New South Wales Supreme Court CITATION : Cremona v RTA [2000] NSWSC 556 FILE NUMBER(S) : SC W200075/94 HEARING DATE(S) : 14/4/99 - 25/5/99 JUDGMENT DATE : 20 June 2000 PARTIES : Minna Maarit Cremona Roads & Traffic Authority JUDGMENT OF : Dowd J at 1 COUNSEL : Mr B Toomey QC (P), Mr W Dodd SC Mr B Gross QC (D), Mr A Porthouse SOLICITORS : Corrs Chambers Westgarth Crown Solicitors CATCHWORDS : Compensation to Relatives - deceased's former drug abuse - likelihood of recidivism - widow's likelihood of remarriage and working - percentage of dependency - basis of calculating loss of income - superanuation calculation LEGISLATION CITED : Compensation to Relatives Act 1987 Phali v Commissioner for Railways 164-5 NSWLR 1545 at 1547 GIO of NSW v Cox (1976) 9 ALR 194 Allan v Commmonwealth (1980) 24 SASR 581 Cullen v Trappel (1980) 146 CLR 1 Whittaker v FCT (1998) 53 ALR 344 CASES CITED : Andrews v Grand and Toy Alberta Ltd [1978] 2 SCT 229 Bresatz v Przibilla (1962) 108 CLR 541 Martin v Owen (1992) Times 21 May 1992 Dominish v Astill (1979) 2 NSWLR 368 Jones v Schiffman (1971) 124 CLR 303 Todorivic v Waller (1981) 150 CLR 422 DECISION : Findings as to basis of calculation ; leave to argue further matters ; calculations to be submitted IN THE SUPREME COURT OF NEW SOUTH WALES (COMMON LAW DIVISION) DOWD J 20 JUNE 2000 No. W75 of 1994 - Minna Maarit Cremona -v- RTA Judgment 1 The plaintiff Minna Maarit Cremona, widow of the late Dr Louis Cremona who died on the night of 28 May 1993 as a result of a motor accident on the M3 expressway south of Wollongong commenced proceedings under the Compensation to Relatives Act 1987 ("the Act") on behalf of herself and their two infant children of the marriage against the driver of a truck ("the truck driver") as first defendant and the Roads and Traffic Authority ("the RTA") as second defendant. The defendants cross claimed for indemnity from each other. 2 At the relevant time Dr Cremona's car was travelling in a lane on the northbound carriage way of the expressway when it struck the rear of a large truck driven by the truck driver. At the time the RTA was performing roadworks on the southbound carriageway of the expressway, such works involving stripping the road surface of the southbound lane and loading the spoilage into trucks including that driven by the truck driver for the spoilage to be taken away for dumping. 3 Application was brought by the plaintiff for summary judgment in favour of the plaintiff against the RTA, as a result of which I ordered that the plaintiff have leave to enter summary judgment against the RTA on liability and that the hearing on assessment of damages be heard with the hearing of the truck driver concurrently with the hearing of the cross-action between the first defendant and the RTA and that the hearing be fixed for an available date in February 1999. 4 On further application to the Court on 16 October 1998 I ordered that "1.The plaintiff discontinue against the first defendant by consent. 2. That a separate trial of the action against the second defendant by the plaintiff occur. 3. That there be a separate trial of the cross claim between the cross claimant and the cross defendant. 4. That the action against the second defendant for assessment of damages be separately tried. 5. That the second defendant pay the plaintiff an interim payment of $800,000. 6. That the second defendant pay the plaintiff's costs of the application for interim payment and the costs of and incidental to the bias application." 5 The assessment was heard before me from 23 March 1999 to 16 April 1999, my decision was reserved subject to further written submissions being later filed. I was then asked to make a further interim payment under s.76E of the Supreme Court Act 1970 as a result of which I ordered the payment of a further two hundred thousand dollars, making $1,000,000.00 thus far paid to the plaintiff. Factual Background 6 The plaintiff, who was born in Finland on 20 April 1964, Dr Cremona having been born on 9 September 1954, were married on 8 September 1988. There are two children of the marriage, Sarah Louise Cremona, born 20 July 1989 and Alex James Cremona, born 21 April 1992. Sarah attends the local Montessori School where she is progressing extremely well in her studies and is a confident and capable student. Alexander also attends that school and is progressing well above his age level and is a highly motivated and articulate child. 7 Dr Cremona had practised as a general medical practitioner in Dapto, in the Wollongong area, having graduated from medicine with Honours at the University of New South Wales at the end of 1978. He had been a professional intern at Westmead Hospital from January 1979 to the end of December 1979, then at that Hospital became a medical resident officer through 1980 and a senior medical resident officer in 1981. From 1 January 1982 to 30 September 1982, Dr Cremona was a medical registrar at Concord Hospital where he commenced a course to be appointed a fellow of the Royal Australasian College of Physicians, which course he did not complete. 8 Subsequent to leaving Concord Hospital Dr Cremona commenced to practise in a group practice as a general practitioner from 1 October 1982 until 1 October 1985 when he commenced practise on his own at Dapto. Dr Cremona had visiting appointments from, October 1983 until his death as a hospital visiting G.P. and was an occupational health officer as to lead monitoring at ERS Pty Ltd at Port Kembla attending weekly until April 1990. 9 Dr Cremona held various academic and professional positions and was particularly involved as the Convenor of the Wollongong G.P. Forum from 1984 to his death. Dr Cremona was, on any assessment of the evidence one of the hardest working General Practitioners in the State. He had numerous related activities which were likely to generate work for his practice. Dr Cremona, being of Maltese extraction, was able to expand his clientele in the Maltese community which community is significantly represented in the Wollongong/Illawarra area. Dr Cremona carried on an extremely high level of community and medical activity during the period of and prior to his practice. 10 In the Wollongong G.P. Forum, Dr Cremona was involved in arranging lectures and drug company sponsorship and advertisements. He was the representative on the Illawarra Measles Taskforce Committee in 1988 and was the secretary education officer of the Department of General Practice at Shellharbour Hospital. Dr Cremona was a foundation member of the Illawarra Institute of General Practice. 11 Dr Cremona was involved in a G.P. evaluation program funded by the Federal Government involving the preparation and treatment of menopause in general practice. This involved fortnightly meetings of three to four hours per fortnight. Dr Cremona had been a lecturer for medical students and as part of this program he had fourth and fifth year students attend his practice. He was also the local diving medico appointed by the local organisation which qualifies divers. He would, additionally see patients in nursing homes and retirement villages and had a very broad and extensive practice in all areas of general practice. He spent every Thursday afternoon with his family although sometimes he had patient visits for some of those afternoons. 12 There was evidence before the Court, which I accept, from his former employers in Dapto who spoke very highly of his patient care, his medical knowledge and his high ethical standards. The written tributes both published and personal letters and the references from medical colleagues show that Dr Cremona had a very high level of patient skills and community respect and he was someone who made himself available to patients very readily and he worked extremely long hours. 13 An examination of the Medicare claim form records exhibited to the Court shows that Dr Cremona to some extent acted in effect as his own specialist in many areas of medical care. Dr Cremona was ordering a large number of pathology and radiology tests and the like from the practices around him for his own diagnostic purposes. There is no evidence that he received any financial benefit from these related practices and therefore I conclude the tests were to assist him in making his own diagnosis and assisting him in the treatment that he carried out. 14 The medicare claims recorded, show a wide range of medical procedures which appear to be somewhat more than that carried out by general practice doctors, in private surgeries, were carried out by Dr Cremona. This shows, in part the popularity of Dr Cremona and the confidence which his patients had in him and the range of surgical and other procedures in which he was skilled. 15 The overriding nature of the practice however was that of a doctor who carried out vast numbers of consultations where such consultations were clearly much shorter than the average consultation but there is no evidence that he was any less skilful than a doctor that took longer in consultation. Dr Cremona worked from very early in the morning to very late in the afternoon. The evidence showed that his waiting room was almost always fairly full with patients waiting. 16 The evidence before me showed that his patient numbers increased to more than double in the period 1986-1993 notwithstanding that he already had a very high patient load and that during almost the same period his consultation rebate from Medicare also doubled. From 1985 to 1993 the number of distinct patients approximately doubled in number as did the number of services rendered. In his practice Dr Cremona was assisted from time to time by a number of locums and assistants from 1985 until May 1993. 17 Dr Cremona's surgery in Bann Bann Street, Dapto comprised a very large waiting room off which were two consulting rooms, one used by Dr Cremona, the other used by any other doctor who worked in the practice and was otherwise used for persons having procedures such as an ECG or where someone was ill and needed to rest and lie down. 18 There was adequate provision on the premises for a partner or employed doctor to work with Dr Cremona. The subject building had other medical professionals that could provide related medical services for Dr Cremona's practice. Dr Cremona had a bulk billing practice as did the sixteen other doctors that carried on general medical practice in Dapto. Substance Abuse 19 The evidence before me showed that since 1987 before his marriage Dr Cremona had been a drug substance abuser, arising, it is suggested, initially from a need to ease the pain of migraine headaches. The abuse progressed from the use of heavy pain killers such as Panadeine Forte to use of the Poisons List, Schedule 8 drugs in the "Doctors Bag" issued to him as to all prescribing doctors. This he did on a recreational basis. He was ultimately found by his receptionist in his surgery having injected himself with pethidine and was admitted to Wandene Private Hospital at Kogarah in December 1990, for assessment and treatment for his drug abuse. 20 Dr Cremona thereupon voluntarily relinquished his Schedule 8 prescribing powers as is common with doctors under the supervision of what is called the impaired doctors scheme. This relinquishment may have, in fact, merely been accepting that it was inevitable that his Schedule 8 prescribing powers would have been taken away from him in any event. Pharmacists generally are notified of his inability to prescribe addictive drugs in Schedule 8 of the Poisons list making it very difficult for the obtaining of such drugs. He did not regain nor apparently seek to regain the power to prescribe such drugs, even though entitled to apply after two years. I will deal with this issue later in this judgment under the various issues that have been argued relevant to the fact of his likelihood of his having fallen back to drug abuse and dependency. 21 Dr Cremona arranged the affairs of his practice to reduce the incidence of income tax. He had superannuation arrangements with a superannuation fund known as Scottish Amicable. He set up a proprietary company, "L J Cremona Pty Ltd", of which initially he and his mother were directors but his wife became a director in the last year before his death consequent on the deterioration of the health of Dr Cremona's mother. He also set up another proprietary company, "Caldety Pty Ltd", as trustee for the Cremona Family Trust which trust was designed to employ staff of the practice and to minimise the incidence of tax. 22 The plaintiff and Dr Cremona had previously jointly owned residential premises at Keiraville outside Wollongong and had acquired three quarters of an acre at Cordeaux Heights which was closer to Dapto in a treed area in the foothills of Mount Kembla. Construction had commenced after Christmas 1992 and the first floor brickwork was completed by the end of May 1993. To do this the plaintiff and Dr Cremona arranged bridging finance somewhat over $100,000.00. These premises have not been the subject of argument in these proceedings since the plaintiff is as the person who acquired full ownership of the premises on the death of Dr Cremona was entitled to those premises in any event and are outside the purview of this claim under the Act. Calculation of Damages 23 Under a claim under the Act only pecuniary loss is calculated, however that task is always difficult and "all but the simplest claims under the Act present uncertain and imponderable elements so that an accurate arithmetic approach is quite impossible." (Phali v Commissioner for Railways 164-5 NSWR 1545 at 1547). In GIO of NSW v Cox (1976) 9 ALR 194 Gibbs J held at 197 that as we can never know for certain what would have happened if the deceased lived, calculations cannot be done on a precise mathematical basis. 24 In Allan v The Commonwealth (1980) 24 SASR 581 Wilson J commented as to the then changes to social customs and said: "Old ideas of the wife living in a fixed and settled routine, allowed so many pounds a month for the household, in receipt of so much pin money, subject to restraint upon anticipation, and looking forward to the dowerhouse in widowhood or to some other variant secured to her by marriage settlement, have been jettisoned by the community, Gone, too, are the almost mathematically precise ingredients by reference to which a widow might be called on to assess her chances in the re-marriage market. Instead, we are presented with working wives displaying independence in action and in matters of finance, households run almost as joint enterprises by two equally contributing partners in the workforce, marriages that are almost indistinguishable from marriages and, speaking generally, vicissitudes in family life which, in their frequency and magnitude, can bewilder, not only a particular family under review, but also those who witness them. In short, the present day trial judge would be deluding himself and the community if he were to pretend to impeccable scientific reasoning and certainty when assessing compensation to widows and widowers who prefer claims like the one now before me." 25 This is particularly applicable to the present proceedings as indeed much greater changes in society have occurred since that decision in terms of the independence of women. This was a family of extremely high income and therefore high disposable income where the wife has a considerable earning capacity herself in a time where women are very much more financially independent in decision making and in emotional and financial terms from their marriage partners. This is particularly so in the case of the plaintiff who is a very strong willed independent and assertive person in her own right with a high level of skill and education. 26 In these proceedings, a lump sum must be assessed representing the loss to all defendants on whose behalf the action is brought and that sum has to be apportioned between the dependents. In the present case the parties have submitted evidence on a total loss calculation basis, adducing evidence on dependency of these persons on whose behalf the claim is made. The question of the apportionment between the plaintiff and her two children has been reserved for further argument as, indeed, has the question of costs. The issue of trustee management fees was also not argued arising out of the payments both lump sum and periodical made under a workers compensation policy in respect of the death of the deceased was also reserved for argument. 27 Australian courts have now for a long time relied on actuarial computations and in the present proceedings the case for the plaintiff has relied on actuarial evidence based on assumptions furnished by the plaintiff's solicitors. In Cullen v Trappel (1980) 146 CLR 1 at p. 17, it was held that a court should proceed as accurately as possible with the assistance of actuarial material (per Gibbs J) however the Supreme Court of Canada in Andrews v Grand and Toy Alberta Ltd [1978] 2 SCT 229 held at p.236-7: "The apparent reliability of assessments provided by modern actuarial practice is largely illusionary, for actuarial science deals with probabilities, not actualities. This is in no way to denigrate a respected profession; but it is obvious that the validity of the answers given by the actuarial witness, as with a computer, depends upon the soundness of the postulates from which he proceeds. Although a useful aid and a sharper tool than the "multiplier-multilicand" approach favoured in some jurisdictions, actuarial evidence speaks in terms of group experience. It cannot and does not purport to speak as to the individual sufferer. So long as we are tied to lump-sum awards, however, we are tied also to actuarial calculations as the best available means of determining amount." 28 In these proceedings it is in my view proper that the considerable actuarial calculations admitted in evidence be used as the basis for calculating damages. Assessment of the credibility of Dr Cremona and the Plaintiff 29 A considerable part of the cross-examination not only of the plaintiff but of other witnesses called by the plaintiff went to the issue of the credit of Mrs Cremona and also in terms of the description by the plaintiff of Dr Cremona's actions and statements and in terms of other witnesses to the extent that there was an attack on the credit of Dr Cremona thus affecting the inferences the Court could draw as to his future intentions and likely career path and his propensity for drug abuse. The RTA's submissions also dealt with the credit of the plaintiff and Dr Cremona. 30 It is submitted by Senior Counsel for the RTA that the plaintiff's evidence must be judged critically in the light of a high degree of willingness to give instructions to maximise all elements of her case. 31 In short, the first RTA submission is that at the time, of being killed, that Dr Cremona was suffering from stress and overwork, that the plaintiff had significantly inflated the amount of additional work and income that the plaintiff's projections would involve at a time when he was endeavouring to preserve his marriage and change his ways in cutting down on working hours. It is also put that the plaintiff presented as someone who is very conscious of the relevance the prospects of remarriage on the amount of damages and her evidence reflected this. 32 In observing the plaintiff giving her evidence she appeared to me to be going to some trouble to emphasise those matters that assisted her claim such as Dr Cremona's diligence and competence. This obviously was aimed at a favourable assessment of his capacity to work and his ability which would reflect itself in an amount paid for damages. It was also clear that the plaintiff was endeavouring to emphasise, in effect, how difficult she was and therefore unlikely to get married. Notwithstanding such emphasis I do however accept that the plaintiff had, in her evidence, a present intention not to marry. She was endeavouring to minimise this deleterious aspect of the evidence 33 In the evidence which she gave when cross-examined about a comment made in the Wandene Private Hospital records about Dr Cremona being very resourceful about obtaining drugs that the plaintiff was in fact endeavouring to cover up the fact that she was aware that he had been "very resourceful". I do not accept the initial explanation by the plaintiff as to the context that she endeavoured to explain the use of the "very resourceful" hospital records. I consider that for some period albeit short the plaintiff was aware of her husbands drug taking and in fact at p.83 of the transcript concedes the issue. 34 I consider that the plaintiff was endeavouring to create a more rosy picture than in fact occurred in relation to the Thursday afternoon the plaintiff spent with his family. Dr Kathy Allen who was the plaintiff's doctor who worked in Dr Cremona's practice during 1990 and 1991 confirmed that Dr Cremona did do house calls on the day of the week that he took off from the surgery. 35 I consider that the weight of the plaintiff's evidence was at all time coloured by the consciousness of the significance of her evidence on matters such as likelihood of resumption of work and likelihood of remarriage. 36 As to the credibility of Dr Cremona it is put on behalf of the RTA that he had been abusing drug substances covertly during the whole period of his marriage and deceiving his spouse and that when he was finally exposed he even then lied to her. Exhibit 4, the report of Dr Norman Ellis of the Pharmaceutical Services Section, which report I accept as being evidence of the conversation with Dr Cremona, shows quite a serious situation that Dr Cremona disclosed: the fact that he enjoyed his initial self administered pethidine injection for migraine which commenced some four years before 1990, that is the beginning of 1987 and that he had commenced self administering pethidine and morphine on a regular basis using his doctors bag supply and using surplus from patients prescriptions issued legitimately. 37 I accept Mr Ellis' report that Dr Cremona was anxious to surrender his drug authority I have noted that he did not seek to have it returned even though he was entitled after two years to make such application. I do not accept that once he had surrendered his Schedule 8 powers that in a relatively closed area such as Dapto that he would have been able, without the appropriate prescribing powers to obtain pethidine or morphine or other such medication used for abuse without being detected by the pharmacists who had all been notified of the withdrawal of those prescribing powers. Heads of Damages 38 In dealing with the heads of damage I will generally follow for convenience, the order in which the plaintiff has dealt with each of the issues. Contingencies 39 In Bresatz v Przibilla (1962) 108 CLR 541, a case relating to the South Australian common practice of reducing damages by 25% for contingencies, Windeyer J said at p.544: "I know of no reason for assuming that everyone who is injured and rendered for a period unable to work would probably in any event have been in a quarter of that period out of work, or away from work and unpaid. No statistics were presented to justify this assumption. Moreover, the generalisation that there must be a 'scaling down' for contingencies seems mistaken. All 'contingencies' are not adverse: all 'vicissitudes' are not harmful. A particular plaintiff might have had prospects or chances of advancement and increasingly remunerative employment. What count the possible buffets and ignore the rewards of fortune ? Each case depends upon its own facts. In some it may seem that the chance of good fortune might have balanced or even outweighed the risk of bad." and at p.543 : "But the second consideration [that is, the allowance for contingencies] is altogether different. It is a mistake to suppose that it necessarily involves a 'scaling down.' What it involves depends, not on arithmetic , but on considering what in the future might have held for the particular individual concerned…" 40 The plaintiff relies on these comments which were adopted in Norris v Blake 41 NSWLR 49 at 73. The plaintiff also relies on Professor Luntz 3rd Edition "Assessment of Damages for Personal Injury and Death" where he deals with Australian statistics and the assessment of contingencies particularly. Most of that portion of the book referring to Professor Luntz deals with the majority of cases where a wife is substantially dependent on her husband as breadwinner, a circumstance somewhat different from the present case. 41 The plaintiff's submission is that if you examine the various factors going to make up the usual 15% contingencies and take out strikes, unemployment and the like, the chance of Dr Cremona having unemployment was virtually nil except for a slight chance of relapse into drug dependency but contends that excluding mortality and including the possibility of drug relapse the provision should be no more than 5% and it is submitted that this is supported by Dr Cremona's excellent health. 42 The evidence in my view is to the contrary. There is evidence that notwithstanding a habit of having little sleep that Dr Cremona was working very long hours, a circumstance likely to create stresses that affect health. It is clear that Dr Cremona had difficulty coping with dying patients as deposed by his solicitor Michael Campbell that primarily being as a result of being emotionally close to patients. 43 The marriage was generative of stress and was likely to continue to do so notwithstanding the adjustments that had been made but the overriding concern that I have is that someone who generates a serious level of migraine and is a poly-substance abuser over a period of four years whilst building up his substantial medical practice has a risk factor which must be taken into account when assessing vicissitudes. 44 Dr Cremona was pushing himself in his work and was likely to be suffering psychologically and had shown a propensity for drug-dependency over a significant part of his life prior to discovery. He is statistically likely to relapse because of the stresses although I will deal specifically with that likelihood of relapse under another heading. I do consider that the vicissitudes contingency factor, which I would agree ought to be low for a self employed general medical practitioner in private practice is in the particular circumstances of Dr Cremona's history, it is proper to calculate a 15% contingency factor for vicissitudes. 45 In relation to Minna Cremona it is submitted that the only vicissitude likely, must be remarriage, which is dealt with later in the plaintiff's submissions and in this judgment. Mrs Cremona is a mother of young children with consequent responsibilities and inability to predict their health but has otherwise good health notwithstanding a serious medical problem she had dealt with in the recent past. 46 I accept that it is proper for a reduction from the normal vicissitudes of 15% when taking into account the normal factors of an employee which is not her circumstance and since she has a fairly wide range of skills and I consider that the proper allowance for vicissitudes is 7.5% being half of the normal contingency factor. It is submitted by the plaintiff that the children's contingency allowance should be minimal as mortality is the only real factor and that constitutes a very small percentage. It is put by the plaintiff that leaving home and severing connection with family would be a tiny contingency. 47 The excellent performance of both children academically to this stage coming from a family with a high achievement tradition makes it unlikely that the children would not follow through and remain dependent on the parents however to adopt a one in fifty probability that something such as a child leaving home or dropping out of school that will happen is a fairly low order of probability and it seems to me that each child should have a that contingency factor of 2%. Marriage strength 48 It is submitted on behalf of the RTA that there were poor prospects of the marriage surviving and that one must have regard to the fact that one marriage in three ends in divorce. That was the view of the English Court of Appeal in Martin v Owen (1992) Times 21 May 1992. It is fairly submitted that tension and mental health of the parties is a factor and the fact that one partner resorts to substance abuse are factors working against the survival of the marriage. Communication problems and attempts to change behaviour are more likely to evidence a marriage that will fail. It is conceded by the RTA that the prospects of failure of marriage are highest in the early years. 49 The plaintiff has frankly admitted that movement to Wollongong was away from her social circle and that she had to make sacrifices and there is evidence that Dr Cremona tended to place her second after his compulsive working activities and the factor such as the deceit over the drugs must place the marriage in a more fragile category. Dr Borenstein's clinical notes reveal that the parties still had a lot of issues to resolve because it was unlikely that Dr Cremona was going to change his habits. Dr Borenstein's evidence shows ongoing adjustment problems. 50 The evidence is that both parties seemed to have a need for control and Mr Newhouse their accountant and friend commented on their propensity for being sparring partners at dinner parties. 51 With the litany of problems in the marriage there was a high statistical likelihood on the evidence that the marriage was at risk. The RTA also relies on the plaintiff's own self description as acrimonious and a "black and white person" and that she was not particularly happy. Her evidence, which I accept, was that the plaintiff was very independent and that she did not cohabit very well and the marriage was not necessarily always congenial. 52 It is necessary, on the other hand, to look at the fact that the parties were successfully negotiating the acquisition of a very nice new home, that they would soon have it paid off and not therefore be subject to the financial pressures that very much impinge upon matrimonial accord in our society. Dr Cremona had started to have increased social and recreational activity with the plaintiff and they were spending and organising holidays together and went bushwalking. 53 The significant evidence however is that the parties had been through a most cathartic episode in the discovery of the drug taking and the acknowledgment of the final admission of the extent of the problem. Also the way in which Dr Cremona, notwithstanding spending more time with his family, continued to operate on all the evidence very efficiently in his practice. Marriage are more fragile at an earlier than at a later stage and the evidence in this case leads me to the view that Dr Cremona's attitude towards the sanctity of marriage and the obsessive success orientation of both parties means that notwithstanding the difficulties that I have outlined, I find that on the evidence the marriage was likely to survive. 54 Notwithstanding the plaintiff's colouring of her evidence I nonetheless accept that, after the difficulties which they had, the parties were better able to cohabit. As submitted by Counsel for the plaintiff, I found Dr Cathy Allen, an impressive witness, I accept her view that the marriage difficulties had been resolved. I also accept the submission that Dr Borenstein's opinion could be relied upon when he expressed the view that the plaintiff and Dr Cremona were determined to make the marriage work. Plaintiff's Remarriage 55 The plaintiff is a difficult forthright determined and strong willed woman who would not make an easy marriage partner. I accept that she considers that she will not re-marry and that she is unwilling to enter into another matrimonial venture. It is submitted on behalf of the plaintiff that there is a low percentage chance of remarriage particularly in the light of the highly successful high performing doctor to whom she had been married. It is unlikely that she would find someone who is able to provide as he did. 56 It is long established authority that the revised capacity of a widow to marry again has been regarded as having some value in the assessment of damage in fatal accident cases. Almost all of the authorities relate however to the "home maker-breadwinner" relationship and bear little similarity to the present proceedings. The principle is restated in Dominish v Astill (1979) 2 NSWLR 368, and in each of the judgments. 57 In the judgment of Reynolds JA His Honour said at p.378: The principle which binds me is that the revived capacity to remarry has a value to this appellant which must be brought into account. This presents the tribunal of fact with a formidable task and, as Menzies J observed in Jones v Schiffman, the extent of any reduction is "not…a matter which can be governed by rules, even by imprecise rules." It has come to be accepted, and in my opinion correctly, that, although real and not nominal allowance should be made for the revived capacity to marry, such allowance should, in general, be moderated for fear of otherwise doing an injustice to the widow." 58 Samuels JA on p.379 also stated: "It is well established that, in assessing a widow's damages under the Compensation to Relatives Act 1987, the possibility of her remarriage must be taken into account as a discounting factor." and again at 381 Samuels JA said: "the death of one spouse inevitably results in a revived capacity in the other to marry. This, for what it is worth in any particular case, has so long been regarded as having some value in the assessment of damages in fatal accident cases that it is profitless to debate how far the established rule is justified. But the death of one spouse does not result in a revived capacity in the other to undertake gainful employment." 59 Samuels JA agreed with Reynolds JA that it was not an easy matter and the comments that the average rate of remarriage for widows under thirty years of age is high rather than low and that a widow under thirty has a better than average chance of remarrying within ten years. 60 Notwithstanding the views expressed by the plaintiff and the fact that there were two young children of the marriage and the clear difficulties the plaintiff has in working in a marriage relationship, I find that there still exists a real prospect of remarriage which the court is obliged to take into account. 61 The difficulty in this particular case is that the relationship which the plaintiff and Dr Cremona had was of an exceptionally high income earning family where both parties have a capacity to earn substantial income. Most of the normal fiscal needs were being provided for the future, particularly superannuation. 62 In Horton v Byrne (1956) 30 ALJ 535 at 585 the Court has said in relation to the authorities requiring an allowance to be made for the possibility of remarriage: "It is needless to say that no formula has been suggested for arriving at the deduction to be made because of that contingency. It has been left as something which should appeal to the good sense of a jury as an argument for moderation." 63 In Jones v Schiffman (1971) 124 CLR 303 the High Court held that the absence of accurate information of the widow's prospects is not a ground for refusing to make a deduction, and where the widow is young and healthy more than a nominal amount should be made. 64 The plaintiff is now thirty six and if I may delicately say is neither younger nor old. It seems to me that the prospect of remarriage would be to someone of professional standing and higher income as being more likely. Nonetheless the independence of the plaintiff in fiscal and personality terms means any contribution to her future support is likely to be relatively small. I consider that a proper provision is to provide a value on her prospect of remarriage at 2% but 2% only of the loss of future economic loss only, not of the total amount of damages, and excluding superannuation. Future Economic Loss 65 The plaintiff has made submissions dealing with future economic loss excluding superannuation as follows: a) Practice Growth 66 The plaintiff submits that practice growth at 4% per annum plus medical rebate growth is reasonable having regard to the demand and for Dr Cremona's service and the demonstrated high growth pattern in the financial years of 1988-1993. The average growth in those years, it is put, is approximately 6% notwithstanding a fall in the 1990-1991 year when Dr Cremona had his admission to Wandene Hospital. It is put by the RTA that there is no prospect of growth in Dr Cremona's practice. It must be said that the evidence for the defendant is supported by the fact that there is little capacity to increase the amount of hours spent by Dr Cremona and in the light of the stresses which he manifested as referred to earlier in this judgment and his need for more holiday time and recreation time to spend with his family, that it is hard to see how much more income can be earned. 67 I reject the basis of the report of Dr Gadiel of 9 September 1996 and his subsequent evidence that Dr Cremona's practice was in some was fragile and that he would have to modify his activities. The evidence before me shows that Dr Cremona, and indeed, Dr Gadiel acknowledges this, treated some patients intensively and would often see several members of the family in one consultation. The fact that his consultation time is less than the average may be attributed to his quick mind, and is a likely bi-product, in part, of the fact that the person you saw last week is someone from whom you don't have to take a long history. Intensive practice is more likely to produce short consultations. 68 The suggestion that the medical advice from the Housing Insurance Corporation Professional Services Division were likely to oblige him to reconstruct his modus operandi to conform with mainstream general practice behaviour is in my view a nonsense. The evidence from the Housing Insurance Corporation shows quite correctly they had inspected the practice and were perfectly satisfied in the way in which it was being conducted. 69 Notwithstanding the intensive level of the plaintiff's work, it is however difficult to see that the plaintiff would not continue some level of growth. Senior Counsel for the plaintiff reminds the Court that Dr Cremona saw 117 patients on his last day of practice. I consider that the period of five years nominated by the plaintiff that there continue to be growth initially at a higher percentage tapering off to the end of the period but that a proper assessment of the increase for that period would be to average growth at 2% until 30 June 1998. I consider that the practice would have thereafter plateaued until Dr Cremona was aged 65 and, in accordance with the evidence before me of the Reark Research Report 1994, as to the normal practice of general practitioners I consider that he would have worked part time for the years 65 to 70 and that a proper estimate of the income earned by him in that five years would be one third of his pre-existing practice income. 70 I am told in the damages schedule attached to the affidavit of Geoff McRae sworn 25 May 1999 filed herein that the medicare increase projected in the income calculations is agreed although I would have thought that medicare income had a substantial component of inflation within it but if the parties have so agreed I allow the medicare increase as calculated by Mr McRae. I have also been informed that the RTA agrees with the calculation of $345,283.00, the anualised profit for the year 30 June 1973 less $25,000.00 for superannuation contribution. I therefore consider that figure less tax should be allowed as the plaintiff's loss per annum as a basis for past and future loss of income calculation. 71 In conformity with Todorivic v Waller (1981) 150 CLR 422 the net figure after tax should be discounted in accordance with the 3% tables. b) Future Development of the Practice 72 It is put by the plaintiff that Dr Cremona was considering changing from a bulk billing practice to a full charging practice. There is evidence that the matter was considered by him but I think it is likely that from time to time many general practice doctors would consider changing from a medicare based practice. 73 In a fairly discreet area such as Dapto with the other sixteen doctors continuing to bulk bill in a lower socio-economic area I think it is unlikely notwithstanding that I accept the relative price insensitivity of a change from bulk billing to a full charging practice that Dr Cremona would have continued to bulk bill. The convenience of so doing as compared with the problems of collecting fees from patients has certain offsetting advantages to the increased gross profit that would come from the charging of AMA recommended rates. 74 Of the various possible future scenarios put in the Deloittes Report (Exhibit C) that in real terms the final choice is between a solo practice until retirement on a bulk bill basis or the taking of a partner on that same basis. The advertisement which was admitted in evidence for someone to work in the practice and the evidence of the various witnesses including the plaintiff lead me to the view that it is likely that Dr Cremona would eventually succeed in taking a partner into his practice. 75 That partner would enable him to ease his own workload but would give the advantages of sharing of costs of the practice would bring financial benefit demonstrated by the evidence. I do not however consider that a partner would come in on a small share such as thirty percent which would mean that Dr Cremona would be earning two and one third than the other partner. It is likely ultimately that another partner would build up a share of the practice and would build up the number of patients to an extent, not approaching the level of Dr Creomona but nonetheless a substantial proportion. 76 I consider that it is likely that a substantial partner would acquire a forty percent share in the practice. It may be that this would initially be at a smaller percentage and later in life a somewhat higher percentage but I consider that a forty percentage sale is a proper basis for projecting the future of the practice. 77 I have not been addressed on the goodwill component and will leave it to the parties to either agree on the calculations or address me for the price for purchase of that practice and the goodwill component to be included in the damages schedule. The loss of the value of the goodwill of the practice will need to be allowed to the plaintiff but this will require calculation based on the findings that I have made. I consider that it was likely that Dr Cremona would have acquired a partner within three years of the end of the 1993 financial year and that a partner would have purchased a share by 30 June 1996. Past Loss and Interest 78 I allow on the basis of the agreed annualised profit in the Deloittes calculation to year ending 30 June 1993 that past loss should be on the basis of Dr Cremona not abandoning bulk billing and that thereafter Dr Cremona and his partner would continue to bulk bill and that Dr Cremona's share of sixty percent would be of a practice which was likely to increase in gross income and that there would be a significant reduction in the shared overheads. 79 As to interest on past losses, the submission of the RTA that the rate of 4 % would be appropriate that income is no longer taxable in the hands of the plaintiff (Whittaker v FCT (1998) 53 ALR 344). Some adjustment will need to be made however for the calculation of interest up to the date of payment of the sums of $800,00.00 and $200,000.00 already paid on their respective dates of payment but for past losses, interest should be calculated as provided by the Supreme Court Rules to date of judgment, by this I mean date of final judgment to which I will shortly refer. Likelihood of Relapse to Drug Abuse 80 The evidence adduced by the RTA and the statistical evidence provided show that there was a high risk of Dr Cremona reverting to drug abuse. He was obviously, notwithstanding his great capacity for work, feeling some stresses and the period of drug abuse had been lengthy. I reject the evidence adduced by the RTA as to a suggestion that there were opportunities for Dr Cremona to continue his drug abuse. The suggestion that it is easy for a doctor to conceal drug abuse requires him to collaborate with someone else or abuse his Schedule 8 prescribing powers. Dr Cremona worked, as I have said in a discreet area with pharmacists who all would have been notified of the limitation on his prescribing powers. The possibility of continuing to abuse drug consumption is inconsistent with the high level of work he continued to carry on and the expansion of his practice. It is inconsistent with someone who not only obtained marriage counselling from Dr Borenstein but continued to seek advice from him as to stress management. Effective continued abuse would require Schedule 8 prescribing powers. He neither had those powers or sought them. 81 The plaintiff's contention that there was no resumption of drug abuse is supported by each of the witnesses called by the plaintiff on this issue and I have no basis for rejecting that evidence. I consider the plaintiff has made a clear case that despite the pressures and the statistical probabilities of resumption of drug abuse that Dr Cremona did not resume the drug abuse an that his rehabilitation was complete. 82 The fact that Dr Cremona did not attend all of the N/A and A/A does not, in my view, detract from the fact that he did attend a number of them. The expertise of the plaintiff in drug matters would also allow her a considerable measure of effective supervision. She would not tolerate Dr Cremona's resumption. 83 For the reasons given above, I do not accept the evidence of Dr Richard Mattick as applying to Dr Cremona, although I do accept his general statistical evidence in the general comments of doctors as to likelihood of recidivism with drug abuse. 84 It is difficult to see someone with a high profile in the Wollongong area in a general practice being able to carry out any covert drug abuse without detection. 85 I accept Dr Gertler, the specialist psychiatrist's, opinion that Dr Cremona was not taking drugs. That view submitted on behalf of the plaintiff was corroborated by the very impressive and highly qualified witness Dr Sella Dalton. 86 I accept the submission of the plaintiff in making this finding that the Court should rely on Malec v Hutton (1990) 169 CLR 638 at 642: "When liability has been established and a common law court has to assess damages, its approach to events that allegedly would have occurred, but cannot now occur, or that allegedly might occur is different from its approach to events which allegedly have occurred. A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. Hence, in respect of events which have or have not occurred, damages are assessed on an all or nothing approach." 87 Thus, I find that Dr Cremona would not have reverted to drug abuse. Superannuation Claim 88 It is submitted by the RTA that losses due to diminished superannuation rights should not be taken into account as a matter of law and relies on s.3(3)(b) of the Act. However it is clear that the plaintiff is entitled to include in her damages the total loss of benefit from superannuation see Luntz "Assessment of Damages for Personal Injury and Death" 3rd Edition paras 9.5.11 89 The plaintiff's has submitted calculations based on an annual superannuation contribution of $25,000.00 by Dr Cremona and earned interest rate of 11% but has submitted them on two bases. The first takes into account the payment which the plaintiff has already received for superannuation of $163,780.00 and alternatively on the basis without that payment. 90 The alternative basis is presented in the event that s.3(3)(b) of the Act precludes that payment being taken into account. I consider that that section does not preclude an assessment of damages on the full superannuation entitlement and therefore the second basis which calculates the full separate superannuation entitlements should be used to calculate that figure of damages. I consider however that after that calculation that in order the plaintiff not receive the same amount of $163,780.00 twice, one from the fund and also the RTA, that that sum should be deducted from the damages that the RTA has to pay so that the full calculation should be made without discount and then that sum deducted. 91 I consider that in determining the growth rate of the superannuation fund that the plaintiff's figure of 11% as proposed in the InTeck calculations in Exhibit Q and the evidence of Geoffrey McRae which supports it is the correct basis for the calculation. 92 Superannuation is not a normal investment which attracts a return in the nature of interest. In addition to its tax benefits, superannuation comprises a capital growth fund in addition to any return on the funds already invested. I accept that notwithstanding the fact that Dr Cremona had not used his full superannuation entitlement in the last financial year of his life that non-contribution was based on two factors: one, that monies were largely being used, as deposed by the plaintiff, to contribute to the house building and; two, that the non-performing Scottish Amicable Fund did not make the investment worthwhile and that Dr Cremona was proposing to change from the existing superannuation fund and was trying to reduce the penalty arising from that change. 93 I consider that the RTA contention that the interest should be earned factor of 7% which, as the plaintiff's Counsel pointed out is less than the RTA's own evidence of three years average, is too low. The 11% calculation takes into account capital growth and investment income. 94 I consider that the methodology proposed by Geoffrey McRae for calculating superannuation is correct, that is taking the gross future superannuation entitlement and that figure be reduced to present tax and thresholds and applying present tax and thresholds. The calculations should therefore be done ignoring the payment of $163,780 as at 30 June 1993 and should be calculated on an 11% investment return on the fund annual contributions of $25,000.00 per annum for Dr Cremona and $8,000.00 per annum for the plaintiff for the financial year ending 30 June 1994 and that both the plaintiff and Dr Cremona would retire on 9 September 2019 when Dr Cremona reached the aged of sixty five years. I consider that after that calculation that the credit be given for the $163,780.00 payment already made. 95 I reject the contention of the RTA that the decision of Anderson J in Jongen v CSR Limited (1992) ATR 81-192 were it was held that the superannuation benefits should be based on present calculations. It is my view proper to calculate superannuation actuarially as that is the basis that all superannuation funds are calculated and that in terms of the principles of reinstatement of the plaintiff in present day value for the loss of a figure payable in the future I can see no basis for omitting a return on investment as proposed by the RTA. Notwithstanding that Badgery-Parker J in Rouse v Shepherd (1994) 35 NSWLR 250 appears to have in awarding damages, by consent, included an investment return I consider that is the correct method of calculation. I reject the RTA's reliance on Todorovic v Waller (1981) 150 CLR 402 that no future allowance should be made for inflation. Todorovic v Waller is a decision affecting the reduction of future losses using discount tables so calculate a figure for present day payment. 96 It is submitted by the RTA that dependency should be 55%. The plaintiff on the other hand submits that the appropriate dependency is 82% comprising 71% for the plaintiff, 6% for Sarah and 5% for Alex. The plaintiff proposes that the dependency should decrease by 3% from 20 July 2012 being Sarah's 23rd birthday and by a further 2.5% on the 21 April 2015, Alex's 23rd birthday. The plaintiff proposes that her dependency should reduce on 9 September 2019 being Dr Cremona's 65th birthday. 97 The plaintiff has strongly expressed the view that she has no current intention of returning to work. The plaintiff has however retained her capacity to practice as a pharmacist and is skilled in Regulatory Affairs within the pharmaceutical industry. I accept that she would intend to do further study but find that the further study would inevitably lead to her re-entering the workforce on a part time basis during the high school education years of the children and that she would return to work on a part time basis comprising most of the working week once both children have entered tertiary education. 98 The plaintiff has worked very hard in the practice of Dr Cremona and indeed worked until an advanced stage of her pregnancy. The plaintiff is an intelligent educated woman who is likely to work for intellectual satisfaction as much as the financial rewards. I consider that she would have re-entered the workforce on the basis that I had proposed if Dr Cremona had been alive and I do not consider that Dr Cremona's death would have made any change to that working proposal. He was likely to be fairly busy in his practice and the substantial drive of the plaintiff would have taken her into the workforce. 99 I consider that the discount factor in superannuation is appropriately 10% for vicissitudes relating to the deceased. Notwithstanding the potential vagaries of taxation and superannuation legislation I consider that the basis for normal vicissitudes of 15% is not an appropriate figure for superannuation. I therefore find that 10% is an appropriate figure. As I have already indicated that for the plaintiff alone a figure of 7.5% is appropriate, and this should apply to her superannuation. 100 Dependency is very difficult to estimate in a high income family. it is likely that the house that Dr Cremona and the plaintiff had built would have been paid for in a short period after its completion and the normal financial pressures of a domestic household would have been reduced. To some extent both the plaintiff and Dr Cremona would have had a large disposable income and Dr Cremona was likely, as an astute investor to make further money after maximising his superannuation entitlements. I consider that it is likely that the plaintiff would have continued her superannuation entitlement at about the figure of $8,000.00 which was being paid from her director's fees. 101 The plaintiff was very much involved in Dr Cremona's practice and would inevitably seek fulfilment in using her brain and skills. The figures in Professor Luntz's book for dependency are largely predicated on the home maker/bread winner family and do not fit comfortably in the circumstances of the present calculation. Although it is noted above that a larger component of Dr Cremona's income would be applied to savings or investments the plaintiff and her children are entitled to claim what the deceased would have saved and ultimately left to them: Davies v Powell Duffryn Associated Collaries Ltd (1942) AC 601. 102 I accept that no deduction should be made from earnings derived by the plaintiff after the deceased's death as held in Caroll v Purcell [1961] 107 CLR 73 but as I have indicated I consider that the plaintiff would have gone back to work and that the death of Dr Cremona would have made no difference and therefore her dependency on her would have been reduced. I consider taking into account all of the above factors that a proper dependency for the plaintiff herself is 63% which is at the lowest range in the table on p.369 of Professor Luntz's book on damages that I have referred to. 103 In relation to the children I find that in a professional family it is likely that the children will complete a tertiary education and being children of a medical practitioner a period until their 23rd birthday of each of them is appropriate. They are progressing well at school and are obviously intelligent and apply themselves even at the young age at the time of the hearing. I consider that the dependency for Sarah should be 6% as submitted by the plaintiff and 5% for Alex. I consider however that the total family dependency which comprises 74% should decrease by 4% from 20 July 2012 being Sarah's 23rd birthday and a further 3% on 21 April 2015 being Alex's 23rd birthday. I consider that the dependency for Sarah and Alex should both then be 2.5% as it is likely that the children would have obtained benefits and assistance from Dr Cremona even after that time. 104 I accept the plaintiff's basis of calculation as a further reduction in dependency on the deceased's 65th birthday of 5.5%. Summary 105 I have already reserved the issues of costs and apportionment and the issue of how the management of the workers compensation payment both past and future should be dealt with. The parties will need to carry out any calculations consequent upon the findings I have made and will need to address on any issues that have arisen as a result of those findings. 106 There will need to be a hearing date set aside as soon as can be arranged by Counsel for both parties at a time that I will endeavour to allow to meet the convenience of Counsel but in the course of the next three of four weeks. After that hearing I would ask that because of the different calculations for past loss and future loss and interest calculations thereon that the parties submit figures at that hearing calculated to a date two weeks after the hearing in order that judgment can be given on all matters the subject of this claim. 107 The formal orders that I make are: 1. That the question of management of workers compensation payments be stood over for further argument. 2. that the question of apportionment for the plaintiff and her two children be stood over for further argument. 3. That the question of management fees on workers compensation both past and future be reserved for further argument. 4. That the question of loss of goodwill on Dr Cremona's be stood over for further submission. 5. That the parties have liberty to furnish at least two days in advance of any future hearing date submissions on the findings that I have made. 6. That the parties have liberty generally to make submissions in respect of any other matter arising as a result of this judgment. 7. That costs be reserved. ********** Last Modified: 09/26/2000 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.