TITLE OF COURT: SUPREME COURT OF TASMANIA (FULL COURT)

JUDGMENT OF: Underwood CJ, Crawford and Slicer JJ

Statutes - Acts of Parliament - Statutory powers and duties - Exercise - Liability - Breach of statutory duty - Liability for damages - Duty to take precautions with dangerous goods - Whether reasonable precautions required.

Dangerous Goods (General) Regulations 1998 (Tas), regs36(a), 46.

Workplace Health and Safety Act 1995 (Tas), s9(4).

Thompson v Goold & Co [1910] AC 409, considered.

Beckwith v R [1976] HCA 55; (1976) 12 ALR 333, followed.

Judgment Number: [2005] TASSC 53

TASMANIAN ALKALOIDS PTY LTD [ACN 009 502 283]

TASMANIAN ALKALOIDS PTY LTD [ACN 009 502 283]

1 The appellant company carries on business near Westbury in Tasmania. Its business is to extract alkaloids from poppies for use in pharmaceuticals. The process of extraction involves the use of a chemical called toluene. Toluene is a highly flammable liquid that floats on water and is heavier than air. It is commonly used as a solvent for paint, resins, adhesives and the like. Exposure to toluene vapour is highly discomforting to the upper respiratory tract. Exposure to a highly concentrated solvent atmosphere, or prolonged exposure, may lead to unconsciousness, even coma and possible death.

2 The respondent is a welder. On 26 February 1999 he was working at the appellant's plant. He was not an employee of the appellant but an independent contractor who was regularly engaged by the appellant. He was working near, but not on, a reactor that was in the process of distilling toluene. At about 7.50am that morning, there was an untoward event ("the event") in the reactor that caused it to discharge a very considerable quantity of toluene vapour into the atmosphere. The respondent was exposed to the vapour for about half a minute before he was taken from the scene and given oxygen. Although taken to hospital, he was not admitted. He quickly made a complete physical recovery. However, the exposure to toluene caused the respondent to suffer from a post-traumatic stress disorder. He brought proceedings against the appellant for damages for negligence and breach of statutory duty. The learned trial judge found that:

* the appellant owed the respondent a duty of care;

* the appellant was in breach of the Dangerous Goods (General) Regulations 1998, reg36(a)(i) and (ii) and the Workplace Health and Safety Act 1995, s9(4);

* the respondent thereby suffered loss, injury and damage.

3 The learned trial judge assessed the respondent's damages for diminished earning capacity in the sum of $606,594 and for pain, suffering and loss of amenities in the sum of $60,000. He also assessed small sums for special damages and future expenses that are not in issue on this appeal.

4 On 25 October 2004, the learned trial judge ordered that judgment be entered for the respondent against the appellant in the sum of $712,181. The appellant has appealed against that judgment alleging that:

* the assessment of damages for pain, suffering and loss of amenities of life and for diminished earning capacity are erroneous.

6 The reactor from which the toluene escaped was in a part of the appellant's industrial complex known as the combined derivatives plant. This area was surrounded by a security fence. In this area there were buildings, vats, reactors, pipes, walkways, and so on. Some parts of the plant were only covered by a roof, some parts of the plant were partly enclosed, and some parts were completely enclosed. The reactor in question was mounted on a platform about first floor level. Overhead was a roof but it, and other reactors, were not totally enclosed.

7 In the alkaloid extraction process toluene is mixed with water. There was no evidence of the proportions of the mix. After use, the mixture of toluene, water and the material extracted from the poppies is placed in a vat and then transferred to a reactor for distillation. The object of the exercise is to purify the toluene so that it can be reused. In order to understand the process and the event, it is necessary to appreciate some physical properties of toluene and water, perhaps not readily known to the general public, but which either were, or should have been, well known to the appellant:

1 As already mentioned, toluene is heavier than air and lighter than water.

3 If left standing, the water in a mixture of toluene and water will disentrain, that is, the water will separate from, or withdraw from, the toluene and settle below it.

4 The boiling point of toluene is 1100C. The boiling point of water is 1000C.

5 If heat is applied to disentrained water, it will boil before the toluene.

6 However, if the pressure on the water is higher than the pressure of water vapour, the water will not boil until its temperature exceeds 1000 C.

8 Routinely, the appellant's practice was to place the mixture of used toluene and water into a receiving vessel. The bottom of this vessel was cone shaped, and after the mixture had been left standing for a time, the disentrained water was drained off through a tap set in the cone. After draining off the disentrained water, the appellant transferred the mixture to a reactor and routinely immediately commenced the distillation process. The bottom of the reactor was also cone shaped. The cone and the sides were surrounded by a jacket into which steam was applied to heat the contents of the reactor. The jacket was divided into several compartments so that the heat could be separately applied to various parts of the reactor and the cone. On the top of the reactor there was a lid that was bolted down with a seal. A vent led from the top of the reactor through the roof. This vent was fitted with a seal designed to rupture at a specific pressure to permit the escape of the contents of the reactor if the pressure exceeded the specified level, thereby preventing the reactor from exploding. The inside of the reactor was fitted with blades that were used to agitate the contents of the reactor during the distillation process to prevent the disentrainment of the water.

9 Prior to the occurrence of the event, the used mixture of toluene and water was placed in vat TA248B. In accordance with the usual practice, water was drained from TA248B and the mixture transferred to reactor RE357. However, contrary to usual practice, the distillation process did not immediately commence. The mixture was left to stand for ten hours prior to commencement of distillation. When distillation commenced, heat was applied to the sides of the reactor, but not to the cone. After the process had been underway for about 2½ hours, the operator noticed that the contents of a site glass were dirty and he turned off the steam supply to the jacket to stop the distillation process. At that stage, the temperature had risen to 1160C and, by calculation, pressure was then between 25 kPa and 36 kPa. About ten minutes later, the event occurred. The seal in the vent ruptured, the seal on the lid blew out, the lid buckled and toluene escaped from both the buckled lid and the vent.

10 The event was the subject of an investigation by an employee of the appellant, Mr Jolly. The report was tendered in evidence, but Mr Jolly was not called to give evidence. A proof of evidence of another employee of the appellant, Mr O'Grady, was tendered in evidence by consent. Mr O'Grady did not give oral evidence either. According to his uncontested proof, he was a production leader in the appellant's extraction plant and present there when the event happened. Relying in the main on Mr Jolly's investigation report, written opinion evidence from a design engineer, Mr Cockshutt, was tendered in evidence by consent. This evidence was referred to as the "catchpot report" because it made recommendations for the installation of a pot to catch any accidental discharge of toluene into the atmosphere. No supplemental oral evidence was given by Mr Cockshutt. Finally, on the issue of liability, written and oral evidence was given by Mr Dreher, a risk engineer. The appellant called no evidence at trial and, generally speaking, the majority of the evidence given on behalf of the respondent was not in dispute.

11 In his report, Mr Jolly noted that RE357 was installed as part of an extraction plant upgrade in December 1998, a short period before the accident, replacing an old reactor. With respect to the cause of the event, Mr Jolly noted that heat was applied only to the middle jacket of the reactor and reasoned that this caused the temperature of the toluene to rise, but did not increase the temperature of any water in the cone at the same time. This circumstance increased the pressure on the water, thereby raising its boiling point. When the steam was turned off, the toluene cooled, the pressure dropped and the superheated water boiled suddenly causing a huge increase in pressure. The report said in part:

"Water is always present in toluene for recovery. It is reasoned that given both the poor agitation of RE357 and the fact that the cone jacket steam was not activated during the distillation, that water was trapped either in layers within the toluene or was resident at the bottom of the cone. For either scenario the temperature, pressure and agitation conditions did not allow this water to be distilled off earlier into the distillation."

12 Mr Dreher agreed with the foregoing extracted from Mr Jolly's report, except that he did not think there was any water trapped within layers within the toluene. His opinion was that all the water was in the cone at the bottom and that it had got there by the process of disentrainment that had occurred during the ten hours the mixture was left standing before distillation commenced.

13 On the hearing of the appeal, it was common ground that there was disentrained water in the bottom of the reactor when the distillation process commenced, that it was not mixed with, or not sufficiently mixed with, the toluene by the agitator inside the reactor and because of the pressure differential and the subsequent shutting down of steam application to the toluene, the water boiled suddenly, the pressure increased dramatically buckling the lid, blowing the gasket on the lid and forcing the toluene up through the vent and into the atmosphere. The learned trial judge's findings with respect to the cause of the event are at par7 of his reasons for judgment:

"Accepting that practically all the water that was at the bottom of TA248B was drained therefrom through the tap at the bottom of that vessel before its contents were transferred to RE357, a significant quantity of water must have been present, mixed with the toluene that was transferred to RE357, and must have settled to the bottom of RE357 when that vessel's contents were**,** unusually**,** left standing for some hours without agitation before the distillation process was commenced. When heat was applied to the sides of RE357, but not the bottom, the toluene began to boil, but the water below it did not. The boiling point of a liquid depends upon the pressure of the air or gas above that liquid. The higher the pressure, the higher the boiling point will be. The effect of the toluene boiling was to increase the pressure in the head of RE357 as the toluene boiled. The effect of the increased pressure was to increase the boiling point of the water under the toluene. After the operator closed off the supply of steam that was heating RE357, the pressure in the head of that vessel began to fall. It fell until the water began to boil. The water was superheated, ie, it was a liquid but its temperature was above 100oC. The toluene was still boiling when the water started to boil. When two different liquid compounds boil in a closed vessel, the pressure in the head of that vessel is increased by the sum of the pressures exerted by each boiling compound. When water boils, it expands dramatically. Thus, when the superheated water began to boil, with the toluene boiling simultaneously, the pressure in the head of RE357 increased so dramatically that the rupture disc ruptured, the gasket around the access lid blew out, and the access lid buckled."

14 Ground 1 of the notice of appeal concerns the "content" of the duty of care. It asserts:

"That the learned trial judge erred in law or fact or both in finding that the Appellant's duty at common law was to take reasonable steps to prevent pressure in RE357 from rising to such a level as to cause a discharge of toluene into the atmosphere in that such a finding was either unsupported by, or alternatively against the weight of, the evidence."

15 At par12 of his reasons for judgment, the learned trial judge found that it was reasonably foreseeable that the pressure in the reactor "might rise to a level that endangered the integrity of the vessel and the safety of those working near it". No objection could be taken to that finding of fact. Given the relationship between the appellant and the respondent and the latter's proximity to the reactor, it is obvious that the appellant owed the respondent a duty of care. Mr Tree SC, who appeared as counsel for the appellant, did not submit to the contrary. It is well settled law that the duty of the appellant was to do what a reasonable company in the position of the appellant would have done in response to the foreseeable risk that an activity of the appellant might cause injury. This proposition of law is encapsulated in the well known passage from the judgment of Mason J (as he then was) in Wyong Shire Council v Shirt [1980] HCA 12; (1980) 146 CLR 40 at 47 - 48:

"In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant's position."

16 Having found that the risk of injury was foreseeable, the learned trial judge said, at par12:

"The defendant's duty of care therefore required it to take reasonable steps to prevent the pressure in RE357 from rising to such a level as to cause a discharge of toluene into the atmosphere."

17 Ground 1 is directed towards that sentence. Mr Tree submitted that the learned trial judge fell into error in concluding that the duty of care was to prevent the emission of toluene as the vent was provided for that very purpose. In my view, the learned trial judge did not so conclude at all. He said that the duty of care required the appellant to take reasonable steps to prevent the pressure rising to such a level as to cause emission of toluene. The extent of a duty of care is a question of law. In the sentence under attack by ground 1, the learned trial judge was doing no more than applying the facts of the case at hand to the law. That this was the learned trial judge's intention is evident from the fact that he cited the same passage from Wyong as I have, and at par11 found that "... the defendant owed those working at its premises a duty to take reasonable care for their health and safety in its handling and use of toluene." Ground 1 is not made out.

18 The remaining grounds of appeal on the issue of breach of duty of care are numbered 2, 3 and 6. It is convenient to deal with them together:

"2 That the learned trial judge erred in fact in finding that a significant quantity of water settled to the bottom of RE357 when its contents were left standing for approximately 10 hours, in that such finding was either unsupported by, or alternatively against the weight of, the evidence;

3 That the learned trial judge erred in law or fact or both in holding that the Appellant breached the common law duty it owed the Respondent, in that his Honour's findings that:-

(a) if toluene escaped from RE357 into the atmosphere, the risk of injury to the plaintiff or to a class of persons including the plaintiff was very high; and/or

(b) there was a significant probability of discharge of toluene into the atmosphere;

were unsupported by, or alternatively against the weight of, the evidence;

6 That the learned trial judge erred in fact in (seemingly) finding that on 16 February 1999, it was reasonably foreseeable that in 10 hours, sufficient water could disentrain from toluene in the Appellant's reactor RE357, as to endanger the integrity of the vessel or the safety of those working near it, in that such a finding was unsupported by, or alternatively against the weight of, the evidence."

19 Mr Jolly's report stated, in part, "hot toluene (1,300L) was released from the reactor ...". The catchpot report contains some calculations with respect to the amount of water that was required to displace various quantities of toluene. These calculations were put to Mr Dreher, who consequently gave evidence that approximately 216 litres of water would have been necessary to displace 1,300 litres of toluene. Mr Dreher appeared to accept that this was a reference to 216 litres of disentrained water.

20 Mr Tree submitted that this evidence led to the conclusion that there must have been 216 litres of disentrained water in the reactor just before the event. There was no evidence of how long it took for water to disentrain, nor how long the used mixture had been in the vat before being transferred to the reactor. Ground 2 of the notice of appeal alleges that error occurred in the finding that "a significant quantity" of water must have been present when the used mixture was transferred from the vat to the reactor. There was no direct evidence of this fact, but given that the cause of the event is not in dispute, such a finding was the only one reasonably open on the evidence. A quibble might arise over the use of the adjective "significant", given the likely proportion of toluene to water, but nothing turns on this.

21 The essence of the appellant's argument on the issue of negligence is that given that:

* there was no evidence of how much water was in the reactor when it was transferred from the vat;

* there was no evidence of how long it took for a litre of water to disentrain from the toluene;

* there was evidence that it was probable that immediately prior to the event there were 216 litres of disentrained water in the reactor;

* the evidence was that nothing like the event had occurred in the past;

* disentrained water had been drained from the used mixture after it had been standing in the vat and prior to transfer to the reactor;

it was not reasonably foreseeable that the event would occur. Mr Tree pressed the point that what had to be reasonably foreseen was the existence of 216 litres of disentrained water in the bottom of the reactor.

"Everyone who worked on or controlled this part of the Toluene boil off was inducted to take particular precautions to prevent the build up of pressure and burst in the disc. Those precautions were as follows:

(a) always drain from the vessel (either TA 248B or RE 357 - or before that RE 350) as much of the water (aqueous) so that the vessel contained as far as possible pure Toluene. The importance of draining was due to the lower boiling point of water as compared to Toluene.

(b) always agitate the contents of the pressure vessel so that the water and Toluene are mixed are mixed [sic] as well as possible.

(c) ensure all the relevant valves, eg the valve into the condenser and out of the condenser, were open."

23 The expert opinion of Messrs Jolly, Cockshutt and Dreher was that there must have been disentrained water in the cone of the reactor. This was the cause of the event. The event would have been avoided if this water had been drained off before commencing distillation, or if the agitator in the reactor had sufficiently mixed it with the toluene in timely manner. There was no evidence about the design or effectiveness of the agitator. The event may have been avoided if the cone had been heated at the same time as the sides of the reactor.

24 The importance of draining away disentrained water is apparent from Mr O'Grady's induction procedures. The appellant knew or ought to have known that:

* it was likely that during the ten hour period the used mixture was left standing in the reactor, some water would disentrain from the toluene; and

* there was a risk that there might be enough water disentrained to cause the event if it was not drained off or properly mixed with the toluene.

25 The relevant foreseeable risk was not that there was approximately 216 litres of disentrained water in the cone of the reactor, but that there was a risk that there might be sufficient disentrained water to give rise to the very event that occurred. That the appellant was, or should have been, well aware of this risk is apparent from the induction procedures set out in the proof of evidence of Mr O'Grady.

26 Mr Tree submitted, correctly in my view, that even though the proper operation of the reactor would result in no emission of toluene into the atmosphere, the mere fact of emission did not mean a breach of a duty of care. He pointed to the fact that the reactor was equipped with a vent which would emit toluene in the event of the pressure being sufficient to break the seal covering access to the vent.

27 There was evidence that it was likely that the bulk of the toluene escaped from the buckled lid and its broken seal and that the majority of the toluene to which the respondent was exposed came from this source. Mr Tree submitted, again correctly in my view, that the buckling of the lid and the emission of toluene from that source was not negligence. The relevant enquiry is what event or events caused that to happen and was that event or events a breach of the duty of care? As mentioned, there was no doubt about the cause. Although it may not have been reasonably foreseeable that, in the circumstances, 216 litres of water would have disentrained, it was well and truly foreseeable that a significant quantity of water may have disentrained. It was equally foreseeable that if this happened the pressure in the reactor would rise to an unknown extent. It is common knowledge that if the pressure increases to a substantial degree the fastenings of the vessel may burst. It may be said that it could not have been foreseen that there was enough disentrained water to cause the pressure to rise to the extent that it did. It may also be said that it could not have been foreseen that the pressure would have been sufficient to make the lid buckle and its seal to burst. What was foreseeable was that pressure might rise to a significant degree and significant increased pressure might cause a breach of the vessel's integrity other than or in addition to the seal on the vent. It is not necessary that the exact location and manner of the breach be foreseen.

28 The reasonable response to that foreseeable risk would have been to simply drain the cone of the reactor and to adequately agitate its contents, prior to commencing the distillation process, in accordance with the appellant's instructions given at the induction. The purpose of those instructions was to prevent a build up of pressure in the reactor.

29 In my opinion, the learned trial judge was correct when he said, at par17 of his reasons for judgment:

"For the reasons stated above, I am satisfied that the defendant was negligent in failing to drain the water from the bottom of RE357 prior to commencing distillation; in failing to agitate, or adequately agitate, the contents of RE357 prior to commencing distillation; and in failing to train and instruct the operator of RE357 to take such steps when toluene had been left to stand in RE357. Many other particulars of negligence were relied upon by counsel for the plaintiff, but I do not think I need to consider them."

30 Grounds 2, 3 and 6 of the notice of appeal fail.

31 The Workplace Health and Safety Act, s9(4) provides:

"(4) Any employer who exercises, or is in a position to exercise, management or control over a workplace must ensure that, so far as is reasonably practicable, any person at that workplace is safe from injury and risks to health.

(a) a body corporate, a fine not exceeding 1 500 penalty units; or

(b) a natural person, a fine not exceeding 500 penalty units."

32 Ground 5 of the notice of appeal asserts that the learned trial judge erred in finding that the appellant was in breach of that subsection. The arguments in support of this ground were those advanced in support of grounds 2, 3 and 6, and for the reasons already given, ground 5 fails.

33 Ground 4 of the notice of appeal asserts that the learned trial judge erred in finding that the appellant was in breach of the Dangerous Goods (General) Regulations, reg36(a):

"36 - A person involved in the handling of dangerous goods -

(a) must take precautions to prevent any dangerous goods from -

(ii) being discharged into any part of a house or other building or of the immediate surroundings of that house or building ...".

34 By virtue of various statutory provisions that the learned trial judge set out, toluene falls within the meaning of dangerous goods and the process of distillation falls within the meaning of handling.

35 The appellant advanced the same arguments in support of this ground as it did in support of other grounds, so it too must fail. However, counsel for the respondent, Mr Read, advanced some interesting arguments with respect to this legislative provision. He submitted, in effect, that it operated to impose strict liability. He submitted that if the toluene escaped, then precautions to prevent it escaping had not been taken. No issue of reasonable foreseeability or reasonable response to the risk arose.

36 It is true that "precautions" is not qualified by any adjective such as "adequate" or "reasonable". At par25 of his reasons for judgment, the learned trial judge said that having regard to the purpose of the regulations, he thought that it should be interpreted to require the taking of adequate precautions. The trouble with that approach is that it requires the judiciary to write into the legislation a word that is simply not there. With respect to this proposition, Lord Mersey said in Thompson v Goold & Co [1910] AC 409 at 420:

"It is a strong thing to read into an Act of Parliament words which are not there, and in the absence of plea and necessity it is a wrong thing to do."

See also Arnold v Stringer [2004] TASSC 13.

37 This judicial directive has even greater impact in this case when regard is had to the fact that the legislature used the word "reasonable" in reg46, which provides:

"46 - A person who stores dangerous goods must take all reasonable precautions to prevent -

(a) an accident by fire, explosion, corrosion or poisoning ...".

38 Regulation 36 is not an absolute prohibition against the escape of dangerous goods. Were it so, the enactment would have read, "a person involved in the handling of dangerous goods must prevent any dangerous good from escaping". The statutory duty is to take precautions. That means that there is a duty to take steps to provide against the prescribed mischief, viz, the escape of dangerous goods. The penalty for a breach is a maximum fine of $10,000. The regulation does not impose a duty to take "every precaution" to prevent the escape of dangerous goods. It seems to me that the proper approach is to remember that it is a penal regulation and bear in mind the following, oft quoted, statement of Gibbs J (as he then was) in Beckwith v R [1976] HCA 55; (1976) 12 ALR 333 at 339:

"The rule formerly accepted, that statutes creating offences are to be strictly construed, has lost much of its importance in modern times. In determining the meaning of a penal statute the ordinary rules of construction must be applied, but if the language of the statute remains ambiguous or doubtful the ambiguity or doubt may be resolved in favour of the subject by refusing to extend the category of criminal offences: see R v Adams [1935] HCA 62; (1935) 53 CLR 563 at pp 567-568; Craies on Statute Law, 7th ed (1971), pp 529-534. The rule is perhaps one of last resort."

39 It would be a substantial extension of the criminal law to construe this regulation so that it operated to impose strict liability, when another interpretation is open on the ordinary words of the section. Upon this interpretation, the appellant did take precautions against the escape of toluene, but not enough to prevent that happening. I would conclude that it was not in breach of the Dangerous Goods (General) Regulations, reg36(a). However, nothing flows from this conclusion having regard to my conclusion on the issue of negligence.

40 The learned trial judge assessed the respondent's damages in the sum of $712,181. Of that sum, $60,000 was allowed for pain, suffering and loss of amenities. $196,794 was allowed for past impairment of earning capacity and $409,800 for future impairment of earning capacity. Ground 7 of the notice of appeal attacks the assessment of $60,000 and grounds 8 - 11 attack the assessments for impairment of earning capacity.

41 Prior to the accident on 26 February 1999, the respondent was a highly skilled welder, hardworking and carrying on a successful business. He completed his apprenticeship in 1991 and became particularly skilled at welding stainless steel, a job that apparently requires a very high level of care and concentration. When he was 19 years old, the respondent left home to live with his partner, Lisa Blenkhorn. They lived together until February 2000, 12 months after the accident. There are two children of this union.

42 In 1995, the respondent commenced to carry on his trade as an independent contractor in partnership with Ms Blenkhorn. The evidence was that she contributed very little to this partnership, but it delivered a tax benefit to the respondent. The uncontested evidence was that before the accident, the respondent worked long hours, enjoyed a family life, drank alcohol very moderately and occasionally smoked marihuana. At the time of the accident, the respondent and his family were living in a house not far from the appellant's premises at Westbury. He also owned four other properties. It was his then intention to work hard, build up a business, employ others in that business and retire at the age of 50.

43 The respondent suffered some immediate, but transitory, physical effects from his exposure to toluene. Although taken to hospital, he was discharged later the same day, but as the learned trial judge found, "the psychiatric consequences have endured ever since".

44 The respondent returned to work at the appellant's premises three days after the accident, but once there he started to sweat and shake. He persevered at his work for a few more days, but the adverse emotional effects and their physical signs of being back where the accident happened did not abate. He was offered welding work at the UMT milk factory at Spreyton and accepted it. However, his symptoms did not improve.

45 The respondent suffered from headaches, sleeplessness, sweating and shaking, with accompanying difficulties in concentrating. He also suffered from nightmares, intrusive thoughts and flashbacks to the accident. He consulted a psychologist shortly after the accident who diagnosed a post-traumatic stress syndrome. This diagnosis was subsequently confirmed by another psychologist, Mr de Jong, and a psychiatrist, Dr Moore. The appellant did not challenge the diagnosis, but submitted that notwithstanding the respondent's post-traumatic stress disorder, his capacity to utilise his residual earning capacity was, and will continue to be, greater than that found by the learned trial judge.

46 Following a brief period of work at UMT, the respondent ceased work altogether for a few months. By this stage, he and his partner were very short of funds. He consulted his general practitioner, who gave him a certificate that he was fit for work provided he avoided industrial welding activities. The respondent undertook a three week course learning to be a tree feller. He told the learned trial judge that he was "just trying to get something that was right away from the welding industry ... something that was out in the open".

47 He obtained work as a tree feller at Scottsdale but his employer was very strict. After no more than four hours, the respondent found he could not continue working. He said that he felt very tired and had to give up. Shortly afterwards he got some more tree felling work closer to home. This time his employer was more tolerant and let him work his own hours. This employer also had a workshop which the respondent described as spotlessly clean and in which he did some welding work - "a day here and there" - when he was not felling trees.

48 His employer had been felling trees for Leighton Contractors and at the beginning of January 2000, this company offered the respondent work on the Hagley-Westbury bypass it was then constructing. The respondent worked for Leighton Contractors from January 2000 until June that year, when work had to stop on account of flooding. Most of the respondent's work with Leighton Contractors was operating a hand held Stop/Go sign. The respondent said he was "pretty happy with that" as he was out in the open, but he found the "strict rules" and getting to work on time difficult to handle. He said that he started to drink heavily at this time, inferentially to relieve his anxiety. He said that he was working long hours, six days a week, found it no physical strain, but a mental strain with "a lot of people counting on [him]".

49 The respondent told the learned trial judge that throughout this time he was not sleeping, was irritable and suffered from loss of concentration. When giving his evidence, the respondent spoke of himself in the third person singular. He said:

"You still wasn't sleeping, you just tossed and turned and sweated all night, you'd wake up in a lather of sweat and your curly hair would be choc-a-block full of water and it'd go through the doona and you'd have to get up and wipe your body in towels and put towels down in the bed and ...".

50 On the first anniversary of the accident, the respondent became highly intoxicated after work and ended up sleeping with his partner's sister. His partner learned of this and the next day she terminated their relationship. The two of them continued to live in the same house at Westbury for a short while after that, but then the respondent moved out and, in March 2000, he went to live on his own in a small house he had built at Port Sorell.

51 Ground 7 of the notice of appeal complains that the learned trial judge erred in the following conclusion he reached at par62 of his reasons for judgment:

"Mr Tree submitted that the breakdown of the relationship between the plaintiff and his original partner was not a consequence of the toluene incident, or alternatively that it was not a reasonably foreseeable consequence of any breach of duty that caused that incident. I disagree. But for the toluene incident, the plaintiff's relationship would not have been under the strain resulting from his psychiatric symptoms, he would not have become intoxicated the night before its first anniversary, and I do not think he would have had sex with his partner's sister. It was reasonably foreseeable that any lack of care in the handling of industrial quantities of chemicals at the defendant's plant might have resulted in someone working there undergoing a life-threatening experience, with the result that such a person might suffer from PTSD for many years, and behave in ways likely to strain any marriage or marriage-like relationship beyond breaking point."

52 Mr Tree's argument in support of error was straightforward. He submitted that the learned trial judge reasoned that:

* the break up of the relationship between Ms Blenkhorn and the respondent.

53 Mr Tree submitted that the real cause of the break up of the relationship was consensual sex with the partner's sister and that was not a reasonably foreseeable consequence of the appellant's breach of duty of care.

54 Mr Tree's argument is too simplistic, in my view. The episode with the sister was, no doubt, as the respondent said in his evidence, the final straw, but it was not the cause viewed in a practical commonsense way: see March v E & MH Stramare [1991] HCA 12; (1991) 171 CLR 506. For more than 12 months, Ms Blenkhorn had been living with a man who was but a shadow of his former self. Without apparent physical injury, he had become a nervous wreck, reducing the family unit to living in poverty. The respondent had become irritable and anxious and, as the evidence that I have recited demonstrates, had become an unpleasant bed companion. In addition, he had taken to drinking to excess. All of these events were reasonably foreseeable consequences of the appellant's breach of duty of care and the learned trial judge was right to express the conclusion that he did in par62 of the reasons for judgment. Dr Moore, who was aware of the fact that the respondent had slept with his partner's sister the day before she terminated the relationship, said with respect to the break up, "I think that was something which was happening over the course of the year. It wasn't a sudden unexpected event."

55 In any event, even if Mr Tree's submission on ground 7 is accepted, I would not disturb the assessment of damages for pain, suffering and loss of amenities on that account. The breakdown of the respondent's relationship with Ms Blenkhorn was not a major factor in the assessment. The respondent gave evidence that he married in 2004. He described his new relationship as happy. The significant matter upon the assessment of general damages was the post-traumatic stress disorder. With respect to this, the undisputed medical opinion was that the respondent is likely to suffer to some degree from manifestations of this condition for the rest of his life.

56 An appeal against the quantum of general damages fixed by a judge is to be determined upon principles analogous to those which govern appeals from the exercise of judicial discretion: Lee Transport Co Ltd v Watson [1940] HCA 27; (1940) 64 CLR 1 at 13 per Dixon J. It follows that in order to succeed on appellate review of an award of discretionary or general damages, the appellant must establish that the trial judge has acted on a wrong principle of law, or misapprehended the facts, or made a wholly erroneous estimate of the damage suffered: Miller v Jennings [1954] HCA 65; (1954) 92 CLR 190 at 194 - 196 per Dixon CJ and Kitto J.

57 In Lee Transport Co Ltd v Watson (supra), Dixon J (as he then was) at 13 made the following observations with respect to appeals against the quantum of general damages fixed by a judge:

"An appeal against the quantum of general damages fixed by a judge is to be determined upon principles analogous to those which govern appeals from the exercise of judicial discretion. The standards by which the amount of general damages is to be fixed are indefinite and uncertain, and to estimate the sum to be awarded involves the exercise of a form of discretionary judgment. If the appellate court is satisfied that some error of principle has been made, it must, of course, review the assessment. It must do so if it positively appears that some material consideration has been disregarded or that extraneous matter has been taken into account. But it ought not to reconsider the amount of damages independently of the assessment made by the judge whose decision is under appeal. The appeal remains a rehearing (Reaney v Co-operative Wholesale Supply Ltd (1932) WN 78), but, because of the nature of the duty discharged by the primary judge, the question whether his assessment or determination of the amount of damages was wrong must be decided, not by the court of appeal making its own estimate, but by considering whether a reasonable result has been reached and in the manner which the law provides. It is enough, however, to entitle and require a court to interfere if a very great disparity exists between the amount which ought, in its judgment, to have been awarded and that which has been fixed; if it is 'convinced ... that the amount awarded was so extremely high or so very small as to make it, in the judgment of this court, an entirely erroneous estimate of the damage to which the plaintiff is entitled' (per Greer LJ in Flint v Lovell [1935] 1 KB 354 at 360, approved in Owen v Sykes [1936] 1 KB 192--cf Coates v Rawtenstall Borough Council [1937] 3 All ER 602 at 606; Mills v Stanway Coaches Ltd [1940] 2 All ER 586)."

58 In Davies v Powell Duffryn Associated Colleries Ltd [1942] AC 601 at 616 - 617, Lord Wright in the following passage explained the function of a court of appeal with respect to an award of damages for personal injuries made by a judge:

"... An appellate court is always reluctant to interfere with a finding of the trial judge on any question of fact, but it is particularly reluctant to interfere with a finding on damages which differs from an ordinary finding of fact in that it is generally much more a matter of speculation and estimate. No doubt, this statement is truer in respect of some cases than of others. The damages in some cases may be objective and depend on definite facts and established rules of law, as, for instance, in general damages for breach of contract for the sale of goods. In these cases the finding as to amount of damages differs little from any other finding of fact, and can equally be reviewed if there is error in law or in fact. At the other end of the scale would come damages for pain and suffering or wrongs such as slander. These latter cases are almost entirely matter of impression and of common sense, and are only subject to review in very special cases. There is an obvious difference between cases tried with a jury and cases tried by a judge alone. Where the verdict is that of a jury, it will only be set aside if the appellate court is satisfied that the verdict on damages is such that it is out of all proportion to the circumstances of the case: Mechanical & General Inventions Co Ltd v Austin (1935) AC 346. Where, however, the award is that of the judge alone, the appeal is by way of rehearing on damages as on all other issues, but as there is generally so much room for individual choice so that the assessment of damages is more like an exercise of discretion than an ordinary act of decision, the appellate court is particularly slow to reverse the trial judge on a question of the amount of damages. It is difficult to lay down any precise rule which will cover all cases, but a good general guide is given by Greer LJ in Flint v Lovell (1935) 1 KB 354, at 360. In effect the court, before it interferes with an award of damages, should be satisfied that the judge has acted on a wrong principle of law, or has misapprehended the facts, or has for these or other reasons made a wholly erroneous estimate of the damage suffered. It is not enough that there is a balance of opinion or preference. The scale must go down heavily against the figure attacked if the appellate court is to interfere, whether on the ground of excess or insufficiency."

This statement was adopted and applied by the High Court in the case of Miller v Jennings (supra) at 195 - 196 in the joint reasons of Dixon CJ and Kitto J; and in Wilson v Peisley (1975) 7 ALR 571 per McTiernan, Gibbs and Mason JJ.

59 Even had I been persuaded that the learned trial judge took into account an extraneous matter, namely the breakdown of the respondent's relationship with Ms Blenkhorn, I would not disturb the assessment of $60,000 for general damages for it would remain an appropriate assessment notwithstanding the inclusion of that matter.

60 Following the breakdown of his family unit, the pressures on the respondent increased. He remained at work on the Hagley-Westbury by-pass with Leighton Contractors. The respondent was given Saturdays off work to see his children, but it seems that this only increased his symptoms of anxiety. Work on the by-pass resumed in August 2000 after a two month break because of flooding. The respondent accepted an offer to return to work on this project. His employer wanted him to do work that had been done by a man who had committed suicide. The work involved cleaning the crib room and the toilets, turning off alarms and working on the construction site. The respondent was frequently late for work and not pulling his weight when he was at work. His employer continually put him on notice that unless his work improved, he would be put off.

61 In early 2001, he was served with divorce papers and became suicidal. He said in his evidence-in-chief:

"... the night when I got served with them papers I knew I was on my last chance and I was going to the trots and I knew I had to get to work the next day and I got there and one of my mates had blown his head off and the next morning I got up and I just couldn't - I got up early and I couldn't go to work so I jumped in the car and just went back down to Port Sorell and then come back on the Monday morning and said, that's it, can't work here any more and they were very concerned that I was going to take my own life then ...".

62 The respondent gave up his job with Leighton Contractors in March 2001. In cross-examination it was put to him that he left his job because a friend had just committed suicide and because he had been served with divorce papers. The respondent described these events as the "tip of the iceberg" and said he probably would have been sacked anyway.

63 In his evidence, Mr de Jong agreed with Mr Tree that it was possible that the suicide of a friend and the service of the divorce papers, rather than the post-traumatic stress disorder, had caused the respondent to give up his job with Leighton Contractors, but added that he thought that his reasons for leaving work were more complicated than that.

64 The respondent's employment with Leighton Contractors played a significant part in Mr Tree's submissions on the hearing of the appeal against the assessment of damages. Apart from a period of two months in the winter of 2000, the respondent worked for Leighton Contractors from January 2000 until March 2001. Grounds 8, 9 and 10 attack the learned trial judge's assessment of the respondent's residual earning capacity. Mr Tree submitted that the respondent's residual earning capacity could have been utilised, and can be utilised, to do the sort of work that the respondent had been doing with Leighton Contractors. The submission was that the respondent gave up that work in March 2001 for reasons unconnected with the appellant's tort.

65 From March 2001 onwards, the respondent lived a hermit-like existence at Port Sorell. He was suicidal. He saw a solicitor, who recommended that he see Mr de Jong. The respondent first consulted Mr de Jong on 27 June 2001 and thereafter consulted him on a regular basis. Between March 2001 and about August 2001, the respondent earned a little money cutting wood, repairing wood heaters and doing similar kinds of odd jobs on an irregular basis. The respondent's parents became concerned about the way the respondent was living at Port Sorell, and his father started to visit him on an almost nightly basis.

66 The respondent's father is a boilermaker/welder. In partnership with the respondent's mother, he held a contract for the provision of maintenance services for the Spirit of Tasmania vessels. The respondent started to do a little work in his father's workshop. Soon after, the respondent started working on the ships. He said that he felt comfortable working in those surroundings. In the beginning, the respondent worked about 1½ days a week, although his father pressured him to do more. The respondent always worked with his father or another employee whom he knew well and trusted. He said he could not have done the work on his own. He said he found the work tiring.

67 By the middle of 2002, the respondent's father had a lot of work on and he pushed the respondent to work longer hours. The respondent said he found it difficult to cope with this pressure and there was friction between him and his father about this and the fact that the respondent was often late getting to work. The respondent said that the work made him tired and at the end of the day "I was just absolutely rooted, I'd go straight to the pub, five or six six ounces into me as quick as I could just to get me relaxed because I was shaking".

68 About this time, the respondent's suicidal thoughts increased. In August 2002, at the suggestion of Mr de Jong, the respondent consulted his general practitioner and, in result, started to take antidepressant medicine. This improved the respondent's condition considerably and he found that he was able to increase his working hours to a marked extent, albeit, always working with a trusted fellow employee or his father. However, this did not last. Asked how he could manage if he could not work for his father, and with another employee whom he could trust, the respondent said:

"I wouldn't be able to do it. I wouldn't get there. I know you think it's strange but the pressure that would be put on your head - the nausea - you'd nearly vomit and like - it's just the mind thing. I just would not be able to do it."

69 The respondent gave an illuminating example of the extent of his anxiety. He described an occasion which he said "happened the other day", when a workman stripped two bolts when bolting an engine to a turbo charger. He told the respondent about this just before he went home. The respondent said that he did not sleep that night worrying about this problem. The next day, the respondent told the first engineer what had happened. The engineer told the respondent that he had better get some helicoils and fit them. The engines had to be started by 10.30 that morning. The respondent had never fitted helicoils before. This is his description of what happened:

"I went over town, I got these helicoils with the instructions, had to drill these two ports out, that's where the threads were, screw the helicoils in with this special tool, and what they did was you drilled them out bigger and you put like a tube in with a thread inside it. The first one went in perfectly, I thought great, and the second one didn't go in properly. I'd never done it before, I didn't know what I was doing, it didn't go in properly and I just started shaking and sweating, I couldn't speak, I didn't know who to see, Shane was there and he said 'Look for Christ sake just stop for a minute, get down here and just have a rest and just relax' he said 'We'll work it out, just wait a minute can you'. I got down and stopped and waited and I got back up there and looked at it and I got the pliers and very very carefully removed it and got it out, thank God, screwed another one in and at the last turn it went in spot on, and screwed the manifold back on to the turbo-charger and it screwed on perfectly, and all that took from when we started work at I think eight o'clock until half past ten and they were so happy because things weren't able to run, took two and a half hours but I was physically - you know I couldn't do anything else for the day."

70 The respondent said that before the accident, working under pressure, even doing things that he had not done before, was something he was very good at doing and that an incident like the one he had just described made him feel ashamed and embarrassed.

71 At the time of the trial, the respondent was still working for his father about 25 hours a week and always with the trusted workmate. The learned trial judge's finding, at par53 of his reasons for judgment, was not challenged:

"From January 2004 until the trial of this action, he worked about 25 hours per week providing maintenance services for Spirit of Tasmania III whenever it was in port in Devonport. He always works with an assistant. I am satisfied that he would not be able to manage without one, nor without the sort of support that he receives from his father and from crew members. He finds working under pressure extremely troubling."

72 In July 2003, the respondent went to Thailand for a friend's wedding. There he met a woman whom he married in February 2004, after going back in October 2003 to stay with her for a while. The learned trial judge found, at par54:

"Mr de Jong has noted symptoms that are consistent with the plaintiff's evidence and with the early report by Mrs Page. Those symptoms include a considerable loss of confidence, feelings that he was unsafe at work, inability to concentrate, difficulty working in places that he considers unclean, avoidance of the defendant's plant, difficulties with social interaction, difficulties coping with intimate relationships, intrusive and unwanted dreams and flashbacks, a tendency to be startled easily, panic in response to any reminders of the toluene incident, the excessive use of alcohol and cannabis, tension headaches, and feelings of dizziness and nausea associated with stress. I am satisfied that the plaintiff has been suffering from all of those symptoms as a result of the toluene incident."

73 No challenge was made with respect to those findings.

74 Ground 8 of the notice of appeal asserts that error attended the finding that the respondent "had made every endeavour to exploit his residual earning capacity". It is apparent from par76 of the learned trial judge's reasons for judgment that Mr Tree made the same submission at trial, arguing, as he did on the appeal, that the respondent was capable of doing the sort of work he did for Leighton Contractors in 2000 and 2001. With respect to that submission, the learned trial judge said, at par76 of his reasons for judgment:

"It is clear that the plaintiff's capacity for work is substantially impaired by his mental disorder. Because of his symptoms, he is incapable of working as a welder, of working on an industrial site [it is likely that his Honour meant that the plaintiff was incapable of working as a welder on an industrial site], of doing any work that reminds him of the toluene exposure, of working for strict employers or principals, of working with other people not selected or approved of by him, of doing work that involves sustained concentration, or of working under time pressure. Although a stainless steel welder might charge for his time at up to $60 per hour, the plaintiff's charge-out rate for his part-time work has reached only $28.50 per hour, which does not exceed his overheads. The plaintiff has a strong work ethic. At times he has forced himself to work in spite of severe psychiatric symptoms. The fact that he obtained a certificate from Dr Trezise and found work as a tree faller certainly illustrates this. In my view he has made every reasonable effort to exploit his residual earning capacity."

75 It was entirely open to the learned trial judge to reject the proposition that the respondent was capable of utilising his residual earning capacity to do the sort of work he had been doing with Leighton Contractors. The evidence made it clear that as time went by, his work performance with Leighton Contractors got worse and worse. He was often late for work. He used up all his sick leave and other leave to break up the periods during which he had to go to work. He felt he was under constant pressure from the rules, not unreasonably imposed by his employer. Although he did work for Leighton Contractors for a relatively long period of time (with a couple of months break in the middle) the respondent's evidence makes it clear that the work caused him to suffer from symptoms of his post-traumatic stress disorder. Further, although the added stressors of the death of a friend and the service of divorce papers precipitated the respondent's decision to leave Leighton Contractors, it was quite open for the learned trial judge to accept the respondent's claim that those events were only the tip of the iceberg and it was only a matter of time before he lost his job.

76 The unchallenged and, indeed, unchallengeable, conclusion that the respondent has a strong work ethic is very significant. That finding makes it unlikely that the respondent, then in difficult financial circumstances, deliberately chose not to utilise his earning capacity to earn money doing the kind of work he did for Leighton Contractors for no apparent good reason. In this context, it may be noted that it was not put to the respondent in cross-examination that he could have, but declined to, so utilise his earning capacity. In my view, ground 8 fails.

77 Grounds 9 and 10 of the notice of appeal are identical. In the original notice of appeal, they were grounds 6 and 7 and virtually identical. They attack the assessment of damages for diminution of future lost earning capacity. Grounds 9 and 10 assert that error attended a finding that the respondent retained only 25 per cent of his pre-accident earning capacity. At par67 of his reasons for judgment, the learned trial judge set out the net annual and weekly earnings of the respondent between 1994 and 2004, upon the assumption that the respondent was not in partnership with anyone. At trial, and, until the amendment of the notice of appeal by the addition of ground 8A, on the hearing of the appeal, Mr Tree accepted that these figures were correct. The learned trial judge referred to evidence that tended to prove what the respondent would have been likely to have earned had the accident not intervened and said, at par83:

"My calculations in relation to the plaintiff's loss of income since July 1999 indicate that he has retained something of the order of 25% of his pre-accident earning capacity."

78 In support of grounds 9 and 10, Mr Tree's basic submission was that, accepting the learned trial judge's finding that between February 1999 and trial in 2004, that the respondent's earning capacity had only been 25 per cent of what it had been prior to the accident, it was erroneous to extrapolate that state of affairs into the future. Mr Tree submitted that the evidence showed that:

* since August 2002, the respondent had been taking antidepressant medicine with good effect;

* since October 2003, he had been in a relationship, and later a marriage, in respect of which he said when asked how it helped his problems:

"It's made me a lot more relaxed. Times are happy. I'm fed very well. I'm looked after very well. Me washing and cleaning's done. Every night I get a massage. Heaps of sex. Heaps of Thai food. Very good."

* the respondent had "looked at" obtaining qualifications to enable him to work on a boat such as the Spirit of Tasmania, but as at the date of trial he had not had the funds to do this;

* the respondent had "looked at" opening a Thai restaurant.

79 With respect to the expert opinion evidence given by Dr Moore and Mr de Jong, the learned trial judge made these findings which are not subject to challenge on this appeal, at pars58 and 59 of his reasons for judgment:

"In Dr Moore's opinion, the plaintiff is suffering from PTSD. After seeing the plaintiff for the second time in April 2004, he reached the opinion that there will not be any further improvement in the plaintiff's symptoms in the long term. He thinks the plaintiff is only able to continue to work on the Spirit of Tasmania III because the shipping line is willing to pay for the time of both him and his assistant. He thinks the plaintiff's future work prospects would be very doubtful if that situation were to change. The plaintiff told him that the only alternative occupation which he could envisage would be as a crew member on a commercial fishing boat. Dr Moore noted of course that that possibility had not been tested. Dr Moore was not able to find any factors predisposing the plaintiff to PTSD, nor any that had contributed to the continuation of the symptoms of that disorder. He said the end of this litigation was likely to result in only transient mild relief of the plaintiff's symptoms.

Mr de Jong's opinion is that the plaintiff fulfils the criteria for a formal diagnosis of chronic PTSD. He believes this condition to result solely from the toluene incident. He noted that the plaintiff had gradually recovered some measure of his former confidence and competence in welding. He thought it likely that there would be some improvement in his condition after the conclusion of the legal process. He thinks it unlikely that the plaintiff will ever fully recover his pre-accident level of functioning, but does think that he has quite good rehabilitative potential. He thinks he will never be able to return to the defendant's plant or any similar site."

80 The respondent's evidence clearly demonstrated that his post-traumatic stress disorder causes him to suffer from acute symptoms of anxiety when he is:

* put in a position where his freedom to work at his own pace and in his own time is curtailed;

* made to do work that requires a high degree of concentration;

81 The unchallenged expert opinion evidence was that although the end of the litigation and his new married life might improve the respondent's symptoms, such relief is likely to be mild and temporary. As I understand the medical opinion evidence, this is because the passage of time since the accident in 1999 without any significant improvement, has caused the respondent's disorder to become chronic. Consequently, the probabilities are that it will always be present and will be symptomatic if exposed to stressors. Such stressors are likely to arise in many workplaces, be it on a fishing boat, on a passenger ferry, or a restaurant.

82 At the time of trial, the respondent was just managing to cope in a very protective work environment provided by his father. At trial, counsel for the appellant did not put to the respondent that he was not fully utilising his earning capacity. In my opinion, the following conclusion, at pars81 and 82 of the learned trial judge reasons for judgment, were the only ones reasonably open to him:

"Because of the plaintiff's PTSD symptoms, his earning capacity is severely impaired. I need not repeat the restrictions that his symptoms place on the availability of work. The plaintiff has contemplated working in the fishing industry, or working in a Thai restaurant with his new wife. Since 1999 there have been a number of occasions when he has optimistically embarked upon a new line of work, hoping that his symptoms will not interfere with it, only to be disappointed. No doubt there are many sources of stressful experiences in the restaurant industry and in commercial fishing. It may be that the plaintiff will find a line of work that is compatible with his symptoms, but I think that most lines of work must be closed to him because of them.

It may be that his symptoms, and thus his capacity for work, will improve with this litigation coming to an end, and with the joys of marriage to his new wife. However, I think it more likely that, as Dr Moore predicted, the end of the litigation will result only in a transient and mild improvement. It is also quite possible that some future event will result in an exacerbation of the plaintiff's symptoms. His exposure to toluene has left him vulnerable to such an exacerbating event, and damages must be assessed accordingly. In my view the need to allow for the possibility of an exacerbation of his symptoms more or less cancels out the need to allow for the possibility of an improvement in them."

84 It is convenient to deal with ground 11 now and then ground 8A. Ground 11 attacks the learned trial judge's conclusion in the last sentence of par82 that I have just set out. It is principally a particular of grounds 9 and 10, although, of course, it also touches the issue of general damages.

85 Mr de Jong said that he had noted an improvement, a settling, and a reduction in severity of the respondent's symptoms. However he added that the respondent's history was one of fluctuating severity of symptoms with acute periods. Mr de Jong said that the respondent was learning to adapt his "social interaction and his vocational exposure" in order to avoid stressors and it is likely that this contributed to an apparent very modest settling of his symptoms. It does not follow that the respondent's capacity to deal with exposure to those stressors will necessarily improve. Dr Moore was asked this question and gave this answer:

"Are there any events which might make Mr Anthony's condition worse? ... Yes, there is always the improbable [sic] [imponderable] your Honour, of the unquantifiable risk of the future event, particularly one involving a physical injury of a frightening nature, involving on-going physical problems, that invariably in my experience makes the pre-existing post traumatic stress disorder worse. So if Anthony is left with in [sic] [an] addition to his current PTSD, a future PTSD with physical restrictions his condition will deteriorate."

86 This answer was not the subject of cross-examination. When asked what kind of stressors are likely to cause symptoms from the post-traumatic stress disorder, Mr de Jong said, "I think any psycho-social stressor that would further reduce the person's capacity to cope would complicate the PTSD".

87 The finding of the learned trial judge that the risk of an exacerbation of the respondent's symptoms cancelled out the prospects of an improvement in them was an appropriate one on the evidence.

88 Ground 8A was a late addition to the notice of appeal. The hearing of the appeal was adjourned for 11 days to enable the ground to be formulated and submissions made with respect to it. It provides:

"8A The learned Trial Judge erred in fact in finding that in the years 2002, 2003 and 2004, the measurement of the plaintiff's earning capacity was his actual earnings as found by his Honour (being respectively $7,680.00, $294.00 and $0.00) because:-

(a) those figures were not an accurate pecuniary representation of the value of the work actually performed by the respondent; and, or alternatively

(b) those figures were arrived at by deduction of amounts from his gross income that were not reasonable deductions for the purpose of assessing his earning capacity."

89 As mentioned earlier in these reasons, at par67 of his reasons for judgment, the learned trial judge set out the net annual and weekly earnings of the respondent between 1994 and 2004 upon the assumption he was not in partnership with anyone.

90 The evidence showed that on 1 July 2001, the business partnership between the respondent and Ms Blenkhorn came to an end. At the same time, the respondent set up a new business called Shearwater Welding and Forestry Services. He was the sole proprietor of this business. Tendered in evidence were (inter alia) the respondent's tax returns for the years ending 30 June 2002 and 30 June 2003. They showed that the respondent's gross earned income for those years was $19,360 and $20,072, respectively. Figures filed as part of those returns showed that the earned income was offset by the cost of stock, depreciation, motor vehicle expenses and other business expenses. In calculating the respondent's net income, the learned trial judge deducted these expenses and made other adjustments (not challenged) to arrive at a net annual income of $7,680 for 2002 (made up of $1,599 from work and $6,081 from Commonwealth benefits) and $294 for 2003.

91 At trial, the appellant did not challenge any of those figures. Upon the hearing of the appeal, the appellant did not suggest that the business expenses were not incurred, nor did it suggest that they were not properly claimed as deductions for the purpose of the Income Tax Assessment Act. By ground 8A, the appellant seeks to put a submission, not raised by it in the evidence, nor argued in closing submissions at trial, that those figures do not provide an accurate yardstick for the measurement of the respondent's diminution in earning capacity during those two years. With respect to the years 2002 and 2003, Mr Tree correctly submitted that at trial the respondent's evidence was that:

* by the end of 2001, he was working about 20 hours per month at $25 per hour;

* in 2002, he was working two to three days per week, up to six hours per day;

* he was able to work every day for a full month on one of the new Spirits of Tasmania;

* at the time of trial, he was working about 25 hours per week for his father, earning in the order of $2,000 per month;

* in addition, he was able to undertake work intermittently, repairing wood heaters and falling trees.

92 Mr Tree submitted that that evidence showed that the learned trial judge's figures of $7,680 and $294 cannot be an accurate reflection of the amount that the respondent could have earned in those years from the utilisation of his earning capacity.

93 For those years, the learned trial judge made his measurement by using the undisputed figures tendered in evidence, and by deducting from the earned income shown therein, the expenses also shown therein as having been incurred in earning that income. That is an entirely appropriate method of making such a measurement. Mr Tree did not submit to the contrary. His submission on the appeal with respect to 2002 and 2003 was that the undisputed expenses of earning the income were not the actual expenses of earning the income. There is simply no evidence to support that proposition. Nothing was put to the respondent in order to ground such a submission.

94 With respect to 2004, no figures were tendered. The evidence was that during the tax year 2004 the respondent worked for about 25 hours per week for his father at a gross hourly rate of $28.50, but there was no evidence detailing his expenses. The trial took place on 12 May 2004, a little more than a month before the end of that financial year. There was imprecise evidence that the respondent went to Thailand more than once in this tax year. He said that he went to a friend's wedding in July that year. The evidence does not disclose the length of that visit. He was there for a month in October 2003 and went there again in February 2004 for about seven weeks. On the last visit, he married his wife. One might infer from that evidence that as at the date of the trial, the respondent had spent not less than twelve weeks of the 2004 tax year in Thailand not utilising his earning capacity. The appellant's complaint is that the learned trial judge's assessment means that the appellant has been required to pay for the respondent's holiday in Thailand. In my view, that is an unreasonable complaint. The appellant did not make this complaint at trial. The learned trial judge found, at par68, that, "In respect of the 2004 year, the plaintiff gave unchallenged evidence that his business was operating at a loss." That conclusion which is not challenged on this appeal, is perfectly correct. It was taken directly from the cross-examination of the respondent. That being the state of the evidence, it is difficult to see what conclusion the learned trial judge could have reached, other than the one expressed by him at the end of par68 of the reasons for judgment.

95 Ground 8A is not made out. I would dismiss the appeal.

TASMANIAN ALKALOIDS PTY LTD [ACN 009 502 283]

96 I agree with the reasons for judgment of the Chief Justice.

TASMANIAN ALKALOIDS PTY LTD [ACN 009 502 283]

97 The issues and analysis of the evidence relevant to this appeal have been accurately and comprehensively dealt with by the learned Chief Justice and do not require restatement. Six of the grounds of appeal relate to the question of liability and for the reasons stated by the Chief Justice, I agree that those grounds of appeal have not been made out.

98 The respondent was injured by the discharge of a toxic vapour which had escaped from equipment used in a distilling and processing plant operated by the appellant. The respondent was an employee who had done nothing to bring about the occurrence which caused injury. Causation and duty readily established the commencing point for consideration of breach of duty with the inference that something had gone wrong. No evidence of operator error was placed before the tribunal of fact by either party. Inferences remaining open to the fact finder were limited. The escape of the vapour could have been a result of defective or inadequate design, a malfunction of the process or a chemical process not previously known. The appellant relied on the last, claiming it to be unforeseeable and specifically that the respondent had failed to establish at trial that it was foreseeable. Foreseeability might remain central to the issue of breach of duty, but it does not deprive the fact finder of the use, as an evidentiary vehicle, of inferential reasoning. The statement of principle that breach of duty is established when a party subject to duty fails to take reasonable care to avoid a foreseeable risk of injury (Australian Safeway Stores Pty Ltd v Zaluzna (1987) 162 CLR 479) does not require a plaintiff to negate all possible foreseeable causes in order to establish liability. Concentration on foreseeability does not exclude the process or method of inferential reasoning.

99 Here the appellant contends that because the respondent could not conclusively prove escape of the noxious substance to have resulted from an unknown or unknowable chemical reaction, that any finding of breach of duty was erroneous. Breach of duty remains a question of fact. In Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; (1999) 200 CLR 121, Gleeson CJ and McHugh J stated, at 134, the approach in the following terms:

"The relevant occurrence in the present case was the accident - the detachment of a hose, carrying compressed air, swinging around and striking the plaintiff in the face. If accidents of that kind do not occur if those who have control of the hose and its attachments use proper care, the plaintiff was entitled to rely on res ipsa loquitur to make out a prima facie case of negligence and it was then for the judge to hold whether the occurrence constituted negligence having regard to all the other circumstances of the case. But once the cause of the occurrence was proved, the principle could play no part in the proceedings."

"Res ipsa loquitur is concerned with negligence arising from an unknown or unspecified cause. It is concerned with an external event whose cause is under the control of the defendant. It is a principle that is as much, perhaps more, concerned with proof that the defendant was causally responsible for the occurrence as it is with proof of a breach of duty. In Mummery v Irvings Pty Ltd [1956] HCA 45; (1956) 96 CLR 99 at 116, Dixon CJ, Webb, Fullagar and Taylor JJ said that '[t]he requirement that the accident must be such as in the ordinary course of things does not happen if those who have the management use proper care is of vital importance and fully explains why in such cases res ipsa loquitur'."

100 It is the risk of injury, not the particular form which is central to the issue of breach of duty.

101 I would dismiss the grounds of appeal relating to liability.

102 Damages were assessed in the sum of $712,181, of which some $60,000 was allowed for pain, suffering and loss of amenity. There is merit in the appellant's contention that the amount awarded as general damages is at the upper range. There is also merit in its contention that some of the consequences attributed to the injury were more complex than claimed. The breakdown of the relationship was caused, in part, by infidelity which, in turn, was more a product of the human condition rather than of a psychiatric syndrome. There is always a tendency in a claim for damages for every problem experienced by a party to be linked to an event or injury for which the claim is made. Accepting both of those critiques, the award made was within the province of the trial judge and the permitted range of discretion. This is an appeal, not a general review of the award, and the award itself does not manifest error (Lee Transport Co Limited v Watson [1940] HCA 27; (1940) 64 CLR 1; Miller v Jennings [1954] HCA 65; (1954) 92 CLR 190; Wilson v Peisley (1975) 7 ALR 571). Even if the learned trial judge overestimated the impact of personal matters on his assessment of the degree of suffering, the award itself ought be permitted to stand.

"8 That the learned trial judge erred in fact in finding that the Respondent had made every reasonable endeavor [sic] to exploit his residual earning capacity in that such a finding was either unsupported by, or alternatively against the weight of, the evidence;

8A The learned Trial Judge erred in fact in finding that in the years 2002, 2003 and 2004, the measurement of the plaintiff's earning capacity was his actual earnings as found by his Honour (being respectively $7,680.00, $294.00 and $0.00) because:-

(a) those figures were not an accurate pecuniary representation of the value of the work actually performed by the respondent; and, or alternatively

(b) those figures were arrived at by deduction of amounts from his gross income that were not reasonable deductions for the purpose of assessing his earning capacity.

9 That the learned trial judge erred in fact in assessing the Respondent's future impaired earning capacity on the basis that he only had a retained earning capacity of 25%, in that such a finding was unsupported by, or alternatively against the weight of, the evidence;

10 That the learned trial judge erred in fact in assessing the Respondent's future impaired earning capacity on the basis that he only had a retained earning capacity of 25% in that such a finding was unsupported by, or alternatively against the weight of, the evidence;

11 That the learned trial judge erred in assessing that the possibility of further exacerbation of the Respondent's symptoms cancelled out the need to allow for the possibility of an improvement in them, in that such a finding was either unsupported by, or alternatively against the weight of, the evidence."

105 Ground 8 can be readily dealt with. The real complaint is not that the respondent has failed to make reasonable endeavour to exploit his future earning capacity, but that his financial returns, as discerned to the Court, were less, through the account method used, than they actually were and did not form an appropriate basis for its future projection.

106 The learned trial judge awarded an amount of $196,794 for loss of past earnings. The methodology employed in the assessment was subject to criticism, but can be understood in the light of the somewhat fragmented evidence placed before the Court and the failure by the appellant, at trial, to fully challenge the assumptions made on the basis of that evidence. On the basis of the evidence and the acceptance of certain assumptions, his Honour awarded the loss of earnings since the accident in the following terms:

107 To that figure was added the calculation of lost earnings to 30 June 1999 of $11,168 which brought the total to $196,794.

108 The respondent had obtained suitable employment with a construction company between January 2000 and March 2001. The learned trial judge accepted that he left that employment as a result of psychological pressures attributable to the accident and the criticism of that finding is rejected. However he retained his skills, although he found it difficult, if not impossible, to work in particular sites or situations. With the encouragement of his father, a boilermaker-welder, he commenced work as a contractor in the general area of welding and boilermaking.

109 In July 2001 the respondent's father made arrangements with the maintenance contractors of supervisors of a ferry service operating from the Port of Devonport. In the words of the respondent given in evidence at trial:

"... I found it very hard but after a couple of months, or maybe even a month, he sort of took me into the ship and it was like a floating hotel and I did feel a little bit more comfortabler [sic] on the ship."

110 The respondent commenced as a sole trader, operating under the business name of Shearwater Welding and Forestry Services and began to work for his father at his workshop. In his words:

"I felt comfortable with its surroundings, I've always liked boats and this was like, just like a big boat, and it was on water and you were with a crew and everyone was there to help you and I felt comfortable with the surroundings, sort of the first time when he took me on there I had to feel comfortable and he made sure everything was right."

111 He supplied invoices for the work performed and the amount payable on a monthly basis. He charged at a rate of $25 per hour. In the first month he received some $1,200, increasing to some $1,400 shortly thereafter. He said that he had increased his work to some two days a week and on some occasions, to three six hour days, with one invoice amounting to $5,158 for a particular task. He said in evidence-in-chief that he was unable to maintain the pressure and rate of work and was required to reduce his rate of work. However he began to put his life in order and remarried. He described the change and marriage in the following terms.

"I went to a friend's wedding in Thailand and she was working at the restaurant where the wedding was taking place and I went to there.

When was that? ... That was in July last year and fell in love with her and I went back a number of times. I went back over in October and had a great time and I forgot about all me worries in the world and lived in a fishing village and slept on the floor. Had limited power. No stove. No tables and chairs. No washing machines and I lived there for a month. Tried to get Kung over for a tourist visa on the tourist visa - tried to get her over for a holiday to look at Tasmania. They said no way so I thought well, how about we get married and she was happy with that and I went over in February this year and married her.

And so you both are living at Port Sorell? ... Yeah, both living at Port Sorell.

And how has your marriage to Kung helped with your problems? ... It's made me a lot more relaxed. Times are happy. I'm fed very well. I'm looked after very well. Me washing and cleaning's done. Every night I get a massage. Heaps of sex. Heaps of Thai food. Very good."

112 He estimated the proportion of the week spent in work as at the date of trial as:

"The ship is in from half past eleven, it's supposed to be in from half past eleven of a Wednesday 'til three o'clock of a Thursday and from, it's in four hours of a Saturday and four hours of a Monday and you go in those days and when you were there, so you do half a day Wednesday, half a day Thursday, we usually fit about seven or eight hours in Wednesday 'til about half past ten at night, half a day on Thursday and then you go in of a Saturday and a Monday and they will ask you to get things or organise things for them for the Wednesday and the Thursday in that time so you may be getting 25 hours a week may be."

113 In cross-examination he stated his taxable income to have been $6,529 for the financial year 2002, $9,858 for 2003 and estimated that for the year 2004 he would operate at a loss. The learned trial judge accepted those figures for the purpose of his calculations for loss of past earnings. Given that there was little scrutiny of the evidence by the appellant, he was correct in so doing. However he had before him taxation records for the periods, which relevantly showed:

114 The Commissioner assessed the taxable income to be $6,259, by taking into account the amount of $6,081 for social security payments:

115 The Commissioner assessed the taxable income to be $9,858, again taking into account social security payments.

116 Accepting the gross receipt as representing a return of $25 per hour, the returns showed a capacity for work over 48 weeks per year to be 16.1 and 16.7 hours, respectively. Invoices tendered at trial indicated the hourly return, as of the date of trial, to have increased to $28.50 per hour. The learned trial judge accepted those figures. He had before him evidence from the proprietor of a metallurgic business operating in Devonport that a "stainless steel welder, working as a contractor, can earn $50 to $60 per hour for his labour".

117 The evidence of the respondent's treating psychologist as to improvement and the current state of the respondent was that:

"My view would still be that the symptoms relate really quite specifically to this accident are not too difficult to discern it is even in the complex context of other things that happened and, you, know, I do see from the history that he had periods where his overall stress has been enormous and his coping has been very difficult and I was pleased to note when I saw him in May this year that there had been a general settling of and that in fact he was coping quite well when everything was going well in his life but then when I asked him about the specific issues associated with the accident, for example, how he would feel driving past the plant, how he would cope in different work settings, I began to observe again the same autonomic hyper-arousal that was evidence in the past and upon that basis my view is that because he has not yet worked through the trauma, that trauma is still contained and it still will disrupt him from time to time so I wouldn't be confident that had the other stressors not occurred that in fact he would be quite well, or much better than what he currently is.

Although it remains a reasonable hypothesis? ... I would perhaps go so far as to say that it's possible that he would be somewhat better but I would still say that the stress associated with the trauma would be largely much the same"

which was consistent with the amount of work being performed by the respondent. Allowing for the costs associated with setting up a new business and its associated overheads, the inability of the respondent to fully regain his former capacity and an understandable reluctance to charge for his labour at a higher rate, the gross return showed an increased and increasing capacity for work.

118 The internal figures disclosed in the taxation returns were not the subject of challenge or detailed examination by the appellant. The learned trial judge was entitled on the material before him to assess loss of part earnings as he did. They were, absent challenge, the actual loss suffered by the respondent. Ground 8A of the notice of appeal ought not succeed.

119 However, with respect, their projection to the assessment of future loss was erroneous. That assessment required one of future capacity. It would appear that his Honour performed his calculation on the basis of the ratio between past lost and attainable income, namely the ratio of $185,000 to $245,000, in reaching his conclusion of 25 per cent retained working capacity. They were and remain separate matters. The hours worked ratio, ie, 16.13 and 16.7 hours respectively show an actual work capacity of 33 per cent and the evidence suggested that the improvement to the psychological health of the respondent would result in a greater residual work capacity. That approach is consistent with that taken by the High Court in cases such as Wynn v NSW Insurance Ministerial Corporation [1995] HCA 53; (1995) 184 CLR 485 and Wilson v Peisley (supra).

120 The projection of future loss at a rate of $1,000 per week did not take into account the current capacity for work and the income likely to be earned. It did not take into account a greater than 25 per cent residual capacity. His calculation of future loss of $683,000 discounted by only 15 per cent might have been appropriate, although it, too, did not reflect improvement. Grounds 9, 10 and 11 are made out.

121 I would uphold the appeal. Given the conclusion reached by the other members of this Court, it is not necessary to recalculate the award. But I would either increase the percentage figure of retained work capacity or the contingency percentage. However, it is not necessary to consider the matter further.

122 I would allow the appeal as to the question of damages.