BLEICHER v HAWTHORNE SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL CLARKE JA, HANDLEY JA and COLE JA 9 March 1995 [1995] NSWCA 49 No question of principle Cole J. This is an appeal from a decision by Master Malpass in which he awarded the sum of $210,000 plus interest and costs to the appellant Horst Bleicher for injuries suffered by him in a motor vehicle accident which occurred on 24 October 1987. The appellant is a barrister. He had some prior experience and qualification in various forms of electrical and mechanical engineering and he was also qualified as and has practiced as an accountant. The only issues which arise in this appeal relate to the sums awarded by the Master for past and future economic loss. The Master awarded a sum of $30,000 for loss of past earning capacity and $80,000 for future loss of erning capacity. The measure of difference between the parties is reflected in the claim by the appellant that past economic loss awards should have been $320,000 and future economic loss should have been $790,000. As a result of the accident, as the Master found, the appellant suffered a cognitive disorder which was described as being no more than mild. The appellant came to the Bar in 1979. He was then aged 51 years having been born in 1928. At the trial he was 64 years of age, a time at which, as the Master held, retirement may have been approaching although the appellant had characteristics which indicated that he was likely to continue to practice into his seventies. The appellant had a number of advantages at the Bar. He had accountancy qualifications, he was described as being energetic and good with detail and had high intellectual ability, and he had an intense approach to his work. On the other hand, he had various qualities which Senior Counsel for the appellant described as demerits. One was the age at which he came to the Bar. The second was that he had no prior legal experience. A third was he apparently had a heavy germanic accent, and a fourth was what was described as a dogmatic or forcefulness of manner which may have detracted from his capacity to earn or achieve work. At the date of the accident he had been at the Bar for some eight years. The Master found that his practice had 'not taken off'. There was no strong group of solicitors which supported him and it was said that much of his work came from Legal Aid. He had what the Master described as a 'mentions practice' which meant in substance that there was no integral practice of substance. He received work passed to him from other floor members. An examination of the financial records showing billings and receipts indicates that it was not customary for him to receive work in matters where significant fees for a particular case were rendered or received. The Master held that he had a cognate disorder as a result of the accidentwhich, as I have said, was described as mild. The Master held: 2 UNREPORTED JUDGMENTS In my view, whilst there has been some impairment in the plaintiff's capacity to carry on his profession he retains a significant capacity to earn income in that profession. He has the capacity to carry out advice work. He retains the capacity to perform at least some court work. His accident injuries have lead to a loss of work or a loss of supply of work. As is often the case, the lost sources of work have not returned. He has received work from other sources. Generally speaking this has been work of lesser quality. There have been a loss of brief on hearings work. In losing this work he may have lost a chance of building a developing practice. The loss of this work made him vulnerable when the recession affected practitioners. The availability of work to him has been affected by the recession. Knowledge of his impairment could be expected to put him at a disadvantage in attracting work. Thus the appellant comes to this Court with the advantage of a finding that the disabilities, being the cognitive disorder found, have affected his practice. The question which the Master faced and with which we have been faced is what is the extent of the diminution of his economic or earning capacity. The appellant sought to establish the loss of economic capacity and its effect in monetary returns in a number of ways. First, he sought to show that he had an established practice by indicating what the pre-accident earnings were for the period from 1983 to the date of the accident. These figures then had to be compared with the post accident earnings for the following 5 years. Second, schedules were tendered which deal with the days which he spent in court, the number of mentions and the number of motions in which he was briefed both before and after the accident. Third, there was tendered a comparison of the income of other barristers of similar standing. Fourth, there was called some evidence from other barristers, and his clerk, who gave impressions of his practice but this aspect can be put to one side immediately because the Master found that the figures established his actual earnings, either on a cash receipts basis or accruals, and did not support the impressions that others had of his practice. Fifth, there was called evidence of two solicitors, one of whom said he hadceased to brief him because of problems regarded as 'impairment of capacity'. It is to be observed that the second solicitor himself noticed no such impairment. In the event, the fifth matter can be put to one side because that is the finding of impairment which the Master made. If one turns to a comparison of the pre-accident gross earnings and the post-accident gross earnings on a cash receipts basis, one sees that for the 5 years pre-accident, he averaged approximately $52,000 per year gross. In the 5 years following the accident, he averaged approximately $63,000 per year gross. That would thus not show, in any empirical way, a reduced earning capacity. The argument that was advanced was that having taken those figures one must then assume some increase due to increase in practice, and because of increase in fees beyond the actuals received. That seems to me to lead inevitably to having to take a global approach to assessment of future economic loss. In seeking to escape the consequence that the post accident earnings exceeded the pre-accident earnings, it has to be borne in mind that the appellant was away from his practice only from the end of October until February the following year. Reference was made to accruals which were said to more accurately reflect the income earning capacity of the appellant. The difficulty with that proposition is that if one looks at the figure for the 4 years preceding the accident, income on an accrual basis was approximately $229,000 whereas for the 4 years post-accident it was URJ BLEICHER v HAWTHORNE (Cole J) 3 approximately $262,000. The consequence is that the figures do not give any basis for saying, in an empirical sense, there has been a reduction in income earning capacity. To further escape that consequence it was sought to rely on a period of income receipts for the 16 months, and indeed but the 4 months, which span the period immediately prior to the accident. It was said that that period was the period after the appellant had ceased to spend a lot of time doing work for his floor in relation tolitigation concerned with the rental of the floor premises. The difficulty with that proposition is that there is a finding of fact, not really disputed, that the appellant did not refuse any work because of his involvement with the floor litigation. Accordingly, the figures on income which were looked at on a receipts basis or an accrual basis do not provide any sound footing for establishing a loss of earning capacity as reflected in income reduction. The second endeavour was to compare the number of hearing days in court, the number of mentions and number of motions. It must be said, as the Master found, that one really cannot project forward from the number of mentions or motions in any meaningful way to give an accurate expectation of what the appellant's future practice may have been. Indeed, it must be said that because a significant portion of the appellant's practice after some 8 years was in truth related to mentions and to motions that there was no underlying sound practice. It must also be said that with a practice of such fragility it would be more exposed to any recessionary or other downturn aspects which may affect those at the Bar. The Master found that recession had in truth had an effect on the practice of the appellant as it had upon other members of the junior Bar. Consideration of the graphs and figures relating to the days in court, mentions and motions really, in my opinion, indicates the variability in the practice of a junior Barrister whose practice, as the Master found, had not taken off. But if one looks a little more closely at the figures, one finds that the appellant achieved his maximum hearing dates in court in 1984. Since that time he has never achieved days in court to the number achieved then. That casts into serious doubt any consideration of a projection based upon a projection from base figures from hearing days in the past. Concerning the third aspect of proof advanced, that is the comparison with the earnings of other barristers admitted at the same time, such comparison seems to me to be misleading. It is misleading in my opinion to seek to consider an appellant, with the advantages and demerits to which I have referred, with the more usual young barrister or junior barrister who comes to the Bar in his twenties or thirties. Secondly, it seems to me to be difficult to take a group of barristers admitted around the same time and seek to draw an average income from that group and treat that as some sought of basis against which one can compare the individual earnings of, in this case, the appellant. The great variability which would be found in that sample would seem to me to make any average misleading. The consideration of those matters, which are referred to with greater and lesser particularity by the Master throughout his reasons, lead me to consider that the correct approach in relation to the assessment of past and future economic loss as reflecting loss of earning capacity is to adopt a global approach. Indeed on the material placed before him, in my opinion, the Master had little alternative. 4 UNREPORTED JUDGMENTS The figures that the Master awarded, the $30,000 for past economic loss and $80,000 for future economic loss, when regard is had to be past earnings and demonstrated earning capacity of the appellant, in my view has not been shown to be so wholly erroneous an estimate of damages as would justify this court in interfering with them. In those circumstances, in my opinion, the appeal should be dismissed with costs. Clarke JA JA. I agree. Handley JA. I also agree. In my opinion, the appellant failed to establish at thetrial that he had lost any particular sums of net income after tax between the accident and the trial. The Master was therefore compelled to undertake a global assessment his past economic loss and to do the same for the future. The appellant has failed to establish that the Master's global assessments were outside the range of a sound exercise of a judicial discretion in the assessment of damages. Clarke JA. The order of the court will be the appeal is dismissed with costs. Orders accordingly. Counsel for the appellant: J Poulos QC/D J Cochrane Solicitors for the appellant: G L Beard Counsel for the respondent: V B Hughston Solicitors for the respondent: P Jessop (solicitor for NSW IMC: Hurstville)