Cochrane & Anor v Hannaford

Court of Appeal (NSW)|1999-06-09|Before: Mason P, Ireland J

New South Wales Court of Appeal CITATION : Cochrane & Anor v Hannaford [1999] NSWCA 371 FILE NUMBER(S) : CA 40256/97 HEARING DATE(S) : 8-9 June 1999 JUDGMENT DATE : 8 October 1999

Peter Robert Cochrane Joy Anne Cochrane PARTIES : Peter Robert Cochrane v Ronald Ian Hannaford JUDGMENT OF : Mason P; Brownie AJA; Foster AJA

LOWER COURT JURISDICTION : Supreme Court - Common Law Division LOWER COURT FILE NUMBER(S) : CW 500014/94 LOWER COURT JUDICIAL OFFICER : Ireland J

COUNSEL : A: J Poulos QC, Ms CE Adamson R: DGT Nock SC, P Regattieri SOLICITORS : A: Abbott Tout, Sydney R: MJ Duffy & Sons, Dubbo CATCHWORDS : TORT - Personal injuries - Motor vehicle accident - Contributory negligence - Whether plaintiff in the circumstances acted reasonably regarding own safety - Unexpected events requiring urgent action - Plaintiff working below grader situated on banking - Reasonable to assume grader would be maintained safely in position; DAMAGES - Economic loss - Quantification - Cost of providing full time foreman appropriate measure of loss of earning capacity of plaintiff - Loss of opportunity of developing farm property - Son and mother partnership at will - Whether loss of future earning capacity calculated by reference to plaintiff's share of partnership profits; DAMAGES - Interest on - Successful claim under Motor Accidents Act 1988 - Purpose and operation of s73 - Whether offer of settlement unreasonable - Whether at time offer made defendant not able to make reasonable assessment of plaintiff's full entitlement to damages; JUDGMENTS & ORDERS - Courts and Judges - Statement of reasons for decision - Scope of - Judge's duty to state reasons - Inferences to be drawn from absence of reasons - Whether relevant injustice or prejudice requiring decision be set aside ACTS CITED : Motor Accidents Act 1988 DECISION : Appeal upheld in part, cross-appeal upheld

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

Peter Robert COCHRANE & Anor v Ronald Ian HANNAFORD

1 THE COURT: This is an appeal from a decision of a judge of the Common Law Division given on 11 April 1997. The proceedings were heard at Dubbo in September 1996 but the matter was not fully disposed of at those sittings. His Honour, the evidence being concluded, adjourned the proceedings to Sydney with a direction that written submissions should be provided by both parties. It appears that his Honour reached his decision after receipt of those submissions, without any further hearing taking place before him. His Honour entered judgment for the plaintiff against the defendants in the sum of $1,153,227.00 and ordered that the defendants pay the plaintiff s costs. The judgment sum was made up of several components to which reference will be made later in these reasons. As a result of steps taken earlier in the proceedings, before the hearing in Dubbo, the only issue in relation to liability was whether the plaintiff had been guilty of contributory negligence, an issue resolved in his favour. The appeal is brought against this finding and also in respect of the quantum of the damages awarded. 2 The action was brought by the plaintiff Ronald Ian Hannaford ("Mr Hannaford") against the defendants Peter Robert Cochrane and Joy Anne Cochrane to recover damages for personal injuries sustained by him in an accident which occurred on a property "Ulumbie" via Walgett on 12 September 1992. Mr Hannaford received severe personal injuries when he was crushed between a Caterpillar D7G bulldozer owned by him and a Caterpillar 12E grader owned by the defendants and driven by the first defendant Peter Cochrane. The defendants were sued jointly as owners of the grader and Peter Cochrane was sued separately as the driver. As already indicated, there was no issue before his Honour as to the liability of the defendants for the negligence of Peter Cochrane. Accordingly, both defendants were liable for that negligence. Although both are appellants in these proceedings, it will be convenient to refer to them as "Mr Cochrane". 3 We shall deal first with Mr Cochrane's claim that his Honour erred in finding that Mr Hannaford was not guilty of contributory negligence.

Contributory negligence 4 The evidence on this issue was given by Mr Hannaford and Mr Cochrane. There were some areas of conflict between the two versions. There was, however, no dispute as to the following facts. 5 On the day of the accident, Mr Hannaford had been engaged in various activities on the property. He said that he would have been involved in probably four or five things going on on the farm. One activity involved the use of the Caterpillar D7G bulldozer. That piece of equipment was being used to de-silt a portion of the bottom of the Namoi River where it flowed through the property. It appears that the presence of logs and sticks in the river, which at that point was only shallow, was causing an accumulation of silt which was interfering with the river's flow. The bulldozer was being used to push the collection of logs and sticks from the river onto the river bank in order to remove the impediment. Mr Hannaford was not driving the bulldozer on this occasion. It was being operated by an employee, Mark Perin. Towards 5:00 pm, in circumstances where dusk was beginning to fall, the bulldozer became seriously bogged in the river bottom. It was necessary that it be removed from this situation. There was some urgency attending its removal because of the need to use it in aid of a fairly tight timetable for the development of the property for cotton farming. Upon learning of the problem, Mr Hannaford went to the scene. At first, he organised an attempted extrication of the bulldozer by using two of the farm tractors, one operated by an employee named Dubner, and the other by himself. The combined effort of these two tractors was insufficient to budge the bulldozer. Consequently, further assistance was required. 6 During that day, Mr Cochrane had been operating a large grader on Mr Hannaford's property. He had been using this piece of machinery for the purpose of clearing irrigation ditches, associated with the development of the property for cotton growing. He was a self employed grader operator and the owner, with his wife, of the grader. He was working for Mr Hannaford, not as an employee but as an independent contractor. Although his operations were at some distance from the scene of the trouble, he heard of the problem over the two-way radio installation in his vehicle. It appears that he heard conversations between Mr Hannaford and his two employees, which were occurring whilst the rescue effort was being undertaken. Of his own volition, Mr Cochrane brought the grader to the scene. He offered his services over the radio and these were accepted by Mr Hannaford. He arrived at the scene and participated in the operation of attempting to extricate the bulldozer. 7 There is some conflict in the evidence as to the situation which obtained upon his arrival. Mr Cochrane testified that the two tractors were linked in tandem to the bulldozer, the first being joined by a chain to the second, and the second being linked by a similar chain to the draw bar on the bulldozer. Mr Hannaford's evidence was to the effect that, at all relevant times, the tractors were linked individually to the bulldozer. It was common ground, however, that Mr Hannaford asked Mr Cochrane to position the grader so that it could be linked by a chain, which it carried as part of its equipment, to the bulldozer and assist in pulling the bulldozer from the river bed on to the river bank. The river bank itself was fairly steep. Photographs that are in evidence indicate this fact. At the top of the river bank there was a relatively flat area over which the grader travelled before coming down the bank and positioning itself at approximately 8 metres from the bulldozer. Mr Cochrane's chain was attached to the draw bar of the bulldozer. He did not attach it himself. It was probably attached by Mr Hannaford. The three vehicles were then used in an attempt to drag the bulldozer on to the river bank. Mr Hannaford organised the operation and was in control of it, in that he issued instructions over the two-way radio system to the drivers of the vehicles. Clearly the chains from the vehicles needed to be adjusted, so that the vehicles pulled evenly and together. 8 According to Mr Cochrane the two tractors were pulling in tandem whilst his grader was independently attached to the draw bar of the bulldozer. Mr Hannaford, on the other hand, was quite clear in his evidence that the three vehicles were independently chained to the draw bar, with the result that the two tractors were not pulling in tandem. It seems clear that his Honour accepted Mr Hannaford's version on this aspect of the case. 9 A first attempt to remove the bulldozer was unsuccessful. A second attempt was made. In the course of this, one of the towing chains broke. There is conflict in the evidence as to which chain it was. On Mr Cochrane's version it was the chain linking the forward tractor to the rear one. On Mr Hannaford's version, it was the chain from a particular tractor known as an Acremaster, which chain was attached directly to the draw bar of the bulldozer. 10 The breaking of the chain brought the rescue operation to a halt whilst the chains were reorganised. Clearly, it was not simply a matter of reattaching the broken chain. The chains had to be adjusted in terms of their length so that when the adjustment was made, the vehicles would pull evenly and uniformly. 11 There is no dispute that Mr Hannaford undertook this task and that it was whilst he was busying himself in removing the chains from the draw bar of the bulldozer, so that they might be readjusted, that the accident happened. There is no dispute that whilst he was so engaged, Mr Cochrane left the controls of his grader and walked the short distance down the river bank towards where Mr Hannaford was working. He left the motor of the grader running and the gears in neutral. He applied the brake and took other steps to retain the grader in its position on the bank. These were insufficient. After a few minutes the grader slid down the bank and crushed Mr Hannaford against the bulldozer. A shouted warning to Mr Hannaford was not successful in removing him from the point of danger. Negligence on the part of Mr Cochrane having previously been found, it was unnecessary for his Honour to make any finding in this regard. However, he indicated what he regarded as being the negligence of Mr Cochrane because the area of negligent activity had a bearing upon the issue of contributory negligence. He found that, in the absence of any direction from Mr Hannaford, as being the man in control of the operation, that he should leave the grader and come down to assist, and his abandoning of control of the grader, in leaving it with its engine running and the gears in neutral, involved a foreseeable risk of harm to persons positioned behind it. His absence from the controls of the grader necessarily meant that if it should slip down the bank, that course could not be arrested by driving it forward. 12 It was common ground that he had received no direction to leave the controls of the grader; nor had he received any direction from Mr Hannaford that he should remain in control of the grader whilst steps were being taken to adjust and reattach the chains. 13 There are some significant areas of conflict in the evidence relating to the period after the breaking of the chain. First, Mr Cochrane testified that the chain which broke was the chain linking the forward tractor to the rear one. Mr Hannaford's evidence, as already indicated, was that the broken chain was one attaching the Acremaster tractor directly to the bulldozer. Although, unfortunately, his Honour makes no express finding, it seems quite clear that he was of the view that Mr Cochrane's evidence should be rejected in this regard. In any event, there is no conflict that after the breaking of the chain, Mr Hannaford was engaged in removing the chains from the draw bar of the bulldozer so that adjustments could be made to cope with the breakage. It is difficult to see why, if the breakage had occurred between the two tractors in tandem, Mr Hannaford should have been confining his efforts to the chains attached to the bulldozer. Mr Cochrane gives no evidence to explain this apparent difficulty in his testimony. 14 Another significant conflict in the evidence arises as follows. Mr Cochrane testified that when he left the controls of the grader and walked down the bank towards where Mr Hannaford was working on the chains, he was able to observe that the chain attaching his grader to the bulldozer was taut. Mr Hannaford's evidence is to the contrary. He said that, at all times, the chains attached to the bulldozer were slack and upon the ground. He says that if they had been taut, it would have been quite impossible to attempt to remove them from the draw bar of the bulldozer. His Honour accepted Mr Hannaford's evidence in this regard. It is an important finding because it negatives a theory propounded by Mr Cochrane and, to an extent, relied upon in argument before us that the movement of the grader was occasioned by a movement in the bulldozer. It was suggested that the bulldozer which had been moved very slightly by the previous pulling attempts had slid back and in doing so, because of the taut chain between it and the grader, had pulled the grader down the bank. 15 However, his Honour found that Mr Hannaford had been seeking to remove the pin from the draw bar in order to release the chains. The chains were slack while he was doing this. The grader moved at a time when the chains were slack. Moreover, the finding in favour of the slackness of the chains supports another part of Mr Hannaford's evidence. He says that when he addressed the problem occasioned by the breaking of the chain and saw the necessity of removing the chains from the draw bar he directed Mr Cochrane to reposition the grader. Clearly enough, this was to slacken the chain and enable Mr Hannaford to undertake its removal. Although his Honour makes no specific finding in this regard, it is our view that his finding as to the slackness of the chain, which was clearly correct, leads reasonably and necessarily to the acceptance of Mr Hannaford's evidence that, prior to working on the chain, he gave the direction referred to above, namely that Mr Cochrane should re-position his vehicle. 16 It should be mentioned that there is no dispute in the evidence that Mr Hannaford was unaware that Mr Cochrane had left the controls of the grader. Although Mr Cochrane had been in the area where the work was going on for some minutes, it is clear and undisputed that Mr Hannaford had his back to him and did not know of his presence or, more significantly, did not know that he had ceased to be in control of the grader after its repositioning. 17 We have spent some time in this discussion of the facts surrounding the accident and in expressing our views as to what the evidence establishes. This has been necessary because his Honour did not make express findings of fact in some areas and did not indicate any general preference for one version against the other. However, the findings of fact that he made, which have been referred to in these reasons, necessarily lead to the additional findings indicated. In these circumstances, it is unnecessary to lengthen these reasons by setting out passages from his Honour's judgment in relation to the issue of contributory negligence. Counsel for the appellants has made a general complaint as to deficiencies in his Honour's judgment, in relation to the absence of findings of fact and, more particularly, in relation to a failure to deal with arguments of substance placed before him on behalf of Mr Cochrane. We shall have occasion to refer to these submissions later in these reasons. However, we are not persuaded that, in relation to the issue of contributory negligence, these deficiencies should result in there being any retrial of the issue. 18 It is clear that the main argument of the appellants in relation to this issue was put to his Honour as it has been put to the Court; namely that Mr Hannaford was in control of the whole operation of the removal of the bulldozer and that, being in that position, he should have taken care to see that Mr Cochrane remained in control of the grader at all relevant times. It was pointed out that there was a hazardous quality to the operation. The grader was positioned on a marked downslope, it was a significantly heavy vehicle, it was only a short distance from where the men including Mr Hannaford were working and that any downward movement on its part would put them in peril. It was submitted that in these circumstances Mr Hannaford owed to himself a duty analogous to that owed to his employees to establish and maintain a reasonably safe system of work. This would entail giving appropriate instructions to Mr Cochrane as to his remaining in control of the grader and as to ensuring that those instructions were carried out. Authorities such as Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 and Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 were relied upon to underpin a submission that Mr Hannaford was a victim of a failure on his own part to provide a safe system of work and that his duty in this regard was non-delegable. We do not think that these authorities are in point. 19 It has often been said that the question of contributory negligence should not be approached by way of an analysis of relevant duty and breach. The question is a simple one; namely, whether the plaintiff in all the circumstances had taken reasonable care for his own safety. (See for example the discussion in The Law of Torts, Fleming, 9th ed Ch 12 p302.) In our view the question of contributory negligence in this case must be approached realistically and practically. Whilst it is true that Mr Hannaford had overall control of the operation being conducted by his employees and, for the limited purpose of the extrication of the bulldozer, also had control over the activities of Mr Cochrane, these facts, which were acknowledged by his Honour in his judgment, are not determinative of the issue. What must be determined is whether Mr Hannaford acted unreasonably having regard to his own safety in the situation which obtained upon the breaking of the chain. This was an unexpected circumstance requiring urgent remedial action. He gave an instruction to Mr Cochrane to reposition the grader so that the chain could be slackened off preparatory to its removal from the bulldozer's draw bar. Thereafter, he immediately busied himself with the operations required for the removal of the draw bar pin and the adjustment of the chains. He would necessarily have had his attention concentrated on this operation. He had no reason to expect that Mr Cochrane, apparently an experienced grader operator in charge of his own grader, would not take all proper steps to remain in control of it during this re-adjustment. In particular, he was not aware that Mr Cochrane had left the controls of the vehicle nor did Mr Cochrane draw this to his attention. It was, in our view, perfectly reasonable, in these circumstances, for Mr Hannaford to assume, as he clearly did, that the grader would be maintained safely in position by Mr Cochrane, its operator and owner. 20 In our opinion, no error has been demonstrated in his Honour's finding that there was no contributory negligence on the part of Mr Hannaford. 21 We turn, then, to the attack which has been made on his Honour's findings as to damages.

Damages 22 There is no dispute that Mr Hannaford suffered severe disabling injuries in the accident. His Honour dealt with these in his judgment in terms which have not been the subject of any criticism. Accordingly, we set them out here: The plaintiff sustained a crush injury which resulted in a vertical sheer fracture of the pelvis causing right sacro-iliac (where the pelvis joins the spine) disruption and diastasis (separation) of the symphysis pubis (the pubic arch). He suffered a ruptured membranous urethra which went on to acute renal (kidney) failure, to (sic) due to the crush injury. He suffered a "gross" fracture of the left femur which was treated by open reduction and plating on 19 October, 1992 when the plaintiff had sufficiently recovered from renal failure.

The treating orthopaedic surgeon, Dr Paul Stalley, has described the plaintiffs injuries as "… very major and significant disabilities which will be present with him on a permanent basis. He first of all has a major foot drop on the right side and weakness where he has had an injury to his lumbo-sacralplexus. "

The plaintiff walks with a limp and has diffuse pain over the trochanteric region of his left hip which is intermittent. He is unable to climb under machinery, or up and down earthen banks and experiences great difficulty in entering crops over rough or muddy ground for crop inspection. Muddy conditions are a continuing feature of irrigated crops.

The plaintiff's ability to move about is seriously hampered by his hip and leg weakness; his foot drop and diffuse numbness in the right foot. He is unable to carry out heavy machinery repairs and is also troubled by right later thigh pain.

Dr Stalley expressed the view that the grinding sensation felt by the plaintiff in the hip was established on x-ray to be gross myositis (inflammation of the muscles) around the hip joint. 23 The award for non-economic loss was agreed by the parties as being 55% of a most extreme case, the appropriate award, therefore, being $129,250. 24 His Honour's award of damages was summarised in the judgment as follows: 1 Out of pocket expenses $30,342 2 Non economic loss 129,250 3 Past economic loss 380,270 4 Future economic loss 400,959 5 Future medical expenses 55,000 6 Cost of modification of farm facilities 7,406 7 Loss of opportunity re: "Runningbrook" 150,000

$1,153,227 25 The components which are the subject of this appeal are (3) past economic loss, (4) future economic loss, and (7) loss of opportunity re "Runningbrook".

In relation to these heads of loss , the appellants make the following criticisms of his Honour's judgment:

(a) His Honour failed to give adequate reasons for his judgment;

(b) His Honour failed to have sufficient regard to the evidence;

(c) His Honour failed to have regard to the appellants' written submissions on damages, sufficiently or at all. 26 The case, as already indicated, was heard at the Dubbo Country Sittings. It occupied more than four hearing days and could not be concluded in the sittings. The evidence was taken but no final submissions were made. His Honour directed that full submissions be made in writing with appropriate references to the extensive transcript and documentary evidence. This was done. The complaint is made on behalf of the appellants that his Honour's judgment evinces no indication that he had regard to significant portions of the submissions that were made on behalf of the appellants as to those heads of loss. Nor, it is asserted, does the judgment provide any reasons why those submissions, if considered, were rejected. 27 As a corollary to these claims, it was asserted on behalf of the appellants that, had his Honour considered and given appropriate weight to the allegedly ignored submissions, he would, necessarily, have awarded damages in a substantially reduced sum. Accordingly, the appellants sought a new trial or, alternatively, if possible, a reassessment of the plaintiff s damages by this Court. 28 Before considering the submissions made in the appeal, it is necessary, briefly, to refer to the cases presented by Mr Hannaford and Mr Cochrane at the trial, the general course of the trial and the evidence adduced. 29 Mr Hannaford was born at Walgett on 20th September 1949. His father conducted a grazing enterprise upon the family property "Barokaville". After initial schooling at Walgett, he completed his secondary education in Sydney, obtaining the Higher School Certificate in 1968. Thereafter, he was employed as a clerk in the local Shire Council at Walgett for a period of some four years during which he saved sufficient money to commence wheat farming activities. These were conducted in the first instance at "Barokaville". Later he commenced share farming on other properties in the district. 30 In 1974, his father became ill and it became necessary for Mr Hannaford to assume management of "Barokaville". The property covered approximately 7,000 acres, and at that stage, carried 3,000 sheep. There were also 1,000 acres devoted to wheat farming. Mr Hannaford has continued to manage that property. 31 The evidence clearly indicated that he was an enterprising young man who wished to expand his farming activities. In 1982, he purchased a further property, "Crossdale". This was a 2,000 acre property situated on the Pilliga Road in the vicinity of "Barokaville". He initially used this property for wheat farming. A few years later, he purchased an additional property of 5,000 acres on the Coonamble Road. This property was called "Wolsley". It was also used for wheat farming. 32 Mr Hannaford devoted himself to wheat farming during the 1980s until 1989, when a drop in wheat prices caused him to turn his attention to cotton growing. This was a significantly different activity from the production of wheat. Mr Hannaford, however, had had experience in the operation of earth-moving equipment which was necessary for the preparation of land for the growing of cotton. The earthmoving machinery was a D7G Caterpillar bulldozer which he owned and in the operation of which he had acquired considerable experience. 33 At the time he turned his attention to cotton growing, there was only one other property upon which cotton was produced on the Namoi River in the Walgett area. Cotton was produced in adjoining areas where the operations were clearly profitable. 34 At first, his cotton growing activities were undertaken through a partnership named The Walgett Cotton Company. His partner was a man named Campbell. It appears that, in addition to the respondent's bulldozer, the partnership had available two large powered earth scrapers. The partnership used these items of equipment to build on-farm water storage, essential for cotton growing, at "Crossdale" and, also, undertook contract earthmoving work on three other properties as preparation for the share farming of cotton on those properties. The partnership continued for two years. Mr Hannaford undertook work involving a great deal of heavy physical labour, consisting of the repair and maintenance of the heavy machinery and its daily operation. Additionally, he engaged in heavy cotton farming work such as the pulling of syphons from place to place, so that they could be used for the introduction of water into the irrigation channels on the cotton farms and, also, "chipping" cotton and weeding. It was not disputed that this was very heavy work, in which he was engaged for some eighty hours per week. 35 At the time he commenced his cotton growing activities, the property "Crossdale" was totally undeveloped. The other three properties already referred to were approximately fifty percent developed. The property "Wolsley" was not suitable for cotton growing and was leased for wheat farming. 36 The nature and extent of the work undertaken by Mr Hannaford up to the time of his accident is summarised by his Honour in findings, which are undisputed, as follows: The plaintiff gave unchallenged evidence that in developing these properties for cotton growing, about eighty percent of his time was occupied in driving machinery but 'there was also a fair slice of heavy duty mechanical repair type work that goes hand in hand with keeping that machinery running especially at Walgett where we are slightly isolated. It's very expensive to get experts to come in and fix your breakdowns, so that always fell in my lap.' As to the size of the equipment he was called upon to work on, the plaintiff said 'The tractor weighted 20 tonnes, yeah, you know, anything from a bolt you could pick up in your fingers to something that needed a crane, it was pretty heavy duty work.' In addition to the earth works associated with land planing, channelling and the construction of large (100 acres) on-farm water storage, the plaintiff carried out the physical work of building the infrastructure for the pumping stations, and the steel water control towers, some eleven metres in height, as well as the installation of 26 inch centrifugal pumps and associated equipment. 37 At the time of the accident on 12 September, 1992, the work of developing "Crossdale" for cotton was approximately 90% complete, with two of the three pumping sites completed. 38 Mr Hannaford suffered some financial difficulties. Borrowing was essential for the undertaking of his cotton growing activities and the acquisition of plant. It appears, however, that he was able to remain afloat financially and was assisted in this regard by the sale of the property "Wolsley". At the time of the accident, he regarded himself as "comfortable" financially. He was clearly carrying a load of debt but was not under dangerous pressure from his financiers. 39 As already indicated, there was no significant dispute as to the severe physical consequences of the accident. As shown in the passage cited from his Honour's judgment, Mr Hannaford was left with significant painful disabilities which affected his capacity to undertake the heavy work associated with the development of land for cotton growing and the production of cotton crops. The cotton crop for which the land at "Crossdale" had been prepared was, in fact, sown shortly after his accident by his employees. The sowing was successful and a good crop was later harvested in 1993. In relation to this crop, it is clear that he was unable to play any significant role as he was undergoing the immediate, severe after-effects of the accident and necessary periods of hospitalisation. Subsequent crops have been undertaken and have proved successful, with Mr Hannaford playing an increased, but still reduced, role in their production. It was not disputed, on the evidence, that his ability to undertake the role of a "hands on" manager was significantly reduced, although he evinced courage and determination in pushing himself to his physical limits. His Honour made the following findings which, on the evidence, could not be challenged: ... the plaintiff, by his entrepreneurial skills, combined with his physical capacity to work long hours operating, maintaining and repairing heavy machinery, has developed from scratch an enterprise capable of generating income from cotton production which, for the present crop, is valued in the order of two million dollars. Hence there is necessarily an asset base bearing a relationship to that income producing capacity which has been generated by the efforts and skills of the plaintiff.

Such a capability in a person in the position of the plaintiff is recognised by Mr Ivey as rare, and I accept this assessment. I also find that the plaintiff's physical and emotional capacity to maintain his personal input was dramatically cut-off by his accident and that his ability to be the 'hands~on' linchpin of such an undertaking is permanently lost to him to a substantial degree. 40 These established facts provide the background for Mr Hannaford's claim for past and future economic loss and for lost opportunity for economic gain in relation to the property "Runningbrook".

Mr Hannaford's case for economic loss 41 Mr Hannaford's claim in the Court below is encapsulated in a statement made by him in his evidence. He said: When I came back from hospital I was not able to do anywhere near the amount of work on the farm I did before I left. The productivity, the advancement, the development of the farm or the prospect of developing other farms went out of the window, simple as that.

42 There was obviously, a significant difficulty in quantifying economic loss resulting from these disabilities. Mr Hannaford's cotton growing enterprise was only just commencing at the time of the accident. Consequently, it was not possible to compare the results pre and post accident, as is not infrequently done in cases of impairment of earning capacity, where the injured plaintiff has been conducting the same pre accident and post accident enterprise. Moreover, as already indicated, there was no neighbouring cotton farm which could be used as a basis for comparison. Reference was made in the evidence to a type of measure described as "the Namoi average" which provided, apparently, some indication of production levels over a broad cotton growing area. Reliance was placed upon this measure by Mr Cochrane who sought to argue that, insofar as Mr Hannaford's cotton production in the years following the accident compared favourably with the Namoi average, no loss had been suffered. 43 Mr Hannaford's case on economic loss depended upon his own evidence and that of an expert, Mr Ivey. His testimony may broadly be described as developing, in detail, the statement which has already been quoted. Mr Hannaford's physical disabilities, he asserted, prevented him from performing a multitude of on-the-spot managerial operations in the field. Whilst he was capable of overall planning, he could not provide "hands-on" leadership in the performance of essential tasks relating to production and maintenance. As a result, crop yields were not as high as they otherwise could have been, there was delay in bringing land into production at "Crossdale" and, in 1996, an opportunity to acquire the property "Runningbrook" had to be foregone, as he lacked the physical ability and psychological drive to undertake its development. It was undisputed that this property was immediately adjacent to the property "Barokaville" and, consequently, could have been economically developed by Mr Hannaford through the utilisation of economies of scale. 44 Mr Hannaford was supported in these contentions by the evidence of Mr Ivey, an accounting and agricultural expert. He conferred with Mr Hannaford and made inspections of the properties. He produced a comprehensive report which was tendered in evidence, without objection. It was argued but faintly before us that findings in the report were inadequately supported by evidence, Ramsay v Watson (1961) 108 CLR 642 being relied upon in this regard. This assertion was not developed in argument. A reading of the whole of Mr Hannaford's evidence indicates that the opinions of Mr Ivey had a sufficient evidentiary basis. 45 Mr Ivey assessed Mr Hannaford's losses for the years 1993 and 1994 under a number of headings, having indicated that: The assessment of past economic loss is based on the specific effects that the accident had on Mr Hannaford's business. Where possible the loss is calculated with reference to known financial figures. However, in many cases this is not possible, and estimates of the likely losses must be made. The headings and associated comments appear in his report as follows, excluding those not ultimately relied upon: (a) Delayed Development of Extra Irrigation Area Mr Hannaford advises that it was planned to develop an extra 200 acres (80 ha) of irrigation land at 'Crossdale' in time for the 1993/94 cotton season. As a result of the accident this land has not been developed. (b) Delayed Development of existing Irrigation Area Mr Hannaford advised that plans to install a pumpsite and a water reticulation system for the existing irrigation area were cancelled as a result of the accident. This has lead (sic) to a loss of productivity in the irrigation area. (c) Reduced Yield Inadequate managerial input after the accident resulted in reduced cotton yields in 1993 and 1994. In particular, weeds were not controlled effectively, the fertiliser programme was sub optimal and the irrigation scheduling was unsatisfactory. It is estimated that the resultant loss of cotton yield was 2.5 bales per hectare in 1993 when actual yields averaged approximately 5 bales/ha. A yield of 7.5 bales/ha should have been easily obtained. In 1994 a loss of cotton yield of 0.5 bales/ha is estimated to have occurred. (d) Higher Cotton Costs Due to inadequate weed control, a greater amount of weed chipping had to be carried out in 1993 and 1994. This is estimated at an extra 30%, or around $13 per hectare. (e) … (f) Contract Farming and Earthmoving The average contract income earnt (sic) by Barokaville Pastoral Company between 1989 and 1992 was $32,080 per year (Attachment 2. 1). In 1993 only $4,800 was earnt (sic). The difference between these amounts is used as the basis for the estimated loss. (g) Extra Cost of employed Labour Wage expenditure in 1993 declined somewhat from the 1992 levels (Attachment 2.1). However this was under the circumstance of smaller contracting, cropping and livestock enterprises. Therefore, even though wage costs fell in 1993 we believe that it does not discount the claim that replacement workers were employed in that year. (h) … (i) Payment to a Neighbour A neighbour, Greg Webber, was employed to assist with the running of Mr Hannaford's properties. He was paid $15,000 to $20,000 for his work. The exact amount is not known at this stage. (j) … 46 Mr Ivey then made calculations in an attachment to the report, in respect of each of these headings, with the acknowledgment that a degree of estimation was required because the enterprise had no previous years of operation with which a comparison could be made. 47 After making appropriate adjustments for the incidence of income tax, Mr Ivey produced an estimate for economic loss in the 1993 financial year of $194,644, and in the 1994 financial year of $104,954, a total of $299,598. 48 Mr Ivey's report was produced in 1994. It contained, in addition to the estimates of the past 1993 and 1994 financial year, an estimate of future economic loss. This was based upon the cost of a replacement manager, Mr Ivey expressing the view that "Mr Hannaford's properties may possibly approach their former level of productivity if an energetic, capable replacement manager is employed". Accordingly, he made a calculation based upon the present value of the salary payable to a person having the necessary level of expertise. This produced an after tax figure of $550,516. The calculation took into account a retiring age for Mr Hannaford of sixty-five years. 49 Mr Ivey's 1994 report did not take into account any compensation for the lost opportunity of purchasing and developing the "Runningbrook" property, as that opportunity did not arise until 1996. Mr Ivey provided a supplementary report dated 4 September 1996 in which he provided a calculated estimate of the returns that might have been achieved through the purchase and redevelopment of the property. A claim was made based upon the present value of future losses so calculated. His Honour did not accept this claim. Accordingly, there is no need to set it out in detail. His Honour, in fact, awarded a much smaller sum on the basis of "lost opportunity".

The appellants' case at the trial 50 On the issue of damages, the appellants called an agricultural expert, Ms Briget Jackson. She presented a report in opposition to that produced by Mr Ivey. She did not challenge his analysis of the relevant heads of damage but asserted that his calculations and estimates were incorrect for the reasons that she gave. She gave as her opinion that the amounts of loss for the 1993 and 1994 years should be very substantially reduced and that it was inappropriate to take the salary of a farm manager as the basis for the calculation of future loss. It was her view that the salary of a farm foreman was more appropriate for that purpose. 51 No other evidence was called, but both Mr Hannaford and Mr Ivey were extensively cross-examined in an attempt to obtain concessions that the post accident disabilities of Mr Hannaford had not affected his earnings, the theme being that Mr Hannaford by the exercise of his managerial skills, which were unaffected by the accident, had rearranged the activities of his existing work force with the result that there was no demonstrated need for the employment of additional labour in the past or in the future: furthermore, the results of the farming operation after the accident showed no compensable loss as the production was equivalent to or better than the Namoi average. 52 Other cross-examination was directed to the asserted lack of ability of Mr Hannaford to obtain the necessary finance to expand cotton farming on the existing properties or to acquire and develop a further property such as "Runningbrook". 53 These areas of attack may be seen as being distinct from attempts made to support, through the questioning of Mr Hannaford and Mr Ivey, the contentions made by Ms Jackson in opposition to those of Mr Ivey.

The judgment in the Court below 54 In relation to the losses of the financial years 1993 and 1994, his Honour accepted the approach of Mr Ivey, preferring his evidence to that of Ms Jackson. He did not deal in detail with the analysis provided by either witness of the particular heads of loss to which reference has been made. He gave a short reason for his general preference for Mr Ivey's evidence in these areas over that of Ms Jackson. That reason has not been attacked in this appeal. He accepted the total figure of $299,598, but took into account the "adverse vicissitudes" which may affect rural production. He considered that a further ten percent deduction would be appropriate to accommodate these vicissitudes. Accordingly he allowed, for these years, damages in the sum of $269,638. It is acknowledged by Mr Hannaford's counsel that a further reduction should have been made to take into account that this figure represented the losses of the "Barokaville" partnership of which Mr Hannaford was a member and not those of Mr Hannaford himself. This is a matter to which we shall return later in these reasons. 55 The primary judge favoured the view of Ms Jackson in relation to future losses. He considered that Mr Hannaford's residual disabilities were not of a sufficient order to require the employment of a farm manager. He accepted that, in accordance with the view of Ms Jackson, a full time working farm foreman would be adequate "to undertake the bulk of the 'hands-on' work previously undertaken by the plaintiff". In so doing, he inferentially rejected a later opinion given by Ms Jackson, in her oral evidence, to the effect that a part time foreman would suffice. There was evidence to indicate, in any event , that there were practical difficulties associated with the obtaining of the services of a part time foreman in the Walgett area. His Honour accepted therefore, on the basis of Ms Jackson's report, that damages for this aspect of Mr Hannaford's claim should be calculated on the basis of the cost of a full time working farm foreman at $47,000 per annum. This produced, to time of judgment, a figure of $130,155. 56 His Honour then took into account that Mr Hannaford was in partnership with his mother in relation to his farming activities. The partnership was an equal partnership. However, his Honour did not award damages on that basis. He dealt with the matter as follows: It is well recognised in cases of this nature that due to the disproportionate input by one partner, a large share of compensatory damages may need to be allocated to that partner. See Taraporewalla v Berkery (1983) 3 NSWLR 28 and see also Cole v Ellis (1992) Aust Torts Reports 81-186 and Zachopoulos v State Government Insurance Commission (1986) Aust Torts Reports 80-023. Taking into account the plaintiffs input to the partnership, and the fact that his mother resides away from the properties in Dubbo, and recognising also that the plaintiff is able to perform some physical work, an allowance of 85% of the amount of $130,155 is made ie $110,632 giving a total past economic loss figure of $380,270. 57 It is acknowledged by the respondents that his Honour erred in not applying the 15% reduction to the figure of $269,638.00 awarded for the years 1993 and 1994. This acknowledgment is obviously correct, and, in itself, is capable of being corrected under the "slip rule". 58 For the purpose of calculating future economic loss, the primary judge accepted as a basis the need for the assistance of a full time farm foreman until Mr Hannaford obtained the age of sixty-five. His Honour used the 5% discount tables and, allowing 15% for adverse vicissitudes, arrived at a figure of $471,717 which he further discounted to 85% of that figure "due to the existence of the partnership and the plaintiffs residual capacity for manual work", the final figure being $400,959. 59 In relation to the claim in respect of "Runningbrook" his Honour accepted that: the development of 'Runningbrook' by the plaintiff was attractive to him, not only due to its convenient location, but also by virtue of the plaintiff having already available the necessary plant and equipment, as well as the expertise, to develop the property and also to achieve economies of scale.

60 Ms Jackson in her evidence had cast some doubt on the ability of Mr Hannaford to acquire "Runningbrook" through lack of available borrowings. His Honour dealt with this matter in his judgment as follows: The defendants' expert, Ms Jackson, doubted the plaintiff's capacity to borrow funds to finance the purchase based upon his banking history and the correspondence which passed between various lenders and the plaintiff. I have considered these opinions, however, when balanced against the plaintiffs achievements in financing his property purchases and effecting their development, I am satisfied that on the balance o)f probabilities, absent his injuries, the plaintiff would have been able to and probably would have purchased 'Runningbrook' and developed that property for cotton production.

61 The primary judge accepted that the purchase and development of "Runningbrook" was denied to Mr Hannaford because of his physical disabilities. He was not, however, prepared to accept a calculation of damages based upon an estimated loss of profits "reduced to a weekly return (and) extrapolated in the matter customarily adopted to calculate an injured plaintiff's future wage loss". Instead, he approached the matter as follows: The plaintiffs lost opportunity, although real and properly to be reflected in a lump sum of damages, does not, in the present case, permit of such precise calculation. The intrusion into the assessment of damages of a degree of guesswork is no novelty. In Linsell v Robson (1976) 1 NSWLR Mahoney JA (as he then was) said at p259: I am conscious that, in the assessment of damages, there is necessarily involved something approaching guesswork, rather than estimation as to future events. And see also Jones v Schiffmann 124 CLR 303 at 308 where Menzies J in considering damages recoverable by a widow in a Lord Campbell's Act claim said: The assessment of damages, whether by a judge or a jury, does sometimes, of necessity, involve what is guesswork rather than estimation. In the present case all the vagaries of rural endeavour must be given due weight, even though the plaintiff has, in my view, discharged the onus of establishing that on the probabilities he would have purchased and developed 'Runningbrook' and generated profit and capital gains from it. The amount of damages assessed as reflecting this lost opportunity is $150,000.

The appellant's submissions on appeal 62 The appellants' complaints, as indicated, relate to three areas of his Honour's judgment namely (a) past and future economic loss, (b) the "Runningbrook" award, and (c) the adequacy of the allowance in respect of the partnership. As well as a general claim that the damages awarded in these areas was excessive, an overriding claim is made that his Honour committed an error of law in either ignoring submissions made by the appellants in relation to these areas or in failing to give reasons for their rejection. It is difficult, of course, to countenance that his Honour, a most experienced trial judge, would have ignored the written submissions of the appellants. It was not seriously suggested that he had. Reliance was, rather, placed upon the absence of any indication in the judgment that they had been considered and rejected, there being no reasons given. 63 The main complaint made on behalf of the appellants is that his Honour failed to deal with a major submission that, notwithstanding that Mr Hannaford had demonstrated a loss of earning capacity, he had nevertheless failed to show that this had resulted in any financial loss (Graham v Baker (1961) 106 CLR 340; Medlin v State Government Insurance Commission (1994-95) 182 CLR 1). In the appellants' written submissions to his Honour, and also in this appeal, the point was made in various ways. It was said that "the plaintiffs injuries have meant that he carries out his cotton farming business, in a modified way and with some difficulty, not necessarily resulting in quantifiable financial loss". It was submitted that "it is clear that by organising the 'Barokaville' Partnership's affairs as he has and using the partnership's assets as he has, the plaintiff has commendably (in this context) overcome his disabilities". It was put that all that Mr Hannaford should receive was lump sums for the loss of earning capacity awarded as a "cushion" rather than receiving damages "calculated on a mathematical, week by week, month by month, or year by year basis". It was said that "to a large extent, the opinions of the experts called are not really of any great assistance". It was further said that "the expert evidence from both parties can only provide some guide to evaluating the success or otherwise of the Barokaville Partnership's business". 64 In putting these arguments, the appellants were, to a considerable extent, abandoning the evidence that they had called through Ms Jackson; in particular, in relation to her calculations of future economic loss. It was a significant contention on the part of the appellants that Mr Hannaford had failed to demonstrate any financial loss arising from his impaired earning capacity, in that there was no evidence that he had in fact hired any substitute labour in the 1993 and 1994 years, or that he would be required to do so in the future. It was part of this submission that he had, with his existing labour force, managed to achieve production levels comparable to the "Namoi average". 65 In relation to the "Runningbrook" claim, arguments seem to have been put in the alternative. It was asserted in the first place that the "Runningbrook" acquisition was, in effect, a flight of fancy, because the partnership would not have been able to obtain finance to acquire the property or develop it. This had been Ms Jackson's original thesis, but, during the course of the trial, she changed her view and accepted that the finance might have become available because of the partnership's achievement of successful cotton farming results. Perhaps because of this, the alternative argument was put on behalf of the appellants that finance would reasonably have been available and, that being so, there was no demonstrated reason why Mr Hannaford should not have gone ahead with the "Runningbrook" acquisition, and consistently with his demonstrated ability to organise his workforce to overcome problems associated with his disabilities, should not also have undertaken the successful development of the property. Again, it was said, that no loss had been demonstrated as flowing from the impaired earning capacity. 66 As it was a major submission in the appeal that his Honour had erred by failing to give reasons for the rejection of the "Graham v Baker" submission, it is convenient, at this stage, to consider the law in relation to the requirement that a judge give reasons for his decision. 67 This topic received consideration in Mifsud v Campbell (1991) 21 NSWLR 725. Samuels JA considered "authorities which deal with the judicial obligation to give reasons". His Honour said (at 728): In Public Service Board of New South Wales v Osmond (1986) 159 CLR 656, the High Court (at 667) said that it was the right to describe the giving of reasons as 'an incident of the judicial process' although a normal but not a universal one. In Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 274, McHugh JA (at 278) makes some comments upon that holding, and goes on to say (at 281) that the failure to explain the basis of a crucial finding of fact involves a breach of the principle that justice must not only be done but must be seen to be done. Similarly, in my opinion, it is an incident of judicial duty for the judge to consider all the evidence in the case. It is plainly unnecessary for a judge to refer to all the evidence led in the proceedings or to indicate which of it is accepted or rejected. The extent of the duty to record the evidence given and the findings made depend, as the duty to give reasons does, upon the circumstances of the individual case. Accordingly, a failure to refer to some of the evidence does not necessarily, whenever it occurs, indicate that the judge has failed to discharge the duty which rests upon him or her. However, for a judge to ignore evidence critical to an issue in a case and contract to an assertion of fact made by one party and accepted by the judge … may promote a sense of grievance in the adversary and create a litigant who is not only 'disappointed' but 'disturbed' - to use the words which appear in the New Zealand case of Connell v Auckland City Council [19771 NZLR 630 at 634. It tends to deny both the fact and the appearance of justice having been done. If it does … then it will have worked a miscarriage of justice and have produced a mis-trial and resulted in what I would take to be an error of law which is reviewable on appeal. Whether it is an error of law or an error of fact, it seems to me a failure by the judge to do what the nature of the office requires. 68 This case was considered with approval in Kiama Constructions v Davey (1996) 40 NSWLR 639 where Meagher JA (at 647) emphasised that "a .judge's duty to state his or her reasons for deciding does not exist in respect of every matter which is raised in proceedings". 69 In Beale v Government Insurance Office (NSW) (1997) 25 MVR 373, the topic was visited in some detail by Meagher JA. It is convenient to refer to some portions only of his Honour's judgment. Thus, his Honour said (at 383): A failure to provide sufficient reasons can and often does lead to a real sense of grievance that a party does not know or understand why the decision was made: Re Poyser and Mills' Arbitration [1964]2QB 467 at 478. This court has previously accepted the proposition that a judge is bound to expose his reasoning in sufficient detail to enable a losing party to understand why they lost: Clutha Ltd v Risby (NSW Court of Appeal, Clarke, Cole JJA and Hunter AJA, CA40460/94, 26 March 1996, unreported).

70 His Honour further said (at 384): Just as the requirement to provide reasons depends on the particular matter, so too the content of the reasons depends on the particular circumstances of the matter being considered by the court. … It follows, that reasons need not necessarily be lengthy or elaborate: Ex parte Powter,. Re Powter (1945) 46 SR(NSW) 1 at 5. The scope of the reasons to be given is, as Mahoney JA said in Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 386, related 'to the function to be served by the giving of reasons'. Accordingly, the content of the obligation is not the same for every judicial decision. No mechanical formula can be given in determining what reasons are required.

71 His Honour then set out some matters which he regarded as fundamental elements of a statement of reasons but continued (at 385), saying: While it is desirable to address these elements in giving reasons for decision, it is the purpose which the reasons serve which assumes primary importance in determining the content of the reasons. That purpose must be weighed against other considerations. It has been noted by this court that the content required of a statement of reasons is to be measured against the burden that the provision of reasons imposes on the judicial system: Sinak v Tess (NSW Court of Appeal, Mahoney, Meagher, Powell JJA, CA40734/91, 15 March 1995, unreported). .... In the end, the balancing act which needs to be undertaken in considering the sufficiency of a statement of reasons involves the adoption of, at the least, a minimum standard which places the parties in a position to understand why the decision was made sufficiently to allow them to exercise any right of appeal.

72 His Honour further said (at 386): It does not automatically follow that because the reasons for decision are inadequate then an appealable error has occurred. Examination of nearly any statement of reasons with a fine tooth comb would throw up some inadequacies. Indeed, an appeal court will reserve any intervention to these situations in which it is left with no choice: where no reasons have been given in circumstances where there was an obligation to provide them and in circumstances where a statement of reasons is so inadequate as to constitute a miscarriage of justice. In other words, the statement of reasons must be looked at as a whole and the material inadequacies identified and considered.

73 Also of significance in the present case is the statement of Mahoney, JA in Housing Commission of NSW v Tatmar Pastoral Co Pty Limited (1983) 3 NSWLR 378 at 385-386 where his Honour said in relation to the judicial duty to state reasons: However, such a duty does not exist in respect of every matter of fact or of law, which was or might have been raised in the proceedings. It is not the duty of the judge to decide every matter which is raised in argument. He may decide a case in a way which does not require the determination of a particular submission: in such a case he may put it aside or, as Lord Scarman said, merely salute it in passing: R v Barnet London Borough Council , Ex parte Nilish Shah (1983) 2 AC 309 at 350.

74 In our opinion, it is quite clear that the obligation to provide reasons and also the extent of those reasons when provided, must depend very much upon the circumstances of the particular case and the reasoning process displayed by the judge in deciding the case. Statements made in other cases, appropriate to a failure to supply adequate reasons in those cases, should not be transposed and applied mechanically to other cases. A review of the evidence given in, and the general course of, a trial will, for the most part, indicate to an appellate court whether the trial judge's failure to make specific findings of fact or to record a submission, set out the judge's deliberations upon it and pronounce his or her conclusion, has had a vitiating effect upon the ultimate decision. If it can legitimately be said that a losing party would necessarily fail to understand from the judge's reasons why the litigant lost, or can properly harbour a feeling of injustice stemming from an apparent failure on the part of the judge to consider a critical submission, then it may be appropriate for an appellate court to intervene. Needless to say, it does not follow that because a judge has failed to refer to particular evidence or particular submissions, that they have not been taken into account. Other express findings may by their very nature indicate that arguments to the contrary of that finding have been rejected, or that evidence in support of that finding has necessarily been preferred to evidence to the contrary. Whether relevant injustice should be found to have occurred must very much depend upon the impression formed by a consideration of the content and course of the trial itself. 75 In the present case, it is correct that his Honour has not expressly dealt with the appellants' Graham v Baker point. But has it been shown that the appellants have been prejudiced thereby to the extent that this Court should set aside the judge's decision? Has relevant injustice been demonstrated? 76 In the first place, it is manifest that his Honour's omission has not prejudiced any right of appeal. The evidence exists. The detail of the submission exists because, pursuant to the judge's direction, it was presented in writing. Indeed, it is part of the submissions in this appeal that, alternatively to ordering a retrial, this Court should reassess the damages taking into account this very submission. 77 Could the appellants be in any real doubt that the judge considered the submission and supporting evidence? A consideration of the whole of the case satisfies us that the submission was necessarily considered, even if not dealt with expressly in the judgment. The assertion that Mr Hannaford had suffered no financial loss because he had been able to re-organise his existing workforce, using his residual managerial skills, so that no addition to the workforce was required and the cotton growing activities did not suffer was a constant refrain in the cross-examination of both him and Mr Ivey. It was frequently asserted, it was regularly denied. The whole thrust of Mr Ivey's evidence was to the effect that, had the plaintiff not suffered from residual physical disability, he could have developed the extra irrigation area on "Crossdale" in time for the 1993-94 cotton season, and thereby increased the profits for that season. It was nothing to the point that the crop was profitable, even more profitable than the "Namoi average". Had the plaintiff not been impaired, it would have been more profitable still. The same may be said of Mr Ivey's opinion that the cotton yield in 1993 and 1994, reasonable though it was, could have been significantly improved if Mr Hannaford had been in a position to exercise his proven "hands-on" managerial skills. As already indicated, we are satisfied that Mr Ivey's expert views in this regard and in respect of other areas of the case were adequately underpinned by the medical evidence and the evidence of Mr Hannaford himself. 78 The fact that Mr Ivey's opinions were accepted indicates sufficiently, in the circumstances of this case, that the appellants' submission to the contrary was rejected. It would undoubtedly have been helpful if his Honour had recorded the submission and his reasons for rejecting it. It would have saved this Court the not inconsiderable labour of reading and considering the evidence relating to it. His failure to do so, however, does not amount to appellable error. The fact that Mr Hannaford, in his impaired state, was able to push the productivity of his farm to the level it reached in the relevant years proves only that he took commendable steps to mitigate his loss; it certainly does not establish that no loss occurred. His Honour's acceptance of Mr Ivey's analysis indicates that the appellants' "Graham v Baker" argument was rejected. This is so obvious that there was no need for his Honour even to "salute it in passing". This ground of appeal must fail. 79 No reason has been demonstrated as to why his Honour should not have accepted Mr Ivey's analysis of the plaintiff's losses as against the countervailing analysis of Ms Jackson. This was very much a matter for his Honour's decision and was one in which his consideration of the reliability of the witnesses may have played a part. There is no basis for interfering with his findings based upon Mr Ivey's assessment of loss, other than a further deduction for the calculation because it was partnership loss and not the individual loss of Mr Hannaford. 80 Moreover, there appears no reason in principle why his Honour's choice of the cost of providing the wages of a full-time foreman as an appropriate measure of Mr Hannaford's loss of earning capacity should not be accepted. It was so accepted by the appellants' expert witness. It is manifestly not to the point that no such employment had taken place. Clearly the earning capacity of Mr Hannaford had been impaired in ways amply demonstrated in the evidence. To seek to restore it. by adding to his residual capacity, the efforts of a full-time foreman, who could undertake significant aspects of Mr Hannaford's previous work which were now denied him, is neither unreasonable nor illogical. The cost of its provision provides an appropriate approach to the quantification of Mr Hannaford's damage occasioned by the impairment of his earning capacity. This submission of the appellants must also fail. 81 We come, then, to the appeal in respect of his Honour's award relating to the property "Runningbrook". It has already been mentioned that the appellants' case in this regard appears to be based upon two mutually exclusive alternative approaches, the first being that, having regard to past difficulties, Mr Hannaford would not have been able to raise the necessary finance to purchase the property. It was manifestly unnecessary for his Honour to refer to all the pieces of evidence which bore on this contention. The opinion originally expressed by Ms Jackson to the effect that the plaintiff would not have sufficient equity to found the necessary borrowing was departed from in the course of her evidence. His Honour has made an express finding that there would be no financial impediment. There can be no reason to disturb this finding either on the ground of absence of reasons or on the ground that it is, for some other reason, insupportable. Indeed, in submissions before us, the finding was embraced on behalf of the appellants who then went on to make a similar submission to that made in respect of the other aspects of economic loss, namely that the plaintiff had sufficient residual capacity and ability to organise his labour force to enable him to have consummated the purchase and entered upon the successful development of the property. His Honour made a clear finding that the plaintiff did not have the physical capacity to undertake this work. In so doing, he accepted the evidence of Mr Hannaford in this regard. Mr Hannaford's evidence and the supporting medical evidence produced a clear picture of a man who had striven to overcome his problems but had reached a point where it would not have been physically or psychologically possible for him to undertake the development of a fresh property. There is no ground demonstrated for disturbing his Honour's finding. His Honour had, therefore, the task of evaluating a lost opportunity. It is clear that he approached this task in a quite conservative way, refusing to accept submissions made on behalf of Mr Hannaford which would have produced a far larger award than his Honour in fact made. There is no reason why his Honour's award should be disturbed. 82 The final area of complaint made by the appellants relates to the primary judge's finding that, because of the existence of the partnership "Barokaville", Mr Hannaford, in regard to all aspects of his economic loss, should receive 85% of the calculated losses. It has already been accepted that his Honour made a slip in not applying this percentage to the calculated losses for 1993 and 1994. The appellants' submission is, however, twofold, namely that his Honour provided no reasons for selecting 85% as the appropriate percentage and that, in any event, that percentage was overgenerous to Mr Hannaford. 83 At the relevant time, Mr Hannaford was in an equal partnership with his mother in the "Barokaville" Pastoral Company which conducted the relevant fanning operations. It was the appellants' contention that Mr Hannaford was entitled, by way of damages, to no more than 50% of the partnership losses. It may be noted that Mr Hannaford had submitted to his Honour that, having regard to the role he played in producing the partnership earnings, he should receive 100% of the amount. His Honour's reasons for making the award as he did have been set out earlier. They make no reference to the capital structure of the partnership. It was not contested that the property "Barokaville" was owned by the mother and that "Crossdale" and the property "Wolsley", before it was sold, belonged to Hannaford. Also, the purchase moneys for "Crossdale" had been provided by Hannaford's bank on the security of a mortgage over his mother's house in Dubbo and the "Barokaville" property. Again, it is a matter for regret that these facts, which are relevant to a determination of the appropriate percentage, were not set out in his Honour's judgment; however, it would be quite unreasonable to assume that they were not taken into account. They are clearly referred to in the parties' submissions. The failure of his Honour to refer to them does not, in our opinion, vitiate his judgment. It also appears that an amount of $200,000 was paid to Mrs. Hannaford Snr. as "partnership salary" in the financial year 1993. The basis for this payment does not appear. The question is whether these facts, which have not been referred to specifically by his Honour, should result in some further deduction being made from the figure of 85% reached by his Honour. 84 His Honour gave consideration to the recognised authorities which are set out in his judgment. In Taroporewalla v Berkery [1983] 3 NSWLR 28, each member of the Court of Appeal (Hutley, Glass and Mahoney JJA) expressed the view that "the principles upon which an assessment should be made of the financial loss of a plaintiff who is disabled from working as a partner in a business have not been finally determined in this court" (per Glass JA at 29). 85 In Taroporewalla, the relevant partnership was one between husband and wife, it having been brought into existence for reasons relating to the reduction of tax on the business income. Mahoney JA, in whose judgment the other members of the Court agreed, said (at 35): There is, in my opinion, no single rule which determines the quantification of damages for a plaintiff in such a case. The damages to be awarded will depend on, inter alia, the nature of the partnership and the plaintiffs relationship to the income which would have been derived from it.

There are, of course, two principles which are fundamental: first, that the plaintiff is to be compensated only for the loss which he has actually suffered, in the past or prospectively; and, second, that that for which the plaintiff is to be compensated, in this regard, is loss of his capacity to derive reward from his efforts.

86 In the circumstances of the case, Mahoney JA had regard to the fact that the business had been the plaintiff's and that the partnership had been formed as a matter of commercial convenience. He said (at 37): He could have rearranged the terns of the partnership. And, in a practical sense, he could, I think, have appropriated to himself such portion of the partnership profits as he saw fit. Therefore I do not think that regard should be had only to 50 per cent of the potential partnership profits; his access to the rest of the partnership should be taken into account.

Mahoney JA, in these circumstances, held that the plaintiff should not be restricted to the 50% entitlement under the partnership and was prepared to award him 80% of the amount of the partnership losses. In Zachopoulos v State Government Insurance Commission (1986) Aust Torts Reports, 80-023, the Full Court of the Supreme Court of South Australia considered how a plaintiff partner should be compensated for economic loss sustained through the partnership by his injuries. Bollen J, in whose judgment the other members of the Court concurred, considered Taroporewalla in the following passage (at 76,733): It is always the loss to the plaintiff which is to be considered. It is he who is to be compensated for his loss, the loss produced by his incapacity. The injured partner's loss will be determined as a starting point by the reduced income which he receives if no replacement is engaged and less work is done or by his share of the cost of replacement labour if it is engaged. There may be (usually there will be) other loss to the partnership. But the claim before the Court is the plaintiff's claim. The Court must assess his loss. When it assesses that plaintiff's loss for pre-trial loss of capacity to earn, the Court should, in my opinion, commence to assess the loss caused to the plaintiff by the expense of replacement labour in deciding what proportion of that expense is or was borne by that plaintiff. As we have seen from Taroporewalla v Berkery (supra) that proportion may not be the same as the plaintiff's percentage of profits as expressed in the partnership agreement. But that 'percentage' and the work and effort which the plaintiff put into the business are relevant. The partner who does all the work will no doubt be entitled to have the full cost of replacement labour taken as the starting point.

I think that in general the starting point should be the proportion of the loss, ie the loss by reference to the plaintiff's share in the expense of substitute labour or in the loss sustained. But share does not encompass only 'share of income'. It is the loss to the plaintiff himself not the whole loss to the partnership which must be ascertained as a starting point. Sometimes the two will be the same, or nearly the same. In Taroporewalla v Berkery the plaintiff's contribution to the partnership was held in fact to be 80% despite his entitlement in the books of a partnership to 50% of the profits. If a man has an inactive partner who does no more than lend his name for tax purposes to the partnership then the active partner may well be entitled to the whole cost of replacement labour engaged during his incapacity. It may be, too, that on some occasions it can be shown that not only is a loss occasioned by the cost of engaging replacement labour but that there is some diminution of profit because the substitute labour works less vigorously or less skilfully or for a lesser time than did the injured partner. That can be taken into account.

(See al-so Cole v Ellis (1992) Aust. Torts Reports, 81-186; Future Look Landscaping Pty Ltd v Hanion (8 July 1998, NSW Court of Appeal unreported); Ward v Newalls Insulation Co Ltd [ 1 9981 1 WLR 1722.) 87 Authority in Queensland had favoured the position that the assessment of damages payable to an injured partner must reflect his or her entitlement to partnership profits at the time of the accident. (Seymour v Gough [1996] 1 QdR 89; Hoskins v Hoskins (21 August 1998, Qld Court of Appeal unreported).) Since we reserved our decision in this case, however, Seymour has been considered by the High Court in Husher v Husher [1999] HCA 47. In the majority decision (Gleeson CJ, Gummow, Kirby and Hayne JJ) it is said that "if the decision in Seymour v Gough was intended to establish some principle that a plaintiff, who at the time of the accident was a partner in a business, can never recover more for loss of future earning capacity than a sum calculated by reference to the plaintiff's past share of partnership profits, it is wrong and should be over-ruled". Their Honours emphasised that each case will turn on its own facts. In this regard, they said as follows: Deciding what value is to be ascribed to the loss of future earning capacity of an injured plaintiff requires close attention to the facts of each case. The task is not one to be undertaken by seeking to classify cases as concerning 'sole traders' or 'partnerships' or 'wage-earners' or ' trading trusts', and then attempting to deduce some rule of general application to all cases falling within the classification thus devised. Rather the inquiry is about what could the plaintiff have done in the workforce but for the accident and what sum of money would the plaintiff have had at his or her disposal. Only when those inquiries are pursued can a judgment be made about what capital sum to allow as damages for the impairment of the plaintiff's earning capacity. In doing so, regard must be had, of course, to all those contingencies of life that might reasonably be expected to affect the course of events in the future.

88 It is clear in the present case that the plaintiff's elderly mother made no contribution whatever to the work of the partnership, which was terminable at will. She had in fact retired some time before to a cottage in Dubbo. The work and planning involved in producing the cotton growing enterprise on "Barokaville", which had previously been devoted to dry farming only, and all the other cotton production undertaken by the partnership was solely the work of Mr Hannaford himself. Had the contribution of Mrs. Hannaford Snr been no more than the lending of her name, there would have been a strong case for the allowance to Mr Hannaford of 100% of the losses occasioned by his injuries. In fact, Mrs Hannaford Snr did more than lend her name. Part of the cotton growing enterprise was conducted on land at "Barokaville". Also, she provided mortgage security to enable the enterprise to be financed. There can be no doubt, however, that the whole of the development of the business and its earning capacity was attributable to the very significant input of managerial skills and rural expertise of Mr Hannaford himself. In our view, the case is one where it would be reasonable to depart from the percentages fixed by what was obviously a loose partnership arrangement. The selection of an appropriate percentage is obviously one upon which different minds would reach different results. We are not persuaded that his Honour's selection of 85% was, in all the circumstances, incorrect. We decline to interfere with it. 89 In the result, the only alteration to his Honour's judgment should be the re-calculation of the amount of $269,638.00 awarded for economic loss for the years ending 30th June 1993 and 30th June 1994 to $229,192.00 to take account of the fact that the 15% reduction should also have been applied to that figure. 90 Mr Hannaford's damages may therefore be summarised as follows: 1 Out-of-pocket expenses $30,342 2 Non economic loss 129,250 3 Past economic loss 339,824 4 Future economic loss 400,959 5 Future medical expenses 55,000 6 Cost of modification of farm facilities 7,406 7 Loss of opportunity re: "Runningbrook" 150,000 $1,112,781 Cross-appeal 91 By cross-appeal the respondent Mr Hannaford challenges the trial judge's decision not to allow interest with reference to past economic loss and the cost of modification of farm facilities. 92 Section 73(1) of the Motor Accidents Act 1988 provides that a plaintiff has only such right to interest on damages payable in relation to a motor accident as is conferred by the section. For present purposes it is sufficient to observe that s73(4) provides that interest is not payable on relevant heads of damages unless the requirements set out in s73(4)(a) are met. These requirements include s73(4)(a)(iv). If the defendant has made an offer of settlement, the amount of all damages of any kind awarded by the court (without the addition of any interest) must be more than 20 per cent higher than the highest amount offered by the defendant and the highest amount must be unreasonable, having regard to the information available to the defendant when the offer was made. Section 73(4)(b) provides that the highest amount offered by the defendant is not unreasonable if, when the offer was made, the defendant was not able to make a reasonable assessment of the plaintiff's full entitlement to all damages of any kind. 93 Ireland J declined to order interest even though the highest offer made by the defendants was an offer made during the trial (on 4 September 1996) of $500,000 plus costs inclusive of out-of-pocket expenses agreed at $30,342. This fell well short of the 20 per cent differential stipulated in s73(4)(a)(1v). His Honour concluded that the defendants were not able to make a reasonable assessment of the plaintiffs full entitlement to all damages and, applying s73(4)(b), held that the defendants' settlement offer was not unreasonable. 94 This Court was informed that counsel for the plaintiff had offered to settle for the sum of $670,000 on 4 September 1996. That offer was rejected later that day by the defendants' counsel who made a counter offer of $500,000 inclusive of agreed out-of-pocket expenses of $30,342 plus costs. The plaintiff's counsel rejected this offer while confirming preparedness to accept $670,000. It is not entirely clear whether the plaintiff's offers were plus costs or inclusive of costs, but nothing turns upon this. 95 Ireland J said that he regarded as relevant the position adopted by the plaintiff when faced with the defendants' offer. He acknowledged that the plaintiff's counter offer did not fall within the description of "the information available to the defendant" when the defendants' offer was made but, nevertheless considered it of some assistance in assessing the reasonableness of the defendants' offer. 96 We are doubtful about this proposition, although it is not critical to our decision. Nor could we accept that the matter would be any different had his Honour been intending to refer to the reasonableness of the defendants' position in the light of the plaintiff s earlier offer. We do not see how the reasonableness of a defendant's bargaining position can be affected by a figure put and rejected on the very day in which the defendant makes an offer which falls dramatically short of the ultimate verdict. The purpose of this part of s73 is to encourage settlement and to sanction a defendant which does not act realistically, excepting cases where the inability to have made a realistic offer was hampered by the absence of relevant available information. The figure at which a plaintiff may be prepared to settle is not itself of that nature. Were it otherwise, a plaintiff desperate to settle for personal reasons whose own best offer came very close to that of the defendant would be unable to recover interest on items of economic loss even if the verdict revealed the defendant's best offer as grossly inadequate. Accordingly, we think his Honour probably had regard to an irrelevant factor. 97 But this was not the only or the principal factor taken into account. His Honour continued: The aspect of the claim which weighs heavily upon my mind, so far as interest is concerned, is that the true nature of the claim in this case did not, it seems to me, really emerge until the evidence had been concluded, that is to say, the evidence called on behalf of the defendant as well as that called on behalf of the plaintiff. To make a reasonable assessment in view of what were the diametrically opposed views of the experts called to give evidence on the economic material was a very difficult task indeed. ... 98 To our mind there is a factual and a philosophical difficulty with this approach. The factual difficulty is that the plaintiff had amended his particulars much earlier - at callover - to allege the new head of future economic loss based on future loss of opportunity. His expert's report set forth the basis upon which that claim was based. The only thing that happened at trial in this regard was that Mr Ivey (the expert) revised downwards his figures in the light of the evidence and what was put to him in cross-examination. The defendants had the plaintiff's particulars and his expert's report well before trial. They obtained their own expert's report. Armed with all of this material, they made their own settlement offer. 99 The philosophical difficulty relates to the function of a provision such as s73(4). Clearly it is aimed at encouraging litigants to give serious consideration to the settlement of proceedings. The function of such provisions is discussed in Morgan v Johnson (1998) 44 NSWLR 578 at 581-2. Mason P was there speaking of familiar provisions found in the Supreme Court Rules and District Court Rules which indicate that the usual order for costs is generally to be departed from if a party does not accept what turns out in the light of the judgment to have been a reasonable settlement offer. Section 73(4) works a little differently, but the rationale is the same. For s73(4) (as for the provisions under the rules) it is true to say (in the words of Mason P in Morgan at 582): Lying behind [the section] is the common knowledge that litigation is inescapably chancy…. For this reason, the ordinary provision is expected to apply in the ordinary case. ...

100 The fact that the experts called by each party may have expressed "diametrically opposed views" is therefore a matter of little relevance in itself. Just as a plaintiff may rely to his or her cost upon the advice of a solicitor or barrister in deciding whether to reject a settlement offer made by a defendant, so too a defendant who seeks to draw comfort from the fact that his or her expert may have encouraged the settlement offer to be pitched too low should not, in itself, make reasonable a defendant's offer falling below the s73(4)(a)(iv) threshold. 101 In our view his Honour erred in concluding that the defendants' offer was "not unreasonable". His Honour took into account irrelevant considerations. Excluding those considerations and having regard to (a) the information in the defendants' grasp when they made their offer, and (b) the extent of the gap between the defendants' best offer and the ultimate verdict, this was a proper case to order interest with respect to economic loss. 102 We would therefore uphold the cross-appeal. It will be necessary for the parties to calculate the appropriate sum. 103 The orders of the Court are: 1. The appeal in relation to economic loss for the years ending 30 June 1993 and 30 June 1994 is upheld but otherwise the appeal is dismissed with costs. 2. Cross-appeal upheld with costs. 3. The parties to bring in short minutes of order within fourteen days to give effect to the Court's reasons. ************

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