GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v QUINLAN SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, CLARKE and MEAGHER JJA 21 November 1991, 20 February 1992 [1992] NSWCA 93 DAMAGES, PAST ECONOMIC LOSS, FUTURE ECONOMIC LOSS Facts: Plaintiff/respondent severely injured in 1986. Appeal on damages; that general damages, past economic loss and future economic loss components were excessive. Held (per curiam): 1. The figure of $150,000 general damages is in no way disproportionate to the plaintiff's injuries. 2. As for the figure of $49,610 for past economic loss, there was no basis on which the trial judge could safely make any further deductions. 3. Due to the trial judge's mathematical error, etc. future economic loss component must be diminished to $110,000. Moran v McMahon [1985] 3 NSWLR 700 Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 188 Harding v William (1963) ALR 604 (HC) Green v McKay (NSW Court of Appeal, 24 April 1991, unreported) Miller v Jennings (1954) 92 CLR 190. Mahoney JA On 25 June 1986 the plaintiff was injured in a motor vehicle accident. She was a pillion passenger on a motor cycle which was hit by a motor vehicle. She suffered serious injuries. On 3 August 1990 her claim for damages was determined by Bruce AJ. His Honour awarded the plaintiff $374,777.15 made up as follows: General Damages $150,000.00 Past Economic Loss 39,340.00 Interest 10,270.00 Future Economic Loss 167,500.00 Future Medical Treatment 3,000.00 Agreed out-of-pocket expenses 4,667.15 $374,777.15 The defendant has appealed to this Court against his Honour's judgment. Before this Court Mr Shore, for the defendant, pressed submissions in relation to three matters: general damages, past economic loss, and future economic loss. In order to understand the submissions made for the parties, it is necessary to refer to the facts as presented at. the trial. There was, I think, no great contest as to the basic facts. The plaintiff was born on 27 January 1963. At the time of the accident she was therefore some 23 years of age. She had attended Wyong High School. During 1979 and 1980 she had, during weekends, worked in a photographic studio with a Mr Phillip Green assisting Mr Green by carrying equipment and generally observing the decorum and sequence of photography in his business. She left school at the end of 1980, having completed Year 12, and began working with Mr Green. She was involved with him in wedding photography, portraiture and other photography such as wildlife photography. 2 UNREPORTED JUDGMENTS In 1982 she moved to Sydney and worked for some six weeks as a photographic assistant and then in a photographic laboratory as a customer service officer. The plaintiff was married in September 1983 and ceased work. In May 1984 she and her husband separated and she commenced a course in Visual Art at the Sydney Art Institute. She passed some examinations but did not pass the first year of the course. She commenced work involving photography and, it would appear, utilised her skills as an assistant prop specialist in her mother's advertising agency. An independent photographer offered her a position as an assistant but, before she took the position, she suffered the relevant accident. In the motor cycle accident she suffered injuries which the learned judge described as follows: "Compound fracture of middle of right tibia; Fracture to top of right tibia; Fracture of right patella; Injury to right posteria cruciate ligament; Shock; Multiple lacerations and abrasions to both knees and right wrist; Injury to left hip; Abrasions to the left knee; Injury to right hand; Bruising to right hand; Injury to both wrists; Injury to both arms." The plaintiff was admitted to the Prince of Wales Hospital and thereafter suffered a number of serious surgical and other procedures. During the initial periods of treatment the underwent a closed reduction of the damage to her right tibia and fibula, an internal fixation of the right tibia and repair to the right cruciate ligament. She was, she said, in considerable pain: she was unconscious for a few days on pain relief and when she became conscious she was in "constant agony". She described in some detail the serious extent of the pain during the period of the initial treatment. Her treatment involved, it is accepted, some eleven surgical procedures. These have been detailed in the medical reports which were tendered and, before this Court, were referred to as evidencing the facts stated in them. The bones in the right leg were pinned and the pin was subsequently removed. She underwent cruciate ligament repair surgery, medial ligament reconstruction and, on 23 June 1988, post cruciate reconstruction. Unfortunately infection developed in the injuries she had suffered. The plaintiff said that in order to stop the infection she suffered a "debridement". She said that the skin and muscle were cut out down the length of her shin, the wound was left open for ten days, and chemicals were placed in the wound. A bone graft from the hip was undertaken and there was, she said, danger of amputation of the leg. It appears that sometime after April 1987 she was readmitted to the Prince of Wales Hospital and a sequestrectomy was carried out. Ultimately by about December 1987 the infection had been overcome and the hospital was able to undertake the work of medial ligament reconstruction and cruciate ligament reconstruction to which I have referred. In a report of 16 June 1988 Dr DG Seaton, an orthopaedic specialist who gave oral evidence before the learned judge, reported on her condition as follows: \ROVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v QUINLAN (Mahone$ JA) "On clinical examination she had three new incisional wounds which are, as yet, still open and require daily dressings with Saline cleansing. She has a livid unhealed scar over the upper tibia at the medial condyle and it is a horizontal scar. Above this she has a vertical scar over the lower end of the femur in its inner aspect. In the knee itself there is a medial para-patellar incision. All of these incisions remain unhealed and slightly septic. However, there is no infection within the knee joint now and she has quite a good range of knee movement although she cannot fully extend it, she lacks 10 degrees of extension, and she cannot fully flex it: she can flex it just past 90 degrees. There is still some four centimetres of quadriceps wasting on measurement of the circumference of the right leg. I gently tested the stability of her right knee and this seems to have improved considerably in that she i has no gross instability of either cruciate ligament or either collateral ligament. There is evidence that her knee is continuing to improve and will improve further with physiotherapy and hydrotherapy: it is too early yet to say. However, it is obvious now that she is not going to lose the leg, that she will not require amputation and that she will get quite a good function in the right leg with increasing range of movement of the right knee. It is probable that she will also get further strength in the right quadriceps mechanism. She has gross cosmetic deformities in the right leg and in the presence of mild sepsis no thought can be given yet to improving the scar tissue: this will, however, need the attention of a plastic surgeon in about 2 1/2 years time. I did not have the advantage of x-rays although I believe from the patient that there is still some metallic foreign body in the right knee. I consider that these x-rays could be photocopied and I would like to view them. I would be pleased to give any further advices in regard to her treatment should she need advices in the future but it would appear that she is doing extremely well under her present orthopaedic surgeon's regime. Overall she is still left with a gross instability in her right leg which may need further treatment in the future but only time will tell. She has lost 50% of the efficient use of this right leg and it may or may not improve." Dr Seaton's final report was given on 7 June 1990. The report said: "Thank you for your letter of 22 January and the abovenamed was reviewed today at your request. Since last seen her progress has been satisfactory. She still has painful, ugly scarring in her right leg not only from the results of her infected tibia but also from the surgery around and about her right knee. She still has a feeling of swelling and pain in the right calf because of the gross skin defect and she still has instability in her right knee which makes her physically disabled in hopping, climbing and running. She still has a fair degree of pain in her knee if she tries to exercise to any great extent. She is doing a Visual Art degree in the design of jewellery but sitting at a bench or desk for a long period of time gives her leg a fair bit of discomfort. On clinical examination her condition has not really changed. She has very ugly scar tissue around her knee where her knee reconstruction was carried out and there is a transverse scar in the upper tibia which shows evidence of livid wound dehiscence and there is a medial para-patellar incision which shows the same appearance. The scar tissue around her knee, including the punctate scars, could easily be improved cosmetically with minor plastic surgery which would cost somewhere in the region of $1,000 including a hospital stay. There is no evidence of recurrent infection and she seems to have recovered completely from her osteo-myelitis. There was 2 cms of wasting in the quadriceps mechanism of 4 UNREPORTED JUDGMENTS the right leg, just above the knee, and the anterior drawer sign was positive indicating that she has an anterior cruciate ligament instability which will lead in the end to osteo-arthritic changes in her right knee. Other than the above findings, I would not change my last report. The screw remains in situ but it is not infected. Allowance will have to made for cosmetic surgery and the fact that she will probably develop osteo-arthritis in her right knee: presently she has lost more than 30% of the efficient use of her right leg because of the accident and instability in the right knee." The plaintiff, in her evidence, described the present condition of her right leg. The lower part of it swells "the whole length around the calf area and the ankle area" after she stands for periods of 10-15 minutes or 20-25 minutes. She has pain-which is "intense in cold weather", which "comes and goes". Standing or sitting for long periods without change in position and attempting some types of fast movements brings on the pain. In the shin bone the pain is "fairly constant". The scarred area of her leg is sensitive to the extent that she wears loose clothing and experiences pain from the friction of clothing on the scarring. She has discomfort lying in bed and still uses a cushion under her right knee: "I just find it impossibly painful to sleep and my right side I find very difficult to lie on as well". As the result of her treatment, the plaintiff has considerable scarring on her right leg. In discussion of the scarring, various descriptive terms were employed. During the course of the hearing of the appeal both parties requested that the Court itself examine the scarring. There were before the Court photographs of the scarring but the parties agreed that it would be of assistance to the Court to see the actual condition of the plaintiffs leg. The plaintiff herself accepted this course. Inspections of this kind are not ordinarily undertaken by the Court. It is not necessary in the present circumstances to canvass the reasons for this. But there were circumstances special to this case which led to the Court agreeing to what the parties had proposed. It was accepted that no contest would arise in this regard as to the facts or the inferences to be drawn from them. It is likely that the plaintiff will in due course undertake plastic surgery to alleviate the effect of the scarring on her leg. An allowance has been made by the learned judge for the cost of such surgery. The surgery will not remove the effect of the scars but will to some extent mitigate the effects of them. However, it has been accepted that the scarring will continue to have significant effects, visual and otherwise, upon the plaintiff. Evidence was given, which the learned judge accepted, that as the result of the injuries degenerative changes are likely to occur in the plaintiff's right knee at an earlier stage than normal and the knee would become more painful in later years. It was said that "in later life an operation such as a total knee replacement may become necessary". In addition to the physical effects of the injuries, the plaintiff suffered significant psychological trauma. During the period of her treatment and thereafter she suffered an anxiety depressive reaction resulting from the surgical procedures, the prolonged pain, and the threat of losing her leg. Dr Milton, a specialist psychiatrist, had thought that her condition would resolve over a period of a few years but subsequently his opinion was that her depression is now "chronic" and it may or may not improve. He saw her tiredness and lethargy as symptoms of the depression from which she suffers and these, he thought, could well affect her future work capabilities. \ROVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v QUINLAN (Mahoney JA) The plaintiff, because of her injuries, did not feel able to pursue the occupation which she had desired to follow, that of a photographer. It was not seriously in contest that the injuries would put difficulties in her way in that occupation. She therefore took up the occupation of jewellery manufacturing and that occupation she was pursuing at the time of the trial. The evidence was that notwithstanding her injuries she would be able to continue in that occupation. I come now to consider the submissions made in relation to the three matters the subject of contest in the appeal. 1. General Damages: The learned judge included in his judgment for general damages $150,000. The principles upon which this Court must consider an appeal in respect of a finding of this kind have been dealt with at length in decisions of the High Court of Australia and of this Court: see Moran v McMahon (1985) 3 NSWLR 700 and the cases there referred to. Those principles have not been in contest in the present appeal. It has been submitted by Mr Shore for the defendant that, within these principles, the Court can and should set aside this award as being, in the relevant sense, "unreasonable": see, eg, Harding v Willman (1963) ALR 604 (HC). The views of individual judges, including judges of this Court, have differed as to the amount which is appropriate for particular injuries and the consequences of them. And I am conscious, as I have on other occasions indicated, that the scope for difference within the limits of reasonableness in relation to matters of pain, suffering and the like is not to be narrowed. See Green v McKay (Court of Appeal, 24 April 1991, unreported). In the literal sense, the extent of the physical disabilities which have been imposed upon the plaintiff by her injuries does not lie at the outer boundary of disabilities which have come before this Court. On the final view of her medical witness Dr Seaton she has suffered a loss of the order of one-third of the useful function of her right leg. But her capacities, for activity and for work, remain substantial. Were the matter to be judged by reference to the incapacities alone, I would conclude that $150,000 was beyond what reasonably could be awarded. But in the present case, a great part of the plaintiffs claim is based upon other matters. As I have said, she has suffered some eleven surgical procedures and more are anticipated. In addition, the pain and discomfort which she has suffered has in the past been great and it remains substantial. The ongoing daily suffering will, it may be inferred, continue. Giving full effect to the weight which a trial judge could properly place upon these matters, and having regard to, as it has been said, the "end of the scale" at which "damages for pain and suffering" lie: Miller v Jennings (1954) 92 CLR 190 at 195; I do not think that it would be proper for this Court, in the special circumstances of this case, to intervene. 2. Past Economic Loss: The plaintiff was awarded $49,610. His Honour's assessment of this sum was based upon her incapacity to earn and an assessment of her earnings uninjured as of the order of $270-$280 per week net. The only objection pressed was that there was no basis for the conclusion that uninjured she would have earned such an amount. The plaintiff's work history before the accident did not disclose a commitment to full time work in the ordinary way. What, uninjured, she would have done can only be the subject of conjecture. It is proper to infer that she would have 6 UNREPORTED JUDGMENTS engaged in some form of work. I do not think that his Honour's assessment of the amount she would have been likely to earn in such work was wrong. 3. Future Economic Loss: The judge had evidence of what the plaintiff, in her injured condition, was earning or was apt to earn. He had to assess what, uninjured, she would have earned. It was suggested that, uninjured, she would have followed the occupation of a photographer and that she would have earned gross $30,000 in the first year, $50,000 in the second year and thereafter something in the order of $75,000 per annum. This suggestion was based upon the evidence of a Mr Melton. The submission for the defendant was, in effect, that assuming the evidence of Mr Melton be accepted according to its terms, what he said did not justify the conclusion that the plaintiff, uninjured would have had earnings of the order indicated. In particular, it was submitted, the acceptance of Mr Melton's evidence according to its terms would not have warranted the conclusion that she would in the future have continued to earn $75,000 per annum gross. There is, in my opinion, considerable weight in that submission. The evidence given by Mr Melton related at least substantially to his experience in the United States of America. That evidence would not lead me, as on a rehearing, to the conclusion that the plaintiff's earnings would have been of that order. However, I am satisfied that the effect of the plaintiff's injuries upon her earning capacity would be substantial. His Honour assessed her as a person of above average ability and capacity. That is a finding with which this Court should not disagree. Assuming that she would have worked for the rest of her working life, I would yet be satisfied that her loss would have been substantial and, perhaps, generally of the order indicated by his Honour, namely, $200 per week. Meagher JA has pointed out that his Honour's assessment of loss at $200 per week was arrived at in a way which is open to question and that, adopting his Honour's approach, the proper loss would be of the order of $150 per week. I agree that the approach suggested by Meagher JA in this regard is the proper approach to be adopted. On that basis, I agree that the award for future economic loss should be $110,000. Upon this basis I agree with the orders proposed by Meagher JA. Clarke JA I agree that the appeal should be upheld. For my part I would substitute a lower figure than proposed by Meagher JA for the reason that I consider the award of general damages to be beyond the permissible range. In saying that I am conscious that the respondent suffered a very severe injury and continues to suffer significant disabilities. Notwithstanding the amount awarded is very large indeed. More importantly it bears such a relationship to the highest amounts awarded by the courts in the State for general damages as to indicate its excessiveness. Where young quadriplegics, whose lives have been almost totally destroyed, come before the courts they are awarded substantial sums up to a figure of $300,000. This may be thought to be a low figure to compensate for the almost complete destruction of a life but; it is the contemporary standard that the courts have set. It represents the presently accepted limit for an award of general damages. In my opinion it is necessary for the courts to bear this in mind and to ensure that there is, in broad terms, a proper proportionality between the most serious case and the one before the court. In this respect it seems to me to be contrary to principle to adopt one standard for the gravest case and a different one for the less \GROVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v QUINLAN (Meaghet JA) serious cases. While no one could suggest that the courts attempt a strictly mathematical approach there is, or should be, no difficulty in maintaining a due relationship, in broad terms, between the amount to be awarded in any given case and the highest award of the day. Looked at in that light the present award is, in my view, appellably excessive. By no stretch of the imagination could it be said that the respondent's injuries and disabilities call for an award half that of the largest sum reserved for those cases which are extremely grave. In other words there is, in my opinion, a lack of proper proportion between the award and the amount awarded to young quadriplegics. In expressing my opinion in this way I do not believe I am transgressing Planet Fisheries Pty Ltd v La Rosa, 119 CLR 188, for general ideas of fairness and moderation must, as I see it, encompass an appreciation of general standards and the largest awards provide some indication of these. Having said that the conclusion of the majority renders it unnecessary for me to nominate what I regard as an acceptable award for general damages in this case. Meagher JA The plaintiff, Miss Quinlan, who is the present respondent, was severely injured on 25 June 1986, when she was 23 years old. The appellant was admittedly liable for the damages which flowed from her injuries. The matter came on for assessment only before Bruce AJ, who awarded her damages in the sum of $374,777.15. It is from this judgment which the appellant appeals in three respects: it submits that the general damages component of the judgment ($150,000) was excessive, that the past economic loss component ($49,610) was excessive, and that the future economic loss component ($145,000) was excessive. Two aspects of the case which were found by the trial judge seem to me to be beyond challenge. One is that Miss Quinlan's injuries (particularly to her right leg) are severe to the point of being horrendous. She suffered a compound fracture of the middle of the right tibia, fractures of the top of the right tibia and of the right patella, injury to her right posterior crutiate ligament, shock, multiple lacerations and abrasions to both knees and right wrist, injury to her left hip and knee, and injury or bruising to her left knee, right hand, both wrists and both arms. This has occasioned her great pain and suffering, eleven operations, trauma, the threat of an amputation, depression, and physical and psychological scarring. By consent, the Court was shown her right leg, and it is still a ghastly sight. The other is that she is an extremely intelligent, attractive and appealing young woman, who but for her injuries would have succeeded in anything to which she turned her mind. The appellant's first challenge relates to the award of general damages. The award of damages is a largely discretionary matter, and the award of general damages is particularly so. Hence this component is immune from disturbance unless it can be demonstrated that the learned trial judge committed some error of law or fact, or else the amount is so disproportionate to the evidence that it bespeaks obvious mistake. It was not suggested that his Honour made any error of law. As far as error of fact is concerned, Mr Shore for the appellant made a valiant but futile attempt to maintain that there were a number of such errors. For example, he submitted that his Honour was wrong in finding that Miss Quinlan suffered a chronic depression; but, whilst the degree and nature of the chronicity may be in dispute, there was medical evidence, which his Honour accepted, that she did indeed suffer from chronic depression. Again, there was a challenge to his 8 UNREPORTED JUDGMENTS Honour's finding that she suffered "gross instability of the (right) knee", but Dr Seaton, whom his Honour accepted, said precisely that. Again, his Honour, it was suggested, fell into error in holding that "degenerative changes are likely to develop in her right knee at an earlier age than normal causing the knee to become painful", but this was the very evidence given on the subject by the appellant's own witness, Dr Barry. In my view, none of the challenges to his Honour's specific findings of fact can be sustained. Nor, in my opinion, can it be suggested that his Honour's ultimate figure of $150,000 was so disproportionate to the evidence that it is manifestly erroneous. If I were permitted to do so I would point out that a similar award of general damages for much slighter injuries survived challenge in this Court in Moran v McNahon [1985] 3 NSWLR 700. I realize that I cannot do so because the High Court in Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 188 has left appellate judges in the anomamous position where they must find that a particular figure is or is not within the range of a sound discretionary judgment without having regard - or, at least, public regard to what that range is. In the event, therefore, I will content myself with remarking that in the present case the figure of $150,000 is in no way disproportionate to the plaintiff 's injuries. The next ground of appeal relates to the component of past economic loss ($49,610). His Honour computed this amount as follows: 15 months @ $270 per week $17,500 Interest at 10% for 4 years $7,000 18 months @ $280 per week $21,840 Interest at 10% $3.270 Total $49,610 The challenge was first that there was no evidentiary basis for the finding of $280 per week, and secondly that no deduction was made either for unemployment benefits received or for interest thereon. As to the first, there was sufficient evidence, viz. the evidence of a Mr Melton, who deposed to receiving $30,000 for his first year as a photographer. His evidence is open to a number of criticisms, but he was the only witness called on the question. He was not cross-examined by the appellant's counsel, who did not bother himself to call any evidence in reply. Accordingly his Honour was entitled, as he did, to accept Mr Melton's evidence. As to the second, there was evidence of the plaintiff's receipt of some payments, but no evidence at all of their nature or quantum. There was therefore, in my opinion, no basis on which his Honour could safely make any deduction. The final component in his Honour's award of damages against which the appeal lies is the award of $145,000 for future economic loss. This represents, according to his Honour, a capitalization of the difference between what she would have earned but for the accident in her chosen profession of photography and what she is in fact earning in the career of jewellery which she is now pursuing. Her working life at the date of trial was 33 years. His Honour concluded that the difference to which I have alluded was $200 per week. This led him eventually to arrive at the figure of $145,000. His Honour said: "I allow a diminution in earnings of $200 a week for 33 years which is $171,140 which I reduce by 15% for the vicissitudes of life, leaving a sum of $145,469 which I round off at $145,000." \GROVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v QUINLAN (Meaghe® JA) To my mind there can be no quarrel with the finding that Miss Quinlan would have pursued a career in photography. She started learning it in years 11 and 12 at school; she worked as a photographer in 1981-2 after leaving school both as an assistant on commercial jobs and as a solo photographer. She then moved to Sydney, where she took various photographic jobs. After an unsuccessful marriage in 1983-4 she did further photographic work and had decided to set up a studio and pursue her career as a solo freelance photographer. Her choice was aborted by the accident. Instead she has to work as a jeweller's assistant, an occupation which gives her less than complete pleasure or satisfaction. His Honour found all this, and there is ample evidence to support him. Moreover, his Honour found that her intelligence, skill and determination was such as to ensure her outstanding success. But, whilst his Honour's approach seems, with respect, to be impeccable, his mathematics seem mistaken. His Honour concluded that an established photographer would earn at least $580 net per week, and there was evidence to justify that finding. He also found, as the evidence would dictate, that a jeweller's assistant would earn between $413 and $500 per week. In these circumstances the choice of $200 per week difference would seem to be a clear error: one could only justify the figure if one deducted the lowest weekly sum a jeweller's assistant could be paid from the highest figure a photographer would earn. In my view, a more realistic figure would be $150 per week. This would yield a figure of $128,355 instead of $171,140; and deducting 15% for contingencies one would arrive at a figure of $109,101.75, which I round off to $110,000. In my view, therefore, the following orders should be made: 1. Appeal allowed. 2. Judgment set aside. 3. In lieu thereof, order that judgment for the plaintiff be entered in the sum of $339,777.15, to take effect as from 3 August 1990. 4. Order that the appellant pay the respondent's costs of the trial. 5. Order that the respondent pay the appellant's costs of the appeal, the respondent to have a certificate in respect of the costs of the appeal under the Suitors' Fund Act. ORDERS 1. Appeal allowed. 2. Judgment set aside. 3. In lieu thereof, order that judgment for the plaintiff be entered in the sum of $339,777.15, to take effect as from 3 August 1990. 4. Order that the appellant pay the respondent's costs of the trial. 5. Order that the respondent pay the appellant's costs of the appeal, the respondent to have a certificate in respect of the costs of the appeal under the Suitors' Fund Act. Counsel: Appellant: H SHORE Respondent: MR J HOLT QC/R GRACE Solicitors: Appellant: GOVERNMENT INSURANCE OFFICE 10 UNREPORTED JUDGMENTS Respondent: GH HEALEY and CO