45 The Fox v Wood component must be adjusted. Mr Morris submitted that, were his submissions to be accepted, the Fox v Wood component should be reduced to $5,467 (instead of the $9,000 awarded). Mr Maiden did not dispute this. I would, therefore, assess the Fox v Wood component at $5,467.
46 Mr Morris submitted, as a preliminary argument, that s 70A of the Motor Accidents Act 1988 (NSW) precluded an award of future economic loss to Mr Mitchell. This section provides:
"A Court shall not award damages for future economic loss or damages for diminution of future economic capacity unless the claimant first satisfies the Court that there is at least a 25 per cent likelihood that the claimant will sustain a future economic loss or that there is at least a 25 per cent likelihood that the claimant will sustain a diminution of future economic capacity, as the case requires."
47 It is likely that Mr Mitchell will suffer from pain to varying degrees throughout his working life. He has difficulty in sitting and bending over for long periods. The lifting of heavy articles will aggravate his back pain. He is not able to undertake hard physical work. It will be difficult for Mr Mitchell to undertake sustained uninterrupted work of any kind. He tires easily and has headaches about twice a week lasting from three to seven hours. According to Dr Rawling, a clinical neuro-psychologist, Mr Mitchell's pain and disability associated with his injuries limit his work tolerance and productivity, reduce his concentration span, and leave him prone to carelessness and error, and lapses in memory.
48 Mr Mitchell has sustained very serious injuries. His capacity to work has undoubtedly been affected. The disability to his neck and his spine will be permanent. In my view, the likelihood that Mr Mitchell will sustain some future economic loss exceeds 25 per cent. In addition I am satisfied that there is at least a 25 per cent likelihood that he has sustained diminution of future economic capacity.
49 Hughes DCJ, in assessing loss of future earning capacity at $324,898, appears to have accepted the following argument advanced on Mr Mitchell's behalf:
"If for example, Mitchell were unable to obtain employment as an interior [decorator] or his business 'plans' with his fellow students did not come to fruition or did and failed one option that would be available to him were he not injured would be to return to the work of a waiter. That is no longer available to him and the current agreed earnings for a waiter are $432.00 net per week. That could be used as a measure or as a guide to determining Mitchell's loss of earning capacity. Allowing that figure, after discounting by 15% for vicissitudes, would allow $324,898.00. It should not be thought that $432.00 per week is a high or excessive figure. It would not represent a significant slab of time for a professional of the type that the plaintiff would be upon qualification."
50 In my opinion, this reasoning is erroneous. Mr Mitchell's loss of earning capacity cannot be measured by reference to the fact that he is no longer able to work as a waiter. He now has the capacity to work as an interior designer and has increased his earning capacity by a considerable amount. The average total remuneration of an interior designer in New South Wales is $53,810 per annum compared to $18,720 being the annual income of a waiter. Regard must be had to the degree to which Mr Mitchell's capacity to earn as an interior designer has been reduced by his injury.
51 Interior design work requires carrying samples of tiles, carpets, fabrics and paints as well as a computer. Mr Mitchell thought that he would be able to do this. The work also involves bending, measuring, going up and down ladders, sitting at a computer for prolonged periods, computer modelling and preparing reports.
52 Mr Mitchell said that doing modelling work sometimes required him to work on a computer for long periods of about eight hours at a time. He said he would also have to spend four to five hours in one "stretch" working on a bench or on a floor constructing scale models. He said that, when working in this way, his pain levels were increased and he has to stop regularly, lie on the floor and walk about.
53 Ms Karen Stephens, a physiotherapist, expressed the following opinion:
"[Mr Mitchell] is currently enrolled full-time in an interior design course. The prolonged sitting and bent over activities such as model making involved with this study is proving to exacerbate his pain. In future in this profession certain activities would not be able to be performed by Mr Mitchell, but would need to be done by others (eg in his own business he could contract out the more physical parts of the work)."
54 Professor Jones, a consultant physician of rehabilitation medicine, said that Mr Mitchell had "potential for entering his chosen career as an interior designer, although there will be issues regarding intermittent pain and its management".
55 Mr Mitchell has contemplated going into the interior design business with some of the persons with whom he has been studying. Should he do this, and have a business that he managed or partially managed, he might be able to regulate his work. There is, of course, a possibility that he would not be able to have his own business and would have to obtain work as an employee. Were Mr Mitchell to find it difficult to be employed as an interior decorator, his injuries would hamper him in finding alternative employment.
56 In my opinion, the appropriate way of assessing Mr Mitchell's future economic loss is to commence with the income Mr Mitchell would probably have earned as an interior decorator, had the accident not occurred. An appropriate deduction should then be made to allow for the extent to which his capacity to earn that income has been lost.
57 I have noted that the average total remuneration of an interior designer in New South Wales is $53,810 per annum. Allowing 15 per cent for contingencies, one arrives at a figure of $45,739. I would assess Mr Mitchell's loss of future earning capacity as being 30 per cent of $45,739 per annum calculated over his working life. Thirty per cent of $45,739 equals $13,772. Mr Mitchell was 29 years of age at the time of the trial. The trial judge accepted that Mr Mitchell would work until age 65 and there has been no challenge to this finding. $13,722 per annum represents $264 per week. Using the multiplier of 884.8, used by the judge, an amount of $233,588 is arrived at. In my view this would be an appropriate amount to award for loss of future earning capacity.
58 I turn now to the future loss of superannuation. Hughes DCJ allowed 11.5 per cent of the net amount allowed for future economic loss. Mr Morris did not submit that this method of calculating loss of superannuation was incorrect. He submitted, firstly, that the loss of superannuation should be reduced concomitantly with the reduction in loss of future economic capacity. He submitted, secondly, that the probabilities were that Mr Mitchell would work for himself and would not have an employer whose contributions to superannuation he would lose; thus, no loss had been incurred under this head.
59 Mr Morris's first submission is undoubtedly correct. As regards his second submission, I do not think that there is much of a possibility that Mr Mitchell will work as an interior designer on his own account. Common sense would indicate that if Mr Mitchell does go into business with others they would probably form a company to regulate their respective interests and limit their liability. Even if Mr Mitchell does not go into business with others, common sense would again indicate that he would probably carry on business through a company and have the benefits of limited liability (and superannuation payments). I would, however, make a small allowance for the contingency suggested by Mr Morris.
60 Taking into account the method employed by the judge in calculating loss of superannuation (namely 11.5 per cent of the net amount allowed for future economic loss), I would calculate the loss of superannuation by deducting 1 per cent for the contingency that Mr Mitchell would be self-employed and allow 10.5 per cent of the amount of $233,588 that I have assessed. I thereby arrive at an amount of $24,527 for loss of superannuation.
61 I turn finally to what the judge described as "future commercial assistance" but which was, in fact, future assistance with domestic tasks. Dealing with this head of damage the judge said:
"Now as to the commercial assistance component. The defendant believes it should be nil. Dr Buckley allows 8 hours a week, Professor Jones allows three hours a week. It is argued and it seems to me, that although Dr Buckley allows 8 hours a week, three hours a week seems reasonable for the condition this man is in, especially the obvious permanent impairment of his back. … The total is $94,721.00."
62 Mr Morris submitted that this reasoning afforded Mr Mitchell compensation for the consequences of the risk of paraplegia. This was contrary to an agreement between the parties that $100,000 would be awarded for the risk of paraplegia and its effects.
63 Mr Morris pointed to the fact that Prof Jones, in a report, said that were Mr Mitchell to develop paraplegia he would need three hours a week of domestic assistance and three hours per month of home handyman assistance. Mr Morris submitted that Hughes DCJ had wrongly taken this evidence into account as the three hours per month assistance that Prof Jones had in mind was predicated on Mr Mitchell becoming paraplegic. This submission is correct, although, elsewhere in his report, Prof Jones said that, were Mr Mitchell not to develop paraplegia, he would need domestic assistance for heavy activities.
64 Dr Buckley, on the other hand, did not qualify his opinion as to the domestic assistance required by reference to paraplegia. He expressed the view that Mr Mitchell would need the services of a handyman for three hours per week. He also said:
"In view of Mr Mitchell's difficulty in carrying out heavy domestic tasks such as ironing, cleaning and heavy washing, I believe that assistance should be provided for him to the extent of five hours per week of housekeeping assistance."
65 Thus, while the judge erred by relying on Professor Jones, he did not err in basing his finding on the opinions of Dr Buckley. Dr Buckley, as I have indicated, thought that Mr Mitchell would require eight hours of domestic assistance. Thus, there was evidence on which his Honour was entitled to rely for his finding that Mr Mitchell was entitled to domestic assistance for three hours per week during his lifetime. Accordingly, I would not uphold the challenge to this head of damage.
66 In summary, I would uphold Ms Tan's appeal in CA 40417 of 2005 by setting aside the awards made in respect of past economic loss, the Fox v Wood component, future economic loss, and future superannuation.
67 The awards made by the judge under these heads and the awards that I propose are set out in the table below.
Head of Damage Amount awarded by trial judge Amount proposed
Past economic loss: $ 73,080.00 $ 44,400.00
Fox v Wood: $ 9,000.00 $ 5,467.00
Future economic loss: $324,898.00 $233,588.00
Future superannuation: $ 37,904.00 $ 24,527.00
$444,882.00 $307,982.00