SIMSON v HAZELWOOD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, HANDLEY and SHELLER JJA 29 September 1998, 29 September 1998 [1998] NSWCA 210 DAMAGES — assessment — past economic loss — future economic loss The respondent was injured when a crate of apples fell on him while he was working for the appellants. The appellants challenged the trial Judge's findings of fact relating to the fork lift the respondent had been operating at the time of the accident, and the assessment of damages for past and future economic loss. HELD: Dismissing the appeal: (1) The findings of fact were open to Simpson J on the evidence and should not be disturbed. (2) The Judge's assessment for past economic loss was open to her. Neither side raised the issue of taxation at trial, and it was not addressed on appeal until one of the Judges made an inquiry of counsel. Accordingly leave to amend on this point should not be granted. (3) The figure awarded for future economic loss was reasonable. Handley JA This is an appeal by defendants from a judgment entered by Simpson J on circuit at Bathurst on 23 August 1996 in favour of the plaintiff for $593,358. The appellants owned and operated an apple orchard near Bathurst. In September 1989 the appellant, Mr Simson, asked the plaintiff to cart some bins of apples from a nearby orchard where they had been stored to his orchard. The apples were stored in large pine bins, four feet square, similar, not identical, to those illustrated in photographs which have been included in the appeal book. There were three cross beams under the bins which permitted them to be stacked on top of each other without crushing the apples. Each bin held 400 kgs of apples. The plaintiff was asked to cart 110 full bins of apples and this he could do at the rate of thirty bins a load. The plaintiff drove to Walloroi Orchard where the apples were stored, loaded thirty bins without incident three deep on his truck and drove to the defendant's orchard. He was able to drive his truck into a shed which had a smooth concrete floor. He had to use a fork lift to unload the bins. On the day in question, the only fork lift that was serviceable and available for use by the plaintiff was a gas operated vehicle which had been owned by the defendants since about 1972. The plaintiff unloaded the first three bins without incident, although he did notice that the fork lift gave a jump when it was put in motion. He drove the fork lift back to his truck to load a further three bins and when he had successfully engaged these he put the fork lift into reverse when he said it gave a lurch and one of the top bins was dislodged from its normal resting place. The plaintiff backed away, lowered the load to the ground, got off the fork lift and walked towards the bins and as he did so, according to his evidence, they collapsed. One or more of the bins struck him and he was significantly injured. There was a conflict of evidence between that called for the plaintiff and that called by the defendants. The plaintiff's own evidence as to how the accident occurred, was supported by an independent witness, Mr Byers, who had worked 2 UNREPORTED JUDGMENTS for the defendants for some twenty-eight years until 1984. He had operated the gas fork lift truck and had noticed that it would from time to time shudder when in operation. The Judge also relied upon the objective evidence as to how the accident had occurred, which he considered tended to support the plaintiff's version. For these reasons she accepted the plaintiff's evidence, although earlier she said that there was nothing in the demeanour of any of the witnesses which enabled her to find where the truth lay and she thought that each of them was attempting, to the best of his or her ability, to give truthful evidence. However in the end the Judge was satisfied about the plaintiff's case and accepted it. Mr Elkaim submitted that the Judge's findings about the condition of the fork lift truck and its propensity to shudder should be reversed and he also submitted that if the defendants acting reasonably were not aware of this propensity they could not be expected to take preventative action or warn the plaintiff about it. In my judgment, these submissions should not be accepted. They invite the Court to reverse findings of fact by a Judge who heard and saw the witnesses but this Court is bound by authoritative decisions of the High Court not to do so except in a clear case where the findings are glaringly improbable or inconsistent with facts which have been incontrovertibly established. Neither condition is satisfied in this case and the appeal on liability therefore fails. Mr Elkaim also challenged the Judge's awards for past and future economic loss. Her award for past economic loss of $70,000 covered seven years between the date of accident and the date of trial. Over the same period she allowed a further $40,000 by way of Griffiths v Kerkemeyer type damages for assistance given to the plaintiff by his father, his father-in-law and his wife in working the property and running his various ancillary businesses. Mr Elkaim endeavoured to challenge the pre-tax basis for the award of $70,000 but in the end, in my view, was unable to establish any significant error. The only detailed evidence of the plaintiff's earnings before the accident and his earnings post accident was that tendered by the defendant, found in p120-p121 of the appeal book. Over the four years immediately before the accident, the operating profit of the business conducted by the plaintiff averaged $38,000 a year, although this included one exceptionally good year and one exceptionally poor year. Over the five years after the accident for which the documentary evidence disclosed precise figures, the plaintiff's operating profit averaged $27,685 a year. This reflected the attempts of the plaintiff to diversify his business to mitigate his losses. The figures included amounts for cartage income, cattle trading and styrene distribution which either reflected new business ventures established since the accident or, in the case of cattle trading, an enhanced business venture in some of the years in question. The net result was that the plaintiffs attempts to mitigate his financial loss, resulting from the accident, had been substantially successful and his gross loss was of the order of $10,000 to $11,000 a year. No figures at all were tendered for the 1995 and 1996 years and those years were not included in the schedules produced for the plaintiff and tendered by the defendant. However the 1996 year had been adverse as the plaintiff had discontinued the styrene distribution business and was winding down the cartage business. The trial Judge having found a gross loss of the order of $10,000 to $11,000 a year, sought to make allowance for taxation. She said: URJ SIMSON v HAZELWOOD (Priestley JA) 3 "Some allowance must be made for the incidence of taxation. Doing the best Ican I assume that after taxation these figures are $30,000 and $20,000. Although it is far from scientific I think the best I can do is to work on a loss since the financial year ended 1990 of $10,000 per annum yielding a total award of damages for past economic loss of $70,000." It is evident that the parties did not give serious attention at the trial to the effect of income tax on the apparent financial losses sustained by the plaintiff, and the Judge was simply left to work it out as best she could. There is no reference to tax at all on the schedules which became p120 and p121 of the appeal book and we have been referred to no other reference to tax in the evidence. The original grounds of appeal did not include any ground which challenged the Judge's allowance for taxation and the matter only arose during the hearing when a member of the Court drew attention to the apparent under allowance for income tax. Since the question was not litigated at the trial and has not been litigated here, and the Court has refused leave to amend the grounds of appeal, the case is not one where we should interfere with this part of the award. If there be an error, it is only in an under allowance for income tax, but the Court cannot be satisfied that there was an under allowance, having regard to the way the trial was conducted. I would therefore reject the grounds of appeal which challenged the Judge's award for past economic loss. The remaining challenge relates to the award for future economic loss. The Judge found that the plaintiff retained only about one-third of his pre-injury work capacity. In light of her award for general damages this assessment could not realistically be challenged and Mr Elkaim did not attempt to challenge it. Her Honour allowed for future economic loss on the basis that the plaintiff could only compensate for his diminished earning capacity by employing a full time orchard or pastoral industry hand at a cost of $385 a week at the award rate. This amounts to $20,000 a year and on that basis, after the usual allowance for contingencies, the Judge awarded $285,000 for future economic loss. The only challenge to this figure was based upon the lesser award made by the Judge for the period prior to trial. However, this reflected the plaintiffs partially successful attempts to mitigate his loss by commencing new business ventures, but by the time the trial had arrived two of these had been, or were about to be, terminated and in those circumstances the award for the past was an inappropriate basis for an award for the future. There being no other ground on which the award for future economic loss was challenged, I would uphold this award as well. It therefore follows that the appeal fails on all grounds and I would propose that it be dismissed with costs. Priestley JA I agree. Sheller JA I also agree. Priestley JA The order of the Court therefore is that the appeal is dismissed with costs. COUNSEL ADDRESSED ON COSTS Priestley JA: After the delivery of judgment the respondent's counsel made an application that the costs order be varied by ordering that the appellant pay the respondent's costs on an indemnity basis as from a date earlier this year. The application was made on the basis of an offer to compromise which was made on or about 30 April this year which offered a significant discount to the appellants 4 UNREPORTED JUDGMENTS if they compromised the case at that stage. In the circumstances, Mr Elkaim was not able to offer any opposition to the application and the Court is disposed to make the order. The costs order previously made is varied so that it will be that the appellants pay the respondent's costs of the appeal and as from 30 April this year those costs are to be on an indemnity basis. (1) Appeal dismissed. (2) Appellants to pay respondent's costs from 30 April 1998 on an indemnity basis. Counsel for the appellant: M Elkaim Solicitors for the appellant: P W Turk & Associates Counsel for the respondent: B Toomey QC/T McKenzie Solicitors for the respondent: King Cain, Bathurst