Danby v BBC Hardware [2001] NSWCA 89 | Case summary

1 HANDLEY JA: This is an appeal by a plaintiff from the judgment of Twigg DCJ QC which was pronounced orally on 21 January 2000 with written reasons delivered on 24 January. 2 The plaintiff 's claim arose out of an industrial accident at the Thornleigh store of the defendant on 24 October 1997. The Judge found a verdict for the plaintiff and assessed his damages at $151,693. Judgment was entered for $126,581 offsetting past out-of-pockets and past wage loss against the amounts which the plaintiff had to repay the defendant under s 151B of the Workers Compensation Act. 3 The course adopted by the Judge in this respect was irregular and will require the form of the judgment to be adjusted. This will not change the effective recovery of the plaintiff. 4 The Judge allowed $79,327 for non-economic loss based on 35 per cent of a worst possible case, future wage loss of $20,000 by way of a cushion, and future out-of-pocket expenses of $20,000, $10,000 of which was for future surgery. He also allowed interest on the past component of the non-economic loss which was contrary to s 151M of the Workers Compensation Act and this error has been conceded by counsel for the appellant. He also allowed a Fox v Wood component of $2,296 and the other amounts that I have already mentioned. 5 The plaintiff has appealed, challenging the amount for non-economic loss, the amount for future wage loss, and has submitted that an allowance ought to be made for loss of future superannuation. 6 The respondent sought leave at the hearing to file a notice of cross-appeal to raise the questions of the interest awarded by the Judge on non-economic loss, the Fox v Wood allowance and alleged over-compensation for future medical expenses. The substantial points raised by the notice of cross-appeal had been dealt with in the respondent's written submissions and the Court granted leave for a notice of cross-appeal to be filed, although strictly it was a notice of contention since the respondent did not seek a variation in its favour of the judgment entered below. 7 The Court indicated during argument that it did not propose to allow the appeal in respect of the award for non-economic loss, or the Judge's decision to refuse to include any amount for loss of superannuation. The 35 per cent of a worse possible case assessed by the Judge for the plaintiff 's non-economic loss was not by any means high, but the Judge found that the plaintiff had a pre-existing back condition in the years immediately before the injury, and was inclined to make somewhat more of his disabilities than the Judge thought was warranted. In these circumstances the figure cannot be said to be outside the range available to the trial Judge and I would not disturb this award. 8 The claim for loss of superannuation benefits was simply not proved and there is no evidence on which the Court could safely act in making any such allowance. I would not disturb the Judge's decision on this question. 9 Dealing with future wage loss, the Judge said that he was not satisfied that the plaintiff could not continue in his present employment, and he also thought that the plaintiff had a potential to earn more in a managerial position in view of his past experience in managing a squash court and working for TNT in a managerial role. The job at TNT came to an end in 1996 for reasons which had nothing to do with the plaintiff and he had not subsequently sought to obtain a managerial position. He was content to work for the respondent until he was injured and again after he had recovered. 10 The Judge also took into account the plaintiff 's pre-existing back problems which emerged during cross-examination. 11 The appellant's case was that the Judge should have assessed the plaintiff 's economic loss as being 50 per cent of his pre-injury capacity or $180 per week. On this basis the award for future economic loss would be increased to some $86,500. The claim on behalf of the plaintiff at the trial was a full wage loss claim of $300 per week for the next 15 years. The Judge allowed instead a cushion against future loss of $20,000, finding that the plaintiff 's capacity to work had been impaired by the injury. There can be no doubt about that bearing in mind his award for non-economic loss. 12 Miss Norton for the appellant submitted that the Court should find that the plaintiff would not be able to work to the normal retiring age of 65, but this was no part of the plaintiff 's case in chief and the reference to his ceasing work before reaching the age of 65 only emerged in cross-examination. The Court is not in a position on that material to find that the plaintiff would not work beyond age 60. 13 In the light of the Judge's findings, I would not accept the submission that the plaintiff 's future economic loss should be assessed on the basis of a loss of $180 per week for the whole period between trial and age 65. On the other hand, the cushion of $20,000 allowed by the Judge seems to me with all respect to be unduly modest. An amount of some $4,680 would have to be allowed in any event for time off work when the plaintiff had, as the Judge found he probably would, a spinal fusion operation at some stage in the future. This leaves an amount of only a little over $15,000 for the chances that at some stage the plaintiff will lose his job with the respondent. The Court may be taken to know persons with injured backs are vulnerable in the general labour market and are not always preferred employees for manual and semi-skilled work of the kind which the plaintiff has been doing as a sales assistant at the respondent's Thornleigh store. 14 There also has to be a chance that the plaintiff will not be able to work through until age 65, bearing in mind the degenerative changes which were in existence in his spine before the injury and the chance that this process will have been accelerated by the injury, the discectomy procedure he has already had, and the spinal fusion which on the Judge's findings he will have in the future. 15 These two factors, the fact that the plaintiff may not be able to work till age 65 and may find himself out of a job with the respondent and back on the general labour market and have difficulty in getting other employment, either of the semi-skilled nature he is now doing, or of a managerial nature that he has done in the past, seem to me with respect to warrant a more substantial cushion against the future than the effective $15,000 allowed by the Judge. 16 Doing the best I can, I would allow a cushion of $50,000 in lieu of the cushion awarded by the Judge. I would otherwise dismiss the appeal. 17 Turning now to the notice of contention points raised by Mr Morris for the respondent, the interest on the non-economic loss damages must clearly be deducted. That amounts to $4,958. The Fox v Wood allowance should also be deducted. The agreement between counsel was that the past out-of-pocket expenses of $13,634 and the past wage loss of $11,478 should be included in the verdict and then taken off because of the operation of s 151B of the Workers Compensation Act. The whole basis of the allowance of additional damages on the principle in Fox v Wood (1981) 148 CLR 438 is that the amount that must be repaid by an injured worker pursuant to provisions of the nature of s 151B exceeds the amount he actually received as workers' compensation because income tax had been deducted at source from his workers' compensation. The agreement in this case between counsel that the past wage loss to be included in the verdict should be deducted from the judgment, no more and no less, necessarily excluded any possibility of a Fox v Wood allowance being properly included in the judgment. 18 I would uphold the notice of contention in respect of the Fox v Wood point as well. 19 The remaining point taken by Mr Morris is that the Judge erred in allowing $20,000 for future medical expenses. His first point was that the Judge only intended to allow $10,000 on this head of damages and this point receives some support from the last line or so of his Honour's written reasons. However there is a clear inconsistency between the last few lines of his reasons and the amount of his verdict. 20 The Court might have had difficulty in resolving this conflict but for the short reasons his Honour pronounced orally on Friday 21 January. He had reserved his judgment on the previous afternoon and on the Friday morning announced what his verdict was going to be, including "future out of pocket expenses, $20,000". This makes it clear that there is no error in the Judge's verdict, and the error is in the last few lines of his reasons. The duplication point therefore fails. 21 Mr Morris's second point was that the Judge had not discounted these future expenses to a present value for the purpose of including the agreed figures in the verdict. It is not clear where the Judge derived these two amounts of $10,000. They are not referred to in the evidence but they appear to have been referred to in the schedule of damages handed up to his Honour by counsel for the plaintiff at the trial. This is recorded at p 65 of the combined appeal book but at p 66 of the transcript junior counsel for the plaintiff at the trial said: "Your Honour, I have prepared a document that sets out the figures at the relevant date. I can give your Honour those figures now". That may only in terms apply to the amounts for non-economic loss which are indexed but it does suggest that counsel were alive to the necessity for giving figures to the Judge in terms of the relevant date or dates as the case may be. 22 In those circumstances, I have not been persuaded that the Judge failed to discount undiscounted figures which had been agreed on between counsel. The error, if there was an error, was a very obvious one and while there have been other obvious errors in the Judge's judgment in favour of the plaintiff this one was first raised on 29 March this year in the written submissions of counsel for the respondent. 23 In these circumstances the appeal should be allowed and the amount of the damages for future economic loss increased to $42,500 to allow for the offsets in favour of the respondent in respect of interest on non-economic loss and the Fox v Wood component. 24 It is also necessary to vary the verdict and the judgment to avoid unintended consequences under s 151B of the Act which could result from the netting-off process adopted by the Judge. 25 I would therefore propose that the appeal be allowed, that the judgment in favour of the plaintiff as to amount be set aside, and in lieu thereof that there be a verdict in favour of the plaintiff for $174,193 to take effect from 21 January 2000. The plaintiff is to have the costs of the appeal and the respondent if qualified is to have a certificate under the Suitors Fund Act. 26 Because of s 151B of the Workers Compensation Act there will be judgment for the plaintiff for $149,081. 27 DAVIES AJA: I agree with Handley JA. 28 HANDLEY JA: They are the orders of the Court.

Danby v BBC Hardware

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