Excessive award of damages
48The appellant further challenged the outcome on the basis that the award of damages was excessive. That challenge involved three limbs, namely:
(a) the assessment of earning capacity at $400 per week, just prior to the motor vehicle accident, was too high;
(b) the expectation that the plaintiff would have continued to work for a further 15 years, despite his existing disabilities, was erroneous, and
(c) if his Honour determined that he had no residual earning capacity, that finding ignored the possibility of him undertaking sedentary work capable of providing an income of $112 per week.
49The assessment of $400 per week net earnings was equivalent to an annual income after tax of $20,800. That figure appears to have been derived by the trial judge from the income tax returns for 30 June 2005 and 30 June 2006 and invoices tendered by the plaintiff. In respect of the earlier year, the taxable income was $24,085. There was no notice of assessment in the material to which the Court was taken, but the tax return did reveal total tax withheld in an amount of $7,946. So far as the later year (2006) was concerned, the figures revealed a taxable income of $13,418, from which, the appellant contends, $3,761 should have been removed, being payments of government allowances. The income then revealed for the whole of that year, resulting from his plasterboard business, was $9,657. On the other hand, the return revealed business income of $17,967 and expenses of $8,310. For a sole contractor, the assessment of earning capacity should not necessarily be viewed by reference to income after reduction for business expenses allowable under income tax legislation.
50The plaintiff presented evidence at trial of invoices rendered by him between August and December 2005, showing average earnings a little in excess of $1,000 per week, and invoices for the period August-October 2006, showing average earnings of $2,300 per week.
51In reaching a figure of $400 net per week, his Honour made an assessment in the following manner (Reasons, p 13):
"The way I see is if you add up the varying amounts, that is, the $12,072 and you add to that the $12,856, it shows a yearly income of about $25,000 which would seem to me to come out as an average of about $440 per week. After you take tax out of that it seems to me that what you would assess his pre-injury ability to earn at would be about $400 per week."
52With respect, this calculation is not entirely easy to follow. The invoices submitted by the plaintiff showed that he worked from July to December 2005, with gross earnings of $18,537. If these figures are reduced for expenses, they may have produced a taxable income in the order of $12,000, although the precise figure taken by his Honour of $12,072 is found neither in the invoices, nor in the tax return for that year. However, it appears that his Honour was taking a calculation from July 2005 to October 2006, to take account of the fact that he was not working continuously and was probably not able to work continuously. In undertaking that calculation, his Honour rejected the plaintiff's reliance solely on invoices for the period August-October 2006, which were said to average $2,300 per week.
53While I would accept that an assessment based purely on the income tax returns would produce a lower average weekly taxable income, I think that his Honour was entitled to use a combination of the invoices, the income tax returns and the evidence of the plaintiff to reach the figure of $400 per week. I see no error in that finding.
54The second issue raised by the appellant concerned the expected working life of the plaintiff, as at 7 October 2006.
55The plaintiff's assessment of damages at trial referred to the "statutory age of retirement" as 67 years and the age to which the plaintiff might be expected to work as 62 years. The document consequently sought to have future economic loss calculated over a period of 16.5 years, rather than 21.5 years. This was referred to as a "concession" of a five year reduction of the expected working life of the plaintiff, due to other factors.
56In his initial reasons, the primary judge made no reference to this calculation, although he appears to have accepted the plaintiff's concession. Because the concession was based upon a reduced working life expectancy arising from the 2003 accident, an express statement of the assumptions and how they were determined might have avoided this potential miscalculation. In his revised reasons, he undertook the following calculation (Tcpt, p 20-21):
"If I accept that he is now just over forty-five years of age, in my view that would give him a further working life of twenty years. If that is reduced by five years it gives him a further working life for which he should be awarded his loss of income over a period of fifteen years.... From that I deduct fifteen percent for vicissitudes of life ...."
57On the basis of these calculations, it is apparent that his Honour treated the effects of the 2003 accident as reducing his ability to work continuously by some 50%, and as reducing his working life (if one accepts a retirement age of 65) by 25% or (if one accepts a retirement age of 67) by 30%. If, to that figure, one adds the 15% reduction for usual vicissitudes, there is a reduction of between 40% and 45%, in addition to the diminution resulting from the inability to work continuously.
58Although the appellant challenged this reduction as inadequate, the basis for that challenge remained obscure. Dr Elias Matalani, a consultant occupational physician, prepared a report for the plaintiff which estimated that each injury contributed 50% to his impaired earning capacity: Report, 4 March 2008, p 8. Dr Bye's medical assessment supported a similar result, based on his calculation of whole person impairment. Accordingly, his Honour's assessment in this respect was not erroneous.
59The third basis of challenge to the assessment of future economic loss depended upon a finding that the plaintiff had no residual earning capacity after the motor vehicle accident. The appellant contended that his Honour had made findings supportive of a residual earning capacity, although he had not identified the extent of it. It is true that there is a level of ambiguity in some aspects of his Honour's reasons prior to their revision. Thus, his Honour stated (p 11):
"[T]here is a significant argument about it but there is no doubt that he is not fit for heavy lifting, excessive squatting, a lot of bending, and matters of that nature. He says I was fit to do quite a bit of work up to the time of this accident, and I am not fit now. He wants to be a supervisor, and I think if he could do that sort of work[;] he is very experienced and could fit in to that sort of area."
60In reviewing the evidence, his Honour noted at one stage a report from Dr Horace Ting, described as a "vocational and functional assessment report" which his Honour described as not being of great assistance: Tcpt, pp 11-12. Later, he noted that Dr Ting "seems to think he could potentially earn $112 per week now": p 12. Shortly thereafter, in assessing earning capacity, his Honour expressed satisfaction that "for the first twelve months [after the accident] he was unfit for work": p 13. He allowed the full amount of $400 per week for that year and continued:
"After that I am satisfied the plaintiff continues to have a loss of earning capacity. However, part of that loss of earning capacity must be before and part after.
It appears at the moment he cannot go back to work, there is nothing really suitable for him to do, and if I apportion that, as I think I should, fifty/fifty then I arrive at a loss of earning capacity at the present time and since, commencing from one year after the accident of $200 per week."
61The error in apportioning the loss has been addressed above; the relevance of this passage for present purpose is to explain the difference in approach between the period of 12 months immediately following the accident and the period thereafter. The allowance of the full amount of $400 per week only for the 12 months immediately following the accident, was said to give rise to an implication that thereafter there was some residual earning capacity, in his Honour's view. Rather, however, the allowance for that 12 month period reflects the attribution of the whole of the loss to the effect of the accident which, during that period, had caused an exacerbation of the pre-existing injuries, which had, by the end of that period, stabilized at their pre-accident levels. Accordingly, it followed from his calculations that his Honour had assessed the plaintiff as having no residual earning capacity since the motor vehicle accident.
62That conclusion is not inconsistent with his Honour's reference in the first passage set out above to the plaintiff wishing to be "a supervisor": [59]. That statement was expressed in a conditional sense ("if he could do that sort of work") and, as counsel for the respondent pointed out, was derived from the following brief exchange in the course of the cross-examination of the plaintiff (Tcpt, 18/11/09, p 90(5)):
"Q. Okay, the question is in the future, if you had not had this motor vehicle accident, would you have worked in the same way?
A. INTERPRETER: Yes, I would, I would and I had a target to achieve. Because I'm capable in my job and I would have become a foreman because young people that need education and they don't know to work."
63Properly understood, the respondent submitted, the comment in the judgment was a reflection of the plaintiff's evidence that he would have wished to become a foreman if he had been able to continue with the work. There was no indication that the job of foreman did not involve heavy manual labour, nor that it was presently available to the plaintiff. That reading is to be preferred.
64The point was clarified after the luncheon adjournment, his Honour stating (pp 19-20):
"The combination of his chronic pain, physical and functional restrictions and the need to take pain killing medications will make him unfit to return to work as a gyprock fixer indefinitely. His restrictions are permanent. He is only fit for sedentary work. Due to the presence of chronic pain, sleep disturbance, poor English and lack of transferable skills he is currently virtually unemployable. ...
Then [there is] the report of Horace Ting, Occupational Therapist, 23 October 2008 .... He says he does not demonstrate a capacity to work as a gyprocker or form worker and he may have a physical capacity to perform sedentary work three hours per day, five days per week. At this stage he has a physical capacity to perform light to sedentary work on reduced hours. He is on a disability pension and is medically unfit to work. He does not demonstrate any earning potential."
65There are distinctions to be drawn between injury and impairment or disability consequent upon injury, and between impairment or disability and diminished earning capacity. Because an individual has a physical and mental ability to undertake certain tasks, it does not necessarily follow that he has a significant residual earning capacity. Earning capacity must be measured by reference to the individual, when viewed with all his or her characteristics, in the labour market. When a person in middle age has spent all his or her life in a skilled or semi-skilled occupation which, as a result of injury, is no longer available, the identification of occupations which are theoretically available is only part of the task. There must also be a practical assessment of the likelihood of the individual obtaining employment in some such occupation. Thus, Dr Ting stated in his report:
"The functional capacity evaluation results indicate that Mr Livaja has the physical capacity to perform sedentary work 3 hours per day, 5 days per week in a supportive work environment. He does not demonstrate a capacity to work as a Gyprocker or a Formwork labourer.
The vocational assessment results suggest that Mr Livaja is not suitable for vocational retraining. Mr Livaja's residual work capacity and limited transferable skills have severely limited his vocational choices to non-skilled sedentary work. Suitable occupations under this category are highly competitive, and Mr Livaja is non-competitive for employment in this job category in the open labour market.
At this stage, though he has a physical capacity to perform light to sedentary work on reduced hours, Mr Livaja is on a disability pension and is medically unfit to work. He does not demonstrate an earning potential.
Should he ever be certified fit to work, Mr Livaja demonstrates an earning potential of $111.90 gross per week (average weekly wage $708.50; 15 hours/38 hours per week; 40% chance in gaining employment).
... Due to the severe nature of his injuries and the multitude of his disabilities, I envisage that Mr Livaja would have difficulty securing and maintaining any employment."
66There was no other assessment of residual earning capacity before the Court. That conclusion of Dr Ting, perhaps treated somewhat dismissively in the earlier reasons, was clearly relied upon in his Honour's later reasons. The analysis supports the view that, in a practical sense, the respondent lacks any residual earning capacity. His Honour's conclusion in that respect was not erroneous.