G AND N ROSSO CONSTRUCTIONS PTY LTD v CRNJAC SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, HANDLEY and SHELLER JJA 17-18 August 1994, 18 August 1994 [1994] NSWCA 102 NEGLIGENCE BY EMPLOYER — PAST AND FUTURE ECONOMIC LOSS — INTEREST ON DAMAGES FOR PAST ECONOMIC LOSS NEGLIGENCE BY EMPLOYER — acceptance of worker's evidence in part — reasonable to discount past economic loss — future economic loss — calculation of interest on damages for past economic loss. The respondent worker was injured while employed by the appellant when timber upon which he was walking gave way. He brought an action in negligence against the appellant. The appeal was limited to the amount of damages. Held: APPEAL - (1) In view of an the evidence the trial judge did not err in accepting the worker's evidence in part and in making the factual findings which he did. (2) On the evidence, it was open to the trial judge to discount past economic loss for the possibility that the uninjured plaintiff would not have been working throughout the relevant period, and the discount of 20% was not unreasonable. (3) There should be no interference with the factual finding of the trial judge which led to the award of damages for future economic loss. CROSS-APPEAL - (1) The submission that there was no reason to discount past economic loss fails. (2) Interest on damages for post economic loss should be calculated at half the applicable rate for the period during which the loss is accruing and at the full rate once the loss has accrued. (3) It is not appropriate that the respondent should have any costs on the cross-appeal. ORDERS 1. Appeal dismissed with costs. 2. Cross appeal allowed. 3. Judgment below set aside for the purpose only of allowing additional interest to be incorporated in it. 4. Judgment in the amount of $109,471.02 to date from 17 September 1991. 5. No order as to costs of the cross-appeal. 6. Any stay hereby dissolved. Priestley JA Mr S Crnjac was working for GandN Rosso Constructions Pty Ltd as a carpenter on 24 March 1986. He was working at a height of two and a half metres or more above the ground when timber on which he was walking gave way and he fen into a trench below. He was injured by the fan and went off work until October 1987. He was voluntarily paid Workers Compensation. In 1986 he commenced Common Law proceedings as plaintiff against his employer as defendant, in this Court. The trial of the plaintiff's claims began before Abadee J and a jury on 11 September 1991. The defendant contested both liability and damages. On 16 September 1991 the jury was discharged and the hearing was completed and the proceedings decided by Abadee J sitting alone. In a judgment delivered on 17 September 1991 Abadee J found for the plaintiff and assessed his damages at $131,054.66. From this Workers Compensation payments of $25,451.54 had to be deducted so that formal judgment was entered 2 UNREPORTED JUDGMENTS for a net figure: this figure was $105,603.02. The defendant appealed to this Court against the judgment and the plaintiff cross appealed. In its appeal the defendant did not challenge Abadee J's finding of negligence against it so I need say nothing more about the circumstances of the plaintiff's accident. The matters raised by the parties on appeal concerned the amount of damages assessed by the trial Judge. The defendant said that on the Judge's findings the award should have been much less. The plaintiff, when the appeal and cross appeal began, was contending that it should have been more. These conflicting views of the effect of his Honour's findings stem basically from the fact that although Abadee J accepted the plaintiffs evidence in part he also strongly expressed the view that the plaintiffs account of his injuries and incapacity for work was from some date after the accident grossly exaggerated. Stated very generally the difference between the parties in this appeal has been about the proper effect of this view of his Honour upon his assessment of damages. On the question of the plaintifFs medical condition after the accident there was conflicting evidence, that of the plaintiff himself and three medical practitioners called in his case, and that of two medical practitioners called by the defendant. After hearing this evidence and after seeing a video film of the plaintiff, which played a part in his Honour's reaching the conclusions he did about deliberate and gross exaggeration by the plaintiff, the trial Judge made the following factual findings: 1. The plaintiff was totally incapacitated for work from 24 March 1986 until October 1987 because of ligamentous strain to his neck and lumbar region. 2. From October 1987 to the end of 1989 the plaintiff was not, as he claimed, virtually an invalid suffering from severe chronic pain and restriction of movement, but there was some fluctuating symptomatology arising from the cervical and back region which led to his submitting to traction in 1988 under general anaesthetic and in late 1989 in Guildford Hospital. Apart from an occasional flare up in this period the plaintiff was only partially and not to any great extent incapacitated. 3. From the beginning of 1990 the plaintiff had no pain or discomfort of a disabling or incapacitating nature. 4. There was some chance, not high, that symptoms might recur in the future. His Honour then considered the plaintiffs pre-accident work history, the economic circumstances relating to type of work, in particular the effect the recession in the building industry may have had on him had he not been injured, the effect on his life of the accident generally, and assessed his damages as follows: (a) General Damages - past $20,000.00 (b) - future $5,000.00 (c) Interest thereon $2,200.00 (d) Out of pocket expenses $9,761.49 (e) Past economic loss October 1987 $34,144.00 (f) Past economic loss January 1988-1990 $26,000.00 (g) Loss of future earning capacity $15,000.00 (h) Interest on economic loss to October 1987 $8,029.00 URJ —GAND N ROSSO CONSTRUCTIONS PTY LTD v CRNJAC (Priestley JA) 3 (i) Interest to trial on economic loss to $ 8,287.00 January 1990 Gj) Fox v Wood component $864.17 TOTAL OF DAMAGES $129,285.6 VERDICT $131.054.6 The defendant submits that an the basic figures in the above list should be drastically reduced. It is submitted the trial Judge erred in conclusions | to 4 earlier stated which he drew from his own primary findings of fact. Here the defendant's submission placed emphasis on the findings of the trial Judge concerning exaggeration and a number of findings stated at intervals in his reasons reflecting severely on the plaintiffs credibility generally, further, on the trial Judge's acceptance of Dr Roebuck and Professor Pheils, and further, on what was said to be the rejection of Dr Maniam's evidence. Dr Maniam was the medical witness whose evidence gave greatest support to the plaintiff's case. He had been treating the plaintiff from July 1986. It seems to me that if the trial Judge had accepted Dr Maniam's evidence in full then not only would the award of damages he made be justified but the plaintiffs cross appeal would probably be upheld. The defendant is right in saying there is a passage in the trial Judge's reasons, at 11, where he seems not to accept some direct evidence of Dr Maniam and there is no doubt that in many respects, directly relevant to the issues his Honour had to decide, Dr Maniam's evidence was in conflict with that of Dr Roebuck and Professor Pheils for the period before 1990. It is on this basis that it is submitted for the defendant that. "The only irresistible conclusion on the evidence and consequent upon his Honour's findings of the respondent's untruthfulness and the rejection of Dr Jakovac's conclusions, was that the medical opinions of the appellant's doctors, Professor Pheils and Dr Roebuck, should prevail over those of Dr Maniam'". This is the central submission in the defendant's appeal. I have already indicated that it has some basis but in my opinion it fails. It seems to me plain that his Honour, faced with difficult conflicts of evidence before him, did not adopt what must have been a tempting and easy solution to label one side an black and the other an white, but instead took the more difficult and more responsible course of trying to sort out the underlying truths or probabilities from the evidence before him in a realistic way. What he had before him was a plaintiff who did have a fan, who had had a bad back, and who he was convinced was now and had for some time been grossly exaggerating his symptoms and his incapacity for work. With these elements of difficulty before him it seems to me that although he did not accept a good deal of what the plaintiff said he did not reject the plaintiff totally. For one thing he accepted what the plaintiff said about liability. For the defendant this was acknowledged, but the point was made that in the dispute about liability there was evidence independent of the plaintiff which could be regarded as reliable, so that notwithstanding the Judge's general doubts about his credibility, the finding which involved acceptance of the plaintiff's evidence did not indicate any unreserved acceptance even of that part of the plaintiffs evidence. Or to put that slightly more accurately, the fact that the Judge accepted one part of the plaintiffs evidence which was supported by other reliable evidence did not mean that his Honour did not entertain doubt about anything which the plaintiff said which had no support. 4 UNREPORTED JUDGMENTS Another feature of the plaintiff's evidence which the Judge must have accepted notwithstanding the legitimate kind of comment made by counsel for the defendant about such acceptance that I have just mentioned, was some of the plaintiff's evidence about the effect on him of the accident. Part of the difficulty in the case is caused by the undoubted fact that there was an accident and there was some injury to the plaintiff. Some part of his evidence had to be accepted. His Honour did not spell out the method that he used in separating that part of the plaintiff's evidence which he believed from that part which he did not accept, but given the premise that he did accept part of the plaintiffs evidence, given the further premise, which seems to me to be correct, that he did accept Dr Maniam's evidence in general, at least up to the period ending the beginning of 1990, it seems to me to be legitimate to infer from the four main factual findings of his Honour which I earlier summarised, that he also accepted the plaintiff in regard to his account of his disability up to 31 December 187 and accepted, although in a highly qualified way, the outline put forward by the plaintiff of his position up to the end of 1989. The only aspect of Dr Maniam's evidence which his Honour explicitly did not accept and which related to a strictly factual matter was the evidence given by that doctor concerning spasm in the plaintiffs back early in 1990. (It is also plain that for the period beginning in 1990, his Honour generally preferred the opinion evidence of the defendant's doctor to that of Dr Maniam.) For the period before 1990 it seems to me clear that his Honour accepted, although as he indicated in various places with some hesitation, Dr Maniam's view that the plaintiff was suffering in the period up to the end of 1989 from symptoms which made him partially incapacitated. There are two matters which seem to me both to support and to justify this view of what his Honour did. The first is the traction which the plaintiff underwent in 1988 and 1989 which I have already mentioned. The second concerns some evidence given by Dr Maniam, which does not seem to have been challenged at the trial, when he said that in the course of the procedure, which I have earlier referred to as traction and which Dr Maniam referred to as having taken place on 23 August 1988 and which he described as manipulation of the plaintiffs neck and back under anaesthetic, the lower back had exhibited restricted movements. He said the explanation for this was some problem existing in the spine and which it would not be possible for a person deliberately simulating symptoms to produce when under anaesthetic. This is, as it seems to me, evidence which could be regarded as objective supporting the view which the Judge arrived at in respect of the period 1988/1989. When the evidence is looked at in this way I do not think that the defendant has made out its basic submission which, to restate it in a slightly different way from the one I used before, was that if you leave the plaintiff's evidence out of account an he was left with at the trial was Dr Maniam; Dr Maniam was not accepted by the trial Judge as against the defendant's doctors; therefore, there was no medical evidence to support his Honour's findings of incapacity and his Honour, therefore, was wrong not to have said that the period in which the plaintiff no longer suffered any disability so far as work was concerned had ended long before the trial Judge found. As I have indicated the basic premises of that argument are not made out once it is recognised that the trial Judge did accept Dr Maniam's evidence in sufficient part for the period up to the end of 1989 to justify URJ —GAND N ROSSO CONSTRUCTIONS PTY LTD v CRNJAC (Priestley JA) 5 the conclusions at which he arrived. When taken together with the other matters Ihave mentioned, that conclusion really answers the main part of the defendant's appeal. There were some other matters which were raised. The item which is labelled (e) in the list set out above resulting in a figure of $34,144, was arrived at by his Honour by calculating what the plaintiff would have earned in the period from the accident to October 1987 and making a discount of 20 per cent from it on the basis that he thought that was a proper allowance for the possibility that uninjured the plaintiff would not have been working throughout the period from March 1986 to 1987. The defendant submitted that his Honour was not only right in making a discount but on the evidence he should have made a greater discount. In my opinion on the evidence available to the Judge it was open to him to make the discount. It was a matter of judgment for him how great the discount should be and on the evidence before him I do not think this Court could say that the amount of the discount was unreasonable. The kind of material the Judge had before him showed that the plaintiff was a worker who moved from job to job and took time off between jobs when it suited him to do so. There is no criticism of him for doing this but it was a fact emerging from the material before the Court and it was something the Judge was entitled to take into account along with his view of the plaintiff's credibility, which it is obvious from the tenor of his reasons throughout was not a favourable one. I do not think the Court should interfere with that item of the trial Judge's assessment. A further figure which was criticised by the defendant was that appearing next to item (g) in the above list, an amount of $15,000 for loss of future earning capacity. This figure was really a putting into financial terms of the main factual finding 4, which I cite above. That is, that in the Judge's view there was a chance that there would be a recurrence of the plaintiffs symptoms after trial. He did not think there was a great chance of it but thought that some amount should be awarded him for the possibility of that future loss in earning capacity. Given that I do not think the Court should interfere with that fourth factual finding generally, for the reasons I have already given, I do not think we should accede to the defendant's submissions in regard to that item. The conclusion I reach therefore is that the defendant's appeal fails. In regard to the plaintiff's cross appeal, although when the proceedings began yesterday the plaintiff's counsel was still indicating that the plaintiff would seek a substantial increase in the judgment amount, by the time the argument had concluded the position had changed. Counsel this morning informed us that there were only two respects in which the plaintiff now sought to have the judgment altered. One related to the item (e) for past economic loss to October 1987, which I have already mentioned and which was challenged by the defendant. The plaintiff also criticised the discount but this time not because it was too small but because it was made at all. The submission was that on the evidence before his Honour there simply was no reason for making such a discount. For the reasons I gave in regard to the defendant's submission I think there was proper material and justification for the trial Judge doing what he did. So this ground of cross appeal in my opinion fails. The other matter which was raised concerns item (i) in the above list. His Honour arrived at a figure of $8,287 for interest to the date of trial on economic loss from 1 January 1988 to January 1990. The plaintiff submitted that using the 6 UNREPORTED JUDGMENTS figures and method which his Honour had evidently used in arriving at the figure of $8,287, what he had done was to underestimate the interest from the period from 1 January 1990 to the date of trial, because he had calculated the interest for the whole period from October 1987 to trial, including the period from January 1990 to trial during which the judge had held there was no economic loss, at the rate of eight and a half per cent. What was contended was that he should have calculated the interest from October 1987 to 1 January 1990 at eight and a half per cent, which would bring out a figure of $4,420 and interest from 1 January to date of judgment at the full 17 per cent rate, which his Honour was taking as the applicable interest rate, bringing out a figure for that one and three quarter years of $7,735. The rationale for this was said to be that on his Honour's own findings the $26,000 for past wage loss had an been incurred by 1 January 1990. The point seems to me to be a good one; the application of the eight and a half per cent rate should only be to the period during which the economic loss was accruing, that is from | January 1988 to 1 January 1990. The conventional way of working that out is to take half the applicable interest rate for the period during which the loss is accruing. Once the loss has accrued there is no reason why the full 17 per cent interest rate should not be applied to the relevant period which, in this case, was from 1 January 1990 to date of judgment. That means that for the $8,287 figure which his Honour used in item (i) there should be substituted the sum of the two figures which I have mentioned, which is $12,155. The judgment below will need to be altered to accommodate that change. There was another matter relating to interest which was raised by counsel for the defendant in opening his case and that was that the total of items (a) to (j) which his Honour had specifically assessed in arriving at a damages figure was $129,285.66, whereas he actually used a total figure later of $131,054.66. At first counsel for the defendant raised the question whether this was not an error on the part of the trial Judge. However, counsel for the plaintiff pointed out that the difference, which is a figure of $1,769, represents eight and a half per cent per annum for the period between 24 March 1986 and 31 December 1987 on the difference between $34,144, which was the plaintiffs wage loss to 31 December 1987, and $22,102, which was the Workers Compensation amount the plaintiff had received in that period. It thus seemed indisputable that the trial Judge must have used that method, which would have been a perfectly proper method, to calculate the interest for that period, which again it was proper for him to take into account. Once these calculations had been made counsel for the defendant very properly indicated that he recognised that the explanation proffered by counsel for the plaintiff must be the correct one and that there had been no mistake by the trial Judge in his original total of $131,054.66. On the cross appeal, therefore, the plaintiff succeeds to the extent that the judgment figure entered by his Honour must be increased by the difference between $12,155 and $8,287, otherwise his Honour's judgment, in my opinion, should stand. On the question of costs, since the defendant's appeal has failed, then that appeal should be dismissed with costs. In regard to the plaintiff's cross appeal the matter on which he succeeded was a comparatively minor one which could wen have been cured at the trial had it be raised there. It does not seem appropriate, therefore, that the plaintiff should have any costs on the cross appeal. Plaintiffs counsel did not seek any in the event that the Court arrived at the decision which, in my opinion, it should arrive at, and counsel for the defendant likewise URJ G AND N ROSSO CONSTRUCTIONS PTY LTD v CRNJAC (Sheller JA) 7 submitted that in the event the Court reaches the conclusion which I think it should, then the appropriate order for costs of the cross appeal would be that there should be no order for costs. I would therefore propose orders in accordance with the opinion I have given. Handley JA I agree. Sheller JA I also agree. Priestley JA: Accordingly the Court's orders are, the appeal is dismissed with costs. The cross appeal is allowed and the judgment below set aside for the purpose only of allowing the additional interest earlier referred to to be incorporated in it. That produces the result that the judgment will be for an amount of $109,471.02 dating from the date his Honour pronounced it, 17 September 1991. In regard to the cross appeal there is no order as to costs. To the extent necessary any stay is hereby dissolved. 1. Appeal dismissed with costs. 2. Cross appeal allowed. 3. Judgment below set aside for the purpose only of allowing additional interest to be incorporated in it. 4. Judgment in the amount of $109,471.02 to date from 17 September 1991. 5. No order as to costs of the cross-appeal. 6. Any stay hereby dissolved. Counsel for the Appellant: RA VINCENT Instructed by: PW TURK AND ASSOCIATES Counsel for the Respondent: CR HOEBEN Instructed by: McLAUGHLIN AND RIORDAN