THE NOMINAL DEFENDANT v NEAL SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CLARKE, HANDLEY and SHELLER JJA 10 March 1995, 11 May 1995 [1995] NSWCA 325 ASSESSMENT OF DAMAGES — MOTOR ACCIDENTS ACT — CONTRIBUTORY NEGLIGENCE — ONUS — TACTICAL BURDEN PAST ECONOMIC LOSS — INTEREST IMPAIRMENT OF FUTURE EARNING CAPACITY FACTS The respondent, Neal was travelling as a passenger in a Holden sedan which was allegedly forced from the road by an unidentified vehicle and struck a tree. Neal suffered serious injuries and sought to recover damages in respect of his injuries and losses. It was inexplicable how Neal had ended up lying parallel to the driver's door. Held (per Clarke JA; Handley and Sheller agreed) CONTRIBUTORY NEGLIGENCE The appellant, The Nominal Defendant, submitted that Neal had not been wearing a properly adjusted seat belt and was thereby guilty of contributory negligence pursuant to the s74(2)(c) of the Motor Accidents Act 1987. The appellant bore the legal onus of proving, on the balance of probabilities that Neal had not been wearing a seat belt at the relevant time. In Cross on Evidence (4th Australian Edition) at para[7165], the authors said: "Where one party bears the burden of proving a negative but the other has greater means to produce evidence to contradict the negative proposition, then provided the party bearing the burden of proof has tendered some evidence from which the negative proposition may be inferred, the other party carries a tactical burden to advance in evidence any matters with which (if relevant) the first party would have to deal in the discharge of its legal burden of proof." I will assume in favour of the appellant that the tactical burden passed in the way described in Cross. Upon this assumption, the court was entitled to draw the inference that Neal was not wearing a seat belt more readily than would be the case if the defendant had been in possession of knowledge of all the relevant facts. On the facts, I am unable to draw the inference either that he was conscious for a short while and walked around to the driver's side and lost consciousness or was propelled forward in the manner suggested by the appellant. How Neal got to his final position remains a matter of speculation and conjecture. The appellant had failed to discharge the onus of proving that Neal had not been wearing a seat belt. PAST ECONOMIC LOSS In awarding compensation for Neal's loss of earning capacity to the date of trial, the Master erred in using the sum of $629.94 as representing the sum that Neal would have earned but for the accident. This sum was what a qualified boilermaker could have earned. At the time of the accident, Neal was not a qualified boilermaker. INTEREST Neal was entitled to interest on the sums awarded to him by the Master and not to a figure reduced on account of the reasonableness of a hypothetical offer which the appellant never made. IMPAIRMENT OF FUTURE EARNING CAPACITY The Master had failed to take sufficient account of the very real possibility that Neal would have lengthy periods out of work and other periods in less remunerative work in 2 UNREPORTED JUDGMENTS assessing this head of damage. The Master had erroneously assumed that although Neal would earn a lesser sum of money than he would if uninjured he was likely to work day in day out in the future as though he were injured. Thus, compensation for the lost capacity should be compensated at a higher rate than the Master adopted. Clarke JA Lorrie Neal, the plaintiff in the court below and the respondent in this Court ("the plaintiff') was travelling as a passenger in a Holden sedan on 14 October 1989 when that vehicle was allegedly forced from the road by an unidentified vehicle and struck a tree. As a consequence of this incident the plaintiff sustained serious injuries and he sued the Nominal Defendant, the defendant in the court below and the appellant in this court ("the defendant'), to recover damages in respect of his injuries and losses. His claim was heard by Master Greenwood who directed the entry of judgment in the plaintiffs favour in the amount of $359,000. The defendant has appealed upon the grounds that the learned Master was in error in not reducing those damages on account of the plaintiff's contributory negligence and in his assessment of damages for the impairment of the plaintiff's past earning capacity. The plaintiff has cross-appealed on the grounds that the Master made errors in the assessment of damages for the impairment of future earning capacity and in the manner of calculation of interest. It is convenient to deal, initially, with the issue of contributory negligence and then to turn to damages. CONTRIBUTORY NEGLIGENCE In his notice of grounds of defence the defendant raised only one particular of contributory negligence, viz a failure to wear a properly adjusted seat belt. Since the passing of the Motor Accidents Act 1987 it is incumbent upon a court to make a finding of contributory negligence where it is satisfied that the plaintiff was not wearing a seat belt as required by the Motor Traffic Regulations 1935 at the time of the motor accident (s74(2)(c)). There are potential difficulties in the application of s74(2)(c) but in this case they need not be adverted to for the reason that the issue is whether the Master should have found that the plaintiff was not wearing a seat belt at the relevant time. It is the defendant's contention that the circumstances surrounding the accident were such as, in effect, to require the Master to conclude that a finding in the defendant's favour on this issue should be made. Before turning to those circumstances and the arguments which were developed in support of the submission I should refer to a legal argument presented by the defendant's counsel in his written submissions but modified to an extent during the oral argument. The argument was based upon a rule which it was said was laid down in R v Turner (1816) 5 M and s206 at 211 (105 ER 1026, at 1028) which, when applied to civil proceedings in General Accident Fire and Life Assurance Corporation v Robertson [1909] AC 404, was stated by the learned authors of Cross on Evidence (4th Australian Edition) at para[7165] as being to the following effect: "Where one party bears the burden of proving a negative but the other has greater means to produce evidence to contradict the negative proposition, then provided the party bearing the burden of proof has tendered some evidence from which the negative proposition may be inferred, the other party carries a tactical burden to advance in evidence any matters with which (if relevant) the first party would have to deal in the discharge of its legal burden of proof". URJ THE NOMINAL DEFENDANT v NEAL (Clarke JA) 3 (See also Parker v Paton [1941] 41 SR 237 at 243; Hampton Court Ltd v Crooks (1957) 97 CLR 367 at 371-372; Shoeys Pty Ltd v Allan (1991) ATR 81-104, at 68.943). Counsel accepted that the defendant bore the legal onus of proving that the plaintiff had not been wearing a seat belt at the relevant time but submitted that insofar as the Nominal Defendant did not become aware of the incident until many months after its occurrence the principle for which Robertson is cited in support was available to assist in the discharge of that burden. Although I had some difficulty in understanding precisely how the submission was ultimately put, I understood counsel to be saying that although proof upon the balance of probabilities was required the circumstances entitled the defendant to discharge that onus by what may be described as slight proof. It may be that in expressing counsel's approach in that way I have done him an injustice, but in the circumstances I think I ought to make my approach to the present question plain. In so doing I will put to one side the fact that when the plaintiff was first seen after the accident he was unconscious and had very little memory of the events and I will assume in favour of the defendant that the tactical burden passed in the way described in the passage from Cross. The principles of law are, in my opinion, clear. At the commencement of the case the defendant bore the onus of establishing, on the balance of probabilities, that the plaintiff was not wearing a seat belt at the relevant time. At the conclusion of the case the defendant could only succeed in obtaining a reduction in damages if it discharged that onus. That is, that it satisfied the court on the balance of probabilities that the plaintiff was not wearing a seat belt at the critical time. It is true, upon the assumption I have made, that the court was entitled to draw the inference that the plaintiff was not wearing a seat belt more readily than would be the case if the defendant had been in possession of knowledge of all the relevant facts. Another way of saying the same thing is that "comparatively slight evidence may be regarded as calling for an explanation" (Parker at 243). In the event that the defendant led sufficient evidence to support the inference it would have been open to the plaintiff to call evidence on the issue or simply to argue that the court should not draw the inference. If the plaintiff sought to lead no evidence in rebuttal it would be open to the trial judge at the end of the case to draw the inference for which the defendant argued. It should be emphasised, however, that the trial judge would not be bound to do that. On the contrary, it would be open to the judge ultimately, to decline to draw the inference. In this context it is helpful, I think, to refer to what Evatt J said in Davis v Bunn (1936-1937) 56 CLR 246 at 271-272. Although his Honour was dealing with the doctrine of Res Ipsa Loquitur the comments which I wish to cite are of a more general nature: "Tt (the doctrine of res ipsa loquitur) is best regarded as an application of the general principle of inferring a fact in issue from circumstantial evidence where the circumstances are meagre,-but significant, (cf Martin v Osborne (1936) 55 CLR 367). In civil cases such an inference may be made if supported by a mere balance of probabilities. Such phrases as 'reasonable explanation', 'onus of adducing evidence', 'onus of going forward with the evidence', 'answering the prima facie presumption', all describe more or less accurately the varying stages of the evidence throughout the course of a trial. But the legal onus of proving negligence always rests upon the plaintiff and every other 'onus' or 4 UNREPORTED JUDGMENTS 'presumption' is merely descriptive of arguments or inferences. At the end, the jury will determine whether, as a matter of reasonable inference, the plaintiff has proved his case;" Similar observations were made by the High Court, in dealing with proof of facts from circumstantial evidence, in Luxton v Vines (1952) 85 CLR 352, at 358, quoting from Bradshaw v McEwans Pty Ltd, (1951, HC, unreported). There it was said: "Tn questions of this sort, where direct proof is not available, it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference; they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture:... But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then, though the conclusion may fall short of certainty, it is not to be regarded as merely conjecture or surmise." In the present case counsel for the defendant urged upon the court the view that the learned Master was in error in saying that he could not be satisfied that the defendant had discharged his onus of proof. According to the argument circumstances were proved from which it was reasonable to find upon a balance of probabilities that the plaintiff had not been wearing a seat belt at the relevant time and the Master should have drawn that inference. Having made those introductory observations I now turn to the facts. The plaintiff was a front seat passenger sitting on the left hand side of the Holden vehicle. The car was driven by his girlfriend who has since become his wife. She was wearing a seat belt. He gave evidence that he put his seat belt on and buckled it near his right hip. He also said, in his evidence-in-chief, that it was his habit to put on his seat belt as soon as he entered a car. In cross-examination he agreed with the suggestion that he could not actually say that he had put his seat belt on but said that it was an every day experience, and in re-examination he seemed to reiterate that he had in fact put his seat belt on. His wife, who was called to give evidence, also said in her evidence-in-chief that he put his seat belt on. In cross- examination she said that he always did it, but did not claim a specific recollection that he had done it on the day in question. The Master found that the plaintiff was bruised across the chest and on the right thigh and, while he accepted that that evidence did not prove that he was wearing his seat belt, thought that those injuries were consistent with his having worn the belt at the time of the accident. The evidence which was accepted established that the car had run down an embankment from the left hand side of the road, mounted a fence and struck a tree. It rebounded about two feet back from the tree and, when it came to rest, was sitting directly over the top of the fence, very little of which was damaged forward of the car. The windscreen was shattered and an expert called by the defendant (Mr George) gave evidence that this could have happened in a number of ways, one of which was that the plaintiff could have been propelled through it. The passenger's seat belt was not damaged. When a Mr Gooden, who was the first person to arrive on the scene, saw the car the passenger's front door was closed and the plaintiff's wife was still in the car. Later Mr Gooden found the plaintiff prone on the ground parallel to the motor vehicle and close to it on the driver's side. His feet were near the offside front wheel and his head was slightly to the rear of the driver's door. He was face up and he was unconscious. URJ THE NOMINAL DEFENDANT v NEAL (Clarke JA) 5 How the plaintiff came to be in that position was something of a mystery but it was the defendant's submission at the trial and on appeal that, in the light of his state of unconsciousness, the compelling inference was that he was propelled from the car into that position. It is somewhat difficult to understand how that could have occurred if, as the evidence established, the front centre of the vehicle collided with the tree. It would be reasonable enough to expect a passenger, not confined by a seat belt, to be propelled forward through the windscreen and into the tree, or past the tree, as a consequence of such a collision. It may be that the person could even have rebounded to some extent from the tree although that is hard to imagine. Even if, however, one accepts an hypothesis which involves some measure of rebound it is difficult to believe that the plaintiff would have ended up in the position in which he was found as a result of the course of events which the defendant has asked the court to infer. Nothing that was said by Mr George went any further than establishing that the windscreen could have been broken by a body propelled from within. Indeed in his cross-examination Mr George agreed that the plaintiff's position was consistent with his having left the car and proceeded around to the driver's side and there collapsed. Mr Watson, who appeared for the defendant, did not endeavour to explain how, in the light of the evidence, the appellant could have finished in the position in which he was found if he had been propelled forward as suggested by the defendant. Rather he attacked what he considered to be the only other rational hypothesis and that is that the appellant had got out of the car and proceeded around to the driver's side and there collapsed. He contended that before a positive conclusion could be made that this had occurred and that the plaintiff had been wearing a seat belt at the time of the collision, it was necessary to conclude that the following sequence of events occurred after the vehicle came to rest: (1) The plaintiff remained conscious for a short time; (2) He uncoupled his seat belt and took it off his shoulder and waist; (3) He opened the door; (4) He got out; (5) He closed the door; (6) He made his way around to the driver's side and had to negotiate the fence which the car had knocked down; and (7) He collapsed unconscious while there. In counsel's submission that sequence of events was highly improbable, indeed it was fanciful. In support of the submission counsel referred the court to evidence which demonstrated that the plaintiff had a serious injury to his left wrist, was deeply unconscious when found and remained in that state for a lengthy time, needed breathing support in the ambulance and when he regained consciousness needed support in walking. The whole thrust of the evidentiary material, according to his submission, conveyed the extreme unlikelihood that the sequence of evidence described by counsel occurred. I would accept that the question as to how the plaintiff got to where he was found is something of a mystery. There are, as it seems to me, difficulties with either of the hypotheses advanced as to how he got to that position. But there is a fairly fundamental problem with the submissions put by counsel for the defendant. The plaintiff, when examined at Westmead Hospital to which he was taken from Camden Hospital, was found to be suffering from a right parietal skull fracture with a right parieto-temporal extradural haematoma amongst other injuries. It is known that those injuries led to the plaintiff becoming unconscious but what is not known is whether it was possible that there might have been a period of consciousness immediately after the accident which lasted for a short period of time, until, for instance, the extradural haematoma developed and rendered the plaintiff unconscious. 6 UNREPORTED JUDGMENTS The defendant led no evidence to show that unconsciousness must have been instantaneous and, as Mr Wheelahan QC senior counsel for the plaintiff submitted, failed to raise the fundamental point on which he now relies. If he had led evidence suggesting that the injuries were consistent, and only consistent, with instantaneous unconsciousness, it would have been open to the plaintiff to call medical evidence in rebuttal. The judges of the court are not medical experts and are simply unable to conclude what consequences would have flowed immediately from the injuries suffered by the plaintiff. If the defendant had wished to submit that unconsciousness must have been instantaneous it was open to him to lead evidence to that effect and to invite the court to act upon that evidence. Having failed to do so I do not think it is open to him now to ask this court to conclude that the plaintiff must have been unconscious the whole time. Further, he did not seek to show how it was that, on the hypothesis that the plaintiff had been propelled forward through the windscreen, he ended up on the ground on his back on the driver's side with his head level with part of the rear door. In all these circumstances I am unable to draw the inference either that he was conscious for a short while and walked around to the driver's side and lost consciousness or was propelled forward in the manner suggested by the defendant. How he got to his final position remains, so far as I am concerned, a matter of speculation and conjecture. In my opinion the Master was correct in his conclusion that the defendant had failed to discharge his onus and this ground of appeal must be rejected. DAMAGES THE DEFENDANT'S APPEAL The plaintiff suffered brain damage in the accident which has left him with permanent memory problems, difficulty in concentrating, increased frustration levels, right leg pain and right hand tremors. The problems on the right side of the body were also described as a slight hemi-paresis in the right hand and right leg. While he had not evidenced any disinhibited behaviour he did have behavioural problems which had created difficulty in his employment and were likely to do so in the future. At the time of his injury he was part of the way through a boilermaker apprenticeship and although he attempted to continue this fairly shortly after the accident he was unable to perform adequately and was told by his employer to come back when he was able to perform the work. He thereupon had about two years of his apprenticeship left to serve. He then undertook a rehabilitation programme and, on its completion, returned to work but was unable to work satisfactorily and was sacked. He then tried to obtain work in the boiler making field with little success. The Master described his efforts as "unrelenting". Finally he obtained work as a welder with Produs Washery, a coal washing establishment at Oakdale, where he worked off and on when work was available between August 1992 and December 1992, when he was sacked from that position. He had been associated at Produs with a Mr King and after he was sacked he badgered Mr King, who was then the principal of a firm at East Maitland, until he was given some work. In order to take up the job he travelled to East Maitland with his wife and young child and he worked there as needed but was finally sacked by Mr King in June 1993 (about two months before the trial). Mr King gave evidence that the plaintiff was desperately keen to obtain work and URJ THE NOMINAL DEFENDANT v NEAL (Clarke JA) 7 desperately keen to work. However, according to Mr King, it was necessary for him to be constantly supervised and care had to be taken in the work which was given to the plaintiff. Mr King mentioned in particular the plaintiff's lack of concentration, his forgetfulness, and his inability to work within a structure. He also said that the tremor in the plaintiffs right hand caused difficulties when holding the welding rod and thus his welding was poor. He had an inability to understand and interpret plans and with his lack of planning ability he had to be allocated simple tasks to be performed under supervision. Mr King had endeavoured to find him work but had been unsuccessful because of the problems that I have already mentioned and, in addition, some behavioural problems which grew out of his frustration in being unable to do what was required of him. The Master was satisfied that, as a consequence of the accident, the plaintiff was never likely to reach the required degree of skill to practice as a boilermaker and concluded that his future lay in other fields with lower skills than those which he wished to exercise. He was limited by his hemi-paresis; by his lack of memory and concentration. He had tried to operate a computer but found that he had continually to re-learn the skills associated with it; his inability to organise and to conceptualise and his degree of frustration in being unable to do that which he was erstwhile capable of doing all counted against him. In awarding compensation for the plaintiff's loss of earning capacity to the date of trial the Master adopted the conventional approach of determining what he was likely to have earned if uninjured and deducting from that figure the amount of money which he actually did earn. The difficulty with the learned Master's assessment is that he acted upon the basis that the plaintiff would have earned the sum of $629.94 net per week from the date of the accident until the trial. This sum was, on the evidence, what a qualified boilermaker could have earned. At the time of the accident the plaintiff was not a qualified boilermaker and had two years of his apprenticeship still to serve. The Master must have overlooked this fact in acting on a schedule which was handed up by the plaintiffs counsel during the trial and his award cannot stand. Indeed, the method of calculation of the sum of $629.94 was, in my opinion, a highly dubious one and provided an entirely unreliable figure for the calculation of either past or future loss. The schedule to which I have referred also set out what the plaintiff would, if he had been paid award wages, have earned for the period. This totalled $60,422. This figure overlooks the possibility that the plaintiff would have earned above the award rates at times during the period in question. In my opinion the figure $78,792, calculated in accordance with a schedule submitted by the defendant's counsel, more fairly assesses the loss. In these circumstances I would be disposed to award the plaintiff $69,541 ($78,792 less $9,251 actually earned) for past economic loss. PLAINTIFF'S CROSS-APPEAL (a) INTEREST The defendant made no offer of settlement in the case and upon the pronouncement of the judgment the plaintiff became entitled to interest. According to the Master the defendant ought to have made an offer and if he had made one discounted upon the ground of contributory negligence there may have been a basis for the settlement of the matter. The Master then said that if he had been wrong in his conclusions on contributory negligence he would have reduced the plaintiff's damages by 20 per cent. He went on to say: "I allocate for past 8 UNREPORTED JUDGMENTS economic loss (that seems to be a mistake as the Master was there talking about non economic loss) the sum of $40,000. As it would have been appropriate for an offer to have been made 12 months after the accident, I take three-quarters of this sum on which I allow interest at 2 per cent, and take 80 per cent of that amount, that is, on the basis that the plaintiff was guilty of contributory negligence. This amounts to the sum of $1,440." He then took the same approach with respect to the interest on past economic loss. In my respectful opinion the approach taken by the Master was legally erroneous. Once the plaintiff became entitled to interest he became entitled to interest on the sums awarded to him by the Master and not to a figure reduced on account of the reasonableness of a hypothetical offer which the defendant never made. The defendant simply made no offer at all and once the Master had determined that the plaintiff was entitled to interest it followed that the interest ought to have been calculated on the sums awarded to him. I should add that, although the defendant did not consent to the allowance of this ground of appeal, he did not seek to support the Master's reasoning. (b) IMPAIRMENT OF FUTURE EARNING CAPACITY The learned Master relied a great deal on the evidence of Mr King who said that he thought that the plaintiff could do no better than work as a welder earning $8-$10 per hour. On the other hand if he had retained his skills as a boilermaker he could have expected to earn between $12 and $14 an hour. The Master said: "On that basis the plaintiff has had a 30 per cent loss in skill which can be related to the accident on Mr King's assessment." He then accepted that the figure which could be earned by a boilermaker was $490 net per week and using his earlier statement as a guide found that his loss of earning capacity should be valued at $150 per week. Senior counsel for the plaintiff pointed out that the Master had adopted a figure of $629 net per week for the past and that if that figure was correct the base adopted for the future was insupportable. He also criticised the Master's statements that the calculation was complicated by three factors: (a) The demand for boilermakers was likely to wax and wane in the future; (b) There would be advances in science and technology; and (c) If there were those advances there would lessen the requirement for boilermakers. There was no evidence supporting any of those propositions and Mr Wheelahan submitted the Master was in error in taking them into account. I have some difficulty with this submission for while the Master made the statements attributed to him they seem to have played no part in his calculation which was based upon the base earnings of a boilermaker and a conclusion that the plaintiff had lost 30 per cent of his earning capacity. What troubles me, however, about the Master's assessment is that he seems to have assumed, and compensated the plaintiff upon the basis, that although he would earn a lesser sum of money than he would if uninjured he was likely to work day in day out in the future as though he were uninjured. In my view the evidence does not present nearly such an optimistic future for the plaintiff. In the past he has had trouble securing work and holding jobs. He has significant physical problems and also has to confront the possibility of being unable to control the irritation resulting from his frustrations at his limited capacity. To my mind the most important evidence given by Mr King was that the plaintiff "had to be allocated simple tasks which he performed under supervision". It is altogether too rosy to suggest that such a person is going URJ THE NOMINAL DEFENDANT v NEAL (Sheller JA) 9 to manage to hold down a job, albeit a lesser one, as though he were uninjured. The assessment of the Master has, in my view, failed to take sufficient account of the very real possibility that the plaintiff will have lengthy periods out of work and other periods in less remunerative work. While I also think there is some force in Mr Wheelahan's submission that a base figure of $490 net per week was too low I have concluded that nothing would be served by seeking to endeavour to ascertain more exactly the amount which the plaintiff would have been likely to earn if uninjured. Suffice to say, I think it would have been more than the figure chosen by the Master and that the compensation for the lost capacity should be compensated at a higher rate than he adopted. In my opinion an appropriate figure on which to work is $200 per week which, adopting the Master's approach, leads to a figure of $159,494. In the result the plaintiff is entitled to a verdict of $347,002.00 together with interest which I would leave it to the parties to calculate. Although the question of costs is somewhat complicated, in my opinion the appropriate order, in the circumstance that the plaintiff will receive no less by way of judgment (once interest is brought to account) than the Master awarded him, is one awarding him the costs of both the appeal and the cross-appeal. The parties should bring in short minutes including the computation of interest and reflecting the terms of this judgment. Handley JA I agree with Clarke JA. Sheller JA I agree with Clarke JA. The parties should bring in short minutes including the computation of interest and reflecting the terms of this judgment. Counsel for the appellant: GM WATSON Solicitors for the appellant: CREAGH AND CREAGH Counsel for the respondent: D WHEELAHAN QC and P CRITTLE Solicitors for the respondent: CALDWELL MARTIN AND COX