SOUTHAM v MARNEY SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL CLARKE JA and SHELLER JA 8 March 1995 [1995] NSWCA 441 MOTOR VEHICLE — assessment of future loss of earning capacity Clarke JA. I will ask Mr Justice Sheller to give the first judgment. Sheller JA. Marilyn Yvonne Southam appeals from a decision of his Honour Judge Luland of Queens Counsel in proceedings commenced by her against the respondent to recover damages for personal injury and economic loss arising out of a motor vehicle accident on 27 October 1983. His Honour's judgment was given on 1 March 1994. Liability was admitted. The appeal is directed to the adequacy of the damages. The total amount was $189,625.23. Components of that amount included general damages $55,000, past loss of earning capacity $61,640 and future loss of earning capacity $11,500. The principal or certainly the initial challenge made to his Honour's finding by Mr Robison who appeared for the appellant, was his Honour'sassessment of future loss of earning capacity. The error relied upon carried over to the assessment of general damages. In the course of his judgment his Honour reviewed the medical evidence which was directed, in part, to the appellant's claim that in the motor accident she had suffered frontal lobe brain damage or, alternatively, a manifestation of psychological disturbance consequent upon the physical injury she sustained. By contrast the respondent contended that she suffered from hypochondriasis. His Honour, having reviewed the evidence, found that there was no brain damage and rejected the claim that the appellant suffered from hypochondriasis. He was, however, satisfied that the appellant was not only injured in the physical manner which he had set out earlier in his judgment: ... but that those injuries had a profound effect upon her in that the psychological stress arising from those injuries and compounded by her emotional stress from being unable to find an answer for her injuries was such to bring about deficits in her cognitive functioning such effects causing a profound loss of enjoyment of life and earning capacity. His Honour was satisfied that as a result of the motor vehicle accident the appellant suffered soft tissue injury affecting her cervical and upper spine, her back and left arm. There was a record of complaint of stiffness and discomfort with restriction in her neck and pain in her lower back and shoulders, with the right arm more painful. An orthopaedic surgeon, Dr Taylor, had expressed the opinion that she suffered moderate muscular and ligamentous strain of the neck. She also had rotator cuff syndrome in her left shoulder and aggravated degenerative changes in the thoracic spine. Part of the evidence at the trial was a report prepared by Dr Stuckey, an orthopaedic surgeon, dated 20 April 1990 in which he reviewed the medical history and said: 2 UNREPORTED JUDGMENTS I still believe that although there has been no clearly demonstrable physical explanation for her symptoms there is a physical basis to them with some superimposed emotional response. Ido believe there is potential for further improvement and that almost certainly there will be complete resolution of the remaining problems, but one could only guess how long complete resolution may take. I would guess that it could well take up to a further five years or so. His Honour reviewed the appellant's employment history, both before and after the accident. He found that in April 1989 she had commenced work as a sales representative at TIC Distributors, suppliers of peripheral computer equipment. She continued there until September 1989. She left with a view to setting up a dealership business, but this failed as a consequence of her ongoing personality difficulties. His Honour was of the view that by this time the appellant's physical injuries had resolved to a large degree but her psychological deficits continued. There followed a history of the appellant working in the fashion industry until she opened a shop of her own. She commenced a company called Marilyn McMahon's Fashion Distributors. That business closed in April 1992 and thereafter the appellant did not return to the workforce. His Honour observed that the appellant conceded that the prevailing economic conditions also played a part in the loss of her business and that the appellant had been able to work satisfactorily for TIC Distributors for a five month period, with seemingly little problem, and left only because of an ambition to commence her own business. There was evidence which his Honour accepted that the plaintiff's earning capacity could be measured by a net return of $200 per week. The trial judge said that he had great difficulty in assessing an appropriate amount for the plaintiff's loss of earning capacity and loss of opportunity after she left TIC Distributors. However, he believed justice would be achieved if he allowed an amount of $50 a week. In calculating the loss of future earning capacity he allowed $50 per week for a period of five years. He said that he was of opinion that the plaintiff's problems would, by that time, be resolved. Applying the appropriate tables and making allowance of 15 percent for vicissitudes of life, he arrived at the amount of $11,500 to which I have referred. The passage that I have quoted in which his Honour referred to the injuries having had a profound effect upon the appellant, does appear, on its face, to be pivotal to the judgment and is the springboard from which Mr Robison puts his submissions that the amounts awarded for general damages and future loss of earning capacity are too low. The problem with the argument is firstly that there was evidence upon the basis of which his Honour could conclude that the weekly loss could be measured by an amount of $50. Secondly there was evidence, notably the report of Dr Stuckey upon the basis of which his Honour could conclude that the appellant's problems would, by the end of a period of five years, be resolved. On the evidence, it seems to me, impossible to challenge those two conclusions, bearing in mind the principles that restrict the task of an appellate court in a case such as this. Mr Robison has laid great and understandableemphasis upon the use of the word 'profound' in two places in the passage in the judgment that I have quoted. It is said that the use of that word suggests that his Honour was satisfied that the psychological stress arising from URJ SOUTHAM v MARNEY (Clarke JA) 3 the physical injuries and affecting the cognitive functioning of the appellant was a condition which would continue beyond a period of five years. The error in the judgment, it is said, is that having made that finding his Honour incorrectly limited the period in the way that he did. Whatever sympathy one might have for that argument if we were sitting at first instance, it seems to me that his Honour's conclusions about the future were justified by the evidence before him. Accordingly, I think that the word 'profound' in the context that it is used has to be understood as referring to significant effects and significant losses, speaking of the period up to the date of trial, and then decreasing over the following five years to which his Honour referred. This was the springboard from which the appellant's argument proceeded. It seems to me that the argument both as to future economic loss and general damages so based must be rejected. Accordingly, I would propose that the appeal be dismissed with costs. Clarke JA. I agree with Mr Justice Sheller. It follows the order of the Court will be as his Honour has announced. Orders accordingly. Counsel for the appellant: BS Robison Solicitors for the appellant: Frank and Woods Counsel for the respondents: RC Tonner Solicitors for the respondents: GJO Australia