was driving his 1972 Toyota truck and large four wheel trailer, but was not carrying a load, as he was on his way to inspect a job site on the north side of Canberra. As he proceeded along near the Prime Minister's Lodge, at which point Adelaide Avenue comprises a bus only lane, three lanes of traffic and a breakdown lane on the driver's left hand side, a passing truck signalled to him that something was wrong with his vehicle.

9. Mr Stotts evidence is that he paid heed to this warning, and proceeded to stop his truck and pull up as close to the left hand gutter as he could. It is clear that at this point his truck was fully within the breakdown lane, but that his trailer, which is wider than the truck, was protruding into the first lane of the carriageway. On Mr Stott's evidence, which I accept, he was unaware of this, and genuinely believed that he was off the roadway, although he did not carefully check this position at the time. He says that at this time he observed that traffic conditions were very light, and that he felt safe in pulling up in the breakdown lane. He says that, had this incident occurred at peak hour or during heavy traffic he probably would have driven his truck slightly up and over the kerb so as to be on the grass verge and entirely away from the roadway.

10. Mr Stott alighted from his truck and immediately noticed smoke coming from the general area of his trailer wheels. His evidence is that as traffic conditions were very light he felt safe in kneeling on the roadway next to the trailer wheels to look under to find the cause of the smoke, which he felt could be merely a stick or the like in contact with the road. As he was in this position he was struck by the defendant.

11. Sergeant Phillip Noble of the Australian Federal Police was called by the defendant to give evidence as to the precise location of Mr Stott's trailer at the time of the accident. His opinion was that the trailer was protruding about 1 metre into the first lane of traffic, and I accept this. On cross examination he stated that at the time of the accident weather and visibility were good, and that a vehicle proceeding along Adelaide Avenue would have had about 500 metres of clear vision of the plaintiff's stationary vehicles and the plaintiff on the roadway.

12. This is consistent with the evidence of Mrs Yvonne Radford, called for the plaintiff, who gave evidence that she had just this level of vision, and accordingly moved from the left hand lane to the centre lane to avoid the plaintiff. She gave evidence that following this lane change another vehicle overtook her from the left hand lane and proceeded at speed until after it collided with the plaintiff. Mrs Radford said that this vehicle did not slow down or seek in any way to avoid the plaintiff. While there was some conflict between Mrs Radford's testimony at the hearing, where she estimated her speed at 90 kph, and her statement to police at the time when she estimated her speed at "80 kph or a bit over", I am satisfied that at the time she was driving between 80 and 90 kph, and the vehicle driven by the defendant was travelling at a higher speed, between 90 and 100 kph.

13. There is no doubt that this vehicle drove straight over the back of both of Mr Stott's legs, causing considerable injury. He was taken by ambulance to Woden Valley Hospital, where he remained for two weeks. Both his legs were injured. Dr Gillespie, the orthopaedic surgeon to whose care Mr Stott was admitted described the injuries thus:

"He sustained a number of orthopaedic injuries to both lower
limbs. He sustained a very communited Grade I compound fracture of
the left medial malleoulus and segmental fracture of the left
lateral malleoulus/fibula. There was also a fracture of the shaft
of third metatarsal in the left foot. In the right foot and ankle,
he sustained fractures of the necks of metatarsal II and III."

14. These fractures were not suitable for internal fixation, and both his legs were encased in plaster. He was discharged from hospital after two weeks, with both feet still in plaster, to the care of his wife at home. At this point he had very limited mobility with crutches, and a wheelchair was also provided. His right leg recovered well, and the plaster was able to be removed after some six weeks, but there were ongoing problems with his left leg and ankle, with the plaster remaining on for some 14 weeks. Evidence was given by Mrs Stott as to the personal care she was required to provide during this time. While she was not able to place a precise time on the extent of her additional care, I have no difficulty in finding a modest claim for Griffiths v Kerkemeyer damages in the sum of $2,000 made out in this case.

15. This is a case where there is really no conflict about medical evidence. It is uncontradicted that the ongoing disability which he suffers as a result of these injuries makes him unfit to return to his previous work as a contract cleaner and trashpak operator. This is apparent from medical reports tendered by both the plaintiff and the defendant. This disability relates both to his physical condition, where his ongoing problems with his left ankle make him, on the opinions of both Dr Gillespie for the plaintiff and Dr Adler for the defendant, unfit for the heavy type of work that he previously undertook, and to his psychological condition, which was described in a report from Dr Glaser for the defendant as:

"a depressive disorder of mild to moderate severity."

There is no doubt that for a man such as the plaintiff, whose life has revolved around his work, the inability to continue to build up his hitherto successful small business would be a major blow.

16. It is very much to the plaintiff's credit that, as soon as he was physically able to, he sought to return to employment. While he had originally sustained himself with hopes and plans to resume his business activities, he gave evidence, which I accept, that by August of 1993 he had come to accept that he would never be able to return to his pre accident activities, and accordingly he picked up the Canberra Times and looked for a job. He was in fact successful in his first application, and commenced work with Southern Plumbing Supplies as a storeman in November of 1993. This work is, he feels, at the limit of his physical capabilities, but he perseveres with it, because he is by nature a hard and conscientious worker.

17. He has been on the lookout for something that would be a little less physically demanding, but to date has not obtained anything. Mr Stott does maintain some business interests, and with his wife continues to clean a couple of offices, on Wednesday evenings and the weekends, and also cleans a block of toilets. He sold his trashpak business in January 1994.

18. In February 1994 the plaintiff underwent an arthroscopy on his left ankle on Dr Gillespie's advice, but it is now clear that this has had minimal, if any effect on improving his mobility.

19. In a matter such as this, where contributory negligence is pleaded, the procedure to be followed is laid down in the apportionment legislation. That is, that the court shall find and record the total damages which would have been recoverable if the claimant had not been at fault, and then make any reduction if contributory negligence is established (Law Reform (Miscellaneous Provisions) Act 1955 Part V). Accordingly, I will consider and assess damages before dealing with the issue of contributory negligence.

20. On the question of general damages, the plaintiff is entitled to be compensated for pain and suffering on the basis of the very considerable trauma of the accident, the period of hospitalisation and the long immobilisation that followed. In assessing general damages I also take into consideration the plaintiff's history as a hard worker, and the extent to which his life revolved around his work. I take account of the evidence that during the period up to late 1993, each visit to the doctor was preceded by a hope that he would be able to return to his previous vigorous business activities, a hope that was in each case dashed. I award $90,000 for general damages, with $70,000 being attributable to past loss, resulting in interest of $5,530.96.

21. Out of pocket expenses were agreed by Counsel at $21,982, which I award. I note that pursuant to the policy of Woden Valley Hospital, interest continues to run on the amount owing to the hospital at $3.92 per day and I therefore adjust this amount to $22,017.28 to take into account interest to the date of this decision.

22. A claim for Griffiths v Kerkemeyer damages in the sum of $2,000 is in my opinion made out, and I so award.

23. A claim for future medicals is made for $5,000, being at the lower end of the cost of a projected operation which may be required on Mr Stott's ankle in the future. While Dr Andrews for the defendant indicates that he believes no further treatment is necessary, doctors for the plaintiff, to varying degrees, feel that a future operation may be required. Dr Morriss has indicated that post traumatic osteoarthritis in the left ankle may reach a stage where an ankle fusion to relieve pain will be required. In his report of 26 March 1996 he says:

"I would envisage that he may come to an ankle arthodesis within
the next ten to fifteen years."

Dr Gillespie is less certain that post traumatic osteoarthritis is inevitable, and describes it as a possibility, but by no means a certainty. Dr Gillespie has estimated the cost of a procedure, if needed, would range between $5,000 to $10,000. Taking into account the uncertainties surrounding both the cost of such an operation and its need, I award $3,000 under this head.

24. There is a substantial dispute between the parties as to the basis of calculation for economic loss, both in regard to past loss and loss of earning capacity. The plaintiff's claim is based on an assumption that, although for taxation purposes the earnings of the business partnerships between the plaintiff and his wife were divided on a basis of equality, he in fact was by far the substantial contributor, and that any calculation of his real loss (which is what must be compensated) must be calculated by adjusting the partnership earnings to reflect a contribution from the plaintiff of 80% of the joint effort. Counsel for the defendant conceded that such an approach is open at law, but urged that it was not made out on the facts of this case.

25. The approach to be adopted in assessing economic loss in partnership cases is discussed extensively in Luntz, Assessment of Damages for Personal Injury and Death, 1990 3rd ed., at 250-253. The authorities there collected show that there have been a variety of approaches adopted, but it is certainly open to a court to go beyond the formula for distribution of profits under the partnership agreement.

26. Two cases cited by the learned author are of particular assistance. In Taroporewalla v Berkery (1983) 3 NSWLR 28 the Court of Appeal (Hutley, Glass and Mahoney JJA) upheld a decision of a Master that it was proper to assess economic loss in a partnership where profits were split 50:50 on the basis that the plaintiff in fact contributed 80% of the effort, Hutley JA said (at 29):

"Where a working member of a partnership has to be compensated
for loss of earning capacity, it his loss of capacity which must
be evaluated. The partnership income, or a part of it, may
provide a guide...",

but in this case the assessment based on 80% was upheld.

27. In Zachopoulos v State Government Insurance Commission (1986) Aust. Torts Reports 80.023 the South Australian Full Court (Jacobs, Mohr and Bollen JJ) the Court accepted that, while the law on this area was unsettled, it could be appropriate to look beyond the partnership agreement. As Jacobs J expressed it:

"At the end of the day, each case will depend upon its own facts,
and the relevant 'principles', if they can be so designated, are
not in doubt. The plaintiff must receive, by way of damages,
compensation for his loss of earning capacity, past and future.
Whether, in the case of a plaintiff who was (or still is) in
partnership with others, his pre accident (or present) earning
capacity is accurately reflected by, or is more or less than his
share of partnership profits will depend upon the nature of the
partnership business, the relationship of the partners inter se
(whether pursuant to the partnership business or otherwise) and
the manner in which the partnership 'profits' in which the
plaintiff shares have been arrived at"

(at 67,723). As Bollen J notes:

"If a man has an inactive partner who does no more than lend his
name for tax purposes to the partnership then the active partner
may well be entitled to the whole cost of replacement labour
engaged during his incapacity"

(at 67,734).

28. In the present case, looking at the evidence, it is clear that Mr and Mrs Stott did not contribute equally to the enterprises. Certainly Mrs Stott was more than the "inactive partner" referred to by Bollen J, but it is clear from the evidence that it was the plaintiff who not only did the bulk of the heavy work, his wife having a long-standing back injury, but was responsible for planning and organising the whole venture. It was clear from Mrs Stott's evidence, both from what she said and from her demeanour, that she is not capable of putting the same effort and organisational skill into a venture as her husband.

29. I accept as reasonable, the plaintiff's claim that he contributed 80% of the partnership effort, and that his earning capacity should be calculated on this basis. Any figure here is necessarily a matter of judgment, but it is clear that without Mr Stott, there would have been no enterprises, and equally, that he could well have conducted these businesses on his own or with a partner other than his wife. He was overwhelmingly the income generator in the partnership, and on the whole of the evidence I conclude this is the appropriate basis for compensating the plaintiff for his true loss of earning capacity.

30. Looking at the after tax income of the partnership for the 1991-92 year (and not adjusting, as the plaintiff's Counsel concedes for the "lost" two months of that financial year following the accident) reveals an after tax income of $55,126, which, when attributed 80% to the plaintiff results in $44,100 or $848 per week. This would amount to a loss to the date of hearing of $172,992. From this must be deducted the amounts actually earned by the plaintiff since the accident, both from the partnership and his wage employment. The figures provided, which I accept, show earnings to date of $85,570 after tax, leaving an overall loss of $87,422, which I award for past economic loss. Interest on this sum is $20,107.

31. I have used the same assumptions for calculation of future economic loss. The plaintiff's pre accident earning capacity (based on 80% of the partnership earnings) was $848 per week. The best he has achieved since then was in the 1994-95 tax year with earnings from both his wages and minor cleaning business of $496. The gap of $352 fairly, in my view, reflects his changed circumstances and permanent loss of earning capacity.

32. There was considerable argument on the appropriate approach I might adopt to deductions for contingencies. In a case such as this, uncertainties abound. On the one hand, it is not unreasonable to factor in the possibility that the plaintiff would be unlikely to be able to work as vigorously or as long on his various businesses up until retirement age, a ground for reducing his potential loss. On the other hand he has been fortunate in obtaining work he can do, and his condition is such that he may well be unable to continue in his present wages job or minor contracts until 65, thus potentially increasing the loss. Moreover, the calculations of his loss from his businesses are based on the 1991-92 year when the businesses were in a growth phase. Counsel for the defendant pointed out, correctly, that earnings from the trashpak aspects of the business were modest - but as the plaintiff pointed out, this aspect of the business was growing.

33. At the end of the day, I accept the normal 15% deduction as appropriate, giving an award of $222,305.

34. This amounts to a global award, before consideration of contributory negligence, of $452,382.24.

35. The defendant has pleaded contributory negligence in this case. Counsel for the defendant conceded at the hearing, quite properly, that the defendant was substantially the cause of this accident, but stressed that the court must take some account of the fact that the plaintiff chose to place himself unnecessarily in a position of danger.

36. There seem to be two aspects of the facts that give rise to this claim. The first is the proposition that, having been signalled by the truck driver that something was wrong, the plaintiff should have driven off Adelaide Avenue before stopping to examine his vehicle. The plaintiff said in evidence that he did not consider this, as his destination was on the north of Canberra, and pulling in to the breakdown lane was an appropriate response. I accept this.

37. The second aspect of the defendant's contributory negligence claim goes to the plaintiff's conduct after pulling over. It is clear on the facts that the trailer was in fact encroaching, by up to 1 metre, beyond the breakdown lane and on to the carriage way. I accept that the plaintiff was not aware of this, but the defendant is entitled to say, in a contributory negligence claim, that he ought to have been. The defendant then says that the plaintiff failed to take due care for himself, either by driving the vehicle up and on to the grass verge, or at least in keeping proper lookout for oncoming cars. Having accepted the evidence of Sergeant Noble and Mrs Radford that there was about a 500 metre clear line of sight for oncoming vehicles of Mr Stott's vehicle, the conclusion is inescapable that Mr Stott also had this line of sight to observe and alert himself to any oncoming vehicle. In his evidence he stressed that because traffic conditions were light, he felt safe, but the evidence does indicate that, in reliance of this impression, he did not keep proper lookout. He was observing under his trailer, and he did not give evidence of carefully checking for oncoming vehicles. He was facing his trailer. He thought he was fully in the breakdown lane - as he said in evidence in cross examination:

"I pulled into the breakdown lane, I got out of my vehicle, my
main concern was my smoking tyre or under my vehicle and that was
the only thing that actually concerned me thereafter."

38. In effect the plaintiff was assuming that he was safe. As Gibbs J said in Purcell v Watson (1979) 26 ALR at 240, a plaintiff

"....could not assume that the driver of the approaching vehicle
was careful and alert and would see him in time to avoid him.
The assumption that other users of the highway will act reasonably
and safely is so often falsified that it cannot be said as a
general rule that a user of the highway can reasonably act on that
assumption."

39. I find that the plaintiff's failure to carefully observe the position of his vehicle, so that he was unaware that it was encroaching about 1 metre beyond the breakdown lane and onto the carriageway, and his failure to carefully observe the roadway to look for oncoming traffic, relying instead of the assumption that traffic was light, was a failure to act reasonably in all the circumstances. This failure to act reasonably amounts to a contributing cause of the losses suffered by the plaintiff (March v Stramare [1991] HCA 12; (1991) 171 CLR 506).

40. Accordingly, I must conclude from the evidence that contributory negligence has been made out, and I assess this at a factor of 20% and reduce the global award of damages by this amount.

41. I therefore award the plaintiff damages in the sum of $361,905.80.

42. I reserve the question of costs and grant liberty to the parties to apply in respect of costs on 2 days' notice.