Lee v Abbes [2003] NSWCA 24 (6 February 2003)

Last Updated: 25 February 2003

NEW SOUTH WALES COURT OF APPEAL

CITATION: LEE v ABBES [2003] NSWCA 24

FILE NUMBER(S):

40107/02

HEARING DATE(S): 6 February 2003

JUDGMENT DATE: 06/02/2003

PARTIES:

TOMMY LEE v FATEH ABBES

JUDGMENT OF: Handley JA Beazley JA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 3738/00

LOWER COURT JUDICIAL OFFICER: Hogan ADCJ

COUNSEL:

Claimant/Appellant: J D Hislop QC

Opponent/Respondent: C Stewart

SOLICITORS:

Claimant/Appellant: Sparke Helmore

Opponent/Respondent: Gerard Malouf & Partners

CATCHWORDS:

DAMAGES - personal injuries - no question of principle

COSTS - arbitration - offer of compromise - defendant requests rehearing - judgment increased - appeal - judgment reduced - more than award but less than offer - exceptional circumstances - DCR Pt 39A r 25(6) - special order made

LEGISLATION CITED:

Arbitration (Civil Actions) Act 1983

Motor Accidents Act

DECISION:

Leave to appeal granted. Appeal allowed with costs. Orders made

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

40107/01

DC 3738/00

HANDLEY JA

BEAZLEY JA

6 February 2003

TOMMY LEE v FATEH ABBES

Judgment

1 HANDLEY JA: The Court has heard a summons for leave to appeal from a decision of Hogan ADCJ on 25 January 2002. The case has been conducted on the basis that if this Court saw fit to grant leave to appeal, it would dispose of the case finally without the need for a further hearing.

2 The proceedings arose out of a motor vehicle accident which occurred on 1 April 1997. Liability was not in issue in the District Court and the case was therefore referred to arbitration under the Arbitration (Civil Actions) Act 1983.

3 The defendant was dissatisfied with the arbitrator's award and sought a re-hearing, limited to the amounts properly assessable for past economic loss and past out-of-pocket expenses. The trial Judge assessed the award for past economic loss at $70,000 and for past out-of-pocket expenses at $5,098.60. The defendant has sought leave to appeal from this judgment, but the challenge is limited to the Judge's allowance for past economic loss.

4 The opponent came to this country from Tunisia in 1988 and although his qualifications in that country were not recognised here, on the evidence he worked normally and on a substantially full time basis until June 1993. He then went back to Tunisia and married, came back to this country and went back to Tunisia again and brought his wife to this country in 1994. For reasons which will be developed shortly, he did not thereafter engage in a remunerated occupation until March 1997 when he went into partnership with his brother in a take-away food business at Alexandria. This catered for the night trade and was open between 6 pm and 4 am. On the evidence, the opponent and his brother worked in that business for ten hours a night, seven days a week until both were injured on the way to work on 1 April in the motor vehicle accident.

5 The business closed down shortly afterwards because the brothers were not able to carry it on. The Judge said that when the opponent returned to this country with his wife in 1994, he continued to work as a taxi driver, but this is contrary to the opponent's own evidence (black 5). He said that the business was closed down on 14 April 1998, but that is a typographical mistake for 14 April 1997. The opponent's evidence was that it was closed during May 1997 (black 25).

6 There was a dispute on the medical evidence about the extent of the opponent's incapacity. Dr Mahony, who was accepted by the Judge, said in evidence given by report, that the plaintiff had symptoms referable to a cervical strain in association with early degenerative changes which affected his upper limbs, which were also a cause of his headaches. He had injuries to both thumbs and degenerative changes in his hands as well and suffered from a lower lumbar back strain. There was also pain in his heels associated with nerve root irritation and tendonitis of the Achilles tendon. All of these matters were referable to his injuries in the car accident.

7 Associated Professor Oakeshott, qualified for the claimant, was of the view that the opponent had made a complete recovery from the injuries sustained in the accident and was capable of performing any work that he wished to attempt without any restrictions. None of the doctors gave oral evidence. The claimant tendered a film showing what was said to be normal activities of the opponent, including running and jogging over relatively short periods in November 1997 and apparently normal prayer activity in a park in August 2000. That is normal prayer activity for a Muslim praying in accordance with their tradition, which of course involves bending the back.

8 The claimant did not qualify any doctor with its film evidence, or if it did, it did not tender medical reports based on the opinion of doctors who had seen these films. The trial Judge saw the films and had the benefit of seeing the opponent cross-examined about them.

9 In the absence of medical evidence based on a view of the films, his Honour found that the conduct that had been filmed was not inconsistent with the generalised soft tissue injuries of which the plaintiff complained. Having reviewed the whole of the medical evidence, the Judge accepted the opponent as genuine in his description of his symptoms and accepted the opinion of Dr Mahony that the opponent has not been able to perform his usual work since the accident. The Judge also accepted the opinion of the general practitioner, Dr Siddiqui, that the opponent was capable of performing light work.

10 There was no evidence that the opponent had any source of income other than unemployment benefits between June 1993 and the commencement of the business in partnership with his brother on or about 11 March 1997.

11 The opponent's counsel tendered a draft, unsigned tax return for the 1997 year, which showed he earned $3,870 from the take-away business between March and June, but the Judge was not prepared to act on that evidence. The opponent said that he had not received any of this money because it was left in the business. On the evidence the opponent was not likely to receive any part of that money as his brother had gone back to Tunisia in 1998.

12 The Judge concluded that the opponent had been capable of working in such a business, either as an owner, part owner, or employee, and if the business had failed for reasons other than the incapacity of the two partners, that the opponent had a capacity to obtain employment of that type elsewhere. The Judge referred on two occasions to the unsatisfactory nature of the evidence, but concluded nevertheless that the plaintiff had suffered a significant reduction in his income earning capacity, and that the award had to be a matter for judgment rather than calculation.

13 His starting point was a figure of $420 a week, based on the gross weekly earnings for adult males in the retail industry. Mr Hislop QC challenged the appropriateness of this figure in the present case, but not its accuracy. The Judge said that he made allowance for the usual contingencies and also took account of the uncertainties about the cafe venture. $420 per week over the period up to the date of trial gave a figure of $105,400 which he reduced because of these factors to $70,000. He then continued:

"He has for much of the time been capable of light work although he has not succeeded in finding any. There is no evidence of any strenuous efforts on his part to find it, apart from the selling venture, but neither was there any evidence that there was any that was available to him or within his capacities".

14 It is evident, in my judgment, that the Judge made no allowance for the retained earning capacity of the opponent in his assessment. The reduction of one-third from the mathematical product of $420 per week over the period before trial is fully accounted for by the Judge's exceptional, but nevertheless appropriate, allowance for contingencies.

15 Mr Stewart, who appeared for the opponent, when asked for his submission on the opponent's level of retained capacity, submitted that this was 30 per cent. If this is even approximately correct, it demonstrates a significant error on the part of the Judge in his assessment, and accordingly, in my judgment, this Court is bound to interfere.

16 The Court has been doubtful about its entitlement to re-assess in this case, but counsel for both parties have urged that course on the Court. We have the benefit of the Judge's finding on the plaintiff's credit, which has not been challenged, and of the Judge's findings about his incapacity and, of course, we are not in a position to differ from the Judge in his acceptance of Dr Mahony and Dr Siddiqui, in preference to Associate Professor Oakeshott.

17 Mr Hislop's principal submission on the re-assessment was that because of the opponent's poor motivation demonstrated by his lack of employment between June 1993 and March 1997, and since the accident, his earnings uninjured would not have exceeded the earnings which a properly motivated person in his position could have earned since the injury.

18 There is considerable force in this submission, but it seems to me that it overlooks the evidence which was not challenged, but could not easily have been, that the opponent and his brother/partner were working ten hours a day, seven days a week, from 6 pm to 4 am in their take-away food business at Alexandria, between 11 March 1997 and 1 April, and were not able thereafter to carry on that business because of their injuries resulting from the accident.

19 In my judgment this Court cannot ignore that evidence, notwithstanding the general lack of motivation the opponent had demonstrated over the earlier period. To some extent this is explained by the evidence the opponent gave that when his wife came to Australia she suffered from some incapacitating skin problem, for which she had to be hospitalised, and for which she underwent an operation. He said that he then had to remain home and look after his wife. These matters do not appear to have been explored.

20 There is no evidence from the hospital or from any doctor that treated the wife. Nevertheless, that evidence, if accepted, is capable of largely explaining the opponent's poor work record after he and his wife returned to Australia in 1994.

21 Doing the best that the Court can in the light of the evidence, which the Judge twice characterised as unsatisfactory, and basing ourselves on the medical evidence accepted by the Judge and his findings about the video material, I am of the view that the opponent's retained capacity for work should be judged as being in the order of 70 per cent, and that proper allowance must be made for that in the assessment.

22 Bearing in mind the contingencies already allowed by the Judge, and the level of retained capacity I have found, I would substitute an award of $15,000 for that made by the Judge. Accordingly, I would propose the following orders:

(1) Grant leave to appeal subject to the notice of appeal being filed within fourteen days.

(2) Appeal allowed with costs.

(3) Set aside the judgment entered in the District Court and substitute a judgment for $28,588.60 less than that judgment, with effect from 25 January 2002.

(4) The opponent to pay the claimant's costs of the appeal, but is to have a certificate under the Suitors Fund Act. I would not disturb the order for costs made by the trial Judge.

23 BEAZLEY JA: I agree.

JUDGMENT ON COSTS

24 HANDLEY JA: After the Court gave ex tempore reasons for judgment allowing the appeal and pronounced orders, including costs orders, Mr Hislop QC, for the claimant/appellant, tendered an offer of compromise dated 22 March 2001 in which the defendant offered to submit to judgment for $30,000 and to pay the plaintiff's costs in the sum of $15,000. This offer was severable in accordance with DCR Part 19A and the plaintiff was entitled to accept the judgment offered without accepting the offer as to costs. The offer of compromise of costs can therefore be put aside.

25 As a result of this Court's orders, the plaintiff will recover judgment for $28,588.60, which is less than the amount offered. It appears that there were further out-of-pocket expenses, but payment of these is a defence under s 45 of the Motor Accidents Act and they can be ignored for present purposes.

26 The offer was made after the arbitration was not reached on 19 March 2001, and prior to the hearing on 14 May and 5 June. The arbitrator awarded $7,000 for past economic loss and out-of-pocket expenses of $7438.80, leading to a judgment for less than the amount offered which, when added to the out-of-pocket expenses subject to the s 45 defence, exceeded that amount.

27 The defendant did not seek, and perhaps was not entitled to seek, an order for indemnity costs from the arbitrator, and the arbitrator ordered the defendant to pay the plaintiff's costs of the arbitration subject to a special order for one of the days of the hearing, which is of no present relevance.

28 The defendant was dissatisfied with the award and sought a rehearing in the District Court. The result was to increase the award for past economic loss from $7,000 to $70,000, but to reduce the amount of the out-of-pockets by $1,994. The defendant thus substantially and significantly lost in the District Court. He has since come here and succeeded in reducing the judgment to $28,588.60, marginally less than the gross award made by the arbitrator, and $8,000 approximately more than the net award.

29 Had the defendant accepted the award made by the arbitrator he would have saved the plaintiff and himself the costs of the proceedings in the District Court, and the costs of the appeal to this Court. In my judgment this amounts to exceptional circumstances requiring a special order to be made to avoid substantial injustice to this plaintiff in accordance with DCR Pt 39A r 25 (6).

30 The further litigation undertaken at the initiative of the defendant has left him worse off than if he had accepted the arbitrator's award. It would be most unjust in these circumstances to order the plaintiff, in accordance with the general principle in the rule, to pay the defendant's costs on an indemnity basis, since the offer of compromise was made. I therefore propose that the Court would order the defendant to pay the plaintiff's costs of the arbitration and of the hearing in the District Court on the appropriate scale.

31 BEAZLEY JA: I agree.

32 HANDLEY JA: They are the orders of the Court.

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LAST UPDATED: 24/02/2003