WAKE v WALSH SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL GLEESON CJ and PRIESTLEY JA 22 March 1995, 22 March 1995 [1995] NSWCA 490 DAMAGES — ASSESSMENT OF DAMAGES — future economic loss whether inconsistency with amount awarded for past economic loss — no incongruity shown in award. ASSESSMENT OF DAMAGES The appellant plaintiff complained of one component of an award of damages, ie the assessment of loss of future earning capacity. It was argued that this was manifestly inconsistent with the basis on which past loss of earnings had been calculated, and should be reviewed - HELD - there was no such inconsistency as alleged and the award should stand. Gleeson CJ This is an appeal from a decision of Master Malpass given on 25 June 1993. The appellant claims that damages awarded to him by the Master were inadequate and seeks an order from this court increasing the award. The appeal as it has been argued turns upon a single point. Before explaining the point, however, it is necessary to mention briefly some matters of background. In effect the Master had before him three actions in each of which the appellant was the plaintiff. This was because the appellant had, over a period of years, suffered three successive injuries and was claiming damages in respect of each of them. The first action was No 13469/91 and it was entitled Wake v Government Insurance Office of New South Wales. The second action was No 14519/88 entitled Wake v Linfox Ltd and the third action was No 13014/90 entitled Wake v Walsh. The third is the action in which this appeal is brought. It relates to the third of the injuries in point of time. For reasons that are not important to this appeal, the first action failed and there was a judgment for the defendant. The second action was compromised and, as I said, this appeal relates to the third action. In this action, Master Malpass awarded the appellant damages in the amount of $495,799.58. That total amount was made up of the following components: dd) Damages related to the provisions of s79 of the $84,440 Motor Accidents Act 1988 (2) Out-of-pocket expenses - $28,588.38 (3) Future out-of-pocket expenses - $5,000 (4) Fox v Wood component - $12,770.20 (5) Past economic loss - $165,000 (6) Loss of future earning capacity - $200,000 The only challenge on this appeal is to the award of $200,000 for future economic loss. No challenge is made to the findings of fact made by Master Malpass. Those findings include the following: 2 UNREPORTED JUDGMENTS "The plaintiff has suffered injury to his low back in each of the three accidents. Save for a short period of time after each of the first two accidents, he was able to continue working for long hours in a heavy job. He suffered small loss of earning capacity after each of the first two accidents. After the second accident, he was able to maintain his heavy work schedule for a period in excess of one year. It was not until after the third accident that he became incapacitated for work. I consider that it was the first accident that caused the plaintiff to suffer the low back problem. Since the time of that accident, he has continued to suffer from that problem. It seems likely that it has been aggravated by his work and the second accident. It was at least further aggravated by the third accident. Since then, he has had a permanent back problem." It should be noted that the action with which we are concerned is the action related to what Master Malpass there described as the third accident. It should also be noted that following the third accident, and in consequence of it, the appellant had three operative procedures, two related to his spine and the third related to his leg. Master Malpass had to deal with an issue as to whether or not the leg problems were caused by the accident. He resolved that issue in favour of the appellant on the basis that the leg symptoms were a consequence of the second operation and the appellant was acting reasonably in undergoing the relevant medical treatment. Master Malpass made the following findings which are not challenged: "The plaintiff has not worked since the third accident. He had a back problem at the time of that accident. As he is now forty-two years of age, twenty-three years will elapse before he attains the age of sixty-five years. The plaintiffs claim is put on the basis that he has had a total incapacity for work since the third accident and that such total incapacity will continue into the future. The plaintiffs treating doctors do not provide much assistance in their reports. The reports of Dr Giblin would suggest that there is some capacity for work. The reports of Dr Fearnside express inconsistent views. His earlier reports are consistent with the plaintiff having a future work capacity. The plaintiff is permanently unfit for work as a truck driver. He is unable to return to heavy activities and will be precluded from heavy lifting, bending or twisting. I am unable to accept the contention that he has had no residual earning capacity and that he will not have any such capacity in the future. He has had limited education. His work history has mainly involved truck driving. He has work skills (see vocational assessment). He has at least average intelligence. Disabilities arising from incidents prior to the accidents impose some restrictions on his capacity. In my view, he would at least have the capacity for some form of sedentary work. He should be able to manage some light manual work. He has made some attempt to obtain light work. He has not been successful in obtaining suitable work. He may benefit from pain management and a regular exercise programme. He needs to lose weight, undertake regular exercise and receive psychological counselling He has a marked dependency on medication and a minimal motivation for return to work". In challenging the sum of $200,000 awarded to represent loss of future earning capacity, counsel for the appellant readily acknowledges that he confronts a problem in that the assessment was not based upon any arithmetical computation. It appears that the case was argued before the Master upon the basis that the appellant had a total loss of earning capacity but the Master did not accept that and to that extent the Master was awarding an amount to represent loss of future URJ WAKE v WALSH (Gleeson CJ) 3 earning capacity on a basis substantially different from the way in which the claim of the appellant was put to him in argument and in evidence. That, no doubt, at least in part explains the Master's selection of a global figure. However, notwithstanding this difficulty, counsel for the appellant has argued that at least implicit error in the Master's approach to the awarding of loss of future earning capacity can be demonstrated by comparing the sum of $200,000 awarded in that behalf with the amount of $165,000 awarded for past economic loss. The argument advanced on behalf of the appellant proceeds upon the following lines. The period in respect of which the past economic loss was awarded was approximately four and a half years. The period in respect of which loss of future earning capacity was considered was a period in excess of twenty years. How, counsel asks rhetorically, can one relate an award of $165,000 in respect of the former period to an award of $200,000 in respect of the latter period? There is, it is submitted, an incongruity and such an incongruity as to justify a complete lack of confidence in the reasoning process that must have lay behind the award of the figure of $200,000. However, as counsel for the respondent has pointed out, the figures of $165,000 and $200,000 are, for a number of reasons, very difficult to compare. First, the period to which the award in respect of past loss of earnings related was a period during which there was at least for large parts of it total incapacity on the part of the appellant. As I said he had, for example, three operations. Furthermore, it was a period in respect of which he had been unable to find alternate work. On the other hand in relation to the future, the Master found as a fact (and this finding is not challenged) that the appellant is not to be regarded as totally incapacitated for work and has a substantial residual capacity. In that respect, counsel for the respondent also draws our attention to the fact that the amount awarded in respect of s79 of the Motor Accidents Act 1988, an amount which is not the subject of challenge in this appeal, was awarded upon the basis of an impairment to the extent of forty percent. Second, it is pointed out that the calculation of past economic loss is not one that is diminished by any allowance for vicissitudes, whereas the amount of $200,000 is diminished on that account. Third, one of the significant factors about the appellant's earnings at the time of the injury was that he was able to do a substantial amount of overtime work and that was reflected significantly in the award for past economic loss. In his reasons for judgment the Master expressed the view, which again is not challenged, that as the appellant got older it was unlikely that he would continue to do the same amount of overtime work as he had done in his younger years. Fourth, the amount of $200,000 represented the net present value of a certain income stream over a period of more than twenty years. On the other hand, the amount of $165,000 was the arithmetical total of wages actually lost. Bearing those considerations in mind, I am unpersuaded that the premise upon which the argument for the appellant depends has been made out. I do not consider that the appellant has demonstrated that there is such incongruity between the figures of $165,000 and $200,000 as to demonstrate at least implicit error in the latter figure. I would propose that the appeal should be dismissed with costs. 4 UNREPORTED JUDGMENTS Priestley JA I agree. It seems to me that the claimed inconsistency in the figures used by Master Malpass as the ingredients in the judgment sum he awarded does not, when examined in the light of the reasons given by the Master for his approach to future economic loss, survive as a true inconsistency. The Master's reasons to my mind adequately indicate why it was that he arrived at the figure of $200,000 for future economic loss, and the reasons were not such as to incline this court to say that there was any error in what the Master did such that this court would have come to any other conclusion. Gleeson CJ: The order of the court will be the appeal is dismissed with costs. Appeal dismissed with costs. Counsel for the Appellant: H Kelly T McKenzie Instructed by: Leakle Ormsby Counsel for the Respondent: H De Suvero Instructed by: Solicitor for GIO - GM Meadows