Robert Hebditch v Russell Charles Sheppeard; Slaven Motors Pty Ltd and Wayne Geoffrey Davey [1996] ACTSC 71 (12 July 1996)

SUPREME COURT OF THE ACT

ROBERT HEBDITCH v. RUSSELL CHARLES SHEPPEARD; SLAVEN MOTORS PTY LTD and WAYNE
GEOFFREY DAVEY
Nos. SCA 61 and SCA 62 of 1995
Number of pages - 9
Appeal

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
GALLOP ACJ, HIGGINS AND RYAN JJ

CATCHWORDS

Appeal from the Master - award of damages for personal injuries - inadequacy of award for general damages by reference to comparable cases

Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1

HEARING

CANBERRA, 8 July 1996
12:7:1996

Counsel for appellant : Mr R. Williams QC

Solicitor for appellant : Snedden Hall and Gallop

Counsel for respondent : Mr P.J. Deakin QC with

Mr D.J. Hooke

Solicitor for respondent : Abbott Tout Harper and Blain

ORDER

No. SCA 61 of 1995
THE COURT ORDERS THAT:

(1) The appeal be dismissed with costs.

No. SCA 62 of 1995
THE COURT ORDERS THAT:

(1) The appeal be allowed and the judgment of the Master
set aside.
(2) In substitution therefor, there be judgment for the
appellant in the sum of $168,448.
(3) The respondent pay the appellant's costs.

DECISION

GALLOP ACJ, HIGGINS AND RYAN JJ These are appeals from orders of the Master of the Court assessing the damages sustained by the appellant in two motor vehicle accidents. The first accident occurred on 28 November 1984 and in respect of it the Master awarded the appellant $148,448 made up as follows:

Pain and suffering $35,000
Interest 6,400
Out of Pocket expenses 18,936
Loss of income 35,000
Interest 28,112
Loss of income earning capacity 25,000
$148,448

2. In the second accident which occurred on 26 September 1986 the appellant suffered a relatively minor aggravation of the injuries which he had sustained in the earlier accident. However, the appellant does not persist in any complaint against the Master's assessment of damages in respect of that second accident which was reflected in an award of damages of $6,700. Accordingly, the appeal numbered SCA 61 of 1995 against that second order must be dismissed.

3. In respect of the award of $148,448 the appellant appeals against the inadequacy of the components for loss of earning capacity, past loss of wages and general damages (called pain and suffering and interest thereon).

FACTS OF FIRST ACCIDENT
4. The facts of the subject accident as found by the Master are that on 28 November 1984 the appellant was on a delivery in the course of his employment of delivering flowers and stopped at a set of traffic lights. A vehicle collided with the back of his van and pushed him into the car in front. The back of the seat snapped off as he was thrown backwards and, then, when he hit the car in front, he was thrown forwards and collided with the windscreen. The seat belt had slipped. The appellant felt pain in his back, across the chest and in his left foot, which became caught in the pedals. He went home and tried to work the next day. He felt sore all over.

5. On 30 November 1984 he consulted his general practitioner who found restricted movement, tenderness over the neck, a bruise on the right upper arm, tenderness over the right leg and swelling of the left foot.

6. The Master then traced the appellant's symptoms and medical treatment up to May 1985 when the general practitioner advised the appellant to consider a return to work on light duties. He obtained some casual work, namely gyprock fixing with a friend for whom he had previously worked. He tried to stick to light duties but in the building trade that was difficult and the increased activity caused pain. He was not capable of doing a full day's work. At that stage he was also suffering from depression as a result of his lack of mobility. Between June and August 1985 he was able to obtain some more light casual work, scaffolding.

7. At the end of August 1988 he complained of low back pain and a CT scan revealed disc bulging at L4/5. He was referred to Dr Chandran, neuro-surgeon. He obtained more work late in 1985 delivering groceries for Woolworths, which continued into 1986. Dr Chandran saw him first on 18 October 1985. He found no neurological deficits. He noted the CT scan evidence of a small disc bulge at L5/S1 and a CT scan of the cervical spine showed degenerative changes at C6/7. Dr Chandran prescribed hydrotherapy and advised further investigation by myelogram to determine the extent of the lumbar damage.

8. His solicitors referred him to Dr Danta, neurologist, who examined him on 28 October 1995. In his opinion, the appellant had some degenerative disc disease in the lumbar and cervical spines which were aggravated and rendered symptomatic by the subject accident.

9. Dr Andrews, who examined the appellant on behalf of the respondent on 14 November 1985, noted the same symptoms and thought the disc degeneration existed before the accident but was aggravated and made symptomatic by it. He considered the appellant fit for light duties only and likely to remain that way unless surgery was performed. He noted, however, that the symptoms were not sufficiently severe to warrant surgery.

10. In March 1986 the appellant found it necessary to attend Woden Valley Hospital for a pain relieving injection. In April 1986 Dr Chandran saw him again. The back pain was a constant dull ache and the appellant's main concern was the neck pain and headaches. Dr Chandran noted that if there was further degeneration an anterior fusion in the cervical spine would be called for.

11. At about that time the appellant was working as a doorman at a football club. At the end of May 1987 the appellant's general practitioner diagnosed him as suffering from a depressive neurosis. He referred the appellant to a rehabilitation specialist who saw him in July 1987. He found the appellant obviously overweight and thought his back problems were mainly related to the facet joints.

12. In 1988 and 1989 he began looking for any work he could get. What was available was not very suitable and he had to see his general practitioner about increased neck and back pain from time to time. Following further investigation in October 1989 he was referred back to Dr Chandran.

13. It is unnecessary to detail the Master's findings about symptoms and treatment until April 1992. The appellant complained to Dr Chandran that his neck pain was extending into his arm with pins and needles in the right hand. Nerve conduction study showed a C6 root disturbance. On 25 June 1992 Dr Chandran performed disc excision, decompression and fusion at C5/6 and 6/7. The appellant spent 10 days in the hospital. The evidence before the Master was that he came out a lot better than when he went in. His neck was better, the headaches had gone and the numbness in his fingers had disappeared. On review in March 1993, Dr Chandran found solid fusion and further improvement in symptoms.

14. By November 1993 the neck had improved but his low back was still troubling him. Early in 1994 the appellant obtained a job coaching softball and baseball in Sweden, which indicated an improved self-confidence about his general health. He also managed to lose about three stone in weight, which the Master found must have helped his general condition.

15. On his most recent review in May 1995 Dr Chandran commented that the appellant had reached a stable state as far as his neck was concerned with minimal symptoms and minor restriction of activities. His main complaint was in the lower back. Dr Chandran thought that with loss of weight and rehabilitation of his back with exercises, he would be able to control his symptoms and look at some form of semi-sedentary work.

16. On all that material the Master found that the appellant probably had a degenerative condition of the spine before the subject accident which was not causing any symptoms. The accident made the condition of his cervical and lumbar spines symptomatic and caused an exacerbation of the condition.

17. The Master held that before the accident the appellant was physically active and had no real skills other than those associated with fairly strenuous activity. As a result of the accident he has not been able to return to the sort of job that he could do before. He became frustrated and depressed. He separated from his wife and family, although he remains on good terms with them. He has constantly tried to work at whatever jobs were available, which were only intermittent and sometimes beyond his capacity in that activity caused exacerbation of his pain.

18. The Master observed that although none of the doctors adverted to it, it would be general knowledge that in its degenerative condition some other trauma might have made his back symptomatic even had the accident not happened. The Master found it impossible to estimate the degree of probability. He said it was also possible that had the accident not happened, the appellant might never have suffered significant back problems.

LOSS OF FUTURE EARNING CAPACITY
19. The appellant's first criticism of the major award of damages is that the Master erred in principle in his treatment of the component for loss of future earning capacity. As to that component, the Master said:

It is obvious, again, that his future income earning capacity is
impaired, physically. But the extent to which that is productive
of economic loss to him is very much a matter for judgment rather
than calculation. The pattern of his earnings before the
accident is relevant. The chance that some other trauma might
have disabled him is also relevant. He may well find some
lighter form of occupation within his capacity. The period for
which he might have expected to work is about 10 years.

I think that an award of $25,000 is fair as between the parties.

20. The reference there to the pattern of the appellant's earnings took up part of the treatment earlier in the Master's reasons for judgment of past loss of earnings as to which it was said:

The plaintiff's taxation records show that before the accident he
had intermittent periods of unemployment, and that the earnings
from the business that he carried on were not extensive. Those
partnership earnings were derived from his exertions, however,
and I do not think it is necessary to halve them. On a strict
accounting, some deductions should also be added back, but it is
not necessary to do that arithmetic for present purposes.

Nevertheless, the pattern is illustrated by the figures extracted
by counsel for the defendant, set out in the following table:

Tax Partnership DSS
Year Earnings Benefits
81/82 $2,232 $5,006
82/83 232 7,576
83/84 3,274 5,598
84/85 6,653 4,107

In the light of that history I do not think it is useful to make
calculations on the basis of an assumption that the plaintiff
would have been employed full time as a driver of a 15 tonne
lorry under the Transport Workers' Award, The conclusions about
economic loss contained in the accountant's report, Exhibit A,
are not a safe basis for judgment, except for their summary of
the plaintiff's actual earnings, which were of the order of
$35,740 to 29 May 1995.

The period in question in the past extends over ten years. The
activity in which he had been engaged was subject to fluctuation,
in line with the building economy in Canberra, as well as risks
of breakdown. There might well have been times when things could
have gone well for the plaintiff. The position delivering
flowers might have lasted for some considerable time.

I think that a discretionary amount of the order of $35,000 over
those ten years is air as between the parties. Interest on half
that amount in accordance with the practice direction is $28,112.

21. It was suggested by Mr Williams QC for the appellant that the Master had fallen into the conceptual error of equating loss of earning capacity with loss of earnings. Reliance was placed on the following observations of McHugh J in Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1 at 16:

In Australia, a plaintiff is compensated for loss of earning
capacity, not loss of earnings (see Luntz, Assessment of Damages
for Personal Injury and Death, 3rd ed. (1990), p.224, esp. fn 3).
In practice, there is usually little difference in result
irrespective of whether the damages are assessed by reference to
loss of earning capacity or by reference to loss of earnings.
That is because "an injured plaintiff recovers not merely because
his earning capacity has been diminished but because the
diminution of his earning capacity is or may be productive of
financial loss" Graham v Baker (1961), 106 CLR at p.347.
Nevertheless, there is a difference between the two approaches,
and the loss of earning capacity principle more accurately
compensates a plaintiff for the effect of an accident on the
plaintiff's ability to earn income. Earning capacity is an
intangible asset. Its value depends on what it is capable of
producing. Earnings are evidence of the value of earning
capacity but they are not synonymous with its value. When loss
of earnings rather than loss of capacity to earn is the
criterion, the natural tendency is to compare the plaintiff's
pre-accident and post-accident earnings. This sometimes means
that no attention is paid to that part of the plaintiff's
capacity to earn that was not exploited before the accident.
Further, there is a tendency to assume that if pre-accident and
post-accident income are comparable, no loss has occurred.

His Honour then imputed to the members of the Supreme Court of South Australia the error of equating the concept of loss of earning capacity with loss of earnings and went on to apply to the instant facts what he regarded as the true principle, saying, also at 16:

The reason that Debelle J (the trial judge) held that the
plaintiff's earning capacity was not diminished was that his
Honour concluded that the plaintiff could have continued as head
of the Discipline of Philosophy and that his main reason for
retiring was not connected with his accident-related injuries.
With respect, I think that his Honour erred in approaching the
question in that way. Whether there had been an impairment of
the plaintiff's earning capacity was a matter conceptually
distinct from the plaintiff's reasons for retiring. The correct
question was whether, as a result of the accident, the plaintiff
had been rendered less capable of earning income. In answering
that question, his Honour was required to look at the plaintiff's
capacity for work beyond the particular employment in which he
was engaged at the time of the accident (Mann v Ellbourn (1974) 8
SASR 298). That the plaintiff was able to retain his position as
Professor of Philosophy was not conclusive proof that he had
suffered no loss of earning capacity.

22. The members of the High Court who delivered a joint judgment in Medlin's case (Deane, Dawson, Toohey and Gaudron JJ) stated the applicable principle in this way, at 3:

A plaintiff in an action in negligence is not entitled to recover
damages for loss of earning capacity unless he or she establishes
that two distinct but related requirements are satisfied. The
first of those requirements is the predictable one that the
plaintiff's earning capacity has in fact been diminished by
reason of the negligence-caused injury. The second requirement
is also predictable once it is appreciated that damages for loss
of earning capacity constitute a head of damages for economic
loss awarded in addition to general damages for pain, suffering
and loss of enjoyment of life. It is that "the diminution of ...
earning capacity is or may be productive of financial loss"
Graham v Baker [1961] HCA 48; (1961) 106 CLR 340, at p.347 per Dixon CJ, Kitto
and Taylor JJ.

23. We are unable to detect any error of principle in the Master's approach to the claim for loss of earning capacity in the present case. As the joint judgment in Medlin reveals, it was first necessary to determine whether the appellant had, in fact, suffered a diminution of earning capacity. The Master did that by finding an impairment of "future earning capacity" stemming from the appellant's physical disabilities. It was then necessary to determine whether the diminution of earning capacity so found had been or might be productive of financial loss. The first part of that exercise was subsumed into the inquiry into what was called "past loss". The second element required an assessment of what the appellant could reasonably have been expected to earn had his pre-accident earning capacity continued undiminished for the rest of the working life which could be regarded as having remained to him but for the injury. It was then necessary to deduct from that amount whatever might be found as the earnings which the appellant could have derived from his diminished post-accident earning capacity over whatever period that was likely to inure.

24. When reduced to its essential elements, the appellant's case on this first head came down to the assertion that the Master had undervalued the appellant's pre-accident earning capacity by looking at what he had chosen to earn in the four years before the accident on 28 November 1984. In particular, it was said, the appellant's pre-accident earning capacity should have been equated with that of a driver of a 15 tonne truck able to obtain and remain in regular employment under the Transport Worker's Award. However, it is clearly not irrelevant to an evaluation of pre-injury earning capacity to have regard to the work which a plaintiff chose, and had been able, to undertake when his physical disabilities and vocational skills were presumably undiminished. Inclination, motivation and persistence in undertaking a particular form of work are as much components of a capacity to earn income therefrom as the physical attributes and technical skills necessary for its performance. We are not persuaded that the Master erred at all in equating the appellant's pre-accident earning capacity with that of a person who, although possessing the driving skills and physical strength required of a regularly employed 15 tonne truck driver, chose for most of his working life to derive lower rates of remuneration as a self-employed cartage and scaffolding contractor and in undertaking deliveries for a florist.

25. Nor are we persuaded that the Master erred in assuming that the appellant's pre-accident earning capacity would have inured for about another 10 years from the date of judgment, ie until the appellant had attained the age of 63 years and 8 months. Given that the earning capacity imputed to the appellant was predicated essentially on physical exertion such as driving and associated work in the construction industry, it was not unreasonable to allow a discount of 16 months to accommodate the possibility of retirement before the customary age of 65 years.

PAST WAGE LOSS
26. The appellant's attack on this component of the Master's assessment of damages starts from the premise which we have just discussed. That is that the evidence justified a finding that the appellant, but for the injury, would in the period of slightly more than 10 years from 28 November 1984 to 17 July 1995 have earned remuneration at a rate and frequency considerably greater than he had achieved in the three or four years immediately preceding his main accident.

27. For the reasons which we have indicated in relation to loss of future earning capacity, we regard it as open to the Master to conclude that the earnings which the appellant would have derived in the ten years to 29 May 1995, had he not been injured, would not have been more than double those actually earned by the appellant and his wife in partnership. In particular, we are not persuaded that the Master on the whole of the evidence should have imputed to the appellant a capacity for the whole of that period to earn income on his sole account at the rate prescribed from time to time by the Transport Workers' Award for the driver of a 15 tonne truck. When regard is had to the fact that the Master assumed in the appellant's favour that the previous partnership income was an appropriate measure of his capacity to earn income as a sole trader or employer, we cannot conclude that the Master's treatment of this component was unreasonable.

GENERAL DAMAGES
28. Noting the appellant's age of 53 years, the Master assessed damages for pain and suffering at $35,000, apportioned $5,000 thereof to the future and awarded interest on the past component at $6,400.

29. It was submitted on behalf of the appellant that that award is inadequate having regard to the following factors:
(a) The appellant has been rendered partly disabled in 1984 at age 43 years and will remain so for the rest of his life.
(b) He was rendered permanently unfit for the work for which he was qualified and suited.
(c) He underwent numerous investigative procedures.
(d) He underwent surgery on 25 June 1993 involving disc excision, decompression of the cervical spinal cord, and fusion at levels C5/6 and C6/7.
(e) There is no treatment available for the appellant's low back and neck disability or headaches.
(f) His medical condition is permanent.

30. The submission was that the award of damages was so low as to be outside the range within which a discretionary or value judgment should have been made.

31. On the other hand, it was submitted on behalf of the respondent that the award for general damages was within the range of a sound exercise of discretion. Counsel for the respondent pointed to the following matters:
(1) The surgery performed upon the appellant's cervical spine succeeded in mitigating his pain.
(2) There are, and at the time of the accident were, significant degenerative changes present in the appellant's cervical and lumbar spine which may have been rendered symptomatic by the other causes absent the accident.
(3) The appellant has continued to work to a comparable level and extent to that which pertained prior to the accident. The improvement in the appellant's condition is illustrated by his capacity in early 1994 to obtain a job coaching softball and baseball in Sweden; and
(4) The assessment of general damages was based largely on the Master's assessment of the appellant. He had that opportunity and there is nothing to suggest that the Master either misused or failed to use his advantage. Accordingly, the allowance for general damages was within the discretionary range.

32. This Court is a court of unlimited jurisdiction in the assessment of damages for personal injuries. By far the greater proportion of such cases arise out of motor vehicle accidents. It is also true to say that a good proportion of such cases involve injuries to the spine at the cervical level and in the lumbar region. In some cases the injury sustained is sometimes confined to soft tissue and ligamentous damage and in other cases surgical intervention has been necessary. The trend has been to award higher awards of damages in the latter class of case than in the former.

33. It goes without saying that in assessing damages the Court must draw upon its own experience, rely upon its own analysis of the evidence in the particular case and reach an opinion about the correct assessment of compensation for the injury sustained, the pain and suffering, loss of amenities and all the other matters that are required to be taken into account in assessing general damages.

34. The Court must recognise also that no two cases are wholly alike and that apparent similarities are often superficial. Because the elements which constitute the basis of an assessment of damages for personal injuries vary so infinitely, there can be no fixed or unalterable standard for assessing the amounts for those particular elements. Nevertheless, it is not out of place for the Court in its endeavour to assess damages within a recognised range to search for any trend of awards in reasonably comparable cases and use a current path as a guide to making its assessment.

35. By looking at comparable cases the Court does not leave itself little room for flexibility. The proper award cannot be arrived at by adopting fixed limits. But it is proper for a Judge to take notice of recent assessments made by other Judges of this Court in cases which bear a reasonably close resemblance to the case under consideration.

36. Having done that in this case, we have reached the conclusion that the amount awarded for general damages was inadequate. Accordingly, we propose to reassess that component of the appellant's damages for ourselves. By reference to recent assessments made by this Court which bear a reasonably close resemblance to this case, we reassess the component for general damages at $55,000.

37. As a consequence the appeal is allowed, the judgment of the Master set aside and in substitution therefor, there will be judgment for the appellant in the sum of $168,448. The respondent is ordered to pay the appellant's costs.