HAY v HAY SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CLARKE, HANDLEY and SHELLER JJA 22 November 1996, 22 November 1996 [1996] NSWCA 243 MOTOR VEHICLE ACCIDENT — negligence — personal injury — damages — future economic loss — possible effect of injuries suffered on future earning capacity not taken into account Sheller JA On 30 July 1992 the appellant, Anthony Hay, was injured when travelling as a front seat passenger in a motor vehicle being driven by his brother, the respondent, Mark Hay. While proceeding along Cropley Drive, Baulkham Hills shortly after 2am on that morning, the vehicle hit a tree by the side of the road. The appellant sued the respondent in negligence. The respondent was not prepared to accept an arbitral award that was made on 24 February 1995 and the proceedings came before Newman J for hearing. Liability was admitted and the parties agreed there should be a deduction of 20 per cent on any judgment for contributory negligence. Newman J assessed damages in an amount of $187,884. This comprised an amount of $10,000 for future medical expenses, $77,550 for non-economic loss, $63,052 for past economic loss, and $37,282 for out-of-pocket expenses. After the deduction for contributory negligence his Honour gave judgment for the appellant in the amount of $150,307.20. The appellant filed a notice of appeal which covered a number of grounds which are not now pressed. The grounds that are pressed relate to his Honour's alleged failure to make any proper allowance for future economic loss and to make an award for loss of business opportunity. The appellant was born on 2 July 1959. Before his accident he had had what his Honour described as a commendable work history. After completing his Higher School Certificate in 1976 and a number of tertiary courses, he acquired expertise in insulation and operation of fans used in air-conditioning systems. He worked for a number of employers and reached executive level as a sales executive. In 1989 he and a colleague established a consultancy partnership described as acting as a link between suppliers of technology and their prospective customers. The partnership had a prospectively beneficial relationship with the commercial consultancy division of Wollongong University. His Honour said by the time of the accident the partnership had not realised any great profit. It was in a formative stage in a time of recession. In early 1993 the appellant attempted to resume work in the partnership but this was apparently unsuccessful and, in February 1993, the partnership was dissolved. In the accident the appellant suffered severe orthopaedic injuries and psychiatric consequences. When he reached Westmead Hospital some short time after the accident he was found, amongst other injuries, to have suffered from fractures of the left clavical, of the pelvis of the inferior and superior rami and of the left acetabulum. 2 UNREPORTED JUDGMENTS A good deal of the hearing was directed to the appellant's credit. Ultimately his Honour concluded, for reasons that it is not necessary to set out, that the appellant was a deceiver and had misled the various doctors who had treated an examined him in terms of the history that he gave them and the symptoms that he described. The consequence of those conclusions, which are not challenged, was to substantially undermine the appellant's case. As I have said, there was no doubt that he suffered from substantial orthopaedic injury and from some post traumatic stress disorder. However, his Honour found that the radiological surveys showed that the fractures with the exception of the fracture of the left clavicle, had healed. Dr Bokor reported that there had been a non-union of the left outer clavicle and stated that, depending on the level of the fracture, open reduction and grafting, or, if it was a true outer clavicle fracture involving the AC joint, an excision of the outer clavicle with stabilisation could be performed. The cost of the surgery would be approximately $1,500 to $2,000. Following surgery, the appellant had an excellent chance of being able to return to full activities without any significant permanent loss of function of the shoulder. In evidence was a bone scan dated 5 June 1995 in which the reported conclusion of Dr Ramsay was: "There is a mild degree of arthritic change of the left hip. There is no scan evidence to suggest trochanteric bursitis." In the course of one of his reports Dr Spira, a neurologist, who examined the appellant on behalf of the respondent, reported on 6 February 1996: "Mr Hay was obviously involved in a major motor vehicle accident in which he sustained multiple injuries as outlined above. The residual effects of his fractures appear to be some early arthritic change within the left hip and an un-united fracture of the left clavicle. The degree of arthropathy in the left hip is not such that it would be expected to produce the prominent limp demonstrated by Mr Hay and I believe that he was deliberately exaggerating this aspect. There were several signs in the physical examination which required deliberate elaboration on his part and in essence Mr Hay claimed extreme discomfort at times when he had none (eg cutaneous compression and false straight leg raising test). Whereas it cannot be denied that Mr Hay sustained multiple and significant injuries in the motor vehicle accident, I believe that he is greatly exaggerating his symptomatology and feigning physical signs. It is also my belief that his claims of extreme anger are exaggerated and his sudden and aggressive demeanour during the early part of the interview appeared to be an act. In strict organic terms I believe that Mr Hay is capable of his pre-accident form of work. The main residual effect expected from his injuries is that he is prone to the development of arthritis in his left hip. A reduction in his weight would reduce the load upon the joint but even without this he is unlikely to require surgical intervention within the next decade or two." Dr Kahn, an orthopaedic surgeon, called by the respondent, was asked about the ununited fracture of the clavicle and whether, save for that restriction, he would place any other restriction on the appellant's ability to work. He said, "No." He was then asked the following questions and gave the following answers: "Q. You prepared this report of 25 January 1996. At the time you prepared that report and indeed any time previously did you have access to a bone scan that was carried out in July 1995? A. No. URJ HAY v HAY (Sheller JA) 3 Q. Would you look at this report? I am sorry, it should have been June 1995. Would you look at a report of Dr Stuart Ramsay dated 5 June 1995. Does that cause you to change any of the view you have expressed as to the necessity for future treatment? A. No. Q. Does it cause you to change any of the views you have expressed as to his capacity to work? A. No." Newman J accepted that the appellant had a continuing disability as a consequence of the injury to his left clavicle. However, he did not accept that the injury prevented him or would ever prevent him from carrying out work as a sales manager. In so finding, his Honour said he had taken into account that this work involved him clambering about ceilings and moving in awkward and confined spaces. His Honour said: "Tn short, I am of the view that as from 1 June 1994 the plaintiff has been able to undertake any form of employment which he was able to undertake prior to the accident and that there is nothing in the evidence which suggests to me, save for one feature, that he will be unable to perform in the future as a consequence of the motor accident." That one saving was a reference to the procedure recommended by Dr Bokor. His Honour said that this procedure would give rise to future medical expenses and it seemed to him he should make an allowance for future loss of earning capacity and future medical expenses. For purposes of quantification he allowed a figure of $10,000 on a global basis to cover this contingency. This was the only allowance that his Honour made in respect of the future earning capacity. Turning to damage for non-economic loss his Honour assessed the plaintiff on the basis of one-third of a most extreme case which quantified at $77,550. His Honour said that he was not prepared to make allowance for loss of business opportunity. The appellant, in his view, had been able to undertake any business activity which he had wished since 1 June 1994. Any losses prior to that date were, in his view, covered by his award for loss of past earnings. He did not find that on the balance of probabilities the plaintiff had established that he was entitled to any damages under that head. The first ground of appeal upon which the appellant now relies is directed to his Honour's failure to consider the question of future earning capacity to allow for the injury to the left clavicle and, in particular, the consequence of that injury in the sense that it prevented the appellant from undertaking heavy lifting. His Honour had also made no allowance for arthritic change within the left hip and the possibility that, in ten or twenty years time, this might affect the appellant's earning capacity detrimentally. It is true that Dr Bokor took the view that the reconstruction operation on the left clavicle had an excellent chance of success. However, there does remain a possibility, which, it seems to me, has to be taken into account in accordance with principle, that the operation may not be successful if it is undertaken and that, in the result, the appellant would suffer a continuing disability affecting his work capacity which may become important if he becomes unable to continue, as his Honour found him able to continue, in his role as a sales manager in a chosen field. I should say that his Honour was of the view that this capacity had been restored by June 1994. In this regard our attention was directed by the appellant's counsel to what was said in Medin v State Government Insurance Commission (1995) 182 CLR 1, and also in decisions of this Court in Ahmedi v Ahmedi (1991) 23 NSWLR 288 and Younie v Martini (unreported) 21 March 1995. 4 UNREPORTED JUDGMENTS It is true to say that his Honour took no account of the sign of arthritic change and the possible effect that would have on the appellant's future. In this respect counsel for the respondent relied upon what had been said by the orthopaedic surgeon, Dr Kahn, to which I have referred. However, it seems to me on the evidence that there was a possibility which should have been taken into account that, as a result of the injuries suffered by the appellant in this accident and their consequences in terms of the clavicle and the left hip, the future earning capacity of the appellant would be affected and that the appellant was entitled to be compensated for this future loss. With the greatest respect, in my opinion, his Honour erred in disregarding these possibilities. The difficulty is to assess an appropriate amount of compensation for that loss. One has to take into account the existence of a surgical procedure which has an excellent chance of succeeding. In terms of arthritic change one is looking ten to twenty years into the future. Inevitably the most that can be done is to fix a global sum which seems reasonably to achieve the object of appropriate compensation. In my opinion such a sum is $25,000. To that extent, I think the judgment of his Honour should be varied. The second ground of appeal relates to the loss of business opportunity. In this regard we were taken to a report prepared by Nelson Wheeler Arnold dated 8 February 1994 and a later report of the same firm of 16 February 1996. The total income of a partnership between the appellant and his wife was set out in these reports. His wife's and his share was about $23,000 in 1992. Understandably, on the limited experience available, the writer of that report was unable to give any indication as to the likely success, or otherwise, of the partnership if it had continued beyond 1993. The amount of earnings of the appellant revealed by the report was considerably less than the amount chosen by his Honour in determining what should be allowed for past economic loss which his Honour based, as I understand it, on the appellant's probable earnings as a sales manager. It is implicit in his Honour's judgment that the capacity which the appellant regained at some time in 1994 was such that he would be able to work from that time as a sales manager earnings wages which would far exceed what was revealed as the loss suffered with the demise of the partnership. However this may be, on the evidence there is no basis upon which we could take a view different from that formed by Newman J. No separate head of damages has been demonstrated for the loss of future business opportunity. For this reason, I am of the opinion that this part of the appeal fails. In my opinion the following orders should be made: 1. Appeal allowed; 2. Set aside the judgment of Newman J of 15 March 1996; 3. Reassess the damages by allowing a lump sum of $25,000 for future economic loss in addition to the allowance made for future medical expenses of $10,000; 4 Taking account of the discount for contributory negligence judgment for the plaintiff for $170,307.20 to take effect from 11 April 1996; 5. The respondent to pay the appellant's costs of the appeal but if so qualified to have a certificate under the Suitors Fund Act 1951. Clarke JA I agree. Handley JA I also agree. Clarke JA: The orders of the Court will be the orders suggested by Sheller JA. URJ HAY v HAY (Handley JA) 5 1. Appeal allowed; 2. Set aside the judgment of Newman J of 15 March 1996; 3. Reassess the damages by allowing a lump sum of $25,000 for future economic loss in addition to the allowance made for future medical 5 expenses of $10,000; 4 Taking account of the discount for contributory negligence judgment for the plaintiff for $170,307.20 to take effect from 11 April 1996; 5. The respondent to pay the appellant's costs of the appeal but if so qualified to have a certificate under the Suitors Fund Act 1951. Counsel for the appellant: RW Tregenza Counsel for the respondent: IDM Roberts Solicitors for the appellant: Champion and PartnersSolicitor for the respondent: Abbott Tout253545