Perry Alexander Laird v Tania Louise Smith [1996] ACTSC 50 (31 May 1996)

SUPREME COURT OF THE ACT

PERRY ALEXANDER LAIRD v. TANIA LOUISE SMITH
No. SCA 80 of 1995
Number of pages - 10
Appeal

COURT

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

CATCHWORDS

Appeal from the Master - award of damages for personal injuries - appeal against finding on causation and components of awards for general damages and past and future economic loss - appeal against finding of causation not made out - no question of principle

Damages - loss of past earnings and future earning capacity - assessments too generous on the evidence - uncertainty, speculation and conjecture surrounding the respondent's hypothetical capacity and actual capacity - arithmetical approach to calculation of damages not possible - appeal against assessment for past earnings not made out - assessment of future earning capacity based upon what is fair and reasonable in the circumstances

HEARING

CANBERRA, 1 April 1996
31:5:1996

Counsel for the Appellant/Defendant : Mr J Coombs QC with

Mr P J Doherty

Instructing solicitors : Crossin Barker Gosling

Counsel for the Respondent/Plaintiff: Mr R Williams QC with
Mr R Mildren

Instructing solicitors : Vandenberg Reid

ORDER

THE COURT ORDERS THAT:

(1) The appeal be allowed.
(2) The award of damages be varied by substituting an
amount of $263,905.
(3) The respondent pay the appellant's costs.

DECISION

MILES CJ and GALLOP J This is an appeal against a judgment entered for the respondent by Master Hogan on 12 September 1995. The Master awarded damages in the sum of $363,905 and reserved the question of costs. The components of the award are:

General damages 50,000
Interest 13,000
Out of pocket expenses 2,405
Past loss of income 65,000
Interest 33,000
Future loss 200,000
$363,905

2. The action was originally commenced in the Magistrates Court in July 1990 and an order was made in that Court on 12 February 1991 extending the period within which the respondent could commence the action pursuant to the Limitation Act 1985. She suffered the injuries when riding as a pillion passenger on a motor cycle driven by the appellant on 6 June 1979.

3. The respondent was born on 3 April 1963. She was therefore 16 years of age at the date of the accident. She was 32 at the date of trial.

4. Counsel for the appellant did not admit negligence but the respondent called the appellant as a witness on matters relating to damages and he was not asked any questions about liability. There being no submissions before the Master about liability, he found negligence on the part of the appellant accordingly.

5. The appeal was confined to the assessments for general damages, past and future earning capacity and interest on the past loss.

6. The grounds of appeal set out in the Notice of Motion and directed to the component of general damages were:

(1) that the amount of damages awarded by the Master for
pain and suffering was excessive and against the evidence
and the weight of the evidence;
(2) that the amount of damages awarded by the Master
for interest on pain and suffering was excessive and
against the evidence and the weight of the evidence;
(8) that the Master erred in finding that the pain and
tendency to severe headaches made it more difficult for her
to cope with her life experiences; and
(9) that the Master erred in finding that the plaintiff
suffered from any increased psychological trauma as a
result of the motor vehicle accident on 6 June 1979.

7. In support of those grounds of appeal, the appellant submitted that the awards for general damages and interest thereon were disproportionate to the type of injury which the respondent suffered in the subject accident and that there were a number of other complicating factors contributing to her symptoms and disabilities.

8. In response to that submission, it was submitted on behalf of the respondent that the Master's findings of fact and conclusion as to causation were supported by the respondent's own evidence, the evidence of witnesses who were described as "lay" witnesses, and the medical evidence. That evidence demonstrated, so it was submitted, clear continuity of symptoms from the date of accident on 6 June 1979 to the hearing of the action on 26 and 27 July and 24 August 1995.

9. The Master's approach to general damages was to make findings of fact in respect of the respondent's injuries and symptoms immediately after the accident and the continuance of the relevant symptoms and disabilities up to the date of trial. He found as follows:

"The plaintiff had been wearing a helmet. When she woke her
head was sore and she had pain in her neck. There was a small
laceration to her scalp, which was sutured. A skull X-ray
disclosed no abnormality. She was detained at the hospital for
some hours, after which a friend took her back to the YMCA,
where she went to bed. She felt dizzy all day. Later, when
she got up, she vomited and fainted, so she was taken back to
hospital. She was complaining of headache and sore neck. She
had double vision. On examination her neck was stiff
bilaterally over the sternomastoids. After a further period of
observation, and when the diplopia had settled, she was again
allowed to leave.

She spent most of the next few weeks in bed. She gradually
improved, but suffered periodic attacks of severe headaches and
neck pain. In about September 1979 she became pregnant to the
defendant. She suffered a lot from headaches and neck pain
during her pregnancy. Her daughter was born in June 1980. She
then went to live with her father and stepmother. Her
stepmother used to apply ice packs to her neck and head when
she suffered headaches.

The defendant separated from her. She later met another man
who was the father of her second child, born in September 1981.
She married him in February 1982. Her third child was born in
April 1983. The marriage was traumatic. She had separated
from her husband some time before she was treated for an
assault by him in June 1983.

She had a number of jobs as a bar attendant or waitress. She
was not able to do them properly, as any heavy lifting caused
migraine type headaches. She did not consult any doctor on a
regular basis, but took tablets to try to deal with the
headaches. Sometimes she needed to rest for many hours in a
darkened room. She also noticed that she had lost strength in
her right arm.

In February 1988 she commenced employment as a sales assistant
with Robbo's Motorcycles. It was a job that she enjoyed, and
she was obviously good at it. Her employer gave evidence, and
expressed the opinion that if she had been able to stay at the
job she might well have become sales manager. Her employer
also confirmed that she appeared to suffer from neck and head
pain, and said that from time to time she had applied cool
compresses and light massage to alleviate the plaintiff's
discomfort. The plaintiff made every effort to remain in full
time employment, but was unable to continue because of her ill
health. She resigned on 16 June 1988.

On 20 April 1989 she consulted Dr Rodgers for treatment of a
migraine headache. She also consulted doctors at his practice
for unrelated conditions.

On 22 January 1990 she began to receive chiropractic treatment
from Mr Tapper, who detected reduced mobility in the cervical
and lumbar spine. X-rays did not reveal any abnormality. He
reported that her initial response to treatment was good, she
did not follow through with her treatment and rehabilitation
program. During 1990 she is recorded as having sought
treatment for migraine headaches from Dr Tan and Dr Atkinson.

In February 1991 she began to consult Dr Eaton on a regular
basis, but initially for a condition not related to the
accident. She began to complain of severe migraine headaches,
and to relate them to the accident, in July 1991. He
prescribed Mersyndol Forte and suggested that she be seen by a
neurologist. He continued to see her for her headaches and
other problems over 1992 and 1993.

In July 1991 the plaintiff was examined by Dr Vanderfield,
neurosurgeon, for the defendant. She was suffering a severe
headache during the examination, which caused some difficulties
to the doctor in eliciting an accurate history. He did not
doubt that she was suffering as she claimed, but in his opinion
her medical history was so complex that he thought it most
unlikely that the injuries in June 1979 could be responsible
for her continuing complaints.

The records of Calvary Hospital show her attendance there for
severe migraine headaches in April 1989, November 1991,
December 1992, March 1994, September 1994 and January 1995.

Over those years she suffered greatly, not only because of her
headaches, but from other illnesses, domestic stress, financial
hardship and her inability to keep in regular full time
employment. She became severely depressed. In January 1992
she was involved in a motor car accident, which exacerbated her
neck pain for some weeks, but which appears not to have left
any permanent effects.

During 1994 she suffered from the effects of chronic fatigue
syndrome and severe depression. Dr Eaton prescribed
antidepressant medication. In July 1994 he certified that she
was unfit to work, extremely tired, had memory difficulties and
cognitive dysfunction. He recommended that her court case be
adjourned until 1995. By December 1994 she had responded to
treatment and was fit to continue with her claim. No claim is
made for economic loss during this period.

Dr Vanderfield re-examined her on 21 February 1995. He
reported that she told him that her life was beginning to be
better, and that since the end of her second marriage she was
under less stress and her headaches had become less frequent.
Her neck was still stiff and sore sometimes. The small scalp
wound had healed well and there was no tenderness on the scalp.
There were no adverse neurological signs. He was still unable
to attribute her complaints to the accident.

Her solicitors sought a report from Dr Scott, occupational
physician, who examined her on 9 March 1995. She told him that
she suffered general headaches 3 or 4 times a week, and
migraine headaches about twice a month. Her neck was painful.
She also complained of lower back pain, which is not relevant
to this claim. His opinion was guarded, because he had not
seen any X-Rays, but it appeared to him that she had suffered
soft tissue injury to her neck in the 1979 accident. Her
condition had become chronic and overlaid with psychological
problems arising mainly out of her family situation. Her work
capacity was severely affected.

Dr Scott later saw X-ray, CT and MRI scans of the plaintiff's
cervical spine. All were normal. He re-examined her on 7 July
1995. His opinion was unchanged. He believed that she has
chronic soft tissue injuries leading to a chronic pain
syndrome. She could benefit from psychological counselling as
well as vocational assessment and possible appropriate
retraining.

Evidence was given by the plaintiff's sister, a social worker
who had close contact with her, her stepmother, a lady whose
children she had minded, and the defendant, from all of which
it is clear that before the accident the plaintiff did not
suffer from the stiff neck and the migraine type headaches that
affected her after it.

Oral evidence was also given by Dr Eaton, who has
qualifications in occupational medicine in addition to those in
general practice. In his opinion, although the actual
mechanism of how the headaches are produced is not entirely
understood, it is probable that they were causally connected
with the accident.

Although Dr Vanderfield was not prepared to accept that causal
connection he did not exclude it.

10. Having made those findings of fact on the evidence before him, he reached the following conclusions:

"On the whole of the evidence I am satisfied that the plaintiff
suffered a head injury and soft tissue injury to the neck in
the accident in June 1979. As a result she has since suffered
from a stiff and sore neck, and from migraine type headaches.
They were severe and constant at first, becoming intermittent
as time passed. Had she been able to enjoy a happy and stress
free life the headaches would not have been as constant or as
severe as they were, and it was not the defendant's negligence
that caused the stresses and unhappy experiences that she went
through. On the other hand, her pain and tendency to severe
headache made it more difficult for her to cope with her life
experiences, and increased the psychological trauma that she
suffered as a result of them.

Her experience at Robbo's shows that she was capable of
obtaining and doing well at a job, and could have obtained a
responsible and fulfilling position as a senior sales
assistant. Her injury prevented her from keeping that job, and
her experiences make it unlikely that she will get such an
opportunity in the future.

Although her condition is chronic, and none of the doctors give
a confidently hopeful prognosis, the severity and frequency of
her headaches has now decreased, and she may continue to
improve in the future.

For her pain and suffering I award $50,000, the greater part of
which is attributable to the past."

11. The Master's findings of fact about the continuity of the respondent's symptoms and disabilities were well supported by the evidence of a number of witnesses. The appellant himself gave evidence about the respondent's symptoms after the accident and up to the end of 1979. Mrs Smith gave supportive evidence in respect of the period 1979 to February 1982 and one occasion between 1985 and 1987. Mrs McDonald gave similar evidence in respect of the period 1981-1983. Mrs Barton gave similar evidence in respect of the period 1983-1985 and 1986-1987, and Mrs MacAuley gave similar evidence in respect of the period February to June 1988.

12. Furthermore, the Master's finding on causation was amply supported by the medical evidence. In his report of 21 March 1995, which was in evidence, Dr Robert J. Scott stated that the respondent suffered soft tissue injury to her neck and lumbar region in the subject accident and that those conditions appeared to have become chronic and to them has been added an understandable psychological overlay.

13. As stated by the Master, oral evidence was also given by Dr Eaton whose opinion was that although the actual mechanism producing the headaches was not entirely understood, it was probable that they were causally connected with the accident.

14. There is no basis upon which this Court should review the Master's findings and conclusion as to causation. The grounds of appeal directed to the component of general damages must fail.

15. There were a number of grounds of appeal in respect of the damages awarded for past loss of income.

16. The Master's approach to the assessment of damages for past loss of income was to make assessments for the periods of time from the date of accident to the date of trial. He commenced by observing that there was only a modest general claim for loss of income from the date of accident until the respondent began working at Robbo's Motor Cycles in 1988. He said that he would allow for that by not discounting the other amounts allowed for past loss of income.

17. He commenced his assessments from the date when she ceased at Robbo's Motor Cycles, namely 16 June 1989. From 17 June 1989 (incorrectly stated in the reasons for judgment as 1988) to 30 August 1989 he found that the respondent had some work but in the light of the evidence the claim of $2,787 for that period was moderate and justified. For the period 31 August 1989 to 18 July 1991 the respondent was unemployed and he regarded the claim for $30,000 in round figures as reasonable. It is to be noted that that period was just under two years.

18. For the period from July 1991 to December 1992 the respondent was working part-time in family care. The Master found a loss of $17,000 in round figures to be made out. He noted that there was no claim until she recovered from chronic fatigue syndrome at the end of 1994. He then adopted the evidence from Robbo's Motor Cycles to estimate her potential capacity at $400 per week net, and allowed $14,600 for loss of income in 1995. Rounding off the sum of those figures he allowed $65,000 for past loss of income plus interest from the date when she left Robbo's Motor Cycles at $33,500. It is noted, however, that in the summary of the components of damages that figure has become $33,000.

19. Several submissions were put on behalf of the appellant by way of attack upon the allowance of $65,000 for past loss of income and interest at $33,000. The period involved is 17 June 1989 to September 1995, that is six years three months.

20. It was submitted that the figure of $30,000 for the period from 31 August 1989 to 18 July 1991 was unwarranted because in that period:

(1) the respondent was admitted to Woden Valley Hospital for
unrelated matters;
(2) the respondent was working with street kids;
(3) the respondent worked as a prostitute; and
(4) the respondent was receiving ongoing treatment for her lower
back problems which were unrelated to the 1979 accident.

21. In response to those submissions, it was submitted on behalf of the respondent that the Master's calculations were made in respect of three periods of past economic loss, namely 31 August 1989 to 18 July 1991; July 1991 to December 1992 and 1995. That submission is not quite correct because it omits the period 17 June 1989 to 30 August 1989 in respect of which the Master allowed a sum of $2,787.

22. At least to some extent the Master's calculations were based upon the respondent's employment at Robbo's Motor Cycles and her potential in that or like employment. He found that "her experience at Robbo's was that she was capable of obtaining and doing well at a job and could have obtained a responsible and fulfilling position as a senior sales assistant. Her injury prevented her from keeping that position and her experiences make it unlikely that she will get such an opportunity in the future".

23. Those findings were based upon the evidence of the respondent and Mrs MacAuley, who said that the respondent involved herself in the sales of bikes and was very good at selling anything. The respondent's employment record at Robbo's Motor Cycles and her actual earnings from February 1988 until June 1988, and the earnings of comparable employees up to 1994, were set out in letters which were tendered in evidence on behalf of the respondent.

24. It was further submitted on behalf of the respondent that the factors relied upon by the appellant and set out above were not of much significance. The respondent was in Woden Valley Hospital for only three days; her work with street kids was mostly voluntary; she only worked as a prostitute for eight months; and she was expected, on the evidence of Dr Rodgers who treated her twice in May 1989, to make a rapid and full recovery from her severe back pain.

25. In all the circumstances, an assessment of $65,000 and interest thereon for loss of earning capacity over a period of six years three months is not unreasonable.

26. The last component is for future economic loss. The Master's approach to future economic loss was to find that during 1995 the respondent had tried to work at house cleaning and had attempted to improve her typing skills. She was not able to persevere with either. Her experience justified Dr Scott's opinion that her income earning capacity was still severely affected. He adopted the evidence from Robbo's Motor Cycles as a conservative estimate of the respondent's potential capacity to earn at the rate of $400 per week net. He took the present value of $400 per week for 33 years at 3 percent, yielding a figure of $439,756. He found that there was evidence tending to show that the respondent will improve so that her capacity for work is not completely destroyed and may well increase in the future. He awarded $200,000 for future loss of income.

27. It was submitted on behalf of the appellant that the Master did not have regard, and should have had regard, to the respondent's disturbed and piecemeal employment record, her capacity for retraining, her residual earning capacity and her continuing unrelated lower back problems. It was submitted that the Master was in error in choosing "an uninjured earning capacity" of $400 net per week to age 65 based upon her potential earnings at Robbo's Motor Cycles because she only worked there for four months from February to June 1988.

28. In a case such as this and where appropriate, it is legitimate to adopt the earnings of comparable employees as a guide to the earning capacity of the injured party. In other cases, the assessment for loss of earning capacity, being intuitive, may have to be approached by providing some sort of buffer for the injured party which is not arrived at by arithmetical calculation. Although reasonable minds may differ as to which is the preferable approach in any particular case, the imponderable factors in the present case are such as to lead us to prefer the latter approach as more appropriate.

29. That is so because of the difficulty in assessing the amount which the respondent would have been capable of earning between the date of accident and the date of trial and the years thereafter but for the accident. The difficulty in assessing the respondent's net loss is accentuated by reason of the uncertainty, speculation and conjecture which surrounds her hypothetical capacity (what she would have earned if there had been no injury) and her actual capacity (what she can now earn if she acts reasonably), together with the imponderability of the number of years for which she would probably have gone on working, let alone whether she was likely to work to age 65.

30. The difficulty of predicting the number of years for which she would have gone on working is not to be determined solely by her own evidence. The nature of the work and the advancement of age are complicating factors. Accordingly, to make an assessment of the respondent's future loss by reference to what the respondent would have been earning at the date of assessment if there had been no injury, which is purely speculative, and doing the calculation for the future on that figure is not appropriate in this case and involves not merely double prophesy but guess work. It gives a false sense of mathematical accuracy in a case where it is impossible to achieve accuracy of that nature. As stated earlier, it is more appropriate to make a frankly intuitive assessment, based on the Court's experience of awards of damages over time, rather than an arithmetical one.

31. Adopting that approach, we reassess the respondent's damages for future economic loss at $100,000, which is a reasonable lump sum for the undoubted but not precisely calculable loss of the respondent's earning capacity. Accordingly, the award for this component should be reduced by $100,000. The result is that the appeal should be allowed and the judgment sum reduced by $100,000.

32. We allow the appeal and substitute judgment for the respondent in the sum of $263,905. We order that the respondent pay the appellant's costs.

HIGGINS J I have read, in draft, the reasons for decision of Gallop J. On all matters save one, I am in agreement with his Honour's reasons and conclusions.

2. That one matter relates to the suggested reduction of the amount awarded by the Master for future economic loss.

3. It seems to me that it was open to the Master to have used an earning capacity of $400.00 net per week as a bench mark against which to judge the limits of the plaintiff/respondent's claim.

4. I agree that given the past work history of the plaintiff, it could not have been assumed that, but for the injury, she would have continuously been employed at the rate of $400.00 net per week.

5. Even in a case where such an assumption would be warranted, a discount of 15% on the then current value of the relevant earning capacity is usual. That reflects the preponderance of unfavourable vicissitudes usual over time.

6. The Master, in this case, could have approached the award of damages either in the manner adopted by Gallop J or in the manner he did. The ultimate question is whether the result was excessive.

7. The degree of discount or of allowance, particularly in the unusual case, will be an intuitive assessment. It is obvious that the plaintiff's incapacity was and would, as the Master assessed it, continue to be serious and have a continuing adverse effect on her capacity to earn, albeit that some improvement could have been anticipated.

8. In some cases, the quantification of the plaintiff's pre-accident earning capacity may be so difficult that no guidance at all would be obtained from the plaintiff's work history.

9. In this case, the plaintiff's work history did, in my view, enable an upper limit to be set on an award for future economic loss.

10. I do not read the Master's assessment of the residual earning capacity of the plaintiff only by reference to being a percentage of such a total. It was necessary for the Master to take account of diminution of the plaintiff's theoretical maximum earning capacity by reason of the non-exercise of that earning capacity for reasons other than the injury caused in the accident. Such reasons might include patchy work opportunities, a lack of commitment to seeking or holding employment or like matters. Those factors will often appear from a plaintiff's work history as indeed they do in this case.

11. The result achieved by the Master awarded only about 45% of the theoretical maximum value of the plaintiff's uninjured earning capacity.

12. It is, of course, arguable that such an allowance was generous but it is also arguable that a discount of 78%, as $100,000.00 would represent, does not reflect the seriousness of the loss. The sum which does represent a fair assessment of the loss in question can only be assessed intuitively but the demeanour and presentation of the plaintiff must play their part.

13. I would simply acknowledge that, as a matter of discretionary judgment, the Master's decision to allow $200,000.00 was not shown to be erroneous and I would not vary it.

14. I would dismiss the appeal with costs.