PARKINSON v DUMBLETON SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL COMMON LAW DIVISION PRIESTLEY, SHELLER and COLE, JJA 14 May 1996, 15 May 1996 [1996] NSWCA 422 MOTOR VEHICLE ACCIDENT — damages re-assessment — discretion in non-economic and future loss. The appellant was involved in a motor vehicle accident on 24 June 1994, and suffered serious injuries to his right elbow and shoulder. He underwent extensive treatment which resulted in severe scarring to his arm and his abdomen. Due to the severity of his injuries, he was unable to resume his employment as a fitter and machinist working underground in the mines, and could only perform 'select light duties'. He also developed post traumatic stress disorder and depression as a direct result of his injuries. The appellant brought proceedings against the respondents to recover compensation for non-economic and future economic loss. Master Greenwood gave judgment on 28 June 1995 in the amount of $268,385, being $77,000 for non-economic loss and $92,276 for future economic loss. The appellant submitted that the Master's assessment of non-economic loss at 35 percent of a most serious case was inadequate, and that his residual earning capacity should have been assessed at nil, having regard to his age, his physical and psychological injuries, and the depressed state of the open labour market. HELD: 1. (per Priestley and Sheller JJA) The Master's assessment of non-economic loss at 35 percent of a most extreme case was outside the range of exercise of a sound discretion. It failed to adequately account for the degree of mental suffering occasioned to the appellant by his injuries and by the loss of employment. (per Cole JA dissenting) The Master's finding was within but at the bottom of the range of his discretion. An increase of the figure would be inappropriate, since discretionary assessments of this kind are by their nature imprecise. 2. (per Priestley and Sheller JJA) The appellant could not be regarded as having any residual earning capacity. In fixing an arbitrary amount, the Master overlooked the appellant's age, training, extent of his disabilities and the unlikelihood of his finding permanent employment. (per Cole JA dissenting) Even though the appellant may have had difficulty in finding employment that would be 'personally rewarding', it was still open to the Master to find that he had residual earning capacity, given his fitness to perform select light duties. ORDERS 1. Appeal allowed; 2. Set aside the judgment of the Master given on 28 June 1995 other than the order for costs; 3. In lieu thereof judgment for the plaintiff in the amount of $321,290 to take effect from 28 June 1995; 4. The respondent to pay the appellant's costs of the appeal but to have a certificate under the Suitors Fund Act 1951 if so qualified. Priestley JA The injuries suffered in a car accident by the appellant in this case had very serious effects upon his life. The details are summarised in Sheller JA's reasons. One result of the accident was that the appellant, because of his age, his diminished abilities, where he had lived during his working life and was still living, and the work prospects in the only field he was fitted for, for practical 2 UNREPORTED JUDGMENTS purposes became unemployable on the open labour market. The appellant's evidence and all the medical evidence, which was uncontradicted by the respondent, support this conclusion. The Master also appears to have recognised the position, although he did so rather obliquely. However, the Master thought that the work the appellant did for his long time employer after the accident showed some residual working capacity which had to be recognised in considering his future prospects. In deciding this the Master does not appear to have taken into account the fact that the appellant's work for his employer was "select light duties" and that the appellant's injuries had been suffered on the way to work, so that the employer was liable to him under the workers compensation legislation. His employer (and no other prospective employer) thus had a reason for offering him light employment duties, having no necessary relation to his ability otherwise to get a job in a competitive labour market. When the employer went out of business and the appellant lost his job, it seems plain, unfortunately for the appellant, that his chances of getting another job, looking at the matter realistically, disappeared. The evidence also shows, in my opinion, that the depression and post traumatic stress disorder directly caused by the accident, that the appellant was continuing to suffer at the time of the trial, were being exacerbated by the appellant's loss of his job and feelings of hopelessness for the future. The Master could not give full weight to this factor because of his view, in my opinion faulty, of the appellant's residual working capacity. Thus, in my opinion, the appellant has shown flaws in the Master's approach to assessing both economic and non economic loss caused to the appellant by the accident. Further, I agree with Sheller JA's reasons in this case, both generally, and as to the approach that should be taken to reassessment of damages. I agree with the orders proposed by Sheller JA. Sheller JA INTRODUCTION The appellant, Brian William Parkinson, was injured in a motor vehicle accident on 24 June 1992 when a semi-trailer jack-knifed, came across his side of the road and struck his motor vehicle. He suffered considerable injuries to his right elbow which required an open reduction and internal fixation. The appellant also underwent a laparotomy and biceps tendon transfer and pinning of the right shoulder. He had at least five operative treatments relating to his injuries. The respondents are the driver and owners of the semi-trailer against whom the appellant brought proceedings to recover damages to compensate him for his injuries. Master Greenwood heard the proceedings and on 28 June 1995 gave judgment for the appellant in the sum of $268,385 which included an amount of $77,700 for non-economic loss and $92,276 for future economic loss. The appellant challenges these two parts of the verdict as inadequate. NON-ECONOMIC LOSS S79 (3) of the Motor Accidents Act 1988, as indexed at the date of the trial, provided that the maximum amount that might be awarded for non economic loss was $220,000, to be awarded only in a most extreme case. The Master found that the appellant's non-economic loss should be assessed as 35 percent of the most serious case". Nothing turns upon this choice of words. The appellant challenges this assessment on the basis that the percentage is outside the range of the exercise of a sound discretion in the awarding of damages. Mr Andrews, who appeared for the appellant, submitted that the range was from 40 to 45 percent. URJ PARKINSON v DUMBLETON (Sheller JA) 3 Mr Canosa, who appeared for the respondents, conceded that the percentage was at the lower end of the range but said that the range was from 35 to 45 percent. The difficulties of this case are not compounded by any exaggeration in the appellant's description of the effects of the injuries upon him or by any significant variation in the conclusions of the expert witnesses. Three matters stand out. Two of them, the state of his right arm and the effect of the injuries upon him are touched upon in the following passage from the Master's judgment: "The plaintiff was qualified as a fitter and machinist and worked underground in the mines. At the time of the accident he was a leading hand. He is right hand dominant. His right hand, to all intents and purposes, is useless for most purposes and he said in evidence he is having difficulty coming to terms with the use of his left arm. The injury and residual disabilities are such that not only has he limited movement of his arm but also pain in the elbow, particularly if it is bumped." In addition he was severely scarred both on the arm and down the front of his abdomen the result of the laparotomy. As the Master said the appellant was concerned by his scarring and his personal relations with his wife, which were unsatisfactory because of the difficulty he had with his useless sore arm. He suffered from depression. He did not go out of the house much. He was embarrassed by his inability to shake hands. He spent his time mainly with his family and close friends. He was unable to train greyhounds as he used to and he had an extremely poor grip in the right hand. He could not grip his right hand to lift any more than three kilograms. The Master described him as "suffering from chronic depression." With all respect I think this rather understates the appellant's condition and makes no mention of the prognosis. The appellant was born on 22 May 1941 and was, accordingly, fifty-four at the time of the trial. The treating doctor, Dr Giblin, said that he had sustained major and permanently disabling fractures and soft tissues injuries to his right upper limb. To all intents and purposes the right upper limb had no significant functional component in terms of his job. It was "of some use for personal care only." Although by the date of Dr Giblin's report on 28 May 1993, his condition had stabilised there was always the likelihood of recurrent flares of osteomyelitis and premature arthritis in his elbow, and the necessity for ongoing surgical attention to his right shoulder. An x-ray report of 19 March 1993 showed there were secondary osteoarthritic changes of the right elbow joint. On 3 March 1993 Dr Kaplan, a consultant psychiatrist, wrote: "On examination, I found Mr Parkinson to be an accurate and co-operative witness. I was particularly impressed with the attention he took to make sure he was precise in the details he was giving me. There could be no disputing the extent of his severe depression. He broke down in utter distress a number of times during the interview, especially when talking about not being able to work again, the disability he faced for the rest of his life and his feelings of frustration and failure over what had been inflicted on him. Aside from that, I felt his cognition was fully intact and there was no evidence of any organic disorder. I note that he tends to avoid any treatment he feels is unnecessary; consequently, he is not on any sustained medication for pain or depression. Assessment Ihave no hesitation in supporting this claim. As a result of his motor accident in June 1992, Mr Parkinson has suffered grievously. He is in chronic pain and has his daily life enormously restricted by the damage and to his right arm and shoulder. From a psychological point of view he is deeply depressed because he 4 UNREPORTED JUDGMENTS feels he has lost his focus in life, namely his ability to work and do various physical activities. He has had a severe blow to his self image and confidence in himself. He is also suffering from a Post Traumatic Stress Disorder as a result of the direct impact of the accident. While this is largely submerged in his severe depression, I have no doubt as to the distress it is causing him. Mr Parkinson is badly in need of treatment and I strongly endorse the decision to involve him in a rehabilitation program once he no longer requires any more operations. However, in addition to that, he definitely needs psychiatric treatment, involving both antidepressants and counselling for his mood state and Post Traumatic Stress Disorder. Final Diagnosis (1) Major Depressive Disorder (2) Post Traumatic Stress Disorder (3) Chronic Pain/Major Physical Disability." On 5 May 1995 Mr Frater, a psychotherapist and counsellor, reported: "Diagnosis In my opinion Mr Parkinson is suffering from post traumatic stress disorder - anxiety and depression. He has changed from a happy, confident and outgoing person to one whose predominant thoughts are centred on his disability, the restrictions that the injuries have caused and their interference in his day to day life. His thoughts are also dominated by feelings of anxiety and depression." Under the heading "Comments and Prognosis" Mr Frater added: "The whole accident has been a traumatic experience. Mr Parkinson has had his way of life changed quite dramatically. At the moment it seems that there is going to be a number of retrenchments at the coal pit where he works and, of course, if Mr Parkinson is one of those selected for retrenchment it is reasonable to assume that it will be nigh impossible for him to gain useful employment in any other area. The work that he has been doing at the mine has certainly occupied him and weighs heavily on Mr Parkinson's mind on what he will do, how he will fill in his time in the future. Of course, this is made more difficult because of the lack of mobility in his arm and the pain that he suffers. Mr Parkinson is a straight forward and honest man and I certainly believe that he is suffering from the degrees of anxiety and depressions that he related to me and this has been borne out by my biomonitoring equipment whilst doing the Traumatic Incident Reduction work. Frequently while doing these 'runs' Mr Parkinson cries quite profusely over the traumas that he has experienced. As I said, on completion of therapy I expect that the emotional matters that relate to his accident will be made benign and there will be no outside factors that will cause a restimulation of any of the factors relating to the accident." In his evidence the appellant described the pain he suffered after the accident. The transcript of his evidence contains the following passage: "Q. What is the situation now about your depression? A. Well, ''m having treatment. I don't know - (Noted: Witness appeared distressed) SHORT ADJOURNMENT Q. How often now do you get upset? A. If I see a bad accident on TV or I see a crime on the TV or I hear something on the wireless I just want to turn it off because it upsets me that much. URJ PARKINSON v DUMBLETON (Sheller JA) 5 Q. Any other things that trigger your problems? A. I try and avoid driving of a night time. I feel as though oncoming traffic is in my lane. Of a day time it seems to be okay because I can see in the distance. Q. Do you get self conscious about your disabilities at social gatherings? A. Yes, I do. Q. Do you have problems shaking hands with people? A. I certainly do. Q. Do you go out as much now as you did before the accident? A. No. I don't. Q. What sorts of places do you not go to now that you did before? A. I don't like going to clubs. I just like to be with my family or close friends and I prefer to stay home. Q. What about to the greyhound races? A. All depends who I'm with but I prefer to just stay at home myself. Q. Do you have some problems now about personal security? A. Yes, I certainly do. Q. What is that? A. That I can't defend myself. Q. Do you get angry? A. Yes. I get angry because there's certain things used to just be a snack for me and I can't do them now. Q. I think you have been seeing Mr Frater, a psychotherapist, is that right? A. That's right. Q. Did you commence with him on 2 March this year? A. That's right.... Q. Do you think you are making some progress with him? A. I don't - I don't really know, I don't know. Q. Do you have a good relationship with him? Yes I have. Q. Is it your intention to continue on with that counselling? A. If he feels as though he can help me I'd love to. Q. I think you have scarring in various parts of your body? A. That's right. Q. You have an 18 centimetre scar on your right shoulder, a 16 centimetre on your right elbow and a long laparotomy scar around your abdomen? A. Yes. Q. Does the scarring bother you? A. Yes. Q. Why is that? A. Because in the summer time you look very unusual wearing long sleeves when you don't have to because of the weather and elbow and if you wear swim trunks the scarring on the abdomen and shoulder shows up. Q. Do you take medication? A. I take pain killers when I want some relief. Q. What sort of pain killers do you take? A. Panadeine Forte. Q. Do you take about a packet of those per month? A. I try not to take any drugs at all. It's just the way I am. I try and avoid drugs as far as possible. Q. Does that cost you $19.75 a packet? A. That's right. Q. I think you were taking Prozac for a time but that did not agree with you? A. No, it had other complications." I accept that the Master referred to the various matters he had to take into account in assessing the percentage of a most extreme case. However I think he underestimated the degree of suffering particularly mental suffering. The impression left on my mind from a consideration of the evidence to which we have been taken is that an assessment of 35 percent as the proportion the appellant's case bore to a most extreme case was below the range of the exercise of a sound discretion. In my opinion this Court should accordingly set aside the judgment and redetermine the amount to be awarded for non-economic loss. FUTURE ECONOMIC LOSS The Master said that the medical evidence suggested that the appellant was "certainly unfit to continue work as a fitter, at least in the circumstances in which he did work. He performed some benchwork. It is difficult to see that that would 6 UNREPORTED JUDGMENTS be satisfactory". The appellant's evidence was that after the accident he resumed work in July 1993 "on light duties". The appellant said that the benchwork that he did was full time. He and another tradesman repaired roof holders. Asked how he was doing that he said: "Just on the bench with my fingers." He continued that work until May 1995 when the coal mine at which he was working was partly closed. He received a letter dated 14 June 1995 from Clutha Ltd referring to an offer of employment proposed to him when the Oakdale Colliery was purchased by Advance Coal Ltd. The offer was subject to the appellant's obtaining from the Joint Coal Board a certificate stating he was fit for full and unrestricted duties underground at the mine. If such certificate was not forthcoming, the offer of employment would be withdrawn. The letter continued: "The mine has a policy of rehabilitation to assist injured employees to obtain a gradual return to normal duties and that such policy does not cater for the assigning of permanent selected or light duties to employees who cannot return to full, unrestricted duties at the completion of the rehabilitation period." The appellant received this letter a fortnight before the hearing of the proceedings began. After he received it he spoke to the manager who told him that unless he could produce a medical certificate to carry out unrestricted duties there was no work available for him. The Master noted that the appellant was unemployed and had not yet sought additional work. He said that bearing in mind the appellant's training, the depressed state of the economy and his age it would be a very sympathetic employer who would take him on for employment. As a miner he could have looked forward to another six years of work. Taking these matters into account he assessed the plaintiff's economic loss at $400 per week. This was arrived at by assessing his residual economic capacity to be $137 per week and his economic capacity, but for the injury, at $547 per week, which was an agreed figure. This amount the Master discounted by 15 percent for vicissitudes taking account of the attendant risks of the appellant's occupation and "the notorious risk of unemployment in the mining industry". Using an appropriate discount factor for the rest of the appellant's working life the Master came to the amount of $92,276. The appellant challenges this assessment on the basis that in truth his residual earning capacity should have been treated as nil. The appellant submits that having regard to his age, the fact that he is right hand dominant, the severe orthopaedic injuries to his right arm and the psychological injuries he has suffered, he has no residual earning capacity. The assessment of residual earning capacity appears to be based on an arbitrary figure. It is not stated to be related to what the appellant was earning in the period up to the time when he ceased work in May 1995S. In his report of 28 October 1993 Mr Barry Bracken, an orthopaedic surgeon, stated that in his opinion the appellant would remain permanently unfit for work requiring use of the right arm above waist level. "He is fit only for selected light duties in respect of his right arm, involving light intermittent use of the right arm at or below waist level. He should not be required to lift more than 2 kg with the right arm and only between floor and bench level." In his report of 24 March 1995 Mr Bracken said: "In consideration of his age and the marked residual disability of his right arm it is my opinion that it is extremely doubtful if he could find employment in the open labour market." It seems to me that the evidence points unerringly to the conclusion that so long and only so long as the appellant could keep employment with an employer prepared to give him selected light employment could he be considered as having any earning capacity. The possibility of this disappeared, for practical purposes, URJ PARKINSON v DUMBLETON (Cole JA) 7 with the policy decision reflected in the letter of 14 June 1995. Thereafter the appellant was in the open market and on the evidence unemployable. The Master recognised this when he said that bearing in mind the appellant's training, the depressed state of the economy and his age it would be a very sympathetic employer who would take him on for employment. In my opinion and with the greatest respect in fixing an arbitrary amount of $137 per week for the appellant's residual economic capacity, the Master overlooked this fact. In that he erred. On the evidence the appellant had no residual earning capacity. Accordingly this part also of the verdict must be adjusted. The appellant also urged that a 15 percent discount for vicissitudes was excessive. I am not persuaded this is so. RE-ASSESSMENT This leaves me to reassess the amount of the judgement. In view of the way the appeal was argued it is only necessary to consider the components for non-economic loss and future economic loss. In my opinion the appellant's entitlement to damages for non-economic loss must be treated as one equivalent to 45 percent of a most extreme case. I am led to this conclusion by the appellant's age, the severity of injury he suffered to his right arm, the necessity for repeated operative procedures, the pain he has suffered and will continue to suffer with the likelihood of recurrent flares of osteomyelitis in the elbow and premature arthritis and the necessity for ongoing surgical attention, his post traumatic stress disorder manifested in obvious continuing distress and depression at the situation he finds himself in and the effects of the severe scarring he bears. Since the trial the maximum indexed limit has been increased to $235.000 but only in respect of motor accidents which occurred after 26 September 1995; s79A of the Motor Accidents Act. In this case the maximum indexed limit applicable at the date of trial, $220,000, still applies case. Since we have not been invited to interfere with other components in the judgment, I think it is appropriate to order that the substituted judgment take effect from 28 June 1995, the date of the Master's decision. I would substitute for the amount the Master awarded for non-economic loss of $77,000 the amount of $99,000. In my opinion the appellant has demonstrated that as at the date of the trial his future economic capacity was nil. Accordingly for the amount of $92,276 assessed by the Master I would substitute, using the same discount factor and allowing 15 percent for vicissitudes the amount of $123,881. I propose the following orders: 1. Appeal allowed; 2. Set aside the judgment of the Master given on 28 June 1995 other than the order for costs; 3. In lieu thereof judgment for the plaintiff in the amount of $321,290 to take effect from 28 June 1995; 4. The respondent to pay the appellant's costs of the appeal but to have a certificate under the Suitors Fund Act 1951 if so qualified. Cole JA This is a damages appeal. No questions of principle arise. I will assume that persons interested in this appeal have access to a copy of Master Greenwood's judgment of 28 June 1995. Four matters were pressed on appeal. 1. FAILURE TO HAVE REGARD TO THE TOTALITY OF MEDICAL EVIDENCE 8 UNREPORTED JUDGMENTS It is said that the Master failed to have regard to the evidence of Dr Deveridge, Dr Kaplan, Dr Giblin, Dr Viset, Dr Rail and Dr Frater. Dr Deveridge expressed the opinion that the appellant was permanently unfit for pre-accident employment as an underground fitter and suffered incapacities in performing heavy manual work as well as grasping objects with his right hand. He suggested further surgery. Whilst Dr Deveridge was not specifically referred to in the reasons for judgment, the Master made findings consistent with that doctor's view.! Dr Kaplan thought the appellant deeply distressed. The Master so found.2 Dr Giblin thought the appellant unfit to return to pre-injury work and likely to suffer in the future pain in the elbow from various causes, with the likelihood of there being future surgery required to the right shoulder. The Master found those disabilities and allowed for future surgery.3 Dr Viset found the appellant to have only partial movement of the right elbow, coupled with inability to lift the right arm beyond specified levels. The Master so found4. Dr Rail dealt with disabilities over the C5-6 area with a nerve lesion and consequences. The Master so founds. Dr Frater found stress and depression had changed the appellant's life. The Master so founds. This ground fails. 2. THE MASTER ERRED IN ASSESSING NON-ECONOMIC LOSS PURSUANT TO THE MOTOR ACCIDENT'S ACT AT 35% OF A MOST SERIOUS CASE It was argued that the Master failed to have regard to the major and permanent disabling fractures to the right arm and shoulder areas, the uselessness of his right arm for employment purposes and its limited use for personal care, future pain in the right elbow and shoulder, difficulties with driving, his unsuitability for employment in some areas, future osteo-arthritic changes, scarring, stress, depression and consequences. It was put that difficulties experienced with his left hand should reflect in the factor of non-economic loss but it was not pleaded as a head of injury and it is not clear the matter was argued before the Master. All the other matters mentioned were considered by the Master. It was also argued that post traumatic stress disorder was not referred to by the Master. In name it was not, but the Master did record that the appellant was suffering from chronic depression, and there was evidence that post traumatic stress disorder was largely subsumed in his severe depression. In my opinion it has not been established that this matter was inadequately considered by the Master. It is of interest that, when asked by the Court for their view of the range of percentage of a most serious case, Counsel for the appellant said 40 to 45%, whilst Counsel for the Respondent said 35 to 45%. On any view, the Master's finding of 35% is either just within or just below the appropriate range. In my Appeal Book at 151D-P, T-W Appeal Book, at 152C Appeal Book, at 151 W-x, 153P-Q Appeal Book, at 150J Appeal Book, at 150W-X Appeal Book, at 152C-D. ANRYNS URJ PARKINSON v DUMBLETON (Cole JA) 9 opinion it is within but at the bottom of the range of discretionary judgment available to the Master. Any slight increase in the figure could properly be regarded as tinkering with necessarily imprecise discretionary assessments. In my opinion this grounds fails. 3. THE MASTER ERRED IN FINDING A RESIDUAL ECONOMIC CAPACITY IN THE SUM OF $137 PER WEEK It was contended the appellant had no residual earning capacity bearing in mind his physical disabilities, his lifetime training and employment as a fitter, and his depression. The Master recognised that a sympathetic employer would be required before the appellant would be re-employed. He will have difficulty in obtaining employment in the open market having regard to both his injuries, disabilities and age of 54 years at trial. Nonetheless there was evidence that the appellant was fit for selected light duties not involving lifting the right arm or certain forms of use of the right arm7. In fact the appellant resumed work in July 1993 working on a full-time basis, although on light duties, until May 1995 shortly before his employer was placed in liquidation. He had not sought work to the date of trial but would were it available. Whilst I recognise the difficulties of obtaining employment which the appellant will find personally rewarding. I do not think it has been demonstrated that the appellant has no residual earning capacity. In those circumstances it was open to the Master to find a residual earning capacity and the figure of $137 is within the available range. 4. THE MASTER ERRED IN DISCOUNTING THE APPELLANT'S FUTURE ECONOMIC LOSS BY 15% RATHER THAN 5%. The Master considered this matter in his reasons. No error has been shown in the exercise of his discretion. In my opinion the appeal should be dismissed with costs. 1. Appeal allowed; 2. Set aside the judgment of the Master given on 28 June 1995 other than the order for costs; 3. In lieu thereof judgment for the plaintiff in the amount of $321,290 to take effect from 28 June 1995; 4. The respondent to pay the appellant's costs of the appeal but to have a certificate under the Suitors Fund Act 1951 if so qualified. Counsel for the Appellant: KW Andrews Solicitors for the Appellant: McGrath Dicembre and Co Counsel for the Respondent: NC Canosa Solicitors for the Respondent: Deacons Graham and James 7. Appeal Book, at 124, Dr Bracken.