Did the primary judge err in allowing a buffer of $25,000 for past and future economic loss?
31The relevant principles with respect to the awarding of a buffer for future economic loss were summarised by McColl JA, with whom Mason P and Beazley JA agreed, in Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99; (2008) 172 IR 453 at [84] where her Honour relevantly said (omitting citations):
"As to the future economic loss, it is appropriate to award damages by way of a buffer, including in a case such as this where damages are to be determined pursuant to the Civil Liability Act, when the impact of the injury upon the economic benefit from exercising earning capacity after injury is difficult to determine. In such a case, the Court still undertakes a comparison between the economic benefits the plaintiff derived from exercising earning capacity before injury and the economic benefit derived from exercising earning capacity after injury, although the difference cannot be determined otherwise than by the broad approach of a buffer."
32More recently, in Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13; (2012) 83 NSWLR 302 at [7]-[9] McColl JA noted that first, the task of assessing damages for lost earning capacity was necessarily impressionistic; secondly, although statutory principles (such as s 126 of the Motor Accidents Compensation Act 1999 (NSW) and s 13 of the Civil Liability Act, both of which are in the same terms) that apply to the assessment of damages as to future hypothetical scenarios are intended to "promote intellectual rigour", there is a point at which even with the application of the requisite degree of intellectual rigour, an element of impression must be involved; and thirdly, buffers should not be awarded indiscriminately particularly where the evidence enables a more certain determination of the difference between the economic benefits the plaintiff derived from exercising earning capacity before and after injury. I note that this last mentioned proposition has no application on the facts of the present case.
33In Kerr Basten JA at [30] observed that:
"there is a point ... beyond which the selection of a figure for economic loss is so fraught with uncertainty that the preferred course is to award a lump sum as a 'buffer', without engaging in an artificial exercise of commencing with a precise figure, and reducing it by a precise percentage."
34Macfarlan JA agreed with Basten JA but added the observation at [69] that the buffer adopted by the assessor in that case would have likely been arrived at by an intuitive assessment of the claimant's possible future loss. I would add that provided the figure adopted is within the permissible range appropriate to the case, no basis exists for appellate intervention.
35In Mason v Demasi [2012] NSWCA 210 at [15] Meagher JA, with the agreement of Beazley and McColl JJA, noted that the assessment of future economic loss by awarding a buffer is not precluded by s 13 of the Civil Liability Act, citing Kerr.
36Basten JA, with the agreement of McColl and Macfarlan JJA, returned to the issue in Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244; (2012) 61 MVR 443 at [33] and [38] where he observed:
"[33] The calculation of economic loss, whether in the past or for the future, involves a comparison between the actual circumstances of the claimant, as a result of the accident, and the circumstances which would probably have continued or come to pass but for the accident. On the assumption that the accident has resulted in a loss of earning capacity, the court must also consider whether such a loss might have occurred independently of the accident.
...
[38] Under the general law, it has long been accepted that, at least in some cases, the assessment will involve such a degree of speculation as to render a calculation by the conventional techniques inappropriate. In those cases, a lump sum is awarded by way of 'buffer', the court being satisfied on the probabilities that a loss will be suffered or, indeed, has been suffered."
37At [39] Basten JA noted that the award of a lump sum buffer will "usually incorporate the element of vicissitudes into the global assessment" and at [46] that although such a lump sum could be characterised as arbitrary or capricious, it could also be characterised, in the circumstances of the particular case, as impressionistic or evaluative. As Macfarlan JA remarked at [51] and [52], where the calculation of future economic loss involves, in the circumstances, speculation and extreme difficulty, the award of a buffer is appropriate. See also, Allianz Australia Insurance Ltd v Sprod [2012] NSWCA 281; (2012) 81 NSWLR 626 at [30]; Ziliotto v Hakim [2013] NSWCA 359 at [56].
38On the facts of the present case there can be little doubt that an award of economic loss in the form of a buffer was not only appropriate but also inevitable. The appellant had no history of paid employment for many years; her future as an employee was fraught with uncertainty given the medical difficulties of her children who, in all probability, would need her assistance during their adulthood. Notwithstanding her above average intelligence, her competitiveness in the labour market was restricted as detailed by Mr Burchett. She was also vulnerable due to her underlying degenerative condition to an incident or event in the future producing the same or similar disabilities that she sustained in the accident.
39Although the appellant had stated that she wished to return to work but for the accident when her youngest child turned 16 in September 2012, she recognised that it would take about a year for her to finish the course which she had been forced to abandon when she sustained the accident. However, her evidence was that she expected to complete the course by that time. Accordingly, there was the possibility that she may have gained some remunerated employment between September 2012 and July 2013, being the time of trial, a period of only 9 or 10 months.
40The primary judge made no separate allowance for economic loss for the period referred to. Rather, he seems to have awarded the buffer of $25,000 as covering the period commencing September 2012. Given the shortness of that period and the paucity of the evidence as to whether the appellant would have gained some employment during that period, I detect no relevant error in the primary judge's approach to this aspect of her economic loss claim.
41In view of the matters to which I have referred at [38] above, of which the primary judge was cognisant, and the matters referred to at [39]-[40], the issue thus became one of determining an appropriate buffer with respect to the future. It was submitted that notwithstanding that his Honour had stated that the fall that she sustained in the accident had prevented the appellant from continuing to acquire some further expertise and that it was possible that that further expertise may have resulted in some increased earning capacity, when he came to consider an appropriate amount he confined the buffer he determined ($25,000) to the loss of the opportunity, as a result of her fall, to continue to gain further qualifications for work in the computer field. He had therefore failed to take into account his own finding that it was possible that that further expertise may have resulted in some increased earning capacity.
42In my view, the primary judge's findings to which I have referred at [22]-[27] above must be looked at as a whole. It is more than apparent that his Honour expressed doubt, by the use of the word "may", as to whether any further expertise of which she had been denied by the accident would necessarily have resulted in some increased earning capacity. This was because of his reliance upon the views of Mr Burchett to which I have referred at [27] above. The appellant on her own account had been out of the workforce for some 26 years either in a casual or permanent capacity; she was at the time of trial 52 years of age and would, in her chosen field, be likely to find considerable competition from workers who were younger and had experience that she did not have. Each of those considerations would have applied regardless of the accident.
43Coupled with the foregoing was his Honour's finding, not challenged, that when determining an appropriate buffer the Court could not disregard her underlying arthritic and degenerative condition and the possibility that had she not sustained her injuries in the accident, it was likely that some future incident or event could precipitate pain and symptoms of a kind similar to those she had suffered since the fall. In this respect, because of her underlying condition, she was vulnerable to future pain caused by such an event.
44As noted at [29], the appellant submitted first, that the onus lay upon the respondent to establish if and when that vulnerability might manifest itself and, secondly, that in any event it was more appropriate for such a possibility to be reflected in a higher than normal allowance for vicissitudes.
45Those submissions may have had force if otherwise the appellant's loss of earning capacity was to be compensated in the usual manner as contended for in her primary case. But when the Court is considering compensating lost earning capacity in the form of a buffer because of the future uncertainties in respect of which it is not possible to make concrete findings, in light of the principles relating to buffers referred to above and, in particular, at [36] and [37], these factors will be reflected in the lump sum adopted.
46As to the appellant's complaint that the primary judge did not take into account the requirements of s 13 of the Civil Liability Act in that he failed to determine her most likely future circumstances but for the injury, in my view his Honour, although not referring specifically to s 13, did make findings relating to her most likely future circumstances particularly in the passages of his judgment to which I have referred at [26] and [27] above.
47Furthermore, her most likely future circumstances but for the injury were encapsulated in his Honour's finding that it was possible that if she acquired further expertise, that may have resulted in some increased earning capacity. It is apparent that his Honour's use of the word "may" rather than "would" reflects his acceptance of Mr Burchett's opinion that there were a number of factors unrelated to her injury which would restrict her competitiveness in the labour market.
48When one combines these factors with his Honour's unchallenged finding that due to her underlying arthritic and degenerative condition, she was vulnerable to some future incident or event in the ordinary course of life or in carrying out her domestic duties which would cause her pain of a similar nature to that which she currently suffered, it is apparent that his Honour paid due regard to the requirements of s 13.
49The determination of a buffer in a case such as the present involves an evaluation of the appellant's condition and an assessment of whether a loss will be suffered on the probabilities. In my view it cannot be said that the buffer of $25,000 so determined by his Honour was outside the permissible range of amounts which different judicial minds may have determined as being an appropriate lump sum.
50In the foregoing circumstances, in my view the appellant's challenge to the primary judge's determination of $25,000 as an appropriate buffer with respect to her loss of earning capacity cannot be sustained. I would therefore reject Appeal Grounds 1-4.