GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v MADERNA SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, CLARKE and MEAGHER JJA 6 August 1992, 6 August 1992 [1992] NSWCA 88 DAMAGES — economic 1086 — loss of economic capacity — female in flower growing partnership with husband — trial judge (PR Garling A-DCJ) treats as case of total destruction of economic capacity finding inconsistent with plaintiff's opinion, activity and medical evidence — held: (1) Damages for economic loss recalculated to increase deduction for contingencies from 15% to 20% for prospects of utilising residual economic capacity; (2) The Court of Appeal should not "tinker" with judgments but where error was shown, which it could correct without any disadvantage vis a vis the trial judge, it should proceed to do so holding back only in cases of de minimis, mere marginal adjustment of the judgment of the primary judge or where, though error has been shown in the components, the total judgment is within the range. NEGLIGENCE — conflict of evidence — resolution open on evidence judge prefers plaintiff's witnesses' evidence — held: Judgment stands. Abalos v Australian Postal Commission (1990) 171 CLR 167 applied. APPEAL — conflict of facts at trial — methods of resolution limits on Court of Appeal's function of appellate review. Kirby P Before the Court is an appeal from a judgment entered by Associate Judge PR Garling in the District Court. The judgment was given on 28 February 1992, having stood reserved for some fourteen months after the trial. Damages claim as consequence of an unidentified motor vehicle. The judgment arose out of an action for damages brought by Mrs Dominga Maderna (the respondent), following a motor vehicle accident in which she was involved on 15 December 1985. The respondent sued the Government Insurance Office of New South Wales. It is the body liable, in law, for the negligence of the driver of an unidentified motor vehicle which caused her injuries. Both liability and damages were contested at the trial. The judgment was entered in the sum of $164,357.98. That sum was not reduced for any contributory negligence on the part of the respondent. It is against that judgment that the Government Insurance Office of New South Wales (the appellant), appeals to this Court. The issues raised by this appeal fall into three categories: (1) a challenge to the finding of negligence on the part of the unidentified driver; (2) a challenge to the award of $50,000 for general damages; and (3) a challenge to the award of economic loss on the basis of total loss of economic capacity rather than substantial, but partial, loss of such capacity. I will deal with each of these challenges in turn. The attack of his Honour's finding of negligence arises out of a conflict of testimony at the trial concerning the way in which the accident involving the respondent occurred. It happened at about 4pm in the afternoon. It occurred in broad daylight and at or near a T-intersection of Arcadia Road and Black's Road, Galston. The respondent was driving her vehicle alone in a northerly direction in 2 UNREPORTED JUDGMENTS Arcadia Road on her correct side of the road. An unidentified vehicle was proceeding towards her in the same road. It was, according to the respondent, travelling on its incorrect side of the road. The respondent said that the unidentified vehicle was travelling very fast. Because of a bend in the road, confirmed by photographs which were exhibited and have been seen by this Court, the respondent did not see the vehicle until it was about twenty metres from her. She swerved left to avoid a collision. In doing so she accomplished her immediate aim. However, her vehicle collided with a lamp post causing the injuries for which she sued. In this case, unlike many others, there was ultimately no challenge to the existence of an unidentified vehicle; nor that the respondent had caused due enquiry or search to be made for the identity of the driver of the vehicle. The ultimate issue which was litigated and determined by Associate Judge Garling was whether the other vehicle was, as alleged, on the incorrect side of the road and thus negligent in a relevant way or not. The respondent called a witness independent of her cause. This was Mrs Grasso, a woman living in a house some one hundred and thirty metres from the T-intersection. She gave evidence that she was in the front garden of the house when she saw a vehicle, going very fast, the description of which coincided with the description given by the respondent of the vehicle with which she collided. Mrs Grasso said that the vehicle was travelling "more to the middle" of Arcadia Road. She did not see it on the incorrect side of the road after it passed her house. However, that would not contradict the respondent's evidence. There is, as I have said, a bend in the road which might explain this testimony. As well, Mrs Grasso said she did not keep the vehicle in her vision. She had no particular reason to do so, unlike the respondent, who then allegedly saw it approaching her on the incorrect side of the road. Mrs Grasso's evidence was obviously very important to the respondent's case. It confirmed the existence of an unidentified motor vehicle just before the accident; that such vehicle was travelling very fast; and that it was, in part at least, on its incorrect side of the road. The appellant relied on contradictory evidence which it called in its own case at the trial. This comprised the evidence of a witness, Mr Geelen. He was also independent of the parties. He was seated in his vehicle at the T-intersection, but in Blacks Road, waiting to turn across the intersection in the direction in which the respondent was travelling. He too saw the unidentified vehicle pass by. However according to him it was travelling at about sixty miles per hour. He said that he also observed the respondent closely as she was proceeding across the intersection. According to him, she was looking to her left, apparently to a fruit stall which was positioned at the point of the intersection on the respondent's side of the road. The trajectory of the road at this point is such that a person, not paying attention to the curve in the road and proceeding directly ahead, would run off the road and strike the light pole just as the respondent's vehicle ultimately did. Resolving conflicting evidence: limits on appellate review. From Mr Geelen's evidence, which included his denial of the assertion that the unidentified vehicle was on its incorrect side of the road, the appellant invited this Court to prefer the version of the case which it had put before Associate Judge Garling. No other evidence was relevant to assist his Honour to choose between the competing versions of the evidence. He had a choice to make. It was typical of choices made in courtrooms everywhere throughout this State everyday. The conflict of testimony fell to be resolved by one means or the other. Sometimes such a \GROVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v MADERNA (Kirby PB conflict is resolved by reference to incontrovertible facts supporting one side: such as contemporaneous documents or admissions against interest. Sometimes it is resolved by reference to the onus of proof which a party carries and which it may have failed to discharge. Sometimes it is resolved by reference to lies in which one or more witnesses are caught out by cross-examination. Sometimes it is resolved because the judge, on balance, thinks one version is more reliable than the other. The judge may reach this view based on a number of considerations: the inherent likelihood of the evidence or the more convincing inter-connection of the facts, as recounted in evidence. Sometimes the judge may express disbelief of a witness because of the appearance of the witness giving evidence. Most judges nowadays recognise that this last means is not a very scientific or satisfactory way to resolve conflicts. Yet, however the conflict is resolved, the party who loses will only succeed on appeal to this Court if it can be shown that the trial judge was wrong. If the trial judge has been influenced in reaching the conclusion expressed by the demeanour of witnesses, express or necessarily implied by the decision, direct or subtle in their influence, this Court is not authorised to interfere with the conclusion reached unless it can be shown that it overlooks incontrovertible facts or is for other reasons, "glaringly improbable". Because this Court does not see witnesses, it is obliged to defer to the trials judge's impression of them in conducting its functions on appeal. See Abalos v Australian Postal Commission (1991) 171 CLR 167,178 and cases there cited. In this case, Associate Judge Garling resolved the conflict of evidence in the following critical passage of his reasons: "Although Mr Geelen did his best to give estimates of distances between vehicles and what each vehicle was doing, I do not find his evidence as reliable as either Mrs Grasso's or the plaintiff's. By this I mean no criticism of Mr Geelen who was, so it seemed to me, attempting to do his best to recall what had occurred. I rather think that it is a function of the position in which he was sitting and the need for him to turn his head both to the right and to the left in order to enable him to see both vehicles in both directions. To the extent that there is any inconsistency between his evidence and Mrs Grasso's evidence, I prefer Mrs Grasso's evidence." The appellant argued that the explanation given for disbelieving Mr Geelen, namely, that he would have been looking from side to side, was an unconvincing reason for rejecting his clear testimony that the respondent was actually seen to look to the road side stall instead of attending to the road ahead of her. I agree that it seems a rather unconvincing reason. However, my anxiety about his Honour's explanation does not authorise me to say that it was the only reason for his Honour's conclusion nor to substitute my opinion, on the probabilities, for that which his Honour reached and expressed in terms of the reliability of the evidence of the competing witnesses. In the evidence at the trial there was a closely fought factual issue to be determined. By convention, and by law binding on this Court, the impression of witnesses is usually important in resolving such conflicts. His Honour was not saying that Mr Geelen was lying or trying deliberately to deceive him. Why should he do so any more than Mrs Grasso? He merely preferred Mrs Grasso's evidence and that of the respondent. In these circumstances, this Court is not in a position to say that this conclusion was wrong. Still less can it conclude that his Honour misused the advantage which he had as a trial judge. Conformably with authority, his Honour's determination of the liability issue must, therefore, stand. Challenge to the award of general damages. 4 UNREPORTED JUDGMENTS The second issue in the appeal concerned the calculation of the respondent's damages. These were made up of the following items: 1. Past Economic Loss $48,000.00 2. Interest on past economic loss $20,500.00 3.Future loss of economic capacity $39,448.50 4. Out-of-Pocket expenses agreed $6,409.48 5. General damages $50,000.00 TOTAL $164,357.98 The appellant challenged items 1,2,3 and 5. At the time of the injury the respondent was aged forty-six years. She was fifty-two at the date of judgment. She is fifty-three now. She came to Australia from Argentina in 1970. Before the accident she worked with her husband in a partnership, growing flowers on their property of three and a half acres at Galston and selling them at markets. They grew chrysanthemums and carnations. In this business the respondent and her husband worked, according to the evidence, some fourteen hours a day. The work involved planting, picking, collecting, cleaning, sorting and trimming flowers and tying them together for sale. Tax returns showed an average nett income of about $150 per week before the injury. This was the nett figure chosen by the trial judge. It has not been challenged before this Court. Immediately after the collision, the respondent was taken to, and admitted at, the Hornsby Hospital. She was found to have suffered fractures to the sixth and tenth ribs on the left side, sever lacerations to the right knee, left leg, and pain in the neck region. A skin graft was required to repair the deep lacerations. This graft was unstable and not very successful. Associate Judge Garling found the following disabilities (which were recounted by the respondent in her evidence and have not really been challenged): (1) soft tissue injury to the right forearm which healed apart from a slight scar; (2) musculo-ligamentous injury to the neck, likewise expected to resolve; (3) fractured ribs, united over six weeks but with some residual symptoms which were not likely to resolve; and (4) substantial soft tissue injuries to both knees with ongoing disability concerned with post-traumatic chrondromalacia patellae. There were also serious cosmetic disabilities. Her wounds were described by Dr McGlynn as "ugly". There was also some evidence of loss of libido. Associate Judge Garling awarded the respondent $50,000 for general damages. The appellant urged that the maximum should have been $35,000 or no more than $40,000. I do not agree. Clearly, the respondent's injuries and disabilities were painful. I would not disturb the component of the judgment which his Honour attributed to general damages. I think it was right. Challenge to the award for loss of economic capacity. When, however, I come to the economic loss the position is somewhat different. The nature of the respondent's economic capacity before injury has been described. Associate Judge Garling found that, from $150 per week nett, the respondent had been reduced effectively to an economic capacity of nil. Even accepting the respondent's own evidence and that of her medical witnesses, I do not believe that the evidence sustained this conclusion in the terms in which it was stated by his Honour. None of the medical witnesses was called to give oral evidence. Accordingly, this Court, like his Honour, has only the medical reports to go on. We are, therefore, at no relative disadvantage, when compared to his Honour, in our capacity to evaluate the medical evidence. \GROVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v MADERNA (Kirby PB In her evidence, the respondent said at the trial (which took place in 1990) that her husband maintained the flower business after her injuries. However, it seems that her husband had himself suffered a supervening injury and had reduced the number of flower beds in which flowers were grown by the business from about fifty or sixty to some six beds. Now the couple bought in flowers to sell them in order to maintain the business. The respondent was cross-examined as to her capacity to do work in the continuing business. She said that she could not work "like before". She said that two hours a day was her limit, after which her legs began "shaking". She said that she could not bend or water or walk on uneven ground or push wheelbarrows around, full of flowers. However, she was able to do some work. Indeed, she did so. Now, her work was for shorter intervals, certainly not fourteen hours a day. It was confined to lighter duties, such as tying flowers into bundles and for that purpose, doubtless, choosing, cleaning and trimming them. Obviously,that work had some economic value. This evidence contradicts a total loss of earning capacity which was the basis on which his Honour approached his award. There is no doubt that the great part of the respondent's economic capacity was destroyed by the subject accident. She was, by the recorded descriptions, an obese woman without a capacity to perform a wide range of duties outside manual work. In hard economic times, such as at present, the range of work available to her would be strictly limited. However, it is an error, in the light of her evidence, to hold that her economic capacity was totally destroyed. Apart from her own assessment, there was medical evidence that tended to confirm her own estimation of a residual work capacity. Dr J Higginbotham expressed the following opinion to the respondent's solicitors in relation to an examination in October 1987: "The injuries outlined above prevent her from doing any strenuous physical activities although she is fit for light activities, not involving heavy lifting, repetitious activities with the upper limbs, prolonged standing, kneeling or crouching. Hopefully there will be some improvement over several months although I think she will be left with some continuing disability, particularly with relation to the lower limbs. This is of the order of 20 per cent of loss of function of the right lower limb and 10 per cent of the left lower limb as the result of the injuries." In August 1990, Dr JE Bentivoglio, orthopaedic surgeon, gave the respondent's solicitors an opinion that, in respect of the injuries to both knees, the respondent's substantial ongoing disability and her complaints were not unreasonable. In his opinion, she did stand a chance of developing degenerative osteoarthritis in her knees but he judged that to be quite remote. Dr JW Power was more dubious when he said the palmar skin was thickened, abraded and stained, indicating heavy manual work. But I think it fairer to the respondent to approach the matter on the basis of her own evidence and that of her doctors in testing his Honour's conclusion. on the whole, I think Associate Judge Garling over-estimated the respondent's loss of economic capacity. The respondent sought to distinguish between a complete destruction of economic capacity and his Honour's actual finding that the respondent's capacity was "totally removed". However, this is a distinction without a difference. So much is shown by the way his Honour finally proceeded to calculate the damages payable to the respondent upon the footing of a total loss. 6 UNREPORTED JUDGMENTS It was urged for the respondent that this Court should not disturb the final judgment. It was said to do so would be "tinkering". I agree that this Court should not tinker with judgments that are substantially correct. It should not be concerned to adjust components if the resulting total trial judgment is within the range. On the other hand, Parliament has provided a facility of appeal. We are not here prevented from performing our function by judge-made rules or notions. If error is shown, as I believe it is, we are duty bound to say so. Unless the case is in the de minimis class, or involves a mere marginal adjustment, we should set aside the judgment and, if it is safe to do so, we should proceed to recalculate the damages for ourselves. Re-assessment by the Court of Appeal. It has not been suggested that the case should be retried. Having regard to the great delays, I would agree that the matter should proceed to reassessment in this Court. There is no reason why we cannot proceed to do so. The out-of-pockets were agreed. I would leave the assessment of $50,000 for general damages undisturbed. I would approach the damages for past economic loss upon the basis that the respondent was totally unable to work for two years from the date of injury. During this time an allowance of $150 per week, being the nett amount found by his Honour on the basis of her tax return, should be provided for, with the conventional 15 per cent deduction for contingencies. This produces a figure of $43,250. Interest on that figure is $18,770. As to the future, I think it more appropriate to allow a 20 per cent deduction. This would take into account the residual economic capacity which the respondent has been shown to have and which she agrees she had. Upon that basis and allowing for the calculation on the figure of $150 allowed by his Honour up to the date of the estimated retirement of the respondent, this would produce an allowance for future economic loss beyond the trial of $37,128. Accordingly, for a re-calculation of the respondent's entitlement to judgment, the components would comprise the following: 1. Economic loss $99,148.00 2. General Damages $50,000.00 3. Out-of-pocket expenses as agreed $6,409.48 TOTAL $155,557.48 Judgment should be entered in favour of the respondent in that sum to take effect from the date of the judgment of Associate Judge Garling, namely, 28 February 1992. As to the costs, the appellant has failed in two of the three issues litigated in this Court. It asked for costs upon the basis that it was required to be here in order to succeed in the one issue upon which it succeeded. However, both at trial and in this Court the principal contest concerned the issue of liability: whether the respondent was entitled to succeed at all. Despite what I might say were the very thorough written and oral submissions of counsel for the appellant, the respondent has held her judgment. Accordingly, in my view, the appropriate order is that the respondent should pay one-third of the appellant's costs. She should have a certificate in respect of that part of the costs. Clarke JA I agree. Meagher JA I agree. The orders which I would, therefore, propose are: 1. Appeal allowed; \ROVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v MADERNA (Meaghet JA) 2. Set aside the judgment entered in favour of the respondent by his Honour Associate Judge PR Garling; 3. In lieu thereof, substitute judgment in favour of the respondent in the sum of $155,557.48, to take effect from 28 February 1992; 5 4. Costs order at trial confirmed; 5. The respondent to pay one-third of the costs of the appeal and is to have a certificate under the Suitors Fund Act 1951 in respect of such costs. Counsel for the Appellant: K Rewell 10 Instructed by: Government Insurance Office of New South Wales Counsel for the Respondent: GT Miller QC / A Reoch Instructed by: Teakle Ormsby and Associates253545