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[2008] WADC 16
District Court of WA
2008-02-08
Mr J
Original judgment source is linked above.
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
CITATION : PITCHEN -v- CADO METAL DESIGN PTY LTD & ORS [2008] WADC 16
Contract - Whether obligation to insure is for benefit of contractor not named in the contract
Civil Liability Act 2002 s 10A
Law Reform (Contributory Negligence & Tortfeasors' Contribution) Act 1947 s 7
Liability in negligence apportioned 75 per cent against First Defendant and 25 per cent against Second Defendants
1 MARTINO DCJ: The plaintiff, Mr Pitchen, claims that in the evening of 24 February 2005 he fell from the first floor of his home to the ground floor when the balustrade upon which he was leaning gave way. The first defendant, Cado Metal Design, was the manufacturer and installer of the balustrade. The second defendants, Mr and Mrs Houlahan, were the builders of the home. Mr Pitchen claims from them damages for the injuries that he claims he suffered in the fall.
2 When he commenced this action Mr Pitchen named only Cado Metal Design as defendant. Prior to trial Cado Metal Design joined four third parties to the action. Mr and Mrs Houlahan were joined as third third party. After Mr and Mrs Houlahan were joined as third parties Mr Pitchen named them as second defendants. Cado Metal Design's claims against all third parties other than Mr and Mrs Houlahan were compromised before evidence was called.
3 The second and fourth third parties did not appear at the trial. The first third party was represented by counsel at the commencement of the trial, but by consent Cado Metal Design's claim against it was dismissed before any evidence was called. As a result of these procedural changes only Mr Pitchen, Cado Metal Design and Mr and Mrs Houlahan took part in the trial. In the pleadings sometimes Cado Metal Design is referred to as the defendant and Mr and Mrs Houlahan are sometimes referred to as the third third party.
4 In his statement of claim Mr Pitchen pleads that he and his partner, Ms Mary Kathleen Wiese, entered into a contract with Cado Metal Design in which Cado Metal Design agreed to manufacture, supply and install interior stair balustrading at the home. He claims that the balustrading gave way as a result of Cado Metal Design's negligence and breach of contract in:
5 By its defence Cado Metal Design admitted that it entered into a contract with Mr Pitchen to manufacture and install interior stair balustrading at the property and that it manufactured and installed that balustrading. It did not admit that the balustrading gave way when Mr Pitchen was leaning on it. It denied that it was negligent or in breach of contract and pleaded that any loss or damage suffered by Mr Pitchen were caused or contributed to by:
6 However in his closing submissions counsel for Cado Metal Design informed me that Cado Metal Design accepted that it had breached the implied term of contract that the work would be performed with reasonable care and skill, that it had breached the duty of care that it owed to Mr Pitchen, that the consequence of those breaches was that Mr Pitchen was injured and that Cado Metal Design was liable to Mr Pitchen in damages.
7 Mr Pitchen claims against Mr and Mrs Houlahan that he entered into a written contract with them for them to build the house, including a suspended concrete slab, staircase and balustrade. He claims that Mr and Mrs Houlahan were negligent and in breach of contract in failing to:
8 Mr and Mrs Houlahan admit that they contracted with Mr Pitchen and Ms Wiese to construct the house. They plead that Mr Pitchen and Ms Wiese engaged Cado Metal Design independently of that contract and that under their contract they are not liable for items that were not part of the contract. They also plead that Cado Metal Design was negligent in its design, installation and manufacture of the balustrade.
The claims between Cado Metal Design and Mr and Mrs Houlahan
9 Cado Metal Design claims against Mr and Mrs Houlahan that Mr and Mrs Houlahan breached their contract with Mr Pitchen and Ms Wiese and that they breached the duty of care that they owed to Mr Pitchen.
10 Cado Metal Design also pleads that under the building contract between Mr and Mrs Houlahan and Mr Pitchen and Ms Wiese Mr and Mrs Houlahan were obliged to:
11 Cado Metal Design claims that these contractual obligations conferred benefits upon it which, pursuant to s 11 of the Property Law Act 1969 it is entitled to enforce.
12 It claims that Mr and Mrs Houlahan have breached those obligations and that it is entitled to indemnity or contribution in respect of any liability it has to Mr Pitchen.
13 Mr and Mrs Houlahan deny that the building contract conferred any benefits upon Cado Metal Design and deny that they breached the building contract. They claim that Cado Metal Design was in breach of its contract with Mr Pitchen and Ms Wiese and negligent in the design, manufacture and installation of the balustrade and that if they are liable to Mr Pitchen then they are entitled to contribution or indemnity from Cado Metal Design pursuant to s 7 of the Law Reform (Contributory Negligence & Tortfeasors' Contribution) Act 1947.
14 Mr Pitchen was born on 23 September 1956 in Mauritius. He went to school in that country and finished school at the age of 15. His education was in the French language. After completing school he completed an electrical and a mechanical apprenticeship. He migrated to Australia in 1979. His technical qualifications were not recognised here.
15 He obtained employment assembling tractors and then as a machine operator, which employment he had for 15 years. He worked in a variety of jobs in the mining industry for approximately 20 years. At the time of the accident he was employed at a gold mine in Wiluna as a crane driver. He had been so employed for approximately two years.
16 Mr Pitchen and Ms Wiese have been de facto husband and wife for approximately ten years. At the time of the accident Ms Wiese also worked at the gold mine in Wiluna. Their employment was "fly in fly out", they would stay in accommodation provided by their employer when working and stay at their home when not working. Their working periods did not always correspond, so sometimes one of them would be working when the other was not.
The contract between Mr Pitchen and Ms Wiese and Mr and Mrs Houlahan
17 In October 2000 Mr Pitchen and Ms Wiese purchased approximately three acres of land at Kalakin, near Lancelin. Their intention was to build a house on that land and create a large landscaped garden and orchard. Ms Wiese looked after the documents, paperwork and matters of detail for Mr Pitchen and herself. They had plans for a two storey house prepared by Mr Alan King, an architectural draftsman.
18 On 30 May 2002 Mr Pitchen and Ms Wiese entered into a written lump sum building contract with Mr and Mrs Houlahan for the construction of their home. The form of the contract was the Housing Industry Association Lump Sum Building Contract.
19 The building contract had a schedule of particulars that provided that the contract price was $370,920 and that the contract was conditional upon Mr Pitchen and Ms Wiese obtaining finance of $390,000. It provided, in cl 11(d), that upon the completion of work the subject of a Provisional Sum or the installation of an item the subject of a Prime Cost item, or at the next progress payment notice, the builder must provide the owner with an itemised statement of the price for the work or items, and the contract price will be adjusted accordingly.
20 The schedule to the contract provided that the Provisional Sums were $13,450. There was no sum for Prime Cost items.
21 Mr Houlahan signed a handwritten document headed "P.C. Sums" that is also dated 30 May 2002. That document, Exhibit 14, contained a list of six items and a sum of money for each item. The total of the sums on the list was $13,450. One of the items was "Balcony & Stairs", for which the sum of money was $8,000. Ms Wiese's evidence was that this document was in her handwriting and that "Balcony & Stairs" related to the balustrade on the stairs and the first floor.
22 Mr Pitchen and Ms Wiese were unable to obtain the finance they needed for the construction of the house at the contract price.
23 They spoke to Mr Houlahan and he prepared a fresh schedule of particulars that provided that the contract price was $310,000 and that the contract was conditional upon Mr Pitchen and Ms Wiese obtaining finance of $310,000. That schedule was signed by Mr Pitchen and Ms Wiese and by Mr Houlahan on behalf of Mr and Mrs Houlahan on 21 April 2003. It did not contain any amounts for Provisional Sums or Prime Cost items.
24 Ms Wiese's evidence in chief was that she believed that a fresh lump sum building contract with the new schedule of particulars was prepared and that it was probably at home. She appears to be mistaken in that belief. No fresh written lump sum contract was tendered in evidence. In his statement of claim Mr Pitchen pleads a contract dated 21 April 2003. By their defence Mr and Mrs Houlahan plead that Mr Pitchen and Ms Wiese engaged Mr and Mrs Houlahan by a lump sum building contract on 30 May 2002 and that the parties amended the contract and signed a second schedule of particulars on 21 April 2003. I raised the issue of Ms Wiese's evidence on this point with counsel at the close of her cross-examination and counsel informed me that nothing turned on the issue of whether there was another complete form of lump sum building contract.
25 Exhibit 15 is a faxed copy of a typed unsigned document containing items and prices. It has a list of six items under the heading "PC Sums" and a list of another six items under the heading "Price Allowed". One of the items in the PC Sums list is "Ballustrade" for which the price shown was $8,000. It has a cross against the item "Tiles (Supply Only)" in the PC Sums list and a cross against the item "Kitchen Cupboards" in the price allowed list. Ms Wiese's evidence was that the document was prepared by Mr Houlahan. Her memory of the document was that it showed what Mr Houlahan was allowing for each item on the list. Her evidence was that the two crosses were placed on the original document by her to signify that in her discussions with Mr Houlahan the price of the price of the house was to be reduced because those items were no longer included in the contract.
26 After the building contract was amended Mr Houlahan commenced building the house. Ms Wiese's evidence was that in around September of October 2003 she spoke to Mr Houlahan about the balustrades. She obtained a quotation from a company that Mr Houlahan recommended, but it was too expensive.
27 Mr Pitchen and Ms Houlahan then went to Cado Metal Design's premises and met with Mr Helmut Hilz. They decided to get Cado Metal Design to install internal balustrades and told Mr Hilz to go ahead.
28 They received an invoice from Cado Metal Design. That invoice is Exhibit 7. It is dated 13 October 2004. It is addressed to "Mr M Pitchen and Ms M Wiesse (sic)". It shows that the cost for the manufacture, supply and installation of interior stair balustrades was $9,600 plus GST; $10,560 inclusive of GST and that a deposit of $1,600 inclusive of GST has been paid.
29 Ms Wiese's evidence was that she gave a cheque for $1,600 to Mr Hilz and received that invoice, probably in the mail. Her evidence was that she paid that amount because that was the difference between the quoted price of $9,600 and $8,000, the PC sum for the balustrade for the balcony and stairs in the PC sum list from Mr Houlahan. When she paid the deposit of $1,600 she was under a misunderstanding as to the total cost of the internal balustrades and did not appreciate that GST was to be added to the price of $9,600.
30 On 18 October 2004 Mr Pitchen and Ms Wiese sent a facsimile to Mr Houlahan (Exhibit 18). In that facsimile they provided for Mr Houlahan's "information and planning" information as to when the cabinets, tiler, internal staircase and balcony would be available.
31 The next invoice from Cado Metal Design, Exhibit 8, was also addressed to Mr Pitchen and Ms Wiese. It was dated 17 December 2004 and provided: "1st progress payment for wrought iron work $3,000 plus GST = $3,300."
32 Ms Wiese's evidence was that when she received that invoice and the following invoices from Cado Metal Design she handed them to Mr Houlahan because she understood that he was to pay those accounts because they came within the PC sum of $8,000 for balustrading.
33 The evidence of Mrs Marjorie Doust, Cado Metal Design's office manager, was that in February 2005 she contacted Ms Wiese about payment of the outstanding account dated for $3,300. Ms Wiese told her that the invoices should have been sent to Mr and Mrs Houlahan. On 11 February 2005, immediately after her conversation with Ms Wiese, Mrs Doust faxed to Mr Houlahan all invoices and a statement. On 16 February 2005 Mrs Doust spoke to Mr Houlahan regarding payment. Mr Houlahan told her that payment would be made by 18 February. Mr Houlahan did not make a payment by 18 February.
34 Cado Metal Design's director Mr Benson Doust gave evidence that on 22 February 2005 he spoke to Mr Houlahan about the monies due. Mr Houlahan told him that he would pay half then and the balance a week later.
35 Mrs Doust's evidence was that on 23 February 2005, by electronic funds transfer, Mr Houlahan paid the sum of $3,300 due on the invoice dated 17 December 2004.
36 Cado Metal Design rendered a third invoice to Mr Pitchen and Ms Wiese, which is Exhibit 9. It is dated 3 February 2005 and provided: "2nd progress payment for wrought iron work $3,145 plus GST = $3,460."
37 Mrs Doust's evidence was that by electronic funds transfer on 23 February 2005 Mr Houlahan paid $828 of the sum of $3,460 due on that invoice. Ms Wiese's evidence was that she did not know why Mr Houlahan only paid $828 on that invoice.
38 The final invoice rendered by Cado Metal Design to Mr Pitchen and Ms Wiese, Exhibit 26, was dated 11 February 2005. It referred to a quotation of $10,560, a deposit paid of $1,600 and the invoices for $3,300 and $3,460. The invoice was for $2,200 inclusive of GST, being the balance after deduction from the quoted price of the deposit paid and the invoices for $3,300 and $3,460.
39 By their defence Mr and Mrs Houlahan say that of Cado Metal Design's total price of $10,560 they made a payment to Cado Metal Design of $4,128 "on behalf of" Mr Pitchen and Ms Wiese. The amount of $4,128 is the total of the electronic funds transfer from Mr Houlahan to Cado Metal Design on 23 February 2005.
40 Ms Wiese's evidence was that they moved into the house between 16 and 20 February 2005. Mr and Mrs Houlahan have not provided to them a certificate of practical completion.
41 On 21 February 2005, after they had moved into the house, but before the accident, Ms Wiese met with Mr Houlahan at the house. Mr Houlahan gave to Ms Wiese a letter dated 20 September 2002 listing charged extras and refunds. Ms Wiese wrote on that letter that the date was wrong and that it should be 21 February 2005.
42 Her evidence was that she and Mr Houlahan discussed the payment of accounts and that it was agreed that Mr and Mrs Houlahan would pay the sum of $4,000 owing to Cado Metal Design. In fact it would appear from the invoices that the balance outstanding on Cado Metal Design's accounts was $4,832. Ms Wiese's evidence was that Mr Benson Doust of Cado Metal Design had been telephoning Mr Houlahan chasing payment of $4,000 still outstanding.
43 Mr Houlahan was not called as a witness. I accept the evidence of Ms Wiese, Mrs Doust and Mr Doust as to their dealings with him.
44 Following Mr Pitchen's accident Ms Wiese wrote to Mr Houlahan a letter sent by facsimile transmission dated 13 March 2005 (Exhibit 20). In that letter Ms Wiese confirmed that she had told Mr Houlahan in a telephone conversation on 28 February 2005 that a panel of the top floor balustrade had collapsed, resulting in Mr Pitchen sustaining a serious back injury, and suggested that Cado Metal Design's outstanding account not be paid until the matter was resolved.
45 On 28 April 2005 Mr Pitchen and Ms Wiese sent a letter by facsimile to Mr and Mrs Houlahan (Exhibit 21). In that letter they wrote that Cado Metal Designs had completed installation of the internal balustrade and asked Mr and Mrs Houlahan to tell them of their intentions concerning the final payment to Cado Metal Design.
46 Mr Pitchen and Ms Wiese sent another letter by facsimile to Mr and Mrs Houlahan on 9 May 2005 (Exhibit 22). In that letter they set out amounts they regarded as owing from them to Mr and Mrs Houlahan and deducted from that balance the sum of $4,000 due to Cado Metal Design, which they said they had settled in full.
47 Mr Pitchen moved into his house on approximately 18 February 2005. The accident occurred at night time. Mr Pitchen's evidence was that he had turned on all the lights in the house and admired it from outside. He then went back inside the house and switched off lights before going to bed. He was on the top floor of the house and he was unsure if he had turned all the ground floor lights off. He placed both hands on the balustrade and leant forward gently on it to see if the ground floor lights were still on. The balustrade gave way and Mr Pitchen fell to the ground floor. I accept Mr Pitchen's evidence as to the accident.
48 Following Mr Pitchen's accident Ms Wiese instructed Mr Peter Airey, a very experienced consulting engineer, to investigate the collapse of the balustrade. Mr Airey inspected the accident site on 8 March 2005 and wrote a report on 9 March 2005.
49 The balcony balustrade had been secured at the northern end by a spigot inserted in a hole drilled in the extreme edge of the first floor concrete slab. At the southern end the balustrade was secured by the two horizontal rails being welded to the newel post.
50 Mr Airey concluded that the spigot at the northern end of the balustrade failed by shearing out of the edge of the concrete slab. The balustrade was then subject to horizontal bending moments causing the southern end welded connections between the balustrade and the newel post to be subject to horizontal prying action. The one millimetre wide welds were so small as to have no effective strength. Those welds failed and the balustrade then rotated eastward and fell to the ground floor.
51 The balustrade failed to comply with the Building Code of Australia because it was unable to resist the horizontal loads provided for by the Code.
52 It is Mr Airey's opinion that the design of the balustrade was satisfactory but that the fixing of the balustrade to appropriate restraints was not. It is also Mr Airey's opinion that there was nothing to indicated that the concrete slab was poorly constructed.
53 Mr Airey's opinion was that prior to the accident the defective installation of the balustrade would not have been particularly obvious. In cross-examination by counsel for Cado Metal Design he agreed that the inadequacy of the connection between the northern newel and the suspended concrete slab would be intuitively obvious to anyone with reasonable experience in the building industry.
54 In addition to expressing his opinion as to the cause of the failure of the balustrade Mr Airey gave evidence as to responsibility for ensuring that the balustrade was adequately secured. In his opinion the builder is fully responsible for the construction of the residence and that responsibility includes supervising the construction of the residence to ensure that it satisfies the requirements of the Building Code. It is normal commercial practice for the builder to allow a PC item for elements of the building upon which a final decision as to supplier has not been made. Sometimes the owner will assist the builder by obtaining quotations, however it remains the builder's responsibility to ensure that any person supplying and installing anything satisfies the requirements of the Building Code.
55 Mr Airey's evidence was not contradicted by any other expert evidence. I accept his evidence that the balustrade was inadequately secured, that this caused the failure and that there was nothing to indicate that the concrete slab was poorly constructed. I also accept his evidence as to the practice in the building industry as to the responsibility of builders. However it remains my task to determine any liability of Cado Metal Design and Mr and Mrs Houlahan.
Whether Cado Metal Design's work was carried out under the contract between Mr Pitchen and Ms Wiese and Mr and Mrs Houlahan
56 I have referred earlier in these reasons to the building contract documents of 30 May 2002 and 21 April 2003. While there is some inconsistency in the use of the terms provisional sums and PC (or prime cost) items in those documents it is clear to me from those documents that under the building contract as amended Mr and Mrs Houston were to install balustrades in the house. The detail of those balustrades had not been finalised and a provisional allowance for both internal and external balustrades of $8,000 had been made.
57 Mr Pitchen and Ms Wiese entered into a contract with Cado Metal Design for the manufacture and installation of internal balustrades. Mr and Mrs Houlahan's case is that by entering into that contract Mr Pitchen and Ms Wiese amended the building contract to delete the internal balustrades. However there is no evidence from which that conclusion can be drawn. It was not the evidence of Ms Wiese or Mr Pitchen and Mr Houlahan did not give evidence. When Ms Wiese received invoices from Cado Metal Design she gave them to Mr Houlahan. Mr Houlahan paid the whole of the invoice of 17 December 2004 and part of the invoice dated 3 February 2005. Until 9 May 2005 the position of both Ms Wiese and Mr Houlahan was that Mr and Mrs Houlahan would pay the balance due to Cado Metal Design. On that day Ms Wiese sent to Mr Houlahan a facsimile stating that they had settled the balance due to Cado Metal Design. However that statement does not operate as to retrospectively amend the building contract. I conclude that the installation of the internal balustrades by Cado Metal Design was at all times part of the building contract between Mr Pitchen and Ms Wiese and Mr and Mrs Houlahan.
58 Although the Cado Metal Design's defence pleads that Mr Pitchen was negligent the pleading was not pressed at trial. All that Mr Pitchen did was lean forward gently on the balustrade. Cado Metal Design has not proved that Mr Pitchen failed to exercise reasonable care for his own safety.
Whether Cado Metal Design was negligent or in breach of contract
59 As I have noted in his closing address counsel for Cado Metal Design accepted that Cado Metal Design had breached the implied term of contract that the work would be performed with reasonable care and skill and that it had breached the duty of care that it owed to Mr Pitchen. I accept the evidence of Mr Airey and I am satisfied that Cado Metal Design's concessions were correctly made and that it was both negligent and in breach of its contract with Mr Pitchen and Ms Wiese.
Whether Mr and Mrs Houlahan were negligent or in breach of contract
60 By cl 1(a) of the building contract Mr and Mrs Houlahan agreed to build the home in a proper and workmanlike manner. I have found that the installation of the balustrade remained part of that building contract. I have accepted the evidence of Mr Airey that the balustrade was inadequately fixed. It follows that the balustrade was not installed in a proper and workmanlike manner and that Mr and Mrs Houlahan were in breach of the contract.
61 Mr and Mrs Houlahan clearly owed a duty of care to Mr Pitchen to exercise reasonable care in relation to the building work to avoid a foreseeable risk of injury: Bryan v Maloney (1995) 182 CLR 609 at 622-623. That duty does not guarantee the performance of the work of contractors and it may be possible to satisfy that duty by employing competent contractors: Zumpano v Montagnese [1997] 2 VR 525 at 533.
62 Zumpano v Montagnese (supra) was a case concerning economic loss as a result of a plumber's failure to install a boundary trap. It was a very different case to this case. There was an obvious risk of serious injury to Mr Pitchen if the balustrade on the top floor of the house was inadequately installed. In the exercise of reasonable care Mr and Mrs Houlahan should have made some enquiry of Cado Metal Design as to how it proposed to secure or had secured the balustrade. There is no evidence that they made any enquiry. If they had made enquiry it would have been clear that the installation was inadequate. I conclude that Mr and Mrs Houlahan have been negligent and that Mr Pitchen suffered injury as a result of their negligence.
Cado Metal Design's claim against Mr and Mrs Houlahan under s 11 of the Property Law Act
63 Cado Metal Design claims that under the building contract Mr and Mrs Houlahan were obliged to insure against contractors' liability to Mr Pitchen and that this obligation conferred a benefit on Cado Metal Design which it is entitled to enforce under s 11 of the Property Law Act.
64 Clause 13(b) and cl 13(c) of the building contract provided:
The Builder shall insure against any liability, loss or damage claim demand and proceedings whatsoever arising out of or connected with or in any way due to the following namely:-
(i) any personal injury to or death of any person arising out of or in connection with or in the course of the Works, other than due to the negligent act or omission by the Owner or any person for whom the Owner may be responsible;
The Builder shall insure against any liability, loss or damage claim or proceedings whatsoever to or by any person employed by the Builder or the Builder's sub-contractors in or about the Works arising at common law or by virtue of any statute relating to workers' compensation or employers' liability except where such liability, loss or damage claim or proceedings is cause by the negligence or other fault of the Owner or its agents."
65 For those provisions to be enforceable by Cado Metal Design the contract would need to identify it as a beneficiary of the contract: Jones v Bartlett (2000) 205 CLR 166. The contract does not do so. There is nothing in the contract to show that Cado Metal Design is a beneficiary of that clause. Cado Metal Design's claim under s 11 of the Property Law Act fails.
Apportionment of liability in negligence between Cado Metal Design and Mr and Mrs Houlahan
66 Both Cado Metal Design and Mr and Mrs Houlahan were negligent. Mr and Mrs Houlahan had the overall responsibility for the construction of the house. However it was Cado Metal Design which physically installed the balustrade in a defective manner and in my view its responsibility is greater. In my view it is just and equitable that as between Cado Metal Design and Mr and Mrs Houlahan liability between them should be apportioned 75 per cent against Cado Metal Design and 25 per cent against Mr and Mrs Houlahan.
67 Counsel for Mr Pitchen tendered into evidence a book of medical reports. Neither defendant required any medical practitioner to attend the trial to give oral evidence.
68 After the fall Mr Pitchen was in great pain throughout the night. He sought medical attention the next morning and was ultimately admitted to Royal Perth Hospital where he came under the care of Mr P Woodland, orthopaedic spinal surgeon. In the fall Mr Pitchen suffered an unstable burst compression fracture of the T12 thoracic vertebra, two fractured ribs and soft tissue injuries to his lumbar spines. The fracture of the thoracic vertebra was treated without surgery.
69 Mr Pitchen was in hospital for 11 days. In hospital he was in constant pain. He was discharged from hospital with a brace which he had to wear constantly for three months.
70 He still has constant back pain. The pain has reduced, but he has to take pain killers regularly.
71 In May 2006 Mr Pitchen obtained employment as a supervisor at a gold mine in China. Due to his back pain he was unable to cope with that work, even though it did not require significant physical activity, and he ceased doing that work in June 2006. He has not returned to any other employment since the accident. In a report to Mr Pitchen's general practitioner Mr Woodland wrote that he did not think that it would be safe or appropriate for Mr Pitchen to be to return to his previous crane driving work.
72 Prior to the accident Mr Pitchen enjoyed gardening, fishing and cooking. He is now unable to do so. In June 2006 Ms Wiese ceased working to care for him and provide him with regular massages. As a result of his injuries Mr Pitchen has suffered and will continue to suffer significant pain and he has lost the enjoyment of recreational activities. He suffers insomnia and has depressive symptoms caused by the pain and restrictions that result from his injuries. He has no significant retained earning capacity.
73 On 20 February 2005 Mr Pitchen's employer wrote to him to inform him that his cash salary from 9 February was $70,500 and that there would be a further review in June 2005.
74 Mr Gunter Sieben had the same employment as Mr Pitchen at the time of the accident. He received four pay increases until the mine at Wiluna closed down in July 2007. At that time his salary was $87,500. Mr Sieben's evidence was that when he was made redundant he received a redundancy payment and he "ended up walking away with $30,000 cash". (T56)
75 Mr Sieben had no difficulty finding other employment and has had to knock work back. He now works as a sub-contract crane diver - serviceman.
76 He produced three payslips from his current employment, Exhibit 17, they show that in September 2007 he received the following income:
77 His evidence was that because his pay period differs from his work period his weekly pay varies, and that he receives $1,450 net a week.
78 I find that if Mr Pitchen had not been injured he would have continued to work as a crane driver at Wiluna. His income would have increased from $70,500 to $87,500 a year. I am unable to find when the increases would have taken place, or how much they would have been. I think it is reasonable to calculate the past loss on the basis of earnings at the rate of $70,500 a year until 30 June 2005. $79,000 a year for the year ended 30 June 2006 and $87,500 a year for the year ended 30 June 2007 and for the current financial year. $79,000 a year is the average of $70,500 and $87,500 a year.
79 In view of Mr Pitchen's injuries and the restrictions that he has, his employment history involving physical activity and his education I conclude that Mr Pitchen has no retained earning capacity.
80 I am satisfied from Mr Sieben's evidence that it is likely that Mr Pitchen would have been made redundant and that he had good prospects, of obtaining other employment. In calculating Mr Pitchen's past economic loss I have made no allowance for a redundancy payment. I do not know what it would have been and it is likely that it would have taken some time to obtain other employment.
81 I am not satisfied that the income currently earned by Mr Sieben is the income that Mr Pitchen would have earned. It does not follow that because Mr Sieben has obtained employment at the rate he now earns Mr Pitchen would have obtained employment at that rate. In my assessment $87,500 a year is an appropriate measure of Mr Pitchen's lost earning capacity.
82 My calculations of loss of earning capacity are as follows:
83 From the date of the accident on 30 June 2005 the weekly after tax income for a gross income of $70,500 a year was $973. The loss for that period of 18 weeks was $17,514.
84 For the financial year ended 30 June 2006 I have deducted from $79,000 the sum of $47,314 earned by Mr Pitchen's company Bovalon Enterprises Pty Ltd for Mr Pitchen's work in China. The balance of $31,686 produces an after tax income of $25,845.
85 For the year ended 30 June 2007 I have deducted from $87,500 the sum of $39,600 earned by Bovalon Enterprises. The balance of $47,900 produces an after tax income of $37,461.50.
86 Thereafter the net weekly loss is $1,218. For the 32 weeks from 30 June 2007 to date the loss is therefore $38,976.
87 The total past loss is $119,796.50. Interest on that loss at the annual rate of 3 per cent is $10,624.
88 I calculate past loss of superannuation, using 9 per cent of the gross income figures and making a deduction of 70 per cent for tax and fund costs at $9,944.
89 Mr Pitchen was an active and fit man at the time of the accident and there are reasonable prospects that he would have worked until the age of 65. However I also bear in mind the heavy nature of the work he was doing, which may have lead him to seek lighter work as he got older. I bear those factors on mind in making an allowance for contingencies of 6 per cent. There are 14 years until he turns 65 and the multiplier is therefore 499. His future loss of earning capacity is therefore $571,315. Future loss of superannuation calculated on the same basis and making the same deduction of 30 per cent for tax and fund costs is $49,725.
90 Mr Pitchen's past treatment costs have been $27,903.80, of which $3,554.50 has been paid by Medicare. Interest on the costs not paid by Medicare ($24,349.30) at the rate of 3 per cent per annum is $2,159. Past travelling expenses have been agreed at $4,613. Interest on those expenses at the same rate is $409.
91 Mr Pitchen will require treatment in the future to manage and control his symptoms. It is not possible precisely to calculate the future treatment costs. The treatment will be over a longer period than the past, but it will not be as intensive as the treatment in the months immediately following the accident. I allow $30,000 for future treatment costs and $5,000 for future travelling expenses.
92 Ms Wiese has provided driving, massage and domestic care services to Mr Pitchen which he has required as a result of his accident. It is likely that she will continue to do so in the future and that Mr Pitchen will continue to require such care. It is artificial to attempt to calculate the value of those items in a case such as this, but I am satisfied that some appropriate allowance should be made. I allow $20,000 for past gratuitous services and $30,000 for future gratuitous services.
93 Mr Pitchen has suffered significant pain, suffering and loss of enjoyment of life as a result of his injuries. They have impaired every aspect of his life. Section 10A of the Civil Liability Act 2002 permits me to refer to other cases in assessing general damages.
94 No party submitted that any other award in another case should be referred to in determining general damages. I assess damages for non pecuniary loss at $65,000.
(1995) 182 CLR 609
(2000) 205 CLR 166