Sutton v Hunter & Anor [2022] QCA 208

SUPREME COURT OF QUEENSLAND

CITATION: Sutton v Hunter & Anor [2022] QCA 208

PARTIES: KATE ANN SUTTON / (appellant) / v / LAUREN NICOLE HUNTER / (first respondent) / ALLIANZ AUSTRALIA INSURANCE LIMITED / ACN 000 122 850 / (second respondent)

FILE NO/S: Appeal No 13022 of 2021 / SC No 10195 of 2020

DIVISION: Court of Appeal

PROCEEDING: General Civil Appeal

ORIGINATING COURT: Supreme Court at Brisbane – [2021] QSC 249; [2021] QSC 268 (Freeburn J)

DELIVERED ON: 25 October 2022

DELIVERED AT: Brisbane

HEARING DATE: 13 May 2022

JUDGES: Bond JA and Crow and Mellifont JJ

ORDERS: The appeal is allowed.Vary order 1 made by Freeburn J on 7 October 2021, by deleting the figure “$314,345” and inserting in lieu thereof the figure “$543,988”.Vary the chapeau of the costs order made by Freeburn J on 22 October 2021 so that it reads “The second defendant pay the plaintiff’s costs on the District Court scale to be assessed on the indemnity basis, excluding”.The second respondent must pay the appellant’s costs of the appeal, to be assessed on the standard basis.

CATCHWORDS: DAMAGES – ASSESSMENT OF DAMAGES IN TORT – PERSONAL INJURY – INCOME LOSS AND LOSS OF EARNING CAPACITY – GENERALLY – where the appellant advanced a claim that she had suffered personal injury and other loss as a result of a car accident – where at the trial before the primary judge liability for the injury was admitted but the quantum of damages was in dispute – where the appellant pleaded a claim for past loss of income – where the primary judge made factual findings and awarded damages for past loss of income – where the appellant contended that the primary judge erred in the factual findings his Honour made as to the amount the appellant would likely have earned had she not been injured – whether the primary judge’s assessment of past economic loss was in error / DAMAGES – ASSESSMENT OF DAMAGES IN TORT – PERSONAL INJURY – INCOME LOSS AND LOSS OF EARNING CAPACITY – GENERALLY – where the appellant advanced a claim that she had suffered personal injury and other loss as a result of a car accident – where at the trial before the primary judge liability for the injury was admitted but the quantum of damages was in dispute – where the appellant pleaded a claim for future loss of income – where the primary judge made factual findings and awarded damages for future economic loss – where the appellant contended that the primary judge erred in the factual findings his Honour made as to the appellant’s loss of earning capacity as a result of the injury – whether the primary judge’s assessment of future economic loss was in error / DAMAGES – ASSESSMENT OF DAMAGES IN TORT – PERSONAL INJURY – INCOME LOSS AND LOSS OF EARNING CAPACITY – GENERALLY – where the appellant contended that the primary judge’s findings relating to statutory construction and the awarding of global sums were contrary to law and authority – where the appellant contended that the primary judge erred in the construction of s 55(3) of the Civil Liability Act 2003 (Qld) – whether the primary judge’s reduction of the amount determined for the appellant’s economic loss by a further 15% was inconsistent with the proper application of s 55 of the Civil Liability Act 2003 (Qld), arbitrary and against the weight of the evidence / PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – GENERALLY – where the primary judge ordered the second respondent pay the appellant’s costs on the District Court scale to be assessed on the standard basis – where the primary judge excluded from the costs order the costs of the application to transfer the proceedings from the District Court to the Supreme Court and the fees and expenses of an expert report – whether the primary judge erred in the manner he exercised the costs discretion / Civil Liability Act 2003 (Qld), s 55 / Civil Liability Regulation 2014 (Qld), sch 6 / Motor Accident Insurance Act 1994 (Qld), s 51C / Personal Injuries Proceedings Act 2002 (Qld), s 40 / Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40, discussed / Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833, discussed / Bulsey & Anor v State of Queensland [2016] QCA 158, cited / Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; [2011] HCA 21, cited / Devries v Australian National Railways Commission (1993) 177 CLR 472; [1993] HCA 78, cited / Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, discussed / Lee v Lee (2019) 266 CLR 129; [2019] HCA 28, cited / Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20, cited / Paul v Rendell (1981) 55 ALJR 371; [1981] UKPC 19, cited / Robinson Helicopter Company Incorporated v McDermott (2016) 90 ALJR 679; [2016] HCA 22, discussed / Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485; [1995] HCA 53, cited

COUNSEL: C Heyworth-Smith KC, with C Newton, for the appellant / G W Diehm KC, with R C Morton, for the respondents

SOLICITORS: Southside Legal for the appellant / McInnes Wilson Lawyers for the respondents

1. BOND JA:

Introduction

2. The appellant had advanced a claim that she had suffered personal injury and other loss, as a result of a car accident on 10 February 2015. The most serious of her injuries was that she suffered post-traumatic stress disorder. She claimed that the accident occurred as a result of the negligence of the first respondent. The second respondent is the first respondent’s insurer.

3. At the trial before the primary judge on 6, 7 and 8 September 2021, liability was admitted, but quantum was in dispute.

4. Amongst other heads of damages asserted in the appellant’s pleading were:(a)a claim for past loss of income, together with interest and past loss of superannuation; and(b)a claim for future loss of income, together with a future loss of superannuation.

5. By this appeal the appellant challenges the assessment made by the primary judge in respect of each of those claims. The appellant further challenges aspects of the decision made by the primary judge as to costs.

6. It is appropriate first to identify how each claim was advanced at trial and how each claim was resolved by the primary judge. Then it is appropriate to determine the various challenges now advanced to the determinations made by the primary judge.

The pleaded claims

Past loss of income

7. The appellant’s statement of claim was amended on the last day of trial just before the appellant closed her case. The way in which the pleading advanced the claim for past loss of income may be summarised in this way:(a)The plaintiff had been out of the commercial workforce for 9 years since her first child was born but intended to return to work once her second child started school. That occurred in January 2015, two weeks before the accident.¹(b)Her injuries had prevented her from working in a cleaning business run by her husband, where she would have worked as the business development manager.²(c)Her injuries caused her to lose the opportunity to launch an online business that she and a friend had planned to advance.³(d)She had an intention to reassess another business plan for selling tanning products and would have done that once her youngest child was settled at school.⁴(e)In the premises of those three propositions, she intended to return to the workforce in some capacity in early 2015 and had reasonable prospects of doing so.⁵(f)She claimed “the sum of $398,814 based on the report of Vincents Forensic Accounting to the 22nd July 2021 based on the average weekly earnings for females in Queensland as per Schedule “C” or alternatively globally for a total loss of earning capacity.”⁶(g)She claimed interest on the past loss of income pursuant to the Civil Liability Act 2003 (Qld) and also claimed past loss of superannuation at 9.5% of the calculated claim.⁷

8. Some observations should be made about the case as pleaded.

9. First, as at the date of trial the appellant had not returned to work and so had not earned any income between early 2015 and the date of trial. Her case theory supporting the calculated claim was that her injuries had caused a complete loss of her earning capacity in the period between early 2015 and the date of trial.

10. Second, the calculated total amount of $398,814 was the total of the after-tax earnings which a full-time worker earning the average weekly earnings for females in Queensland would have made for the period 11 February 2015 to 31 July 2021. By advancing her claim calculated in that way, the appellant communicated that her case was that the value of the loss of her earning capacity during the years leading up to trial should be assessed by making the assumptions inherent in the pleaded calculation (namely a return to full-time work in some capacity during the identified period resulting in earning the calculated level of remuneration) and by using the methodology by which the Vincents report arrived at the pleaded sum.

Future loss of income

14. The appellant’s claim for future loss of income was also pleaded by reference to the counterfactual that but for the accident the appellant would have returned to the workforce in some capacity in early 2015 and that she would have continued in the workforce until retirement in March 2038 at age 67.

15. She pleaded:¹⁰

“The plaintiff’s psychiatric condition is chronic and will preclude her from returning to remunerative employment of any kind in the short to mid-term, and possibly at all;

The plaintiff clams the sum of $754,180 based on based on the average weekly earnings for females in Queensland calculated in accordance with the assessment in Schedule “D” of the Vincents Forensic Accounting Report dated 22 July 2021;

Alternatively, [t]he plaintiff claims $1,000,000.00 for future economic loss on a global basis for total loss of her capacity for employment.”

16. Again, some observations should be made about the case as pleaded.

17. First, her case theory supporting the calculated claim was that her injuries had caused a complete loss of her earning capacity in the period from the date of trial to her hypothetical retirement in March 2038 at age 67. That might be thought to be inconsistent with the pleaded material fact that it was only a possibility that she would be precluded from returning to remunerative employment after the period she described as the “short to mid-term”.

18. Second, the calculated total of $754,180 was a net present value calculation as at 31 July 2021 using a 5% discount rate. It sought to assess the net present value of the after-tax earnings which a full-time worker earning the average weekly earnings for females in Queensland would have made for the period 1 August 2021 to 26 March 2038. By advancing her claim calculated in that way, the appellant communicated that her case was that the value of the loss of her earning capacity for the future should be assessed by making the assumptions inherent in the pleaded calculation (namely a continuation of full-time work resulting in earning the calculated level of remuneration until a retirement in March 2038) and by using the methodology by which the Vincents report arrived at the pleaded sum. It is notable that, as pleaded, the appellant’s case would regard it as a certainty that she would have done so, because the pleaded calculation allowed no discounting for the vicissitudes of life.

19. Third, the appellant’s pleading did not explain the calculation of the alternative $1,000,000 “global” claim for a total loss of earning capacity.

20. Fourth, analysis of the Vincents report reveals that the rates used to calculate the pleaded amount of $754,180 already included for superannuation. An additional claim for superannuation could not be maintained if those rates were used.¹¹

The approach of the primary judge

21. So far as the past economic loss claim was concerned, the primary judge considered the three factual propositions pleaded by the appellant to which reference has been made at [7](b), [7](c) and [7](d) above.

22. As to the first proposition – which was that the appellant had been prevented from working in her husband’s cleaning business – after considering the evidence which he had received from the appellant, her husband and her husband’s business partner, the primary judge found that on the balance of probabilities, the appellant had not proved that, as a result of the injuries she received in the accident, she was unable to commence work in the cleaning business.¹²

23. As to the second proposition – which was that the accident caused the appellant to lose the opportunity to launch an online business that she and a friend had planned to advance – after considering the evidence which he had received from the appellant, her friend Ms Kowalski and Ms Bernhardt (who was essentially a business mentor), the primary judge found that it was not possible to be satisfied that the business was a viable one, or that the appellant was likely to be gainfully employed in such a business, or that there was a prospect that she would earn an income as a partner in such a business.¹³

24. As to the third proposition – which was that she had intended to reassess a business plan for developing a tanning product business – after considering the evidence which he had received from the appellant and her husband, the primary judge found that he could not be satisfied that there was a viable business in prospect.¹⁴

25. However, despite those adverse findings, the primary judge was persuaded that the appellant’s earning capacity had been impaired because of the accident. He found that this was not a case in which it was relatively easy to calculate damages, as might have been the case if the period of incapacity was closed or there was a solid history of stable employment.¹⁵ Rather he found that the assessment of the appropriate level of damages to compensate the appellant for loss of her earning capacity was complicated by the following factors:¹⁶(a)her work history involved consistent employment but in a variety of jobs;(b)by the time of the injury, she had been out of the workforce for more than a decade; and(c)her possible employment in the three businesses referred to in the pleading was quite uncertain.

“55 When earnings can not be precisely calculated

(1)This section applies if a court is considering making an award of damages for loss of earnings that are unable to be precisely calculated by reference to a defined weekly loss.

(2)The court may only award damages if it is satisfied that the person has suffered or will suffer loss having regard to the person’s age, work history, actual loss of earnings, any permanent impairment and any other relevant matters.

(3)If the court awards damages, the court must state the assumptions on which the award is based and the methodology it used to arrive at the award.

(4)The limitation mentioned in section 54(2) applies to an award of damages under this section.”

28. Second, the primary judge examined and rejected the invitations which had been made in the second respondent’s submissions before him that he should make “global” awards of damages for past economic loss and future economic loss.¹⁸ He noted that although the appellant did not seek such awards, she did submit that it was open to him to make such awards.¹⁹ In the course of his analysis, the primary judge discussed the case law concerning the making of “global” awards, which he characterised as awards in which the figure is arrived in some purely intuitive way without any identification of assumptions or articulation of methodology.²⁰

29. Third, after an examination of that case law the primary judge expressed²¹ these conclusions:(a)Section 55(3) alters the common law.(b)Where the section applies, the court is required by the statute to state both its assumptions and the methodology used to arrive at the award for economic loss.(c)That requirement does not permit the court to make a ‘global award’ in the sense of an award that is not the subject of some application of assumptions as well as a methodology.(d)The evident purpose of the section was to ensure that courts do not use what has been described as the ‘purely intuitive’ assessment of damages as a global sum but instead adopt a transparent and reasoned approach based on the evidence.

30. Fourth, the primary judge acknowledged what he regarded to be the unsatisfactory state of the case law concerning global awards, and summarised what he thought to be the issues which the case law left unresolved, in these terms:²²

“That said, it must be acknowledged that the Court of Appeal’s decision in Reardon-Smith v Allianz Australia Insurance Ltd [[2007] QCA 211], and its majority decision in Ballesteros v Chidlow [[2006] QCA 323], accepts the validity of modest global sums for loss of earning capacity. On the other hand, the dissent of Fryberg J in Ballesteros v Chidlow [[2006] QCA 323] is to the contrary. The Court of Appeal’s more recent decision in Allianz Australia Insurance Limited v McCarthy [[2012] QCA 312] recognises the possibility of global sums for economic loss but requires that the court sufficiently reveal the basis for even a modest global award.

There are some issues that are unresolved by those three intermediate appellate decisions:

(a)What is a sufficient explanation for a global award?

(b)How can an explanation be sufficient given that s 55(3) of the Act requires the assessment to be based on both a statement of assumptions and a methodology?

(c)What precisely constitutes a modest award?

(d)How can the modesty of the award be said to have tempered the requirements of the statute?”

31. Fifth, ultimately the primary judge concluded at [110] (footnotes omitted) that:

“… it is doubtful that the court is entitled to adopt a global approach to economic loss. Even if that were not the case, it is appropriate for the court to decline the parties’ invitation to adopt a global approach to economic loss. It is necessary to embark on the assessment process in a methodical way – to the extent that is possible.”

32. Sixth, the primary judge then explicitly found²³ that he had reached the state of satisfaction referred to in s 55(2) of the Civil Liability Act, namely that the appellant had suffered and will suffer loss having regard to her age, work history, and the likely earnings which she would otherwise have earned but for the accident and the resulting impairment. He then embarked²⁴ upon the assessment of the appropriate award of damages for the impairment in the appellant’s earning capacity.

33. Seventh**,** the primary judge first stated the assumptions on which his award of damages for the impairment in the appellant’s earning capacity would be based. He found that the following were the appropriate assumptions to be made on the balance of probabilities:(a)First, it was likely that the appellant would have returned to the work force. She impressed him as capable and intelligent and he accepted her evidence that she had intended to return to work once her youngest child went to school.²⁵(b)Second, she would likely have returned to work as an employee not a business owner.²⁶(c)Third, it was not likely that she would have returned to full-time work, at least for quite some time.²⁷(d)Fourth, it was difficult to assess what kind of position she would have held. But given her history the prospects were that she would have held a managerial position in a small business or something similar.²⁸(e)Fifth, in the absence of any evidence of the salary of managers it would be assumed that her likely salary would be similar to the average weekly salary rates identified in schedules C and D of the Vincents report. (His Honour referred to schedules 3 and 4, but it is obvious he meant schedules C and D.) He noted that those rates included for superannuation. Based on that information, the average after-tax earnings for the years from 2015 to 2025 would be $62,907 which translated to a weekly after-tax wage of $1,200 per week (or $240 per day).²⁹(f)Sixth, whilst the appellant had been unable to work until trial, with the resolution of the litigation and the benefit of on-going treatment, she would be able to gradually return to work over the next few years, reaching a relative recovery by the end of 2025, by which time she would be 54 years of age.

and applying the assumptions to which reference has been made, and appreciating the uncertainties and the broad-brush approach of the exercise, the primary judge concluded that a rational approach was as follows:

(c)a loss of two days per week for 2015, 2016, 2017 and 2018, i.e., $240 x 2 days x 52 weeks x 4 years = $99,840;

(d)a loss of three days per week for 2019, 2020 and 2021, i.e., $240 x 3 days x 52 weeks x 3 years = $112,320;

(e)a loss of two days per week for 2022, 2023, 2024 and 2025, i.e., $480 net per week using the 5 per cent multiplier of 189.60 for 4 years = $91,008.

36. The following observations may be made as to that methodology:(a)Contrary to a submission advanced by the appellant, the primary judge was making an award of damages for loss of earnings that were unable to be precisely calculated by reference to a defined weekly loss. The calculation was an estimate. The fact that he conducted the estimate by making allowances in particular amounts gave it an apparent precision, but he was still performing the task contemplated by s 55(1) and seeking to comply with s 55(3). The apparent precision does not convert the award into something it was not.(b)Because the primary judge had accepted that the appellant had been unable to work until trial, the judge must be taken to have concluded that she had lost 100% of her earning capacity in the years after the accident and up until trial.(c)The first two assessments must be regarded as the primary judge’s assessment of the value of the appellant’s hypothetical earning capacity in the years after the accident and up to and including the year of the trial had the accident not occurred. His methodology was to value her earning capacity on that counterfactual by allowing two days per week at the average weekly earnings for females for the first four years and three days per week at that rate for the next three years. As appears from [37] below, that allowance took into account some risks which might have happened even on that counterfactual, but did not take into account others.(d)But the assessment looking to the future must be regarded as a combination of an assessment of the extent of her hypothetical earning capacity looking to the future and the extent to which it would continue to be adversely affected by her injury, arriving at the result that, but for the accident, she would have been able to work two days more per week than she will otherwise be able to work. The primary judge calculated the value using the same rates as he had used in relation to past loss. It is clear, however, that his assumption was that for the years after 2025, she would suffer no loss of earning capacity which is equivalent to the conclusion that the extent to which she would be able to exploit her earning capacity after 2025 would be at the same level as it would have been but for the accident.(e)All three assessments (and the failure to make any assessment for lost earning capacity for the years after 2025) are consistent with the finding identified at [33](f) above.

37. Ninth, the primary judge explained³² the approach he would take to applying a discount for the vicissitudes of life. He thought that the risks of the appellant not working at all, or of working only part-time, or on a casual basis or spasmodically, were built into the methodology he adopted and would justify no further discount. He concluded that it would be appropriate to apply a 15% discount for other non-employment related vicissitudes such as ill-health, pandemics, extended holidays, etc.

“Past economic loss

(a)2015-2018 - $99,840

(b)2019-2021 - $112,320

(c)Sub-total - $212,160

(d)Less discount of 15% = $180,336.

Future economic loss

(e)2022-2025 - $91,008

(f)Less discount of 15% = $77,357.”

The grounds of appeal

39. The appellant submitted that the awards of $180,336 and $77,357 were “manifestly inadequate and the subject of error and speculation”. She submitted that those awards should be set aside in lieu thereof this Court should make awards of $398,814 and $641,053, respectively.

40. The former figure was the pleaded claim for $398,814 for past economic loss and would represent acceptance of the pleaded calculation. The appellant’s written submissions on appeal justified the $641,053 claim for future economic loss by reference to the schedule of damages handed up during the trial.³³ Regard to that document reveals that the figure claimed at trial and now claimed on appeal is the pleaded claim for $754,180 for future economic loss, discounted by 15%.

41. In her written submissions, the appellant grouped thematically the errors which she alleged in an amended notice of appeal.

42. She asserted that the primary judge erred in the findings his Honour made as to the amount the appellant would likely have earned had she not been injured in the accident, identifying the following as the relevant appeal grounds (the square-bracketed figures being references to paragraphs in the judgment of the primary judge): (a)Ground (b): The Court's assumption at [120] that but for the accident, the appellant would only have worked two days a week for four years and three days a week for the next three years, is an underassessment of the appellant’s prospects of work capacity, as is the allowance of only two days a week going forward.(b)Ground (ba): The Court's assumption at [120] that, but for the accident, the appellant would only have earned $240 per day, is an underassessment of the prospects of the appellant's work capacity, is against the evidence and ignores the loss of chance.(c)Ground (e): The Court's finding at [50], [53] and [57(c)] that the appellant’s prospects of deriving employment or benefit from the businesses were negligible, is against the evidence and the weight of the evidence.(d)Ground (h): The Court's finding at [40(a)] and [43] that a contribution to the cleaning business only involved preparation of business cards, is against the evidence and the weight of the evidence.

43. She asserted that the primary judge erred in the findings his Honour made as to the appellant's loss of earning capacity as a result of her injury and the quantum of loss found to have been produced by that loss of earning capacity, identifying the following as the relevant appeal grounds:(a)Ground (a): The Court's finding at [119] that the appellant will gradually return to work over the next few years and recover by the end of 2025, is a finding without evidential basis and against all of the evidence, including that of Dr Chalk.(b)Ground (c): The Court’s preference for the evidence of Dr Chalk at [22], who had not seen the appellant for over two years, is against the evidence and the weight of the evidence.(c)Ground (d): The Court's finding at [27] that the appellant could work from home is a finding without evidential basis.(d)Ground (f): The Court's reliance on overseas travel at [17] and [29] ignores the evidence relating to the trips, their purpose and their lack of benefit.(e)Ground (g): The Court's reliance on attempts to get the appellant to socialise as not being relevant to employability, is against the weight of the evidence.(f)Ground (i): The Court's finding at [50] that there is a lack of proof of the appellant's inability to commence work in the cleaning business, is against the evidence and ignores the loss of chance.

Relevant principles of appellate restraint

46. On an appeal of the present nature, it is for the appellant to satisfy this Court that the order that is the subject of appeal is the result of some legal, factual or discretionary error: Allesch v Maunz (2000) 203 CLR 172 per Gaudron, McHugh, Gummow and Hayne JJ at 180-181 [23].

47. Where, as here, the alleged errors are in many respects alleged errors in fact finding, an appellant faces formidable (albeit not necessarily insurmountable) hurdles. An appellate court is required to exercise restraint when invited to interfere with a judge’s findings of fact, at least where those findings are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence.

48. Thus in Fox v Percy (2003) 214 CLR 118 at 127 [26]-[27], Gleeson CJ, Gummow and Kirby JJ referred with approval to a trilogy of earlier cases, including the following observations of Brennan, Gaudron and McHugh JJ in Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479, as to the correct approach of an appellate court where findings of fact based on credibility are challenged (footnotes omitted):

“More than once in recent years, this Court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against – even strongly against – that finding of fact. If the trial judge’s finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge “has failed to use or has palpably misused his advantage” or has acted on evidence which was “inconsistent with facts incontrovertibly established by the evidence” or which was “glaringly improbable”.”

49. That direction towards appellate restraint was emphasised by the High Court in Robinson Helicopter Company Incorporated v McDermott (2016) 90 ALJR 679 per French CJ, Bell, Keane, Nettle and Gordon JJ at [43] in the following terms (footnotes omitted):

“The fact that the judge and the majority of the Court of Appeal came to different conclusions is in itself unremarkable. A court of appeal conducting an appeal by way of rehearing is bound to conduct a “real review” of the evidence given at first instance and of the judge's reasons for judgment to determine whether the judge has erred in fact or law. If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings. But a court of appeal should not interfere with a judge's findings of fact unless they are demonstrated to be wrong by “incontrovertible facts or uncontested testimony”, or they are “glaringly improbable” or “contrary to compelling inferences”. In this case, they were not. The judge's findings of fact accorded to the weight of lay and expert evidence and to the range of permissible inferences. The majority of the Court of Appeal should not have overturned them.”

50. At first blush, that instruction seems to leave very little room for an appellate court to be persuaded of factual error. The passage was explained in the subsequent decision of Lee v Lee (2019) 266 CLR 129 per Bell, Gageler, Nettle and Edelman JJ at [55] in these terms (footnotes omitted):

“A court of appeal is bound to conduct a “real review” of the evidence given at first instance and of the judge's reasons for judgment to determine whether the trial judge has erred in fact or law. Appellate restraint with respect to interference with a trial judge's findings unless they are “glaringly improbable” or “contrary to compelling inferences” is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts. Thereafter, “in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge”.”

51. The grounds of appeal advanced in this case also challenge the evaluative judgments made by the primary judge in reaching his assessment of the value of the impairment of the appellant’s earning capacity, both in the years preceding trial (past economic loss) and for the years after trial (future economic loss). Both evaluative judgments necessarily involved the consideration of hypothetical events, having regard to what the primary judge had heard and seen of the witnesses, including the appellant and medical experts. Neither task was straightforward. And it could not be thought that there was any one right answer. In such circumstances, the observations by Allsop J, with whom Drummond and Mansfield JJ agreed, in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at [24]-[25] are instructive:

“What is error in any given case depends, of course, not only on the evidence, but also on the nature of the findings or conclusions made by the primary judge. The demonstration of error may not be straight-forward where findings or conclusions involve elements of fact, degree, opinion or judgment or when the findings or conclusions in question can be seen as made with the advantage of hearing the evidence in its entirety, presented as it unfolded at the hearing with the opportunity over the course of the hearing and adjournments for reflection and mature contemporaneous consideration and assessment, in particular in a long and complex hearing: ….

This is not to elevate ordinary factual findings to the protected position of those based on credit, but it is to make clear, first, the advantages of the trial judge and, secondly, the need for demonstration of error. The inability to identify error may arise in part from the unwillingness of the appeal court to be persuaded that it is in as good a position as the trial judge to deal with the issues, because of the kinds of considerations referred to in [24] above. Or, it may be that the nature of the issue is one such that (though not a discretion) there cannot be said to be truly one correct answer. In such cases the availability of a different view, indeed even perhaps the preference of the appeal court for a different view, may not be alone sufficient: …. In circumstances where, by the nature of the fact or conclusion, only one view is (at least legally) possible (for example, the proper construction of a statute or a clause in a document, where, although, as often said, minds might differ about such matters of construction, there can be but one correct meaning: …) the preference of the appeal court for one view would carry with it the conclusion of error. However, other findings and conclusions may be far more easily open to legitimate differences of opinion eg valuation questions, …”

52. With those considerations in mind, it is appropriate to turn to a consideration of the alleged errors.

Consideration of the challenges to the assessment of past economic loss

53. I will not deal with the alleged errors in the order in which they were articulated in the amended notice of appeal, and I will group some of them together.

54. The appellant contended:(a)By appeal ground (h), that the primary judge’s finding at [40(a)] and [43] that a contribution to the cleaning business only involved preparation of business cards, is against the evidence and the weight of the evidence.(b)By appeal ground (i), that the primary judge’s finding at [50] that there was a lack of proof of the appellant's inability to commence work in the cleaning business, is against the evidence and ignores the loss of chance.(c)By appeal ground (e), that the primary judge’s finding at [50], [53] and [57(c)] that the appellants prospects of deriving employment or benefit from the businesses were negligible, is against the evidence and the weight of the evidence.(d)By appeal ground (b), that the primary judge’s assumption at [120] that but for the accident, the appellant would only have worked two days a week for four years and three days a week for the next three years, is an underassessment of the appellant’s prospects of work capacity.(e)By appeal ground (ba), that the primary judge’s assumption at [120] that, but for the accident, the appellant would only have earned $240 per day, is an underassessment of the prospects of the appellant's work capacity, is against the evidence and ignores the loss of chance.

55. These appeal grounds cannot succeed.

56. First the primary judge did not ignore “the loss of chance” because, as I have explained at [11] above, the appellant did not plead a case that the three types of business opportunities referred to at [7](b), [7](c) and [7](d) above should be separately evaluated as lost valuable commercial opportunities. Rather those pleas were properly regarded as pleas supporting the critical material fact that the appellant would have returned to full-time remunerative work in some capacity in early 2015. The pleaded case sought to have lost earning capacity measured by reference to lost capacity to earn average weekly female wages. In her written submissions in this Court, the appellant sought to develop the argument that the primary judge erred by not making an evaluation of each business opportunity as a separate lost valuable commercial opportunity with a view to informing his judgment as to quantification of past economic loss. Given the way the pleading was framed, there was no error involved in not performing that task.

57. Second, I have explained at [21] to [25] above how the primary judge reached the findings which he made in relation to the three business opportunities which had been pleaded. They were findings of fact which were likely to have been affected by impressions about the credibility and reliability of witnesses. Although the appellant sought to have this Court reach a different evaluation of that evidence, there was no clear articulation of why the approach which the judge took should be regarded as erroneous, bearing in mind the principles of appellate restraint in relation to fact finding identified at [47] to [51] above. I am not persuaded that there has been any error by the primary judge.

Consideration of the challenge to the assessment of future economic loss

61. In order to consider the challenge advanced to the assessment which the primary judge made of future economic loss, it is necessary first to examine in a little more detail the evidence which sounded on the assessment which the primary judge made of the extent of the appellant’s loss of earning capacity in the years after the trial.

62. His Honour had heard and seen the appellant give her evidence. He expressed his view of her in the manner recorded at [33](a) above.

63. A report dated 9 August 2016 from Dr Chung, an independent psychiatrist was before the primary judge, based on an examination which took place on 1 August 2016.³⁴ Dr Chung was not called to give evidence at trial. Of note for the issues on appeal were the following opinions expressed by Dr Chung:(a)After the accident her alcohol intake had increased to the stage that she would drink one half to one bottle of wine per day. But she had stopped drinking two months previously.³⁵(b)She suffered from post-traumatic stress disorder. Her prognosis was poor and it was likely that her PTSD symptoms would remain chronic.³⁶(c)Her injuries had affected her employment and would also affect her future employment.³⁷(d)The appellant’s PIRS³⁸ rating for “Adaptation” was “2” and the reasons for that rating were “Severe anxiety prevents her from leaving home without her husband. Does most of the housework and child care although interest and motivation in her day to day tasks has decreased.” Dr Chung’s overall PIRS rating was 6% which equated to an identification of a moderate mental disorder.³⁹

64. Four reports of Dr Chalk, an independent psychiatrist, were before the primary judge: reports dated 10 and 17 July 2017 based on an assessment carried out on 6 July 2017; a report dated 18 July 2019 based on an assessment carried out on 17 July 2019; and a supplementary report dated 29 July 2019 which was prepared after blood and urine tests results had been obtained.

65. In July 2017,⁴⁰ Dr Chalk thought that the appellant was continuing to slowly improve and he would expect a continued but slow rate of improvement over the next 12 or so months. He thought she would benefit from some further psychiatric input in due course. He thought that she would be able to return to employment in the future. Her PIRS rating for “Adaptation and Employability” was “2” and the reasons for that rating were “She is not working but was undertaking work previously. Her anxiety certainly interferes with her capacity to work currently”.

“--- I don’t think it’s unrealistic to be perfectly honest, no. I don’t – I mean, she – as I understand it, her husband works from home and, certainly, COVID has made a huge difference in the way we work. So certainly, in my view it’s conceivable that she could work from home.

So you don’t mean work out in the community. You mean work from home?---Well, what I’m saying – what I meant – I don’t know whether she can work in the community, ultimately. But certainly, lots of people are working from home at the moment, and people have done over a lengthy period of time, and clearly, work can be done from home.

But if a work plan involved a necessity to travel, a necessity to socialise and meet people?---That would be more challenging.

All right. To the point that you would accept Dr Lotz’s view that she is not capable of working at all at the present time in that context?---No. I don’t accept that, no. Because I think there are two arms – a number of arms to that, and I think that one is trying to confound a number – a number of things. I am happy to stand by what I have said.

Well, when you confound a number of things, is it unfair to say - - -?---In [other] words, I think what you’re doing is that you’re mixing up travel – her capacity to travel and her capacity to socialise and – with a capacity to work. They’re not –they’re not all the same thing. That’s why they’re separated on the PIRS.

But if for the purpose of the question, you accept the fact she can’t drive or travel, or least she can be a passenger but not a happy one - - -?---No. But she has – she has – she has difficulty travelling, yes.

And if you accept the fact that attempts to socialise and – I don’t want to bore you with her history, but they have been fairly disastrous – and so other than with a couple of very friends and her husband she really doesn’t socialise, then work other than work from home is not a realistic expectation; is it?---I think that she would find it challenging to work out of the home, yes.

All right. And we’re now over six and a-half years after this accident?---Mmm.

What’s the hope going forward for her?---I think that where this is life, there’s hope. And I think that with ongoing treatment, with the closure of the litigation, and with, hopefully, further addressing alcohol issues, that things may well improve.

Yes. And in that answer, you’re assuming that the litigation is a stressor for her?---I’ve been doing this work for many years. In my experience, litigation is a stressor for all involved.

All right. Just in fairness to you, Doctor, I want to put to you that the reality is that the plaintiff’s mental state is at a point where even working from home is not a realistic option, because she can’t or won’t deal with people on the phone. Even just things like dealing with the children’s schooling, dealing with paying accounts, dealing with sorting out tradies, whatever, because of her condition whatever it is?---I’ve already answered that. I can’t take it any further, Mr Newton.

Yes?---I’ve already expressed my view.”

70. The primary judge expressed his view of the competing experts in the course of explaining his reasons for determining general damages. No appeal is advanced in relation to the conclusion he reached on that subject. He noted that the Civil Liability Act and the Civil Liability Regulation circumscribed awards of general damages by requiring that an injured person’s total general damages must be based on an injury scale value (ISV) on a scale of 0 (in which an injury is not severe enough to justify any award of general damages) to 100 (in which the injury is of the gravest conceivable kind).

71. In the course of reaching an assessment of the appropriate ISV for the purpose of assessing general damages, the primary judge examined the differences between all three experts, noting the principal difference between the experts was in the category of adaptation/employability. Dr Chung, and Dr Chalk in both of his reports, had scored Ms Sutton at 2 (mild impairment) for this category, but Dr Lotz allocated a score of 4 (severe impairment) for this category. The primary judge noted that schedule 6 of the Civil Liability Regulation had given as the respective exemplars for those ratings:(a)For class 2 mild impairment:⁶⁰

“can work in the pre-injury position, but for no more than 20 hours a week, for example, because the injured person is no longer happy to work with particular persons

can work full-time in a different position where performance of the relevant duties requires the use of comparable skill and intellect to that required to perform the duties of the pre-injury position”.

(b)For class 4 severe impairment:⁶¹

“can not work more than 1 or 2 days at a time

works less than 20 hours a fortnight

the pace at which work is done is reduced

attendance at work is erratic”.

72. The primary judge concluded (footnotes omitted):

“Of course, it is difficult to choose between the opinions of experts, not least because the court does not possess psychiatric expertise. On balance, my preference is for the views of Dr Chalk. It seems to me that Dr Lotz’s views are likely to be too pessimistic. Ms Sutton impressed as a witness. She appeared capable and intelligent. I agree with [the second respondent’s] submissions that there is some prospect of improvement. It would be surprising if she were not able to be employed in at least a part-time capacity. It is true that her anxiety about road transport may narrow her employment choices, and transport to work may be a challenge. But it seems to me that, once the litigation has resolved, Ms Sutton was more likely to conform to the ‘mild impairment’ examples rather than the ‘severe impairment’ examples.”

73. He identified six interrelated factors which supported his preference for the more optimistic views of Dr Chalk:(a)First, although he acknowledged that the competing views were not explained in any detail, he thought Dr Chalk’s view was supported by his own positive impressions of the appellant as a witness. Having regard to that impression, and in the absence of any more specific evidence from an occupational therapist or other health professional, he was reluctant to accept the conclusion that she would be unable to be employed in any position for the rest of her life.(b)Second, he found the evidence was insufficiently focussed on the impact on employment opportunities in favour of the impact on her social activities.(c)Third, he noted that employment does not necessarily require attendance at a work place. He noted, in particular, that the appellant’s husband worked from home.(d)Fourth, he noted that the appellant had been able to home-school her children, one of whom had educational challenges, and that was likely to have been a significant undertaking.(e)Fifth, she had managed to travel overseas twice since the accident.(f)Sixth, although he would not form the view that Dr Lotz’s evidence should be doubted because he was the appellant’s treating psychiatrist, he thought that there were reasons to be cautious in accepting that evidence because a treating psychiatrist’s evidence might be affected by the need to maintain a therapeutic relationship with the patient. That compared with the disinterested independence of Dr Chalk.

74. The views which the primary judge formed about the relative merits of the expert opinion cannot be successfully impugned by the appellant. His Honour’s views reflect a careful and balanced assessment of the expert evidence, plainly informed by his Honour’s impressions of both witnesses and of the appellant. The appellant has not demonstrated that the conclusion as to preference was in error.

75. On the question of the assessment of an ISV his Honour actually adopted a middle ground between Dr Chalk and Dr Lotz, concluding that “an appropriate PIRS assessment is 10%, a moderate increase to Dr Chalk’s assessment of 6%, which would attract an ISV at the top of item 12 of the scale in Schedule 4 (moderate mental disorder), i.e. an ISV of 10.”

76. That was not the only area in which despite the primary judge’s clear preference for Dr Chalk, the primary judge was prepared to act on Dr Lotz’s assessment. As has already been mentioned (see at [33](f), [35] and [36] above), in relation to the assessment of past economic loss, the primary judge was prepared to accept that the appellant had been unable to work up to and including 2021, when Dr Chalk had concluded in 2017 and 2019 that she could return to some form of gainful employment, at least up to 20 hours a week.

77. The area in which the primary judge’s preference for Dr Chalk had the impact of which the appellant complains was the preference given to the views of Dr Chalk over Dr Lotz insofar as they sounded as to the appellant’s prognosis for the future and, in particular, her ability to be employed in the future. As has been mentioned at [33](f) above, the primary judge found that with the resolution of the litigation and the benefit of on-going treatment, she would be able to gradually return to work over the next few years, reaching a relative recovery by the end of 2025, by which time she would be 54 years of age.

“So – but when we got over there, it was very hectic – hectic. There’s, like, motorbikes everywhere. It’s, like, insane. They just drive every which way, so I was an absolute wreck in the car. We decided to get out of Ho Chi Minh and take an Uber-type car, because the motorbikes aren’t allowed on the highways, out of the city into quieter beach-type areas. You know, I – and I had a few people do massage and stuff on me, to the point that one of them said to me, “What – what’s happened to you? I can’t move you at all. I cannot – I can’t get any of this release out”. The family hated the Vietnamese trip. They were just glad that we were – we had gone home, and it ended up a bit of a mess by the end of it, so that was - - -

That wasn’t successful?---No, not at all.”

(c)Her husband said that again they had heard there could be some “ancient medicine” that might work. He observed that his wife “couldn’t handle that over there because of all the noise and – there’s a lot of motorbikes and cars and stuff. So, yeah, she was really not comfortable over there”.⁶⁵

(d)None of the foregoing makes good the proposition that the primary judge erred by using the evidence as one of the interrelated reasons why he preferred Dr Chalk to Dr Lotz. It is irrelevant that the appellant received no benefit from the trips. The primary judge’s point was that she managed to go on the trips in the first place.

84. By appeal ground (g), the appellant contended that the primary judge’s reliance on attempts to get the appellant to socialise as not being relevant to employability, was against the weight of the evidence. This ground cannot be sustained. The primary judge did not say the evidence was irrelevant to employability, rather that it was difficult to draw a parallel between that evidence and employment. It will be recalled that in his oral evidence Dr Chalk had criticised a proposition put to him in cross-examination as mixing up the appellant’s capacity to travel and her capacity to socialise with a capacity to work. Dr Chalk said they were not all the same thing and that was why they’re separated on the PIRS. No error is demonstrated.

85. There is one area in which I think that the appellant did demonstrate error.

86. The appellant contended:(a)By appeal ground (a), that the primary judge’s finding that the appellant would gradually return to work over the next few years and recover by the end of 2025, was a finding without evidential basis and against all of the evidence, including that of Dr Chalk.(b)By appeal ground (b), that the primary judge’s allowance of only two days a week going forward was an underassessment of the appellant’s prospects of work capacity.

87. In this regard, my view is that the conclusion that the appellant would improve to the extent that there would be no diminution in capacity after 2025 cannot be supported by the evidence. Dr Chalk’s view was that the appellant had the capacity to work at least up to 20 hours per week in 2019. He adhered to that view under cross-examination. But he also thought that her condition had stabilised and reached maximum medical improvement. His evidence did not support a conclusion that within four years after trial she would have no permanent impairment, and his evidence was the most optimistic. Even noting that the appellant’s own pleading asserted that it was only a possibility that she would be completely prevented from returning to remunerative work after the short to medium term, the primary judge erred by not making an allowance for permanent impairment of earning capacity, which meant that he should have made some allowance for loss in the years after 2025.

88. That finding of error means that this Court must relevantly proceed to make its own findings of fact in relation to future economic loss and to formulate its own reasoning based on those findings.

89. The approach I will take is that I will act on the findings made by the primary judge, except where I have identified error. Accordingly, I will adopt the primary judge’s preference for Dr Chalk’s view of the level of impairment, specifically in relation to “Adaptation and Employability”. Based on that view I would find that the appellant’s loss of earning capacity was reflective of a chronic psychiatric condition which had been caused by the accident. In 2019, Dr Chalk thought her condition had stabilised and reached maximum medical improvement but that she could work at least up to 20 hours per week. The primary judge thought it was likely that she would be able to return to part-time work. I would find that she has suffered a 50% loss of her earning capacity and I would find that, for the purposes of assessing future economic loss, had she not been injured her earning capacity for the future would have been full-time employment. In order to value a loss of half of that earning capacity, it is appropriate to apply the rates used by the primary judge, namely $1,200 per week. A 50% loss of capacity should then be valued on the basis of $600 per week for 17 years, less a discount to reflect the vicissitudes of life. I would adopt the 15% discount used by the primary judge, noting that the relief which the appellant seeks to obtain on appeal accepts the appropriateness of making a 15% discount to the net present value calculation which assumes full-time work earning statistical average weekly earnings: see at [40] above.

Consideration of the challenge to the construction placed on s 55(3) of the Civil Liability Act

92. The appellant contended in appeal ground (j) that the primary judge’s findings relating to the construction of s 55(3) of Civil Liability Act and the awarding of global sums were contrary to law and authority.

93. The primary judge did not award a global sum. The appellant’s argument is irrelevant to the attack which she advanced in relation to the orders which the primary judge made. It is also irrelevant to her argument as to the orders which should be made on appeal because she does not argue that there should have been a global sum awarded, or that this Court should make a global award.

94. I would leave consideration of whether there was any error in the primary judge’s analysis of s 55 and the related case law to an appeal in which it was necessary to consider those matters. Accordingly, it is not necessary to consider this ground of appeal further.

Consideration of the challenge to the costs orders made by the primary judge

95. In a separate judgment on costs, the primary judge ordered the second respondent to pay the appellant’s costs on the District Court scale to be assessed on the standard basis, but excluding:(a)the costs of the application to transfer the proceeding from the District Court (at Southport) to the Supreme Court; and(b)the fees and expenses of Vincents and any costs associated with obtaining the expert reports of Vincents, and preparing and leading that evidence.

96. By appeal ground (k), the appellant contended that the primary judge’s costs findings should be overturned and costs of trial be allowed on an indemnity basis, and that the costs should include the costs of transfer of the proceedings and of the Vincents report to the extent it was not struck out.

97. Three aspects of the primary judge’s costs order were impugned by the appeal ground. First, the decision not to award costs on an indemnity basis. Second, the decision to exclude costs of the transfer proceedings and, third, the decision to exclude the costs of the Vincents report to the extent it was struck out. I will consider each aspect in order.

The decision not to award indemnity costs

98. The total award of damages made by the primary judge, based on an amount of $77,357 for future economic loss, was $314,345.

99. The reference to indemnity costs arises because the appellant advanced an argument before the primary judge that she should be entitled to indemnity costs because she had recovered more than the mandatory final offer of $310,000 which she had made on 13 August 2018 under s 51C of the Motor Accident Insurance Act 1994 (Qld). That provision is similar in terms and effect to s 40 of the Personal Injuries Proceedings Act 2002 (Qld) (PIPA). Both sections require that the court must, if relevant, have regard to the mandatory final offers in making a decision about costs. By referring to offers plural, the sections make it clear that the court is to have regard to the offer made by the person in the position of the claimant (in this case, the appellant) and the person in the position of the respondent (in this case, the second respondent).

100. His Honour rejected the claim for indemnity costs, because:(a)he concluded that the amount obtained was effectively the equivalent of the amount offered and the appellant should not be regarded as having bettered the offer; and(b)he was not persuaded that the refusal to accept the offer was imprudent or unreasonable.

101. By appeal ground (k) the appellant seeks to reverse that aspect of the costs order.

102. If the amount which should be awarded for future economic loss increases to $307,000 then the total award of damages will increase from $314,345 to $543,988. That would mean that an integer which was material to his Honour’s decision is now different. The appellant must now be regarded as having obtained a result significantly more favourable than the amount of the offer which she made. The discretion whether to award costs on an indemnity basis should be re-exercised by this Court having regard to the now changed position. It is unnecessary to determine whether the primary judge’s discretion could have been said to miscarry based on the matters which he considered.

103. In Bulsey v State of Queensland [2016] QCA 158 at [40]-[42] McMeekin J (with whom Fraser JA and Atkinson J agreed) observed that:

“[Mandatory final offers under the PIPA regime] themselves can provide a proper basis for an award of indemnity costs although that result is not inevitable. The accepted test is whether the refusal to accept the offer was imprudent or unreasonable, and a significant factor in making that assessment is the “relevant strengths and weaknesses of the cases that ought to have been apparent to the parties when the offer was made”: see Lawes v Nominal Defendant [2007] QSC 103 per Byrne J (as his Honour then was) and the authorities cited.

The significance of the legislative provisions and evident purpose should not be overlooked. The purposes of the PIPA are set out in s 4 of that Act and include providing a procedure for the speedy resolution of claims for damages for personal injury to which the Act applies; promoting settlement of claims at an early stage wherever possible; and ensuring that a person may not start a proceeding in a court based on a claim without being fully prepared for resolution of the claim by settlement or trial. Offers made under the PIPA process should be made at a time, if the parties have complied with their obligations (see for example s 20), when the “relevant strengths and weaknesses of the cases … ought to have been apparent to the parties.”

Finally it ought not be overlooked that the legislation requires the court to consider mandatory final offers when considering costs. Section 40(8) provides: “However, the court must, if relevant, have regard to the mandatory final offers in making a decision about costs.” To give effect to the legislative injunction in s 40(8) where an offer has been made by a plaintiff that was less favorable to the plaintiff than the eventual judgment it would be necessary, at least in the usual case, to adopt the only alternative basis allowed for in the rules – costs on the indemnity basis. Otherwise the offer would be disregarded. Cases in the trial division where such offers have been considered include Monement v Faux & Anor [2005] QSC 342 at [26] per Douglas J for a decision under the Motor Accident Insurance Act 1994 (Qld) regime and Pollock v Thiess Pty Ltd & Ors (No 3) [2014] QSC 121 for a decision of my own under the PIPA regime.”

104. The factors which are relevant to the question of whether the appellant should have her costs on an indemnity basis are these:(a)The appellant’s mandatory final offer was for $310,000 plus costs. The second respondent’s offer was for $70,000 plus statutory costs.(b)The appellant has obtained a result well in excess of the offer she made in 2018. In the usual case that would mean that she would get her costs on the indemnity basis.(c)At the time the offer was made the parties had the expert opinion of Dr Chung and the 2017 report of Dr Chalk. Both opinions supported the conclusion that she suffered from post-traumatic stress disorder.(d)Dr Chung’s opinion was more pessimistic. He opined that the appellant’s prognosis was poor, her PTSD symptoms would remain chronic, and her injuries had affected her employment and would also affect her future employment. Her PIRS rating for adaptation was “2”.(e)At that time Dr Chalk accepted that her anxiety prevented her working. However, he thought she was continuing to slowly improve and he would expect a continued but slow rate of improvement over the next 12 or so months. He thought she would benefit from some further psychiatric input in due course. He thought that she would be able to return to employment in the future. Her PIRS rating for “Adaptation and Employability” was “2”.(f)Accordingly, as at the time of the offers, she had a 100% loss of earning capacity. In 2018 the appellant would reasonably have been thought to have 20 years working life left. If she did not improve, that would suggest the possibility of an award well in excess of the appellant’s offer, based on a consideration of economic loss alone and ignoring medical expenses and general damages.(g)To my mind the only way in which it might become reasonable to reject the offer which the appellant made is if there were a reasonable and prudent basis to conclude that the plaintiff’s chronic condition would sufficiently improve with time, that the economic loss component of her claim would reduce below the offer. The evidence did not support that conclusion. Dr Chalk thought she would improve so that she could return to work but did not quantify the extent to which that might occur. Essentially the rejection of the appellant’s offer must be taken to be based on a speculation that her chronic condition would sufficiently improve.(h)It was neither reasonable nor prudent to make that speculation.

105. In those circumstances, I conclude that the appellant is entitled to recover her costs on the indemnity basis.

The remaining aspects of the costs award

106. As to the decision to exclude costs of the transfer proceedings:(a)The proceeding had commenced in the District Court and was transferred to the Supreme Court because the quantum of the claims made by the appellant for economic loss exceeded the jurisdictional limit of the District Court.(b)The primary judge was persuaded by the second respondent that the case should have remained in the District Court and therefore any costs order should be on the District Court scale and the amount recoverable should also exclude the costs of the transfer from any order for costs made against them.(c)By appeal ground (k) the appellant seeks to reverse that aspect of the costs order.(d)That aspect of the appeal ground must fail. Even having regard to the level of success obtained by this appeal, the appellant’s claim is still well within the jurisdiction of the District Court. Accordingly, there is no reason to conclude that the primary judge’s costs discretion miscarried in awarding costs on the District Court scale. Nor is there reason to conclude that the discretion miscarried in excluding the costs of the transfer.

107. As to the decision to exclude the costs of the Vincents report:(a)Much of the report had been ruled inadmissible during the trial.(b)The primary judge was persuaded by the second respondent to exclude not just the costs of the inadmissible components of the report, but the entirety of costs related to the report, as is evident by the form of the order his Honour made.(c)His Honour explained his approach in these terms:⁶⁸

“During the trial, the opinion parts of the Vincents report were ruled to be inadmissible. The inadmissibility was for several reasons. In this respect, this case is similar to Brown v Daniels & Anor (No 2). In that case, an objection was taken to the successful plaintiff’s expert engineering evidence of Dr Kahler. Davis J ruled a large part of Mr Kahler’s report to be inadmissible. Subsequently, Dr Kahler’s report was admitted into evidence, but in a heavily redacted form. His Honour noted that nothing of the nature of an expert opinion of Mr Kahler was admitted. Ultimately, His Honour ordered that the second defendant pay the plaintiff’s costs, excluding any fees or expenses paid to Dr Kahler and any costs associated with obtaining or leading evidence of Dr Kahler, which was either admitted into evidence, or proposed to be admitted into evidence.

In the circumstances Allianz ought not to be required to pay Ms Sutton’s costs of obtaining the Vincents report and the attempt to rely on that report. One further reason for excluding those costs is that a party who prepares and serves an expert report under UCPR 427 places the opposite party in an invidious situation. The opposite party is required to elect whether to prepare and serve its own responsive expert report. Here, Allianz obviously backed its assessment that the Vincents report would be ruled inadmissible. But in Brown v Daniels the defendant elected to engage another expert to respond to Dr Kahler’s report. Thus, the costs of two experts were wasted. Costs orders ought to encourage parties to apply to careful scrutiny to the preparation and admissibility of expert reports, especially where those expert reports are not joint reports under UCPR 429G.”

(d)By appeal ground (k) the appellant seeks to reverse only that aspect of the costs order which relate to the report to the extent it was not struck out. That aspect of the appeal ground must fail: the appellant did not identify any error of fact or principle by the primary judge in the formation of those views. Nor could such a conclusion be regarded as so obviously wrong as to justify an inference of error.

108. The result is that the only aspect of the costs order which I would change is that the appellant should have her costs of the trial on an indemnity basis.

Proposed orders

109. The following orders should be made:

The appeal is allowed.

Vary order 1 made by Freeburn J on 7 October 2021, by deleting the figure “$314,345” and inserting in lieu thereof the figure “$543,988”.

Vary the chapeau of the costs order made by Freeburn J on 22 October 2021 so that it reads “The second defendant pay the plaintiff’s costs on the District Court scale to be assessed on the indemnity basis, excluding”.

The second respondent must pay the appellant’s cost of the appeal, to be assessed on the standard basis.

110. CROW J: I agree with the reasons of Bond JA and with the orders his Honour proposes. As to the proper quantification of loss of economic capacity, I agree with Bond JA for the following reasons.

111. In Paul v Rendell (1981) 34 ALR 569 at 571, Lord Diplock said:

“The assessment of damages in actions for personal injuries is not a science. A judgment as to what constitutes proper compensation in money terms for pain, suffering or deprivation of amenities of life, can only be intuitive, and the assessment of future economic loss involves a double exercise in the art of prophesying not only what the future holds for the injured plaintiff but also what the future would have held for him if he had not been injured.”

112. As explained by Deane, Gaudron and McHugh JJ in Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at 643 in reaching a view as to hypothetical future events, a court is required to assess the degree of probability that an event might occur or might have occurred and adjust the award of damages to reflect the degree of probability.

113. Where the court is required to engage in the double art of prophesying and adjust damages depending upon the degree of probability that an event might or might not occur or have occurred, both the prophecy and the probability adjustment are based on the evidence as accepted by the Court. As the primary judge observed at [57],⁶⁹ the assessment is relatively easy for a plaintiff who is a stable wage-earner over many years and has suffered a total loss of work capacity or even a partial loss of work capacity. The assessment of loss for those persons who suffer business losses is notoriously far more difficult. Similarly, where a person, who has not been in receipt of remuneration from employment or business activities for a period of a decade is injured, the art of prophesying and probability adjustment is difficult. In such circumstances, a trial judge ought to be afforded considerable leeway in the trial judge’s determination of that prophecy of hypothetical future events and probability adjustment.

114. The evidence accepted by the primary judge did support the conclusion of the primary judge, that the appellant would likely achieve “a relative recovery by the end of 2025”, but it did not support the conclusion, which underpins the primary judge’s quantification of future economic loss, of a complete recovery by the end of 2025.

115. In assessing general damages as required under the Civil Liability Act,⁷⁰ the primary judge made specific findings under the category of “adaptation/employability” in assessing the PIRS level. The primary judge found that “once the litigation has resolved, Ms Sutton was more likely to conform to the ‘mild impairment’ examples rather than the ‘severe impairment’ examples”.⁷¹

116. The two examples of mild impairment in the area of ‘adaption’ in Schedule 6 of the Civil Liability Regulations are firstly, “can work in the pre-injury position, but for no more than 20 hours a week, for example, because the injured person is no longer happy to work with particular persons” and secondly “can work full-time in a different position where performance of the relevant duties requires the use of comparable skill and intellect required to perform the duties of the pre-injury position”.

Footnotes

1. Further amended statement of claim (FASOC) subparagraphs (f)(i)-(iv) at Appeal Record (AR) 66. ↩

2. FASOC subparagraphs (f)(v)-(viii) at AR 66. ↩

3. FASOC subparagraphs (f)(ix)-(xv) at AR 66-7. ↩

4. FASOC subparagraphs (f)(xvi)-(xvii) at AR 67. ↩

5. FASOC subparagraph (f)(xviii) at AR 67. ↩

6. FASOC subparagraph (f)(xix) at AR 67. ↩

7. FASOC subparagraphs (g)(i) and (h)(i) at AR 67. ↩

8. Kate Ann Sutton v Lauren Nicole Hunter [2021] QSC 249 (Primary judgment) at footnote 98. ↩

9. Vincents Report paragraphs 13.1-13.4 at AR 613 and schedule C at AR 618. ↩

10. FASOC subparagraphs (i)(i)-(iii) at AR 67-8 (roman numerals omitted). ↩

11. Vincents Report paragraphs 13.5-13.6 at AR 614 and schedule D at AR 619. ↩

12. Primary judgment at [41]-[50]. ↩

13. Primary judgment at [51]-[53].