Spehar v Trtovac & 2 Ors

LOWER COURT District Court JURISDICTION : LOWER COURT DC 2030/01 FILE NUMBER(S) : LOWER COURT Black DCJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41014/02 DC 2030/01

MEAGHER ACJ IPP JA

Friday, 25 July 2003 MARKO SPEHAR v JASMINA TRTOVAC & 2 ORS Judgment 1 MEAGHER ACJ: I agree with Ipp JA. 2 IPP JA: On 10 December 1998, the appellant, then 18 years old, was seriously injured in a motor vehicle accident. He commenced proceedings for the damages he suffered in consequence. The action was heard by Judge Black QC in October 2002. In his Honour's judgment he observed: "Liability is not in dispute and accordingly this is a matter for assessment only".

It is not apparent from the material before us whether only one or two (and, if so, which) or all of the respondents were held to be liable, but whatever the position may be in this regard, Mr Hislop QC, together with Mr Capelin, appeared for the party liable (and I shall refer to this party as "the respondent"). 3 Black DCJ awarded damages to the appellant in the sum of $299,427 made up as follows: -

Non-economic loss $139,000 Past out-of pocket expenses $ 13,627 Future out-of-pocket expenses Nil Past economic loss $ 35,000 Past loss of superannuation: $ 2,800 Future economic loss $100,000 Future loss of superannuation $ 9,000 Total: $299,427

4 In this appeal the appellant challenges the awards for future economic loss, future loss of superannuation and future out-of-pocket expenses. 5 His Honour accepted that the appellant "had a significant injury to his right femur, resulting in nerve damage, which has left him with a permanent foot drop". He has serious and disfiguring scarring to his right leg. 6 Dr Samad, a psychiatrist retained by the appellant, testified that the accident caused the appellant to suffer from major depressive and anxiety stress reactions. A psychiatrist retained by the respondent expressed the view that there was no evidence to suggest that the appellant suffered "an abnormal response to the injuries under consideration". Black DCJ said in this regard: "[The appellant] has suffered considerable mental anguish concerning the effect of the accident upon his previously excellent physique, and I accept he will continue to feel upset about that aspect".

And: "I do not accept the criticisms of the [appellant] in the [respondent's] medical reports that he is exaggerating and misrepresenting his symptoms in the way they describe". 7 I infer from these remarks that his Honour accepted the opinion of Dr Samad. The fact is that, at the time of the trial, the appellant was taking a combination of pharmaceutical drugs including an antidepressant, a "major tranquilliser" and a drug to combat the side effects of the tranquilliser. Dr Samad had prescribed these for the mental condition from which the appellant was suffering. 8 The appellant attended school until 1995, when he was in year 10. He was not good at academic subjects. In May 1997, he travelled overseas because he wished to visit his ill grandfather for the last time. In addition, there had been "stress at home" by reason of the break-up of his parents' marriage and his father suggested that he should go for a long holiday. He remained overseas until October 1997. 9 During the period from the time that he left school until he went overseas (while aged between 15 and 16 ½ years) the appellant was unemployed. 10 After the appellant returned home in October 1997, he remained out of work until October 1998. During a period (apparently shortly before the accident), the appellant obtained employment from a firm known as "D & S Constructions" for whom he worked for about five weeks and performed heavy manual labour, including digging trenches, carrying bricks and moving wheelbarrows. 11 During the period that the appellant was unemployed he seems to have spent most of his time playing sport and keeping physically fit. He also undertook martial arts and was plainly a person of athletic inclination. 12 On 10 December 1998, two days before the accident, the appellant obtained employment with Livla Interiors Pty Ltd. He said he left D & S Constructions because he had obtained a "better job" at Livla, where he received "more pay". 13 The appellant's work at Livla involved working as a labourer and assisting in installation of gyprock walls. 14 At Livla, the appellant worked as an independent contractor and earned $120 per day after tax. He thus earned $500 per five-day week, an income in line with New South Wales' average weekly earnings. 15 In dealing with future economic loss, Black DCJ accepted that the appellant was unsuitable for heavy labouring work "and any work involving the climbing of ladders". His Honour said that the appellant's "future employability has definitely been significantly affected in as much as he will have to obtain light and/or sedentary employment". 16 On the other hand, Black DCJ had serious doubts about the appellant's motivation to work, saying: "The [appellant's] record both at school … and thereafter has not shown a regular application to work. Indeed, prior to the accident his working experience was minimal and since the accident his efforts at rehabilitation have not been such as to inspire confidence in his application to work". 17 His Honour expanded on these remarks, saying: "It seems to me from the various medical reports and also the evidence of his sister that the [appellant] has not made appropriate efforts to rehabilitate himself, although he says that he is now minded to do so … [B]ecause of the lack of application to work by the [appellant] prior to the accident he would not in my judgment be entitled to a full calculation based on any particular percentage of disability". 18 Nevertheless, the judge concluded that the appellant would probably be rehabilitated and find some employment. He said: "I am confident that with the passage of time the [appellant] will become more accepting of his situation and that given appropriate application to rehabilitation will find a range of acceptable employments and will become more socially active. Nevertheless, for the rest of his life he will have permanent reminders of this accident and in my judgment …. 45% … is an appropriately [sic] assessment to make". 19 Taking these matters into account, his Honour decided to deal with future economic loss by "doing the best I can by way of a cushion rather than attempting to formulate precise percentages of loss". His Honour held that the appropriate figure for future economic loss was $100,000. 20 Mr Rewell SC, who together with Ms Beardow, appeared for the appellant, challenged his Honour's reasoning in concluding that the appellant's lack of scholastic achievements, his failure to work before going overseas, the fact that he only worked a few weeks after returning to Australia, and his failure energetically to look for work after the accident, justified a significantly reduced award for loss of future earning capacity. 21 The report card from the appellant's school does show a lack of application at school on his part. However, I doubt whether the school performance of a 15 year old boy is a reliable indicator as to his motivation to work as an adult and breadwinner. 22 I also do not think that the fact that the appellant made little attempt to obtain employment between the ages of 15 and 16 ½ years (prior to his trip overseas) has any material significance. He was then far too young to draw any inference about his likely motivation later in life. 23 The period after his return from overseas until the date of the accident has greater relevance, but the fact is that he did obtain work during that period and was sufficiently motivated to change his job to get more pay. 24 Mr Hislop drew attention to SRA v Madden [2001] NSWCA 252 where one of the factors taken into account by Handley JA (with whom Rolfe AJA - on this point - and I agreed) in reducing the damages for loss of future earning capacity was the lack of education and motivation on the part of the respondent, a young man aged 18 years at the date of the trial. 25 In my view, however, the appellant stands in a different situation to the respondent in Madden. Firstly, the appellant in this case had actually obtained employment before the accident, in contrast to the respondent in Madden. Secondly, prior to the accident, the appellant qualified as a security officer and a forklift driver. While he only applied for one job as a forklift driver and did not apply for any security jobs, at least his conduct in obtaining these qualifications demonstrated a real interest in improving his capacity to obtain future employment. This was unlike the respondent in Madden who, "although he felt he could do a TAFE course … had made no inquiries about doing one and could suggest no reason why he had not done so" (per Handley JA at para 34). Thirdly, the appellant's sister, who Black DCJ regarded as "a truthful and accurate witness," testified that the appellant's motivation had increased, "he wanted to work, he wanted to earn money, have a career, get a job". Fourthly, the appellant's injuries appear to be significantly more serious than those of the respondent in Madden. Those injuries must have affected the appellant's motivation to obtain work after the accident. Fifthly, the major tranquilliser and other drugs the appellant's psychiatrist told him to take must also have had a similar affect. 26 Mr Rewell pointed out that, using the 5% multiplier and deducting 15% for vicissitudes of life, the award of $100,000 is equivalent to a weekly loss of earnings of $127 net per week, that is a loss of less than 20% of the average weekly earnings of a full time male employee in New South Wales. This is to be compared with the degree of injury suffered by the appellant, namely 45% of a worse case. 27 Mr Rewell submitted that for the rest of his working life the appellant will be required to find work of a sedentary or clerical nature for which he is not well qualified and has little, if any, aptitude; moreover, with his injuries and psychological problems, the appellant will not be an attractive candidate to prospective employers. 28 In my opinion, these submissions should be accepted. His Honour has been led astray by the inferences he has drawn from the appellant's pre- and post-accident employment history, and his school record. 29 I accept that the case is suitable for a lump sum award in the nature of a "cushion". An assessment of the appellant's future employment prospects is difficult, and an arithmetic calculation of the earnings he is likely to receive (having regard to the injuries he has sustained) even more so. 30 In my view, however, the amount of $100,000 as a cushion is far too low. In my opinion, an appropriate award for future loss of earnings would be $175,000. 31 Black DCJ calculated the loss of future superannuation entitlements by awarding the appellant 9% of the cushion of $100,000, that is, $9,000. Mr Rewell accepted that, should this Court decide that it was appropriate to calculate the award by determining a cushion, the increased loss of superannuation entitlements should be calculated in the same way. Mr Hislop made no objection to this approach. Accordingly, I would assess the total loss of future superannuation entitlements as being $17,500 - an increase of $8,500. 32 As regards future out of pocket expenses, Black DCJ said: "It was suggested on [the appellant's] behalf that he should receive a further $15,000 for future out of pocket expenses. I cannot find any evidentiary basis for making that award. All the medication he currently takes is at no expense to him and as he expressly said he was reluctant to undergo future cosmetic surgery, that decision means he is not entitled to claim the cost of it. In the result I find myself unable to make any award in relation to future out of pocket expenses". 33 The surgery to which his Honour was referring was plastic surgery involving ameliorating the scarring of the appellant's leg. There was evidence from a plastic surgeon that the overall cost of the surgery would be $20,000. There was no challenge to this evidence. There was other evidence that the surgeon's fees for such an operation would be $5,500, without the cost of "tissue expanders" which cost approximately $1,500 each. There was no evidence as to how many tissue expanders would be required (or what they were). I do not regard this other testimony as inconsistent with the overall cost of $20,000 as estimated by the plastic surgeon previously mentioned. 34 The appellant testified that he was "not ready" for the operation "because there's a lot of risk involved of infection and more operations". By the time of the trial the appellant had had ten operations already. Later in his evidence the appellant said that he did "not for now" want further operations. 35 The appellant's evidence in this respect did not justify a finding that the appellant, permanently, "was reluctant to undergo future cosmetic surgery". At the time of the trial he was reluctant, but it did not follow that that state of mind would continue for ever. The appellant was entitled to be paid a reasonable sum based on the contingency that he would have the operation. 36 Moreover, there was ample evidence that the appellant was seeing his psychiatrist and general practitioner on an on-going basis and that he was taking a large number of pharmaceutical drugs. While it is true that some of these costs would be met by Medicare, there appears to be little doubt that some of these expenses would have to be met by the appellant from his own pocket. 37 In my view, the observation by the judge that there was no evidentiary basis for making an award for future out of pocket expenses was erroneous. In my view, the sum claimed of $15,000 under this head is reasonable and it should be awarded. 38 I would uphold the appeal and increase the amount of damages awarded by $98,500, that is, from $299,427 to $397,927. Costs reserved. 39 This increase of $98,500 is made up of $75,000 (being the increase in future economic loss) plus $8,500 (being the increased loss of superannuation entitlements) plus $15,000 (being the new award for future out of pocket expenses). **********

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