INQUA Pty Ltd (543) v McFADDEN SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY ACJ, SAMUELS and CLARKE JJA 9 March 1990, 16 March 1990 [1990] NSWCA 98 JOINT LIABILITY — joint tortfeasors — head contractor for construction of transmission line subcontracts some work — subcontractor's employees place rope across public road — obvious danger — plaintiff injured when car brakes suddenly to avoid collision with rope before flagmen placed in position by subcontractor — suffers whiplash injury — trial judge (Enderby J) apportions liability as between head contractor and subcontractor 75:25 — appeal on apportionment — held: (1) It is rare that the apportionment between tortfeasors in respect of their negligence is disturbed by an appellate court. Pennington v Norris (1957) 96 CLR 10, 16 applied. (2) However, in the present case, it was plain that the subcontractor was principally liable for the injuries suffered by the plaintiff; (3) Accordingly, the apportionment should be 25:75. DAMAGES — personal injuries — two injuries — second injury only compensable — married woman camp site cook — whiplash injuries — computation of past economic loss and future loss of economic capacity — findings as to diminution caused by first accident — no issues of credibility — held: Error shown — recalculation appropriate — damages recalculated — no issue of principle. Kirby ACJ I agree with Clarke JA. Samuels JA I agree with Clarke JA. Clarke JA On 23 September 1987 Mr Justice Enderby, who had heard both actions the subject of the present appeals, gave judgment in which he found in favour of the plaintiff (McFadden) against the defendants Balfour Beatty Power Constructions Australia Pty Ltd ("Balfour") and Inqua Pty Ltd ("Inqua") and awarded McFadden damages, including interest, of $123,965.00. Both defendants appealed and each instituted a cross claim in which it claimed contribution against the other. In the cross claims Balfour was found 75 per cent and Inqua 25 per cent responsible for McFadden's damages. Balfour's notice of appeal challenged the finding on liability, the apportionment, the conclusions in respect of various heads of damage and a number of ancillary matters. On the hearing of the appeal it abandoned the challenge to the finding on liability and restricted itself to those grounds of appeal which challenged the apportionment, the amount awarded for past and future economic loss, and the general damages. Inqua only challenged the awards on those components of the damages which I have already mentioned. Apportionment In July 1983 Balfour, which had contracted with the Electricity Commission of New South Wales to construct the Bayswater/Mt Piper 500 kv transmission line in the vicinity of Lithgow, commenced work under the contract. The work involved the construction of a large number of towers between which the line ran. Broadly the method adopted was to install tower foundations at all the relevant locations and then to erect the towers, which had been fabricated elsewhere, on the foundations. In order to facilitate the erection of the towers Balfour entered 2 UNREPORTED JUDGMENTS into a sub contract with Inqua, amongst others, for the latter to erect the top section of a number of the towers which had been brought to the site. Under this sub contract Balfour provided all the equipment which was necessary for the erection of the towers and Inqua supplied the manpower. The equipment supplied by Balfour included a jib, winches, a number of ropes and concrete slabs which were used as temporary anchorages. During the process of lifting the top section of the tower onto the foundation it was necessary to secure portion of the section about to be lifted into position on the tower to the temporary anchorage by means of a rope in order to prevent that portion from striking the lower part of the tower which was already in position. On 5 December 1983 Inqua's employees were erecting the upper section of a tower in the vicinity of Back Road, near Cullen Bullen. Prior to the commencement of the erection process employees of Balfour had come to the site and left the concrete temporary anchorage in position on the opposite side of the road to the foundation on which the tower was to be placed. Accordingly, when Inqua's employees secured the rope from the section which was about to be placed in position to the temporary foundation the rope was stretched across the road. When the rope was only a few feet above the ground a potential situation of danger arose which would have been obvious even to inexperienced workmen. Despite the obvious risk Inqua's employees proceeded to secure the rope at one end to the section and at the other to the temporary anchorage and to leave it stretched across the road about three or four feet from the road surface. They did this without taking any precautions to protect oncoming motorists from the obvious risks of.danger. They had, however, perceived that risk because one of the workmen was proceeding from the site of the tower to the road to act as a flagman when the accident occurred. At the critical moment before the flagman arrived McFadden was driving her vehicle along the road and did not see the rope until she was almost upon it. She braked very heavily. The rope appears to have struck and then brushed over her car which came to a standstill some little distance from where the rope crossed the road. The very sudden deceleration of her car caused her to suffer a whiplash injury and aggravated a lower lumber injury which she had only recently sustained. There can be no doubt that both Balfour and Inqua were negligent. Balfour placed the temporary anchorage on the side of the road opposite the tower foundation knowing that in the erection process a need would arise for a rope to be strung across the road and that the rope would, at varying stages of the lifting operation, be at different heights above the road. Its men knew, therefore, that the lifting operation in this instance involved the creation of a risk to oncoming motorists and it took no steps to minimise that risk. Inqua, for its part, got its procedures wrong. Instead of placing the flagman out on the road and then securing the rope it took no steps to warn oncoming motorists of the existence of the rope or the danger until after it had created the risk. Ihave already indicated that Enderby J concluded that Balfour's responsibility for McFadden's injuries should be assessed at 75 per cent. His Honour simply said that the negligence exhibited by Balfour was greater than that of Inqua. He gave no reasons for that conclusion. It is apparent that the Act under which the apportionment was affected gives a very wide discretion to a judge and that he therefore must be allowed great latitude in arriving at a judgment as to what the needs of justice dictate in the particular circumstances. For this reason it was said URJ INQUA Pty Ltd (543) v McFADDEN (Clarke JA) 3 in Pennington v Norris, 96 CLR 10, at 16, in an analogous situation: "that cases will be rare in which the apportionment made can be successfully challenged." But giving full weight to those considerations it seems to me that his Honour must have overlooked certain features of the case and that his apportionment cannot be supported. It must, of course, be accepted that Balfour was the head contractor and was in overall control of the operation. However, none of its men were at the site at the time and the danger created by the positioning of the rope was so obvious that it was hardly necessary to instruct a responsible sub-contractor to take steps to minimise the risk created by the positioning of the rope, or to remain at the site and supervise the operation in order to ensure that proper safeguards were put in place. That is not to say that Balfour was not negligent in failing to take those steps. The point is that its negligence in that respect pales into relative insignificance in comparison with the negligence of the actual wrongdoers who went about the operation in a dangerous way. The position can be summed up as follows: Balfour placed the temporary anchorage in such a position that it must have known that at some stage during the operation a rope would be positioned across the road in a position of possible danger to passing motorists. Notwithstanding its knowledge of the risk which would flow from the positioning of the rope it took no steps to ensure that its sub-contractor followed a safe system and, in particular, failed to equip the sub contractor with road notices which it had in its possession. For its part the sub contractor failed to take any precautionary measures before placing the rope in a dangerous position. It thereby created a potential danger to motorists and failed to give them any warning of it. Its negligence is emphasised by the action of its foreman in sending a flagman to the roadway after the creation of the danger. Having regard to these factors, and to all the circumstances of the case, I am of opinion that a fair and reasonable allocation of the responsibility for McFadden's injuries is to attribute it as to 75 per cent to Inqua and, as to 25 per cent to Balfour. Past Economic Loss His Honour awarded McFadden $5,000.00 for economic loss attributable to the work she would have done on the farm in which she lived with her husband had she not been injured in the accident. He also awarded her $26,153.00 for past economic loss resulting from her inability to work as a machinist and employ her sewing skills. Both appellants challenge these awards. They also complain that the finding upon which the awards were based was not supported by evidence and was erroneous. That finding was expressed in these terms: "I have no reason to doubt that had the second accident not occurred she would have continued to progress and within about five or six months have resumed some form of employment, probably not the employment that may have been her first preference, that of construction site cook or even as waitress because of the advice she had been given, and I have no reason to doubt that she would have taken employment using her sewing skills as a machinist which would have allowed her to earn an income." Before turning to consider the evidence to which we were referred in support of the submission that that conclusion was not soundly based it is necessary to say something about McFadden's history. She was born on 19 December 1936, was married in 1956 and at the time of the accident had two grown up children. After her second child reached five years of age she returned to the workforce initially at the Lithgow Small Arms Factory. After two years there she moved to a hotel where she was a cook. After leaving 4 UNREPORTED JUDGMENTS that job she commenced work as a seamstress at Berlei, a foundation garment manufacturer. She left that line of work about five or six years before the accident and returned to cooking and catering, working initially in the towns and then as a camp site cook. In May 1983 her work at the camp site ceased and she had just arranged another job as a cook and waitress at the Lithgow Bowling Club when she was involved in a car accident. That occurred in June 1983 when the car in which she was riding left the road and struck a tree. McFadden suffered very significant injuries in this accident including a crush fracture of a lumber vertebra. Although she had had a previous back injury at work in 1976 her disability from this injury had settled after about six months and she had no back problems in the years preceding the June car accident. Following this car accident she was in hospital for about 17 days and then discharged and allowed to return home wearing a brace. Her husband took about two months off work in order to look after her at this time. It would appear that her condition had significantly improved by the time of the accident the subject of the present appeal. She had ceased taking pain killing tablets regularly although she still took them from time to time and she was being weaned off the brace. She said "the real acute pain, it had died down and it was like a dull toothache". Her neck pains resulting from the June accident, which were minor compared to the lower back disability, had, it would appear, settled significantly by December. However, she was still taking pain killers and although she felt that she was picking up well she readily conceded that she was quite unable to do any work, whether in employment or on the farm, at that time and that she was having a deal of trouble with her household duties. She said she could wash up, put the meal on, make the bed up and do a bit of dusting and light duties. The following evidence is enlightening: "Q. I think also you said that you would not now be capable of going back to work as a cook? A. No. Q. But that was still the situation, was it not, before the second accident - you were not capable of doing any work? A. I wasn't capable of doing anything. Q. I think you also said you could do some light work at home or you could do a few hours. What sort of light work do you think you could do? A. I mean doing the cooking, cooking a meal and just I vacuum clean one room at a time. I might do the bedrooms one day and the lounge room the next day and things just like that. Q. If you were going to go out to work and do some light work, what sort of light work do you think you could do for a few hours: A. There's no work that I could do. Q. What about shopkeeping or shop assistant? A. I couldn't stand for very long and the sudden movements and that - I just don't know when it's going to strike me down. I couldn't do that." Her treating specialist, Dr Burgess, gave evidence that prior to the December accident she was making an encouraging recovery and it looked as if she might get back to a reasonable normal existence subject to the proviso that in view of her significant lower back injury it was necessary for her to avoid specific back abuse such as heavy lifting, bending and stooping and that sort of thing. I apprehend that, although she had not reached this stage of improvement by December 1983, she may eventually have reached a situation where she would also have been cautioned not to sit or stand in the one position for too long. Dr URJ INQUA Pty Ltd (543) v McFADDEN (Clarke JA) 5 Burgess thought that the prognosis in respect of her neck injury was good and that it would probably have resolved, if the second accident had not occurred, about six months after her first injury. In the second accident there was no actual collision. Her injuries, which on this occasion were essentially of the soft tissue variety, involved an aggravation to an underlying pathology in her neck and an exacerbation of the lumber injury which she had previously suffered. The only treatment prescribed was digesic tablets, some physiotherapy and a fortnight in bed at home. Without in any way wishing to minimise the severity of the effects of the second accident it is appropriate to describe them as aggravation injuries to her neck and lower back. In saying that I do not fail to recognise that she herself gave evidence, which appears to have been accepted, that her neck problems had been much worse since the second accident and that they did not appear to be getting any better. Dr Burgess believed that following the aggravation to the lower back disability she would continue to suffer intermittent problems with low back pain from time to time indefinitely. He thought her neck disability should respond to conservative treatment over a period of time and unless the possibility of the development of cervical spondylosis became a reality her neck should settle down. Against this, of course, her neck has continued to give her problems for many years now and I think his Honour was correct to assess general damages upon the basis that there was a permanent disability in her neck. In the light of that evidence I am unable to accept that it was correct to find that if the second accident had not occurred she would have resumed some form of employment, such as a seamstress, in May or June 1984. While the evidence demonstrated some recovery of the serious lower back injury McFadden was still, in December, in a significantly disabled condition. The occasion on which she was involved in the accident involving the rope was but her second outing alone in the car since June 1983. She herself said she was quite unfit for anything but the lightest activity and that it was necessary for her to take her time in carrying that out. In my opinion there is no basis to be found in the evidence for the conclusion that her recovery would have reached such a stage by June 1984 that she would have been able to undertaken sewing work. Furthermore, the judgment proceeded upon the basis that sewing work is within the capacity of a person with a significantly disabled back. That seems to me to be questionable on the evidence and contrary to the undoubted fact that she had sustained a back injury while lifting a sewing machine in her earlier employment. No doubt she could have avoided lifting sewing machines but the nature of the work would have required her to sit for lengthy periods in front of the sewing machine and it is far from clear, on the evidence, that she would ever have been fit to do this. Because the case, when it originally started, involved her claim for compensation in respect of the first accident as well as the second there was little concentration by counsel for the parties upon the extent of the aggravation caused by the second accident and her likely prognosis if that accident had not occurred. As a result of the sparsity of the evidence on these topics it is very difficult to see any basis upon which the learned trial judge could have come to a positive conclusion, on the probabilities, that she would have returned to gainful employment at any time in the future. Certainly I am unable to find any sound base in the evidence for a conclusion that, if the second accident had not intervened, she would have returned to sewing work prior to the trial. Given his Honour's conclusion that the heavier jobs were denied her because of the 6 UNREPORTED JUDGMENTS disabilities flowing from the first accident I would conclude that there should have been no allowance for past economic loss in respect of that or any other work. The claim in respect of the farm loss is clearly unsustainable. His Honour found that the first accident destroyed, in a practical sense, a large part of her capacity to do heavy work on the farm. That was clearly a correct finding and there being no suggestion that she could have earned income on the farm from light work the claim which was upheld had no sound foundation. Accordingly I would uphold the appeals against past economic loss. Future Economic Loss His Honour allowed $50,000 for impairment of future earning capacity and said that that award was to reflect the loss flowing both from her incapacity to do machining work and farm work. As I have sought to point out she is quite unable to do productive farm work and this inability flows solely from the first accident. That conclusion alone taints the award. Counsel for McFadden sought to justify the award by pointing out that the evidence demonstrated that machinists earned $152 net per week and that an assessment of $100 per week over a 15 year period, with a 25 per cent discount for vicissitudes, discounted on the 3 per cent tables reflected a figure so close to $50,000 as to justify the award. There are many difficulties with this approach not the least being that it would extend McFadden's hypothetical work future until she was one month short of 66 years of age. In the face of her own evidence that she intended to work until she was 60 or some time thereafter this is difficult to support. However, there is a more fundamental flaw, in my opinion, in the award which relates to the assumption that she would have been able, but for the second accident, to return to sewing work. This does not seem to me to have been established on the evidence and I do not believe her case can be put higher than that she suffered an aggravation of pre-existing injuries which probably effected a further decrease in her work capacity. The evidence does not allow of an assessment of the extent of that decrease and, in my view, an award could be based only upon the premise that that increased deterioration in work capacity may have reflected in some economic loss in the future the accurate measurement of which is not possible. There are, of course, many cases in which the courts are called upon to award some amount by way of damages for impaired earning capacity in the future despite the absence from the evidence of any material upon which any accurate assessment of that loss can be gauged. This is, in my view, one such case and while I accept that some diminution has been proven I do not think it can be reflected otherwise than very generally in the damages. It would seem to me that the second accident could not be held responsible for any inability to perform farm work and I consider that a fair measure of the effects of the second accident on her future earning capacity is reflected in the sum of $15,000. General Damages The appellants also challenged the award of $30,000 for general damages. I appreciate the point that this case concerns aggravations of previous conditions one of which was very serious. Notwithstanding and in the light of the plaintiff's evidence of the serious impact upon her of the neck disability I do not think it has been shown that his Honour was in any way over generous in this award. On the contrary I entirely agree with it and would adopt it as the appropriate award on the re assessment. In the ultimate I would set aside his Honour's judgment and in lieu thereof award McFadden the sum of $48,342.00 being made up as follows: URJ INQUA Pty Ltd (543) v McFADDEN (Clarke JA) 7 Agreed Out of Pocket Expenses - $302 Impairment of Future Earning Capacity - $15,000 General Damages - $30,000 Interest on past general damages - $ 3,040 There was no challenge to his Honour's apportionment of the general damages as to past and future and therefore I see no ground for interfering with it and hence the award of interest is the same as made by his Honour. My reassessment of the damages reflects my opinion that this is a proper case in which to take that course despite the objection of McFadden's counsel. The case is one in which there were no serious factual conflicts. Nor was the credit of McFadden impugned. It was not suggested in cross examination that she was a dishonest or unreliable witness and her evidence was, in any event, supported by that of the doctors. Furthermore, there was no significant difference in the evidence between the doctors and in these circumstances it is preferable that this court reassess the damages, being in as good a position as the trial judge was to do so, rather than to send the case, involving an accident which occurred more than six years ago, back for re trial. I would propose the following orders be made in each case: 1. Appeals dismissed. 2. Judgments below set aside and in lieu thereof direct entry of judgment for the plaintiff against each defendant in the sum of $48,342.00. Such judgment to take effect from 23 September 1987. 3. Judgment for Balfour Beatty Power construction Australia Pty Ltd on its cross claim against Inqua Pty Ltd for 75 per cent contribution. 4. Judgment for Inqua Pty Ltd on its cross claim against Balfour Beatty Power construction Australia Pty Ltd for 25 per cent contribution. The defendants to pay the plaintiff's costs of the trial. The respondent plaintiff to pay the appellants' costs of the appeal and to have a certificate under the Suitors Fund Act. aun Counsel for Balfour Beatty: DA COWDERY QC and MG CUMMINGS Solicitors for Balfour Beatty: Windeyer Dibbs Counsel for Inqua: GB HALL QC and C SANDRASEGARA Solicitors for Inqua: Morgan Ardino and Co, Annandale Counsel for McFadden: RP McLOUGHLIN Solicitors for McFadden: Higgins and Higgins, Lithgow