New South Wales Court of Appeal CITATION : Christopher Daly v Anne O'Connell [1999] NSWCA 177 FILE NUMBER(S) : CA 40158/98 HEARING DATE(S) : 4 June 1999 JUDGMENT DATE : 4 June 1999 PARTIES : Christopher Daly Anne O'Connell JUDGMENT OF : Giles JA at 1; Cole AJA at 32 LOWER COURT JURISDICTION : District Court LOWER COURT FILE NUMBER(S) : DC 304/92 LOWER COURT JUDICIAL OFFICER : Karpin DCJ COUNSEL : Appellant - M Walton Respondent - A J Black SOLICITORS : Appellant - Owen Hodge, Hurstville Respondent - Russell McLelland Brown, Wollongong CATCHWORDS : DAMAGES - general damages - whether wholly erroneous proportion to a most extreme case - damages for economic loss - whether errors in translating findings in principle into figures. DECISION : Appeal allowed, judgment for $325,112 set aside, and in lieu thereof judgment for $226,523 taking effect on 27 February 1998. The respondent to pay the appellant's costs of the appeal and to have a certificate under the Suitors Fund Act if qualified. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40158/98 DC 304/92 GILES JA COLE AJA Friday 4 June 1999 CHRISTOPHER DALY v ANNE O'CONNELL JUDGMENT 1 GILES JA: The plaintiff was injured when the defendant ran into the back of her car. Liability was admitted. Karpin DCJ assessed damages at $325,112, the components of which included general damages of $72,600, past economic loss of $66,960, and future economic loss of $151,856. The other component of the damages was out of pocket expenses. 2 The defendant appealed in relation to the components other than the out of pocket expenses. General damages 3 The general damages were said to be manifestly excessive and not in accordance with s 79 of the Motor Accidents Act. Section 79 requires that the damages for non economic loss be assessed as a proportion, determined according to the severity of the loss, of the maximum amount which may be awarded under the Act, the maximum amount to be awarded only in a most extreme case. Other provisions provide for thresholds failure to reach which brings lump sum deductions. 4 Her Honour assessed the damages "on the basis of 30 per cent of a worst case scenario". This was not the language of s 79, but it is quite clear that her Honour was carrying out the required exercise. The question then is whether the 30 per cent was wholly erroneous so as to attract appellate intervention, the constraints upon appellate intervention, using that language, being well established (see Moran v McMahon (1985) 3 NSWLR 700). 5 Before the injury the plaintiff was in good health. Her Honour found that she suffered soft tissue injuries with associated structural damage to the spine or discs which caused exacerbation of an underlying degenerative condition. The plaintiff suffered a period of some months' pain associated with the soft tissue injury, and her Honour found that she continued to complain of pain but had also developed a significant psychosomatic component to her complaints which continued despite treatment. She did say that the plaintiff appeared to have devoted herself somewhat to her ill health, and that what her Honour described as the subsequent depressive illness may have more to do with the plaintiff's perceptions of the asserted sequelae of the accident than with the realities and that the plaintiff had tended to exaggerate her symptoms and to devote much of her life to them. Nonetheless, her Honour found that there was a casual connection between the plaintiff's current psychiatric condition and to a somewhat lesser extent the totality of her present physical problems. 6 The structural damage accepted by her Honour can be seen from the medical reports, speaking of disc damage producing neural irritation. The medical reports, which included histories and the plaintiff's reported sufferings of pain and constriction on her physical abilities, were briefly summarised by her Honour, and she must have accepted that, despite the psychosomatic addition, they reflected the plaintiff's position. Her Honour summarised them by reference to continuing neck pain, reduced since the plaintiff had ceased work but exacerbated by physical activity, headaches, right shoulder pain, a constant burning pain in the lower back, low level tinnitus which had improved since the accident and of which the plaintiff was conscious only at night, and a reduction in ability to concentrate. Her Honour also referred to continuing anxiety and stress and a level of frustration from the plaintiff's reduced capacity to manage her life. The medical reports amply justified this summary. 7 The plaintiff was aged 44 or 46 at the time of the trial, depending upon which part of the trial be taken, and she would therefore have the difficulties which her Honour described for a considerable period. The medical reports included that her disability was likely to increase in the future. 8 It must be remembered that the requirement that this Court consider that her Honour's 30 per cent was a wholly erroneous estimate means that the test is not what I might have done had I been placing a percentage figure on the findings made by her Honour. I regard the 30 per cent as in the high end of the range available to her Honour, but nonetheless within the range. That is to say, I do not feel able to conclude that her arrival at the percentage of 30 per cent was wholly erroneous so as to attract appellate intervention. Economic loss 9 Her Honour found that the plaintiff had a residual earning capacity. She also found that the plaintiff was entitled to be compensated for her economic loss by regard to the earnings of a grade 1 clerk. The appeal in relation to economic loss was concerned with these two elements in its calculation. (a) Residual earning capacity 10 In reasons delivered on 25 September 1997 her Honour recorded the plaintiff's belief that she was able to work sixteen hours per week in a position similar to that in which she had worked prior to the accident. She later recorded that the plaintiff believed that she could work the equivalent of two days per week in a clerical position. When it came to her finding as to reduction in working capacity, her Honour said, "I am not satisfied that the plaintiff is totally incapacitated to undertake employment. I do, however, accept that she has a reduced capacity to undertake employment and assess that capacity at 3 days per week." 11 Going on to translate that into a result, on the following page of the judgment her Honour said that the plaintiff was entitled to be compensated at the rate of two days or sixteen hours per week (on the basis to which I will come to do with the earnings of a grade 1 clerk), that being said in relation to past economic loss, and that she was entitled to sixteen hours per week from the date of judgment to age 60, calculated on the same basis and reduced by a percentage for vicissitudes. 12 If matters stood there, it is plain enough that the economic loss was to be assessed on a residual earning capacity of three days per week. Despite the plaintiff's evidence concerning working two days per week which her Honour had recorded, it can readily enough be seen why her Honour arrived at the three days per week. In an appeal from the termination of her employment because of the effects on her of the accident, the plaintiff had herself suggested that she could work part time two to three days or twenty one hours per week, and that, plus her Honour's view to which I have already referred that the plaintiff tended to some extent to exaggerate her position, provided good reason for arriving at the three days per week. The problem arose thereafter. 13 In circumstances which need not be gone into, after the judgment of 25 September 1997 her Honour stood the matter over for the parties to arrive at the figures which flowed from her reasons. The matter came back before her Honour on 27 February 1998. Her Honour was told of disagreement between the solicitors on the figures and that the disagreement was in part as to the two or three days. 14 It is plain enough that her Honour returned to the matter without familiarity with her judgment of 25 September 1997, since the transcript of the occasion refers to her being provided with or getting a copy of that judgment. She was referred to one of the paragraphs in which her Honour recorded the plaintiff's belief that she could work two days per week, and then to the part in her judgment where her Honour said that she accepted that the plaintiff had a reduced capacity to undertake employment. Clearly enough reading the remainder of that sentence in the judgment, her Honour then responded to a question, "Does your Honour see that?" by saying, "Yes I do and there's an error, it says three days rather than two days". 15 The submissions to her Honour then moved on to another matter of disagreement on the figures. They did include the provision of short minutes with two alternative calculations, one on the basis of two days per week and the other on the basis of three days per week, and her Honour was told, "If it's a two day finding then it's the higher of the two figures, if it's a three day, then it's the lower of the two figures." Her Honour was not referred to the working out of the apparent assessment of a residual earning capacity of three days per week in the following page of the judgment of 25 September 1997 in which she had referred to entitlement to compensation at the rate of two days or sixteen hours per week and again to entitlement to sixteen hours per week. 16 In due course her Honour gave judgment for the plaintiff, using the higher figures from the short minutes of orders without otherwise (so far as the transcript indicates) ventilating with the representatives of the parties the question of two days or three days. 17 The defendant submitted that her Honour had found, and clearly worked out the result of the finding, that the economic loss should be assessed on the basis of a residual earning capacity of three days per week, and that her Honour fell into error when, on 27 February 1998, she took two days rather than three days. It was said that her Honour was in error in thinking that her earlier judgment was in error, and that the problem was that her Honour returned to the matter without familiarity with her judgment and was not referred fully to what she had then said. 18 The plaintiff replied that her Honour should be taken to have been exercising her power under the slip rule to correct the earlier judgment, and that she was not in error on the later occasion, as could be seen from the fact that when presented with the two versions in the short minutes of orders, she took that which gave the plaintiff the higher of the two figures. 19 I think both parties accepted that it was necessary for us to choose between these views of what had occurred before her Honour, the prospect of a further trial before her Honour being unthinkable. 20 For my part, I have no doubt that the way the defendant put the matter is the correct way. I consider that her Honour came to the view, and expressed it in her reasons of 25 September 1997, that the economic loss should be assessed on the basis of a residual earning capacity of three days per week, and in regrettable but understandable circumstances was wrong in thinking on 27 February 1998 that the three days was an error for two days. I do not think that her Honour was intending to exercise her powers under the slip rule, and what should have been given effect to was her Honour's finding as expressed in the original judgment. (b) Earnings of a grade 1 clerk 21 The plaintiff was employed at the time of the accident as a temporary grade 2 clerk with the State Rail Authority. Her Honour recorded that she claimed for loss of earnings on the basis of her employment as a grade 2 clerk at that time. 22 The plaintiff tendered what was described as a schedule of wage loss at the close of her case. The transcript recorded that it was admitted without objection, but nothing more was recorded about its status. The schedule set out wages of "Comparable 1" and "Comparable 2", averaged them, and then mathematically dealt with them in order to arrive at figures for wage loss and consequential figures. What the comparable wage earners were was not stated. 23 At a later time in the extended hearing her Honour was provided with what was described as an updated schedule of wage loss. When it was said that the defendant's counsel might wish to look at the updated schedule, the transcript recorded the response from counsel, "It's only a schedule, I don't object to my friend handing it up". The transcript then recorded that the amended schedule was marked as Ex CC and that it had been admitted without objection. Again, nothing more appeared to indicate its status. It was a similar schedule to the earlier version, with "Comparable 1" and "Comparable 2" but no indication of what the comparable wage earners were. 24 In her Honour's reasons of 25 September 1997 she said - "Firstly, in accordance with the amended schedule of wage loss, as at 14 August 1997, I note that there is no indication as to whether the comparable earnings of a grade 1 or 2 clerk are used for comparable earnings. I note my finding that the plaintiff is only entitled to be compensated as a grade 1 clerk. She is entitled, accordingly, to the wage loss calculated in each of the years 1990 to 30 June 1996, provided that calculation is based upon the comparable earnings of a grade 1 clerk." This was later taken up as the basis of calculation for future wage loss. The reference to the finding that the plaintiff was only entitled to be compensated as a grade 1 clerk was to a finding earlier in her Honour's reasons which need not be set out. 25 As I have noted, her Honour then stood the matter over for the parties to arrive at the figures which flowed from the reasons. In my view, her Honour was specifically finding that it had not been established that the amended schedule of wage loss represented the comparable earnings of a grade 1 clerk. She expected the parties to be able to translate her finding of principle into a figure or figures. 26 However, the parties were unable to do so, and that was the other matter of disagreement raised before her Honour on 27 February 1998. Her Honour was told of the disagreement, and there was some discussion of it. She was reminded of what was said when the amended wage schedule was handed up, and after some further discussion her Honour said, "Nonetheless by consent exhibit CC was admitted as a basis for calculating the economic loss and I'm not going to get involved in any reopening of the case. So far as I am concerned that's the basis upon which you proceeded, Mr Howard." 27 Unfortunately, I think this is where another error occurred, again because her Honour returned to the matter without familiarity with her judgment. In the further discussion her Honour was reminded of what she had said about the schedule of wage loss not indicating whether the comparable earnings were of a grade 1 or a grade 2 clerk, and when she was reminded, she said, "And that was the fact of course, it wasn't possible to know from that." The error came when her Honour nonetheless adopted Ex CC as the basis for calculating economic loss, despite her findings that the plaintiff was only entitled to be compensated as a grade 1 clerk and that Ex CC had not been shown to represent the comparable earnings of a grade 1 clerk. 28 The schedule of wage loss had been admitted as something to do with calculation of economic loss, but her Honour's findings meant that it could and should only be used for that calculation if it were established that it represented the comparable earnings of a grade 1 clerk. That had not been established when her Honour gave her principal judgment, and it had not been established thereafter. With respect, her Honour was in error in taking the schedule of wage loss as the appropriate basis for the figures in the short minutes of orders, and departed from her earlier judgment in doing so. 29 On one view, the result was that the plaintiff had not proved the amount of the economic loss to which her Honour had found she was entitled. Such a drastic result was not suggested. The defendant had put before her Honour on 25 February 1998 a letter which had been obtained from the Human Resources Department of the New South Wales Public Service, setting out the salaries of grade 1 clerks. It was accepted in this Court that the salaries were not necessarily the entire measure of the earnings of a grade 1 clerk. Nonetheless, the only acceptable evidence her Honour had, if she had formally taken it in, and the only acceptable guide in this Court, of and to the earnings of a grade 1 clerk (given that the schedule of wage loss has not been shown to represent the comparable earnings), is the letter. In those circumstances, in my opinion, in reassessing the damages we should adopt the figures in the letter as the comparable earnings of a grade 1 clerk. 30 It follows from what I have said that the appeal should be allowed and there should be a reassessment of the damages for economic loss. The figures which flow from what I have said have been agreed, and mean that the plaintiff's judgment of $325,112 becomes a judgment of $226,523. 31 I propose that the appeal be allowed, that the judgment of her Honour for $325,112 be set aside, and that in lieu thereof there be a judgment for $226,523 taking effect on 27 February 1998. We can hear from the parties in relation to costs when Cole AJA has expressed his opinion in relation to the appeal. 32 COLE AJA: I agree with the reasons for judgment delivered by the presiding judge. 33 GILES JA: Which takes us to costs. Mr Walton, what do you say? 34 WALTON: We seek costs, if your Honour pleases. 35 GILES JA: Mr Black? 36 BLACK: I would submit to your Honours that in circumstances where the error has not fallen from either party that each party bear their own costs. In the alternative if your Honours consider that the appellant should get their costs, we would seek, if eligible, that the plaintiff be given a certificate under the Suitors Fund Act. 37 GILES JA: We consider that the appellant is entitled to his costs of the appeal. 38 The orders will therefore be as indicated in my reasons, plus an order that the respondent pay the appellant's costs of the appeal but have a certificate under the Suitors Fund Act if qualified. _______________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.