Wynn v NSW Insurance Ministerial Corporation

High Court of Australia|1995-12-21|Before: Brennan CJ, Gummow JJ, Handley JA, Stephen JJ

High Court of Australia Brennan CJ Dawson, Toohey, Gaudron and Gummow JJ Wynn v NSW Insurance Ministerial Corporation (FC 95/051) [1995] HCA 53

Set aside pars 1 and 3 of the order of the Court of Appeal and in lieu thereof an order be made in accordance with the judgment of this Court in terms to be agreed between the parties and filed in this Court. In default of agreement there be liberty to apply to this Court on seven days' written notice.

The respondent to pay the appellant 85 per cent of her costs of this appeal.

The facts by reference to which the plaintiff/appellant's damages for personal injury were assessed in the Courts below are stated in the joint reasons for judgment next to be published. The Court of Appeal reduced the assessment for future economic loss to allow for the cost of domestic help that would have been incurred by the plaintiff if she had continued in her employment with American Express for 23.75 years. The trial judge found that the plaintiff would have continued in that employment for that period. Handley JA, with the concurrence of Clarke and Sheller JJA, said:

A fair allowance must also be made for the cost of domestic help for any children and for other household duties. There was no evidence of the probable cost of such domestic help, but it cannot be ignored, and the Court must do the best it can. In my opinion a fair deduction for these costs would be $250 a week, with the plaintiff and her husband bearing half each. Grounds 1, 2 and 3 of the plaintiff's grounds of appeal challenged the correctness of this deduction. When the matter was called on for hearing in this Court, the respondent conceded grounds 1, 2 and 3. In the light of that concession, I am in agreement with the order proposed in the joint reasons for judgment. It may be that, by reason of the absence of any evidence as to what expenses the plaintiff would have incurred for domestic assistance or as to the plaintiff's need for, or engagement of, domestic assistance in her present circumstances, the concession was properly made. But, as I apprehend the principle established in Sharman v Evans [9] , the second ground of appeal is erroneously stated and, so far as the concession relates to that ground, it was wrongly made. That second ground of appeal reads as follows: The Court of Appeal erred in law, contrary to Sharman v Evans, by deducting from the amount allowed for the Appellant's lost earnings in the future a sum to cover the cost of care for any future children and other household duties, in that it failed to have regard to the well established principles:

(a) that when awarding damages for loss of earning capacity no reduction is to be made for the cost of maintaining oneself and one's dependants unless an element of double compensation would otherwise intrude, and

(b) that courts in assessing compensation for loss are not concerned with the manner in which the plaintiff expends her income.

The plaintiff relies on a passage in the judgment of Gibbs and Stephen JJ in Sharman v Evans [1] : It is now well established that no reduction is to be made, when awarding damages for loss of earning capacity, for the cost of maintaining oneself and one's dependants unless an element of double compensation would otherwise intrude, as in the case of hospitalisation as a non-fee paying patient or where the cost of future hospital expenses is also awarded and necessarily includes, as in the present case, the patient's board and lodging. The cost of a plaintiff's self-maintenance was contrasted with other items of expenditure which a plaintiff would no longer need to make in earning the income which would have been earned but for the compensable injuries that the plaintiff has sustained. Their Honours said [2] : Where, as here, a plaintiff suffers a total loss of earning capacity he will not normally continue to incur all of the outgoings necessary for the realisation of that capacity which would have been incurred had his capacity been unaffected; items such as the cost of clothing suitable to his particular employment and of transportation to and from work provide examples, no doubt there are others. Compensation for loss of earning capacity is paid only because it is or may be productive of financial loss (Graham v Baker [3] ) and to compensate for total loss of earning capacity without making allowance for the cessation of these outgoings is to compensate for a gross loss when it is only the net loss that is in fact suffered. The distinction between saved expenditure that is to be taken into account in assessing future economic loss and saved expenditure that is irrelevant to the assessment is not the distinction made in taxation law [4] between "outgoings incurred in gaining or producing the assessable income" and "outgoings of a private or domestic nature", as their Honours' reference to the cost of clothing and of transportation to and from work shows. The test is whether the saved expenditure was "necessary for the realisation of [the plaintiff's earning] capacity". If the expenditure is no longer necessary for that purpose then, unless it is discretionary "pleasure-giving expenditure", the saving is to be taken into account. "Pleasure-giving" expenditure which a plaintiff is no longer able to make or from which a plaintiff can no longer derive pleasure is generally left out of reckoning [5] , but that exception has no present relevance. Sharman v Evans does not suggest that expenditure on self-maintenance is taken into account in reckoning what a plaintiff's undiminished earning capacity would have returned as net income, but it does require that saved expenditure on self-maintenance (in that case by reason of its being provided for in the cost of hospital care) be taken into account. And the second passage cited above shows that saved expenditure "necessary for the realisation" of the plaintiff's earning capacity be taken into account though the expenditure be (for taxation purposes) of a "private or domestic nature". 1. (1977) 138 CLR 563. 2. (1977) 138 CLR 563 at 577. 3. Sharman v Evans (1977) 138 CLR 563 at 577. 4. (1961) 106 CLR 340 at 347. 5. Income Tax Assessment Act 1936 Cth, s 51(1). 6. Sharman v Evans (1977) 138 CLR 563 at 578; but see the discussion by Gibbs and Stephen JJ about the case of a plaintiff whose injuries make him "wholly incapable of experiencing pleasure".

Where a plaintiff, in consequence of his or her compensable injuries, is unable to continue to earn the income he or she had the capacity to earn but is left in a position where he or she can reasonably be expected to dispense with or to provide a service that had previously been provided for the plaintiff at a cost in order to facilitate the earning of the plaintiff's income, the plaintiff's capacity to provide the service and to avoid the incurring of the cost must be taken into account in assessing the plaintiff's loss. Some distinction may have to be made between merely optional expenditure that relieves a plaintiff of unwelcome domestic chores and expenditure that was in a practical sense necessary to allow the plaintiff to earn his or her pre-injury income (for example, child-minding for infants). If, in the present case, it would have been reasonable to expect the plaintiff to perform her own domestic chores after the accident, although she would have found it necessary to employ domestic assistance in order to facilitate her continuing to perform her demanding work with American Express had she not been injured, it would have been right to make some allowance for her saving of the expenditure on domestic assistance. Of course, if her part-time work after the accident (which was properly taken into account in assessing the extent of her diminished earning capacity) made it unreasonable to expect that she would perform her domestic chores without paid assistance, it would be wrong to treat her as having saved the cost of domestic assistance. Evidence was needed to ascertain the extent of any savings which she had been able reasonably to make by performing some or all of her own domestic chores. There was no evidence on this point. Although the second ground of appeal was erroneously stated, in the light of the concession, it must be assumed that the plaintiff was unable reasonably to make any savings in respect of domestic assistance.

On the other aspects of the case, I respectfully agree with the joint judgment next to be published.

The appellant, Leonie Myree Wynn, brought proceedings in the District Court of New South Wales against the respondent, NSW Insurance Ministerial Corporation [6] , to recover damages for injuries sustained in a motor vehicle accident in 1986. Following a hearing in November 1992, Judge Kirkham awarded her damages in the sum of $990,547.30, of which $705,980 was for future economic loss. The respondent appealed to the Court of Appeal of the Supreme Court of New South Wales. The appeal was limited to damages and, in the result, it was held that future economic loss should be assessed at $411,350 and damages reduced to $678,334.70. Subject to an adjustment for superannuation contributions, the appellant now seeks restoration of the damages awarded at first instance.

The appellant had joined as defendant the Government Insurance Office of New South Wales (the GIO) pursuant to s 14 of the Motor Vehicles (Third Party Insurance) Act 1942 NSW. The relevant liability of the GIO became, by reason of ss 38 and 39 of the Government Insurance Office (Privatisation) Act 1991 NSW, a liability of NSW Insurance Ministerial Corporation, a corporation constituted by s 28 of that statute.

The appellant, her circumstances, employment history and prospects

The appellant was thirty when she was injured in the accident involved in this appeal. She had had an earlier accident in 1972 in which she suffered an injury to her cervical spine. That injury was treated surgically in 1974, the affected area being stabilised by bone graft. The operation was successful and, by the time of the 1986 accident, the appellant was virtually symptom free. She participated in various sports, including touch football, netball and water skiing, and was working in a managerial position with American Express.

The appellant commenced work with American Express in 1981. She was hard-working and ambitious, intent upon making a career with the company and hoping, one day, to become a vice-president. She was promoted to a managerial position in 1985 and, following further promotion, was made manager of authorisations in 1986. She continued with her work for some little time after the accident and was promoted in October 1987 to the position of Director of Customer Services, one step below vice-president. Her work as Director of Customer Services involved long hours, many of them at a computer. In 1992, the position attracted a salary package of $75,556 net per year or $1,453 net per week.

The 1986 accident undid the positive effects of the surgical fusion carried out in 1974 and brought about a serious aggravation of the injury sustained by the appellant in 1972. Her symptoms progressed and began seriously to interfere with her work. She found it necessary to cease work with American Express in 1988 and, apart from one period of casual employment with that organisation, has since worked only part-time in the family business. This is run by her husband, whom she married in 1990, and her brother.

The trial judge's calculation of damages for future economic loss

The trial judge found that, but for the aggravation of her earlier injury, the appellant "would have worked within the American Express organisation at least until the age of sixty years". In reaching that conclusion, his Honour found that it was not very probable that, having worked her way to the position of Director of Customer Services, she would retire by reason of marriage or motherhood.

The appellant's net weekly loss as at the date of hearing was assessed at $1,013. This figure was reached by deducting $440 for present earning capacity [7] from the then net weekly salary package of $1,453 for Director of Customer Services. Calculation of that loss until the age of sixty (23.75 years) in accordance with Sch 3 to the Motor Vehicles (Third Party Insurance) Amendment Act 1984 NSW [8] produced an amount of $743,137. That sum was then discounted by 5 per cent to take account of contingencies or what are commonly called "the vicissitudes of life" [9] , resulting in the sum of $705,980 for future economic loss.

His Honour proceeded on the basis that the appellant could and did work eight hours per week and that the hourly value was $55 net. 2. Schedule 3 to the Motor Vehicles (Third Party Insurance) Amendment Act 1984 NSW inserted into the Motor Vehicles (Third Party Insurance) Act 1942 NSW a provision that, in the case of claims relating to death or bodily injury occasioned by motor vehicles to which the provisions of the amending Act apply, the present value of the future economic loss is to be qualified by a discount rate of 5 per cent. According to the standard actuarial table of economic loss, the present value of $1 per week at a discount rate of 5 per cent interest per annum for 23.75 years is $733.60. By multiplying the appellant's net weekly pay prior to the accident of $1,013 by 733.60 the trial judge arrived at the sum of $743,137 for future economic loss. 3. Note the criticism of this expression in Bresatz v Przibilla (1962) 108 CLR 541 at 543-544, per Windeyer J who referred to contingencies as being "glibly called" the vicissitudes of life. See also Jackson v Hamparsum (1988) 7 MVR 80 at 87, per Hope JA who regarded it as "quaint and even discriminatory" to treat the prospect of a woman having a child as a "vicissitude".

In deciding on a discount of 5 per cent for contingencies, the trial judge made allowance for the possibility that, had she remained in employment with American Express, the appellant might have taken maternity leave but considered that, except for ordinary transient illnesses, her work would not otherwise have been interrupted. In particular, his Honour considered that, although her 1972 injury would have produced symptoms by the time she was fifty-five, it would not have prevented her continuing in employment until the age of sixty. His Honour balanced against the possible need to take maternity leave the prospect that the appellant might have been promoted to a vice-presidential position.

In the Court of Appeal, Handley JA (with whom Clarke and Sheller JJA agreed) considered that the calculation of future economic loss should be reduced by amounts to allow for superannuation contributions and the cost of child care and domestic help. The reduction for superannuation contributions can be put to one side as the parties agree that the Court of Appeal was correct in this regard. So far as concerns child care and domestic help, a deduction of $125 per week [10] was made for the whole of what would have been the appellant's working life. In the result, future economic loss was assessed at $571,320.34 before allowing for contingencies.

The Court of Appeal calculated that the cost of child care and domestic help would be $250 per week, with the appellant and her husband bearing half each.

The Court of Appeal held that there should be a discount of 28 per cent for contingencies, of which 8 per cent was for two years' absence from the workforce to have two children. The balance of the discount was for the prospect that the appellant "would at some stage [choose] or [be] forced to accept a less demanding job" because she "would be unable or unwilling to remain in her job which placed such heavy demands on her time, energy and health and the love and patience of her husband".

At the conclusion of the appellant's argument in this Court, counsel for the respondent conceded that the approach taken by the Court of Appeal could not be supported. It is appropriate to observe that that concession was correct and to indicate why that is so. It is convenient in so doing to deal first with the separate aspects of the discount for contingencies, namely, the prospect of reduced participation in the workforce and the possibility that the appellant would take maternity leave.

So far as concerns the prospect of reduced participation in the workforce, there is nothing in the evidence to suggest that the appellant was any less able than any other career oriented person, whether male or female, to successfully combine a demanding career and family responsibilities. Rather, the evidence of her rapid promotion within the American Express organisation, her ambition to advance further and her desire to remain in the paid workforce, when considered in the light of the practice of American Express to promote from within the organisation, clearly justified the trial judge in forming the view that there was a prospect of her further advancement. As will later appear, the trial judge was correct to treat this as a positive factor to be taken into account in allowing for contingencies.

So far as maternity leave is concerned, the appellant gave evidence that, for her first child at least, she would have wished to take twelve months' maternity leave if she had continued to work with American Express. Even if allowance is made for two years' unpaid maternity leave for two children [11] - calculated by the Court of Appeal as 8 per cent of net loss after deduction for child care and domestic help - there is no reason to think that it was not adequately reflected in the trial judge's balancing exercise which, after allowing for the possibility of promotion and increased earnings, resulted in a discount of 5 per cent.

There was no evidence as to whether leave would be paid or unpaid. The general position with respect to maternity leave in New South Wales is that under Div 3, subdiv 2 of Pt 2 of the Industrial Relations Act 1991 NSW an eligible employee is entitled to take a maximum of fifty-two weeks' maternity leave. Section 28 specifically provides that maternity leave is unpaid leave; cf Industrial Authority Determination (Maternity Leave) made pursuant to s 63 of the Public Sector Management Act 1988 NSW which provides that New South Wales State public servants are entitled to nine weeks' paid maternity leave and up to twelve months' unpaid leave after the actual date of the birth of the child.

The position with respect to the deduction of child care expenses for the purpose of calculating net loss is, perhaps, not so clear. It is well settled that "[c]ompensation for loss of earning capacity is paid only because it is or may be productive of financial loss" [12] . Thus, it has been said that "outgoings necessary for the realisation of that capacity" [13] , such as transport costs, tools and equipment, must be deducted.

Sharman v Evans (1977) 138 CLR 563 at 577, referring to Graham v Baker (1961) 106 CLR 340 at 347. See also Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 4-5, 16. 2. Sharman v Evans (1977) 138 CLR 563 at 577.

There is simply no basis for treating domestic help as necessary for the realisation of earning capacity and, to the extent that the Court of Appeal thought otherwise, it was clearly wrong. What a person does or does not do outside working hours may depend on whether he or she has domestic help, but domestic help has no relevant connection with the earning of income. There are, however, circumstances in which the cost of caring for very young children may properly be seen as an "essential prerequisite" to the earning of income [14] and, in this sense, as an outgoing "necessary for the realisation of [earning] capacity". However, outgoings which are deducted for the purpose of calculating economic loss are those which are necessarily incurred in or in connection with the employment or undertaking by which earning capacity is realised [15] , not those which are incurred, even as a "necessary prerequisite", merely to provide an opportunity to realise that capacity. In a sense, child care can be regarded as an opportunity cost. But even that mistakes its true nature.

Lodge v Federal Commissioner of Taxation (1972) 128 CLR 171 at 175, per Mason J. 2. Sharman v Evans (1977) 138 CLR 563 at 577; Lim v Camden & Islington Area Health Authority [1980] AC 174 at 191.

Child care is a cost that may be incurred by men [16] or women. It may be incurred whether or not the child's mother is in the paid workforce. On the other hand, not all women in the paid workforce incur a cost for the care of their young children. For example, one or more family members may provide care on a voluntary basis. Moreover, if costs are incurred they will vary according to the type of care decided upon and decisions in that regard are likely to take account of various matters besides those directly associated with participation in the paid workforce. These considerations lead to the conclusion that the cost of child care is simply one of various costs associated with having children. And as such, the cost is properly characterised for the purpose of calculating economic loss, as it is for the purposes of taxation law, as essentially private or domestic in character [17] . So characterised, it is no more to be deducted when calculating loss of earning capacity than are other items of expenditure for personal amenity.

See, eg, Halstead v Condon (1970) 46 Tax Cas 289; [1970] TR 91. 2. See, as to the tax deductibility of child care expenses, Lodge v Federal Commissioner of Taxation (1972) 128 CLR 171; Martin v Federal Commissioner of Taxation (1984) 2 FCR 260; Jayatilake v Federal Commissioner of Taxation (1991) 101 ALR 11. See also Bowers v Harding [1891] 1 QB 560; Wylie v Eccott (1912) 6 TC 128; Norman v Golder [1945] 1 All ER 352; Halstead v Condon (1970) 46 TC 289.

In view of the Court of Appeal's apparent treatment of the cost of child care as a cost of earning income and the concession by the respondent that its approach was vitiated by error, it is neither necessary nor desirable to consider the circumstances in which deductions should be made for saved expenditure with respect to items of personal amenity [18] . Moreover, there is nothing in the evidence to suggest that the appellant's reduced participation in the workforce results in reduced or saved expenditure on child care.

See Sharman v Evans (1977) 138 CLR 563 at 578. See also Shearman v Folland [1950] 2 KB 43 at 50; Fletcher v Autocar & Transporters Ltd [1968] 2 QB 322 at 336-337; Lim v Camden & Islington Health Authority [1980] AC 174 at 191; Dews v National Coal Board [1988] AC 1 at 14; Toneguzzo-Norvell v Burnaby Hospital [1994] 1 SCR 114 at 127; 110 DLR (4th) 289 at 296-297.

The argument for the respondent in this Court was that allowance should have been made for the possibility that the appellant's 1972 injury would have prevented her working in a high level managerial position until age sixty even if the 1986 accident had not occurred. An argument to that effect was put in the Court of Appeal but not dealt with in its judgment [19] . As it was developed in this Court, the argument was that, overall, the appropriate discount was 38 per cent [20] , resulting, after allowance for superannuation contributions, in a verdict in the sum allowed by the Court of Appeal. More precisely, it was argued that no allowance should be made for the prospect of advancement and that 38 per cent fairly represents the possibility that the appellant would have taken unpaid maternity leave and the further possibility that her previous neck injury would have prevented her continued employment until age sixty.

The issue was, however, recognised by Clarke and Handley JJA during the course of argument. 2. The respondent added the cost of child care and domestic help, calculated by the Court of Appeal at $125 per week, to the discount of 28 per cent awarded for "vicissitudes" and calculated that this was effectively a discount for "vicissitudes" of 38 per cent.

It is necessary to say something as to contingencies or "vicissitudes". Calculation of future economic loss must take account of the various possibilities which might otherwise have affected earning capacity. The principle and the relevant considerations were identified by Barwick CJ in Arthur Robinson (Grafton) Pty Ltd v Carter [21] as follows:

Ill health, unemployment, road or rail accidents, wars, changes in industrial emphasis, so that industries move their location, or are superseded by new and different techniques, the onset and effect of automation and the mere daily vicissitudes of life are not adequately reflected by merely - and blindly - taking some percentage reduction of a sum which ignores them. 1. (1968) 122 CLR 649 at 659.

It is to be remembered that a discount for contingencies or "vicissitudes" is to take account of matters which might otherwise adversely affect earning capacity and as Professor Luntz notes, death apart, "sickness, accident, unemployment and industrial disputes are the four major contingencies which expose employees to the risk of loss of income" [22] . Positive considerations which might have resulted in advancement and increased earnings are also to be taken into account [23] for, as Windeyer J pointed out in Bresatz v Przibilla [24] , "[a]ll "contingencies" are not adverse: all "vicissitudes" are not harmful". Finally, contingencies are to be considered in terms of their likely impact on the earning capacity of the person who has been injured, not by reference to the workforce generally [25] . Even so, the practice in New South Wales is to proceed on the basis that a 15 per cent discount is generally appropriate [26] , subject to adjustment up or down to take account of the plaintiff's particular circumstances.

Assessment of Damages for Personal Injury and Death, 3rd ed (1990), p 285. See also Jones v Schiffmann (1971) 124 CLR 303 at 305, per Barwick CJ; Mitchell v Mulholland [No 2] [1972] 1 QB 65 at 75. 2. See, eg, Lulich v Bell Bros Pty Ltd (1967) 41 ALJR 268 at 268, 270; Broadribb v Hanna [1969] 1 NSWR 35 at 42; Jones v Schiffmann (1971) 124 CLR 303 at 315 where positive contingencies were taken into account. See also Ritchie v Victorian Railways Commissioner (1899) 25 VLR 272 at 276; General Motors-Holden's Pty Ltd v Moularas (1964) 111 CLR 234 at 258; Murphy v Houghton & Byrne (Q) Pty Ltd [1964] QWN 6 at 15-16; Sinclair v Bonnefin (1968) 13 FLR 164; Mallett v McMonagle [1970] AC 166 at 177; Toneguzzo-Norvell v Burnaby Hospital [1994] 1 SCR 114 at 124; 110 DLR (4th) 289 at 295 where it was recognised that contingencies can be favourable as well as adverse. 3. (1962) 108 CLR 541 at 544. See also Teubner v Humble (1963) 108 CLR 491 at 508-509; Blackstock v Patterson [1982] 4 WWR 519 at 533. 4. Lewis v Todd [1980] 2 SCR 694 at 714; 115 DLR (3d) 257 at 271-272. 5. See, eg, Moran v McMahon (1985) 3 NSWLR 700 at 713-714. Note the criticism of Kirby P at 706. See also Burnicle v Cutelli [1982] 2 NSWLR 26 at 30; Hobell v Leonard (unreported; Supreme Court of NSW, Court of Appeal; File No 40209 of 1989; 29 May 1990).

Leaving aside the appellant's previous neck injury and the possibility that she might have taken unpaid maternity leave, there was little, if anything, in her circumstances to suggest that her earning capacity was at risk from any of the four major items which Professor Luntz has identified as detrimentally affecting earning capacity. She was in good health, fit and energetic; she was employed in a position which would not seem to involve exposure to accident or disease; and as an employee in a managerial position with American Express, she would not seem to have been at particular risk of redundancy or the possibility of being involved in industrial disputes.

As already indicated, there was evidence upon which the trial judge might properly form the view that, had the accident not occurred, there was a prospect that the appellant would have been further promoted within American Express. The argument of the respondent to the contrary must be rejected. All that had to be established was "a real possibility" [27] of promotion. The evidence clearly permitted an inference to that effect. And once that inference was drawn by the trial judge, it was necessary for the prospect of advancement to be taken into account and balanced against the need to take maternity leave. If they were the only personal considerations to be taken into account, it could not be said that, in the circumstances of this case, a discount of 5 per cent was inappropriate.

Wilson v Peisley (1975) 50 ALJR 207 at 209; 7 ALR 571 at 574. See also Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 at 639-640, 643; Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 365-367; Mallett v McMonagle [1970] AC 166 at 176.

However, the evidence clearly established that, following the injury in 1972 and notwithstanding the bone graft carried out in 1974, the appellant's spine was susceptible to further injury and was likely to suffer degenerative changes. If there was a chance that the 1972 injury would have reduced the appellant's ability to work in any event, that chance had to be assessed and allowed for in the calculation of future economic loss [28] . Unless allowed for in that way, the defendant would be held responsible for loss which was not causally related to the injury suffered in 1986.

It is necessary to say something of susceptibility to further injury. It is not permissible in assessing the chance that an earlier injury may have resulted in impaired earning capacity to have regard to the possibility of further tortious injury. That possibility must be disregarded because, in the event of further injury, damages would be assessed, as in this case, by allowing for any pre-condition resulting in or having the possibility of resulting in impaired earning capacity [29] . Only by disregarding the possibility of further tortious injury does the law ensure full compensation.

See Jobling v Associated Dairies Ltd [1982] AC 794, especially per Lord Keith of Kinkel at 815-816, approving Baker v Willoughby [1970] AC 467 on this point. See also General Motors-Holden's Pty Ltd v Moularas (1964) 111 CLR 234 at 248-249; Wilson v Peisley (1975) 50 ALJR 207 at 209, 212; 7 ALR 571 at 574, 581-582.

The trial judge clearly found that the probabilities were that, but for the 1986 accident, the pre-existing condition occasioned by the 1972 accident would not have affected the appellant's continued employment until age sixty. However, it was still necessary for his Honour to consider whether it might have done so. This he did not do. As the medical evidence is not really in dispute, the questions whether there was a chance of the appellant's pre-existing condition reducing her ability to work, and, if so, what allowance should be made for that chance may conveniently be dealt with by this Court.

The undisputed evidence was that the appellant had a better than average result from the spinal fusion carried out in 1974 but that, nevertheless, her spine was vulnerable to further injury. The evidence of Dr Bryan, the appellant's treating doctor, was that she was particularly at risk in the first four to five years after the spinal fusion but that "as the years passed she became much more able to handle the situation". That evidence did not exclude a continuing risk of injury. And it is fair to assume that risk was not restricted to tortious injury.

Moreover, the evidence clearly established the possibility of degenerative changes. The trial judge's finding, on the probabilities, that the changes would have produced symptoms at age fifty-five but would not have prevented continued employment until age sixty did not eliminate the possibility that symptoms might have occurred earlier, resulting in reduced earnings or in early retirement. This and the possibility of non-tortious injury should have been allowed for in determining the appropriate discount for contingencies [30] .

Wilson v Peisley (1975) 50 ALJR 207 at 209; 7 ALR 571 at 574.

As Brennan and Dawson JJ pointed out in Malec v J C Hutton Pty Ltd [31] , "[d]amages founded on hypothetical evaluations defy precise calculation". The discount to be allowed for the possibility that the appellant's previous injury might have resulted in her impaired earning capacity can at best be a matter of impression. Having regard to the better than average result of the surgical fusion carried out in 1974 and the diminishing nature of the risk of further injury, the discount should not be great. In our view, the appropriate discount for maternity leave and the possible effects of the condition brought about by the 1972 accident, balanced against the prospect of further advancement, is 12½ per cent.

The appeal should be allowed in part. Paragraphs 1 and 3 of the order of the Court of Appeal should be set aside and in lieu thereof there should be judgment for the appellant in accordance with these reasons. The appellant should have her costs at first instance and 85 per cent of her costs in the Court of Appeal and in this Court. The matter should be stood over to enable the parties to agree upon and file a minute of order.

At a glance

Court

Decision date

Before

Source

Judgment (54 paragraphs)

Parties

Cases Cited (18)