Barden v Seric

Supreme Court of NSW|2012-11-20|Before: Hulme J, Basten JA, Simpson J

Judgment 1HIS HONOUR: Mark Barden says that he sustained injuries in a motor accident when Paul Seric drove onto the incorrect side of the road and collided with him. He claims that Mr Seric was negligent and should pay damages. Mr Barden could have commenced proceedings in the District Court but he commenced them in this Court. 2Mr Seric says that there are no complex legal issues involved in this case and so, according to the legislation governing civil procedure, the proceedings must be transferred to the District Court. Mr Barden's response is that there will be complex legal issues involved in the assessment of damages for economic loss and so it is appropriate that the proceedings remain in this Court. In my view what complexity there may be is factual rather than legal. I agree with Mr Seric and order the transfer of the proceedings.

The pleadings 3Mr Barden filed his statement of claim in this Court on 5 April 2012. A defence was filed on 22 June 2012. Mr Seric denies driving on the incorrect side of the road when the collision occurred. Negligence is denied. It is accepted that Mr Barden suffered injury, loss and damage but not to the extent he claims. Contributory negligence is raised.

Evidence on the application 7Mr Seric relied upon two affidavits of Mr Daniel Stoddart sworn on 13 July 2012 and 21 September 2012. In the first affidavit, Mr Stoddart indicated that he was unaware of any complex legal issue or issue of general public importance in the claim brought by Mr Barden. Annexed to the second affidavit are various taxation returns and financial statements for Mr Barden and a partnership. 8Mr Barden relied upon affidavits sworn by Ms Belinda Brown on 26 July 2012 and 19 November 2012. Ms Brown is a solicitor. She deposed that Mr Barden was in partnership with his wife and that they operated a family grain growing business. She said that the issues in respect of economic loss "are somewhat complex" having regard to the nature of the business, the need to employ replacement labour, and the manner in which the distribution of profits and losses should be determined between the husband and wife. There was also the complication of assessing what income is appropriately assigned to being a return on capital and what is to be assigned to the return on labour. 9Ms Brown's first affidavit concluded: Because of the combination of these factors and in particular the complexity surrounding the approach to economic loss in respect of a farmer who is involved in a partnership where his wife also works full-time as a teacher, means the matter is appropriately dealt with in the Supreme Court and in this manner will significantly reduce the likelihood of the matter needing to be dealt with on appeal.

Matters not in issue 10Mr Kelleher, counsel for Mr Seric, accepted that "the amount to be awarded to Mr Barden, if successful, is likely to be more than $1,000,000": s 146(4)(a)(i). No-one suggested that the matter involved "issues of general public importance": s 146(4)(a)(ii). The sole issue on the application was whether "the case involves complex legal issues". 11The power to transfer proceedings from this Court to the District Court only arises if the proceedings "could properly have been commenced in the District Court": s 146(1). It was submitted for Mr Seric that they could have as s 44(1)(d) of the District Court Act provides that in respect of motor accident claims there is no monetary ceiling to the jurisdiction of the District Court. Mr Hickey, counsel for Mr Barden, did not contend to the contrary; I am satisfied that the power to transfer is available. 12Neither party anticipated that there would be any complex legal issue involved in the resolution of the primary issue of liability; it is a relatively straightforward motor accident claim. Rather, Mr Barden contended that there would be complex legal issues involved in the assessment of economic loss if the primary issue is resolved in his favour.

The claim for economic loss 13Mr Barden's statement of particulars (r 15.12 of the Uniform Civil Procedure Rules 2005 (NSW)) included under the heading "Particulars of Loss of Income" a description of the nature of the work he had performed. He was described as having been "the working manager of his farm". Aside from the physical work associated with the enterprise, he was also said to have performed all of the marketing and financial decision making roles of the partnership. He had been able to resume some aspects of his pre-injury farming activities but was now reliant on assistance provided by his wife and father and, from time to time, contractors. 14Particulars of the claim for loss of earning capacity and future economic loss include that he would be unable to continue in the occupation of farmer; that he would otherwise have continued working until the age of 72 years; and that he had lost opportunity (loss of the ability to expand the business by purchasing adjoining properties).

Submissions for Mr Seric 15A relevant consideration in assessment of economic loss is the fact that Mr Barden derived income by way of distribution of profits and losses between himself and his wife in connection with a farming business. For Mr Seric, it was submitted that this did not entail any legal complexity. The correct approach to be taken in the assessment of economic loss in a partnership structure between a husband and a wife has been settled by Husher v Husher [1999] HCA 47; 197 CLR 138 at 146-149; [14]-[23]. Cochrane v Hannaford [1999] NSWCA 371 (at [82]-[88]) was cited as an example of the application of the principles in Husher v Husher to the assessment of future economic loss in the context of a farming partnership. It was noted that in that case, as in the present, there had also been a claim for lost opportunity. 16It was submitted for Mr Seric that while there were legal principles to be applied to the facts, the law was both settled and clear. 17It was anticipated on Mr Seric's part that the evidence will involve an exploration of the nature of the partnership under which Mr Barden exercised his earning capacity; how he exercised that capacity; and the extent to which the exercise of that capacity within the partnership controlled the income of the partnership. In this respect, it was submitted that the question of the earnings of the enterprise and the cost of replacement labour are not likely to raise any complex factual questions. 18Mr Kelleher reviewed the content of the taxation returns and financial statements for the financial years 2007 to 2010 which are annexed to the second of Mr Stoddart's affidavits. The partnership earnings and distributions to Mr Barden, his overall income, and the comparative distributions to his wife are readily calculable. It is clear that the major proportion of the income of the business (the "lion's share" as it was put in submissions) went to Mr Barden with the balance going to his wife who otherwise worked full-time as a teacher. The partnership did not incur any expenses for wages until after Mr Barden's accident (and then only modestly so). So, it was submitted, Mr Barden was not only the controlling mind of the partnership business but its "physical presence" as well. 19The submission for Mr Seric was that these matters did not even raise any factual complexities in the case; not that this was the issue in this application. The issue is whether there are "complex legal issues". 20The final point addressed in submissions for Mr Seric concerned the claim in Mr Barden's solicitor's affidavit that there would be the "complication of assessing what income is appropriately assigned to being a return on capital and that which is to be assigned to the return on labour." It was suggested that such a point was dealt with in Kaplantzi & Anor v Pascoe [2003] NSWCA 386 where (at [32]) Hodgson JA equated the loss of a capacity to generate capital gains with a loss of earning capacity. I did not hear full submissions on the subject but I observe that his Honour had been concerned with a claim under the Compensation to Relatives Act 1897 (NSW) by the widow of a man killed in a motor vehicle accident. The circumstances arising under such a claim are not the same as in the present case. Also, his Honour was constrained by the legislative intention underlying a cap on claims pursuant to s 125 of the Motor Accidents Compensation Act.

Submissions for Mr Barden 21In his submissions on behalf of Mr Barden Mr Hickey took no issue with any of the legal analysis of Mr Kelleher. His submissions were to the following effect. The complexity in this case arises out of the financial situation of Mr Barden and the assessment of his loss of earning capacity and general future economic loss. Whilst the relevant legal principles may be clear, their application to a complex factual situation will not be at all clear. Accordingly, there would be complex issues of both fact and law. It was noted that each of the cases referred to in Mr Seric's submissions which were asserted to be factually similar to the present were all heard at first instance in this Court. Another difficulty which it was submitted will arise is the economic uncertainties and fluctuations inherent in agricultural enterprises.

Decision 22A starting point is to recognise that this type of case is dealt with regularly in the District Court. I do not think it is an overstatement to say that judges of the District Court are involved in the assessment of damages, including the assessment of economic loss, past and future, on a daily basis. This not infrequently involves plaintiffs who derive their income from sources other than simply a salary or wages. 23I am not satisfied that these proceedings involve any "complex legal issues". It was telling that counsel for Mr Barden was unable to identify any such issues with precision. At its highest, the submission was that there were difficult and complex factual issues to which a trial judge will be required to apply various legal principles. This appears to me to be a case in which the difficulty, if there is any, will be in the determination of the factual issues between the parties. It will be confined to a discrete aspect of the assessment of damages if Mr Barden succeeds on liability. Once the facts have been determined, there should be no difficulty, let alone complexity, with the application of settled legal principles.

Costs 24It follows from these conclusions that Mr Barden should have commenced proceedings in the District Court. Whatever will be the ultimate outcome, Mr Barden should pay Mr Seric's costs with respect to this application.

Orders 25I make the following orders:

The proceedings in file number 2012/108416 are transferred to the District Court.
The plaintiff is to pay the defendant's costs of and incidental to this application on the ordinary basis.

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: 04 December 2012

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