New South Wales Court of Appeal CITATION : Richey-Lowe v Australasian Conference Association Limited [2001] NSWCA 447 FILE NUMBER(S) : CA 41001/00 HEARING DATE(S) : 31 August 2001 JUDGMENT DATE : 6 December 2001 PARTIES : Appellant: Cherie Caryle Richey-Lowe Respondent: Australasian Conference Association Limited t/as Sydney Adventist Hospital JUDGMENT OF : Beazley JA at 1; Studdert AJA at 50 LOWER COURT JURISDICTION : District Court LOWER COURT 760/99 FILE NUMBER(S) : LOWER COURT Delaney DCJ JUDICIAL OFFICER : COUNSEL : Appellant: J S Drummond Respondent: L King SC/P Stockley SOLICITORS : Appellant: Coleman & Greig Respondent: Hickson Wisewoulds CATCHWORDS : Damages - Assessment for future economic loss - Inadequte award - Judgment - Reasons for judgment - Inadequate reasons LEGISLATION CITED : Supreme Court Rules 1973 (NSW), Pt 51 Div 4 Global Network Services Pty Ltd v Legion Telecall Pty Ltd [2001] NSWCA 279 CASES CITED: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Rodwell v Dowdle [2000] NSWCA 197 Saif Ali v Sydney Mitchell & Co [1980] AC 198 DECISION : Appeal allowed IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41001/00 DC 760/99 BEAZLEY JA STUDDERT AJA Thursday, 6 December 2001 Cherie Caryle RICHEY-LOWE v AUSTRALASIAN CONFERENCE ASSOCIATION LIMITED t/as SYDNEY ADVENTIST HOSPITAL FACTS The appellant injured her back during the course of her employment with the respondent. At the time of the accident she was working part time and she has not since returned to work. She gave evidence that at the time of accident she was in the process of setting up her own business and either in that, or in other employment was intending to work full time. The appellant claimed that the trial judge's award for non-economic loss, future economic loss and future domestic assistance was inadequate. HELD (i) His Honour failed to give adequate reasons for his award for future economic loss: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247. (ii) If the trial judge's award for future economic loss was based on full time employment the assessment was inadequate. (iii) His Honour failed to make any finding as to whether the appellant would have pursued her own business and, if so, what the business' prospects of success were. (iv) His Honour's award for future economic assistance was inadequate. (v) His Honour's assessment of non-economic loss was outside a reasonable discretionary range. ORDERS (i) Appeal allowed; (ii) Orders of Delaney DCJ set aside save for his Honour's order as to costs; (iii) Remit the matter to the District Court for rehearing on the assessment of damages for non-economic loss, future economic loss and future domestic assistance; (iv) The appellant to pay the respondent's costs of the additional written submissions addressing the proposed amendment of and the amended Notice of Appeal; (v) The respondent otherwise to pay the appellant's costs of the appeal, but to have a certificate under the Suitors' Fund Act 1951 (NSW), if so entitled. ******** IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41001/00 DC 760/99 BEAZLEY JA STUDDERT AJA Thursday, 6 December 2001 Cherie Caryle RICHEY-LOWE v AUSTRALASIAN CONFERENCE ASSOCIATION LIMITED t/as SYDNEY ADVENTIST HOSPITAL JUDGMENT 1 BEAZLEY JA: This is a plaintiff's appeal from the award of damages made by Delaney DCJ in respect of non-economic loss, future economic loss and future domestic assistance arising out of a low back injury sustained by the appellant during the course of her employment with the respondent (the Sydney Adventist Hospital). 2 His Honour assessed the appellant's damages as follows: Non economic loss $66,030 (being 30% of a most extreme case) Past economic loss $60,852 Future economic loss $65,000 Past Superannuation $6,000 Past domestic assistance $11,648 Future domestic assistance $23,637 3 His Honour also made awards for past and future medical expenses, the Fox v Wood component, interest on past economic loss and for certain unpaid expenses, making a total award of $248,208.16. 4 The only ground of appeal pleaded in respect of each of the awards for future economic loss, future domestic assistance and non-economic loss was that the award was inadequate. In submissions, the appellant further alleged that the trial judge had failed to consider her claim for future economic loss based upon her intention to commence her own business as a remedial masseuse. Challenge to Award for Future Economic Loss 5 The appellant was almost 30 years of age at the date of accident. She had commenced employment with the respondent in May 1996 as a remedial masseuse/technical assistant working 21 hours a week over 3 shifts, earning $310 net per fortnight. She injured her lower back on 1 July 1996 whilst assisting a patient from a Sitz bath. There was no dispute on the medical evidence that the appellant sustained a central L5/S1 disc protrusion as a result of the accident. She has developed mild to moderate sciatica as a result of the injury. She has not worked since the accident except for a few days of light duties in the week after the accident. The appellant and her husband were, at the time, planning to start a family. They had a child on 1 January 1998. 6 Since leaving school in year 10, the appellant had had a variety of jobs, principally in the retail industry (in a children's clothes shop, a flower shop and a carpet shop). She had also managed her mother's coffee shop in Lane Cove and worked as a book keeper for about a year. She had qualifications in show-card and ticket writing, although she said her ticket writing skills are no longer useful because of computer technology, in book keeping and in remedial massage. As already indicated, the appellant commenced working with the respondent in May 1996, working 21 hours a week over 3 shifts. She earned $310 net per fortnight. 7 The appellant gave evidence that there had been no change in her low back pain from the time of the accident, that the pain progressed as the day went on and she required medication. She also said the pain became worse with activity. 8 His Honour awarded the appellant the whole of her past economic loss in an agreed sum of $60,852. 9 Future wage loss was dealt with in the following manner. 10 The appellant gave evidence that at the time of the accident she was planning to commence her own remedial massage business. She had set up a room in her home for that purpose and had made preliminary inquiries of AMP in respect of professional indemnity and public liability insurance. She had been forwarded a proposal form by AMP but had not returned it as at the date of the accident. 11 The appellant said her intention in relation to the business was initially to start with four patients a day and to build up to seven one hour patients a day, which was her work load at the hospital. She proposed to work at home four days a week. She also initially intended to retain her job at the hospital "to keep a continual flow of money". She said she had gained information from the hospital as to the interest there was in remedial massage and had spoken to people at some of the local sports clubs and at one of the local shops. She assessed the responses she received as being positive and she believed she could establish a viable business. She agreed she had not, as at the date of the accident "tested the water" in relation to her proposed business but she based her expectations on the fact that she was "a very good remedial masseuse". She also said that if the business had not proved successful she would have found more employment elsewhere. 12 The medical evidence as to the appellant's ability to work was contained in the various medical reports of the appellant's treating doctors and in the reports of the medico legal experts. None of the doctors were called to give evidence. 13 The appellant's general practitioner was Dr Curlewis. As at December 1997, approximately 18 months after the accident he considered her "unfit for any sort of work" even of a clerical nature. He reported on 15 February 2000 that, having seen her on a three monthly basis since December 1997 "there has been little progress … and she remains unfit for any gainful employment … She can only sit or stand for a limited period (15 minutes)". 14 Dr Ryan, orthopaedic specialist, to whom she was referred by Dr Curlewis almost immediately after the accident, considered, in September 1996 that she was unfit for her previous employment and should be retrained so that she could find "a secretarial or perhaps ward clerk position. This would be compatible with her physical abilities". It appears Dr Ryan did not see the appellant again. 15 The appellant was found to be unfit for work in a "Fit for Work" assessment conducted by physiotherapist Joanne Lawrence and obtained by the respondent in May 1997. 16 In May 1997 Dr Curlewis referred the appellant to Dr Dan, neurosurgeon. Amongst other signs Dr Dan noted the right ankle jerk was reduced and pin prick sensation was diminished over the left lateral foot, although in a later report he noted he may have meant the right foot. He made no comment as to her work capacity. 17 Dr Dan re-examined the appellant on 7 July 2000. On this occasion reflexes were normal but pin prick sensation over the lateral foot remained reduced. He considered her low back pain and sciatica were related to the ruptured disc. He said: "On her present clinical picture she would be fit for activities which did not involve lifting, bending or carrying but would not [be] fit for work as a nurse because of the heavy physical component of that work." He considered her condition was permanent. 18 Dr Benanzio, orthopaedic surgeon, provided a medico legal report to the appellant's solicitors on 7 June 2000. He considered that the discomfort radiating to both legs suggested nerve root irritation. He said she was permanently unfit for activities requiring back strain and was unfit to work as a masseuse. He stated she should be assessed by a Rehabilitation Unit for retraining or redeployment. 19 A rehabilitation assessment was carried out in July 2000 by Ms Margi MacMaster, Consultant Occupational Therapist for the appellant's solicitors. Ms MacMaster considered the appellant had: "… sufficient transferable skills to work in light physical demand areas of work such as Sales, Florist shop and bookkeeping. She however is presently restricted to work where she must regularly change her posture in view of poor physical tolerances to static postures. This will currently make employment difficult to achieve." 20 Ms MacMaster stated that participation in a pain programme to assist her mobility might better equip her to participate in some employment. 21 The appellant was seen by Dr Cant, specialist physician on behalf of the respondent on 24 November 1999. He said that because of her back disorder "it would be unwise for [the appellant] to resume any type of employment requiring frequent bending or heavy lifting". He did not otherwise comment on her work capacity. 22 On 23 November 1999, the appellant saw Dr Opie, surgeon, on behalf of the respondent. He noted a minor sensory loss on the outer side of the left foot (S1 dermatome). He commented on her capacity to work in the following terms: " Capacity for work – Apart from her back problems, the Appellant's medical problems [hypertension pituitary tumor] coupled with her son's medical problems [necrotising bowel disease requiring colostomy since closed and profound deafness requiring daily treatment] would make it impossible for her to hold down a regular job. … … If the appellant had no problems other than her back, then she would be fit for all lighter work not requiring lifting and bending." 23 Dr Bryan, orthopaedic surgeon, expressed the opinion in his medico legal report of 26 November 1999 that he thought the appellant would "improve gradually" but that she would continue to have some problems with her back. He said "[s]he could at best, engage in some light or sedentary work and could be satisfactorily employed". He also considered that "given time there are prospects for gradual improvement". 24 Finally, the respondent obtained a medico legal report from Dr Hall, occupational physician and consultant physician. Dr Hall had seen the appellant in his capacity as occupational physician at the Sydney Adventist Hospital. In short, Dr Hall considered that when he saw the appellant in September 2000 she was exaggerating the extent of real injury and thought her injury was "compatible with at least part time employment". He also considered that the provision of "two hours domestic assistance per week would be reasonable". 25 His Honour, having reviewed the appellant's evidence and the medical evidence, concluded: "I have reached the conclusion that in respect of the future, the [appellant] should be allowed the sum of $100 per week reduced earning capacity, reduced by 20 percent for vicissitudes taking into account that she had, at the time of the accident a number of other medical problems and together with the fact that she intended to start a family. In addition, I have to take into account her work history which has never been in work of the type which required the heavy lifting which was required in this case, although it did require some lifting. I have reached the conclusion that if she had been tempted to do so she would have been able to rehabilitate herself in some an (sic) appropriate way. Taking into account this evidence, I allow for the period of 29 years to the date of retirement by way of a cushion or buffer for the future, rather than using the tables, the sum of $65,000. I add $6,000 for superannuation." 26 In reaching this conclusion his Honour did not state what medical evidence he accepted. Nor did his Honour indicate whether he was considering the appellant's work capacity and therefore her loss of earning capacity on a full or part time basis. This was an important consideration, because the appellant's case was that she would either work full time in her own business in the foreseeable future, or, failing being able to establish a successful business, would work full time by a combination of her hospital job and some other employment. As will become apparent, I consider that his Honour's judgment reveals appealable error in a way not asserted in the notice of grounds of appeal, namely by failing to give adequate reasons for decisions. An examination of the evidence in respect of economic loss makes this apparent. 27 His Honour awarded the appellant past economic loss of $60,852. That amount was agreed between the appellant and the respondent. This Court has not been favoured with the break up of how that amount was arrived at. What is known is that there was a period of almost 4 ½ years between the date of accident and the date of judgment (1 July 1996 to 30 November 2000 – the action having been heard on 18 October 2000), that except for a few days the appellant did not work from the date of accident, and that as at the date of accident the appellant was earning $310 net per fortnight. For there to have been a wage loss of approximately $60,000 there must have been increases over the four year period in the net wage applicable to the appellant's former position with the respondent. The appellant's expert accounting report by Furzer Crestani lends support to this but the loss calculated by them does not provide the answer as to how the sum of $60,852 was calculated. There may also be an component of superannuation included in the assessment of $60,000. But that is surmise only based on the absence of any mention of past superannuation anywhere in the judgment. Nor is there any exposition in his Honour's judgment as to why he awarded the sum of $60.852 for past economic loss other than it being an agreed sum. It seems however that his Honour allowed for a full wage loss for that period. On that basis he accepted an inability to work of at least 21 hours per week. 28 By contrast his Honour awarded $65,000 for future economic loss, having found that "[the appellant] would have been able to rehabilitate herself in some … appropriate way" had she wanted to do so. The figure of $65,000 was based, before any reduction for vicissitudes, on a sum of $100 per week reduced earning capacity. His Honour then said that rather than using the actuarial tables he would "allow a cushion or buffer for the future". As it turns out the sum of $65,000 is a direct actuarial calculation. I do not consider, however, that much turns on that. The question is, where does the figure of $100 per week come from? 29 It is known that the appellant's hourly rate as at the date of the accident was $7.38 (She earned $310 per fortnight ($155 per week) working 21 hours per week). If that was the applicable hourly rate as at the date of the hearing, it would mean that his Honour accepted that the appellant could only work about 7 hours a week. In other words a loss of $100 per week would mean that his Honour assessed that the interference with the appellant's work capacity was in the order of two thirds. It must, of course, be assumed that the award of past wage loss reflected a higher hourly rate. However, even if it had been assessed on the basis that her wage had increased by 10%, which according to the Furzer Crestani report was the increase in the average weekly wage over that period, there would not be much difference in the assessment. 30 If his Honour assessed the appellant as only being able to work about one day a week, as would be the case on the previous assumptions, one would expect that to be the case whether she worked part time or full time. If she was assessed on the basis that she would, for most of her working life work full time, her loss would be far greater than $100 per week. There does not appear to be any basis in the evidence for the appellant's future work capacity to be assessed other than on a full time basis, subject, perhaps, to a short period when her child was an infant. If I am correct in that view, the appellant's ground of appeal that the award was inadequate would be made out. 31 It must be remembered of course, the appellant's ambitions went beyond working in paid employment. Her case was that she proposed to set up her own business. Her planning to do so was advanced but not complete. She could have earned about five times the hospital hourly rate in that business had it been successful. On that basis, his Honour's allowance of $100 per week would mean that his Honour had assessed the appellant as being able to work a full working week except for about three hours. Such medical evidence as dealt with interference with her work capacity indicates a significantly greater loss than this. Although his Honour referred to the appellant's plans as a matter of history, he failed to make any finding as to whether she would have undertaken a business (the evidence in respect of which was all one way) and failed to make any assessment of its prospects. I only add that it may be that the appellant's case in this regard was properly to be regarded as a loss of opportunity case. 32 Three things are apparent from the foregoing. First, it is not apparent upon what basis his Honour assessed interference with future economic capacity. Secondly, there would be a significant difference in the amount of the award assessed for future economic loss, depending upon whether the appellant was assessed as working on a full or part time basis. Thirdly, his Honour failed to consider a material part of the appellant's claim. The first and the third of these matters involve error. The second demonstrates error. 33 There is yet another way to consider the matter, as, it must be said that the award of $65,000 for loss of earning capacity for 29 years in the future (even taking into account the effect of the actuarial base upon which future economic loss is assessed) seems hugely disproportionate with an award of $60,000 for past economic loss for a period of 4 years. This is even more so if the appellant's loss of future economic capacity should have been assessed, in substantial part, on the basis that she would have worked full time, the award for past economic loss having been calculated on the basis of part time employment. Although this is a wholly simplistic approach and not one which lends itself to critical juridical analysis, it certainly raises a deep suspicion as to the adequacy of the award for future economic loss. 34 That said, the real difficulty with his Honour's assessment, in my opinion, is that it is not apparent whether the loss of $100 per week was assessed on the basis of full or part time employment. Nor is it apparent where that figure came from. A trial judge is required to give reasons for decision. The reasons need not be elaborate, but "it is necessary that the essential ground or grounds upon which the decision rests should be articulated": Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 per McHugh JA at 280. See also Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430. I do not consider his Honour's reasons adequately comply with the obligation to give reasons as explained in these cases. 35 As mentioned above, this was not a ground taken on the appeal. The question which then arises is whether this Court should intervene on that basis. In Global Network Services Pty Ltd v Legion Telecall Pty Ltd [2001] NSWCA 279, Mason P in referring to an issue raised in the course of argument by the Court, observed at 22 that "[n]either party embraced it, but this does not force the Court to proceed as if only two choices were open on the issue". His Honour continued "[j]udges are more than mere selectors between rival views – they are entitled to and do think for themselves". See Saif Ali v Sydney Mitchell & Co [1980] AC 198 at 212 per Lord Wilberforce, cited by Brennan CJ in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 366. 36 The principle to which I have just referred is of course subject to the requirement that the parties be heard on an issue which the Court considers relevant. Accordingly, the parties were invited to provide written submissions on the point. The appellant was also requested, if she wished to seek leave to amend, to provide written submissions as to why that leave should be given. 37 The appellant has sought leave to amend and both parties have filed written submissions. In essence, the appellant submits that the issue in respect of which the reasons are inadequate were all debated fully on the appeal and that the respondent had an opportunity to deal with them. The respondent opposes the grant of leave to amend, pointing out that the appellant has not identified why this ground of appeal was not raised prior to the hearing of the appeal. The respondent also asserts prejudice in terms of costs and in being deprived of the ability to make oral submissions. Costs can be attended to by an appropriate order. I do not consider that not making oral submissions is a prejudice which would cause the Court to refuse an application for the amendment. The Court places considerable reliance on written submissions. Indeed Pt 51 Div 4 of the Supreme Court Rules 1973 (NSW) requires the filing of written submissions prior to the hearing of the appeal. It is not an infrequent occurrence that parties are then given liberty to file further written submissions at the end of a hearing, to deal with a point which arose during the course of the hearing. Sometimes, because of the time constraints on the Court, parties are required to complete their submissions by filing further written submissions. The respondent's written submissions cover the matters upon which the Court required assistance. 38 In my view, the amendment should be allowed, because, as I have already said, it is not possible to understand from his Honour's judgment how he reached his conclusions and I consider his reasons to be inadequate. 39 Part 51 r 23 of the Supreme Court Rules provides that the Court of Appeal shall not order a new trial where there has been, inter alia, an error of law, unless it appears to the Court that some substantial wrong or miscarriage has thereby been occasioned. In the normal course, a trial judge's failure to give adequate reasons involves such a miscarriage so as to require the matter be remitted for rehearing. An appellate court will, however, strive to avoid a rehearing if, given the constraints of r 23 that is all possible. The question is whether that can appropriately be achieved in this case. Rodwell v Dowdle [2000] NSWCA 197 provides an example of where the Court upheld a trial judge's assessment notwithstanding that the trial judge's reasons did not fully explain the basis upon which the award was made. In this case, a new trial on the disputed assessments of damages could only be avoided if the evidence leads inevitably to the result found by his Honour. 40 I have referred already in some detail to the medical evidence. However, it needs to be reconsidered in light of the question I have posed. Leaving aside Dr Curlewis, the medical evidence was consistent in that all doctors recognised that there were restrictions on any employment involving bending and lifting. There was evidence by some doctors that the appellant was fit for "all lighter work" and/or "light or sedentary work". That evidence is consistent with the appellant having restrictions on bending and lifting. That evidence irresistibly leads to a conclusion that the appellant had an interference with her work capacity but that interference was not total. His Honour's judgment decides as much. 41 There was other evidence which might or might not have impacted upon his Honour's decision. I refer, in particular, to Dr Hall's evidence. Dr Hall considered the appellant was exaggerating. It is not clear whether his Honour accepted any part of Dr Hall's evidence on the question of work capacity. His Honour did not make any express finding to that effect, although it is arguably implicit in his finding that "had she been tempted" she could have rehabilitated herself. However, the appellant was not cross-examined to that effect. If his Honour's assessment of economic capacity was in any way based on Dr Hall's evidence that the appellant was exaggerating, then that should in my opinion have been stated expressly. That is probably another way of saying that his Honour failed to give adequate reasons. 42 It follows from what I have said that the medical evidence does not lead inevitably to the conclusion arrived at by his Honour. Without knowing what evidence his Honour accepted or the basis upon which his Honour reached his decision, the figure of $100 per week seems to be no more than a figure plucked out of the air. In saying that, I do not overlook the fact that the assessment of damages, including future economic loss is an evaluative process. However, it is a principled process. With respect to his Honour, the judgment provides no indication as to how he went about that process. It is not possible therefore for this Court to overcome the inadequacies in his Honour's reasons. 43 It follows that it is not possible, in my opinion, for this Court to itself assess the damages. There are too many factual issues left undecided for it to do so. Accordingly, the assessment of future economic loss will have to be remitted to the District Court for redetermination. Future Domestic Assistance 44 The appellant claimed that since the accident she has been able to do little of her housework and her husband now performed most of those tasks. The trial judge allowed the appellant four hours per week for past assistance. He reduced it to two hours per week for future assistance. There was medical support for this in Dr Hall's report. 45 However, the trial judge did not expressly adopt Dr Hall's evidence. As I have already said, Dr Hall considered the appellant was exaggerating her symptoms. No one else expressed that view. The respondent did not cross-examine the appellant to that effect and his Honour did not make a finding to that effect. 46 Except for Dr Hall's comment, the medical evidence was overwhelmingly consistent in that the appellant's condition has been in status quo for some time. Only Dr Bryan expressed the opinion that she had prospects of improvement, but said such improvement would be gradual and she would always have some problems with her back. 47 In my opinion, except for Dr Hall's report, the appellant's evidence and the medical evidence pointed to the need for greater domestic assistance than two hours per week. With respect to his Honour, an assessment of two hours per week is of such minor proportions as to indicate error. These matters have to be assessed with an eye to realism and practicality. An allowance of two hours per week would barely cover the time taken to do the family shopping, let alone clean, wash, iron, change beds and vacuum, being an example of some of the usual recurring heavy domestic tasks. However, given the inadequacies in his Honour's reasoning process generally, the appropriate course is to also remit this question back for redetermination. Non Economic Loss 48 That leaves the question of non economic loss. In this regard, it has to be recognised that there is a wide judicial discretion and for an award to be interfered with by an appellate court (and assuming no other relevant error) the trial judge's award must be outside a reasonable discretionary range before appellate interference is required. In my opinion, this award is outside such a range. The appellant was almost 31 years old at the time of the accident. She has a life expectancy of another 52 years. In addition to being in fairly constant pain the appellant has suffered a significant interference with her lifestyle. This will be permanent. None of this was disputed by the respondent in cross-examination, nor did his Honour make a finding to the contrary. However, because of his Honour's failure to make adequate findings on the medical evidence, this issue should also be remitted for redetermination. 49 Accordingly I would propose the following orders: (i) Appeal allowed; (ii) Orders of Delaney DCJ set aside save for his Honour's order as to costs; (iii) Remit the matter to the District Court for rehearing on the assessment of damages for non-economic loss, future economic loss and future domestic assistance; (iv) The appellant to pay the respondent's costs of the additional written submissions addressing the proposed amendment of and the amended Notice of Appeal; (v) The respondent otherwise to pay the appellant's costs of the appeal, but to have a certificate under the Suitors' Fund Act 1951 (NSW), if so entitled. 50 STUDDERT AJA: I agree with Beazley JA. ********** 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.