O'REGAN v STACK SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, CLARKE and MEAGHER JJA 24 September 1992, 15 December 1992 [1992] NSWCA 175 APPEAL from Supreme Court — Assessment of damages — Serious physical and emotional consequences — Judgment of $483,460 — General damages $90,000 — Held: No appealable error in assessment of general damages or (Clarke JA dissenting) of future economic loss — No question of principle. Mahoney JA On 30 March 1984 the plaintiff was injured in a motor vehicle accident. He suffered substantial injuries and was admitted to the Sutherland Hospital for treatment. On 20 April 1984 he was discharged from the hospital in a plaster cast. On 25 June 1984 he resumed work. On 29 November 1984 he commenced proceedings to recover damages in respect of the injuries. On 16 May 1990, after a trial before Master McLaughlin, he was awarded $483,460. The defendant has appealed to this Court against the judgment given for the plaintiff. At the trial, liability for damages was an issue. It is no longer in issue. The only matters argued on the appeal relate to the quantum of damages. The amount awarded by the Master was itemised by him as follows: Past out of pocket expenses $17,493 Future medication and treatment expenses 10,000 Past loss of earning capacity 72,209 Interest on past economic loss 11,956 General damages 90,000 Interest on past general damages 32,949 Future economic loss 248,853 $483,460 The main components of the judgment called in question are those relating to past and future loss of economic capacity and general damages. Other items of a less substantial nature have also been the subject of submissions. In order to understand the submissions and the reasoning of the Master, it is necessary to refer to the nature of the plaintiff's injuries and the consequences of them. The Master found that the plaintiff had sustained injuries to the head and to the left pneumothorax, a fracture of the right radius, a fracture of the left scapula, a compound fracture of the left tibia and bruising and lacerations to the face, chest and right knee. He suffered as a consequence problems with his nose, which was broken in the accident, and infections and swelling to the left side of his face and in the antrum. Those problems, the Master concluded, "caused considerable pain and discomfort and required surgical intervention and treatment with antibiotics". The Master said: 2 UNREPORTED JUDGMENTS "T am also satisfied that the plaintiff suffered a problem which has resulted in what he described as jittering with his left arm, which caused him to drop articles which he was carrying. Further that he suffered problems with his balance, bumping into things on his left side. Whilst driving, he was involved in a number of relatively minor motor vehicle accidents and collisions. I am satisfied, on the balance of probabilities, that the foregoing difficulties and problems experienced by the plaintiff were caused by the injuries which he received in the accident on 30 March 1984. There is no dispute concerning the problems which the plaintiff had with his teeth (and which required treatment by an orthodontist), and the limitations in his activities, for a period, resulting from the fracture of his leg. The essential area in which there has been dispute between the parties and between the medical evidence placed before the Court on behalf of the plaintiff and that on behalf of the defendant relates to the cause of the mental and emotional problems which the plaintiff has been experiencing since the accident and the effect of those problems upon the plaintiffs ability to engage in some form of remunerative occupation. It was contended on the part of the plaintiff that he was unconscious at the time when he was admitted to the Sutherland hospital, and that he remained unconscious for a period thereafter (probably about three days, although there are varying estimates in the evidence). It was alleged on the part of the plaintiff that he suffered brain damage, which resulted in psychiatric problems, personality changes and disorders, depression, suicidal tendencies, insomnia, problems with his marriage, irritability and argumentativeness, loss of friends. The defendant disputed that the plaintiff had suffered any brain damage in the accident. Further, it was contended on the part of the defendant that the plaintiff, even before the accident, had suffered from personality problems and disorders, and that although those problems and disorders may have been exacerbated by the accident, they certainly were not caused by it. It was submitted on behalf of the defendant that the conduct of the plaintiff long before the accident - for example, in terminating his science course at the University of New South Wales, and in terminating one of his courses at the Technical College - indicated a difficult personality. Because of the personality problems experienced by the plaintiff after the accident, and because of the emotional difficulties and the severe depression which he was experiencing, the plaintiff was on two occasions (in March 1986, after a suicide attempt, and in February 1987) admitted to the Psychiatric Unit of Sutherland Hospital. In March 1986 he was referred to Dr George B Foster, a psychiatrist. The plaintiff has been seeing Dr Foster regularly since that time. At first, he was seeing the doctor once a month. In more recent times he has been seeing Dr Foster every two weeks. In addition, the plaintiff in October 1985 was referred to Mr William Goard, a clinical psychologist. The plaintiff underwent a number of tests at Mr Goard's practice, those tests being administered by one of Mr Goard's associates, a fully qualified clinical psychologist, and the results of the tests being assessed by Mr Goard personally. For the past four and a half years, since October 1985 the plaintiff has been attending Mr Goard's practice at least once a week. Apparently he has not been seeing Mr Goard personally. Further, there has been little formal or recorded URJ O'REGAN v STACK (Mahoney JA) 3 communication either between Mr Goard's associate whom the plaintiff has been seeing weekly and Mr Goard himself, or between any member of Mr Goard's practice and Dr Foster." A considerable body of evidence relating to the medical and emotional state of the plaintiff was placed before the Master. These consisted of reports from fourteen medical practitioners, one orthodontist and four clinical psychologists. Six of the medical experts and three of the clinical psychologists gave oral evidence. It appears that the Master accepted a substantial part of the case advanced for the plaintiff. There was significant contest as to the effect of the accident upon the plaintiff and also as to the extent to which his condition at the trial was due to it. It has been suggested that, prior to the accident, the plaintiff had suffered from, at least, emotional difficulties and that his condition at the trial was, to a greater or lesser extent, due to his pre-accident condition. And there was, in addition, dispute as to whether his condition at the trial was as he claimed and whether it resulted from organic brain damage or merely some form of mental or emotional affect. The Master referred to the expert evidence and cited some of the material placed before him. He then said: "Tt is possible that before the accident the plaintiff may have had a somewhat prickly personality, and that the description 'intellectually conceited' may not have been inappropriate. However, in the light of the evidence, both written and oral, from the foregoing psychiatrists and psychologists, I am satisfied upon the balance of probabilities that the plaintiff's present emotional and mental problems are directly attributable to his motor vehicle accident on 30 March 1984. Whether or not the plaintiff sustained organic brain damage in the accident (which, upon the evidence, I consider to be likely), I am satisfied that, had it not been for the accident, the plaintiff would not be suffering from his present emotional and mental difficulties. This being so, he is entitled to be compensated by the defendant. I am of the view that there has been no adequate explanation as to why the plaintiff has not worked since February 1988. The fact that he has not worked cannot result from any physical inability to do so. Video films were shown of the plaintiff performing vigorous and sustained physical activities. I am satisfied from those films, and also from the answers which the plaintiff gave in cross examination in relation to those films, that he is physically capable of employment. Neither can his not having worked since February 1988 be due to any lack of desire on his part to work, since he said on more than one occasion in his evidence that he wanted to work. The evidence does not in my view adequately explain why the plaintiff has not sought or obtained employment over the past two and a quarter years." It is, in my opinion, to be concluded from what the Master said, in the passage Ihave cited and elsewhere, that he accepted it was "likely" that the accident had caused the plaintiff "organic brain damage"; that he was suffering "present emotional and mental problems"; and that those problems were directly attributable to the accident. He concluded that the plaintiff was "physically capable of employment". I do not think that, by this, the Master meant that the plaintiff was physically capable of doing work of every kind: that would have been inconsistent with the thrust of significant portions of the evidence, such as 4 UNREPORTED JUDGMENTS those of Professor Jones. But I infer that the Master concluded that the main problem the plaintiff had was, as it was variously described, psychiatric, mental or emotional. It was then necessary, in order that an assessment of damages be made, that a conclusion be drawn as to the extent to which these problems (I shall use the term "psychiatric" to comprehend the problems which the Master found to exist) restricted what the plaintiff could in practical terms do. Some of the witnesses, eg, Professor Jones, had indicated that there was "little evidence of major problems in his limbs" and that therefore "moderate physical work would be not contrarily indicated". Professor Jones envisaged him "working in physically demanding jobs, not excessively physically, which he could cope with from a motive point of view, that is in his arms and legs, but which would not place him into a position where he would become aggressive or have altercations with his peers or employers". The Master took from the video films shown that the plaintiff performed "vigorous and sustained physical activities". But, in my opinion, he concluded that, because of his psychiatric problems, he was experiencing difficulty in holding down a job. It was this and the associated matters which, in my opinion, the Master saw as the main practical results of the accident. The Master did not in terms detail what were the plaintiff's present emotional and mental difficulties. But he accepted that his psychiatric problems had, between the date of the accident and February 1988, caused him to act in a manner which, in relation to employment and associated matters, was disorganised such as to cause him difficulty in continuing in employment. The Master accepted that the plaintiff's work history had been as follows: Period Net Income Weekly Income 1.4.84-30.6.84 (12 weeks) $4,235.74 $353 per week 1.7.84-30.6.85 (52 ") 4,337.35 $83 1.7.85-30.6.86 (" "*) 11,337.62 $218 1.7.86-30.6.87 (" ") 4,156.37 $80 1.7.87-30.6.88 (" ") 620.02 $12 1.7.88 to date (-) (-) $24,687.10 The Master accepted that the plaintiff, since February 1988, had not worked or effectively sought work and he inferred that there was no adequate explanation why the plaintiff "has not sought or obtained employment over the past two and a quarter years", that is, over the period from February 1988 to the trial. In respect of the period from the accident, 30 March 1984, to February 1988 the Master awarded damages upon the following basis. The plaintiff had, in address, provided the Master with evidence of what the plaintiff uninjured would have earned in his pre-accident occupation, $65,544.11, and what in fact he had earned during the period from the accident to February 1988, viz, $24,687.10. The Master concluded that prima facie there was a net loss of $40,857.01 for that period. It follows from the fact that the judge accepted the figures of $65,544.11 and $40,857.01 that he accepted that the plaintiff's work pattern between the accident and February 1988 was the result of the accident and that the plaintiff had not URJ O'REGAN v STACK (Mahoney JA) 5 failed to mitigate his damages. In other words, he accepted that the plaintiff's condition due to the accident was such as to reduce his working capacity in that way. In respect of the period from February 1988 to the trial (November 1989) the Master concluded that "there has been no adequate explanation as to why the plaintiff has not worked since February 1988". His conclusion was, in effect, that the plaintiff should have mitigated his loss by working during that period. That conclusion required that the Master determine what, if he had worked, he would have earned. The Master did not find, in terms, whether, if he had worked, the plaintiff could have earned what an ordinary able bodied person could have earned, or whether he could have earned, in substance only the limited order of income which, between the date of accident and February 1988, he had in fact earned. However, it is in my opinion clear that he found and acted upon the second basis. On that basis, it was necessary for him to find as a fact what, between February 1988 and November 1989, the plaintiff would have earned. The difficulty with which he was faced was that the nature of the plaintiff's incapacity, as he had found it to be evidenced by what had occurred between the accident and February 1988, was that he tended to work for some periods and not for others and that the amount that he earned during the periods he worked varied. It was difficult therefore to infer from the experience of this first period what, for the 1988-89 period, the plaintiff would have done and so would have earned. Thus, during the 1988-89 period, the plaintiff might not have worked at all or he might have worked continuously or only part-time. The Master took it as "appropriate" to assume that if the plaintiff had "remained in employment" during this period "he would have received an income no less than he had been receiving in the period from his resumption of work in June 1984 to February 1988". This averaged $476 per month and the Master calculated the income that would have been earned in the 1988-89 period at that rate. Mr Barry, for the defendant, has rightly submitted that this inference is not a compelling one and, his submission suggested, not a legitimate one. There is, I accept, considerable force in this. But it was necessary for the Master to make some assessment. It was not open to him to find that the plaintiff, if he had worked, would have earned the wages of an able-bodied person: his psychiatric problems would, in my opinion, have precluded that. It was therefore necessary to assess an.amount upon the assumption of a more limited capacity. In taking the average of $476 per month ($119 per week) the Master did not, I think, do any injustice to the defendant. The average income during the two years preceding February 1988 was less than $120 per week: for the period 1 July 1986 to 30 June 1987, it was of the order of $80 per week and for the succeeding year of the order of $12 per week. I do not think that it is to be inferred that the plaintiff's psychiatric problems had so improved that his capacity immediately thereafter was beyond the order of $120 per week. For these reasons I do not find appealable error in what the Master did in assessing past economic loss. It follows that the amount upon which interest was calculated in respect of past economic loss was not erroneous. In assessing interest on past economic loss, the Master applied a previously acceptable rate of interest of the order of eight and a half per cent. In the absence of any error in the calculation of past economic loss or, as I shall indicate, any other matter, I do not think that the court should, as a matter of law or discretion, interfere with the rate of interest adopted. 6 UNREPORTED JUDGMENTS I come now to future economic loss. The Master concluded that the plaintiff would retain for the rest of his working life partial economic capacity. It was, I think, not seriously in dispute that, uninjured, he would at the trial have been earning net some $398.92 per week. With his reduced economic capacity, he could be expected to earn less. As I have indicated, the Master accepted his capacity to earn to be $120 per week approximately. That suggested a weekly loss of some $280 per week. He applied the three per cent multiplier for the balance of the plaintiffs working life, thirty-three years, and the resulting figure was $311,066. Mr Barry pointed out that his Honour had said: "T do not see why the plaintiff should not obtain remunerative employment within the next few years. If so, it will probably be at a rate considerably higher than the net amount he was receiving in the three years immediately preceding February 1988." He suggested from this that it should be inferred that his Honour's calculations were erroneous in that, eg, he failed to take account of the fact that "within the next few years" from the trial the plaintiff would or might be unemployed. If this was an error, it was an error in favour of the defendant. I see no appealable error involved. The Master, in my opinion, acted upon the basis that, for the future, the plaintiffs capacity would be what it had been in the immediate past. It had not been established by the evidence that the plaintiff's condition would effectively improve to negative such an inference. I see no appealable error therefore in what the Master did. The Master applied a twenty per cent discounting factor to take account of contingencies. I see no error in the discretionary judgment involved in this. In regard to general damages, the plaintiff was awarded general damages of $90,000 and the Master assessed $65,000 as the pre-trial component of it. This amount is, in my opinion, high. However, it is to be considered against the background of the damages which the plaintiff had suffered. There was as the learned Master said, "pain and discomfort over a protracted period" requiring the performance of dental and surgical procedures as well as continuing medication. The plaintiff was in hospital for operations upon his antrum only shortly before the trial. Apart from physical restrictions which he suffered, the psychiatric problems were significant: the Master said: "Even if the injury to his head was not the sole cause of the plaintiff's mental and emotional problems, I am satisfied that the injury exacerbated and aggravated a pre-existing problem, for which the plaintiff is entitled to be compensated. The mental and emotional consequences of his injury include insomnia, irritability, loss of his friends, in consequence of his irritability and argumentative attitude, problems with his wife and in the intimate aspects of his marriage." Having regard to all the evidence, I am not satisfied that the award is beyond the range available to a sound discretionary judgment nor, in my opinion, is the apportionment shown to be wrong. Reference was made in argument but briefly to the disallowance of out-of-pocket expenses in respect of medical or psychological treatment. It is not necessary to pursue the detail of this. It is sufficient to indicate that, in my opinion, no appealable error has been shown in this regard. For these reasons, I am of opinion that the appeal should be dismissed with costs. Clarke JA I agree with the reasons of Mahoney JA except in relation to the compensation awarded by the trial judge for future economic loss. In my opinion the trial judge erred in assessing the amount to compensate the respondent for this area of his claim and for this reason the appeal should be allowed. URJ O'REGAN v STACK (Meagher JA) 7 My opinion is, however, contrary to that of the majority and little is to be served by explaining its basis in detail. Shortly put, I regard it as having been singularly inappropriate to assume that the respondent's earnings pattern for the past, during which there were surgical and dental procedures, provided a sound basis for assessing a loss which extended for thirty three years from the date of trial. The adoption of this approach led to an award for future economic loss which, to my mind, was not supported by the proven facts. I would allow the appeal. Meagher JA I agree with Mahoney JA. (By majority) Appeal dismissed with costs. Counsel for the Appellant: CT BARRY Instructed by: GM MEADOWS, SOLICITOR FOR GIO Counsel for the Respondent: JE MACONACHIE QC/MA BARKO Instructed by: ROACH and HALLIGAN