New South Wales Supreme Court CITATION : Craig Andrew ELLIOTT v COMMONWEALTH OF AUSTRALIA [2003] NSWSC 1090 HEARING DATE(S) : 03/03/2003 to 19/03/2003 and 05/08/2003 JUDGMENT DATE : 26 November 2003 JURISDICTION: Common Law JUDGMENT OF : Foster AJ at 1-12 DECISION : 1. That there be judgment for the plaintiff against the defendant in the sum of $1,448,271.67; 2. That the defendant pay the plaintiff's costs on a party/party basis up to and including 4 February 2003 and thereafter on an indemnity basis. CATCHWORDS : Damages for injuries sustained, disabilities and consequential losses allegedly occasioned to plaintiff whilst undergoing initial recruit training in the Army. LEGISLATION CITED : Veterans' Entitlements Act 1986 CASES CITED : Manser v Spry (1994) 181 CLR 428 at 434-437. National Insurance Co of New Zealand v Espagne (1961) 105 CLR 569 at 573, 598 PARTIES : Craig Andrew Elliott - Plaintiff Commonwealth of Australia - Defendant FILE NUMBER(S) : SC 20467/99 COUNSEL : Mr H. Shore - Plaintiff Mr R.E. Williams QC with Mr B. Skinner - Defendant SOLICITORS : Thomas & Company - Plaintiff Australian Government Solicitor - Defendant IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION CORAM: FOSTER AJ WEDNESDAY, 26 NOVEMBER, 2003 20467/99 Craig Andrew ELLIOTT v COMMONWEALTH OF AUSTRALIA SUPPLEMENTARY JUDGMENT 1 HIS HONOUR: At the conclusion of my previous reasons for judgment in this matter, I made certain findings relating to the quantum of damages and then stood the matter over for the purpose of receiving, after a directions hearing, further submissions and argument on this issue. 2 I have now had the benefit of those submissions and arguments, which enable me to finalise the case. 3 The assessment of damages in this matter has been greatly assisted by the introduction into evidence, by consent, of evidence indicating the level of wages paid to an employee of Australian Protective Services, in a position comparable to that of the plaintiff, from the 1992/1993 financial year to the 2002/2003 financial year. There is no need to set out in these reasons the whole of that evidence. As will be seen, I have taken it into account in arriving at the figures which form the basis of my award of damages. 4 Some further submissions were made in relation to the question of the award of interest on the amount I had awarded previously for general damages. It was submitted that I should apply the rate of interest of 2%, which was not the subject of contest, to only 28% of the award, this representing the proportion that the time between the date of accident and judgment bore to the whole of the period of the plaintiff's life expectancy. I have considered the submission but decline to give effect to it. My previous decision was a discretionary one, in which I took into account the manifold effects of the accident upon the plaintiff up to the conclusion of the proceedings. In my view, there are more factors to be taken into account in reaching this discretionary conclusion than merely having regard to proportionate periods of time. 5 At the conclusion of the previous hearing, there was an outstanding question between the parties as to whether the amount of the payments made by ComCare to the plaintiff was refundable out of his verdict. The plaintiff had received considerable amounts by way of compensation payments and medical expenses from this source. He had received similar payments by way of "military compensation" from the Department of Veterans' Affairs, as to which there was no dispute that such amounts were subject to refund. It has now been agreed that the payments from ComCare are, likewise, refundable. Accordingly, I do not take them into consideration in determining the plaintiff's out-of-pocket expenses and past loss of wages as components of this award of damages. 6 As to out-of-pocket expenses there is no dispute between the parties that these total $166,842.67. The whole amount is refundable. Accordingly, it will be included in the plaintiff's award. 7 There is, also, agreement as to the Fox v Wood component of damages. The agreed amount if $58,776.00. This amount will be included in full, in the plaintiff's award. 8 I turn, then, to the question of past loss of wages. I have been assisted in arriving at the appropriate figure under this heading by the submissions and calculations of counsel which have been produced in written form. 9 I think it appropriate to consider, in the first instance, the period from the date of accident to 11 February 1993 when, as I have held, the plaintiff would have, on the balance of probabilities, left the army for the purpose of seeking employment in the outside commercial world. As I have found, he would have, on the probabilities, have achieved employment with APS or some similar organisation at the same rate of pay. Both the plaintiff and the defendant have introduced into evidence expert reports of considerable size, from which figures have been extracted. So far as the period under consideration is concerned those figures indicate agreement as to the amounts actually earned by the plaintiff in the years in question and also what he would have earned, had he remained in the service of the army. I have been provided with those figures in tabular form. They clearly indicate that over this particular period, although in the first two years the plaintiff suffered a loss, his earnings outside the army, overall, were greater than those he would have earned had he remained within it. In these circumstances, no loss has been demonstrated up until 11 February 1993. 10 For the period from 11 February 1993 until the date of trial, plaintiff's counsel has produced, in tabular form, a set of calculations which contrast the plaintiff's actual earnings with the earnings of a comparable employee in APS. I regard this approach as being both suitable and useful in the circumstances. The plaintiff persisted in his employment with APS until it ceased, in the circumstances, to which I have referred. Subject to contingencies to which I shall make brief reference later, there is no reason to suppose that he would not have continued in this or similar employment. The plaintiff's actual earnings for the years in question, being the balance of the financial year ending 30 June 1993 and the following financial years up to and including 2003 have been arrived at, largely on the basis of agreement between the figures produced by the expert evidence on each side. I accept the figures as produced in the table submitted on behalf of the plaintiff. The figures of a comparable earner in APS were supplied by letter from that organisation and have been admitted into evidence. The figures represented gross earnings. These have been reduced, appropriately, to nett earnings, with the result that in each of the relevant years a nett loss has been demonstrated. The total of that loss is $335,395.00. This figure, of course, can only be regarded as a guide to the determination of the plaintiff's past wage loss. I consider that it is a useful guide. Having regard to the fact that it covers a period of sixteen years, I must consider whether there should be some reduction in it, having regard to the ordinary contingencies of life, as it contemplates the full employment of the plaintiff over that period. There is nothing in the evidence which, in my view, requires that I find that the plaintiff might have improved upon these earnings, had he been uninjured. However, I should take into account that he might have lost time from employment through non-compensable injuries, or through an unwise change of jobs or otherwise. I consider that, in fairness to the defendant, I should reduce the amount of this component to $300,000.00. 11 The plaintiff is entitled to an award of interest in respect of his past wage loss. However, I must take into account that throughout the period in question he received payments of compensation either from ComCare or by way of "military compensation." These amounts are agreed, being $152,677.00 paid by ComCare and $83,955.00 paid by "military compensation". Accordingly, over this period, the plaintiff's actually incurred loss amounts to $63,368.00. It is upon this amount, in my opinion, that he is entitled to an award of interest. Counsel for the plaintiff has satisfied me that the appropriate interest rate, to cover the whole period, being ten years, is 4.625% per annum. The appropriate award of interest, therefore, is $29,308.00. The result is that I award for past loss of wages and interest thereon the figure of $329,308.00. 12 As to the plaintiff's future loss of earning capacity, I am assisted in arriving at an appropriate award of damages by having regard to the current earnings at APS of a comparable employee. Such an employee is earning $859.60 nett per week. Although other approaches are possible, I consider that, in the circumstances of this case, it is helpful, in the first instance, to have regard to a figure that would represent the plaintiff's total loss of earning capacity from 2003 until retirement at age sixty-five. The appropriate multiplier for the period of 31 years is 1059.2. Applying this multiplier to the current comparable earnings, a figure of $910,488.00, approximately, is produced. In the circumstances of this case and having regard to findings I have made, I regard this figure as a useful guide to an appropriate award of damages, had I found that the plaintiff was totally and permanently incapacitated from gainful employment. This, however, is not the position. The plaintiff wishes to be employed and has made and, in my view, will continue to make efforts to obtain work. However, I have already noted, that his local medical practitioner, Dr Lewis, is strongly of the view that the plaintiff, because of his injuries and there ongoing effect, is, for practical purposes, unemployable. 13 The plaintiff has been offered opportunities for retraining in areas where his disabilities will be less likely to affect him. I am satisfied that he has co-operated in these areas of training. I am also satisfied that, should the training result in offers of gainful employment, he will accept them and endeavour to perform the work. However, I am also satisfied that his very significant knee injuries will always present an impediment to worthwhile employment. Moreover, the evidence indicates that the condition of the knee will worsen and may well result in the need for a full replacement. He is, in my view, forever debarred from avenues of work for which, in an uninjured condition, he was suited. He really has no working future except in areas of sedentary work for which he may be appropriately trained. I note that vocational tests have been pessimistic as to his acquiring suitable jobs, within his range of competence. 14 Doing the best I can, I have formed the view that the plaintiff's employment future must necessarily be a patchy one, with periods of employment which may well be only part-time, followed by periods of unemployment. Even in a sedentary occupation he will need to have sympathetic employers who are willing to allow him time off during the working day in order to deal with the pain of his injury and also tolerate periods when the plaintiff may not be able to report for work, because of his disability. 15 I have come to the conclusion that this is an appropriate case to adopt the approach of estimating the plaintiff's future loss of earning capacity on a percentage basis. I consider that he has lost 60% of his earning capacity. As a matter of mathematics, this produces a figure of $546,293.00. In relation to this, however, it is necessary to take into account the contingencies of life. I think it reasonable to apply the ordinary 15% deduction for these contingencies. This results, in a round figure in the amount of $460,000.00, which I award to the plaintiff in respect of this aspect of his claim. 16 A claim is also made for the plaintiff's loss of long-service leave entitlements. This is dealt with in the expert evidence tendered on behalf of the plaintiff in what has been described as the Profin Report. The acquiring of the entitlement would have been dependent upon the plaintiff's working for ten years with APS, or a similar employer, upon leaving the army. I consider that, on the balance of probabilities, he would have done so. The fact that he voluntarily left the service of APS does not deflect me from this view. I have already dealt with this matter. I am satisfied that had it not been for the effects of the accident, the plaintiff would not have found himself in the situation which led to his relinquishing of this employment. The appropriate figure calculated by the expert is $5,689.00. I consider that I should allow this in full and do so. Also, the plaintiff is entitled to interest on this amount from 1998 to date. I am satisfied that the appropriate interest rate is 9.25% with the result that he is entitled to an additional payment, by way of interest, in the amount of $3,156.00. 17 A claim is also made for domestic assistance. I am satisfied that the plaintiff has made out a claim for assistance over and above what might reasonably be expected in the ordinary family situation. I think that a requirement in this regard of two hours per week for the past and for the future is a modest assessment, which I propose to allow. The figure of $15 per hour is claimed, which appears quite reasonable. This results in a figure for the past of approximately $50,000.00 when interest is taken into account. I award that figure. As to the future, I think it reasonable to make provision for the plaintiff up to age sixty-five years, a period of thirty-one years after which, I am prepared to assume, he would have needed such assistance in any event. The relevant multiplier is 1059.2 to be applied to $30 per week for two hours assistance. The resulting figure is approximately $32,000.00, which I allow. 18 A claim is also made for loss of superannuation benefits. It is not easy to arrive at an appropriate figure. However, the report of the defendant's expert arrives at a calculated loss of $63,758.00 which is based upon a future loss of income of $217,103.00. This figure is, of course, lower than the figure I have awarded for future loss of earnings. In all the circumstances, I think it appropriate to allow $70,000.00 under this heading. 19 This leaves for consideration the question of any allowance for future medical and pharmaceutical expenses. The situation is complicated by the fact that the plaintiff is in receipt of a disability pension granted under the Veterans' Entitlements Act, 1986 and is eligible for health care at the expense of the Department of Veterans' Affairs "for….internal derangement of the left knee, depressive disorder, primary localised osteoarthrosis of the left knee, deep vein thrombosis below the left leg and chondromalacia patellae of the left knee." The Department has made payments to the plaintiff pursuant to this entitlement and on 6 November 2003 issued to the plaintiff a Determination under s.93(9) of the Veterans' Entitlements Act 1986, that the cost of the treatment provided to him, from 31 December 2001 to 6 November 2003, is $3,571.65. By letters of the same date addressed to the plaintiff and to his solicitor, the Department advised that it was "required to fully recover our treatment and associated costs currently amounting to $3,571.65 should you receive any settlement payment." The plaintiff was also advised that it was in his interest to ensure that his claim included provision for this cost. As I understand the situation, this amount is included in the out-of-pocket expenses, to which I have made reference, and which will be included as part of the plaintiff's damages. However, the situation in relation to future expenses for medical treatment and pharmaceutical necessities is not clear. 20 The defendant's submission is "that the plaintiff has no basis for claiming for future treatment expenses in view of his entitlements to same under the Veterans' Entitlements Act, 1986 and any allowance for future pharmaceutical expenses would need to bring into account the plaintiff's entitlement to same under the Act." Accordingly, it is claimed that "no damages should be awarded under this head." 21 Mr Hanna, solicitor for the plaintiff, sought clarification of the situation from the Department. An answer was received, on 21 August 2003, in the following terms:- "I refer to our telephone conversation this morning regarding Mr Elliott's future medical expenses. As discussed, if the judgment specifically includes a portion for future medical treatment, the Department of Veterans' Affairs (DVA) would expect that Mr Elliott utilise these funds to cover such treatment required relating to his compensable injury. If no portion has been specifically documented in the judgment, Mr Elliott may be able to receive treatment at departmental expense by utilising his "Repatriation Health Card". As previously advised, a copy of the final judgment will need to be provided to the Department. I also make mention that the above is the Department's current policy and only relates to medical treatment expenses incurred by the Repatriation Commission. It may be advisable for you to seek confirmation from the Military Compensation and Rehabilitation Service (MCRS) regarding their policy in this matter." 22 However, on 14 March 2003 the plaintiff had been served with a Notice pursuant to s. 93(2) of the Veterans' Entitlement Act, 1986 which was in the following terms:- "Whereas you, Craig Elliott of 19 Hawthorn Grove, Wendouree, Victoria 3355 are being or have been provided with treatment by the Repatriation Commission and whereas you: (a) have made a claim against another person for compensation, or may become entitled to be paid compensation by another person, in relation to the disease, disability or condition by reason of which that treatment is being so provided or has been so provided; or (b) are entitled, whether by virtue of an order of the court, a settlement of a claim for compensation or otherwise to be paid compensation by another person; or (c) have been so paid compensation by another person, whether by virtue of an order of a court, a settlement of a claim for compensation or otherwise in respect of a disease, disability or condition, I hereby notify you, pursuant to Section 93(2) of the Veterans' Entitlements Act 1986 (the Act) that you are required to pay for treatment that has been provided under Part V of the Act at any time on or after the date of service of the notice for, or in relation, to that disease, disability or condition." 23 Section 93(2) provides as follows:- "Where a person (in this section referred to as the "patient") who is being, or has been, provided with treatment under this Part recovers or receives compensation from another person, the patient is liable under this sub-section to pay to the Commonwealth an amount equal to the cost of the treatment so provided or, if the Commission, by notice in writing served on the patient, notifies the patient that payment of a lesser amount is claimed by the Commission, that lesser amount." 24 "Compensation" and "cost" are defined, relevantly, in s 93(1), as follows:- " 93. (1) In this section "compensation", in relation to a person who is being, or has been provided with treatment by the Commission under this Part, means an amount that is by way of compensation or damages, or is, in the opinion of the Commission, in the nature of compensation or damages, in respect of the disease, disability or condition by reason of which that treatment is being, or has been, provided, but does not include an amount for which the person has made contributions; "cost", in relation to treatment provided by the Commission under this Part, means the cost (as determined by the Commission by instrument in writing) of and incidental to that treatment." 25 It may be that, as a practical matter, the plaintiff would be in a more satisfactory position if all his future medical and pharmaceutical expenses, relating to his injury were to be paid by the Department of Veterans' Affairs. However, in view of the apparent conflict between the above referred to letter and notice from the Department and the possibility of future changes of policy, I regard it as unsafe to accept the submission of the defendant that the plaintiff's present entitlements effectively remove any concerns that his future financial needs in this area will not be met. Moreover, as a matter of law, I am quite satisfied that the plaintiff's entitlements under the Veterans' Entitlements Act, 1986 cannot result in any diminution of the extent of the obligation of the defendant, as tort feasor, fully to compensate the plaintiff for the reasonably foreseeable consequences of the tort. In Manser v Spry (1994) 181 CLR 428, consideration was given (at pages 434-437), to "the problem whether a benefit to which a plaintiff is entitled is relevant to – that is, whether it goes in reduction of – the damages which a tort feasor is to pay for the loss or damage caused by the tort." After consideration of frequently cited passages from the judgments in National Insurance Co. of New Zealand Limited v Espagne (1961) 105 CLR 569 (at pages 573, 598), the Court said, (at 436):- "If statute provides that a particular benefit is to be repaid out of damages, there is a clear indication that that benefit is not to go in reduction of the tort feasor's liability." 26 In my view, this is clearly such a case. Accordingly, it is appropriate that I assess damages under this head. If the plaintiff, in the future, calls upon his entitlement under the Veterans' Entitlements Act, 1986, then the amount that I so assess, in my opinion, will provide a fund out of which repayments to the Department, pursuant to the service of appropriate notices upon the plaintiff, can be met. It may well be, although I express no concluded view, that if, in the future, the fund is exhausted, then the plaintiff may still be able to call upon his entitlements under this statute, without incurring the obligation to make repayments. 27 The evidence is replete with clear indications that the plaintiff will incur expense in the future for medical treatment and pharmaceutical preparations. There is the prospect of further surgery in the form of arthroscopy which would, as in the past, require that the plaintiff be off work for significant periods. There is the prospect of the worsening of his arthritic condition, leading to a full knee replacement. There is also the prospect of the reoccurrence of reflex sympathetic dystrophy which will require medication. Clearly, the plaintiff will require future consultations with his general practitioner, on a fairly regular basis for the purpose of obtaining check-ups and prescriptions for pain killing medication. In the event of any major procedure to his knee, there will be the usual need for physiotherapy. It has been submitted, appropriately in my view, by counsel for the plaintiff, that this aspect of the plaintiff's damages can only be approached in a global manner. He points out that, as indicated by the evidence, the plaintiff has incurred expenses in the amount of $12,173.80 over the last two and a quarter years. These expenses have, consequently, been incurred at the rate of $104 per week. Based upon the plaintiff's present life expectancy of 44.35 years, and using the 3% multiplier for 44 years, namely 1284.5, the resultant figure is $133,588.00. This is not an area, of course, where precision is remotely possible. Counsel suggested that this figure be used as a guide to the provision of a cushion or buffer for future medical expenses, in the amount of $100,000.00. I consider that this approach is a reasonable one in the circumstances and I adopt it. Consequently, I award under this head of damage, the amount of $100,000.00. 28 The total of the awards I have made under the various heads that I have considered is $1,448,271.67. Accordingly, I make the following orders:- 1. That there be judgment for the plaintiff against the defendant in the sum of $1,448,271.67. 2. That the defendant pay the plaintiff's costs on a party/party basis up to and including 4 February 2003 and thereafter on an indemnity basis. ******************* Last Modified: 11/27/2003 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.