New South Wales Court of Appeal CITATION: Patricia Ring v Troy Rigby [2005] NSWCA 357 HEARING DATE(S): 10/10/05 JUDGMENT DATE: 20 October 2005 JUDGMENT OF: Ipp JA at 1; Brownie AJA at 2 DECISION: Appeal allowed, judgment of the District Court be set aside, and in lieu thereof there be judgment for the respondent for $238,935.39, the judgment to take effect from 24 September 2004. The respondent should pay the appellant's costs of the appeal, but should have a certificate under the Suitors' Fund Act 1951. CATCHWORDS: Damages - no question of principle. Motor Accidents Act 1988 LEGISLATION CITED: Suitors' Fund Act 1951 Watts v Rake (1960) CLR 158 CASES CITED: Shorey v P T Limited [2003] HCA 27; (2003) 197 ALR 410 Patricia Ring - Appellant PARTIES: Troy Rigby - Respondent FILE NUMBER(S): CA 40920/04 P G Mahony SC with G J Bellew - Appellant COUNSEL: D R Campbell SC with S J Longhurst - Respondent Turner Whelan - Appellant SOLICITORS: Kells (Wollongong)- Respondent LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): 114/02 LOWER COURT JUDICIAL OFFICER: Quirk DCJ IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40920/04 DC 114/02 IPP JA BROWNIE AJA Thursday 20 October 2005 PATRICIA RING v TROY RIGBY Judgment 1 IPP JA: I agree with Brownie AJA. 2 BROWNIE AJA: The respondent was injured in a motor vehicle accident on 14 December 1998, and he obtained a judgment against the appellant for damages, assessed in accordance with the provisions of the Motor Accidents Act 1988 (the Act), containing these components: Past Out of Pocket Expenses $18,529.89 Future out of Pocket Expenses $15,000 Past Economic Loss $76,776 Past Superannuation Loss $ 6,910 Future Economic Loss $100,000 Non Economic Loss $115,000 TOTAL $332,215.89 3 The appellant contends that each of these figures, other than the figure for Past Out of Pocket Expenses, is excessive. 4 The learned trial judge, Quirk DCJ, found, and the appellant does not now dispute, that the respondent sustained organic injuries to the neck, low back and left hip, and that he was subsequently incapacitated by the low back and hip conditions, in combination, and also by a psychiatric condition, described as chronic adjustment disorder with mixed emotions, which psychiatric condition was caused, at least in part, by the motor vehicle accident. No attempt was made, either at trial or on appeal to disentangle the various causes of the psychiatric state: see Watts v Rake (1960) CLR 158 and Shorey v P T Limited [2003] HCA 27; (2003) 197 ALR 410 at [43] – [49]. Nevertheless the appellant argues that the various sums awarded, mentioned above, were excessive, principally upon the basis that, upon a proper review of the evidence, the respondent's condition was not as serious or as disabling as her Honour took it to be. 5 The respondent was 28 years old when injured. He suffered from epilepsy from the age of eleven, but that condition was mostly controlled by medication. Having obtained his School Certificate, he was apprenticed as a baker, and subsequently worked as a baker until March 1998, some nine months before the accident. He was then sexually assaulted by his employer, and dismissed. He brought an Industrial Relations claim against his employer, but was substantially out of work during the nine months before the accident. On the day of the accident, he started casual work as a "Santa Claus", and the accident occurred during his lunch break that day. 6 After the accident, he was trapped in his car for a time, then taken by ambulance to hospital, and discharged after about two and half hours. There was a debated question whether he suffered any significant symptoms in the period before 14 February 1999, when he consulted a general practitioner, Dr Balgi, but her Honour accepted this part of the respondent's case, and I see no error in this regard. 7 Thereafter, the respondent saw and/or was treated by a large number of people. There are more than 200 pages of medical and paramedical reports and records in evidence, and none of the authors of these documents gave oral evidence. The respondent was a poor historian (no attack was made upon his honesty), and it is impossible to reconcile this mass of evidence, either as to the histories given, the complaints made, the findings upon examination, or the opinions expressed. He was treated in various ways, and out of work until September 1999, when he obtained work with Austar Entertainment Pt Ltd (Austar), selling pay television subscriptions, working from door-to-door. He was reasonably successful in this work for a time, but he said and her Honour found that he had difficulty performing the work, particularly when psychiatrically or psychologically distressed, as he was from time to time, and he was dismissed in July 2000 for not meeting his sales targets. The respondent observed that this may have been caused by he and a co-worker having effectively canvassed all the households in the area, but the finding just mentioned has not been shown to have been in error. 8 Thereafter, he was unemployed (except for two jobs, involving three days work) until the trial, which took place in September 2004. During this period, he continued to see and/or be treated by various people. At the time of the trial, he had arranged affairs so that he had the full-time custody of his seven-year-old son, from Sunday to Thursday each week, and also of his daughter, aged about thirteen, at weekends, when his daughter chose to go to stay with him rather than with her mother, the respondent's former de facto wife. 9 The appellant made much of the circumstance that the respondent's physical limitations, as found by her Honour, and as shown by the evidence, were not particularly severe, when considered independently of his psychiatric state. This may be accepted, but his physical disabilities were far from insignificant, and although there was a good deal of uncertainty as to just what his physical limitations were, there has been no demonstrated error in the finding made that, by reason of his low back and left hip conditions it is unlikely that he will ever be able to return to work full-time as a baker, since that work involves heavy lifting and bending on a repetitive basis. Although the appellant admitted that one ought, so to speak, read down the findings of fact by reference to the evidence, there was evidence to support the finding made, that there were organic causes for the disabilities found: in brief, some wasting of the left buttock and thigh, and findings of nerve root irritation on EMG tests. There were also observations of lumbar disc bulging, but these were treated as equivocal. 10 The psychiatric condition was more significant. There were reports from two psychiatrists in evidence, Dr Durrell for the respondent and Dr Maguire for the appellant. These two men agreed that the respondent was suffering from the psychiatric condition in question, but differed as to its causes, Dr Maguire referring to the respondent's separation from his de facto wife, his having suffered a grand mal seizure in July 2001 in consequence of which he suffered burns to the thigh, and his having been assaulted by his sister's husband. Dr Durrell rejected these suggested causes, for reasons that seem perfectly sensible, her Honour preferred the opinion of Dr Durrell, and this finding has not been challenged. 11 The judge also found that it was likely that, after appropriate psychiatric treatment, expected to take one to two years, the respondent should be able to participate in the work force, subject to his child care responsibilities. Again, the appellant did not challenge this finding, and there was no notice of contention. The appellant's submissions were limited to the proposition that, when one looked at the evidence overall, the amounts awarded were excessive. 12 The sum awarded for future out-of-pocket expenses represented the expected costs of pain management relating to the respondent's physical conditions, assessed at $4,000, together with $5,000 for general practitioner reviews, and $6,000 for psychiatric treatment. These sums were of course estimates, expressed in round figures, but I do not consider that any error has been demonstrated. Her Honour had of necessity to do the best she could with a considerable volume of unsatisfactory evidence. 13 The sum awarded for impairment of earning capacity prior to trial, $76,776, was assessed by the judge in this way. She found that, but for the injury, the respondent would have been able to work as a baker, and would have been able to earn $463 per week net. For the period of about 5.7 years between injury and trial, this represented a total of $137,233. In fact, he had earned $22,069 working with Austar, a difference of $115,164. Her Honour discounted this figure by one third, resulting in the figure of $76,776. 14 The figure of $6,910 represents a superannuation component of 9 percent of $76,776, and does not require separate consideration. 15 The appellant did not challenge the methodology adopted, but did challenge the discount of one third, submitting that a discount of the order of 60 percent should have been applied. One matter relied upon concerns the burns which the respondent suffered, consequent upon an epileptic seizure he suffered in July 2001. At the time of the seizure, he was at home, cooking. A pan was thrown upon his leg and stuck there, and he sustained what appeared to have been a reasonably severe burning injury. In his evidence in chief, he said that the wound was dressed, and that he had to have the dressing changed twice a day for nine months. He was not cross-examined about this topic. He did not say that the burn had disabled him in any way, saying only that he had opted to not have a skin graft operation because he did not want further scarring. I do not think that it is open to this Court to accept the invitation of the appellant to make a finding, based upon this evidence, that the burn and the resultant need to have it dressed twice a day for nine months meant that he was unable to work for nine months, or indeed for any other particular period, for reasons not the result of the accident sued upon. The matter certainly cannot be overlooked, but it would be wrong to make a finding, apparently inconsistent with the view taken by the trial judge, that he was unfit to work, by reason of his epileptic condition, for nine months. 16 The appellant submitted, both at trial and on appeal, that the respondent had been shown to have been fit for work as a salesman, but her Honour did not accept that, noting that he had been continuing to receive treatment for his disabilities whilst employed by Austar, and that he had found difficulty with the walking involved in going from door to door. No error has been demonstrated, and in addition it does not appear insignificant that he had not found any other sales job during the period prior to trial. 17 I do accept that the respondent is not entitled to damages, based upon whatever difficulties might arise from the circumstance that he now has the full time custody, four days each week, of his son. However satisfying that is to him, his son and his former de facto wife, and however admirable it may be, it is hardly a matter that would justify his being entitled to receive damages from the appellant, based upon the assumption that he was unable to exercise his earning capacity, since he had to look after his son (and/or his daughter). However, as a practical matter, this is not important in the resolution of this case. 18 The fixing of the figure of one third, by way of discount, was in the nature of a discretionary judgment, made upon unsatisfactory evidentiary materials, and I do not accept that any error has been demonstrated. 19 Her Honour allowed $100,000 in respect of impairment of future earning capacity, as a "cushion". Again, the methodology adopted is not disputed, but the amount awarded is disputed. The starting point in the assessment was that, during the period of two years following the trial, when her Honour expected the respondent to be having psychiatric treatment, his earning capacity would be considerably restricted. This seems to be entirely sensible, and I note that Dr Durrell, reviewing the position shortly before trial, was less optimistic than he had been earlier, when he had spoken of the treatment being successfully completed within one or two years. Her Honour referred to the hoped-for improvement, but it was by no means a certainty. I consider that the figure awarded was within sound discretionary limits. 20 The more controversial question concerns the assessment, made pursuant to the terms of s 79A of the Act, of the severity of the respondent's non-economic loss. The judge found (and it is not now disputed) that before the accident he was extremely fit, playing either first or reserve grade Australian Rules football in his district, playing touch football, and running on four occasions in the City-to-Surf race. He had been a hard and consistent worker until the sexual assault in March 1998. Her Honour found that his life appeared to revolve around work, sport and his family life. After the accident he had been mostly out of work, in considerable pain, and suffering from a significant psychiatric condition. There was a great deal of medical and paramedical treatment, and her Honour accepted the evidence of Ms Brown-Lee, the respondent's former de facto wife, as to the significant changes in his lifestyle and attitude after the accident. Her Honour assessed his loss as being 35 percent of a most extreme case. 21 I have come to the conclusion, with respect, that this assessment is excessively high. The respondent's condition needs to be viewed overall, considering his low back and hip conditions, as well as his psychiatric condition. The physical conditions mean that he will be unable to do his chosen work as a baker on a fulltime basis, which probably means that he will not be able to do this kind of work at all, practically speaking. He will have ongoing pain, but her Honour found that it was probable that successful psychiatric treatment would have the effect of diminishing at least his perception of the pain. A combination of the physical conditions and the psychiatric condition mean that his capacity to find work in the two years after trial will be limited, but her Honour found that after two years he should be able to participate in the work force. 22 Additionally, one must look at his total medical condition in the context of what he has been doing. For a period of nine or ten months, when he worked for Austar, he evidently coped quite well with that work, at least in the main. He is evidently coping quite well also with the responsibilities of sole full time parenting duties, four days per week for his seven-year-old son, as well as looking after his daughter from time to time at weekends. That is, his psychiatric condition, whilst certainly not a minor one, was not so severe that, when one views his physical conditions and his psychiatric condition together, one can properly say that his loss represents 35 percent of a most extreme case. 23 The appellant drew attention to some of the provisions of the Act: "2A Objects of Act (1) The objects of this Act are: (a) to repeal the Transport Accidents Compensation Act 1987 and thereby to abolish the scheme for compensating victims of transport accidents (TransCover) established under that Act, and (b) to re-instate a common law based scheme under which damages can only be awarded after a finding of negligence, and (c) by the scheme under this Act: (i) to reduce the cost of the former common law based scheme by limiting benefits for non-economic loss in the case of relatively minor injuries, and (ii) to introduce a stricter procedure for the making and assessment of claims for damages, and (iii) to preserve the benefits payable to persons with more severe injuries involving on-going disability, and (iv) to give full weight to the need to identify fraudulent claims, deter their lodgment and prosecute those responsible for them, and (v) to encourage recovery from injury and early and effective rehabilitation, where appropriate, as a key feature of the scheme, and (vi) to encourage the speedy, efficient and effective provision of benefits balanced by the need to investigate claims properly and the need to encourage an early return to employment. (2) It must be acknowledged in the application and administration of this Act: (a) that participants in the scheme under this Act have shared and integrated roles with the overall aim of benefiting all members of the motoring public by keeping the overall costs of the scheme within reasonable bounds so as to keep premiums affordable, and (b) that the law (both the enacted law and the common law) relating to the assessment of damages in claims made under this Act should be interpreted and applied in a way that acknowledges the clear legislative intention to restrict the level of non-economic loss compensation in cases of minor injuries, and (c) that: (i) the premium pool from which each insurer pays claims consists at any given time of a finite amount of money, and (ii) insurers are obliged under this Act to charge premiums that will fully fund their anticipated liability, and (iii) the preparation of fully funded premiums requires a large measure of stability and predictability regarding the likely future number and cost of claims arising under policies sold once the premium is in place, and (iv) the stability and predictability referred to in subparagraph (iii) require consistent and stable application of the law. 2B Interpretation and application of Act by reference to objects (1) In the interpretation of a provision of this Act or the regulations, a construction that would promote the object of this Act or the provision is to be preferred to a construction that would not promote that object. (2) In the exercise of a discretion conferred by a provision of this Act or the regulations, the person exercising the discretion must do so in the way that would best promote the object of this Act or of the provision concerned. ………… 79A Determination of non-economic loss—accidents occurring after midnight on 26.9.95 (1) This section applies only to motor accidents that occurred after midnight on 26 September 1995. (2) The object of this section is to limit the amount of damages for non-economic loss in cases of claims relating to relatively minor injuries, in order to achieve the object of the Act of more fully compensating those with more severe injuries at a cost the community can afford to meet. (3) No damages are to be awarded for the non-economic loss of an injured person as a consequence of a motor accident unless the injured person's ability to lead a normal life has been, or in the near future is likely to be, significantly impaired for a continuous period of not less than 12 months by the injury suffered in the accident. (4) No damages may be awarded for non-economic loss unless the severity of the non-economic loss of the injured person is at least 15 per cent of a most extreme case. (5) The maximum amount that may be awarded for non-economic loss is $235,000, but the maximum amount is to be awarded only in a most extreme case. (6) If the severity of the non-economic loss is assessed to be equal to or greater than 15 per cent of a most extreme case, the damages for non-economic loss are to be determined according to the following Table: Severity of the non-economic loss (as a proportion of a most extreme case) Damages for non-economic loss (as a proportion of the maximum amount that may be awarded for non-economic loss) 15% 1% 16% 1.5% 17% 2% 18% 2.5% 19% 3% 20% 3.5% 21% 4% 22% 4.5% 23% 5% 24% 5.5% 25% 6.5% 26% 8% 27% 10% 28% 14% 29% 18% 30% 23% 31% 26% 32% 30% 33% 33% 34%-100% 34%-100% respectively (7) An amount determined in accordance with subsection (6) is to be rounded to the nearest $500 (with the amounts of $250 and $750 being rounded up). 24 The appellant submitted, both at trial and on appeal, that the respondent's loss should be assessed as being 25 percent of a most extreme case, and I consider that this figure is appropriate, with the result that the damages to be awarded under this head should be $21,719.50, being 6.5 percent of $359,000: see the table contained in s 79A(6) of the Act. 25 I propose that the appeal be allowed, that the judgment of the District Court be set aside, and that in lieu thereof there be judgment for the respondent for $238,935.39, the judgment to take effect from 24 September 2004. The respondent should pay the appellant's costs of the appeal, but should have a certificate under the Suitors' Fund Act 1951. ********** 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.