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Supreme Court of New South Wales |
010453/90
Tuesday 12 November 1996
SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION
JAMES J
JUDGMENT
HIS HONOUR: This is an action for damages for professional negligence brought by Antanasios (Arthur) Valmas against Trevor Nyman, a solicitor. It was alleged in the statement of claim that the plaintiff had retained the defendant as his solicitor to advise him and to bring court proceedings at common law on his behalf for the recovery of damages for personal injuries suffered by him in an accident which occurred on 18 May 1983. It was alleged that on 18 May 1983 the plaintiff had been working at a building site at Abbotsford in the course of his employment by a man named Manuel Christianos and that on that day a backhoe being operated by a man named Ignazio Pendino struck him, causing him to fall from a wall thereby suffering personal injuries. It was further alleged that the accident on 18 May 1983 had occurred as a result of negligence and breach of statutory duty by Christianos and Pendino. The plaintiff claimed that the defendant had failed to commence common law proceedings for the recovery of damages for the personal injuries suffered by the plaintiff in the accident, before the limitation period for bringing such an action had expired on 18 May 1989 and had thereby been negligent and had also committed a breach of an implied term of his retainer that he would exercise reasonable care, skill and diligence in acting for the plaintiff.
The defendant did in fact cause common law proceedings for the recovery of damages to be commenced against Christianos and Pendino on 31 July 1989, that is after the limitation period had expired. At the same time as the statement of claim in those proceedings was filed, an application for an extension of the limitation period was filed. A defence was filed on behalf of Christianos and Pendino, in which amongst other defences a defence based on the Limitation Act was pleaded. The application for an extension of the limitation period was not proceeded with and the proceedings generally were not pursued.
The plaintiff subsequently brought a claim for workers compensation under the Workers Compensation Act 1987 against Christianos and also the Work Cover Authority on the basis that Christianos was not insured against liability under the Act. On 15 October 1990 Burke CCJ delivered a judgment in which he found that on 18 May 1983 the plaintiff was employed by Christianos, that on 18 May 1983 the arm of a backhoe being operated by Pendino had struck the plaintiff causing him to fall from a wall, that the plaintiff had suffered injuries including a fracture of the sternum and a fracture of the fifth thoracic vertebra, that up to 31 August 1986 the plaintiff had not demonstrated any difference between his actual earnings and what he probably would have earned if uninjured, but that subsequently there had been such a difference. Burke CCJ made an award of workers' compensation on the basis of partial incapacity from 1 September 1986 onwards. I will refer to Burke CCJ's judgment in more detail later in this judgment.
In the present proceedings the defendant, Mr Nyman, admitted in his defence that he had been retained by the plaintiff as alleged by the plaintiff and that by failing to commence proceedings at common law against Christianos and Pendino within the limitation period he had breached an implied term of his retainer and had also been negligent. Hence, the hearing before me was confined to an assessment of the damages which should be awarded to the plaintiff as a result of the admitted breaches of duty by the defendant. There was no suggestion that any distinction should be drawn, so far as the assessment of damages was concerned, between the cause of action in contract and the cause of action in tort. The plaintiff claimed two kinds of damages, namely:-
1. Damages to compensate the plaintiff for the loss of the chance of recovering damages in the common law proceedings which should have been brought on his behalf against Christianos and Pendino before the limitation period expired. It will be convenient to refer to the action which should have been brought as "the lost action" and to this first kind of damages as "the lost action damages".
2. Damages to compensate the plaintiff for not having had his claims arising out of the accident determined in the lost action and for having had to bring the present proceedings. It will be convenient to refer to this second kind of damages as "the further damages".
As regards the lost action damages, in Scott v Echegaray (1991) Aust Torts Repts 69, 129, a case of an action against a solicitor for damages for professional negligence for failing to commence common law proceedings on behalf of an injured worker, it was held by Mahoney JA, with whose judgment Gleeson CJ and Kirby P agreed, that the trial judge had not erred in adopting an approach that he should assess (a) the value of the injured worker's right to sue at common law at the relevant time and (b) the value of his rights under the Workers' Compensation Legislation and should then deduct (b) from (a). Mahoney JA observed that in the ordinary course it would have been necessary for the parties to establish matters (a) and (b) by the evidence of experts but that the parties had made an agreement which was to be taken as entitling the judge to make the relevant assessment of the value of the common law and workers' compensation rights, by the application of his own knowledge and experience. Similarly, in the present case, it was agreed by the parties that there would be no need to call expert evidence to enable an assessment of the lost action damages and that I should assess the value of the plaintiff's right to sue at common law at the relevant time and the value of the plaintiff's rights under the Workers' Compensation Legislation, without it being necessary for evidence to be called from qualified persons expressing opinions about the value of those rights.
It was common ground that the assessment of damages in an action for professional negligence against a solicitor, where by reason of the solicitor's negligence the client has lost the benefit of a court action which he might successfully have brought, is governed by the decisions of the High Court in Johnson v Perez [1988] HCA 64; (1988-89) 166 CLR 351 and Nikolaou v Papasavas ( 1988-89) 166 CLR 395. Johnson v Perez contains a fuller discussion of the principles to be applied. However, Nikolaou v Papasavas is more directly applicable because in that case, as in the present, the benefit of the action had been lost through the client's cause of action becoming statute barred before any proceedings were commenced. In Johnson v Perez proceedings which had been commenced were, by reason of the solicitor's negligence, dismissed for want of prosecution. In Nikolaou v Papasavas Wilson, Dawson, Toohey and Gaudron JJ in their joint judgment said that the loss flowing from the negligence of the solicitors crystallised at the date when the cause of action against the solicitors arose, that is when the claim for damages against the original tortfeasor became statute barred. Their Honours said at p404:-
"For reasons which are set out in some detail in Johnson v Perez, his Honour should first have focused on Mr Nikolaou's situation when his claim for damages for personal injuries became statute barred. He should have assessed damages by reference to the loss at that date of the right to claim damages. That loss would ordinarily be quantified by the trial judge taking a broad brush approach to the several matters that in a particular case may require to be resolved - the likely date when in the absence of the negligence of the solicitor the action would have come to trial, the evidence that would or should have been available to the plaintiff at that time, the relevant principles of law then governing the assessment of damages, the question of contributory negligence, and (an issue which would not be a problem in the present case) the prospects of any judgment given in favour of the plaintiff being satisfied - in order to arrive at a figure representing the loss suffered by the plaintiff..."
In the present case, it was agreed by the parties that the date at which a notional trial in the lost action would have been heard could be taken to be 30 June 1992. Accordingly, in determining what loss the plaintiff suffered at the time his causes of action against Christianos and Pendino became statute barred, I have to take into account what evidence would or should have been available at the time of a notional trial held on 30 June 1992 and what principles of law would have governed the assessment of damages as at 30 June 1992. In Nikolaou v Papasavas there was an agreement between the parties which the High Court said had been treated as amounting to an agreement that Mr Nikolaou would have recovered in the lost action 75 percent of the damages to which he was otherwise entitled. However, it is clear that, in the absence of such an agreement, a court has to assess the chances that the plaintiff would have succeeded in the lost action, the chances in the lost action of a finding that the plaintiff had been guilty of contributory negligence and the chances of the plaintiff actually succeeding in recovering the amount of any judgment in his favour. The lost action was never brought and there was never any trial of the lost action. Hence, whether the plaintiff would have succeeded in obtaining a verdict in the lost action, whether there would have been a finding of contributory negligence in the lost action and whether the plaintiff would have succeeded in recovering the amount of any verdict given in the lost action are all hypothetical and it is necessary to assess the degree of probability that such hypothetical events would have occurred. Malec v JC Hutton Pty Limited [1990] HCA 20; (1990) 169 CLR 638 especially at 643.
In the present case, as regards the first kind of damages claimed (that is the lost action damages), counsel for the defendant disputed that the plaintiff would have succeeded in obtaining a verdict in the lost action, contended that in the lost action there would have been a finding of contributory negligence against the plaintiff, disputed in many respects the claims for damages made on behalf of the plaintiff and contended that any damages which might have been awarded to the plaintiff in the lost action would not have been recoverable. It is accordingly necessary to assess:-
1. What chance or degree of probability the plaintiff would have had of recovering a verdict in the lost action (the issue of liability in the lost action).
2. What chance or degree of probability there would have been of a finding of contributory negligence in the lost action (the issue of contributory negligence in the lost action).
3. The damages which would have been recoverable in the lost action (the issue of damages in the lost action).
4. What chance or degree of probability the plaintiff would have had of actually recovering any damages he was awarded in the lost action (the issue of the prospects of recovery of damages awarded in the lost action).
I will deal with each of these issues in turn.
1. The Issue of Liability in the Lost Action.
In the statement of claim in the present proceedings it was alleged that the accident of 18 May 1983 had been caused by the negligence of each of Christianos and Pendino and by breaches of statutory duty by each of them. Similar causes of action had been pleaded in the statement of claim in the abortive common law proceedings in 1989.
Accordingly, in the present proceedings it was submitted on behalf of the plaintiff that in the lost action the plaintiff would have succeeded in recovering a verdict on one or more of the following causes of action:-
(i) Against Pendino for negligence in permitting part of the backhoe being operated by him to strike the plaintiff.
(ii) Against Christianos for breach of an obligation at common law to exercise reasonable care to provide a safe system of work and a safe place of work.
(iii) Against Christianos for breaches of regs73(1), 73(3), 74 and 77A of the Construction Safety Regulations under the Construction Safety Act, 1912.
(iv) Against Christianos as being vicariously liable for the negligence of Pendino.
Before dealing with each of these causes of action, it is necessary to refer to some of the evidence which should have been available at the date of the notional trial on the issue of liability in the lost action.
The plaintiff gave evidence in the present proceedings that at the time of the accident he carried on a business of providing the services of tradesmen to builders, he doing many of the jobs himself. At the end of 1982 he had been employed by Christianos as a supervisor for a wage of $450 per week to work on a project of Christianos's at Abbotsford for the building of sixteen town houses. The plaintiff's evidence about the happening of the accident on 18 May 1983 was brief, disjointed and assisted by some leading by his counsel. However, he gave evidence that he had been standing on a wall at the Abbotsford building site, when he was struck on the head by part of a backhoe (sometimes described as a bobcat) being operated by Pendino. The plaintiff had not seen the part of the backhoe before it struck him. After being struck the plaintiff fell from the wall a distance of about fifteen feet, landing near the base of the wall. When the plaintiff was struck by the backhoe, Pendino was performing an operation he had performed many times before without accident, of excavating rubbish or dirt from a hole, swinging the arm and bucket of the backhoe so as to dump the rubbish and then swinging the arm and the bucket of the backhoe back to where the rubbish was. Pendino had been at the building site "on and off", working for a week or two, then leaving and then coming back. Christianos had arranged for Pendino to work at the site and had introduced Pendino to the plaintiff, saying that Pendino was going to operate the backhoe at the site.
In cross-examination the plaintiff said that he had been the supervisor and had been the only one on the job to give instructions. He had thought it was safe for him to stand on the wall because he had done it many time before without falling. There was a drop on one side of the wall only. He denied that anyone had previously told him when he stood on the wall that he should get down.
In cross-examination the plaintiff said that he did not actually see that it was the backhoe (or bobcat) which hit him. He denied that he had just fallen off the wall, without being struck by anything. He was asked, "and I'm suggesting you don't know whether you were hit by the bobcat or not, do you?" and he answered "I know because something hit me, something but I don't know if it was a bobcat or anything else". He was asked, "can you tell his Honour how you say the bobcat could have hit you without you seeing it?" and he answered "because you can't see all the time, the bucket came up".
The plaintiff called two witnesses to the accident, Mr Sleiman and Mr Daoud.
Mr Sleiman said that on the day of the accident he had been working as a concrete formworker at the Abbotsford site about seven to ten metres away from the plaintiff and in a position about four or five metres higher. Mr Sleiman saw the backhoe take dirt out of a hole, dump it and then "I heard something. I watch and I see Mr Valmas fall down and the machine hit him a little bit". It was the arm of the backhoe which hit Mr Valmas on the head. The plaintiff fell down from a wall a distance of up to three metres.
In cross-examination Mr Sleiman agreed that it was a noise that first caught his attention. At the request of counsel for the defendant Mr Sleiman drew a sketch of the accident site and agreed that the backhoe was on the other side of the wall from where he was. He agreed that at the time he was engaged in setting up form work for concreting. He agreed that in a statement he had given to the plaintiff's solicitors he had said that he had heard a noise and then looked around. However, he maintained that he had seen the backhoe hit the plaintiff. He was asked, "why then did you say to Mr Valmas's solicitors that you heard a noise and looked around, if you, in fact, saw him being hit by the backhoe?" and he answered "how to explain to you. I was there and when I look by accident I see the backhoe working and him fall down. Straight away I see him, you know, like hit him. And I am not sure. It is thirteen years. I can't remember. I don't lie. I say the truth." Mr Sleiman agreed in cross-examination that he had been very unhappy that Mr Christianos has reported him once to the police.
Mr Daoud gave evidence that on the day of the accident he also had been a formworker at the building site at Abbotsford. The plaintiff had been standing on a wall 2.7 metres high. Mr Daoud said that the backhoe "come back and hit him (that is the plaintiff) behind the head and collapse the garage, ground level".
A statement made by Mr Daoud to the plaintiff's solicitors in January 1988 was admitted into evidence pursuant to s64(3) of the Evidence Act. I had grave doubts whether I should admit the statement because of the long lapse in time between May 1983 and January 1988 and I have decided that I should not give any weight to the statement.
In cross-examination Mr Daoud claimed to have a very good recollection of the scene of the accident. He said, "I said I remember 'till I die. Is a photograph of my eye, I never forget that". Mr Daoud agreed that at the time of the accident he was setting up formwork but he said, "You don't close eyes when waiting to hand timber to me" and "I was standing facing, I am on high view, facing him where the digger is digging".
The following passage occurred in the cross-examination of Mr Daoud:-
"Q. And what I suggest to you is you have just assumed that the backhoe hit him?
A. Yes.
Q. What I am putting to you is that when you saw him fall, you thought he must have been hit by the backhoe?
A. My eye was on him because he on lower position and I on high position, the backhoe wanted to turn and it hit in the head".
In re-examination Mr Daoud said that he did not know the meaning of the word "assume".
All of the plaintiff, Mr Sleiman and Mr Daoud were asked by counsel for the defendant to draw sketches of the scene of the accident and the positions of the various persons involved. There are a number of discrepancies between the sketches.
In the defence case Mr Christianos said that on 18 May 1983 he had seen the plaintiff standing on top of a wall. He said that he had "many times" told the plaintiff to come down from the wall but the plaintiff had always refused, saying that he had been a builder for thirty-five years. Mr Christianos did not actually see the plaintiff fall off the wall. He said that he had had a dispute with Mr Sleiman and Mr Daoud, that Mr Sleiman had got a gun and that Mr Christianos had been obliged to call the police.
In cross-examination Mr Christianos agreed that there was no handrail, scaffolding, safety belt or safety harness, safety net or barriers provided for anyone standing on the wall. In cross-examination Mr Christianos was asked questions about the signature purporting to be his appearing in the affidavit verifying the defence in the abortive proceedings in 1989. There was a progression in Mr Christianos's evidence from "this looks like my signature" to "I don't think it is exactly" to "I don't think the signature is mine" to "I would say 100 percent it is not mine". It had been put to Mr Christianos that he did not wish to admit that the signature was his, because in the particulars of the defence of contributory negligence pleaded in the defence there is no allegation that he had warned the plaintiff to get down from the wall.
Mr Pendino gave evidence through an Italian interpreter. He said that on 18 May 1983 he had been operating a backhoe at the Abbotsford site. He saw the plaintiff on top of a wall three metres high. When he was asked what he saw happen to the plaintiff he said, "he just bend on that side... he went down on the ground". Mr Pendino said that the arm of the backhoe was not fully extended and the bucket was about nine metres away from the plaintiff.
When asked in cross-examination when after 18 May 1983 he had first been asked to recall the events of 18 May 1983 he said about two weeks before giving evidence, when an investigator came to his home.
In cross-examination Mr Pendino denied that the backhoe being operated by him had hit the plaintiff. He said that the arm of the backhoe was four to five metres long and that the bucket itself was about half a metre long. He said that the backhoe was a registered vehicle and could be driven on roads. The following questions and answers occurred in the cross-examination:-
Q. Did Mr Valmas tell you to do the digging job?
A. No.
Q. He was the supervisor on the site wasn't he?
A. Yes but was the proprietor that wanted that hole dug. He asked me to do it.
Q. Mr Valmas was supervising your doing it, wasn't' he?
A. He was on top of the wall. Maybe he wanted to come and have a look.
Q. He was supervising you, wasn't he?
A. This is a question that has to be asked to the proprietor, not to me. I don't know these things.
Q. Didn't he give you some directions while you were operating the backhoe?
A. Not to me."
Elsewhere in the cross-examination Mr Pendino said that Mr Christianos had asked the plaintiff to come down from the wall. He agreed in cross-examination that there was a flat area level with the top of the wall on which the plaintiff was standing but it was left entirely unclear how close this flat area was to where the plaintiff was standing.
After this review of some of the evidence on the issue of liability I turn to a consideration of the various causes of action.
(i) The cause of action against Mr Pendino.
The principal issue of fact in a trial of the cause of action in negligence against Mr Pendino would have been whether the plaintiff was struck by some part of the backhoe being operated by Mr Pendino, causing the plaintiff to fall from the top of the wall to the ground, or whether the plaintiff simply fell from the top of the wall, without having been struck by the backhoe. If the plaintiff was caused to fall by being struck by some part of the backhoe, a conclusion that Mr Pendino was negligent in operating the backhoe, for example by not keeping any proper lookout, would readily follow.
In the present proceedings the plaintiff, Mr Sleiman and Mr Daoud gave evidence which, if it had been given in the trial of the lost action and had been accepted by the tribunal of fact, would have supported a finding that the plaintiff was struck by the backhoe. Mr Christianos did not claim to have seen the plaintiff fall. Mr Pendino denied that the plaintiff was struck by the backhoe.
Certain criticisms are common to the evidence of all of these witnesses. None of them was a native English speaker and all of them had difficulties of varying degrees in understanding and answering the questions they were asked. Mr Pendino, as I have already mentioned, gave his evidence through an interpreter. All the witnesses were in giving evidence of what had happened on 18 May 1983 attempting to give evidence about what had happened on a day thirteen years previously. None of them had made a contemporaneous record of what had happened. None of the sketches any of them drew while giving evidence is such as to inspire any real confidence in its accuracy. Their evidence about distances and dimensions and positions tended to be incoherent. There were no other witnesses and no photographs of the scene of the accident.
The evidence of the witnesses for the plaintiff is open to criticism. Without attempting to be exhaustive, the plaintiff, while maintaining that something hit him admitted that he did not know whether it was the backhoe. Mr Sleiman accepted in cross-examination that he was engaged in the task of setting up formwork at the time of the accident, that it was a noise he heard which first caught his attention (suggesting that he had not really seen the backhoe hit the plaintiff), that he was working on the other side of the wall from the backhoe and his view was partly obscured. Mr Sleiman became very unsure in parts of his cross-examination and he agreed that he had been "very unhappy" with Mr Christianos. Mr Daoud was inappropriately emphatic about the vividness of his recall of an incident which happened thirteen years previously and he also had been engaged in fixing formwork at the time of the accident.
Mr Christianos, as I have already stated, did not claim to have actually seen the plaintiff fall off the wall.
It was submitted by counsel for the plaintiff that I should not accept Mr Pendino's denial that the backhoe hit the plaintiff. Counsel criticised Mr Pendino on the basis that he had given grudging, conflicting evidence about whether during an adjournment while he was under cross-examination he had had a conference with Mr Christianos who had already given evidence, that he had given conflicting evidence on whether the backhoe had hydraulic controls, that his denial that he had been served with the statement of claim in the abortive 1989 proceedings should not be accepted, that if his own evidence was to be accepted he had first attempted to recall what had happened on 18 May 1983 only very recently, that Mr Pendino had been named as a defendant in the abortive 1989 proceedings and had an interest in denying that there had been any negligence on his part. I consider that there is some force in these criticisms. Counsel for the plaintiff criticised other parts of Mr Pendino's evidence but I consider that most of these parts of Mr Pendino's evidence can be explained on the basis of breakdowns in communication between the questioner and the witness, questions and answers having to be transmitted through an interpreter.
I have concluded that the combined weight of the evidence of the plaintiff, Mr Sleiman and Mr Daoud would probably have been sufficient to satisfy a tribunal of fact in a trial of the lost action held on 30 June 1992, that the plaintiff was caused to fall by being struck by some part of the backhoe being operated by Mr Pendino. There is no evidence to the contrary from Mr Christianos. Mr Pendino's evidence generally is to a high degree unsatisfactory.
I conclude that there is a very high degree of probability that the plaintiff would have succeeded in obtaining a verdict against Mr Pendino in the lost action.
(ii) The cause of action against Mr Christianos for breach of an obligation at common law to exercise reasonable care to provide a safe system of work and a safe place of work.
It was expressly conceded by counsel for the defendant in written submissions that a duty was owed by Mr Christianos to the plaintiff to provide a safe system of work and a safe place of work. However, it was submitted that the plaintiff was wholly responsible for the system of work obtaining at the Abbotsford site, in that Mr Christianos had no building experience and had engaged the plaintiff to organise the job, the plaintiff had assumed the role of supervisor and the plaintiff was the only person at the site who gave instructions. Counsel cited Nicol v All Yacht Spas Pty Limited [1987] HCA 68; (1987) 163 CLR 611 at 618.
I note, however, that Nichol v All Yacht Spas Pty Limited itself was a case in which the High Court held unanimously that an employee was not disabled from complaining that a system of work was unsafe on the ground that it had been devised by him. There is no doubt that the plaintiff was acting as a supervisor for Mr Christianos and he said in cross-examination that he was the only person to give instructions. However, his evidence that he was the only person to give instructions is at variance with the evidence of Mr Pendino, at least some of which on this particular point I am disposed to accept. Mr Pendino insisted that it was the proprietor who asked Mr Pendino to excavate the hole and that the plaintiff had not given Mr Pendino any directions while he was operating the backhoe.
I have concluded that I should find that the plaintiff was not wholly responsible for the system of work in force at the site and that in a notional trial of the lost action there is a very high degree of probability that a tribunal of fact would have held that Mr Christianos owed a duty to the plaintiff to provide a safe system of work and a safe place of work. I have further concluded that there is a high degree of probability that a tribunal of fact would have held that Mr Christianos breached that duty by not taking some of the precautions of the kind put to him in cross-examination by counsel for the plaintiff and that this breach caused the accident. No argument on this aspect of the case other than the argument based on Nichol v All Yacht Spas Pty Limited was advanced by counsel for the defendant in his extensive written submissions.
(iii) Causes of action against Mr Christianos for breach of statutory duty.
I accept submissions by counsel for the defendant that regs73(1), 74 and 77A of the Construction Safety Regulations would not have applied in the present case, on the basis that the work to be done by the plaintiff was not work which could not be done by a person standing on a permanent or solid construction (reg73(1)), on the basis that there was not a risk that the plaintiff might fall for want of an adequate foot hold (reg74(1)) and on the basis that there was not a need for scaffolding so that brick laying work could be carried out by persons standing on the scaffolding.
Subject to one submission to the contrary, counsel for the defendant accepted that reg73(3) bound Mr Christianos and would have applied in the present case, in that the plaintiff was working at a place from which he would be liable to fall a distance of more than 1.8 metres. It was implicitly accepted by counsel that if the Regulation applied there had been a breach of the Regulation. The only submission put by counsel for the defendant was based on what Herron J said in Peterson v General Constructions Pty Limited (1961) 61 SR 242 at 246:-
"I think there may be cases in which persons who are working in such a fashion as that might stand outside the protection of the Regulations if by their conduct they have shown to have gone beyond the course of their employment or in some way acted so irresponsibly as not to be covered by the Regulations".
I would not accept that this exception applies to the present case. In standing on the top of the wall the plaintiff was acting in the course of his employment as a supervisor so as to discharge his functions as a supervisor. There is no suggestion that he was acting for some purpose of his own beyond the course of his employment. Nor was he acting so irresponsibly as not to be covered by the Regulations.
In my opinion, there is a high degree of probability that at the notional trial the plaintiff would have succeeded in a cause of action based on a breach of reg73(3).
(iv) The cause of action against Mr Christianos as being vicariously liable for the negligence of Mr Pendino.
I have already found that there is a high degree of probability that in a trial of the lost action the court would have found that Mr Pendino had been negligent. Whether Mr Christianos would have been found vicariously liable for Mr Pendino's negligence would have depended on whether there was a relationship of employer/employee between Mr Christianos and Mr Pendino. If there was, Mr Pendino's negligence clearly would have occurred in the course of such employment.
The evidence on whether there was a relationship of employer/employee between Mr Christianos and Mr Pendino is meagre. I do not consider that I can do more than say that there would have been some likelihood that an employer/employee relationship could have been established in a trial of the lost action. The evidence given in the present proceedings includes that Mr Christianos engaged Mr Pendino. Mr Christianos was usually on the site. Mr Christianos directed Mr Pendino to dig the hole. To the extent that the plaintiff supervised Mr Pendino the plaintiff was acting as Mr Christianos's employee.
2. The Issue of Contributory Negligence in the Lost Action.
It was submitted on behalf of the defendant that at a notional trial there would have been a finding of contributory negligence against the plaintiff, on the basis that the plaintiff had continued to stand on the top of a wall from which he was liable to fall a substantial distance, despite having been told many times by Mr Christianos to come down from the wall, and on the basis that, if he did not see such a large object as the arm of the backhoe before it struck him, he must have been failing to keep a proper lookout.
It was conceded by counsel for the defendant that contributory negligence was not legally available as a defence in the cause of action against Mr Christianos for breach of the statutory duty imposed by reg73(3) of the Construction Safety Regulations.
As regards the contributory negligence alleged, I do not consider that it was negligent of the plaintiff as a building supervisor to stand on the top of a retaining wall of a building under construction. I do not accept Mr Christianos's evidence that Mr Christianos told the plaintiff many times or at all to come down from the top of the wall. I formed an unfavourable view of Mr Christianos's credibility generally and I consider it is of significance that there is no such allegation in the particulars of contributory negligence by the plaintiff alleged in the defence to the 1989 proceedings, which I am satisfied was verified by Mr Christianos. I consider that the plaintiff could reasonably expect that Mr Pendino, an experienced backhoe operator, who was performing an operation with the backhoe which he had performed many times before without accident, would so control the backhoe as not to strike a clearly visible person standing on the top of a wall.
I conclude that there is little chance that at a notional trial the amount of the plaintiff's verdict would have been reduced by a finding of contributory negligence.
3. The Issue of Damages in the Lost Action
Earlier in this judgment I referred to the decisions of the High Court in Johnson v Perez, Nikolaou v Papasavas and Malec v JC Hutton Pty Limited and to the decision of the Court of Appeal in Scott v Echegaray; to the agreement between the parties that the date of the notional trial in the lost action could be taken to be 30 June 1992; and to the agreement between the parties that I should assess the value of the plaintiff's right to sue at common law at the relevant time and the value of the plaintiff's rights under the Workers Compensation Legislation, without the need for expert evidence to be called. Before endeavouring to apply the principles stated in the cases I have just referred to, I will refer to some of the evidence in the case relevant to the damages which would have been recoverable in the lost action.
The plaintiff gave evidence that he was born on 8 August 1934 in Greece. He was accordingly forty-eight years old at the time of the accident, would have been fifty-seven years old at the time of the notional trial and is now sixty-two years old.
The plaintiff worked in the building trades in Greece, apart from a period in the Greek army. He migrated to Australia in January 1962. From about mid 1963 he worked in Australia in the building industry. Between 1969 and 1974 the plaintiff travelled overseas, combining travel with periods of work. In 1975 (in one part of the transcript the date is inaccurately transcribed as 1965) the plaintiff obtained a licence from the Builders' Licensing Board. In 1976 he started up his own business, providing building tradesmen to builders, doing much of the work himself.
I have already referred to the plaintiff's evidence about the accident on 18 May 1983.
After the accident the plaintiff recovered consciousness in Balmain Hospital. He had been taken to Balmain Hospital by ambulance. He was discharged from Balmain Hospital after having been in hospital for a period between one and two weeks. He felt pain in his chest, back and neck. He had trouble with his breathing. He denied that he had had any problems with his breathing before the accident.
About two to three weeks after the accident the plaintiff returned to working for Mr Christianos and he continued working for Mr Christianos until June 1984. He continued to be paid $450 per week by Mr Christianos. In one part of his evidence the plaintiff said that after the accident he was unable to continue carrying on his own business but elsewhere in his evidence he said that he did some work in his own business after the accident.
The plaintiff said in evidence that in about 1981 or 1982 he had lost between $43,000 and $47,000, when a building owner with whom he had a contract did not pay him and the plaintiff was unsuccessful in a subsequent arbitration.
Between 1986 and 1990 the plaintiff received sickness benefits and since the award made by Burke CCJ in 1990 he has been receiving periodical workers compensation payments.
The plaintiff asserted that he still feels pain in his chest, spine and neck, that if he tries to lift anything he feels pain, that he has difficulty in turning his head and that he suffers from headaches. He has not worked since 1986.
In cross-examination the plaintiff agreed that after he returned to work for Mr Christianos after the accident, he had worked for him for more than a year for the same pay, supervising the construction of the town houses at Abbotsford and performing such functions as employing tradesmen, checking on the rate at which the tradesmen were working, checking on the standard of their work and dealing with complaints by the owner. He had been able to manage such physical work as was required, which was not like the constant heavy work involved in working full-time as a brick layer or a concreter. Mr Christianos had never complained about the plaintiff's performance. The plaintiff was asked "and of course that was the sort of thing that you could have kept doing after 1986, isn't is, that sort of supervision?" to which he replied "exactly". Later in his evidence the plaintiff said that the sort of work he was doing for Mr Christianos he could do, even with the problems he has with his chest and back since the accident.
After the plaintiff stopped working for Mr Christianos he undertook the building of a couple of houses on his own account. However, on these jobs he had problems with his chest and back. He was unable to do any of the physical work himself and had to engage tradesmen to do all the work and at the end of each job the plaintiff found that there was no profit for him.
In 1986 the plaintiff decided not to continue working. He did not ask Mr Christianos for another job as a supervisor because Mr Christianos had moved interstate. When asked whether he could have applied for a job as a building supervisor the plaintiff said, "No, I didn't ask because my English is still not 100 percent and I am too old". He added, "the job I doing for Mr Christianos - nobody can give it to me". The plaintiff accepted, as is obvious, that he has very long experience and considerable skills in the building industry.
The plaintiff was asked a number of questions in cross-examination about whether his job with Mr Christianos was unusual, in that he was an employee and not a contractor. He was asked, "that normally you did it the way you said earlier that is that you were the contractor rather than being paid a fixed weekly amount, is that so?" to which he replied "Yes". The plaintiff said, "I wouldn't mind if I worked for wages or if I work on my own job". But his preference was for working for himself. He agreed that he made more money if he organised a building job himself.
The plaintiff was cross-examined about his income tax returns. The income tax returns state that the plaintiff's net income as a building contractor in the year ended 30 June 1980 was $8,447, in the year ended 30 June 1981 was $4,033, in the year ended 30 June 1982 was in fact a loss of $15,961, that his net income as a building contractor and an employee in the year ended 30 June 1983 was in fact a loss of $6,240, that his net income as a building contractor in the year ended 30 June 1984 was a loss of $12,540, that his net income as a building contractor and an employee in the year ended 30 June 1985 was $43, that his net income as a building contractor in the year ended 30 June 1986 was in fact a loss of $1,835 and that his net income in the year ended 30 June 1987 was $4,403 consisting of sickness benefits.
All the plaintiff's income tax returns were prepared by the same firm of accountants. In his cross-examination the plaintiff said that he had kept records, provided information to the accountant including information about any cash received and had then left it to the accountant to prepare the income tax returns. For several years no income tax return had been prepared and then in one year, which appears to have been 1987, a number of returns were prepared. The plaintiff claimed not to have been aware that many of his income tax returns showed losses. In re-examination he said that before the accident he had had enough money to provide for himself and his family.
In the discharge summary from Balmain Hospital it is recorded that there was an anterior displacement of the lower half of the plaintiff's sternum and that there was anterior compression of the mid thoracic vertebral body, probably T-6, consistent with a recent fracture.
The first medical practitioner the plaintiff saw after being discharged from Balmain Hospital was a general practitioner with a surgical qualification, Dr Selvaraj, who made an after hours visit to the plaintiff on 30 May 1983. Dr Selvaraj's contemporaneous note of this visit records no more than the fact of the visit.
The plaintiff had been a general patient of Dr Selvaraj's since January 1982 and after the accident the plaintiff continued to see Dr Selvaraj for medical problems arising from the accident and also generally.
In a report of 19 July 1984 Dr Selvaraj said:-
"I was involved in the care of this man when I was asked to a after hours visit on 30/5/83 and I was informed that he had presented to the casualty after a fall between ten and twenty feet at a building construction site and alleged to have landed on his right side. When I examined him on 30/5/83, I did notice that he was in a considerable amount of distress and he had chest pain, particularly in the region of the sternum. He also had considerable amount pain in the dorsal region about the middle of the dorsal spine."
Later in his report Dr Selvaraj said:-
"Since then Mr Valmas was not examined in my rooms until 8/5/84. Of course he had seen me many times during this period, but they were all for conditions unrelated to his fall. On 8/5/84 when he was seen, he started complaining of pain in the sternum and the dorsal spine and an x-ray examination revealed a fracture of the dorsal fifth vertebra and a fracture of the sternum. Both the fractures were healing and were in good position".
In a report of 17 May 1994 Dr Selvaraj said of the plaintiff, whom he had examined on 4 May and 7 May 1994:-
"His posture was one of a moderate degree of Kyphosis.
His chest expansion was extremely limited and air entry was diminished over both lung bases.
He was tender over the fifth dorsal vertebra and over the middle of the body of the sternum.
His chest expansion with inspiration was grossly limited and was less than one inch.
He appeared to be very anxious, depressed and tired."
Dr Selvaraj expressed the opinion that the plaintiff's symptoms were "predominantly related" to the accident, that the plaintiff had a 50 percent permanent loss of chest function and was unemployable as a builder.
In cross-examination of Dr Selvaraj it emerged that in January 1982 the plaintiff had been diagnosed by Dr Selvaraj as having a right-sided inguinal hernia, which had been operated on by Dr Selvaraj in June 1982 and which had not recurred. In April 1992 Dr Selvaraj diagnosed the plaintiff as having a left-sided hernia, which was operated on in February 1993. If in 1992 the plaintiff had been working in a job involving heavy lifting, Dr Selvaraj would have advised him not to lift heavy weights for six to twelve months. Dr Selvaraj gave evidence that predisposing factors for hernia in the plaintiff's case are a chronic obstruction airways disease aggravated by the plaintiff's smoking, which causes the plaintiff to cough, and a bladder obstruction which causes him to strain when passing water.
On many occasions both before and after the accident the plaintiff has presented to Dr Selvaraj suffering from acute bronchitis. For example in March 1993 Dr Selvaraj noted "severe coughing and wheezing and expectoration". Dr Selvaraj recommended that the plaintiff stop smoking but the plaintiff has not heeded his advice. The plaintiff has been treated with medication including injections for his bronchitis.
Before the accident the plaintiff often complained of general weakness and not feeling well and of sexual impotence, which may have been associated with his divorce. He was often concerned, anxious and depressed. On 14 February 1983 Dr Selvaraj noted that "he was quite upset and...visibly perturbed and quite sad". In April 1993 he made complaints of generalised aches and pains.
In the twelve months after the accident the plaintiff complained primarily about his bronchitis, not his injuries from the accident.
The only other medical practitioner who gave oral evidence at the hearing was Dr Searle, consultant orthopaedic surgeon, two of whose reports were also admitted into evidence.
In his opinion of 14 May 1990 Dr Searle expressed the following opinions:-
"The fracture of his thoracic vertebra was associated with neighbouring soft tissue injuries, including ligament strains of the nearby joints, and damage to the T-4-5 disc. The symptoms and disability from these injuries are persisting and are permanent and causes a severe degree of disability especially in relation to his normal work activities. He is certainly unfit for his pre-injury work and indeed is unfit for any form of work which requires physical effort. He is also unfit for work which requires prolonged standing or prolonged sitting, lifting or repeated bending, repeated or strenuous movements of the upper limbs, or regularly travelling moderate distances. From a practical point of view this makes him unemployable.
The fracture of his sternum is also consistent with the fall he described and appears to have gone on to non-union. It is still tender and would be painful if he were required to perform repeated or strenuous movements of his upper limbs. With regard to prognosis there will be no change in this condition with the passage of time.
However the prognosis for his thoracic spine is not so good. Degenerative changes will intervene at the injured levels, probably from about T3 to T6 and will cause gradually increasing symptoms and disability with the passage of time."
In his report of 31 May 1994 Dr Searle expressed similar opinions. He said:-
"In the thoracic region he has not only fractures of T-5 and possibly T-4 but damage to the soft tissues in this area, and almost certainly ligament strains in the low thoracic spine as well. The symptoms and disability from these injuries are persistent and permanent and cause referred pain into the back of the neck and the occiput, and the thoracic symptoms are also aggravated by movements of his neck. Degenerative changes have already developed and the symptoms and disability in this area will gradually increase with the passage of time.
The pain and tenderness in the sternum are consistent with an old fracture which has remained ununited. This causes a moderate degree of disability, but prevents him performing any activity which requires repetitive or strong movements of his upper limbs.
As previously explained he is probably unemployable. This work incapacity is permanent. Because of this physical disability he is also unfit for performing normal domestic chores and requires assistance for such activities, two or three hours a week.
He has a 30 percent permanent impairment of his back, and a 50 percent permanent impairment of his sternum which I estimate is equivalent to a 10 percent permanent loss of efficient use of his chest."
In cross-examination Dr Searle said that in expressing an opinion that the plaintiff required two to three hours a week of assistance, he had simply proceeded on the assumption that the plaintiff carried out the average normal domestic chores. Two to three hours a week had been the time suggested to Dr Searle in a letter of instructions to Dr Searle from the plaintiff's solicitors and such a figure seemed reasonable to Dr Searle. The number of hours required would be affected by whether a person lived in a home unit or a large house.
Dr Searle said that he felt that work as a supervisor on a building site would be beyond the plaintiff unless it was very part-time work. Dr Searle was asked:-
"If he were able to carry out the supervisory activities which didn't involve him in prolonged standing or prolonged sitting or heavy lifting or repeated bending or undertaking repeated or strenuous movements of the upper limbs, then it would follow, from your expression of opinion wouldn't it, that he would be able to undertake that form of work?"
Dr Searle replied:-
"If what you say is correct then he probably would be able to undertake that sort of work but, as I said, from a practical point of view on a building site I imagine that even supervising requires you to be on your feet".
I generally accept the evidence of Dr Searle.
The plaintiff's case also included a report prepared for medico-legal purposes by Dr Dent, a psychiatrist, dated 31 May 1994. Dr Dent considered that major aspects of mental suffering for the plaintiff included concern about whether he would be able to work again, depressive helplessness and anger. Dr Dent considered that the plaintiff might "even be beyond retrieval in the psychological sense" and that the plaintiff "feels murderously angry". Dr Dent added: "I think he is right when he says a part of him has died". In a later part of his report Dr Dent says:-
"...it is not humane to suggest that there be no ongoing assistance; I believe he would be benefited, again to what may regrettably now be a limited optimum, if he were referred to a psychiatrist to assist him. I think he would be benefited from the use of psychoactive medication and probably antidepressant medication.
It would be prudent to recommend he see a Greek speaking psychiatrist or a specialist with such facilities....Nevertheless we should not be seeing this as a situation where he will now recover, but one where simple humanity says he needs assistance now to relieve what degree of suffering can be relieved..."
The plaintiff gave the following evidence in relation to Dr Dent in his evidence in chief:-
"Q. Have you seen a psychiatrist at times?
A. No.
Q. What about Dr Dent?
A. Yes, I saw him once.
Q. Has he suggested you might try and find a Greek speaking psychiatrist to assist you?
A. I can't remember....
Q. If a psychiatrist suggested that you should have ongoing psychiatric help.
A. Yes.
Q. Would you have the help?
A. Yes.
Q. Do you think a Greek speaking psychiatrist might be able to help you.
A. I don't think so.
Q. But would you try?
A. I never had problems for doctors for language".
The plaintiff gave the following evidence about whether he felt anger:-
Q. Do you ever feel angry?
A. Yes.
Q. Do you feel angry with some people?
A. No.
Q. Why do you feel angry?
A. I don't feel angry with people.
Q. Do you ever feel angry?
A. No,
Q. What about Mr Nyman, how do you feel about him>|?
A. I don't feel anything."
A number of medical reports were admitted into evidence in the defendant's case and I have taken all of these reports into account. Dr Rapaport, vascular and general surgeon, in a report of 19 September 1994 concluded inter alia.
"The patient has chronic bronchitis and emphysema as a result of heavy cigarette smoking which is continuing and this has produced radiological signs on chest x-ray. It is possible that the presence of his lung disease may have contributed to his decision to quit working.
I believe this patient would be fit for some supervisory work in the building industry. On the basis of his age and chronic airways disease, I believe he is not fit for heavy labouring and brick laying."
Dr James Maguire, a consultant psychiatrist, in a report of 11 October 1994 said inter alia:-
"Mr Valmas said he was a hard worker who found it difficult to cope with sitting at home with nothing to do. This caused him to become 'nervous' by which he meant he was 'a little bit on edge - a bit cranky and couldn't sit still in one spot for a long time.
Neither Dr Dent nor Dr Maguire was required to attend for cross-examination and I have to decide which of their reports I prefer. I generally prefer the report of Dr Maguire. The statment of the plaintiff's symptoms in Dr Dent's report is exaggerated. The report itself is expressed in florid language and reads like a piece of advocacy. The plaintiff has never in fact undergone any psychiatric or psychological counselling or treatment.
I will now proceed to determine what damages would have been assessed at the notional trial. At a notional trial on 30 June 1992 damages for loss and damage up to the date of the notional trial would have been past damages; damages for loss and damage after the date of the notional trial would have been future damages. I will deal in turn with the various heads of damages.
1. Past Loss of Earning Capacity.
In his submissions both written and oral counsel for the plaintiff did not make any claim for damages for past loss of earning capacity for any part of the period between 18 May 1983 and 31 August 1986, which was approximately when the plaintiff ceased to carry on his business as a building contractor.
As regards damages for past loss of earning capacity for the period from 1 September 1986 onwards, counsel for the plaintiff submitted that the plaintiff's income tax returns for the years when he was working should be disregarded, as not being true indices of his earning capacity. It was clear, it was submitted, that while he was working the plaintiff was able to maintain himself and his household and the losses or the extremely small amounts of net income shown in his income tax returns could not have been a true reflection of the income he was in fact receiving.
In his submissions counsel for the plaintiff expressly limited the plaintiff's claim for damages for past loss of earning capacity so as to accord with findings made by Burke CCJ in his judgment of 15 October 1990, repeatedly stating that Burke CCJ's findings gave rise to issue estoppels which would have enured up to the date of the notional trial, although elsewhere in his submissions counsel said that the plaintiff was prepared "to reduce this aspect of his claim as a matter of convenience to the date of the notional trial". It was accepted by counsel for the plaintiff that the amount of workers' compensation payments received by the plaintiff up to 30 June 1992 in pursuance of Burke CCJ's judgment should be deducted from the damages which would otherwise be awarded for past loss of earning capacity.
On p44 of his written submissions counsel for the plaintiff set out a table of figures derived from findings and orders made by Burke CCJ in his judgment of 15 October 1990. I will now reproduce that table, with an additional column containing figures which can be arithmetically derived from the figures in counsel for the plaintiff's table.
From
To
Probable
weekly
earnings
$
Earning
Capacity
$
Difference
$
pay-
ments
$
Loss x
weeks
$
Loss
$
1986
1987
1988
1989
1990
Residual
W's
C
Total
1
Sept
30
June 1987
506
256
250
150
100
x 43
4300
1
July
30
June 1988
526
267
259
155
104
x 52
5408
1
July
30
June 1989
547
277
270
160
110
x 52
5720
1
July
30
June 1990
568
288
280
165
115
x 52
5980
1
July
30
June 1992
590
300
290
170
120
x 104
12480
$33,888
The column headed "Probable Weekly Earnings" contains the amounts which Burke CCJ considered that the plaintiff would probably have earned if he had been uninjured. The column headed "Difference", which I have inserted, contains the differences between the figures for probable weekly earnings and the figures for residual earning capacity.
Counsel for the plaintiff submitted that the plaintiff should be awarded the total amount in the Total Loss Column, that is $33,888, which is the total of the differences between what the plaintiff would probably have earned if uninjured and the plaintiff's residual earning capacity, less the amounts of the workers' compensation payments.
Counsel for the defendant submitted that I should accept the plaintiff's income tax returns as accurate and as true indices of his earning capacity and that I should find that the plaintiff retained a residual earning capacity to work as a supervisor in the building industry. Counsel submitted that I should find that the plaintiff had failed to demonstrate any past loss of earning capacity or, alternatively, that any damages awarded for past loss of earning capacity should not exceed the amounts of the awards of compensation made by Burke CCJ and that an amount should be deducted because of the plaintiff's left-sided hernia in 1992. If this alternative approach of counsel for the defendant was adopted, including making a deduction for the hernia in the amount contended for by counsel, an amount of $33,482 would be arrived at. This amount is very similar to the amount claimed by counsel for the plaintiff, although the methods of arriving at the results are different.
I will now proceed to assess damages for past loss of earning capacity. As counsel for the plaintiff did not claim any damages for the period from 18 May 1983 to 31 August 1986, I will not award any damages, for any part of that period. I do not consider that the plaintiff's income tax returns provide any useful guide to his earning capacity; the returns clearly did not make a full and accurate disclosure of his income. I find that the plaintiff has demonstrated a partial loss of earning capacity from 1 September 1986 onwards. As both counsel referred me to Burke CCJ's findings and orders, counsel for the plaintiff contending that I was bound by them, I propose to adopt them, even if they do not give rise to any estoppel. I see no reason why I should equate the damages to be awarded for past loss of earning capacity with the amounts of workers compensation awarded by Burke CCJ. On the other hand, counsel for the plaintiff's submission makes sense, that damages for past loss of earning capacity should be awarded on the difference between what the plaintiff probably would have earned if uninjured and his residual earning capacity, but that the amounts of workers compensation should then be deducted. I do not consider that any amount should be deducted for the plaintiff's left-sided hernia, which was not operated on until 1993.
I accordingly find that damages for past loss of earning capacity would be the amount claimed by the plaintiff of $33,888.
Interest on Damages for Past Loss of Earning Capacity
Interest on damages awarded for past loss of earning capacity would clearly have been recoverable at the notional trial. No objection was made by counsel for the defendant to the rate of 15 percent adopted by counsel for the plaintiff. However, the calculation of interest in the plaintiff's written submissions seems to assume that the period over which interest is to be calculated is 4.8 years, whereas the period from 1 September 1986 to 30 June 1992 is approximately 5.8 years.
I find that interest on the damages for past loss of earning capacity would be $14,741.
Damages for Future Loss of Earning Capacity
Counsel for the plaintiff submitted that the plaintiff would have been awarded damages for the period between 30 June 1992, the date of the notional trial, and 8 August 1999, the plaintiff's sixty-fifth birthday, a period which in calculations of damages was asserted to be 7.2 years, but is much closer to 7.1 years, on the basis that the plaintiff throughout the whole of the period had a total loss of earning capacity, damages being assessed at the rate of $750 per week (based on what the plaintiff said was his total income when, before the accident, he was working for Mr Christianos and also conducting his own business) or, alternatively, at the rate of $465 per week, being the rate of remuneration of a brick layer. It was submitted by counsel for the plaintiff that only a conventional discount of 15 percent for contingencies should be allowed.
Counsel for the defendant submitted, as he had in relation to the claim for damages for past loss of earning capacity, that the plaintiff should be bound by his income tax returns and that, for many reasons, a discount of more than 15 percent should be allowed for contingencies.
In regard to this head of damages, I adhere to the view I expressed in relation to the claim for damages for past loss of earning capacity that the plaintiff's income tax returns do not provide any useful guide to the plaintiff's earning capacity.
Apart from the income tax returns, the evidence is meagre. I do not consider that I can confidently rely on the plaintiff's evidence that when he had two jobs, that is working for Mr Christianos and also working for himself, "he got in his own pocket" $700 to $800 per week. There are no supporting records and the figures stated are utterly at variance with his income tax return for the year ended 30 June 1983, which was prepared years afterwards, in which he shows a loss for that year. Furthermore, the period when the plaintiff had two jobs, working as an employee for Mr Christianos and also carrying on his own business, could have been an abnormally lucrative period for the plaintiff.
Nor do I consider that the rate of remuneration of a bricklayer should be adopted. It seems to me highly improbable that if the plaintiff had not been injured he would, with his preference for working for himself, his experience and skills as a supervisor, his advanced age and his bronchitis, have worked as a bricklayer between the ages of fifty-eight and sixty-five.
In October 1990 Burke CCJ found that the probable weekly earnings of the plaintiff if uninjured would have been $590 per week and I have decided to adopt, as the amount which the plaintiff would probably have been earning at the date of the notional trial if he had not been injured, the amount of $600 per week. I find that from 30 June 1992 onwards the plaintiff would have had no residual earning capacity.
I agree with the submission made by counsel for the defendant that a greater discount than the conventional discount should be allowed for contingencies, because of the heavy nature of almost all work in the building industry, the risk of injury in a non-compensible accident, fluctuations in the availability of work in the building industry, the plaintiff's chronic airways disease, his pre-accident susceptibility to periods of depression and the conditions predisposing him to a formation of hernia. I also take into account that the plaintiff's left-sided hernia had been diagnosed before the date of the notional trial.
I consider that damages should be awarded at the rate of $600 per week for 7.1 years, using a multiplier taken from the 3 percent tables of 335, with a discount for contingencies of 30 percent, producing a figure of $140,700.
Later in this judgment I will deal with the subject of the deduction of the value of the plaintiff's future workers' compensation rights.
General Damages
Without attempting to be exhaustive, some of the more salient aspects of the plaintiff's claim for general damages can be summarised as follows. The plaintiff, a forty-eight year old man, fell a distance of about fifteen feet at a building site. He lost consciousness in the fall and was taken by ambulance to hospital, where he remained until 26 May 1983. His principal injuries were a fracture of a thoracic vertebra with associated soft tissue injuries and a fracture of his sternum which remained for a long time ununited. He has experienced and will permanently continue to experience pain and restriction of movement in his back, chest, neck and head. Dr Searle is of the opinion, and I accept, that the plaintiff has suffered a 30 percent permanent impairment of his back and a 50 percent permanent impairment of his sternum, equivalent to a 10 percent permanent loss of the efficient use of his chest. The plaintiff did not sustain any psychiatric condition as a result of the accident but has suffered some depression.
On the other hand, I have to take into account that before the accident the plaintiff had had frequent serious attacks of bronchitis and that some of his difficulty with his chest and breathing since the accident is attributable to his bronchitis. He also had frequent episodes of depression before the accident.
Counsel for the plaintiff contended for an award of general damages of $175,000. Counsel for the defendant contended for an award of general damages of $55,000 to $60,000. I am of course determining what amount of general damages would have awarded at a notional trial on 30 June 1992.
I consider that $90,000 would have been awarded for general damages.
Interest on Past General Damages
It was common ground that interest on past general damages should be calculated at 4 percent. I apportion general damages, half to the past and half to the future. Interest on $45,000 from 18 May 1983 to 30 June 1992 (close enough to nine years) is $8,100.
Past Out of Pocket Expenses
In the plaintiff's written submissions it was stated that the plaintiff was still considering whether to make a claim for damages for past out of pocket expenses. In oral argument it was conceded that there was no claim for damages for past out of pocket expenses. Presumably any out of pocket expenses would have been covered by the award made under the Workers Compensation Act.
Future Out of Pocket Expenses
The plaintiff claimed damages for future out of pocket expenses, relying on the report by the psychiatrist Dr Dent in which Dr Dent said that the plaintiff would be benefited by physiotherapy, psychiatric counselling, pain management and psychoactive and antidepressant medication. A global sum of $50,000 was claimed.
I do not consider that any damages should be awarded for future out of pocket expenses. As I have indicated earlier in this judgment, I prefer the evidence of Dr Maguire to the evidence of Dr Dent. I have already referred to the plaintiff's evidence that he did not think a Greek speaking psychiatrist would help him and that he did not feel any anger for Mr Nyman. There is no evidence that the plaintiff has ever undergone any physiotherapy, psychiatric counselling or pain management and in my opinion there is no prospect that he would ever undergo any of these forms of therapy.
In any event, the plaintiff continues to have the benefit of the order under s60 of the Workers Compensation Act, which should cover the costs of any of the kinds of treatment mentioned by Dr Dent.
Past and Future Domestic Care
The plaintiff lives in a home unit with his two adult sons. The plaintiff said that his two sons assist him by providing domestic services but he was unable to provide any estimate of the amount of time spent by them in providing those services.
Counsel for the plaintiff based a claim for damages for the cost of past domestic services on evidence by the plaintiff's son, Mr C Valmas, that he and his brother did between sixteen to twenty-four hours housework per week in the unit. It was submitted that if time spent otherwise than for the care of the plaintiff was deducted, there would still be ten hours per week spent in the care of the plaintiff. It was suggested by counsel for the plaintiff that an hourly rate of $10 could be adopted for the computation of damages for past domestic care and that an hourly rate of $13.12 could be adopted for the calculation of damages for future domestic care.
Counsel for the defendant did not dispute that some damages should be awarded under this head, but submitted that they should be minuscule.
Mr Valmas gave evidence that he and his brother, both of whom are adults and working, live in a home unit with the plaintiff. Mr Valmas said that since the accident his brother and he do 90 to 95 percent of the housework in the unit. The following questions and answers occurred in Mr Valmas's examination in chief:-
"Q. All up how many hours would you and your brother spend on housework per week?
A. Never added it. I can estimate on it.
Q. Estimate the best you can?
A. Combined.
Q. Yes.
A. Between sixteen and twenty, twenty-four hours I would say".
In later evidence in chief, when counsel for the plaintiff sought to elicit what he and his brother actually did, he said "there are only three plates to be washed anyway and my father washes his own; vacuuming of the unit varied, maybe once a week, maybe twice a week, sometimes three times a week". When asked how often he would do clothes washing for his father he answered, "varies again, twice a week, depending. We have different occupations, my brother and myself so". Later again he said, "we would wash I don't say I wash my own, my brother washes his own, father washes his own its all combined". In cross-examination Mr Valmas said that the things he and his brother had done since the accident were practically the same things as they had done before the accident.
I do not consider that I can place any reliance on Mr C Valmas's estimates of the time spent by his brother and himself in performing household chores in the home unit they share with their father. His estimates were vague, unsupported by detail and in fact at variance with such detail as was given and in my opinion it is inherently likely that his estimates were greatly exaggerated. I consider that I should place more weight on Dr Searle's evidence that the plaintiff requires assistance for normal domestic chores at the rate of two to three hours per week. That sort of figure had actually been nominated to Dr Searle by the plaintiff's solicitors.
I find that damages for the cost of past domestic care at the rate of three hours per week would be $14,040 and that damages for the cost of future domestic care for the rest of the plaintiff's life, taking a life expectancy of eighteen and a half years, would be $29,264.
Loss of Superannuation
In his written submissions counsel for the plaintiff submitted that the plaintiff should be awarded damages for loss of superannuation, based on $750 per week or on $565 per week gross as a bricklayer. In oral submissions it was merely contended that a modest figure should be awarded.
In my opinion, I should accept counsel for the defendant's submission that if the plaintiff had not been injured he would have continued working in his preferred mode as a contractor carrying on his own business and would not have become entitled to any superannuation as an employee. I reject this claim for damages.
Cost of Management
Counsel for the plaintiff submitted that the plaintiff would have been entitled to some professional assistance to manage the amount of his verdict, even though he is not a disabled person. It was submitted that the amount of the management fee should be calculated in accordance with the regulations under the Protected Estates Act and in accordance with the decision of the Court of Appeal in GIO v Rosniak (1992) 27 NSWLR 665 or alternatively a reasonable lump sum should be awarded to enable the plaintiff to retain the services of an accountant or investment adviser.
Counsel for the defendant submitted that no evidence had been given to establish a need for fund management or that any verdict would be the subject of management. Counsel for the defendant also submitted that GIO v Rosniak was a case involving a plaintiff suffering from severe brain damage and was a decision given on 17 July 1992, after the date of the notional trial.
In my opinion, an amount for fund management would not have been awarded at the notional trial. GIO v Rosniak had not then been decided. As counsel for the defendant submitted, there is no evidence of a need for fund management created by the tortfeasor or that the amount of the verdict would have been subject to fund management. The plaintiff was a man of some business acumen who had carried on for some years his own business as a building contractor and was used to collecting, handling and disbursing substantial sums of money. I find that the plaintiff was not intellectually disabled in any way by the accident. After the accident the plaintiff continued working for Mr Christianos for a number of months, built two houses on his own account as a building contractor and then ceased to carry on business only because of his physical disabilities. It is apparent from the amounts I have stated and will state for other heads of damages that the amount of the total verdict would have been nowhere near as large as the amount contended for by counsel for the plaintiff.
The heads of damages which I consider would have been awarded at the notional trial can be tabulated as follows:-
Damages for Past Loss of Earning Capacity $33,888.00
Interest on Damages for Past Loss of Earning Capacity $14,741.00
Future Loss of Earning Capacity $140,700.00
General Damages $90,000.00
Interest on Past General Damages $8,100.00
Past Domestic Care $14,040.00
Future Domestic Care $29,264.00
$330,733.00
Earlier in my judgment I concluded that there was a high degree of probability that in the lost action the plaintiff would have succeeded in obtaining a verdict against Mr Pendino, the plaintiff would have succeeded in obtaining a verdict against Mr Christianos for breach of his obligation at common law to provide a safe system of work and a safe place of work and the plaintiff would have succeeded in obtaining a verdict against Mr Christianos in a cause of action based on a breach of reg73(3) of the Construction Safety Regulations and some likelihood that the plaintiff would have succeeded in obtaining a verdict against Mr Christianos on the basis that he was vicariously liable for the negligence of Mr Pendino. I have also concluded that there was little likelihood of any finding of contributory negligence against the plaintiff and that in any event contributory negligence would not have been legally available as a defence to the cause of action against Mr Christianos based on breach of statutory duty. In my opinion, I should find that at a notional trial the plaintiff would have had a 95 percent chance of the amounts of damages I have set out being assessed and that accordingly the value of the benefit he lost through his solicitor's breach should, subject to any deductions which would have had to have been made from the verdict in any event and subject to any risk that he might not have been able to actually recover any damages awarded in the lost trial, be found to be $314,196.
From this total deductions should be made of amounts which would necessarily have been deducted in full. Social Security payments amounting to $23,544.74 would have been deducted.
In calculating the amount of damages for past loss of earning capacity I have already taken into account past workers' compensation.
Counsel for the plaintiff submitted that the value of the plaintiff's rights to future workers' compensation should not be deducted from the amount of the damages, or, alternatively, that the value of the plaintiff's rights to future workers' compensation should be substantially discounted.
Counsel for the defendant submitted that it was necessary to deduct the value of the plaintiff's rights to future workers' compensation. It was submitted that what had to be deducted was the value of the plaintiff's rights to future workers' compensation and not the amount of compensation which the plaintiff happened to be receiving at the time of the notional trial, that under s55 of the Workers Compensation Act the plaintiff could have applied at any time after 1 April 1992 to have the amount of his weekly compensation increased, on the basis of the total incapacity he alleges he then had, to $242.20 per week ($210 net) and that the amount of $210 should be used in calculating the amount of the deduction for future workers' compensation rights.
It was also submitted by counsel for the defendant that the plaintiff's rights to workers' compensation would continue until his death, because s52 of the Workers Compensation Act 1987, which provides for the termination of weekly benefits on the worker reaching retiring age, applies only if the worker's injury occurred on or after 30 June 1985 and hence does not apply in the plaintiff's case.
It was conceded by counsel for the defendant that the value of the future workers' compensation rights would have to be discounted for contingencies, for example the contingency of the plaintiff not succeeding on an application for an award of compensation on the basis of total incapacity, of a redemption or of a successful application by the employer or Work Cover to terminate the award. However, it was submitted that the adverse contingencies affecting the plaintiff's rights to workers' compensation were much less important than the adverse contingencies which would have affected the plaintiff's earning capacity if he had not been injured.
It is clearly established that it is necessary, at least at some stage in the process of the assessment of damages in a case such as the present, to deduct the value of the plaintiff's rights to future workers' compensation, which, if the solicitor had not been negligent, would have terminated at the date of the notional trial. See Tipper v Williams (Court of Appeal 12 May 1993). I also accept that what should be deducted is the value of the plaintiff's rights to future workers' compensation, not merely the extent to which he has happened to exercise them up to the date of the notional trial. Consistently with my finding that on and from the date of the notional trial the plaintiff was totally incapacitated from working, the value of the plaintiff's future workers' compensation rights should be calculated at the rate of $210 per week.
I also accept that because the plaintiff's injury occurred before 30 June 1985 his workers' compensation rights will not cease on his attaining retiring age but will continue until his death. I accept, as was submitted by counsel for the plaintiff, that the plaintiff's life expectancy at the date of a notional trial was approximately eighteen and a half years and that a multiplier of 743.5 can be used.
In some cases courts have applied an equal percentage discount to the damages for future loss of earning capacity and to the value of the future workers' compensation rights, while recognising that the actual contingencies are not the same in the two cases. In the present case, I consider that there is force in the submission made by counsel for the defendant and I have decided to select a lesser percentage, 20 percent, for the discount on the value of future workers' compensation rights. The amount of the deduction for future workers compensation rights is accordingly $124,908.
If the amounts for Social Security payments and for the value of future workers' compensation rights are deducted from the amount of $314,196, a figure of $165,743 is arrived at.
4. The Issue of Prospects of Recovery of Damages awarded in the Lost Action.
Notwithstanding a submission to the contrary made on behalf of the plaintiff, it is clearly necessary for me to consider this issue. See Nikolaou v Papasavas at 404.
No evidence was given by either Mr Christianos or Mr Pendino, in either examination in chief or cross-examination, about his financial means, either currently or at about the time the notional trial would have been held.
It seems highly unlikely that Mr Pendino would have had the means to satisfy a substantial judgment obtained against him or that he would have been insured against liability. At the time the plaintiff was injured Mr Christianos was the proprietor of a building project involving the building of a number of town houses at Abbotsford and it may be that it could be inferred that at that time he was a person of some financial substance. However, even if this inference could be drawn, evidence about his financial position in 1983-4 is a weak basis for drawing any inference about his ability to satisfy a substantial judgment obtained in mid 1992. Mr Christianos was not insured against his liability to pay workers' compensation to the plaintiff and it is improbable that he was insured against any other form of liability to the plaintiff. There is no evidence that he had any such insurance.
Thus far, in my consideration of this issue, it would seem that the plaintiff's chances of actually recovering damages awarded in the lost action would have been very slight. However, counsel for the plaintiff pointed to evidence given by Mr Pendino in cross-examination that the backhoe was a registered vehicle which could be driven on roads and if being driven on a road could be steered off the road into a driveway. It was accordingly submitted on behalf of the plaintiff that at the time of the accident the backhoe was a motor vehicle within the meaning of the Motor Vehicles (Third Party Insurance) Act, that it was a registered and therefore an insured motor vehicle, that the injury suffered by the plaintiff was bodily injury caused by or arising out of the use of a motor vehicle and accordingly there was necessarily insurance against the liability to the plaintiff (or at least access to a statutory fund). Counsel for the plaintiff cited Fawcett v BAP By Products Pty Ltd [1960] HCA 59; (1969) 104 CLR 80 and GIO v Green [1966] HCA 6; (1966) 114 CLR 437. Counsel for the defendant did not make any submission to the contrary of these submissions by counsel for the plaintiff, except to contend that insurance would be available only to satisfy a judgment recovered against Mr Pendino and that in the cause of action against Mr Pendino contributory negligence could be relied on.
I consider that I should find that if in the notional trial the plaintiff would have obtained a verdict against Mr Pendino (and I have already concluded that there would have been a high degree of probability of that happening) then the plaintiff would certainly been able to recover the amount of the verdict via the Motor Vehicles (Third Party Insurance) Act.
It is true that it did not occur to the draftsman of the statement of claim in the 1989 proceedings to allege that the backhoe was a motor vehicle. However, in my opinion, it would certainly have occurred to some legal adviser of the plaintiff at some time before the notional trial that recovery of any judgment from Mr Pendino or Mr Christianos would be uncertain and that consequently some amendment would have been made to the statement of claim to add such an allegation.
Because of the availability of compulsory third party insurance I find that the plaintiff would have been certain to recover the damages awarded to him in the lost action in his cause of action against Mr Pendino. However, because of the slight chance of the plaintiff not succeeding on that cause of action or of a finding of contributory negligence, the figure of $165,743 should be reduced by 5 percent, producing a figure of $157,456.
Interest
The plaintiff would have been entitled to interest on the amount of a judgment obtained in the notional trial between the date of the notional trial and the present. The interest should be calculated on the sum of $157,456, to take into account the chances that the plaintiff would not have obtained a verdict or would not have been able actually to recover interest. In written submissions the plaintiff claimed interest at the rate of 15 percent per annum. However, this rate is more appropriate for the years preceding 30 June 1992, when interest rates were higher, and I have adopted an interest rate of 12 percent as a fairly accurate average interest rate for the period since 30 June 1992. I have treated the period for which interest is to allowed as four and one third years. Interest on the notional judgment so calculated is $81,877.
Costs of the Notional Trial
It was submitted by counsel for the defendant and disputed by counsel for the plaintiff that the amount of the solicitor/client costs which the plaintiff would have incurred in the lost action, that is the costs the plaintiff would have incurred which would not have been recoverable under a costs order against the defendants should be deducted. I accept that, consistently with the general guiding principle in the assessment of damages that the object is to award the plaintiff an amount of money that will, as nearly as money can, put the plaintiff in the same position he would have been in if he had not been injured by the defendant, the amount of any costs the plaintiff would have incurred in the lost action which would not have been recoverable from the defendants in the lost action should be deducted. The plaintiff should not be placed in a better position than he would have been in if the defendant had not committed any breach of duty.
The defendant called evidence from Mr Pearlman, a solicitor, who started working for the defendant as an employed solicitor in February 1994. On the basis of an inspection of half a dozen files in which the defendant had acted as solicitor for the plaintiff in personal injury matters between about 1989 and 1992, the files having been selected by other employees of the defendant, Mr Pearlman expressed the opinion that if proceedings by Mr Valmas against Mr Christianos and Mr Pendino had gone to a hearing and the trial had lasted three days, the total costs would have been about $25,000 and the percentage of those costs recoverable from the defendants between 60 to 65 percent, leaving the balance of the costs to be borne by Mr Valmas. In cross-examination Mr Pearlman said that of the six matters two had gone to an arbitration hearing and all the others had been settled.
Various criticisms were made by counsel for the plaintiff of Mr Pearlman's evidence and some of these criticisms have weight. However, I accept that the plaintiff would have had to meet some costs out of his own pocket and in the absence of any other evidence I propose to broadly accept Mr Pearlman's evidence and deduct $8,000 for these costs. The costs would have been less if there had not been a full trial of the lost action. On the other hand, if the plaintiff's claims had been settled out of court before a hearing, the amount of the settlement would probably have involved some element of compromise on his part.
If there had been a full trial of the lost action, at least this amount of costs would have been incurred, regardless of the result of the trial. If the plaintiff had not succeeded in obtaining a verdict, the costs payable by him would have been much greater. Accordingly, I do not propose to discount the amount of the costs.
The amount of the costs should not be deducted from the amount of the notional judgment, for the purposes of calculating interest on the amount of the notional judgment.
After the deduction of these costs the amount of damages referable to the lost action is $157,456, plus $81,877, less $8,000, producing a figure of $231,333.
The Further Damages
Damages of this kind can properly be awarded in an action of this kind against a solicitor. See Nikolaou v Papasavas at 404-5.
I have already referred to the plaintiff's evidence in chief where he said that he did not feel angry with people and that he did not feel anything about Mr Nyman. Counsel for the defendant did not object to the questions in response to which this evidence was given. Towards the end of the hearing, after the plaintiff had completed giving evidence and after certain other witnesses including Dr Selvaraj had given evidence and after an overnight adjournment, the plaintiff was recalled at the request of his counsel and asked whether he had ever had any conversation with Mr Nyman "on the topic of him not having lodged your claim for common law proceedings". This question was objected to by counsel for the defendant and I indicated that I would probably disallow the question, on the grounds inter alia that it had not been asked in evidence in chief and was now sought to be asked at a very late stage in the hearing, after a number of witnesses including the plaintiff's general medical practitioner had concluded giving their evidence. Counsel for the plaintiff then said that he would withdraw the question. Counsel for the plaintiff was permitted to ask the plaintiff how he felt when he was asked in cross-examination by counsel for the defendant whether he had been foolish to stand on the wall, to which the plaintiff replied that he had felt very angry, and when he was asked in cross-examination by counsel for the defendant whether he had been told to get down from the wall, to which the plaintiff replied that he had felt a bit worried and angry.
I do not consider that I should place much weight on these answers. As I have already indicated, the questions were asked and the answers were given after an overnight adjournment. The answers appeared to have been rehearsed and were given without expression and without conviction. I did not observe the plaintiff evince any anger in the relevant parts of the cross-examination.
In support of the claim for this head of damages counsel for the plaintiff also relied on Dr Dent's report, and in particular a passage containing a history allegedly given by the plaintiff to Dr Dent that when he found out that the plaintiff had not "put the claim in" he was so angry that he could have shot the defendant and an opinion by Dr Dent that the news from his solicitor had exacerbated "the plaintiff's helplessness and despair" and made the plaintiff's depression worse.
It was recognised by counsel for the plaintiff that it was difficult to reconcile the evidence the plaintiff had given in court in these proceedings with the history recorded by Dr Dent. However, it was submitted that it was more likely that the plaintiff would express his anger in a session with a psychiatrist than in giving evidence in a courtroom.
I do not see why the plaintiff in giving evidence in court proceedings, which he must have known were for the recovery of damages from his former solicitor, would have been reluctant to express any anger he genuinely felt against his solicitor. I consider that I should prefer the evidence given by the plaintiff in the courtroom, particularly having regard to the reservations I have previously outlined about Dr Dent's report. I do not accept that the plaintiff feels or has felt any homicidal anger against the defendant or any emotion over and above what would ordinarily be expected in a person in his position or that the defendant's failure to commence court proceedings had the dire consequences asserted by Dr Dent.
Counsel for the defendant submitted that I should not entertain any claim for further damages because it had not been pleaded. However, damages of this kind are a recognised head of damages in this sort of proceeding, the defendant had been served with Dr Dent's report and counsel for the defendant did not object to the questions asked of the plaintiff in examination in chief as to what he felt about the defendant. I consider that I should entertain such a claim for further damages.
I accept that the plaintiff suffered some anxiety and stress in attempting to check with the defendant about the progress of the proceedings which should have been brought, discovering that no proceedings had been brought with the limitation period, having to instruct other lawyers, having to wait until the present proceedings reached court and having to undergo a trial against his former solicitor in which some allegations were made against him which might not have been made in a trial of his original claims.
I assess the sum of $20,000 for the further damages.
Costs of these Proceedings
In written submissions counsel for the plaintiff made a claim for indemnity costs. He did not refer me to any authority or any court rule in support of this claim. Counsel for the defendant submitted that an order for indemnity costs would be contrary to principle and contrary to such authority as exists. Counsel for the defendant cited Vulic v Bilinsky (1983) 2 NSWLR 472 at 488; NSW Medical Defence Union v Crawford (1993) 31 NSWLR 469 at 494.
I do not consider that there should be any departure from the normal order for costs and I consider that I should make an order that the defendant pay the plaintiff's costs.
I intend to publish these reasons without immediately making any formal orders so that the parties will have the opportunity of drawing my attention to any formal or arithmetical errors I may have made or any matters I may have overlooked.
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URL: http://www.austlii.edu.au/au/cases/nsw/NSWSC/1999/1375.html