JEFFREY v MARSHALL SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY and POWELL JJA 16 March 1995, 16 March 1995 [1995] NSWCA 220 Damages — Personal injuries — General damages — Economic loss Inadequacy Priestley JA I will ask Powell JA to give his reasons first. Powell JA On 31 July 1987, the Appellant, Mrs Jeffery, was a passenger in a motor vehicle travelling in Bridge Street, Hornsby at a time when that motor vehicle came into collision with another motor vehicle. The date of the accident is significant, for it was shortly after the coming into operation of the provisions of the Transport Accidents Compensation Act 1987. Of those provisions, for present purposes there need be noted only s40, which provided (inter alia) that no right to, or claim for, damages or compensation should lie for, or in respect of, death of or bodily injury to a person caused by or arising out of a transport accident occurring on or after 1 July 1987, and s52 and there following, which provided for compensation for loss of earning capacity, the amount of compensation being prima facie eighty per cent of the regular earnings of the person who had been injured. Following the accident, Mrs Jeffery was conveyed to Hornsby Kuring-gai Hospital, where she was detained for observation for a period of four hours or thereabouts. In addition to the usual physical examination, a series of x-rays of the thoracic spine was carried out. The hospital records would tend to indicate that, upon examination, Mrs Jeffery complained of tenderness in the lower mid thoracic spine and, as well, that the x-rays, while revealing some degenerative changes, revealed no further bony injury. Accordingly, Mrs Jeffery was discharged to home and advised to seek the assistance of her local medical practitioner. By the following day, Mrs Jeffery was complaining of neck pain and, as well, pain in a number of other parts of her body. As a result, she was unable to return to her employment for a period of some three months, during which, in addition to having treatment by her local medical practitioner, she had treatment from a physiotherapist. However, although, at the end of that period of 3 months, Mrs Jeffery returned to her employment as a Bar Attendant at the Australian Arms Hotel at Penrith, she found that the demands of her employment were such that she was unable to continue and she thereafter remained unemployed. It seems fairly clear that, within a short time after she had been involved in the accident, Mrs Jeffery made application to the Transcover Authority for payments pursuant to the provisions of the Transport Accidents Compensation Act 1987. Although the evidence which was tendered at the trial does not reveal the amount of those payments, we have been informed, today, by Mr LJ Ellison, who appears for Mrs Jeffery, that the total amount paid to Mrs Jeffery in the period from 31 July 1987 to 31 December 1988 was some $16,636. Although, again, the material which was tendered at the trial does not indicate how the sum was made up, sufficient material is before the Court to indicate that the amounts so paid to Mrs 2 UNREPORTED JUDGMENTS Jeffery by Transcover in all probability represented payments for loss of earning capacity calculated in accordance with the provisions of the Transport Accidents Compensation Act 1987 and based on Mrs Jeffery's then usual weekly earnings for a period of seventy-four weeks, that is the whole of the period from 31 July 1987 to 31 December 1988, together with a sum of $1,228 or thereabouts which latter sum appears to represent out of pockets for which Mrs Jeffery would otherwise have been liable, but which, in accordance with the provisions of the Transport Accidents Act 1987, were paid direct by Transcover Authority. Before passing on, it is appropriate to record, here, that, although, immediately prior to the accident, Mrs Jeffery had been on sick leave from her employment, she had had a good working record for a period of the better part of twenty years prior to the accident, of more recent times being employed as a Casual/Permanent Bar Attendant at the hotel at Penrith. Although Mrs Jeffery's income at the time was said to be approximately $250 a week gross, and about $225 a week nett, the evidence also contains a suggestion that, at particular seasonal periods during the year, Mrs Jeffery might have been employed for longer periods, and might, during those times, have been in receipt of a larger income. However, for present purposes, I proceed upon the basis, as the Transcover Authority seems to have done, that Mrs Jeffrey's usual weekly earnings were about $250 a week gross, and $225 per week nett I have said that Mrs Jeffery did not return to her employment after the period of three days to which I have earlier referred. That she was at least to a degree disabled from her employment appears to have been clear, for not only was she examined by her own general medical practitioner on a number of occasions during the period of seventy-four weeks to which I have earlier referred, but, on at least two or three occasions during the period, she appears to have been examined by doctors retained on behalf of the Transcover Authority for the purpose. Thus, in March 1988, Dr JB Lawson, a consultant physician, reported to the Transcover Authority inter alia: "... She has some continuing comparatively minor symptoms related to the comparatively recent soft tissue injuries of cervical spine and upper body. Improvement in movement and function appears consistent with considerable recovery from this injury. No evidence of localised tenderness or spasm remaining. There is no radiological evidence of fracture of vertebrae, or spondylotic changes, and further complications of the injury to the cervical region appear unlikely. My impression is that she will eventually make a return to her usual Bar Attendant work. At present she is affected by some continuing mild anxiety symptoms. This would appear to be some form of post traumatic anxiety reaction related to the injuries and disruption of her work which has affected her general livelihood causing some financial difficulties for her. However, she shows no evidence of grossly disabling anxiety or other psychologic disturbance. Following a short rest my impression is that she will be fit to return to work and does appear in fact to be motivated to return to full-time work in her usual occupation..." Although the evidence which was tendered at the trial is not clear, it would appear that the financial difficulties to which Dr Lawson referred in his report may well have been brought about by the difference between the usual weekly income Mrs Jeffery had there before had, and the amounts of compensation which she was receiving from Transcover, which difference made it difficult for her to continue to service the mortgage which she had on her home; the evidence, sparse though it was, suggesting that her first response to those difficulties was to URJ JEFFREY v MARSHALL (Powell JA) 3 let her home and seek to obtain other and less expensive accommodation for herself - it will be necessary to return to this later. In November 1988, Mrs Jeffery was seen by Dr G Hession, a consultant physician, who reported to the Transcover Authority on 24 November 1988 (inter alia) as follows: "OPINION: In a motor vehicle accident of 31st July 1987 she suffered: 1. Soft tissue injury of neck, ligament strain. 2. Soft tissue injury to mid dorsal region, ligament strain. 3. Soft tissue injury to right wrist, right ankle and chest. Some pain/discomfort is experienced in her neck from time to time on specific movements. Pain in her left subscapular region is present continuously and is aggravated by prolonged sitting and specific movements. Symptoms related to her right wrist, right ankle and bruised chest subsided without sequelae. I anticipate the soft tissue injuries of her neck and mid dorsal region will completely resolve with time, leaving no disability. She is significantly overweight and I believe her eventual cure would be hastened by weight reduction. She is fit for her pre-accident part-time work as a bar attendant. I do not consider rehabilitation to be required. The conditions abovementioned have not stabilised and there is no accessible permanent impairment at this stage " Although the evidence does not make it clear that this was so, it seems tolerably plain that it was on the basis of this report that, as it was entitled to do under the provisions of the Transport Accidents Compensation Act 1987, the Transcover Authority moved to terminate the payments to Mrs Jeffrey of compensation for loss of earning capacity. It seems clear, although the date on which it occurred is not, that, as the result of her financial difficulties, and as the result of the termination of her compensation payments, Mrs Jeffery felt obliged to sell her home at Penrith and to seek cheaper accommodation elsewhere, which accommodation, if it be possible, did not involve her in taking a mortgage which she would be unable to service. Although there is no evidence of Mrs Jeffery seeking to obtain such accommodation in the greater metropolitan area, one would think it likely that she may have cast about with a view to doing so, but found it beyond her means. Be that as it may, it seems that, eventually, Mrs Jeffery determined to move to Iluka, which appears to be a village on the North Coast, not far from Maclean, a village with which she had had some association for many years, and a village in which she was able eventually to obtain accommodation for herself without obtaining a mortgage. It would, however, seem that, although Iluka was otherwise a pleasant place in which Mrs Jeffery might live, there was no available employment of a type which she felt she could undertake. This, in my view, is a matter of some significance, for her past work history would indicate, both, that Mrs Jeffery was a woman who would work if she could, and, further, that, when she said that she had sought employment and was willing to undertake it, she meant what she said. Be that as it may, the Transport Accidents Compensation Act 1987 was repealed as from 1 July 1989, at which time the right to seek damages at common law in respect of motor accident injuries was restored as from 1 July 1987. For present purposes, it is necessary to note the provisions of only two sections of the Motor Accidents Act 1988 which replaced the Transport Accidents Compensation Act 1987. The first of those provisions is s79 which at the time of the trial with which we are concerned provides in subs(1): 4 UNREPORTED JUDGMENTS "... No damages should be awarded for non economic loss of an injured person as a consequence of a motor accident unless the injured person's ability was significantly impaired..." and the latter provisions of which place a ceiling on the amount of damages which might be awarded for non economic loss, that ceiling being adjusted, from time to time, by way of indexation pursuant to Orders made by the relevant Minister each year. The other section to which reference must be made is s147 which provides: ".., the value of any benefit provided to or on behalf of a person under the 1987 Act in relation to 'an immediate transport accident" - and the accident in which Mrs Jeffery was involved was such - "shall be deducted from the amount of any damages payable to the person in accordance with the Motor Accidents Act in relation to the accident..." Following the coming into force of the provisions of the Motor Accidents Act 1988, these proceedings were commenced on Mrs Jeffery's behalf. The proceedings appear to have come on for hearing at Penrith on 28 April 1993 before Taylor DCJ. We have been informed, without objection, that the hearing commenced in the late afternoon of that day, which was a Friday, and which was the last day of the Penrith sittings. If this be so - and, as I have indicated, no objection to our being told that it was so was raised - then it perhaps explains both the manner of the conduct of the trial before his Honour and what can only be described as the decidedly sparse nature of the evidence tendered on matters of some significance. In particular, it is to be noted that, although, in the course of the evidence which appears to have been led - through a series of blatantly leading questions - reference was made to the fact that Mrs Jeffery had received compensation payments from the Transcover Authority, as I have previously recorded, the amount of those payments was not disclosed in the evidence, nor, so it would seem, was his Honour's attention drawn to the provisions of s147 of the Motor Accidents Act 1988. Mrs Jeffery was the only witness who gave oral evidence at the hearing. Having recounted, in brief form, her previous work history and the circumstances of the accident and her work history thereafter, Mrs Jeffery then gave some evidence as to the nature of the complaints which she had, and which she said continued, together with some equally brief evidence as to the effects upon her life, and, in particular, her social life and sporting activities which those complaints had. At the conclusion of Mrs Jeffery's oral evidence, his Honour was informed that it had been agreed between the parties that Mrs Jeffery was earning $224 per week nett at the time of the accident and that the out of pocket expenses - which expenses did not include the sums paid on Mrs Jeffery's behalf by Transcover - amounted to $2,681.19. That having been done, the medical reports provided by Mrs Jeffery's general medical practitioner and by a number of specialists who had examined her for medico-legal purposes were then tendered and Mrs Jeffery's case was closed. The evidence tendered on behalf of the present Respondent was limited to the report from the Hornsby Kuring-gai Hospital, the reports which had been provided to the Transcover Authority by Dr Hession and Dr Lawson and a report of Dr WG Donaldson, an orthopaedic surgeon, who had been retained for the purpose of a medico-legal examination. URJ JEFFREY v MARSHALL (Powell JA) 5 Counsel then addressed, and, after a short adjournment, his Honour then delivered his Judgment. The Judgment is extremely brief but some aspects of it might be noted. In the course of his Judgment, his Honour recorded his view that Mrs Jeffery appeared to be a reliable historian and a person, who, subject to one or two matters to which he was later to refer, impressed him as somebody doing her best to tell the truth. One of the matters to which he was later to refer was the reason for Mrs Jeffery selling up in Sydney and moving to Iluka, his Honour indicating his view that the real reason was that, despite the fact that she had said in the course of her evidence that she had hoped to be able to work until she was aged sixty, Mrs Jeffery had at that time really decided to retire early; the other was the extent of Mrs Jeffrey's incapacity for work. His Honour then turned to deal with the effects of the accident upon Mrs Jeffery's life and, having done so, came to the question of quantifying damages. In this regard he commenced: "\.. In my opinion she has some residual capacity for work. If work were available in Iluka I formed the opinion of her in the witness box that she would be able to perform work at the local golf club or real estate agent where she has expressed an interest in being employed. Iam not able to conclude on the evidence that the accident forced the plaintiff to move to Iluka and that there were no other options for her here and I am not satisfied on the evidence that she is totally incapacitated by any means in that she is unable to perform work. The objective medical evidence is extremely limited and the Court has to rely entirely on what the plaintiff said in the witness box and overall she did appear to be a good witness doing her best to tell the truth. I accept that she would have some difficulty in the heavy - some of the more heavy aspects of the work she described, as I say I think that she could perform some duties on a casual fulltime basis (sic). The out of pocket expenses are agreed at two thousand six hundred and eighty-one dollars and the claim is for non economic loss, out of pocket expenses and economic loss. In my opinion the appropriate percentage or proportion relating it to the maximum for the plaintiff in this case is fifteen per cent which translates after application of the deductable (sic) to fourteen thousand one hundred and fifty dollars. As cushioned (sic) against the economic loss that the plaintiff has suffered as a result of this accident I allow her seven thousand five hundred dollars and I allow her the out of pocket expenses of Two thousand six hundred and eighty-one dollars nineteen. It will be a verdict for the plaintiff in the sum of Twenty four thousand three hundred and thirty-one dollars nineteen". Counsel for Mrs Jeffery then inquired whether that verdict was intended to include past economic loss to which his Honour responded: .. Yes the - well I have expressed - I have used the word cushioned badly, I withdraw that. In my opinion the loss that the plaintiff has suffered attributable to this accident is the best as I can assess Seven thousand five hundred dollars. It is implicit in what I said that there is a finding of significant impairment under s79 (1)." Thereafter there was paid to Mrs Jeffrey a cheque for about $7,700, that sum representing the amount of the verdict after deducting therefrom the amount of $16,636 which had earlier been paid to, or on behalf of, Mrs Jeffrey by Transcover. 6 UNREPORTED JUDGMENTS From the verdict and judgment so entered, Mrs Jeffery has appealed, the grounds of appeal being, in substance, that his Honour's award for general damages was inadequate, that his Honour's award with respect to past economic loss was manifestly inadequate, and that his Honour's award with respect to future economic loss was also inadequate. As to the first matter, Mr Ellison has sought to persuade us that, in determining that the extent of Mrs Jeffery's disability was fifteen per cent of a most serious case, his Honour erred and that a greater award was called for. It seems to me, however, with respect, that it is not open for us to accede to this submission. What was involved is clearly a value judgment, as I prefer to call it, or a discretionary judgment, as others have done, and such a judgment may only be attacked if there appear errors of the type described in the well-known passage in the joint judgment of Dixon, Evatt and McTiernan JJ in House v The King!. In my view, no such error is apparent in the present case and thus I put this ground of appeal to one side. I am, however, concerned with the other two grounds of appeal, primarily because, as is apparent from what I have earlier recorded, from the total verdict of some $24,000 which his Honour found there was to be, and, in fact, was, deducted the amount of $16,636 representing the total of the payments of compensation which had earlier been made to, or on behalf of, Mrs Jeffery by Transcover. It seems to me that, when there was before his Honour evidence, which was virtually unchallenged, first, that Mrs Jeffery had been unfit to return to her pre-injury employment at least for the period from 31 July 1987 to 31 December 1988, in respect of which period she would have been entitled otherwise to receive a sum of $16,000 or thereabouts for loss of income, together with a sum representing the out of pockets which had been paid on her behalf; and, second, that Mrs Jeffrey's future capacity to earn was limited; to allow a sum of only $7,500 for past and future economic loss was to fall into error. While I appreciate that, as has been submitted by Mr RWC Royle, who appears, today, for the Respondents, that the mere fact that Transcover made the payments to which I have earlier referred, for the period to which I have earlier referred, did not establish that Mrs Jeffery was, in fact, disabled, as she claimed, for that period, and, still less that she has a continuing residual disability, it seems to me that, on the whole of the evidence, his Honour had no alternative but to find, first, that Mrs Jeffery did sustain past economic loss in the sum of about $16,000, and, second, that had she a continuing residual disability, it following that an award of $7,500 for past and future economic loss was demonstrably inadequate. In these circumstances, I am of the opinion that the Appeal should be upheld. In the event, we are asked to reassess damages, and it seems to me that this is a case in which it is open to the Court to reassess. The most appropriate course to adopt, so it seems to me, is to substitute for the verdict found by Taylor DCJ a verdict in a sum which incorporates the amount which, pursuant to the provisions of s147 of the Motor Accidents Act 1988, was required to be repaid to the Transcover Authority. I would propose that the following Orders should be made: 1. Appeal upheld. 1. (1936) 55 CLR 499, 504-505 URJ JEFFREY v MARSHALL (Powell JA) 7 2. Judgment entered by Taylor DCJ on 23 April 1993 set aside and in lieu thereof enter Judgment for the Appellant in the sum of $40,967, such Judgment to take effect from 23 April 1993. 3. Respondents pay the costs of the Appellant of the Appeal and of the trial 5 at first instance and if qualified to have a Certificate under the Suitors Fund Act 1951 in respect of the costs of the Appeal. Priestley JA: I agree with what Powell JA has said and have nothing to add. The Orders of the Court are therefore as he has suggested. (at page 12) 10 F Counsel for the appellant: LJ Ellison Solicitors for the appellant: Coote Scott and Corry (Penrith) by their City, Agents Davis Hyde and Page 15 Counsel for the respondent: RWC Royle Solicitors for the respondent: GM Meadows Solicitor for NSW Insurance Ministerial Corporation