LEE yv. KORONUI SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL POWELL JA and SMART AJA 27 June 1997 [1997] NSWCA 188 In assessing damages for economic loss it is usually desirable to deal with past and future economic loss separately. An amount by way of a "buffer" is usually not appropriate for past economic loss. It may be appropriate for future economic loss. Powell JA. I will ask Smart AJA to deliver the first judgment. Smart AJA. Marie Joan Lee has appealed against the award of damages to her on the ground that the amount awarded for economic loss is demonstrably inadequate. She sustained a severe whiplash injury and other bruising when the motor vehicle which she was driving was struck on the right side by another vehicle and the area from the headlight to the engine on her car was squashed. She described it as a 'terrible' collision. Her car was a 'write off'. The back of her head went through the driver's side window which had been wound up. Her car was spun around and ended up some distance away. She was knocked out. Mrs Lee was born on 22 June 1930 and was aged 59 at the time of the accident on 29 July 1989. In about 1987 she had been diagnosed as suffering from Paget's disease. The judge accepted that her pains and disabilities as a result of her accident were quite different from the pains which she had previously suffered. The judge found that she was a witness of truth. He summarised the position thus: ... the plaintiff has suffered a whiplash type injury which has had the effect of causing difficulty to her in her movements and in lifting heavy objects with her right arm ... a degree of insecurity in respect of her right leg ... and the difficulty with her right knee which ... has caused her inconvenience and difficulty from time to time.'"'The judge accepted that as a result of the accident she had difficulties in the interaction between her neck and her right shoulder. The judge assessed the plaintiff's non economic loss as 20 per cent of a most serious case. This was not challenged. The plaintiff had worked on a full time basis as a nursing assistant performing heavy duties from 1974 to about 1987, often working six to seven days per week. She said that about 30 April 1988 she began working for her son's company at its nursing home but on reduced hours because of the problems which she was having with Paget's disease. This date may be incorrect having regard to her 1987 tax return. Perhaps it should be 30 April 1987. Usually she worked eight hour shifts on Saturdays and Sundays. She was on call and worked on other occasions as required. Sometimes she would relieve a nursing assistant who was on holidays. After the accident she was no longer able to do all the duties of a nursing assistant although she tried. She could no longer lift patients safely or do the bending required. The judge found that her injuries severely interfered with her ability to carry out her work and that there was no other form of work which she could do. The judge accepted that prior to the accident she had intended to work for as long as she possibly could. She had to support a home and herself. She said 2 UNREPORTED JUDGMENTS that if she had not had the accident she would not have retired in June 1990 when she became 60. The judge regarded predictions as to date of retirement as difficult. The judge described the plaintiff as intelligent and active in mind and body. He accepted these passages from the report of 2 June 1995 of Dr F J Harvey, an orthopaedic surgeon, who examined the plaintiff on behalf of the defendant: She gives the appearance of a very agile 65 year old. She walks briskly without a limp. She does have a slight dorsal kyphosis. She can touch the floor with ease and says that this causes no pain at all. And: ... | would have thought her work capacity is greater than average for a person (of) this age ... Ihave not overlooked that Dr Harvey described the plaintiff as fit and could not identify any permanent impairment which he could relate to her traffic accident. As earlier mentioned the judge accepted, in effect, the plaintiffs evidence that she could no longer work as a nursing assistant. Her evidence was supported by the general practitioner who treated her and some reviewing specialists. The judge after noting that Emeritus Professor Posen thought that Mrs Lee's Paget's disease was mild quoted this passage: Mrs Lees Paget's disease (on its own) is unlikely to have caused her to retire at the age of 59 or 60. The judge was satisfied that the plaintiff had suffered economic loss and held that she should be compensated on the basis that she intended to continue to work, the best way to compensate her being by way of a buffer for loss of earnings. He took into account her age, her suffering from Paget's disease and the vicissitudes of life for which he thought that a higher percentage than 15 per cent should be taken. He decided that the buffer should be $15,000. This was apparently to cover all economic loss. The judge did not address specifically the question of past and future economic loss nor did he analyse the period between the accident and the date of hearing (23 April 1996). The plaintiff contended that the judge had not dealt with past economic loss and that a buffer and a discount for the vicissitudes of life apply to future economic loss. The judge referred to the plaintiff having earned as a nursing assistant with her son's company $13,504 gross for the year ended 30 June 1989 and $3,065 gross for the year ended 30 June 1990. The tax returns for the years ended 30 June 1988, 1989 and 1990 disclose that the plaintiff received these moneys from the son's company and paid these taxes: Gross Tax Income Deducted 1988 $12,164 $2,131.20 1989 $13,504 $2,522.10 1990 $ 3,065 $ 605.19 In each of the years quoted the plaintiff had another source of income, namely, interest. This was a minor amount in 1988, a greater amount in 1989 and a significant amount in 1990. URJ LEE v. KORONUI (Smart AJA) 3 The plaintiff ultimately went on the age pension. The taxation returns suggest that she did not do so prior to 30 June 1990. She said that she retired in June 1990 and went on the age pension as her disabilities precluded her from continuing. The plaintiff was fit and agile in 1995 and 1996 but subject to the disabilities found by the judge. It is not permissible to approach the matter in the broad way adopted by the judge. The idea of a buffer for past economic loss is not easy to accept. On the primary findings made by the judge economic loss should have been assessed by awarding the plaintiff her net salary loss for the year ended 30 June 1990. She was not entitled to apply for the age pension until 22 June 1990. It would be prudent totake her net salary as a nursing assistant for the year ended 30 June 1989 as $11,000 (in rounded figures) and deduct from that sum about $2,500 ($3,065 less $605.19 rounded off) being her net income as a nursing assistant for that year. The plaintiff's other income when added to that earned as a nursing assistant resulted in tax being payable for the year ended 30 June 1990. This results in a figure of about $8,500 for the year ended 30 June 1990. She should be awarded $10,000 for the year ended 30 June 1991. This is based upon her net income as a nursing assistant for the year ended 30 June 1989, her desire to work and a slight reduction in the hours worked with her increasing age and health. The judge should then have awarded her a sum to compensate her for economic loss from 1 July 1991 to the hearing on 23 April 1996. I would assess this sum as $12,000. Most likely, after reaching 62 she would have reduced the amount of work which she performed. She would probably have applied for the pension and worked to supplement her pension. For future economic loss the award should be $4,000. She was nearly 66 at the date of the hearing and would probably only have worked occasionally if she had not been injured. I am unable to accept the submission that the plaintiff should be awarded $88,300 for past economic loss. This was based on awarding her a sum calculated at the rate of $13,500 for 5.8 years and $10,000 for the year ended 30 June 1990. Even taking the net rather than the gross figures this is unreal for a lady of her age and health. This is not the only way to approach the calculations but it is a permissible way and it yields a correct result. The defendant submitted that if the court was of the view that there was error in the judge's approach the matter should be remitted for rehearing on the question of damages. I am unable to accept that submission. On the findings made by the judge, this Court is well able to deal with the matter. The amount in issue is relatively small. The costs of a new trial should be avoided. The plaintiff should, therefore, be awarded: Out of pocket expenses $ 172.20 Non economic loss $27,500.00 Past economic loss $30,500.00 Future economic loss $ 4,000.00 $62,172.20 It was common ground that no question of interest arises. I propose that the appeal be allowed with the amount I have mentioned being substituted for the verdict and judgment of the judge. 4 UNREPORTED JUDGMENTS Powell JA. Although the manner in which I have calculated for myself what would be an appropriate award of damages in favour of the appellant differs from that adopted by Smart AJA, in the result the difference between the figure which T have arrived at and that at which his Honour has arrived is so small as to be of no significance whatsoever in the outcome of this appeal. I am therefore content to adopt the figure which his Honour has calculated. The order of the court is thus: that the award of damages made by Blanch CJ in the District Court should be set aside and that in lieu thereof there be entered in favour of the appellant an award in the sum of $62,172.20. The respondent should pay the appellant's costs of the appeal. 1. Appeal allowed. 2. Judgment of District Court for plaintiff for $42,672.20 set aside and in lieu thereof judgment is entered for the appellant - plaintiff for $62,172.20 as of 23 April 1996. 3. Confirm the orders as to costs made in the District Court. 4. Respondent - defendant to pay the appellant's costs of the appeal. Counsel for the appellant: W Baffsky Solicitors for the appellant: Maxwell Berghouse and Ives Counsel for the respondent: W S Reynolds Solicitors for the respondent: Connery and Partners