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[2003] VSCA 114
Court of Appeal (Vic)
2003-08-22
PHILLIPS and EAMES, JJ.A. and WARREN, A.J.A.
Original judgment source is linked above.
Accident compensation - Transport accident - Jury verdict for pecuniary loss and general damages - Interest payable only on damages for past loss of earnings - Amount awarded for such past loss fixed by judge - Whether properly fixed - Transport Accident Act 1986 s.93(11), (15).
"(15) A court must not, in relation to an award of damages in accordance with this section, order the payment of interest, and no interest shall be payable, on an amount of damages, other than damages referable to loss actually suffered before the date of the award, in respect of the period from the date of the death of or injury to the person in respect of whom the award is made to the date of the award."
Thus, interest was allowable only on damages referable to past loss[1] - in this case past loss of earnings. The judge was therefore invited by both counsel to fix the amount on which interest should be paid. Her Honour then fixed that sum at $118,423.56.
(1) As for the past, the claim commenced on 22 May 1997 because during the first 18 months after the accident the respondent had been paid for her losses (under the Act). Based on the average of the four pay slips which had been tendered in evidence, her earnings would have been at the rate of $429 per week, to which had to be added 8% for employer-funded superannuation. Had the respondent been earning at that rate for six months of the year, the total would have been $46,795, from which there had to be deducted $12,939, the amount which the respondent had earned quite recently from delivering pizzas. Counsel then said that something further should be added to take into account the fact that the original income figure of $429 per week was "back in 1995 and there have been increases since then up to now"; for that, he suggested adding another $7,000 or thereabouts. The result, about $40,000.
(2) As for the future, counsel said that he worked "on the assumption that she [now] has no capacity to do any casual work at all". Earnings for casual work, for six months in the year, were, according to the evidence, $504 per week after tax, to which had to be added employer-funded superannuation. The result, when averaged out over the span of 12 months, came to approximately $282 per week which was, as counsel put it, "in yearly terms what [the respondent] would have earned on a six month basis today if she was working casual at [Seppelts]". Mention having been made of her working until age 55 or 60 or 65, appellant's counsel took the multiplier appropriate to age 60, which was 765 and produced a figure of $215,730 - or, after discounting by 15% for vicissitudes, $183,000. Appellant's counsel wrapped up the submission to the jury thus: -
"So what proportion of her work capacity do you think she has lost by reason of the aggravation, what proportion of it? She cannot do repetitive work, cannot do heavy lifting, she cannot sit in one place for long periods of time. How do you factor that into your overall figure? Do you say that means that she has lost a work capacity of 25 per cent of the overall figure, 50 per cent, a third? It is entirely a matter for you."
Suggesting that the respondent had lost one-third of her overall capacity, appellant's counsel put the figure for future economic loss at "just over $60,000". In total, therefore, appellant's counsel suggested, for pecuniary loss, "something in the order of $100,000". And he put the like figure for general damages.
"Now, they are different because their wages are not entirely identical. If we move from A through to C, above the first one you could put Judith Smith, employee A is Judith Smith. Employee B is Stanley Payne. Employee C is Kim Lowe/Smith, married name and single name. Now, again, these figures, they run the same way. They are just calculations done of the past loss, the future loss, past super, future super, take 15 per cent off down there and you get to those figures. Principally why they are different is that as you have heard from the lady on the video link, Kim Lowe, that is employee C, she is now supervisor. So she has gone on and got herself promoted and so forth and so there is a difference as there is [in] any workplace. Some people do better than others. All we are trying to do is to give you a bit of an average sample, if you like, across three employees. Now, the defendant may say, well, look, that is unfair to us because they are now permanent people and Natasha [the respondent] may not have been a permanent person. Well, so what? I mean, it is really just to give you some assistance in relation to that, but why would she not have had as much chance as anyone else to get herself into permanent employment? If she is prepared to work under the difficulties she presently works under, why would she not? As a matter of probabilities, it is not certainty, we cannot be certain, but why would she not probably have made the grade? Is there any real reason to knock her down and to knock her out of being a candidate for permanent employment? We would say not. We would say quite the contrary. But again, with respect to those comparable employees, there are different figures that you come to and they are there to just give you some guide with respect to calculating this pecuniary loss damages."
Thus, counsel for the respondent put to the jury figures based upon the loss of a capacity to work for much longer than the 6 months per year adopted by appellant's counsel. As he put it to the jury, "why would she not have had as much chance as anyone else to get herself into permanent employment?".
"There is no precise science about this, it is a matter of your Honour's determination with respect to the evidence, but it is our submission that they have, in effect, taken a much more optimistic view about the future in relation to the plaintiff, but that ought not on the evidence of the doctors and everyone else in the case, ought not to lead to any reason to conclude that there has been anything other than a full measure of the past losses."
On the other hand, appellant's counsel drew the judge's attention to the marked contrast displayed by the table of figures relied upon by respondent's counsel, at the highest end giving a figure of "about $120,000" for past loss and "about $460,000" for the future and, at the lowest end, "about $78,000" for the past and "about $335,000" for the future. He urged upon the judge that-
"... the only conclusion you can come to is that she [would] be casual and so that the figure for past loss is closer to the $40,000 figure put by [appellant's trial counsel] rather than the higher figure ...".
"HER HONOUR: Yes, thank you. Yes, well, in the circumstances, I do think it is appropriate that the interest should be calculated on the basis of a past loss of - well, it is $118,000 odd, isn't it? COUNSEL [for the respondent]: 118,413 your Honour. HER HONOUR: Yes. It is a comparable employee and that is a - yes. And I suppose it is a view of my - my view of the evidence in reality, is it not, ... in a sense? I hear what you say, but I think in the circumstances I am going to order that interest be paid on the $118,423.56. Is that correct, gentlemen? COUNSEL [for the respondent]: I think it is 118,423, yes, your Honour."
In fact it was $118,413, not $118,423, if one simply added the figures in the last of the five columns put by counsel for the respondent to the jury, but that slip is of no significance now. The judge plainly adopted the last of the five columns as that of "a comparable employee" and made her determination accordingly.
"The submission, extended to the full, would deprive a judge of the power to award any interest in a case where no dissection of the jury's verdict had been sought and obtained. This proposition cannot be accepted. It is true that a judge should not speculate as to the probable or possible combination of figures which go to make up a lump sum verdict, but there is no reason why a judge, having heard the evidence and the verdict, could not in proper cases draw sound inferences as to the minimum amount which was awarded for past losses and act accordingly."
See also and compare Commonwealth of Australia v. Ryan[8] and Hogan v. Trustees of the Roman Catholic Church for the Archdiocese of Sydney[9]. On the foregoing basis, the proper task for the judge is to arrive by inference at the amount - and perhaps, in fairness to the defendant, the minimum amount - that the jury must be taken to have fixed for past loss. For the reasons already given, I think that that amount should be determined here as having been $60,000.
say so, I think that that is how the matter should have been approached on this occasion. It should be unnecessary to invite the judge to embark upon the exercise when, with a bit of goodwill and commonsense, counsel could probably reach agreement without much difficulty once a verdict has been obtained. That not only the judge in the County Court but now also three judges of this Court have been occupied by the question agitated on this appeal is altogether out of proportion to the issue involved and in future counsel should do their best to reach agreement before embarking upon the course followed here. As the High Court said of the calculation of interest on damages in Fire & All Risks Ins.[11], "the process should not be permitted to assume an importance incommensurate with its relative effect".
[1] For the notion of past loss as understood in this area, see, for example, Ruby v. Marsh [1975] HCA 32; (1975) 132 C.L.R. 642 at 660 per Gibbs. J., 662-3 per Stephen J., 667-8 per Jacobs, J.; Fire & All Risks Ins. Co. Ltd. v. Callinan [1978] HCA 31; (1978) 140 C.L.R. 427; Cullen v. Trappell [1980] HCA 10; (1980) 146 C.L.R. 1 at 19 per Gibbs, J.
[2] The appellant complained in the notice of appeal about the inadequacy of the judge's reasons but in argument that effectively merged with the other points taken.
[3] Under s.49 of the Act, weekly payments are made for loss of total earning capacity, commencing 18 months after the accident or when other entitlement ceases, whichever happens last. The sum of $23,414.40 was paid under s.49 between 22 May 1997 and 21 November 1998. The writ was filed on 6 December 1999.
[4] The table described in paragraph [9] above.
[5] Section 93(11)(a)(i) reads:-
"(11) Damages under sub-section (7) are to be reduced -
(i) if the person was entitled to compensation under this Act, by the amount of compensation paid in respect of the injury under sections 49, 50 and 51..."
[6] (1986) 5 N.S.W.L.R. 171 at 175.
[7] New South Wales Court of Appeal, 22 October 1979, unreported.
[8] [2002] N.S.W.C.A. 372 (21 November 2002) at [55].
[10] De Nitis v. Seekts [1962] VicRp 60; [1962] V.R. 417 (Smith, J.) and Murphy v. Murphy [1963] VicRp 83; [1963] V.R. 610 at 614 per Herring, C.J., both approved in Fire & All Risks Ins. Co. Ltd. (1978) 140 C.L.R. at 433. See also Clarke v. Foodland Stores Pty. Ltd. [1993] VicRp 81; [1993] 2 V.R. 382 at 402.
[11] (1978) 140 C.L.R. at 432-3, quoted in Clarke, supra, at 402. See also Bennett v. Jones [1977] 2 N.S.W.L.R. 355 at 364, Cullen v. Trappell (1980) 146 C.L.R. at 22 per Gibbs, J.; Luntz , Assessment of Damages for Personal Injury and Death (4th ed., 2002) para. 11.3.17.
McLennan
Radford [2003] VSCA 114