McDonald v FAI Insurance [1995] QCA 436

Court of Appeal (Qld)|1995-10-03|Before: Pincus JA, Thomas J, Williams J, Before Pincus J

On 3 October 1995 judgment was delivered increasing the amount of damages awarded to the plaintiff by $10,000 for the reason that in the view of a majority the learned primary judge should have applied the principle of Malec v. J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 C.L.R. 638 to assessment of the plaintiff's damages. It will be noted, however, that the reasons of the members of the majority differ in that Pincus JA was prepared to award damages for loss of earnings both before and after trial, whereas G N Williams J was of the view that only damages for future economic loss should be awarded; despite that difference an order was agreed upon. The dissenting judge, Thomas J, did not differ from the majority on any legal point, but rather on the application of the principle of Malec to the facts.

An indemnity certificate is sought on the basis that the appeal succeeded "on a question of law": see of the . To come within the section it is not we think necessary that the only matter in issue in an appeal be a legal question as opposed to a factual one; if the appellant's success is largely, or in substance, on a question of law that is enough to give rise to a discretion in the Court to grant an indemnity certificate. Here, there was perhaps a question as to whether the findings made by the trial judge properly read brought the principle of Malec into operation and there was certainly a question whether the evidence did so; but it would hardly be accurate to describe what was in issue as a legal question since there was really no dispute about the relevant law.

Separate reasons Pincus JA, Williams J concurring as to the result.

APPEAL ALLOWED. ORDER THAT IN LIEU OF JUDGMENT FOR $21,235.83 THERE SHOULD BE JUDGMENT FOR THE APPELLANT FOR $31,235.85 WITH COSTS OF THE ACTION AND THIS APPEAL TO BE TAXED.

CATCHWORDS: CIVIL - Damages - economic loss - finding by trial judge plaintiff unlikely to have been in employment in any event - application of Malec v. JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 C.L.R. 638 considered - assessment of award for loss of chance.

Solicitors: Butler McDermott & Egan for the applicant.

The essential point of this personal injury appeal is merely that, when discussing past economic loss, the primary judge found that it would have been "unlikely" that the plaintiff would have been in employment for certain periods between the injury he suffered and the trial. It was argued that a finding of unlikelihood of economic loss does not justify denying altogether an award under that heading. The details of the matter are to be found in the reasons of Thomas J.

I agree with the plaintiff's argument that the word "unlikely" implies in its context that, but for the accident, there was a chance, although less than an even chance, that the plaintiff would have had employment during the relevant period. Malec v. J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638, is authority for the proposition that when a court has to consider what an injured plaintiff's position would have been, in a financial sense, if the injury had never occurred, damages should be assessed on the basis of degrees of probability; that is so, even if there is thought to be a less than even chance of loss. In some respects it is not clear how far the doctrine of Malec goes. It is not applicable to findings of liability, but only to the assessment of damages; but as to some issues, it is not necessarily easy to draw a line between the question of liability and that of damages.

In a case of the present kind, however, that difficulty does not arise. Prima facie, the plaintiff is entitled because of the judge's finding to have an adjustment made in the damages, depending upon this Court's view of the degree of probability of loss. The circumstances of the case support rather than refute the notion that it was unlikely (rather than impossible) that but for the accident the plaintiff would have earned some more money, by working during the pre-trial period, than he did in fact then earn. The judge's conclusion about the plaintiff's condition was, in summary, that he experiences considerable pain in his lower back and neck as a result of his injury, although the injury does not prevent him, while his muscles are not in spasm, from bending to pick up loads and carrying some loads. The judge was satisfied that the muscle spasms had worsened and would continue and accepted an assessment of 5% disability - meaning 5% of the whole body. The plaintiff was a person who worked after his accident in a job requiring substantial physical exertion. He thought he lost that job because of his back problems, but the trial judge seemed to be doubtful whether that was the proper explanation for his dismissal.

I am of opinion that the word "unlikely" was used by her Honour accurately, with its ordinary meaning and not as meaning impossible or all but impossible; the reasons show every sign of having been, with respect, written with commendable care and attention to detail. The judge's reasons do not convey a view that the plaintiff would, had he not been injured, have had no significant chance of earning more than he did in fact earn between the injury and trial. I can see no particular ground for assuming that any different position would subsist after trial.

The plaintiff is a person with a poor working history and in relation to whom there is a number of substantial reasons for being sceptical about his earning capacity, injury or no injury. But on the findings as to the effects of the injury, it must have been an obstacle in the path of the plaintiff if he wished to obtain and keep employment and I cannot accept that the existence of that obstacle should be held to produce no financial loss. It is not possible, however, to make any useful calculations about the extent of the loss. I agree in the orders proposed by Williams J.

The question is whether nil assessments of past economic loss and future economic loss are sustainable in this case.

At the time of his accident in 1986, the appellant was a 32 year old man who over the preceding 12 years had worked only occasionally and intermittently for short periods and who was not able to suggest the amount of any earnings he had made.

On a few occasions after the accident he undertook work for reward and demonstrated thereby the existence of some earning capacity and of an occasional willingness to exercise it. The accident left him with some physical disability although it cannot be regarded as particularly serious or disabling. The only difficulties attributable to the accident are pain in his lower back and neck from a ligamentous injury. The muscles occasionally go into spasm, and this then causes considerable pain. He has a partial disability which has been quantified at 5 percent. His lifestyle and his habits are adversely affected by many other factors unrelated to the accident, including drug addiction and intermittent rheumatoid arthritis which involves swelling of his hands and ankles.

The most noteworthy exercise of his earning capacity occurred over an 18 months period in 1988-1989 during which he was continuously employed on work which included fairly heavy lifting. That employment ended not because of inability to perform the work but because he was dismissed. Although the circumstances of the dismissal are complex, the learned trial Judge does not in the end seem to have regarded its cessation as accident-related. It is to be noted that he was at that time a heroin addict and that he sought treatment for the addiction within a week of his dismissal from employment.

Similarly, in relation to his subsequent "pot-painting" activity, he did not claim to have ceased such work because of any consequence of the accident, but rather because it became non-economic to remain in that activity.

His earnings during the 8½ years between accident and trial were very low, but seem somewhat better than his pre-accident earnings. It was not suggested that he was entitled to any damages for economic loss in the period between the accident and the time when he first took work thereafter. He obviously sustained no damages during times he was employed. Notably, moving forward from the time of his employment, the evidence does not justify any finding that his disabilities from the accident were responsible for any cessation of work, or for his failing to seek or obtain other work.

It seems to me that the difficulties occasioned by the accident are relatively insignificant when compared with those from his heroin addiction, associated methadone programs and other problems including his rheumatoid arthritis. In an economic context, his lifestyle and attitude are relevant factors in both projections that the Court must attempt to make, namely of his prospects of earning money if the accident had not happened, and his prospects of earning money now that it has happened.

An assessment of an injured plaintiff's economic loss following an accident involves findings of hypothetical fact, whether the assessment is for pre-trial economic loss or for future economic loss. Each exercise involves the calculation "A minus B", where "A" is the amount that the plaintiff would have earned but for the accident, and "B" is the amount that the plaintiff is now capable of earning with the disadvantage of his injury. The only valid distinction between past and future economic loss is that there are fewer uncertainties in relation to the former,

"In neither instance can one know for sure that the plaintiff would have gone on working if there had not been the injury; but one can know that at least up to the date of trial work would have been available to the plaintiff, whereas one cannot be certain of this for the future." (Luntz Assessment of Damages for Personal Injury and Death 3rd ed. para. 5.1.3)

It would in my view be erroneous to treat an assessment of pre-trial economic loss as a "past fact" or an "event which has occurred" for the purposes of applying words used in Malec v. J C Hutton Pty Ltd (1991) 69 C.L.R. 638, 642-643. That case draws a distinction between, on the one hand, events which have occurred, and on the other, future and hypothetical events. The Court said:

Those words are not applicable to a determination by a court of pre-trial economic loss any more than they are to a determination of future economic loss. Degrees of probability must be taken account of with respect to both categories of damage. Indeed in the case like the present it might be preferable to make a single assessment of all prospective economic loss following the accident. The usual purpose in assessing such damages in separate categories is to ensure that the Court takes advantage of the greater accuracy that is usually possible in assessment of damages over the pre-trial period. That advantage is illusory in the present case.

The proportional approach under which the Court assesses the degree of probability that an event would have occurred, or might occur, and adjusts the damages to reflect this, is therefore necessary with respect to any assessment of economic loss in the present case. The assessment of such damages is an example of the assessment of damages for loss of a chance (cf. Luntz above, paras. 1.9.5, 1.9.6). In the area of assessment of damage, as distinct from determination of liability, there is a positive need for giving effect to speculative possibilities. Malec recognises this. Further statements have been made in the High Court on the question of assessment of damages for loss of a chance including the Commonwealth v. Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 C.L.R. 64, 118-126; and Sellars v. Adelaide Petroleum NL (1993-1994) 179 C.L.R. 332, 355-356. In Amann Deane J observed that the subject required a pragmatic approach and noted the difficulty, adverted to in Hadley v. Baxendale [1854] EngR 296; (1854) 9 Ex. 341 (156 E.R. 145), that rules for assessing damages (in that case for breach of contract) are not rigid rules of universal application, but are "prima facie rules which may be displaced or modified whenever it is necessary to do so in order to achieve a result which provides reasonable compensation ..." without imposing undue liability upon the other party.

In Sellars above, the Court was concerned with assessment of damages for deprivation of a commercial opportunity. The Court observed:

"... the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities."

The present case lies close to the marginal area where a nil assessment is justifiable. When a plaintiff is shown to have had at least some earning capacity, and to have suffered

some physical disability from an accident which might be expected to make the maintenance of employment somewhat more difficult, it is usual to make some allowance for economic loss. Matters of degree are involved, and here there are additional factors operating that make it close to dangerously speculative to say that the consequences of the accident (as distinct from other factors) are likely to have any effect upon the exercise of his earning capacity.

It is helpful to see assessments of this kind as part of a wider spectrum of marginal cases such as those where appropriate proof is lacking, cases where the evidence leaves the Court in such a state of speculation that either nil damages or low damages are the result, through cases where the issues are of their very nature incapable of precise proof and the Court does the best it can on the available material.

In a case where damage is capable of precise proof, and a plaintiff fails to produce such proof, no assessment (or a nil assessment) will be made (Sunley and Co. v. Cunard [1940] 1 K.B. 740, 747; Woodham v. Rasmussen (1953) St.R.Qd. 202, 215; Holmes v. Jones [1907] HCA 35; (1907) 4 C.L.R. 1692, 1703, 1717; Ted Brown Quarries v. General Quarries (1977) 16 A.L.R. 23 37). In cases where some loss has apparently been suffered but the plaintiff has failed to take the trouble to produce evidence that would reasonably be expected to be available, no more than a very conservative estimate of damages will be made (Minchin v. Public Curator (1965) A.L.R. 91, 93; Ashcroft v. Curtin [1971] 3 All E.R. 1208; Aerial Advertising Co. v. Batchelors Peas [1938] 2 All E.R. 788, 796). This may be contrasted with the familiar exercise of assessing damages upon issues which of their very nature are incapable of precise proof, such as future economic loss, and, quite frequently, past economic loss, where the Courts do the best they can on necessarily imprecise matter. (Malec (above); Chaplin v. Hicks [1911] 2 K.B. 786, 795; Wheeler v. Riverside Coal Transport [1964] Qd.R. 113, 124; Biggen and Co. v. Permanite Ltd [1951] 1 K.B. 422, 438; Dessent v. The Commonwealth [1907] ArgusLawRp 96; (1977) 13 A.L.R. 437, 447). Even in cases of that kind a plaintiff is expected to place before the Court the essential facts upon which the necessary inferences and projections are to be made. There is no difference in the approach of the Courts according to whether the case is based on contract or tort. In all cases the extent of proof required depends upon the nature of the issue to be proved.

In the present case, when one turns to the equation "A minus B", one has to deal in generalities as there is nothing specific to go on. His earnings but for the accident were likely to have been very, very low. Similarly his earnings with the disabilities sustained in the accident are still going to be very, very low. Are they going to be any lower than they would have been without the accident? The best answer to this is probably not, but they might be.

I do not think that any principle in Malec or Sellars requires that there must be a positive assessment in circumstances as speculative as these. In view of the other factors operating in this plaintiff's life the accident-related physical problems will not, except upon the most remote and unlikely conditions have any measurable effect upon the exercise of his earning capacity. His entitlement to damages for this is in my view a theoretical one only. There comes a time when a remote chance of a small loss should be regarded as a nominal loss only.

Giving due respect to the approach of the learned trial Judge, it would in my view be incorrect to substitute a positive assessment in these circumstances. An award of say $5,000 under each head would be well above a nominal level, and might be interpreted as this Court's indication of the level of damage below which it is unsafe to go whenever moderate physical injury is caused to a person who has some slight earning capacity. But of course each case must depend on its own facts. I do not think that Malec requires a positive assessment in circumstances as marginal as the present. It is true that he had, and has, an earning capacity of some value, but it is not shown any real prospect that this accident will cause the loss of any opportunity to exercise it.

If one asks in the present case "Is there any evidence that but for his accident-related pain he would have done more work in the 8 years since the accident than he has in fact done?" The answer is that there is no such evidence and no inference to such effect is even slightly open. If the answer had been "Yes" I should have held that there should be an assessment under both heads, albeit at quite a small level. However on the evidence in the present case his potential loss must be regarded as so trivial and speculative that it was appropriate for the learned trial Judge to make a nil assessment of economic loss.

The appellant, the plaintiff in the action, appeals against the decision of the learned trial Judge not to award him anything for past and future economic loss in the assessment of damages relating to injuries he sustained in a motor vehicle accident on 27 October 1986. A number of relevant findings were made and in the circumstances it is desirable that the relevant reasons of the trial Judge be set out, albeit at some time length:

"The plaintiff's employment history, as his counsel conceded, was not spectacular before the accident. It has been less than spectacular since then, apart for a period of about 18 months. He trained for four years (between 1969 and 1973) at the Melbourne College of Design and obtained a certificate in advertising and display. After leaving the College the plaintiff worked for some short periods in Melbourne as a rouseabout and in a few small businesses, moving around until he settled in Bundaberg between 1976 and 1980. There he was unemployed for periods, working occasionally for market gardeners with some intermittent involvement in screen printing. There he also met two brothers, Nick and Steve Ridley, who operated Fads Designs Pty. Ltd, which conducted a screen printing business.

In 1980 he moved to the Sunshine Coast and worked in setting up and operating a business at Eumundi for Fads Pty. Ltd., which was also associated with the Ridleys and of which the plaintiff was a director. He then believed he also had an interest in that company. Its business involved painting and decorating sandshoes which were sold to national retailers and overseas. The business seems to have been most successful, but the plaintiff was paid only about $50 per week as well as being provided with accommodation and living expenses. At some point the factory employed up to 22 workers, none of whom was paid more than nominal wages. However, the business slowed and the Ridley brothers asked him to leave. A secretary advised him to seek legal advice but he did not do that, and from about late 1983 was in receipt of unemployment benefits.

The plaintiff is also a drummer and in early 1986 joined a band known as "Trax" which was only sufficiently successful to earn him about $30 to $40 per week. He was on his way to a band rehearsal when the accident occurred.

... The plaintiff's association with the band ceased sometime in 1987. He said he decided to leave the band because his neck and lower back were still sore and the physical activities involved in moving band equipment and sitting for long periods at his drum set, caused him considerable pain and discomfort which made him very tired. He was called back to Melbourne in mid 1987 as his brother was extremely ill. I was not persuaded that the plaintiff would have continued with the band if he had not been injured, or that the pain and discomfort so caused before mid 1987 resulted in any loss of income. He was in receipt of social security benefits from May 1987 to March 1988. During the period, from when he left the band to March 1988, and while he was relaxed, he said, he was relatively pain free although the pain flared on occasions. The plaintiff said he did not seek medical treatment during this period because he did not experience any real problems except when stressed or overworked. If the plaintiff experienced no pain between about May 1987 and December 1988, the evidence of the orthopaedic surgeons and a physiotherapist suggests it would have been likely that the soft tissue injury had resolved, and that heavy manual work and lifting associated with the plaintiff's employment during 1988 and 1989 caused the problems of which he now complains. Having regard to Dr Keays' assessment of the plaintiff I accept the plaintiff's evidence that he suffered some periodic pain between February 1987 and November 1988, and that he was required to take anti-inflammatory drugs and analgesics at various times during this period.

He found employment on 10 March 1988 with Briner Ads Pty Ltd at Cheltenham in Melbourne, as a screen printer, and quickly became the foreman of the screen printing section where he trained four apprentices and supervised the work of between four and six labourers. He said the work was very physically demanding and required the lifting weights of 40 to 50 kilograms which caused him pain in his back and extreme tiredness.

... He suggested he was dismissed on about 21 June 1989 because he refused to work the double shifts.

On 1 July 1989 he was hired as the foreman of a screen printing shop in Melbourne operated by Gadsden Pty Ltd where he supervised one apprentice and one labourer in one of its smaller shops. The work was similar to that at Briner Ads, and physically as demanding. He hoped he would be transferred to the company's art department, but as part of company policy he was required to undergo a physical examination, which he managed to delay until about December 1989. He mentioned his back trouble during the medical examination. He was then dismissed. The plaintiff said he believed he was sacked because his back problems had then come to his employer's notice. But at least one supervisor was quite critical of his work.

However the plaintiff had become a heroin addict while he was in Melbourne in 1988 and 1989. It was not suggested that his addiction was caused by the injury sustained in 1986 or that it contributed to his addiction. He had used soft drugs since he was about 18, and by the last 3 or 4 months of 1989, while he was working for Gadsden Pty Ltd he was taking about 1 or 2 grams of heroin per day, which he said he paid for with his wages and with what other people had given him. A week after his dismissal from Gadsden Pty Ltd he sought treatment for the heroin addiction from Dr. Fox in Melbourne, and began a three year Methadone programme. Between December 1989 and May 1990 he saw Dr. Fox 16 times complaining 14 times of withdrawal, aches and pains and only on 2 occasions of back pain. He was then sufficiently ill that he would have been unable to work for wages.

... From about May 1990 he was treated at the Nambour General Hospital for his addiction. He remained on the Methadone programme for a further two and a half years. Both he and Miss Fleming believe he could have worked part-time during part of that period. However he was suffering from the aches and pains, insomnia, loss of libido and other problems relating to his drug addiction.

... It seems he is also addicted to Valium. Although I accept that while working at Briner Ads Pty. Ltd. and Gadsden Pty Ltd he suffered pain related to the soft tissue injury exacerbated by heavy lifting, the effect of his heroin addiction was such that while undergoing the Methadone programme, he suffered from headaches, unsteadiness and some of the pain he experienced in his back was related to his withdrawing from the use of heroin and Valium. He also suffered from problems with his bowel, frequency in micturition and in early 1993 rheumatoid arthritis was diagnosed.

When he was again examined by Dr Keays in October 1990, x-rays revealed a small fleck of calcification in the posterior longitudinal ligament at the level of the L4/5 disc which Dr Keays said confirmed the possibility of ligamentous injury. Dr Keays then assessed the plaintiff's permanent physical impairment at 5%, and confirmed this assessment again in 1992, when he recommended the plaintiff avoid aggravating activities and undergo a program of strengthening and stretching exercises. He received physiotherapy for his back on numerous occasions in August and September 1990, November 1991, April 1992 and from August 1992 to November 1992.

Susan Fleming and the plaintiff lived for three years at North Arm, Yandina until moving to Maroochydore in December 1994. He has been on social security benefits since Gadsden Pty Ltd dismissed him. Between 3 May 1987 and 23 August 1993 he received benefits amounting to $47,618.30.

... Since returning to Queensland, the plaintiff and Susan Fleming have supplemented their social security benefits by painting pottery and garden pots which they sell at local markets. They decorate these at home where the plaintiff works at two work benches, one at which he can sit and the other at which he can stand while working. He said he avoided lifting the larger size pots of about 18 inches in width and about 16 inches in height. He frankly conceded that he is able to bend his back explaining that most of the pots weighed probably only about half a kilo and that he was not greatly restricted in lifting them and that most of his movements were quite normal, as it was only when his back flared up that he had trouble.

... He lifts the larger pots which the couple decorate and admits most of his movements are "quite normal". Video tapes of him taken of him at home in October 1993 showed him bending at the waist while picking up or working with pots of various heights, lifting pots of dimensions up to 18 inches in diameter and 12 inches high and carrying those up about 5 steps into the house. Both the plaintiff and Ms Fleming suggested those pots were quite fragile, not being as heavy as the Australian-made ones and that Ms Fleming carried the heavier pots. A video taken of him at a market in July 1994 showed him carrying a cardboard carton of pots and repeatedly bending to put those cartons weighing about 8 to 10 kilograms onto the back of a sedan vehicle, as well as dismantling a stall and loading the poles, bench and trestles on to the car. The plaintiff then moved and bent freely without any apparent restriction, which he said he could do on good days. The plaintiff's movements as shown on the video tapes, according to both orthopaedic surgeons who gave evidence, confirmed there was no organic evidence of the back problem which might indicate that there did not appear to be anything wrong with the plaintiff's back, but that in these types of injuries his pain would be a subjective thing.

The plaintiff's evidence of his ability to move and carry the pots prior to the last few months was overall consistent with what was seen on the video tapes, and I accept that he attempted to be frank and truthful about his ability to move and bend in lifting and carrying the pots. Having regard to the days spent in keeping him under surveillance, I accept he was generally a truthful witness and when his muscles are in spasm that he suffers considerable pain.

... However, I am satisfied on the balance of probabilities that he does experience considerable pain in his lower back and neck as a result of the injury sustained in the accident. Although the injury does not prevent him, while his muscles are not in spasm, from bending at the waist to pick up gardening pots and other implements, or prevent him from carrying some loads, stretching or other physical activities involved in the enterprise conducted by him and Susan Fleming, I am satisfied on the balance of probabilities that these spasms though episodic, have worsened and will continue and are the result of the ligamentous injury suffered in the collision of 1986. Accordingly I accept the 5% assessment of his disability.

... The plaintiff denies he is "work shy" and claims to have worked consistently with or for other people whether he is paid or not. He says it is difficult to find employment as a screen printer in the Sunshine Coast area.

The plaintiff has not been in full time employment for wages since December 1989. In the 1988 tax year he earned net wages of about $4,961 from Briner Ads Pty. Ltd, and in the 1989 year net wages and accrued leave of about $22,719. His net wages for his six months' employment with Gadsden was about $9,620. Between 25 July 1993 and 18 September 1994 he earned $1619 selling pots and other goods at local markets. He and Susan Fleming have not earned any income from those activities since then as the plaintiff says they have insufficient funds to purchase raw materials.

In considering whether he has or will suffer any economic loss I have taken into account the plaintiff's work and health history, his desire to live on the Sunshine Coast while understanding it offers little work for screen printers, and the fact that he has not attempted to obtain screen printing or other work for wages commensurate with his skills and health. His lifestyle, his work history, the effect of his addiction in the past and his rheumatoid arthritis indicate that it would have been unlikely that he would have been in employment even part time for wages while he was on the Methadone programme or that he would have sought part time or full time employment since coming off that programme, even if his lower back had been free from pain. I am not persuaded having regard to those matters and the level of benefits he has received that he has suffered any past economic loss as a result of his injury, or that the soft tissue injury, rather than his lifestyle and other health problems, has impaired his earning capacity in the future."

It is clear from those findings that the learned trial Judge considered that many of the appellant's present problems were due to conditions not related to the injuries he sustained in the accident. Further, notwithstanding the injury to his lower back he was virtually in continuous employment from 10 March 1988 to 18 December 1989, and during that time he carried out heavy lifting work. That clearly demonstrates that prior to the complications associated with his subsequent heroin addiction he was able to do heavy physical work when properly motivated.

Counsel for the respondent in his submissions pointed out that all of the basic findings made by the learned trial Judge in the extended passage quoted above were clearly justified on the evidence; indeed, counsel for the appellant did not seriously challenge any primary finding of fact.

The case for the appellant was based on the reasoning of the High Court in Malec v. JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 C.L.R. 638, and it is necessary to refer to the reasoning therein. The critical passage in the judgment of the majority (Deane, Gaudron, and McHugh JJ.) is to the following effect:

"A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. Hence, in respect to events which have or have not occurred, damages are assessed on an all or nothing approach. But in the case of an event which it is alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high - 99.9% - or very low - 0.1%. But unless the chance is so low as to be regarded as speculative - say less than 1% - or so high as to be practically certain - say over 99% - the court will take that chance into account in assessing the damages. Where proof is necessarily unobtainable, it would be unfair to treat as certain a prediction which has a 51% probability of occurring, but to ignore altogether a prediction which has a 49% probability of occurring. Thus, the court assesses a degree or probability that an event would have occurred or might occur, and adjusts its award of damages to reflect the degree of probability. ... The approach is the same whether it is alleged that the event would have occurred before or might occur after the assessment of damages takes place." (642-3)

Brennan and Dawson JJ agreed "with the general thrust of the reasoning" of the majority but expressed the view that it was "undesirable for damages to be assessed on the footing of an evaluation expressed at a percentage." (640). They went on to say:

"We should add that we would not favour the use of the term 'probability' to describe the possibility of occurrence of a situation when the possibility is minimal."

The problem in Malec arose because the Full Court found that it was "likely" that, independently of the defendant's negligence, the plaintiff would have been unemployable by the relevant date and suffering from a similar neurotic condition to that which was precipitated by his accident.

In this case the learned trial Judge used the term "unlikely" in the last paragraph of the reasons quoted above, and it is the use of that term which, according to counsel for the appellant, gives rise to the error. It is said that the use of that term demonstrated that, but for the injuries resulting from the accident, "there remained a possibility that the plaintiff would have exercised his earning capacity". That submission is said to apply both to the past and the future.

In the course of oral submissions counsel for the appellant conceded that the evidence did not demonstrate any earning capacity during the period of heroin addiction, and in consequence no award should be made for the period from December 1989, when the appellant was dismissed from Gadsden, until the end of 1992, by which time he was fairly well rehabilitated. Further, it was conceded that, on the evidence and in the light of the findings of the learned trial Judge, no economic loss was proved prior to the appellant commencing work with Briner in March 1988. That meant that the claim for past economic loss was limited to the period 1 January 1993 to the date of trial, namely 18 May 1995.

It is during that period that, in accordance with the findings made by the learned trial Judge, the appellant has lived at Yandina and Maroochydore earning small amounts from painting pottery and garden pots for sale at local markets. There is also a clear finding that he has not sought any more remunerative employment during that period. Having regard to the whole of the reasons of the learned trial Judge it seems clear that she concluded that the appellant, for reasons not associated with his back condition, decided not to seek remunerative employment but to live according to his chosen lifestyle surviving on social security benefits. Though the term "unlikely" was used, the reasons indicate that a finding was made that, for reasons not associated with the subject injury, the appellant had elected not to seek remunerative employment during the relevant period. His accident related medical condition has not caused any economic loss to date. Thus so far as the past is concerned the findings exclude even the chance of economic loss resulting from the accident related medical problems. In those circumstances damages do not have to be assessed on the Malec principle for loss of a chance. There is simply no evidence to support the inference that, but for the appellant's accident related medical problem, he would have earned anything more than he has in fact earned to date of trial.

It follows that the appeal must fail so far as it is related to the pre-trial period.

The learned trial Judge did not give extensive consideration to the future when considering the issue of economic loss. She merely indicated that she was "not persuaded ... that the soft tissue injury, rather than his lifestyle and other health problems, has impaired his earning capacity in the future."

The plaintiff was born on 18 August 1954, making him 32 at the date of the accident and now almost 41. He lives in a de facto relationship, and there was no suggestion that he has any persons dependent on him. One would ordinarily conclude that a person of his age as at the date of trial had some 20 year's working life ahead, but given this appellant's general medical history that would have to be significantly discounted in his case. Relevantly he has in consequence of the injuries he sustained in the accident a 5% permanent physical impairment because of a ligamentous injury to his back. Further, there is the express finding that he experiences considerable pain in his lower back and neck as a result of the injury. He also experiences muscle spasms, which are episodic, and which do limit him in such activities as lifting and bending. These injuries did not totally destroy his future earning capacity and the learned trial Judge has not made a contrary finding. But they certainly have limited the range of job opportunities available to the appellant were he motivated to find gainful employment. Even if one were to discount his future working life expectancy by 50% because of his medical problems not associated with the accident, one is still left with an approximate 10 year period during which he has a working capacity limited by the consequences of the injuries sustained in the accident. If he were motivated to seek gainful employment and change his current lifestyle, say because social security payments to him were stopped, he would not be able to earn as much as he otherwise might have been able because of the accident related disabilities.

In my view the learned trial Judge erred in not recognising that as the loss of a chance of earning income in accordance with the principle derived from Malec.

Given the appellant's clear preference for his current lifestyle, and the other matters relevant to economic loss referred to in the reasons given by the learned trial Judge, the prospects of his deciding within the next 10 years to exercise his capacity to earn income are not great, but that is offset to some extent by the fact that, being unskilled, most available jobs will require a degree of physical exertion and that is where he is most significantly disabled.

As the High Court recognised in Malec the assessment of economic loss in such a situation is neither scientific nor a mere matter of arithmetic calculation. One cannot realistically measure the loss in terms of a number of dollars per week over a particular period. The assessment must be a global one which reflects all of the matters referred to in the reasons for judgment of the trial Judge.

Doing the best I can I would assess future economic loss in the sum of $10,000.

The appeal should therefore be allowed and in lieu of judgment for $21,235.85 there should be judgment for the appellant for $31,235.85 with costs of the action and this appeal to be taxed.

At a glance

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Decision date

Before

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Source

Catchwords

Judgment (72 paragraphs)

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Cases Cited (1)