Amaca Pty Ltd v Karakasch [2004] NSWCA 79 | Case summary

2 CRIPPS AJA: This an appeal from a decision of his Honour Judge Maguire in the Dust Diseases Tribunal of New South Wales published on 17 April 2003. The learned trial judge awarded the respondent the sum of $719,477 as compensation for personal injury to the deceased being mesothelioma consequent upon exposure to asbestos dust and fibre and which led to his death in 2003. 3 In his award the learned trial judge allowed the sum of $369,001 for future loss of earning capacity. At trial the appellant submitted that the respondent was entitled to only $32,778 for future economic loss. 4 Appeals from the Dust Diseases Tribunal of New South Wales are limited to questions of law. (See section 32 Dust Diseases Tribunal Act 1989). 5 From 1998 until the onset of his illness the deceased and his wife ran the Marlin Motel at Nelson Bay. The appellant has conceded that it was open to the learned trial judge to calculate loss of earning capacity of the deceased as though he were the sole trader and that he would have continued working until aged 70 - a period of 14 years from the date of the trial. 6 The learned judge clearly understood the task that confronted him which was conformably with the decision in Husher v Husher (1999) 197 CLR 138 to determine what, had the deceased not been injured he would, not could, have earned in the future. At the date of trial he could earn nothing. The question at issue between the parties before the learned trial judge was how his loss of future economic earning capacity should be calculated. 7 As to this the learned trial judge said: "Counsel canvassed alternative ways of quantifying the plaintiff's loss. Ms Katzmann urges, and Mr Bartos leaves open the measure of damage as being the cost of replacement labour. But Mr Bartos adds the rider that where there is no loss of earnings in fact no damage is run. He deals with what he suggests is a return on capital and refers to decided cases." 8 In the notice of appeal and the submissions filed initially on behalf of the appellant there appears to be scant recognition of the circumstance that appeals from the Dust Diseases Tribunal are limited to questions of law. However I have distilled from them a submission that it was not open to the learned trial judge to assess the value of the deceased's loss of earning capacity by reference to the cost of replacement labour and that, in law, his Honour was prohibited from quantifying his loss otherwise than by reference to the difference between the net profit generated by the motel business less the cost of capital invested in it. So much, at least, was made plain in the appellant's "Submissions in Reply" prepared by Mr Gleeson SC. This had the consequence that many of the submissions originally advanced were abandoned. 9 In Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Glass JA identified the distinction between errors of fact (which are not appealable) and errors of law (which are appealable). His observations are apposite to the conclusions of judges in the Dust Diseases Tribunal. His Honour said (and after referring to the authority of the Court to set aside a jury's finding because it was vitiated by errors of fact): "It is important, I believe, to remember that whether an error is one of fact or law is determined by legal theory and the theory is the same whether the tribunal be divided or undivided. Errors may be committed by a Workers' Compensation judge at any one of three points viz determining the facts by way of primary findings and inferences, directing himself as to the law and applying the law to the facts found. At the first stage the determination of facts by a reasoning process marred though it be by patent error, illogicality or perversity will, as has been said, never be vulnerable to attack as an error of law by an applicant for compensation. At the second stage any error made will by definition be an error of law. At the third stage when the law correctly stated is applied to the facts found in order to produce a conclusion error may intrude again. An erroneous conclusion that the facts properly determined fail to satisfy a statutory test, for example, injury arising out of the cause of employment, substantial interruption to journey, or failure to provide suitable employment will ordinarily be an erroneous conclusion of fact. It is only in marginal cases that the statutory test is satisfied or not satisfied as a matter of law, because no other application is reasonably open. Hope v Bathurst City Council (at 10); Australian Gas Light Co v Valuer-General (at 138; 55). Accordingly this Court will not entertain unexplained perversity of result as a ground for intervention although it will correct perverse or unreasonable applications of law to the facts found." 10 In the present case the learned trial judge found that the deceased's loss of earning capacity was to be measured by the cost of alternative labour in preference to what was described as the "loss of profit" approach contended for by appellant. 11 The appellant relied on the circumstance that for four and a half years prior to the respondent's succumbing to mesothelioma he had not earned the equivalent of the cost of an alternative motel manager being approximately $63,000 per year. 12 A great deal of evidence and submissions before the learned trial judge were directed to the cost of renovations undertaken by the deceased, attempts by him to cater for guests aged over 40 and invested by him of approximately $750,000 in the motel business. The learned trial judge found as a fact that at the time the deceased became ill the business was running at a level to be in a position to fund alternative labour to replace his efforts. A challenge to that finding is, at its highest, a challenge to a finding of fact which was determined by reference to the business records of the motel business. It would follow that unless it can be established that in law, on the evidence, the learned trial judge was bound to reject the earnings of an alternative manager as a measure of what the plaintiff would (as opposed to could) earn by reference to the salary of a motel manager no question of law arises. 13 In State of New South Wales v Moss (54 NSWLR 536) Heydon JA dealt with the approach to be adopted by a court when dealing with loss of future earning capacity. His Honour pointed out that when estimating future economic loss (at p 553): "…. the law takes account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring in a range from just above the speculative to just below the certain. The inquiry - the process of estimation of possibilities - is thus an imprecise and indeterminate one to be carried out within very broad parameters." 14 Later he said (at 559): "The task of the trier of fact is to form a discretionary judgment by reference to not wholly determinate criteria within fairly wide parameters. Though the trier of fact in arriving at the discretionary judgment must achieve satisfaction that a fair award is being made, since what is involved is not the finding of historical facts on a balance of probabilities, but the assessment of the value of a chance, it is appropriate to take account of a range of possible outcomes even though the likelihood of any particular outcome being achieved may be no more than a real possibility." 15 In my opinion it was open to the learned trial judge to assess the deceased's loss of earning capacity by reference to the cost of replacement labour. The circumstance that he was conducting a business did not preclude that approach. But even if he made a mistake in this regard his mistake was not an error of law (see Azzopardi). 16 In my opinion it was open to the learned trial judge to calculate the deceased's loss of earning capacity by reference to the cost of replacement labour. After all it did not appear to be disputed that he was a competent motel manager. What appeared to be suggested was because in the first four years he had not made profits equal to $60,000 per year his loss of earning capacity could never be any higher than the maximum profit in any one year less interest on $750,000 being capital invested in the motel. In my opinion it was open to the learned trial judge to conclude the respondent could and would have earned money calculated by reference to rates payable to a motel manager. But however that may be if that conclusion be erroneous it was an error of fact, not law. 17 Somewhat belatedly it was submitted that the learned trial judge's decision should be set aside because of inadequate reasons. I have already referred to that portion of his Honour's judgment dealing with the competing methods of quantifying the deceased's loss. It would seem to me that the reason why the learned trial judge selected the method advanced by the deceased's representative and not the method advanced by the appellant would be clear to an observer of the proceedings who heard the evidence and read the judgment. 18 The orders I propose are:

Amaca Pty Ltd v Karakasch

At a glance

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Judgment (10 paragraphs)

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