NEW SOUTH WALES INSURANCE MINISTERIAL CORPORATION v RAYNER SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, MAHONEY and Cripps JJA 19 March 1993, 19 March 1993 [1993] NSWCA 197 DAMAGES — motor vehicle injury — chronic neck and back pain — psychiatric disability and depression — female prison officer — dismissed from position on grounds of disability — subsequent intermittent work record — trial judge (Mahoney DCJ) allows past economic loss at $98,731 and future economic loss at $232,047 — insurer appeals — held: (Kirby P; Mahoney and Cripps JJA concurring): (1) As to the allowance for 10 years total incapacity, this did not show error given the medical evidence and the discount of 25% for future contingencies; (2) As to the allowance of 15 years partial incapacity for work, this showed no error sufficient to warrant disturbance by the Court of Appeal - estimation of the impact of depression and psychiatric disability on the plaintiff in the future was a matter peculiarly for the trial judge who observed her give evidence - possibilities and not just probabilities had to be allowed for. Malec v J C Hutton Proprietary Ltd (1990) 64 ALJR 316 (HC) applied; (3) Appeal dismissed. ORDERS Appeal dismissed with costs. Kirby P Ms Lynn Rayner (the respondent) was injured on 27 November 1985 near Bankstown. The motor vehicle that she was driving was struck from behind by another motor vehicle. The circumstances in which she received her injuries give rise to liability in negligence in the appellant. A female prison officer suffers physical and psychiatric injuries Liability to the respondent was admitted at the trial. This took place before his Honour Judge Mahoney QC in the District Court in May and November 1991. His Honour entered judgment in favour of the respondent, initially, in a rounded sum of $443,000. Subsequently, as it was agreed before this Court today, judgment was entered in the sum of $444,220.90. In due course, I will set out the component parts of that judgment. The respondent's case was that she had suffered physical injuries to her neck and back which caused her chronic pain and discomfort, to such an extent that it interfered with her ability to perform her employment duties, and in her ordinary enjoyment of life. The respondent had worked in a wide range of duties prior to suffering her injuries. At the time she was injured, she was working as a prison officer. After leaving school, she had enjoyed what the trial judge called "a knockabout existence". This had involved clerical work, work as a farmhand assistant, work in show business involving horses, and dancing and singing. As a result of the chronic pain and physical disabilities caused in the subject incident, the respondent developed a psychiatric condition. This factor eventually caused the Department of Corrective Services to terminate her services on the basis that she was incapable of performing the full range of her duties. Thereafter, 2 UNREPORTED JUDGMENTS she worked at Miranda Fair as a shop assistant, at the University Co operative Bookshop, in duties as a security guard working in a bar, and other like work. However, this work was intermittent. In current economic circumstances, work of that kind is, self evidently, not always easy to find. There was some complaint of continuing physical disability on the part of the respondent. However, the principal trouble that she was complaining of at the trial was of the psychiatric condition, which culminated in profound depression and feelings of low self esteem. In the course of calculating his initial judgment sum, Judge Mahoney made a number of mathematical errors, which are easy enough to make in the calculation of component parts. He overlooked a component which he had himself allowed for future medical treatment. He did not appear to make specific allowance for general damages of $70,000. He made mistake in the calculation of the future economic loss component. When these mistakes were corrected, apparently under the slip rule in the District Court, and before final judgment was entered, the component parts of the judgment, as finally made and amended, were as follows: Out of pockets agreed $ 11,987.09 Future medical treatment 6,000.00 Past economic loss 98,731.00 Future economic loss 232,047.90 General loss 70,000.99 Interest 25,454.99 TOTAL JUDGMENT $444,220.98 In respect of the economic loss component, the trial judge allowed a discount of 25 percent against future contingencies. In doing so, he allowed a greater percentage than is conventionally allowed. The conventional discount is of the order of 15 per cent, although, as this Court has frequently said, that figure is not to be regarded as inflexible. Quite rightly, in this case, the judge took into account the uncertainties of the life of a prison officer with the background of this particular respondent, even had she suffered no injury. By leave of the Court, before the Court today, a further amended notice of appeal was filed raising seven grounds of appeal. Two of these were not argued. One of them, although not argued, was the subject of passing comment. In the final analysis, however, two essential complaints are made which have to be passed upon by the Court. The first relates to the suggested error that the trial judge made in providing the allowance which he did for the total incapacity of the respondent for work of any kind. The second relates to the allowance which the judge made for future loss of earning capacity of a diminished quantity after the termination of the initial period of total incapacity. In short, the respondent was twenty five years at the date of the accident. She was thirty five years at the date of trial. Judge Mahoney allowed her damages on the basis that she would be totally unfit for work for approximately ten years, taking her to age forty five. He then allowed here damages on the basis of a further fifteen years, in which he provided the damages on a footing of partial incapacity for work. For the first period his Honour allowed a sum of $543, being the then current average weekly wage at the time of trial for a competent prison WHEW SOUTH WALES INSURANCE MINISTERIAL CORPORATION v RAYNER (Kirby PB officer. For the second period he allowed a sum of $250 a week, being his estimate of the loss suffered by the respondent during that further period of fifteen ears. * Suggested over compensation for initial economic loss rejected I turn to the first essential subject matter of complaint, which is to be found in grounds 3, 5 and 6 of the amended grounds of appeal. The source of the complaint is to be found in the judge's reasons, in which he recorded the following conclusion: Accordingly, I find that the plaintiff sustained a severe soft tissue assault to her spine, more particularly to the lower spine, in the accident, the severity of which can be comprehended by a consideration of the symptomatology which I have sought to sketch out during the earlier parts of this judgment. This finding meets specialist evidentiary support in the expressions of opinion by Drs Sekel and Evans. If ind that the plaintiff's personality was such that she was a candidate for a very marked psychological reaction to the substantial insult to her psyche, involving as it did an awareness of extreme vulnerability in her role of sole provider and economic supporter of her young son. I find, relying on the evidence from Dr Wilson, which was unchallenged by any other evidence in that speciality to the contrary, that she did in fact suffer from a reaction and that she continues so to be affected and will continue so to be for a considerable period of time. I only saw her in the witness box for a relatively brief period of time. That, coupled with her stance, her posture, her movements about the court and her frequent outbursts of tears in the witness box I regard as being genuine - even though they may lack the justification of any identifiable physical pathology. They were so gross that I doubt that she could consciously and of her own volition have replicated them on four different hearing days spread over almost two years. " As a result of these conclusions, the judge proceeded to make the allowance which he did in these terms: As one component of the global verdict, I propose to allow ten years purchase based on the figure of $14 per week. Actuarially discounted at 5 per cent, this will have a present value calculated thus: $14 x $412.90 = $5,708.60. This sum will be rounded up to $6,000.00 and included in the verdict to take account of future medication, servicing of the TENS machine and the like. Exhibit C reveals that the current average weekly wage for a comparable employee is $543.00 net. Iam satisfied on the evidence that in order fairly and fully to compensate the plaintiff she must receive the present value of such a wage for a period of 10 years and for the period thereafter viz from age 45 to age 60 she should have included in her verdict a sum which will represent the present value of a weekly loss of $250.00 over that 15 year period. The respective equations for those calculations are: $543.00 x $412.90 $ 224,204.70 ($250.00 x $555.00) 0.614 $ 85.192.50 $ 309,397.20" The respondent says that, in allowing for a period of total incapacity of ten years, the judge overlooked the evidence of Dr Wilson, upon whom the respondent principally relied, in respect of the respondent's prognosis. He thereby over compensated the respondent, notwithstanding the evidence of Dr Wilson. 4 UNREPORTED JUDGMENTS Dr Frances Wilson gave this evidence: Q. Does she regard herself whether it is the fact or not, as having been rendered useless? A. Yes, she regards herself as permanently damaged. Q. Do you know of any way that image can be turned around, I know you have been trying to? A: Yes. I think it can be turned around. It would be a very long process. I think it could be turned around if her physical condition improves and if her, if she gained some success, particularly in regard to work it could be turned around but it would be a very long haul. Q. What? A. We are talking about years, five years, something like that. " In essence, the appellant says that the correct approach, grounded in the evidence, was for the judge to have allowed for a period of total incapacity for work of no more than five years from the date of the trial. In providing for compensation for ten years, he went beyond the evidence of Dr Wilson and thus over compensated the respondent. I can understand this complaint. However, in my view, it involves an excessively mathematical and precise approach to the task of evaluating the proper damages for this respondent. The judge was obliged to make allowance not only for probabilities, but for possibilities. See Malec v JC Hutton Pty Ltd (1990) 64 ALJR 316 (HC) at 318. He had an advantage of seeing this respondent give her evidence. He referred to the impression which she had made upon him. Clearly he took that impression into account in his assessment and calculation. This Court must defer, consistent with authority, to the impression which the primary judge derived from the advantage which he enjoyed and which we do not. His Honour was also clearly affected by the good pre injury work history of the respondent as a prison officer. Indeed, immediately following the subject accident, and despite medical certification and advice to the contrary, the respondent returned to work, only to collapse in the course of performing her duties. This evidence showed her keen commitment to her duties before the accident supervened. Assessing the impact of psychiatric disabilities upon a person always invokes a matter of judgment. It is not susceptible to mathematical precision. Judge Mahoney was entitled to take into account, in judging the future impact of psychiatric disability on this respondent, the impression which he derived of her, against the background of the evidence that was available to him. Dr Wilson's statement upon which the appellant so strongly relied in the evidence, and which I have extracted, should be taken in isolation. It is to be read against the background of her other comments. In a written report which is reproduced in the evidence, Dr Wilson reported her general impression that the prognosis in the case of the respondent was "very poor". There was also other evidence which indicated that this represented the overall opinion of Dr Wilson. For example, she said in oral evidence: "Q. Do you agree with me that the resolution of this case inasmuch as it will relieve the financial burden of what she spoke to his Honour about would be a significant factor in alleviating her present depressive state? A. I think she will be a little better after this case is resolved, but I don't think she would be significantly better. Q. Am I correct in thinking you are saying by reason of her self image and the effect that the physical disabilities have on it that so long as that persists you would not expect her to be able to rehabilitate her syndrome? WHEW SOUTH WALES INSURANCE MINISTERIAL CORPORATION v RAYNER (Kirby PB A. Yes. Q. If that is permanent unfortunately the psychiatric condition is permanent also? A. I would think so. Q. Doctor, in respect of the rehabilitation question, if the opinion of the rehabilitation psychologist were that it was extremely unlikely that Miss Rayner would obtain sustainable employment, may we take it that would reinforce your view that her condition is more or less permanent. A. Yes, it certainly would. " One other consideration must be kept in mind. As I have already said, Judge Mahoney allowed a discount of 25 per cent for contingencies. It would have been an appropriate consideration for him to take into account, in providing such a relatively high discount that, in the realm of psychiatric disorders, the future was even more difficult to predict in the case of this respondent than the realm of frank physical injury. It is true, as the appellant says, that the principal disability of the respondent at the date of trial, and in the future, would seem to be psychiatric, rather than physical, in origin. But that fact does not make the disabilities any less real to her. Like Judge Mahoney, I would infer that the respondent was the subject of discreet investigation by the appellant. Yet nothing was put at the trial which cast any doubt upon her honesty. Nothing raised a doubt upon the approach which the judge took, and expressed in his findings, concerning his impression of the respondent's disabilities. Accordingly, I am not able to say, in respect of the allowance which his Honour made for the period of ten years on the footing of total incapacity, that his Honour erred. This Court only has authority to interfere in the decision of the trial judge if error has been shown. In my opinion, it has not been shown in respect of this complaint. The reasoning which I have just set out applies equally to the complaint made in respect of ground 5 of the amended grounds of appeal. This was that his Honour failed to take into account the fact that, at the conclusion of this litigation, the respondent would benefit from improvement in her psychiatric condition. It was not submitted that this, in itself, demonstrated error. However, it was said that this explained the failure of the judge to approach correctly the allowance to be made for a period of total and partial incapacity for work after the trial. It is true that some of the evidence which the respondent herself gave suggested that she was hopeful that she might improve in the future. Dr Clark also gave evidence that, in his opinion, the prognosis in her case would improve once she had "settled the case", ie after the litigation was concluded. On the other hand, Dr Wilson expressed the view that she did not think that the respondent would be significantly better in the future. It was open to Judge Mahoney to accept, in this respect, the approach of Dr Wilson, even though it was more pessimistic. I see no error in his doing so. In particular, there is no error, because his Honour allowed the discount of 25 per cent for future contingencies. These included the contingency that the respondent might indeed improve significantly after the litigation. Suggested over compensation for long term disability rejected I turn now to the second essential ground of complaint. This was that there was no evidentiary basis for future loss of earning capacity as allowed for the years of the 6 UNREPORTED JUDGMENTS respondent's life from age forty five to age sixty. His Honour allowed her damages at the rate of $250 per week during this period. But for the injury, it appears that the respondent would have been earning, at the date of trial, a sum of approximately $543 a week as a full time employed prison officer. His Honour gave the respondent something significantly less than half of this sum. He does not explain in his reasons how precisely he arrived at the round figure of $250 a week. This occasioned the criticism which the appellant puts forward in the appeal. It was suggested that, because the underlying physical conditions of the respondent were not serious, the amount that was allowed under this head not only lacked an evidentiary basis, but was plainly excessive in all the circumstances. Again I can understand this complaint. Perhaps if I were approaching the matter myself at first instance I would have lent an ear to it. But this Court's jurisdiction is limited to the correction of error. The judge had to do the best he could on the basis of the material that was before him. He knew that the respondent had performed bar work, worked as a shop assistant and as a security guard. But he would also be deemed to know the difficulty, in current and foreseeable economic circumstances, in securing work of this kind. Particularly, he would take into account, sensibly and practically, the difficulty that a woman of forty five years would have in the general labour market in securing work of any kind, given an effective period of fifteen years of only scattered and intermittent employment. The respondent had chronic low back pain. According to her principal doctor, Dr Wilson, her prognosis was poor. She suffered profound depression. She had low self esteem. In these circumstances, to allow her something less than the 50 per cent of her "but for' injury earnings, and then to discount that sum by a further figure of 25 per cent for contingencies, does not, to my mind, permit this Court to set aside the judge's judgment or to enter or require a different judgment in lieu. Order: Appeal dismissed. The result is that the two principal arguments which have been put before this Court fail. I would propose that the appeal be dismissed with costs. I would reserve the issue of the title of the appellant. Mahoney JA I agree with the judgment of Mr Justice Kirby. Notwithstanding the arguments that were given, I do not think that the appellant should succeed on either of the grounds argued. I agree with the orders proposed. Cripps JA I agree. Kirby P: The appeal is, therefore, dismissed. The appellant must pay the respondent's costs. The Court gives leave to the appellant to change its name in the title. The record will be changed to substitute for the "Government Insurance Office of New South Wales" the "New South Wales Insurance Ministerial Corporation". The orders are as I have mentioned. Appeal dismissed with costs. Counsel for the Appellant: AP Quinlivan Solicitors for the Appellant: Government Insurance Office of New South Wales Counsel for the Respondent: BMJ Toomey QC / FV Fletcher WHEW SOUTH WALES INSURANCE MINISTERIAL CORPORATION v RAYNER (Cripps JA) Solicitors for the Respondent: Taylor and Scott