New South Wales Supreme Court CITATION : GIBSON v COB SUPPLY COMPANY PTY LTD NO 2 [2001] NSWSC 713 FILE NUMBER(S) : SC 17534/81 HEARING DATE(S) : 6 June 2001 JUDGMENT DATE : 31 August 2001 PARTIES : Plaintiff: Kerry John Gibson Defendant: COB Suppply Company Pty Ltd JUDGMENT OF : Hulme J at 1 COUNSEL : Plaintiff: Mr G Farmer Defendant: Mr B.G. Smith SOLICITORS : Plaintiff: Craddock Murray Neumann Defendant: Dexter Healey DECISION : See paragraph 27 - 13 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION NO: 17534/81 Friday, 31 August 2001 HULME J Kerry John GIBSON v COB SUPPLY COMPANY PTY LTD JUDGMENT HIS HONOUR: 1 I delivered Reasons in these proceedings on 20 March last, saying I would leave to the parties some consequential calculations which were required and one or two further relatively minor matters. Although the matter has been back before me on four occasions, on most of which the parties were not prepared to deal with outstanding issues, there are still areas of disagreement. On the last occasion there were tendered schedules and expert reports setting out the respective contentions of the parties. Despite the existence of significant differences, there was no attempt to argue or analyse most of the matters in issue. These Reasons are directed to recording the areas of agreement and resolving the remaining issues. Except to the minimum extent necessary, I shall not re-canvass matters dealt with by me in my earlier Reasons. 2 I should perhaps add that, although there are differences in the approach taken in a limited number of areas, there is no challenge otherwise to the accuracy of the calculations of the experts, even where they differed. It was submitted by counsel for the Defendant, without demur, that minor discrepancies in to the maths involved might be dealt with by taking a mean. General Damages 3 There was no challenge to the figure determined in my Reasons of 20 March, viz. - $175,000. Interest on General Damages 4 The Plaintiff claimed $334,352, calculated by reference to the usual Supreme Court interest rates which, over the period have varied between 9.5% and 21%. It was submitted that the figure(s) to use are a matter of discretion - see Metro Meat Industry Board v Williams (1991) 24 NSWLR 54 at 58-59. While that last proposition may be accepted, I am not persuaded that the circumstances of the Plaintiff or of the case are justify a departure from the usual practice of using 4% - a figure which does make allowance for the fact that the sum awarded for general damages reflects current values, not the much lower ones prevailing at the time of the Plaintiff's accident - see M.B.P.(S.A.) Pty Ltd v Gogic (1990-91) 171 CLR 657 at 663. 5 Of course, one does not simply apply 4% to the whole of the principal for the whole of the period. The calculation made on behalf of the Defendant accurately reflects what I said in my Reasons of 20 March and the above conclusion. Hence, under this heading, the Plaintiff should receive $47,883.13. Past Economic Loss - First Period 6 In my principal Reasons, I divided the past into two periods. Mr Raneri, an accountant engaged on behalf of the Plaintiff has calculated the loss for the first period at $99,592. Ms Wright, the expert used by the Defendant has calculated the loss at $100,027.13. Given that each commenced with the figure of $40,000 per annum referred to in my Reasons, the difference between the experts arises from differences in their determination of the tax payable in 2 of the years. In these circumstances, and neither side having chosen to address on the topic of which figure is correct, I will split the difference and in respect of this period award the sum of $99,809. In this regard I am also conscious of the fact that the payments would be spread in any event over five tax years without anyone being able to say with any precision how much would be received in the first and last of these years. The figures used by Mr Raneri and Ms Wright, and those I have decided upon appear in the following table:- Mr Raneri Ms Wright Decision Year 1 23,835 24,533.50 24,184 Year 2 24,858 24,857.88 24,858 Year 3 25,293 25,293.33 25,293 Year 4 25,606 25,342.42 25,374 $99,592 $100,027.13 $99,809 Interest on Past Economic Loss - First Period 7 Subject to one matter the amounts appearing in the last column of the above table will be used in the calculation of interest. The reservation arises from the fact that the Plaintiff has been paid Workers' Compensation and, as Ms Wright has done, this should be taken into account. An affidavit of Robyn Parker of 3 May 2001 shows that $5,156.50 was paid by weekly instalments over the period 23 January to 23 October 1981 and that $22,713.26 was paid later. 8 Having regard to the approximations necessarily involved in various aspects of the damages assessment, 1 June 1981 seems a fair average date to assume for the payment of the $5,156.50. There is no evidence as to the precise date or dates for payment of the later sum. A decision of Judge Egan which no doubt led to that payment was made on 2 May 1996. An appeal was decided on 28 November 1996. It seems not unreasonable in those circumstances to proceed, as Ms Wright did, on the assumption that the amount was received on 31 December 1996. 9 Accordingly the amounts on which interest should be calculated set out in the immediately preceding table should be reduced accordingly. 10 Interest in respect of this first period was calculated by Mr Raneri in the sum of $224,747 and by Ms Wright in the sum of $237,399.65. Apart from the differences as to the amounts to which I have referred above, the experts also differed as to the dates from which interest should be calculated. I have tabulated the differences below. However it seems to me that both experts are wrong in their choice of those dates. I would infer that the Plaintiff's football earnings would have been received in large part during the football seasons in the years 1981-1984. Having regard to the fact that a period of training, I assume paid within the $40,000, is likely to have preceded the period during which matches were played in each of those years, I think an appropriate average date to take for the calculation of interest is 1 June in each of the four years. I set out all of these dates for comparison, together with the principal amounts derived from what I have said above and on which interest should be calculated. Mr Raneri Ms Wright Decision Principal 12/12/1980 1/1/1981 1/6/1981 $19,028 1/10/1981 1/1/1982 1/6/1982 $43,886 1/10/1982 1/1/1983 1/6/1983 $69,179 1/10/1983 1/1/1984 1/6/1984 $94,553 11 $94,653 is the amount on which interest should be calculated from 1 June 1984. After 31 December 1996, the amount should be reduced by $22,713 to $71,940. In this regard, as in many others, I propose to ignore the cents. 12 A calculation of interest appears in the First Schedule hereto. The interest amounts to $233,371.63. Past Economic Loss - Second Period 13 Mr Raneri calculated the loss for this period at $65,853, Ms Wright at $49,635.45. I do not agree with either of these figures. However, as I have set out below how the figure I have arrived at is calculated, I do not regard it as necessary to detail all of my disagreements. 14 The periods, and weekly rates of pay which, in accordance with my earlier Reasons are to be used are set out in the following table. Also set out are those weekly rates converted to annual income, the tax payable on that annual income, calculated from figures in the CCH annual Master Tax Guide, and the proportion that tax is of the annual income:- Period Rate Period Year Tax Average total total rate 1/7/96-9/4/97 $16,822) ) $22,590 $3,702 16.4% 10/4/97-30/6/97 $517.84 $5,768) 1/7/97-14/9/97 $517.94 $6,360) ) $28,136 $5,588 19.9% 15/9/97-30/6/98 $546.32 $21,776) 1/7/98-14/9/98 $546.32 $6,709) ) $29,683 $6,114 20.6% 15/9/98-30/6/99 $576.37 $22,974) 1/7/99-14/9/99 $576.37 $7,078) ) $30,741 $6,474 21% 15/9/99-30/6/00 $593.66 $23,663 1/7/00-14/9/00 $593.66 $7,290) ) $31,663 $5,879 18.6% 15/9/00-30/6/01 $611.47 $24,373 1/7/01- 31/8/01 $611.47 $5,418 $5,418 18.6% Notes : (i)The income figure in the first line is derived from the table in paragraph 90 of the principal Reasons. (ii)In the last line, the 2000-2001 percentage has been adopted. Given my preference for an average tax rate - see next paragraph - this seems to me fair. 15 In the peculiar circumstances of this Plaintiff, whether or not he would have used his residual earning capacity had the Defendant paid the Plaintiff what in my view was owed, is unknown. Hence it seems to me that an average tax rate for each year is the most appropriate to use, rather than one calculated as if the Plaintiff had not used that earning capacity at all or on the assumption, adopted by Mrs Wright, that the earning capacity lost should be valued on the basis that the use of that capacity would have attracted a tax rate calculated on the basis that the Plaintiff had already earned by working 15 hours per week. 16 The loss of earning capacity in the second period should be calculated as follows:- 10/4/97-30/6/97 $5,768 x (100 - 16.4 - 1.7)% = $4,724 x 23/38 = $2,859 1/7/97-30/6/98 $28,136 x (100 - 19.9 - 1.5)% = $22,115 x 23/38 =$13,385 1/7/98-30/6/99 $29,683 x (100 - 20.6 - 1.5)% = $23,123 x 23/38 =$13,995 1/7/99-30/6/00 $30,741 x (100 - 21 - 1.5)% = $23,824 x 23/38 = $14,420 1/7/00-30/6/01 $31,663 x (100 - 18.6 - 1.5)% = $25,299 x 23/38 = $15,313 1/7/01- 31/8/01 $5,418 x (100 - 18.6 - 1.5)% = $4,329 x 23/38 = $2,620 $62,592 Note : The last figure in the brackets represents the Medicare levy for the year 17 Interest on the above sums taken from average dates half way through the periods is $13,649.55, calculated as set out in Schedule 2 to these Reasons. 18 Both experts agree that in respect of this second period an allowance should also be made on account of the loss of superannuation. Mr Raneri calculated this at $4,550, Ms Wright at $4,212.26. They are agreed as to the rates for each of the relevant years and that there must be a 15% deduction for tax. Based on those rates and the lost gross income indicated above, the amount to be allowed for superannuation is $4,748.80 calculated as follows:- Y/E 30/6/97 5,768 x 23/38 x 06 x .85 = 178.05 Y/E 30/6/98 28,136 x 23/38 x 06 x .85 = 868.51 Y/E 30/6/99 29,683 x 23/38 x 07 x .85 = 1,068.98 Y/E 30/6/00 30,741 x 23/38 x 07 x .85 = 1,107.07 Y/E 30/6/01 31,663 x 23/38 x 08 x .85 = 1,303.19 1/7 - 31/8/01 5,418 x 23/38 x 08 x .85 = 223.00 $4,748.80 19 Mr Raneri's calculation of interest on the superannuation loss is $662. Ms Wright has not calculated it separately. My calculation of the interest is set out in Schedule 3 to these Reasons and results in a total of $979.47. Future Economic Loss 20 Mr Raneri's calculated damages under this head as $240,468.77. Ms Wright derived a figure of $171,197 06. Again Mrs Wright's calculations proceeded on the basis that:- "The total weekly future net economic loss was then calculated as the difference between the net income that would have been earned after tax had the 38 hour week been worked, and the net income that was assumed to be earned by the Plaintiff by working 15 hours a week." 21 In my view this calculation also should be done using an average tax rate. On an income of $611.47 per week, the Plaintiff would earn $31,882 per annum. Tax and the Medicare levy on that is $6,423 resulting in a net annual income of $25,459. 23/38 of that is $15,409 or $295.53 per week. 22 The period involved is from 1 September 2001 until 5 June 2020, one of 18 years and 279 days. The multiplier on the 3% tables is 728.4 for 18 years and 758.6 for 19 years. 751 is close enough for present purposes. Once a 15% allowance is made for vicissitudes, the amount recoverable under this head is $188,652. 23 An allowance has also to be made for future superannuation. Mr Raneri's figures were $28,268 plus interest. Ms Wright's were $18,256.29. In my view the amount to be allowed is $18,074.39 calculated as follows;- $611.47 x 23/38 x .09 x .85 x 751 x .85 24 $611.47 represents the gross wage calculated above. 23/38 represents the proportion of earning capacity lost. .09 represents the percentage of gross income required to be paid on account of superannuation. 751 is the multiplier used above. One .85 represents the tax payable on superannuation levies and the second .85 is to allow for vicissitudes. The difference between Ms Wright's calculations and mine lies in the multiplier. Mr Raneri's calculations omitted some of the factors. Furthermore, as an allowance for the future, this sum does not attract interest. Sundry 25 Mr Raneri calculated the Fox v Wood component at $2,708, Mrs Wright at $2,677.19. Having regard to the smallness of the difference and for reasons indicated above, I propose to allow the mean of these figures - $2693. 26 In accordance with my principal Reasons, an amount of $750 should be allowed on account of future out-of-pocket expenses. 27 Apart from any deductions which should be reflected in the judgment, the Plaintiff should therefore recover the sum of $848,202.97 made up as follows:- Para 3 General Damages $175,000.00 Para 5 Interest on General Damages 47,883.13 Para 6 Past Economic Loss - First Period 99,809.00 Para 12 Interest on Past Economic Loss - First 233,371.63 Para 16 Past Economic loss - Second Period 62,592.00 Para 17 Interest on Past Economic Loss - Second 13,649.55 Para 18 Loss of Superannuation - Second Period 4,748.80 Para 19 Interest on Superannuation Loss - Second Period 979.47 Para 22 Future Economic Loss 188,652.00 Para 23 Future Superannuation Loss 18,074.39 Para 25 Fox v Wood 2,693.00 Para 27 Future out-of-pocket expenses 750.00 28 $848,202.97 29 Against the possibility that there may be amounts to be deducted, the parties were given something over 2 weeks' notice of the date when these Reasons would be published in order than any evidence in this regard might be available and notice of it served, and a final verdict and judgment entered today. SCHEDULE 1 GIBSON v COB SUPPLY COMPANY LIMITED Principal Period Part Year Rate % Interest 19,028 1/6/81 - 30/6/81 1/12 13.5 214.06 19,028 1/7/81 - 31/5/82 11/12 14.5 2529.14 43,886 1/6/82 - 30/6/82 1/12 14.5 530.29 43,886 1/7/82 - 31/5/83 11/12 15.5 6235.47 69,179 1/6/83 - 31/12/83 7/12 15.5 6254.93 69,179 1/1/84 - 31/5/84 5/12 14.5 4179.56 94,553 1/6/84 - 31/12/84 7/12 14.5 7997.61 94,553 1/1/85 - 31/12/85 1 14.5 13710.18 94,553 1/1/86 - 30/6/86 1/2 18.25 8627.96 94,553 1/7/86 - 1/7/87 1 19.5 18437.83 94,553 1/7/87 - 31/10/87 1/3 19.5 6145.94 94,553 1/11/87 - 29/2/88 1/3 18 5673.18 94,553 1/3/88 - 28/2/89 1 15 14182.95 94,553 1/3/89 - 31/8/89 1/2 17 8037.00 94,553 1/9/89 - 31/8/90 1 21 19856.13 94,553 1/9/90 - 28/2/91 1/2 19 8982.53 94,553 1/3/91 - 31/8/91 1/2 17 8037.00 94,553 1/9/92 - 28/2/92 1/2 15 7091.47 94,553 29/2/92 - 31/8/92 1/2 13 6145.94 94,553 1/9/92 - 31/8/93 1 11.25 10637.21 94,553 1/9/93 - 31/8/94 1 10.5 9928.06 94,553 1/9/94 - 28/2/95 1/2 10.5 4964.03 94,553 1/3/95 - 29/2/96 1 12 11346.36 94,553 1/3/96 - 31/12/96 5/6 12 9455.30 71,940 1/1/97 - 28/2/97 1/6 12 1438.80 71,940 1/3/97 - 31/8/97 ½ 10.5 3776.85 71,940 1/9/97 - 31/8/98 1 10 7194.00 71,940 1/9/98 - 31/8/99 1 9.5 6834.30 71,940 1/9/99 - 29/2/00 ½ 9.5 3417.15 71,940 1/3/00 - 31/8/00 ½ 10 3597.00 71,940 1/9/00 - 3/8/01 1 11 7913.40 233371.63 SCHEDULE 2 GIBSON v COB SUPPLY COMPANY LIMITED Principal Period Part Year Rate % Interest 2,859 21/5/97 - 31/8/97 103/365 10.5 84.71 2,859 1/9/97 - 31/12/97 1/3 10 95.30 16,244 1/1/98 - 31/8/98 2/3 10 1082.93 16,244 1/9/98 - 31/12/98 1/3 9.5 514.39 30,239 1/1/99 - 31/8/99 2/3 9.5 1915.14 30,239 1/9/99 - 31/12/99 1/3 9.5 957.57 44,659 1/1/00 - 29/2/00 1/6 9.5 707.10 44,659 1/3/00 - 31/8/00 ½ 10 2232.95 44,659 1/9/00 - 31/12/00 1/3 11 1637.50 59,972 1/1/01 - 31/07/01 7/12 11 3848.20 62,592 1/8/01 - 31/8/01 1/12 11 573.76 13,649.55 SCHEDULE 3 GIBSON v COB SUPPLY COMPANY LIMITED Principal Period Part Year Rate % Interest 178 21/5/97 - 31/8/97 103/365 10.5 5.27 178 1/9/97 - 31/12/97 1/3 10 5.93 1,047 1/1/98 - 31/8/98 2/3 10 69.80 1,047 1/9/98 - 31/12/98 1/3 9.5 33.15 2,116 1/1/99 - 31/8/99 2/3 9.5 134.01 2,116 1/9/99 - 31/12/99 1/3 9.5 67.00 3,223 1/1/00 - 29/2/00 1/6 9.5 51.03 3,223 1/3/00 - 31/8/00 1/2 10 161.15 3,223 1/9/00 - 31/12/00 1/3 11 118.18 4,526 1/1/01 - 31/07/01 7/12 11 290.42 4,749 1/8/01 - 31/8/01 1/12 11 43.53 979.47 ********************* Last Modified: 09/05/2001 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.