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[2009] NSWCA 333
Court of Appeal (NSW)
2009-08-17
Allsop P, Ipp JA, Basten JA
Original judgment source is linked above.
CITATION: AMOUD v AL BATAT [2009] NSWCA 333
JUDGMENT OF: Allsop P at 1; Ipp JA at 6; Basten JA at 7
(1) Allow the appeal and set aside orders 1-3 made by the District Court on 26 September 2008 and the costs order made on 21 November 2008.
(a) direct that judgment be entered for the plaintiff in an amount notified by the parties to the Registrar, calculated in accordance with this judgment; DECISION: (b) the judgment so entered take effect from 26 September 2008; (c) order the defendant to pay the plaintiff's costs in the District Court.
(3) Order the respondent to pay the appellant's costs in this Court.
(4) Grant the respondent a certificate pursuant to the Suitors' Fund Act 1951 (NSW) in respect of the costs of the appeal.
CATCHWORDS: DAMAGES - future economic loss - challenge to adequacy of damages - assessment flowing from motor vehicle accident - psychological injuries sustained - psychological treatment prescribed - whether treatment likely to be undertaken - likely effect of treatment upon future earning capacity - Motor Accidents Compensation Act 1999 (NSW), s 126 - WORDS AND PHRASES - "future economic loss"
LEGISLATION CITED: Civil Liability Act 2002 (NSW), s 13 Motor Accidents Compensation Act 1999 (NSW), ss 83, 126
Fazlic v Milingimbi Community Inc [1982] HCA 3; 150 CLR 345 Husher v Husher [1999] HCA 47; 197 CLR 138 Kallouf v Middis [2008] NSWCA 61 Leichhardt Municipal Council v Montgomery [2005] NSWCA 432 Leichhardt Municipal Council v Serratore [2005] NSWCA 406 MacArthur Districts Motor Cycle Sportsmen Inc v Ardizzone [2004] NSWCA 145; (2004) Aust Torts Rep 81-744; 41 MVR 235 Malec v JC Hutton Pty Limited [1990] HCA 20; 169 CLR 638 Najdovski v Crnojlovic [2008] NSWCA 175; 72 NSWLR 728 CASES CITED: Nominal Defendant v Lane [2004] NSWCA 405 Norris v Blake (No 2) (1997) 41 NSWLR 49 Penrith City Council v Parks [2004] NSWCA 201 Purkess v Crittenden [1965] HCA 34; 114 CLR 164 Roads and Traffic Authority v Chandler [2008] NSWCA 64; (2008) Aust Torts Rep 81-945 State of New South Wales v Nominal Defendant [2009] NSWCA 225 Tran v Younis [2006] NSWCA 188 Vosebe Pty Ltd v Bakavgas [2009] NSWCA 117 Watts v Rake [1960] HCA 58; 108 CLR 158
PARTIES: Zoohour Amoud - Appellant Aeman Al Batat - Respondent
COUNSEL: D J Russell SC/T J Boyd - Appellant L King SC - Respondent
SOLICITORS: Kheir & Associates - Appellant Moray & Agnew - Respondent
IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40434/08 DC 652/07
ALLSOP P IPP JA BASTEN JA
14 October 2009 Zoohour AMOUD v Aeman AL BATAT Headnote In February 2005, as a 17 year old schoolgirl, Ms Amoud ("the appellant") was a passenger in a motor vehicle involved in a serious accident. She suffered severe injuries and remained in hospital for some months. Despite largely recovering "physiologically", she retained significant scarring, including facial scarring, ongoing pain and physical disabilities, together with a significant psychiatric condition, thus affecting her ability to undertake employment.
The respondent conceded liability, leaving damages to be assessed in the District Court by SJ Gibb DCJ. The two principal items of damage were awards for non-economic loss ($220,000) and future economic loss ($255,000). In application of s 126 of the Motor Accidents Compensation Act 1999 (NSW) ("the MAC Act"), her Honour assessed the damages for future economic loss on the basis that the appellant would undergo psychological treatment, and that such treatment would enable the appellant to regain a significant portion of her earning capacity. The appellant appealed to this Court from this assessment.
(i) the correct approach to determining the likelihood of the appellant undergoing psychological treatment, and (ii) the correct approach to determining the effect of such treatment upon her future earning capacity.
In relation to (i) (per Basten JA, Allsop P and Ipp JA agreeing)
In relation to (ii) (per Basten JA, Allsop P and Ipp JA agreeing)
ALLSOP P IPP JA BASTEN JA
14 October 2009 Zoohour AMOUD v Aeman AL BATAT Judgment 1 ALLSOP P: The reasons of Basten JA reveal that this appeal can be disposed of by the analysis of the primary judge's treatment of the two factors critical to the assessment of future economic loss: (a) the likelihood of the appellant obtaining treatment; and (b) the likely effect of that treatment. 2 As to the first factor (the likelihood of obtaining treatment), this was a matter to be assessed by reference to the principles in Malec v JC Hutton Pty Limited [1990] HCA 20; 169 CLR 638 at 642-643 based on probabilities and possibilities rather than assessing whether on the balance of probabilities the event would have occurred or not. Though her Honour did not express herself as undertaking a Malec analysis, I agree with Basten JA that in substance the approach employed implicitly encompassed the essential elements of the correct approach. No error has been demonstrated in this respect. 3 As to the second factor (the likely effect of the treatment) again her Honour was required to deal with this by application of Malec. Her Honour did not. That was erroneous. I agree with the analysis by Basten JA of the evidence and with his conclusions applying Malec. 4 As to the Motor Accidents Compensation Act 1999 (NSW), s 126, I would prefer to express no views on the scope of its operation. As the reasons of Basten JA reveal, no part of the disposition of this appeal rests on the construction of s 126. 5 For these reasons, I agree with the orders proposed by Basten JA. 6 IPP JA: I agree with Allsop P. 7 BASTEN JA: In February 2005, when she was a 17-year-old schoolgirl, Ms Amoud ("the appellant") was the passenger in a motor vehicle involved in a serious accident. Her injuries were sufficiently severe to require her to remain in hospital for some months. Although it is said that she has largely recovered "physiologically", she retains significant scarring, including facial scarring, ongoing pain and physical disabilities, together with a significant psychiatric condition. 8 Liability was not in dispute, but there was an assessment of damages in the District Court before her Honour SJ Gibb DCJ. The two principal items of damage were the awards for non-economic loss ($220,000) and future economic loss ($255,000). Those amounts, together with various additional amounts, resulted in a judgment in favour of the appellant, after allowance for payments made pursuant to the Motor Accidents Compensation Act 1999 (NSW) ("the MAC Act") in amount of $642,207.70. 9 The sole issue which remains for determination on the appeal is the correctness of her Honour's assessment of future economic loss. 10 By way of background, it may be noted that there were two other unrelated grounds in the notice of appeal. The first concerned a challenge to the amount allowed for future domestic care, which was abandoned by the appellant. The second concerned an order for costs made by the trial judge which was conceded by the respondent. The effect of the concession will depend upon the outcome in this Court with respect to the substantive issue in dispute and will be addressed in due course. An erroneous assessment of future economic loss 11 Subject to two specific complaints, the trial judge went about the assessment of future economic loss in a largely uncontroversial manner. She commenced by referring to s 126 of the MAC Act, which governed the exercise required to be undertaken. For that purpose, she set out to identify the appellant's "most likely future circumstances but for the injury": Judgment, p 27. She noted that such an assessment was to be undertaken without the useful guidance which can usually be obtained from a past employment history, referring to the remarks of the High Court in that respect in Husher v Husher [1999] HCA 47; 197 CLR 138 at [8] (Gleeson CJ, Gummow, Kirby and Hayne JJ). 12 Having considered the appellant's "education deficits deriving from her lackadaisical performance at school", her Honour assessed her pre-injury earning capacity as "at a relatively unskilled level", giving rise to a likely income equivalent to the average weekly earnings for female employees, namely $726 per week gross or $600 per week net. There is no challenge to that assessment. 13 Certain assumptions underlay that assessment. The first was that the appellant "would have been unlikely" to complete her higher school certificate in 2005, although it was "likely" that she would have completed some formal 'technical and further education training' by late 2008 or 2009. 14 A greater difficulty arose in assessing the loss likely to flow from her continuing psychological disabilities. 15 Her Honour accepted evidence that before the accident, the appellant was "capable of working and able to fend for herself on the open labour market". Because of her psychological disability, that was no longer so. There were two questions to be answered:
(a) what was the likelihood that the appellant would undergo psychological treatment, and (b) what would be the likely outcome of such treatment? 16 In relation to the first question, her Honour had to grapple with a history of what was described as "avoidance behaviour" which had resulted in her failing actively to seek or accept treatment in the past. Her Honour accepted, however, evidence given by the appellant that she intended now to seek and accept treatment. Although there had been difficulties in obtaining treatment through the public health system, from a suitable and sympathetic professional, her Honour noted that the practical difficulty which had hitherto blocked her access to private treatment (namely cost) would be removed by the award of damages, which included a significant component for future medical expenses. Her Honour concluded at p 18: "Given the plaintiff's evidence that she is now actively seeking treatment, I find that it is likely that the plaintiff will obtain the treatment she needs, and Dr Jungfer recommends." 17 Her Honour allowed a period of three years for the appellant to reach a state where she would be ready to enter the workforce, the period allowing "a margin for error in her completion of the treatment recommended by Dr Jungfer". The first component of her future economic loss was calculated as $600 net per week for three years which, appropriately calculated, gave a present amount of $87,360. There was no dispute in relation to that amount. However, the appellant challenged what appeared to be findings on the balance of probabilities that the appellant would undergo such treatment and that it would be effective. Thus, from the end of the three year period, her Honour assessed a weekly loss calculated at $200 net per week for the remainder of her life. This gave rise to a sum of $160,980.48. 18 These figures were increased by an amount on account of superannuation, as to which no issue arises, although the amount will need to be adjusted if the underlying loss is varied. 19 With respect to the process of treatment, the appellant mounted both a legal and a factual challenge to the approach adopted by the trial judge. The legal challenge relied upon an asserted failure of the trial judge to consider and take into account, the possibility that the appellant would not undergo the proposed treatment or, if she commenced it, would not complete it. Factually, to the extent that her Honour relied upon the appellant's statements in evidence to form the conclusion that she would undergo treatment, there was said to be no adequate attempt to assess the reliability of such a statement of present intent, by a person suffering a psychological disability, as an indicator of future conduct. 20 In relation to the second element of the assessment, namely the likely effectiveness of the treatment, it was contended that her Honour had, again, assessed an ongoing diminution of earning capacity at one-third of her pre-accident capacity, without making any allowance for the possibility that the treatment might not be effective in restoring a significant level of earning capacity. This was a complaint based upon an assessment of the medical evidence. Relevant legal principles 21 The approach to assessment of future economic loss in relation to claims arising out of motor vehicle accidents is governed by s 126 of the MAC Act which provides: " 126 Future economic loss - claimant's prospects and adjustments (1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant's most likely future circumstances but for the injury. (2) When a court determines the amount of any such award of damages it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events concerned might have occurred but for the injury. (3) If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted." 22 The proper understanding of this provision and its counterpart in the Civil Liability Act 2002 (NSW), namely s 13, has been addressed by this Court on a number of occasions: see MacArthur Districts Motor Cycle Sportsmen Inc v Ardizzone [2004] NSWCA 145; (2004) Aust Torts Rep ¶81-744; 41 MVR 235; Penrith City Council v Parks [2004] NSWCA 201; Nominal Defendant v Lane [2004] NSWCA 405; Leichhardt Municipal Council v Serratore [2005] NSWCA 406; Leichhardt Municipal Council v Montgomery [2005] NSWCA 432; Tran v Younis [2006] NSWCA 188; Kallouf v Middis [2008] NSWCA 61; Roads and Traffic Authority v Chandler [2008] NSWCA 64; (2008) Aust Torts Rep ¶81-945 Najdovski v Crnojlovic [2008] NSWCA 175; 72 NSWLR 728; Vosebe Pty Ltd v Bakavgas [2009] NSWCA 117 and State of New South Wales v Nominal Defendant [2009] NSWCA 225. After initial concern expressed in Ardizzone that the section might not be capable of application in accordance with its express terms, these authorities accept two propositions, namely that the section can apply in its terms, but that it does not cover all aspects of the exercise required to be undertaken in assessing future economic loss. 23 It is clear that the section is not a code, but assumes the continued operation of general law principles. Whether it merely encapsulates, rather than qualifying, the general law, and if the latter to what extent, is less clear. Subsection (1) is formulated as a prohibition on an award of damages for future economic loss, unless its terms are satisfied. The section imposes a burden of proof on the claimant to satisfy the court as to the matters identified in the provision. Those matters are twofold, namely:
(a) the claimant's most likely future circumstances but for the injury, and (b) the assumptions about future earning capacity (and other events) which will form the basis of calculation. 24 It appears that sub-s (1) deals only with the baseline earning capacity which might have been achieved but for the injury. Of course, an assessment of post-injury future earning capacity will also be required, but if sub-s (1) were addressing the assumptions necessary for that part of the exercise it would be unlikely to require them to "accord with" the most likely future circumstances but for the injury. The operation of this provision will vary from case to case and will depend in part on the level of particularity or generality at which the exercise is undertaken. Because there is no challenge in the present case to the findings by the trial judge in respect of the most likely future circumstances, or the assessment of future earning capacity, but for the injury, the operation of this provision need not be addressed further. 25 Subsection (2) requires an adjustment to an otherwise appropriate amount to take account of the possibility that "the events concerned might have occurred but for the injury". There is clearly a step between the exercise addressed in sub-s (1) and that required by sub-s (2). That step must be to identify the departure from the baseline earning capacity (calculated in accordance with sub-s (1)) caused by the injury. The third step is to calculate, as a monetary amount, the present value of the difference between the baseline and the assessment of post-injury earning capacity. The diminution caused by the tortious injury will provide a figure for assessing the appropriate award of damages. It may not be the final figure, because the diminution caused by the accident might have occurred, in part or in whole, in any event, within the working life of the claimant. Some allowance must be made for that circumstance: it is that allowance which constitutes the adjustment required by sub-s (2). 26 Subsection (3) is designed to ensure transparency in respect of the two steps in the process identified in sub-ss (1) and (2). In the course of the missing steps, namely the assessment of the extent of the disability caused by the accident, further findings will be made as to hypothetical future circumstances. Whether or not those findings must be identified and stated in the Court's reasons, pursuant to sub-s (3), is largely immaterial: they should in any event be stated in accordance with general law principles. 27 One issue which has given rise to debate in the case-law is whether the court, in making an assessment of future economic loss, is entitled to take into account the possibility of departure from the baseline calculation derived from the claimant's most likely future circumstances. For example, the most likely future circumstances might be that a claimant would remain in his or her pre-accident employment but would achieve two levels of promotion over a working life. In accordance with general law principles, in assessing the loss caused by the accident, the court would be entitled to take into account the possibility that a further promotion might have been achieved (with resultant higher earnings) and the possibility that no promotion would have been achieved. The approach under the general law is commonly identified by reference to the principles stated in Norris v Blake (No 2) (1997) 41 NSWLR 49; a different (and more typical) factual example, which arose under the statutory regime, may be seen in Nominal Defendant v Lane. Although s 126(1) requires that the assumptions underlying the baseline calculation should "accord with" the claimant's most likely future circumstances but for the injury, it does not expressly preclude taking into account possible variations from those circumstances. Further, the form of the section is inconsistent with any clear implication excluding other considerations. The facts and arguments in this appeal do not require the resolution of these issues. 28 A further significant uncertainty may arise with respect to a pre-injury susceptibility. Such matters have conventionally been treated in a different way to the general vicissitudes of life: see, eg, Watts v Rake [1960] HCA 58; 108 CLR 158 and Purkess v Crittenden [1965] HCA 34; 114 CLR 164 and cf Malec v J C Hutton Pty Ltd [1990] HCA 20; 169 CLR 638. The notice of appeal in the present matter originally contained a ground asserting that the trial judge had erred in finding that the appellant had a prior psychiatric or psychological condition. That ground was, however, not pressed and accordingly this issue does not arise. Application of principles 29 The legal challenge raised by the appellant concerns the assessment of post-injury conduct on the part of the appellant and the effectiveness of the proposed treatment. As explained above, this challenge is directed to a step in the assessment of future economic loss which is not covered by s 126 of the MAC Act. Each element involves an assessment of a future hypothetical event and, as the appellant correctly contends, should have been assessed in accordance with the general law principles as to possibilities, as stated in Malec v J C Hutton. (a) likelihood of obtaining treatment 30 The appellant's case, in seeking to establish error, focused squarely on the finding that "it is likely that the plaintiff will obtain the treatment that she needs": Judgment, p 18. However, that statement was not necessarily in terms inconsistent with her Honour having also taken into account the possibility of a contrary result. To assess the question fully, it is necessary to address the manner in which her Honour dealt with the relevant factual issues. 31 As a preliminary point, it may be noted that there were references in the course of argument to the judgment being "sympathetic" to the appellant. However, such a characterisation is unhelpful. To the extent that her Honour identified factors which might have favoured a lower award, those matters should be addressed in their specific context. For present purposes, her Honour made findings which accepted the appellant's evidence, but in circumstances where the result was arguably unfavourable to the appellant's claim. It is not appropriate to characterise as "sympathy", acceptance as fact of the hopes as to the future expressed by someone with a psychological disability. Rather, it is necessary to assess the findings actually made on their merits. 32 The treatment recommended by Dr Jungfer included both medication (an anti-depressant) and consultations with a psychiatrist: report, 28 May 2007, par 10.1. She further recommended a cognitive behaviour program with a clinical psychologist, involving 20 consultations. The time period over which this treatment was expected to continue was not identified in the report. The only point clarified in her oral evidence was that she expected the drug treatment to last for two years. Nevertheless, it would appear that Dr Jungfer was not envisaging treatment extending over three years and it is clear that her Honour adopted a three year period before the appellant would be ready to enter the workforce, in order to allow for delay in completion of the treatment. 33 There was no suggestion in argument on the appeal that failure to undertake recommended treatment would constitute an unreasonable failure to mitigate the appellant's loss. That was no doubt because the evidence of her "avoidance behaviour" was partly related to her unwillingness to relive the experiences of the accident and its aftermath, and was thus itself causally related to the accident: see generally Fazlic v Milingimbi Community Inc [1982] HCA 3; 150 CLR 345. 34 In assessing that the appellant was likely to undergo treatment as recommended by Dr Jungfer, her Honour expressly took into account her history of avoidance behaviour: Judgment, p 16. Her Honour accepted that the plaintiff had been "afflicted by psychological difficulty in the years before the motor vehicle accident" - Judgment, p 9 - and that there had been, in the past, significant post-accident factors, including, in early 2006, the death of a young man with whom she had been briefly involved: Judgment, p 8. Her Honour also appears to have accepted that, as she was now a young woman, she had developed a greater degree of insight into her problems and her need for treatment. 35 In these circumstances, her Honour was entitled to deal with the question of whether the appellant would accept treatment as one involving a degree of speculation which was capable of being addressed by allowing a longer period than might otherwise have been appropriate for completion of the treatment. This involved an assessment not merely of the psychiatric and psychological evidence concerning the appellant, but of the appellant herself in giving affirmative evidence of her desire for treatment, as at the date of the trial. No reason has been demonstrated to warrant interference with the assessment, having regard to the opportunity afforded the trial judge of hearing and observing the appellant. There was, for example, no explicit evidence from an expert discounting the likelihood of her undergoing treatment because of her psychological condition. Her Honour was entitled to deal with the uncertainty with respect to this matter by a generous allowance for the period prior to completion of the treatment. Though not stated in terms of a Malec analysis, the provision for uncertainty was implicit in her Honour's approach. (b) effect of treatment 36 The second issue, namely the likely effectiveness of treatment, gives rise to separate questions. The primary contention of the appellant was that her Honour assessed the probable effect of the treatment, without allowing for the possibility of a less favourable outcome. To assess whether that challenge is made good it is necessary to address the relevant medical evidence. In the event that error is established, that consideration may form the basis for a reassessment by this Court. 37 The trial judge was faced with a difficult issue in resolving the extent of the diminution in the appellant's earning capacity resulting from the accident. There was a high degree of imprecision (no doubt understandable) in Dr Jungfer's evidence as to the nature of the improvements likely to result from treatment. In order to relate her psychological state to her earning capacity, evidence was tendered by way of a "vocational assessment report" prepared by Professor Robert Pryor, a vocational psychologist and Adjunct Professor, School of Education, Australian Catholic University. Dr Pryor agreed with Dr Jungfer that as at the date of assessment, namely June 2007, the appellant was unemployable. However, he also accepted the desirability of psychiatric care and clinical psychological intervention and concluded that there were various clerical positions of a kind which might appeal to the appellant and be within her capabilities. In commenting on a more pessimistic report of Dr Thomas Benjamin, Dr Pryor stated in a supplementary report of 26 November 2007 (p 4): "From a vocational perspective my report concurs with the observation that Ms Amoud's adjustment may be remediable to at least some extent. This gives hope for her ultimate participation in the open labour market. I agree that formal vocational study is not an option for Ms Amoud and in my report I did not include a training option section. I also concur that some further general education along with ongoing psychological/psychiatric interventions would be of benefit to Ms Amoud and would enhance her subsequent employability." 38 Her Honour found that the appellant was unlikely to complete further study but was "likely to be able to function at the employment level [contemplated] by Professor Pryor, and thus to be likely to earn about $400-$500 per week net for the remainder of her working life": Judgment, pp 27-28. According to the appellant, that was a finding made on the balance of probabilities without any attempt to assess the significant possibility of a less advantageous result for the appellant. As will appear from the evidence discussed below, that submission should be accepted. This was not an example of inapt language masking what had in fact been a proper consideration of possibilities. 39 The appellant also complained that the trial judge had overstated Dr Jungfer's degree of confidence in a favourable outcome following treatment. Thus, having noted the appellant's statement that she wished to have treatment, her Honour continued, "to use Dr Jungfer's words 'there is no reason why she wouldn't improve'": Judgment, p 18. 40 The evidence of Dr Jungfer was imprecise as to the nature and degree of the improvement and was somewhat less categorical than the extract quoted suggested. In her written report Dr Jungfer had noted under the heading "Prognosis": "Symptom duration … a poor prognostic indicator. In view of the length of time that she has been symptomatic her high avoidance behaviour she has a poor prognostic disorder." 41 This somewhat cryptic statement was apparently intended to indicate that the duration of her symptoms, together with her high avoidance behaviour, gave rise to a poor prognosis. The explanation was clarified to some extent in oral evidence (Tcpt, 12/08/08, pp 160-161) in the following terms: "Prognosis is what you see the patient - the outcome being in the longer term. There was a paper in the British Journal of Psychiatry, which is widely available, published 1999; it was a prospective study. It looked at what indicated whether people were still symptomatic and it was duration of the symptoms, and, so, the fact that she had been symptomatic a number of years after the accident indicated that her prognosis for symptom recovery was poor." 42 In answer to a question from the trial judge, Dr Jungfer noted that the 1999 study indicated that if people were "still symptomatic 12 months after the accident that that indicated they would have ongoing symptoms": Tcpt, p 161 (10). 43 In commencing cross-examination, counsel for the respondent said that he had "just one question" (Tcpt, p 161 (46)), but with some assistance from her Honour, the cross-examination extended over several pages of transcript. The thrust of it was, however, largely limited to the first question which was that, having proposed treatment, Dr Jungfer could see benefit flowing in the form of improvement for the appellant: Tcpt, p 162 (5). Dr Jungfer agreed that with "evidence-based clinical treatment for her condition … one would expect a reduction of symptoms". Her Honour then sought to clarify how that was to be reconciled with the earlier opinion based upon the 1999 study to which she had referred. She replied: "It was very evident, though, that Ms Amoud hadn't had aggressive or comprehensive therapy. I put forward a management plan and costings … because … for every patient that is treatment resistant, if you try a different treatment, about one-third get better. So, there is a prospect for improvement, but if you are looking at general prognostic indicators, symptom duration indicates that they are unlikely to get completely better." 44 The cross-examination continued at pp 162-163: "Q. But would you be hopeful that with this regime of treatment that you have outlined … given that what you have said of this particular person, Ms Amoud - that that treatment would, you would hope, result in improvement in the condition? A. In her? Some symptomatic improvement, yes. Q. What about any form of treatment for anger management? Does that come into the mix? A. The clinical psychological treatment normally involves helping people to identify their feelings and manage it. It doesn't specifically target anger [on] its own, but more, you know, all the types of feelings. So, instructing someone on how to recognise their emotions and give them strategies to control it would hopefully improve it. Q. And with improvement in that area, that could lead to someone becoming more appealing as an employee? A. If you regulated their anger? Q. Yes. A. Yes. Q. And do you think that that treatment you have suggested at the bottom would assist in regulating this particular person's anger if she has any? A. If she fully participated in the program and actually did the treatment, there is no reason why she wouldn't improve." 45 Extracts from Dr Jungfer's evidence, including the last four questions and answers, were included in the judgment at p 16. It seems unlikely that when her Honour came to quote the words "there is no reason why she wouldn't improve" two pages later, that her Honour had forgotten the context. Nevertheless, put in context, those words do not relate to improvement with respect to the appellant's condition generally, but specifically in relation to regulation of anger. 46 Two points are clear from Dr Jungfer's evidence: first, that for people who had remained symptomatic for 12 months or more, two-thirds do not "get better". Secondly, she anticipated "some symptomatic improvement" with the appellant. 47 In these circumstances, the expert evidence established three matters with a degree of clarity:
(a) the appellant was unlikely to undertake any training, of a kind which would have allowed her to reach the baseline of average weekly earnings hypothesised as the most likely outcome, absent the accident; (b) the prospects of a substantial recovery were less than 50%, and (c) without effective treatment, the appellant was unemployable. 48 The trial judge concluded that, after three years, the appellant's disability would have reduced so as to result in a diminution of earning capacity of one-third. Given that the assessment was to apply over virtually the whole of the appellant's working life (42 years) it would be impossible to assess the consequences of the accident with any degree of precision. It was not necessary for her Honour to ascribe particular proportions to the destroyed capacity for training and the effect of the psychological disability on employability generally. Nevertheless, the former, being accepted by the experts, must have resulted in a significant degree of diminution in earning capacity. That being so, the possibility that treatment would not result in a substantial reduction in symptoms must have been treated as relatively slight. That assessment must have rejected or ignored the evidence of Dr Jungfer that, statistically, there was a 66% chance that the appellant would not get better, given the duration of her symptoms. Her Honour was entitled to reject that evidence, but it was a highly significant part of the appellant's case and there was no expert evidence to the contrary. For example, Dr Pryor did not comment adversely on it. Rejection would have called for an explanation and there was none. The alternative, that the evidence was ignored, constituted error. Accordingly, this Court should reconsider this aspect of the award for future economic loss. Reassessment of loss (a) is assessment sustainable despite error? 49 As her Honour noted, there was a degree of imprecision in any quantification and she in fact rounded the final figure for future economic loss and superannuation upward, by an amount of some 8%. She also applied to that figure the ordinary factor for vicissitudes namely 15%. She added the following comment (Judgment, p 28): "If it be that the plaintiff would have abandoned her HSC, or made no attempt to rectify the looming educational deficiencies and pursue further studies, it may be that the vicissitudes factor in the future income quantification is underestimated." 50 The respondent contended that this last qualification, together with the fact that, having identified the appellant's likely earning capacity in the range of $400-$500 per week, worked from the lower figure, meant that the appellant had been treated favourably. 51 There may have been a degree of favourable treatment, but these elements do not suggest a basis for this Court to decline to intervene, if error is otherwise established. The fact that her Honour identified a reduction in earning capacity in the range of 17%-33%, tends to confirm that, although she adopted the greater figure in her calculations, she substantially underestimated the chance that the treatment would not be effective or would not restore a large part of her earning capacity. 52 In relation to the generous (because limited) reduction for vicissitudes, two factors may be noted. The first is that it is by no means clear what her Honour might otherwise have undertaken by way of percentage reduction, had she been minded to adopt a different figure. An increase from 15%-20% would be a substantial variation (one-third) but would have a minor effect on the overall calculation of damages. Secondly, the youth and immaturity of the appellant at the date of the accident might also have given rise to a possibility that her earning capacity would have risen beyond the average with work experience and maturity. 53 The respondent further asserted that the probable effect of the treatment was not assessable only by reference to a possibility or chance. There are two answers to that submission. First, future hypothetical events must always be assessed by reference to a possibility or chance; secondly, on the evidence set out above, there was clearly a significant level of speculation involved as to the effect of treatment on the appellant. 54 In written submissions, the respondent referred to a report tendered in his case at trial, from Dr James Maguire, a consultant psychiatrist, dated 9 November 2007. However, that report was almost entirely directed to the cause of the appellant's non-compliant behaviour. In an earlier report (19 June 2007) Dr Maguire had expressed the view that, from a psychological point of view, "Ms Amoud is fit to work": p 11. He did not doubt that the approaches to treatment already undertaken had been "appropriate and necessary" but because of the appellant's non-compliant behaviour, he said that it was "difficult to recommend any further treatment without some detailed information from her to [sic] psychologists in terms of strategies employed and their observations of Ms Amoud's response". This does not bear on the present issue. (b) future economic loss: conclusion 55 Her Honour was in error in assessing future economic loss on the basis of a diminution in earning capacity productive of a monetary loss of $200 per week. On the expert evidence, there was a substantial prospect that the appellant would be unable to obtain employment for significant periods. Although her psychological state might improve over the long term, it would also be necessary to take into account the consequences of a poor employment record in her youth. A proper assessment based on the evidence would have accepted a reduction in earning capacity calculated on a steady basis, after three years from the date of judgment, of 50% or $300 net per week. On the calculation undertaken by her Honour, that would result in an amount of $241,470. There will need to be a proportionate increase in the amount on account of superannuation. Costs 56 As noted above, her Honour ordered, incorrectly as conceded by the respondent, that the plaintiff should pay the defendant's costs of the trial up until the date of an offer of compromise made on 23 June 2008. That part of the order should be set aside. Because the judgment now proposed will exceed the offer of compromise, the plaintiff is entitled to obtain an order for her costs with respect to the whole of the trial. 57 The respondent should pay the appellant's costs of the appeal. Orders 58 The amount of the judgment awarded by the trial judge should be varied in accordance with the foregoing reasons. The parties should have an opportunity to make the necessary calculations to give effect to those reasons. Assuming the parties are able to agree on the appropriate amount, a judgment for a specified amount may be entered by consent. 59 The trial judge gave judgments both for the amount of the damages as calculated by her Honour and for a separate amount after allowing credit pursuant to s 83 of the MAC Act for an amount already paid by or on behalf of the defendant. Because such a payment amounts to a defence, there should have been a single judgment for the lesser amount. The judgment to be calculated by the parties should allow a reduction for payments made under s 83. 60 The original costs order made by the trial judge was varied, fresh orders being made, apparently by consent, on 21 November 2008: see respondent's written submissions, paragraph 9. Despite seeking to have that order set aside, the appellant did not provide this Court with any copy of the order. Although the respondent consented to the order being set aside, he did not indicate the terms of the order. If the order proposed below is not in appropriate terms, the parties have leave to file an order which is in the appropriate terms with the order for judgment in the calculated amount. 61 The Court should now make the following orders:
(1) Allow the appeal and set aside orders 1-3 made by the District Court on 26 September 2008 and the costs order made on 21 November 2008.
(2) In lieu thereof: (a) direct that judgment be entered for the plaintiff in an amount notified by the parties to the Registrar, calculated in accordance with this judgment; (b) the judgment so entered take effect from 26 September 2008; (c) order the defendant to pay the plaintiff's costs in the District Court.
(3) Order the respondent to pay the appellant's costs in this Court.
(4) Grant the respondent a certificate pursuant to the Suitors' Fund Act 1951 (NSW) in respect of the costs of the appeal. **********
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AMOUD
AL BATAT