Connell-McDowell v Bleechmore [2000] VSCA 34

Court of Appeal (Vic)|2000-03-24|Before: TADGELL, CALLAWAY and BATT, JJ.A.

DAMAGES - Personal injury - Barrister - $200,000 for pain and suffering not excessive - Calculation of past loss and loss of earning capacity.

The respondent successfully sued the appellant in the County Court claiming damages for personal injuries suffered in a motorcycle collision on 31st December 1990 at Tallangatta. The trial was had before a judge without a jury and, on 11th August 1998, the respondent obtained judgment for $935,097.73 and costs. There was a stay of 28 days, which was continued in the circumstances described in . The appellant now complains only of the quantum of the damages, which were made up as follows: (a) $200,000 for pain and suffering, reduced by an amount of $1501.27 paid pursuant to and of the ; (b) $699,099 for pecuniary loss (consisting of $211,000 for past loss of income and $488,099 for loss of earning capacity); and (c) $37,500, as an agreed sum for damages in the nature of interest.

The following account of the facts bearing on the appeal and the course of evidence is taken in large part from the uncontested summary filed by the appellant pursuant to Practice Statement C.A. 2 of 1995.[2]

The respondent, who was born on 21st September 1947, completed his secondary schooling in Adelaide and then held a position with Outward Bound. He next spent some three-and-a-half years in the Australian Army, including an extended tour of duty in Vietnam. On his discharge at the age of about 24 or 25 he began a law/arts course at the University of Adelaide. There were two breaks in that course. During the first he travelled for a year in Africa and Europe, obtaining employment in England and Germany as a butcher. During the second he spent a year as an officer with a national student body. He studied politics and languages and completed his law course in about 1977. He completed articles with Messrs Peter Waye & Associates and remained there as an employee solicitor for four or five years. He then practised briefly on his own account, largely as an advocate, before going overseas for further travel, including a bicycle journey around South America.

On returning to Adelaide after an absence of some 18 months to two years, the respondent was employed for a similar period as senior counsel for the Aboriginal legal rights movement, for which he conducted both trials and appeals. He then went to Nicaragua with the intention of working as a volunteer assisting the Sandinista government in matters of education and services. He became a paid adviser and remained in Nicaragua for about three years, returning to Australia in 1987. His father had had an accident and, after spending some time arranging his father's affairs, he joined the Royal Commission into Aboriginal Deaths in Custody, becoming the head of the South Australian inquiry section and later counsel assisting the South Australian inquiry. He stayed with the Royal Commission for something in the order of two-and-a-half years, following which he decided to take a holiday. It was in the course of that holiday that the collision occurred and, at the age of 43, he sustained his injuries.

The medical evidence was to the effect that the respondent had suffered injuries to his left knee and both ankles. There was a fracture of the left tibial plateau, requiring screw fixation and bone grafting, and fractures of both the left and right talar bones. The fracture to the right ankle was more complicated. He was immobilized in below-knee plasters until 11th March 1991, when X-rays demonstrated satisfactory union of the talar fractures. Symptoms persisted and there was evidence of the development of secondary osteoarthritic changes in the knee and ankles. Mr Cundy, who was one of two surgeons who gave viva voce evidence on the respondent's behalf, thought it likely that he would continue to tolerate his symptoms over the next five or ten years but might then give further consideration to the possibility of surgical arthrodesis of the right ankle. His expectation was that the respondent would persist with conservative management and avoid surgical intervention. Progressive osteoarthritis in the left knee raised the likelihood that in the decades ahead the respondent would require a knee-joint replacement, but that procedure would be performed only if required and would be delayed for as long as possible.

The respondent described in his evidence his continuing symptoms. He said that those in his knee had remained about the same, that he experienced ankle pain all the time but that the right ankle was worse than the left. His injuries affected his gait, his general mobility and his capacity to work. They precluded running and most sporting activities; he was still able to swim but had to alter his stroke. The injuries also interfered with his ability to dance, to go bushwalking and to engage in most other physical activity. He conceded that there was every likelihood he would continue to travel and indeed that he had returned to Nicaragua since the accident. He still regularly rode a motorcycle and was able to continue many of his activities, albeit on a more restricted basis and with a greater requirement for rest before and afterwards. There was evidence from other lay witnesses confirming from their own observations the persisting effect of the respondent's injuries.

About nine months after the accident the respondent arranged to return to practice in Adelaide on his own account. He moved into chambers owned by Mr Peter Waye, initially free of rent, and gradually built up the amount of work he was doing. There was not a lot of walking required because the courts were not far from his chambers, and he was able to drive to suburban courts. He gave evidence that approximately half his practice was in the Magistrates' Court and, of the other half, most was District Court trial work with some appearances in the Supreme Court. He agreed that he had a practice similar to that of Mr Lister, to whom we refer below. Whether or not he was standing, he was in pain towards the end of the day. As an incident of the nature of his practice it was on occasions necessary for him to pass work to others, but he said that his injuries had caused him to do so more often than formerly. Overall, he said, the pain reduced his capacity to concentrate.

Mr Peter Waye, to whom the respondent had been articled and who had observed his practice before and after the accident, Judge Bishop of the South Australian District Court and two practitioners named Lister and Braithwaite all gave evidence that he was a well-known, well-respected and competent criminal advocate. Their testimony included evidence of the actual earnings achieved by a practitioner with a similar practice, namely Mr Lister, payments made by South Australian Legal Aid to practitioners and rates of pay in the Legal Aid organization itself.

It was submitted that the damages awarded for pain and suffering were excessive in amount having regard to the respondent's age, to his continued independent living and lifestyle - including walking long distances and riding his motorcycle on a daily basis - and to the prospect that any remedial surgery was long-term, and for the most part possible as opposed to probable. The appellant conceded, however, that a sum up to $175,000 under this head could be supported. There is often a wide range within which reasonable minds may differ as to the appropriate component for pain and suffering. No error of principle was identified. We accept Mr Stanley's submission that $200,000 was not plainly wrong or a wholly erroneous estimate and we shall not interfere with that component.

After reviewing the evidence, her Honour expressed her conclusions on pecuniary loss, beginning with past loss of income up to judgment on 11th August 1998. She said:

"As far as the past loss of income, the figure submitted by the plaintiff of $211,000 being a figure based upon what he could have earned taking a figure of $85,000 per annum as a reasonable figure for what he could have earned and deducting from this what he in fact has earned on each of his tax returns since returning to his profession after the accident and allowing for 18 months after the accident, so commencing from 1st July 1992, I accept that this is a reasonable way to assess the past loss of earnings and I propose to make an award for past loss in that amount."

For the year ended 30th June 1989 the respondent's gross income from the Royal Commission was $111,106 and his expenses were $11,970, leaving net income of $99,136. The corresponding amounts in the 1990 financial year were $93,804, $8,588 and $85,216. His income after tax in those two years was $56,469 and $51,090 respectively. His gross income for the six years ended 30th June 1993 through to 1998 began at $37,029, rose to $68,416 in 1997 and fell away to $45,000 in the last year. His average expenses during that six-year period were $27,618 per annum. It appears from the evidence that was before the learned judge that the figure of $211,000 for past loss to which her Honour referred was not based, as her reasons quoted in [10] above suggest, on estimated net income of $85,000 per annum in each relevant year of income but on estimated net income of $85,000 in the years ended 30th June 1993 and 1994, $90,000 in each of the next two years, $95,000 in 1997 and $100,000 in 1998. Her Honour appears to have misunderstood either the evidence of the respondent's estimated net professional income for the years 1993-1998 or the submission on his behalf that was founded on it. The adoption of the figure of $211,000 implies an acceptance of average net earnings of approximately $91,000 per year before tax, which is much the same as the respondent was earning at the Royal Commission. The method of calculation for which Mr Stanley contended below depended on figures set out in a table in exhibit F, a document purporting to be an extract from which he handed to us during the hearing of the appeal. The table given to us appears, however, to contain errors (and we assume that exhibit F contained the same errors) under-stating the estimated after-tax income for 1997 and for 1998. So far as we can determine, the figure for 1997 should have been $58,068 (not $55,568 as stated in the table) and the figure for 1998 should have been $60,748 (not $55,748 as so stated). The combined under-statement, on that footing, was $7,500, so that the total estimated after-tax income for the years 1993-1998 should have been $335,378 (not $327,878 as stated in the table). If the table be corrected in the way we have suggested the submission made by Mr Stanley below and repeated on the appeal is understandable and, as we shall indicate in [22], justifiable.

Turning to loss of earning capacity, her Honour said:

"As for the future loss of earnings, I am satisfied that the sum of $130,000 gross per annum is a fair and reasonable sum for the assessment of what the plaintiff could have earned had he been uninjured in his future career at the Bar, and the evidence supports the adoption of this figure.

I accept the plaintiff's submissions as to the approach to adopt in calculating future loss of income using this figure i.e. by taking $130,000 per annum and reducing it to a weekly figure of $1465 [net] per week and deducting from that the present earnings of the plaintiff (calculated by averaging them over the last three years) of $358 per week to reach a figure, by way of future loss of $1,106.80 per week. Then utilising the multiplier to 65 [scil. 490] to reach a figure of $542,332 being the net loss to the plaintiff of future income to the age of 65 years.

I have considered the submission put by the plaintiff's counsel that because of the real likelihood of future operations impacting on his working time for a period of 6-12 months and the evidence that the plaintiff would have worked on until seventy years, I ought not discount the future loss of earnings at all for the normal exigencies of life. I do not accede wholly to that submission but I have taken it into account in fixing a lower than usual percentage for the discount for future contingencies. In my view, the figure for loss of future earnings should be reduced by 10 per cent for the normal contingencies of life and I do that in this case, leaving a sum of $488,099."

Her Honour had earlier said that, on the material before her, she was satisfied that the respondent had been seriously hampered in his ability to work to his full pre-accident potential. She estimated his loss of earning capacity at 50 per cent. Consistently with this her Honour, instead of subtracting $358 per week from $1,465 per week, should simply have divided the latter figure by two - producing $732.50 per week instead of $1106.80. The application of the same multiplier of 490 to the age of 65,[3] produces a round figure of $360,000 rather than $542,332.

Mr Galbally submitted that the judge had erred in considering three questions. The first was the income-producing capacity of the respondent's professional practice prior to the accident. He submitted that her Honour failed to consider that the respondent had not practised "in the mainstream of professional life" apart from the five years after qualification when he worked as an employee; that she had placed too much weight on what was in effect a "one off brief" with the Royal Commission in assessing his general earning capacity; and that she had failed to take into account that temperamentally the respondent was not a person suited to "the grind of private practice". Counsel submitted that a finding of $85,000 per year was not a general reflection of the respondent's pre-accident earning capacity. As we have noted in [11], the award of $211,000 for past loss of income in fact implies a higher figure.

Mr Stanley denied that the role of counsel assisting the Royal Commission was outside the mainstream of professional life or that her Honour had placed too much weight on the appointment to that role. It was, he said, only part of the evidence of the respondent's earning capacity. There was an unchallenged statement by the respondent to the effect that, in the early 1980s, he had earned the equivalent of what he later earned at the Royal Commission; there was the evidence of Messrs Lister and Braithwaite of their actual earnings and their assessment of the respondent's uninjured earning capacity. Mr Waye had testified that, in his belief, the respondent would have been one of the three leading juniors in the criminal field in South Australia but for the accident. Counsel submitted that the evidence, far from suggesting that the respondent was unsuited to private practice, was to the contrary; the assertion had not been put to the respondent directly in cross-examination and no submission to that effect had been made in the appellant's closing address.

The second question propounded by Mr Galbally related to the likely course of the respondent's professional career and the level of income that he would probably have achieved had the accident not occurred. He submitted that it was unrealistic to say that the respondent, at his age, was about to embrace the Bar on a full-time long-term basis. Save for a brief period he had not worked as a barrister or sole practitioner at any time in his professional career before the Royal Commission. Moreover, in counsel's words, the respondent had shown a "lack of commitment and a tendency not to settle down", which was said to be inconsistent with a long term commitment to the Bar. He was likely to return to salaried employment in the profession. As counsel submitted, Her Honour over-assessed the respondent's future earning capacity by at least 25 per cent. We took that to mean that, given the 50 per cent finding, it should have been no greater than 25 per cent. Mr Galbally also challenged her Honour's finding that $130,000 per year as the respondent's unimpaired earning capacity was supported by reference to incomes of those in comparable positions.

Mr Stanley responded by pointing out that, from the time he completed his articles until his appointment with the Royal Commission, the respondent's work was essentially that of a criminal advocate. He had testified to his determination to pursue a legal career and the submissions made on behalf of the appellant were contrary to the evidence of the witnesses called on his behalf, which the learned judge had evidently accepted. Mr Braithwaite, for example, had said that, if the respondent had returned even to paid employment, he would have been able to earn a salary package in excess of $150,000 per annum gross.

Mr Galbally's third question challenged the extent to which the respondent's injuries were productive of financial loss, given the likely course of his professional career. He submitted that the evidence did not justify the finding that the respondent was capable of working at only 50 per cent of his pre-accident level and that her Honour provided no reasons to justify it. The respondent himself offered in cross-examination three reasons for the appreciable fall in his earnings since the accident: first, that he travelled to country and suburban courts less often than formerly; secondly, that he could not cope so well as he used to do with long or arduous trials; and thirdly that in general he was unable to work as hard as formerly. Mr Galbally argued that those reasons were not persuasive, saying that it was not easy to ascertain what had brought about the reduction in the respondent's earnings since the accident and that it was curious that his earnings for the last three years had become so extraordinarily low.

Mr Stanley pointed to the stark comparison of the figures before and after the accident, to some of which we have already referred, and reminded us of Mr Waye's unchallenged evidence that the respondent was working at somewhere between 35 per cent and 50 per cent of his previous capacity. Her Honour had referred to that evidence in the course of her reasons. We note that the respondent said in evidence that he estimated his loss of earning capacity at about half.

It is expedient to refer now in more detail to the evidence of Messrs Lister and Braithwaite, on which her Honour evidently relied. The former was a solicitor, then aged 46, who gave evidence of what he regarded as a similar professional career to the respondent's except that he had worked continuously as a barrister and solicitor and had made a decision not to work as hard as he could in order to leave time for his family. In his view he could easily gross $200,000 per annum if he was prepared to do so. His actual income was in evidence. About 30 or 40 per cent of his work came from Legal Aid.

Mr Braithwaite had for the last seven years been chief counsel to the Legal Services Commission. He was aged 50, having studied law as a mature-aged student. His salary was linked to that of a magistrate and had recently risen to about $130,000 per year together with the use of a car. There was also a voluntary superannuation scheme to which his employer contributed. He gave evidence of the salaries earned by other lawyers in the Attorney-General's Department, of whom some earning between $100,000 and $120,000 or even more would be less experienced than the respondent. In addition he was asked the following question and gave the following answer:

"MR. STANLEY: Your Honour, my learned friend has put it a lot better than me. It is directly as he suggested. (To witness) What is the level of fees that are paid, to your knowledge, to sole practitioners engaged as counsel by the Legal Aid Commission for a year?---All right, I understand. Well, some of them would - from the Legal Services Commission, over a year, certainly gross - well, 120,000. That's a sole practitioner. And of course they have private paying clients on top of that, and they might do running down as well."

We turn to our conclusions. For past loss of earnings Mr Stanley at the trial had based himself "on a figure [for estimated net business income] rising from approximately $85,000 a year in 1993 up to $100,000 around the present time". Those figures appear in the table extracted from Exhibit F, which the appellant did not challenge below and which Mr Galbally himself told us he accepted. The table, corrected as mentioned in [11] above, justifies the figure of $211,000 awarded under this head. Mr Galbally's argument started from the proposition that $85,000 was a gross figure, but that is clearly incorrect, as the table itself shows. His written outline of argument did assert that $85,000 was unacceptable, but little was said in support of that. As we have mentioned, her Honour apparently misunderstood Mr Stanley's submission, treating it as based on an average annual figure of $85,000. This led to much of Mr Stanley's address on this topic in this Court being devoted to justifying the average figure of $85,000. As was the case below, little attack was made by Mr Galbally upon the figure of $211,000 itself, not unnaturally in view of the concession concerning the table. Despite her Honour's apparent misunderstanding and the course which argument took on appeal, we would not, in the light of the absence of real challenge below to Mr Stanley's submission on this topic and the acceptance of the table, interfere with her award of $211,000, justified as it is by the table. It, and the figures on which it is based, are, we think, reasonable.

In considering the respondent's loss of earning capacity, we do not conclude that his youthful idealism in the years prior to the Royal Commission should be held against him. Rather this Court should accept, as her Honour did, the assessments of Mr Waye and his professional peers that the respondent would have been a successful specialist advocate. We take into account a residual propensity to travel for extended periods, but we accept the judge's figure of $130,000 per year gross. We are not persuaded to interfere with her Honour's assessment of a 50 per cent loss of earning capacity, given not only the respondent's own evidence but those of qualified witnesses who had had an opportunity to observe him.

The discount for contingencies of the figure for loss of earning capacity should in our opinion be 15%. We do not think that the evidence justifies a partial allowance for the possibility that the respondent might work beyond 65. It follows from this and what we have said in [13] that $306,000 should be allowed under this head. Interest will require to be recalculated.

The appeal will be allowed to the extent we have indicated. We shall give counsel an opportunity to agree on the amount of interest and shall hear them as to costs.

[3] This case is not an appropriate vehicle to consider the significance, and proper use, of such a multiplier: cf. Arthur Robinson (Grafton) Pty. Ltd. v. Carter [1968] HCA 9; (1968) 122 C.L.R. 649 and Wynn v. N.S.W. Insurance Ministerial Corporation [1995] HCA 53; (1995) 184 C.L.R. 485.

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