Past and future loss of earning capacity
59 Damages for both past and future loss are allowed to an injured plaintiff because the diminution of his earning capacity is or may be productive of financial loss. The plaintiff claims that as a result of the injuries that he sustained in the accident he is unable to return to his pre-accident employment as an electrician. For past loss of earning capacity the plaintiff claims $800 net per week from the date of the accident to date, less what he has earned. In total the plaintiff claims $65,000 for past economic loss and interest on $26,865 at 6% for 3.5 years = $5,641. Interest calculated on $26,865 at 11% for 3 years is $8,865. For future loss of earning capacity the plaintiff claims $500 per week discounted at 3% and 15% for vicissitudes. The amount claimed for loss of future earning capacity is $346,970.
60 In relation to past earnings, the income that Inco obtained was due solely to the endeavours of the plaintiff in both obtaining work and carrying out the work of an electrician. From time to time Inco employed casual tradesmen. Their wages were paid by Inco. All of Inco's income was paid into the Wilke Family Trust (the trust). It was in the discretion of the trustees as to the amount each beneficiary received from the trust each year.
61 Between 1990 and 1994 the plaintiff derived income from Inco Electrical Pty Limited and the Wilke Family Trust. In 1990 the trust earned $295,357. The plaintiff received $35,000 as wages and $18,910 from the trust totalling $53,910. The plaintiff's taxable income was $51,544 less tax $16,898 = $666 net per week. Jill Wilke received $35,000 as wages and $18,910 from the trust = $53,910 = $670 net per week. In 1991 the trust earned $267,005. The plaintiff received $18,451 as wages = $263 net per week and nil from the trust. In 1992 the trust earned $145,050. The plaintiff received $20,000 as wages and $10,085 from the trust = $440 net per week. The average net weekly earnings for this 3 year period = $680. As can be seen from the amounts, that trust earned and the distributions made to the plaintiff during the financial years 1990 to 1992 fluctuated from $263 net per week to $666 net per week. The wages paid to the plaintiff by Inco Electrical were modest. The income that the plaintiff derived from the trust was also modest in comparison to the income received by the trust.
62 In mid 1993 the plaintiff attempted to go back to work but he could not physically do the work. He tried to supervise and employ workers but with the size of the jobs he was doing he could not make enough profit. He tried for a couple of years to get back to work. In 1993 the plaintiff had a taxable income of $35,968 ($27,240 Inco Electrical Pty Limited and $9,923 from the trust). Dr Urs, the plaintiff's general practitioner assessed that the plaintiff was unfit for work until 8 August 1994. I accept that the plaintiff was unfit for work until 8 August 1994. For the year ended 30 June 1994 the plaintiff had a taxable income of $33,149 derived from Inco Electrical $20,000 and $13,115 from the trust ($480 net per week). Inco ceased to be active.
63 On 14 September 1994 the plaintiff was employed at the Ryde Family Support Service as a centre co-ordinator. This centre was called the Kuringai Career Transition Centre and its aim was to locate and try to find work for families of people who had become unemployed. The plaintiff said that the only qualifications he needed to get the job was his driver's licence and his own car. While employed at the centre he undertook counselling work although he was not qualified in that field. He made an attempt to obtain some qualifications and attended the College of Applied Psychology full time for one year and then another year part time then he ran out of money and was unable to continue. (t 14.38; t 15.20). For the year ended 30 June 1995 the plaintiff had a taxable income of $25,845 ($400 net per week) derived mainly from Ryde Family Support Service.
64 As well as his job with the centre the plaintiff worked part time from August 1995 until January 1996 for an organisation called Options Community Training as a case manager working with the long term unemployed. He was also involved in counselling unemployed professionals. The plaintiff left this employment as he was unable to handle the pressure. (t 15.40-53; t 16.5-10). The plaintiff was unemployed from March 1996 until August 1996. For the year ended 30 June 1996 the plaintiff had a taxable income of $20,807 ($334 net per week).
65 On 23 August 1996 the plaintiff commenced working for Bridge Business College (the College) as a computer teacher although he had no qualifications in that field. At present he is employed as a business teacher at the college on a part time casual basis. For the year ended 30 June 1997 the plaintiff had a taxable income of $40,347 ($775 net per week). He normally works four days a week but has been off work of late because his back "has been a bit of a shit" (t 16.35-55). He teaches one or two students in each class (t 45.50) and teaches such subjects as workplace industrial relations, workplace reform and industrial environment. For the first years with the College he taught a course in computers for which he had minimal skills. He currently earns $30 per hour and works about 30 hours per week. He does not think that he can physically work 40 or 50 hours per week. The plaintiff also said that it was a lot of pressure to do that much teaching work. Currently the College does not have any more work available (t 46).
66 So far as the future is concerned the plaintiff said that he needs a change as his job at the College caters to overseas students and as the Government is continually revamping the private colleges to bring them up to a higher standard, part of that being that teachers are to have some teaching qualifications in the field that they are teaching, and he does not have any qualification other than having done a "train the trainer" class for three days (t 17.20.). With teaching, he can move about if his back gives him trouble. He can sit in a chair and when his back hurts he can get up and sit on a table or walk around a room. He is capable of continuing his employment as a teacher.
67 Mr Keith Dawes, a psychologist, in his report dated 23 February 1994 stated that he assessed the plaintiff's intellectual capacity by administering the Wechsler Adult Intelligence Scale. The plaintiff's verbal ability and performance score was better than 80% of the general population. In terms of intelligence the plaintiff was assessed as better than 85% of his peers. It was Mr Dawes' view that the plaintiff would operate competently as an independently employed counsellor, a trades co-ordinator or as a member of a health based team. He had a considerable experience in managing people, relating to clients, record keeping and planning. He had demonstrated ability to manage others. Mr Dawes' opinion was that the plaintiff showed a clear indication of success in retraining as a counsellor/co-ordinator. He has the necessary intellectual capacity, interest and personality attributes to successfully complete tertiary study. The course of study which he has selected is highly likely to fulfil his need for successful retraining.
68 The plaintiff gave evidence that as much as he would love to go back to being an electrician, because of the state of his back and wrist this is not possible (t 17.30). He can dig for a short time with one hand. He cannot do two handed tasks. He cannot work in floor and ceiling spaces in crouched positions. He can not pull cables with his hands. It would be necessary for him to do these movements to carry out his tasks as an electrician. As previously stated, the plaintiff's view that he cannot return to work as an electrician is supported by Drs Caspary, Conrad and Herbert and I find that due to the injury to the plaintiff's wrist suffered in the accident, he is no longer able to work as an electrician. I accept that after the accident the plaintiff attempted to employ and supervise casual employees but found that running the business without the benefit of his labour was not viable.
69 In Husher v Husher & Anor [1999] HCA 47, The High Court (Gleeson CJ, Gummow, Kirby and Hayne JJ) stated (at para 18) that the financial loss of what (if there had been no accident) the injured plaintiff would (as opposed to could) have expected to have under his or her control and at his or her disposal by exercising that earning capacity are the financial rewards from work that are the rewards that the plaintiff would have been able to direct to whatever purpose or destination the plaintiff chose. In the present case, the whole of the income of the trust came from the efforts and the exploitation of the plaintiff's earning capacity. As a matter of practical reality the contribution of the plaintiff's father and later those of his wife contribution to the trust were negligible.
70 The Wilke Family Trust was a trust that could be wound up and the assets distributed. It was the plaintiff's choice as to whether the trust was maintained. If he chose to make some other arrangement concerning the fruits of his labour, the effect would have been given to that choice whatever view his father or wife would have held. This raises two questions: (1) would the plaintiff, but for the accident, have continued as an electrician with the current financial arrangement; and (2) what would have been his earning capacity?
71 In relation to the amount that should be allowed for payment of taxation, the High Court in Husher referred to Spargo v Haden Engineering (1993) 60 SASR 39, a decision of the South Australian Court of Appeal. The High Court accepted the adjustment made by Perry J. In Spargo the plaintiff had been employed as a sheet metal worker by a company which was trustee of a discretionary family trust. The plaintiff had generated the only income received by the trustee company and that income was distributed to the plaintiff and members of his family. The court held that the damages to be allowed to the plaintiff for loss of future earning capacity should be calculated by reference to the whole of the income he had generated. Perry J said:
"But it does not follow that if the Court should properly have regard to the total income produced in the business in assessing the plaintiff's loss of earning capacity, in determining the net income for the purpose of calculating the amount to be allowed for loss of earning capacity, only the small amounts of tax, if any, paid by the various family members with reference to the amounts allocated to them, should be deducted. To do so, is to be over-generous to the plaintiff. If he is to be given the benefit of aggregating the distributed income for the purposes of measuring his earning capacity, the allowance for income tax in determining the net earnings should approximate the amount which he might have paid on the gross earnings if they had been brought to account by him rather than by the family trust."
72 The plaintiff to some extent, would have exploited his own earning capacity to generate net income of a particular amount. I say to some extent, because the amount the plaintiff could earn as an electrician is dependent on the amount of work that is available in the building industry at any particular time and this fluctuates. However, there is no reason to doubt that, but for the accident, Inco would have continued to be sub-contracted by Rondal to carry out electrical work.
73 It is my view that the plaintiff may not have continued being self employed (through his company) as an electrician until his retirement at 65 years even if he did not have the accident. At the time of the accident the plaintiff had been involved in the electrical trade for almost 20 years. The plaintiff gave evidence that until then it had been a passion. However by 1987, the plaintiff recognised that he did not want to still be walking through ceilings when he was 65 years old but that he still wished to continue working as a tradesman but doing different types of electrical work (t 40.15-35). In cross examination the plaintiff admitted he has always been interested in psychology but denied that in 1987 he nearly left his work as an electrician to go to university and study psychology. This is at odds with a letter (Ex 1D/4) he wrote to a psychologist dated 13 March 1987 that he was suffering from burn out and this year he nearly left work and went to university to study psychology as his major subject. The plaintiff's explanation was that he was going through a very bad emotional state and had been told by the psychologist that he was experiencing "burn out". The plaintiff thought a change in career could bring life back into the family and fix his problems. After thinking about the career change, he decided not to adopt this course. He admitted that he always wanted to be a counsellor and when he resumed work after the accident, that is exactly the path he followed.
74 The plaintiff had expressed a desire to make a career change, but continued to work as an electrician for a further 5 years to the date of the accident. He would have, whether or not the accident occurred, attempted to ease himself out of the physical work of an electrician as he did not still want to be walking through ceilings when he was 65 years old. He may have still been working in the trades but in a more supervisory role or alternatively he may have pursued his desire to be a counsellor. He has always demonstrated the commitment to work and that did not and would not have changed whether the accident had occurred or not. He would have continued to earn a reasonable income. Doing the best I can, I would find that the plaintiff would have earned $700 net per week from two sources, Inco Electrical and the distributions from the trust. I would have assessed the plaintiff's past economic loss from 24 December 1992 to 8 August 1994 at $700 net per week. From 8 August 1994 to date I would have assessed the plaintiff's past economic loss as being what he could have earned at $750 net per week less what he has actually earned. The parties can calculate this amount and interest due on past economic loss.
75 For the future, he would have earned $800 to $900 net per week. He probably could have earned more taking into account the comfortable position of the trust but he would have, in some years in the future, made a career shift which may have resulted in a decrease in financial remuneration for some time. He is currently earning about $764 net per week but I accept that this job is insecure and the plaintiff may be forced on the open labour market where he has limited experience and qualifications. He cannot do physical work nor stand or sit for long periods of time or use his left hand. He is intelligent and resourceful, can manage people, keep records and plan. He is self motivated. I assess his loss of earning capacity at $100 net per week until he reaches the age of 65 years. This should be discounted at 3% and 15% for vicissitudes. The parties can calculate this sum.
Past Out-of-pocket expenses
76 Past out-of-pocket expenses have been agreed at $19,807. These out-of-pocket expenses have been paid.
Workers compensation payback
77 Workers compensation payback is $38,135.