McGRATH v NRMA INSURANCE LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SHELLER, COLE JJA and Simos AJA 27 August 1996, 27 August 1996 [1996] NSWCA 351 DAMAGES — assessed to usual retiring age — variation of trial judge's finding on retiring age and deduction for vicissitudes of life. Cole JA This is an appeal against an assessment of damages made by Hulme J in a judgment delivered on 2 April 1996. The factual circumstances material to that assessment are set out in that judgment and I will assume that any person interested in this judgment has access to the judgment of Hulme J. Accordingly, I will not repeat the factual findings there made. Three matters were argued on appeal. First, it was contended that his Honour's assessment pursuant to s79(2) Motor Accidents Act 1988 that the amount of damages to be awarded for non-economic loss was thirty per cent of the maximum amount which may be awarded was so wholly erroneous as to be appellably wrong!. The appellant's contention at trial and on appeal was that the percentage should be at least thirty-five to forty per cent. His Honour found that the appellant suffered "significant psychological problems and headaches", problems which were likely to continue, but in the light of the comparatively minor physical injuries assessed the proportion at thirty per cent. In my opinion, that percentage is within the trial judge's discretionary range and appellable error has not been demonstrated. Second, it was contended that his Honour erred in calculating loss of future earning capacity only until the age of fifty-five years. It was contended that his Honour should have determined that loss based upon the appellant working until at least sixty years and probably until sixty-five years. Hulme J's finding was: "The plaintiff said that she had no plans for early retirement. However, it seems to me that it would be appropriate to calculate damages under this head upon the assumption that the plaintiff would have continued to work until age fifty-five and not older. Her evidence does not suggest a mixed intention or reason to work until later than that age. Furthermore, although I do not need to rely on this, her husband is about ten years older than the plaintiff and it may well have been that they would have sought to have retirement time together well before he reached seventy-five. Joint activities of a similar nature inspired them to postpone having children."2 The third matter raised on appeal was a contention that his Honour erred in reducing future economic loss by a figure of twenty per cent allowing for the vicissitudes of life, rather than the usual fifteen per cent. In this regard his Honour said: 1. Moran v McMahon (1985) 3 NSWLR 700. 2. Appeal Book, at 304. 2 UNREPORTED JUDGMENTS "Tt is, however, apparent from the plaintiff's reaction to the accident that she must have had a susceptibility to an unusually strong reaction to accidents or, it may be, to stress beyond her ability to cope. One must recognise that the existence of a family may have been an incentive to cease work earlier than later although the financial demands imposed by the children may have operated in the other direction. In all the circumstances it seems to me it is appropriate to make a higher allowance for the vicissitudes of life than is sometimes done. I would allow twenty per cent."3 In relation to these two matters raised on appeal, his Honour continued: "One matter which has caused me to wonder whether I have not been too harsh on the plaintiff in adopting the age of fifty-five and the figure of twenty per cent is the fact that the plaintiff's husband was made redundant in April 1994. In the plaintiff's words he is 'not particularly skilled and employment for him doesn't look terribly promising' - matters which are calculated to have made the plaintiff place a greater emphasis on work than otherwise. However, I have concluded that I should adhere to the figures mentioned."4 Regarding retiring age, the appellant relied upon Dykstra v Heads> and Baldwin v Lisicic®. From those authorities was derived the proposition that, absent evidence, a court was entitled to assume that persons would work until the age at which age pensions become payable, being sixty years in the case of females and sixty-five years in the case of males. Here the appellant gave evidence of her intentions. She was asked: "Q. Did you have any plans beyond the time of child bearing, with regard to returning to work, or otherwise? A. Yes, with the Public Service there are generous leave entitlements, to have children and leave without pay, so my tenure in the Public Service was secure, so yes, I would have imagined that I was going to continue in gainful employment. Q. Did you have any plans for early retirement? A. No I didn't." After noting her husband's work redundancy she gave the following evidence: "Q. Does that have implications for the family of a financial nature? A. Yes, it certainly does. Q. In what way? A. Him being forty-five and not particularly skilled, and employment for him doesn't look terribly promising, so to me I suppose it looks like that I'll have to get some form of employment somewhere, but financially it hasn't been looking very good." In my opinion, there was no basis in the evidence for the trial judge determining that the appellant would retire prior to the statutory age which she will receive a pension. Particularly is that so in the light of financial circumstances resulting from her husband's redundancy. Particularly also is it so in the light of the appellant's strong work ethic and achievements. The appellant's contention that there was simply no evidence to justify a finding of work cessation at age fifty-five years should be upheld. The appellant is entitled to have her future economic loss calculated until the age of sixty. 3. Appeal Book, at 304. 4. Appeal Book, at 30S. 5. (1989) Australian Torts Reports 80-280 by Samuels JA at 68,985 6. (unreported) NSW Court of Appeal, 20 April 1993 by Kirby P at 9. URJ McGRATH v NRMA INSURANCE LTD (Cole JA) 3 Regarding the discount of twenty per cent for vicissitudes, it is clear that a trial judge should consider a plaintiff's particular circumstances in determining an appropriate percentage'.7 Hulme J did that. A weighing of the various factors in that equation, including the appellant's successful work record, psychological make-up and social and family situation, may lead another tribunal of fact to a different conclusion. However, before this Court may intervene it must be persuaded that appellable error has been shown in the trial judge's decision to fix a discount of twenty per cent. In my opinion, such appellable error has been shown. At 15 of the judgment his Honour indicated that he would assess her future loss of income and earning capacity upon the basis that she was promoted, or would have been promoted, pre-trial from Grade ASO5 to Grade AS06. However, he continued: "But I am not persuaded that I should make any allowance for further promotion." There was evidence which was not the subject of cross-examination or challenge before the trial judge which was the evidence of the appellant's superior officer. That evidence was a Mr Merchant who said: "T thought that she certainly could have continued to work to the level of an AS06 and she possibly could have been promoted to the next level beyond that, which would have been a senior officer Grade C." It was submitted that the trial judge was not obliged to accept that evidence. That clearly is so. Nonetheless, the evidence was there and it was unchallenged and uncontradicted in cross-examination. In those circumstances, it seems to me to have been an error not to have taken into account that possibility in weighing the question of what was an appropriate discount for the vicissitudes in assessing some discount to be made in relation to future economic loss. Ihave already quoted the passage in his Honour's judgment where his Honour dealt with the assessment of the figure of twenty per cent. It seems that his Honour has translated the appellant's reaction in a non-work situation to an horrific accident to which she was subjected and its effect on her psychologically to form a view that because she has reacted to that horrific accident and response by causing to her stress in various forms, his Honour formed the view that that difficulty in coping with stress would reflect itself in a work situation. That seems to me to be an inappropriate form of reasoning. One can readily accept that a person subjected to an horrific accident of this nature would have a strong personal reaction exhibited in stress. It does not follow at all, in my view, that a person who may be subjected to work pressure would react in a similar way in consequence of usual stress resulting from work situations. Accordingly, it seems to me that his Honour has erred, firstly, in not taking into account the possibility of some further promotion and, secondly, in inappropriately translating personal stress in a non-work situation to the effect of stress in a work situation in reaching his assessment of the discount to be allowed for vicissitudes. It is those errors which have led his Honour to increase the normal figure of fifteen per cent to twenty per cent. It follows, in my opinion, that the verdict and judgment of Hulme J should be set aside and in lieu thereof judgment entered in a sum to reflect his Honour's reasons, varied by extending the loss of future income earning capacity to the age of sixty rather than fifty-five years, and amending the discount for vicissitudes to fifteen per cent. 7. Winn v New South Wales Insurance Ministerial Corporation (1995) 184 CLR 485 at 498. 4 UNREPORTED JUDGMENTS The parties are agreed, subject to any necessary checking, that the figure resulting is $485,727.92. In my opinion the judgment of Hulme J should be set aside. In lieu thereof there should be substituted a verdict in favour of the appellant of $485,727.92. The respondent to pay the appellant's costs of the appeal but should have, if qualified, a certificate under the Suitors Fund Act. Sheller JA I agree. Simos AJA I agree. The order of the Court will be that the appeal is allowed. The orders made are as proposed by Cole JA with liberty to the parties to apply to amend any error. Representation: Counsel for the appellant: DA Wheelan QC and PG Mahony Solicitors for the appellant: Baker Deane and Nutt Counsel for the respondent: CR Hoeben SC Solicitors for the respondent: Abbott Tout