New South Wales Court of Appeal CITATION: Jopling v Isaac [2006] NSWCA 299 HEARING DATE(S): 13 October 2006 JUDGMENT DATE: 7 November 2006 JUDGMENT OF: McColl JA at 1; Basten JA at 2; McDougall J at 5 DECISION: Appeal dismissed with costs on the indemnity basis CATCHWORDS: DAMAGES - basis of appellate review of awards of damages - whether damages awarded for non-economic loss, past economic loss and future economic loss were manifestly excessive LEGISLATION CITED: Civil Liability Act 2002 House v The King (1936) 55 CLR 499 Dell v Dalton (1991) 23 NSWLR 528 Franklins Limited v Byrnes [2005] NSWCA 54 Graham v Baker (1961) 106 CLR 340 Khan v Polyzois [2006] NSWCA 59 CASES CITED: Malec v J. C. Hutton Pty Limited (1990) 169 CLR 638 Owners - Strata Plan 156 v Gray [2004] NSWSC 304 Precision Plastics Pty Ltd v Demir (1975) 132 CLR 362 Sellars v Adelaide Petroleum N.L. (1992) 179 CLR 332 Southgate v Waterford (1990) 21 NSWLR 427 State of New South Wales v Moss (2000) 54 NSWLR 536 PARTIES: Margaret Jopling (Appellant) Clinton Isaac (Respondent) FILE NUMBER(S): CA 40066/06 COUNSEL: S G Campbell SC (Appellant) D W Elliott (Respondent) SOLICITORS: Moray & Agnew (Appellant) Gerard Malouf & Partners (Respondent) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 2971/04 LOWER COURT JUDICIAL OFFICER: McLoughlin SC DCJ LOWER COURT DATE OF DECISION: 17/01/06 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40066/2006 DC 2971/2004 McCOLL JA BASTEN JA McDOUGALL J Tuesday 7 November 2006 MARGARET JOPLING v CLINTON ISAAC Judgment 1 McCOLL JA: I agree with McDougall J. 2 BASTEN JA: I agree with the reasons of McDougall J and the orders proposed by his Honour. 3 There was a suggestion in the course of oral argument that the imprecision of the plaintiff's evidence at trial did not permit an award of damages for future economic loss because it did not allow determination of the plaintiff's "most likely future circumstances but for the injury", as required by s 13(1) of the Civil Liability Act 2002 (NSW). Underlying such an argument might be a question as to whether the approach explained by Heydon JA in New South Wales v Moss (2000) 54 NSWLR 536 at [87], set out below at [60], remains a correct exposition of legal principle. If s 13 requires some different approach, there are likely to be significant difficulties in assessing reasonable compensation for children who suffer serious injury. In any event, no argument was put based on such inconsistency in approach and accordingly the issue may be left for another time. 4 Nor was it argued that s 13(2) and (3) might preclude a calculation based on a "cushion", as is sometimes undertaken in assessing compensation in circumstances of uncertainty. 5 McDOUGALL J: On 10 August 2001, the respondent (Mr Isaac) fell about 3 metres to the ground from the balcony of premises, 1/5 Killick Lane, Crescent Head (the premises). The appellant (Ms Jopling) was the owner of the premises. Mr Isaac was living there when the accident occurred. The accident occurred because a rusted and corroded balcony rail gave way when Mr Isaac leant against it. He suffered a number of injuries, the most serious of which was a comminuted fracture of the right patella. 6 Mr Isaac sued Ms Jopling for damages, including non- economic loss, past and future loss of earnings and earning capacity, and the cost of likely further medical and related treatment. Ms Jopling admitted liability, but alleged that Mr Isaac was guilty of contributory negligence. The case was heard by McLoughlin DCJ. His Honour found that Mr Isaac's damages (before interest and before any allowance for contributory negligence) amounted to $186,500, made up as follows: Non- economic loss $ 58,000 Past economic loss $ 17,500 Past loss of opportunity $ 10,000 Future economic loss $ 60,000 Future loss of opportunity $ 30,000 Future out of pocket expenses $_11,000 $186,500 7 His Honour found that Mr Isaac was guilty of contributory negligence. He assessed this at 15%. Accordingly, he reduced the amount of damages to $156, 825. It was common ground on the hearing of the appeal that the figure should have been $158,525. The grounds of appeal 8 Ms Jopling challenges all but the last of the elements of the assessment of damages. The grounds of appeal, paraphrased, are: (1) The award of damages was excessive in the circumstances. (2) The assessment of non- economic loss on the basis that Mr Isaac's injuries and disabilities equated to 28% of a most extreme case was manifestly excessive. (3) The award of $27,500 for past economic loss was manifestly excessive and "unsupportable on the evidence". (4) The award of $30,000 for future loss of opportunity was erroneous because there was no evidence to support it. (5) The award of $60,000 for future economic loss was manifestly excessive and "unsupportable on the evidence". (6) Further to (4) and (5), in each case the primary judge failed to apply s 13 of the Civil Liability Act 2002. 9 Mr Isaac did not challenge the finding and quantification of contributory negligence. Nor did he raise, by way of notice of contention or otherwise, a challenge to the arithmetical error to which I have referred in para [7] above. Non- economic loss Basis of appellate review 10 Mr D W Elliott of counsel, who appeared for Mr Isaac, reminded the Court of the observations of Gibbs J in Precision Plastics Pty Ltd v Demir (1975) 132 CLR 362 at 369. His Honour there said that an appellate court would not interfere with a trial judge's assessment of damages "simply because it would have awarded a different figure had it tried the case at first instance." He said that the court could only interfere where there is some error of principle, misapprehension of the facts or wholly erroneous estimate of the damages suffered. 11 In Khan v Polyzois [2006] NSWCA 59, Hislop J (with whom Mason P agreed) said that the principles stated by Gibbs J in Demir apply to the assessment of non- economic loss under s 16 of the Civil Liability Act. 12 In The Owners – Strata Plan 156 v Gray [2004] NSWCA 304, Sheller JA (with whom Gzell J agreed) at para [41] applied the test laid down by the majority in House v The King (1936) 55 CLR 499, 505 to an assessment under s 16. His Honour concluded, on the facts of that case, that the trial judge's "decision that the severity of the non-economic loss suffered by the plaintiff ast 33 percent of a most extreme case was so unreasonable and plainly unjust that it must be inferred that in some way his Honour failed properly to exercise the discretion reposed in him in making the determination he did." 13 In Franklins Limited v Byrnes [2005] NSWCA 54, McColl JA at paras [48] and [49] (with whom Beazley and Tobias JJA agreed) dealt with the basis of appellate interference in awards of damages for non-economic loss at paras [48] and [49] made the same point. The appellant in that case had accepted that, in order to challenge the primary judge's award of damages for non-economic loss, it had to meet the test laid down by the majority in House. It is plain that her Honour accepted that this was so. Although her Honour was speaking in the context of s 151G of the Workers Compensation Act 1987 (as it stood at the time relevant to that appeal) the principle is entirely applicable to this case. The primary judge's findings 14 Mr Isaac was born on 3 October 1974. He was thus 2 months short of his 27th birthday when the accident occurred. He was certified unfit for work from the date of the accident until 30 August 2002 – a period of some 13 months - by his treating practitioner, Dr Singham. However, Mr Isaac's evidence was that he resumed work, namely a modelling engagement, in July 2002. 15 Mr Isaac was assessed by Dr Conrad, an orthopaedic surgeon. Dr Conrad's unchallenged evidence was that Mr Isaac's disabilities included 30% permanent loss of efficient use of the right leg at or above the knee, 10% permanent loss of the efficient use of the right arm below the elbow, and 3% significant bodily disfigurement due to a prominent (post operative) scar on the right leg. The primary judge did not accept Dr Conrad's assessment in relation to the right arm: on the basis that it was not supported by inconsistent with Mr Isaac's evidence. Otherwise, he accepted Dr Conrad's evidence. 16 Mr Isaac was also assessed by Dr Gibson, a plastic and reconstructive surgeon. The primary judge accepted the evidence of Dr Gibson, which again was unchallenged. Dr Gibson assessed a whole person impairment of 5%, and noted that there could be some impairment of Mr Isaac's ability to work as a model. 17 The primary judge also accepted the histories of disabilities given by Mr Isaac to Dr Conrad and Dr Gibson: (1) Stiffness in the right wrist from time to time, worse in cold weather. (2) Difficult to lift anything heavy with right hand. (3) Pain and stiffness in right knee; prolonged standing, walking or running is difficult. (4) Difficult to squat or kneel. (5) Restricted sporting activities, including surfing, snowboarding and tennis. (6) Scarring of the right knee. (7) Wasting of the right thigh. 18 The primary judge concluded that Mr Isaac "has suffered a very serious injury by way of a fractured patella with the [sic] restrictions in squatting, kneeling, standing, walking or running, the scarring and muscle wasting." His Honour said that "[t]hese injuries will be with the plaintiff for the rest of his life, on probability a total of fifty plus years from time of injury. It will bring with it the onset of arthritis, and I accept Dr Conrad's opinion in that respect." 19 The primary judge said that the assessment of non- economic loss required consideration of Mr Isaac's age at the time of injury and "the significant disabilities with [sic] which he has suffered and that which [sic] he will suffer as his knee deteriorates in later life". On that basis, his Honour fixed the s 16 percentage as 28 percent of a most extreme case. 20 It does not appear in express terms what his Honour considered to be the "yardstick" of a most extreme case. Nor does it appear that either party directed his Honour's attention to other awards of damages for non- economic loss (Civil Liability Act, s 17A). The parties' submissions 21 Mr Campbell SC, for Ms Jopling, submitted that the assessment of 28% was so plainly unreasonable that this Court should infer that the primary judge had erred in the exercise of his discretion. He submitted that the relevant yardstick, or most extreme case, should be considered to be quadriplegia or some similarly catastrophic injury. On that basis, he submitted, the nature and extent of Mr Isaac's disabilities, as found by the primary judge, could not justify the s 16 finding of 28%. Mr Campbell submitted that the appropriate assessment was 25% of a most extreme case. 22 Mr Elliott submitted that no error of principle had been demonstrated. He submitted that the primary judge had taken into account a range of factors, all of which were relevant to his assessment. (I interpose that Mr Campbell's submissions did not challenge this. They challenged the outcome.) Mr Elliott submitted that no error of principle or misapprehension of facts had been demonstrated. Nor, he submitted, had the estimate been shown to be wholly erroneous. Decision 23 It is correct to say that the submissions for Ms Jopling do not assert any error of principle or misapprehension of fact. Thus, the challenge to the primary judge's quantification of non- economic loss must fail unless the outcome can be shown to be wholly erroneous: so unreasonable and plainly unjust that error in the exercise of the discretion must be inferred. A challenge on this basis faces an immediate obstacle. As McColl JA said in Franklins at para [52], "[t]he exercise a primary judge is required to undertake in determining the severity of a plaintiff's non-economic loss for the purposes of s 151G [of the Workers Compensation Act 1987] is neither scientific nor normative. While it is not wholly at large, it does, nevertheless, involve an exercise of discretion with which … the Court will rarely intervene." (As I have said in para [13] above, the principles stated by her Honour in relation to s 151G of the Workers Compensation Act are equally applicable to s 16 of the Civil Liability Act.) 24 Indeed, to say that a determination of non- economic loss involves more art than science might be to overstate the degree of logic and precision with which such an assessment is performed. A primary judge has the benefit of considering the whole of the evidence, and of observing the plaintiff in the witness box. A primary judge has the advantage of forming an assessment, not always or wholly based on objective and rational factors, of the plaintiff's credibility, and of assessing the veracity and accuracy of the plaintiff's complaints. As this Court recognised in Southgate v Waterford (1990) 21 NSWLR 427 at 442 "a point is reached where further reasoning is impossible. It is necessary to make a determination which is insusceptible to entirely logical expedition … . That determination rests up on the judge's findings [sic] and his or her reaction to those findings, drawing upon the judge's general experience. … [A] more "scientific" approach is forbidden by binding authority of the High Court and of this Court." (That case concerned s 79 of the Motor Accidents Act 1988; as with s 151G of the Workers Compensation Act, the principles are applicable to s 16 of the Civil Liability Act.) 25 Again, in Dell v Dalton (1991) 23 NSWLR 528, Handley JA (with whom Kirby P and Priestley JA agreed) said at 533 that the assessment of non- economic loss involves "questions of fact and degree, and matters of opinion, impression, speculation and estimation, calling for the exercise of commonsense and judgment." 26 It is apparent from the primary judge's findings that his Honour reviewed carefully the whole of the evidence bearing on the s 16 assessment. It does not appear that counsel for Ms Jopling sought to persuade his Honour that the evidence of Mr Isaac was exaggerated, or untrustworthy, or that it should not be accepted. It is plain that his Honour in substance accepted Mr Isaac as a witness of truth. 27 The medical evidence tendered in support of Mr Isaac's case was unchallenged. Indeed, it appeared that Ms Jopling had procured Mr Isaac to be examined by an orthopaedic specialist, who had prepared a report; but that specialist was not called at trial and, when counsel for Mr Isaac sought to tender his report, counsel for Ms Jopling objected and (entirely properly) the tender was rejected. 28 Mr Isaac gave evidence, which clearly the primary judge accepted, of the disabilities and limitations that were consequent upon his injuries. His surfing prowess was very severely diminished. He was no longer able to engage in snowboarding. He suffered pain in the right leg after standing for more than a short period of time; and if he were required to sit, he needed to extend and flex the leg. There was a significant limitation - about 10-15% - in the range of extension movement of the right leg. 29 Mr Isaac was a young man when the accident occurred. IClearly, it has had a significant impact on his quality of life. That Clearly, those impacts will continue (and, with the diagnosis of osteoarthritis, worsen) over the years. 30 Those circumstances, and the rest of the evidence considered (and obviously accepted) by the primary judge, support his Honour's assessment. Indeed, I think, it can be said that his Honour took a conservative approach towards the assessment. 31 In those circumstances, bearing in mind the evidence given by Mr Isaac that entirely supported, and fleshed out in terms of their real world impact, the complaints of disability given to Dr Conrad and Dr Gibson, I do not think that his Honour's assessment of non- economic loss has been shown to be erroneous to the point where, having regard to the principles that I have stated, this Court should intervene. 32 In passing, I repeat that Mr Campbell's submission was that the primary judge should have made a s 16 assessment of 25% of a most extreme case. In my view, it is impossible to say that a variation between 28% and 25% is so extreme as, absent demonstration of some specific vitiating factor, to demonstrate error in the exercise of the discretion. True it is that the impact of the variation is substantial (because of the operation of the table to s 16). But the question of erroneous exercise of discretion falls to be considered at the level of the "first" step set out in the note to s 16, which is determination of "the severity of the claimant's non-economic loss as a proportion of a most extreme case". That is where the exercise of discretion arises. The arithmetic result of the exercise is prescribed by the table. Past economic loss The primary judge's findings 33 Before the accident, Mr Isaac had spent about 7 years working in a number of casualmenial and lowly paid occupations, including as a kitchen hand. It is apparent that Mr Isaac's real passions were surfing (seeking to establish himself as a professional surfer) and snowboarding. Shortly before the accident, Mr Isaac started to work as a model. The primary judge found that his modelling career had "flourished" after the accident. 34 There was evidence of Mr Isaac's pre- accident income, and of his earnings in the year ended 30 June 2003 once his modelling career had blossomed. 35 The primary judge concluded that Mr Isaac's modelling career "would have blossomed if the accident had not taken place" and that he "would have obtained modelling work at a more accelerated rate than that which he did." His Honour found that Mr Isaac had lost the ability to work as a kitchen hand, and had also lost some opportunities to undertake modelling, during the 13 month period he was unfit for work. 36 On that basis, the primary judge fixed the amount of past economic loss (exclusive of loss of opportunity) at $17,500, which his Honour noted was about $500 per week gross. His Honour said that he fixed this by balancing the relatively low earnings shown in Mr Isaac's tax returns derived from his work as a kitchen hand with his considerably higher earnings as a model. The parties' submissions 37 Mr Campbell submitted that the primary judge had erred by failing to give what he said was due weight to Mr Isaac's evidence of his intentions at the time of the accident. It appears to be the case that Mr Isaac at that time still hoped to achieve success on the professional surfing circuit, and that he regarded his casualmenial work as a means to support him in between surfing competitions. Thus, Mr Campbell submitted, the primary judge should have concluded that but for the accident Mr Isaac would have continued to make "nominal earnings" (presumably, as a kitchen hand and the like) while he pursued his surfing career. 38 However, the primary judge found that Mr Isaac had commenced to work as a model prior to the accident. Mr Campbell did not submit that this finding was not open to his Honour. 39 Mr Campbell submitted further that there was a "lack of relevant evidence" and a "paucity of evidence" as to Mr Isaac's pre- accident earnings. 40 Mr Campbell submitted further that there was insufficient evidence to support the primary judge's finding that there would have been lost opportunities after August 2002 but before the hearing for Mr Isaac to derive earnings as a model. 41 The ground of appeal referring to the alleged failure to take into account the requirements of s 13 of the Civil Liability Act is not in terms pursued. However, Mr Campbell's submissions asserted that the primary judge had erred in failing to take into account s 12. The respondent's submissions 42 Mr Elliott submitted in substance that the primary judge's findings for past economic loss and past loss of opportunity were open to him on the evidence. He referred to the unchallenged evidence as to the period of total incapacity, as to earnings and as to past loss of opportunity to perform active modelling work. (The primary judge found that Mr Isaac was unable to undertakehad declined at least two modelling opportunities, one in New Zealand and one in America, because of his scarring. In fact, on Mr Isaac's evidence, there were two in America and therefore three overall.) Decision 43 The primary judge took an entirely reasonable approach to the assessment of past economic loss. It was open to him to conclude that, but for the accident, Mr Isaac would have undertaken more modelling work than in fact he did. It was open to him to derive a figure for past economic loss during the period of total incapacity based on a combination of his relatively low paid work as a kitchen hand and his relatively well paid work as a model. 44 I do not think that this Court should interfere in the primary judge's assessment of past economic loss. 45 The likelihood that, but for the accident, Mr Isaac would have undertaken more modelling work was recognised to some extent in the primary judge's decision to allow loss of earnings at a higher weekly rate than that established by the tax returns. Thus, any loss of opportunity in the period of total incapacity was reflected in the assessment of damages for that period. 46 It is apparent from the primary judge's reasons that his Honour allowed the sum of $10,000 for past loss of opportunity not in relation to the period of total disability but in relation to the period thereafter until the date of trial. His Honour's award was supported both by the evidence of the three foregone modelling opportunities to which I have referred, and by more general evidence from Mr Isaac and from his agent, Ms Graham, as to Mr Isaac's unsuitability for, and inability to undertake, certain kinds of modelling work. 47 In my view, the award of $10,000, representing loss of opportunity (both for the three demonstrated assignments and for the more general reduction in capacity) was an assessment that was open to the primary judge. I do not think that this Court should interfere. 48 The s 12 point to which I referred in para [41] above was pressed in relation to both past and future economic loss. I propose to consider it in relation to the latter category, to which I now turn. Future Economic Loss The primary judge's findings 49 The primary judge noted that "[t]here is no real evidence put before the Court to assist the Court in determining the quantum of [future loss of opportunity]. If one looks at [Mr Isaac's] earnings in Australia of $58,000 in 2003 and one accepts that there has been success on the international modelling stage, it would be appropriate in my view to allow a figure for this year period of loss of somewhere in the vicinity of five to eight percent of his Australian earnings, which would leave a figure of somewhere in the vicinity of $30,000 over a ten year period." 50 On that basis, his Honour quantified future diminution of earning capacity in that sum. 51 The primary judge then looked at Mr Isaac's likely earning capacity once his modelling career came to an end, which the primary judge found would occur after about ten years. He noted Mr Isaac's evidence that, by then, he hoped to have saved enough money not to need to work again, but said that "experience shows this frequently is not the case". His Honour thus concluded that Mr Isaac "is more likely to apply and have need to apply himself to longer working hours than a person in his twenties". He said that "the matter can only be dealt with by way of a lump sum cushion because of the stated [sic] evidence." 52 As to future loss of opportunity, the primary judge allowed a figure of 5 to 8% of Mr Isaac's Australian earnings, projected forward over a 10 year period. The figure of 5 to 8% appears to be his Honour's quantification of the impact of diminished earning capacity by reason of disabilities; presumably, including the scarring on the right knee. The reference to a 10 year period reflects his Honour's finding that Mr Isaac's modelling career would continue for about 10 years from the date of trial. The parties' submissions 53 Mr Campbell's initial submission was that the evidence for Mr Isaac had not satisfied what he said was the two step test laid down in the majority judgment in Graham v Baker (1961) 106 CLR 340: that Mr Isaac had failed to establish that such diminution of his earning capacity as might have been demonstrated was, or might be, productive of financial loss. Thus, Mr Campbell submitted, the claim failed at the threshold. 54 Mr Campbell submitted alternatively that the primary judge had erred in applying the principles laid down in Malec v J. C. Hutton Pty Limited (1990) 169 CLR 638 and Sellars v Adelaide Petroleum N. L. (1992) 179 CLR 332. He submitted that his Honour had failed to assess the probability of occurrence of the relevant events so as to mould his award of damages. 55 Mr Campbell submitted further that the primary judge had erred in failing to apply s 13(1), (2) of the Civil Liability Act. He submitted that his Honour had not identified Mr Isaac's most likely future circumstances, and had not addressed the possibility that those circumstances might have arisen in any event but for the injury. 56 Further, Mr Campbell submitted that the primary judge had not given reasons to support his quantification of future economic loss; indeed, he submitted, the primary judge could not do so, because Mr Isaac had not adduced evidence that would permit assessment. It should be noted, however, that the grounds of appeal did not raise an alleged inadequacy of reasons. 57 Mr Elliott referred to the primary judge's findings which I have summarised. He submitted that those findings were open to his Honour on the evidence. He submitted that the primary judge's reasoning process was consistent with Malec. Decision 58 In my view, it was open to the primary judge to find (as he did) that Mr Isaac, despite his expressed hope (or wish) to have saved enough money to retire, was likely to have to continue to work once his modelling career came to an end. In my view, it was open to his Honour to find (as he did) that Mr Isaac's earning power, once his modelling career had ceased, was likely to be diminished because of his injuries and disabilities. 59 His Honour made no specific finding as to the impact of Mr Isaac's injuries and disabilities on his ability to work in the fields in which he worked prior to the accident. However, it is implicit from his Honour's acceptance of Mr Isaac's evidence as to his disabilities that he accepted that Mr Isaac would not be able to perform work that involved (for example) standing for lengthy periods of time: including, therefore, work as a kitchen hand or chef. 60 Mr Campbell referred to the judgment of Heydon JA in State of New South Wales v Moss (2000) 54 NSWLR 536. His Honour referred, from 551 [66] on, to a large number of decisions. He summarised the effect of those at 559 [87]: "In short, where earning capacity has unquestionably been reduced but its extent is difficult to assess, even though no precise evidence of relevant earning rates is tendered, it is not open to the cCourt to abandon the task and the want of evidence does not necessarily result in non-recovery of damages. … The task of the trier of fact is to form a discretionary judgment by reference to not wholly determinate criteria within fairly wide parameters. Though the trier of fact in arriving at the discretionary judgment must achieve satisfaction that a fair award is being made, since what is involved is not the finding of historical facts on a balance of probabilities, but the assessment of the value of a chance, it is appropriate to take into account a range of possible outcomes even though the likelihood of any particular outcome being achieved may be no more than a real possibility". 61 In my view, that is precisely the approach taken by the primary judge. The question that we are required to consider is, therefore, whether some exercise has been demonstrated in the error of the discretion to which Heydon JA referred: either specific error, or a wholly unreasonable outcome. 62 Mr Campbell did not submit that the primary judge's findings on future economic loss were afflicted by any demonstrable specific error (leaving aside his point on s 12, to which I shall return). 63 On that basis, and having regard to the primary judge's findings to which I have referred in para [58] above, his Honour was required to determine, as best he could on the evidence, the allowance that should be made for future economic loss. It is clear that his Honour assessed the matter on the basis that the diminution in earning capacity would affect Mr Isaac for about 20 to 25 years (ie, after his modelling career would end in about 10 years' time until about age 60 to 65). A "cushion" (which is the way that his Honour approached this question) of $60,000 fairly reflects represents approximately $2,400 to $3,000 per year. In light of his Honour's acceptance of a 5 to 8% disability. , I do not think that his Honour's assessment reveals any error; on the contrary, as with the s 16 assessment, I think that it is conservative. 64 I think that the primary judge's assessment of future economic loss satisfied both the requirements of s 13 of the Civil Liability Act and, to the extent that it has separate operation, the principle laid down in Malec and Sellars. 65 I turn to the s 12 point. Section 12 provides: "Damages for past or future economic loss—maximum for loss of earnings etc 12 Damages for past or future economic loss—maximum for loss of earnings etc (1) This section applies to an award of damages: (a) for past economic loss due to loss of earnings or the deprivation or impairment of earning capacity, or (b) for future economic loss due to the deprivation or impairment of earning capacity, or (c) for the loss of expectation of financial support. (2) In the case of any such award , the court is to disregard the amount (if any) by which the claimant's gross weekly earnings would (but for the injury or death) have exceeded an amount that is 3 times the amount of average weekly earnings at the date of the award . (3) For the purposes of this section, the amount of average weekly earnings at the date of an award is: (a) the amount per week comprising the amount estimated by the Australian Statistician as the average weekly total earnings of all employees in New South Wales for the most recent quarter occurring before the date of the award for which such an amount has been estimated by the Australian Statistician and that is, at that date, available to the court making the award , or (b) if the Australian Statistician fails or ceases to estimate the amount referred to in paragraph (a), the prescribed amount or the amount determined in such manner or by reference to such matters, or both, as may be prescribed." 1 I have to say that I found great difficulty in understanding Mr Campbell's submissions on this point. There was no evidence that Mr Isaac's earnings, pre or post trial, had approached or were likely to approach the threshold of three times average weekly earnings. It was common ground that average weekly earnings at the time of the trial were $863.80, so that the relevant s 12 limit was $2,591.40. The figure that his Honour took into account, of about $58,000 per year, equates to $1,115.38 per week, or about 43% of the applicable s 12 limit. 66 On the basis of the evidence, his Honour was not required to consider s 12, and cannot have fallen into error in failing to deal with it. 67 However, Mr Campbell submitted, there was evidence to suggest that Mr Isaac may have earned, or may have had an earning potential of, more than the limit. He referred to evidence showing an amount of $1,500 paid to Mr Isaac for a two day assignment; to evidence showing that Mr Isaac was busy and in demand; and to evidence showing that Mr Isaac had worked in overseas centres such as Paris, New York and Miami. 68 All that evidence may be accepted (as, no doubt, the primary judge did accept it). But it does not follow from this that the operation of s 12 was engaged. Section 12 has not been the subject of judicial analysis. In circumstances where the submissions founded on the section are obscure, and do not show that its operation is engaged, I do not think that the Court should engage in further analysis of the section. 69 Mr Campbell submitted that it was for Mr Isaac to prove his case on damages. That too may be accepted. Mr Isaac chose to prove a case based on earnings of $58,000 per year. The primary judge accepted that case. Not surprisingly, Ms Jopling did not seek to put a case to the primary judge that Mr Isaac's earnings were higher. On the evidence, there was no reason for the primary judge to consider the operation of s 12, and he did not err in failing to consider that which did not arise for consideration. 70 The remaining issue relates to his Honour's quantification of loss of opportunity during the remaining period of Mr Isaac's modelling career. There was evidence that Mr Isaac had been forced to decline some opportunities for work. There was evidence that his injuries and disabilities would prevent him from accepting some kinds of work. His Honour's approach - assessing the diminution in earning capacity (as a model) at 5 to 8%, and applying this diminution to his post accident earnings as a model - was a rational way of quantifying loss of opportunity. 71 In my view, the assessment of $30,000 for this head of damage is neither unsupported nor unsupportable. Future out of pocket expenses 72 Both the affidavit in support of the appeal (sworn by Ms Jopling's solicitor to demonstrate that the appeal lay as of right) and Ms Jopling's schedule of damages alleged that his Honour had erred in relation to his assessment of future out of pocket expenses. The alleged error was that $6,000 of the sum, relating to the cost of future operative treatment, should have been discounted because of Mr Isaac's evidence that he would defer the surgery until his modelling career had come to an end (ie, for about 10 years). 73 Whether through oversight, or because discretion was seen to be the better part of valour, this alleged error was not asserted in Ms Jopling's grounds of appeal. Nor did it receive a mention in the summary of argument that was filed. In those circumstances, I do not think that this Court should consider it. Costs 74 The primary judge ordered Ms Jopling to pay Mr Isaac's costs of the hearing, on an indemnity basis. His Honour did so having regard to an offer of compromise made by Mr Isaac to settle for $42,500 and to the outcome of an arbitration in which the arbitrator found in Mr Isaac's favour in the sum of $112,037. It was accepted before his Honour that it was Ms Jopling who sought a rehearing after that arbitration. 75 If (as I have concluded is the case) the primary judge's determination of damages should stand, his Honour's award of costs on the indemnity basis should likewise stand. Mr Campbell accepted that the order for indemnity costs could not be disturbed unless the determination of damages reduced the quantum to less than $42,500. 76 The costs of this appeal can be dealt with briefly. Each of the six challenges advanced by Ms Jopling hashave failed. It is plain that Mr Isaac should have his costs. It is equally plain, given the offer of compromise, that they should be paid on the indemnity basis. 1 In those circumstances, I think that the proper order for the costs of this appeal is that Ms Jopling should pay Mr Isaac's costs of the appeal. Proposed orders 77 I propose the following orders: (1) Order that the appeal be dismissed. (2) Order the appellant to pay the respondent's costs of the appeal on the indemnity basis. ****** 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.