NEW SOUTH WALES INSURANCE MINISTERIAL CORPORATION v SPRENGNAGEL SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY and PRIESTLEY JJA 28 March 1995, 28 March 1995 [1995] NSWCA 315 PERSONAL INJURIES — DAMAGES — PAST AND FUTURE ECONOMIC LOSS. PERSONAL INJURIES — DAMAGES — PAST AND FUTURE ECONOMIC LOSS — plaintiff injured in car accident — trial judge awarded damages under various heads, which included past and future economic loss. In assessing past and future economic loss the judge took into account various factors for estimating what the position of the plaintiff might have been had she remained uninjured — defendant/respondent submitted that those findings should have led to a significantly smaller figure for both past and future economic loss. Held: per Priestley JA, the overall result in regard to economic loss cannot be said to be either unreasonable or inconsistent with the factual materials before his Honour; per Mahoney JA, the issue of economic capacity is essentially one of judgment and estimate and not amenable to greater certainty. Mahoney JA I will ask Priestley JA to give the first judgment. Priestley JA This is a defendant's appeal against the amount of damages awarded to the plaintiff by his Honour Judge Cooper in the District Court. The plaintiff's claim arose from a car accident for which the defendant admitted liability. The accident was on 6 September 1986. The plaintiff was then aged twenty. Judgment was given on 25 June 1993. The judge assessed the damages at $219,917, made up of economic loss from the date of the accident to the date of judgment, $43,714; interest on that amount, $17,090; general damages, $40,000; out-of-pockets for the past and the future, $16,113; and future economic loss, $ 103,000, in round figures. In the appeal the defendant accepted the trial judge's basic findings but submitted that those findings should have led to a significantly smaller figure for both past and future economic loss. The trial judge dealt with the effect of the accident on the plaintiff by first considering her own account of her symptoms, then the medical evidence, and then summarising his findings. Her own account was that she had lost consciousness in the accident and had woken up in hospital; that then the whole of her body was aching, particularly her neck, shoulder, chest and back. She had had no problems with these parts of her body before the accident. After two days in hospital she found herself very drowsy and tired when she got home and her whole body ached. Early in 1987 she had physiotherapy treatment. She was continuing to feel pain in her back and shoulder and was taking analgesic tablets, which gave her some relief. Heavy household work caused pain in the left shoulder and neck. In March 1988 she bought a special orthopaedic bed to help her with her back. She felt no improvement in 1988, 1989 or 1990. 2 UNREPORTED JUDGMENTS From 1991 she felt that her back was getting worse. Her shoulder and neck pain and problems remained about the same. She was getting headaches three times a week. At the time of the trial she said her low back was always hurting. She found herself unable to run or play with her children as she did before the accident. She had difficulty with housework, washing, and bending over and vacuuming. She was unable to wash windows or stand on chairs and could only sit for short periods without experiencing pain. She found car travel painful after forty to sixty minutes. Washing and ironing caused pain in her neck and shoulder. At the time of the trial she was still taking tablets for depression and pain and she had decided against having a recommended operation to her lower spine, at least for the time being. The judge thought this was a reasonable attitude for her to adopt in her circumstances. The judge seems to have accepted that the medical evidence supported the plaintiff's account of her physical state. He had considerable medical evidence before him. His conclusion, in the light of the plaintiff's evidence and the medical evidence, was that he was satisfied that, as a result of the accident, the plaintiff had sustained a musculo-ligamentous injury to the cervical spine giving her pain and restricted movement, not constantly but from time to time. He was also satisfied that she had sustained an injury to her lumbar spine which made a pre-existing non-painful condition painful. This exacerbation of a pre-existing condition was causing pain to the plaintiff on lifting, bending, stooping, and when standing or sitting for long periods. The trial judge also looked at the history of the plaintiff before the accident and considered that history in regard to her work capacity. His conclusion was that there were restrictions on that working capacity, principally because of her lack of training, psychiatric problems arising from unhappy domestic situations in which she had been concerned, and the need to care for her two young children. She had been looking for work for some months before the accident without success. At this time the children were in foster care. Thus, at that time one of the restrictions on her working capacity was not operative. After the accident, in December 1986, she got a job as a sales assistant at a delicatessen. The nett award wage was about $240 per week. In the light of medical evidence which was contemporary with this employment, the judge accepted that the plaintiff tried to work full time, making the attempt for a week, but that the ill-effects of the accident, principally pain in her back, caused her first to reduce her working hours to two to three daily and then to give the job up altogether. Her local doctor certified her as unable to work due to back and shoulder pain up to 16 May 1987. On this evidence the trial judge concluded that the plaintiff would have worked during the period from which she got the job to 16 May 1987 but for the effects of the accident, and he allowed her loss of wages at $240 per week for that period, an amount which he calculated as totalling $4,080. From May 1987 to June 1988 the judge considered the plaintiff would not have worked, even if uninjured. This was because, from around April or May 1987, the plaintiff again had custody of her two children. The restrictions on her movements and the emotional problems which the judge found that she had, which were not connected with the accident, would have prevented her during this period to June 1988 from working in any event. By August 1988 the situation had changed again. By this time the older child was at school and the younger one had started in kindergarten. WAEWV SOUTH WALES INSURANCE MINISTERIAL CORPORATION v SPRENGNAGEB& (Priestley JA) The judge's view also was that the plaintiff by August 1988 was on a more even keel emotionally. From August 1988 the plaintiff sought to get part time work, part time work being all that was feasible for her in view of her situation with the children, and in the judge's view uninjured she would have been confined to seeking part time work at this time. Her efforts to get part time work were unsuccessful. She gave her understanding of the reasons as that when she told employers to whom she was applying for work that she had two children and a problem with her back resulting from a car accident they simply were not interested in employing her. The judge thought that the plaintiff in her uninjured state would have been able to get twenty hours part time work, notwithstanding the circumstances that would have obtained had she been uninjured in relation to her domestic situation and children. The judge recorded also that in March 1991 the plaintiff attended the Commonwealth Rehabilitation Service in order to get their assistance and counsel as to how she could secure employment. From July 1991 she made further efforts to get work, again unsuccessfully. In the end, in regard to the period between the accident and trial, the judge allowed her the $4,080 that I have already mentioned and a figure for the period from August 1988 to trial calculated on the basis of $130 per week, representing the judge's view that uninjured she would have been able to obtain part time work during that period which would have yielded a figure of that order. When he came to consider the future he made a calculation which began with a figure for part time work. Apparently there was an exhibit before him showing that by the time of trial the figure which he had earlier taken as $130 would have reached $160. He said that in order to take into account her present value of $160 per week and the fact that in the future that figure might increase or decrease by virtue of a number of imponderables, he would use a figure of $200 per week as a starting point for estimating future economic loss. The imponderables which he referred to, he said, included, but were not by any means limited to, general economic conditions; commitments to her family; the fact she might undergo surgery, which might or might not improve her work capacity; her age, which was then twenty-seven; the fact that operating in the conventional way he should assume that had she been uninjured she would have worked for something like thirty-three years after the date of trial. Or, to put it more accurately, as his Honour did, that she had thirty-three years of working life ahead of her. He also took into account that for a further eight to ten of those years her work capacity would be reduced by her obligations to her children. He mentioned how difficult it is to make any precise calculation in regard to the estimate of future economic loss. He then took the figure of $200 a week and discounted it by approximately 40 per cent for the vicissitudes of life, which he had in other places mentioned in greater detail, plus about $12,000 to cover the possibility of future treatment expenses. In this court the defendant's first criticism of the trial judge was directed to what was said to have been his failure to discount in regard to the past economic loss the part time wage figure which he used in his calculation. It was said that this particular plaintiff, uninjured, because of her having two children, because of her lack of training, and because of the psychiatric or emotional difficulties from 4 UNREPORTED JUDGMENTS which she suffered, could not reasonably be said to have been likely to work uninterruptedly for the final period in his Honour's calculation, as his Honour assumed. Although one can understand this submission, it does not persuade me of any error on the part of the trial judge. In regard to what was said to be lack of training and the rather limited work experience of the plaintiff prior to the accident, there are countervailing factors. The first is that the plaintiff had had some experience in connection with working in delicatessens and food outlets. Associated with the defendant's submission was the contention that the plaintiff would not have been able to secure work even if uninjured throughout the period in question. But, as against that, and as against the whole of this submission, was the fact that in December 1986 the plaintiff did obtain a job in a delicatessen, as already mentioned, and left the employment in the delicatessen only because of the after-effects of the accident. I think it was open to the trial judge to assume that the plaintiff uninjured would have been anxious to work and would have been likely to obtain work, as she in fact did in December 1986, and that uninjured she would have been able to retain that work. As against the submission that even uninjured it is looking at things in a very optimistic way to assume she would have retained her job throughout the period in question is the fact that in looking at the loss the plaintiff suffered during this period because of the accident the judge was beginning with a figure for wages which was a part time figure. That is, he was using a figure which had already built into it a significant element of discount. It is true that with her two children it would seem quite likely that the plaintiff would have restricted her working life to part time work of the order of twenty hours a week. That, however, is not something that is completely certain. The trial judge was entitled to take into account the fact that in the plaintiff s life, uninjured, she would have had a capacity to work full time in a physical sense and may have been able to obtain more than twenty hours work a week, may have been able to make arrangements concerning the care of her children somewhat different from those that she had to make in her injured state. These are matters of estimation and uncertainty. I do not think the trial judge can be said to have been wrong in adopting the figures which he did. If they were on the optimistic side so far as the plaintiff was concerned, it seems to me that, in any event, the way in which his Honour approached future economic loss brought about what was an overall balanced result so far as the aggregate of past and future economic loss is concerned. Turning to the defendant's submissions as to future economic loss, the principal point made was that the judge should not have taken the figure of $200 a week as his starting point but should have stuck with the $160 a week which was shown by the evidence as what the plaintiff would have earned part time for the number of hours per week she probably would have been looking for had she not been injured. The submission substantially accepted the remainder of his Honour's calculations. That is, it was said that the 40 per cent discount which he applied was appropriate but should have been applied to the $160 figure not the $200 figure. I do not agree with this submission. The 40 per cent discount is a high one especially when applied to future earning capacity already assumed to be limited to something only marginally better than a part time capacity. When those two factors are taken into consideration - namely, that 40 per cent is itself a high discount figure and that WAEIV SOUTH WALES INSURANCE MINISTERIAL CORPORATION v SPRENGNAGEB (Mahoney JA) the $200 a week figure also represents a discount on full earning capacity - I do not think that the principal submission put for the defendant has any force. The trial judge took into account the fact that it was unlikely for at least eight to ten years after the date of trial the plaintiff uninjured would not have used her working capacity to work full time. He also took into account, it seems to me, the possibility that at some stage in the interval between twenty-seven years of age and sixty years of age the plaintiff may have been in a position to work full time and may have wanted to work full time. This seems to me a proper and material consideration. If anything, as I indicated earlier, the trial judge may have been a little heavy in his discount for the future. But in the remarks that I have made about loss of income for the past being perhaps based upon somewhat optimistic assumptions and for the future being perhaps a shade weighted against the plaintiff, I am not indicating that either of those estimate made by his Honour was appellably wrong. They were both well within the range available to him on the facts before him. Certainly in my opinion the overall result in regard to economic loss cannot be said to be either unreasonable or so out of keeping with the factual materials before his Honour as to be appealable. In my opinion therefore the appeal should be dismissed with costs. Mahoney JA. I agree with the order proposed by Priestley JA and with what his Honour has said. In deference to Mr Marshall's appropriately persistent submissions, I will just add these observations. I think the judge in this case had the advantage of seeing the plaintiff and therefore was able to form an opinion of the acceptability of what she said as to her future working life. When she said that she would seek to work when her children were suitably cared for at school or in kindergarten, his Honour saw fit to accept that and I think he was in a position of advantage in doing so. The submissions of Mr Marshall were, in my opinion, quite appropriate to economic loss. His suggestions, over-simplified, were that the judge should have adopted, and we on appeal should adopt, an estimate of various things, such as work capacity, work intentions and earnings different from those which the judge accepted. There was, I think, a number of possibilities open to him and the judge accepted particular ones of these. There is force in what Mr Marshall has said in relation to some of the matters. It is arguable that some particular estimates - for example, of economic capacity or earnings might have been adopted rather than the ones that the judge adopted. But I think in the end these matters are matters of judgment and estimate. It is difficult, I think, to advance more cogent reasons for accepting the alternatives proposed than for accepting those which the judge accepted. I think that one of the temptations of this area of the law is to attempt to give greater certainty to a topic than the topic will bear. I think the problem is essentially one of judgment and estimation. In the end, I myself would have come to the same conclusion as the judge, but it is sufficient to say that I see no cogent reason why his estimate and the contingencies he accepted were wrong and those which have now been proposed were right. I agree that the appeal should be dismissed with costs. 6 UNREPORTED JUDGMENTS The order of the court is appeal dismissed. The order for costs will be the ordinary order for costs, modified to the extent that indemnity costs are payable from 23 September 1993. 5 _ Representation Counsel for the appellant: HJ Marshall Solicitors for the appellant: GM Meadows 10 Counsel for the respondent: GB Hall QC / AG Todd Solicitors for the respondent: Anthony Ziade and Associates