New South Wales Court of Appeal CITATION : Roads & Traffic Authority of NSW v. Lolomanaia [2001] NSWCA 268 FILE NUMBER(S) : CA 40628/00 HEARING DATE(S) : 13 June 2001 JUDGMENT DATE : 27 August 2001 PARTIES : Roads & Traffic Authority of NSW - appellant Kepueli Taufui Lolomanaia - respondent JUDGMENT OF : Hodgson JA at 1; Davies AJA at 59; Fitzgerald AJA at 60 LOWER COURT JURISDICTION : Supreme Court LOWER COURT CL11135/90 FILE NUMBER(S) : LOWER COURT Greg James J JUDICIAL OFFICER : COUNSEL : Mr. S. Walmsley SC with Mr. P. Doherty for appellant Mr. D. Nock SC with Mr. S. Torrington for respondent SOLICITORS : Hunt & Hunt, Sydney for appellant Bond & Bond, Eastwood for respondent CATCHWORDS : DAMAGES - Domestic assistance - Need due in part to matters unrelated to the compensable injury - Van Gervan principle. D. CASES CITED: Van Gervan v. Fenton (1992) 175 CLR 327 DECISION : See par.58 of judgment IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40628/00 CL 11135/90 HODGSON JA DAVIES AJA FITZGERALD AJA Monday 27th August 2001 ROADS AND TRAFFIC AUTHORITY OF NSW V. LOLOMANAIA JUDGMENT 1 HODGSON JA: This is an appeal from a decision of Greg James J by which his Honour awarded the respondent damages of $944,357.50 against the appellant, and ordered the appellant to pay the respondent's costs of the proceedings on a party and party basis up to and including 15th July 1994 and on an indemnity basis thereafter. Prior to hearing the case, the primary judge dispensed with a jury, over the opposition of the appellant. One ground of appeal relates to this action. The other grounds of appeal relate to questions concerning quantum of damages and costs. BACKGROUND 2 The respondent was born on 26th November 1950 in Tonga. He migrated to Australia in 1972. He worked in various labouring capacities, and commenced employment with the appellant on 18th July 1983. 3 On 18th September 1986, along with other members of a gang, the respondent was trying to attach a trailer to a truck. Because a lifting device attached to the trailer was broken, the respondent and others were lifting it manually. On the findings of the primary judge, not directly contested on appeal, the respondent suffered a back injury on this occasion, and this was due to negligence of the appellant, his employer. This incident was the subject of the proceedings before the primary judge. 4 After the incident, the respondent continued to work for the appellant, with some interruptions, and he saw a number of medical practitioners. 5 A further incident occurred, apparently in 1987, when the respondent, during his employment, lifted a road sign and felt pain in his back. 6 On 15th June 1988, the appellant advised the respondent of a decision to terminate his employment from 16th June 1988. However, it seems that he was reinstated into light duties on 23rd September 1988. In these light duties, he continued to have periods off work and medical treatment. 7 On 22nd September 1989, the respondent was involved in an accident when a motor cycle, on which he was riding to work, went into the back of a bus. It seems that the respondent suffered broken ribs in this accident, and also an injury to his right shoulder. 8 After this accident, it appears that he continued to work much as before, until December 1989, when he was given clerical work. 9 His employment was finally terminated on 2nd December 1994. He has not obtained employment since, and from that time he has been paid workers compensation on the basis of total incapacity. 10 In November 1997, the respondent underwent extensive back surgery. This diminished his pain, but he continues to be unfit for work as a labourer; and as mentioned earlier, he has had no employment since December 1994. 11 In November 1998, there was a determination by Quirk J in the Compensation Court of an application by the respondent against the appellant for lump sum compensation in respect of his shoulder injury suffered in the motor cycle accident. The respondent made no application for periodic payment in respect of this injury, as he was on full periodic payments in relation to the injury the subject of these proceedings. Quirk J awarded him $10,000.00 in respect of 12.5 per cent loss of use of his right arm at or above the elbow, and $5,555.65 for pain and suffering, plus interest. 12 The hearing before the primary judge commenced on 20th July 1999. At about that time, he dispensed with a jury, for reasons published on 19th May 2000. In those reasons, his Honour noted factual complexity concerning the causation of the respondent's disability, especially having regard to the workers compensation claim in respect of the shoulder, and also complications arising from estoppels that could be raised by the workers compensation decision. His Honour took the view that these questions of causation and estoppel would be ill-suited for jury determination. 13 The hearing concluded on 30th July 1999. There were written submissions, the last of which was provided in late October 1999. His Honour gave judgment on 19th May 2000 on the substantive issues concerning liability and quantum. There were further submissions on quantum, resulting in a final judgment on quantum on 9th June 2000. There were then submissions on costs, and judgment on costs was given on 8th August 2000. 14 There are many grounds in the Notice of Appeal, but four matters have been pursued: first, the challenge to the decision to dispense with the jury; second, the manner in which his Honour dealt with the respondent's shoulder injury and its relevance to his damages claim; third, a contention that his Honour's decision was against the weight of evidence; and finally, the question of costs. DISPENSING WITH JURY Submissions 15 Mr. Nock SC for the appellant submitted there was no issue sufficient to deprive the appellant of the common law right to a jury. The issues in the case were not outside the ordinary scope of a civil trial, as envisaged in Pambula District Hospital v. Herriman (1998) 14 NSWLR 387. 16 Mr. Nock also referred to a Court of Appeal decision given after the primary judge's decision, but before his reasons, namely Department of Community Services v. Dezsery [2000] NSWCA 196. In that case, there were two injuries, alleged to have been negligently caused, occurring six months apart; and the District Court judge dispensed with a jury because of difficulties arising from the inter-relationship of the injuries. Mr. Nock submitted first, that the present case was different, because, in the present case, unlike that case, there was no complication arising from the Workers Compensation Act 1987; and second, that there was no reason why a properly instructed jury in this case could not have dealt with issues concerning the shoulder injury. 17 Mr. Nock referred to paragraphs 8 and 9 of the reasons for dispensing with the jury, which express views as to conflicts in the medical evidence; and he submitted that the primary judge did not have before him material justifying those views at the time of dispensing with the jury. In any event, he submitted, a dispute between doctors was an ordinary incident of personal injury proceedings; so that, if this could justify dispensing with a jury, it would do so in such case generally, contrary to the decision in Pambula. 18 Mr. Nock referred to paragraphs 10 and 11 of the judgment, concerning the effect of a possible estoppel from the judgment of Quirk J in the Compensation Court. He submitted that this was a question of law, raising no particular complexity and requiring no more than a proper direction to the jury, along the lines of what in fact was agreed between the parties during the proceedings. 19 Mr. Nock referred to the case of Mayne Nickless Limited v. Dwight (Court of Appeal, unreported, 23/10/97). That case concerned two accidents, both affecting the same part of the body, and involving complications from the 1987 Workers Compensation Act; and yet the Court of Appeal did not interfere with the trial judge's decision not to dispense with a jury. Decision 20 Mr. Nock's submission that his Honour did not, at the time of his decision to dispense with the jury, have the material justifying the views he expressed concerning a conflict in the medical evidence, is itself entirely unsupported by evidence. Mr. Nock conceded that the fact of conflict was put to the primary judge without objection; and in those circumstances, the submission, unsupported by any evidence of what was actually said, that the primary judge went beyond material before him, is one that should not have been made. 21 In relation to estoppel, the primary judge said this: I was informed that an issue which would arise in the present proceedings was the effect of that accident and of her Honour's decision as raising an estoppel, upon the claim made in the present proceedings. It will be contended that the effects of this accident caused or substantially caused the bulk of the loss claimed by the plaintiff or that the decision binds the plaintiff so that it is not open to him to contend otherwise. 22 I note particularly the primary judge's comment that it would be contended that Quirk J's decision bound the respondent so that it was "not open to him to contend otherwise" than that the shoulder injury "substantially caused the bulk of the loss claimed" by him. Such a submission was apparently made (see pars.89 and 90 of the substantive judgment), but in the event did not detain the primary judge very long. However, it cannot be contended that the primary judge should not have acted on the basis that the estoppel argument was likely to raise complex questions. 23 The fact that the Court of Appeal in Dwight did not overturn a decision not to dispense with a jury has no relevance, except as an illustration of the reluctance of appeal courts to interfere with discretionary decisions. 24 In my opinion, on the material before him, the primary judge was amply justified in concluding that the interplay of issues concerning the two injuries, conflicting medical opinions and the respondent's intention to rely on an estoppel to defeat the respondent's claim as to the bulk of his loss, made this a case which, on its own particular facts, was unsuitable for determination by a jury. SHOULDER INJURY AND WEIGHT OF EVIDENCE Submissions 25 Mr. Nock submitted that the shoulder injury caused physical disabilities that affected the respondent's working capacity and created a need for domestic assistance. If the respondent's evidence to the Compensation Court was correct, the respondent could not have resumed labouring work after the motor vehicle accident in September 1989. The primary judge was wrong to conclude that the shoulder injury was not such as to significantly disable the respondent in the absence of the back condition, and failed to have sufficient regard for the impact of that injury so as to discount damages for economic loss and domestic assistance. 26 In relation to economic loss, Mr. Nock submitted that the primary judge erred in being concerned with the question of loss of earnings, rather than loss of earning capacity. He should have determined what was the earning capacity of the respondent at the time of the shoulder injury, and what effect the shoulder injury had on that capacity. In fact, the evidence was that, prior to the shoulder injury, the respondent's average weekly loss of earning was about $84.00. 27 Mr. Nock submitted that the primary judge should have treated that as a measure of the affectation of earning capacity by reason of the back injury. It was agreed that the total past economic loss of the respondent was $191,000.00, and had the primary judge taken $84.00 per week as the measure of loss of earning capacity by reason of the back injury, the damages awarded for past economic loss would not have been $191,000.00 but a little over $40,000.00. 28 At one stage, Mr. Nock submitted that, in awarding $191,000.00 for past economic loss, the primary judge did not even make any allowance for the loss of earning immediately following the shoulder injury. However, that submission was abandoned, when Mr. Nock conceded that any such loss was de minimis. In fact, the evidence was that, following the shoulder injury, the respondent obtained a medical certificate that he would be unfit for work for two weeks, but the evidence was that he actually attended work during that time. 29 Mr. Nock submitted that the allowance of the full $191,000.00 for past economic loss was inconsistent with the primary judge's taking off five per cent from future economic loss, because of the shoulder injury. 30 Mr. Nock submitted that the decision on economic loss was against the weight of evidence, inter alia in that all doctors agreed that, if one accepted evidence given by the respondent to the Compensation Court, the shoulder injury alone would have incapacitated him. 31 Turning to domestic assistance, Mr. Nock submitted that the award of $85,205.00 for past domestic assistance, and $147,716.45 for future domestic assistance, was based on evidence from Dr. Buckley that the respondent needed five hours assistance per week housekeeping and three hours per week handyman assistance; but Dr. Buckley's opinion was based on the respondent's disability from both the back and shoulder injuries, without distinction. Furthermore, there was a discount of five per cent applied to future domestic assistance by reason of the shoulder injury; but none to past domestic assistance, and no other discount for vicissitudes. 32 In relation to the conduct of the trial and the judge's reasons, Mr. Nock submitted that there were glaring inconsistencies in the respondent's evidence; this was conceded in Counsel's submissions on behalf of the respondent, yet this was not addressed by the primary judge in his reasons. Furthermore, parts of the reasons, particularly concerning economic loss and domestic assistance, were simply copied from the respondent's written submissions. 33 Mr. Walmsley SC for the respondent submitted first, in relation to economic loss, that there was no basis for extending the five per cent discount in relation to the shoulder injury to past economic loss; and second, that the primary judge had deducted from future economic loss $45,000.00, because of the chance of workers compensation payments on the basis of the shoulder injury. 34 In relation to domestic assistance, Mr. Walmsley submitted that the true basis for such a claim is the need of a plaintiff for domestic services, and it is not necessary to show that the need is or may be productive of financial loss: see Van Gervan v. Fenton (1992) 175 CLR 327 at 333. Accordingly, the market cost of such services is ordinarily the value to be attributed to that need; and this is usually done by calculating a number of hours of needed domestic services and applying the commercial rate to such hours. 35 In this case, the respondent's claim in respect of services, including services gratuitously provided by family and friends, amounted to five hours per week for housekeeping and three hours per week for handyman services. This was based on Dr. Buckley's unchallenged evidence. The respondent's oral evidence was to the effect that his wife and children had to do the domestic duties; and even though the respondent, at Black Book 422, said that his inability to do work around the house related to both the back and the shoulder, Black Book 166H confirmed that the back was his main problem. Decision 36 In relation to past economic loss, although what is compensated is loss of earning capacity, actual loss of earnings in the past is generally a reasonable measure of that loss. No error is shown in the primary judge adopting that measure. 37 In my opinion, the primary judge's reasons for substantially accepting the respondent's evidence were adequate, and that acceptance cannot be successfully challenged here. It is true that some evidence given by the respondent before Quirk J concerning the effect of his shoulder injury and his history of employment was inconsistent with the case made out before the primary judge; but the whole of the picture presented by the respondent to Quirk J by the whole of the respondent's evidence before her, and reflected in her judgment, was substantially consistent with the whole of the picture presented before the primary judge. 38 In relation to Mr. Nock's submission that all doctors agreed that, if one accepted evidence given by the respondent to the Compensation Court, the shoulder injury alone would have incapacitated him, what was in fact put to the doctors was only a very small part of the evidence given by the respondent to the Compensation Court, and did not fairly reflect the effect of the whole of the evidence given to the Compensation Court. 39 The primary judge found that the respondent's back was "the significant and substantial cause of his loss of earning capacity and at (meaning "of") most of his disabilities". In my opinion, that finding was plainly not against the weight of evidence. In addition to other factors, it was strongly supported by documents prepared by rehabilitation officers at the most relevant time, in particular a report from Royal Ryde Rehabilitation Hospital dated 15th August 1989, a report from Nexus Management Services Pty. Limited dated 20th November 1989, a further report from Nexus Management Services Pty. Limited dated 8th December 1989, a further report from Royal Ryde Rehabilitation Hospital dated 12th December 1989, and another report from Royal Ryde Rehabilitation Hospital dated 18th January 1990. Having regard to the circumstance that the accident causing the shoulder injury occurred on 22nd September 1989, the circumstance that these reports, all dealing with problems associated with ensuring satisfactory employment for the respondent, mentioned his back problems and not his shoulder problems, is very powerful evidence supporting the contention that it was his back that was the significant and substantial cause of his loss of earning capacity. 40 In my opinion, the primary judge's finding that the whole of the past economic loss was caused by the back injury was justified on the evidence. In my opinion, there is no inconsistency between an average weekly loss of $84.00 per week prior to the shoulder injury and a much larger average weekly loss thereafter: the low loss prior to the shoulder injury was due to the respondent's continued employment by the appellant; and the increased average loss thereafter was due to the later loss of this employment and the inability to find other employment. The primary judge found, and was entitled to find, that the back injury was the substantial cause of both of these circumstances. 41 In my opinion, the deduction of five per cent from future economic loss in respect of the shoulder did not require or suggest a similar deduction in respect of past loss. Although in making this deduction the primary judge referred to the shoulder as an actuality, rather than a vicissitude, in my opinion it is clear that the deduction was on the basis that the plaintiff was more susceptible than usual to incapacity from causes other than his back injury. 42 In my opinion, there is more force in the submission concerning domestic assistance. Although the primary judge was justified in finding that the back was the significant and substantial cause of most of his disabilities, and that all economic loss was caused by the back (subject to the discount of five per cent and the allowance of $45,000.00), the question of need for domestic assistance does raise additional questions. 43 The report of Dr. Buckley records continued shoulder pain, worry about the shoulder, and the respondent saying that the shoulder was very weak so that he had difficulty performing tasks which required strength, although normally the shoulder did not worry him as much as the back. In giving his opinion that the respondent required three hours of handyman assistance and five hours of housekeeping assistance per week, Dr. Buckley did not distinguish the need arising from the back from that arising from the shoulder. 44 As I have stated, it was plainly open to the primary judge to hold that the back injury alone meant that the respondent was unable to obtain employment. Ability to obtain employment tends to be all or nothing: either one has employment or one does not. Domestic matters, on the other hand, can be attended to by a plaintiff to greater or lesser extents up to the limit of the plaintiff's capability; so that, in my opinion, it was necessary in this case to consider what the respondent could and could not do if the only problem was his back problem. This was not done, either by Dr. Buckley or by the primary judge, and in my opinion this was an error. 45 I note that Dr. Buckley's report was described by the primary judge as being based on the Van Gervan principle, which assumes that a plaintiff lives alone and will live alone. I take it that this is based on the view, taken as having been expressed by a four/three majority of the High Court in that case, that one should leave out of account altogether the consideration that relevant domestic services may be ones provided by family members before the injury, as part of the give and take of domestic arrangements, and continued to be provided after the injury as part of the same give and take. 46 I am not certain that this view was expressed by a majority of the High Court; but if it was, in my opinion it was in the circumstances of that case by way of obiter dicta only, and in my respectful opinion, such a view would be contrary to principle. It is established that what is compensated in relation to domestic services is the loss of capacity to perform domestic services; but nevertheless, the compensation must be compensation to a particular person for the economic value of that loss to that person. 47 Suppose that a husband and wife have an arrangement that the wife cooks and the husband maintains the house and garden (although the wife is capable of doing so). The wife is injured, so that she is unable to do the work necessary to maintain the house and garden, though she can continue to cook; and the arrangement continues as before. In my opinion, it would be contrary to principle that the wife be compensated for the loss of capacity to maintain the house and garden as if the arrangement with her husband had never existed and as if it would not continue: rather, she should be compensated in effect for the contingency that she may need the capacity to maintain a house and garden in the future. 48 Suppose instead that the arrangement was that the husband cook and the wife do the work to maintain the house and garden. The wife is injured so that she cannot maintain the house and garden, but can cook; and the husband and wife change the arrangement, so that the wife cooks and the husband maintains the house and garden. Leaving aside any question of whether the wife should be compensated because this different arrangement is less congenial to her, in my opinion as a matter of principle compensation to the wife for the economic value of her loss of capacity to maintain the house and garden should take account of the circumstance that, in the fair give and take of domestic arrangements, she does not need to do this or pay anyone to do it; so that her compensation should rather be for the contingency that she may need this capacity in the future. 49 In the present case, it would seem that the respondent may be capable of making a fair contribution to a domestic arrangement in which everything that needs to be done gets done by family members; and if so, it would seem incongruous to me that he should be compensated as if he actually required paid domestic assistance for eight hours per week in the past and indefinitely into the future, resulting in an award of over $200,000.00. 50 It appears that these points were not raised before the primary judge, and they have not been made grounds of appeal, and I will not pursue them further. Limiting myself to the point which has been taken and which I have discussed in paras.42 to 44, this Court is faced with the alternative of either sending the matter back for re-trial, or doing its best on the material which it has. In my opinion, plainly the latter course is the preferable course. Doing the best I can, I would deduct twenty per cent from the award for loss of domestic services (in addition to the five per cent in respect of the future) to allow for the contribution of the plaintiff's shoulder to his need for domestic services, resulting in a deduction from the verdict of $46,584.00. costs 51 The primary judge ordered that the appellant pay the respondent's costs of the proceedings on a party and party basis up to and including 15th July 1994, and on an indemnity basis thereafter. 52 The reason for this was that, on 15th July 1994, the respondent received an award of $410,381.43 from an arbitrator, including $45,000.00 received as workers compensation; and that the respondent did not apply for a re-hearing but the appellant did. 53 It was pointed out before the primary judge, and before us, that after the arbitration the respondent ceased to work, added a claim for domestic assistance and increased by 300 per cent his claim for economic loss. However, the primary judge expressed the view that, even allowing for the increased claim, the verdict in the proceedings was greatly more favourable to the respondent than the result of the arbitration. 54 Mr. Nock submitted that the circumstances of the arbitration were so substantially different from those of the hearing that it was unfair to make the comparison which the primary judge made. 55 Plainly, the result of the proceedings was not substantially more favourable to the appellant than the determination of the arbitrator; so Pt.52A r.34 of the Supreme Court Rules required an order that the appellant pay the respondent's costs of the proceedings from 15th July 1994. That of course would have been the result in any event. The question is, whether those costs should be on an indemnity basis. 56 In my opinion, there is an analogy with the refusal of an offer of compromise, and the additional circumstance that the respondent was put to the expense of proceedings before an arbitrator, as well as proceedings before the Supreme Court. In my opinion, the order for indemnity costs was open to the primary judge, as a matter of discretion, if he correctly assessed that the verdict in the proceedings was greatly more favourable to the respondent, making allowances for the different circumstances in which it was made. Part 52A r.30 clearly contemplates that such comparisons may be made, even though circumstances may change between the arbitration and the Supreme Court proceedings. 57 In my opinion, the challenge to the costs order must fail unless the appellant can satisfy this Court that the primary judge was in error in considering that the result of the Court proceedings was greatly more favourable to the respondent than the result of the arbitration, making due allowance for the increased claims. In my opinion, the appellant has totally failed to make out any such error. The reduction in the verdict that I propose makes no relevant difference. CONCLUSION 58 For those reasons, in my opinion the following orders should be made: 1. Appeal allowed to the extent of reducing the verdict by $46,584.00, and otherwise dismissed. 2. Each party to bear its own costs of the appeal. 3. The respondent to have a Suitors Fund certificate in respect of his own costs of the appeal, if otherwise qualified. 59 DAVIES AJA: I agree with the judgment of Hodgson JA. 60 FITZGERALD AJA: The circumstances giving rise to this appeal are set out in the reasons of Hodgson JA. 61 Having regard to the way in which this case was argued, I consider that it does not provide a suitable occasion for an analysis of the principles governing awards for lost capacity to perform domestic activities. Subject to that, I agree generally with his Honour's reasons. 62 I agree with the orders proposed by his Honour. ********** 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. 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