Van Duren v Keyes [2007] ACTSC 32 (17 May 2007)

Last Updated: 8 May 2008

OWEN VAN DUREN V PETER KEYES

[2007] ACTSC 32 (17 May 2007)

DAMAGES - personal injury - low back injury - pre-existing asymptomatic degeneration - effect on earning capacity as electrical contractor - no issue of principle

No. SC 444 of 2005

Judge: Master Harper

Supreme Court of the ACT

Date: 17 May 2007

IN THE SUPREME COURT OF THE )

) No. SC 444 of 2005

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: OWEN VAN DUREN

Plaintiff

AND: PETER KEYES

Defendant

ORDER

Judge: Master Harper

Date: 17 May 2007

Place: Canberra

THE COURT ORDERS THAT:

Judgment be entered for the plaintiff in the sum of $246,000.00.

1. This is an assessment of damages for personal injury arising out of a motor vehicle collision. The plaintiff was born on 13 February 1981, and on the date of the accident, 5 August 1999, was a year twelve student at St Edmund's College, Griffith. At about 3.25pm on that date, he was driving a Ford Laser car east on Frome Street, Griffith. He had a friend as a passenger. School had just finished, and they were going to play golf. At the intersection of Blaxland Crescent, the plaintiff's car came into collision with a Hyundai Excel car, driven by the defendant, on whose behalf liability is conceded. The plaintiff hit his head on the inside of the car, but it emerged that his more serious injury was to the lower back, and to a lesser extent the mid-back and neck.

2. The plaintiff completed year twelve, though he was unable to continue an active sporting life. He played for his school's second XV: St Edmund's has long had a reputation for producing outstanding rugby players, and the plaintiff at one time played in the same team as Matt Giteau, now a professional who represents Australia. The plaintiff greatly enjoyed his rugby. He tried out the following season for Easts and was selected in the Colts team, but found that he could not cope with the training. He has not played rugby since, and has been unable to get back to his previous summer sports which included cricket and swimming.

3. The years since the accident have seen the plaintiff generally able to continue working, but unable to play sport, and suffering from chronic low back pain with acute episodes of greater severity, generally brought on by physical incidents.

4. A CT scan in October 1999 showed probable disc herniation at L4-5 with a suggestion of a disk protrusion at L5-S1. The plaintiff underwent a course of physiotherapy in late 1999, and saw a chiropractor a number of times during 2000, continuing with chiropractic treatment at intervals during the ensuing years.

5. The plaintiff is the youngest of four brothers. His brothers work in the family painting business, started by his father about 25 years ago. His grandfather had also been a painter. The boys helped in the business during school holidays and on weekends. The plaintiff's father died of a heart attack in May 2005. Since then his mother, who had always looked after the bookwork, has been attempting to run it, but its profitability has greatly reduced.

6. In his final year at school, the plaintiff started a pre-apprenticeship training course, and when he left school he started an apprenticeship with Electro Group Training, with a view to qualifying as an electrician. In his first year he won the group's Trainee of the Year award.

7. The plaintiff had suffered from headaches from time to time before the accident. After the accident his headaches became much more intense. He described them as migraine headaches, though I am not sure that they met that description objectively. The headaches caused him to lie down and take prescription painkillers. I had the impression that these headaches had been worse in the early period after the accident and had become less of a problem for him by the hearing.

8. In June 2001 he hurt his back lifting a switchboard, and was off work for about two weeks. A few days after returning to work, he and his brother were involved in an incident with police in a carpark, in which he fell or was thrown to the ground, further aggravating his back.

9. Life for the plaintiff seems to have continued uneventfully until May 2003, when he saw the doctor on a few occasions complaining of sudden sharp pain in the lower back following minor work-related incidents. A further CT scan in July 2003 indicated the potential for nerve root compromise at L4-5. The plaintiff had some further time off work, and more physiotherapy. At about this time he was referred to Dr Charles Howse, a sports medicine practitioner, who gave him a number of cortisone injections.

10. The plaintiff's evidence was that he was physically restricted throughout his apprenticeship. He coped with tasks requiring lifting or twisting with help from fellow employees. He wore a back brace, and took painkillers as needed. He carried out exercises recommended by his physiotherapist.

11. In October 2003 he decided to defer his apprenticeship. His letter to the ACT Apprenticeship Authority within the Department of Education, Youth and Family Services gave the reason for his deferral as `a medical condition'. By this time the plaintiff had reached a point where it would have taken him about six months to complete his apprenticeship. His understanding is that it remains open to him to complete his apprenticeship at some time in the future.

12. At about the same time, he began a business as an electrical contractor through a company, Van Duren Electrics Pty Ltd, of which he and his mother were the directors and shareholders. The growth of the business was slow, and for about six months he spent most of his time working in the family painting business with his father and brothers. Thereafter, the electrical business appears to have become a reasonably successful one, engaging the plaintiff for most of his available working time, although he has continued to spend some time working with the family company. He says that in the two years before the hearing he spent about one day a week working for the family company. After the death of his father he became more involved in the pricing, quoting and management side of the business.

13. The plaintiff's case is that he has suffered a loss of income through Van Duren Electrics because of his physical limitations. He has dealt with the problem by engaging subcontractors to carry out the heavier work. He has also had to engage a qualified electrician at times to comply with legislation or regulations. He estimates that 70% to 80% of the work done by subcontractors represented work he would have done himself if he had been physically capable of it. This estimate seems to me to be speculative: the plaintiff is unable to support it with documentary material. Nevertheless I accept his evidence that he has used subcontractors to some degree to compensate for his physical disabilities. The plaintiff concedes that some of the subcontract work would probably have been required in any event because the business was expanding and he would not have had time to do all the work himself.

14. He describes a general state of affairs over the year or so up to the hearing, where there were times when he could do a normal day's work. There were times when he would push himself and aggravate his back pain. About once a month he experienced acute pain causing him to take a day or two off work and rest at home, returning on lighter duties for three or four days. The back pain often affected his sleep. He took painkillers two or three times a week to help him sleep. He thought that his back condition had been constant for the last few years.

15. He has been in a relationship with his girlfriend Candice for about seven years, and his back pain affects the physical side of the relationship. He has done some diving and spearfishing, sometimes monthly. He is attempting to move the focus of his business towards programming and home automation, which I take to relate to domestic burglar alarms which he expects will require less physical exertion.

16. During 2005 he was referred to Dr Geoffrey Speldewinde, a consultant in rehabilitation, pain and musculoskeletal medicine. Dr Speldewinde gave him a number of injections into the right facet joints at L4-5 and L5-S1 for diagnostic purposes and subsequently similar injections into the right sacroiliac joint. In December 2005 the plaintiff was arrested by police and thrown against a police vehicle, aggravating his back injury.

17. Once the diagnostic injections identified the source of the neural pain, Dr Speldewinde recommended a course of percutaneous radiofrequency neurotomy. The plaintiff had had one such procedure by the time of the hearing, but it was too early to tell whether it had been completely successful. The plaintiff was hopeful that it would offer relief. The relief could not be expected to be permanent and the procedure would need to be repeated at intervals of one or two years.

The medical evidence

18. Counsel for the plaintiff tendered a bundle of medical reports and clinical notes. The reports I found of assistance were by Dr Gytis Danta, the treating neurologist; Dr Speldewinde, the treating pain management specialist; Dr Graeme Griffith, a consultant surgeon who saw the plaintiff at the request of his solicitors; and Dr Owen White, a neurologist who also saw the plaintiff for the purpose of a report to his solicitors. Dr Griffith was cross-examined by telephone. It emerged that the plaintiff had been seen by an orthopaedic surgeon, an occupational physician and a pain management specialist for the purpose of reports to the defendant. In the event counsel for the defendant did not adduce any medical evidence. I draw the available inference that the reports obtained by the defendant's insurer and solicitors would not have assisted the defendant's case.

19. Dr Danta saw the plaintiff in December 2004. He was given a history of no spinal symptoms before the car accident but mild headaches perhaps twice a year. The plaintiff told him that he had hit his head against the right car pillar, causing a haematoma to the scalp and a split-second loss of consciousness. By the end of 2004 he was suffering from headaches about 15% to 20% of the time. The headaches generally lasted a couple of hours, but sometimes a full day, and were sometimes accompanied by nausea and vertigo. Backache and neck pain were present intermittently, exacerbated by physical activity sometimes of a quite minor nature. It was Dr Danta's opinion that the headaches and neck pain were all accident-related. He referred the plaintiff to Dr Speldewinde.

20. Dr Speldewinde reported to the plaintiff's solicitors in June 2006, saying that he had been seeing him since February 2005 for rehabilitation of his persisting back pain. He said that the neurotomy treatment which he recommended carried an 80% likelihood of significant pain relief within twelve months. It was a palliative treatment and could be repeated from time to time. Dr Speldewinde was in no doubt that the plaintiff's condition had been caused by the motor accident. The cost of the neurotomy treatment was about $3500.00 including day hospital fees. The treatment might need to be repeated every one to two years, up to five times in all. The plaintiff's headaches would require continued management with medication strategies supervised by a pain psychologist at an approximate cost of $1,000.00, and judicious use of analgesic medication which could be expected to cost something like $200.00 a year.

21. Dr White saw the plaintiff in March 2004. He diagnosed the plaintiff's back problems as due to disc prolapse at L4-5, occasioned by the motor accident. He had some doubts about the plaintiff's capacity to cope with the demands of the work of an electrician over a period of many years, and thought that unless he modified his work he might have increased pain and disability in the future. Given the plaintiff's relative youth, he expected amelioration of the pain over a period of years, though there was some uncertainty with that prognosis.

22. Dr Griffith saw the plaintiff on three occasions, in July 2003, May 2005 and July 2006. He attributed the plaintiff's symptoms to disc lesions at L4-5 and L5-S1, with intermittent referred pain to the buttocks and leg, accompanied by chronic adjustment disorder with elements of anxiety and depression. He remarked on the fact that young people exposed to MRI for any reason are found to have bulges of lumbar discs in about 50% of cases, so that the plaintiff's lumbar radiological findings might have been within the realms of normal variation and not pathological. The prognosis was for gradual improvement, though the fact that the plaintiff remained symptomatic seven years after the accident caused concern. The physical status was stable: acute prolapse was most unlikely, as was future surgery. Incidents since the motor accident should be seen as periodic aggravations, with a return to baseline levels in a short period. The motor accident, rather than any of these minor incidents, should be seen as responsible for the plaintiff's continuing symptoms. There was a suspicion of contusive cartilage injury to the right knee, caused by the accident. There was a significant neuropathic element to the plaintiff's pain, and it might be appropriate to trial a neurolytic such as Pregabelin (Lyrica) over a period of three or four months, at an approximate cost of $150 per month.

23. When cross-examined by telephone, Dr Griffith was asked whether it was likely that, assuming the motor accident had not occurred, the combination of the plaintiff's work as an electrician, and his pre-existing degenerative spinal condition, would have been likely to have led to the development of lower back symptoms in the future. He agreed that this was likely, though he thought that it would have been unlikely to become symptomatic for ten to fifteen years, rather than one to two years, with symptoms at a similar level to the present. He clarified this answer in re-examination, saying that the question was a speculative one, but that the plaintiff would probably have developed symptoms of significance rather than minor niggles by his early to mid-thirties.

24. This hypothesis had not been put to Dr Griffith as an assumption when he prepared his reports, nor had it been put to any of the other medical practitioners whose reports were in evidence. It was put to Dr Griffith for the first time while he was giving his evidence by telephone: he was not provided with an opportunity to give much consideration to it. I can reasonably infer that the opinion of the doctors qualified on behalf of the defendant on this issue did not assist the defendant's case. I am not sure that Dr Griffith's experience as a general surgeon adequately qualifies him to express an opinion as to whether, or when, the plaintiff's back might have given rise to significant symptoms in the absence of the motor accident. One can reasonably assume that surgeons generally come into contact, in a treating capacity, with patients who are complaining of symptoms viewed by their general practitioners as warranting an expert view as to whether they might be candidates for surgery. The expression of opinion sought from Dr Griffith would seem to require study of a number of symptom-free tradesmen in the plaintiff's age group, some with and some without spinal degeneration, over a period of years. The proposition could be properly tested only by conducting periodic radiological investigations of a control group of tradesmen every five or ten years during their working lives. It follows that I am not inclined to find, on the basis of Dr Griffith's opinion alone, that the plaintiff would more probably than not have developed back symptoms at a similar level to his present symptoms by his mid-thirties.

25. I nevertheless accept that the degenerative changes, although causing no symptoms to the plaintiff at the time of the accident, were likely to progress, probably eventually becoming productive of back pain and restriction of movement, and probably cutting short his working life as an electrician. This finding is better reflected in an adjustment in the amount I would have otherwise allowed for loss of earning capacity for the future, rather than by an attempt to arrive at a likely early retirement age and by carrying out a mathematical calculation.

26. I am satisfied that the effect of the motor accident on the plaintiff has been greater, by reason of his pre-existing spinal degeneration, than the likely effect of a similar trauma on a young man of the same age with a spine in normal condition. I take account of the fact that the plaintiff's spine immediately before the accident was such as to make him more vulnerable to subsequent trauma to which he might have been exposed over the years than the norm.

The evidence as to loss of earning capacity

27. The business started by the plaintiff's late father was operated as a discretionary family trust, with a company called Van Duren Pty Ltd as the trustee. The beneficiaries were the parents and the plaintiff and his brothers: the income was distributed between them each year by the trustee in varying proportions. As I have mentioned, the plaintiff ran his electrical business through another company, Van Duren Electrics, of which he and his mother were the shareholders and directors. That company did not involve the plaintiff's late father or his brothers. The businesses were structured and operated in a manner which makes it difficult to determine with any accuracy the amount the plaintiff earned each year, and thus to quantify the effect of his injuries on his earning capacity.

28. Oral evidence about the economic loss portion of the claim was given by the plaintiff, his mother and a forensic accountant, Mr Geoffrey Davis. The plaintiff's mother had a much clearer idea of the structure of the businesses than the plaintiff. She is responsible for the bookkeeping and administration of the family business and the plaintiff's company. She confirmed that the plaintiff and his brothers all worked in the family business on weekends and during holidays while they were at school, and continued to work in the business after they left school. The family business made extensive use of subcontractors.

29. The plaintiff's mother explained that when Van Duren Electrics required extra labour the family company would employ a subcontractor to help him. The subcontractor would invoice the family company, and the family company would pay. This expenditure would be recorded in the accounts of the family trust, not the plaintiff's company. The plaintiff's mother had attempted to identify invoices which related to subcontract work for the plaintiff's electrical business, but I am not satisfied that she was able to do so with any accuracy.

30. Over a period of four years before the hearing, the plaintiff's mother said that she lent her son about $200,000.00. She did this to help him become self-sufficient. Such assistance had not been necessary with her other sons. She said that one reason was that the plaintiff had not been able to work as hard as his brothers. $55,000.00 of the loan had been recorded as a loan by the family trust to the family company. About $30,000.00 represented a loan by the plaintiff's mother to the plaintiff for a deposit on an investment property. The rest of the plaintiff's borrowings, about $115,000.00, was the total of amounts she had lent her son over the period of which there was no written record. Her evidence was that there was no formal arrangement for the son to repay the amounts lent to him, though she hoped that he might do so one day.

31. Van Duren Electrics did not pay any salaries. The plaintiff's mother agreed that if the plaintiff was paid for some electrical jobs in cash, she would not necessarily know about it and these would not appear in the company's records. The profit and loss statement for the plaintiff's company included in its expenditure a figure for subcontractors ($12,536.35 in 2003-2004; $29,765.91 in 2004-2005). The plaintiff's mother explained that these were figures she had given the accountants as the total of amounts paid by the family trust to subcontractors in respect of work done for the plaintiff's company. Loan agreements were executed between the family company and the plaintiff's company in each year for those amounts.

32. The plaintiff's mother said that from time to time the family company had referred painting work to Van Duren Electrics. When this happened the family company provided any necessary subcontract labour, and the family trust paid for it. The amount was recorded as part of the loan to Van Duren Electrics at the end of the financial year. The subcontract labour for the plaintiff's company had been provided in that way since its incorporation in October 2003. The plaintiff's mother said that she hoped that the accruing loans would be repaid, though she said that it was more likely that they would be forgiven, I infer because she doubts whether Van Duren Electrics will ever be profitable enough to repay them.

33. The records of the family trust show that income continued to be distributed to the plaintiff ($71,000.00 in 2003-2004; $47,000.00 in 2004-2005). These distributions were declared by the plaintiff as income in his personal tax return but it is far from clear that he actually received the money. It seems to me more likely that, typically for a family corporate and trust structure of this kind, income was notionally distributed by the accountant when preparing the company's financial records, probably well after the end of the financial year, in such a way as to minimise the total tax payable.

34. During the course of the plaintiff's evidence, he was cross-examined by counsel for the defendant from the tax returns of the family trust, the plaintiff's company and the plaintiff himself. It seems to me that throughout the period for which records were available, commencing with the year before the motor accident, the amounts shown in the tax returns bore little if any resemblance to the amounts actually received by the plaintiff. His personal 2003-2004 tax return showed income of $71,000.00 from the family trust, but no income from his wage as an apprentice or from his business. The plaintiff was quite unable to explain this, saying that the documentation was prepared by the family's accountants, and that it was they who should be asked to explain.

35. The plaintiff frankly agreed, indeed volunteered, that when the opportunity presented itself, he accepted cash for both electrical and painting jobs. He appeared to be naïve in the extreme about this, to the extent that I wondered whether he had any appreciation of his obligation as a taxpayer to declare income from all sources. My impression was that he had probably grown up in, and spent his working life in, a culture where cash jobs, unrecorded and undeclared, were so widely accepted that it would not have occurred to him to reflect on whether there might have been anything improper or unlawful about such practices.

36. The plaintiff's evidence was that by 2005 he was spending most of his time on electrical work. He usually worked with one offsider, treated by the business as a subcontractor, but he also worked with a number of assistants. Occasionally he worked with one of his brothers. He often had more than one person working for him and frequently had more than one job going at a time. One of his subcontractors was a qualified electrician, whom he needed to carry out tasks he was unqualified to perform. The plaintiff spent most of his time communicating with customers, giving quotes and generally managing the business.

37. The plaintiff agreed that the expenses of his company did not include a superannuation or workers' compensation component. He said that any such expenses would have been paid by the family trust.

38. The plaintiff's evidence was that the loan from the family trust to Van Duren Electrics, represented by the accumulating subcontract expenses, was agreed within the family to be for a period of ten years. The loan carried interest but he was not required to pay it back until the end of the ten-year period. He said that his intention was to pay it back at that time.

39. He was not asked about the loan of $200,000.00 which his mother had given evidence about. The figure she mentioned of $55,000.00 being recorded as a loan from the family company to the plaintiff's company is consistent with the plaintiff's company balance sheet for 30 June 2005, which shows loans from directors of $55,490.28. There is no written corroboration of the rest of the loan.

40. Mr Davis prepared a written report, on which he was cross-examined. He assumed a need for ten hours a week substitute labour, increasing to fifteen hours a week by the hearing, and to twenty hours in the future, to age sixty-five. He was asked to assume that Van Duren Electrics spent about half of its time on electrical work and about half on painting. About 70% of the work came from a core group of repeat customers. He assumed that the effect of the plaintiff's injuries was that he had had to employ substitute labour to perform tasks which he would have been able to perform himself if he had not been injured. This had increased the expense of running the business.

41. Mr Davis's report was prepared on the assumption that the plaintiff required ten hours of help a week for the first eight months to 1 July 2004; 15 hours a week from 1 July 2004 until 31 January 2006, and 20 hours a week thereafter. Mr Davis accepted the profit and loss statements attached to the Van Duren Electrics tax returns.

42. He adopted an hourly rate of $20.55, a base hourly rate which he obtained from a CFMEU enterprise bargaining agreement for 2003 to 2005. He made no allowance for superannuation, workers' compensation, travel or other expenses. From these figures, Mr Davis calculated the plaintiff's past loss of earnings at $22,452.00 and his future loss, assuming a discount rate of 3% per annum, with no allowance for vicissitudes, at $430,848.00 to age sixty-five. For the future Mr Davis assumed workers' compensation premiums of 11.91% of gross wages, superannuation of 9% of gross wages, and a contribution to the Australian Construction Industry Redundancy Trust (ACIRT) of $23.66 per week for substitute employees.

43. He did not have the benefit of invoices to verify the hours worked or the cost of subcontractors. He agreed that if one ignored workers' compensation, superannuation and ACIRT, the hypothetical gross weekly wage for a subcontractor working twenty hours a week would reduce from $515.87 to about $400.00.

Findings

44. I accept the plaintiff and his mother as honest witnesses. Counsel for the defendant made no submission to the contrary. I accept that they left it to their accountants to prepare their accounts and those of their business structures, and their tax returns, in such a way as to minimise tax. It is clear that the plaintiff received income in cash which did not appear in any of the written records.

45. I accept that the figures in the tax return shown as subcontract expenses, and the corresponding loans from the family company to Van Duren Electrics, were honestly arrived at by the plaintiff's mother from the information she had available to her. The plaintiff's brothers helped him in his business from time to time, and I suspect that they may have been paid in cash on occasions.

46. If the plaintiff had not been injured, I am satisfied that he would have completed his apprenticeship and qualified as an electrician.

47. The plaintiff has been suffering from the symptoms of a serious lower back injury for nearly eight years. His symptoms are likely to continue, perhaps with some improvement over time, for the rest of his life. The injury has affected his capacity to play rugby and other sports. Although he has had considerable treatment, he has adapted to his disabilities and continued his working life to the best of his ability.

48. I invited counsel to suggest a range for general damages for pain and suffering and loss of enjoyment of life. Counsel for the plaintiff put a figure of $70,000.00. Counsel for the defendant suggested $45,000.00 to $55,000.00. It seems to me that a fair figure to both parties for general damages is $60,000.00, of which I apportion $35,000.00 to the past. Interest on the past component should be allowed at $5,500.00.

49. The evidence supports a modest award for domestic assistance provided by the plaintiff's mother and girlfriend over the years. I allow $1,500.00 including interest for the past, and $1,000.00 for the future.

50. Treatment expenses were claimed up to the hearing at $15,161.97, and will have increased since then. For past treatment I allow $15,500.00. It seems that the plaintiff has paid about $2,500.00 of these expenses, the balance being either unpaid, or paid by Medicare or the defendant's insurer. The plaintiff is entitled to interest at commercial rates on the expenses he has paid himself, for which I allow $1,000.00.

51. The plaintiff claims an amount of $15,000.00 for future treatment expenses. Counsel for the defendant submits that this is a little high and that an appropriate allowance would be $10,000.00. I accept that the plaintiff will continue with radiofrequency neurotomy, offered by Dr Speldewinde at $3,500.00 per session, for another four sessions over the next ten years. I accept that the plaintiff will continue to need painkillers from time to time. I allow $12,000.00 for future treatment.

52. The major issue between the parties relates to loss of earning capacity. In this regard I need to make a comparison with what would probably have happened had the motor vehicle collision not occurred. I am satisfied that the plaintiff would in those circumstances more probably than not have completed his apprenticeship and become a qualified electrician. He would probably have started his own business at about the time he did. Fortunately for the plaintiff, Van Duren Electrics has had plenty of work notwithstanding his disabilities. It seems to me that the measure of his past economic loss is largely restricted to the expenses incurred in employing additional labour to carry out the tasks which have been physically beyond him. As to the future, it seems to me that he is likely to continue to be reasonably successful in business. I think it likely that over the next ten or fifteen years he will move increasingly into a managerial role.

53. Counsel for the defendant submits that the plaintiff has adapted his work to his injuries. He submits that there is no evidence to support a conclusion that 70% to 80% of the cost of subcontractors is attributable to the plaintiff's injuries: accepting that there are tasks the plaintiff cannot or should not attempt, and that subcontractors could carry out such tasks, it is clear on the evidence that the plaintiff spends his time usefully, performing some other task within his capacity. Counsel for the plaintiff relies on the plaintiff's evidence that it is financially inefficient for him to be doing minor tasks while he pays subcontractors to perform tasks that a tradesman in his position would normally carry out personally.

54. I accept that in the early days of Van Duren Electrics, the plaintiff required assistance most of the time, because tasks arose regularly which were beyond him. I also accept the plaintiff's evidence that periodically he experiences acute episodes of pain and needs to take some days off work, returning for two or three days at less than full capacity. On such occasions he needs someone else to perform the work he would otherwise be doing, as well as the heavier work.

55. Counsel for the plaintiff submits that I should find 75% of the past subcontract expenses attributable to the plaintiff's injuries. If I were to accept this submission, and apply the methodology suggested by Mr Davis, I would arrive at a figure for past loss of earnings of about $35,000.00. Counsel for the defendant, on the other hand, submits that a figure of $10,000.00 is adequate for the past.

56. Both counsel accept that it is appropriate to go behind the corporate and trust business structures, and to take account of the reality that the plaintiff himself had, at the time of the motor accident, a potential earning capacity, that the capacity has been impaired by the plaintiff's injuries, and that the impairment has caused a reduction in what the plaintiff would otherwise have earned: Husher v Husher [1999] HCA 47; (1999) 197 CLR 138 per Gleeson CJ, Gummow, Kirby and Hayne JJ at paras 18-23.

57. As I said earlier, I am not minded to accept the plaintiff's estimate that 70% to 80% of the work done by subcontractors represented work he would have done himself if he had been physically capable of it. The estimate was not supported by any documentation, or by the evidence of any other witnesses, and the plaintiff did not explain how he arrived at his estimate. The evidence does not provide a basis for a mathematical approach to the selection of a figure for past loss of earning capacity. Doing the best I can, I propose to allow $25,000.00 for the past component, plus interest of $4,500.00.

58. In considering an appropriate award for loss of earning capacity for the future, I must take account of the medical evidence of pre-existing degeneration in the plaintiff's lower spine, and of the likelihood that this condition would over time probably have become productive of symptoms which would have reduced the plaintiff's working capacity regardless of the motor accident. I must also take into account the fact that the pre-accident condition of the plaintiff's spine increased his vulnerability to the effects of subsequent trauma, whether in the workplace or elsewhere, in the future. The plaintiff is already moving towards more of a managerial role within his company, and I suspect that a move in this direction would have been likely regardless of the motor accident. The plaintiff's capacity to engage in the physical work of an electrician is considerably impaired, but his capacity to work in a managerial capacity is much less so.

59. I must also take account of the fact that he may not always have the opportunity to work in his own business, employing tradesmen and labourers. If he were ever to find himself out of work, his employability in the general labour market would be considerably less than if the motor accident had not occurred.

60. The plaintiff is now twenty-six years of age. Counsel for the plaintiff submits that it would be appropriate to calculate the plaintiff's continuing loss to the age of fifty-five, but to reduce the amount arrived at by 33% to take account of the usual vicissitudes of life, and the factors particular to the plaintiff, principally the degenerative condition of his lower back prior to the accident.

61. The 3% multiplier for 29 years is 1016. It seems to me that the present value of the plaintiff's loss of earning capacity should be assessed at something of the order of $150.00 to $250.00 net per week. Applying the multiplier and deducting 33% yields a range of about $100,000.00 to $135,000.00. The selection of a figure inevitably involves the exercise of some discretion. I propose to award $120,000.00 for the future component of the plaintiff's loss of earning capacity.

62. The total of the components is as follows:

General damages $60,000.00

Interest on past component $5,500.00

Treatment expenses

- past $15,500.00

- interest $1,000.00

- future $12,000.00

Loss of earning capacity

- past $25,000.00

- interest $4,500.00

- future $120,000.00

Griffiths v Kerkemeyer

- past $1,500.00

- future $1,000.00

$246,000.00

63. On consideration the total seems to me to represent an appropriate reflection of the effects upon the plaintiff of his injuries in the motor accident. There will be judgment for the plaintiff for $246,000.00.

Costs

64. On the morning of the second day of the hearing counsel for the defendant applied for an adjournment to inspect business records which had been produced that morning by the plaintiff. I will need to set out a little of the history. The action was commenced in the Magistrates Court in June 2003 and removed to this court with the costs of the removal application being reserved, in July 2005. The solicitors for the defendant had issued a number of summonses for production of documents in the Magistrates Court, though not a summons addressed to Van Duren Electrics Pty Ltd or to Van Duren Pty Ltd. The plaintiff was not required at any stage to file an affidavit as to documents.

65. The solicitors for the defendant appear to have taken the view, immediately following the transfer to this court, that the action was ready for hearing. On 2 August 2005, the defendant's solicitors completed a certificate of readiness and submitted it to the plaintiff's solicitors. On 13 September 2005, they applied to the court for a listing conference. The matter came before the Deputy Registrar on three occasions before a certificate of readiness was ultimately completed on behalf of the plaintiff and filed. The point should be made that the form of certificate of readiness draws the attention of the parties to whether or not discovery and inspection of documents have taken place. The defendant certified that discovery had not taken place and that inspection was thus not applicable.

66. On 13 April 2006 at a listing hearing conducted by the Deputy Registrar, the action was listed for hearing on 7 August 2006. On 7 July 2006 the defendant's solicitors issued a subpoena addressed to the plaintiff requiring him to produce the business records of Van Duren Electrics and his own tax returns and related documents. The subpoena was duly served: in response, the plaintiff did not produce any documents, but lodged what purported to be a statutory declaration by his mother, in which she set out dates and amounts of payments to subcontractors from October 2005 to May 2006. This was patently not responsive to the subpoena. A solicitor for the defendant appeared before the Deputy Registrar on 28 July 2006 and was granted access to this document. The issue was not raised again prior to counsel's application on the second day of the hearing, 8 August 2006, for an adjournment. The application for adjournment was not opposed by counsel for the plaintiff.

67. On 8 August the solicitors for the defendant issued a subpoena addressed to Van Duren Pty Ltd seeking production of records of payments, distributions and loans between Van Duren Pty Ltd and either the plaintiff or Van Duren Electrics Pty Ltd. The documents sought were duly produced by the family company and access was granted by the solicitors to those documents on 18 August; the hearing resumed on 21 August 2006.

68. Counsel for the defendant submits that the adjournment on 8 August was made necessary by the plaintiff's failure to comply with the subpoena of 7 June.

69. It appears to me that the adjournment was made necessary by the forensic decision evidently made by the solicitors for the defendant during the interlocutory stages of the matter not to require discovery of documents. If the process of discovery had been undertaken, as I would have thought was appropriate where there was a claim for loss of earning capacity of this nature, issues as to the adequacy of disclosure of documents would have been dealt with much earlier, and would not have required an adjournment of the hearing. Even on or shortly after 28 July, when the defendant's solicitors were provided with access to the so-called statutory declaration by Mrs Van Duren as the response to the subpoena to the plaintiff, an application could have been made to vacate the hearing date pending proper compliance with the subpoena. The plaintiff himself can be criticised for failing to produce the documents he was required to produce, but it does not seem to me that his failure was the cause of the adjournment on 8 August. I am not satisfied that these circumstances justify any special order as to costs in relation to that adjournment. In the absence of any special order, the usual position will obtain: the costs occasioned by the adjournment will be costs in the cause.

70. I shall hear the parties as to the costs of the action and the reserved costs of the application for removal from the Magistrates Court.

I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Associate:

Date: 17 May 2007

Counsel for the plaintiff: Mr RL Crowe SC

Solicitors for the plaintiff: Maliganis Edwards Johnson

Counsel for the defendant: Mr AJ Black

Solicitors for the defendant: Sparke Helmore

Date of hearing: 7, 8, 21 August 2006

Date of judgment: 17 May 2007