DAWSON v HALL SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CLARKE, MEAGHER and HANDLEY JJA 2 and 3 November 1993, 29 July 1994 [1994] NSWCA 80 DAMAGES — interest — defendant submitted to condition of adjournment that interest on any judgment be backdated to 28 days after adjournment — order by trial judge pursuant to condition eighteen months later — whether correct — held: setting aside the order — (1) defendant's submission to the condition did not relieve trial judge from considering the appropriateness of the award of such interest; (2) the condition was oppressive as the usual order for pre-judgment interest would compensate the plaintiff for any financial prejudice due to the delay; (3) the effect of the order was to award interest in respect of future losses: Fire and All Risks Insurance v Callinan (1978) 140 CLR 427 applied; (4) the effect of the order was to award interest on past general damages contrary to MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657; (5) the award included interest upon interest contrary to s83A(2)(a) of the District Court Act 1973. PRACTICE AND PROCEDURE — District Court Rules Pt28 R9 — expert's report — whether expert's report obtained through subpoena at the trial and used in cross-examination must have been served in accordance with rule before being admissible in the case of the party issuing subpoena — held: report admissible although not served — (1) the rule has no application to a report by an expert coming to a party's knowledge for the first time when produced on subpoena at the trial; (2) the rule applies to reports in the possession of a party twenty eight days before trial which that party intends, or may wish, to tender in evidence; (3) even if the rule did apply, the case was one where the trial judge's discretion should have been exercised to admit the report. PRACTICE AND PROCEDURE — Damages List — whether case suitable for hearing in running list — held: (1) it was not — cases are fixed for hearing in the Damages List on express or implied assurances from solicitors and counsel that they can be conveniently and expeditiously disposed of in that List by ex tempore judgments. District Court Act 1973, s83A. District Court Rules 1973, Pt28 R9 Clarke JA I agree with Handley JA. Meagher JA I agree with Handley JA. Handley JA This is a defendant's appeal from a judgment of P Garling ADCJ in a motor vehicle case. The defendant admitted liability and the action proceeded as an assessment. The Judge awarded the plaintiff $724,134. The accident in question occurred on 19 October 1981 when the plaintiff was twenty one. He was the driver of a Toyota sedan which was stationary at lights in Pittwater Road, Collaroy when it was hit from behind with considerable force by the defendant's vehicle. Both vehicles had to be towed away. The plaintiff was driven home by his father and did not seek medical attention until the next day. 2 UNREPORTED JUDGMENTS He then presented to Dr Muston, his local doctor, with complaints of soreness in the neck, chest and right leg. On examination he had a full range of neck movement. Over the next twelve months he returned from time to time with similar complaints. The doctor found that neck movement was full but there was some discomfort at the limits of lateral flexion. The plaintiff's symptoms continued and in August 1982 he complained that his neck often grated, was still uncomfortable, and that when his neck troubled him he suffered migraine headaches. He said at the trial that his neck was still troubling him. The trial took place in February and March 1991 with judgment being delivered on 22 May 1992. The Judge found that the plaintiff was an honest witness and rejected the defendant's attacks on his credit. He accepted the plaintiff's evidence that he experienced pain in his neck and shoulders which radiated into the occipital region at the back of his head and brought on migraine headaches. He also found that the plaintiff was a gifted pianist but that his disabilities had substantially interfered with his earning capacity. He assessed the damages as follows: General damages $45,000 Interest on past general damages 3,600 Past lost earnings 180,000 Interest thereon 72,900 Future lost earning capacity 268,000 Out of pocket expenses 3,370 Total $672,870 In unusual circumstances which will be considered later in these reasons the Judge awarded further pre-judgment interest amounting to $151,564 and entered judgment for $724,134. Unfortunately this appeal was entered in the Damages List and was included in a running list of such appeals. This was a heavy complex case where many of the findings of the trial Judge were under challenge. There was never any prospect of the Court being in the position to give an ex tempore judgment. The Court fixes cases in the Damages List for hearing in the running list on express or implied assurances from solicitors and counsel that it can conveniently and expeditiously dispose of the cases. The case should never have been included in this list and the attempted short-cut has led to further delay. The case was hard fought at the trial. The principal issues which were reagitated on appeal were the plaintiffs claim that his post-accident migrainous headaches were a result of his whiplash injury and the Judge's awards for past and future economic loss and interest. The plaintiff, after the age of three, suffered from migraine headaches centred at the top of his head and the front of his forehead. The Judge said:- "Although his evidence was that the severe migraines had passed when he was a young child, it is apparent that he continued to get some headaches up until the time of the accident once every couple of months". He was satisfied however that these headaches were different from those which the plaintiff suffered after the accident. Subject to this the Judge found that the plaintiff had been healthy and physically fit. The Judge accepted the evidence of Dr Searle that the plaintiff, by engaging in piano playing, would experience pain and he was unfit for anything which required repeated or strenuous movements of the upper limbs. He also thought URJ DAWSON v HALL (Handley JA) 3 that the plaintiff's symptoms and disabilities had become permanent. He said that the worsening of the plaintiff's symptoms in the period from five to nine years after the accident was consistent with his injuries and that he did not expect that there would be any improvement. He said that the headaches of which the plaintiff was complaining after the accident were of a type typically associated with a neck injury. The Judge later referred to parts of the report of Dr Polgar, a neurologist, dated 2 September 1980 tendered by the defendant and said: "This demonstrates that prior to the accident the plaintiff was continuing to suffer from headaches in the locations described, provoked at times by tension and at other times apparently unprovoked. The existence of this material does not cause me to change my acceptance of the plaintiffs evidence that the headaches which he sustained after the accident were of a different type and in a different location to those which he sustained before. Nor does it cause me to alter my acceptance of the evidence of Dr Searle upon the subject of the headaches." The appellant challenged the Judge's findings concerning the plaintiffs headaches. It is clear that the Judge, with respect, misunderstood the plaintiff's evidence when he said that this was that his severe migraines had passed when he was "a young child". The plaintiff said in chief that they ceased when he was about twelve to thirteen. His findings that these earlier migraines were at the top of the head and the front of the forehead and that he continued to get "headaches... once every couple of months" until the accident were based on the plaintiffs evidence in chief. The trial Judge was not entitled to accept this evidence without qualification because objective evidence in the clinical notes of Dr Muston and the report of Dr Polgar, painted a very different picture. Dr Muston's notes record the following for 12 March 1980: "S. (symptoms) Recurrence of headaches all over head - constant every day. Had migraines as infant. On treatment till two years ago. Restarted Prominal, Dilantin few months ago and no improvement. No nausea, no visual disturbance except thinks 'black spot' in (left) eye at times. O. (On examination) Tense over back and neck... A. (Assessment?) Tension headaches from muscle tension back and neck probably psychosomatic. P. (Prescribe?) Relaxation exercises". On 29 August 1980 the following was recorded: "S. Recurrence headaches constant for 3/12 (3 months) with exacerbations. PH. (Perhaps) migraine. O. NAD (No abnormality detected). A? Tension headaches". The notes indicate that the plaintiff was then referred to Dr Polgar who saw the plaintiff on 2 September and reported to Dr Muston the same day. The defendant obtained knowledge of this report at the trial through a subpoena to Dr Muston. The defendant's counsel used the report in the cross-examination of the plaintiff and his witnesses. When defendant's counsel tendered the report in his own case, plaintiff's counsel objected because the report had not been served. This was a reference to DCR Pt28 R9. The Judge took the view that the rule applied and indicated that he would not relax its requirements. The absurdity of the situation was highlighted when Dr Muston's clinical notes from the same period, produced on the same subpoena, which had not been served either were admitted without objection. Dr Polgar's report was an "expert's report" within R9(2) and so were 4 UNREPORTED JUDGMENTS Dr Muston's notes because they constituted statements by an expert in writing which set out each doctor's opinion and the facts on which it was formed. Defendant's counsel then tendered two paragraphs of the report which contained a record of the plaintiff's complaints. Plaintiff's counsel did not object and the two paragraphs were admitted by consent. The objection by plaintiff's counsel was misconceived and the report did not fall within the rule. Although the rule applies to experts' reports which are otherwise admissible under s14CE of the Evidence Act as business records (R9(6)(b)), it did not apply to this report. "Experts' report" is defined in R9(2) as meaning: "... a statement by an expert in writing which sets out the expert's opinion and the facts on which the opinion is formed and which contains the substance of the expert's evidence WHICH THE PARTY SERVING THE STATEMENT INTENDS TO ADDUCE IN EVIDENCE IN CHIEF AT THE TRIAL." (emphasis supplied) The rule therefore applies to business records in the possession of a party twenty eight days before trial which that party intends, or may wish, to tender in evidence. Such a report must be served on the opposite party in due time. The tule has no application to a report by an expert which turns up on subpoena at the trial. Even if the rule did apply the Judge, in my opinion, should have exercised his discretion to admit the report. The case for such an exercise of discretion was, with respect, overwhelming. The report was not prepared for the purposes of litigation. It was written more than a year before the accident. The defendant did not know of its existence in time to serve it twenty eight days before the trial (R9(4)). At that time the report was not part of the evidence the defendant intended to call at the trial. The defendant was not seeking to ambush the plaintiff because the report had already been used extensively in cross-examination and the plaintiff could have led evidence in reply. If there was any ambush it was by the plaintiff's use of the rule to exclude a business record such as this. The important paragraph from Dr Polgar's report was admitted into evidence read: "Over the past five to six months, there has been some change in the pattern however. First of all he has a fairly constant headache which is there most of every day. This is mainly over the top of the head and is described as being pressing and tight, remaining unchanged through the day or somewhat worse when he is tense. Several times a week however, he gets more severe headache, which is more widespread going down the occipit and neck and also into the eyes and temples and the upper part of the face. This more severe pain usually takes two hours to reach a peak and can last for several hours or even several days. The pain is most severe over the vertex and in the temples. The pain is still mainly pressing and tight, and after the peak it can throb. There is accompanying anorexia, but no real nausea or vomiting. With about 60% of the severe headaches near their peak, he does have blurring of vision and flashing lights which may last for about an hour, but there is no photophobia. At times tension has precipitated the more severe headache, but at other times these are unprovoked." Dr Muston's notes contained further entries relevant to this appeal: "15 October 1980 Headaches initially better. Still very tense. Tablets initially helpful but headaches recurred. Now 2/3 week." The doctor recommended relaxation therapy and prescribed further medication. URJ DAWSON v HALL (Handley JA) 5 On 1 June 1981 the following appeared: "Now getting typical (left) unilateral migraine with vomiting. Lingraine, Sandomigrain not helpful in past.' The doctor prescribed different medication. On 16 July he recorded: "Deseril has reduced incidence, severity of headaches. Initial nausea, now settled. No side-effects". The doctor prescribed a further course of Deseril and asked the plaintiff to come in for a review in three months time. These contemporary records constituted objective evidence which the Judge could not ignore and which could not be devalued by credibility based findings in respect of oral evidence at a trial ten or eleven years later. It is apparent that the plaintiffs migraines as a child continued until he was about eighteen, and that he was then able to go without medication until shortly before he saw Dr Muston on 12/3/80. The clinical notes indicate that from then on he was on medication for migrainous headaches until the accident. These headaches caused some visual disturbance (12/3/E30), they were left-sided (12/3/80, 1/6/81), and they were prolonged and regular ("constant every day" 12/3/80), ("constant for 3/12" 29/8/80), ("now 2-3/week" 15/10/80). The plaintiff's headaches were therefore far worse and far more frequent than the trial Judge acknowledged and included a definite migrainous component. Moreover they were not confined, as the Judge found, to the top and front of the plaintiff's head. As Dr Polgar noted: "Several times a week however, he gets more severe headache, which is more widespread going down the occipit and neck and also into the eyes and temples and the upper part of the face." The Judge found that the plaintiff's headaches after the accident were of a different type and in a different location to those experienced before the accident. There was ample evidence to support the conclusion that some of his headaches after the accident were different from any he had experienced before. The plaintiff said that after the accident he had three different types of headache, "ordinary" tension headaches, migraines of the type he had known before the accident, and the new variety. The latter started as neck pain and spread into the occipit causing headaches which reached forward towards his eyes and can develop into a migraine. However each type of migraine was worse on the left side. Dr Puflett who qualified for the defendant expressed the opinion in November 1985, without the benefit of Dr Muston's notes or Dr Polgar's report, that the plaintiff's headaches were tension headaches mixed with migraine, and were not related to the accident. The Judge rejected his evidence. On paper there appears to be much to be said for Dr Puflett's view but, in the light of the Judge's credibility based findings, it is not one which is open to this Court. In my opinion the Judge's finding that after the accident the plaintiff suffered from a new type of migraine headache associated with his whiplash injury cannot be disturbed. However proper allowance, which the trial Judge did not make, must be made, by way of deduction, for the other types of headache having regard to their severity and regularity as revealed in the contemporary records of Dr Muston and Dr Polgar. The plaintiff in his evidence tended to downplay the severity of his pre-accident migrainous headaches, in comparison with the new type. He said that before the accident he did not get "tension" headaches from playing or teaching the piano, and they did not interfere "in any way" with his ability to carry on either of these activities. They did not increase when he played the 6 UNREPORTED JUDGMENTS piano, did not cause neck pain while he was playing, and did not restrict the hours he could play. Since the accident his neck pain which brings on headaches does all these things. His mother corroborated this evidence and said that since the accident between half an hour and an hour's playing was "as much as he can cope". However this was not the whole picture. The plaintiff said that before the accident "if you had a headache it was difficult to play the piano, read, write, do anything, you just had a headache for a long time", but then added with hardly a pause "It did not interfere with my piano practise". He said that piano playing helped ease his headaches. The Judge's finding on the plaintiffs credibility establishes the honesty of this evidence but not necessarily its accuracy. The plaintiff was being asked to recall events which occurred ten to eleven years before trial. His evidence, however honest, cannot prevail over the contemporary records of Dr Muston and Dr Polgar. It is clear that piano playing alone, however helpful in some or all cases, was no cure all for the plaintiff's pre-accident headaches. If it had been he would have had no occasion to consult Dr Muston, resume medication, or be referred to Dr Polgar. Dr Muston reported that the headaches had produced vomiting, and it must be accepted, I think, that one would not attempt to play the piano immediately before, during, or after vomiting. Dr Polgar reported that during about fifty per cent of the severe headaches the plaintiff experienced blurred vision and flashing lights and I think one must accept that piano playing would not continue in these circumstances. In my opinion therefore this Court is entitled to interfere with the Judge's findings on the headache question which as they stand were inconsistent with established facts. See Brunskill v Sovereign Marine (1985) 59 ALJR 842 at 844. However I do not consider that we are entitled to substitute findings to the opposite effect but we can substitute qualified findings for the unqualified ones made by the Judge. There is much to be said for the view that the Judge's findings on this and other issues are so unsatisfactory that the conclusion should be drawn that he palpably misused his advantage in seeing the witnesses and a new trial should be ordered. However such a result would be extremely unsatisfactory in a case where the accident occurred thirteen years ago. The case is close to the line but in my view we are entitled and bound to reassess. PAST ECONOMIC LOSS The Judge awarded $180,000 for past economic loss to cover the period of approximately nine years from the date of the accident to 21 November 1990. He found that the plaintiff's ongoing disabilities interfered to a significant extent with his capacity to play the piano and to be a professional musician. At the date of the accident the plaintiff was employed by Westpac. He continued to work there for the next two years before resigning to take up employment with PS Benedict and Co Pty Ltd, which owned a music store and operated a music school. He did this in order to pursue a teaching career in music. His parents purchased this company during the 1985 tax year (33). The plaintiff did not claim that his neck injury prevented him from doing his work at the bank or the equivalent in a similar job. His claim was that it prevented him from effectively pursuing a second occupation, after hours, as a musician and music teacher. The Judge was satisfied that the plaintiff was unable to play the piano for regular sessions for more than an hour and that this effectively prevented him from being a professional pianist in places such as The Boulevarde URJ DAWSON v HALL (Handley JA) 7 Hotel, William Street where he had been offered employment as a resident pianist. Accordingly he accepted the claim that the accident had substantially denied him this second career. He assessed the plaintiff's loss at the date of trial as $600 gross per week equivalent to a little over two professional playing engagements or an additional fifteen hours of music teaching. This was discounted for tax and the vagaries of the music industry to give a figure of $20,000 per year which over the nine years to trial produced the award of $180,000. The appellant propounded several challenges to this award. The first was directed to the Judge's findings about the extent of the injury to the plaintiff's neck and cervical spine and his pre-existing difficulties with headaches. This has already been considered. The second related to the extent of his difficulties with piano playing after the accident. The plaintiff said he could not sit at a piano for more than an hour at the most on a good day and sometimes he would start to get pain after fifteen minutes. He said that in 1983 and 1984 he could not play the piano in hotels, restaurants or bars because that would require sitting at the piano for at least forty five minutes an hour four times a night and that he could not do this because of the headaches associated with his neck pain. When he joined the company he worked as a music teacher (33). At this stage he only took private students and was limited he said to fifteen hours a week (34) but then added that he was "flat out" to do more than an hour and a half a day. He said that he was still practising with selected ensembles and certain soloists but was limited to doing one act. He couldn't sit at the piano and just play for a whole night's entertainment. Later he said he taught about twelve hours a week during 1984-1985 (36). But for his injury he would have been teaching thirty hours a week. He said that in 1985 but for his injury he would have been teaching probably twenty hours a week "because that's a comfortable amount of time to teach" (37) and would have been playing professionally maybe three or four nights a week. He said that in 1985 he would have been earning $120 to $150 a night two nights a week (38). He had continued to teach ten to twelve hours a week over the last four or five years in addition to his daily practise (52). He said that in 1985 he played at the Manly Pacific, " he could do one night" (37) and he was the official musician for Warringah Shire Council but this only required twenty minutes playing. He was also the musical director of the Glen Street Theatre. He did a preliminary training course in the Yamaha method of teaching piano in 1986 and the rest of the course later. This required him to be at the keyboard for eight hours a day during the training seminars over the twenty one day course. The plaintiff said he dosed himself up on tablets and coped with the pain as best he could (41). This was confirmed by his instructor but the instructor also said that the plaintiff when teaching a class by this method would be at the piano for fifty minutes each hour (20-21, 23). His mother said that at the time of trial he was taking two one hour classes a day back to back (121). The plaintiff had met Christine Killburn through amateur musical shows. In 1987 she was the public relations officer for the Sydney Boulevarde Hotel. At her request the plaintiff played for two hours at a Mother's Day lunch and another function (53-54) and she then asked him if he would become the hotel's resident pianist on a twelve months contract at an annual salary of $60,000 gross. He said this would have required four to five hours playing a day four days a week. The plaintiff rejected this offer because of his headaches. His evidence was corroborated by Miss Killburn, but she said that he would have been required to play six nights a week and on Sundays (134). 8 UNREPORTED JUDGMENTS The plaintiff said that he had also been approached by restaurants and clubs to play two, three or four nights a week at $150 to $250 a night but had also rejected these offers for the same reason (55). He had however played at maybe half a dozen functions over the last two or three years (56). After leaving school he became involved in amateur musical shows in his part of Sydney. This involved him in musical directing, conducting and playing in three different shows a year (25, 26). He also performed as an accompanist (26). After the accident he could not do as much. He did two shows in 1982 (32), and only conducted one. He has since mainly done one show a year but occasionally two (32). However in 1984 he conducted a thirty six piece orchestra at the Glen Street Theatre and played as well, but not for more than an hour (34-35). He said that in the last three years he does not do as much work for his shows, only about ten per cent of what he used to do. He still does the creative work and prepares people but uses an accompanist or rehearsal pianist, does only a very small amount of playing, and doesn't always conduct the shows (41). A very different picture emerged from the evidence of Mr Jacombs, an independent witness, called in the plaintiffs case, who worked with the plaintiff on amateur musicals at the Forestville Musical Society. They had been associated during the last eight years before the trial. He had noticed that after a show the plaintiff, on coming from the stage or orchestra pit, "would exhibit some pain in the neck area and some difficulty in moving the arms and the shoulders" (130). He had observed these difficulties while the plaintiff was conducting the orchestra in October 1990. The show was 'Oliver', there were ten performances over two weeks, each of two acts, one lasting an hour and the other forty five to fifty minutes. The plaintiff conducted this show (131) and had conducted the majority of the Society's shows over the previous eight years. The Society puts on two shows a year and the plaintiff has acted as conductor or performer in both. He remembered a show in 1986 where the musical accompaniment was provided by two pianists, one of them the plaintiff. There were two acts of an hour each with an interval of fifteen to twenty minutes with "reasonably" continuous playing over eight to ten performances (132). The Judge accepted that there was no certainty that the plaintiff would have been in full time employment as a musician in addition to his ordinary job and said that he would have been exposed to the vagaries of the music "industry". He thought that the plaintiff's economic loss should be assessed on the basis of his lost opportunity of obtaining this work. The uncertainties in the industry were illustrated by the evidence of Mr Fish, the then financial controller of The Boulevarde Hotel, who was called by the defendant. He said that for the previous eighteen months the salary of the resident pianist at the hotel had been $36,400 gross, a substantial reduction from the $60,000 offered to the plaintiff in 1987. The effect of the recession on the industry was confirmed by the evidence of Mr Sommerville, also called by the defendant. He said that over the last few years the amount of work available was substantially lessened, there were fewer places to play, competition was fierce, and incomes had dropped. The Judge took as his starting point the figure of $600 gross per week. In doing so he purported to accept some of Mr Sommerville's evidence. Although the Judge was mistaken about the effect of this evidence there was ample other evidence to support the finding and despite the mistake, I would not disturb it for the 1990 year. However in my respectful opinion his Honour was not entitled to adopt a figure based on evidence of the earnings of a professional pianist and music teacher at the time of trial and use it as the basis for his assessment of the URJ DAWSON v HALL (Handley JA) 9 plaintiff's economic loss for the whole period since October 1981. The plaintiff's own evidence would support a much lower figure for 1986. He said that but for his injury he would then have earned about $120 to $150 a night, two nights a week at hotels and restaurants (38). The plaintiff was doing minimal teaching in 1981 and for some time thereafter and he was not qualified as a teacher until 1988 (101). There is also no evidence and no finding that in the very early years he would, but for his accident, have had two or more professional engagements a week at all, let alone on a regular basis. There is no precise evidence as to the amounts a competent pianist such as the plaintiff could have earned over each of the years between 1981 and 1991 other than that referred to above. Moreover no economic loss was proved for the two years immediately after the accident while the plaintiff still had his full time job with Westpac. In my opinion therefore the assessment for past economic loss was wholly erroneous. It must be set aside and this Court must undertake the task of reassessment. For reasons which will become apparent later the Judge assessed the past loss to 1990 although he gave judgment in 1992. This Court must include the losses for 1991 and 1992 in the past category. On a fair view of the plaintiff's evidence his lost earnings for the period between 1983 and 1985 would not exceed $300 a week gross. He said he taught twelve or fifteen hours a week. In view of other evidence I would not be doing an injustice to the plaintiff if I adopted the higher figure. The plaintiff said that he would otherwise have taught thirty hours a week but said later that if he was working at night he would not have taught for more than twenty hours. This would demonstrate a loss of five hours teaching a week at the rate referred to in his evidence of $12 an hour or $60 per week. This would give a gross loss of $360 a week. I estimate the gross loss for the 1984 year at $330 a week. The only way that I can estimate the gross loss for the five and a half years from 1986 to 1990 (other than 1987) is to average the starting and closing figures of $360 and $600 which gives a figure of $480 per week. The 1987 year is in a different category. The plaintiff was offered the position of resident pianist at The Boulevarde Hotel on an annual contract at a salary of $55,000 to $60,000 gross. On the basis of $57,500 a year this would give an income of $1,106 a week gross. The position was as resident pianist working six nights a week between 6.30 and 11.30, on Sunday for brunch, and for cocktail parties and "whatever comes in" (134). Miss Killburn was not asked whether this was a full time position or whether the plaintiff as resident pianist would have been free to take piano lessons for the family business. However I would infer from the salary, the duties and the description of the position itself that the plaintiff would not have been free to take piano lessons in Warringah after school hours and on weekends except on his day or days off. In any event the plaintiff, if uninjured, would have wished to avoid tension to protect himself from his pre-accident migrainous headaches. I therefore conclude that this would have been a full time job, at least for this plaintiff, and he would have been obliged to give up his teaching job with the family company. The plaintiff's income tax returns for the 1984 and the following tax years except 1988 are in evidence. Excluding the 1984 year when the plaintiff was still working for the bank until he resigned, these disclosed the following taxable income: 10 UNREPORTED JUDGMENTS 1985 $10,350 $200 per week gross 1986 $11,700 $225 per week gross 1987 $20,400 $392 per week gross 5 | 1988 $10,305 $200 per week gross (This is based on the plaintiff's notice of assessment which is in evidence). 1989 $10,150 $200 per week gross The returns for the 1985, 1986 and 1987 years included substantial amounts for director's fees. These were not paid during the 1988 and 1989 years for some reason which was not explored in the evidence. The plaintiff was married during the 1986 tax year but had been divorced by February 1990 (193X). He did not claim the dependant spouse rebate in his income tax returns so presumably his wife worked. They lived in their own home but whether it was rented or being paid off does not appear. One wonders how the plaintiff was able to enter into marriage and live in a suburban house on a salary in 1986 of $225 per week gross even if his wife was working. It is of course possible that he and his wife received other benefits in cash or in kind through the family company but these issues were not explored at the trial and there is no precise evidence of such additional benefits. However he was able to take a holiday to the United Kingdom in 1989 20 (108) and to Bali in 1990 (107). One has the distinct impression that the evidence of economic loss in this case may well represent the equivalent of the tip of the iceberg. The plaintiff said he worked in the company's shop two or three hours a day at the most and taught for two hours in the afternoon (96). It was not clear when he started working in the shop but the better inference, I think, is that he had been doing this work since his parents purchased the company during the 1985 tax year. There are further difficulties in assessing the plaintiff s economic loss for the 1991 and 1992 years. After July 1990 the plaintiff began to work longer hours in the shop and increased the number of lessons he was taking. Early in 1991 he started to take extra private lessons as well (98). Since the beginning of third term 1990 he had been receiving $450 per week gross (99E) and from February 1991 he had been receiving $550 per week gross (99G, P). According to the Judge's findings the plaintiff's condition deteriorated between five and nine years after the accident but this evidence discloses that during 1990-1991 he was able to substantially increase his working hours both teaching and in the shop. The Judge totally overlooked this evidence. In my opinion it demonstrates that the plaintiff did not fully utilise his working capacity between 1984 and 1990. 40 Because the plaintiff's claim was for loss of a second income, the estimated loss of gross earnings must be added to his actual gross earnings to arrive at his taxable income and an estimate must then be made of the extra tax he would have paid had he received the lost earnings. Unfortunately the parties gave this Court no assistance whatever in relation to the applicable tax scales. There are further complications in the 1987, 1991 and 1992 years. The foregoing analysis results in the following figures: Actual Gross Earnings Lost Gross Earnings Total Earnings Estimated net loss after tax 1984 $200 $330 $530 $180 1985 $200 $360 $560 $200 1986 $225 $480 $705 $280 URJ DAWSON v HALL (Handley JA) 11 1987 $392 $714 $1106 $400 1988 $200 $480 $680 $290 1989 $200 $480 $680 1990 $200 $480 $680 During the 1991 and 1992 years the plaintiff earned substantially more while working for the family company. In the first six months of the 1991 year he earned $450 a week gross and in the second half $550 a week gross, an average of $500. If one projects forward to the 1992 year the plaintiff's earnings during February 1991 the result would be $650 a week gross. If the plaintiff had received the lost earnings of $600 per week gross during the 1991 and 1992 years, his total income for those years would have been $1100 a week and $1150 a week respectively. On this basis I estimate the net loss after deduction of tax for those years at $320 a week. From these figures there must also be deducted allowances for the plaintiff's pre-accident disability, his capacity for work after the accident shown by Mr Jacomb's evidence but not utilised until after July 1990, and the vagaries of the music industry. In the light of the evidence previously referred to the allowance for these factors could not be less than thirty per cent and probably should be much more. I have applied the full discount figure of thirty per cent to the 1987 year although the plaintiff would have been protected by his contract from the vagaries of the music industry during that year. There must be a real doubt whether the man referred to in the report of Dr Polgar of 2 September 1980 could ever have fulfilled a contract calling for performances six nights a week and during the day on Sunday. I therefore assess the plaintiff's past economic loss as follows: 1984 6,552.00 1985 7,280.00 1986 10,192.00 1987 14,560.00 1988 10,556.00 1989 10,556.00 1990 10,556.00 1991 11,648.00 1992 11.648.00 Total 93,548.00 FUTURE ECONOMIC LOSS The Judge calculated the plaintiff's future economic loss to the age of fifty five. This was not challenged but on a reassessment I see no reason why the plaintiffs loss should not be calculated to age sixty five. At the date of the judgment the period for which future economic loss must be calculated by this Court is thirty three years. Allowing a net loss of $224 a week for thirty three years on the 3% tables less 15% for vicissitudes gives a figure for future economic loss of $195,540. I would award this sum. INTEREST ON PAST ECONOMIC LOSS The plaintiff should receive interest on his past economic loss at an appropriate rate. The awards for 1986, 1988, 1989 and 1990 are based on an average of the 1985 and 1990 figures and probably represent overcompensation for the earlier 12 UNREPORTED JUDGMENTS years on which interest would run for longer periods. The parties have provided no basis for an interest calculation on a reassessment. The Judge used the rate of 15% and awarded interest at this rate on half the past loss. This rate was not challenged and I propose to adopt it. On this basis the award for interest on past economic loss will be $56,128. SPECIAL ORDER FOR INTEREST There remains for consideration the Judge's award of $151,564 as further prejudgment interest. His Honour explained this award as follows: "The interest components have been calculated as at 27 November 1990. I have done this because on that day when the defendant sought an adjournment her counsel agreed that it was appropriate that, in the event that the plaintiff recovered a verdict, it should be regarded as being recovered as at 27 November 1990. On that day I made orders designed to give effect to that submission... The order was necessary in my view to remedy any prejudice to the plaintiff arising from the adjournment. The defendant consented to the making of such an order. Accordingly I need to make provision in accordance with that order for interest on the whole of the judgment to accrue from twenty eight days after 27 November 1990 until this date. The appropriate rate... is 19%". The history of the proceedings up to 27 November 1990 was set out in his Honour's reasons delivered that day for granting the defendant's application for an adjournment. The proceedings were not commenced until more than three years after the accident and later the case had to be stood out of call-overs in May and August 1988 because the plaintiff was either in default or did not attend. The case was fixed for hearing on 18 July 1990 but could not be reached. Up to this point there had been no apparent default on the part of the defendant or her legal advisers. However the defendant was seriously in default when her legal advisers were not ready to proceed on 27 November 1990 and the case had to be adjourned. However, as his Honour's reasons delivered that day record, plaintiff's counsel conceded that an adjournment would cause no particular prejudice to the plaintiff. Nevertheless the adjournment when granted was subject to the condition referred to. The hearing resumed on 27 February 1991 and concluded on 7 March. The parties made their submissions in writing and his Honour's reserved judgment was delivered on 22 May 1992. The additional interest was therefore awarded for the period from 27 December 1990 to 22 May 1992. In my opinion this award cannot be supported. The defendant's submission to the condition did not relieve the Judge from the duty of considering whether and to what extent it was appropriate to make such an order. The defendant's default which caused the adjournment on 27 November resulted in the hearing being delayed until 27 February but did not cause the further delay of fourteen months until the delivery of his Honour's reserved judgment. If his Honour had been able to deliver an ex tempore decision in March 1991 the condition would have attracted an award of further interest for a period of less than three months. In any event the condition was oppressive. The enactment of s83A and its equivalents have enabled courts by awards of prejudgment interest to compensate plaintiffs for the financial prejudice caused by delays in the hearing and determination of their cases. An award of prejudgment interest on ordinary principles would have substantially, if not fully, compensated the plaintiff for the delay and there was no occasion for any further award of interest for this purpose. URJ DAWSON v HALL (Handley JA) 13 There are, however, more fundamental objections. The decision in Fire and All Risks Insurance v Callinan (1978) 140 CLR 427 establishes that pre-judgment interest should not be awarded in respect of damages intended to compensate the plaintiff for future losses. In this case his Honour awarded interest on future general damages and future economic loss assessed as at 27 November 1990 for a period of approximately eighteen months. This award also included interest on past general damages for the same period at the rate of 19% contrary to MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657. Furthermore it included interest on interest totalling $76,500 already award on the past economic loss and past general damages. The present award could only be made under s83A but was beyond power because it was contrary to s83A(2)(a) which provides that the section does not authorise the giving of interest upon interest. For all these reasons the further award of prejudgment interest must be wholly set aside. INTEREST ON GENERAL DAMAGES The Judge awarded $20,000 general damages for the past, assessed up to 27 November 1990 and awarded interest on this amount for the whole period prior to that date at the conventional rate of 2%. This award must be adjusted to the date of the actual judgment. On this basis I assess the past component at $23,000 and the pre-judgment interest at $4,830. CONCLUSIONS In my opinion therefore the respondent's damages should be reassessed as follows: General damages $ 45,000.00 Interest on general damages $ 4,830.00 Past economic loss $ 93,548.00 Interest on past economic loss $ 56,128.00 Future economic loss $ 195,540.00 Out of pocket expenses $ 3,370.00 Total $ 398,416.00 Accordingly, the following orders should be made: 1. Appeal allowed. 2. Set aside the judgment in the District Court except as to liability and costs. In lieu thereof substitute judgment for the plaintiff for $398,416. 3. The respondent is to pay the appellant's costs of the appeal but is to have a certificate under the Suitors Fund Act. 1. Appeal allowed. 2. Set aside the judgment in the District Court except as to liability and costs. In lieu therefore substitute judgment for the plaintiff of $398,416.00. 3. The respondent is to pay the appellant's costs of the appeal but is to have a certificate under the Suitors Fund Act. Counsel for the Appellant: J Mater Solicitors: GM Meadows, GIO Legal Section Counsel for the Respondent: DF Jackson QC with S Torrington 14 UNREPORTED JUDGMENTS Solicitors: Hunt and Hunt