Sophie Fegan by her tutor Inga Rozenauers v Lane Cove House Pty Limited

CATCHWORDS: Damages - future economic loss - buffer - s 13(1) Civil Liability Act 2002

Briscoe-Hough v AVS Australian Venue Security Services Pty Ltd [2005] NSWCA 51 Carolan v AMF Bowling Pty Ltd t/a Bennetts Green Bowl (unreported) Court of Appeal, 16 November 1995 Graham v Baker (1961) 106 CLR 340 Hornsby Shire Council v King [2005] NSWCA 67 Jopling v Isaac [2006] NSWCA 299 CASES CITED: K'mart Australia Ltd v McCann [2004] NSWCA 283 Leichhardt Municipal Council v Montgomery [2005] NSWCA 432 MacArthur District Motorcycle Sportsman v Ardizzone [2004] NSWCA 145 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 Medlin v State Government Insurance Commission (1995) 182 CLR 1 Penrith City Council v Parks [2004] NSWCA 201 State of New South Wales v Moss (2000) 54 NSWLR 536

PARTIES: Sophie Fegan by her tutor Inga Rozenauers (Claimant) Lane Cove House Pty Limited (Opponent)

COUNSEL: C. Patterson (Claimant) G.M. Gregg (Opponent)

SOLICITORS: Ian Kenneth Chipchase of Stacks/Goudcamp (Claimant) Ebsworth & Ebsworth (Opponent)

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40424/06

IPP JA BELL J

Wednesday 18 April 2007 SOPHIE FEGAN BY HER TUTOR INGA ROZENAUERS v LANE COVE HOUSE PTY LIMITED Judgment 1 IPP JA: I agree with Bell J. 2 BELL J: The claimant sustained injury as a small child when an "A" frame piece of equipment collapsed and fell on her at a childcare centre operated by the opponent. The accident happened on 1 December 1994 when the claimant was not quite four years old. The injury was to the tips of the middle and ring fingers of her left hand. She is now a high school student aged 16 years. 3 The claimant brought proceedings in the District Court claiming damages as the result of her injury. Liability was admitted and the matter proceeded as an assessment. 4 On 16 June 2006 the trial Judge assessed the claimant's damages as follows: Non-economic loss $14,500.00 Past out of pocket expenses $1,801.10 Future out of pocket expenses $600.00 _________________________________________ $16,901.10 5 The claimant applies for leave to appeal against the judgment. The Court heard submissions in respect of the application for leave and, upon the assumption that leave may be granted, the appeal. 6 A single challenge was made arising from the Judge's decision not to award the claimant any damages for future economic loss.

7 The claimant gave evidence at the trial. She said that she uses a computer keyboard at school and at home. She quite regularly types her assignments and essays and every night she logs on to MSN and corresponds with other users. After 30 minutes of computer use she starts to get stabbing pains in her middle finger. She finds that after 15 or 20 minutes of constant typing her fingers start to hurt and she has to stop and wait for the pain to subside. She believes that she would not be able to work in a position in which she had to use a computer as a major component of her work. There was no challenge to the claimant's evidence in these respects. 8 The claimant was in Year 10 at the date of her evidence. Her father is a solicitor and she was about to undertake work experience with a barrister. She said that she would like to be a lawyer and that she had achieved good marks in commerce. 9 The claimant's father gave evidence that she complains of pain in her fingers when using a keyboard for any length of time. This evidence was not the subject of challenge.

10 Dr Honner, a specialist hand surgeon, was qualified on the claimant's behalf. In his report, dated 11 June 2003, he diagnosed a severe crushing injury to the tips of the non-dominant left long and ring fingers. He assessed the claimant's prognosis as fair, observing that she had reached a stable, steady state and would not suffer any later deterioration. Dr Honner considered that the claimant had suffered a permanent loss of six per cent of efficient of her non-dominant left hand.

11 Therese Brosnan, a hand therapist, assessed the claimant. Ms Brosnan reported that the claimant had adapted well to having a hypersensitive middle fingertip and a ring finger nail bed defect. Functionally, she performed well in generalised activities. Ms Brosnan considered the claimant's overall status with respect to long-term outcomes is good. She noted that the claimant suffers gross grip and pinch strength and pain within the middle finger on prolonged use of the left hand, in particular when keyboarding. It was difficult to determine how this might affect the claimant's vocational goals. She recommended that the claimant's capacity to type over a sustained period be assessed. The assessment was undertaken by Melisa Bobanovic, an occupational therapist. 12 Ms Bobanovic said that the claimant reported that her main problems were hypersensitivity of the tip of the middle finger, aching within the middle finger and an experience of tingling to the tip of the middle finger that worsens after approximately 30 - 40 minutes of keyboard usage. An assessment was carried out over two hours. Ms Bobanovic concluded that the claimant had adapted well to her finger injuries and hypersensitivity. Functionally she was able to perform all the tasks requested and she displayed minimal pain behaviours. At the completion of the two-hour testing the claimant reported her pain to be 5/10 and that there was an increase in tingling and aching within the fingertips. Ms Bobanovic assessed the claimant as being able to perform typing tasks for a reduced period. That is, performing tasks for less than 15 minutes at a time over a normal eight hour day with regulation breaks. In Ms Bobanovic's opinion, vocational options, such as a legal secretary, administration and/or data entry positions that involve constant typing were not likely to be suitable options.

13 The opponent tendered a number of reports prepared by Dr Conolly, a specialist hand surgeon. Dr Conolly expressed the opinion, in a report dated 18 January 2002, that the claimant was fit for her current schoolwork and current activities and fit for all forms of occupation and recreations, which she might choose in the future. Dr Conolly considered she would be fit for clerical duties and fit for typing and computer work using her previously injured middle and ring fingers. Dr Conolly prepared a further report dated 28 May 2003. In that report he noted under the subheading "Current complaints" that the claimant had reported that when using a keyboard on a laptop computer at school her two fingertips became irritable. In a report dated 28 May 2003 Dr Conolly assessed the claimant as having suffered a 10 per cent loss of left hand function as compared to a most extreme case.

14 Her Honour found that the claimant suffered: · Tenderness, particularly of the middle finger and hypersensitivity when knocked. This is a particular problem when playing netball which she does competitively for the school; · Tingling of the fingertips. The fingertips become irritable and painful when using a keyboard and after 15 to 20 minutes of constant use it is necessary for her to rest her hand to wait for the pain to subside; · There is also restriction of flexion of the PIP joint and loss of grip strength which Dr Conolly assessed in his reports in some detail. 15 The Judge noted Ms Bobanovic's opinion that the claimant was only able to perform typing tasks for a limited period and that occupational options, such as being a legal secretary or occupying an administrative and/or data entry position - being occupations involving constant typing - were unlikely to be suitable for her. Her Honour found that the claimant would have been unlikely to engage in occupations of this nature, irrespective of her injuries. Her Honour took into account that the claimant's father is a solicitor and the claimant's evidence that she would like to be a lawyer. Her Honour commented that the claimant presented as an intelligent and articulate young lady. She found that it was highly likely that the claimant would undertake some form of tertiary study. Her Honour found that the claimant would have difficulty using a keyboard for extended periods and that most occupations, including those which it was most likely the claimant would engage in, such as law or commerce, would involve at the very least a reasonable amount of keyboard work. 16 In arriving at the assessment of the claimant's non-economic loss, the Judge took into account the claimant's difficulties in using a keyboard. Her Honour's acceptance of these difficulties contributed to the finding, which may be thought a generous one, that the claimant's injuries (crush injuries to the tips of two fingers of her non-dominant hand) were to be assessed as 20 per cent of a most extreme case.

17 Counsel for the claimant submitted that against the factual findings to which I have referred at paragraph [14] above, her Honour erred in her approach to the assessment of future economic loss pursuant to s 13 of the Civil Liability Act 2002 (the Act). 18 The Judge dealt with the claim for future economic loss saying this: Economic loss is to be determined in accordance with s 13. Sub-s (1) provides: A count cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant's most likely future circumstances but for the injury. The court is then required to make the adjustments required in sub-s (2) and (3). In view of the fact the plaintiff was only aged four when the injury occurred and is still only fifteen and a half her likely future circumstances but for injury is a matter which is virtually impossible to determine with any degree of certainty and involves considerable speculation. The plaintiff's counsel submitted that a buffer was appropriate because the entirety of her working life will be affected by the injury. He submitted that a buffer would take into account such matters as interruptions to her employment, restrictions in the nature of vocations she can pursue as well as reduction in work efficiency. Her counsel relied on what the Court of Appeal stated in Penrith City Council v Parks [2004] NSWCA 201 namely that a modest award as compensation for the chance that a claimant may be disadvantaged in the future because of injury is not precluded by the section. However, what the Court said was that s 13 attempts to identify the pre-injury circumstances upon which any award for damages may be based and that is the problem which the plaintiff faces in this case. [my emphasis.] Counsel for the plaintiff also referred the Court to Macarthur District Motorcycle Sportsmen Incorporated v Ardinzzone [2004] NSWCA 145. However, I do not consider that this authority assists the plaintiff's case as Mr Ardinzzone has been able to demonstrate that he had a restricted earning capacity in specific occupations which he may have pursued but for injury. The Court of Appeal stated in that case that s 13 does not require that if the assumptions referred to cannot be established in a clear and concrete manner there cannot be award for future economic loss. However whilst I accept the plaintiff may have the difficulties to which I have referred, on the evidence before me I am not persuaded that she is likely to suffer any economic loss as a consequence. For these reasons I consider that she has failed to discharge the onus in relation to the claim for future economic loss (judgment 7-8). (emphasis added) 19 Counsel submitted that the Judge approached the assessment of damages under s 13 wrongly in that she understood the section as requiring the claimant to establish future loss of earnings rather than a loss of earning capacity. I see no warrant for concluding that her Honour proceeded under this misconception. She referred to impairment of earning capacity in discussing the decision of this Court in MacArthur District Motorcycle Sportsman v Ardizzone [2004] NSWCA 145, a case which was concerned with the assessment of future economic loss under s 13.

20 Next, counsel for the claimant submitted that in the sentence that I have highlighted above the Judge is to be understood as finding that the claimant had failed to establish her "most likely circumstances" for the purposes of s 13(1) and that she was thus precluded from an award for future economic loss. This was said to be inconsistent with the Judge's earlier finding of the "most likely circumstances", namely, that the claimant was highly likely to undertake tertiary studies and obtain employment in law or commerce and in such employment to do a reasonable amount of work using a keyboard. 21 In counsel's submission it appeared that her Honour had taken a passage from the judgment of McClellan AJA Penrith City Council v Parks [2004] NSWCA 201 at [58] out of context. His Honour said this: [58] With respect to an award for future economic loss in the nature of a buffer, I doubt whether the section has any relevant impact. Although the section must be complied with, it will not lead to a conclusion which has any relevance to such an award. The Court must determine the claimant's "likely future circumstances" and identify the pre-injury percentage possibility of those events occurring, but the compensation awarded is not otherwise confined. A modest award as compensation for the chance that a claimant may be disadvantaged in the future because of the injury is not precluded by the section. All that the section is attempting to do is identify the pre-injury circumstances upon which any award of damages may be based, but it does not dictate the outcome in the event that only part of a claimant's earning capacity has been affected by the injury.

The highlighted sentence in her Honour's judgment was said to mirror his Honour's concluding sentence. In the same case Giles JA (Cripps AJA concurring) at [3] held that s 13(1) appears to be directed to a claimant's pre-injury most likely circumstances. His Honour went on to find that it is still open to assess damages by way of a buffer in circumstances in which the impact of the injury upon the economic benefit to be obtained from exercising earning capacity after injury is difficult to determine (at [5]). Counsel observed that this approach has been followed in a number of cases by this Court. That is so: K'mart Australia Ltd v McCann [2004] NSWCA 283; Briscoe-Hough v AVS Australian Venue Security Services Pty Ltd [2005] NSWCA 51; Hornsby Shire Council v King [2005] NSWCA 67; Leichhardt Municipal Council v Montgomery [2005] NSWCA 432; Jopling v Isaac [2006] NSWCA 299. It is not apparent that any difference in approach to the construction of s 13 between Giles JA and McClellan AJA in Parks led to her Honour misconstruing the provisions of subs (1) in the way that is alleged. Her Honour took from Parks that s 13 did not preclude an award of damages by way of a buffer for the chance that a claimant may be disadvantaged in the future because of the injury (J 7.8).

22 The Judge delivered judgment the day following the trial. The highlighted sentence upon which counsel for the claimant relied is not expressed with the clarity of the remainder of the judgment. However, the construction for which counsel contends seems to me to be strained. I do not accept that her Honour is to be taken to have overlooked the findings that she had made concerning the claimant's pre-injury most likely circumstances. It seems to me that in the highlighted sentence her Honour's reference to the "problem" which the claimant faced, when read in context, was to her conclusion that, "whilst I accept the plaintiff may have the difficulties to which I have referred, on the evidence before me I'm not persuaded that she is likely to suffer any economic loss as a consequence" (J 8.5). 23 Counsel submitted that given the finding that the claimant suffers a disability which affects her capacity to use a keyboard, she must be assessed as having suffered some reduction in her capacity to earn income and that she had an entitlement to some compensation by way of a buffer: Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 17. 24 At trial, counsel then appearing for the claimant, submitted that an appropriate buffer was a sum of the order of $50,000. In this Court counsel submitted that the range was $20,000 - $25,000.

25 The claimant was not entitled to recover damages for loss of future earning capacity unless she established both impairment in capacity and that such impairment may be productive of financial loss: Medlin v State Government Insurance Commission (1994-1995) 182 CLR 1 per Deane, Dawson, Toohey and Gaudron JJ at 3; Graham v Baker (1961) 106 CLR 340 at 347. Her Honour noted that counsel for the claimant had submitted that a buffer would take into account interruptions to employment, restrictions in the nature of the vocations that the claimant could pursue and reduction in work efficiency (J 7.5). On the application it was put that the claimant would be disadvantaged in her pursuit of employment in any professional field in that, all things being equal, she would be less employable than a person who did not have any reduction in typing capacity. There was no evidence of the relative disadvantage that a person employed in a professional (or managerial) capacity, who was unable to type for sustained periods without a break, would be likely to face in the market.

26 In the absence of evidence that the claimant was at risk of interruption to her employment occasioned by her reduced capacity to type for extended periods without a break, or that any reduction in her efficiency on this account might occasion her financial loss, it was not necessary for the Judge to deal with these submissions more fully than appears in the judgment. As a matter of common experience, a professional person (or a person employed in a managerial role) may work more efficiently if he or she has well developed touch-typing skills. Nonetheless, to posit that a person in employment of this description who has difficulty typing for sustained periods without a break may suffer financial loss arising from this circumstance may be thought somewhat fanciful.

27 In Macarthur District Motorcycle Sportsman Inc v Ardizzone [2004] NSWCA 145 Hodgson JA observed that, at least theoretically, there may be some tension between the requirements of s 13(1) and the statements of principle in Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at 634. Basten JA in Jopling at [3] commented on the significant difficulties that would attend the assessment of damages for children who suffered serious injury if s 13 is held to require a different approach. In Jopling the primary judge's assessment of a buffer in accordance with the principles explained by Heydon JA in State of New South Wales v Moss (2000) 54 NSWLR 536 at 559 and in Malec was approved. Counsel for the claimant submitted that a proper application of these principles dictates that some allowance be made for future economic loss since, among the possible future outcomes is the chance that the claimant's impairment of a vocational skill may be productive of financial loss. Reliance was placed on Heydon JA's observations in Moss at [87]: In short, where earning capacity has unquestionably been reduced but its extent is difficult to assess, even though no precise evidence of relevant earning rates is tendered, it is not open to the court to abandon the task and the want of evidence does not necessarily result in non-recovery of damages. … The task of the trier of fact is to form a discretionary judgment by reference to not wholly determinate criteria within fairly wide parameters. Though the trier of fact in arriving at the discretionary judgment must achieve satisfaction that a fair award is being made, since what is involved is not the finding of historical facts on a balance of probabilities, but the assessment of the value of a chance, it is appropriate to take into account a range of possible outcomes even though the likelihood of any particular outcome being achieved may be no more than a real possibility. 28 As I have noted, the Judge approached the assessment on an understanding that a claimant who may suffer disadvantage by reason of the injury is not precluded from an award under s 13. A fair reading of the judgment conveys that her Honour was not satisfied that the claimant had established that her reduced capacity to use a keyboard for extended periods without a break impaired her capacity to earn income in a way that was, or may be, productive of financial loss. To my mind to come to such a conclusion was not unreasonable; because unlike the facts in Moss this is not a case in which it is apt to speak of an "unquestionable reduction in earning capacity". In the event that it was an error not to make some allowance for the chance of financial loss arising from the claimant's injury I consider that any buffer would involve a sum well below the revised range posed by her counsel on the hearing of the application. Taking into account the principles set out by Kirby P (as he then was) in Carolan v AMF Bowling Pty Ltd t/a Bennetts Green Bowl (unreported) Court of Appeal, 16 November 1995, I would refuse leave to appeal. 29 The orders that I propose are: 1. Dismiss the application for leave to appeal; 2. The claimant is to pay the opponent's costs of the application. *******

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