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[2011] NSWSC 518
Supreme Court of NSW
2011-05-18
Garling J, Mason CJ, Gaudron JJ, Hammerschlag J, Allsop P
Original judgment source is linked above.
Judgment 1Bruce Walter Edward Kerney, the plaintiff, was driving his motor vehicle north on the Upper Bylong Road near Bylong, on 25 November 2001. 2Scott Staden-Gaffney was driving a vehicle owned by the first defendant, John Mead, south along the Upper Bylong Road at about 80kmph on the wrong side of the road. 3A high speed collision occurred and Mr Kerney sustained very serious injuries. 4He brought proceedings in this Court claiming damages for his injuries and consequent disabilities. 5The defendants, Mr Mead and Mr Staden-Gaffney, admitted that they were negligent, and that they were the cause of the accident. They admitted that they were obliged to pay damages to Mr Kerney but put in issue the amount of those damages. 6Accordingly, the Court has proceeded to hear, and by this judgment will determine, the amount of Mr Kerney's claim for damages.
Damages - The Legal Position 7A person, injured by a tort who claims compensatory damages, is entitled to have an assessment of those compensatory damages upon the basis that the injured person should receive compensation in a sum which, so far as money can do, will put that person in the same position as he or she would have been in, had the tort not occurred: Haines v Bendall (1991) 172 CLR 60 at 63 per Mason CJ, Dawson, Toohey and Gaudron JJ; Todorovic v Waller (1981) 150 CLR 402 at 412; MBP (SA) Ltd v Gogic (1991) 171 CLR 657; Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 at [66] per Hammerschlag J (Allsop P and Beazley JA agreeing on this point). 8As Windeyer J said in Skelton v Collins (1966) 115 CLR 94 at 128: "The one principle that is absolutely firm, and which must control all else, is that damages from the consequences of mere negligence are compensatory. They are not punitive. They are given to compensate the injured person for what he has suffered and will suffer in mind, body or estate. Only so far as they can do so is he entitled to have them." 9In a case of a tort constituted by a motor vehicle accident in NSW, the provisions of the Motor Accidents Compensation Act 1999, in particular Chapter 5, have effect to alter various aspects of the common law with respect to the award of damages. However, there is nothing in the legislation which detracts from the overall statement of principle to which I have referred.
The Plaintiff - Uninjured 10Mr Kerney was born in 1966 and was 35 at the time of the motor vehicle accident. He is now 45. He is the only child of parents who are now elderly and in failing health. 11Mr Kerney grew up in Kandos and has lived there all his life. He is the third generation of his family to have lived in the area. His grandfather owned a property "Gowrie" which is located near Bylong. Bylong is about 60km north of Kandos. "Gowrie" was inherited by Mr Kerney's father, and formed part of Mr Kerney's upbringing. 12Mr Kerney went to school in Kandos and having obtained his Higher School Certificate, joined Telstra as an apprentice technician. That apprenticeship commenced on 7 July 1984. It continued up until Mr Kerney's accident in 2001. 13In the course of his employment with Telstra, Mr Kerney did a good deal of training in connection with radio theory and electronics. Initially he was involved with radio installation all over country NSW. By the time of his accident, he was employed as a reasonably senior technician. 14The work that he did with Telstra was physically arduous. It involved lifting and handling radio racks and sub-racks which could weigh up to 60 kilograms and required two people to lift and position them. As well, Mr Kerney handled spools of cable which were heavy and had to drag and position cables which were both for power and communication. 15Mr Kerney also undertook battery replacement installation work which involved lifting and handling large heavy batteries often weighing 30 kilograms to 40 kilograms. 16Mr Kerney's work with Telstra was carried out throughout rural NSW. Although he was based in Kandos, he travelled to many parts of NSW. As one would expect in the course of that travelling, he developed a social network amongst his fellow Telstra employees all over NSW. He was not much at home during that period, although Kandos was then and remains now, his only home. 17Mr Kerney, prior to his accident, also had an interest in farming. As I have noted above, his father inherited the property "Gowrie" which was about 1200 acres in the Bylong Valley. The property, in common with others in the area, was a beef cattle property. Mr Kerney was principally responsible for the running of it for many years prior to his accident. This was largely because as his father got older, his father gave away the physical work on the farm. 18In about 1998, Mr Kerney decided to enhance his farming pursuits by purchasing a property called "Bylong Creek" which was about 800 acres in size and which was nearby to his father's property "Gowrie". 19Mr Kerney's physical work on "Bylong Creek" and "Gowrie" involved building stock yards which was very heavy work involving the digging of holes and the placement of large hardwood timbers together with lifting, handling and fitting hardwood railings. It involved the construction, maintenance and repair of fences. It involved the cleaning, at periodic intervals, of wells from which water was drawn. This involved descending down into the well and scooping or shovelling out debris which would accumulate in the bottom of the well and prevent the ready drawing of water from the well. 20Mr Kerney undertook cattle work involving the handling of animals. Occasionally, this would include the castration or "marking" of bull calves and the provision of assistance to cows when calving. This would involve pulling the calf to extract it from its mother's womb, which usually required the application of significant physical effort. 21Leading up to his accident, Mr Kerney was running cattle on both "Gowrie" and "Bylong Creek" and was undertaking a good deal of work on "Bylong Creek" to make it suitable as a cattle property. He was able to do this because his job with Telstra involved him working a nine day fortnight, and so he had an adequate number of days in each fortnight to go out to the farms in the Bylong Valley. 22Like all those who are fortunate enough to experience the beauty of the Bylong Valley, his Upper Bylong property was for Mr Kerney, his Elysian field. The evidence demonstrated that he obtained a great deal of pleasure from spending time, often with friends, in that tranquil part of rural NSW. 23At the time of his accident, Mr Kerney was living in Kandos in a single bedroom, weatherboard cottage on a good size block of land. He had lived there for many years and was responsible for doing all of the maintenance on the house himself. As well, his father had given to him two shops in the nearby town of Rylstone. Kandos and Rylstone are 7km apart. Rylstone is on the Cudgegong River, and is about an hour or so by road to the south east of Mudgee. The Bylong Valley and the Cudgegong Valley are to the west of the Wollemi National Park. Kandos is in the Capertree Valley, and is also to the west of the Wollemi National Park. 24Both towns are modest in size. According to the published statistics of the Australian Bureau of Statistics from the 2006 Census, in 2006 Kandos had a population of about 1800 and Rylstone had a population of 1200. 25The two shops which Mr Kerney owned were commercial premises and available for tenanting. At the time of his accident, one of the shops was rented out to the Meals On Wheels organisation and the other had been run as a video store but the tenancy had ceased in about June/July 2001. 26At the time of his accident, Mr Kerney was in a personal relationship with Ms Danielle Marchant (who was then known as Danielle Simpson). The relationship had existed for a number of years and had developed to a stage where Mr Kerney, at least, was contemplating marriage. Ms Marchant lived in the Penrith area and had not moved fulltime to live with Mr Kerney at Kandos. Her intentions had not yet crystallised. 27Mr Kerney described his general level of activity prior to the accident as being one in which he was highly motivated, he liked outdoor activities including fishing, bushwalking, rock-climbing and other adventure type activities. He was a keen horseman. He had three horses which he kept down in the Bylong Valley which he used for both cattle work and riding for pleasure. He rode motorcycles on the farm both two-wheel and four-wheel. He drove a four wheel drive motor vehicle and enjoyed taking it off formed roads. 28This rather full and satisfying life was interrupted by his accident on 25 November 2001.
The Accident and Immediate Sequelae 29Because the matter before me was an assessment of damages, there is little detail available about the accident. As I have recounted earlier, Mr Kerney was travelling along the Upper Bylong Road in the Bylong Valley. He was driving a small Mitsubishi utility and was towing a trailer which had loaded onto it a large round bale of hay. 30The section of roadway along which he was travelling was relatively narrow and the defendants' vehicle came around a bend, completely on the wrong side of the road, and a head-on collision ensued. 31Mr Kerney gives this description of that accident (Ex A, para 39): "I can remember the bonnet of my car folding up in front of me in the impact. I can remember steam everywhere." 32According to the report of the ambulance service (Ex U), Mr Kerney was involved in a high speed motor vehicle accident and was significantly trapped in the wreckage. The rescue squad attended and the extraction was difficult. When the ambulance officers arrived, Mr Kerney was conscious, he was amnesic to the occurrence of the accident and was centrally pale. The ambulance officers detected no obvious head injury or abnormality to Mr Kerney's neck, however, they observed fractures to his left sided ribs, an obvious trauma across the anterior part of his chest from the steering wheel, a fracture of the right femur and a lowered level of consciousness. The officers estimated upon arrival that Mr Kerney's Glasgow Coma Scale was 12 out of a maximum 15. 33Mr Kerney was, when extracted, flown by helicopter directly from the scene of the accident to the Nepean Hospital. 34According to the notes of an examination of the Nepean Hospital at 1740 hours of 25 November 2001 in the Emergency Department, Mr Kerney had sustained the following injuries: (a) A comminuted fracture of the right femur; (b) Undisplaced fractures of the second, third and fourth right metatarsals; (c) A dislocation of the left metatarsophalangeal joint; (d) Bilateral fractured ribs; (e) Closed head injury, intraventricular blood, amnesia for time of injury; (f) Soft tissue injury neck and upper back. 35The report of Dr Christina Tse, a medical practitioner, recorded the following complications as having been observed at that time: (a) Right common peroneal nerve injury, pain and numbness in toe; (b) Bilateral pleural effusion and basal atelectasis; (c) Anaemia due to fractures; (d) Possible allergy rash to morphine; (e) Antibiotic resistant organisms; (f) Adjustment disorder, flashbacks and depression. 36Mr Kerney came under the care of Dr Charles New, an orthopaedic surgeon. 37During his period in hospital which extended until 8 January 2002, Mr Kerney underwent a number of operations, including a closed reduction of his great toe with an application of plaster, as well as an open reduction and internal fixation of his comminuted femur which necessitated the use of a reamed femoral nail. 38Dr New noted at the initial operation that the fracture of the femur was "... segmental and complex in nature ... ". 39There was no dispute between the parties about Mr Kerney's complex orthopaedic history which followed the initial accident. It will be necessary in due course to describe that somewhat bumpy path. 40There was a dispute about the nature and extent of Mr Kerney's head injury and any disabilities which are said to relate to it. 41It is convenient at this part of the judgment to note such contemporaneous material as is available which relates to the nature of Mr Kerney's head injury. 42As I have recorded above, upon arrival at the scene, the ambulance officers did not detect any obvious head injury. However, the accident was one which occurred at high speed and the force was significant. There was a reduced level of consciousness, albeit not to a great extent, observed by the ambulance officers who initially recorded a Glasgow Coma Scale reading of 12. However, before Mr Kerney was put into the helicopter for transfer to hospital his Glasgow Coma Scale had improved to near normal and was recorded at 14. 43It is apparent from the part of the notes of Nepean Hospital which were tendered (Ex U) that a CT scan was taken on 25 November 2001 at about 6.15pm. 44The films were not tendered in evidence. The only evidence of what those films disclosed is contained in a number of documents reporting upon them. The first in time is a handwritten note from a Dr Kathes who is recorded as being a radiology registrar. A radiology registrar is a radiologist in training who is not yet qualified for admission as a fellow of the Royal Australian and New Zealand College of Radiologists. Such a registrar may be in their first year of training or at some late stage of their training. 45The evidence is silent as to where Dr Kathes was on the five year training path to qualify as a fellow of the College. 46Dr Kathes completed what was described as a "provisional report". In so far as it is relevant to a head injury, that report includes the following: "CT - brain (non contrast)
The Rough Orthopaedic Road 59The rough orthopaedic road which Mr Kerney travelled continued until April 2007. Dr Cummine, a most experienced orthopaedic surgeon, described Mr Kerney's course of recovery as " terrible ". He also noted that it would have been very difficult for Mr Kerney throughout this period because he had not been believed by a number of doctors for such a long time about the extent of the pain and suffering through which he was going. 60As I have indicated above, Mr Kerney was operated on at Nepean Hospital shortly after his admission. An attempt was made at an open reduction and fixation of his right femoral fracture. 61On 25 March 2002 (Ex E), Dr New, who was then Mr Kerney's treating orthopaedic surgeon, noted that Mr Kerney had a non-union of his right femur which would require further open reduction, internal fixation and bone grafting. 62In May 2002, he was readmitted to hospital, this time at the Hills Private Hospital, where he underwent surgery by way of open reduction and internal fixation of the fractured femur and bone grafting. The injury was noted at that time by Dr New as being: "... quite a complex injury which, despite being closed on the first occasion, required a full open reduction with cabling to fully reduce the fragments." 63Apparently, about one week after this procedure, while still a patient at the Hills Private Hospital, Mr Kerney had a third operation, which was a relatively minor one, to adjust one of the internal fixing screws. Dr New makes no specific mention of this. 64On 3 December 2002, Mr Kerney was reviewed by Dr New who noted that Mr Kerney was still using crutches and, whilst the fracture was in a reasonable position, union was not complete. 65At that time, Dr New referred Mr Kerney to Dr Rami Sorial, a consultant orthopaedic surgeon at Penrith, for his further advice with respect to the ongoing management of the fractured femur. Dr Sorial became actively involved in Mr Kerney's care and took over his day to day management from February 2003. 66During the period between May 2002 and December 2002, Mr Kerney was also cared for by Dr David Gronow, the medical director of the Sydney Pain Management Centre. Dr Gronow recorded that Mr Kerney suffered quite severe pain in his right leg after the surgery undertaken by Dr New. During the course of his admission to the Hills Private Hospital, Mr Kerney received powerful pain medication. During that period he was noticed by Dr Gronow to be quite anxious with a degree of depression and accordingly was prescribed Zoloft as an anti-depressant medication. Dr Gronow recorded his diagnosis in a report of 9 August 2002 (Ex F) in this way: "He was diagnosed as having as a result of the surgery necessitated by his motor vehicle accident, a combination of nociceptive and neuropathic pain in a patient who is under a degree of distress and depression." 67On 4 April 2003, Mr Kerney was admitted to the Nepean Private Hospital and Dr Sorial undertook further surgical intervention which he described in this way: "An open debridement, curettage and allograft bone grafting of the non-union site with autologous growth factor to the fracture site, bone strut fixation using Zimmer cables and re-insertion of the proximal interlocking screw was performed." 68On 16 December 2003, at the Nepean Private Hospital, an arthroscopic partial medial meniscectomy and chondroplasty of the right knee was carried out to address ongoing symptoms in the right knee joint where there was a tear of the posterior horn of the medial meniscus. 69Due to ongoing symptoms, but because the fracture union was progressing apparently satisfactorily, on 10 August 2004, Dr Sorial removed a number of interlocking screws and one of the cerclage cables under a general anaesthetic. 70Although Dr Sorial thought by 13 March 2006 that Mr Kerney's condition had stabilised and he did not plan any further surgery, Mr Kerney underwent further surgery at the hands of Dr Ian Harris. 71He was first seen by Dr Harris on 5 September 2006. On that day, Dr Harris arranged for a further CT scan of the right femur. According to Dr Cummine's report of 3 September 2007 (Ex 9), the CT scan: "... confirms that there is a pseudarthrosis extending through the width of the femur, including the medial femoral cortex. This medial femoral cortex appeared to be united on plain film. The CT scan also shows that there has been a fracture of the allograft at the point of the pseudarthrosis." 72A pseudarthrosis is a pathologic condition in which both a failure of callus formation following pathologic fracture through an area of deossification and a weight bearing long bone, results in formation of a false joint. In short, a plain x-ray will give the impression of a union which is a false impression. 73Dr Harris operated on 26 October 2006 and again on 3 November 2006. 74By mid July 2007, Dr Harris was of the view that the right femur had finally united and that it was unlikely that Mr Kerney would require any further surgery to his right leg. He noted that Mr Kerney would always be left a 2cm shortening of the right side and will require a build-up in his right shoes. 75The precise length by which Mr Kerney's leg was shortened is a matter of clinical judgment and estimation which is generally regarded as difficult in the absence of radiological measurement. 76Dr Ellis records two measurements of the leg length shortening. In a report of 1 September 2008, he records that there was approximately 1.5cm of shortening of the right leg. In a report of 9 April 2010 he records that there was 2.5cm of shortening of the right leg. 77As I have said, Dr Harris recorded a 2cm shortening of the leg. 78In his report of 3 July 2008, Dr Paul Spira recorded that on physical examination he noted a 3cm shortening of the right lower limb. 79On 29 July 2008, Dr Cummine noted a 1.5cm shortening of the right limb which he thought was the same in his report of 9 April 2010. 80In the course of their concurrent evidence, the doctors agreed that it would be reasonable to take a median measurement. I find that Mr Kerney has suffered a shortening of his leg to the extent of about 2.25cm. In order to walk without a limp, it will be necessary for Mr Kerney to have a built-up shoe on that side of his body. 81The final report which Dr Harris wrote was on 20 August 2007 (Ex L). He said this: "Bruce Kerney was reviewed ... ten [months] post plating and bone grafting of his right femoral non-union. He has some complaints of pain around the leg but his main complaint is of ongoing weakness. He still has a positive Trendelenberg gait and has weakness in the quadriceps as he is unable to do a single leg mini squat. He is continuing to work on this with exercises. He also remains over-weight at 117kg but he is trying to work on this. Also, he is still on Morphine but is now down to 20mg a day and continues to gradually wean off this. He has a build up in his right shoes which allows him to walk without a noticeable leg length discrepancy. ... I have discharged Mr Kerney from my care. His fracture has soundly united and he will not require any further surgery. He should continue to work very hard on strength in the right leg in order to get as much return as he can." 82Based on this report, defendants submitted that by 1 July 2007, Mr Kerney was fit to return to work in a modified capacity. 83The latest report of Dr Harris does not reflect this and I do not think that by August 2007 Mr Kerney had fully recovered from his injuries sufficiently to return to any form of work.
The Plaintiff's Psychological State 84In a report of 8 January 2002 from the Wentworth Area Health Service, Ms Judith Wilford, a social worker, reported the following: "Thank you for seeing Bruce for whom a motor vehicle accident which occurred 25.11.01 has caused significant distress - physically, mentally and emotionally. The Psych team at Nepean Hospital have assessed Bruce as experiencing an acute emotional reaction to a traumatic incident rather than, at this point in time, Post Traumatic Stress Syndrome. I have been engaged within a counselling relationship with Bruce regarding said 'acute emotional reaction'. Whilst he has been responding to such counselling well, and gradually making good progress, it may be that at a later date post discharge from hospital, further counselling may be required. As Bruce seems to have quite good insight into such possible needs, I am giving him this referral to utilise if and when he wishes to do so." 85In a report of 29 August 2002, Ms Penelope Walk, a psychologist reported on Mr Kerney's history and condition between the time of his discharge from Nepean Hospital and when he came to consult with her. She said: "Mr Kerney was referred by his GP and the local visiting mental health team subsequent to an overdose of tablets taken in late June. A request was made for treatment of depression and anxiety. ... Mr Kerney presented on time for the first and subsequent appointments. He expressed relief that psychological services locally provided in his community offered more regular contact than the visiting mental health team was able to provide. He was emotionally labile as he described his symptoms. To date he demonstrates a capacity to undertake cognitive-behavioural interventions. Symptoms
The Plaintiff's Present Position 125Mr Kerney gave evidence about his present physical and mental state, much of which was unchallenged and can be readily accepted. Mr Kerney now walks with a limp which is noticeable. The defendants tendered, and showed in Court, some movie film taken of Mr Kerney. This served in my opinion to corroborate Mr Kerney's claim that he had difficulty with walking and particularly, as the day wore on, his limp became more pronounced. 126In terms of ordinary activities, he obviously had difficulty getting in and out of one of the vehicles which he was driving when filmed. He was filmed openly attempting to undertake some of the ordinary activities surrounding his daily life, such as lawn mowing, repairing equipment, tidying sheds and other areas on his property. There was nothing that I saw in that film which caused me to doubt in any way the credibility of Mr Kerney, or his account of the activities in which he could engage whether with difficulty or not. 127Mr Kerney reported in his statement (Ex A) that from time to time his right knee was painful and occasionally gave way without warning. 128He said he found going up and down steps difficult because he tended to favour his right leg and use his stronger left leg. He said that he had given up virtually all of his sporting activities, he cannot ride a conventional motorbike any more, but is able to ride a quad bike providing that it is able to be started electrically. 129He reported that he had needed domestic assistance which had been provided by his parents, which he found humiliating and embarrassing "... because they were at a stage with their lives where I should have been looking after them rather than them looking after me ". He reported that his outlook on life was rather bleak. He said that his relationship with his parents had suffered because of the accident. His statement finished with the expression which I accept as his perception of the consequences of the accident, namely, " Everything has been a complete disaster ". 130In his evidence, he accepted that he had been attempting to undertake as wide a range of activities as he could but said that it was his injuries and disabilities which precluded him from undertaking any broader range of activities. He agreed that he had obtained various tickets or licences to operate a variety of equipment since the accident but said, which I accept, that he was unable to climb into some of the machines and to operate them for anything more than 15 or 20 minutes at a time. 131He accepted that he had a reasonable level of literacy and numeracy skills and would be able to undertake light work if it could be obtained, particularly providing he did not either have to sit or stand for lengthy periods of time. He accepted that if it were available he would attempt to undertake sales work in an automotive area or a machine part selling area, and that he could, if work were available, obtain work assisting a real estate agent or perhaps even selling real estate. 132I accept Mr Kerney's evidence as generally accurate and reliable. It was largely corroborated by his contemporaneous complaints and also by the evidence of a number of other witnesses. There was nothing about Mr Kerney's demeanour whilst giving evidence which caused me to doubt the accuracy of his evidence. 133Overall I had the impression from all of the evidence that Mr Kerney was very seriously injured in the motor vehicle accident, he had had a very difficult period of recovery because of the orthopaedic complications of his injury which had affected him psychologically as well as physically, and that only in recent times had he reached a position of some stability in his condition. 134I formed the impression that he continues to suffer significant disability but, perhaps not unsurprisingly for a male of his age living in a small rural town, found it difficult to admit the real extent of his disability and seek adequate treatment for it. This is particularly so in the area of his mental health condition, albeit that it is at a relatively low level. 135So far as the psychological sequelae of his injuries were concerned, he said that he now has to write everything down in terms of appointments and things which he needed to remind himself about, he used a diary and a calendar, although in recent times he had given it up. He agreed that it was some time since he had taken antidepressant medication or other medications more generally, although on really bad days he took medication by way of pain relief which is now a rare occurrence. 136I am satisfied that these complaints and the conduct of Mr Kerney are the consequence of his closed head injury, and also his depressive illness, as Dr Klug accepts. These complaints do not, on the evidence, significantly interfere with the everyday activities of Mr Kerney. 137I did not take the evidence about the consumption of medication by Mr Kerney to indicate that there was nothing wrong with him. On the contrary, I had the sense that he was the type of stoical figure who tended to "soldier on" until his condition forced him to take medication or consult with medical practitioners. 138In summary, Mr Kerney is a man with a serious ongoing permanent orthopaedic disability in his right leg, his right leg is shortened, he walks with a noticeable limp, and he has ongoing pain for which he avoids taking what would otherwise be appropriate medication. He has an ongoing chronic depressive disorder which fluctuates in its intensity and for which he has a need from time to time to consult with Dr Margaret MacLeod. I am not satisfied he suffers from Post Traumatic Stress Disorder. 139He is a man who prior to his accident had a full and active life, both physically and socially. Much of that has been taken from him. He is now largely reclusive, spends most of his time in and around the towns of Kandos and Rylstone, he has to care for his aged parents as best he can, and is unable to return to the work which he was undertaking. He has not felt able to obtain alternative employment, and to the extent that he has attempted so to do, has not been successful. 140His orthopaedic and psychological conditions are static. They will continue to fluctuate and he will have good and bad days, but there will be no complete remission of either of the conditions. He is not able to return to his farming and outdoor activities and much of his enjoyment of life has been taken away from him.
Assessment of Damages 141Against the factual background, it is appropriate to turn to the quantification of damages. 142Section 123(1) of the Motor Accidents Compensation Act provides that a court cannot award damages to a person in respect of a motor accident contrary to Chapter 5 of that Act. It will be necessary, particularly with respect to economic loss, to return in some detail to the provisions of the Motor Accidents Compensation Act .
Non-Economic Loss 143So far as damages for non-economic loss are concerned, which are dealt with in Part 5.3 of the Motor Accidents Compensation Act , s 131 provides that no damages may be awarded for non-economic loss unless there has been established a degree of permanent impairment of the plaintiff which is greater than ten per cent. 144The extent of the injuries which Mr Kerney had suffered would place him above that degree of permanent impairment. The defendant accepted that Mr Kerney was above the threshold imposed by s 131, and was entitled to an award for non-economic loss. 145The assessment of non-economic loss under the Motor Accidents Compensation Act mirrors the assessment that would have been made at common law subject to the imposition of a ceiling which presently is $432,000. Unlike the proportionality approach to non-economic loss in the Civil Liability Act 2002, the provisions of Part 5.3, and in particular sections 131 and 134 of the Motor Accidents Compensation Act do not require such an approach. 146Heydon JA (as his Honour then was) in Hodgson v Crane (2002) 55 NSWLR 199 at [39] said: "On the true constructions of ss 131-134, once the s 131 threshold of 10 per cent permanent impairment is passed, the court is to assess damages for non-economic loss without any statutory restraint ...". 147His Honour noted that the court was obliged to comply with the maximum amount fixed by s 134. 148An award of general damages (now called non-economic loss for damages caused by motor vehicle accidents) is intended to compensate a plaintiff for the pain and suffering through which he has gone, and he will continue to go through, to the loss of the amenity of his life through which he has gone and through which he will go, and for the loss of enjoyment of the life which he had and which he cannot now continue to have. It is designed to compensate for all of those individual things, often too numerous to list, which fall within these general descriptions. 149I take all of the matters into account to which I have earlier made reference with respect to the impact that this accident has had on Mr Kerney. I note that he was a relatively young man at the time of the accident, 35 years old. He is now 45 years old and has a future life expectancy of about 40 years. He has had the good years of his life taken from him. He has been deprived of his social network which he associated with his work. He has been deprived of the ability as a third generation farmer to continue his family's farming interests in the Bylong Valley. He was clearly a man who was at peace when he was farming. He enjoyed it. He looked forward to farming on those days of the week when he was not engaged in his Tesltra job. This has been taken from him. 150But, it is necessary to strike a balance. He is able to care for himself, he is mobile and able to walk around and drive, albeit with some difficulty, he retains his full intellectual capacity. He still retains friends although in a much reduced social circle. He is often reclusive but not permanently so. He has a degree of psychological turmoil particularly because of his complex relationship with his parents who had to take for him after the accident instead, as he thought appropriate, he to care for them. 151For all of these matters, for non-economic loss, I award Mr Kerney the sum of $275,000.
Past Out of Pocket Expenses 152The parties have agreed that the past out of pocket expenses amount to $242,852 and that Mr Kerney is entitled to this amount. 153Apparently, Mr Kerney claimed an additional sum of $4,150 which the defendants disputed. Although identifying this as a sum the subject of claim, Mr Kerney did not attempt any proof of this sum and there is no basis in the evidence before me to allow it. I do not.
Future Out of Pocket Expenses 154By reference to seven identified heads of claim which I have grouped into the four categories below, Mr Kerney claims a total of $199,000 for future out of pocket expenses. It needs to be said that in respect of these heads, many of them are unsupported by evidence, the sums assigned to them are matters of pure guess work, and it is not possible to accept all of those things which Mr Kerney claims. 155These are the categories of items claimed: (a) Right total knee replacement (i) Dr Cummine expressed the opinion that it was likely that Mr Kerney would require a future total right knee replacement in a period of between 10 years and 20 years from now. The other doctors agreed that this was likely. Dr Cummine estimated the cost of that operation to be in the order of $40,000 to $50,000. (ii) It is appropriate to take the median cost of the operation as $45,000 and apply the deferral factor for 15 years being the median period. This calculation amounts to a sum of $21,645 which I allow. (b) Right total hip replacement. (i) Dr Cummine said he thought it highly unlikely Mr Kerney would require a hip replacement. Doctors Spira and Ellis agreed with that assessment. Dr Ellis' view was " I didn't think that the hip joint was intrinsically affected significantly to warrant the possibility of a hip replacement ". (ii) In light of the unanimous opinion of the doctors, it is inappropriate to make any allowance for the possibility of any future hip replacement because it is highly unlikely to occur. (c) Orthopaedic injury review and treatment (i) Mr Kerney claims that he will need medical review for his orthopaedic injuries. He also claims that he will require physiotherapy, massage and medication for his orthopaedic injuries. (ii) Mr Kerney claimed a total of $60,000 for these items. (iii) The defendants accept that a much smaller sum of $10,000 approximately, would be appropriate for these items. (iv) The principal difference between the parties seems to be whether it is likely that Mr Kerney will have any physiotherapy or other allied health treatments. He has had little to date. I doubt that he will have much in the future. (v) It is not possible to be precise about this claim. A broad estimation is the best approach. I think an appropriate sum for medical consultations, medication and any associated treatments, including imaging and the like, for the balance of Mr Kerney's life expectancy is the sum of $25,000. (d)Psychological and psychiatric review and treatment (i) Mr Kerney claims a total of $86,700, representing treatment by psychologists, psychiatrists and a session of inpatient treatment for his psychiatric condition. Again the basis for this is largely guess work. (ii) I have held that Mr Kerney does not suffer from Post Traumatic Stress Disorder, and accordingly, based on the evidence, he would not be an appropriate patient for admission to the St. John of God Hospital at Richmond, notwithstanding Dr MacLeod's view to the contrary. (iii) The only psychiatric treatment Mr Kerney has in fact had since his accident has been delivered by psychologists, and the only consultation he has had with a psychiatrist was at the instigation of his solicitors for the purposes of this case. (iv) The evidence was that the cost of a consultation with a psychologist for treatment was $212. The defendants submit that an allowance of 24 future consultations, totalling a little over $5,000 would be appropriate. As I have said, for this part of the claim, Mr Kerney submits that $46,700 is appropriate, not including any inpatient treatment. (v) Again, applying a broad approach, I think that the appropriate figure is somewhere in between these two amounts. I propose to allow Mr Kerney 50 consultations with a psychologist for the future. The appropriate allowance is $10,600. He may also require some medication, and some consultations with a psychiatrist. In total for this head of claim, I would allow a sum of $20,000. 156In summary, I would allow $66,645 for future out of pocket expenses.
Past and Future Care 157The parties are agreed on the proper awards to be made with respect to past and future care. 158For past gratuitous care, the parties are agreed that the appropriate sum for damages is $20,000. 159For future commercial care to be provided to Mr Kerney, the parties are agreed that the sum of $100,000 is appropriate. 160Both of these amounts will be included in the assessment of Mr Kerney's award.
Economic Loss 161This is the area upon which the parties are significantly at issue. 162The parties agree that Mr Kerney is no longer capable of undertaking his pre-accident employment as a senior technician for Telstra, carrying out work in a variety of rural locations around NSW. 163As the parties cannot agree on what Mr Kerney's residual earning capacity is, they cannot agree on what the damages attributable to the loss of that employment. 164As well, Mr Kerney claims significant monetary sums for the loss of his capacity to undertake his farming and dealing with a project which was in mind at the time of accident, involving the establishment of a video and gift store in Rylstone. It will be necessary to discuss each of these heads of economic loss individually. 165However, it is appropriate to make some findings of fact which will impact upon these issues.
Loss of Telstra Employment 166The parties agreed that the evidence demonstrated that according the documents produced by Telstra, which were tendered as Ex 21, as at 18 July 2003, Mr Kerney's base salary was $998 gross per week. Mr Kerney's evidence was that he was earning over time in addition to his base salary in the order of 10 per cent or so. 167Applying this to the gross sum would suggest that, excluding allowances, Mr Kerney's average weekly earning in July 2003, from all of his work, would have been in the order of $1098 gross per week or $803 net per week. 168Both parties are agreed that it was necessary to apply an increase factor to take Mr Kerney's earnings from Telstra up to the date of this assessment, so as to establish what he would have earned had he not been injured. 169The submissions proposed a number of alternative methods of doing this. The defendants' principal submission was that the appropriate method of projecting the increase was to take the percentage increase which had been allowed under the Telecommunications Services Industry Award in the period from 2002 to 2010. 170The report of the defendants' accountant, Mr Ivey, dated 31 January 2011 (Ex 19) contained award rates which he had extracted from that award. Accordingly, it was possible to calculate the percentage increase in those amounts. 171However, the award was not tendered, and Mr Ivey in his report makes no assertion that Mr Kerney was in fact covered by that award. He simply assumes that he was. 172I note that the award is one which is readily available, and could have been tendered. I also note that the modern industrial relations framework provides for employees to be remunerated either on the basis of an award or alternatively by reference to a modern enterprise award, or an enterprise instrument, within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). In those circumstances, I am not prepared in the absence of evidence that the award covered Mr Kerney or Telstra, to infer that this award had direct application to Mr Kerney or Telstra. 173I therefore reject the defendants' principal method of calculating increases, because the evidence does not support that the award nominated had any relevance to Mr Kerney and his occupation. 174The second alternative which was contended for by the defendants was to increase the 2003 sum by reference to average weekly earnings and the percentage increase in those earnings. Thirdly, Mr Kerney submitted that one could increase the rates by reference to the earnings of a comparable employee, Mr Wellington. 175It is necessary to say something about Mr Wellington's employment. 176Mr Wellington worked for Telstra, as did Mr Kerney whom he knew. He was employed at one level of seniority (and pay rates) below Mr Kerney. Whilst he did broadly similar work, he was located in the metropolitan area and did the great bulk of his work in the metropolitan area. He said in evidence that he performed a lot of overtime, and that probably in the order of 25 to 35 per cent of his wages came from overtime. This is markedly different from Mr Kerney, whose overtime amounted to about 10 per cent of his base earnings. 177I do not think it is safe to regard all Mr Wellington's net earnings, as being comparable to Mr Kerney's net earnings. 178However, I see no reason why the percentage increases in earnings which Mr Wellington received, as an employee of Telstra engaged in substantially the same work as Mr Kerney, would not be those which Mr Kerney would have also received. 179Accordingly, I am satisfied that the percentage increase in the net earnings of Mr Wellington is the appropriate rate of increase to apply to Mr Kerney's earnings from Telstra to calculate his most likely earnings from Telstra if he had not been injured. 180One also needs to keep in mind that the tax rates have also changed over time, and the appropriate tax rates will need to be applied. 181In summary, the principal integers for the calculation of the earnings which Mr Kerney would have earned, had he not been injured, from his employment with Telstra are: (a) The calculation of Mr Kerney's actual earnings as at the date of his accident is to be calculated by reference to his income tax returns; (b) The calculation of Mr Kerney's actual earnings as at 18 July 2003 is $803 net per week, a sum calculated from the figures disclosed in Ex 21; (c) The other earnings for each of the remaining financial years, should be derived by application of the percentage increases in the average earnings of Mr Wellington, the nearest proved comparable employee from Telstra, to Mr Kerney's earnings; (d) The tax rates to be applied in order to derive the appropriate net earnings are those fixed from time to time by the Commonwealth. 182It is appropriate, in order to ensure accuracy, that the parties, through their expert accountants, calculate this figure and bring in short minutes of order to reflect this calculation (and others which follow). 183The defendants accepted that Mr Kerney was completely incapacitated for work until at least 30 June 2007. The defendants submitted that after 1 July 2007, Mr Kerney had a capacity for work and that accordingly he was not entitled to the entirety of his loss of earnings from Telstra after that date. 184The task upon which the Court is embarked at this stage is to determine whether Mr Kerney has any, and if so what, residual earning capacity. Earning capacity must be measured by reference to the particular individual when viewed with all of his or her characteristics in the labour market: Nominal Defendant v Livaja [2011] NSWCA 121 at [65]. 185The first step in the assessment of residual earning capacity is to determine, by reference to the evidence of what the plaintiff is capable of doing, including the expert medical evidence, what the nature is of his physical capacity to undertake work. 186The second step is to undertake an identification of occupations which are theoretically available. 187There is a third and important stage, namely that there must be a practical assessment of the likelihood of the particular plaintiff obtaining employment in one or other of the occupations which are identified as theoretically available: See Livaja at [65]. 188It is necessary to consider the question of which party bears the onus of proof of an issue of residual earning capacity. 189McColl JA (Handley and Bryson JJA agreeing) said at [73] in Rabay v Bristow [2005] NSWCA 199: "73. Compensation for loss of earning capacity is awarded because of the diminution in an injured plaintiff's earning capacity 'is or may be productive of financial loss'." Graham v Baker (1961) 106 CLR 340 at 347. 190It is necessary for a plaintiff to prove the loss for which compensation is claimed: Todorovic v Waller (1981) 150 CLR 402 at 412-413, however conversely, it is not incumbent upon the injured plaintiff to prove what employment he or she " is not capacitated from performing ". It is for a defendant who contends that the plaintiff has a residual earning capacity to adduce evidence of what the plaintiff is capable of doing and what jobs are open to such a person: Luntz, Assessment of Damages for Personal Injury and Death (4 th ed) at 97 [1.9.21]. 191This approach was referred to with approval in Magnou v Australian Wool Testing Authority Ltd [2007] NSWCA 357 at [20]. I will consider these questions with the question of onus in mind. 192Thereby the first step therefore which is to be considered is what is the present physical capacity of the plaintiff to undertake work. 193It was the unanimous view of all of the doctors, and the defendants accepted, that Mr Kerney had significant physical restrictions for work. All doctors agreed that, at the least, he was not fit to undertake his pre-accident employment with Telstra, he was not fit to work 40 hours per week and he was not fit to undertake work which involved lifting weights more than ten kilograms. As well, the doctors were all agreed that Mr Kerney's working life was shortened, although there was a debate as to whether 55 years of age or 60 years of age was the likely date upon which his working life will finish. 194Dr Ellis, in the course of the oral evidence, contrary to the adoption of the joint report (Ex Q) of 15 March 2011, expressed the opinion that Mr Kerney was unlikely to achieve any work at all. At T109.50-110.4, he said: "He has had rehabilitation efforts, which have failed, and as well he is psychologically affected by depression, leading to two suicidal attempts. For these reasons, I think his prognosis and employment potential is poor, and work in an employment capacity is unlikely to be achieved." 195Later, at T113.26, Dr Ellis expressed this view: "... he has multiple impairments and injuries and continuing pain. Activities of weight lifting do not go with a severe injury if can do this work that the others allege he can he may be able to do them temporarily or for a short period but in an employment capacity to carry on and do them in a continued employment capacity his prognosis is bad for the reasons that I have stated. The fact that he has continuous pain in his right leg is probably of a neuropathic nature. He has been seen by a pain specialist and had specific treatment for neuropathic pain." 196The view of Dr Spira and Dr Cummine was that Mr Kerney was capable of sedentary employment and/or employment restricted to light or selected duties on a part time basis. 197I do not accept the view of Dr Ellis that the plaintiff is completely unemployable and unfit for any work at any time in the past or for the future. There are a number of reasons for this: (a) As far as it was revealed, the substantial basis for Dr Ellis' opinion about Mr Kerney's unfitness for work was that in addition to his orthopaedic disabilities, he had significant neck and back pain and a serious psychological condition, all of which combined to make him unfit for work. That basis was not substantiated in the evidence. In particular, the extent to which Mr Kerney had neck and back injuries and ongoing disabilities, if any, was minimal. The basis of the opinion which Dr Ellis formed of Mr Kerney's psychological difficulties was not revealed, other than the mere fact on the recited history of the post existence such psychological difficulties. Dr Ellis' opinion was not reflected in the expert opinions of those more qualified than Dr Ellis in the psychiatric field; (b) Dr Ellis, a general surgeon, did not on the evidence disclose any particular qualification which would enable him to say that employment was or was not likely to be achieved. His particular expertise, such as it is, is in determining the physical disabilities with which Mr Kerney suffers, which related to his speciality of general surgery. I could detect no such injuries or disabilities in this case. It would be wrong, in my view, to equate the qualification, experience and expertise of Dr Ellis with that of a specialist physician. (c) A further basis for the opinion of Dr Ellis, namely, that Mr Kerney had multiple percutaneous neurotomies performed by Dr Sunduraj was not supported by any evidence which was tendered. Mr Kerney gave no evidence of undergoing these treatments, when they were or what effect, if any, it had on his capacity for work. There was no report by Dr Sunduraj which set out the detail of these procedures. The lack of that material means either that there is no basis proved for Dr Ellis' opinion, or alternatively, the basis of his opinion remains unrevealed; (d) The approach of Dr Ellis, both in the context of his report, the manner in which he gave his oral evidence, gave rise to a clear impression that Dr Ellis took the view that he was not prepared to discuss, explain, or justify the basis upon which he had reached his opinion. In this case, I formed the impression that Dr Ellis approached the expression of his opinion as though his " ipse dixit " was sufficient. In this case, he did not furnish the court "... with the criteria enabling evaluation of the validity of [his] conclusions ... ": Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at [59] per Heydon JA. 198In addition to the foregoing reasons, I do not accept the opinion of Dr Ellis, as expressed in oral evidence because I found the explanation for the significant difference in opinion between what appears in the joint expert report and the opinion which he expressed orally, by Dr Ellis, disingenuous. He asserted that he did not note any difference of opinion with respect to work capacity to that expressed in the joint expert report because the consensus of the expert meeting was, as indicated in the report, and that it was not a matter for him to express any disagreement with the consensus. 199The difficulty which I have in accepting this explanation is that in the very paragraph where the "consensus" opinion was expressed without demur from Dr Ellis, the last sentence notes a disagreement that Dr Ellis expresses, but it is a limited one, namely, one which only relates to the length of Mr Kerney's future working life. The opinion as there expressed assumes, as so it seems to me, that Mr Kerney will be able to undertake further employment but in a limited range of capacities. It is that restricted working life to which Dr Ellis refers, when expressing the opinion recorded in that paragraph. I do not accept the explanation which Dr Ellis gave in oral evidence for the change in his opinion to that which he expressed orally. 200I have come to the view that in adhering to that explanation in light of his lack of particular expertise, the inadequacy of the expressed basis for his opinion and the contents of the joint report, Dr Ellis left behind his role as an impartial expert expressing an opinion in pursuance to his duty to the Court, and adopted an advocacy role for the plaintiff. That course of conduct did him no credit in this case. 201For those reasons I reject his opinion. I accept the opinions of Dr Cummine, Associate Professor Spira, and also Dr Conrad who signed the joint report, that Mr Kerney has a residual work capacity. 202However, I do not accept that Mr Kerney has all of the work capacity which both Dr Cummine and Dr Spira attributed to him in the joint expert report. The history upon which that assessment of the work capacity was based is encapsulated in Dr Cummine's final report dated 9 April 2010 (Ex 11). As Dr Cummine understood the history given to him by Mr Kerney, he thought that Mr Kerney was fit to, and capable of, driving a 20 tonne excavator for use on his farming property, he was able to maintain his vehicle, work in a shed and do work on the farm. This was described in this way in the joint report by Dr Cummine, and relied upon by Dr Spira and Dr Conrad: "Mr Kerney was able to perform work on his own farm and that he was able to drive a 20 tonne excavator as well as to assist friends in the installation of machinery." 203The terms of the joint expert report make it plain that the opinion was expressed in respect of that history. 204I do not accept that Mr Kerney can do, in any unrestricted way, these tasks. In the course of the concurrent evidence, a series of assumptions which are set out in Ex P were put by counsel for Mr Kerney to the experts. It seems to me that those assumptions fairly reflect the evidence given by Mr Kerney which I accept. In particular, I accept Mr Kerney's evidence that he is not capable of operating a 20 tonne excavator or other like earth moving machinery except for short periods of 15 minutes or so. I also accept that he experiences difficulty climbing into any of the machines referred to and experiences pain and discomfort whilst operating those machines. There is no realistic prospect of Mr Kerney being able to operate these machines for any lengthy period of time and certainly not in circumstances where stress was placed on his right leg. If the machines are to be operated in the natural environment rather than on an enclosed and smooth surface, the greater stress will be placed on Mr Kerney, and his capacity to operate the machinery will be much reduced. 205I also accept that Mr Kerney presently performs no work on his farm, that he is unable to kneel, crouch or squat and that his right leg and knee, in particular, is unstable on rough or uneven ground. 206In my opinion, the extent of his injuries and disabilities means that Mr Kerney is fit to work part time in light or restricted duties, probably for no more than three hours a day, in a job which he can sit and stand as necessary, and in which he is not required to walk over rough or uneven ground or climb stairs. 207In other words, his residual capacity for work from 1 September 2007, when he last saw Dr Harris and was discharged from his care, to date is in the order of 40 per cent. 208The defendants tendered evidence, which was not challenged, that there were a range of occupations which with his skills and education, Mr Kerney could engage in. 209These theoretically available positions included: (a) Hire car or taxi radio dispatcher; (b) Driving instructor; (c) Bus driver; (d) Desktop publishing operator; (e) Sales representative; (f) Excavator Operator; or (g) Real estate property manager. 210Mr Kerney agreed that some, but not all, of these occupations were within his physical capacity. I would add to that agreement these constraints, namely, providing he could work on a part time basis with a sufficiently flexible employer who would tolerate the unpredictability of his attendance. 211Accordingly, the defendants had discharged by their evidence, the obligation to prove that there were occupations in which Mr Kerney was able to engage. 212Having established the degree of physical and psychological incapacity to undertake work, it is necessary to determine whether Mr Kerney has in fact a significant residual earning capacity measured by reference to his individual circumstances in the labour market. 213In my opinion, the following circumstances are relevant: (a) At the time of his accident, Mr Kerney was in his mid 30s and is now aged about 45. His employment history was in one field with one employer; (b) The field in which he was skilled, namely telecommunications, has in the period since his accident, undergone technological change to a marked extent. Without undergoing any retraining, work in the telecommunications industry would not be open to Mr Kerney; (c) Mr Kerney has lived all of his life in Kandos, a small town northwest of Sydney. That is where his home is, it is where he went to school and where he grew up. His elderly parents who are in failing health live there, and it cannot be reasonably expected that in the foreseeable future, Mr Kerney should exercise his residual work capacity by moving away from Kandos; (d) As a consequence, the places open to Mr Kerney to exercise his work capacity are those cities and towns within no more than one hour's drive of Kandos. In a practical sense, this means the towns of Kandos, Rylstone and Mudgee, as well as the environs of those towns; (e) Although I have formed the view that Mr Kerney is capable of working three hours a day, there will be periods of time when Mr Kerney's physical injuries and disabilities mean that he cannot work every day in a working week and he may have to work part-time. In other words, he may be in a position of taking more sick leave than would an ordinary employee, or else having a less reliable attendance record. 214There was no evidence of the state of the labour market in the Kandos and surrounding areas, by which I include Rylstone, Mudgee and their environs. I do not know whether there are more jobs on offer than there are applicants, nor do I know whether there are any employers in that region, who are sympathetic to employing men of Mr Kerney's age who have disabilities. 215There is no evidence, even of a generally descriptive nature, about the types and numbers of employers, the industries in which they work or operate, and the levels of their operation in the area in which Mr Kerney is based. 216In cross-examination, senior counsel for the defendants put to Mr Kerney that he was capable of doing a number of jobs in areas of skill which were identified to him. Mr Kerney readily agreed. 217However, Senior Counsel did not put to Mr Kerney that there were any realistically available job opportunities in the relevant geographical areas. In fact, Senior Counsel's approach was to the contrary. At T20.3, the following exchange occurred: "Q. However you could go back into [the telecommunication] field either in a clerical capacity or a technical capacity, couldn't you? A. Yes, I suppose so. Q. Perhaps at a lower level than you were but nevertheless back into that field? A. There is none of that work in the local area, but yes. Q. Well you have said - just to pick up on what you have just said - at one point you were considering going to Sydney, weren't you? A. Yes. Q. Because it was obvious to you that employment opportunities would be far better in Sydney than they might be in Rylstone or Kandos? A. That's correct. ... Q. ..., but have you reconsidered the idea of moving to either Sydney or a larger rural centre where more work might be available? A. No. Q. What about Mudgee? A. Not really, no. Q. That is a bigger centre, isn't it? A. It is. Q. And there would be more work available there? A. I assume so. Q. Have not you given that any thought? A. No. Q. Why not? A. Impractical. Q. Why? A. My dependency on my friends and where I live, I own my own house. I just have not considered it." 218The thrust of this cross-examination was to accept that the availability of work was very limited in Rylstone and Kandos, may have been better in Mudgee, but that Mr Kerney ought reasonably to have considered moving to Sydney to obtain employment. 219The evidence does not enable me to be satisfied that, whatever the limited extent of Mr Kerney's theoretical work capacity is, that there is any practically achievable job which he can do on the open labour market in the general area in which he lives. 220It is not reasonable to expect him to move from Kandos. I think it is practical for him to travel to Mudgee to obtain employment there, notwithstanding his evidence to the contrary. But there is simply no evidence that by going to Mudgee there would be any work which he could practically obtain. 221It is of importance to note two matters which support this finding. They are: (a) the defendants tendered two reports from the Vocational Capacity Centre dated 2005 and 2008 (Ex 12 and Ex 13). These reports each recorded the results of a "Functional Capacity Evaluation" of Mr Kerney's condition shortly prior to the preparation of each report. The reports also included a "Vocational Assessment Report" and a "Job March Report". It is clear that the assessments were comprehensive. To the extent that the functional capacities of Mr Kerney were thought in these reports to be different from the restricted capacity described by the expert medical witnesses, I prefer the evidence of the medical experts. What is notable, should the contents of these reports, and which supports the conclusions to which I have come, is that although the reports identify specific jobs (called "vocational choices") which the Mr Kerney would be able to undertake, they do not suggest that such jobs exist within reasonable geographical propinquity to Mr Kerney's home in Kandos. The Centre seems an organisation which is entirely suitable to have undertaken such an exercise; (b) the defendants employed, for the benefit of Mr Kerney, a rehabilitation organisation, to assist him to recover from his injuries and disabilities and to return to the workforce. That organisation was referred to in the evidence by the name "Recovre". Mr Kerney was not placed in any employment by that organisation, nor was there any evidence from that organisation which suggested that it had identified any employment suitable for Mr Kerney which was realistically available to him. 222These two matters, both of which note the absence of evidence tendered or led by the defendants, from organisations which are likely to be in a position to provide that evidence, suggest to me that I can more confidently draw the conclusion which I have reached above, namely, that there is no work which Mr Kerney can practically speaking obtain which would enable him to exercise his residual physical capacities: Jones v Dunkel (1959) 101 CLR 298. 223I would assess Mr Kerney's residual earning capacity as having no value. Accordingly he is entitled to the entirety of his Telstra earnings by way of economic loss from the time of the accident up to judgment. 224As was agreed between the parties, it will be appropriate to compensate Mr Kerney for a loss of superannuation payments which would have been made on Mr Kerney's behalf by his employer, on his net lost earnings to date. The appropriate rate was agreed at 11 per cent. The parties should calculate this amount.
Future Earning Capacity 225An award for future economic loss is subject to s 126 of the Motor Accidents Compensation Act which is in the following terms: "(a) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant's most likely future circumstances but for the injury. (b) When a court determines the amount of any such award of damages it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events concerned might have occurred but for the injury. (c) If a court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted." 226In Kallouf v Middis [2008] NSWCA 61 at [7], McColl JA and Hall J said: "Section 126 is in the same terms as s 13 of the Civil Liability Act 2002. The provisions of the two sections have been considered by this Court on a number of occasions: Macarthur Districts Motor Cycle Sportsmen Inc v Ardizzone [2004] NSWCA 145; (2004) 41 MVR 235; Penrith City Council v Parkes [2004] NSWCA 201; Nominal Defendant v Lane [2004] NSWCA 405. The principles established by those cases as to the application of s 126 have been summarised by P A Leslie and M M G Britts, Motor Vehicle Law in New South Wales, 4th ed (1993) (at [13.7792]) as follows: (a) assess the "most likely" of the possible future economic circumstances facing the claimant but for the accident (including type of employment, duration of employment and remuneration); (b) assess the claimant's economic prospects as a consequence of the accident; (c) compensate the claimant for the difference between (a) and (b), including, where appropriate, through the use of a buffer; (d) adjust (c) by an appropriate percentage (including, where appropriate, by 0%) for vicissitudes, to reflect the possibility that the claimant may not have achieved (a) even had the accident not occurred; and (e) include a statement of the assumptions made as to the claimant's most likely future circumstances and the appropriate percentage adjustment." 227Both parties accepted that but for the accident, Mr Kerney's most likely future economic circumstances were that he would have continued to work for Telstra, or in like employment, until ordinary retirement age. I would take this to be 65 years of age. This agreement is the basis for, and the reasons why, I adopt this as basal assumption for the assessment of future economic loss. 228As I have said, the residual earning capacity which Mr Kerney has, which is a theoretical earning residual capacity, does not result in any practically available work. It is unlikely in the future that he will be able to earn any money as a consequence of the conditions in which he presently is. 229Accordingly, the future loss will be assessed by reference to the entirety of his likely Telstra earnings. 230However, his employment with Telstra was, in common with other like employments, always subject to a risk that he may have been injured in the course of his work, he may have fallen ill, or otherwise been unable to continue his work, he may have been made redundant and have been unemployed for a period of time, or there may have been other adverse vicissitudes which would have resulted in him not working through to age 65 with Telstra. I would assess the likelihood of him working through to age 65 with Telstra or other like employer as being 85 per cent. In other words, I would deduct the conventional 15% for adverse vicissitudes. 231I note that the expert medical opinion was that Mr Kerney, as a result of his injuries, would have to cease work at either 55 or 60 years of age, which is earlier than I have found that he would had he not been injured. In light of the fact that I have found that his residual physical capacity will not be able to be exercised in a remunerative way, the shortening of the period during which he may have exercised this working capacity does not need to be the subject of additional compensation. 232The parties should calculate and include in the short minutes of order to be provided, a sum for future economic loss, consisting of: (a) his net loss of earnings from Telstra at the date of this judgment; (b) the application of the appropriate discounting factor for the period to age 65 years; (c) a deduction of 15 per cent for adverse vicissitudes. 233Both parties accepted that it would be appropriate to add a sum for lost future superannuation benefits on the net future loss figures at the rate of 11 per cent. The parties should make provision for this in the short minutes of order.
Loss of Farm Earnings and Other Business Income 234Mr Kerney claims a loss of farming revenue and other business revenue in the sum of $260,000 to date and a further $200,000 for the future. 235The defendants submit that no such award ought be made. 236The evidence in support of this award is sparse. 237As I have said, Mr Kerney owned an 800 acre property in the Bylong Valley. It was nearby, if not immediately adjacent, to his father's 1200 acre property "Gowrie", which in due course Mr Kerney would have inherited. Prior to the accident he was running both properties jointly for the purpose of small enterprise of the raising of beef cattle. 238His property, Bylong Creek, was not in a fit state as at the date of the accident to be a stand alone beef cattle property because the fences were not adequate, he had only a half complete set of cattle yards, and the water was not sufficiently reliable. 239According to his tax returns prior to the accident, Mr Kerney with respect to his farming enterprise, incurred losses only. He sold a modest number of cattle and in his tax return summarised in Ex S the figures give the clear impression that his farming enterprise was barely modest and unlikely to become a successful business. After the accident, Mr Kerney brought to account an interest component for the farm property together with extensive depreciation deductions. The consequence of the addition of these items is that between the accident and date of trial, the losses incurred on the farming property have increased, and significantly so. 240Mr Kerney said that he intended to make the farming enterprise a more commercial undertaking. He said that he was working on improving "Bylong Creek" to that end. There was no expert evidence adduced as to what the two properties, which Mr Kerney would in due course have jointly operated, were capable of providing by way of farming income nor what size that enterprise would have become having regard to the nature and quality of the pasture, and the carrying capacity of the land. 241The Court was not favoured with any evidence of the likely profitability of a beef cattle farm in the Bylong Valley, or other similar areas, what comparable properties may have achieved in the requisite period, what the beef cattle prices had done in the requisite period, and whether there was any proper basis upon which to conclude that a farming enterprise such as that envisaged by Mr Kerney, would have earned Mr Kerney any net income after deduction of business expenses. 242Nor did Mr Kerney mount a claim, based on the income tax returns which had been submitted to, and assessed by the Australian Taxation Office, that by reason of the loss of his Telstra income he had lost in real terms any benefit which might be obtained from a tax loss of the kind which his farming property realised for him. 243As well, evidence addressing important questions such as the need for, and nature of, any proposed capital development of the properties, what amount of capital needed to be provided to the properties in order to ensure their efficient and effective running, the costs of that capital, when it might be provided and things of that kind, were completely absent. 244In the evidence there is simply no basis for a finding that the property would at any time have returned any profit whatsoever. 245Another way in which Mr Kerney may have put his claim, if it was to be thought that the farming enterprise was likely to be income producing, would be to claim the additional cost of replacement labour to undertake work which Mr Kerney would himself have otherwise have done. Should such a claim have been made it would have been possible to understand what the real cost to Mr Kerney in terms of his farming income, the accident had caused. No such claim was made or particularised. 246Regrettably, all of these matters were categorised by a complete absence of evidence. 247The situation in which this component of Mr Kerney's claim falls to be considered is not entirely analogous to the claim considered by Heydon JA in State of NSW v Moss (2000) 54 NSWLR 536. 248That is because this is a case where the Court is being asked to do something more than merely value earning capacity and residual earning capacity. What the Court is being asked to do with respect to this component of the head of damages is to assess the losses and profits which would have accrued from a business enterprise which was being and would have been continued to be undertaken by the plaintiff. 249The existing business enterprise had never made a profit. Whether the business enterprise would in the future make a profit necessarily depended upon such a range of variables that without any evidence which might value any of those possible options and variables, the Court is simply unable to assess any loss as accruing or likely to accrue. 250In those circumstances, I make no allowance for lost farming income either to date or for the future.
Loss of Potential Shop Business 251Mr Kerney said in his statement which became part of his evidence, that he anticipated that when Ms Marchant moved to Kandos to live with him, and their relationship became permanent, that she would start up a video shop and gift shop business in Rylstone in one of the shops which he owned, and which at the time of his accident was empty. 252He claimed a loss of potential future earnings from this enterprise. 253Ms Marchant who was called to give evidence, said nothing at all on the topic of intending to engage in such an enterprise. 254There the evidence rested. 255The evidence did not satisfy me that the project had proceeded to such an extent where I could conclude that, had the accident not happened, it is more likely than not that the enterprise would have been commenced, let alone that it would have been profitable. It was at best a remote chance which depended upon a number of factors coming to fruition. 256There was no evidence as to what possible income could have been generated by such a shop, there was no evidence that the use of the premises which Mr Kerney owned for the purposes of such a shop, would have resulted in a greater income to him than he would have received from the shop being tenanted and his receiving the usual rent. 257There was simply no basis upon which any monetary compensation could be determined with respect to this intended project. 258In those circumstances, not withstanding the submissions by senior counsel for Mr Kerney that in the application of a "broad brush" approach, I could make an allowance for such putative enterprise, I decline so to do.
Summary 259In summary, I propose to enter a judgment for Mr Kerney against both defendants in a sum which is to be calculated by reference to the figures which I have determined and is included in the schedule below by reference to the figures to be calculated by the parties to which I have referred in the paragraphs.
Schedule of Damages (a) Non-Economic Loss [151] $275,000 (b) Past Out of Pocket Expenses [152] $242,852 (c) Future Out of Pocket Expenses [156] $66,645 (d) Past Gratuitous Care (agreed) [158] $20,000 (e) Future Commercial Care (agreed) [159] $100,000 (f) Past and Future Loss of Farming Business Income [250] Nil (g) Past and Future Loss of Shop Business [258] Nil (h) Past Earning Capacity Loss [181-182], [223] To be calculated (i) Past Lost Superannuation Benefit [224] To be calculated (j) Future Earning Capacity Loss [232] To be calculated (k) Future Lost Superannuation Benefit [233] To be calculated
260The defendants should pay Mr Kerney's costs of the proceedings. If there is any application to be made with respect to a different order for costs, it can be made when the proceedings are next before the Court.
Orders (1)Judgment for the plaintiff in a sum to be calculated. (2)Direct that the parties confer with a view to agreeing the proper sum to be calculated for damages in accordance with these reasons for judgment. (3)In the event that the parties are unable to agree, direct that each party is to file on or before Friday, 24 June 2011, the short minutes of order for which each party contends, together with any evidence upon which each party relies to support the orders for which it contends, and submissions which it wishes to make in respect of those orders. (4)Such documents are to be filed electronically with my Associate. (5)Stand proceedings over for further submissions to Tuesday, 5 July 2011 at 9.30am.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 June 2011
Kerney
Mead & Anor
(1991) 172 CLR 60
(2002) 55 NSWLR 199
(1959) 101 CLR 298
(2001) 52 NSWLR 705
(1991) 171 CLR 657
(1966) 115 CLR 94
(2000) 54 NSWLR 536
(1981) 150 CLR 402
(1961) 106 CLR 340
(2004) 41 MVR 235