Bombala Council v Coombes

1. Appeal allowed in part. DECISION: 2. Vary the verdict and judgment made and entered on 18 May 2007 by substituting the sum of $235,945.83 for $267,416.74. 3. Otherwise confirm the costs order at first instance. 4. As to the costs of the appeal there is no order as to the costs up to 7 November 2007 but that thereafter the appellant should pay the respondent's costs of the appeal on an indemnity basis.

CATCHWORDS: TORT - Negligence - Personal injuries - Appeal as to quantum of damages - Whether error by primary judge shown - Adjustment of past economic loss.

PARTIES: BOMBALA COUNCIL (Appellant) Annemarie COOMBES (Respondent)

COUNSEL: G J HICKEY (Appellant) H J MARSHALL SC/ E BEILBY (Respondent)

SOLICITORS: DLA Phillips Fox (Appellant) Beilby Poulden Costello (Respondent)

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40373/07

MASON P HODGSON JA

1 MASON P: The respondent was injured in a motor vehicle accident on 18 April 1999. The liability of the appellant was established in the Court of Appeal (see Coombes v RTA [2006] NSWCA 229) and the matter was remitted to the District Court for rehearing limited to damages. The evidence at the hearing consisted of the testimony of the respondent and her partner. Bundles of medical reports were tendered but none of the doctors was required to give oral evidence. 2 Judge Peter Johnston awarded a verdict of $267,416.74. This included the following components:

Past economic loss including lost superannuation $85,500 Future economic loss including superannuation $50,000 Non economic loss assessed at 30% of most extreme case $98,000 3 The appellant challenges these three components as excessive. If the appeal succeeds as to past economic loss, there will need to be an adjustment of the interest component of $15,132.18 awarded with respect to the past out of pockets and economic loss. 4 The respondent was twenty-one years old at the time of the accident. 5 She was driving a car that was involved in a head-on collision with a truck. The car was badly damaged and the respondent was trapped in it for a period. She felt a sharp pain in her lower back as well as pain in the neck and a headache. The accident produced soft tissue injuries superimposed on a pre-existing degenerative problem affecting C5/6. The trial judge accepted the evidence of the appellant's orthopaedic specialist, Dr Upjohn, that in the distant future degenerative changes in the cervical and lumbar spine may develop at an earlier age than they might otherwise have done. 6 Initial treatment from the respondent's general practitioner consisted of anti-inflammatory and anti-depressant medication. The respondent was referred to a chiropractor whom she has continued to consult regularly. Unfortunately her neck and back problems have persisted and were still manifesting themselves by the time of the trial on damages in April 2007. 7 The respondent was initially unable to return to her TAFE studies due to her problems and she also started to decompensate psychologically due to a combination of anxiety and depression. Her nightmares were continuing involving flashbacks to the accident. She became apprehensive, irascible and socially withdrawn. She began to lose weight and became quite gaunt. She also had a fear of cars, of driving or sitting in the front passenger seat. She frequently broke down and cried. Referral to a rehabilitation program at the Victorian Rehabilitation Centre and to an adolescent psychologist did little to relieve the symptoms and their emotional impact. 8 In 2003 the respondent saw a psychiatrist, Dr Krakavenski, on several occasions. The respondent gave evidence that her initial symptoms included severe headaches, pain in the neck, shoulder-blades and lower back. Her sleep was interrupted by pain as well as the nightmares that were part of the PTSD diagnosis made by the psychiatrists on both sides of the record. These symptoms persisted and the respondent consulted first her GP and then, as indicated, a psychiatrist. She continued to get chiropractic treatment monthly between 1999 and the trial in 2007. The back pain has prevented the respondent from doing heavy lifting as well as household and other jobs that involve standing in the one position. She is unable to assist fully in domestic chores in the household with her partner. To lift her arms above her head causes sharp pain between the shoulder-blades. 9 The respondent gave the following evidence as to her situation in 2007 (Black 50). Q. I want to ask you how you're presently feeling. Today for example you've sat in the witness box for an hour at a time, how are you feeling at the moment, physically? A. I am a little bit sore. I don't know if it's, as I've been wiggling around a bit, but I'm able to sit for those periods of time.

Q. When you say you're a little bit sore where are you referring to? A. Mainly my lower back.

Q. And on a day-to-day basis, say over the course of this year, how's your neck been for a start? A. I still get pain within my neck and usually it goes down into my shoulder blades.

Q. Is this on a daily basis or a weekly basis or how often do you get this now? A. It comes and goes, but it's mostly there almost every day.

Q. Is it there when you wake up or does it come on towards the end of the day? A. Some mornings I will wake up with it and then other days I might not wake up with it but it will develop during the day.

Q. And what do you feel as it develops? A. It might be brought on by the way I might turn or might start off with a little twitch or like I suppose a spasm and then it would build up to quite intense pain.

Q. Now you say you take some Nurofen do you take Nurofen every day? A. Most days, yes.

Q. How does that affect the level of your pain? A. It does lessen it a little but it doesn't completely take it away.

Q. And what about your lower back, can you tell us how that has been this last three months? A. The pain still comes and goes. It's there most days. Some mornings I do wake up with it and it's like with my neck, otherwise it might develop during the day. That also I get spasms, twitching, funny feelings and once again if I take Nurofens it might help a little bit.

Q. Does it go away with the Nurofen? A. No.

Q. If you have it say one day and you sleep, have a good night's sleep is it gone the next morning? A. Not necessarily.

Q. How's sleeping for you? A. Some nights I do get a good night's sleep but there's other nights when I'll wake with the pain and I have to get up out of bed and walk around and then like take a tablet and then go back to bed.

Q. Do you get back to sleep straight away? A. It takes me a little while to get comfortable.

Q. And when you've had interrupted sleep how are you the next day? A. I usually wake up with the pain, quite tired.

Q. Does it affect the way you inter-relate with other people? A. I wouldn't say so, no.

Q. You've described a level of pain that you have, the area you describe as being stiff, has that persisted to the present time? A. I still get days when I am sick.

Q. You've told us that you still see the chiropractor approximately on a monthly basis do you pay for that? A. Yes. 10 The respondent accepted that the monthly visits to the chiropractor gave relief for about two weeks but not total relief (Black 51). 11 The sexual relationship with the respondent's partner has been affected by the continuing problems with the back. There are still occasional nightmares and anxiety about being in a car. Things appear to be getting better but a complete resolution is not expected. 12 The respondent's partner, Mr West, said that the respondent's nightmares had lessened but that she tends to now wake in pain more than in fright. He said that she is still very nervous as a passenger. He described her general level of emotional stability as unstable. Mr West corroborated the respondent's evidence that she continues to have restricted neck movements and continues to complain about back pain. She is unable to do the ironing, washing, gardening, cleaning and making of beds. She needs help drying her hair. Mr West denied the cross-examiner's suggestion that he was exaggerating. 13 The trial judge also concluded that a depressive condition overlay the orthopaedic problems. His Honour said (J30-32): 30. Overlaying all her orthopaedic problems, Ms Coombes also developed a depressive condition. According to Dr Krapivensky, the treating psychiatrist, she fulfilled all the criteria and 'suffers from ongoing chronic post traumatic stress disorder and superimposed major depressive illness' from the accident, which has had a 'broad impact' on her psychosocial and occupational functioning. The prognosis was uncertain.

31. Dr Carson, a psychiatrist qualified for the defence, diagnosed a post traumatic stress disorder. In his view, however, the symptoms of the disorder had almost completely remitted by July 2003, apart from occasional nightmares of the accident and nervousness when driving. The prognosis was for full recovery.

32. I accept, therefore, that overlaying her physical problems, Ms Coombes has suffered from a serious psychological condition, which has abated to some extent, but that she will continue to suffer from intermittent anxiety about her ability to work and to engage in normal social activity. However, apart from the condition having been being productive of decreased motivation in the past, it is unlikely to dramatically reduce her future capacity for gainful employment. The more she rehabilitates herself, exercises, and engages in gainful employment, the less likely she will be to suffer from anxiety. 14 The trial judge also accepted the respondent's testimony as to the long-term physical impact of the injury. He held (at J29) that: Miss Coombes continues to suffer symptoms and problems in the neck and back caused by her accident. However, there has been a steady improvement and there will be further improvement with the passage of time. 15 When addressing the economic loss claim his Honour said at J33: 33. … It was submitted, for example, that Ms Coombes had exaggerated the effects of her disabilities. Some of her complaints seemed at first blush to be somewhat extreme, such as her alleged inability to make a bed. However, when the totality of the medical evidence, including the psychiatric evidence, is examined dispassionately, it cannot be said that this plaintiff was a gross exaggerator, as the defence would have me believe. Her complaints have been made consistently over a long period of time. All the objective medical practitioners have accepted her as genuine. The chiropractor is perhaps one voice in the wilderness, but one wonders why he has nevertheless continued to treat her as extensively as he has. She impressed me as a genuine witness. Her partner, Mr West, corroborated her evidence. He gave evidence in a straightforward manner, and impressed me as a genuine and caring person. He has been a significant and supportive presence for Ms Coombes in the time they have known each other and I have no hesitation in accepting his evidence.

Non-economic loss 16 I shall first address the appeal in relation to the award of damages for non-economic loss. The appellant had contended at trial for an award in the range of 15% to 20% of a most extreme case. In this Court the submission was for 20% to 22%. The trial judge awarded $98,000 being the sum referable to an assessment of 30% of a most extreme case, this being the sum claimed by the respondent. His Honour said (J43-44): 43. For Ms Coombes, it was submitted that there should be an award assessed by reference to 30% of a most extreme case, having regard to the fact that she has suffered from her injuries for 8 years, and her age; that the enjoyment of her 20's has been substantially interfered with; the continuing nature of her problems; and the possibility of an accelerated onset of osteoarthritis in later life.

44. I have regard to all these factors, as well as the impact of her injuries on her social and family life, and the depressive condition she developed. ….. 17 The appellant submits that this sum was wholly disproportionate. I agree that it was high but cannot accept that it has been shown to be outside the range of an assessment open to the judge on the evidence. It is not just a question of his Honour having seen and accepted the testimony of this plaintiff. But this case involves an injury that has been found to have caused significant and continuing pain and discomfort for a young woman with an overlay of a diagnosed psychiatric illness. The range of matters referred to in paras 43 and 44 of the trial judge's reasons which I have set out above attest to the somewhat unusual range, nature and duration of the accident-induced disabilities.

Economic loss 18 The respondent completed her secondary schooling to year 12 in 1995. In 1996 and 1997 she completed an advanced diploma course in arts and fashion at the Melbourne Institute of Textiles. In 1998 she started a two year fashion design diploma at the TAFE. The accident interrupted her studies and she did not finish the course until 31 July 2000. Because of the physical and emotional problems stemming from the accident the respondent was only able to attend TAFE on a part-time basis when she resumed her course. She had to struggle through the classes and it was an effort to study. Her symptoms persisted despite intervention by the Victorian Rehabilitation Centre and treatment by an adolescent psychologist. 19 In December 1999 she started casual work with Nike as a sales specialist but was put out of this job after four weeks when the employer discovered her history of disability. She next obtained work as a kitchen hand working at a restaurant for 12 weeks notwithstanding some continuing pain. In October 2000 she obtained work at KMart initially for nine hours over three days a week. The work was initially quite light. Despite continuing back and neck problems, the respondent increased her hours incrementally until by the end of March 2001 she was working 35 hours per week. She remained at KMart for four years until October 2004 when she moved to work in a clothing store called Chain Reaction. There she was rapidly promoted from a routine quality control role to an expediting role. This administrative work involved allocating stock and chasing up suppliers. It was largely sedentary and enabled her to get up and move around. 20 It can be seen that apart from the early years the respondent has been able to obtain full employment notwithstanding her continuing disability stemming from the accident. This is something of a pointer to her drive and willingness to work but it does not follow that the accident has had no continuing adverse economic impact.

(i) Future economic loss 21 It is convenient next to turn to the award of $50,000 by way of a "cushion" or buffer with respect to future economic loss. The respondent experienced some difficulties in getting steady employment after the accident. In the early stages at least, the level of her neck and back problems, her state of nervousness and general lack of confidence were undoubtedly contributing factors both as to her drive to seek employment and her capacity to retain it. 22 I have already referred to the episode at Nike. The jobs at KMart and then Chain Reaction show the respondent's capacity to retain employment and, as her maturity and condition gradually improved, to move upwards in her chosen fashion industry. Unfortunately the Chain Reaction job came to an end in January 2007 when the position was made redundant. This was the respondent's situation at the date of the trial as to damages assessment. 23 The respondent's case as regards future economic loss was that the accident prevented her from moving into the design and manufacturing side of the fashion industry. She had wanted to progress into this better paid area and she qualified to do so when her TAFE course was completed. Her case at trial was that by reason of her continuing physical limitations she has a permanent reduced ability to compete on the open labour market and an inability to seek employment in the design and fashion side of the clothing industry where she would be required to do physical work such as cutting and carrying heavy bolts of fabric, which is beyond her capacity. 24 The findings underpinning the cushion award were expressed as follows, (J34, 36 and 37): 34. I am satisfied that by reason of her ongoing physical symptoms and problems, combined with her psychological condition, Ms Coombes has been incapacitated for work to the extent she claims. To her credit she has applied herself to obtaining work, and progressing, but she has done so by learning to work within her limitations.

36. I turn to consider the impact of her continuing problems on her future earning capacity. She seeks a 'cushion' of $50,000.00, by way of buffer, to reflect her continuing problems, which reduce her ability to compete on the open labour market. Although I am satisfied that to date she has believed she has been incapacitated for work in the design and manufacturing side of the fashion and clothing industry, by reason of her ongoing problems, and that this has adversely affected her capacity to seek out and obtain such work, I am not convinced that these problems will continue indefinitely to preclude her in the future from obtaining and performing such work if she has the creative capacity and a genuine desire to do so. In these circumstances, an award by way of a buffer is in my view appropriate. I also take into account the possibility of accelerated future degenerative changes, in accordance with the views of Dr Upjohn.

37. For all these reasons, I am satisfied that the following assumptions about Ms Coombes' future earning capacity accord with her most likely future circumstances, but for her injuries: she would have worked till the age of 65 in the fashion industry, on the creative or manufacturing side, as opposed to the administrative or managerial side of that industry. Her capacity to compete for that work has, however, been diminished by her physical restrictions, in particular her capacity to perform work involving cutting and carrying heavy bolts of fabric and the like. I find that damages that would have been awarded are to be adjusted by reference to an 85% [15%] possibility that the events concerned might have occurred but for her injuries. 25 It can be seen that his Honour addressed the issue presented by s13(1) of the Civil Liability Act as to the correct approach to assessing future economic loss. It may also be observed the cushion award rests upon two overlapping bases. His Honour accepted that the respondent's continuing physical and psychological problems, and the possibility of orthopaedic deterioration, will reduce the respondent's ability to compete on the open labour market. In doing so the learned judge was sensitive to the likelihood of an upturn as the physical and psychological issues hopefully resolve themselves at least in part. 26 The award as to the future also compensated for the differential between the type of employment represented by the jobs at Chain Reaction in the so-called administrative side of the fashion industry on the one hand and the work to which the respondent would have aspired uninjured in the design and manufacturing side of that industry. There was evidence that the design and manufacturing type of work would have involved greater physical effort and endurance and that the respondent's injuries meant that this door was likely to remain closed to her. There was also some evidence that remuneration was better in the design and manufacturing side. That evidence was not exactly strong but it supported the cushion, impressionistic as such awards inevitably are. 27 The appellant's complaint in this Court focussed upon the quantum of the award as distinct from its availability. In my view the appellant is bound to accept that such an award was well open to his Honour in light of his acceptance of the respondent's credibility and the medical and other evidence about some continuing disabilities. As to the quantum of the award in light of the respondent's comparatively young age, and the findings in relation to continuing disabilities and their likely or possible progression, I am not persuaded that the appellant has made good its challenge to the award for future economic loss.

Past economic loss 28 At J33 the primary judge referred to a schedule of damages containing calculations as to past economic loss and said that the mathematics of it was not disputed. His Honour went on to say that the only remaining issue was the extent of incapacity. He found the issue of incapacity in favour of the respondent and made findings of past economic loss in accordance with the schedule. It was submitted for the appellant that there was a broader challenge to past economic loss, and in particular that because the respondent agreed that from 2000 onwards she could physically do the work that came with the Chain Reaction job that she started in October 2004, she should not have been awarded damages on the basis that her failure to earn at the rate achieved in that job for the whole period from 2000 and 2004 was due to her injury. 29 In my opinion the primary judge was justified in finding that the respondent had acted reasonably in earning what she actually earned in this period, but he should have made some allowance for the possibility, that even if uninjured, the respondent would not have obtained full time work providing remuneration at the level attained at Chain Reaction in 2004 for the whole of that earlier period commencing in March 2000. The respondent's actual experience showed it was not easy to obtain employment in fashion industry work, and even accepting that uninjured she would have had a wider range of employment available and been a stronger candidate for employment, there should in my opinion have been a deduction of the order of 20% for the chance of delays in obtaining employment. 30 Perusal of the submissions of counsel for the appellant at trial shows that it was clearly put to his Honour that the reasons why the respondent did not go straight to Chain Reaction was that she was not able to get a job in the fashion industry as quickly as she wanted to (see Black 106-7). I therefore think that his Honour was in error in stating at J33 that the only debate raised in relation to past economic loss was the extent of the respondent's incapacity. 31 This matter requires an adjustment of the figures in the schedule, and there also should be adjustments of apparent mathematical errors in it. In respect of the period 20 April 1999 to 1 March 2000, the period is about 45 weeks, and subtracting four weeks for work at Nike, the correct calculation is 41 weeks at $100 per week giving $4,100. The period March 2000 to October 2000 is at most 35 weeks, which at $492 per week gives $17,220; and subtracting $1,300 from this gives $15,920. 32 In the first six months of the period from October 2000 to October 2004, the loss was $492 per week less $195 per week, that is $297 per week, giving a loss of $7,722 rather than $10,374. The other figure of $18,564 seems correct. 33 The period from October 2002 to June 2005 is about two years eight months, not 4.5 years, so the loss of $111 net per week should be for 139 weeks, giving $15,429 not $25,974.

The total then becomes $ 4,100 15,920 7,722 18,564 15,429 Total $61,735 34 Reducing this by about 20% or $12,347, I would round out the appropriate figure at $50,000. To this should be added $5,500 for superannuation. 35 Accordingly, I propose that the verdict and judgment of $267,416.74 should be reduced to reflect the substitution of $55,500 in place of $85,500 for past economic loss including lost superannuation. The consequential recalculation of interest on past out of pockets and economic loss is from $15,132.18 to an agreed sum of $13,661.27. The revised verdict and judgment therefore becomes $235,945.83. I therefore propose the following orders: 1. Appeal allowed in part. 2. Vary the verdict and judgment made and entered on 18 May 2007 by substituting the sum of $235,945.83 for $267,416.74. 3. Otherwise confirm the costs order at first instance. 36 HODGSON JA: I agree. 37 MASON P: The costs of the appeal. …

MARSHALL: Your Honour as I indicated earlier there was an offer of compromise served on 7 November 2007 in the sum of $200,000 plus costs. We would seek indemnity costs from that date.

MASON P: It was a Calderbank offer, not an offer under the Rules.

MARSHALL: No, it was an offer of compromise under the Rules.

MARSHALL: I'm happy to hand the letter and the offer up, fortunately the copy I have or file copies are not signed.

MASON P: I had indicated that absent a Calderbank offer we were minded to reflect the limited success in the appeal by no order as to costs, so does it follow that there should be no order until 7 November and thereafter costs on an indemnity basis in your favour from that time onwards?

MARSHALL: That's the order we would seek, your Honour. The appeal was filed I think July, some time around that time.

HODGSON JA: You wouldn't have incurred very much costs until November but I think consistently with what was foreshadowed, subject to what the appellant might say, that would seem to follow that it would be each party bearing their own costs until that date and then thereafter the appellant paying the respondent's costs on an indemnity basis.

HICKEY: There are limited things I can say in response to this. Costs regardless of the rules that provide for offer of compromises are still discretionary and of sorts the appellant has won the appeal in a limited fashion. Your Honours earlier indicated an order that you thought was appropriate. It's one that the appellant would adopt in total but I can't point to anything else that would assist your Honours in dealing with this issue other than a request for a beneficence. 38 MASON P: At the conclusion of argument this morning the Court announced the general thrust of the orders it was proposing to make. We indicated that we were minded, subject to any Calderbank type issues, to make an order in the appeal that each party bear their own costs. In proposing such an order we had regard to the limited success of the appellant in the issues that it tendered on the appeal. It was also proposed that the respondent have a certificate under the Suitors' Fund Act with respect to her own costs. The court has now been informed that on 7 November last year there was a settlement offer from the respondent to the appellant at a figure which even allowing for what was proposed about the costs of the appeal comes in at a sum less than the verdict that is proposed by way of disposition of the appeal. In light of that it seems to me that the proper order that should be made as to the costs of the appeal is that there be no order as to the costs up to 7 November 2007 but that thereafter the appellant should pay the respondent's costs of the appeal on an indemnity basis. It would appear that in light of such an order there is no call for an order under the Suitors' Fund Act in the respondent's favour. 39 HODGSON JA: Yes I agree. 40 MASON P: The order for costs that I propose is as indicated and that is the order of the court.

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