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Terranova v Joseph[2009] QCA 402

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Terranova v Joseph & Anor [2009] QCA 402

PARTIES:

ALISON JENNIFER TERRANOVA
(plaintiff/appellant)
v
SCOTT JOSEPH
(first defendant/first respondent)
ALLIANZ AUSTRALIA INSURANCE
(second defendant/second respondent)

FILE NO/S:

Appeal No 6369 of 2009

Appeal No 6371 of 2009

DC No 608 of 2008

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

24 December 2009

DELIVERED AT:

Brisbane

HEARING DATE:

8 October 2009

JUDGES:

McMurdo P and Holmes and Fraser JJA

Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

  1. The plaintiff’s appeals are dismissed.
  2. The defendants’ cross-appeal is dismissed.
  3. The parties are granted leave to file written submissions as to the costs of the proceedings in this Court in accordance with Paragraph 37A of Practice Direction No 1 of 2005 save that those submissions must be provided to the Court by 4 pm on 29 January 2010.

CATCHWORDS:

DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – MEASURE OF DAMAGES – PERSONAL INJURIES – LOSS OF EARNINGS AND EARNING CAPACITY – PARTICULAR CIRCUMSTANCES – where first respondent hit the appellant’s car and appellant sustained back injuries – where appellant had commenced work as a paralegal prior to the accident – where appellant was unable to work the same hours as a result of the injuries she sustained in the accident – where trial judge awarded the appellant damages for future economic loss but discounted the amount by 35 per cent – where second defendant cross-appealed against award of damages for future economic loss on basis that trial judge’s finding was against the weight of the evidence – whether and in what amount the appellant should have been awarded damages for future economic loss

PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – ORDER FOR COSTS ON INDEMNITY BASIS – where appellant argued that she should have received costs on the indemnity basis, as the final judgment amount exceeded the amount of offers made by the appellant under the Motor Accident Insurance Act 1994 (Qld) and the Uniform Civil Procedure Rules 1999 (Qld) – whether appellant should have been awarded costs on the indemnity basis

Civil Liability Act 2003 (Qld), s 55(2)

Motor Accident Insurance Act 1994 (Qld), s 51C

Ballesteros v Chidlow and Anor [2006] QCA 323

Castro v Hillery [2003] 1 Qd R 651; [2002] QCA 359

Drew v Makita (Australia) P/L [2009] QCA 66

Elford v FAI General Insurance Company Limited [1994] 1 Qd R 258; [1992] QCA 41

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Hart v Consolidated Meat Group P/L [2005] QCA 421

Hiscox v Woods and GIO General Ltd [2002] QSC 064

McChesney v Singh & Ors [2004] QCA 217

State of New South Wales v Zerafa [2005] NSWCA 187

Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009

Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485; [1995] HCA 53

COUNSEL:

R Douglas SC, with J Kimmins, for the appellant

S Williams QC, with R Morton, for the respondent

SOLICITORS:

Gouldson Legal for the appellant

McInnes Wilson Lawyers for the respondent

  1. McMURDO P: I agree with Fraser JA's reasons for dismissing the plaintiff's appeals and the defendants' cross-appeal.
  1. I wish only to add a brief observation in respect of the plaintiff's appeal from the trial judge's order that the defendants pay her costs on the standard basis. A decision as to the appropriate costs order involves discretionary considerations so that an appeal will only succeed if the costs order was unreasonable, clearly unjust, or it arose from an error of fact or law or failure to take into account a material consideration or from giving undue weight to any circumstance or matter: House v The King.[1]  The plaintiff's pre-trial offer to settle, which was considerably less than the judgment she obtained, means that under Uniform Civil Procedure Rules r 360 the court must order the defendants to pay her costs calculated on the indemnity basis, unless they show another order for costs is appropriate in the circumstances.  As Fraser JA explains in his reasons, it was open to the trial judge to conclude that, at the time of the plaintiff's offers to settle, the defendants' legal representatives could not have foreseen a judgment in her favour based on the conclusion that she might suffer future economic loss because of a reduction in her working hours causing an equivalent pro rata reduction in the salary paid by her present employer.  The trial judge recognised that this conclusion was a "close call".  I wish to emphasise that in the circumstances pertaining in this case, a judge could also properly have been determined that the defendants had not shown that an order other than for indemnity costs in favour of the plaintiff was appropriate. 
  1. I agree with the orders proposed by Fraser JA.
  1. HOLMES JA: I agree with the reasons of Fraser JA and with the orders he proposes.
  1. FRASER JA: After a three day trial in the District Court in April 2009 in which only the quantum of damages was in issue, the trial judge gave judgment on 28 May 2009 in favour of the plaintiff against the defendants for $108,098.32, which included $73,000 for future economic loss and $6,570 for future superannuation benefits.[2]  After hearing argument about costs, on 29 May 2009 the trial judge ordered the defendants to pay the plaintiff's costs on the standard basis.[3] 
  1. The plaintiff has appealed against the damages award on the ground that the trial judge erred in discounting the gross sum her Honour assessed for future economic loss of $112,301.53 by 35 per cent to arrive at the figure of $73,000. The plaintiff contended that future economic loss should have been discounted by no more than 15 per cent. She contended that her future economic loss should consequentially be assessed at about $95,000 and there should be a consequential increase in the loss of future superannuation entitlements from $6,570 to $8,591.07.
  1. The plaintiff has also appealed against the costs order, contending that costs should have been ordered on the indemnity basis because the amount of the judgment exceeded the amount of the plaintiff's mandatory final offer under the Motor Accident Insurance Act 1994 (Qld) and the amount of an offer delivered under Pt 5 of Chapter 9 of the Uniform Civil Procedure Rules 1999 (Qld) (“the UCPR”).
  1. By way of cross-appeal, the defendant has challenged the award of any or any substantial future economic loss and future superannuation benefits, contending that the trial judge's findings in the plaintiff’s favour were against the weight of the evidence or otherwise in error. The defendants contended that the judgment should be reduced to $9,690.93.

Factual background

  1. The plaintiff was 28 years old when she was injured in a car accident on 25 January 2005. She was 32 years old at the time of trial. At the end of 2004 she had commenced work as a paralegal in a firm of solicitors where she ran the firm’s superannuation and disability insurance section under the supervision of a partner, Mr Hodgson. This involved mainly non-litigious matters, but the plaintiff also did some secretarial work in relation to the litigious matters. The evidence suggested that the plaintiff was driven by a strong work ethic. Before the accident she had worked from 7.30 am until 5.00 pm without pausing for morning tea, lunch or afternoon tea. She also worked three to five hours on most Saturday mornings. The plaintiff intended to stay with the firm as a paralegal and to work until she was 65 or 70 years old. She was married without children and was the main breadwinner in the family. Her employer held her in high regard. In the car accident which gave rise to the litigation the plaintiff sustained injuries to her cervical spine and lower spine, the former being found by the trial judge to be the dominant injury and falling within Item 88 of Sch 4 of the Civil Liability Regulation 2003 (Qld). 
  1. On 28 May 2009 the trial judge delivered draft reasons for judgment making findings on most issues but not including any figures in the spaces provided in the draft reasons for future economic loss, future superannuation benefits, and the gross amount of damages. On that occasion the parties were represented by their solicitors, who had been notified to come armed with appropriate publications concerning the calculations of future economic loss. In the course of that hearing the trial judge supplemented the draft reasons by remarks made during discussion with the solicitors.
  1. In relation to the economic loss component of the award, the trial judge made the following findings:
  1. As a result of the accident the plaintiff continues to experience pain in her cervical spine, pain in her lumbar spine, and headaches; the plaintiff had not greatly exaggerated her ongoing symptoms as the defendants had vigorously sought to establish at the trial;[4]
  1. As a result of neck pain and more often as a result of headache the plaintiff had lost concentration and had left work on average once a fortnight;[5] 
  1. In the past the plaintiff had worked long hours without breaks but that is now neither desirable nor possible; if she does not take breaks in the future her symptoms will be seriously aggravated;[6]
  1. Although the plaintiff’s pain had not yet led to any reduction in her hours of work, and her productivity and concentration at work had remained the same as before the accident, a result of her pain was that it will be necessary in the short term and the long term for her to reduce the number of hours she works by going home earlier from time to time or by taking days off, following precautionary measures advocated by the occupational therapist, Ms Johnson: in the aggregate the plaintiff will lose something of the order of 30 days per year;[7]
  1. The plaintiff was likely to work for another 36 years until she was 68 years old;[8]
  1. For each of the 30 days per year for those 36 years during which the plaintiff would lose work because she needed to go home early or needed to take a day off, the plaintiff would lose her after-tax daily rate of pay of $220 (the parties’ solicitors agreed that was the relevant daily amount);[9]
  1. Applying the five per cent tables (the parties’ solicitors agreed upon the multiplier) the gross loss was $112,301.53;[10]
  1. That amount should be discounted by 35 per cent;[11]
  1. On the resulting calculation, future economic loss was $73,000, and superannuation at nine per cent was $6,570;[12]
  1. When those figures were added to the awards in the draft reasons for general damages ($15,200), past special damages ($6,101.74), interest on past special damages ($200), past economic loss ($1,526.58), and future special damages ($5,500), the total award of damages was $108,098.32.[13] 

Adequacy of the reasons

  1. The defendants argued that the trial judge gave no reasons for the finding[14] that the plaintiff continued to experience problems as a result of the accident (pain in the cervical and lumbar spine and headaches), but it is evident that the finding was based upon the plaintiff's evidence to that effect.  Similarly, the findings that it was not desirable or possible for the plaintiff to continue to work her long hours and must reduce her hours were clearly enough based upon that evidence summarised by the trial judge which had been given by the plaintiff,[15] Ms Johnson,[16] and Professor McPhee.[17]
  1. As to the defendants’ contention that the trial judge failed to comply with the statutory obligation in s 55(2) of the Civil Liability Act 2003 (Qld) (to have regard to work history and actual loss of earnings in assessing damages for loss of earnings that are unable to be precisely calculated by reference to a defined weekly loss), the trial judge referred to those matters and it seems clear that her Honour took them into account.
  1. The defendants also argued that the trial judge failed to satisfy the requirement in s 55(3) (that if a court awards damages the court must state the assumptions on which the award is based and the methodology used to arrive at the award) and that the reasons were so inadequate as to amount to an error of law.  The reasons do require some study to find the real basis of the plaintiff’s success but it then appears that it is sufficiently explained.  When reference is had both to the written reasons and to the trial judge’s findings expressed at the hearing on 28 May 2009 it emerges that her Honour assessed the future economic loss by accepting the evidence that the plaintiff would need to take additional time off work in the average aggregate period of about 30 days every year for the following 36 years and that this would be reflected in a pro rata reduction of her salary.  The methodology for the consequential loss in superannuation was not in issue.  In light of the issues agitated at trial, the reasons sufficiently disclosed the trial judge’s reasoning process for the future economic loss component of the damages award.[18]  The piecemeal way in which the reasons were delivered did unfortunately obscure the reasoning process and the reasons would have been more readily comprehensible had they left less to implication.  But having regard to the unavoidable uncertainty in the exercise of assessing future economic loss the methodology was sufficiently exposed.  I would add that a failure expressly to state the methodology in full would not justify the setting aside of an award which was supported by the evidence.[19] 

The defendants’ factual challenges

  1. In addition to a substantial attack on the trial judge’s acceptance of the plaintiff as a credible witness, the defendants argued that the finding that the plaintiff would lose income corresponding to the loss of 30 working days per year, or in any substantial amount, was irreconcilable with some uncontentious facts, notably including that the plaintiff returned to full time work shortly after the accident and she did not lose any earnings between her return to full time work and when the trial was heard years later. The defendants referred also to the small amount of the award for special damages and the limited medical evidence which supported the claim.
  1. In order to discuss those arguments it is necessary to refer in some more detail to the evidence which supported the trial judge’s findings.
  1. The plaintiff's evidence of the difficulties she suffered at work was corroborated by remarks in her employer's (Mr Hodgson’s) 2008 appraisal and in a note in 2007 to the effect that she had taken time off because of her injuries, she had left work early, and she had taken medication. The trial judge, who had the advantage of seeing and hearing Mr Hodgson give evidence, was not bound to accept the defendants' argument that his comments should be discounted because he was at the relevant times both the plaintiff's employer and her solicitor.
  1. The plaintiff's claim that she had sustained a significant loss of working capacity also found support in some of the medical evidence. The neurosurgeon, Dr Campbell, noted that her symptoms of neck pain, back pain and headaches resulting from her accident became chronic; her prognosis with regard to performing her duties as a paralegal was only "satisfactory to guarded"; and it was likely that she would continue to require "the occasional half-day off work here and there".  The defendants pointed out that, there being no objective evidence to corroborate the plaintiff's pain, Dr Campbell's opinions were dependent upon acceptance of the plaintiff's assertions.  So much may be accepted, but the substance of her assertions was accepted by the trial judge. 
  1. The evidence of the occupational therapist called by the defendants, Ms Johnson, supported the trial judge’s assessment. Ms Johnson agreed in cross-examination that in light of the plaintiff's symptoms the only step which could reasonably be taken to ensure her long-term ability to work was a reduction in her working hours. Ms Johnson agreed that such a reduction could take place either by reducing the number of hours worked per day or by taking a break in the middle of the week, although Ms Johnson would prefer a daily reduction in hours.  Ms Johnson gave the following evidence:

"…I think that you'd always try to do the things that I've mentioned before like the lunch hour and perhaps you might reduce her work day by an hour or so towards the end of the day . . . Yes you'd be (a) ensuring that she sticks fairly tightly to a regular break in the middle of the day in order to mobilise.  The second thing you may look at it is that she takes an hour off at the end of the workday and finishes an hour earlier and then, you know, looking at how she manages from there on,…

Then progressing through, you referred to taking the hour off at the end of the day.  The next alternative perhaps is to, as I've suggested before, reduce the number of days worked per week so you would have a day off in the middle of week?...That's right."[20]

  1. The defendants argued that although the trial judge referred to part of Ms Johnson's evidence[21] her Honour did not in terms state that this evidence was accepted, but such acceptance was implicit in the trial judge's findings that it was necessary for the plaintiff to reduce her working hours by about one hour every day to avoid aggravation of her symptoms and in her Honour’s assessment of loss referable to a reduction of working hours equivalent to about 30 days per annum: if the plaintiff reduced her work by one hour a day for five days a week for a 48 week working year the total reduction would amount to 240 hours per annum, which is equivalent to the approximately 30 days per annum referred to by the trial judge.
  1. The defendants also pointed out that Ms Johnson maintained the opinion in her report that the primary management of the plaintiff’s symptoms should be regular postural breaks at lunch-time, that Ms Johnson originally disavowed expertise about the plaintiff’s "long term ability to work", and that her evidence was premised on acceptance of the plaintiff's complaints. Nevertheless, Ms Johnson’s evidence in cross-examination directly supported the plaintiff's claim that in the future she would have to significantly reduce her working hours as a result of the accident, by as much as one hour per day on average. The assumptions upon which Ms Johnson's opinions were expressed were sufficiently like the plaintiff's evidence to make Ms Johnson’s evidence useful in determining the effect of the accident upon the plaintiff's working capacity. 
  1. The defendants called Professor McPhee, a specialist orthopaedic surgeon with a speciality in spinal surgery, who gave reports in March and December 2005 and June 2006. Although he expressed the opinion that the plaintiff had not sustained a permanent impairment to her neck or lower back, based on the AMA Guidelines as to the Evaluation of Permanent Impairment, he did conclude that the plaintiff had suffered a soft tissue strain of her neck and lower back with continuing complaint of intermittent neck pain and low back ache. In cross-examination he agreed that the plaintiff's work was an aggravating factor so far as her neck and lower back pain were concerned and that, depending upon her tolerance to pain, that suggested that there had been a significant effect upon her capacity to work. Furthermore, he thought that it was "fair enough" to suggest that it might assist in the plaintiff's case for her to take a day off work, for example on Wednesday each week. He also agreed in cross-examination that the AMA guidelines which he had used to assess impairment did not fully take into account the effect of the pain the plaintiff might experience. Contrary to a submission made for the defendants, the trial judge did not misconstrue Professor McPhee's evidence when her Honour found that he agreed that the plaintiff may need to adapt and downgrade her work and that this might take the form of a reduction in hours or in the plaintiff taking a day off in the middle of the week.[22]
  1. The defendants relied upon the evidence given by Dr Pincus, an orthopaedic surgeon called by the defendants. In his report of 28 November 2007 he noted that some of the plaintiff's symptoms of her soft tissue injuries to the cervical and lumbar spine had persisted with daily complaints of neck pain and intermittent low back pain; that her range of movements had improved over the preceding years such that her cervical spine was now essentially within normal limits other than a very minor lack of flexion range; that her lumbar spine continued to give intermittent symptoms but there was a full range of movement; and that her ability to continue to do her work, in a busy job working 50 hours a week, would not in any significant way be affected by the accident. The defendants criticised the trial judge's rejection of Dr Pincus' expert opinion (that the plaintiff had no permanent impairment and would not be affected in her employment by the accident related injury) on the ground that the trial judge had wrongly observed that most of the re-examination of Dr Pincus seemed to be on the premise that the plaintiff was suffering constant pain 24 hours a day for three years.[23]  This was a slip.  Dr Pincus was not re-examined.  The comment appeared between her Honour’s reference to Dr Pincus’ evidence that people who had pain all day every day did not miss only two weeks of work and then work 50 hours a week and her Honour’s reference to the plaintiff's evidence that she had low back pain two to three times per week and headaches every second day.  The point which the trial judge apparently intended to make was that Dr Pincus' opinion, in so far as it rejected what Dr Pincus thought was a premise of the plaintiff's claims, was itself premised on an incorrect appreciation of the plaintiff’s symptoms.  It should also be noted that Dr Pincus accepted that the guide which he had used to assess the plaintiff as having no permanent impairment, the AMA 5th Edition Medical Guide, did not take into account pain, such that a person with zero per cent impairment could be suffering exactly the same pain and symptoms as somebody assessed as having between five and eight per cent impairment.
  1. As to the quantification of the plaintiff’s loss of earning capacity reflected in the reduced hours of work, Mr Hodgson gave evidence that:

"If Alison were to reduce her hours, there would be a pro rata reduction in her salary.  For example, if she went to 50 per cent of her present hours, we would keep her on the same salary but pro rata it to reflect the reduction in her hours."

  1. The likely reduction in hours which the trial judge found was far less than a 50 per cent reduction, but that percentage was used merely as an example of a pro rata reduction which would follow in a particular case. Mr Hodgson was not cross-examined on this evidence. Accordingly Mr Hodgson’s evidence supported the finding that a reduction in the hours of the plaintiff’s work of an additional five hours a week probably would result in a pro rata reduction in the plaintiff’s income.

Findings based upon credibility

  1. In large part the trial judge's conclusions adverse to the defendants were based upon findings about the pain experienced by the plaintiff which in turn were based upon her evidence. The trial judge substantially accepted that evidence despite the vigorous and extensive challenge to it in cross-examination. In this Court the defendants emphasised their arguments that the plaintiff’s evidence was inconsistent with reports of her symptoms to the doctors, she had managed an increased workload since the accident, her budget had increased, her pay had been increased, her appraisals were glowing, and she had worked consistently in the order of 50 hours per week which, the defendants argued, exceeded the pre-accident position as reported by her employer.
  1. As to the first point, whilst there were some inconsistencies between the plaintiff’s evidence and the evidence of some of the medical witnesses of the symptoms of which the plaintiff complained, the trial judge was well placed to judge the significance of those matters and was entitled to act upon the plaintiff's explanations and evidence of what she told the doctors. The inconsistencies were not so marked as to justify this Court in overturning the trial judge's acceptance of the plaintiff’s general credibility.
  1. As to the remaining arguments, it is first relevant to note the uncontentious evidence that the plaintiff had established the superannuation department in her employer’s firm only shortly before the accident, so that growth in her workload was unsurprising. In that context, it was not surprising that the trial judge accepted the plaintiff's evidence that she had become increasingly more efficient as explaining the increases in the plaintiff’s budgets,[24] which otherwise might have seemed inconsistent with her reported symptoms.  The defendants submitted that the trial judge erred in finding that the plaintiff might be able to achieve only $250,000 of the 2009 budget of $275,000,[25] but that accurately reflected the plaintiff's evidence about the budget of $275,000 that "I'd only expect to get about the 240, 250 at this point." 
  1. In relation to the comparison of the plaintiff’s work hours before and after the accident, the plaintiff's evidence was that before the accident she did not report all of the overtime that she worked, so that the records were not necessarily a reliable indication of her hours.[26] The plaintiff’s evidence was corroborated by Mr Hodgson.  Accordingly, the plaintiff's evidence that she was unable to work on as many Saturday mornings after the accident as before was not demonstrated to be false.
  1. The defendants challenged the trial judge's acceptance of the plaintiff's evidence that she had been required to leave work early in the period up until trial on the ground that the plaintiff was unable to produce records which corroborated that claim. This was said to be extraordinary because she worked in a solicitor's office as a paralegal and her employer, who had the conduct of the damages claim until shortly before the matter was set down for trial, specialised in personal injuries claims. But the plaintiff herself had no such speciality and her employer did not require her to document the times when she left early from work. Again, the plaintiff’s evidence on this topic was corroborated by her supervising partner, Mr Hodgson. 
  1. The defendants contended that the plaintiff's case that her injuries would prevent her from continuing to work the hours she had worked up until trial was contradicted by a record of a medical attendance on 25 July 2007 which recorded, "feeling stressed and teary – too much work to do – trying for baby for 6 months acne getting worse also… – neither she or partner have had children before – p/ counselling to approach boss about reduced workload…" That record was not inconsistent with the plaintiff's evidence that her accident-related pain rendered her usual workload too difficult for her to continue to sustain. In cross-examination she explained that at the time of that attendance her assistant was away and Mr Hodgson was overseas, so that she was then not coping: her stress was "a combination of everything".
  1. Referring to the very modest amount awarded for special damages, the defendants contended that the absence of records and receipts for the pain relief medication which the plaintiff said that she had regularly taken falsified that evidence. The plaintiff's accepted evidence, however, was that she bought her pain relief medicine as part of more general shopping purchases and she did not think to keep the receipts.
  1. The defendants criticised the plaintiff for failing to adopt the measures suggested by her occupational therapist, Ms Johnson, to relieve the symptoms of which she complained (constant left sided cervical pain, worsening on Wednesdays, Thursdays and Fridays)[27].  Ms Johnson had recommended that the appellant take her lunch break instead of working through it because that might assist with reduction of the low back and cervical symptoms.  The defendants pointed out that the plaintiff followed this advice only after her lawyers suggested to her that she do so.  It was, however, open to the trial judge to accept the plaintiff’s explanation that Ms Johnson was not her treating doctor; that she had made the recommendation after assessing her only in a relatively short period of time; "with the amount of work that I was doing I didn't see that I was able to"; and she did not think it would help.  And what might seem on its face to be an odd approach may have been driven by the plaintiff's strong work ethic.  In that light it is not extraordinary that the plaintiff followed Ms Johnson’s advice only after being advised to do so by her lawyers.  Overall the evidence on this topic justified the trial judge’s findings that the plaintiff's attitude was "understandable but foolish" and that it was more probable than not that taking the recommended breaks would help.[28]
  1. The defendants argued, as they had put to the plaintiff in cross-examination at the trial, that the plaintiff contrived to create misleading evidence by attending her doctor shortly before the original trial date, complaining of debilitating headaches which required prescription medication for the first time in four years, embarking upon physiotherapy for a period up until the date of trial, and keeping her diary regarding work hours. The defendants failed to satisfy the trial judge that the plaintiff had embarked upon any such contrivance and it is not easy to see any sufficient basis upon which this Court could make the finding of serious misconduct sought by the defendants. That is particularly so when the recurrence of the plaintiff's symptoms was explained by her evidence that she had aggravated her injury by attempting to bring her files up to date when she and Mr Hodgson were both going on leave. The defendants contended that an inference should be drawn against the plaintiff because she failed to call the physiotherapist but the defendants might have called the physiotherapist or sought to have the records of the physiotherapy admitted at the trial.
  1. The defendants referred to evidence suggesting that the plaintiff had continued to play touch football after the accident but none of this evidence was irrefutable and the plaintiff adhered to her version in cross-examination. The defendants also referred to records of the plaintiff’s use of "facebook" which suggested the recreational use of that facility on her computer at home, but if the records were accurate there was nothing in them that was inconsistent with the plaintiff's case accepted by the trial judge.
  1. The defendants also relied upon a series of points which might have formed useful cross-examination points but which were insubstantial grounds for challenging the findings of fact in this appeal: the plaintiff's evidence of regular headaches was not demonstrated to be false by reference to what was only a selection of physiotherapy records and the absence of records of complaints at particular times; a record in a note of her attendance on her general practitioner on 9 November 2006 that she suffered a "sudden" onset of a headache on that occasion was not inconsistent with her claim of regular headaches; the plaintiff's credibility was not seriously tainted by her inability to explain why she had attended physiotherapists in 2002 and 2003, many years before the trial; and the plaintiff's expressed opinion (submitted to be so extraordinary that it impugned her credibility) that a result of her injuries was to give her cause for concern that she might say the wrong thing at "extra-curricular" work events was inconsequential.

The defendants’ cross-appeal: conclusion

  1. The defendants’ strongest argument was that the uncontentious facts cast doubt on the evidence accepted by the trial judge as justifying the future economic loss claim. The plaintiff had returned to full time work shortly after the accident; although she claimed to have reduced her working hours because of her pain, she had not lost any earnings between her return to full time work and when the trial was heard some four years later even though the medical evidence suggested that her injuries had stabilised; and she could produce evidence of only very limited expenditure on painkillers. Those facts do make it seem improbable that the plaintiff had suffered any substantial loss of working capacity or one which should be measured by reference to the loss of as many as 30 working days per year in addition to sick leave, weekends, holidays and the like. But that was what the trial judge found and the trial judge’s findings were necessarily influenced by her Honour’s assessment of the credibility and reliability of the oral evidence. There is no reason for thinking that the trial judge did not take into account the improbabilities in the oral evidence which were strongly advocated by the defendants. It must also be borne in mind that the trial judge’s apparently generous assessment based on the loss of 30 working days was tempered by her Honour’s selection of an unusually high discount rate of 35 per cent: I will return to that point.
  1. In the end, whilst some critical assertions in the oral evidence upon which the award for future economic loss was based seem improbable in light of the uncontentious facts, I cannot conclude that any of the relevant findings are falsified by “incontrovertible evidence”, are “glaringly improbable”, are contrary to “compelling inferences”, or otherwise are such as to justify this Court in setting aside the award for future economic loss.[29] 

The plaintiff's appeal

  1. The plaintiff contended that the trial judge’s reasons were inadequate in relation to the discount rate which is the subject of the plaintiff’s appeal. That contention must be accepted, in my respectful opinion. The only reason the trial judge gave for selecting the unusually high discount rate of 35 per cent was a remark made in the course of discussion on 28 May 2009 that "…I haven't specifically said and I should have said that I thought 35 per cent discount was about right".
  1. Whilst the plaintiff had previously undergone a surgical posterior spinal instrumentation of the thoracic spine as a result of scoliosis, Professor McPhee gave unchallenged evidence that she did not have ongoing symptoms from that surgery and it did not contribute to her ongoing symptoms. There was no evidence that the plaintiff’s thoracic spine would be likely to degenerate or that she would suffer from any other particular medical difficulties. She had a good work history and there were no personal circumstances suggesting that there should be any unusually high discounting of her future economic loss. Indeed the evidence of her strong work ethic and marked and rapid success in her role (for example, she had been given an assistant as her file numbers increased) suggested that some of the imponderable factors might have worked in her favour. The plaintiff's position was not more vulnerable than that of the plaintiff in Wynn v NSW Insurance Ministerial Corporation[30] in which a significantly lower discount rate was found to be appropriate.  It is fair to describe the defendant’s submissions in opposition to the challenge to the discount rate as unenthusiastic, and realistically so in my view.  The defendants did seek to support the rate by reference to the written submissions for the plaintiff at trial which suggested figures of 20 per cent and 35 per cent, but the first rate was specified in the context of a loss of nearly $200,000 and the 35 per cent rate was given in the context of a claim based on a change in the nature of the plaintiff’s employment (legal secretary rather than paralegal) when the evidence suggested that such a change was a relatively remote prospect.  On the evidence here the discount rate should have been no higher than about 15 per cent.

Disposition of the appeal and cross-appeal as to damages

  1. As I have mentioned, the assessment of future economic loss referable to the loss of 30 working days every year seems too generous. On the other hand there is the counter-balancing error in the unjustifiably high discount rate of 35 per cent. Whilst the net award still seems generous in light of the uncontentious facts discussed earlier, the defendants have not made out a case for appellate correction of the trial judge’s findings of fact. In the result, in my opinion the award was not a “wholly erroneous estimate of the damage suffered” and nor would appropriate correction of it constitute that “substantial alteration in the whole award” which is necessary to justify appellate review.[31] 
  1. Accordingly both the plaintiff’s appeal and the defendants’ cross-appeal against the damages award should be dismissed.

Trial costs

  1. The judgment of $108,098.32 exceeded the amount of the appellant's mandatory final offer of $80,000 plus standard costs under s 51C of the Motor Accident Insurance Act 1994 (Qld) made at the pre-proceeding compulsory conference on 28 February 2008.  More significantly, the judgment also exceeded the plaintiff's offer $70,000 plus standard costs made under the UCPR on 3 August 2008.  The plaintiff's challenge to the trial judge's refusal to award costs on the indemnity basis was made primarily with reference to the UCPR, r 360.  The submission in relation to the offer made under s 51C of the Motor Accident Insurance Act 1994 (Qld) was that it should be taken into account in exercising the discretion under the UCPR r 360, which operated more favourably from the plaintiff’s perspective.
  1. Rule 360 of the UCPR provides:

(1) If—

(a)the plaintiff makes an offer to settle that is not accepted by the defendant and the plaintiff obtains a judgment no less favourable than the offer to settle; and

  1. the court is satisfied that the plaintiff was at all material times willing and able to carry out what was proposed in the offer;

the court must order the defendant to pay the plaintiff’s costs calculated on the indemnity basis unless the defendant shows another order for costs is appropriate in the circumstances.

  1. If the plaintiff makes more than 1 offer satisfying subrule (1), the first of those offers is taken to be the only offer for this rule."
  1. The trial judge found that the defendant had established that an order for costs on the ordinary basis was more appropriate than an order for costs on the indemnity basis.[32]  Her Honour accepted that whilst the quantum of the plaintiff's future economic loss claim of $150,000 was made clear in the initial claim and statement of loss and damage, the finding in favour of the plaintiff as to her necessity to have time off work flowed essentially from the concessions made by Ms Johnson and Professor McPhee that she would need that time off work.  Her Honour found that at the time of the offer the defendants' legal representatives could not have foreseen a judgment based on that evidence, but instead would have formed the correct view on the evidence that the plaintiff was not restricted in her ability to continue to work.  The trial judge said that the application was a "close call" but thought that on balance indemnity costs should not be awarded.
  1. Senior counsel for the plaintiff argued that the discretion not to award indemnity costs under r 360 should only be exercised where the plaintiff has inexcusably withheld proper or relevant matters going to the evaluation of the plaintiff's claim, such that the case presented up to the time of the offer is a misrepresentation. That would amount to a gloss on the rule, which does not define the circumstances in which the Court may depart from the indemnity basis.  Examples of cases in which the discretion might be exercised are given in the authorities cited for the plaintiff[33] but those examples do not confine the discretion. 
  1. Relevant considerations were discussed in McChesney v Singh & Ors, where the Court observed[34] in relation to the cognate r 361 of the UCPR:

"Pursuant to r 361 of the UCPR the trial judge’s discretion is enlivened when "a party shows that another order for costs is appropriate in the circumstances." In Castro v Hillery [2003] 1 Qd R 651, the Court of Appeal in considering the considerations relevant to the exercise of the discretion emphasised the need to consider whether the recipient of the offer has had an informed opportunity to assess the chances of either side doing better than the offer. This is to be assessed in the light of the circumstances as they existed at the time of the offer.

The appellant placed reliance on Morgan v Johnson (1998) 44 NSWLR 578, where the Court of Appeal of New South Wales had regard to the principles applicable to the exercise of the discretion under the analogous costs provisions of the District Court Rules 1973 (NSW), which mandated a consequence for not accepting an offer more favourable than the judgment awarded, “unless the Court otherwise ordered”. At 581-582 the Court set out the following principles as guiding the exercise of the discretion under the New South Wales rules:

(1)The purpose of the rule is to encourage the proper compromise of litigation, in the private interests of individual litigants and the public interest of the prompt and economical disposal of litigation;

(2) The aim is to oblige the offeree to give serious thought to the risk involved in non-acceptance;

(3) The prima facie consequence of non-acceptance will be that the rule will be enforced against the non-accepting party. This is because, from the time of non-acceptance “notionally the real cause and occasion of the litigation is the attitude adopted by [the party] which has rejected the compromise”.

(4) Lying behind the rule is the common knowledge that “litigation is inescapably chancy”. For this reason, the ordinary provision is expected to apply in the ordinary case. The mere fact that it was reasonable for the litigant to take the view that he or she did in rejecting the offer is not enough to displace the rule."

  1. The trial judge took those considerations into account in concluding that the particular case upon which the plaintiff ultimately succeeded emerged only at the trial in the cross-examination of Ms Johnson and Professor McPhee and that the sub-issues identified in the plaintiff's pleaded and disclosed claim of future economic loss were largely resolved in favour of the defendants. On that basis, it was not only reasonable for the defendants to reject the offer but their rejection of it reflected an appropriate assessment to the extent that they had an informed opportunity to assess the plaintiff’s case.
  1. The plaintiff’s senior counsel argued that the plaintiff’s claim before action and her subsequent statement of claim had always asserted that she would suffer a loss of income in the future. It is true that she claimed that in her work as a paralegal she would be "(i) unable to work the same hours as she was able to do prior to her injuries; [and] (ii) required to regularly leave work early…". Those claims reflected the plaintiff's statements of loss and damage, which made the same claim for future economic loss, noting that the plaintiff "has to leave work early due to her ongoing symptoms…is at a real risk of inability to find alternate employment, or a restriction in the type of employment available and/or the remuneration available for that employment…". But the claim was put as a "global sum” and attributed to the plaintiff’s “disadvantage on the open labour market” rather than in the way it emerged at trial.
  1. The plaintiff's senior counsel referred also to the 10 June 2008 report by Ms Johnson, the occupational therapist called by the defendants.  Ms Johnson's report did refer to the plaintiff’s statements that she would leave work early about once a fortnight because of a headache causing reduced concentration and irritability and Ms Johnson reported her opinion that the plaintiff should take her lunch break and exercise during the day in an attempt to reduce her symptoms, but Ms Johnson did not express an opinion that the plaintiff’s injuries required her to leave work markedly early or to do so every day.  That emerged only in cross-examination.  The plaintiff's senior counsel contended that the defendants might have made enquiries of Ms Johnson on that topic but they had no reason to anticipate it.
  1. Reference was also made to a series of documents which the plaintiff provided to the defendants before the proceedings commenced. A statement by Mr Hodgson supported the plaintiff's claims that increasing pain on some days required her to leave work early and that she could not sustain the same number of weekly hours she performed before the accident, but it did not include his accepted evidence at trial that the additional reduction in working hours identified by Ms Johnson would be reflected in a pro rata reduction in salary. The pre-proceeding statement of loss and damage similarly referred to the plaintiff's employer's flexibility in allowing her to leave work early "(without affecting the claimant's pay)" and put her economic loss upon the footing that she had a "real risk of inability to find employment elsewhere or a restriction in the type of employment available and/or the remuneration available for that employment." The material supplied to the defendants also included a statement by the plaintiff which was substantially reflected in her evidence at trial, but with the important qualification that it did not include the plaintiff's accepted evidence at trial that: she could not perform the hours which she was currently doing long-term, she would not be able to because her headaches were too debilitating at times and the neck pains made it difficult to continue working the hours, and she would have to cut back the number of days she worked per week or reduce her hours. Whilst the absence of that evidence from the statement might be explicable by the fact that the statement was dated 13 November 2007 and the plaintiff's evidence at trial was that her symptoms were subsequently exacerbated, the statement did not disclose the basis upon which the claim ultimately succeeded.
  1. The plaintiff's senior counsel referred to other reports delivered before the offer was made under the rules (a 21 February 2007 report by Mr Hoey, an occupational therapist, and Dr Campbell’s report) but although this material supported the plaintiff's claim that she had suffered a permanent loss of earning capacity it did not support the claim accepted at trial that the reduction in hours which the plaintiff could work caused her economic loss equivalent to a pro rata reduction of the salary paid by her current employer. The defendant understandably might not have foreseen that basis for more than a modest award when the plaintiff had continued to work on a full time basis without diminution in salary before the trial. Against that background it was open to the trial judge to find that when the offer was made the defendants did not have an informed opportunity to assess the chance that either side would do better than the offer.
  1. The inherently risky nature of the claim for future economic loss doubtless informed the trial judge’s comment that the application under r 360 was a "close call", but the discretionary decision not to award indemnity costs was justified by the relevant considerations which her Honour mentioned.

Proposed orders

  1. I would dismiss the plaintiff's appeals (CA 6369/09 and CA 6371/09) and the defendants’ cross-appeal. As was sought by the parties, I would give the parties leave to make written submissions about the costs of the proceedings in this Court in accordance with paragraph 37A of Practice Direction No 1 of 2005 save that those submissions must be provided to the Court by 4 pm on 29 January 2010.

Footnotes

[1] (1936) 55 CLR 499, 507.

[2] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009.

[3] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 29 May 2009.

[4] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [94].

[5] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [54].

[6] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [123].

[7] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [121](a)-(c), (e), (h), (k), [122], [123].

[8] Transcript of oral reasons, O'Sullivan DCJ, 28 May 2009.

[9] Transcript of oral reasons, O'Sullivan DCJ, 28 May 2009.

[10] Transcript of oral reasons, O'Sullivan DCJ, 28 May 2009.

[11] Transcript of oral reasons, O'Sullivan DCJ, 28 May 2009.

[12] Transcript of oral reasons, O'Sullivan DCJ, 28 May 2009.

[13] Transcript of oral reasons, O'Sullivan DCJ, 28 May 2009.

[14] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [94].

[15] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [57].

[16] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [61] – [64].

[17] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [76].

[18] Cf Drew v Makita (Australia) P/L [2009] QCA 66 at [58] – [65].

[19] Ballesteros v Chidlow and Anor [2006] QCA 323 at [40] – [41] per McMurdo P, citing State of New South Wales v Zerafa [2005] NSWCA 187 (see per Campbell JA at [139] – [143]).

[20] Transcript, 24 April 2009, at 3-18.

[21] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [64].

[22] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [76].

[23] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [72].

[24] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [18].

[25] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [19].

[26] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [9].

[27] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [60].

[28] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 28 May 2009 at [52].

[29] See Hart v Consolidated Meat Group P/L [2005] QCA 421 at [38], citing Fox v Percy (2003) 214 CLR 118.

[30] (1995) 184 CLR 485. See also Luntz, Assessment of Damages for Personal Injury and Death, (2002, 4th edition), 380 – 381.

[31] Elford v FAI General Insurance Company Limited [1994] 1 Qd R 258 at 264.

[32] Terranova v Joseph & Anor, unreported, O'Sullivan DCJ, DC No 608 of 2008, 29 May 2009.

[33] Castro v Hillery [2003] 1 Qd R 651, McChesney v Singh & Ors [2004] QCA 217, and Hiscox v Woods and GIO General Ltd [2002] QSC 064.

[34] [2004] QCA 217 at [12], [13] per Jerrard JA and Atkinson and Philippides JJ.

Close

Editorial Notes

  • Published Case Name:

    Terranova v Joseph & Anor

  • Shortened Case Name:

    Terranova v Joseph

  • MNC:

    [2009] QCA 402

  • Court:

    QCA

  • Judge(s):

    McMurdo P, Holmes, Fraser JJA

  • Date:

    24 Dec 2009

Litigation History

EventCitation or FileDateNotes
Primary JudgmentDC608/08 (No Citation)28 May 2009Damages in favour of the Plaintiff against the Defendants for $108,098.32
Appeal Determined (QCA)[2009] QCA 40224 Dec 2009Plaintiff's appeals dismissed; Defendants' cross-appeal dismissed; Parties granted leave to file written submissions as to the costs of the Proceeding: McMurdo P and Holmes and Fraser JJA

Appeal Status

Appeal Determined (QCA)

Cases Cited

Case NameFull CitationFrequency
Ballesteros v Chidlow [2006] QCA 323
2 citations
Castro v Hillery[2003] 1 Qd R 651; [2002] QCA 359
4 citations
Drew v Makita (Australia) Pty Ltd[2009] 2 Qd R 219; [2009] QCA 66
2 citations
Elford v FAI General Insurance Company Limited[1994] 1 Qd R 258; [1992] QCA 41
3 citations
Fox v Percy (2003) 214 CLR 118
2 citations
Fox v Percy (2003) HCA 22
1 citation
Hart v Consolidated Meat Group Pty Ltd [2005] QCA 421
2 citations
Hiscox v Woods [2002] QSC 64
2 citations
House v The King (1936) 55 CLR 499
1 citation
McChesney v Singh [2004] QCA 217
3 citations
Morgan v Johnson (1998) 44 NSWLR 578
1 citation
New South Wales v Zerafa [2005] NSWCA 187
2 citations
Wynn v New South Wales Insurance Ministerial Corporation (1995) 184 CLR 485
2 citations
Wynn v NSW Insurance Ministerial Corporation [1995] HCA 53
1 citation

Cases Citing

Case NameFull CitationFrequency
Farnham v Pruden[2017] 1 Qd R 128; [2016] QCA 181 citation
1

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