Delaney v Shepherd[2000] QCA 107

SUPREME COURT OF QUEENSLAND

1. THE COURT:  This appeal and the cross-appeal concern a judgment given on 26 February 1999 in an action before the District Court at Ipswich in which the appellant sought damages for personal injuries he alleged were caused by the negligence, breach of contract, or breach of statutory duty of the respondents.

2. The appellant recovered $171,427.50 damages from the respondents. On or about 4 January 1995, when he was employed by the respondents as a surveyor’s chainman, he was injured when he slipped down a steep embankment.  He sustained a fracture of his left calcaneus involving the subtalar joint.  As a result of his injuries he suffered pain, loss of amenities, impairment of his earning capacity, and other loss and damage.  The learned trial judge assessed his damages at $278,203.41, of which $67,750.00 was for past impairment of earning capacity, $130,000.00 for future impairment of earning capacity, and $7,800.00 for future losses of employers’ contributions to superannuation.  ($7,800.00 is six per cent. of $130,000.00:  see Hedge & Ors v. Trenerry, Appeal No. 4911 of 1996, 7 November 1997;  and Hyne & Son Pty Ltd v. Tomlinson, unreported, Appeal No. 8283 of 1997, 22 May 1998.)  At the trial the respondents admitted that they were liable to compensate the appellant, and it was agreed by the parties that he should recover three-quarters of the damages assessed by the learned trial judge.  Accordingly, judgment was entered for $171,427.50, after the deduction of one-quarter of the $278,203.41 (rounded off to $69,551.00), and $37,224.91 to be refunded to WorkCover Queensland. 

3. The appeal was confined to the sum assessed for damages for future impairment of earning capacity, and, although the notice of contention raised wider issues, at the hearing of the appeal and cross-appeal the respondents confined their cross-appeal to one part of the assessment of damages for past impairment of earning capacity, $53,550.00 for 1 October 1995 to 22 February 1999, and to the assessment for future impairment of earning capacity.

4. It is convenient to discuss first the assessment for future impairment of earning capacity. His Honour arrived at the $130,000.00 by starting with a weekly figure for present impairment of earning capacity of $420.00: $625.00 less residual capacity of $205.00. From that he deducted $80.00 per week as travelling expenses (200km per week at 40c per kilometre), leaving $340.00 a week. The appellant being forty years old, his Honour concluded that he should start his calculation assuming a remaining working life of twenty-five years.  Applying the five per cent. table to the $340.00 a week, he arrived at $253,083.00 for the twenty-five years.  Then his Honour discounted that figure by forty per cent. for the usual contingencies of unemployment, the unavailability of consistent overtime, and the possibility of an earlier retirement than at sixty-five years.  His Honour mentioned that the appellant accepted a discount of forty per cent.  The $253,083.00, discounted by forty per cent., would then give a figure of $151,849.80.  His Honour decided that a further discount was appropriate to take account of possible increases in the appellant’s residual earning capacity including that resulting from an improvement in his condition if he were to undergo a fusion operation.  His Honour then arrived at a figure of $125,000.00.  He adjusted that figure to $130,000.00, however, by taking into account that the appellant would be off work for three to four months to recover from the fusion surgery.

5. At the hearing of the appeal Mr Oliver made no complaint on behalf of the appellant about the weekly figure of $420.00, nor did he contest that some discount was appropriate for travelling expenses. An allowance must be made in assessing damages for such expenses as outgoings necessary for the realization of earning capacity: see Wynn v. N.S.W. Insurance Ministerial Corporation (1995) 133 A.L.R. 154 at pp. 156 and 160, and Judd v. McLean & Ors Supreme Court No. 835 of 1995, 19 November 1996.  It was not suggested that the $5,000.00 was inappropriate for the assessment of loss of earning capacity while the appellant was undergoing and recovering from the fusion operation.

6. Mr Oliver argued however that discounting the appellant’s damages for future impairment of earning capacity to the extent that they had been was, in the circumstances, excessive: nineteen per cent. for travelling expenses, the forty per cent. to which we have referred for contingencies, and the further discount for a possible improvement of the appellant’s residual earning capacity. The question of a discount for travelling expenses had been discussed at the trial and, according to Mr Oliver, he suggested the figure of forty per cent. mentioned by the learned trial judge to take into account the usual contingencies and travelling expenses.  There was nothing in the record to that effect, although it must be observed that a discount of forty per cent. for the usual contingencies would appear to be excessive.  It was not challenged on behalf of the respondents that the concession made by Mr Oliver at the trial had been as he asserted it was.  Had the forty per cent. been used to discount the damages for both travelling expenses and the usual contingencies it would then have been on the basis of approximately nineteen per cent. for travelling expenses and approximately twenty-one per cent. for the usual contingencies.  At the hearing of the appeal Mr Oliver did not seek to resile from his concession that a deduction of forty per cent. for both would be appropriate, although he argued that the $80.00 per week for travelling was excessive and also that the forty per cent. for the usual contingencies was excessive. The $80.00 per week was, it appears, based upon the assumption that the appellant would continue to live where he presently resides and would travel by car to and from a place of work twenty kilometres away for the remainder of his working life.

7. There is substance in the argument that a deduction of more than forty per cent. for travelling expenses and the usual contingencies including the possibility of early retirement was excessive.  The assumption that the appellant would make a forty kilometre return trip to work each day for twenty-five years appears to be unwarranted.  The obvious possibility that he would either seek employment closer to home or change his residence so that it was closer to his work was given insufficient weight in that assessment in our view.  Furthermore, no evidence was drawn to our attention which would warrant a discount of forty per cent. for the usual contingencies, not all of which, it must be remembered, would be unfavourable.

8. The discount to $125,000.00 was of approximately eighteen per cent. It was argued on behalf of the respondents that that discount made insufficient allowance for the appellant’s residual earning capacity.  We see nothing in the evidence, and we were referred to nothing, which would lead us to conclude that his Honour’s assessment of this aspect of the case was such as to call for the intervention of this court.  The assessment by his Honour was within the range appropriate to this consideration. 

9. In the result then we conclude that it has not been demonstrated that his Honour’s assessment of damages for future impairment of earning capacity was in error in any respect apart from his making a deduction of approximately sixty per cent. for travelling expenses and the usual contingencies, including the possibility of early retirement.  The deduction for those matters should be reduced to the forty per cent. contended for by Mr Oliver. 

10. Mr O'Sullivan, on behalf of the respondents, submitted that his Honour’s assessment of damages for the impairment of the appellant’s earning capacity in the period from 1 October 1995 to 22 February 1999 was in error in that his Honour failed to take into account travelling expenses.  It was not however put to the appellant in cross-examination that he would have incurred expenses in travelling to and from work had he been employed prior to trial.  Mr O'Sullivan conceded that that was so, but said that this matter could be considered by the court in assessing whether the award of damages, when considered globally, was in error.  The flaw in that argument is however that if the respondents had sought to make the matter of travelling expenses that might have been incurred up to trial an issue it should have been the subject of cross-examination.  We therefore conclude that the consideration relied upon by the respondents should be ignored.  The calculation of the damages for future impairment of earning capacity is in a different position because of the concession made at the trial that those damages should be assessed taking travelling expenses into account. 

11. It follows then that his Honour’s assessment of the appellant’s damages for future impairment of earning capacity was inadequate by approximately $30,000.00. Adjusting the $253,083.00 to remove the $80.00 per week discount one arrives at $312,632.00. Discounting that figure by forty per cent. gives $187,579.00. Discounting the $187,579.00 by a further eighteen per cent. gives $153,815.00. Adding back the $5,000.00 gives $158,815.00 - $160,000.00 in round figures, or $30,000.00 more than the $130,000.00 allowed by his Honour. Adjusting that figure for the agreed responsibility of the appellant one arrives at $22,500.00.

12. The sum assessed for future losses of employers’ contributions to superannuation must also be adjusted: from $7,800.00 to $9,600.00, six per cent. of $160,000.00. Adjusting the increase of $1,800.00 for that item for the agreed responsibility of the plaintiff one arrives at $1,350.00.

13. For those reasons the appeal should be allowed with costs, and it should be ordered that the appellant recover against the respondents $195,277.50 in lieu of $171,427.50. The cross-appeal should be dismissed with costs.