Ryan & another v A F Concrete Pumping Pty Ltd & another - [2013] NSWSC 113 - NSWSC 2013 case summary — Zoe

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Ryan & another v A F Concrete Pumping Pty Ltd & another

[2013] NSWSC 113

Supreme Court of NSW|2013-02-08|Before: Adamson J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2013-02-08

Before

Adamson J

Catchwords

(2004) 217 CLR 424 -Attorney-General for New South Wales v The Perpetual Trustee Company Ltd [1952] HCA 2
(1952) 85 CLR 237 -Barclay v Penberthy [2012] HCA 40
(2012) 86 ALJR 1206 -Commissioner for Railways (NSW) v Scott [1959] HCA 29
(1959) 102 CLR 392 -Dib Group Pty Limited trading as Hill & Co. v. Cole [2009] NSWCA 210 -Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88

Source

Original judgment source is linked above.

Catchwords

(2004) 217 CLR 424 -Attorney-General for New South Wales v The Perpetual Trustee Company Ltd [1952] HCA 2(1952) 85 CLR 237 -Barclay v Penberthy [2012] HCA 40(2012) 86 ALJR 1206 -Commissioner for Railways (NSW) v Scott [1959] HCA 29(1959) 102 CLR 392 -Dib Group Pty Limited trading as Hill & Co. v. Cole [2009] NSWCA 210 -Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 8867 NSWLR 516 - Husher v Husher [1999] HCA 47(1999) 197 CLR 138 -Knauer v Transfield Pty Limited [2005] NSWSC 176 -Leveridge v Witten (Court of Appeal, 14 September 1979, unreported) -Malec v JC Hutton Pty Ltd [1990] HCA 20(1990) 169 CLR 638 -Marinovski v Zutti Pty Ltd [1984] 2 NSWLR 571 -Mercantile Mutual Insurance Co Ltd v Argent Pty Ltd (1972) 46 ALJR 432 -Spargo v Haden Engineering Pty Ltd [1993] SASC 379360 SASR 39 -State of New South Wales v Moss [2000] NSWCA 133

Judgment (9 paragraphs)

[1]

The application of s 151Z(2) of the Workers Compensation Act 180Section 151H contains the following limitation on the recovery of damages: "(1) No damages may be awarded unless the injury results in the death of the worker or in a degree of permanent impairment of the injured worker that is at least 15%. Note. Section 322 of the 1998 Act provides that the assessment of the degree of permanent impairment is to be made in accordance with WorkCover Guidelines. That section also provides that impairments that result from the same injury are to be assessed together. ... (4) The degree of permanent impairment that results from an injury is to be assessed as provided by this section and Part 7 (Medical assessment) of Chapter 7 of the 1998 Act.. . " 181In light of my findings that Reliance Pools would not, if sued, have been liable to the plaintiff it is not strictly necessary to determine whether the plaintiff exceeded the threshold of 15% whole person impairment. However because the assessment of whole person impairment was the subject of oral evidence, it is appropriate that I do so. This determination requires the Court to consider the relevant medical evidence and the WorkCover Guidelines pursuant to which medical assessments are made in accordance with the Workplace Injury Management Act. 182The evidence germane to the question of whole person impairment was: (g)The opinion of Dr Teychenne, neurologist and approved Workcover certifier, who adjudged that the plaintiff had suffered a 29% impairment as a result of the accident; (h)The opinion of Dr Rowe, neuropsychologist, who opined in a written report that the plaintiff had suffered a whole person impairment of 12% impairment, with 10% for cognitive impairment but who in cross-examination revised his opinion on the impairment attributable to cognitive impairment to 0%; and (i)Dr Harrison, orthopaedic surgeon who opined that the plaintiff suffered 2% impairment as a result of injury to his shoulder. 183The certification procedure which would have been invoked had the plaintiff sued his employer was not applicable. In these circumstances the Court is obliged to assess the evidence for itself to determine the degree of whole person impairment. Nonetheless I accept the plaintiff's submission that it is not appropriate that I endeavour to interpret the applicable guidelines to come to a finding unsupported by expert evidence, particularly in circumstances where, when the assessment is real rather than actual, the assessor must be duly certified. 184Although I considered Dr Rowe to be expert in his field of neuropsychology and I have accepted his evidence in other respects, I prefer the evidence of Dr Teychenne on the assessment of the degree of permanent impairment. Dr Teychenne has been a consultant neurologist for about thirty years and is, accordingly, highly experienced. He has substantial expertise in diagnosing, assessing and treating cognitive impairment. He is an accredited assessor of whole person impairment and accordingly is entrusted with the task of performing such assessments when the task is actual rather than, as here, hypothetical. 185The opinion of Dr Harrison is not contested. The principal impairment suffered by the plaintiff is a cognitive one. 186The threshold is exceeded in respect of the cognitive impairment. I find that the plaintiff suffered a whole person impairment of 29%. For reasons given in a separate judgment to determine an interlocutory application for leave to rely on expert reports served out of time, this finding is not binding on EML.

[2]

The claim by Reliance Pools International 187This claim per quod is brought separately from the plaintiff's claim. As referred to above, the plaintiff has specifically abandoned any loss of income occasioned by his inability to participate in the business to be conducted by Reliance International. 188It was common ground that, by reason of the accident, the plaintiff could not engage in the venture proposed to be undertaken by Reliance Pools International. It was not submitted that a per quod claim could not be made in the circumstances; nor was it submitted that a claim for damages that was wholly comprised of future, post-accident, loss could not be made. 189It was accepted, in accordance with Commissioner for Railways (NSW) v Scott [1959] HCA 29; (1959) 102 CLR 392 (Scott), Attorney-General for New South Wales v The Perpetual Trustee Company Ltd [1952] HCA 2; (1952) 85 CLR 237 (Perpetual) per Dixon J at [13], and Marinovski v Zutti Pty Ltd [1984] 2 NSWLR 571 (Marinovski), that a company whose general manager or executive director is disabled through another's negligence can recover as loss from a wrongdoer. 190The evidence establishes that at all material times the plaintiff was to be an integral part of the business affairs of Reliance Pools International and was personally responsible in very large measure for the reputation of Reliance Pools itself which Reliance Pools International proposed to exploit. That the proposed agreement between Gemco and Reliance Pools International made specific provision for the plaintiff to provide consultancy services is a powerful indication of the contribution it was considered the plaintiff would make to Reliance Pools International. 191EML, whose submissions on damages were adopted by AF Concrete, submitted that the loss, if any, to be suffered was speculative since no contract had been concluded and the lack of follow-up by the Qatari interests once Ms Suleiman "backed off" showed that they were not particularly committed to the venture.

[3]

Whether damages can as a matter of law be assessed on the basis of loss of profits 192EML submitted that a per quod claim cannot be based on loss of profits since damages for such a claim are limited to the cost of a replacement servant and associated expenses. EML adopted the analysis of Kiefel J in Barclay v Penberthy [2012] HCA 40; (2012) 86 ALJR 1206 at [156] - [164] (Barclay) and submitted that Mercantile Mutual Insurance Co Ltd v Argent Pty Ltd (1972) 46 ALJR 432 (Argent) is not authority for the proposition that a claim for loss of profits can be made, because only the quantum of damages and not the basis on which they were awarded, was at issue in that decision. 193EML also submitted, in accordance with Kiefel J's analysis in Barclay, that the decision of the Court of Appeal in Marinovski, by which I am bound, effectively rests on the unstable foundation of Argent and is therefore of no assistance to Reliance International in the present claim. 194It referred to obiter statements of Fullagar J in Perpetual at [24]-[27] which were referred to by Dixon CJ and Taylor J in Scott at [8] and [4] respectively. It also referred to Leveridge v Witten (Court of Appeal, 14 September 1979, unreported) which was considered in Marinovski by Hutley JA at 575 in the following passage: The only other relevant authority is Leveridge v Witten (Court of Appeal, 14 September 1979, unreported), where Hope, Reynolds and Glass JJA said: "There is a paucity of authority on the principles by which damages are to be assessed in such a case and counsel were unable to make submissions which tended to establish a principle of useful application to the present facts. It seems to us that the proper approach to such a problem as the present is that in general damages should be limited to the loss proved to the company in respect of the period during which the company was obliged to pay money for services it did not receive and for such time as the company suffers loss while seeking a suitable substitute employee. It cannot be correct, as a general principle, to award damages to a company where a particular employee as the result of a tortious act has ceased to be employed and the company would throughout the period of the working life of that employee have received greater profits by the application of his particular skills, energy and intellect than is otherwise probable. We are unable to accept that the law would require a comparison between the effectiveness as a revenue producer of the injured employee and his substitute or successor." This does not exclude a company proving losses in the form of decline in profits or increase in losses from an accident to an employee, but the occasions would be rare. The judgment makes no reference to Argent's case and I find it difficult to reconcile with the last sentence as the very basis of the award of damages in Argent was that the companies were deprived of the services of Box, which loss, in turn, caused a fall in profits. It must follow that where an employee of unique capacity is lost and replaced by an inferior employee damages resulting from the proved loss will be recoverable. For example, a leader in a new field, such as biotechnology, may be literally irreplaceable and his injury destroy the company. There is no single test for the measure of damages recoverable by an employer for the loss of an employee. 195Kiefel J's conclusion appears relevantly in the following passage in Barclay at [164]: Consistency with the purpose and scope of the action per quod servitium amisit requires that damages be limited to the cost of substitute labour. In Cattanach, it was observed that the employer suffers damage only when it is forced to pay a salary or wages to its injured employee when it is, at the same time, deprived of the employee's services. To permit recovery on any wider basis, including for profits lost, would be to transform an exceptional remedy for a particular type of loss into a substantial exception to the general principles which have developed concerning recovery of economic loss in tort. In terms of the coherence of the law, that would be undesirable. 196Although the passage from Kiefel J's reasons supports the proposition for which EML contends- that loss of profits is not a true measure of damages for a per quod claim- the statements from Scott and Perpetual are less unequivocal. In any event I do not consider myself to be at liberty to depart from what the Court of Appeal said in Marinovski. Further, I consider the obiter statements of the majority in Barclay leave open the possibility of a claim based on loss of profits if it is established, as I consider it to have been in the instant case, that Mr Ryan was irreplaceable in the business structure.

[4]

Assessing the quantum of the claim 197I consider the claim by Reliance International ought be assessed as a claim for the loss of a chance which must be quantified as such, in accordance with the statements of principle contained in Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 at [7] (Malec v Hutton). On this analysis it would, in my view, be unfair to the defendants and EML to treat as certain a prospect which might have had a 51% chance of coming to pass and unfair to Reliance Pools International to ignore the loss of the chance to exploit the reputation of Reliance Pools and the plaintiff's special skills and reputation if it were adjudged to have only a 49% chance of coming to pass. 198Although Reliance Pools International had not started trading at the time of the plaintiff's accident and never did, some groundwork had been done prior to the accident and further groundwork as set out above was done after the accident to cultivate its relationship with Gemco. It was suggested that I should be sceptical of the plaintiff's and Ms Suleiman's optimism in circumstances where no one from Gemco was called to say what its attitude to the deal was. I do not draw an adverse inference against Reliance Pools International on that ground. The email communications speak for themselves: Gemco appears to have been interested but no binding commitment had been made, although there had been some discussion about the terms of any eventual venture. 199Although no evidence was given about what, if any, follow up occurred after Ms Suleiman "backed off" it was not suggested to her in cross-examination that Gemco was not interested because they themselves had not followed up Ms Suleiman. 200There was undoubtedly uncertainty about the terms of Reliance Pools International's remuneration. At one stage a licence fee of $100,000 was proposed; however, in January 2009, there was mention of a fee of 10% of contract fees. The MOU referred to 15% of turnover. 201There was also a deal of uncertainty about the commencement of the venture and its probable duration. According to the MOU, entry into a Licence Agreement would be conditional upon a trial pool being completed. The trial pool, which had to be for a minimum contract value of $250,000, was to be commenced within 6 months of signing the MOU and completed within 9 months to a standard that satisfied Reliance Pools International. Failure to meet any of these criteria would give Reliance Pools International a right to terminate. The initial term was to be three years with an option to renew. According to the MOU, Gemco was only bound to use the Reliance Pools Qatar brand for pools worth $250,000 or more. 202Furthermore none of the pools that was designed for Reliance Pools was protected by intellectual property rights. Mr Garnett, the pool designer frequently engaged by Reliance Pools, said that it would not be uncommon in his experience for someone to copy their designs and said that there was nothing to stop someone from doing that. 203Further, it was submitted that Reliance Pools International had not proved what its actual loss would be as distinct from its loss of gross income since it did not establish what the plaintiff himself would have been paid by Reliance Pools International as a result of services performed for its benefit. 204Reliance Pools International must prove that it lost something of value and, if so, what its loss is likely to have been as a result of the unavailability of the plaintiff. 205Reliance Pools International relied on Dr Crouch's calculation of its gross annual income of $266,000 as comprising the following four elements: Licence fee $100,000 Consulting fee $45,000 Working drawings $25,000 Travel reimbursement $96,000 206Reliance Pools International properly conceded that if the amount for travel were truly a reimbursement it would not add to its income. It also properly conceded that it had made no allowance for the cost of the plaintiff's remuneration and that it was fair to allow that the plaintiff would earn at least the amount of $45,000 since this amount represents consulting fees which would be a direct result of his labour. Once these adjustments are made the gross income amounts to $125,000. 207EML contended that the amount referable to working drawings ought also to be disregarded because either the plaintiff would do them, in which case it was, like the $45,000 consultancy fees, properly to be regarded as monies generated by his personal exertion; or Reliance Pools International would have to pay someone to do them and this was not allowed for in the expenses (see below). I do not accept this submission since I consider that there was a real prospect that Reliance Pools International could earn a profit on working drawings and that the monies in the line items for "salary/ consulting" or "all other expenses" may represent payments to persons such as Mr Garnett for the preparation of such drawings. 208Dr Crouch estimated various expenses to be incurred by the company in the course of earning the gross income. The figures ultimately advanced in oral submissions were: Motor vehicle expense/ travel $5,000 Repairs and Maintenance $5,000 Salary/ consulting $30,000 All other expenses $10,000 Total $50,000 209On these figures, the net profit of Reliance International before tax would be $75,000. According to Dr Crouch, a tax margin of 30% is appropriate because of the corporate structure, giving rise, on these figures to a net after tax profit for Reliance Pools International in the order of $52,000 or $1,000 per week. 210Dr Crouch, in his report, considered that as the company had not traded the best that could be done to quantify future profitability is to use the proposed first year's trading figures. 211The timing of the negligence by AF Concrete has deprived Reliance Pools International of the opportunity of seeing this venture come to fruition. It has also made it difficult for Reliance Pools International to quantify its claim with any real precision. However, where a wrongdoer has deprived the injured party of the means of more exact proof, a Court will endeavour to assess damages on the material available: see the authorities referred to by Heydon JA in State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 at [72]. 212EML submitted that one approach might be to select a weekly net profit figure and then apply a 5% multiplier for 23 years, being 721.2, to give a starting figure in the order of $720,000 without any reduction for vicissitudes or uncertainty as to how the venture would proceed. EML submitted that I ought allow no more than 25% to 33% of that amount, having regard to the real issues of uncertainty and the need to take account of multiple layers of potential uncertainties as discussed in Malec v Hutton at [7] and [9]. If one adopted this method one would arrive at a figure in the order of $180,000 to $240,000. 213AF Concrete, which adopted EML's submissions on the per quod claim except as to the calculation of damages, proposed a different calculation which led to a significantly smaller total sum. These calculations, including my own, are necessarily speculative. I do not, however, consider AF Concrete's submissions to take adequate account of the value of the chance lost. 214Although there are attractions to the approach for which EML ultimately contended, I consider there to be a better chance that Reliance Pools International would gain most of its income from the venture in the first three year term and that thereafter Gemco would have the skills, expertise and reputation to continue without its association with Reliance Pools International or, for that matter, the plaintiff. On this assessment it is somewhat artificial to conceive of a venture that would last 23 years. It follows that the greater part of the loss of Reliance Pools International would already, but for the accident, be in the past. 215I am inclined to assess the past loss of Reliance Pools International for the period of three and a half years from the latter half of 2009 (being my estimate, and the plaintiff's concession, of when income would first be received) to the date of judgment at 50% of the net profits after tax of $52,000, being an amount in the order of $100,000, inclusive of interest under s 18 of the Act. 216As for the future, I allow a buffer of $100,000 to reflect the loss by Reliance Pools International of the opportunity to exploit the plaintiff's expertise to make a profit from providing assistance by way of technical knowledge and design skills to entities based in Qatar to construct swimming pools of a higher standard than is generally available there presently. The amount for the future takes account of my view that once the plaintiff had supervised sub-contractors on particular pools, there was a real prospect that his 'niche' would attract local competition. Reliance Pools International's competitive disadvantage because of the plaintiff's location in Australia and his unwillingness to relocate to the Middle East would, in my view, prevent it from making more substantial profits than those allowed for by the buffer. 217Accordingly I assess damages on the per quod claim in the amount of $200,000.

Parties

Applicant/Plaintiff:

Ryan & another

Respondent/Defendant:

A F Concrete Pumping Pty Ltd & another

Legislation Cited (1)

Social Security Act 1991(Cth)

Cases Cited (20)

Whether Reliance Pools was negligent 64Whether Reliance Pools was negligent needs to be determined because it affects whether a reduction to the plaintiff's damages needs to be made to take account of the employer's liability and also the cross-claim by AF Concrete against EML for contribution and indemnity. 65The question posed by s 151Z(2) of the Workers Compensation Act 1987 is: what damages would the plaintiff have been entitled to recover from Reliance Pools? As the plaintiff has not sued his employer for damages, the question is a hypothetical one to be answered by reference to the circumstances existing at the time of the accident: Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88; 67 NSWLR 516 at [42]. 66There are two aspects to the hypothetical recovery of damages by the plaintiff against Reliance Pools: first, would the employer have been found liable in negligence; and secondly, would the plaintiff have exceeded the threshold of 15% whole person impairment. The second question is dealt with later in connection with damagess. 67Although the plaintiff, as a director of Reliance Pools, had the capacity to control the company, this has been found to be no impediment to a director who is also an employee recovering damages from an employer for breach of the duty of care the latter owes to him: Andar Transport Pty Limited v Brambles Limited [2004] HCA 28; (2004) 217 CLR 424, at [49]-[50] per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ. 68Reliance Pools, as the plaintiff's employer, had a non-delegable duty to take reasonable steps to provide the plaintiff with a safe system of work. However this duty will operate differently on another's premises than it does on its own: Dib Group Pty Limited trading as Hill & Co. v. Cole [2009] NSWCA 210, at [54] per Basten JA, with whom Beazley and McColl JJA agreed. 69I have found the negligence which caused the accident was a casual act of negligence by the employees of AF Concrete. In my view, there was no negligence on the part of Reliance Pools. The defendants have failed to prove that there is any action that Reliance Pools could reasonably have taken to reduce the risk to the plaintiff that ensued. Nor have they proved any relevant omission on the part of Reliance Pools to take reasonable care to provide the plaintiff with a safe system of work. The case that it was negligent for any of the relevant employers, Reliance Pools, AF Concrete or C & J, to permit their employees to be present on the 7th floor when the concrete was being blown has not, for reasons already given, been made out. 70Although AF Concrete contended that Reliance Pools was negligent in failing to require the plaintiff to wear goggles, there was no relevant injury to the plaintiff's eyes or to the area around his eyes. Accordingly the wearing of goggles was, at best, irrelevant to this accident. Correspondence between Reliance Pools and Workcover dated 21 July 2008 annexed to Dr Cooke's report indicates that the only matters of concern to Workcover, as far as its investigation of Reliance Pools was concerned, were the provision of safety glasses and gloves and a 2-way communication device, neither of which had any causative bearing on the accident. 71Accordingly, there is no deduction to be made from the plaintiff's damages by reason of any negligence by his employer. It also follows from these findings that EML is entitled to succeed on its cross-claim against AF Concrete and there must be judgment for EML on the cross-claims to which it is a cross-defendant in so far as they seek contribution or indemnity in respect of the plaintiff's claim.

The plaintiff's post-accident working capacity 106I accept the unchallenged evidence of Dr Hutton that the plaintiff has implemented all treatment recommendations, including what has been described as "periodisation", which is a method the plaintiff uses to pace himself so that he can make the most of his limited endurance. 107The indulgence shown to the plaintiff in the course of his voluntary work for Misfit Aid in Australia and on the trips would not be extended to a paid worker. Furthermore, even jobs which are considered to be menial and therefore not requiring any substantial mental effort might still be beyond him, as Dr Rowe explained in passage set out above. 108The defendants accepted that the plaintiff has lost some earning capacity but submitted that he had a residual earning capacity and that if his work was less mentally arduous but more physically demanding, he could manage to work for longer hours. 109The defendants bear the evidentiary onus of establishing that the plaintiff has a residual earning capacity and what jobs are open to him by which he may exploit that capacity. In Rabay v. Bristow [2005] NSWCA 199, McColl JA, with whom Handley and Bryson JJA agreed, said at [73]: "It is for a defendant which contends that the plaintiff has a residual earning capacity to adduce evidence of what the plaintiff is capable of doing and what jobs are open to such person ... H. Luntz Assessment of Damages for Personal Injury and Death 4th Edition at 118 ..." 110The defendants' contention that the plaintiff had a residual earning capacity was put to Dr Rowe who responded as follows: Q. There are jobs where that is the case, where little mental exertion is needed and a lot more physical exertion? A. It is not as simple as that. You would have to look at the occupation carefully and the nature of his impairments. For example, he comes up quite impaired on a cognitive domain, known as attention. . . . But depending on the activity, if there is a high demand of these attentional resources, then we would expect that potential risk of fatigue to be a lot higher. For example, he may participate in a fairly simple job, such as a production line, but it requires careful attention and vigilance. So he may not be able to do that sort of work even though it is a less mentally demanding task. So what you are saying is correct in a general sense, but I think you would have to look at the specifics of the occupation. 111Counsel for C & J Concrete put to the plaintiff that he could drive a tractor along the beach to plough the sand. The plaintiff disagreed. He explained that if something went wrong, for example a tyre went flat, he would not know what to do. I accept the plaintiff's assessment of his limitations. 112The defendants tendered reports from persons who considered that the plaintiff had an impaired or substantially unimpaired earning capacity, including Dr Selwyn-Smith and Dr Champion. However, these reports did not take account of the unchallenged evidence of the lay witnesses and Dr Hutton and therefore the opinions cannot be accepted. Furthermore the opinions rest on the premise that the principal impediment to the plaintiff's working is a psychiatric condition, such a post-traumatic stress disorder, rather than a cognitive impairment caused by brain damage. As referred to above, it is common ground that the post-traumatic stress disorder has resolved. No neurologist was called by the defendants to challenge or impugn the opinions of Dr Paul Teychenne, neurologist, or Dr Donald Rowe, neuropsychologist, as to the extent, effect and permanence of the plaintiff's cognitive impairment, which I accept. 113The vocational report of the Vocational Capacity Centre, relied on by the defendants, suggested that the plaintiff could work as a construction manager or a project manager and would earn in the order of $2,000 per week. Neither defendant had the temerity to put this proposition to Dr Teychenne or Dr Rowe. I do not propose to consider it further. 114Having regard to the evidence of the plaintiff, the unchallenged evidence of his wife and his general practitioner, and the medical evidence of Drs Teychenne and Rowe, I do not consider the plaintiff to have any residual earning capacity. I accept the plaintiff's submission that he has lost all earning capacity by reason of the cognitive impairment caused by the traumatic brain injury sustained in the accident.

Damages for past and future economic loss due to loss of earnings and future earning capacity 132There was a considerable dispute about the plaintiff's earnings before the accident and the amount the plaintiff would have earned but for the accident. 133Part of the difficulty in assessing the plaintiff's pre-accident earnings arises from Reliance Pools being effectively under his control. All the earnings of Reliance Pools were a result of his labour and efforts. They were, however, distributed in such a way as to minimise tax. Accordingly the plaintiff's net earnings as disclosed in his tax return did not reflect his true earning capacity. 134In Husher v Husher [1999] HCA 47; (1999) 197 CLR 138 (Husher) the plurality said, at [23]: ". . . the inquiry is about what could the plaintiff have done in the workforce but for the accident and what sum of money would the plaintiff have had at his or her disposal." 135I am required, by s 13 of the Act to assess damages on the basis of the plaintiff's most likely future circumstances but for the injury. The plaintiff had been conducting the business of Reliance Pools since 1997, some eleven years before the accident. The undoubted success the plaintiff had enjoyed in winning awards and developing an excellent reputation in the marketplace for high-end pools would make it highly unlikely that he would change direction at the age of 43. 136I have taken into account the statistics referred to by Mr Ivey which indicate that although the age at which persons are entitled to the aged pension under s 43 of the Social Security Act 1991, the average retirement age is less than that. However, the plaintiff was concerned to preserve his physical fitness and therefore, but for the accident, is likely to have retained sufficient physical and mental capacity to run Reliance Pools. In any event he was not personally engaged in the physical exertion required to construct a pool since he engaged subcontractors for this task. 137The plaintiff enjoyed running his own business, was very focussed on work and derived considerable satisfaction from it. I am satisfied on the balance of probabilities that, but for the accident, the plaintiff would have continued in the business of Reliance Pools, or a similar business, until the age of 67. 138The question to be determined is therefore what sum of money plaintiff would have had at his disposal through the business of Reliance Pools. To answer the question requires an analysis of the likely future earnings of Reliance Pools which will be considered further below. 139I consider, in accordance with what Perry J said in Spargo v Haden Engineering Pty Ltd [1993] SASC 3793; 60 SASR 39 (Spargo) at [40], cited with approval in Husher, at [26], that it is appropriate that the allowance for income tax: ". . . should approximate the amount which he might have paid on the gross earnings if they had been brought to account by him rather than by the family trust." 140Although the plaintiff did not formally concede in submissions that he accepted that this was the effect of Spargo, he claims in his Schedule of Damages, the maximum gross loss per allowable under s 12 of the Act, adjusted to produce a net figure as if he was earning this amount as a PAYG employee. The way the plaintiff puts his future loss of earning capacity by reference to net weekly income calculated at the tax rate for a PAYG employee is, therefore, consistent with Spargo. This is the approach I shall also adopt.

Contracts entered into for the 2009 financial year 165The evidence established that there were fourteen contracts to be carried out between July and December 2008, of which, by reason of the accident, only five were completed. The sum of the contract amounts was in the order of $1m. Mr Ivey accepted that it was likely that, but for the accident, these contracts would have produced an additional net profit of $200,000 for the six-month period which commenced a fortnight before the accident had they been completed. Dr Crouch, who was slightly more conservative about such matters, agreed that the additional net profit but for the accident would have been in the order of $180,000. 166There was no evidence of the Reliance Pools ever having failed to complete a pool. The number and type of awards is some indication that I should not infer that these contracts would not have been completed. The reputation of Reliance Pools was not in issue. Mr Garnett, whose evidence was not challenged gave the following evidence: Q. Where would you have placed Reliance Pools in the market generally in terms of ordinary pool builder, or up the top end? A. Definitely the top end. We have worked with a number of pool builders and I would put him right at the top. Q. What would you say about Mr Ryan's ability in terms of pool building design and construction? A. He was probably a pioneer in a lot of aspects in the way that he built pools. It was always top quality, always for the best clients. So, pretty much as good as they came in Sydney. 167Had these contracts referred to above been completed, the gross turnover and net profit, would, I infer, have substantially exceeded the amounts for previous years and produced an after-tax income in the hands of the plaintiff in excess of the statutory cap. Indeed, Mr Ivey's concession as to the 6-month $200,000 net increase in income would alone, if it were the sign of things to come, produce an income under the plaintiff's control that substantially exceeds the statutory cap. 168I am satisfied that the pre-tax income that the plaintiff would have had available to him but for the accident for the year following the accident would have exceeded the cap of $3,162.90. 169It was contended against the plaintiff that this increase would not have been maintainable because of the effects of the Global Financial Crisis (GFC). The difficulty with this submission is that it was not supported by evidence of when the GFC began, what its effects on the building industry in the Sydney metropolitan area were and, in particular, how it affected the high-end swimming pool market in which Reliance Pools operated. Nor were any questions asked of, or propositions put to, witnesses who might be likely to know. In these circumstances I do not propose to discount the plaintiff's damages on that ground. 170I am satisfied on the basis of the evidence of the plaintiff, Dr Crouch and Mr Garnett, that once Reliance Pools had adopted the new business approach its profitability would probably have continued in future years at least at the level at which it would have been in 2009, had it not been for the accident. 171I have considered whether it is appropriate to include in the plaintiff's claim the amount of $45,000 for consultancy fees that the plaintiff might have earned from Reliance Pools International as provided for in the draft documents. It would not involve double-counting since it was ultimately accepted by Mr Cavanagh SC who appeared for both the plaintiff and Reliance Pools International that Reliance Pools International would be a mere conduit for that money. However in my view the plaintiff's probable future earnings would have exceeded the statutory cap even without the $45,000 and therefore it would make no difference if the amount were included. Accordingly it is not necessary to calculate the capital sum likely to be represented by these consultancy fees, taking into account my findings on vicissitudes with respect to the per quod claim brought by Reliance International. 172Had I been required to determine past and future economic loss without reference to the statutory cap in s 12 of the Act to limit an award of damages for past or future economic loss to a gross income of $3,162.90 per week, which equates to a net (after tax) income of $2,175 per week, a nice question would have arisen as to the quantification of the plaintiff's loss and whether the business would have continued to grow and what allowance should be made for vicissitudes over the 24 years remaining of the plaintiff's working life. However, since I am satisfied that the actual figure, for the past and the future, would in the future substantially exceed the weekly cap I am not required to make a hypothetical determination of the amount by which it would do so: see the approach adopted by Studdert J in Knauer v Transfield Pty Limited [2005] NSWSC 176 at [113] with reference to a similar statutory regime created by s 34 and s 151I of the Workers Compensation Act. 173The plaintiff is entitled to interest on these damages under s 18 of the Act. I request that the parties calculate the applicable interest and bring in short minutes of order reflecting their calculations.

[2004] HCA 28

[2012] HCA 40

[1993] SASC 3793

(2004) 217 CLR 424

(1952) 85 CLR 237

(2012) 86 ALJR 1206

(1959) 102 CLR 392

(1999) 197 CLR 138

(1990) 169 CLR 638

(1972) 46 ALJR 432

(2000) 54 NSWLR 536

[1952] HCA 2