ABRAHAMS v TURNER SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL GLEESON CJ, MEAGHER and BEAZLEY JJA 15 May 1996, 16 May 1996 [1996] NSWCA 7 Beazley JA This is an appeal from a judgment of Judge Twigg in the District Court given on 16 October, 1995. In his judgment, his Honour awarded a verdict for the appellant against the respondent in the sum of $108,652.32. The basis of the appeal is that his Honour erred in failing to award any damages for loss of earnings or loss of earning capacity from | January, 1992 both to date of trial and in the future. The appellant was born on 30 July, 1944 and was in her mid-40s as at the date of trial. She was injured in a motor vehicle accident on 3 November, 1989. At that time she was recently divorced. She had two teenage children and save for a condition of rheumatoid arthritis, was otherwise in good health. Immediately prior to the accident she was not in full employment. She had a working history as a dental nurse many years before the accident and she had also been a stud mistress at a horse stud for a period of time. It appears that for almost the entirety of her marriage she had not been engaged in other than home duties. She gave evidence that because of her separation from her husband it was her intention to find employment to support herself and the children. Her intentions, she said, were to commence a retail business selling art supplies and that she would, in conjunction with that business, teach art and also do her own art work which she would sell. Those intentions had developed out of a passion which she had for art. She was insured in the motor vehicle accident suffering what his Honour found to be significant injuries. Those injuries included an injury to the left knee which had basically resolved by the time of the trial; a substantial injury to the right leg which involved fractures of the right tibia and fibula; a fracture of the right clavicle; a fracture of the sternum and some other insignificant injuries which resolved quickly. His Honour found that those injuries meant that the appellant's ability to lead a normal life was significantly impaired, which he assessed at 30 percent of a most serious case. After the accident the plaintiff did obtain some employment. About 18 months after the accident she commenced conducting art classes at her home for which she earned on average about $45 per week. She continued to conduct those art classes up to about the date of the trial. In 1994 she undertook work, for a period of two terms, at a shop in Jamieson, for which she earned about $80 per week. The appellant said that she was unable to maintain that employment because she was unable to cope with the travel from her home to Jamieson and also had difficulty climbing stairs which was required of her during the course of that employment. In 1995, the appellant gained employment at the Blue Mountains Grammar School teaching two classes per week, earning approximately $100 per week. There was evidence that that arrangement was about change as at the date of the 2 UNREPORTED JUDGMENTS trial so that the amount of work would diminish with a consequent diminution of her earnings to about $80 per week. She also gave evidence that there was a prospect that work available to her might cease all together. The appellant also had done some work painting ornate blackboards. She had also commenced contributing articles to a magazine concerning certain aspects of folk art and had in fact been paid $250 for her first article. The appellant gave evidence that she did not feel physically able to carry out her intention to establish the business to which I have referred. She said that her impairment was such that she was not able to stand up for long periods and not long enough to carry on such a business. She also expected the condition of her leg and back would deteriorate if she attempted to work on a regular basis. The appellant gave evidence that her ability to earn income was restricted by her physical incapacities and again, she referred to the difficulty of travel by public transport such as she experienced at the time she worked at Jamieson. She had difficulties sitting or standing for prolonged periods. There was no medical evidence tendered on behalf of the respondent. The only medical evidence in the trial was that which was adduced on behalf of the appellant. The appellant's general practitioner gave evidence to which his Honour referred at 245 of the Appeal Book in which the doctor expressed the opinion that the appellant was unfit for permanent full time work which would require either standing or walking for long periods. He considered that she was capable of working provided she had an adequate opportunity to rest and to elevate her right leg. He considered that she would be able to carry out the work involving art, which could be done mostly seated and he considered that factor combined with retail sales on a part time basis. The appellant had come under the care of Dr Bray, orthopaedic surgeon as a result of her injuries. Dr Bray did not express an opinion as to the appellant's ability to work or as to any impairment of her working capacity. However, in his two reports - the first of 23 January, 1991 and the second of 7 June, 1994 - Dr Bray gave a detailed assessment of the appellant's continuing disabilities which showed that she had a significant impairment of the function particularly of her right lower limb at and below the knee, which Dr Bray had assessed at about 30 percent. The appellant had also been seen Dr Richards who expressed an opinion that the appellant would be unfit to do any physical type of wort, or any work that involved prolonged weight bearing or prolonged sitting or standing. During the course of his reports I should also mention that the evidence of Dr Richards supported the appellant's evidence that she would have difficulty travelling extended distances on public transport, climbing stairs, standing on trains or negotiating multiple transfers on public transport which might be required she worked outside the home. Finally, Dr Ellis, surgeon, provided a medico-legal report in which he expressed the view that the appellant continued to have physical disabilities, that she had a 30 percent loss of efficient use of the right lower limb as a whole; she had a ligamentous injury of her left knee involving a 10 percent loss of efficient use of her left lower limb; that she had an aggravation of degenerative change in her back resulting in a 15 percent impairment and also a 10 percent permanent impairment of her chest due to the fractured sternum which she sustained in the accident. Dr Ellis expressed the view that the appellant's injuries were consistent with the accident and that she was fit for light duty work only. URJ ABRAHAMS v TURNER (Beazley JA) 3 The appellant's case had been presented at trial on the basis that she had suffered an impairment of her earning capacity due to her accident and that the assessment of damages for that impairment should be assessed on the basis that at the least she would have been able to earn an income as a shop assistant. In addition to that, it was submitted by counsel for the appellant, that she would have been able to earn moneys as an art teacher and as a producer of artwork. The case based upon the earnings shop assistant was put forward by counsel notwithstanding the appellant had never established the retail business she had proposed. There was no evidence before the Court as to what she might have earned in such a business. However, it was submitted that she would have earned at least as much as a shop assistant. The trial judge found that the appellant, was not entitled to damages for loss of her earning incapacity beyond the end of 1991. He found that the difficulty occasioned to the appellant by the injury to her right leg was such that by the end of 1991 she was able to earn as much as she could have earned - if not more - as a shop assistant. His Honour had earlier found that it was not clear to him that the appellant had been using her full economic talents. Indeed he said that the appellant had been keeping strictly within the confines of the Social Security system and the tax system. He made that finding in the context of a statement which appears at 246 of the Appeal Book that "it is the custom of people in the community that if they can rely on the taxpayer to pay for their support, they do so and as far as possible keep within the limits Social Security system allows them and supplement their earnings." It appears that his Honour's view that the appellant had in fact been keeping herself strictly within the confines of the Social Security system and the tax system came out of evidence, at 125 and following of the Appeal Book, that she had not filled in income tax returns at various times as she was aware that she did not have to do so because her earnings were under the taxation threshold. She understood that this was at the rate of about $100 per week. In my opinion, in coming to the finding that the appellant had not been using her full economic talents and that there was no impairment of her earning capacity from the end of 1991, his Honour fell into error. That finding was contrary to all the medical evidence and also contrary to the evidence of the appellant herself. The medical evidence clearly demonstrated that the appellant had sustained significant injuries which impaired her work capacity that those disabilities were continuing and that impairment of her working capacity also continued and would continue indefinitely into the future. I am of the opinion that his Honour's verdict to the extent that he made no allowance for the impairment of earning capacity from the end of 1991 should thereby be set aside. That raises the question as to what amount ought to be allowed for the economic loss from that time. It was not suggested by either counsel that this was a matter which ought to be sent back to the trial judge for re-assessment. There was material before the court which enables this Court to make its own assessment of that impairment. The difficulty with assessing the appropriate amount of damages in this case is the lack of earning history of the appellant. That is not said by way of criticism but as an expression of the realities of the case. The appellant had not worked during the course of her marriage. She found herself shortly prior to the accident in a position where she saw herself needing to earn income, with perhaps a limited ability to do so. However, she possessed a speciality which she considered would enable her to do so. That specialty was her expertise in art. 4 UNREPORTED JUDGMENTS In his submission, the appellant's counsel put forward a range of damages of between $40,000 to $60.000 as an appropriate range of damages for loss of earning capacity from 1 January, 1992 to the time when the appellant turned 60. The range was based upon an assessment of loss of between $100 to $50 per week calculated by the appropriate multiplier with an allowance of 15 percent for vicissitudes. Counsel stated that that was an appropriate allowance to make in the circumstances because it also in effect discounted the period for past economic loss which normally would not occur. Because of the uncertainties of the appellant's earning capacity and consequently, the uncertainty as to the extent to which that earning capacity was reduced because of the accident, it seems to me that a broad-brush approach is the appropriate course to follow. It is necessary to provide a cushion or a buffer for the impairment of earning capacity but to do so in the range which has been put forward by the appellant which, as I have said was based upon probable earnings of a shop assistant - but taking into account the amount which the appellant actually was earning and would be likely to earn in the future as an art teacher. It is also necessary to take into account in a broad-brush way, the vicissitudes of life. In my opinion it would be appropriate to select the lower figure in the range suggested by the appellant. I consider that his Honour's award of damages ought to be increased by an amount of $40,000. There was a cross-appeal as to interest. Counsel for the respondent submitted that interest should only have been allowed from 26 June, 1995, that being the date upon which the appellant filed an amended Pt12 statement which specified the basis upon which she made her claim for economic loss. However, the appellant had always put forward a case that there had been an interference with her earning capacity as is demonstrated by the Pt12 statement which was dated on 21 February, 1992. In those circumstances I consider that the cross appeal be dismissed. I propose that the orders of the court be that the verdict of the trial judge be increased by an amount of $40,000. To that extent the appeal be allowed, that the respondent pay the appellant's costs of the appeal and that the cross appeal be dismissed. Gleeson CJ I agree. Meagher JA I also agree. Gleeson CJ: Now the order of the court is that the appeal is allowed to the extent that the amount of the verdict and judgment for the plaintiff will now be $148,652.32. The orders will otherwise be as proposed by Beazley JA. 1. The appeal is allowed to the extent that the amount of the verdict and judgment for the plaintiff will now be $148,652.32. 2. The respondent pay the appellant's costs of the appeal. 3. The cross appeal on the matter of interest be dismissed. Counsel for the Appellant: K Rewell Solicitors for the Appellant: Mr S Smart, Stephen Smart and Associates Counsel for the Respondent: L King SC URJ ABRAHAMS v TURNER (Meagher JA) Solicitors for the Respondent: Ms M Maurice, Henry Davis York