2 The learned trial Judge in this case made a careful assessment of the damages for loss of earning capacity. It has not been shown that her Honour erred in any way.

4 PARKER J: I have had the advantage of reading the reasons which Miller J is to publish in this appeal.

5 The award made by the learned trial Judge may be viewed as a possibly generous exercise of the discretion she was called on to exercise. It has not been shown, however, to be manifestly excessive. This was, a difficult and unusual case and, as has been indicated by Miller J, the trial Judge was obliged to do the best she could with somewhat unsatisfactory evidence. I respectfully agree that it has not been shown that her Honour misunderstood or misused the evidence before her or that she failed to have due regard to any relevant aspect of it. Nor has it been shown that her Honour erred in her approach to any legal issue relevant to the assessment of the damages warranted by the respondent's loss of earning capacity. There is no justification, therefore, for interfering with the amount of damages as assessed by the trial Judge.

6 I respectfully agree with his Honour's reasons and with his conclusion that the appeal should be dismissed.

7 MILLER J: This is an appeal from a judgment of O'Brien DCJ delivered in the District Court at Perth on 25 November 1999 in which the respondent was awarded the sum of $34,635 by way of damages, all but $3735 of which represented damages for loss of earning capacity. Damages for loss of earning capacity were divided as to $20,900 for past loss of earnings and $10,000 for loss of future earnings.

8 The appellant contends that each of the awards for past loss of earnings and loss of future earnings was excessive. In relation to past loss of earnings the grounds of appeal assert that the learned trial Judge was wrong in law and in fact in awarding the sum of $20,900 because on the evidence at trial the respondent had not been engaged in gainful work as a painter for a period of at least 13 months prior to the accident; in the six financial years prior to that accident he had earned only a total of $14,372 as a painter; and during three of those years had earned nothing at all. It is contended that no proper inference could be drawn that but for the accident and from the date thereof the respondent would have earned income as a painter to the extent found by the learned trial Judge. In relation to the award for future loss of earning capacity it is contended that the learned trial Judge made an award which was manifestly excessive and wrong in law and in fact because the respondent's pre-accident earnings history did not support any inference that by reason of the accident he would lose as much as $10,000 in earnings as a painter during the course of the next two years.

9 The respondent suffered injuries in a motor vehicle accident on 20 August 1998. They included cervical and lumbar sacral spinal injuries and a soft tissue injury to the right knee. All injuries had basically stabilised by the time of trial, with the exception of that to the lumbar sacral spine. In this respect the learned trial Judge found the respondent to have suffered a lumbar spinal injury in the accident which had left him with fairly constant back pain since that time. The learned trial Judge accepted medical opinion to the effect that if the plaintiff was truthful he was asymptomatic before the accident and having suffered pain thereafter, it was more probable than not that an annular tear was either caused by or became symptomatic as a result of the accident. Her Honour concluded that she had no reason to doubt the plaintiff's testimony that he did not suffer back pain before the accident and she found on the balance of probabilities that the annular tear was either caused by or became symptomatic as a result of it.

10 The learned trial Judge's conclusions in relation to economic loss involved considerable criticism of the respondent. She found that he had worked for A & Z Painting and Renovating intermittently from 1992 until 1996/97 but there was no evidence that the respondent had ever applied for any painting job other than with A & Z. Her Honour pointed out that for some time the respondent had conducted his own business or had been in Yugoslavia, but overall he had not had a steady work history. He had, from time to time, survived because of family assistance and he had received social security payments during the years 1996/97 and 1997/98 (but for only a portion of those years). Her Honour concluded that "given his other employment over those years I find it implausible that he could have survived financially without some supplement to his income. However there was no evidence of income from other sources other than I have outlined".

11 The average weekly income earned by the respondent as a painter over the six years prior to trial was only $46 per week or $2395 per annum. However, a representative of A & Z testified that the respondent would have had work with that company from 24 August 1998 until trial and probably longer. This the learned trial Judge found difficult to accept, particularly because of the respondent's minimal work with A & Z over the preceding seven years and the big lapses of time when he was not employed at all. Her Honour did, however, consider that because by August 1998 the respondent was then the father of two young children and had to support them, his circumstances had changed considerably and it was therefore open to accept his evidence that he genuinely needed work and was prepared to take up a job offer from A & Z which, as at 24 August 1998, was to last for some 22 days. There was evidence that the person employed to replace the respondent worked until the end of March 1999 on that and other jobs, and in the circumstances the learned trial Judge was prepared to award the respondent loss of past wages from 24 August 1998 until 31 March 1999, deducting four weeks to reflect Christmas and contingencies. 120 days were allowed at $110 net per day. Thereafter an allowance was made of $7700 being "a global amount" representing 70 days at $110 per day on the assumption that this period would have been worked by the respondent with A & Z after March 1999 and prior to trial. It represented 70 of about 170 working days which would have been available to the respondent during that time.

12 In relation to future loss of income, the learned trial Judge accepted the bulk of the medical evidence that in one to two years' time the respondent's symptoms should have resolved and would thereby allow him to return to work as a painter. Her Honour found it impossible to predict with any certainty when in that time frame the respondent would be fit to return to work, particularly as A & Z were unable to predict with any accuracy whether the business would continue to be busy and, more importantly, whether there would be work available for the respondent. She added that "the plaintiff's previous work history does not convince me that it is more probable than not that he would seek, let alone find, work as a painter with another employer". After taking into account the respondent's work history and the uncertainty as to when the respondent would be fit to return to work, the learned trial Judge awarded a global sum of $10,000 for loss of future income. On the assumption that the respondent would have resumed work as a painter in approximately two years' time, the award represented about 90 days of work at $110 net per day out of approximately 400 working days, or, about 25% of the two year period.

13 On the hearing of the appeal counsel for the appellant produced a chronology of the respondent's work history, which indicated that he first began work for A & Z in August 1992, having prior to that time operated a clothing import business in 1991/92 and before that been back and forward to Yugoslavia. As the respondent was born in 1957, he had reached 35 years of age at the time he first began work as a painter with A & Z. Prior to that time there is simply no record of his work history, save that he was said to have worked as a taxi driver in Yugoslavia for six months in 1983; worked with his father who had a painting business in Yugoslavia and established an import/export clothing business which required him to travel to China to purchase and import silk fabric (but which appears to have been unprofitable and was terminated in 1992). Counsel for the appellant extracted from the respondent's income tax returns a total income of $14,372 between the years 1992 and 1998 which gave the average weekly income figure referred to by her Honour of $46. Reference was made to various passages in the transcript of the proceedings at trial which certainly established that the respondent had a very chequered work history, with long periods of time when he was simply unemployed and unable to explain how he survived. It was suggested that the respondent had at trial simply failed to discharge the legal burden of proof which rested upon him in satisfying the Court that he had suffered damage which could be quantified in money terms: Watts v Rake [1960] HCA 58; (1960) 108 CLR 158 per Dixon CJ at 159. It was conceded by counsel for the appellant that the respondent was entitled to recover damages not merely because his earning capacity had been diminished, but because the diminution of his earning capacity was or might be productive of financial loss: Graham v Baker [1961] HCA 48; (1961) 106 CLR 340 at 347. It was also conceded that the fact that the respondent was not employed at the time of his injury did not prevent a claim for loss of earning capacity, although it was contended that it was necessary for the respondent to show what work he would have done and how much he would have earned had the injury not occurred: Luntz, Assessment of Damages for Personal Injury and Death, 3rd ed, par 5.1.5.

14 Reliance was placed by counsel for the appellant upon the observations of von Doussa J in Giorginis v Kastrati (1989) Aust Tort Reports 80-233 at 68,463, where his Honour said:

"The burden of proof rests on the plaintiff. Where damages are claimed for a loss of earning capacity, the plaintiff must prove the extent of his pre-accident earning capacity, the extent to which that capacity would have been productive of income had the accident not happened, and the extent to which the compensable injuries have diminished his ability to exercise the pre-accident earning capacity. It is necessary to emphasise that these matters cannot be satisfactorily proved by medical experts alone. There must also be evidence to prove the basic facts on which the medical opinion depends, and the circumstances of the plaintiff which are necessary to translate the medical opinion into findings of fact pertinent to the assessment of damages for a loss of earning capacity. Medical opinion alone as to the plaintiff's pre-accident and post accident capacity for work cannot prove the extent to which the plaintiff's earning capacity has been exercised in the past, or the extent to which is residual earning capacity is likely to be exercised in the future. In a case like the present one, it is incumbent on the plaintiff to show how he has used his capacity for work both before and after the accident. The plaintiff will be well advised to produce the best evidence available."

The argument for the appellant was that because the respondent had confirmed that his income was that disclosed in his relevant income tax returns and because in the six years prior to the accident the most he had earned as a painter was $5772 in one year (1992/93), there was on the evidence no reason to conclude that but for the accident, he would have exercised his earning capacity to any greater extent than he had before that accident. It was contended that application of the principles set out by von Doussa J in Giorginis v Kastrati (supra) meant that the Court should accept evidence of pre-accident earnings as the basis for assessment of damages for loss of earning capacity, and this meant that no more than $46 per week should be allowed, giving a total of $2990 for loss of earning capacity prior to trial and allowance of $4508 for a loss of earning capacity thereafter.

15 In my view the submissions of the appellant overlook the fact that what the respondent was entitled to be compensated for was a loss of earning capacity which had occurred by reason of the accident. In O'Brien v McKean [1968] HCA 58; (1968) 118 CLR 540, Barwick CJ (at 545 - 546) put it this way:

"... I have elsewhere pointed out in relation to this aspect of economic loss in cases of personal injury, that it is the loss of earning capacity which has occurred by reason of the accident which is to be the subject of compensation by an award of damages: it is not a case of replacing the wages which would have been earned in the future by a sum of money which represents the present value of the total of such wages: see Arthur Robinson (Grafton) Pty Ltd v Carter. That loss of earning capacity has already occurred and is either permanent or likely to continue for some estimable time. The fair compensation for it is to be determined as a matter of judgment and not of calculation. But it is of course to be an informed judgment. Though the damages as I have said are not to be a replacement of the future wages, part of the relevant information for the purpose of forming a judgment as to the fair and reasonable compensation is a broad estimate of what that earning capacity before its destruction or diminution was capable of producing during such time as it would have been likely to be gainfully exercised. In obtaining such a conspectus, the vicissitudes of life, as it has been said, must not be lost sight of."

16 In this case the learned trial Judge was acutely aware of the shortcomings in the respondent's claim for economic loss. She made reference to his minimal work with A & Z over the preceding seven years; the big lapses of time when he was not employed by A & Z (which were only partially explained by evidence of his other activities); the "very vague" evidence of Mrs Biskupic as to the requirements of A & Z; the unsatisfactory evidence as to his efforts to secure employment with A & Z; the lack of any or any detailed evidence of efforts to obtain painting work with an employer other than A & Z; and the fact that the plaintiff seemed to have survived financially from 1992 until the date of his accident on a very limited substantiated income.

17 However, the learned trial Judge took into account various contingencies, including the fact that the respondent now had two young children to support and his circumstances had changed considerably. The award of damages made for past loss of earning capacity was modest. It was limited to the period 24 August 1998 - 31 March 1999 at $110 net per day and thereafter, between March 1999 and trial (25 November 1999) an award of a further 70 days at $110 per day net. As I have already pointed out, this was an allowance for less than one-half of the available working days within that period. Likewise, when it came to future loss of earning capacity, the learned trial Judge took into account various contingencies and vicissitudes. For that reason her Honour allowed only $10,000 being compensation approximately at $110 per day net for approximately one-quarter of the period between trial and the expiration of a further two years. There is no indication as to what, if any, multiplier was used, but as her Honour pointed out, the $10,000 allowance was simply a "global allowance" which was the best she could do on the evidence before her.

18 Numerous cases were cited in the outline of the respondent's submissions dealing with the difficulties of assessing damages for loss of earning capacity where there are limitations and shortcomings in the evidence. In many of those cases a "global" sum has been allowed. In Yammine v Kalwy [1979] 2 NSWLR 151, Mahoney JA (at 156 - 157) set out the alternative ways in which damages for loss of earning capacity may be assessed:

"That for which a plaintiff is to be compensated in this regard is the loss of a capacity; that, at the beginning and the end, is the loss for which compensation is to be assessed. However, there are several ways in which, according to the facts, the assessment of that compensation may be approached. It may be approached simply by fixing the sum seen to be appropriate to that loss as such. The difficulties involved in the fixing of that sum - and in verbalizing the principles upon which it is to be achieved - need not be canvassed. But frequently (and this was the point to which the observations in the cases referred to in Allan v Loadsman were directed) the plaintiff, or the defendant, seeks to quantify the compensation for loss of that capacity by attempting to establish what the weekly wage loss is which will be suffered because of the loss of that capacity, and by arriving at a sum by applying the conventional tables to this, with appropriate discounts. This may be a perfectly permissible way of quantifying the loss in a particular case. It is often used, no doubt because it is felt that it will provide a greater sum than the alternative approaches. In some cases, the weekly wage loss quantification, and the sum derived from it, will alone be accepted as sufficient compensation; in other cases it may be necessary to add an additional sum by reference to such other aspects of the loss of the capacity as may not be fully compensated for by the mere weekly wage loss so dealt with."

19 In the present case the learned trial Judge utilised in part the "weekly wage loss approach". However, her Honour's ultimate methodology was one of "simply fixing the sum seen to be appropriate to the loss" by reference to the potential daily earnings which the respondent, as a painter, would have been capable of earning had he obtained work in that trade and been motivated to do it. In the end her Honour's task involved very much the exercise of a discretion, which although clearly reviewable by this Court, was a discretion exercised "doing the best she could". Difficulties in estimating damages do not relieve a tribunal from the responsibility of assessing them "as best it can": McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377 per Dixon and Fullagher JJ at 411. In my view, the exercise of discretionary judgment by the learned trial Judge in this case took into account all relevant factors and resulted in an award of damages to the respondent which was reasonable on the evidence. It was not the case that the respondent was contending that he earned anything more than the figures revealed in his income tax returns, but it was open to the learned trial Judge to conclude that whatever those earnings might have been over the preceding six years, the respondent did have a capacity to work as a painter and was in the period post-accident and for a period of approximately two years after trial, likely to have exercised that capacity. The extent to which the respondent was likely to have exercised it was peculiarly a matter for the learned trial Judge's discretion, and I would not interfere with it. In my view all relevant factors were taken into account and it cannot be said that the learned trial Judge's award was manifestly excessive or otherwise in error. For these reasons I would dismiss the appeal.

Cohen v Ninkovic [2000] WASCA 169

At a glance

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Judgment (47 paragraphs)

Cohen v Ninkovic [2000] WASCA 169 (23 June 2000)

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Cases Cited (14)