Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Morvatjou v Moradkhani [2013] NSWCA 157 Hearing dates: 1 February 2013 Decision date: 05 June 2013 Before: McColl JA at [1], Hoeben JA at [106], Tobias AJA at [109] Decision: 1 Appeal allowed. 2 Set aside the verdict and judgment for the plaintiff ordered by Williams DCJ on 22 November 2011. 3. Direct the parties, if they are able to agree as to the amount of damages recalculated in accordance with this judgment, to lodge with the Court within seven days of the date of this judgment a form of consent order to be made by the Court in chambers. 4. In the event the parties are unable to agree as to the amount of damages direct that: (a) within seven days of the date of this judgment the appellant lodge with the Court a submission identifying the orders that he contends should be made to give effect to this judgment, together with submissions in support of that contention; (b) within seven days thereafter the respondents lodge a reply to the appellant's submissions; (c) within a further seven days the appellant lodge any submission in reply to that of the respondents. 5. Cross-appeal dismissed. 6. Respondents to pay the appellant's costs of the appeal and the cross-appeal and have a certificate under the Suitors' Fund Act 1951, if qualified. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: DAMAGES - accident at workplace - damages for past economic loss - quantification of lost earning capacity - where appellant's lost earning capacity not reflected by income disclosed in tax returns - whether falsity of tax returns must be admitted before allowance could be made on that basis DAMAGES - damages for future economic loss - award of superannuation - whether appellant was employee or independent contractor - whether appellant qualified for superannuation under Superannuation Guarantee (Administration) Act 1992 (Cth) PROCEDURE - responsibility of legal advisers to ensure best evidence of lost earning capacity is adduced at trial Legislation Cited: Evidence Act 1995 Suitors' Fund Act 1951 Workers Compensation Act 1987 Superannuation Guarantee (Administration) Act 1992 (Cth) Cases Cited: AMP General Insurance Ltd v Kull [2005] NSWCA 442; (2005) 44 MVR 339 Cohen v Ninkovic [2000] WASCA 169 Conley v Minehan [1999] NSWCA 432 Giorginis v Kastrati (1988) 49 SASR 371 Graham v Baker [1961] HCA 48; (1961) 106 CLR 340 Heuston v Yore Contractors Pty Ltd (Supreme Court of New South Wales, Hunt CJ at CL, 9 March 1992, unreported) Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 Husher v Husher [1999] HCA 47; (1999) 197 CLR 138 Marshall v Whittaker's Building Supply Co [1963] HCA 26; (1963) 109 CLR 210 Matar v Jones [2011] NSWCA 304 McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377 Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1 Norman v Golder (Inspector of Taxes) [1945] 1 All ER 352 O'Brien v McKean [1968] HCA 58; (1968) 118 CLR 540 Paff v Speed [1961] HCA 14; (1961) 105 CLR 549 Spargo v Haden Engineering [1993] SASC 3793; (1993) 60 SASR 39 State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402 Trajkovski v Ken's Painting & Decorating Services Pty Ltd [2002] NSWSC 568 Watts v Rake [1960] HCA 58; (1960) 108 CLR 158 Texts Cited: Luntz, Assessment of Damages for Personal Injury and Death, 4th ed (2002) LexisNexis Butterworth Category: Principal judgment Parties: Efran Morvatjou - Appellant/Cross Respondent Leonie Moradkhani - First Respondent/First Cross Appellant Ali Moradkhani - Second Respondent/Second Cross Appellant Representation: Counsel: S Norton SC with P Khandhar - Appellant/Cross Respondent G J Parker SC - Respondents/Cross Appellants Solicitors: L J Sharpe & Co - Appellant/Cross Respondent Turks Legal - Respondents/Cross Appellants File Number(s): CA 2012/51621 Publication restriction: No Decision under appeal Citation: Morvatjou v Moradkhani Date of Decision: 2011-11-22 00:00:00 Before: Williams DCJ File Number(s): DC 2011/160191 Judgment 1McCOLL JA: Efran Morvatjou, the appellant, was injured on 8 May 2007 when he fell off a ladder while working for Ali Moradkhani, the second respondent, and Leonie Moradkhani, the first respondent. The appellant was a painter. He has not returned to paid employment since his accident. 2The case was brought on the basis that the appellant was employed by the respondents and, accordingly, could only recover for past and future loss of earnings: s 151G, Workers Compensation Act 1987. Judge Williams awarded the appellant past economic loss in the amount of $34,866, which amounted to $149 net per week over the 234 weeks following the accident until trial. There was no claim for superannuation on past economic loss. His Honour awarded future economic loss of $348,000 including superannuation. The future economic loss was based on what his Honour described (at [33]) as an approximate loss of about $480 net per week. After adding $15,239.87 for agreed Fox v Wood damages, the primary judge awarded the appellant $398,105.87: Morvatjou v Moradkhani (District Court of New South Wales, Williams DCJ, 22 November 2011, unreported). 3The only issue which arises on appeal is the allowance the primary judge made for past economic loss. The respondents have cross-appealed challenging the award of superannuation. The cross-appeal was pursued only in the circumstance that the appeal was allowed and the Court reassessed damages. The primary judgment 4The primary judge was of the view (at [10]) that there were "credit issues on both sides, particularly in regard to wages". His Honour found (at [10]) the second respondent's evidence to be "quite unreliable", in particular, relevantly, "in the area of cash payments" and in his explanation for a letter dated 30 June 2006 the substance of which is set out in his Honour's reasons (at [21]) (see [10] below) addressed "To Whom It May Concern" (exhibit 5). Insofar as liability was concerned, the primary judge found (at [11]) the appellant's "version of events ... to be more probable than that of the [second respondent]". The primary judge did not make any adverse credit findings insofar as the first respondent was concerned. Nor, it might be noted, despite his statement (at [10]), did he make any explicit adverse credit-based findings about the appellant's case. 5There was no issue that the appellant was unfit for work generally: primary judgment (at [2]). The primary judge found (at [26]) that the "principal reason for him not working is a severe psychiatric condition that developed as a consequence [of the fall]." His Honour was "more than satisfied that [the appellant] has sustained a substantial diminution of his earning capacity": primary judgment (at [27]). However, his Honour (at [16]) described "the most vexed question in regard to damages [as being] the quantification of what the plaintiff was earning in the past and what his earning capacity might be for the future." 6There was a controversy between the parties as to whether, as the appellant contended, he was paid in cash and by cheque or, as the respondents averred, only by cheque. 7The respondents denied paying the appellant in cash. The first respondent asserted that the painters who worked for the respondents' painting business, presumably including the appellant, were paid around $180 a day: primary judgment (at [22]). 8There was also an issue as to whether the appellant had declared all his income in his tax returns. The primary judge recorded (at [17]) the appellant's evidence that he had declared all the income he received except for the year 2006. In that year, he said he had not declared cash payments, but had filed an amended return. 9The respondents prepared a schedule of the appellant's average net weekly income from his tax returns which they had tendered which showed (primary judgment (at [18]): Financial Year Ending Business Income (Gross) Business Expenses Taxable Income (Gross) Average Net Income Per Week** 30June2003 $6,272 $436 $5,836 $112 net 30June2004 $11,725 $4,906 $6,819 $131 net 30June2005 $9,217 $2,126 $7,091 $136 net 30June2006 $22,377 $11,793 $10,584 $194 net 30June2007 $7,048 $461 $6,587 $148 net 30June2008 Nil Nil Nil Nil 30June2009 Nil Nil Nil Nil 30June2010 Nil Nil Nil Nil ** I have set out the headings as they appeared in the respondents' trial schedule. 10The primary judge described the plaintiff's evidence as "confusing as to income": primary judgment (at [21]). His Honour continued: "He said if he was paid cash he'd get $150 a day and if by cheque he'd get $180 a day and that he was working 6 days per week for the defendants. After saying that he was only paid cash in 2006, he resiled somewhat from that and said he usually got paid cash and the most he would get per week in that regard was $900. Exhibit 5 is a 'to whom it may concern' letter dated 30/6/06 by Mr Moradkhani stating that the plaintiff was employed fulltime at a gross weekly wage for $840. Exhibit 6 is a letter from the defendant's solicitors disclosing comparable earnings of two employees one earning $170 plus GST per day and one earning $170 without collecting GST per day. Despite receiving a certificate under s 128 of the Evidence Act the plaintiff maintained that all of his relevant income (ie including cash) was declared in his tax returns." 11The primary judge concluded (at [24]) that it was "difficult to accept that no cash payments were made". His Honour said: "What seems to be the situation is that the various jobs were located by the defendants who then arranged for the work to be done. Whether a painter came and said I will do that job for $x or whether having done the job the painter submitted an invoice for $x is unclear. What is clear is that in regard to the job on which the plaintiff sustained his injury, he did not arrange the job but simply turned up and was told what to do for which he was paid a daily rate of $180. That figure is evident from the plaintiff's evidence, Mrs Moradkhani's evidence and exhibits 5 and 6. So that as at the date of accident the plaintiff had the capacity to earn $180 per day." 12The appellant claimed economic loss of $600 net per week as to both the past and the future as well as future superannuation loss at the rate of 11 per cent. $600 net per week was the award rate applicable at the time of trial for a painter under the Building Employees (Mixed Enterprise) State Award: primary judgment (at [30]). 13The respondents submitted that the appellant's real loss was $149 per week, being what they contended was his average weekly income as disclosed in his tax returns. The mathematics of this calculation were not in dispute, and were adopted by the primary judge. They do not, with respect, appear to be accurate as the actual average across the schedule is $144 per week. However, as will be apparent, nothing ultimately turns on this minor discrepancy. The respondents also disputed the appellant's entitlement to superannuation on the basis that he was a contractor: primary judgment (at [29]). 14The primary judge was not satisfied that the appellant had established past economic loss of $600 net per week. His Honour was also not satisfied that the appellant's contention that he was receiving $180 per day and working full time could be reconciled with the income disclosed in his tax returns. His Honour then said: "32. Clearly only one of those propositions can be correct. It may be that he was getting paid $180 a day when he worked, but was he working full time? Not if his tax returns are correct. 33. I allow the plaintiff economic loss to date in the sum of $34,866.00. As to the future doing the best I can on the basis of a significant diminution in his earning capacity without pretending that the figure constitutes a mathematical calculation but is more in the nature of a global adjustment, I allow the plaintiff the sum of $348,000.00 which includes superannuation. I base that figure on an approximate loss of about $480 nett (sic) per week. I allow the superannuation claim as in my view the plaintiff was not, in effect, a true sub contractor." (Emphasis in original) The evidence 15The appellant was born in Iran. He migrated to Australia in 1996. He had completed a short English course on his arrival, then commenced to work as a painter. He was married with two children. He gave evidence through an interpreter. 16In opening the case, Senior Counsel who appeared for the appellant at trial but not on appeal, informed the primary judge that the appellant's tax returns did not accurately disclose all of his income and that in due course he would be asking his Honour for a s 128 certificate under the Evidence Act 1995 in respect to evidence related to that topic. 17The appellant's evidence-in-chief concerning his past earnings was brief. He said that he did not work for anyone else after he started working for the respondents. In terms of payment he said: "He was paying me $150 as a daily - daily wages and $180 on a cheque." 18He said he was getting the cheque "per day". He said he gave the respondents tax invoices. 19In cross-examination Mr G Parker, who appeared for the respondents at trial and on appeal, asked the appellant whether he had accurately declared his income in the financial years prior to commencing work with the respondents. At that stage the appellant's counsel sought the s 128 certificate to which he had referred in his opening. The primary judge granted that certificate. The cross-examination proceeded as follows: "Q. Is it the case, Mr Morvatjou, that you completed your income tax returns and you declared in those income tax returns all of the income you received for each of the financial years in respect to - you prepared the returns? A. INTERPRETER: Yes. Q. You did. So the income tax returns that you filed you say disclose all of the income that you received in each of the financial years, is that correct? A. INTERPRETER: The cash payment I received, no, I didn't declare. A. WITNESS: Only one year. Q. Just one year? A. INTERPRETER: I made amendment." 20The cross-examiner then elicited from the appellant that he had filed an amended income tax return for the 2006 tax year in which he disclosed that he had received cash. The appellant said that he had given his tax returns, including the amended 2006 tax return, to his solicitor. Mr Parker called for the amended 2006 return. No such return was ever produced. An amended return was produced for 2008, but that was for a financial year which post-dated the accident. 21Mr Parker then took up with the appellant his evidence-in-chief concerning the cash and cheque payments as follows. "Q. Was the $150 cash received for each day? A. INTERPRETER: Yes. Q. Was the $180 cheque received for each day? A. INTERPRETER: The week, like one week he paid me cash and the other week like he was going to give me a cheque, it was based on 180. Q. See I'm trying to work out how much you say you were receiving per week. If you got $150 a day for five days a week that would be $750? A. INTERPRETER: Six days, I was working for six days. Q. So you worked six days. So $150 a day would be, cash, would be $900 a week, right? A. INTERPRETER: Yes. Q. And do you say in addition to that you got a cheque for $180 a day? A. INTERPRETER: It wasn't additional to that. When I was receiving cheque, when I was receiving cheque based on 180 but when I was receiving cash it was based on - the cheque was based on 180, but the cash based on 150. Q. What I want to know is how much you say you were receiving per week, can you tell me? A. INTERPRETER: 900. HIS HONOUR: Q. But if you were paid by cheque, if your employer paid you by cheque you would receive $1,080 a week, would you? A. INTERPRETER: It wasn't like he was paying me every day, like at the end of the week my wage was 900, but he was paying for example three days as a cheque or four days as a cheque. 22Mr Parker then elicited from the appellant that he was paid by cheque for the invoices that he rendered. He put it to the appellant that the respondents only paid him by cheque, a proposition with which he disagreed. The appellant was then asked when the respondents gave him cash and said "[m]ost of the time". The following exchange then took place: "Q. What was the largest cash payment made to you during the course of your engagement with the Moradkhanis? A. INTERPRETER: Like $900 every .. (not transcribable) .. Q. That was the biggest payment? A. INTERPRETER: Yes. Q. And when did you receive that? A. INTERPRETER: At the end of each week. Q. So every week they gave you a $900 cash payment? ... PARKER Q. Did they give you a $900 cash payment every week? A. INTERPRETER: I repeat it again, sometimes I receive that in cheque, sometimes I received that in cash. Q. Well what I'm trying to work out is how many times you received a $900 payment in, for example, the financial year ended 30 June 2006? A. INTERPRETER: I have no idea right now, it's been a long time. Q. You had no idea how much you received in that year? A. INTERPRETER: I don't remember now." 23The appellant denied receiving any cash payments before he started to do work for the respondents. He said that his income tax returns for the years 2003, 2004 and 2005 were all completed by reference to cheque payments. 24The appellant's wife was called. She gave perfunctory evidence in chief that he had been involved in the accident, had not worked since and was not running a business. Unsurprisingly, she was not cross-examined about any issue going to economic loss. 25The second respondent gave evidence that the appellant was paid by cheque and never by cash. He said the appellant worked for him whenever he had a job. He denied that the appellant was a full time employee. 26In cross-examination the second respondent said the appellant did "[a]s many jobs as [the second respondent] had". However, when shown an analysis of the cheques the respondents had paid to the appellant, according to which they had paid a cheque for $3000 to the appellant in May 2006 and the next cheque for $470 in July 2006, he said that the payments represented "all the work [he] had on for [the appellant]". He said the appellant was not only doing work for him, but was working for other painters. He also said that during the period May-July 2006 he had "many jobs", but that the appellant was not "the main person". 27When shown the "To Whom It May Concern" letter, which he wrote, the second respondent said it was "letter to favour my people ... is not unusual for me to write, not just for him ... [t]o help them out and is not a serious crime, that is just to help them out, to rent a house, whatever." He said it was false to say in the letter that the appellant was "a full time employee of our business" and that he did not pay him the gross weekly salary of $840 referred to in the letter. 28The second respondent agreed that he supplied the appellant with paint, sandpaper, paintbrushes, any equipment including ladders, planks and trestles and all "consumable items" he used in his work. 29In re-examination, the second respondent identified 4 original invoices from the appellant, two of which corresponded to the May and July 2006 payments about which he had been cross-examined. The invoices were tendered and marked exhibit 3. 30In cross-examination, the first respondent agreed that the appellant's daily rate probably equated to around $180 a day. 31The respondents tendered a schedule showing all cheque payments they said they had made to the appellant during the 2006 and 2007 financial years. According to that schedule they had paid him $10,577 in the 2006 financial year and $4,430 in the 2007 financial year. The first respondent, who had prepared the schedule, said she had not arranged for any cash payments to be made to the appellant and that it was not the practice of the respondents' partnership to pay him by cash. She said he was paid by cheque and usually issued the respondents with an invoice stating the address of the job on which he had been working and the amount owed. 32Three of the invoices in exhibit 3 showed amounts which corresponded with the dates and payments recorded in the schedule of cheque payments. However one invoice, dated 2 or 3 November 2005 in the sum of $2455, did not appear in the schedule. Each invoice showed a supplier's Australian Business Number ("ABN"). Submissions 33The appellant's fundamental complaint is that, having given evidence that his tax returns did not disclose the full extent of his earnings, the allowance the primary judge made for past economic loss was so inadequate as to be manifestly erroneous. He submits that the amount the primary judge allowed for past economic loss cannot be reconciled with the amount he allowed for future economic loss. He argues, in short, that he and his family could never have survived on $149 a week, that that was less than the daily rate of $180 the respondents acknowledged he was paid, that he was a full time employee and that appellate intervention is required. 34Turning to the specific submissions, the appellant first complains that the primary judge's conclusion as to past economic loss was based on a misapprehension of his evidence. He argues that the primary judge was mistaken in concluding that he gave evidence to the effect that he had declared all his income in his income tax returns. He also submits that it was not clear that he said that the only year he earned cash and did not put it in his income tax return was the 2006 year. 35Rather, the appellant contends that his evidence was that while undertaking the respondents' work, he was receiving $150 in cash when so paid and $180 by way of cheque. Having regard to the fact that he was working six days a week, that meant that he was earning approximately $900 a week prior to his accident. As his tax returns did not disclose income anything like that amount, he could not have disclosed it all. 36Secondly, the appellant complains that in allowing him only $149 per week for past wage loss, the primary judge did not take into account the admission constituted by the fact that the respondents' workers compensation insurer had paid him weekly benefits in the amount of $81,586.46. The appellant contends that that amount, in itself, would represent his past economic loss without the inclusion of any cash payments and amounted, at minimum, to $226.63 per week. The appellant relied, in this respect, on the proposition that payment of workers compensation by an insurer is a rebuttable admission that the injured worker is incapacitated at the time such payments are made as a result of the injury received in the course of employment: see Heuston v Yore Contractors Pty Ltd (Supreme Court of New South Wales, Hunt CJ at CL, 9 March 1992, unreported). 37Thirdly, the appellant relies on the letter written by the second respondent, addressed "To Whom It May Concern", dated 30 June 2006, which stated that the appellant was "a full time employee of our business and has a gross weekly salary of $840" as evidence of the period he worked. He submits that the primary judge failed to place any, or any sufficient, weight on that letter. 38The appellant submits that if no cash payments are allowed, he should recover the amount of $226.63 per week for 234 weeks being the weekly payment he received from the respondents' workers compensation insurer, totalling $53,031.42 to trial. However he also contends that, given the primary judge's finding that he received cash payments, past economic loss should have reflected a component to allow for such payments. He argues that the appropriate allowance for past economic loss is $140,400 based on the figure accepted by the primary judge and supported by both parties' evidence, to the effect that he had the capacity to earn $180 a day. $140,400 represents the amount of $600 net per week claimed at trial over the 234 weeks to judgment. 39The respondents submit that it was open to the primary judge to conclude (at [31]) that the appellant had not established past economic loss of $600 net per week. They emphasise that it was for the appellant to prove his economic loss. 40The respondents first dispute the appellant's submission that the primary judge found that he was working six days a week. Rather, they contend that paragraph [32] of the primary judgment indicated that his Honour was not so persuaded. They also rely, in this respect, on the second respondent's evidence that the appellant was not a full time employee. 41Secondly, the respondents rely on the second respondent's evidence that the 30 June 2006 letter was false, was written as a favour and was not an unusual thing to do. They note that the appellant did not give any evidence about it and, furthermore, repeat that he did not say he was working for them full time. 42Thirdly, the respondents submit that there was no evidence that they conducted their painting business for cash. Each had asserted to the contrary. The appellant had not given evidence that the business was conducted on a cash basis. Nor had that proposition been put to the second respondent and, when it was put to the first respondent, she denied the proposition. 43Fourthly, the respondents submit that the primary judge was left without any basis upon which to calculate the amount by which the earnings disclosed in the appellant's income tax returns were to be increased by reference to any additional cash receipts. 44Fifthly, the respondents submit that Heuston v Yore Contractors Pty Ltd does not assist the appellant as, insofar as it concerned the admission reflected by the making of workers compensation payments, any such admission went to physical incapacity, but did not constitute evidence that the weekly compensation an insurer paid equated to past economic loss. 45As I have said, the respondents also cross-appealed, challenging the primary judge's award of superannuation on the basis that the appellant was an independent contractor and there was no evidence that he qualified for superannuation under the Superannuation Guarantee (Administration) Act 1992 (Cth) (the "SGA Act"). 46The respondents submit the primary judge's conclusion that he could allow the appellant's superannuation claim because the appellant "was not, in effect, a true sub-contractor" (primary judgment (at [33])) was not supported by the evidence. 47The respondents rely upon the fact that the appellant's counsel opened the case on the basis that he was a "sub-contractor", at least "in name", that the appellant provided tax invoices to them, that he had an ABN and that he claimed business deductions in his tax returns. 48Alternatively, the respondents submit that, even if the primary judge was correct in concluding that the appellant was not "a true sub-contractor", the evidence did not establish that he worked 30 or more hours per week as required by s 12(11) of the SGA Act to qualify as an employee. 49The appellant submits that the primary judge's conclusion that he was not "a true sub-contractor" was supported by the evidence. He points to the evidence that he did not work for anybody else after commencing to work for the respondents, that they supplied the paint and all equipment he used including ladders and planks, that he was paid $150 per day if paid by cash or $180 per day if paid by cheque and that, at the time of his accident, the only contribution he made to the work environment was, as the primary judge found (at [13]), "to provide his labour". He challenges the respondents' submission that there was no evidence he qualified under s 12(11) of the SGA Act, pointing to his unchallenged evidence that he was working six days a week. He also relies upon the statement in the "To Whom It May Concern" letter signed by the second respondent that he was "a full time employee of our business and has a gross weekly salary of $840". Appeal: consideration 50Damages for past and future economic loss are allowed to an injured plaintiff "because the diminution of his earning capacity is or may be productive of financial loss": Graham v Baker [1961] HCA 48; (1961) 106 CLR 340 (at 347) per Dixon CJ, Kitto and Taylor JJ; see also Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1 (at 3) per Deane, Dawson, Toohey and Gaudron JJ; (at 16) per McHugh J. 51An injured plaintiff's economic loss is conveniently assessed "by reference to the actual loss of wages which occurs up to the time of trial and which can be more or less precisely ascertained and then, having regard to the plaintiff's proved condition at the time of trial, to attempt some assessment of his future loss": Graham v Baker (at 346 - 347) per Dixon CJ, Kitto and Taylor JJ. 52However, as Gleeson CJ, Gummow, Kirby and Hayne JJ said in Husher v Husher [1999] HCA 47; (1999) 197 CLR 138 (at [7]) after quoting the passage from Graham v Baker to which I have referred (footnotes omitted): "But damages for both past loss and future loss are allowed to an injured plaintiff 'because the diminution of his earning capacity is or may be productive of financial loss'. Both elements are important. It is necessary to identify both what capacity has been lost and what economic consequences will probably flow from that loss. Only then will it be possible to assess what sum will put the plaintiff in the same position as he or she would have been in if injury had not been sustained." (Emphasis added) 53Furthermore, as Heydon JA (Mason P and Handley JA agreeing) said in State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 (at [71]): "[S]trictly the issue does not turn on a comparison between what money the plaintiff would have earned apart from the injury and what money the plaintiff will earn after the injury. The compensable loss is not a loss of income but the loss of capacity to earn income in a manner productive of financial loss ... The income earned before the injury is relevant, but only as an evidentiary aid in assessing damages for the loss of capacity to earn income ... Evaluation of the worth of a loss of capacity to earn - of a lost chance to earn - is of its nature a more imprecise inquiry than calculation of a lost income. It rests on the hypothesis - that the plaintiff will have undiminished capacity - which has been rendered false by events. It does not depend on calculating the income from a particular career which is no longer possible, but in calculating the damage to a capacity to carry on various careers. It is an exercise in estimation of possibilities, not proof of probabilities." (Emphasis added) 54It is incumbent upon the plaintiff to prove the loss for which compensation is claimed (Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402 (at 412) per Gibbs CJ and Wilson J) and the quantification in money that should be adopted in the sum awarded: Watts v Rake [1960] HCA 58; (1960) 108 CLR 158 per Dixon CJ (at 159). Accordingly, the plaintiff must prove the extent of his or her pre-accident earning capacity, the extent to which that capacity would have been productive of income had the accident not happened, and the extent to which the compensable injuries have diminished his or her ability to exercise the pre-accident earning capacity: Giorginis v Kastrati (1988) 49 SASR 371 (at 374) per von Doussa J (King CJ and Legoe J agreeing). 55If a plaintiff does not adduce records of pre-accident earnings, leaving the evidence in a state of uncertainty, it "does not necessarily follow, as a matter of law or fact, that proof of the plaintiff's claim for lost earning capacity will fail [as] [t]he evidence may nevertheless establish, on the balance of probabilities, the likelihood of some substantial element of loss, and the court will take that into account in assessing general damages ... However, the assessment is likely to be a modest one having regard to the uncertainties unnecessarily left open by the evidence. The plaintiff will usually not be heard to complain on appeal that the loss may have been greater": Giorginis v Kastrati (at 375). Thus, because "the information concerning economic loss and documents relevant to it are within the knowledge and possession of the plaintiff ... the lack of clarity on such matters is primarily the responsibility of the plaintiff": AMP General Insurance Ltd v Kull [2005] NSWCA 442; (2005) 44 MVR 339 (at [75]) per Hodgson JA (with whom Santow JA agreed). 56Conceptually, there is no distinction in principle between the calculation of past and future economic loss (better expressed as past and future lost earning capacity), although in practice the former tends to be included among special damages: Luntz, Assessment of Damages for Personal Injury and Death, 4th ed (2002) LexisNexis Butterworth (at [5.2.2]). This is because, as Fullagar J explained in Paff v Speed [1961] HCA 14; (1961) 105 CLR 549 (at 558 - 559), past economic loss "is [usually] capable of precise arithmetical calculation or at least of being estimated with a close approximation to accuracy". His Honour gave two illustrations of this, "the plaintiff employed at a fixed wage or salary [whose] loss of income can commonly be calculated with exactness" and the "plaintiff [who] has not been employed, [whose] monetary loss can be estimated without difficulty by reference to his past earnings." 57There is the added complication in this case that the appellant invites the Court to conclude that he gave evidence that his tax returns did not disclose the full extent of his earnings and that his damages for past economic loss should have reflected a component referable to his non-disclosed income. It is apparent that the primary judge would have allowed such damages had he been satisfied that the appellant had established how frequently he was earning $180 per day, the earning capacity the primary judge was satisfied the appellant had at the time of the accident. 58Although as the following discussion makes apparent, it is open to the Court to consider a claim for damages for lost earning capacity on the basis that a plaintiff's pre-accident income was greater than that disclosed in his or her income tax returns, there is a question as to whether, before a claim can be considered on that basis, the plaintiff has to give express evidence that his or her income tax returns do not disclose the full extent of his or her earnings. 59This question needs to be addressed because I do not read the appellant's evidence as constituting a clear admission that he had not disclosed all his income in his tax returns, although I accept that, on one view, such a conclusion is implicit in his argument at trial and on appeal that the quantification of lost earning capacity should be undertaken on the basis that it exceeded the income revealed by his tax returns. 60In Matar v Jones [2011] NSWCA 304, Macfarlan JA (with whom Beazley and Giles JJA agreed) said of a case where the plaintiff gave evidence, and objective evidence confirmed, that his tax returns did not disclose all his income: "[16] This is to the appellant's discredit but does not preclude him from recovering damages upon what he truly earned, as distinct from what he disclosed. The following observations made by von Doussa J in Giorginis v Kastrati ... and approved by this court in AMP General Insurance Ltd v Kull ... are in point: '... Where the plaintiff gives evidence that his income tax returns do not disclose the full extent of his earnings, a court will scrutinise the plaintiff's evidence with special care. The want of honest compliance with the taxation laws is a matter that will reflect adversely on the plaintiffs (sic) credit and may lead to the rejection of his evidence as untrustworthy, at least about his earnings. In such a case the plaintiff has only himself to blame if damages are assessed in line with the pre-accident income actually disclosed to the revenue authority. However, where the fact of the receipt of other income is proved, then, in my view, the plaintiff is entitled to have that exercise of his earning capacity brought to account, although subject to reduction for the income tax which should have been paid, and subject to the question whether the plaintiff would have continued to exercise that capacity had he been required to pay tax on the additional income: see McIntosh v Williams [1976] 2 NSWLR 237 at 244, 252. Melino v Ken Eustice Motors (North Road) Pty Ltd (1984) 111 LSJS 296 at 308-310 is an example of a case where undisclosed income was proved and brought to account'." (Emphasis added) 61In Giorginis v Kastrati (at 376), following the passage Macfarlan JA quoted in Matar v Jones, von Doussa J said: "A court should not, generally speaking, make a finding favourable to the plaintiff in a personal injury case that his income is otherwise than he has disclosed to the revenue authority unless the plaintiff admits the non-disclosure. A fortiori, such a finding should not be made where the plaintiff denies that he has failed to properly disclose his income. Unless the plaintiff admits the falsity of his income tax returns the court should not speculate in his favour, for example that his pre-accident earnings were probably higher than he has disclosed. Rather, the court should adopt the income figures actually disclosed and base the assessment of damages on them. Again, if this results in a low assessment, that is the consequence of the plaintiff adhering to the accuracy of his income tax returns." 62In AMP General Insurance Ltd v Kull (at [75]), Hodgson JA set out the evidence about economic loss (as to which the appellant complained the primary judge's award was excessive) as follows: "[40] In relation to economic loss, Mr Kull gave no evidence in chief as to his pre-accident earnings. In cross-examination, he agreed that his taxable income, as shown in his tax returns for the years ended June 1998 and 1999, was $4000: however, these tax returns were not put into evidence. Evidence was given in Mr Kull's case by two witnesses concerning amounts paid to Mr Kull for maintaining motor vehicles: a Dr Mayman estimated that he paid Mr Kull between $10,000 and $12,000 per year in the five years preceding the accident to service and repair large farm vehicles, such work costing him since the accident up to $20,000 per year; and a Mr McMurray, a haulage contractor, estimated that in the five years preceding the accident he paid Mr Kull an average of $20,000 per year. The primary judge estimated Mr Kull's pre-accident earning capacity as: declared income $8000; casual repairs (gross) $35,000; sub-total $43,000; less expenses, tax and penalties $25,000; giving $18,000 or about $320 net per week. He assessed Mr Kull's past economic loss for 250 weeks at $320 per week, giving $80,000." 63The appellant complained of a number of mathematical errors in the primary judge's calculation of economic loss. Significantly for present purposes, however, the appellant contended that the plaintiff "had said in evidence that the $4000 shown in his tax return was correct" and that there was no evidence as to the net amount of the plaintiff's cash income: AMP General Insurance Ltd v Kull (at [69]). There was also a complaint that the primary judge had allowed an amount greater than that for which the plaintiff had contended at trial: AMP General Insurance Ltd v Kull (at [71]). 64The plaintiff argued that the primary judge had not erred and that his evidence concerning his income tax returns had to be understood with his evidence that he was paid for much of his work in cash: AMP General Insurance Ltd v Kull (at [72]). 65Hodgson JA set out (at [70]) the passages from Giorginis v Kastrati I have reproduced (at [57] - [61] above) which he observed were "emphatically endorsed by King CJ and Legoe J". He also referred (at [72]) to Trajkovski v Ken's Painting & Decorating Services Pty Ltd [2002] NSWSC 568 where Dunford J said: "[51] Giorginis v Kastrati was referred to with approval by the Court of Appeal in Brear v James Hardie & Coy Pty Ltd [2000] NSWCA 352, 50 NSWLR 388 at [52] but only to the extent that the trial judge was entitled to take into account the fact that the appellant had called no evidence about matters (relating to past income) upon which it might have been expected that he or witnesses called by him might cast light. [52] In these circumstances, where I consider it likely that the plaintiff had some income beyond that disclosed in his taxation returns, although he has not directly admitted submitting false returns, I assess the plaintiff's loss of income by reference to what has been disclosed together with something for the additional income discounted for the tax that should have been paid on it; but because of the paucity of the evidence, the assessment must be conservative and not over generous. As there has been no direct admission of the lodging of the false taxation returns no question arises about referring the matter to the relevant authorities. I reject the submission that in a case such as this it is appropriate to take Average Weekly Earnings or any similar table as a guide." (Emphasis added) 66Hodgson JA accepted (at [74]) the appellant's complaints of error. In so doing he agreed "with what was said in Giorginis v Kastrati". Relevantly, his Honour did not accept that "the matters referred to by [the plaintiff] could realistically indicate that [he] declared a net income substantially in excess of $4,000, which was reduced to that figure by deductions of the kind referred to." His Honour did not discuss the different views expressed in Giorginis v Kastrati and Trajkovski v Ken's Painting & Decorating Services Pty Ltd concerning whether non-declared income could be taken into account in assessing economic loss where the plaintiff had not admitted submitting false returns. He set aside the award for economic loss and, because "[p]recision [was] not possible" allowed an amount for past economic loss which represented approximately the average of the plaintiff's weekly income as disclosed in his tax returns and a buffer for future economic loss: AMP General Insurance Ltd v Kull (at [76]). 67Giles JA, while agreeing (AMP General Insurance Ltd v Kull at [1]) with Hodgson JA's reasons that the verdict for the plaintiff should stand but with the reduced damages, qualified his agreement in this respect, saying: "... I do not think it necessary, if Giorginis v Kastrati (1988) 48 SASR 371 so suggests, that a plaintiff admit tax evasion before earnings greater than those disclosed to tax authorities can be taken into account in assessing his damages. The Court must decide on the evidence before it. The evidence may warrant, indeed require, the conclusion that the plaintiff's earnings exceeded his declared income even if the plaintiff has not admitted non-disclosure of income. ..." 68In a different context, with some analogical similarity to the present case, it has been held that the tax treatment of a plaintiff's earnings is not decisive. Accordingly where in a corporate structure, it was found that a "decision to apportion salary income [as set out in the company's tax returns] almost equally between husband and wife was done as an income-splitting exercise, for tax purposes" and the plaintiff's tax returns disclosed only that income derived as a result of the tax-splitting, Mason P (Powell and Beazley JJA agreeing) held that the "tax treatment is not conclusive": Conley v Minehan [1999] NSWCA 432 (at [40]). 69In so finding, Mason P rejected a submission based on Giorginis v Kastrati that the income tax returns should have been taken at face value: Conley v Minehan (at [38]). His Honour held, in effect, that that submission was inconsistent with Husher v Husher, the facts of which he described as follows: "[41] ... Husher ... involved a 50/50 partnership at will between a husband and wife. The husband (who was the injured plaintiff) generated the partnership income through his skill and labour. The wife's limited contribution to the business was to perform minor bookkeeping and message-taking tasks. The income was split, obviously for tax-saving purposes. It was recognised that the arrangement would very probably have been maintained indefinitely. The tax arrangements between the plaintiff and his wife meant that the plaintiff did not derive the whole of the partnership income. Nevertheless, his capacity to terminate the partnership at will, and to bring to an end, or vary, the arrangements made with his wife concerning the manner in which income generated by his activities was derived, resulted in an effective control which was of critical significance in measuring his earning capacity and his financial loss." 70Mason P applied (at [40]) what he described as "the basal principle that damages for both past loss and future loss are allowed to an injured plaintiff 'because the diminution of his earning capacity is or may be productive of financial loss'" as set out in Husher v Husher (at [18] per Gleeson CJ, Gummow, Kirby and Hayne JJ) as follows: "The financial loss occasioned by impairment of earning capacity is the loss of what (if there had been no accident) the injured plaintiff would (as opposed to could) have expected to have had under his or her control and at his or her disposal by exercising that capacity. We refer to 'control' and 'disposal' because what the plaintiff has lost are the financial rewards from work that are rewards the plaintiff would have been able to direct to whatever purpose or destination he or she chose." 71Mason P also referred to the plurality's emphasis in Husher v Husher (at [23]) that the facts of each case require close attention and their Honours' statement that: "The task is not one to be undertaken by seeking to classify cases as concerning 'sole traders' or 'partnerships' or 'wage-earners' or 'trading trusts', and then attempting to deduce some rule of general application to all cases falling with the classification thus devised. Rather, the enquiry is about what could the plaintiff have done in the workforce but for the accident and what sum of money would the plaintiff have had at his or her disposal." (Emphasis added) 72Some other aspects of Husher v Husher should be mentioned. First, it is apparent that the partnership accounts showed the appellant and his wife as sharing the profits equally: see 197 CLR 138. Secondly, the propositions the plurality identified as the "basic principles" related to claims for both past and future economic loss: Husher v Husher (at [7]). While the focus of the plurality's reasons was on the assessment of damages for loss of future economic capacity, it cannot be doubted, in my view, that they apply equally to the determination of past loss of earning capacity and its quantification. Thirdly, the plurality returned to the basic principles (at [17]) which they said: "... require identification of what earning capacity has been impaired or lost and what financial loss is occasioned by that impairment or loss. In the present case there is no doubt that the capacity that the appellant lost was a capacity to earn whatever he could have earned working as a block layer. But the inquiry does not stop at what the appellant could have earned. It is necessary to ask what loss the appellant suffered because of the diminution of that capacity and that invites attention to what would have happened but for the negligent infliction of injury (as best a court can predict that future course of events). The latter question (what would have happened but for the negligent infliction of harm) was said to be answered, in this case, by identifying that it was highly probable that the partnership at will would have been maintained but for the occurrence of the accident. But it is necessary to consider the content and consequences of that conclusion with some care." (Emphasis in original) 73Fourthly, although the question did not fall for decision in that case, the plurality discussed (at [24]ff) whether account should be taken of the taxation consequences of income-splitting arrangements like those the appellant had made. Their Honours considered Spargo v Haden Engineering [1993] SASC 3793; (1993) 60 SASR 39 in which the Full Court of the Supreme Court of South Australia (Perry J, Legoe and Duggan JJ agreeing) held that the damages to be allowed to a plaintiff for loss of future earning capacity should be calculated by reference to the whole of the income he had generated, even though all his income had been received by the trustee company of a discretionary family trust which distributed it to the plaintiff and members of his family. Perry J also held (at 54) that if the plaintiff was "to be given the benefit of aggregating the distributed income for the purposes of measuring his earning capacity, the allowance for income tax in determining the net earnings should approximate the amount which he might have paid on the gross earnings if they had been brought to account by him rather than by the family trust." The plurality accepted (Husher v Husher at [26]) that "an adjustment of the kind proposed by Perry J was not inappropriate in that case". 74Finally, in applying the principles to the facts in Husher v Husher, the plurality concluded (at [20]) that "[w]hat the appellant would have had under his control and at his disposal but for the accident was, therefore, the whole of the fruits of his skill and labour", even though (at [21]), "[t]he tax arrangements between the appellant and his wife therefore meant that the appellant did not derive the whole of the partnership income." 75It will be recalled that in Giorginis v Kastrati, von Doussa J said, in substance (at 376), that "generally speaking" a plaintiff should admit the falsity of his or her income tax returns before a court should make a finding favourable to the plaintiff that his or her income was otherwise than as disclosed to the revenue authority. It was no doubt that qualification which led Giles JA to query in AMP General Insurance Ltd v Kull (at [1]) whether von Doussa J had mandated that a plaintiff should have to admit tax evasion before a court could make a finding favourable to a plaintiff of income exceeding that disclosed in income tax returns even if such a finding was otherwise open on the evidence. 76Giles JA's view that such an admission is not necessary is, in my view supported by the reasoning in Husher v Husher and Conley v Minehan and, too, by Cohen v Ninkovic [2000] WASCA 169, the facts of which bear some similarity to the present case. 77In Cohen v Ninkovic, the plaintiff was a painter who was injured in a motor vehicle accident on 20 August 1998. On the evidence at trial, he had not been engaged in gainful work as a painter for a period of at least 13 months prior to the accident; according to his income tax returns in the six financial years prior to the accident he had earned only a total of $14,372 as a painter and during three of those years he had earned nothing. The income of $14,372 represented an average weekly income figure of $46 or $2395 per annum: see Cohen v Ninkovic (at [8], [11] and [13]). 78There was evidence from a representative of a company ("A & Z") for which the plaintiff had done intermittent painting work in the past that he would have had work with that company from 24 August 1998 until trial and probably longer. The trial judge found that evidence "difficult to accept, particularly because of the respondent's minimal work with A & Z over the preceding seven years and the big lapses of time when he was not employed at all." However, her Honour considered that because by the date of the accident "the respondent was then the father of two young children and had to support them, his circumstances had changed considerably and it was therefore open to accept his evidence that he genuinely needed work and was prepared to take up a job offer from A & Z which, as at 24 August 1998, was to last for some 22 days." There was also evidence that the person employed to replace the plaintiff worked until the end of March 1999 on that and other jobs. Accordingly the trial judge was prepared to award him lost past wages of $110 net per day from 24 August 1998 until 31 March 1999, deducting four weeks to reflect Christmas and contingencies. Thereafter her Honour allowed him $7700 up to trial, "a global amount" (or buffer as more commonly described in this State) representing 70 days at $110 per day on the assumption that he would have worked during that period with A & Z after March 1999 and prior to trial. The award of $7700 represented about 70 of the 170 working days which would have been available to the respondent during that time: Cohen v Ninkovic (at [11]). 79On appeal, the appellant complained that the plaintiff had failed to discharge his legal burden of proof of satisfying the Court that he had suffered damage which could be quantified in money terms. The appellant also relied upon Giorginis v Kastrati to submit that "because the respondent had confirmed that his income was that disclosed in his relevant income tax returns and because in the six years prior to the accident the most he had earned as a painter was $5772 in one year (1992/93), there was on the evidence no reason to conclude that but for the accident, he would have exercised his earning capacity to any greater extent than he had before that accident": Cohen v Ninkovic (at [13], [14]). 80Miller J (with whose reasons Wallwork and Parker JJ agreed) rejected the appellant's submission as "overlook[ing] the fact that what the respondent was entitled to be compensated for was a loss of earning capacity which had occurred by reason of the accident": Cohen v Ninkovic (at [15]). He referred to Barwick CJ's statement in O'Brien v McKean [1968] HCA 58; (1968) 118 CLR 540 (at 545 - 546) that: "... it is the loss of earning capacity which has occurred by reason of the accident which is to be the subject of compensation by an award of damages: it is not a case of replacing the wages which would have been earned in the future by a sum of money which represents the present value of the total of such wages: see Arthur Robinson (Grafton) Pty Ltd v Carter. That loss of earning capacity has already occurred and is either permanent or likely to continue for some estimable time. The fair compensation for it is to be determined as a matter of judgment and not of calculation. But it is of course to be an informed judgment. Though the damages as I have said are not to be a replacement of the future wages, part of the relevant information for the purpose of forming a judgment as to the fair and reasonable compensation is a broad estimate of what that earning capacity before its destruction or diminution was capable of producing during such time as it would have been likely to be gainfully exercised. In obtaining such a conspectus, the vicissitudes of life, as it has been said, must not be lost sight of." (Emphasis added) 81Miller J observed (at [19]) that the trial judge's "ultimate methodology was one of 'simply fixing the sum seen to be appropriate to the loss' by reference to the potential daily earnings which the respondent, as a painter, would have been capable of earning had he obtained work in that trade and been motivated to do it." His Honour also observed (at [17]) that "[t]he award of damages made for past loss of earning capacity was modest" as, too was the "global allowance" for the future. 82Miller J reiterated (at [19]) the established principle that "[d]ifficulties in estimating damages do not relieve a tribunal from the responsibility of assessing them 'as best it can'": McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377 per Dixon and Fullagar JJ (at 411); see also State of New South Wales v Moss (at [87]) per Heydon JA (Mason P and Handley JA agreeing). 83His Honour concluded (at [19]) that the trial judge did not err in the exercise of her discretionary judgement. While his Honour accepted that it "was not the case that the [plaintiff] was contending that he earned anything more than the figures revealed in his income tax returns", he held that it was open to the trial judge "to conclude that whatever those earnings might have been over the preceding six years, the respondent did have a capacity to work as a painter and was in the period post-accident and for a period of approximately two years after trial, likely to have exercised that capacity." 84In my view the authorities do not mandate that a plaintiff must admit to tax evasion before the Court can determine on all the evidence how to quantify the plaintiff's lost earning capacity. To require such an express admission would be a triumph of form over substance. Rather, as Husher v Husher, Conley v Minehan and Cohen v Ninkovic make plain, the tax treatment of a plaintiff's income is not conclusive. The Court must determine what the plaintiff could have done in the workforce and what sum of money the plaintiff would have had at his or her disposal: Husher v Husher (at [23]). 85I would reject the appellant's submission concerning the effect of the workers compensation payments. In my view Heuston v Yore Contractors Pty Ltd is authority only for the proposition Hunt CJ at CL stated, namely that "the continued payment of worker's compensation is admissible against the defendant in whose name the insurer defends the common law proceedings as an admission that the worker is still incapacitated at the time of such payments as a result of the injury which he received in the course of his employment". It is common ground in this case, as I have said, that the appellant has been fully incapacitated since the accident. Heuston v Yore Contractors Pty Ltd is not, however, authority for the proposition that the amount the workers compensation insurer pays the plaintiff represents his or her income foregone as a result of the accident. It is apparent from the correspondence in evidence in which the respondents' workers compensation insurer sought to claw back amounts it said the appellant had been overpaid by way of workers compensation that the insurer's calculation of his average weekly earnings was undertaken in accordance with a statutory formula as required by the Workers Compensation Act. Appeal: conclusion 86The appellant established that his pre-accident earning capacity was $180 a day: primary judgment (at [24]). In my view, with respect, the primary judge erred in his conclusion that the appellant had failed to establish the period over which he exercised that capacity before the accident. His Honour focussed too closely on whether the appellant had established the periods he worked for the respondents as opposed to resolving the question of the extent to which his earning capacity would probably have been productive of income had the accident not happened. 87In my view it was open to his Honour to conclude that the appellant's income tax returns did not fully disclose his income and that he received part of his income from the respondents in cash all or some of which was not disclosed. I would understand the appellant's evidence that he worked six days to mean he was working six days a week on a full time basis. That conclusion is supported by the second respondent's evidence that the appellant worked for him whenever he had a job as well as the "To Whom It May Concern letter" stating that the appellant worked full time. 88Although the second respondent asserted that letter was false, the primary judge found his evidence to be "quite unreliable" in his explanation for its contents. The letter was, in my view, a clear admission by the respondents that the appellant was a full time employee with a gross weekly salary of $840. The primary judge relied on the letter and other evidence (at [24]) as supporting the conclusion that the appellant's daily rate was $180. That would be the case if the appellant was only working about four and a half days a week for the respondents. If he was earning $150 a day which was the amount the appellant said he received when paid in cash, that would represent just under six days work a week. More significantly, it would also have been open to his Honour to conclude, in my view, that the appellant was earning $840 gross per week annually over the period he worked for the respondents prior to the accident. 89There is also support for the fact the respondents did not fully disclose in the cheque schedule the amounts they paid the appellant in the invoice to which I have referred showing a payment to him not set out in the cheque schedule. However the appellant did not rely on the invoice to that end and, in my view, I should not draw that inference in such circumstances. 90I would also observe there is, as the appellant submitted, a fundamental inconsistency between the primary judge's reliance on his income tax returns to quantify his past lost earning capacity at $149 a week and his allowance of $480 a week for future lost earning capacity. His Honour's reasons do not, with respect, explain that apparent discrepancy. 91Finally, allowing past lost earning capacity at $149 a week was, with respect, a glaringly improbable conclusion. As the appellant submitted, he could not have supported himself, let alone his family on that amount. 92Accordingly, I would conclude that his Honour erred in finding that he could rely only upon the appellant's income tax returns to quantify his past loss of earning capacity. In my view, it was open to his Honour to conclude, and also for this Court on appeal to conclude, that the appellant was receiving an amount in the order of $180 a day on a full time basis. However, because it is apparent that, if that was the case, the appellant's income tax returns were not accurate, it is necessary to err on the side of caution when determining what the "real" figure was: see Giorginis v Kastrati (at 375 - 376). 93The gross income figure of $840 a week disclosed in the "To Whom It May Concern" letter represents a net weekly figure in 2006 of approximately $660 a week according to the Furzer Crestani tables. In my view it would have been open to the primary judge to find that the appellant would have exercised his earning capacity on a full time basis, working the six days a week he asserted he was working and which it can be inferred his family responsibilities would have required him to work, subject to the vicissitudes which might be expected to be associated with work as a painter such as it being affected by adverse weather conditions and being dependent upon custom. It would also have been open to his Honour to conclude that, prima facie, $840 gross per week was an appropriate quantification of the appellant's lost earning capacity. However, exercising the caution to which I have referred, and taking into account vicissitudes, it is, in my view, appropriate to discount that figure somewhat. I would allow the appellant past economic loss of $400 net per week, which represents an average of about $475 gross per week over the relevant period. That figure also bears a rational relationship to the $480 net per week the primary judge awarded for future loss of earning capacity. The parties agreed that $400 net per week amounted to $93,600 up to trial. The cross-appeal 94The effect of this conclusion is to breathe life into the cross-appeal pressed, as I said earlier, only if the Court came to recalculate damages for past economic loss. 95The respondents' first complaint is that the primary judge erred in concluding (at [33]) the appellant was not "a true sub contractor". They contend the appellant was an independent contractor. 96In order to determine whether the appellant was an employee or an independent contractor, his Honour was required to consider the totality of the relationship between the parties: Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 (at 29) per Mason J; Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 (at [24], [58]) per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ. The distinction between an employee and an independent contractor is "rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carries on a trade or business of his own": Marshall v Whittaker's Building Supply Co [1963] HCA 26; (1963) 109 CLR 210 (at 217) per Windeyer J; referred to with approval by the majority in Hollis v Vabu Pty Ltd (at [39] - [40]). 97There was little evidence going to this issue. However the primary judge found, in substance (at [24]), that the appellant did his work under the respondents' direction and control. The respondents provided all the appellant's "tools of trade": see [28] above. The only indication to the contrary was that the appellant had his own ABN and gave the respondents invoices. 98Taking all the evidence into account the primary judge, in my view, did not err in concluding that the appellant was an employee. 99The respondent also contends that there was no evidence that the appellant qualified for superannuation because he did not satisfy s 12(11) of the SGA Act which provides: "(11) A person who is paid to do work wholly or principally of a domestic or private nature for not more than 30 hours per week is not regarded as an employee in relation to that work." 100I have doubts whether s 12(11) applies to the appellant. Prima facie, it appears to be directed to people engaged in work in a home environment and in analogous activities as opposed to those engaged, as the appellant undoubtedly was, in a trade: see Norman v Golder (Inspector of Taxes) [1945] 1 All ER 352 (at 354) per Lord Greene MR. However this was not argued and, in any event, is academic as I have concluded it was open to the primary judge to find the appellant was a full time employee and, as a corollary I would infer, working eight hours a day. Orders 101Finally I note that even though the statement of claim included a claim for interest, the primary judge did not allow interest on past economic loss. This apparent omission was not the subject of complaint in the notice of appeal. It is possible, I assume, that the reason for the apparent omission lies in s 151M of the Workers Compensation Act which circumscribes the circumstances in which interest is payable on awards of damages in respect of an injury to a worker. Subject to compliance with s 151M, however, interest on past economic loss should be included in the appellant's award. I would hope the parties can reach agreement on whether interest is payable. 102The parties should undertake the recalculations necessary to give effect to this judgment including, if appropriate, interest pursuant to s 151M. Failing agreement, they should make submissions as to the quantification of damages in accordance with the timetable set out in the orders. Such submissions, failing compelling argument to the contrary, will be dealt with on the papers. 103This case is an appropriate occasion to emphasise von Doussa J's observation in Giorginis v Kastrati (at 375) that, "[t]he plaintiff and his advisers carry a heavy responsibility to ensure that [the best evidence of economic loss] is properly marshalled together in advance of the trial, and where it is not admitted, to have it introduced into evidence." I do not intend the emphasis on his Honour's observation to reflect either on the appellant or his legal advisers in this case. The Court, of course, has no knowledge of the instructions the latter sought or received. 104I propose the following orders: 1 Appeal allowed. 2 Set aside the verdict and judgment for the plaintiff ordered by Williams DCJ on 22 November 2011. 3. Direct the parties, if they are able to agree as to the amount of damages recalculated in accordance with this judgment, to lodge with the Court within seven days of the date of this judgment a form of consent order to be made by the Court in chambers. 4. In the event the parties are unable to agree as to the amount of damages direct that: (a) within seven days of the date of this judgment the appellant lodge with the Court a submission identifying the orders that he contends should be made to give effect to this judgment, together with submissions in support of that contention; (b) within seven days thereafter the respondents lodge a reply to the appellant's submissions; (c) within a further seven days the appellant lodge any submission in reply to that of the respondents. 5. Cross-appeal dismissed. 6. Respondents to pay the appellant's costs of the appeal and the cross-appeal and have a certificate under the Suitors' Fund Act 1951, if qualified. 105The submissions referred to in [104](4) will be dealt with on the papers unless any compelling contrary argument is advanced. 106HOEBEN JA: In this matter I agree with McColl JA. 107I particularly endorse the observation by her Honour at [103] to the effect that "the plaintiff and his advisors carry a heavy responsibility to ensure that [the best evidence of economic loss] is properly marshalled together in advance of the trial and where it is not admitted, to have it introduced into evidence". Unlike her Honour, I am not as charitable in my assessment of the way in which the plaintiff's claim for past and future loss of earning capacity was presented in this case. 108As McColl JA has made clear in her judgment, the evidence as to loss of earning capacity, both past and future, was highly unsatisfactory. No attempt appears to have been made to present the evidence in a rational and cohesive fashion. This made the task of the primary judge needlessly complex and difficult. Trial judges are entitled to expect much more by way of preparation of cases than that which occurred here. It is not sufficient for legal advisors presenting cases of this kind to adduce incomplete and conflicting evidence in the hope that a trial judge will eventually make some sense of it. 109TOBIAS AJA: I agree with the orders proposed by McColl JA with respect to the appeal and the cross appeal for the reasons she has expressed. I would also wish to emphatically adopt her Honour's remarks at paragraph [103] of her reasons as well as those of Hoeben JA at paragraph [108] of his reasons. However, I agree with McColl JA, not having heard the appellant on the issue so raised, that it may be unfair to directly cast the blame to which reference is made on the appellants legal advisers. 110Nevertheless, I would observe that it is all too common, and has been for many years, for this Court to experience poor preparation on the part of the plaintiff's legal advisors in District Court personal injury cases. This is so not only with respect to economic loss issues but also with respect to medical issues. 111I accept that it may not be practicable for medical witnesses, and particularly medico-legal experts, to be brought to the District Court for oral examination and cross examination. But where, as is often the case, there is a conflict in the written medical evidence between the experts for the plaintiff and the defendant, every effort should be made by the plaintiff's legal advisors to have his or her medical experts directly respond to any relevant conflicting views expressed by the defendant's experts rather than leave the conflict hanging in the air for the trial judge to resolve. 112As care is not generally taken to attempt to resolve these conflicts, the consequence is that the trial judge is left to choose between the opinions of the experts without proper assistance. This Court then has to grapple with the same problem. It is high time that it was eliminated. 113I have made this comment in a number of judgments over the years but more often than not nothing has been done about it. I therefore propose to request the Registrar to forward these comments to the Law Society in the hope that it will disseminate them particularly to those firms of solicitors that specialise in personal injury cases in the District Court. Of course, there may be a good reason why the conflicting opinion of a defendant's expert is not put to the plaintiff's expert for a response. But as at present advised I cannot think of one. All things being equal, leaving the conflicting opinions of the experts, and particularly the medico-legal experts, up in the air as if they were two ships passing in the night is entirely unsatisfactory and particularly unfair to the difficult task that the trial judge is required to undertake. ********** 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. Decision last updated: 05 June 2013