Coulahan v Clissold [2000] VSCA 196

Court of Appeal (Vic)|2000-10-12|Before: BROOKING, CHARLES and BATT, JJ.A.

Damages - Assessment - Jury's award - Pain and suffering - Pecuniary loss - Future or potential economic loss - Whether "manifestly excessive" - Test to be applied.

Justice Charles will deliver the first judgment.

By writ issued on 19 September 1997, the plaintiff commenced action against Coulahan as defendant for damages for personal injuries suffered in the accident. The action came on for trial in the Supreme Court at Warrnambool before a judge and jury on 10 May 1999. After a trial lasting five days, the jury found that the plaintiffs's injuries had been caused by the appellant's negligence, but also found that the plaintiff had been contributorily negligent and that his damages should be reduced by 30 per cent. The jury assessed the plaintiff's damages for pecuniary loss at $350,000 and for non- pecuniary loss at $165,000. After appropriate reductions for contributory negligence and payments made under the Transport Accident Act 1986, judgment was entered on 14 May 2000 for the plaintiff in the sum of $351,447.27, together with interest agreed at $3000 and costs on a solicitor/client basis.

The appellant appealed against this verdict, but does not challenge the finding of negligence against him or the finding that 30 per cent was the proper figure relating to the plaintiff's contributory negligence. The appeal is therefore limited to challenging the amounts awarded by the jury in damages, both for pecuniary loss and pain and suffering, on the ground that in each case they are manifestly excessive. The plaintiff has not cross-appealed.

The plaintiff was born on 29 July 1970. He left school after completing Year 10 and started an apprenticeship as a panel-beater in Colac, then being 16 years old. He

did not start trade school until he was 18 or 19. He was still an apprentice panel-beater when the accident occurred.

Following the collision, the plaintiff was placed under the care of an orthopaedic surgeon, Mr W.H. Huffam. X-rays at the Geelong Hospital showed that the plaintiff had suffered compression fractures in his back, with a considerable deformity of the 10th and 11th thoracic vertebrae and a slight deformity of the 12th thoracic vertebra. Operative treatment was not indicated and the plaintiff remained in bed in hospital until 14 March 1989 when he was discharged. For six months after leaving hospital the plaintiff wore an immobilising back brace at all times other than when showering or sleeping. Three months after the plaintiff was discharged from hospital, Mr Huffam certified that he was fit to commence light duties.

The plaintiff had no further medical treatment other than Dothep prescribed by his general practitioner, and over-the-counter painkillers. He did he not see Mr Huffam again until February 1999 when his lawyers arranged a review. Dothep was prescribed to assist in sleeping and the plaintiff took it up to three nights a week.

The plaintiff's evidence was that he returned to light duties as an apprentice panel-beater in Colac some seven or eight months after the accident. He completed his apprenticeship in 1992 when he was about 22. Over time his duties were increased and he was able to do heavy work, but more slowly. His evidence was that he was at first earning some $350 per week after tax, continuing to work for O'Halloran Colac Toyota until he resigned in about 1993.

Following the accident the plaintiff became frustrated and started to drink excessively, although he later regained control of his drinking habits. He commenced playing tennis, basketball and football, but after two seasons had given away each of these sports, having been interested in a variety of athletic pursuits before the accident.

After resigning his job in Colac, the plaintiff moved to Alice Springs where he had arranged work in another panel-beater's shop. It was his hope that the warmer weather would help his back. There he performed lighter duties because he was slow when attempting heavy work. In Alice Springs he earned about $600 per week after tax. After working there for about ten months the plaintiff moved back to Colac and took up work again as a panel-beater employed by a firm called Argento's. He said he earned up to $700 to $1000 per week at Argento's. He stayed there for about two years before resigning due to a combination of back pain and the fumes associated with the radiator repair business in which he was working.

He then moved to Melbourne to work as a panel-beater in Bridge Road, Richmond. The work done by that firm was lighter than in the country and the plaintiff was able to carry out this work. In the Bridge Road firm he earned about $550 after tax. After five or six months, the plaintiff left the job in Richmond because commuting by train to his work caused increased back pain.

The plaintiff then obtained work with his uncle on a fishing boat, initially as a cook, but then as a fisherman. This work, however, involved 18-hour days, which he found was painful. The work was heavy and the pay was poor and the plaintiff earned $2500 after tax over the three or four months for which he was working for his uncle. Thereafter the plaintiff took a break for two months before starting work with Murdoch Panels, a panel- beating firm in Geelong where he earned some $465 a week after tax. After about ten months, he left Murdoch Panels because the work was too heavy.

After another period of unemployment, the plaintiff, in September 1998, started casual work with South City Panel and Paint Pty Ltd, a Geelong panel-beating firm where he still worked at the time of trial. His evidence was that if he worked there full-time, he would earn $450 per week after tax. He was, however, unable to work full-time because of the pain and tiredness associated with his back injury. Instead he worked two to three days per week, more commonly three days, earning a little over $200 net if he worked two days and close to $300 if he worked three days.

Evidence was given by the proprietor of the business, Franceso Pellizzeri, who said that a panel- beater with ten years' experience was paid $430 net per week working 38 hours. Mr Pellizzeri said that a panel beater has to be fairly fit and that "It's something that not a lot of elderly panel-beaters stay till they're 65". Under cross-examination, Mr Pellizzeri said that it was a heavy job and that his oldest panel-beater was 62. He said it was the sort of job which, in his experience, becomes more difficult as one gets older, but "there are some still doing it in their mid-30s and 40s". His 62 year-old panel-beater was still working full-time. He said of the plaintiff that he had all the skills necessary for his trade and very good knowledge of it, that he was able to work under very minimal supervision and with very minimal quality control. He said of him that he was a little better than the average tradesman. The thrust of his evidence was that if the plaintiff had to reduce his hours with the firm, it would be difficult for Mr Pellizzeri to accommodate him, but because of his knowledge and reliability, he would try to do so. The plaintiff said that he intended to work as long as he could, but thought that would only be for about another five years.

In this Court, the case made by Mr Ruskin for the appellant was that the jury's verdict in relation to the plaintiff's economic loss reflected an acceptance of a near-total loss of earning capacity on his part as at the trial. He submitted that the evidence indicated that the plaintiff had a current earning capacity working for three days a week and that that capacity was likely to persist for five years or so. Thereafter, the evidence was that it was at least probable that the plaintiff would continue to have an earning capacity, although a precise evaluation of that capacity was difficult to determine. Mr Ruskin took us to the evidence given by the plaintiff, Mr Pellizzeri, the plaintiff's partner, Mr Huffam and Mr Radley to support these contentions.

As to the plaintiff's past economic loss, his counsel at trial had claimed $25,000 for it. It is unnecessary to spend time on this question, because Mr Ruskin put it to us that an amount of $18,000 to $20,000 for past economic loss could be sustained on the evidence. The real question, he submitted, was as to the future. In this respect, Mr Ruskin relied on Malec v.J.C. Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638, where Dean, Gaudron and McHugh, JJ. said at 642 -

"But in the case of an event which it alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high - 99 per cent - or very low - 0.1 per cent. But unless the chance is so low as to be regarded as speculative - say less than 1 per cent - or so high as to be practically certain - say over 99 per cent - the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 per cent probability of occurring, but to ignore altogether a prediction which has a 49 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded."

Mr Ruskin submitted that the jury was bound to have regard to the probability that the plaintiff would continue to do some work beyond a period of five years after the trial. On this basis, he submitted the figure of $350,000 for pecuniary loss was far too high. His submission was that realistically the plaintiff would have a prospect of earning at least $200 per week net after the period of five years had ceased. It was for the plaintiff to establish the extent of his loss, in this respect the extent of his incapacity.

In relation to the figure awarded for general damages, Mr Ruskin accepted that the plaintiff's damages in this area were significant and that he had had to give up many things. But, he said, the plaintiff still jogs, still walks his dogs, his motivation to work has been preserved and he has had minimal treatment. His pain and suffering were real and degeneration of his back condition had been established, but, he submitted, the amount awarded was very high in the context of what had been separately awarded for economic loss. He put to the Court that a figure of $125,000 to $150,000 would have been an appropriate figure for general damages if the pecuniary loss awarded had not been so high. In combination, the submission was that the amount awarded for general damages was unreasonable.

At trial, the plaintiff's counsel, in his address to the jury, reviewed the evidence of what the plaintiff had earned as a panel-beater and then submitted that the plaintiff's earning capacity averaged at around $500 per week. The agreed multiplier to the age of 65 was 771.50, so that the total figure for future earning capacity as at trial for the then 29 year-old plaintiff, leaving to one side what he might actually earn in the future, was $385,750.

Counsel then dealt with the risk factor. He put to the jury that the plaintiff hoped to work for five years as a panel-beater, but was not likely to achieve this. He said that the plaintiff was entitled to 7 per cent superannuation, which would add $30 to $40 per week. It was then put that if the jury took 10 percent from the figure of $385,750, the result would be around $350,000, to which the amount of past lost earnings of $25,000 was to be added. He suggested that the plaintiff would work through to the age of 65.

In this Court, Mr Tobin, for the plaintiff, put a somewhat different argument. Mr Tobin submitted that on all the evidence, the future earning capacity of the plaintiff was no more than $56,000, on the assumption that he could continue working as a panel-beater for five years and on the basis of evidence given by the plaintiff and his partner suggesting a deterioration in his health and ability to work that made it unlikely that he would last for five years. He put it that there might only be a 50 per cent chance of the plaintiff getting an additional five years, so that his residual earning value might be no more than $28,000. Mr Tobin argued that there should be little deduction for vicissitudes, which were intended to cover four risk factors: the plaintiff's health; the risk of accident; the possibility of unemployment; and industrial disputes. He submitted that the 10 per cent figure mentioned by the plaintiff's counsel to the jury was realistic, and that the jury may have considered the plaintiff's prospects were better than counsel had suggested. But, in particular, Mr Tobin argued that it was open to the jury to assess the plaintiff's future earning capacity at $600 per week, higher than his counsel had put to the jury, on the basis of all the evidence, in particular what he had earned at Alice Springs, at Argento's and at Bridge Road, Richmond.

The appellant's task in this Court is to demonstrate that, on the view of the evidence most favourable to the plaintiff, the verdict was so high that no reasonable jury properly instructed, and confining itself to matters relevant, could have arrived at this figure; Woodhead and the Transport Accident Commission v. Barrow[1]; Australian Iron and Steel Ltd v. Greenwood[2].

The plaintiff fell to be assessed as a young man, injured at the age of 18 while still an apprentice, who, before the accident, was extremely fit and active with no known back problems. He was plainly a hard and honest worker and, after completing his apprenticeship, a skilled panel-beater who was regarded by his employer as reliable and trustworthy and who had borne his injuries stoically. Mr Ruskin said that there were no credit issues and that the plaintiff's evidence was in effect unchallenged.

It is convenient to take first the question what was the appropriate wage at which to assess the plaintiff's earning capacity. The plaintiff's evidence was indeed that he had taken home "$600 a week clear" in Alice Springs, there being a shortage of panel-beaters in that place. As to Argento's, asked what he was getting in his pocket, the plaintiff replied,

"That'd vary from - like I said earlier, it varied whether I was on performance base, on how much you would do, or on a wage. The performance base would be anything up to $700 to $1000 a week."

He explained that "performance base" meant, "It was the number of radiators you would do in a day or week." The work at Bridge Road, Richmond, where the plaintiff earned $550 a week clear, had lasted a comparatively short time and the plaintiff had difficulties both with getting accommodation in Melbourne and in travelling to work by train from Geelong. Under cross-examination, the plaintiff agreed that accurate evidence of what he had earned (both how much and for how long) would be contained in group certificates which he had at home, but which he had not brought to court.

The clearest evidence of the earning capacity of a panel-beater was given by Mr Pellizzeri, the proprietor of the business at Geelong at which the plaintiff had worked since September 1998 and who had run that business for eight years. Mr Pellizzeri had been a qualified panel-beater for 35 years. He said that panel-beaters worked a 38 hour week and, with ten years' experience, earned $580 a week gross and in the vicinity of $430 net. Some overtime was available at his business on Saturday mornings at penalty rates, for which two or three out of his seven panel-beaters worked.

In the light of the evidence of the plaintiff's earnings at Murdoch Panels in Geelong ($465 weekly net), the vagueness and uncertainty of the evidence given in relation to his earnings at Argento's, and the special circumstances obtaining in relation to the work at Alice Springs, in my view it would not have been open to the jury to take as the plaintiff's earning capacity the figure of $600 weekly suggested by Mr Tobin. The figure of $500 weekly had been put by plaintiff's counsel at the trial. The jury appears to have accepted much of what was put by the plaintiff's counsel, and I think it is probable that this was the figure used by them and which they were entitled to accept.

In an award of $350,000 for pecuniary loss, the jury may be taken to have awarded the plaintiff $25,000 for past pecuniary loss. On the assumption that the plaintiff would have earned $500 per week to the age of 65, the value of his future earning capacity was $385,750. If the plaintiff had worked as a panel-beater for a further five years at his present earning rate, at the agreed multiplier of 226 for a five year period, the value of his future earning capacity in that period was approximately $56,000. The plaintiff said in evidence that he hoped to work till 65, but on Mr Pellizzeri's evidence, a more realistic finishing age for a panel-beater would have been 55 to 60, with some prospect of the plaintiff working on beyond that. At the agreed multiplier of 741.3, the figure achieved if the plaintiff had worked up to the age of 60 at the rate of $500 weekly would have been $370,650. Furthermore if the weekly figure of $500 included an amount for overtime, the jury would need to consider whether the plaintiff would still have worked overtime in his later years, absent his present injuries.

From this figure it would then have been necessary for the jury to make allowance for the plaintiff's earning capacity as a panel-beater in the next few years and thereafter in whatever more sedentary occupation was available. The evidence of the plaintiff and his partner certainly suggested some deterioration in his back condition, and whilst his evidence was that he hoped to work for five years, he might not have achieved that result. His present employer's evidence was highly supportive of him as a reliable and trustworthy worker and he would, on the evidence, have continued to employ him in this part-time capacity as long as the plaintiff was able to carry out his lighter than normal duties.

The orthopaedic surgeon, Mr Huffam, said at trial that the plaintiff was probably working to his maximum capacity, that he might go on for some years, but with increasing difficulty. He said the plaintiff should, however, be directed into some other form of work which was not going to place strains on his back and that he would be better with some form of sedentary type of work. His opinion in September 1996 had been that the plaintiff should be able to do quite a lot of his normal work and his back should become stronger as he worked.

Mr Radley gave evidence as a vocational psychologist. He said that the plaintiff's skills were at a physical rather than intellectual level and his capacity to earn a living was very much dependent on his physical strength and ability. He was noticeably slow intellectually, in the lower 18 per cent of the population. Mr Radley said that he had a strong desire to work and a realistic aptitude for alternative employment in an occupation of a more sedentary nature, but that he would have to go on and complete some form of higher education or retraining for this purpose, a process which might take three to six years. For example, if the plaintiff were able to improve his literacy skills and obtain a basic level of understanding of consumer relations and operating computers, he could work as a storeman in a spare parts department or with a car detailer, or in booking cars in for service, doing some keyboard work and working with customers. It was on the basis of this evidence that Mr Ruskin submitted that the plaintiff should be regarded as having an ongoing capacity for work, after he was no longer able to carry out panel-beating, of at least $200 per week.

There should, in my view, have been some reduction in the overall award to take account of vicissitudes, although having regard to the plaintiff's entitlement to superannuation, something less than 15 per cent might well have been appropriate. The difficulty with the present award for pecuniary loss is, however, that, as the appellant submitted, it made virtually no allowance for what was, on all the evidence, the probability that the plaintiff would take up some more sedentary occupation once he could no longer work as a panel-beater. While his back was likely to give him increasing pain in the future, it was never suggested by Mr Huffam, the only doctor called to give evidence, that he would not have been able to work to the age of, say, 60 in some more sedentary form of occupation.

In my view, on all the evidence at trial, there was established a reasonable degree of probability that the plaintiff had a capacity for work in a sedentary occupation once he gave up work as a panel-beater and that he would be able to work at such an occupation for at least a considerable portion of his life, if not necessarily to the age of 65. In failing to take into account this future capacity, the award of $350,000 for pecuniary loss was, in my opinion, too high and the appeal must therefore succeed.

Both parties accepted before us that if one portion of the jury's award for damages was unsustainable, then the other was, as it were, interlocked and fell with it, an approach which seems to me correct in light of what was said by Kitto, J. in Pateman v. Higgin[3]; see also Amato v. Onorato[4]. The award for general damages was indeed substantial, but in the circumstances it is unnecessary for me to express a view on whether the sum awarded was excessive.

Both parties then urged the Court to undertake the task of reassessing damages ourselves, rather than ordering a new trial limited to the question of damages, both for economic reasons and the convenience of the parties. There are, of course, often great practical advantages in an appellate court taking this course; cf. Bunge (Australia) Pty Ltd v. Patterson[5].

With some reluctance, I would decline this invitation. The task of assessing the damages awarded for pecuniary loss in the present case requires the tribunal to make an assessment of what the plaintiff's earning capacity would have been absent the injuries resulting from the collision; whether he would have worked on to the age of 65; what discount should be allowed for vicissitudes; and what the plaintiff is likely to earn both in the next five years, possibly more, possibly less, as a panel-beater and thereafter in some more sedentary occupation. In assessing the last point, it would be necessary to have regard to the time that must be taken to retrain the plaintiff, his capacity to undertake and benefit from such retraining and for how long his increasingly painful back will permit him to work at any occupation. All these matters involve making an assessment of the plaintiff who, of course, we have not seen in the witness box. Apart from the difficulties this Court would have in

assessing damages, there is the possibility of disagreement between members of the Bench on any of these issues and the result might in any event be unfair to the plaintiff. I greatly regret that the result is that, notwithstanding that the accident occurred in February 1989, the question of damages must be retried.

I would allow the appeal, set aside the verdict as to damages and order that there be a retrial limited to the question of damages.

The appeal is allowed with costs. The verdict, in so far as it assesses damages, and the judgment are set aside. A new trial is ordered on the issues of damages.

The costs of the first trial are to be in the discretion of the judge at the new trial. We assume that a certificate is sought.

The respondent will have a certificate under s.4 of the Appeal Costs Act 1998.

[1] Unreported, Supreme Court, Appeal Division, 3 September 1993 at 8.

[4] Unreported, Court of Appeal, 12 December 1996 at 9.

[5] Unreported, Court of Appeal, 12 July 1995 per the President at 3.

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Judgment (51 paragraphs)

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Cases Cited (3)