HEILER v NSW INSURANCE MINISTERIAL CORPORATION (formerly GIO) SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CLARKE, HANDLEY and SHELLER JJA 8 July 1994, 8 July 1994 [1994] NSWCA 126 DAMAGES: economic loss; second job cash in hand; evidence of earnings; conservative assessment The appellant was involved in a motor vehicle accident whilst returning home from work at Banjo's Restaurant, Lansvale. He challenged the Master's award at trial for both future and past economic loss, claiming that the Master had not taken into account the amounts which the appellant earned while working at the restaurant cash in hand. The Master based his assessment of economic loss upon the appellant's wage as a special meter reader for the Sydney County Council but found that whilst accepting he had worked there, there was insufficient evidence evidence to support the appellant's claim to have earned $250 per week from the restaurant. On appeal the Court found that there was sufficient evidence for the Master to have made a finding that the appellant had received $250 per week, but that that sum should be discounted to allow for taxation and any penalty which would be imposed if the matter came to the attention of the Commissioner of Taxation. Accordingly, the figure of $100 per week was added to the $200 per week allowed by the Master to determine what the future loss would be. Sheller JA This is an appeal from a judgment given by Master McLaughlin on 29 July 1992. The Master gave the plaintiff a verdict for $507,748. Components of that total were an amount of $108,955 for past economic loss and $130,679 for future economic loss and then an amount for interest. The appeal is limited to a challenge to the first two amounts, which the appellant plaintiff says should be higher for the reason that in both cases the Master, refused, except in a minimal way, to take into account amounts which the appellant said he had earned while working at Banjo's Restaurant, Lansvale. The claim arose out of a motor vehicle accident which occurred on 2 August 1986. At the time of the accident the plaintiff was thirty-two years of age. The trial proceeded as an assessment and in light of the way in which the appeal has been limited, it is unnecessary to say more than that the Master described the injuries suffered by the plaintiff in the accident. They were very severe injuries. The Master also described the considerable treatment which the plaintiff was, as a result, compelled to undergo. The Master found that the plaintiff would carry substantial continuing disabilities, essentially to his left leg and his left arm. These disabilities involved limitation in the use of those limbs. At the time of the accident the plaintiff was employed by the Sydney County Council as a special meter reader, earning $285.40 net a week. He had been employed by the Council since the age of twenty-one. The Master said that from August 1985 the plaintiff had also worked in a second job at Banjo's Restaurant, Lansvale, where he was employed as a kitchen hand and as a cold larder chef. 2 UNREPORTED JUDGMENTS The appellant had not worked since the date of the accident and was in receipt, as the Master said, of workers' compensation at the time of the trial in the amount of $248.20 gross a week because he suffered his injuries on his way home from work at Banjo's restaurant. The Master said that it was apparent that the plaintiff would never be able to resume his pre-accident employment, either as a special meter reader or as a kitchen hand and as a cold larder chef. The Master said that the greatest area of dispute between the parties related to past and future earning capacity. There was considerable cross examination of the plaintiff concerning his earnings from Banjo's Restaurant. The appellant said that he received payments in cash, supplementing those which appeared on a group certificate in respect of that work. That certificate disclosed that for the period from 4 May 1986 to 30 May 1986 the plaintiff received gross wages of $437.07. The Master said, "As I understand it the plaintiff was employed at the restaurant full-time during that period". The plaintiff gave evidence in the form of a statement in which he said that he started work at Banjo's Restaurant in August 1985, that his hours varied but he would usually work three or four nights a week as well as weekend work. At times he worked all Saturday and half Sunday. That was the usual position. The plaintiff also gave oral evidence about this. During his oral evidence he said that, at one point, he was starting at 7 o'clock in the morning and working until the restaurant closed, which seems to have been as late as 12 o'clock, midnight, or 1 o'clock in the morning. He was cross-examined about this and particularly about the limited period of work shown on the group certificate. This was the only documentary evidence produced by the plaintiff as to his work at Banjo's Restaurant. In the course of this cross-examination, the plaintiff said that he earned $250 a week in the restaurant. He said he used to earn that much in the restaurant or more. He said that the amount of $250 a week was "in the hand", meaning that it was received by him without deduction for taxation. When the Master came to deal with this part of the claim, he said that he was prepared to accept that the plaintiff did work part-time as a restaurant hand and cold larder chef at Banjo's restaurant. He referred to a letter which had been tendered in evidence from the restaurant as to the various rates of pay for a kitchen hand. Adopting those rates, a figure was reached, per week, far in excess of the $250 per week claimed. The Master then went on to say that he was satisfied that the plaintiff received earnings from Banjo's restaurant. The Master said, however: "T cannot be satisfied as to the amount of such earnings. In all these circumstances, in the total absence of any evidence as to how much the plaintiff was actually receiving from the restaurant, (apart from unsubstantiated versions by the plaintiff that he was receiving at least $250 a week (usually in cash) throughout the entire period), I do not see how I can properly include a component for past loss of earnings in excess of the amount in that regard disclosed by the plaintiff in his income tax return". By that the Master meant the amount in the group certificate which he took into account in assessing the claim for past economic loss. The Master's conclusion not to allow anything, beyond what was shown in the group certificate, for the appellant's claim for past economic loss was, with the greatest of respect, in my opinion, flawed. Clearly enough the Master was satisfied that the plaintiff was doing part-time work at Banjo's Restaurant. Clearly WAERJLER v NSW INSURANCE MINISTERIAL CORPORATION (formerly GIO) (Handley JAB enough he was satisfied that the plaintiff received earnings from that source. The Master then said that there was a total absence of any evidence as to how much the plaintiff was actually receiving. With respect, this is not correct. The plaintiff gave evidence as to what his earnings were. To some extent, this is supported by the workers' compensation award made in his favour arising out of travel to and from the restaurant on the night of the accident. On the basis that the Master's conclusion was flawed it is necessary to reconsider whether there was evidence on the basis of which a conclusion could be reached that the plaintiff was earning an amount claimed by him to be $250, approximately, per week from Banjo's restaurant. Having considered carefully the submissions that have been made in writing by both parties and having listened to the oral submissions, I am satisfied that it was open to the Master to make a finding that the appellant had received the amount of $250 per week. I am satisfied that the Master, in rejecting what he described as "unsubstantiated assertions" gave insufficient weight to the fact that some amount was being earned and it was sufficient to produce the workers' compensation payment that was made. Looking at the matter for myself, as I think I am entitled to do, I am satisfied that the plaintiff was earning the amount that he claimed per week. It is clear enough, however, that in assessing what the economic loss should be, this amount has to be discounted to take account of taxation and also to take account of penalty to be imposed if this matter came to the attention of the Commissioner of Taxation. It seems to me that an appropriate figure to allow is $100 a week over the period from the date of accident up to the date of trial. When the Master came to consider future economic loss he took as his starting point, $390 a week net, which was the amount that was being earned by the appellant as a special meter reader. He then projected that for twenty-one years, but discounted it back to a net loss of $200 a week. In making this assessment the Master gave no account, for the reasons that he had given for rejecting the plaintiffs evidence, of the $100 a week that he had been earning from Banjo's Restaurant. As I have said, I do not think that the reasons given by the Master for rejecting this evidence were sound. Accordingly, I think the same figure of $100 a week should be added to the $200 a week to determine what the future loss would be. Calculations have to be made to adjust both amounts; past economic loss and the interest thereon and also the amount of future economic loss. It seems to me to be appropriate that this be a matter to be dealt with by the parties and the amount of the verdict should be set forth in short minutes. It should be noted that the plaintiffs evidence was that he intended to remain doing restaurant work until aged 45, then cut it down and eventually give it away. For the reasons given, I would propose that the appeal be allowed, that the verdict of the Master be set aside and the verdict be adjusted in accordance with minutes to be brought in by the parties. The respondent to pay the costs of this appeal and also the costs of the trial. Clarke JA I agree. Handley JA I agree. I would just add that an injured plaintiff who seeks to recover earnings from a second job from which no tax was deducted, must establish that claim. In this case there was no corroboration from the employer or fellow workers and there was no documentary evidence produced from a bank or mortgagee. In the circumstances a plaintiff must expect the Court to assess the 4 UNREPORTED JUDGMENTS additional damages payable because of the loss Of earnings from the second job on the most conservative view consistent with reality. Iam not satisfied that any relevant inference can be drawn from the workers' compensation payments alone. However, I am prepared, on the available material, to accept that an additional sum of $100 a week net be added to the plaintiffs past and future economic loss. I agree with the orders proposed by Sheller JA. Clarke JA: Short minutes of order can be brought in at 9.30 am next Tuesday to Mr Justice Sheller's Chambers. The orders as agreed by the parties are as follows: 1. Judgment of Master McLaughlin of 29 September 1992, save as to liability, be set aside and in lieu thereof enter judgment for the appellant in the sum of $568,385.40. Judgment to take effect from 29 September 1992. 2. Respondent to pay the appellant's costs of the appeal. Respondent to have certificate under the Suitors Fund Act 1951 if so eligible. » Counsel for the appellant: S Norton Solicitor for the appellant: Bryden Doherty & Shead Counsel for the respondent: R C Tonner Solicitor for the Respondent: J M Crestani