Re Public Trustee of the Northern Territory (As Manager of the Estate of Kent William Hale) v Baldon Pty Limited [1982] FCA 199 (12 October 1982)

FEDERAL COURT OF AUSTRALIA

Re: PUBLIC TRUSTEE FOR THE NORTHERN TERRITORY (as manager of the estate of
KENT WILLIAM HALE)
And: BALDON PTY. LIMITED
No. NT G28 of 1981
Assessment of damages

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Northrop J.
McGregor J.
Sheppard J.

CATCHWORDS

Assessment of damages - personal injury - serious orthopaedic injuries - plaintiff a paranoid schizophrenic - challenges to adequacy of amounts awarded for destruction of earning capacity, loss of amenities of life and for domestic assistance - no question of principle.

HEARING

MELBOURNE
12:10:1982

ORDER

1. The appeal be allowed.

2. The cross appeal be dismissed.

3. The respondent pay the appellant's costs of the appeal.

4. There be no order as to the costs of the cross appeal.

5. The amount of the judgment entered in favour of the appellant on 23 October 1981 be varied by increasing it from $159,569.31 to $189,569.31.

DECISION

This is an appeal from a judgment of the Supreme Court of the Northern Territory delivered on 23 October, 1981. The judgment was given in a matter in which the appellant as plaintiff sued the respondent as defendant for damages. The action was brought by the appellant as manager of the estate of one Kent William Hale who was injured in the course of his employment with the respondent. Like the learned trial judge we have reservations as to whether it was appropriate for the Public Trustee to be made a party. However, no point concerning this matter was taken before his Honour or before us and nothing turns on it. Hereafter, for convenience, we shall refer to Mr. Hale as the appellant.

The appellant was injured on 10 April, 1973, in a horse riding accident. His Honour found that the respondent was in breach of the duty of care which it owed the appellant as its employee and awarded the appellant the sum of $159,569.31 by way of damages. The appellant challenges the adequacy of this amount. No challenge, by way of cross appeal, is made to his Honour's finding of negligence. The respondent however, by leave given during the hearing of the appeal, has cross appealed in respect of one of the ingredients which go to make up the amount of the judgment which was entered. The respondent claims that the amount of the judgment should be reduced for this reason.

The award of damages was made up as follows:
Pain and suffering and loss of amenities $30,000.00
Past economic loss 25,000.00
Loss of earning capacity 85,000.00
Provision for domestic services 15,120.00
Hospital and medical expenses 4,449.31
$159,569.31

The appellant challenges the adequacy of the amounts awarded for pain and suffering and loss of amenities, for loss of earning capacity and for provision for domestic services. The respondent challenges the amount awarded for loss of earning capacity. Its challenge is made only because his Honour used a discount rate of 2 per cent rather than the 3 per cent which, at least for the moment, it is appropriate to use following the decision of the High Court in Todorovic v. Waller [1981] HCA 72; (1981) 56 A.L.J.R. 59. The decision of the High Court was delivered on 16 December, 1981, that is after his Honour's judgment under appeal had been delivered, so that his Honour did not have the benefit of the High Court decision when he published his reasons.

His Honour has given, with respect, a clear and concise account of the injuries which befell the appellant and of their effect upon him down to the date of the trial. The account of them hereafter given is taken from his judgment.

Although some challenges were made to his Honour's findings of primary fact, the principal submissions of the parties were directed to showing that his Honour's evaluations of the amounts to be awarded for the various heads of claim were erroneous. In this respect it should be mentioned that although the only matter upon which the respondent cross-appealed is the one already mentioned, senior counsel for the respondent suggested in the course of his argument that his Honour's awards in respect of all the challenged heads of damage were over generous or at least on the high side of the appropriate range.

The appellant is a half-caste aboriginal. He was born on 15 September, 1954, and at the date of trial was 27 years of age. On 10 April, 1973, when the accident occurred, he was 18 years of age and was employed as a stockman on a property known as Bing Bong Station. He suffered a compound fracture of the upper shaft of the left femur and a closed fracture of the shaft of the left humerus. He was rendered deeply unconscious, due, apparently, to a condition of fat embolism from which he began to suffer. The nature of that condition will be explained a little later. Whether the appellant suffered an actual head injury is not clear from the evidence. It is not material to attempt to resolve that question.

The appellant was taken to Gove Hospital and then flown to Darwin Hospital where he was admitted on 12 April, 1973. He remained unconscious but was resuscitated. His fractured left arm was put in plaster in a satisfactory position and the wound to his leg was cleansed but not sutured. The left leg was controlled by skeletal traction through the tibia.

The left leg was heavily infected but was able to be stitched on 22 April. The position of the fracture was not satisfactory but because of the infection an open reduction of the fracture was not attempted; it was decided to accept malunion.

After a considerable time healing of the infected wound occurred. The fracture then appeared to be uniting and the appellant was mobilised in a caliper. When he was learning to walk with the help of a four pronged walking aid, his left humerus fractured spontaneously above the site of the original fracture. This was due to a loss of strength in the bone.

On 28 October, 1973, the left arm was again put in plaster. On 8 November the appellant underwent a further operation to his left leg in an endeavour to improve the position of the old fracture. He was again put in traction. By mid December the fractured humerus had again united and it was decided to recommence the attempt to get him walking. This proved to be a long and difficult process due, amongst other things, to the appellant's loss of confidence. He became increasingly impatient and unco-operative with the nursing staff.

In the end a reasonably good result was obtained with the left arm but the appellant has substantial residual and permanent disability in his left leg. It is 7 cm. shorter than the right leg. There is 20 degrees loss of flexion in the left hip and all other movements of the hip are reduced by 50 per cent. Although he has a full range of movement in the left knee, there is some ligamentous laxity in it. He has wasting both of the thigh and of the calf. The leg is scarred both as the result of the original wound and of the operative treatment he has undergone.

The appellant walks with a severe limp. He has not at any recent time worn any type of raised orthopaedic shoe to compensate for the shortness of his left leg. He has curvature of the spine due to the shortness of the leg, but this corrects fully when he is sitting or lying. As a result of his injuries the appellant has a very awkward gait which, in the opinion of the learned trial judge, could be substantially improved by wearing a built up surgical shoe. The appellant did at one time wear a pair of surgical shoes which wore out. He purchased another pair second-hand but these hurt his feet and he wore them no longer. At the trial he wore thongs. Of him his Honour said, "He presented as rather a miserable person, lacking in motivation to improve his gait. There is no doubt, however, that he has gross physical deformities as a result of the accident".

Serious as those deformities are, they are not the only problem which the appellant has. He has been diagnosed as a paranoid schizophrenic. He demonstrated symptons of paranoia during his rehabilitation in Darwin Hospital and in January 1974 was transferred from the orthopaedic ward to the psychiatric ward. Later he was transferred to a rehabilitation centre in South Australia and has subsequently had several admissions to psychiatric units. At the time of the trial he remained under treatment as an outpatient of the Darwin Hospital.

He was at that time living in a caravan at the Bagot Road Reserve. The caravan was placed on a block of land occupied by an aunt, one Clara Johnson. She lives in a house nearby. The caravan has no toilet facilities but such facilities are available about 100 yards away on the Bagot Reserve. However, the appellant has the full use of Mrs. Johnson's house except during the night when it is locked.

Mrs. Johnson (often described in the evidence as Aunt Clara) does whatever housekeeping has to be done in the caravan, prepares the appellant's meals and does his washing. She is kindly disposed towards him. For these services she was, for the period of six weeks immediately before the trial, being paid an amount of $20 per week by the Public Trustee. The appellant supplements this amount from time to time with payments of $10 or $20. It is not possible to determine from the evidence what the regularity of these payments has been. His Honour thought that part of the $20 per week paid by the Public Trustee was probably used for food and concluded that of the amount of $20 per week paid by the Public Trustee, $12 to $15 per week should be regarded as appropriated to cleaning, washing and suchlike. No error is disclosed in that finding.

The appellant has the benefit of overall supervision by officers of the Department of Community Welfare who visit him two or three times a week to assist him in the day to day management of his affairs. Nevertheless, as his Honour found, he is slovenly in appearance, lacking in personal hygiene and miserable about his own life.

His Honour summarised his findings concerning the appellant's present condition as follows:

"I am satisfied on the evidence that his physical disabilities and mental illness of paranoid schizophrenia are due to the accident. He is unfit for any form of physical work in his present state. It may be that wearing a suitable boot would make him fit for some light work on a part time basis. He has tried some sedentary work at a sheltered workshop "in Darwin in the last couple of years. He did not acquit himself very well there. He was not a regular attender, he would stay 2 or 3 days and then would not return for another week or so. He was usually fairly dirty and did not get on well with other people. The manager of the workshop gave evidence of his work performance. He was fairly slow in the simple assembly tasks to which he was directed. He would get depressed and argue with other trainees and on occasions the manager of the workshop would have to telephone the Berrimah Health Clinic so that he could be given some medication. The combination of his physical disabilities and mental illness are such that there is no real likelihood of his entering gainful employment at any time in the future. His mental illness is not likely to improve to the point where he can lead an independent life in the community much less be able to work in the community.
Before the accident Hale had the normal desires of marriage and ordinary social standing in the community. I think that he now has no real prospects of marriage or inter-personal relationship."

There was some challenge before us to his Honour's finding that the appellant's schizophrenia was due to the accident. Alternatively it was submitted that he was a person predisposed to schizophrenia with the consequence that if it had not been brought about by the accident, it may well have been a condition from which the appellant suffered in later life due to some other triggering incident. The evidence led from a number of doctors was to the effect that the schizophrenia was due to the accident. According to the tenor of Dr. Radeski's evidence the schizophrenia was caused by stress due to his long period of confinement in hospital and the difficult treatment he underwent or by an insult to his brain caused by the fat embolism or a combination of both. Fat embolism is the occlusion of blood vessels by fat droplets usually resulting from bone or fatty tissue trauma. The preponderance of medical opinion in this case is that one or more droplets entered the blood stream, perhaps from bone marrow, and lodged in the brain causing the condition of deep unconsciousness from which the appellant suffered shortly after the accident. The views of doctors, other than Dr. Radeski, as to the cause of the schizophrenia are to the effect that it was caused by stress rather than the fat embolism. Such conflict as there is in the medical evidence is of no consequence; it all points to the accident as being the cause of the schizophrenic condition from which the appellant suffers.

The condition is permanent. It is, however, relieved by injections of a drug regularly given the appellant. The drug is known as modicate. It may have a number of serious side effects which are described in the evidence but there is no evidence that the appellant has suffered from any of these except a degree of Parkinsonian-like tremor and some twitching of his mouth.

The appellant is clearly addicted to alcohol and it may be, as senior counsel for the respondent submitted, that some of his shaking or tremor is due to alcohol rather than modicate. It is not really possible to say. The sad fact remains, however, that the appellant is permanently a paranoid schizophrenic and that this condition is a result of the accident.

There is ample evidence which establishes that prior to the injury the appellant led a comparatively normal life. He was not schizophrenic during this period. He was, however, despite the fact that for a time he lived normally in Adelaide and had employment, unstable and unreliable. He was given to violent outbursts and at one stage served a period of imprisonment in the Northern Territory for an assault. His earlier life is described in some detail in his Honour's judgment but it is not necessary further to refer to it.

His Honour found that on the probabilities the appellant would have continued to work in an itinerant way in stock work in the Northern Territory. He thought he might have been able to obtain some local council work from time to time but did not think that he would have worked in a regular way for a full year. He thought that he would have been likely to work for a total of about half of each year. Although his Honour does not expressly say so, it is clear that he did not accept that such predisposition as the appellant had to schizophrenia would have made it likely that he would at some later stage of his life, had he not suffered the accident in question, become schizophrenic. It is a matter that his Honour no doubt took generally into account when having regard to the vicissitudes of life as he dealt with each head of claim. His Honour's approach in this respect was, with respect, entirely correct.

There was some challenge by counsel for the appellant to his Honour's finding that the appellant would have been unlikely to work for more than about six months of each year had he not been injured. But the evidence was such as to make this a finding to which his Honour could very reasonably come. No error is disclosed in the conclusion which he reached.

It is now possible to come to the challenges which were made to the various heads of damage. The award for loss of earning capacity ought not to be increased. At first sight the figure of $85,000 awarded to a man of 27 years of age for the total destruction of his earning capacity may seem low. But once his Honour's findings and approach are accepted, that is established not to be the case. His Honour's approach was to take as a starting point a figure derived from the relevant award for stockmen which would result in earnings of $142.35 nett per week plus keep valued at $35.20 per week, making a total weekly wage of $177.55 nett. His Honour concluded, on the basis of evidence before him, that the appellant would have retired at the age of fifty. He assessed damages for loss of earning capacity on the basis of a period of 23 years and an effective total wage of $177.55 nett per week. As earlier mentioned he selected an interest rate of 2 per cent and concluded that the capital sum needed to provide $177.55 per week for 23 years was in round figure $168,000. His Honour expressed his conclusion as follows, "Taking account of the fact that Hale would probably only work a period of 6 months of each year and all the other contingencies except death, I provisionally fix a sum of $85,000 for loss of earning capacity".

By reason of the decision in Todorovic v. Waller (supra) his Honour's figure of $168,000 must be reduced due to the need to select an interest rate of 3 per cent rather than 2 per cent. The figure should be, roundly, $148,500. His Honour's award of $85,000 was slightly more than half the sum of $168,000. Using the same approach the figure of $148,500 should be reduced to $75,000. This will involve a reduction of the amount provisionally awarded for future economic loss by $10,000. We have not thought it correct otherwise to depart from the approach adopted by his Honour. We think his selection of a retiring age of 50 and his assumption that the appellant would not obtain work, had he not been injured, for more than six months in any year reasonable in the circumstances. It is true that the appellant may have worked otherwise than as a stockman after he turned 50. It is also true that he may in some years have worked for longer than six months. But his past record must be taken into account. The position may equally have been that he did not work for as much as six months every year or that he retired well before his fiftieth birthday. The exercise of quantifying an appropriate figure is a most difficult one. We do not consider that the approach adopted by his Honour discloses error; indeed we consider his approach in all the circumstances to be as correct a one as could be adopted. He has deducted nothing for contingencies, something one would have had to do if a later retiring age or a longer period of work each year had been assumed. If the matter had been approached in that way the figure arrived at would not have been very different from his Honour's, subject to the need to apply the higher interest rate because of the decision of the High Court in Todorovic v. Waller (supra).

The next matter to be considered is the appellant's claim for a provision for domestic services. His Honour allowed $15,120., $120 of which was for past services. The challenge then is to the adequacy of the amount of $15,000. His Honour, as has been mentioned, allowed for actual expenditure of $12 to $15 per week. He again used an interest rate of 2 per cent and said that the capital sum necessary to provide an annuity of this amount was in the order of $21,000. His Honour did not say for what period he had allowed the annuity but upon the basis of the actuarial certificate which is in evidence he must have taken a period of 43 years at the end of which the appellant would turn 70. There is no specific evidence of this, the actuarial certificate only dealing with annuities which would cease at the age of 65 years. But if one adopts the figure for that age shown on the certificate the amount involved is $19,605 which is underneath his Honour's figure of $21,000. If his Honour had adopted an interest rate of 3 per cent rather than 2 per cent, his figure would have been approximately $17,500.

The claim which is made is based partly on actual expenditure which the appellant will incur in the future and partly on the principles propounded in Griffiths v. Kerkemeyer [1977] HCA 45; (1977) 139 C.L.R. 161.

The claim is particularly difficult to quantify because it is almost impossible to predict how and in what circumstances the appellant will continue to live in the future. There is much evidence from the psychiatrists which suggests that he may eventually have to be institutionalised. There is other evidence which suggests that he will resist this. He may not continue to live in the caravan near Mrs. Johnson's house, but if he does wish to do so, she may become either unable or unwilling to look after him in future years. There is evidence that the cost of domestic assistance in Darwin at the time of the trial varied between $1 per hour for pensioners to as much as $6 per hour for those able to afford to pay that amount. These figures were provided by the Australian Red Cross Society which said that its service was subsidised by the Government and provided basic housekeeping, the preparation of meals and shopping. The service was unable to provide live in housekeeper or specialist housekeeper services.

His Honour thought that the services provided by Mrs. Johnson could probably be done in one hour of each day. That finding would seem to be unchallengeable. But counsel for the appellant said that if this were the case the proper cost of it was $42 per week, that is seven hours per week at $6 per hour. The trouble about that submission is that at the moment the services are provided by Mrs. Johnson for a figure in the order of $15 per week. For the moment, therefore, it would be inappropriate to award more. But if the position changes it is unlikely that the appellant will be able to obtain the services he does for as little. Indeed, once the case is over Mrs. Johnson herself may want more to do what she does.

Having reflected upon the matter we do not think that the problem can be approached in the conventional way of selecting a figure and projecting it forward for the expected life span of the appellant. The evidence in the case, and this is no fault of the appellant and his advisers, does not enable that course to be taken. All we would say is that we consider the figure of $15,000 to be substantially too low. It is so low as to require the interference of this Court. It should be increased to $30,000.

That leaves the amount awarded for pain and suffering and loss of amenities of life. The orthopaedic injuries suffered by the appellant and their consequences have had a most devastating effect upon the appellant's future life. He is seriously crippled and will remain so always. His earning capacity is all but destroyed. He will be compensated separately for this loss but some compensation to him personally for the fact that he can, for all practical purposes, no longer work is also appropriate. His physical injuries are only part of the problem. He is, not to mince words, mentally ill and will remain so. His mental illness is controlled by a drug which fortunately has not produced serious side effects. But it may do so in the future and the appellant must keep taking this drug regularly. There is some evidence to suggest that his intellect has, to a degree, been diminished as a result of the injuries. As we understand the evidence the impairment to his intellect was the result of the fat embolism earlier described. His Honour did not make a finding about this matter but it would seem to us that such a finding is justified upon the evidence.

It may be that the appellant had some predisposition to schizophrenia. It may also be that he is exacerbating his condition by over indulging in alcohol. Be that as it may, he remains permanently physically and mentally crippled by his injuries and their consequences. As his Honour has said he is a pathetic man. What future he has is difficult to foresee but there is little reason for any optimism. He is entitled under the law to a very substantial solatium.

In our opinion his Honour's figure of $30,000 was substantially too low. An appropriate figure is $55,000.

In the result, we are of opinion that the amount of damages should be made up as follows:
Pain and suffering and loss of amenities $55,000.00
Past economic loss $25,000.00
Loss of earning capacity $75,000.00
Provision for domestic services $30,120.00
Hospital and medical expenses $ 4,449,31
$189,569.31

In reaching our conclusion we have considered whether there should be any reduction of the total amount to avoid the danger of overlapping areas intended to be compensated by the various heads of damage found to have been suffered. Having considered the matter we have concluded that there is no warrant for any such reduction.

Accordingly, the appeal is allowed. The judgment entered for the appellant is varied by increasing the amount of it from $159,569.31 to $189,569.31. The respondent is to pay the costs of the appeal. Although the amount included for loss of earning capacity is less than that allowed by his Honour, the amount of the judgment has been increased overall. For that reason the cross appeal is dismissed. We make no order as to the costs of the cross appeal.