David Michael Paulin v Alan Stott [1997] ACTSC 5 (3 February 1997)

SUPREME COURT OF THE ACT

DAVID MICHAEL PAULIN v. ALAN STOTT
No. SCA26 of 1996
Number of pages - 8
Appeal from the Master - Damages

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY MILES CJ, GALLOP AND HIGGINS JJ

CATCHWORDS

Appeal from the Master - assessment of damages for personal injuries - general damages and apportionment for the past - no new question of principle

Damages - past and future economic loss - partnership situation - no new question of principle

Taroporewalla v Berkery [1983] 3 NSWLR 28 Zachopoulos v State Government Insurance Commission (1986) Aust Torts Reports 80.023

HEARING

CANBERRA, 11 December 1996 3:2:1997

Counsel for the Appellant: Mr G Parker

Instructing Solicitors: Abbott Tout Harper & Blain

Counsel for the Respondents: Mr R Crowe

Instructing Solicitors: Pamela Coward & Associates

ORDER

THE COURT ORDERS THAT:
1. The appeal be allowed. 2. The award of $361,905.80 be set aside and in substitution therefor, there be an award of damages in favour of the respondent for the sum of $319,174.84.

DECISION

MILES CJ
1. I have read a draft of the judgment of Gallop J and agree with the orders proposed and with the reasons.

GALLOP J
2. This is an appeal by the defendant in an action for damages in negligence for personal injuries sustained by the respondent in a motor vehicle accident on 4 May 1992. Damages were assessed by the Master in the sum of $452,382.24, which figure was reduced by 20% because of the Master's finding of contributory negligence on the part of the respondent, yielding a net figure of $361,905.80. The respondent has also cross-appealed against the finding of 20% contributory negligence.

3. The components of the award of damages of which the appellant seeks review are as follows: (1) general damages - $90,000; (2) apportionment of general damages in the ratio of $70,000 to the past, resulting in interest of $5,530.96; (3) past economic loss - $87,422 plus interest of $20,107; and (4) future economic loss - $222,305

4. In submitting that the award of $90,000 for general damages was a wholly erroneous estimate of the damage suffered by the respondent, the appellant did not raise any issue of the credibility of witnesses, the respondent's injuries or ongoing permanent disabilities, and did not submit that the Master had made any error of law.

5. The following findings of fact were made by the Master and were not disputed on the hearing of the appeal.

6. The respondent 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 and in 1968 he moved with his family to Canberra. He worked for a while as a service station attendant and then found employment as a storeman, first with the CSIRO and in 1971 with a Canberra furniture store. He enjoyed his work and was obviously a very hard and conscientious worker. He obtained various promotions and ended up as the warehouse and stores manager.

7. In about 1980 he decided to chance his arm as an independent businessman and commenced his own business which grew with some success over the next 3 years. In this and in later businesses he worked in partnership with his wife. In 1984 the respondent and his wife decided to move from Canberra and sought a new life in the Clare Valley of South Australia. This move lasted only 12 months. The respondent realised that opportunities for the family were limited and as a result the family moved back to Canberra in 1985. He again obtained employment at the furniture store as warehouse supervisor.

8. In 1989 he ventured again into small business in partnership with his wife. They operated a series of businesses. The respondent was a very hard worker who, on the evidence of a family friend, "lived for his work". The partnership conducted cleaning contracts for the ACT Housing Trust which involved complete cleans of premises upon a change of tenant. The wife would do the lighter inside duties and duties such as cleaning outside windows, while the respondent 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. The partnership also conducted contracts to do the final clean on houses that had had asbestos removed. The partnership also moved into office cleaning with a range of clients.

9. As a sideline to the yard cleaning business, the partnership moved into "trash pak" supply and gradually built up this business by purchasing additional runs from established operators and building up their own business through reputation and referral.

10. At the time of the accident the respondent was working solidly through the week on the various cleaning contracts and conducting the trash pak 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, the respondent was responsible for preparing the tender documents to bid for new cleaning contracts and renewals, and for the general planning and oversight of the ventures.

11. As previously stated, none of those facts was in any way in dispute at the trial.

12. As to the facts of the accident, the respondent was driving a Toyota truck and large 4-wheel trailer unloaded along Adelaide Avenue in the direction of Parliament House at about 10.00 am on 4 May 1992. As he proceeded along near the Prime Minister's Lodge, at which point Adelaide Avenue comprises a bus only lane, 3 ordinary traffic lanes and a break-down lane on the fair left side, a passing truck signalled to the respondent that something was wrong with his vehicle. The respondent paid heed to this warning, stopped his truck and pulled up as close to the left hand gutter as he could. The truck was fully within the break-down lane, but the trailer which was wider than the truck was protruding on to the first lane of the 3 ordinary traffic lanes. The trailer was 12 feet long and 6 feet wide. The respondent was unaware that his trailer was so protruding and believed that he was off the roadway, although he did not carefully check this position at the time. Traffic conditions were light and the respondent felt safe in pulling up in the break-down lane.

13. He alighted from his truck and immediately noticed smoke coming from the general area of the trailer wheels. He knelt on the roadway next to the trailer wheels to look underneath to find the cause of the smoke, which he thought could be merely a stick or the like in contract with the road. He was in that position when he was struck by the appellant who was proceeding in the same direction as the respondent.

14. The Master found, on the evidence, that the trailer was protruding about one metre on to the first lane of traffic. He further found that at the time of the accident weather and visibility were good, and that a vehicle proceeding in the easterly direction as the appellant was, would have had about 500 metres of clear vision of the respondent's stationary vehicles and the respondent on the roadway.

15. The Master found on the evidence that the appellant was travelling at a speed of between 90 and 100 kph when his vehicle drove straight over the back of the respondent's legs, causing considerable injury.

16. The respondent was taken by ambulance to Woden Valley Hospital where he remained for 2 weeks. Both his legs were injured. Dr Gillespie, the orthopaedic surgeon to whose care the respondent was admitted described the injuries thus: "He sustained a number of orthopaedic injuries to both lower limbs. He sustained a very comminuted Grade 1 compound fracture of the left medial malleolus and segmental fracture of the left lateral malleolus/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.

17. These fractures were not suitable for internal fixation, and both his legs were encased in plaster. He was discharged from hospital after 2 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 6 weeks, but there were ongoing problems with his left leg and ankle, the plaster remaining on for some 14 weeks.

18. There was no dispute before the Master that the respondent's ongoing disabilities make him unfit to return to previous work as a contract cleaner and trash pak operator. The Master found that for a man such as the respondent, whose life had revolved around his work, the inability to continue to build up his hitherto successful small business would be a major blow. The disabilities identified by the Master were ongoing problems with his left ankle and a psychological condition described in the evidence as "a depressive disorder of mild to moderate severity".

19. The Master found that as soon as he was physically able the respondent sought to return to employment but by August 1993 he had come to accept that he would never be able to return to his pre- accident activities. Accordingly, he looked for a job and was successful in his first application. He commenced work with Southern Plumbing Supplies as a storeman in November 1993. He was still in that employment at the date of trial and was maintaining some business interests in partnership with his wife, namely cleaning a couple of offices on Wednesday afternoons and weekends, and a block of toilets. He sold his trash pak business in January 1994.

20. In assessing general damages the Master took account of the respondent's pain and suffering, of the very considerable trauma of the accident, the period of hospitalisation and the long immobilisation that followed. Further, he took account of the respondent's history as a hard worker and the extent to which his life revolved around his work. He assessed general damages at $90,000, with $70,000 being attributed to the past, resulting in interest of $5,530.95.

21. It was submitted on behalf of the appellant that although the respondent sustained very comminuted Grade 1 compound fracture of the left medial malleolus, and segmental fracture of the left malleolus/fibula, and a fracture of the first and third metatarsal in the left foot and fractures of the necks of metatarsals I and III in the right foot, by 8 October 1992 his treating orthopaedic surgeon, Dr Gillespie, reported that the right leg/foot/ankle had recovered well and with no residual symptomatology by 21 September 1992.

22. In his report of 1 July 1993 Dr Gillespie reported that the respondent's right leg was "asymptomatic and normal to clinical examination". At that stage the respondent was continuing to be troubled by stiffness, limitation of movement and pain in the left ankle, with consequential loss of agility and mobility. He had an arthroscopy of the left ankle on 9 February 1994. Nerve conduction studies on 14 December 1994 demonstrated nerve damage causing weakness in the left ankle. The respondent also suffered an injury to the cervical spine, referred to by Dr Gillespie in his report of 1 July 1993 in terms "occasionally bothered by neck pain".

23. The respondent also has some psychological reaction to his inability to pursue his business activities, chronic pain and changed life circumstances, in the form of depression and post-traumatic stress disorder, for which he underwent treatment by a psychologist between 1 August 1993 and 10 May 1996.

24. As to future medical treatment, the preponderance of medical opinion in evidence was that no further treatment is necessary.

25. The Master recognised that there was some conflict in the evidence and quoted from the report of Dr Morriss to the effect that post- traumatic osteoarthritis in the left ankle may reach a stage where an ankle fusion to relieve pain will be required. But Dr Morriss' opinion was expressed in his report of 26 March 1996 in very tentative language: "I would envisage that he may come to an ankle arthrodesis within the next ten to fifteen years".

26. On the other hand, Dr Richard Vance, orthopaedic surgeon, said in his report of 2 February 1993 that the respondent walked without a limp and that the left ankle movements showed a full range of plantar flexion, while dorsi flexion was restricted by 10 degrees. Inversion movements were also restricted by about 20 degrees while eversion movements were full. Toe movements were full.

27. Dr Vance expressed the opinion in that report that the left leg and ankle remained weaker and stiffer and full recovery had not yet occurred. He said improvement was occurring and would continue to occur as the respondent was already leading an active life and in addition carrying out home exercise. Dr Vance said that the respondent will not require any further treatment either conservative or operative in relation to his left leg. Finally, he said that he felt sure that in the short term further improvement will occur in relation to function in the left ankle, that he was not totally sure that a full range of movement would be regained, but any residual loss of dorsi flexion would barely constitute any significant disability.

28. Dr Colin Andrews, consultant neuro-surgeon, said in his report of 12 March 1993 that the percentage impairment of the right foot was zero. The left ankle with regards to the left leg is a 10-15% disability of the whole leg. He saw no further medical or operative treatment required and no need for further physiotherapy or hydrotherapy. He regarded the respondent's left ankle disability, though likely to persist, as more of a minor problem which should not unduly affect his work as a cleaning contractor except when working on stairs.

29. Dr Anthony Cairns, orthopaedic surgeon, said in his report of 7 April 1994 that the respondent walked with a slight limp, favouring the left leg which demonstrated persistent wasting of the musculature of the left calf. He expressed the opinion, however, that the respondent was fit to pursue his occupations as a contract cleaner and gardener with some limitations and would also be fit to undertake occupations including storeman and sales assistant, with some restrictions on heavy manual occupations.

30. On the whole of the evidence I am of the opinion that the assessment of general damages of $90,000 was excessive and outside a proper range in all the circumstances. I would vary the assessment by reducing it to $50,000. I am further of the opinion that the apportionment between past and future pain and suffering and loss of enjoyment of life was against the evidence. I would apportion $35,000 to the past and award interest at the rate of 2% over a 4 year period between the date of accident and date of trial, which yields a figure of $2,800.

31. The last component of which the appellant seeks review is the loss of earning capacity, past and future, of the respondent. The approach of the Master was to assess the economic loss on the basis of the partnership between the respondent and his wife existing at the time of the subject accident. The respondent's claim before the Master was that, although for taxation purposes the earnings of the partnership were divided on a basis of equality, the respondent was in fact the substantial contributor and that any calculation of his loss of earning capacity was to be calculated by adjusting the partnership earnings to reflect a contribution from the respondent of 80% of the joint effort.

32. He approached his task first by reference to the relevant cases, and in particular to the judgment of the New South Wales Court of Appeal in Taroporewalla v Berkery [1983] 3 NSWLR 28, particularly per Hutley JA at 29: "Where a working member of a partnership has to be compensated for loss of earning capacity, it is his loss of capacity which must be evaluated. The partnership income, or a part of it, may provide a guide ..."

33. The Master also had recourse to Zachopoulos v State Government Insurance Commission (1986) Aust. Torts Reports 80.023 where Jacobs J expressed the principle as follows (at 67,723): "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".

34. The Master found that on the evidence the respondent and his wife did not contribute equally to the partnership enterprises. He found that the wife was more than an inactive partner, but that it was clear on the evidence that it was the respondent 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. He found that the wife, both from what she said in evidence and from her demeanour, was not capable of putting the same effort and the organisational skill into the venture as her husband. The Master went on to conclude that the respondent was overwhelmingly the income generator in the partnership. Accordingly, he adopted the respondent's own assessment of the respective contributions and held that the respondent contributed 80% of the partnership effort. He assessed damages accordingly.

35. In contesting this approach, the appellant referred to the income tax returns disclosing an apportionment of 50/50 between the respondent and his wife and other aspects of the evidence.

36. The respondent said in evidence that a lot of the work was physical and demanding and that he did "all the heavy stuff". He said his wife was not a very strong person, that she had a sort of a back problem which gave her a bit of pain. She was able to do work but at times was under more pain than at other times. She used to do the sweeping, windows on the outside with a hose, but he would do all the heavy stuff. The wife would do whatever she could to help him. He further gave evidence that he would juggle all the work and keep everybody happy. Later in his evidence he said that he would do things at 100% speed whereas his wife could not keep up with him. His own assessment was that he did 80% of the work.

37. In cross-examination the respondent said that his wife would do what she could but a lot of it was too hard for her and she would just have to sit down and rest until he had finished what he was doing. He could not take her home. She could not drive the car so she just had to wait until he had finished what he had to do and they would go home together. His wife's evidence was to the same effect.

38. Having considered all the evidence before the Master, I cannot see any basis upon which this Court should interfere with his apportionment of the partnership effort by the respondent as being 80%. This is the only aspect of the Master's assessment for past and future economic loss raised by the appellant. Accordingly, the Master's assessments for these components cannot be interfered with.

39. The last matter is the matter raised by the respondent by way of cross-appeal against the finding of 20% contributory negligence on the part of the respondent. In my opinion it was reasonably open upon the evidence for the Master to find contributory negligence on account of the respondent's failure to take adequate care for his own safety, placing himself in a position of danger by kneeling on the roadway in such a position that his lower legs protruded out on to a traffic lane used by traffic, and failing to keep a proper lookout for vehicles travelling upon that portion of the road. The respondent was not entitled to assume that other road drivers would drive in such a way as to avoid him when he placed himself in a position of danger.

40. I would not interfere with the Master's finding of contributory negligence on the part of the respondent, nor with his assessment of 20%.

41. The review of the award of general damages from $90,000 to $50,000 and of the award of interest for the past from $5,530.96 to $2,800 means that the award of damages has to be reduced by $42,730.96. The orders I propose are that: (1) the appeal be allowed; (2) the award of $361,905.80 be set aside and in substitution therefor, there be an award of damages in favour of the respondent for the sum of $319,174.84.

42. I would further order that the respondent pay the appellant's costs of the appeal.

HIGGINS J
43. I agree with the reaons of Gallop J and with the orders which he proposes. I have nothing further to add.