FRANCOIF v TAYLOR SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, MEAGHER and HANDLEY JJA 12 and 13 October 1994, 13 October 1994 [1994] NSWCA 99 DAMAGES — quantum — economic loss — motor vehicle accident — respondent unemployed at time of accident — accident deprived him of substantial chance of earning significant income — whether damages for past and future economic loss excessive — held: They were — no question of principle. MOTOR ACCIDENTS ACT — Transcover benefits received by respondent — whether under s147 of the Motor Accidents Act such payments are a partial defence — held: They are not — s147 merely confers a right to deduct those payments when satisfying the judgment. District Court Act 1973, s44(2) and s(3) Motor Accidents Act 1988, s147 Workers'Compensation Act 1926, s63(5) ORDERS (1) Appeal allowed. (2) Set aside the judgment of Barbour DCJ except as to liability and costs. (3) Reduce the award for past and future economic loss in the manner proposed. (4) Direct that the parties recalculate the award for interest and bring in short minutes to reflect the revised judgment. (5) The appellant shoulg have the costs of the appeal and the respondent should have a certificate under the Suitors Fund Act. Priestley JA I will ask Handley JA to give his reasons first in this matter. Handley JA This is an appeal by the defendant from a decision of Judge Barbour QC delivered on 15 July 1993. The proceedings before his Honour arose out of a motor vehicle accident which occurred on 22 July 1987 and the case fell to be decided under the retrospective provisions of the Motor Accidents Act 1988. At the time he was injured the plaintiff was unemployed having ceased employment with the Spastic Centre some year or so before. He had a history of prior injury which meant that he had been working as a skilled tradesman at the Spastic Centre after November 1985 on a regular part time basis for only five hours a day. In July 1986 the Spastic Centre required him to resume full time work, presumably on the basis of an eight-hour day. The plaintiff was unable to undertake work at this level and his employment with the Spastic Centre came to an end. Thereafter, despite efforts to find work, the plaintiff was unable to do so although on the day he was injured he had an appointment for a job interview. The judge awarded the plaintiff a total of $161,448.72. The only amounts in dispute are the awards for past and future economic loss in the sums of $74,873 and $40,681 respectively. Because of the views that I have formed on the course that this court should take with regard to the amounts awarded by his Honour for past and future economic loss, it is not necessary to consider the appellant's challenge to his Honour's decision under s44(3) of the District Court Act to grant 2 UNREPORTED JUDGMENTS the plaintiff leave to amend to increase the amount claimed in the statement of claim above $100,000 and I will therefore express no view on that question. His Honour based his awards for economic loss on the income the plaintiff had been earning for a five-hour day five days a week at the Spastic Centre between November 1985 and July 1986. However, with all respect to his Honour's views, the factual substratum for these awards was not soundly based. Not only had the particular job disappeared some twelve months before the accident, but it was also clear beyond argument that the plaintiff had not been gainfully employed in the following twelve months. The plaintiff's wife had commenced to operate a coffee shop at Dee Why near their home in January 1986 at a time when the plaintiff was still employed at the Spastic Centre. Following his termination there the plaintiff occupied himself in assisting his wife at her coffee shop. However, he was unable to wait on tables and his useful contribution in the operation of the shop was limited to operating the espresso coffee machine. However some three weeks before the accident, the plaintiff had ceased to help at the coffee shop because of the increasing difficulties he was experiencing with his leg. Evidence in the medical reports of Dr Carr of 18 January 1988 and Dr Ruff of 13 April 1988 establish that the plaintiff's medical condition particularly in his left leg and knee deteriorated during the twelve months after he had left the Spastic Centre and this was an important factor in his decision to cease working at the coffee shop. In the circumstances I am satisfied that his Honour's decision to award the plaintiff past and future economic loss on the basis of his employment history and wage levels at the Spastic Centre between November 1985 and July 1986 was erroneous and that this court is entitled and bound to intervene and set aside the awards in question. There is no difficulty in the court reassessing as no question of credibility is involved. The plaintiff is entitled on a reassessment to a significant award for past and future economic loss. He was highly skilled and was clearly motivated to seek and obtain further employment. His compensation for past and future economic loss falls to be assessed on the basis that the injuries sustained in the motor vehicle accident on 22 July 1987 have deprived him totally of the substantial chances which he then enjoyed of continuing to earn significant income in the remaining years of his working life. In the circumstances I think that the court should accept the submission of Mr Russell for the appellant that the appropriate course is to halve the awards for economic loss made by his Honour. I therefore propose that the award for past economic loss should be reduced to $37,437 and the award for future economic loss should be reduced to $20,341. This has the effect of reducing the awards for past and future economic loss to $57,778. There will have to be a consequential adjustment to interest in respect of the component for past economic loss. The result of the variations that I have proposed is that there is no longer any need to consider the question of amending the amount claimed in the statement of claim for damages as s44(2) of the District Court Act provides that an award for pre-judgment interest may be added to any amount otherwise awarded within the jurisdictional limit of the court. The final question arises under s147 of the Motor Accidents Act. This provides: "The value of any benefit provided to or on behalf of a person under the 1987 Act in relation to an intermediate transport accident shall be deducted from the amount of any damages payable to the person in accordance with this Act in URJ FRANCOIF v TAYLOR (Meagher JA) 3 relation to the accident, but no person shall, by the operation of this Part, be liable to repay any money paid to or on behalf of the person under the 1987 Act." There is no dispute in this case that the plaintiff had received benefits under the Transcover legislation prior to the commencement of the Motor Accidents Act totalling $9,352.05. The defendant did not submit that the receipt of these amounts should be taken into account in calculating interest and, in the circumstances, I would ignore their receipt for that purpose. However, both counsel have addressed the court on the question whether s147 provides a defence or merely confers a right to make the deduction in question when satisfying the judgment. There was an established legislative precedent in s63(5) of the Workers Compensation Act 1926 which made workers' compensation payments a defence in part to a worker's claim to damages. Parliament used significantly different language which in my opinion reflects an intention that Transcover payments should not be a statutory defence. Parliament must have deliberately decided not to follow the well-known legislative precedent available in s63(5) of the Workers Compensation Act. In my opinion therefore the Transcover payments should not be taken into account in arriving at the Court's judgment in cases where such payments have been made. This, of course, does not prejudice the defendant's right to deduct those payments when satisfying the judgment. I would therefore propose that the following orders be made: (1) Appeal allowed. (2) Set aside the judgment of Barbour DCJ except as to liability and costs. (3) Reduce the award for past and future economic loss in the manner proposed. (4) Direct that the parties recalculate the award for interest and bring in short minutes to reflect the revised judgment. (5) The appellant should have the costs of the appeal and the respondent should have a certificate under the Suitors Fund Act. Priestley JA. I agree. Meagher JA I also agree. Priestley JA: The orders of the Court will be as proposed by Justice Handley. (1) Appeal allowed. (2) Set aside the judgment of Barbour DCJ except as to liability and costs. (3) Reduce the award for past and future economic loss in the manner proposed. (4) Direct that the parties recalculate the award for interest and bring in short minutes to reflect the revised judgment. (5) The appellant shoulg have the costs of the appeal and the respondent should have a certificate under the Suitors Fund Act. Counsel for the appellant: D J RUSSELL Solicitors for the appellant GM MEADOWS Counsel for the respondent B MCMANAMEY Solicitors for the respondent TURNER FREEMAN