BRAEMA PASTORAL COMPANY LTD and ANOR v HUTCHISON SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MEAGHER, HANDLEY and POWELL JJA 9 November 1993, 9 November 1993 [1993] NSWCA 33 COMPENSATION TO RELATIVES ACT — WHETHER SELF-EMPLOYED DECEASED PAID TAX — PRESUMPTION OF LEGALITY APPLIED. The deceased was electrocuted in January 1986 while painting a homestead owned by the appellants. His widow brought an action under the Compensation to Relatives Act. The deceased's eldest daughter gave evidence that a director of the first appellant had told her father that the power had been turned off and this was recorded in a statement by her taken by a police constable five days after the accident. The director did not give oral evidence at trial because of his poor health and age, but the trial Judge offered to attend his home to take evidence. This offer was not taken up. The trial Judge found a verdict for $477,683, which was challenged on a number of factual grounds. One of these grounds was that the assessment was based upon the absence of any evidence that the deceased had lodged income tax returns and paid tax. Held: (1) An inference against the defendants was open because of their unexplained failure to take advantage of the trial Judge's offer to take evidence on commission at the director's home; Jones v Dunkel (1959) 101 CLR 298 followed; (2) In the absence of evidence to the contrary the Court should proceed on the presumption of legality and regularity so that it should infer that the deceased was lodging tax returns and paying income tax. Marine Investment Company v Haviside [1872] LR 5 HL 624 referred to. Handley JA This is an appeal by the defendants from a judgment of Carruthers Jwho heard an action under the Compensation to Relatives Act during the special sittings in the Common Law Division in May this year. The appeal has been expedited and properly so. It is a matter of some regret that the trial was not expedited although the widow made an application for expedition. For some reason which mystified Carruthers J and which mystifies me, Master Monaghan refused expedition. As a result a widow who had a claim under the Act for her own benefit and the benefit of her four children had to wait six years to have her action heard, the action having been commenced some two years and three months after the date of death. Fortunately, as I said, this Court has been able to expedite the appeal. Carruthers J gave judgment on 19 July and this Court is hearing the case today. The deceased was electrocuted on 21 January 1985 while painting the homestead on Segenhoe Horse Stud near Scone in the Hunter Valley then owned by the appellants. The defendants have challenged his Honour's judgment both on liability and quantum. It was common ground that the deceased met his death while painting an attic section of the homestead in the vicinity of the electrical wires which brought power to the homestead. The insulating tape which had originally been applied to the wires and some of the electrical fittings in close proximity to the wooden attic structure had become defective. An officer of the Shortland County Council who inspected the area after the accident noted that some of the insulating tape had unwound from one of the wires and that a metal nut was exposed through a break in the insulating tape. The nut was obviously live when 2 UNREPORTED JUDGMENTS the wires were conducting current. The deceased raised his right arm in the course of his painting work, it came in contact with an exposed part of a wire and he suffered a fatal shock. The plaintiffs case on liability was put on three alternative grounds at the trial but in my opinion it is only necessary to deal with the first of these. The deceased's eldest daughter, Michelle, was with him at the time and was supporting the ladder on which he was working. She gave evidence that she heard a conversation between her father and Mr Israel, a director of the first appellant just before he resumed work after lunch. Her father said to Mr Israel: "Have you turned the power off, boss? and Mr Israel replied: "Yes, I have turned it off'. Shortly after this her father suffered the fatal shock. Following the accident an officer of the Shortland County Council and a member of the Police Force attended to investigate. The policeman, Constable Garry Taylor, took a written statement from Michelle and took a further statement five days later. The statement taken at the homestead does not mention the conversation between her father and Mr Israel about the power having been turned off. This is mentioned in the statement taken on 26 January 1985. However Constable Taylor gave evidence that although he did not record a reference to this part of the conversation when he took her statement on the day of the accident, Michelle had told him about this and he failed to record it in the first statement. Michelle was cross-examined but was accepted by the judge as a witness of truth as was Constable Taylor. Their evidence was not contradicted by sworn evidence but a written statement from Mr Israel was tendered by the defendants and admitted, the Judge being satisfied that he could not give oral evidence at the trial because of his age and poor health. Mr Branson QC who then appeared for the defendants applied for an adjournment to take the evidence of Mr Israel on commission at his home near Belmont. This application was refused but the trial Judge indicated a willingness to attend at Mr Israel's home to take his evidence. This offer was not taken up and no reason was shown for failing to do so. The learned trial Judge did not refer to Jones v Dunkel (1959) 101 CLR 298 but in my opinion an inference against the defendants was open because of their unexplained failure to take advantage of the trial Judge's offer. I fail to see any distinction between taking the evidence of Mr Israel on commission in his own home before someone other than the trial Judge and taking his evidence there before the trial Judge. In the circumstances the appellants are seeking to challenge credibility-based findings by the trial Judge who saw, heard and believed two witnesses for the plaintiff and saw no witness for the defendants. Mr Hislop QC submitted that his Honour's findings were inherently or glaringly improbable and referred to a number of matters in support of that submission. The only one of these that I think needs to be specifically mentioned is the suggested improbability that Mr Israel would have allowed the power to be turned off to the entire horse stud so that the deceased could paint this attic section of the homestead. I see no improbability in that course being taken for a relatively short time in daylight hours but, in any event, it is not clear that it was necessary to turn off the power for the whole stud in order to isolate the wires leading to the attic section. There is some suggestion to that effect in the evidence of Mr O'Brien a former officer of the Shortland County Council but this is contradicted by the report of Mr Simpson, a consulting engineer, which was URJ BRAEMA PASTORAL COMPANY LTD and ANOR v HUTCHISON (Handley JA) — 3 admitted without objection. It seems from his report that it was possible to isolate the wires leading to the homestead without interrupting power leading to the other parts of the property. Moreover Mr Simpson's report indicates that the facts relating to the power-isolating system at the stud could be obtained from the Shortland County Council from a contemporary report made to it after the accident. The defendants did not tender that report. In the result the appellants failed to establish that it was necessary to turn off the power to the whole property in order to isolate the wires leading to the attic section. The appellants' submission that the need to turn off the power to the whole property made the daughter's evidence about the conversation between the deceased and Mr Israel glaringly improbable therefore lacks any firm foundation in the evidence. In my opinion the challenge to the finding on liability fails. His Honour found a verdict for $477,683. The first challenge to his Honour's findings on quantum is that his Honour erred in treating the sum of $80 a week for motor vehicle expenses as part of the support which the widow and children received from the deceased in his lifetime. The deceased was an itinerant self-employed painter who moved around the eastern States of Australia in a more or less regular manner over a twelve month period obtaining contract work on farming properties and in country towns as opportunity offered. For this purpose he had a truck and a caravan. The truck had the dual purpose of towing the caravan and moving the family and being available to enable the deceased to do his painting work. His Honour accepted that the maintenance of this truck cost the deceased at least $130 a week and he mentioned that costs such as hire purchase payments, fuel, registration and insurance were included in this figure. He did not itemise all the items that made up the $130 per week. There was some suggestion from Mr Hislop QC that for this reason the figure of $130 should not be accepted. However his Honour merely said that the $130 figure included the itemised amounts but as I said he made no attempt to provide a complete breakdown. His Honour further found that it would be proper to allow fifty per cent of the use of this vehicle for business purposes. However when his Honour found that the family had received benefits from the deceased worth $300 per week he included the costs of the motor vehicle at $80 rather than at $65 being half the $130 figure previously mentioned. In my opinion this analysis does not demonstrate any error on the part of the trial Judge. While the motor vehicle was used approximately equally for business and private purposes, the fixed costs of the vehicle had to be incurred for there to be any use for the benefit of the family. No doubt some of the variable costs for fuel and maintenance were solely referable to its business use but all the other costs had to be incurred if the truck was to be available for any private purposes. In those circumstances his Honour was not bound to include only fifty per cent of the costs in the dependency figure but could allocate a higher figure. $80 per week in the circumstances seems a fair figure. I would not disturb his Honour's calculation of the dependency figure at the net amount of $300 per week. The second challenge to the assessment of damages is based upon the absence of any evidence that the deceased had lodged income tax returns and paid tax since his arrival in Australia. The widow gave evidence that she thought he was lodging tax returns and paying tax but she was not sure and no documentary evidence on the issue was tendered by either side. In particular, no attempt was made by the defendants to create an evidentiary presumption in their favour by 4 UNREPORTED JUDGMENTS calling upon the plaintiff prior to the trial to obtain the deceased's income tax records from the Taxation Department under the Freedom of Information Act. Mr Hislop QC submits that the Court should draw the inference that the deceased was not paying income tax. In my opinion no such inference should be drawn. The presumption in the absence of evidence is one of legality and regularity. In my opinion the same presumption should be applied in the present case as is applied where secondary evidence is given of a lost document which is liable to stamp duty. In the absence of evidence to the contrary the presumption is that the lost document was duly stamped and the evidentiary onus of establishing a case to the contrary lies upon the party who asserts it. See Marine Investment Company v Haviside [1872] LR 5 HL 624 at 631. I conclude, therefore, that in the absence of evidence to the contrary this Court should proceed on the presumption of legality and regularity and this means that this Court should infer that the deceased was lodging tax returns and paying income tax. There is the widow's evidence earlier referred to and no evidence to the contrary. Such other evidence as does exist is consistent with tax having been paid. The deceased warranted in the hire purchase agreement over the truck that his income was $2000 per month. I would, in the absence of anything to the contrary, read this as a reference to his net income after business expenses rather than his gross takings. On this basis there was more than a sufficient margin between his net income before tax and the dependency figure of $300 per week found by his Honour to allow for payment of income tax on a net business income of $24,000 a year. I therefore reject the second challenge to the quantum of the verdict. The final challenge is based upon his Honour's finding that if the deceased had lived his children would have remained at school as long as possible, until aged seventeen or thereabouts. The widow gave evidence that she and the deceased wanted the children to remain at school as long as possible and that they proposed to settle at Scone permanently at some stage to ensure a stable educational environment for the children. Mr Hislop QC challenges this finding on the basis that the itinerant lifestyle followed by the deceased would not have been conducive to a stable educational environment and, in those circumstances the children would more probably than not have left school at fifteen and sought employment in the workforce. He supported this submission by reference to the fact that this is what had happened when the family returned to England following the death of the father. In my opinion no safe inference can be drawn from the behaviour of the family after the death of their breadwinner following their return to the economically-depressed environment in the north of England. The eldest daughter, Michelle, turned fifteen some four months after her father died. She gave evidence that she would have remained at school as long as possible and later would have taken a course in secretarial work. She was not cross-examined on this evidence. The Judge accepted the evidence of the mother and the daughter on this issue. In all the circumstances it seems to me this submission should be rejected. There was evidence to support the findings of the trial Judge and the failure to cross-examine Michelle, who after all was nearly fifteen when her father died, on this issue is really fatal to the present submission. The final ground of challenge is that his Honour's discounts of ten per cent for the period before trial and twenty per cent for the future were insufficient. His Honour declined to further discount the award for the widow's prospects of remarrying and that conclusion has not been challenged. The discount for the URJ BRAEMA PASTORAL COMPANY LTD and ANOR v HUTCHISON (Powell JA) 5 future is on the high side in those circumstances and sufficiently, in my opinion, reflects the economic vicissitudes that the deceased would have faced in being dependent upon the rural communities in the eastern States for painting work in the years ahead if he had not met his untimely death at the age of thirty eight. I am not persuaded that his Honour should have further discounted his awards of damages for unfavourable vicissitudes and it is possible that these discounts, if anything, favour the defendants rather than the plaintiff. I propose therefore that the appeal should be dismissed with costs. Meagher JA I agree. Powell JA I agree. Meagher JA: The order of the Court is that the appeal is dismissed with costs. Counsel: Appellant: J D HISLOP QC/G PARKER Respondent: PCB SEMMLER QC/J SAINTY Solicitors: Appellant: P V McCULLOCH and BUGGY Respondent: HICKSON LAKEMAN and HOLCOMBE