Norris v Routley

Issue three

The deceased's consumption costs are a function of the interaction between his anticipated income and that of his wife. I have already dealt with the deceased's income. Dr Norris argues that there should be a very substantial discount on her own income in the order of 50 percent for the purpose of calculating the deceased's consumption of household income, but nothing exceeding a 5 percent discount in relation to his own income. The former discount is said to reflect such variables as the number of pregnancies she might have expected to receive per month and the associated number of consultations per patient.
As with several issues in these proceedings, the parties' respective positions have somewhat opportunistically changed from time to time to accommodate the particular perspective from which the issue was being viewed. The present issue is an exemplar of that fact.
Dr Norris was examined at the trial by her counsel on the issue of her anticipated income from practising as an obstetrician. That evidence was being led in support of the argument that she was in need of a practice manager, which was the role that she anticipated would be performed by the deceased had he survived. That evidence was in in the following terms: "Q. At 2010 how did you contemplate your husband would execute his role as practice manager and as carer for the boys and homemaker? A. Well, he would have been flexible in that role, so he could allocate so many hours per day with the school hours, of course. It's nine to three for school hours, and then other times to if he would allocate to the out of hours or weekends or whatever he needed to because he had to he had two roles. He had a role of primary carer and he would have a role as a practice manager, but that could be a flexible one. Q. What was your intention when you commenced in private practice concerning the building up of the volume of patients in private practice? A. Well, I was hoping to you want to achieve a certain level of deliveries per month. You're wanting to know how many per months? Q. What was that level? A. You would be looking at approximately 20 deliveries per month, or perhaps a little bit more than that if the yes, so at least 20. Q. Do you know now how many deliveries per month you are averaging? A. I'm averaging at seven per month. Q. Or what period of time did you anticipate you would build up your practice to the point where you would be managing 20 pregnancies per month? A. Well, from 12 months maybe to 12 months to a 24 month period. Q. To what extent did you anticipate that your husband would be involved once the practice reached the 20 pregnancies per month? A. He would be a fulltime practice manager. Q. Knowing, as you do, what practices an obstetrician and gynaecologist involves, do you see any way that you could manage that volume of patients without a practice manager? A. No, you could not. Q. Do you see any way that you could manage that volume of patients without a practice manager who was effectively working on a fulltime basis? A. I'm sorry, say that again? Q. Do you see any way that you could manage that volume of patients… A. Yes. Q. …without a practice manager working effectively on a fulltime basis? A. No. Because you need a fulltime practice manager to manage that workload. Q. You have some secretarial staff now; is that right? A. That's right. That's correct. Q. You have two secretaries each working on a part time basis? A. That's right. Yes. Q. What's the total number of hours per week you have secretarial services now? A. Well, there's someone present for I'll just add those up. So there's 32 hours per week, so three, eight hour days and two four hour days per week, and two secretaries share those secretarial roles. Q. What is the position now? You've told his Honour that you were doing point 4 of a fulltime equivalent as staff specialist at John Hunter Hospital. In addition to that, what is your schedule in your private practice? A. So I work three short days. I work Mondays, Wednesdays and Thursdays from about approximately nine to three, to work in with the kids' schedule, with my boys' schedule. That was initially with Henry was and now he's gone to Melbourne, but now William is still in year 10, so I'm still limiting my hours to so three, six hour days. So Monday, Wednesdays and Thursdays. Q. Why are you limiting your hours in such fashion? A. Well, because they need supervision. Well, William needs supervision still, and I'm not going to that's my job. I'm his mother first and foremost, so that's my job."
On the second day of the hearing, when objection was taken by Dr Routley to the admission of paragraph 2.16 of Mr Gaudian's 22 August 2014 report, the following discussion took place: "HIS HONOUR: Let's just go back a space and deal with fundamentals. It was not put by Mr Kirk to Dr Norris in the witness box yesterday and correct me if I'm wrong that her anticipated pregnancies per month at the current time was false or misguided or that her projections into the future were unlikely to be accurate. Am I right about that? TOOMEY: It was not, your Honour. KIRK: It's not, but I would say it's not before me to have to prove that point; that the projections are achievable, and there is some evidence that they are not achievable. HIS HONOUR: No. No. But this sentence in 2.16 goes to the achievability of the projections, doesn't it? And the evidence is where it stands and Dr Norris was whatever be the worth of her projections not put to task or contradicted by her KIRK: It was her prediction. HIS HONOUR: Yes. KIRK: She didn't give evidence that it was achievable. HIS HONOUR: But she's an obstetrician of some significant experience in the local area. She wasn't criticised by you as unqualified to make that prediction upon the basis of her experience. KIRK: But it's for her to establish that within this area she can achieve those figures. HIS HONOUR: Yes. KIRK: That she hopes to achieve those figures, as she hoped to achieve other figures which have not been achieved, does not establish that she would have been able to achieve those figures. HIS HONOUR: Well, the evidence is what the evidence is and it wasn't you didn't seek to deal with it in a way that contradicted her, and there is no evidence to the contrary. That doesn't mean that it establishes the point. It is a question for me to determine the worth of that evidence. KIRK: That's true. And where it gets to. That's right."
It will be clear from these transcript extracts that Dr Routley was attempting to limit any evidence that supported the proposition that Dr Norris was, or would become, a successful medical practitioner in her field of specialty, thereby casting doubt upon the deceased's realistic prospects of working as her practice manager earning what had been predicted. Conversely, Dr Norris was attempting to achieve the opposite result. In the mildly curious events that have now occurred, each party has adopted the other's original position. Dr Norris submits that her income predictions were "blue sky" predictions, or what I understand using plain English to mean overly optimistic, and Dr Routley now wishes to contend that they were achievable. Dr Norris now contends that her anticipation of 20 pregnancies per month was no more than her hope, whereas Dr Routley disputes that characterisation.
It is not to be overlooked that I effectively favoured Dr Norris's original approach at [55], and also at [104] of my principal judgment, when I concluded in these terms: "[104] Secondly, the available assumption that Dr Norris's practice would have become busier over the years as her experience increased and her reputation became more widely known in my opinion diminishes the likelihood that the domestic work arrangements would have altered. The progressive reduction in Dr Norris's spare time as her work increased rather suggests that her ability or inclination to assume a greater role in domestic chores would have been more likely to diminish than expand. The opposing view is counterintuitive. In a related way, the reduction in the number of hours of domestic work required following the boys' departure from the household would in my view have increased the likelihood that Mr Norris would have maintained his monopoly on the provision of domestic services. The house would by then have consisted of only two people, thereby further reducing the prospect that Dr Norris would have become a greater contributor to the reduction of Mr Norris's workload."
Those matters notwithstanding, Dr Norris continued to maintain that the discount to be allowed for vicissitudes on her income "ought to be significantly greater than the standard allowance of 15 percent." She argued that the standard allowance takes account of matters that would otherwise affect earning capacity, such as sickness, accident, unemployment and industrial disputes: Wynn v NSW Insurance Ministerial Corporation [1995] HCA 53; (1995) 184 CLR 485 at 497. Dr Norris argued that these were matters that could have an impact upon the future earnings of an employed person in a secure job where future earnings can be predicted with some certainty. The standard allowance can of course be adjusted up or down to take account of particular circumstances. In this case Dr Norris argued that the particular circumstances included those which create greater uncertainty as to whether she would proceed to earn the income that I have accepted is likely.
In this respect Dr Norris drew attention to what I said in the principal judgment at [51] and [54]: "[51] Nevertheless, Dr Norris's income remains as an important fraction of the whole family income in the years of Mr Norris's projected economic contribution to the home. Its precise calculation is, however, fraught with some uncertainties and difficulties. [54] … Even though the accountants had unrestricted access to Dr Norris's income tax particulars, unknown and unpredictable circumstances made the calculation of Dr Norris's contribution to the family income over the anticipated life of Mr Norris a less than scientific process."
It is not in dispute that Dr Norris's income claim is one to which s 13 of the Civil Liability Act 2002 applies. The calculation of Dr Norris's own earning capacity involves an "assumption about future earning capacity or other event upon which [it] is to be based": s 13(1). Accordingly, a discount must be made for the percentage possibility that the events that have been taken into account might not have occurred. Moreover, quite apart from s 13, legal principle mandates that there be a consideration of "the degree of probability that an event would have occurred, or might occur, and adjust its award of damages to reflect the degree of probability": Malec v Hutton. For presently relevant purposes in this case, Dr Norris contended that this must include the overly optimistic or hopeful predictions she made about her probable future earnings.
In this respect my attention was drawn to what was said by the High Court in De Sales v Ingrilli [2002] HCA 52; (2002) 212 CLR 338 at [68] as follows: "[68] How is account then to be taken of life's uncertainties? Had the deceased not died as he or she did, who is to say how long a life the deceased would have led? What would have happened? Would the deceased have continued to earn at the level being earned before death? Or would death, incapacitating illness or financial calamity (in one form or another) have intervened? If it had, would any of the survivors have then contributed to the financial well-being of the family? Even if there were no disaster (physical, financial or other) would the financial contribution made by the surviving spouse or de facto spouse, have changed anyway? And if action is brought on behalf of a surviving spouse, or de facto spouse, can it be assumed that the relationship would have endured? Will the surviving spouse remarry after the date of judgment, or form some continuing relationship which will have some financial consequence for any of those for whose benefit the action is brought? All these, and more, are possibilities that may have to be reflected in any assessment of the present value of the economic loss suffered by all of the relatives as a result of the deceased's death, not just a surviving spouse. Because the assessment requires estimation and judgment rather than calculation, seldom, if ever, will it be right to express the result as if it were correct to the nearest dollar. That falsely asserts a degree of accuracy in the assessment that is impossible. All that can be done is to select a percentage or lump sum to allow for the estimated value of those possibilities which may or may not have eventuated if the deceased had lived and those which may or may not eventuate in the future."
Dr Routley contended that the appropriate discount to apply to Dr Norris's income was 15 percent. He submitted that that was the appropriate rate because it reflected the fact that there were fewer risks attending her income than in the case of the income of the deceased. In particular, Dr Routley submitted that Dr Norris did not face any greater degree of risk of illness or early death than anyone else of her age and attributes.
I have come to a different view about the rate of discount for vicissitudes that should apply to the deceased's income. However, that difference of opinion does not also lead me to conclude that the rate of discount for which Dr Routley contends should not be adopted. I accept that the calculation of Dr Norris's income is attended with the uncertainties to which I referred in my principal judgment, and which for present purposes Dr Norris has enthusiastically embraced. However, those uncertainties attend the calculation of the sum to which the discount currently being considered would apply. For example, the so-called overly optimistic assessments made by Dr Norris about her projected success inform the income calculation in the first place. They also include all of matters of the kind listed by Dr Norris in paragraph 40 of her counsel's written submissions as follows: 1. the number of pregnancies per month; 2. the number of consultations per delivery; 3. the type of delivery - complicated or uneventful; 4. the fees charged per consultation; 5. the number of ultrasound scans per pregnancy; 6. the fees charged per ultrasound; 7. insurance costs; 8. the cost of replacing capital items, such as sonographic equipment; 9. sonographers' wages; 10. secretarial costs; 11. medical supplies; 12. advertising; 13. bank fees; 14. locum fees.
I take these matters to be specifically concerned with the original calculation, so that they have already been taken into account, and not with the unpredictable and uncertain negative and positive events that the future may produce, which are the type of vicissitudes currently being considered, such as injury, incapacity or early death.
Dr Norris has not to my mind established any unusual or extraordinary negative factors that would influence or warrant a departure from the usual rate to be applied.
It makes no difference to the final outcome in arithmetical terms whether the discount for vicissitudes is applied to the income figures of the deceased and Dr Norris in the first place or to the final consumption figure arrived at as a product of each by applying the Luntz percentages in the second place. The result will be the same provided discounts are not applied to both sides of the equation. It was however necessary for me to approach the matter adopting the former method as I have chosen variously to apply a different discount for vicissitudes to the income of the deceased on the one hand and the income of Dr Norris on the other hand.
Finally Dr Norris conceded that no discount should apply to the sum of $10,000 that I originally allowed for care costs which was an assessment that did not warrant further reduction. That concession is both appropriate and uncontroversial.

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