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[2014] NSWDC 94
District Court of NSW
2014-06-06
Spender AJ
Original judgment source is linked above.
The issues in these proceedings 1The plaintiff by statement of claim filed on 10 September 2013 brings proceedings for damages against his former employer, a builder specialising in apartment construction and renovation, arising from the circumstances of an accident which occurred on 24 February 2010. The plaintiff, a 21-year old apprentice, was working under the supervision of the site foreman, Mr Bryce Daenell, when he fell while working at heights on the ceiling to a level 3 metres below, resulting in very serious head injuries. 2As the defendant was the plaintiff's employer, the provisions of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) ("the WIM Act") apply. The plaintiff filed a pre-filing statement pursuant to s 315 and the defendant responded to that pre-filing statement in accordance with s 316. A certificate of mediation outcome was issued by the Workers Compensation Commission on 30 August 2013. 3 The provisions of s 318 limit the parties to their pre-filing statements and defences; an application by the defendant to rely upon evidence not served with the defence is set out in more detail below. 4Liability was admitted on the first day of the trial. The sole issue for determination is the plaintiff's entitlement to past and future economic loss of this very young man. I note that the difficulties in assessing economic loss for persons on the threshold of their working careers are well-recognised; in Mundy v GIO of NSW (Supreme Court of NSW, Spender AJ, 5 June 1995 at p 3) described such a task as requiring the trial judge "to assess the unassessable".
The plaintiff's injuries and disabilities 5The plaintiff's injuries as particularised are as follows: (1)Injury to head; (2)Closed head injury of severe nature; (3)Severe traumatic brain injury; (4)Left temporal skull fracture; (5)Undisplaced fracture of the left temporal bone; (6)Contusions of the left frontal, occipital and temporal lobes; (7)Subdural Haematoma; (8)Right palm laceration; (9)Post traumatic amnesia; (10)Injury to right upper limb. 6The plaintiff's continuing disabilities as particularised are as follows: (1)Impairment in comprehension and production of language signals of daily living; (2)Impaired cognitive functioning; (3)Impaired memory; (4)Impaired concentration; (5)Oral comprehension difficulties; (6)Difficulty answering questions; (7)Impaired reading ability; (8)Impaired writing ability; (9)Impaired learning ability; (10)Difficulty speaking; (11)Inability to undertake complex problem solving activities; (12)Episodic loss of consciousness or awareness; (13)Recovery complicated by generalised tonic-clonic seizures; (14)On account of the plaintiff's seizures, his Driver's Licence has been suspended; (15)Unable to use power tools without supervision; (16)Unable to work at heights or on ladders on account of epilepsy; (17)Epilepsy which is a paroxysmal disorder interfering with daily activities including driving a motor vehicle; (18)Severe traumatic brain injury resulting in a significant impairment of speech, as well as suffering from poorly controlled epilepsy; (19)Difficulty with communication requiring speech therapy and ongoing tutoring; (20)Whole person impairment of 35%; (21)Paroxysmal disorder (epilepsy) interfering with daily activities; (22)Impairment of communication disorders due to dysphasia; (23)Fatigue effects work capacity; (24)Sleeping long hours due to fatigue; (25)Inability to drive; (26)Inability to work without the risk of seizures; (27)Inability to use power tools without supervision; (28)Inability to work at heights; (29)Need for frequent to constant supervision at work; (30)Difficulty with understanding instructions; (31)Initial complete loss of speech; (32)Post traumatic epilepsy requiring anti-epileptic medication (33)Fatigue and tiredness exacerbated by medication; (34)Unable to tolerate alcohol; (35)Difficulty undertaking pre-accident social, sporting, domestic and recreational activities; (36)Unable to play contact sports; (37)Difficulty with reading and writing; (38)Difficulty sleeping; (39)Feels both mentally and physically tired; (40)Conversational speech is interrupted by mispronounced words; (41)Difficulty with questions; (42)Unable to work more than part-time; (43)Unable to carry out any work which requires him to use his own vehicle as a driver; (44)Headaches; (45)Unfit to work as a fully qualified Carpenter; (46)Adjustment to disability issues; (47)Anxiety and depression; (48)Social withdrawal; (49)Loss of independence; (50)Loss of self-esteem; (51)Low self-confidence; (52)Relies on memory aids; (53)Requires work to be checked; (54)Adjustment Disorder with mixed anxiety and depressed mood; (55)Requires rest breaks; (56)Continuing difficulty processing auditory information in fast paced group conversation; (57)Difficulty obtaining insurance; (58)Ongoing word finding difficulties with decreased coherence in verbal and written expression; (59)Significant fatigue after performing any cognitive based task; (60)Difficulties more apparent in social and vocational settings which create problems with speed and accuracy of processing both auditory and written information; (61)Requirement for adjustment to disability counselling; (62)Grief and loss issues relating to having to adapt to work and lifestyle changes; (63)Forced cancellation of an overseas trip; (64)Frustration and irritability; (65)Recovery set back by seizures resulting in significant work restrictions as a Carpenter including working at heights, use of power tools and loss of Driver's Licence; (66)Forced to consider alternative career options and unable to pursue chosen career as a Carpenter/Builder; (67)Delay in completing Carpentry Apprenticeship; (68)Need to recover on weekends from fatigue by resting and sleeping; (69)Ongoing word finding difficulties and difficulty in pronouncing multi-syllabic words, worse when tired; (70)Continuing to be slow in reading and difficulty in spelling; (71)Need for Thesaurus when reading or studying; (72)Continuing to be prone to become fatigued easily when either physical or mental effort; (73)Continuing potential for further epileptic seizures; (74)Loss of train of thought requiring prompting; (75)Continues to experience word-finding difficulties; (76)Continuing difficulty in pronouncing certain words; (77)Loss of concentration; (78)Memory difficulties; (79)Speech difficulties; (80)Difficulty with reading, spelling and comprehension.
The plaintiff's background 7Born in 1988, the plaintiff attended Gymea Technology High School between 2001 and 2006, completing his Higher School Certificate in that year. He was a very good all-round student, excelling in sport, and was the school captain and winning a number of school prizes. The Principal of the High School provided a reference in the following terms: "To Whom It May Concern STEVEN MCALLAN has been a student at Gymea Technology High School for the past six (6) years and will be awarded a Higher School Certificate in 2006. During his final year Steven was rewarded with the prestigious role of Gymea Technology High School 2006 Captain. In this capacity he has shown himself to be a young man of considerable confidence, presence and popularity. He has chaired formal assemblies, school assemblies and a variety of other formal occasions. Steven's leadership qualities extend beyond this. He has been a member of the Student Representative Council for five years including two years as Secretary and one year as the Council's President. Steven participated in the Peer Support Program where he helped year 7 students in their transition into high school and has been involved in the school's Peer Mediation Program. During this period Steven's conduct has been exemplary. Steven is an extremely cooperative student who has the ability to set goals and maintain his focus to achieve them. Steven has demonstrated a diversity of talents in a variety of fields, and his outgoing nature has made him a pleasure to teach and enhanced his popularity with his peers and school staff. Steven's mature and reliable approach to his studies has been rewarded with a number of academic awards. He has received Senior Awards for academic excellence in General Mathematics, Design and Technology and Hospitality. In his junior years he was placed at the top of his subjects including; History, English PD/H/PE, Human Movement and Woodwork. During the past six years Steven has proven to be an invaluable member of the school sporting community involving himself in Zone Cross Country, swimming, athletics, knockout competition soccer teams, netball and was Athletic Age Champion for four years and Cross Country Age Champion for three years. As a coach of junior students in soccer and touch football Steven has been able to employ techniques he acquired from completing his Soccer Referee's Course. He received his Boating License in 2002, and has captained a number of sporting teams. Gymea Technology High School is pleased to give Steven the highest recommendation to any future employer and we wish him every success in whatever studies or endeavours he wishes to pursue. [Signature of the Principal]" 8The plaintiff, when he completed school, "could fairly be described as having the world at his feet prior to the subject accident" (Dunnett v Brennan [2000] NSWCA 211 at [24]). After the he completed his Higher School Certificate, he sought to further his career in soccer by travelling to England where he played soccer and worked in a bar; both before leaving on this working holiday and after his return he worked at Surf Dive 'n' Ski as a sales assistant. He commenced both his apprenticeship and his employment with the defendant in 2008, and completed Certificate III in Carpentry in December 2009. He was offered a contract for the 2010 soccer season by the Fernhill Soccer Club shortly thereafter. 9The plaintiff had long held ambitions of becoming a self-employed builder. His evidence was that he sought an apprenticeship with the defendant while completing a carpentry course at TAFE with this long-term plan in mind. He was proceeding well at work, sometimes being asked to be the foreman, and was doing well at his studies, which he enjoyed. He had completed his TAFE course prior to the accident, which he described as "lucky", but had not yet completed his apprenticeship. 10The parties agreed that, uninjured, the plaintiff would have completed his apprenticeship in January 2012. 11The plaintiff has no recollection of the circumstances of his accident, which occurred on 24 February 2010 when he was drilling a hole in the ceiling of premises being constructed by the defendant. He was knocked off his feet when the drill bit became stuck and fell about 2.5 to 3 metres onto the concrete floor. The next thing he recalls is waking up in hospital some time later. He remained in hospital for 3 weeks before being transferred to a rehabilitation hospital, where he was an in-patient until 25 May 2010. 12His accident on 24 February 2010 put an end to these activities. The severity of the plaintiff's injuries are set out in a report of Sydney South West Area Health Service of 25 May 2010 as follows: "Mr Steven McAllan is a 21 year-old right-handed man who sustained a traumatic brain injury (TBI) in a fall at a worksite on the 24/02/2010. He reportedly fell approximately 2.5 metres backwards onto a concrete floor where he struck his head. Ambulance officers attending the scene recorded his Glasgow Coma Scale (GCS) score as 7/15. He was taken to Wollongong Hospital, where on admission to the Emergency Department his GCS score had improved to 11/15. The initial cerebral CT scan reported a left parietal-occipital acute subdural haematoma, mass effect and partial effacement of the left lateral ventricle, and a suspected skull fracture. A follow-up CT scan on the 25/02/2010 reported that a left temporal lobe contusion had become more conspicuous, with evidence of raised intracranial pressure, midline shift to the right and a left temporal skull fracture. Mr McAllan was managed conservatively without neurosurgical intervention. Acute management occurred at Wollongong Hospital between the 24/02/2010 and 15/03/2010, and included intravenous fluids, analgesia and anticonvulsant medication. His recovery was complicated by generalized tonic-clonic seizures on two occasions, of 30-60 seconds duration. An MRI scan on the 1/03/2010 reported cortical contusions in the left parieto-temporal and left frontal lobes, a shallow left subdural haemorrhage, a minimal left parietal subarachnoid component, and more pronounced midline shift and mass effect A review CT scan on the 3/03/2010 noted contusions in the left temporal, parietal, frontal and occipital regions, with persistent midline shift. Mr McAllan was transferred to the Brain Injury Rehabilitation Unit (BIRU), Liverpool Hospital on the 15/03/2010 for ongoing management At die time of transfer a CT scan reported evolution of the left temporoparietal haematoma and subarachnoid haemorrhage. An EEG conducted on the 25/03/2010 reported left fronto-temporal and central regional abnormalities which were maximal over the temporal region. A Circle of Willis CT scan on the 26/03/2010 reported no evidence of an intracranial aneurysm or AVM, and noted shallow chronic left subdural haemorrhage. An MRI on the 4/01/2010 reported appearances suggestive of left frontal and left parieto-temporal contusions, and a reduction in size of the left subdural haematoma. As a result of his injury Mr McAllan sustained severe receptive and expressive dysphasia. On admission to the BIRU, Mr McAllan's speech was initially limited to a few basic words such as "yeah" and "please". It was difficult to assess duration of post-traumatic amnesia (PTA) because of Mr McAllan's severe dysphasia, however, on the 19/03/2010 it was possible for him to understand the PTA questions and he was fully oriented and able to memorise three pictures and the therapist's name. Therefore, PTA was assessed to be less than 23 days' duration." 13In addition to the injuries and disabilities suffered in the fall, he required hospitalisation for a lengthy period, and the following report was sent by Sydney South West Area Health Service to the GIO Workers Compensation on 25 May 2010: "Due to the severity of his injury Mr McAllan has been hospitalised for a lengthy period which has led to a loss of strength and fitness from his pre-morbld level. Pre-morbidly Mr McAllan was working in a physically demanding role as an apprentice carpenter and was extremely physically fit and active. Socially he participated at a high level of competitive soccer, as well as regularly cycling and swimming. Physiotherapy intervention to date has involved high level mobility retraining, cardiovascular fitness retraining, and lower and upper limb strengthening exercises. Mr McAllan's return to work is likely to be delayed by the severity of his injury, particularly, the significant receptive and expressive communication difficulties he now experiences." 14The plaintiff made remarkable progress from his "very severe traumatic brain injury" (Exhibit A, p 59). The speech pathology discharge report described him as having "severe difficulties" in auditory comprehension, expressive communication, speech, reading and writing (Exhibit A, pp 28-35). In addition, he suffered from physical difficulties, particularly with his right upper limb, although it was "difficult to understand exactly what he was reporting due to his language impairments" (Exhibit A, p 21). He suffered from a right facial droop, severe expressive and receptive dysphasia, right-sided incoordination/neglect (Exhibit A, p 6). 15However, worse was to come. Although he was able to return to light duties at work on 23 August, he was unable to complete his trade training because on 14 December 2011 he suffered a seizure resulting in suspension of his driver's licence. He suffered a second seizure and was taken to Sutherland Hospital. His driver's licence was suspended for two years. Although his medication was changed and increased, he suffered a third seizure on 30 July 2012 and was sent to St Vincent's Hospital. His driver's licence was suspended for another two years and remains currently suspended until August 2014. 16As the issues for determination are the plaintiff's past and future economic loss only, a more detailed analysis of the plaintiff's injury and disabilities needs to be seen in the context of the impact of these injuries and disabilities on his employment prospects. Accordingly, these are set out in more detail in the section on future economic loss below. 17The defendant did not serve a vocational report attached to the pre-filing defence. An application was made to rely upon this vocational report notwithstanding the failure to do so.
Defendant's application to rely upon vocational reports of Mr Burchett 18The rationale behind the tender of documents is these proceedings being restricted is set out in the relevant provisions of Part 6 of Chapter 7 of the WIM Act. These sections place limitations upon the parties to set out particulars of the claim and the evidence of the claimant. Section 316 provides: "316 Defendant must respond to pre-filing statement (1) The defendant must, within 28 days after the pre-filing statement has been served on the defendant, respond to the pre-filing statement by: (a) accepting or denying liability (wholly or in part), and (b) (to the extent, if any, that the defendant does not accept liability) serving on the claimant a defence to the claim setting out such particulars of the defence and evidence that the defendant will rely on to defend the claim as the Rules may require. Note : A defence can be filed after 28 days but after 28 days the claimant can refer the claim to mediation under Division 4. (2) If the defendant fails to respond to the pre-filing statement as required by this section within 42 days after it is served on the defendant, the claimant can commence court proceedings for the recovery of work injury damages. Note : If the defendant fails to respond within 42 days, the defendant is prevented from filing a defence (see section 318) and the claimant can proceed to obtain summary judgment on the question of liability. If the defendant responds to the pre-filing statement within 42 days, the matter is required to proceed to mediation under Division 4 before court proceedings can be commenced." 19Section 318 provides: "318 Parties limited to pre-filing statement and defence (1) For the purposes of court proceedings on a claim for work injury damages: (a) the claimant is not entitled to file a statement of claim that is materially different from the proposed statement of claim that formed part of the pre-filing statement served by the claimant, except with leave of the court, and (b) the defendant is not entitled to file a defence that is materially different from any defence served on the claimant in response to the claimant's pre-filing statement within 42 days after service of the pre-filing statement, except with leave of the court, and (c) the defendant is not entitled to file a defence that wholly or partly disputes liability for the claim if the defendant has failed to serve on the claimant a defence to the claim as required by this Division within 42 days after the claimant served the pre-filing statement on the defendant, and (d) a party to the proceedings is not entitled to have any report or other evidence admitted in the proceedings on the party's behalf if the report or other evidence was not disclosed by the party in a pre-filing statement or defence served under this Division, except with leave of the court. (2) The court is not to grant leave under this section unless satisfied that: (a) the material concerned was not reasonably available to the party when the pre-filing statement or defence was served, and (b) the failure to grant leave would substantially prejudice the party's case. (3) The regulations may provide for exceptions to this section." 20The general scheme of Part 6 of Chapter 7 of the WIM Act is for the regulation of proposed pleadings and the supporting documents, which is why they are called "pre-filing statements" and "pre-filing defences". It is only after these steps have been completed and a mediation has taken place pursuant to s 318A that a statement of claim can actually be filed in court. The intention is that the parties give full disclosure of their position so that by mediation prospects of settlement can be fully explored. 21The question of the plaintiff's employability in the building industry would always have been a significant issue given the nature and severity of his injuries, and in particular after he suffered the series of epileptic seizures which resulted in the loss of his motor vehicle driver's licence. His evidence was that his employer would not allow him to use certain power tools at all, and that other power tools had to be used under supervision. He remained with his employer on light duties but the vocational capacity assessment report of Mr Martin, served with the plaintiff's pre-filing statement, stated in unequivocal terms that the plaintiff would not be able to continue his employment with the defendant and that his prospects of obtaining alternative employment in the open labour market were very poor. The report noted he was at that time working three days a week with his pre-injury employer but required supervision and further instruction to a considerable degree. 22The plaintiff resigned from his employment on 10 May 2013 and his last day of work was on 17 May 2013. He obtained part time employment with the St George and Sutherland Community College on 20 May 2013 as a disability worker assisting persons with disability. 23The defendant was aware of the plaintiff's resignation on 10 May 2013. The pre-filing defence filed on 30 May 2013 (MFI 1) lists a series of medical reports, an investigator's report in relation to the accident and a draft defence. No vocational report of any kind was served. The precise particulars of evidence and information the defendant propose to rely upon were: (1)"Current medical evidence addressing the plaintiff's injury, disabilities and ability to work including from a functional and vocational assessment. (2)Evidence addressing the plaintiff's allegations of entitlement of damages for economic loss, including the plaintiff's actual and probable earnings both before and after the injury consisting of records relating to his earnings in employment with the defendant, earnings of comparable employees in the employ of the defendant, records to be obtained from the plaintiff pursuant to subpoena including taxation returns, books of accounts, business records, financial and banking records and any records relating to same within the custody possession and power of any accountant or other service provider retained by the plaintiff for such purpose, including in relation to any business conducted by or on behalf of the plaintiff. (3)Factual evidence relating to the plaintiff's allegations in the PFS, including statements or oral evidence from witnesses, documents yet to be obtained from the defendant, records from the defendant workers compensation insurer claims file, records from any medical provider to the plaintiff including such records to be obtained pursuant to subpoena. (4)The defendant reserves the right to adduce and rely upon such further evidence as may be necessary arising out of any response to requests for particulars, documents produced under subpoena or other evidence obtained or provided by the plaintiff hereafter." 24Counsel for the defendant submits that the reference to "functional and vocational assessment" was an indication to the plaintiff that a vocational assessment would be relied upon by the defendant, and that this was to be inferred from this reference. Mr Halligan informed me from the bar table that the report of Mr Burchett which was the subject of this application was prepared in or about 27 August 2013 and served, and it appears to have played some part in, or available for, the subsequent mediation. The subsequent reports of 14 and 15 April 2014 are updates, to which the additional objection was taken that they were not served upon the plaintiff in time, although this complaint was not proceeded with. 25I do not accept this submission. The terms of paragraph (1), which is the principal basis upon which the defendant submits their reliance upon vocational material is a part of the pre-filing defence, clearly addresses only the medical evidence, in that the sentence reads "[c]urrent medical evidence addressing the plaintiff's injury, disabilities and ability to work including from a functional and vocational assessment" (emphasis added). The documents sought in paragraphs (2) and (3) consist of financial records only. As to paragraph (4), the plaintiff's vocational assessment was served together with the pre-filing statement and was not material of a "further evidence" nature, or a document which required production under subpoena. 26Some support for Mr Burchett's report still being able to be relied upon, notwithstanding its exclusion from the pre-filing defence, may be obtained from McKay v Palmers Removalists & Storage Pty Ltd [2010] NSWCA 83. Mr McKay brought proceedings for damages pursuant to s 151 Workers Compensation Act 1987 (NSW), having obtained a certificate of mediation outcome from the Workers Compensation Commission prior to commencing proceedings. Both parties in those proceedings had filed vocational material with their pre-filing statement and defence which did not refer to the plaintiff seeking or obtaining a special licence for interstate truck driving, for which the salary was higher. After his accident, the plaintiff obtained an MC licence, which was necessary for interstate truck driving, but as there was no reference in the vocational assessment prepared for the defendant of the plaintiff having obtained the necessary licence, or that he had planned to obtain a MC licence before the accident, or that he wished to be an interstate truck driver, this source of loss was not considered in the reports. The sole reference in the plaintiff's vocational report was a reference to the plaintiff having driven, and wishing to drive, heavy vehicles. The plaintiff was not cross-examined about his wish to become an interstate truck driver, as the issue arose in closing submissions, according to Mr Lidden SC (whose instructing solicitor appeared for Mr McKay).. 27The Court of Appeal held (at [22]-[29]) that there was sufficient reference to the plaintiff's wishes to drive interstate trucks for these to have been issues arising from the vocational assessments. In addition, the failure of the defendant to cross-examine the plaintiff on critical aspects of his claim meant that a challenge to this evidence on the basis of reconstruction was not made out (at [30]-[32]). The Court, although referring the matter back to the Compensation Court for mediation, did not refer to the provisions of ss 313 to 318 of the WIM Act. 28The question in McKay was whether there was sufficient reference to the claim in the vocational assessor's reports. Their Honours were satisfied that the reference to driving heavy vehicles and to the plaintiff having carried out interstate transport jobs was sufficient. 29Is the reference to "functional and vocational assessment" in paragraph (1) of the pre-filing defence, or any of the other descriptions in paragraphs (2) - (4), sufficient to include a reference to a vocational assessment report, which would accordingly be a document to be taken into account? 30The Court of Appeal in Wilkinson v Perisher Blue Pty Ltd [2012] NSWCA 250 took a different view to that taken in McKay (to which no reference was made) and affirmed the decision of Robison DCJ that the defendant was not entitled to dispute liability pursuant to s 318(1)(c) of the WIM Act despite subsequent attempts to raise liability. Hoeben JA stated at [218]-[219]: "[218] The statement of Mr Fearnside is to be found at Blue 130-138. In it Mr Fearnside analysed in considerable detail the system of work of mountain awareness officers at the resort and expressed an opinion as to the impracticality and disadvantages of the alternative systems of work proposed in Ms Armour's report. This was dealt with at paras 27, 28, 29, 34, 35, 38, 40, 42, 44, 45, 46, 47, 48 and 49 of the statement. The only reason the statement did not address a system which had a mountain awareness officer at the top of the slope and one at the bottom, but no-one in between, was because such an alternative system was not advanced on behalf of the appellant until the trial. [219] His Honour's interpretation of s 318(1)(d) was correct. I do not read that section as requiring a verbatim transcript of the evidence which will be given at trial, but rather a disclosure of the nature and substance of the evidence to be given. The statement of Mr Fearnside satisfied that requirement. The statement did not specifically deal with the alternative system of work advanced by the appellant at trial because at the time the statement was served, that was not part of the appellant's case. In that respect, it could fairly be said that this evidence "was not reasonably available to the party when the pre-filing defence was served". It was common ground that the evidence was important, otherwise the objection would not have been taken." 31Hoeben JA went on to note that Robison DCJ had correctly applied s 318(1)(d) of the WIM Act in relation to this evidence. 32The first issue is whether the evidence was available, in that the vocational report was provided at the mediation, according to counsel for the defendant. However, subsequent availability is not sufficient; the question is whether it was part of the pre-filing defence, and I am satisfied that it was not. 33The next issue is whether the vocational assessment evidence was "not reasonably available" when the pre-filing defence was served (s 318(2)(a)). The only explanation provided for this is that when the plaintiff resigned on 10 May 2013 the defendant was taken by surprise and did not have time to prepare a vocational assessment report. This was put from the bar table without any supporting evidence. 34The "obligation of forensic diligence" (Australian Winch & Haulage Co Pty Ltd v Collins [2013] NSWCA 327 at [140]) was squarely raised by the plaintiff in these proceedings, which were adjourned to the following day to enable the defendant to lead evidence in order to establish that the material was not reasonably available. In Australian Winch & Haulage Co Pty Ltd v Collins, the plaintiffs succeeded in a claim for the cost of funds management as part of his damages notwithstanding this issue not having been raised, in the absence of evidence as to efforts to obtain medico-legal evidence, but principally because this argument was not put to the trial judge (at [139]). That is not the case here. The defendant could have answered the first limb of s 318 by calling evidence. No evidence is available and this requirement fails in limine. 35Taking all of the above into account, I accept Mr Lidden SC's submissions that the decision not to call this evidence was either a tactical decision or an oversight, and not triggered by any surprise as the plaintiff giving notice on 10 May 2013 and ceasing employment on 17 May 2013, almost two weeks before the pre-filing statement was in fact filed and served in these proceedings. 36The defendant also fails in relation to the second limb of s 318(2), namely whether failure to grant leave would substantially prejudice the party's case. Mr Halligan did not address this issue beyond stating that it was self-evident that the exclusion of this material will be forensically disadvantageous to his client. 37The medical evidence provided by the defendant is brief, inadequate and out of date. The most recent report served by the defendant is the report of Dr Mellick of 12 December 2012 in which Dr Mellick considered it was appropriate to defer final assessment of the plaintiff's language deficient until he could assess his dysphasia, which he recommended should occur six to nine months after the date of his report. No such report was prepared. Accordingly, the most recent evidence of the defendant is Dr Mellick's note of the findings of Dr Rawling, a doctor retained by the plaintiff, who reported the plaintiff making "significant gains" in relation to his speech function. A psychologist's report of 25 June 2012, concerning treatment early in 2012 which was described as "brief" and largely comprised of advice about improving his sleep, adds nothing to the medical evidence before me. Any vocational assessment report relied upon by the defendant would have to rely almost entirely on the plaintiff's medical evidence. 38Furthermore, all of the medical evidence in these proceedings points to the plaintiff suffering a very severe head injury which has been complicated by subsequent epileptic seizures of such severity that he is currently unable to drive. Medical evidence addressing the plaintiff's injury from a functional and vocational assessment would have to take those factors into account. 39Having regard to the way in which the parties addressed me as to computation of past and future economic loss, I cannot ascertain that the unavailability of Mr Burchett's report would "significantly prejudice" the party's case where the medical evidence is clear. 40Having noted my reasons for rejection of the report of Mr Burchett, I now consider the parties' submissions in relation to past and future economic loss.
Plaintiff's Schedule of Damages 41The plaintiff provided a schedule of damages (Exhibit E) as follows: a. Past wage lossThe plaintiff would have completed his apprenticeship (uninjured) in January 2012. Thereafter, whether in the employ of the defendant or elsewhere as a tradesman he should have earned average weekly earnings. These were $1,150 net per week. In the 2012 year the plaintiff earned $550 net per week including workers compensation payments.The loss is thereafter 26 weeks at $600 net per week = $15,600.In the 2013 financial year the plaintiff earned $650 net per week. The loss is therefore $500 net per week or $26,000.In the 2014 financial year (thus far) the plaintiff earned $497 net per week over 48 weeks. Once again this includes workers compensation and it also includes the extra hours he worked at the commencement of his current job. The loss is therefore $650 net per week for 49 weeks = $31,850. Total loss of past wage loss therefore (to which workers Compensation payments must be added) is $73,450 To this must be added workers compensation payments of $51,617 Total $125,067 b. Past loss of superannuation $13,757 c. Future wage loss$1,200 per week for 41 years discounted at 5% and 15%1200 x 924.8 x 85% $943,296 d. Future loss of superannuation14.36% of $943,296 $135,427 e. Fox v WoodAgreed by the parties $7,600
Defendant's Schedule of Damages 42The defendant's schedule of damages consists of a detailed analysis of the plaintiff's past actual earnings. Rather than attempt to paraphrase it, I shall set it out in full: "[Page 1] Classic Home Improvements (Australia) ats Steven McAllan Schedule of past economic loss Injury 22 February 2010. Plaintiff had commenced an apprenticeship in January 2009 and was due to finish 6 January 2012. At the time of the accident he had been a second year apprentice for several weeks at a base pay rate of $13.57 per hour. Payslips for the 6 weeks leading up to the accident show net earnings average $521.49 per week. Actual earnings after the injury: 1. 24.02.10 - 21.8.10 - 26 weeks - nil earnings. 2. 2.8.10 [sic] - 30.6.11 - 45 weeks Actual earnings based on the attached wage records for that period were $19,724.22 which is calculated by adding the various "year to date" wage components as at 30 June 2011 - $23,849.22 less the $4,125.28 which is the total of workers compensation benefits paid up to 19 August 2010. That produces an average of $438.32 gross per week or around $410 net per week. For 45 weeks that totals $18,450 3. 1.7.2011- 30.6.2012 - 52 weeks - Unfortunately the pay records as attached do not show year to date earnings as at 28 June 2012. However, the attached handwritten sheet indicates total of workers compensation payments paid for that year at $10,634.48. An alternate calculation has been made adding the weekly payments paid by GIO to the employer over that period (see handwritten note in schedule attached - $10,645). Adopting that higher seond [sic] figure, that should be taken away from the figure of $34,578.74 which is the wages for that year including the workers compensation so his actual earnings clear of workers compensation were $23,933.74. That is an average of $460.26 gross per week or $425 net per week. For 52 weeks that totals $22,100 4. 1.7.2012 - 18.5.2013 - 46 weeks - total earnings at "Classic" as per payslip year to date $24,000.18 at 46 weeks so average is $523.91 gross, $475 net per week. For 46 weeks that totals $21,850 5. 19.5.2013 - 30.6.2013 - 6 weeks payslip from St George College shows gross earnings $3,157.56. for six weeks that average is $526.17 gross or $480 net. For 6 weeks total is $2,880 6. 1.7.2013 - 5.6.2014 - 48 weeks - St George payslip shows year to 14 May 2014 $25,014. For 45 weeks average $555.87 gross or $500 net per week. For 48 weeks total $24,000 ADDING THE 5 "BOLD" FIGURES 18,450 + 22,100 + 21,850 + 2280 [sic] + 24,000 = $88,680* [Page 2] Schedule Steven McAllan v Classic Home Improvements Probably earnings but for the injury 24.2.2010 to 21.8.2010 - first year apprentice - $522 net per week for 26 weeks - $13,572 21.8.2010 - 7.1.2011 - 20 weeks at $522 net - $10,440 8.1.2011 - 8.1.2012 - in this year he would have progressed toyear 3 apprentice earning around 15% more $600 net per week - $31,200 8.1.2012 - 8.1.2013 - in this year he would have been a first year out tradesman based on the earnings Bryce Daenell he would have earned around $54,259 or $1,043 gross per week less say $1,050 gross $852 net $44,720 8.1.2013 - 8.1.2014 - 52 weeks at say $1,150 gross p/w or $950 net p/w $49,400 8.1.2014 - 5.6.2014 - 21 weeks at $975 net - $20,475 Potential net earnings but for the accident to date: $169,807 Less actual net earnings from page 1 $88,680 ** Net loss to date $81,127 *** Past loss super 11% net $8,924 **** Future economic loss based on probable net earnings of $1,050 net per week less actual earnings $500 net per week difference $550 net per week for 42 years multiplier 924.8 less 15% forvicissitudes $432,345 Future loss of superannuation - 12.5% of net: $54,045.00 Fox v Wood $7,600.00 Total: $584,041.00 Less weekly benefits paid: - $51,617.00 Net total: $532,424.00 *****" Notes: * I note this figure is in error as $2,280 was added, as opposed to $2,880. The net figure should be $18,450 + $22,100 + $21,850 + $2,880 + $24,000 = $89,280 ** I note this figure should have been $89,280 (see * above) *** This figure $81,127 (being $169,807 - $88,680) is also incorrect; it should read $80,527 **** This figure should read $80,527 x 11% = $8,857.97 ***** This figure was worked out as follows - $81,127 + $8,924 + $432,345 + $54,045.00 + $7,600.00 - $51,617.00. Given $80,527 should be in place of $81,127, the final figure should read $531,824. 43The defendant's estimate of future economic loss is based upon comparable earnings of Mr Bryce Daenell, who was the supervisor of the site on the day the plaintiff had his accident. The defendant had also had regard to the figures for project builders (see 42 of Mr Martin's report) and has estimated probable net earnings of the plaintiff as a project builder at being $1,050 net per week. 44The parties have also taken a different approach in relation to superannuation. The plaintiff relies upon the New South Wales Court of Appeal's approach to this issue in Najdovski v Crnojlovic (2008) 72 NSWLR 728 at [53] as follows: "[53] It has generally been assumed that the calculation required takes as the "relevant per centage" the figure specified in the Superannuation Guarantee (Administration) Act 1992 (Cth) which has, since the 2002/2003 tax year, been 9 per cent of the employee's gross ordinary time earnings: see Zorom Enterprises Pty Ltd v Zabow (2007) 71 NSWLR 354 at 372 [72] (Campbell JA). (For ease of calculation, and because damages are assessed by reference to earnings net of tax, the calculation is sometimes undertaken on the basis of 11 per cent of net earnings.)" 45The defendant provided an outline of reasons for an estimate of 12 to 12.5% in a short memorandum provided to the Court, the relevant portions of which are as follows: (1)The superannuation levy is only payable on a worker's "ordinary time earnings". (2)The Court of Appeal has determined that loss of superannuation ought to be based on 9% (as at the time of gross loss earnings). For the reasons indicated above would only be 9% of the proportionate gross earnings to which the statutory superannuation guarantee levy applies - that is based earnings and not overtime. (3)It has been generally accepted that because it is usual to calculate economic loss on a net of tax basis that an approximation of 9% of gross earnings is 11% of net earnings, and that calculations for past and future loss of superannuation has been often done on a guideline basis of the 11% of net earnings. (4)As the defendant understands, the plaintiff's calculation of future loss of superannuation based on 14.36% of future net loss of earnings is based on an actuarial table prepared by Furzer Crestani based on the assumption that over the next six years there is to be a progressive increase in the compulsory superannuation guarantee levy up to 12%. The defendant notes that the current government has already deferred the introduction of that increase and the defendant contends that on that basis some discount would be applied as for the doubt to whether the full proposed increase will be implemented. (5)Moreover, however, as indicated above the levy is only base earnings. It appears the plaintiff's assertion as to what would be the plaintiff's probable earnings but for the injury would include the plaintiff being likely to be in work where he received overtime or other bonuses and that portion of his probable earnings would not have attracted the superannuation guarantee levy and that should be considered a factor in reducing the claim 14.36% of net. (6)Furthermore, the defendant asserts there is no clear evidence that people who are on salary or non-award rates will ultimately get the full benefit of that progressive increase in superannuation guarantee percentages. Most persons who would be earning what is asserted to be the probable earnings of the plaintiff but for the injury would come as a package, and the defendant contends that it is likely that part of any superannuation increases for such persons would be at least partly absorbed in smaller wage rises with the employer looking at the increase in the combined salary and superannuation package figure. (7)If it is being asserted that the plaintiff's probable earnings but for the injury as a self-employed builder and if he was self-employed he would get no superannuation from an employer. (8)In all of the circumstances the defendant contends that a figure of 12-12.5% of assessed net future economic loss should be the maximum added for potential loss of superannuation. 46I note the agreement between the parties as to Fox v Wood. I shall first deal with the issue of past wage loss.
Past wage loss 47The principal difference between the plaintiff and defendant on this issue is the amount the plaintiff would have had earned as a "first year out" tradesman. The defendant considers that the plaintiff would have continued to work at the same trade of being a carpenter and his earnings would have been comparable to his fellow carpenter, Bryce Daenell. The plaintiff has carried out the same exercise having regard to average weekly earnings of $1,150 net per week. 48The question is the degree of probability that, had the plaintiff been uninjured, he would have exercised his earning capacity by becoming a self-employed builder, in accordance with the principle set out in Malec v JC Hutton Pty Ltd (No 2) (1990) 169 CLR 638. As is set out in more detail below, I have assessed future economic loss on that basis. Although the plaintiff would have been a first year out tradesman, the likelihood is that a young man of his capabilities would have received average weekly earnings for the sum proposed by the plaintiff. Taking the deductions for workers compensation payments which are common to both formulae, the figure for past wage loss is $73,450, to which must be added workers compensation payments of $51,617. 49This brings me to the question of past loss of superannuation. 50The formula is not in dispute here and the appropriate amount for past loss of superannuation is $13,757.
Future wage loss 51When determining the plaintiff's future wage loss, I have taken into account his evidence as to his future capabilities, the comments of Mr Martin and, most importantly, the medical evidence before the court. In his report, Mr Martin refers to three particular reports, namely the reports of Kasey Metcalf, Lynette Wong and Dr Lorentz. 52The most recent medical report for the plaintiff paint a gloomy picture of his ability to cope. Kasey Metcalf describes his current speech therapy problems as follows: "Word-finding difficulties were clearly evident during the interview, but he was able to convey his message sufficiently when given sufficient time and mild prompts." "His performance on working memory tasks fell within the borderline impaired range overall and equivalent to previous performance. His ability to recite increasingly lengthy series of number (i.e. immediate attention) was reduced. His performance was also below average when he was required to manipulate verbal information in mind." "His performance on mental arithmetic was in the low average range, but he demonstrated the basic capacity to calculate simple sums in mind. His performance on a task of written mathematical computations was also in the low average range for his age and suggested that he had a basic understanding of everyday maths. His ability to read and comprehend increasingly complex sentences was also low average and suggested that he had functional reading comprehension skills." "On current testing, he demonstrated areas of continued cognitive weakness that included inefficiency in his auditory immediate attention, working memory and poor divided attention. However, his new learning and memory for verbal material was within the normal range and his capacity to perform mental and written calculations was adequate for everyday financial affairs." (Exhibit A, pp 33-34) 53Similarly, in relation to his writing ability, Lynette Wong states: "His main difficulties with study are with organised succinct verbal/written expression, spelling and processing the information into modules. Once he has formulated an answer he reported the thought is lost with the distraction of trying to spell even high frequency words. This seems to be related to ongoing difficulties with working memory and being able to hold information while processing other information." "During conversation the difficulties with verbal expression continue to be evident. He has extreme difficulty relating even fairly uncomplicated sequences. This is further exacerbated by word finding difficulties with result and verbose and circulatory verbal and written expression. The articulatory difficulties relate to ongoing verbal dyspraxia." (Exhibit A, p 34) 54Dr Lorentz gave the following description: "His reading was very slow and laboured and he mispronounced words. I asked him to write down his activities on the morning of the examination and he wroteas follows: "I get the train from Como to the city and walk down York Street to see the doctor." "He did this very slowly and was obviously grammatically incorrect." "Mr McAllan has difficulty with communications some four years after his injury so that he is unlikely to improve significantly in the future. He may have difficulty in following more complicated or complex instructions and he will have difficulty of expressing himself verbally and in writing limiting his employability." (Exhibit A, p 33) 55Drawing upon each of these, Mr Martin has produced a comprehensive vocational capacity assessment report. He summarises the plaintiff's employment and earning capacity but for the injury as follows: "But for the injury, Mr McAllan stated it was his intention to complete his Apprenticeship as a Carpenter, and complete formal qualifications to gain a Builders licence, and work as a Project Builder (Carpenter/Builder). Mr McAllan would have probably been capable of working as a Carpenter/Builder but for the injury. He would probably have been capable of owning and running his own business. Other occupations that would have been available to Mr McAllan in the building industry in the longer term include Foreman/Supervisor or Site and Construction Manager. Mr McAllan would probably also have been capable of working in these occupations. In the short term (3-5 years), Mr McAllan would probably have worked as a Carpenter/Builder (Project Builder) and earned at least $1,550 gross per week as at May 2014. In the longer term, after approximately 6 years, Mr McAllan would have been able to work as a Foreman/Supervisor and earn $2,229 gross per week and after further experience as a Site and Construction Manager and earn $2,334 gross per week." (Exhibit A, p 30) 56The defendant's medical evidence can add little if anything to this sombre picture. The most that Dr Mellick can opine is that a remarkable improvement in speech function "may occur after brain injury" and to refer to the "significant gains" noted by Dr Rawling in relation to the plaintiff's speech. As the plaintiff was unable to say more than a few words after the accident, and spent many months in intensive therapy before being able to have a conversation with his doctors (some of whom have commented on the difficulties of this), this opinion is of little assistance. 57I have had the benefit of hearing the plaintiff speaking while he was giving evidence and being cross-examined. I have also had the opportunity to compare what he says about his abilities with what these have been found to be by Mr Martin. 58An example of the plaintiff's problems in relation to both speech and cognitive function can be seen from his misunderstanding of several questions he was asked in cross-examination. In particular, when Mr Halligan asked if he was able to bath persons who came to the disability centre, the plaintiff agreed that he did so. In re-examination, Mr Lidden SC enquired whether the plaintiff did in fact bath the persons who came to the disability centre. It transpired that the plaintiff had confused the words "bath" and "bathroom" and had simply not understood the question. 59There were other answers that the plaintiff gave which seemed inconsistent or unlikely; this "bath/bathroom" was simply one example which was explored in re-examination, where his errors were obvious. This was not a trivial error by a witness who was not paying attention; the plaintiff gave the impression that he was listening to questions intently and answering them to the best of his ability. This was an example of the plaintiff's cognitive faculties failing. 60There were a number of examples of the plaintiff's speech problems in the course of his oral evidence. On several occasions Mr Lidden SC directed my attention to the plaintiff's slight stutter and to his habit of stopping to search for a word. 61Towards the end of the cross-examination, he became very visibly tired and tended to agree with many of the questions he was asked. For example, he agreed with all of the questions about how he was enjoying his work as a disability services officer, which appeared to be inconsistent with his avowed wish to become a self-employed builder. The gaps while he searched for words became longer and after a while he began just to agree. To my observation, the plaintiff simply missed the significance of the questions he was being asked. The statement he made earlier in his evidence, namely that it took him some time to accept that he was going to have to give up his dream of becoming a self-employed builder, seems to me a more accurate description of the plaintiff's real state of mind on these issues. The contrast between his answers early in examination in chief, when occasional flashes of the impressive young man he must have been before he suffered his accident, and his monotonal and stuttering answers at the end of cross-examination, was quite marked. 62Finally, although the plaintiff minimised his physical and mental disabilities and painted himself as someone who was coping with his day to day life, the evidence set out in Mr Martin's report painted a different picture. In particular, the plaintiff described himself as being able to send email and use a computer. This was relied upon by Mr Halligan in his closing submissions in relation to the plaintiff's future employability. However, Mr Martin's report (Exhibit D, p 13) notes that the plaintiff is unable to touch type, admitted to him that his keyboard skills were "poor", had done very little typing since his injury, had very poor spelling and would probably be slower typing now. I note that in his evidence, the plaintiff volunteered, when describing his computer skills, that Spell Check was a "godsend". 63Given the plaintiff's difficulties in speaking and reading, I accept the Mr Martin's estimate of the plaintiff's computer skills as between very basic and basic is more accurate than the more positive view expressed by Mr Halligan based upon apparent admissions by the plaintiff in cross-examination. 64Nor do I regard the fact that the plaintiff possesses or is able to use a smartphone, or that he can send an email, is indicative of his having significant computer skills. As Mr Martin notes at p 14 of his report, basic computer skills would require far more than these skills, such as the ability to produce documents in standard format at 20 words per minute. Most persons in the plaintiff's age bracket possess smartphones, and can send emails; it is unrealistic to regard the ability to perform such functions as evidence of anything other than the most basic computer literacy. 65In addition, many jobs are closed to the plaintiff by reason of his history of epileptic seizures and taking epileptic medication. Whether or not his motor vehicle licence is returned to him, the likelihood of his obtaining employment where any driving is involved, given this history, is low. Nor is it appropriate to consider jobs in the hospitality industry where he is serving alcohol. The medical reports make clear that the plaintiff must not take alcohol, and that he has in fact ceased taking any form of alcohol since his accident. Jobs such as handyman or store employee would be difficult, as the plaintiff cannot perform work at height, which would mean employment at any large store such as a hardware store would be unsuitable. 66Ultimately, the plaintiff's future employment possibilities consist of work in the area in which he currently finds himself, such as a disability services officer, which is an idea environment for a young man who himself suffers from significant disabilities. 67Mr Martin describes the plaintiff's current earning capacity as follows: "Mr McAllan is currently earning $22 gross per hour for approximately 3.5 days per week ($585.20 gross per week). PAYG summary for the period 13 May 2013 to 30 June 2013 show earnings of $3,157.56 gross or $460.50 per week." 68Mr Martin describes the plaintiff's future employment and earning capacity as very poor, giving a "25% possibility" only. He states that the plaintiff's "anticipated income in the long term is 25% of $607.80 being $151.95 gross per week". 69The first issue for consideration is the plaintiff's ability to sustain his current employment. I shall deal with this before dealing with his stated preference, namely to work as a self-employed builder.
The plaintiff's work as a disability services officer 70The plaintiff's evidence was that he enjoyed his work as a disability services officer, and that he had enrolled in a course which he anticipated completing towards the end of the year, which would give him a formal qualification in order to do the work he is currently doing. 71Although counsel for the defendant encouraged me to take an optimistic view of the plaintiff's employability and current employment, the terms of his letter of appointment are quite clear. This is a job which depends firstly upon government funding being available, as this letter makes out: "Grading will be as per the SGSCC Enterprise Agreement 2011 and/or the SCHADS Award. Your conditions of employment will be as follows:
Work in the building industry 78The plaintiff's evidence was that if he had not suffered the accident which occurred, he would have completed his apprenticeship as a carpenter as well as formal qualification to gain a builder's licence and work as a builder, whether as a project builder or carpenter builder. He would have had the benefit of being self-employed and would have planned to own and run his own business. Other possibilities were that he would become a foreman or a supervisor on site for a construction manager, but given this impressive young man's abilities, the likelihood that he would have become a builder is one which I am confident would have occurred. 79Having regard to the principles set out in Malec v JC Hutton Pty Ltd (No 2), supra, I am satisfied that but for his injury the plaintiff would not simply have completed his apprenticeship, but completed formal qualifications to gain a builder's licence and work as a carpenter, project builder or a self-employed builder. Alternatively, he may have worked in other occupations of a similar kind and earn the average full time earnings of a male New South Wales worker. This was not a young man who would have remained a carpenter for the rest of his working life. Accordingly, I am satisfied that I should adopt the formula based on average weekly earnings proposed by the plaintiff which gives a future wage loss of $943,296. 80I am satisfied that the plaintiff's actual loss is the figure of $1,200 per week having regard to the severity of his injuries. I am satisfied that his current employment is extremely uncertain. He can lose his job at any time due to withdrawal of funding. In addition, I take into account Mr Martin's comments about the distressing nature of such work, resulting in many employees in this field not working in such positions until retirement age. Finally and most importantly, the plaintiff is still not able to work a 5-day week, and has had to adapt the hours where he is working to allow for the fact that the most he can manage is a 3-4 day week. He currently has a very indulgent employer, he cannot rely upon having indulgent employers for the rest of his working life. 81I agree with Mr Martin's assessment that the plaintiff's future employment prospects are poor.
Future loss of superannuation 82I have referred to the formula set out in Najdovski v Crnojlovic, supra, and conformably with my findings in that regard, I propose to award the sum sought by the plaintiff for future loss of superannuation, namely $135,427. 83There is one issue with which I should deal in the defendant's submissions in relation to the question of future superannuation, and that is the submission that if the plaintiff was self-employed "he would get no superannuation from an employer". This is an unmeritorious submission. The plaintiff has lost the opportunity to be a self-employed builder in circumstances where he would most probably set up a company which employed him and paid him superannuation, or alternatively had his own private superannuation scheme. The significant benefits which flow from being self-employed are often difficult to calculate when looking at future economic loss, but a submission that no allowance should be made for superannuation on the basis that the plaintiff would not have any because he was not an employee is not a submission which should be made in the context of expectations that all workers will provide for themselves at the end of their working lives from superannuation schemes of one sort or another.
Orders 85Although I have accepted the sums sought by the plaintiff, I have left the parties the task of confirming the mathematically agreed sum of damages, in view of the mathematical errors set out in [42] above, as well as granting liberty to apply in relation to costs. (1)Judgment for the plaintiff. (2)Defendant pay plaintiff's costs. (3)Parties have liberty to apply in relation to costs, as well as bring in Short Minutes of Order reflecting the judgment sum and the payback amount to the workers compensation insurer. (4)Exhibits retained until further order.
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: 16 July 2014
McAllan
Classic Home Improvements
(1990) 169 CLR 638
(2008) 72 NSWLR 728
(2007) 71 NSWLR 354