McCracken v Melbourne Storm Rugby League Football Club Limited & 2 Ors

Court of Appeal (NSW)|2007-12-13|Before: Beazley JA, Ipp JA, Basten JA, Hulme J

CITATION: McCracken v Melbourne Storm Rugby League Football Club Limited & 2 Ors [2007] NSWCA 353

JUDGMENT OF: Beazley JA at 1; Ipp JA at 2; Basten JA at 131

DECISION: Appeal and cross-appeal dismissed with costs.

LEGISLATION CITED: Civil Liability Act 2002 (NSW), s 3B(1)(a) Wrongs and Other Acts (Public Liability Insurance Reform) Act 2002 (Vic)

Abalos v Australian Postal Commission (1990) 171 CLR 167 Adams v Ascot Iron Foundry Pty Limited (1968) 72 SR (NSW) 120 Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649 Cousins v Wilson [1994] 1 NZLR 463 Devries v Australian National Railways Commission (1993) 177 CLR 472 Enston v Pardel (1957) 75 WN (NSW) 370 Fobel v Dean [1991] 6 WWR 408 Fox v Percy (2003) 214 CLR 118 Giorginis v Kastrati (1998) 49 SASR 371 Government Insurance Office v Johnson [1981] 2 NSWLR 617 Graham v Baker (1961) 106 CLR 340 Husher v Husher (1999) 197 CLR 138 J K Kealley v Jones [1979] 1 NSWLR 723 CASES CITED: Jongen v CSR Ltd (1992) Aust Torts Reports 81-192 Kschammer v R W Piper & Sons Pty Limited [2003] WASCA 298 Lee v Sheard [1956] 1 QB 192 McCracken v Melbourne Storm Rugby League Football Club and 2 Ors [2005] NSWSC 107 McCracken v Melbourne Storm Rugby League Football Club and 2 Ors [2006] NSWSC 1250 McNamara v Duncan (1971) 26 ALR 584 Medlin v The State Government Insurance Commission (1995) 182 CLR 1 Minchin v Public Curator of Queensland [1965] ALR 91 Paff v Speed (1961) 105 CLR 549 Rauk v Transtate Pty Ltd (2001) Aust Torts Reports 81-592 Spargo v Haden Engineering Pty Ltd (1993) 60 SASR 39 State of New South Wales v Lepore (2003) 212 CLR 511 State of New South Wales v Moss (2000) 54 NSWLR 536 Williams v Milotin (1957) 97 CLR 465 Yammine v Kalway [1979] 2 NSWLR 151

Jarrod McCracken (Appellant) PARTIES: Melbourne Storm Rugby League Football Club Limited (First Respondent) Stephen Kearney (Second Respondent) Marcus Bai (Third Respondent)

COUNSEL: B J Gross QC/T Boyd (Appellant) M L Williams SC/R S Sheldon (Respondents)

SOLICITORS: Thurlow Fisher (Appellant) Moray & Agnew (Respondents)

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT DATE OF DECISION: 22/02/05, 23/11/06

LOWER COURT MEDIUM NEUTRAL CITATION: [2005] NSWSC 107, [2006] NSWSC 1250

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40269/07 SC 20071/03

BEAZLEY JA IPP JA BASTEN JA

JARROD McCRACKEN v MELBOURNE STORM RUGBY LEAGUE FOOTBALL CLUB LIMITED & 2 ORS Judgment 1 BEAZLEY JA: I agree with Ipp JA. 2 IPP JA:

The claim, the judgment and the appeal 3 The appellant, Mr Jarrod McCracken, was an outstanding rugby league football player. He played as a professional from 1991 to 2000. His career was ended on 12 May 2000 when he was injured in a game between his team, Wests Tigers, and the first respondent, Melbourne Storm (an incorporated company). His injuries were caused by a spear tackle effected on him by the second respondent, Stephen Kearney, and the third respondent, Marcus Bai. The first respondent employed both Messrs Kearney and Bai. 4 Messrs Kearney and Bai, in so tackling Mr McCracken, lifted his legs off the ground, raised him in the air, turned him so that his head was below his legs and dropped him head first onto the ground. 5 Mr McCracken brought proceedings in negligence against the three respondents for the damages he suffered in consequence of the injuries he sustained. He alleged that Messrs Kearney and Bai failed to exercise due care by lifting him in a posture and to a height "which created an unreasonable risk that he would fall to the ground head first" and by failing to control his movement so as to avoid him "falling to the ground head first" He claimed that Melbourne Storm was vicariously liable for the negligent conduct of Messrs Kearney and Bai. 6 The trial judge, Hulme J, upheld Mr McCracken's claim (see McCracken v Melbourne Storm Rugby League Football Club and 2 Ors [2005] NSWSC 107). His Honour found that, in consequence of Messrs Kearney and Bai tackling Mr McCracken in a negligent way (in the course of their employment with Melbourne Storm), he suffered a significant strain of the cervical spine with probable ligamentous and intervertebral joint involvement and traumatic cervical spondylosis. As a result he was not able to play rugby league again. 7 His Honour granted a verdict and judgment in favour of Mr McCracken for $97,500 made up as to $90,000 for general damages, $6,500 for interest on general damages and $1,000 for future out-of-pocket expenses (see McCracken v Melbourne Storm Rugby League Football Club and 2 Ors [2006] NSWSC 1250). His Honour rejected Mr McCracken's contention that he had suffered loss of earning capacity. 8 Mr McCracken appeals against his Honour's assessment of damages. The appeal was confined to a claim for past loss of earning capacity, that is, loss incurred by Mr McCracken prior to the trial (which took place between 14 and 22 February 2005). 9 The respondents, in turn, cross-appeal against his Honour's decision that Messrs Kearney and Bai were negligent (and, hence, Melbourne Storm was vicariously liable to Mr McCracken). It is desirable to address the question of liability first.

The cross-appeal 10 At trial, Mr McCracken adduced testimony of an expert, Mr Warren Ryan. Mr Ryan testified that players at "elite levels" of rugby league are taught by their coaches, "when they have caught an attacking player, to put him onto the ground forcefully to cause hard and bruising impact with the ground which will hurt and discourage the attacker". 11 Mr Ryan expressed the opinion that both Messrs Kearney and Bai, in executing the tackle on Mr McCracken, "used unreasonably dangerous methods which would be regarded by virtually all NRL coaches, NRL Judiciary and any experienced observers of the game as unreasonably dangerous and which the players (Kearney and Bai), given their training, skill and experience, could and should have avoided". He expressed the opinion that the actions of Messrs Kearney and Bai constituted unreasonably dangerous play. 12 Mr Ryan based his expert testimony on a video recording of the tackle, which was tendered in evidence. Hulme J said that, having regard to the video recording, he saw no reason to reject Mr Ryan's opinions or his appreciation of what the video recording showed. On the contrary, he said the recording revealed "many reasons to justify [the acceptance of Mr Ryan's opinions]" ([2005] NSWSC 107 at [22]). His Honour, nevertheless, decided the case largely by reference to his own impressions of the tackle as shown in the video recording. 13 His Honour took into account the fact that both Messrs Kearney and Bai were charged (in accordance with the procedures laid down by the Australian Rugby Football League) with, and pleaded guilty to, making a dangerous throw in effecting the tackle. The charges reflected s 15 of the ARL Laws of the Game which provided: "1. A player is guilty of misconduct if he: … (d) uses any dangerous throw when effecting a tackle".

The ARL Laws of the Game explained a dangerous throw in the following terms: "If, in any tackle of, or contact with, an opponent that player is so lifted that he is placed in a position where it is likely that the first part of his body to make contact with the ground will be his head or neck ('the dangerous position'), then that tackle or contact will be deemed to be a dangerous throw unless, with the exercise of reasonable care, the dangerous position could not have been avoided." 14 Hulme J observed that the guilty pleas of Messrs Kearney and Bai indicated an acceptance on their part that each of them did not exercise reasonable care. 15 The principal arguments advanced on behalf of the respondents at trial were that Messrs Kearney and Bai approached Mr McCracken from opposite sides and, although each tackled him virtually simultaneously, each was not aware of the other; each acted in accordance with the laws of the game and what occurred was an unfortunate accident. It was submitted that, having regard to the speed of the game, the time available for decision-making and the fact that hard tackling was an accepted incident of the game, there was no negligence on the part of the tacklers. 16 Hulme J remarked on the unusual height to which Messrs Kearney and Bai had lifted Mr McCracken before releasing him to the ground. The judge had no doubt that "lifting" was a "proper characterisation of what occurred" (at [31]). He said (at [32]): "The actions of [Mr Kearney] as depicted on the video are impossible to reconcile with his evidence that he simply could not correct himself in time during the course of the tackle". 17 His Honour said (at [34]) that a consideration of the video demonstrated that the movements of Messrs Kearney and Bai were not normal, and were not "to an appreciable degree unavoidable", as had been submitted on the respondents' behalf. His Honour said (at [35]): "[I]t is not necessary in preventing the forward movement of a player to deal with him as [Mr McCracken] was dealt with." 18 On appeal, similar arguments were advanced again on behalf of the respondents. At the heart of the submissions of Mr Sheldon (who argued this part of the appeal on the respondents' behalf) was the proposition that his Honour erred in finding that each of Messrs Kearney and Bai was aware of the other's presence. He submitted, further, that, even if they were aware of each other's presence, their awareness involved mere fractions of a second and occurred in other than perfect conditions for the assessment by the tacklers of the risk to which Mr McCracken was exposed. 19 Of course, Mr Ryan's testimony and the guilty pleas are relevant, but in the end, the issue of liability must be determined largely by this Court's impression of what the video recording reveals. This was shown to the Court both in real time and in slow motion. 20 Having seen the video recording, I agree entirely with Hulme J. From the recording I am left in no doubt whatsoever that the tackle constituted a gross infringement of the laws of the game and there was no modicum of care in the actions of Messrs Kearney and Bai. 21 In the circumstances, I would not uphold the arguments of the respondents in regard to the cross-appeal. 22 There are, however, aspects of Mr McCracken's claim in negligence that give rise to concern. For reasons that I shall mention, I do not think that the difficulties that I discern should be taken further. Nevertheless, it would be as well to note them. 23 The trial before Hulme J was divided into two parts. His Honour first dealt with the question of liability and delivered a judgment on that issue. Thereafter, the hearing continued with the assessment of damages and his Honour delivered a second judgment in that regard. 24 In his statement of claim, Mr McCracken alleged that the act of Messrs Kearney and Bai in tackling him "was intentional and done with intent to cause injury". Hulme J, in his reasons dealing with liability, referred to this allegation and said (at [3]) that it had been pleaded "[w]ith an eye to the provisions of [s 3B(1)(a)] of the Civil Liability Act [2002 (NSW)]". Section 3B(1)(a) provides that the provisions of the Act "do not apply to or in respect of civil liability (and awards of damages in those proceedings) …in respect of an intentional act that is done with intent to cause injury or death …". Apparently, Mr McCracken's purpose in asserting that the tackle was performed with intent to cause injury was to avoid the provisions of the Civil Liability Act that limit damages awards. 25 In fact, after the hearing on liability but prior to the hearing on damages, it became common ground that, because the place where Mr McCracken was injured was Victoria, the relevant law was that of Victoria and the Civil Liability Act did not apply. The parties accepted that the accident was governed by the Wrongs and Other Acts (Public Liability Insurance Reform) Act 2002 (Vic). At the commencement of his judgment on damages, his Honour recorded that the law of Victoria applied (see [2006] NSWSC 1250 at [3]). 26 The Victorian Act contains provisions that were notionally capable of application at trial, but it was common ground on appeal that they did not apply to Mr McCracken's claim for past loss of earning capacity. The only ground agitated in the appeal against the assessment of damages was his Honour's rejection of Mr McCracken's claim for this head of damage. Hence, as events have turned out, the allegation of intent on the part of Messrs Kearney and Bai was unnecessary and irrelevant. 27 Nevertheless, Hulme J found ([2005] NSWSC 107 at [26]): "[T]he actions of [Messrs Kearney and Bai], not only in tackling [Mr McCracken] but in lifting and upending [Mr McCracken], more or less to the extent it occurred, were intentional and done with the intent that he should fall heavily onto the ground."

In State of New South Wales v Lepore (2003) 212 CLR 511, Gummow and Hayne JJ said (at 602 to 603, [270]): "As Williams v Milotin [(1957) 97 CLR 465 at 470] makes plain, negligently inflicted injury to the person can, in at least some circumstances, be pleaded as trespass to the person, but the intentional infliction of harm cannot be pleaded as negligence [see also Cousins v Wilson [1994] 1 NZLR 463 at 468]." 28 It is not without significance that in McNamara v Duncan (1971) 26 ALR 584, a case involving an injury to a player during a game of Australian Rules Football, the player based his cause of action on trespass to the person (and not negligence). 29 During the course of the appeal, the Court drew the attention of the parties to what was said in Lepore but both Mr Sheldon and Mr Gross QC (who together with Mr Boyd appeared for Mr McCracken) indicated that it was common ground that the matter should be dealt with on the basis that, if this Court were not persuaded that Hulme J was wrong, the judgment in respect of liability should be upheld on the grounds of negligence. The parties did not wish the Court to take up the issue whether Mr McCracken's claim was based on an incorrect cause of action. That being so, I shall follow suit and say nothing more about the issue.

The fundamental issue in the appeal 30 Mr McCracken was born on 27 March 1970. He left school aged about 14 or 15. He completed an apprenticeship as a motor mechanic and also spent some time in building construction. After becoming a professional rugby league football player in 1991, he played in Australia at First Grade level. Towards the end of 1992, at the end of the Australian season in that year, he played for St Helens in the English Rugby League, the premiership competition for rugby league in England. He played for a number of clubs in Australia and signed a contract with Wests Tigers for the 2000-2001 season. He was captain during the 2000 season until his injury. During his career, Mr McCracken played about 163 First Grade rugby league games and 22 test matches for New Zealand. He was internationally known as a star player. 31 Prior to the spear tackle, it was Mr McCracken's intention to play with Wests Tigers until 31 October 2001, that is, until the end of the 2001 season. His Honour found that, but for his injuries, Mr McCracken would have played rugby league in England after the conclusion of the 2001 Australian season and would have entered into a contract with an English club to play for them until at least 31 October 2004. 32 By reason of his injury, Mr McCracken's capacity to earn income as a footballer was destroyed. His further amended particulars were in the following terms: "The plaintiff claims economic loss in respect of income as a professional Rugby League player for the period 12 May 2000 to 31 October 2004 …" 33 Hulme J found, in effect, that Mr McCracken's loss of income to be attributed to his inability to play rugby league after his injury was $762,000. His Honour thought that there should be a 10 per cent discount applied to this sum to allow for adverse possibilities that may have prevented him from earning the amount in question. 34 Of course, it was open to Mr McCracken to obtain gainful employment of a different kind during the period 12 May 2000 to 31 October 2004 and, in fact, he did so. During that period, Mr McCracken (who had been interested in property since his youth) retained, purchased, developed and sold property to a very significant degree and increased his income and asset position to a remarkable extent. It is by reason of the earnings that Mr McCracken received from his property transactions during the period in question that Hulme J considered that he had not suffered any loss of earning capacity. In the appeal, Mr McCracken challenges several of his Honour's factual findings and contends that he made a number of errors of law.

Mr McCracken's property dealings prior to the tackle 35 In the words of Hulme J ([2006] NSWSC 1250 at [47]): "The plaintiff bought his first property at age 18, i.e. in or about 1988. He carried on activity in this area during his football career. He said that while it took some time he could fit it in with playing football. He gave as an example that when sitting on a team bus going to Canberra he would not read the form guides as 90% of the people did but read the real estate section of the Sydney Morning Herald. He would also look at records of comparable sales. He described also looking at the rental rates per square metre, selling prices and capitalisation rates for commercial property and negotiating. He might have obtained building inspection reports. He said that he had invested almost all of his football earnings in real estate." 36 Mr McCracken was plainly a person of considerable energy and commercial ability. His Honour said (at [48]): "As an indication of the plaintiff's capacity to do other things while still pursuing a football career, it might be noted that for a period from about July 1998 to January 1999 he had a helicopter charter business. Although others operated the business, the plaintiff played some role. He also was in control of, and overseeing, the refurbishment and building works effected at the 'Wentworth Hotel' at Cessnock during the period October 1996 to February 2000. He oversaw the running of the hotel, visiting it in the order of twice a week." 37 At the time of his injury in May 2000, Mr McCracken owned or had agreed to buy five properties. They were eventually sold and the aggregate proceeds of the sales exceeded $7,500,000. Mr McCracken made an aggregate profit of $2,100,000 on these sales. 38 Hulme J found:

(a) At the time Mr McCracken was injured he had an appreciable measure of capital.

(b) Even while playing football, Mr McCracken had a capacity to earn significant income from land dealing or development.

(c) The profits derived from the realisation of the five properties were not in any sense due to the utilisation of an earning capacity in replacement for the loss of Mr McCracken's ability to earn money from playing rugby league.

Mr McCracken's property dealings between the time of the tackle and the trial 39 After Mr McCracken's injury he bought additional properties for himself and his wife and he arranged for properties to be purchased in the names of various companies that he owned or caused to be registered. 40 It was common ground, and Hulme J accepted, that all these properties were to be regarded as having been purchased by Mr McCracken, personally, and the profits derived from them were to be regarded as having been earned by him. It is, accordingly, unnecessary to identify the name of the particular purchaser of the properties. I shall proceed to set out the properties that Mr McCracken purchased in this way. 41 In July 2000, 57 Albatross Avenue, Mermaid Beach, a beachfront property, was purchased for $1,775,000 and the purchase was completed in January 2001. Mr McCracken developed this property by constructing a three-storey building, comprising three units, on it. Construction commenced in the second half of 2001 and took about 12 months. During this time, Mr McCracken acted as project manager and, for at least some of the period, was on site once a month. The units were sold for $6,500,000. On the basis of the sale of two units for $4,200,000, a profit of about $1,400,000 was declared. 42 In January 2001, a property was purchased in Port Douglas for $545,000. On 9 July 2001, it was resold for $590,000. 43 On 15 May 2001, the Triangle Shopping Centre on the Gold Coast was purchased for $2,870,000. It was sold about a year later for $3,600,000, realising a profit of about $500,000. 44 In October 2001, a property was purchased in Townsville for $1,700,000 and was sold for $2,500,000 in August 2004. 45 Also in October 2001 a property was purchased in Townsville for $3,200,000. This became known as the Watermark development. 46 In May 2002, a commercial building known as "Northtown on the Mall" in Townsville, containing a mix of retail and office space, was purchased. 47 In 2002, Mr McCracken acquired an option to purchase a beachfront property at Broadbeach. He sold the option shortly afterwards. Hulme J commented (at [74]): "Although at one stage he said that he had made a profit of about $100,000 on the transaction, when further cross-examined … he seemed to agree that he had made a profit of $500,000." 48 In August 2003, the Seaview Hotel in Townsville was purchased for $6,900,000. A few months later, the hotel, together with what was referred to as "confidential information", was sold. The hotel was sold for $7,500,000 and the confidential information was sold for $2,500,000. Hulme J said (at [75]) that this confidential information comprised "council applications, at least some preparation of development plans, and surveys etc in relation to a proposed development of 120 units on the property and adjoining premises and 'in-principle' agreements from adjoining landholders". The $2,500,000 was profit. 49 In July 2004, an option was acquired to purchase land in Mermaid Beach for $7,500,000. The purchase was effected in October 2004 and the property was resold for $9,000,000, completion occurring on 7 March 2005. 50 On 18 August 2004, Northtown on the Mall was valued at $15,000,000. Hulme J found that the profit from this property would be of the order of $5,000,000 or more. 51 In March 2005, Mr McCracken believed that the Watermark property would yield in excess of $10,000,000 in the ensuing nine months. 52 During the period in question, Mr McCracken appears to have had other plans to purchase property that did not materialise.

The trial judge's findings 53 Hulme J found that the skill and flair Mr McCracken demonstrated and the results he achieved in the field of land dealing and development reflected an income earning capacity "just as much as did his skill and results on the football field" (at [111]). 54 His Honour found that Mr McCracken had employed that earning capacity since 1996 and that, uninjured, he would have continued, while playing football, to purchase and develop land. In a crucial finding, his Honour held (at [114]) that since Mr McCracken's injury he had employed his income earning capacity in land dealing and development "far more than he did beforehand". His Honour found that that fact was at least in part due to the far greater time Mr McCracken had available (because he was no longer playing football) to devote to land dealing and development. 55 His Honour concluded that, after his injury, Mr McCracken's use of his capacity to earn from land dealing and development had been very profitable. His Honour pointed out that the profits included amounts in the order of $500,000 from the Triangle Shopping Centre, $5,000,000 or more from Northtown on the Mall, $2,500,000 from the Seaview Hotel and in the order of $10,000,000 from the Watermark. These amounts total some $18,000,000. The judge concluded that Mr McCracken had not suffered a relevant loss of earning capacity by reference to the profits derived from these four properties. 56 His Honour singled out the Triangle Shopping Centre, the Seaview Hotel and Northtown on the Mall as properties "productive of profits most likely to be a result of [Mr McCracken's] football injury and/or not to have been derived had he gone to England" (at [145]). 57 In regard to the Watermark, his Honour said (at [123]): "The time of purchase of the Watermark, October 2001, means that [Mr McCracken] may well have heard about and acquired it when he did. Its rental income means that [Mr McCracken] could probably have bought and held on to the property until his football career ended." 58 Nevertheless, the judge had no doubt that, during the relevant period, Mr McCracken devoted a significant amount of time and attention to the Watermark project. Moreover, on 29 June 2004, Mr McCracken sent an invoice to the company engaged in the redevelopment claiming an amount of $170,000 plus GST for "professional consulting services rendered for the period 1 September 2003 to date in regards to co-ordination of all necessary pre-construction tasks in relation to development project 'The Watermark', 72-74 The Strand, Townsville." His Honour observed (at [106]): "The invoice was raised on the suggestion of Mr Crofts, [Mr McCracken's accountant], for [Mr McCracken's] time, effort, skill and knowledge in putting The Watermark project together, although it was not Mr Crofts but [Mr McCracken] or his secretary who determined the amount."

Significantly, Mr McCracken acknowledged that this was not the first such invoice. 59 Other evidence also established, to the judge's satisfaction, Mr McCracken's extensive personal involvement in the four properties mentioned that led to the substantial profits they realised during the relevant period. 60 Senior counsel for Mr McCracken submitted to Hulme J that no extra earning capacity had been released by reason of Mr McCracken's injury. It was said that the extra time freed up was of no use to him. Although Mr McCracken may have had more time available through not playing football and that might have allowed him to indulge in more transactions, these could be good or bad and that was a matter of luck, and the end result, if successful, would be a capital gain. It was also submitted that architects, builders and others, and not Mr McCracken, carried out the vast bulk of the work of redevelopment. 61 His Honour rejected these arguments. He said (at [142] to [143]): "The plaintiff in this case had an income earning capacity in land dealing and development. Such a field of activity uses capital, albeit often borrowed but it also uses skills inter alia in judging what to buy, in deciding what to do with what is bought, in obtaining the funds with which to buy and at times re-develop, and in deciding who to employ to assist in these activities. Not all those who follow the road the plaintiff has are successful and to suggest that the plaintiff's success is simply due to capital gains, market movements, the labour of others and inflation is simply wrong and ignores the fact that it was the plaintiff who largely put these other elements or people together and more particularly made the decisions to purchase and otherwise deal with the properties. And even the contribution of capital may be considered of little weight if it is all borrowed. Although for obvious reasons he was unwilling to state it so baldly, it seemed to me that the substance of many of Mr Gross' submissions was that the plaintiff's success has been due to everything else but the plaintiff's skill and earning capacity. The proposition has only to be stated to be rejected." 62 His Honour's ultimate conclusions were stated as follows (at [146] to [149], [152]): "The question, so far as the period for which the plaintiff claims damages for loss due to the reduction in his football earning capacity is concerned, is whether his earning capacity in the field of land dealing and development has been productive of more financial gain that it would have been had his injury not occurred, and if so, either by how much or whether in an amount that exceeds the loss of football earnings. (In so stating the matter, I put to one side the onus of proof.) The conclusion at which I have arrived is that the plaintiff's earning capacity in the field of land dealing and development has been productive of more financial gain than the loss due to the diminution in his football earning capacity. Certainly, I am not satisfied both that it has not and that, looking at the totality of the plaintiff's income earning capacity, there has been, or will be, any financial loss. Thus the plaintiff, who carries the onus of proof, has not discharged it in respect of his claim for damages for a reduction in earning capacity. … I am conscious also that had he not undertaken the projects on hand towards the end of 2004, he would have been likely to pursue other projects in the post (expected) football period. Any judgment of whether the financial return from use of an income earning capacity in substitution for his lost football earning capacity has outweighed the latter has to take account of considerations such as these. Precision is not possible but I am satisfied that even when account is taken of these factors the conclusions I have expressed above are appropriate. I recognise also that insofar as I have been influenced by the thought that the plaintiff's absence in England might have reduced the likelihood of him buying some of the properties referred to, one must recognise that he may have purchased or dealt with properties there. I regard this consideration as having some weight but I would incline to the view that the chances of involving himself in a market new to him and one where he did not intend to remain for many years were much less than the chances of the activity that occurred. … Thus there should be a verdict for the Plaintiff in the sum of $97,500."

Mr McCracken's submissions on appeal 63 Mr McCracken's written submissions on damages were 69 pages long. It is difficult to state his contentions succinctly. It is sufficient to set out the grounds of appeal, and they are as follows: "1. His Honour erred in law: (a) in holding the Appellant bore an onus of proof that he would have purchased certain properties even if the accident had not occurred, and (b) in treating as a set-off in the Respondents' favour the potential gain from purchase of such properties. 2. His Honour erred in law and on the facts in deducting from loss of earning capacity by playing professional football, capital gains made by the Appellant on property development. 3. His Honour erred in law in failing to discriminate between the improvement in the Appellant's assets position from purchases of properties and the exercise of his earning capacity. 4. His Honour erred in failing to take account of: (a) the Appellant's capacity to improve his assets position from locating, purchasing, holding or selling property even if the accident had not occurred; (b) the value of the Appellant's earning capacity in relation to property acquisition even if the incident had not occurred. 5. His Honour erred on the facts in making an excessive allowance for the residual earning capacity of the Appellant following the accident. 6. His Honour failed to give adequate reasons for his decision."

The relevant legal principles 64 In considering the legal principles that are applicable to the assessment of the claim for damages in issue, the starting point is Graham v Baker (1961) 106 CLR 340. Dixon CJ, Kitto and Taylor JJ said in that case (at 347): "[A]n injured plaintiff recovers not merely because his earning capacity has been diminished but because the diminution of his earning capacity is or may be productive of financial loss. And if, notwithstanding such impairment, both his contract of employment and his right to ordinary wages continue, how can it be said that his impairment has resulted in any loss so far as his earning capacity is concerned?" 65 The words of McHugh J in Medlin v The State Government Insurance Commission (1995) 182 CLR 1 (at 16) must be borne in mind: "In Australia, a plaintiff is compensated for loss of earning capacity, not loss of earnings. In practice, there is usually little difference in result irrespective of whether the damages are assessed by reference to loss of earning capacity or by reference to loss of earnings. That is because 'an injured plaintiff recovers not merely because his earning capacity has been diminished but because the diminution of his earning capacity is or may be productive of financial loss'. Nevertheless, there is a difference between the two approaches, and the loss of earning capacity principle more accurately compensates a plaintiff for the effect of an accident on the plaintiff's ability to earn income. Earning capacity is an intangible asset. Its value depends on what it is capable of producing. Earnings are evidence of the value of earning capacity but they are not synonymous with its value. When loss of earnings rather than loss of capacity to earn is the criterion, the natural tendency is to compare the plaintiff's pre-accident and post-accident earnings. This sometimes means that no attention is paid to that part of the plaintiff's capacity to earn that was not exploited before the accident. Further, there is a tendency to assume that if pre-accident and post-accident incomes are comparable, no loss has occurred." 66 Mr McCracken's submissions, to a large extent, ignore that part of his capacity to earn that he did not fully exploit before the injury. 67 In Husher v Husher (1999) 197 CLR 138, Gleeson CJ, Gummow, Kirby and Hayne JJ said (at 147, [18]): "The financial loss occasioned by impairment of earning capacity is the loss of what (if there had been no accident) the injured plaintiff would (as opposed to could) have expected to have had under his or her control and at his or her disposal by exercising that capacity. We refer to 'control' and 'disposal' because what the plaintiff has lost are the financial rewards from work that are rewards the plaintiff would have been able to direct to whatever purpose or destination he or she chose." 68 These remarks are particularly apposite in the present case. They demonstrate that, as regards his past loss of economic capacity, the issue is whether, in the relevant period, Mr McCracken incurred a loss (in comparison with what he would have earned had he not been injured) after exercising whatever earning capacity he then had. This involves examining the financial rewards Mr McCracken derived from work that he in fact had under his control or at his disposal. As Professor Luntz in Assessment of Damages for Personal Injury and Death, (Sydney: LexisNexis Butterworths, 4th ed, 2002) at [5.2.6] remarks: "Where the plaintiff is only partially disabled, the damages to the date of trial are the difference between what would have been earned if the plaintiff had not been injured and what the plaintiff has now earned, or was capable of earning, less tax, in each instance." 69 In State of New South Wales v Moss (2000) 54 NSWLR 536, Heydon JA referred to the "two uncontroversial themes" running through the cases relating to the assessment of damages for injury to earning capacity referred to by his Honour at 551 to 552, [67] to [69]: "Thus, in relation to the first of these themes, in Paff v Speed (1961) 105 CLR 549 at 559, Fullagar J said that the 'usual method of proving damages under [this] head is by calling evidence to show what the plaintiff could probably have earned during the rest of his life if he had not been injured and what, if anything, he is now capable of earning'. The same is true where the defendant is seeking to demonstrate that the diminution of earning capacity is only partial. Barwick CJ, in Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649 at 657, said of a plaintiff who had been rendered almost a quadriplegic: 'He has lost his earning capacity, so far as the evidence goes, all earning capacity. In this connexion, however, too little attention it seems to me is paid to the possibilities which have and will yet open up for paraplegics and quadriplegics: but this ought to be the subject of the evidence and not of mere suggestion on the part of judge or advocate.' The first theme was stated with the qualification 'in general', because there is authority that in some circumstances over-elaborate evidence is unhelpful. In J K Kealley v Jones [1979] 1 NSWLR 723 at 734-735, Moffitt P said: 'Sometimes, particularly in a jury trial, evidence of some claimed prospective earnings but for injury may distract rather than aid quantification of loss. A jury may well make a better assessment of the loss of a young law student debarred by injury from becoming a barrister by evidence such as in Gilles' case [(1975) 49 ALJR 349] uncluttered by evidence of earnings made by selected leading senior counsel, with or without the aid of statistics as to success and failure rates of students and barristers, where such evidence is led in supposed aid of quantifying the lost opportunity of becoming leading counsel in the foggy future.' This approach may rest on a general recognition that 'the task of assessing damages in personal injuries cases should be kept as simple as possible': Jongen v CSR Ltd (1992) Aust Torts Reports 81-192 at 61,713 per Anderson J. The second theme in the authorities was summed up by Reynolds JA in Yammine v Kalway [1979] 2 NSWLR 151 at 155, as follows: 'in seeking to quantify his damages, a plaintiff could be well advised to offer [evidence of wage levels] in many cases; and likewise a defendant, in seeking to cut down the damage, might similarly be well advised to tender such evidence; neither, in the absence of such evidence, could complain, to the same effect, at any quantification arrived at. This, however, is far from asserting that in the absence of such evidence only nominal damages is appropriate. …[W]here a plaintiff has suffered a significantly disabling injury which obviously affects the range and nature of the work he can, therefore, perform, a tribunal of fact can, without specific evidence as to what other persons with that kind of disability can earn, make a judgment and assessment, on a percentage basis or otherwise, of the value of the lost capacity.' Where the plaintiff calls incomplete evidence and there is only a low award for diminution of earning capacity, it is difficult for the plaintiff to complain: Minchin v Public Curator of Queensland [1965] ALR 91 at 93; Giorginis v Kastrati (1998) 49 SASR 371 at 375." 70 As Fullagar J observed in Paff v Speed (1961) 105 CLR 549 (at 559), the usual method of proving damages for loss of earning capacity is by calling evidence to show what the plaintiff could probably have earned had he not been injured and what he is now capable of earning, the point being that it is for the plaintiff to show what, if anything, he remained capable of earning. 71 Sugerman JA explained this in detail in Adams v Ascot Iron Foundry Pty Limited (1968) 72 SR (NSW) 120 (at 132 to 133): "In many, if not most, cases of damages for personal injuries, damages are awarded in respect of a lost or diminished earning capacity of the plaintiff. In such cases loss of earnings in the past and prospective loss of earnings in the future furnish a guide to the measure of such damages. A plaintiff is frequently said by medical evidence to be unfit as a result of his injury for his former employment, but to be capable of doing other forms of work, eg light work with or without particular qualifications. If in such cases a question arises of the plaintiff's ability to find such other forms of work the problem is not one of mitigation of damages. It is really the plaintiff who is seeking to increase damages by establishing that he has been unable to obtain and in the future may not be able to obtain, or may only be able to obtain intermittently, work of the only kind of which he is capable. In this respect the onus of proof in the sense of the onus of satisfying the jury rests upon the plaintiff as part of the general burden which lies upon him of proving the extent of the damage he has suffered by reason of the injury. In some cases it is the defendant who seeks to introduce evidence by way of establishing that a particular employment, usually with the defendant himself as the previous employer, within the capacity of the plaintiff is available to him. The present is an example of such a case. In such cases the defendant is really denying, according to the circumstances, that the plaintiff's incapacity is as extensive as he claims or that his loss of earning capacity is aggravated by the impossibility of him obtaining employment within the limited capacity remaining to him." 72 In Medlin v State Government Insurance Commission, McHugh J (at 21) said:

"In Adams v Ascot Iron Foundry Pty Limited , Sugerman JA correctly pointed out that, where a question arises as to whether a plaintiff could have obtained employment that was within his post-accident capacity, the question is not really one of mitigation of damages. The plaintiff must prove that such employment is beyond his or her capacity 'as part of the general burden which lies upon him of proving the extent of the damage he has suffered by reason of the injury'." 73 These authorities demonstrate that the onus was on Mr McCracken to prove what, if anything, he was now not capable of earning. 74 Much of Mr McCracken's argument was directed to the proposition that the increase in his assets was caused by inflation of property values and the holding of capital assets by him. Mr Gross submitted that any profits derived in this way should not be taken into account when determining whether Mr McCracken's loss of capacity to play rugby league was productive of economic loss. 75 The following statement by Hutley JA in Government Insurance Office v Johnson [1981] 2 NSWLR 617 has long been accepted as setting out the relevant principles in this regard. His Honour said (at 627):

"Loss of earning capacity is the capital asset consisting of the personal capacity to earn money from the use of personal skills. This is not the same as earnings where the person concerned has capital. If a millionaire rentier is killed, under circumstances giving rise to an action for damages, his loss of earning capacity is not the value of the interest he collects. Examples can be indefinitely multiplied. Where a person has capital employed in a business, it is necessary to split his earning capacity from his income." 76 In Kschammer v R W Piper & Sons Pty Limited [2003] WASCA 298, Malcolm CJ (with whom Murray and Parker JJ agreed) accepted (at [152]) the following propositions in Luntz, Assessment of Damages for Personal Injury and Death:

"Where, in a particular business, the physical or intellectual exertion of the plaintiff does predominate, the loss of profits that results from the disablement should be attributed entirely to the injury, even though the capital invested would have contributed to the realisation of those profits. This is because, at least in the short term and subject to the duty to mitigate by employing a substitute, the capital has in effect been sterilised; it is rendered useless until the plaintiff can resume working it or deploy it elsewhere. Subject to an adjustment for tax in cases of income splitting, Spargo v Haden Engineering Pty Ltd (1993) 60 SASR 39 (FC), cited with approval in Husher v Husher (1999) 197 CLR 138 at [26]; Rauk v Transtate Pty Ltd [2001] Aust Torts Reps 81-592 (NSW SC) at [130], the loss for which damages are payable is the total diminution in the plaintiff's returns from the business that have resulted from the injury: cf Lee v Sheard [1956] 1 QB 192 (CA); Enston v Pardel (1957) 75 WN (NSW) 370 (FC); Fobel v Dean [1991] 6 WWR 408 (Sask CA) at 437-9. Similarly, if by contributing the labour to a partnership the plaintiff is able to earn more than would have been earned as an employee, damages are not limited to an employee's earnings, but the plaintiff may recover on the basis of the higher rewards to be expected by a partner." 77 I, too, would accept those propositions, which are consistent with Government Insurance Office v Johnson. Hulme J specifically referred to the cited passage from Professor Luntz's work and applied the principles there stated.

Some preliminary matters 78 Many of his Honour's findings are of primary facts and depend, to a significant degree, on his Honour's assessment of Mr McCracken's credibility, character and personality. 79 There is nothing to suggest that his Honour misused his position as trial judge or made findings "inconsistent with incontrovertible facts", or acted on "glaringly improbable evidence", or made findings "contrary to compelling inferences": see Devries v Australian National Railways Commission (1993) 177 CLR 472; Abalos v Australian Postal Commission (1990) 171 CLR 167; Fox v Percy (2003) 214 CLR 118. Generally, the evidence, in my view, amply supports his Honour's conclusions. 80 Mr McCracken's case on the assessment of damages is noteworthy for its paucity of evidence tending to show, had he not been injured, the period in which he would have been in England, what prospects he had of earning money from property development in England, and in Australia while in England, how he would have earned money from those sources (given that he was a stranger in the one country and would have been absent for some lengthy undefined period from the other), what kind of properties he might have bought, developed and sold, and what profits he was likely to have made. 81 The basic reason why his Honour dismissed Mr McCracken's claim for loss of earning capacity was that the evidence established that, during the relevant period, Mr McCracken earned far more than he would have had he not been injured. As I go on to explain, the evidence amply supports this conclusion.

Ground 1 of the Notice of Appeal 82 For the sake of convenience, I repeat that this ground avers that Hulme J wrongly held that Mr McCracken bore an onus of proof that he would have purchased the relevant properties even if the accident had not occurred, and wrongly treated the potential gain from the purchase of those properties (or some of them) as a set-off in the respondents' favour. 83 I have above expressed the view that the onus was on Mr McCracken to prove what, if anything, he was incapable of earning after he was injured. Hulme J did not err in holding that the onus was on Mr McCracken to prove that he would have purchased the relevant properties, even had he not been injured. This fact is but an element of Mr McCracken's post-injury earning capacity (and I repeat that the onus was on him to prove the diminution in that). 84 I have mentioned that Hulme J based his decision that Mr McCracken did not suffer any relevant loss of earning capacity by reference to the profits derived from four properties, Northtown on the Mall, Watermark, Triangle Shopping Centre and the Seaview Hotel. 85 Hulme J expressly acknowledged (at [148]) that "a number of the figures and evidence" on which he relied "encompass[ed] events beyond the period of [Mr McCracken's] expected football career …". The profits from Northtown on the Mall and Watermark materialised after 31 October 2004 (the date on which the period of the claimed past loss of earning capacity expired). The profits from these two properties were due to be realised shortly after 31 October 2004 and it is to be inferred that the vast bulk of those profits were produced by Mr McCracken's work and skill, and the work of others directed by him, during the relevant period. In the circumstances, the profits earned from these two properties were capable, after appropriate adjustment, to be used as a guide (as was done by Hulme J) in measuring Mr McCracken's earning capacity during the period that he would have played football had he not been injured. 86 The profits from Triangle Shopping Centre and the Seaview Hotel were received during the relevant period and the inference that Mr McCracken produced them by his own labours is compelling. 87 His Honour's approach was entirely orthodox and, in my view, cannot be faulted. In the circumstances, I would not uphold the first ground of appeal.

Ground 2 of the Notice of Appeal 88 I repeat that this ground, in effect, avers that Hulme J erred in law and on the facts, when determining Mr McCracken's loss of earning capacity, in deducting capital gains he made on property development from the earnings he would have achieved playing football over the relevant period. 89 After he was injured, Mr McCracken worked as a land developer. He treated property as a commodity to be bought, developed and sold. The evidence, as I have indicated, establishes that he did this successfully and earned substantial profits. 90 As I have noted, Hulme J found that over the relevant period Mr McCracken made in the order of $18,000,000 from the Triangle Shopping Centre, Northtown on the Mall, the Seaview Hotel and the Watermark. His Honour found that those profits were brought about, predominantly, by Mr McCracken's skill and work as a property developer. His Honour held that Mr McCracken began to earn a substantially higher income relatively soon after the relevant period (and this is borne out by, amongst other things, his and his wife's income tax returns). 91 His Honour said (at [131]): "Even if some of the profits should be regarded as attributable to the employment of capital or the engagement of others such as architects, I would nevertheless conclude that the major causative factor in the derivation of the profit was [Mr McCracken]. Looked at from another perspective he, and not capital, was the cause of the vast bulk of the profit. In the exercise of labour and skill that was an incident of [Mr McCracken's] earning capacity in land dealing and development, he made the decisions that led to the profits, including the decision to purchase, borrow, engage others, obtain plans and sell or redevelop." 92 Making reasonable allowances for the contribution made by the capital invested by Mr McCracken, and other contingencies, the profits earned over the relevant period far exceeded the approximately $760,000 (less 10 per cent for contingencies) that Mr McCracken would have earned from playing rugby league. In my view, the judge's methodology was appropriate and he did not have impermissible regard to capital appreciation. 93 I gained the impression from the argument advanced on Mr McCracken's behalf that it was being submitted that all profits from the properties should be regarded as capital gains. That is not correct. Mr McCracken was developing and trading in properties. That was his business and, for the most part, the profits he made were from his own intellectual and physical exertions in the course of his day-to-day business operations. 94 Mr McCracken led no evidence to support, directly, his contention that the income he earned from property development during the relevant period was derived from capital gains, and he made no attempt to quantify any capital gains that might in fact have accrued to him. The judge had to do the best he could on the evidence before him. To paraphrase Heydon JA in State of New South Wales v Moss, in the absence of appropriate evidence to support Mr McCracken's case in regard to ground 1, it is difficult for Mr McCracken, as plaintiff, to complain about the findings his Honour in fact made that are relevant to that ground. 95 I would not uphold ground 2.

Ground 3 96 Ground 3 asserts that his Honour erred "in law" in failing to discriminate between the improvement in Mr McCracken's assets position from purchases of properties and the exercise of his earning capacity. 97 As I have attempted to demonstrate, Hulme J did not so err. He was particularly conscious of the need to discriminate in the way ground 3 asserts that he should have and, in fact, his Honour did so. 98 Both in written submissions and in oral submissions it was submitted on Mr McCracken's behalf that his Honour erred in fact (that is, in addition to erring in law) in failing so to discriminate. Even though this was not a formal ground of appeal, I shall deal with it. 99 Hulme J made several general observations to the effect that Mr McCracken's property dealing activities after he was injured and before the trial were far more extensive than they would have been had he not given up playing rugby league. His Honour observed (at [108]): "General experience leads inevitably to the conclusion that the nature of [Mr McCracken's] activities was such that the obtaining of finance and the ability to regularly service it were vital. No doubt at times he relied on the assistance of others, including his accountant, but the importance of the topic and [Mr McCracken's] own evidence as to liking to be involved lead me to have no doubt that the obtaining of finance was something with which [Mr McCracken] regularly concerned himself and which occupied some appreciable amount of time." 100 Mr Crofts, Mr McCracken's accountant, agreed that since Mr McCracken stopped playing football he had been fully engaged in investigating and developing properties. 101 The evidence reveals that Mr McCracken's land dealings increased exponentially after his injury and, as I have mentioned, there was then a substantial increase in the income tax paid by him and his wife. The inference is that this was brought about by the additional time that Mr McCracken was able to spend on his property activities. 102 Hulme J reflected on the extent and frequency with which finance was sought during the relevant period and, in doing so, recorded some of Mr McCracken's borrowing activities that he gleaned from the documents. The identification of the letters written and received in this regard goes on for some three pages in his Honour's judgment. It is quite apparent from this material that, throughout the relevant period, Mr McCracken was heavily involved in obtaining, arranging and monitoring finance from various sources for his various projects. Mr McCracken's extensive personal involvement in this aspect of his various transactions is compelling testimony of the importance of his personal control and the need for him to be on the spot. 103 The evidence, generally, supports Hulme J's findings that Mr McCracken utilised his income earning capacity in the field of land dealing development far more than he did before the accident. 104 I shall now go to the four particular properties on which Hulme J principally based his conclusion. 105 Mr McCracken purchased the Triangle property when he said, "I was pretty desperate". This state of mind had been induced by his injury. Hulme J inferred that Mr McCracken was desperate because, after his injury, he was not able to derive any earnings from rugby league. This inference is compelling. 106 Mr McCracken appears to have devoted much of his energy, shortly after his injury, to making a profit from the Triangle Shopping Centre property. His Honour noted (at [121]): "The purchase of the Triangle Arcade was [Mr McCracken's] first venture into that sort of property and his remarks about his situation and motivation at the time of purchase certainly raise a question whether, had he not been injured, he would have acquired it. It is impossible to conclude that its acquisition was not, at least in part, a consequence of his injury." 107 Hulme J concluded (at [124]) that the dates on which Northtown on the Mall and the Seaview Hotel had been purchased (July 2002 and August 2003, respectively) "argu[e] against the likelihood of [Mr McCracken] then acquiring them". That is because, on his Honour's findings, Mr McCracken would probably have been in England at the time. His Honour found that the probabilities were that, had Mr McCracken not been injured, those properties would not have been acquired. The judge said (at [124]): "For there is not only the issue of him hearing about them. There are also issues such as the investigation of what they were and had to offer and, in the case of the Seaview, a preference which [Mr McCracken] acknowledged he had for being able to keep an eye on cash businesses. I doubt if [Mr McCracken] while in England could have done whatever it was that enabled the latter to be sold with the 'Confidential Information' that yielded or helped to yield the $2.5m profit. It is improbable that [Mr McCracken] could have put in train the redevelopment of Northtown on the Mall while resident in England and great doubts exist whether his lenders would have advanced the funds to an absentee developer." 108 His Honour (at [125]) concluded that, had Mr McCracken's football career continued, "probably neither would have been acquired and, even if either was, redevelopment of the one would not have commenced and the profit on the other not derived, until at the earliest [Mr McCracken's] return from England at about the end of 2004". His Honour then said (at [126] to [127]): "In any event, the plaintiff bears the onus of proof of showing that he has suffered loss through impairment of his earning capacity. In the circumstances of this case that involves persuading me that the probabilities are the opposite of those stated in the immediately preceding paragraph. Even if the conclusions there expressed are not positively justified, the plaintiff has failed to persuade me of the opposite. He has also failed to persuade me that the Triangle Arcade would have been purchased and its profit derived had his injury not occurred. The profit derived from the Seaview Hotel and the transaction associated with it is itself substantially in excess of what the Plaintiff lost through inability to continue playing football. So is the profit to be derived from the development of Northtown on the Mall. Of course, if one concluded that the plaintiff would have acquired Northtown on the Mall and merely deferred re-development of it, it may be only a case of profit being delayed not lost. However, the figures are such that even a delay in the receipt of profit would have a significant operation in off-setting the plaintiff's football income. And there is also the profit on the Triangle to be taken into account." 109 As regards the Seaview Hotel, Mr McCracken "operated the hotel with the management". In a letter dated 12 March 2004, Fleming Moynihan & Kay (chartered accountants) wrote to Mr McCracken's solicitors stating in regard to the Seaview Hotel: "[Mr McCracken] was responsible for the overall management of the Hotel operations whilst employing two (2) fulltime managers. Approximately 6 hours per week were spent working in this company of which has now ceased operations [sic]." 110 Mr Crofts said that the $2,500,000 selling price for the confidential information in regard to the Seaview Hotel represented, primarily, the fruits of Mr McCracken's expertise and labours. There is no evidence to the contrary. Hulme J (at [75]) observed that Mr McCracken had agreed that "a lot of work was done on the project". All this work was done after the injury and there appears to be no merit in the proposition that Mr McCracken could have produced the confidential information while playing football in England. The profit of $2,500,000 from the Seaview Hotel confidential information alone far exceeds the earnings Mr McCracken would have earned but for the injury. 111 As regards Northtown on the Mall, Fleming Moynihan & Kay stated: "[Mr McCracken's] role as sole director is to effectively act as the centre manager. He would work approximately 25 hours per week in this role and has two (2) employees to assist with the operations of the centre".

112 Mr McCracken testified, as regards Northtown on the Mall: "[A]ll management of the property is undertaken by myself, well not all management. I have people who work at the centre, so, I oversee it, I can, like, if there is [sic] queries of course the lady has to ring me and bounce questions of [sic] me and send me e-mails, whatever the case is, and I oversee all the management. I probably make the decisions, make the hard sort of calls, but the day to day management is done in-house on site" 113 Hulme J (at [92]) noted that, on 6 November 2004, Mr McCracken wrote to a finance house saying that $60,000 for "management costs" which comprised part of the "outgoings" were "not a present day expense, as all management of the property is undertaken by myself". His Honour inferred that Mr McCracken was the property manager, and there is no appeal from this finding. 114 Mr McCracken testified that he spent more than $3,500,000 in refurbishing Northtown on the Mall "over the last three years". 115 A letter of 26 July 2004, from Mr Vazey - a mortgage broker retained by Mr McCracken - contained the observation that Mr McCracken was "controlling the management of [Northtown] on the Mall from his office located on the first floor and [has] a very proactive hands on approach for the continuing success of the centre". His Honour (at [90]) remarked that Mr McCracken acknowledged, in his testimony, "that he could have given this information to Mr Vazey, saying that he liked to have involvement in anything he had". 116 The proposition that Mr McCracken could have done the work necessary for the development of Northtown on the Mall while playing rugby league in England (and looking after the many other property developments in which he was involved - which Hulme J did not take into account in assessing the relevant loss) is extremely improbable. 117 As regards the Watermark, in the course of cross-examination Mr McCracken was asked whether he remembered speaking to Mr Vazey in late July 2004. The following exchange occurred: "Q. And did you tell him that you had spent all your time over the past three years finetuning the [Watermark] project? A. No. Q. Did you tell him something like that? A. In a figure of speech, yes, maybe. Q. Because it was the biggest project you had ever been involved with at this stage? A. Yes. The only thing that I can't get is all my time. Yes, all my work time, that was one project. I don't have more than one thing really going at the one time. I just concentrate on doing one thing." 118 I have referred to the invoice that Mr McCracken sent, claiming an amount of $170,000 for "professional consulting services" rendered during the period 1 September 2003 to 29 June 2004. The professional consulting services were described in the invoice as co-ordinating "all necessary preconstruction tasks" in relation to the Watermark development project. As Mr McCracken acknowledged that this was not the first such invoice it can be inferred that Mr McCracken probably charged at a proportionate rate for the entire time that the Watermark was being developed. 119 Mr Crofts accepted that the value in the Watermark project was due to Mr McCracken's skill and experience and hard work and risk taking, along with other professionals acting under his control and direction. 120 Mr McCracken did not explain how he could have done all the work necessary for the Watermark project (and for which he charged) while playing rugby league in England. 121 Hulme J's finding that the profits from the Watermark would not have been earned had Mr McCracken not been injured is compelling, and there is no basis for the argument that his Honour erred in this regard. 122 Fleming Moynihan & Kay's letter of 12 March 2004 refers to other properties and the hours spent by Mr McCracken in managing them in the relevant period but these are properties to which Hulme J did not take into account when assessing Mr McCracken's past loss of earning capacity. 123 In my opinion, there was ample evidence that supported Hulme J's conclusion that the major causative factor in the derivation of the profits over the relevant period was Mr McCracken. In my opinion, his Honour did not err on the facts in this respect as Mr McCracken submitted.

Ground 4 124 I reiterate that ground 4 asserted that Hulme J erred in failing to take account of Mr McCracken's capacity, even if the accident had not occurred, to improve his assets position from dealing in property, and the value of that earning capacity. 125 Mr McCracken led no evidence to support directly his contention that, even if the accident had not occurred, he would have improved his financial position by dealing in property, and he led no direct evidence supporting the quantification of any such capacity. He led no evidence of the capacity he had to earn income from property dealings had he not been injured and had he played rugby league in England. Again, the judge had to do the best he could on the evidence before him and it is difficult for Mr McCracken to complain about the findings his Honour in fact made in this regard. 126 In any event, his Honour did take proper account of Mr McCracken's capacity to improve his assets position, had he not been injured. He did so by not having regard to the profits derived from several of the properties that Mr McCracken acquired, developed and sold during the relevant period. I consider that his Honour was generous to Mr McCracken in this respect.

Grounds 5 and 6 127 The fifth ground is that his Honour erred in making an excessive allowance for the residual earning capacity of Mr McCracken following the accident. 128 This ground merely repeats, in different words, the complaints made in the previous grounds. I would dismiss it. 129 The final ground is that his Honour failed to give adequate reasons for his decision. There is no substance in this ground, which I would dismiss. 130 I would dismiss the appeal with costs. 131 BASTEN JA: I agree with Ipp JA **********

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Wrongs and Other Acts (Public Liability Insurance Reform) Act 2002(Vic)

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