MILLER v SMITH SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL HANDLEY JA and SHELLER JA 7 March 1995 [1995] NSWCA 295 MOTOR VEHICLE ACCIDENT Assessment of damages — future economic loss Handley JA. I will ask Sheller JA to give the first judgment. Sheller JA. The plaintiff, Keith Brian Miller, appeals from a decision of Phelan DCJ of 20 December 1993 in proceedings to recover damages for injuries suffered by the plaintiff in a motor vehicle accident on 18 April 1989. The appeal is limited to the adequacy of the amount awarded by his Honour for future loss of earning capacity. The plaintiff submitted that his Honour's assessment of a 50 per cent constant residual earning capacity for the remaining eighteen years of the plaintiff's working life was too great. The plaintiff was born on 10 November 1947 and was aged forty-one at the date of accident and forty-six at the date of his Honour's decision. After the accident he was left with two injuries, one to the right ankle and the other, to a lesser degree, a facial injury. For present purposes I need not deal with thenature of the facial injury. Shortly after the accident the plaintiff was referred to an orthopaedic surgeon, Dr Peter Giblin. His reports usefully set out the plaintiff's symptoms and the history of their treatment. After the accident the plaintiff made, what was regarded as, a reasonable recovery in respect of the ankle injury until July 1989 when osteoporosis was demonstrated in x-rays. On 3 November 1989 he underwent manipulation of the ankle joint and multiple adhesions were felt. His condition did not improve. At that stage he had problems with walking. On 2 May 1990 a right subtalar joint arthrodesis was performed. This improved his condition but, in the language of the trial judge, did not remove crippledness or lessen chronic pain. The arthrodesis had gone on to solid union. In his report of 13 November 1991 Dr Giblin confirmed that. He went onto describe chronic pain in the os calcis area of the ankle which remained unchanged. There was associated osteoporosis secondary to the injury. In his report of 8 April 1993 Dr Giblin said that in his opinion the plaintiff had a permanent 55 per cent loss of function of the affected lower limb at or below the knee. X-rays taken on 21 October 1992 showed decreasing osteoporosis but when Dr Giblin saw the patient on 13 January 1993 he had pitting oedema around his ankle and was complaining of on-going pain. On 17 February 1993 these symptoms persisted. On 3 March 1993 Dr Giblin reported the focal pain and swelling and clicking was mainly on the lateral aspect of his ankle. The plaintiff underwent surgical exploration of that area on 16 March 1993 and the main finding was the rupture of two tendons. Dr Giblin observed that a MRI scan had not been helpful. 2 UNREPORTED JUDGMENTS The plaintiff left Bankstown Technical School at the age of fifteen. From 1963 he was employed in the silk screen printing trade. In 1973 he was employed by Madison Productions where he remained in employment up to the time of the accident. Ultimately he had the status of a leading hand. Five or six silk printers were employed under his direction. He was highly regarded by his employer. In his judgment, after referring to the reports of Dr Giblin, Professor Jones and Drs Kendall and Cameron, his Honour accepted Dr Giblin's assessment. He also accepted the plaintiff as a witness of truth. He then came to consider the plaintiff's employment history since the accident. On 18 October 1989, six months after the accident, the plaintiff's employment with Madison's Productions was reluctantly terminated. He had not worked since. The plaintiff endeavoured to mitigate his loss by familiarising himself with several courses at technical college to do with graphic reproduction and computer design. His Honour was satisfied that the plaintiff had been inhibited in his ability to mitigate his loss by seeking more active employment by the programme of therapy and surgical care that he had had to submit himself to, associated with relatively high levels of pain which in turn affected his concentration. Dr Giblin said that the plaintiff would be unable to walk over uneven surfaces such as a ploughed up field or on a sloping surface such as a roof or sideways across an incline and as far as the future is concerned he will get further post-traumatic arthritic changes in the smaller joints of his foot. Indeed, whilst he considered that an arthrodesis, which according to the doctor was inevitable within the foreseeable future, would tend to reduce his pain to some extent, itwould limit his mobility. The stress caused by the arthrodesis would affect other areas of the plaintiff's foot. He would have difficulty with stairs. The tendons that have snapped could not be repaired, although one of the needs for review was to detect any collapse of tendons which might be capable of repair if detected early. The doctor thought there was a likelihood of this happening because of the abnormal gait and the abnormal stress. He said that the plaintiff was in a bind because while he really should use his foot, that increased the likelihood of increased tendon rupture. He foresaw him as having the need for as many as half a dozen physiotherapy sessions a year to obtain symptomatic relief and for ongoing drug therapy. The degeneration of his ankle was regarded as just a question of time. He foresaw the need for an occasional steroid injection. In his opinion the plaintiff would be capable of retraining to undertake work in a sedentary position. The plaintiff himself said that sitting constantly caused quite serious discomfort and he was probably most comfortable when he was able successively to move around and sit. Dealing with the loss of future earning capacity, his Honour described the plaintiff as a person of average intelligence and a highly motivated worker before the accident. He said that one could have some degree of hope that he would endeavour to retrain himself and obtain some sort of work but that this was not going to be an easy course for a man of his age and in the current climate of employment. This was the area where there was most dispute between the plaintiff and the defendant. His Honour said: . it seems to me from the figures before me that if he was in his present employment, the calculation made by the plaintiff as to what his present net earning would be should be accepted, that is $533.14 (per week). In the end result though I think that I should on the balance of probabilities conclude that the plaintiff's position is not as bad as his counsel has submitted and not so good that I should accept the submission URJ MILLER v SMITH (Sheller JA) 3 of the defendant. In the end result, I have decided that the plaintiff's reduced economic capacity is 50 per cent of the figure towhich I have just referred .... Inherent in this conclusion are a number of matters. First, that the reduced earning capacity of the plaintiff was, at the date of his Honour's decision, $266 per week. Secondly, that this reduced capacity would remain unaffected for the remaining eighteen years of the plaintiff's working life. Thirdly, Dr Giblin's view that he could see the plaintiff retraining to secure work in a sedentary position. If he obtained a job which involved 90 to 95 per cent sitting down Dr Giblin saw no reason why he could not do that job for the rest of his working days. An example put to Dr Giblin which he accepted was sitting at a computer doing keyboard work. He also said that the job would have to be fairly close to the plaintiff's home to avoid trouble with public transport. Fourthly, his Honour apparently took account of the inhibitory effect of a programme of therapy associated with relatively high levels of pain, which affected his concentration, on the plaintiff's seeking more active employment. In his submissions on behalf of the plaintiff, Mr Levy proceeded under five heads. I need, I think, refer to only four of them. Firstly, he emphasised the chronic pain which on the evidence affected the plaintiff's concentration. Secondly, he referred to his limited capacity for retraining hampered by the high level of chronic pain. Thirdly, he referred to his vulnerability to future deterioration and degeneration of his ankle condition. Finally he referred to the plaintiff's age and lack of other skills. By reference to those matters he submitted that the 50 per cent of residual capacity fixed by his Honour was too high. By contrast Mr Russell, who appeared for the respondent, relied upon his Honour's acceptance of Dr Giblin's evidence and particularly the view of Dr Giblin the treating surgeon that the plaintiff could in the future be retrained soas to undertake an occupation involving no more than a sedentary position. Mr Russell referred to a number of the aspects of the evidence which fell under heads which I will set out: The plaintiff had done TAFE courses in graphic reproduction and computer design. Up to the trial the plaintiff was still under treatment and had not had time to look for a job. He was going to start looking. There was a possibility of working from home until something better came up. The plaintiff had done a six month course learning the basics of computers. The plaintiff wished to find a full-time sedentary job. The plaintiff would be able to do a supervisory job in a large silk-screening company. He may have to do a 3-year course to get the appropriate certificate. He had not yet looked for such jobs. The graphic reproduction course taught him to produce positives and negatives for the silk-screening industry. It was a hobby-type course and he would need to do another course to a more professional standard. If the plaintiff could get a job in graphic reproduction he could physically do such work. The plaintiff also did a hobby-type course in computer design, using the Page Maker Programme. A computer design job would be a sit-down job. The plaintiff would be physically able to do such a job. As a silk-screener he was already familiar with page layouts and design. The plaintiff intended to look for a job and to do more re-training. The future medical treatment would not hinder either re-training or working.' 4 UNREPORTED JUDGMENTS In my opinion the problem with his Honour's approach is that to assess the loss of future earning capacity he proceeded by calculating the loss of earnings at the date of the hearing or of his Honour's decision and then projecting that over the remainder of his working life. This, it seems to me, ignores the fact that onthe evidence, which his Honour accepted, any future earning capacity depended upon occupational retraining which at that time the plaintiff had not undertaken. That is retraining by a person aged forty-six and who had left school at the age of fifteen. Furthermore, on the evidence that retraining would be hampered by continuing persistent chronic pain. There was unchallenged evidence from the plaintiff, which his Honour accepted, that he experienced difficulty absorbing information. The plaintiff gave the following evidence in response to a question put by his Honour pertaining to whether he had artistic inclinations: A. Ilike to think I have. I think the biggest problem I find is I find it very hard, whether it is with getting older, but I find it very hard to absorb information especially on the computer level. That's why I bought the computer to play with it. I certainly couldn't get into the Page Maker System at home because it would be a very expensive computer and a very expensive programme which of course I am certainly not in a position to even play with that. It's something that someone would have to play with for twelve or eighteen months to at least to get anything out of it of any quality at all. If the plaintiff undertook this training and qualified the question of what hours he would be capable of working remained. The plaintiff gave the following evidence: Q. These days you have told us you've got problems with pain and discomfort. How does that affect your concentration? A. Well I find I am not able to sit down for long periods of time and really concentrate on what I am doing. My mind tends to wander a little bit from what I am doing back to I guess the problems I have. Q. What sort of concentration span are you talking about that you are able to persist with when you are sitting down? A. Half an hour I suppose. Q. What happens when you are sitting for a long time, what happens when you are sitting for half an hour so far as your leg is concerned? A. I find the leg tends to, I don't know if it's the right word but it tends tolock. I find when I stand up sometimes I have trouble standing on it and as I am sitting down I have to keep moving right for a little bit because it tends to set in the one spot. Q. How do you see things panning out for you in the future so far as work is concerned? Are you going to be able to work in any sort of sedentary job full-time? A. I find it difficult to foresee that. I accept that I must. I have to be able to find something but I really don't know how I am going to do it. There remains the obvious question of his ability, trained and qualified, to compete in the marketplace and to obtain work in the future on a regular basis. There is the matter of future deterioration and the inevitable development of arthrodesis, surgical intervention and the possibility of ruptured tendons. It is to be observed that the previous ruptured tendon had caused the plaintiff chronic pain. His Honour proceeded on the assumption that the plaintiff would earn the amount suggested as from the date of the trial up to the end of his working days. A different approach is to accept that the real questions in this case are whether the plaintiff, firstly, would be able to undergo retraining. Secondly, whether he would be able to qualify on such a course. Thirdly, having done so whether he would be able to obtain work and finally, whether he would be able to keep in that URJ MILLER v SMITH (Handley JA) 5 work until aged sixty-five. If the answer to any of the first three questions is in the negative then it follows, in the way that this case has been put, that his earning capacity at trial would be nil. If the answer to the final question is in the negative it follows that at some time in the future it will be reduced perhaps again to nil. On any view it will for some period of time be nil, that is, for the period after the trial during which this training programme was to be undertaken. All these imponderables show that in the present case the appropriate and fairapproach to assessing the plaintiffs loss of future earning capacity is to assess the chance of the plaintiff having in the future no earning capacity at all. In this regard I refer to Malec v J C Hutton Pty Limited 169 CLR 638 particularly at 543. Bearing in mind the matters to which I have already referred in this judgment and the matters that were put to us by counsel for the parties, in my opinion the chance of the plaintiff having no earning capacity in the future is appropriately assessed at 75 per cent. On that basis I would treat his future earning capacity as 25 per cent of his pre-accident earning capacity. In calculating the future loss of earning capacity his Honour proceeded on an eighteen year remaining working life for the plaintiff. Since the decision was given, when the plaintiff was aged forty-six, it would seem that the appropriate remaining working life should have been taken at nineteen years. Adopting the figure of $534.15 per week as the pre-accident net weekly earning figure of the plaintiff, applying 75 per cent to that over a nineteen year period at the 5 per cent discount rate and deducting 15 per cent for contingencies the amount arrived at is $219,625. Accordingly, I would propose that the appeal be upheld, that the verdict be set aside and that in lieu thereof a verdict calculated to take account of the variation which I proposed of the amount for future earning capacity substituted. The respondent should pay the plaintiff's costs of the appeal and if qualified the respondent should have a certificate under the Suitors" Fund Act. Handley JA. I agree. In this case the assessment of the plaintiffs future economic loss involved more imponderables than usual and it was therefore necessary for the trial judge to assess the prospects of the plaintiff's residualphysical capacity being to be productive of earnings. I am satisfied that the trial judge correctly assessed the plaintiff's reduced physical capacity at approximately 50 percent. However, if one asks oneself whether there could be any confidence that the plaintiff would in fact earn the basic sum which the judge took into account in assessing his future economic loss week-in and week-out for the nineteen years of his remaining working life the answer must be there could be no comfortable satisfaction that that would occur. There were just too many imponderables for that finding to be made. In the circumstances it was appropriate and indeed in my opinion necessary to adopt the approach authorised by Malec v J C Hutton Pty Limited and on that approach I agree with the reasons and conclusions of Sheller JA. The orders of the Court therefore will be as he has proposed. Accordingly the Court will make the orders proposed by Sheller JA and substitute the figure of $676,976.53 for the judgment entered by the trial judge with effect from 20 December 1993. Orders accordingly. Counsel for the appellant: LA Levy Solicitors for the appellant: RG Hughes and Co 6 UNREPORTED JUDGMENTS Counsel for the respondent: DJ Russell Solicitors for the respondent: P Jessop - GIO Hurstville