Hyne & Son Pty Limited v Tomlinson
[1998] QCA 101
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- Hyne & Son Pty Limited v Tomlinson[1998] QCA 101
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Hyne & Son Pty Limited v Tomlinson[1998] QCA 101
Hyne & Son Pty Limited v Tomlinson[1998] QCA 101
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Brisbane Appeal No. 8283 of 1997
[Hyne & Son P/L & Anor. v. Tomlinson]
BETWEEN:
HYNE & SON PTY LIMITED (ACN 009 660 995)
(First Defendant) First Appellant
AND:
QUEENSLAND RAIL
(Second Defendant) Second Appellant
AND:
WARREN JOHN TOMLINSON
(Plaintiff) Respondent
Davies J.A.
Pincus J.A.
Shepherdson J.
Judgment delivered 22 May 1998
Separate reasons for judgment of each member of the Court; each concurring as to the orders made.
APPEAL ALLOWED WITH COSTS. JUDGMENT BELOW SET ASIDE AND IN LIEU JUDGMENT ENTERED FOR THE RESPONDENT AGAINST THE FIRST APPELLANT FOR $156,177.46 AND AGAINST THE SECOND APPELLANT FOR $159,593.64, WITH COSTS.
CATCHWORDS: NEGLIGENCE - PERSONAL INJURY - appeal against judgment in its entirety on the ground that the primary judge’s award for future economic loss and future loss of superannuation contributions were manifestly excessive.
Counsel: Mr P.R. Dutney QC, with him Mr M.D. Hinson, for the first and second appellants
Mr J.R. Webb for the respondent
Solicitors: Ebsworth & Ebsworth as town agents for Corser Sheldon & Gordon for the first and second appellants
R.J. Suthers for the respondent
Hearing date: 3 April 1998
REASONS FOR JUDGMENT - DAVIES J.A.
Judgment delivered 22 May 1998
Shepherdson J., whose judgment I have had the advantage of reading, has set out in detail the facts relevant to this appeal and the submissions of the parties to this Court. I adopt his Honour's statements in those respects.
Like his Honour I would substantially accept the submissions for the appellants that the component in general damages for future economic loss should be reduced to reflect a nett weekly loss of $123.00 instead of $190.00 allowed by the learned trial Judge. Shepherdson J. has assessed a present value of this at $90,000.00 and I would accept this rather than the appellants' contention for $84,800.00.
The essential difference between that loss and the loss found to exist by the learned trial Judge is in the amount estimated as the present earning capacity of the respondent. The learned trial Judge thought that it was $200.00 per week which was his nett earnings at the time of trial. The appellants' contention was that it was $267.00 per week, the rate which Shepherdson J. has accepted and which I would also accept. That latter rate is based on the respondent's nett earnings over the period from 22 September 1995, the date on which he was made redundant at Hyne & Son, to 13 August 1997.
There was nothing in the evidence to support a contention that the respondent's earning capacity had reduced over the period between 22 September 1995 and the date of trial and no such contention was made to this Court. Indeed if one were to take the period from 1 July 1996 to 13 August 1997, the period which the learned trial Judge took to fix the current earning capacity of a comparable employee in the respondent's former employment, that would yield average nett earnings for the respondent of $306.00, instead of $267.00, and consequently a nett loss of earning capacity of only $84.00 a week, instead of $123.00.
In my view these calculations show that the respondent's average nett earnings over the period from 22 September 1995 to the date of trial give a better reflection of his future earning capacity than the amount at which he was earning at the date of trial and for a short period before that. Indeed it might be thought to be a conservative estimate in view of the higher average nett earning rate since 1 July 1996.
Before this Court Mr. Webb, for the respondent, contended that the learned trial Judge erred in calculating the current nett earning capacity of a comparable employee in the work in which the respondent would have been engaged but for the accident. He submitted that, if one took the period from 1 July 1997 to 13 August 1997 it would yield a higher figure than $508.00 per week, the amount which his Honour accepted based on the period from 1 July 1996 to 13 August 1997. Mr. Webb's calculations appear to be correct. However I think his Honour was entitled to take a longer period in order to estimate sustainable earnings. Moreover, as Shepherdson J. has, in effect, pointed out, to take both the earnings of a comparable employee in the respondent's former employment and the actual earnings of the respondent over a similar period is more likely to be a fair comparison than to take one over a substantially shorter period than the other. As I have indicated, if both had been taken over the period from 1 July 1996 to 13 August 1997 the respondent's nett loss would be substantially less than that contended for by the appellants.
Calculations of the kind to which I have referred give a misleading impression of exactitude but of course all that can be done is to give a rough estimate. In attempting to achieve that it is desirable to compare like with like and I think that a result based substantially on the appellants' submission goes closer to achieving that than the estimate arrived at by the learned trial Judge.
Mr. Webb also attacked his Honour's estimate of 23 per cent for income tax, submitting that he should have looked at the tables provided to arrive at a more exact figure. But that is to assume a degree of precision to which, as I have said, courts cannot aspire in such matters.
Consequent upon the reduction in this component for general damages the component of $12,000.00 for loss of superannuation benefits should be reduced to $6,000.00. As Shepherdson J. has concluded, these together require a reduction in the amount of general damages by $54,000.00.
I would therefore agree with the orders proposed by Shepherdson J.
REASONS FOR JUDGMENT - PINCUS J.A.
I have read the reasons of Shepherdson J. and those of Davies J.A. Like their Honours, I accept the appellants’ contention that the judge should have taken $267 per week as a figure representative of the respondent’s earning capacity at the time of trial, rather than the $200 per week on which the judge worked. It appears to me, with respect, to have been unfair to the appellants to base calculations of future economic loss on the respondent’s earnings immediately before trial, which happened to be significantly lower than the earnings he more commonly enjoyed.
A different question arises with respect to the figure taken as the earnings the respondent would have received if he had not been retrenched. His Honour’s opinion on that aspect, reached on rather unsatisfactory information, was attacked from both sides. Mr Webb contended for the respondent that the earnings of a comparable employee should have been taken to be $564.90 per week gross, that being the amount earned by such an employee in a period of 6 weeks just before trial. Mr Webb compared this with the figure of $390 per week nett adopted by the primary judge and argued that his Honour’s assessment of future economic loss was, on that basis, conservative. The figures supplied by the employer show comparable income in the last three financial years before trial varying from about $23,000 in the 1995 year to about $30,000 in the 1996 year and $26,000 in the 1997 year; this suggests that it would not be right to adopt as a guide the earnings in the period of 6 weeks immediately before trial. I can see no justification for disagreeing with the trial judge’s view that the comparable earnings should be calculated for the period from 1 July 1996 to 13 August 1997; it was that calculation which gave the judge a figure of $390 per week. I am in respectful agreement with the view of the other judges that his Honour’s finding that the comparable earnings were $508.21 per week gross should be supported. What is not so clear is whether the judge was right in converting that into a nett figure of $390 per week. Mr Webb says, correctly as it seems to me, that that was $11 out.
But having regard to the evidence as a whole and to the fact that the whole process is based upon assumptions which events may entirely falsify, I accept that the figure of $90,000 for future economic loss put forward by Shepherdson J. is a fair one. I am influenced by the circumstances that, although there neither was nor could have been any challenge to the learned primary judge’s findings on the extent of the respondent’s disability, Dr Morgan was unable to determine what was wrong with the respondent, medically, and expressed no opinion as to whether his problems would continue unabated. One would hope that, after further investigation, what Dr Morgan apparently thinks to be a strain of muscles and/or ligaments might be improved by appropriate treatment. It appears that little has been done to date by way of treatment; the respondent said that, given sufficient funds, he would like to try more therapy.
I agree that the $12,000 loss of superannuation benefits should be reduced as proposed by Shepherdson J. and that the appeal should be disposed of by the orders set out in the conclusion of his Honour’s reasons.
REASONS FOR JUDGMENT - SHEPHERDSON J
On 19 August 1997 a learned District Court judge sitting at Maryborough tried a claim by the above named respondent for damages for personal injuries caused by the alleged negligence of both the above named appellants. On the same day his Honour gave judgement for the respondent plaintiff against the first named appellant in the sum of $210,177.46 and against the above named second appellant in the sum of $213,593.64 for damages and costs.
The appellants have appealed from the whole of the judgments on the grounds that “the learned primary judge’s awards of $138,000 damages for future economic loss and $12,000 for future loss of superannuation contributions were manifestly excessive, beyond the limits of a sound discretionary judgment and unsupported by the evidence”.
The Component for Future Economic Loss
The only witness called to give evidence at the trial was the respondent. He was born on 5 May 1965 and was thus 32 years old at the time of trial. On 20 September 1993 he was injured in a work related incident which was the subject of the action. He had been educated to grade 10 level and left school in 1979. He worked between then and 20 September 1993 in largely labouring type activities. It is not necessary to detail these activities which his Honour set out in his reasons for judgment.
The respondent had worked for the first appellant between 1988 and 22 September 1995 when he was made redundant. The evidence showed that during the period from 20 September 1993 until his redundancy he had worked full-time as a labourer for the first appellant, except for the 22 September 1993, a period from 18 November 1993 to 1 December 1993 and a further period from 16 March 1995 to 22 March 1995. During this latter period he received workers’ compensation.
Pausing there, Exhibit 1 before the learned trial judge was a typed and signed statement made by the respondent. It is undated. In para. 32 of Exhibit 1 he claimed “loss of wages as set out in schedule No 1 hereto”.
Schedule No 1 is headed “Past Economic Loss”. It is necessary to refer to this in some detail because it helps to understand the basis of the appellants’ challenge to the component for future economic loss assessed by his Honour.
Schedule No 1 reads:-
“Past Economic Loss
Net loss of wages from 20.9.1993
to date (as per letter from employer $78,679.48
Less actual (net) wage received:-
| Part 1993/94 | Group Certificate Hyne & Son | $11,429.24 |
| 1994/95 | Group Certificate Hyne & Son | $17,082.09 |
| 1995/96 | Group Certificate Rosetuft P/L | $6,987.60 |
| Hyne & Son Pty. Ltd | $5,429.10 | |
| VEP Construction | $1,275.00 | |
| Group Certificate Valcorp P/L | $222.65 | |
| 1996/97 | Group Certificate Rosetuft P/L | $10,204.60 |
| Group Certificate Valcorp P/L | $6,137.75 |
1997/8 Rosetuft P/L 7 weeks x $200.00 $1,400.00 $60,168.02 $18,511.46"
I should say at this stage that the letter from the employer referred to is not before this Court. We do not know whether it was before the learned trial judge but that is of no significance.
At the commencement of the trial his Honour was told that the parties had agreed past economic loss at $18,511.46. They did not tell his Honour exactly how that sum was calculated although a reading of the above schedule 1 combined with the evidence enables the calculations to be understood.
I turn now to the calculation by his Honour of the $138,000.
Part of the evidence before his Honour was Exhibit 14 which was a letter dated 19 August 1997 (the date of the trial and the judgment) from the first appellant to its solicitors Corser Sheldon and Gordon.
In his reasons his Honour said of this letter (p. 35):-
“The first defendant has provided a letter dated today in which it is suggested, as I understand it, that were he currently employed by the first defendant he would be receiving gross the weekly sum of $471.80.”
How his Honour deduced this is not clear from the transcript.
The letter shows:- “(e) $471.80". What “(e)” means is not known. It appears from oral submissions in this Court that during addresses, which were not transcribed, his Honour was told by the respondent’s counsel that $471.80 was the actual weekly amount that the plaintiff might be earning were he still employed by the first defendant.
What is clear from his Honour’s reasons is that he relied on para. (a) of Exhibit 14 which set out figures which applied to both the respondent “and a comparable employee as both would have performed the same task”.
Paragraph (a) showed sums of money for various periods commencing 20 September 1993 and ending 13 August 1997. One period was the year ended 30 June 1996 for which the sum was $29,552. Another was for the year ended 30 June 1997 for which the sum was $26,151. For the period 1.7.97 to 13.8.97 a figure of $3,470.26 is shown.
His Honour, relying on some of these figures said:- (pp. 35-36)
“The same document lists the income which a comparable employee has earned since September 1993 to date. That shows that in the last financial year that employee earned $26,151 [year ended 30/6/97] and in the 43 days to 13 August of this year earned $3,470. If one looks to the financial year ending in June of this year that employee has a gross income of $501 per week. If you look at his earnings for the first 43 days of this financial year his earnings were $564 gross per week or, as counsel for the plaintiff has urged upon me, $578.38 if one treats that time period as being 6 weeks exactly.”
His Honour then went on:-
“If one looks at the comparable earnings from 1 July 1996 to 13 August of this year one arrives at a figure of $508.21. Assuming that tax is deducted from the gross earnings at that level at the rate of about 23 per cent it seems to me that the net earnings of the plaintiff, were he still employed by the first defendant, would be likely to be of the order of $390 per week.”
His Honour then referred to his earlier finding that the respondent was then currently earning $200 per week net and said - “which suggests superficially that his current loss is $190 per week.”
I pause to say that this figure of $190 is attacked by the appellants as being incorrect but before I turn to the argument, I mention the following further findings made by his Honour.
His Honour noted that since the accident the respondent has acquired qualifications as a real estate salesman saying:-
“However those qualifications have not, it seems to me, in the past, enabled him to earn any significant income. That, it would seem to me, is probably simply a result of the economic times in which we are now living.” (pp. 34-35)
I pause to say that in schedule 1 (past economic loss) the references to Valcorp P/L are references to earnings while working as a real estate salesman.
After referring to the fact that prior to the September 1993 accident the respondent had had thoughts of engaging in the business of a landscape gardener and had given up those thoughts, his Honour then went on to note that the respondent had obtained work as an assistant to a milk vendor and was receiving $200 per week from the source. The reference in schedule 1 to “Rosetuft P/L” is to the respondent’s earnings as such assistant.
To arrive at the figure of $138,000 his Honour noted that the respondent was only 32 years old at the time of the judgment and said:- (p. 36)
“... so he might have, one might think, at least another 33 years in which to work. It seems to me that he has made, on the evidence, numerous efforts to secure such limited employment as may be available to him and thus far without any significant success.
I think it is important I bear in mind the opinion of Professor Morgan that the plaintiff is capable of sedentary or semi-sedentary work and it would be advantageous for him to avoid heavy laborious forms of duties which require repetitive bending, lifting or the carrying of heavy objects.”
His Honour then said:-
“It seems to me then that I should discount the prima facie weekly net loss which I have already discussed significantly because I think it is likely that the plaintiff may perhaps from time to time be able to secure other work or I think perhaps even more likely that he may be able to supplement his present income with other part-time employment. I propose to discount in this case by discounting the years rather than the sum and for the record I have adopted a period of 24 years. Using that sum I arrive at a loss of $138,000 ... .”
The appellants have submitted that the learned trial judge erred in adopting the $200 per week based on current net earnings and that on the evidence he should have adopted $266.80 per week as the appropriate figure to be deducted in order to arrive at the net weekly loss. The appellants have derived the $266.80 per week from the respondent’s actual net earnings after he was retrenched on 22 September 1995 and as appear in schedule 1. An examination of schedule 1 which I have set out earlier shows that indeed the respondent did earn (net of tax) $26,227.60 in the period from 22 September 1995 to date of trial. The average weekly net earnings during this 98.3 week period are said to be some $267. If that figure were deducted from $390 instead of the $200 relied on by his Honour, the calculation for future impairment of earning capacity should have been based on some $123 per week.
It is apparent that the respondent’s work as an assistant milk vendor has been consistent since late 1995. His work with VEP Construction (mentioned in schedule 1) was noted in his statement Exhibit 1 and was described as a “second job” which lasted only 5 weeks when he resigned the position. Nevertheless, it did show an earning capacity which the respondent was prepared to exercise. The learned trial judge when assessing what has been called future economic loss was concerned with quantifying the present value of future loss due to impairment of the respondent’s earning capacity.
Mr Webb who was respondent’s counsel at trial and in this Court sought to show that the weekly figure $508-21 gross relied on by his Honour was at the lower end of a range of gross weekly figures. He relied on the actual earnings of the “comparable employee” in Exhibit 14 for the period 1 July 1997 to 13 August 1997 which resulted in $578.38 gross per week for 6 weeks and eschewed his Honour’s approach of having averaged gross weekly earnings from 1 July 1996 to 13 August 1997 to arrive at $508.21.
Next, Mr Webb submitted that his Honour’s adoption of “about 23%” as the relevant tax rate had led to a low figure of $390 per week nett of tax and that had his Honour applied the Australian Taxation Office published weekly deduction schedule as he submitted his Honour should have done, the nett weekly earnings on a gross weekly wage of $508.21 would have been $401.31 instead of the $390.
Mr Webb did not seriously challenge the 23% rate but used the taxation schedules to demonstrate a range of nett weekly earnings with $390 being at the lower end. It appears that a copy of those schedules were handed to his Honour, probably during addresses.
As Lord Diplock, in delivering the judgment of the Privy Council in Paul v. Rendell (1981) 55 ALJR 371 said (at p. 372):-
“The assessment of damages in actions for personal injuries is not a science ... the assessment of future economic loss involves a double exercise in the art of prophesying not only what the future holds for the injured plaintiff but also what the future would have held for him if he had not been injured.”
I am not satisfied that the learned trial judge erred in calculating the gross weekly loss at $508.21 (based on the comparable employee) and deducting tax therefrom at about 23% to arrive at the figure of $390 which he used in calculating the future economic loss component. It was obviously open to him to rely only on the 6 weeks from 1 July 1997 to 13 August 1997 but his Honour rejected that approach and in my view, rightly looked to the evidence (Exhibit 14) for a longer period on which to base his calculations.
Having arrived at the $390 his Honour then was obliged to estimate the weekly nett earnings from the respondent’s use to trial of his residual earning capacity and to deduct that figure from the $390.
I have mentioned the appellants’ calculations which are based on the respondent’s nett earnings from 22 September 1995 to 13 August 1997. His Honour applied only the $200 per week and in so doing relied on schedule 1 which showed $200 per week earned as a milk vendor’s assistant during the 6 weeks from 1 July 1997 - 13 August 1997. Schedule 1 also showed that earnings from the same source during the year ended 30.6.97 were slightly less than $200 p.w. In my view this approach by his Honour showed inconsistency in that to calculate the $508.21 per week, his Honour looked at the “comparable employee’s” earnings from 1 July 1996 to 13 August 1997. To be consistent he should have looked at the figures in schedule 1 showing the respondent’s nett earnings for the same period. Had he done so he would have seen that in that period the respondent earned (nett of tax) $17,742.60 which included $10,204.60 as a milk vendor’s assistant for the year ended 30.6.97 and $6,137.75 as a real estate salesman selling on commission.
The average of net weekly earnings for this 58 week period was $305.88. If this figure were deducted from $390 the average nett weekly loss becomes some $84 per week which is substantially less than the $123 per week for which the appellants contend.
It must be borne in mind that:-
“an injured plaintiff recovers not merely because his earning capacity has been diminished but because the diminution of his earning capacity is or may be productive of financial loss.”
(Graham v Baker (1961) 106 CLR 340 at 347)
In fairness to the respondent it should be said that the actual net wages shown in schedule No 1 included the period from 20 (sic) September 1995 to 30 June 1996 and show only $222.65 earned from selling real estate in that period - much less than the respondent earned in the ensuing years.
The nett earnings over the whole period from 22 September 1995 to 13 August 1997 give the best guide to the respondent’s nett weekly earnings as an indicator of his residual earning capacity and this is the approach taken by the appellants.
In my respectful view the learned trial judge did err in fixing a figure of some $200 as the amount to be deducted from $390 in order to arrive at a present loss of about $190 per week. This latter figure did not fairly reflect the respondent’s loss of earning capacity. In my view he should have deducted some $267 per week resulting in a present loss of $123. On the 5 per cent tables, the present value of a current loss of $123 per week over a period of 24 years is $90,774 and on the same tables the present value of such a weekly loss for 29 years is some $99,630. The appellants seek to rely on the latter figure discounted by 15 per cent to allow for “usual contingencies” which may have prevented the respondent from exercising his pre-injury earning capacity. The respondents have argued an appropriate award should be some $85,000.
It is apparent from his Honour’s reasons as I have set them out above that his Honour when he arrived at discounting to a period of 24 years did take into account the fact that the respondent may be able to supplement his present income with part time employment. I note in passing that although the learned trial judge thought that the respondent might have at least another 33 years to work, the respondent himself in schedule 2 to exhibit 1 claimed a global sum to compensate him for the loss of employment opportunities to age 62 - a period of 29 years only.
I would have assessed the component for future economic loss at $90,000.
The award of $138,000 is in my view plainly an overestimate and the sum of $90,000 should be substituted for that amount.
As to the appeal in respect of the $12,000 being the component for loss of future superannuation contributions, it appears that it has become a common practice to allow 6% of the sum assessed for future economic loss as an appropriate sum for loss of future superannuation contributions (see Hedge v Hedge unreported decision of this Court - Appeal 4911 of 1996 - delivered 7.11.1997 at p. 11).
However, as the court there pointed out that is only a rough guide.
On the basis that the component for future economic loss is $90,000 the figure of $12,000 is more than double 6 per cent of that component.
This component of $12,000 should be altered to $6,000.
In my view then the total award of damages should be reduced by $54,000. I would therefore allow the appeal, set aside the assessment of total damages and in lieu assess that total at $159,593.64.
It would follow that the judgments below must be altered so that the respondent plaintiff do recover against the first named appellant defendant the sum of $156,177.46 and against the second named appellant defendant the sum of $159,593.64.
I would order the respondent to pay the appellants’ costs of the appeal to be taxed.