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- Hancock v Johnson[2013] QDC 341
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Hancock v Johnson[2013] QDC 341
Hancock v Johnson[2013] QDC 341
DISTRICT COURT OF QUEENSLAND
CITATION: | Hancock v Johnson & another [2013] QDC 341 |
PARTIES: | ANNETTE LEITH HAY HANCOCK (plaintiff) and MICHELLE FRANCIS JOHNSON (first defendant) and DAVID CHARLES JOHNSON (second defendant) |
FILE NO/S: | D4021/2010 |
DIVISION: | |
PROCEEDING: | Trial |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 4 September 2013 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 31 January, 1 February 2013 |
JUDGE: | McGill DCJ |
ORDER: | Judgment that the defendants pay the plaintiff $445,515.90, including $11,554.79 by way of interest. |
CATCHWORDS: | NEGLIGENCE – Dangerous premises – occupiers’ liability – concealed trap – whether occupiers knew or ought to have known of the presence of the trap Jaenke v Hinton [1995] QCA 484 – applied. |
COUNSEL: | R J Lynch for the plaintiff R A I Myers for the defendants |
SOLICITORS: | Shine Lawyers for the plaintiff Sparke Helmore Solicitors for the defendants |
- [1]The plaintiff is the widow of Carwood Hancock who passed away on 24 October 2009: Exhibit 25. Prior to this he had operated a garden maintenance business, and on 7 October 2009, for the purpose of that business, he had gone to the defendants’ property. While working there he stood on a metal lid over a cylindrical drainage pit in a corner of the property, which collapsed causing him to fall into the pit and injure his right knee. This led to greatly reduced mobility,[1] as a result of which he developed a deep vein thrombosis in the right leg, which in turn led to a pulmonary embolism from which he died. It is clear from the evidence of Professor Ansford, a specialist forensic pathologist who supervised the post-mortem, that the death was a consequence of that deep vein thrombosis, which in turn was a consequence of the injury to the right knee, which was caused by the fall: p 72, Exhibit 34. It follows that the fall was a cause of the death of the deceased[2], and I so find.
- [2]The plaintiff claims damages for loss of dependency[3], and also claims on behalf of the estate of her late husband the cause of action which survives to the estate under the Succession Act 1981 s 66.[4] The defendants deny that they knew or ought to have known of the presence of the drainage pit. It was not submitted that, if they had known, or ought to have known, of its presence they were not liable, nor was any plea of contributory negligence on the part of the deceased raised.
Background
- [3]The drainage pit is essentially a concrete pipe of about 900 millimetres diameter which has been sunk into the ground to a depth of at least two metres.[5] At least four drains discharge into it; presumably there is also an outlet pipe, although this is not obvious in the photographic exhibits. There is no evidence as to how this came to be on the property, but the drainage pit is located in the north-west corner of the relevant land,[6] and in 1965 an easement for drainage purposes running between that corner and a road further downhill was registered over adjoining land in favour of a parcel of land comprising the subject land and what is now a separate block to the east of it.[7] Later in 1965 these two parcels were created by subdivision, and an easement for drainage purposes was registered over a strip of land running along the northern boundary of the defendant’s land to the other parcel of land. This easement had the practical effect of preserving the connection between the new subdivision 2 and the easement running down to the street, by means of the easement over the back of subdivision 1, the subject land.
- [4]It is reasonable to infer that there are probably pipes or other drainage infrastructure below the surface of each of these easements.[8] I expect that in practical terms the pit provides access to the junction between those two sets of pipes, and is the means by which drainage from the relevant land joins the drainage from the adjoining land before flowing down the pipe to the lower road. That suggests that the drainage pit dates from about 1965, though it is certainly possible that the drainage system was put in at an earlier date, before the necessary legal arrangements were finalised.
- [5]For some time, probably since it was installed, the drainage pit had what looks to be a circular cast iron grate which would sit at the top of it, and there was a circular steel cover which sat over the top of the grate, presumably to reduce the number of leaves and other garden material which fell into the pit. After the incident both of these were found at the bottom of the pit: Exhibit 24. The grate was corroded, quite severely on one side, and it is apparent that as a result of this corrosion the grate was no longer strong enough to sustain the weight of a man standing on it. The metal plate was relatively thin and was also not capable of sustaining the weight of a man, so when Mr Hancock stepped onto it the corroded grate gave way and the metal cover bent sufficiently to enable it too to fall into the pit.[9]
- [6]The top of the pipe constituting the pit stood a little above the surface of the ground at that point in the yard, within a small area bounded on two sides by boundary fences, and on two by a low wooden retaining wall: Exhibit 11. Above the wall was an area of garden, which lay behind a swimming pool. There is no evidence about when the swimming pool was installed, but it was obviously well after 1965, and the low sleeper retaining wall was constructed so as to ensure that landscaping work in conjunction with the swimming pool did not interfere with the top of the drainage pit.[10] A person looking towards that corner of the yard, therefore, would first have noticed that for some reason this area in the corner had been left unfilled, and maintained a level lower than the surrounding garden bed. A closer inspection of this lower area would have revealed, subject to the presence of fallen leaves and other garden waste, the circular metal cover sitting a few centimetres above the surrounding ground.
State of the premises
- [7]There was in evidence a number of photographs taken of the premises, the surrounding area and the pit, on 15 December 2009: Exhibit 1-30. At this stage of course the cover was at the bottom of the pit, so what one sees is the top of the hole rather than the cover, and the top of the hole is obviously not concealed by any fallen leaves or other garden litter: Exhibit 11. Significantly however the rest of the sunken area shows little sign of any build-up of leaves or other garden litter. If there were some significant build-up at the time of the fall, I would expect reasonable traces of it to remain unless someone had gone to the trouble of cleaning up what was left, that is, that part that had not fallen down the hole. The defendants claimed not to have done this.[11] I suspect however that someone cleaned up the area somewhat before these photographs were taken.
- [8]The reason for this is that some of the photographs show that there are four quite small palm trees in the garden set back from the edge of the paving surrounding the swimming pool, three on one side of the filter box and one on the other: Exhibit 3. The presence of these palm trees is interesting. A former owner, who sold the property to the defendants in 2007, said that they were not there when she owned the property,[12] and that she would not have put them in, since she disliked palm trees.[13] I accept this evidence, and find that the palm trees were not there at that time.
- [9]In a statement made by Mr Hancock to a solicitor on 19 October 2009, recorded in a diary note dated 10 November 2009, he said that a few days prior to 7 October the first defendant contacted him and asked him to remove or trim a murraya hedge in the area beside the swimming pool which was becoming overgrown,[14] and to plant some new palm trees in the garden area adjacent to the swimming pool: Exhibit 31. The first defendant denied that she gave that instruction (p 19), and said that all she ever told Mr Hancock was a general request when he was first engaged to keep the place tidy: p 18. The effect of her evidence was that the initiative to trim this hedge, which is what he was doing when he fell into the pit, was his. Both defendants were coy to the point of being evasive about when the palm trees were planted,[15] but both claimed that the photographs showed less vegetation near where the palm trees now are than was present at the time when they purchased the property.[16]
- [10]If some murraya trees had been removed or cut back in order to make room to plant the palm trees,[17] that would have significantly reduced the amount of vegetation in the area; one side effect of this is that someone standing on the paved area beside the swimming pool in the vicinity of the filter box and looking towards the corner of the yard could easily have seen the lower area in the corner, and that there were a number of things there: Exhibit 5. The photographs show that the top of the pipe was not the only thing in this lower area; there were also some rectangular pieces of timber, some short lengths of retaining wall logs, two pieces of 100 millimetre white plastic piping of a kind used for sewerage pipes,[18] a quantity of black plastic sheeting, a coil of black irrigation piping, a rectangular metal plate, and two sprinklers of different design, one yellow and one red: Exhibit 11.
- [11]The former owner was able to recognise some of the things that had been there in her day, but said that she had believed that the black plastic sheeting, the sprinklers and the white pipes were not there at that time: p 43, pp 45-6. Those pipes of course are not connected to anything; they are simply surplus piping which has been put there as an inconspicuous place for them to be left, and there was no evidence about whether any work on the sewerage system had been undertaken at any time while the defendants owned the property, or indeed while the previous owners did so.[19]
- [12]There is some support for the proposition that they were not there at the time when the defendants purchased the property in the evidence of Mr Craig, who undertook a property inspection for them prior to their purchase: Exhibit 49. Mr Craig claimed to have examined the boundary fences, and to have commented on some problems with the boundary fence at the left rear of the property. That fence ultimately is the fence on one side of the sunken area. A thorough examination of the boundary fencing would have involved looking at that part of the fencing which was adjacent to the sunken area, but it is possible that Mr Craig’s inspection was not that thorough. He said however that if he had seen the white plastic piping he would have investigated that (p 74), and that piping was prominent in the photographs, so unless that corner of the property was at the time of his inspection much more overgrown than it is shown to be in Exhibits 1 to 30, I think it more likely that the reason why Mr Craig did not see the pipes is that they were not there at that time.
- [13]Either the pipes were not there, or the area was much more overgrown when the defendants purchased the property. In the former case, they ought to have found out about the lid when they put the pipes there, and ought to have investigated it. In the latter case, there must have been a lot more murraya tree, and no palm trees, at that stage. There is no reason for pipes to end up in a position like that unless the occupants had put them there,[20] and if they had put them there they could hardly have failed to be aware of the presence of the drainage pit, or at least its cover.
- [14]In theory it is possible that the palm trees were put in prior to October 2009, but it strikes me as odd that the deceased would have made a false statement about the instructions that he had been given if there were already obviously palm trees growing there at the time. A more plausible explanation, in my opinion, is that the palm trees were not there, and the murraya hedge was more substantial, at the time of the incident, and after Mr Hancock was injured but before the photographs were taken the defendants had someone else cut back the murrayas, and plant the palm trees which are seen in Exhibit 3.[21] That person could also have cleaned up the fallen frangipani leaves.
- [15]It is also interesting to compare Exhibits 43 and 44, photographs taken on 11 June 2010, with the photographs taken on 15 December 2009. Exhibit 43 is taken from a similar position to Exhibits 9 and 10. There are some differences in the vegetation, though the main difference is that one of the palm fronds has died, and the frangipani leaves that were dropped in autumn 2010 are conspicuous on the ground and elsewhere; in Exhibit 9 there is a certain amount of plant waste on the ground but it is difficult to identify any frangipani leaves, except on top of the pool shed. There is a blue object, which the second defendant conceded looked like a pool toy, in the garden area between the photographer and the sunken area in Exhibit 43: p 47. I suppose it could have been flung out of the pool and landed there. A comparison between Exhibit 11 and Exhibit 44 shows that there have been some changes, but some things are the same. The white plastic pipes have gone, the square metal plate which was leaning up against the coil of irrigation hose has fallen over, and the wire grill that was behind it is not obvious in Exhibit 44. It seems to me however that it is visible in Exhibit 43, immediately below the dead palm frond, and partly on top of the blue pool toy.
- [16]The metal plate which looks like a barbeque plate is lying down in Exhibit 44, and has obviously been in that position for some time since dead frangipani leaves had accumulated on top of it. Indeed dead frangipani leaves are conspicuous in Exhibit 44, in contrast to the way they are conspicuously missing from Exhibit 11. Apart from that the only real difference that I can detect is that the weeds have grown a bit. The second defendant said that after he found out about the pit he obtained a piece of marine ply and made a cover for it (p 44), but that is not visible in this photograph. It might have been moved out of the way for the purpose of the photograph, but not only is there no trace of it in either photograph, the metal plate which has obviously been lying down for some time overlaps the top of the pit. It seems to me that Exhibit 44 suggests that, if the second defendant ever put a marine ply lid on the drainage pit, it must have been after 11 June 2010. Unfortunately he was not cross-examined on the differences between Exhibit 44 and Exhibit 11.
- [17]It is understandable that the defendants would get rid of the white pipes, though curious that they did not go on and clean up the area more generally. Moving the metal grill from behind the plate leaning against the fence and leaving it apparently discarded in the garden bed also looks more like something that children would do; it does not look like any sort of systematic attempt to clean up the area. The other thing that emerges from Exhibit 44 is that, although fallen frangipani leaves are conspicuous, it would obviously have taken a lot more than one year’s supply of dead frangipani leaves to have caused the lid of the drainage pit to have effectively disappeared under the pile of leaves.
- [18]Mrs Johnson said that when she received the notice of claim and saw the pit one of her reactions was anger because she had not been told of the hazard prior to that point: p 36-7. Her explanation seemed to focus on concern about the wellbeing of her dog, but she also referred to concern because her kids had been in that area: p 29. Mr Johnson said that their boys would never go into the garden: p 46. It may be that Mrs Johnson was just more cautious about relying on the natural disposition of her sons, but there is a more striking inconsistency in their evidence. At one point Mrs Johnson said that after they received the notice of claim “we have never hired a gardener again”: p 28. On the other hand Mr Johnson agreed that they had another gardener for at least the last 12 months before they sold that property, and said that he had told that gardener about the drainage pit and about the case: p 44.
Knew or ought to have known
- [19]It will be apparent therefore that I have significant concerns about the credibility of the defendants. On the whole I was not impressed with either of them in the witness box, and neither struck me as a particularly reliable witness. In the circumstances I do not accept their evidence that they were not in fact aware of the presence of this drainage pit prior to the deceased’s fall, at least in the sense that they were aware of the metal cover which would have been visible in the corner of their property. Whether they had ever taken the trouble to investigate what was underneath it is another matter; it is, I think, quite plausible that they would not have done so.
- [20]The fact that I reject their evidence that they were not aware of this does not mean that they have been proved to be aware of it. There was no direct evidence that they were aware of the presence of the pit, or at least the metal cover to the pit, prior to the fall of the deceased, but for reasons I have given I consider it probable that at least the white surplus sewerage pipes were placed there during the time they were in occupation of the premises. That is not something that would have been done by a tradesman doing work on the premises: a tradesman might have left them behind, but would not have taken the trouble of hiding them in this way. I consider the obvious explanation is that the defendants put the sewerage pipes in this position as an inconspicuous place where they could be left. There is no reason to think that they were put there after the fall of the deceased. The evidence also supports a conclusion that some other items there were put there by the defendants during their occupation of the property. In all of the circumstances, I consider that the evidence supports an inference that the defendants were in fact aware of the presence of the metal pipe cover prior to the fall of the deceased.
- [21]In any case, I have no hesitation in concluding that they ought to have been aware of it, in the sense that a reasonable person in their position would have been aware of it. I consider that reasonably careful owners of a suburban residential property would familiarise themselves with the nature and characteristics of the property, to the point where they would look into a corner such as this to see what was there when the property was acquired, or not long thereafter.[22] This, I think, would be a product of natural curiosity, but I consider that in circumstances where occupiers know that people such as tradesmen, or even social invitees or children, may have occasion to come onto their property reasonably careful occupiers of a property will take the trouble to familiarise themselves with their property in order to ascertain whether there is any significant hazard to such persons on the property.
- [22]The duty of a householder in the context of hazards presented by the state of the premises was considered by the Court of Appeal in Jaenke v Hinton [1995] QCA 484. Williams J, with whom the other members of the court agreed, held that the relevant duty of occupiers of land was to take reasonable care to avoid foreseeable risk of injury to the respondent, but in that case held that the risk was so low that a reasonable man would have been justified in disregarding it and taking no steps to eliminate it. This depends on the chance of the risk materialising (p 7), and I suppose on the seriousness of the consequences which could follow if it did.
- [23]In that case it was held that the presence of an ordinary garden hose across a lawn did not pose such a risk of injury to a person who came to be walking across the lawn as to make the occupier liable in negligence for failing to remove the hose. But that was a case where the item in question was obvious, and would have been obvious to the person walking across the lawn, and the extent of the risk of injury could be easily evaluated. Where the injury arises from the presence of something which is concealed, the ability to assess the extent of the risk of injury depends upon an awareness of the presence of the circumstances giving rise to the risk. In these circumstances, the proper performance of the duty to take reasonable care for the safety of entrants requires an occupier of land to take reasonable steps to ascertain whether there are any hazards, particularly concealed hazards, present on the land which might endanger persons coming onto it.[23] That exercise can only be properly done by someone who is aware of the extent of the risk, because of the significance of the extent of the risk in determining whether a reasonable person would take steps to deal with it.
- [24]The practical effect of this is that in my opinion it is part of the ordinary duty of care of an occupier of premises to which entrants are reasonably foreseeable to check the premises for the presence of any hazards, particularly concealed hazards, which might endanger a foreseeable entrant. Accordingly, if in fact there is a significant, concealed hazard on premises, in effect a concealed trap, and it is foreseeable that an entrant might be endangered by that hazard, it is not an answer for the occupiers to say that they were in fact unaware of the presence of that hazard. This is not a case where reasonable inspection by an ordinary person would have detected no indication of a potential problem;[24] reasonable inspection would have detected the metal lit, which should then have been investigated.
- [25]It is unnecessary for this analysis to be undertaken on the basis of entrants in general, because it is sufficient to consider whether the duty to the deceased was breached. In circumstances where the defendants knew that the plaintiff’s husband was going to be doing work in the garden, then that I consider gave rise to a duty at least to check the areas where the deceased could foreseeably be working. That then makes it necessary to decide whether the deceased had been specifically told to cut back the murraya trees in the area behind the swimming pool, or whether he was just expected to do the usual lawn mowing and weeding of the gardens. The deceased told a solicitor at a time when he was in hospital that he had received these particular instructions. It seems to me obvious from the photographs that the murraya trees had been cut back, and indeed that palm trees had been planted, by December. I think it most unlikely that the deceased would have told his solicitor that he had received instructions to do something which had already been done.
- [26]His offsider confirmed that on the day in question the deceased took him to the property and they embarked at once on a substantial program of cutting back the murraya trees: p 64. I think it quite unlikely that the deceased would have been conducting such substantial pruning on his own initiative and without any specific instructions or request that he do so.[25] I reject Mrs Johnson’s evidence that she gave no such instructions, accept the evidence of the deceased, and find that he was specifically instructed to do work which would take him into the vicinity of the murraya trees. In those circumstances, I consider there was an obligation to inspect that area to ascertain whether there was any hazard there which a reasonable person, knowing that the deceased would or could be working in that area, would take steps to protect the deceased against, whether by warning him or doing something to mitigate the risk. It is clear that that was not done.
- [27]While he was working on the property the deceased was using a chainsaw, and in those circumstances his attention would have been focussed on the saw and on the trees he was pruning. That circumstance ought to have been reasonably foreseeable to the defendants. Because of the presence of the metal cover, the hazard presented by the pipe and the heavily corroded metal grill under the cover was by no means obvious, but was in the nature of a concealed trap. Nevertheless it ought to have been located by someone who was specifically checking for hazards rather than simply doing work on the site. Had it been seen, in my opinion a reasonable occupier would have investigated, at least to the point of lifting up the metal cover to see what was underneath, and the occupier at that point would have detected the hazard. Given the risk of significant injury being suffered by a person who fell into the pit as a result of standing on the lid, I consider that a reasonable person who was aware of the hazard would in the circumstances have taken steps to protect entrants such as the deceased from that risk; I did not understand that that proposition was contested on behalf of the defendants. Mr Johnson said that once he was aware of the hazard he put a sturdy cover over the pipe: p 44. Mrs Johnson said she would have done something about the hazard if she had known it was there: p 30.
- [28]In the circumstances I find that the defendants knew, and ought to have known, that the drainage pit and hence the hazard that it presented, was there, and ought at least to have warned the deceased about its presence, if not gone further and taken appropriate steps to make the pipe safe by covering it with some sturdy lid. It is unnecessary to consider anything further than the failure to warn, because I accept that if the deceased had been warned about the presence of the hole he would have probably avoided standing on the lid and falling into the pit,[26] and in that way his death would have been avoided. Accordingly I find that there was negligence on the part of the defendants, and that that negligence caused the deceased to fall into the pit, and, for the reasons given earlier, his death. Accordingly the defendants are liable to the plaintiff for damages for loss of dependency.
Quantum
- [29]The deceased was 61 years of age at the time of his death: Exhibit 35. On his death he left his estate to his wife, the plaintiff: Exhibit 31. He used to work for Capral Aluminium, until about 2005, when he left that employment and set up a gardening business.[27] The plaintiff was born on 26 January 1949, and qualified as a secondary school teacher in 1972: p 23 She married in 1973, and worked until 2009 when she had to resign because of anxiety and depression: p 25. She said that she received a lot of help and support from the deceased up until his passing, which set her back a little and she was not entirely recovered. During the worst of her illness the deceased had done most of the housework: p 26.
- [30]Prior to the injury in question the deceased’s health was good, and he planned to continue to work as long as he was fit and able, the plaintiff thought to about 68 or so: p 27. After the plaintiff resigned she received some payment for long service leave, and otherwise the family lived on savings and on what the deceased earned in his business: p 28.
- [31]There are two aspects to the plaintiff’s claim for damages: the claim for loss of dependency, and the estate claim. Damages are awarded for the former “proportioned to the injury resulting from the death” and are given for the loss of support which the deceased would have provided, valued by determining the net loss on balance of losses and gains.[28] The loss includes the value of loss of gratuitous services which are or will be replaced.
- [32]There was a conflict in the submissions as to whether I should assess the financial dependency by reference to the average tables set out in the textbook by Professor Luntz[29] or by reference to the individual circumstances of the deceased in this case, as established by the evidence. The latter approach was favoured in French (supra) at [243], where Fryberg J said that the statistics quoted in the textbook should be an approach of last resort. In that case however there was evidence of the relevant information, namely how much of the deceased’s income he spent specifically on himself in the period leading up to his death, which his Honour accepted and on the basis of which he was able to make the necessary calculations. By contrast, I have no evidence about how much money the deceased spent specifically on himself. Accordingly, even treating the use of tables as a last resort, I have no choice but to use them.[30] Although there was one daughter still living at home, she is an adult daughter and the case proceeded on the basis that she was not a dependent. Accordingly on the basis of the table the appropriate percentage is 65.6 per cent.
- [33]At the time the plaintiff had no separate income, having retired before she reached an age when she was entitled to access her superannuation. She is now in receipt of a disability pension: p 23. After she retired, the family income consisted of the money brought in by the deceased from his business, with the family otherwise living off their savings. It does not seem to me however that this would alter the proportion determined by reference to the tables; to the extent that the total amount spent consisted in part of income from the business of the deceased, and in part ordinary savings, the apportionment percentage would apply to both, at least in the absence of evidence indicating some specific alternative arrangement.
- [34]A more difficult question is identifying just what the income of the deceased was. He kept some financial records of his gardening business, and provided them to an accountant, who prepared his tax returns. This material made no reference to any payments having been made to the offsider Mr Fenech, who the plaintiff said received payment in cash.[31] The plaintiff did not know whether these payments were an expense not taken into account by the deceased for the purposes of his financial records, or whether they were payments made out of income the deceased received before it was recorded as income for the purposes of those records: p 30.
- [35]On the whole I consider the latter explanation the more likely, for two reasons: first, it would avoid a situation where the deceased was in effect paying tax on the income of his assistant,[32] so it is the more natural thing to do, and second, the analysis performed by Mr Green suggests that the income in fact being achieved by the deceased would have been achieved, at the rate the deceased was said to have been charging, with much less than fulltime hours,[33] although the evidence was that the deceased usually worked a fairly full day.[34] Of course some of this time would be spent travelling, and some spent dumping rubbish or otherwise on work that could not be charged for, but this analysis would be more consistent with a situation that, when the deceased had the assistance of Mr Fenech, he would split the payment with him before treating what he received as takings.[35]
- [36]I have the benefit of two reports from forensic accountants in relation to the lost dependency, one prepared on behalf of the plaintiff and one on behalf of the defendants: Exhibits 36, 48. Both of these reports were based on accounts for the business of the deceased prepared by his accountant, which are attached as Schedule 6, Appendix 5 respectfully. However, the figures in these do not quite correspond. To some extent this is because the information is presented in a different way, but there are expenses for subscriptions included in Exhibit 48 but not in the other version. Curiously, in two years the inclusion of these figures has the effect of increasing the expenses of the business, but in the third year the net profit figure is the same, but the figures for some of the expenses seem to be quite different. Although there is some critique of the approach in Exhibit 36 by the author of Exhibit 48, no reference was made to the omission of the subscriptions item.
- [37]The first difference between the accountants was as to the treatment of depreciation. The deceased’s accountant had claimed depreciation at the maximum available rate for tax purposes, so as to minimise tax liability. The plaintiff’s accountant proposed to add the figure for depreciation back into the balance so as to get the cash income, since in practice the amounts allowed by way of depreciation were available for ordinary living expenses.[36] On the other hand, the defendant’s accountant considered that allowance should be made for depreciation at the rate appropriate to the actual life of the items being depreciated; that is to say, some allowance should be made for depreciation, but not the amount made by the deceased’s accountant.[37]
- [38]The matter is complicated by the fact that there was some money borrowed for the purpose of setting up the business but those loans were fully paid out in the 2008-9 financial year: Exhibit 36, p 9. Accordingly, there would have been some expense incurred, whether out of the proceeds of the business or otherwise, to repay capital during this period, and the accelerated depreciation allowances would have assisted in reducing the burden of this. However, this had finished by the date of death, so none of the money coming in would in fact have been applied to capital expenditure, in the form of repaying loans used to finance that expenditure.
- [39]There is no reason to think that the deceased maintained a sinking fund for the purpose of financing capital replacement. Accordingly it appears to me that in practice the whole of the amount allowed in the accounts as depreciation was by the date of death not in fact required for that purpose, and therefore would have been used for the purposes of supporting the plaintiff and the deceased.[38] It is also relevant to bear in mind that the expense of interest would no longer have been applicable, and it was appropriate for this to be disregarded for the relevant periods in Exhibit 36.
- [40]The next issue on which the forensic accountants differed was that the defendants’ accountant took the view that the future earnings of the deceased should be based on a projection of the most recent earnings the deceased had actually achieved. He noted that the business growth rate had declined in 2009, as can be seen from Appendix 5, and inferred from this that the business was reaching its natural limit, and would not grow in the future. It is true that the growth rate fell off during that period, but this was the period when the plaintiff became ill, and the deceased had to take on to some extent a role of taking care of and supporting her.[39] There is a separate issue about the time this took, but obviously it took some time, and apart from that would have been a source of worry and distraction for him. He may well have felt that it was going to take more of his time, and it would be unwise to be trying to expand the business further until the situation had settled down.[40] It would be unsurprising if this affected the growth of the business during that financial year.
- [41]It appears that the plaintiff’s condition did not settle down very much prior to his passing, but the plaintiff is now doing more for herself (p 31), and no doubt as her position improved, particularly with an appropriate regime of medication, the deceased would have felt more confident about leaving her to go to work. There is also the consideration that Brisbane was in drought during that period, and the amount of work fell off for gardeners, particularly those whose focus was on mowing lawns, and would therefore have been less than in normal years. This would also affect the rate of growth of the business. The plaintiff said that the deceased had had flyers printed so that he could distribute them with a view to getting more customers: p 35.
- [42]It was also apparent from the analysis of the defendants’ accountant that, if the deceased was charging $60.00 an hour for his services, he must have been spending a fair bit of time each day on non-charging hours, given that he seems to have worked fairly long hours, on the plaintiff’s evidence: p 33. One explanation may be that the charge figure of $60.00 was not correct, or applied only for a limited time prior to the date of the accident. There was in evidence an invoice from the deceased dated 25 February 2009 when he charged the defendants $189.20 plus GST for two and a quarter hours work for two men, which on my calculations comes to about $84.00 per hour: Exhibit 45. It is possible that he charged $60.00 of this, and gave his offsider the balance, but it occurs to me that it is also possible that the division was different: On the whole therefore I think there was some room for expansion of the business,[41] and perhaps also some room to operate more efficiently, by picking up clients in areas close to where he had existing clients and replacing those that required additional travel time.
- [43]Overall therefore I do not think that the conclusion of the defendants’ accountant, that there would be no future growth in the business, was a reasonable one. The plaintiff’s accountant assumed that the business would continue growing to 2015, but not thereafter. On the other hand, the rate assumed was only 5 per cent per annum, a good deal less than the percentage achieved between 2007 and 2008, and I think a rate of growth of 5 per cent is reasonable.
- [44]It was submitted for the defendant that the big increase in the turnover in 2008 was due to the deceased’s taking on a helper. It is true that Mr Fenech said he worked with the deceased for about two years (p 62) but there was no precision about when he started, and he also said he worked three to four days a week. That he was taken on may have been an act of friendship, but it may also have been in response to the fact that the business was growing so well that the deceased felt that he needed assistance to keep up. Indeed, that seems a more plausible explanation. Besides, if Mr Fenech was paid before the money received was treated as income, as I think was more likely, the income figure in the accounts reflects the deceased’s share of income, and it was not necessary to make allowance for some unidentified portion of this being attributable to wages.
- [45]The plaintiff’s accountant had also assumed the expenses increased at the same rate, and it occurs to me that some of these expenses would be essentially fixed expenses, in the sense they would be costs which were not dependent upon the level of turnover. On the other hand, some fixed costs do rise from year to year anyway, so such a figure may well be realistic. I also note that the plaintiff’s accountant has made allowance for an amount of about $1,000.00 a year for asset renewal purposes, to cover the cost of replacing from time to time the smaller items of equipment. That seems realistic. I consider therefore that the approach of the plaintiff’s accountant to the question of projected earnings is a reasonable one. I accept his calculation, but will add into past loss the loss from February to June 2013, to get a total of $69,587.[42] Interest at 1.91%[43] from October 2009 comes to $5,090.50.
- [46]There are two issues remaining: the first of these is the appropriate period to allow for future loss. An age of 68 was suggested, essentially on the basis that it had originally been expected that the plaintiff would work until she was 65, and that she would be retiring at about that time: p 34. Of course the plaintiff left work earlier than that, and that if anything would have placed an additional financial pressure on the family,[44] which in turn might have encouraged the deceased to maintain the business for longer.
- [47]The plaintiff said that the deceased was the sort of person who was keen to work (p 37), and the inference is that he would probably have continued to work for as long as he could, though if he were still working into his 70’s it is likely that by then he would be reducing the amount of work done to allow for his advancing years. Prior to this accident the plaintiff was in good health: p 27. There is of course always a risk that something might have intervened, but on the other hand if he was still reasonably fit by age 68 it would be unsurprising if he continued to work on, so long as he felt up to it. On the whole, and making due allowance for the risks and possibilities, I think that the possibility of his continuing to work, at least to some extent, after 68 probably cancels out the risk of something occurring to prevent him from working to that age, or the possibility that he might simply have decided to stop or to begin tapering off at an earlier age. I think therefore that it is reasonable to calculate loss of future dependency on the assumption that that is the period he would be working.
- [48]This was calculated by the accountant at $71,827, but that figure was calculated as at the end of January 2013, and discounted to a present value on the 5 per cent tables. Some of this loss now falls into past loss, and the future component is to be discounted over a slightly shorter time. To simplify the calculations, I have modified the updated Schedule 1 in Exhibit 36, by treating the loss in the first line as included in past loss and the other losses in future loss, and discounting each by the discount factor in the line above. This produces a cumulative net present value for future loss of $67,003.94.[45]
- [49]The other issue is as to the sale of the business. It was assumed by the plaintiff’s accountant that the deceased, when he chose to give up the business, would be in a position to sell it as a going concern, along with the business equipment, for a total of $36,000: Exhibit 36, p 11. The defendant’s accountant on the other hand thought that the business had only a nominal value in terms of goodwill, and that it was not appropriate to take into account the value of the equipment because it was open to realise the value of the equipment anyway following the passing of the deceased. I think that the latter point is sound; indeed if I did not disregard any benefit from the sale of the equipment it might be necessary for me to deduct the benefit to the plaintiff as a result of having inherited the equipment.
- [50]The plaintiff’s accountant allowed $10,000 for equipment, and the real issue is whether his goodwill figure of $26,000 is realistic. It appears to be based on the sale of a gardening and mowing business with a work availability guarantee of $1,500 per week.[46] The assumed turnover figure by 2016 is actually somewhat greater than this, but the difficulty is just what is meant by a “work availability guarantee”. There is always a risk that some customers will not co-operate in any process of “selling” them, and I suspect that the real benefit of the guarantee is that it protects to some extent against that risk. I would not expect someone in the position of the deceased to offer such a guarantee, but simply to sell what he had on the basis that the purchaser was to take his chance of the customers’ staying on. That I think would justify a substantial discount from the figure of $26,000.
- [51]On the other hand, I think there is some real benefit for someone starting up a business like this to have an existing customer base, rather than to have to go out and canvass for customers from scratch; apart from anything else, you do not know whether there will be that many customers out there who will be interested in taking up the service. Not everyone has a paid gardener, and there are a lot of gardening businesses around, so presumably there is a fair bit of competition in this area. On the whole, I think that the customer list of an established business ought to have some value, as indeed the defendant’s accountant conceded. Doing the best I can I adopt the suggestion of the defendants’ accountant, of $10,000 for it.[47] The present value of that discounted at 5 per cent per annum is $8,428. The conventional percentage of this figure should be treated as dependency lost as well.
- [52]It follows that, subject to any discount for the vicissitudes of life, the total loss of future dependency of the plaintiff is $72,532.71. In view of the matters taken into account in calculating future earnings of the deceased to age 68, that is, the end of 2016, that factor has already been allowed for in my calculations, and whenever he stopped work, he could have sold the business, so I will not discount this further, and the total loss of dependency of the plaintiff is $142,119.71.
- [53]The next issue is the claim for loss of services. The deceased was providing care and support to the plaintiff during her illness, and she put in evidence a document setting out the different kinds of support provided, and how much time was involved: Exhibit 38. Under cross-examination the plaintiff in effect conceded that some of these figures could well have been lower: p 31-34. The first, financial management of the household, strikes me as a bit high given that there was no complicated financial management involved, and I think that an allowance of about half that amount is more realistic. The plaintiff was asked about some parts of the second item, and the figure may be a little high, though it includes accompanying the plaintiff on appointments, social activities and shopping trips, which could well be quite time consuming. This was in part because the plaintiff does not drive a car, but it may well have been also because of her illness, in that she would have needed support on these occasions. On the whole I would allow eight hours per week, but I suspect the time involved in social activities and shopping trips would be likely to be mostly for mutual benefit, and I will allow 50 per cent for mutual benefit. Much the same applies to the third item, household cleaning including washing and ironing: I think 8 hours is more realistic, all of which was for mutual benefit so 50 per cent should be apportioned to the plaintiff.
- [54]The deceased did all of the cooking as well as washing-up and other activities in the kitchen, including making porridge for breakfast and a cooked meal at night: p31. That could easily occupy nine hours per week, not much more than one hour per day, and again this was for mutual benefit. Item 5 is I think too high, bearing in mind that it does not include home maintenance or renovations, and I would allow two hours per week; the evidence was that it took the deceased about two hours when he mowed the lawn and did the edges, but he did not do that every week, and presumably on the other weeks equivalent time was spent on other yard maintenance: p 34. There was evidence that the deceased spent time on renovating the family home, as well as ordinary home maintenance, and in those circumstances I expect the final allowance of three hours per week is reasonable.
- [55]Overall therefore this suggests a period of 32 hours per week which was applied either to their mutual benefit or to the benefit of the plaintiff, and the plaintiff’s share of this, apportioned on the basis indicated for each item, comes to 18 hours per week. However, ultimately counsel for the plaintiff contended for only 17 hours per week, and in the circumstances I consider I should allow only that figure. It was agreed that the appropriate rate for loss of services was $22.50 per hour.
- [56]The defendant’s submissions in relation to damages for loss of services were limited to the proposition that the periods claimed by the plaintiff were too high: but there was no dispute that an allowance at that rate was properly payable for such time as was in fact applied by the deceased to the provision of services for the benefit of the plaintiff.[48] On the findings I have made, applying the agreed rate, this produces a weekly figure for lost services of $382.50. There has now been a period of about 200 weeks since the date of death, so past lost is assessed at $76,500. Interest is allowable at 1.91% per annum, in the sum of $5,596.20.
- [57]For future loss, the plaintiff claimed loss of dependency by reference to the deceased’s prospective lifespan and age, 64 on 8 October 2012. Since it is now some time since the end of the trial, I think it more appropriate to allow this calculation by reference to an age of 65 this year,[49] but otherwise following the methodology in the plaintiff’s outline,[50] which was not disputed in the submissions on behalf of the defendants, this produces a future loss of $261,630, subject to a discount for contingencies.
- [58]The plaintiff submitted that the only discount should be for the usual vicissitudes of life, a figure of 10 per cent. It appears to me however that there is another factor involved in the level of care provided: the deceased was providing much more care than would normally be provided because of the plaintiff’s illness, and there has already been some improvement in the plaintiff’s condition: p 31. In those circumstances I think it would be reasonable to expect that in time there could well be some further improvement, and this would reduce the need for care by the deceased. Because of this factor I think a greater discount should be allowed than the ordinary 10 per cent, and I will therefore discount the future loss by 20 per cent. This produces a figure for future loss of $209,304.
- [59]The claims for funeral expenses and special damages were not contentious. Accordingly the total loss is assessed at:
| Past loss of dependency | $69,587.00 |
| Interest thereon | $5,090.50 |
| Future loss of dependency | $72,532.71 |
| Past loss of services | $76,500.00 |
| Interest thereon | $5,596.20 |
| Future loss of services | $209,304.00 |
| Funeral expenses | $5,637.00 |
| Interest thereon | $824.73 |
| Special damages | $400.40 |
| Interest thereon | $43.36 |
TOTAL | $445,515.90 |
- [60]There will therefore be judgment that the defendants pay the plaintiff $445,515.90, including $11,554.79 by way of interest. When this judgment is delivered I will hear submissions as to costs, but unless there is some other relevant consideration the defendants should pay the plaintiff’s costs of and incidental to the proceeding to be assessed.
Footnotes
[1] Plaintiff p 26; Fenech p 67.
[2] Applying a commonsense test: March v E & MH Stramare Pty Ltd (1991) 171 CLR 506.
[3] Under Pt 4 of the Supreme Court Act 1995 then in place; the relevant provisions have been re-enacted in Pt 10 of the Civil Proceedings Act 2011.
[4] Pursuant to the Civil Proceedings Act 2011 s 66. As a procedural provision, this section applies to the existing proceeding, and ultimately this part of the claim was not the subject of any specific contention.
[5] When the deceased was in the pit, he could just reach up to its lip: Fenech p 70.
[6] The defendants have since sold the property on which this incident occurred.
[7] Exhibit 47. The defendants were aware of the easements; Mrs Johnson p 17, Mr Johnson p 39.
[8] Exhibit 47, report of Purcell, paras 9.1(b); 10.1(f).
[9] The corrosion on the grate, and the state of it and the cover, readily appear from the photographic exhibits. The defendants produced the actual grate and cover at the trial, though it is not apparent to me that anything was achieved as a result, and they were returned at the conclusion of the hearing.
[10] The area was renovated in about 2003: Craven p 39.
[11] Mr Johnson p 43; Mrs Johnson p 29, p 30.
[12] Craven p 39. They were not there on the date the sale to the defendants settled: p 53.
[13] Craven p 46.
[14] This was planted by the former owner in 2003: Craven p 34. In her day, the area would have been more readily visible.
[15] Mr Johnson p 42, 47; Mrs Johnson p 34, 35. They denied they had planted them: Mr Johnson p 42, Mrs Johnson p 34.
[16] Mr Johnson p 47; Mrs Johnson p 36.
[17] I accept they were not planted on the day of the accident: Fenech p 66. He and the deceased did not go back to the property: p 67.
[18] Craig p 75.
[19] The fact that they were sewerage pipes emerged only in the evidence of the last witness.
[20] The defendants denied they did this: Mr Johnson p 41, Mrs Johnson p 21.
[21] Mr Johnson denied anyone did gardening during this period: p 43.
[22] The previous owners were aware of it: Craven p 43. That a tenant of the property did not discover it does not demonstrate that ignorance was reasonable: Morgan p 57. While he was there the property maintenance was undertaken by the owners’ agents: Morgan p 56; Exhibit 46, invoices sent to the agents.
[23] See also Baker v Gilbert [2003] NSWCA 113 at [38].
[24] As in Short v Barret (1990) and Stannus v Graham (1994) discussed in Baker v Gilbert at [26] et seq.
[25] The previous gardener never trimmed those plants: Elsom p 52.
[26] He was safety conscious in his work: Fenech p 63.
[27] The plaintiff p 24 – he had previously worked in other occupations; Fenech p 61.
[28] French v QBE Insurance (Australia) Ltd [2011] QSC 105 at [223]. In this case there was no suggestion of any relevant gains.
[29] Assessment of Damages for Personal Injury and Death (4th ed 2002).
[30] This approach has been used in other recent cases: Thornton v Lessbrook Pty Ltd [2010] QSC 308; Schimke v Clements [2011] QSC 182.
[31] Plaintiff p 30.
[32] Unless Fenech had other income, he would not be paying tax on this level of income himself: Maynes p 4.
[33] Exhibit 48 p 14.
[34] Plaintiff p 33.
[35] This was also said by the plaintiff’s account to be what he suspected: Maynes p 4.
[36] Exhibit 36 p 9.
[37] Exhibit 48 p 15-16.
[38] In fact the plaintiff’s accountant allowed a small amount each year in the hypothetical future accounts for replacement of equipment which would have covered minor capital equipment, although not the work vehicle.
[39] Plaintiff p 25, 31-33.
[40] He had built up the business already from a low base after he took it over: plaintiff p 30.
[41] Maynes p 5.
[42] Exhibit 36, Schedule 2, $61,372 and $8,215.
[43] Half of 3.82%; see: http://www.rba.gov.au/statistics/tables/xls/f02d.xls?accessed=2013-09-03-13-26-51: Civil Liability Act s 60(3).
[44] The deceased had only a small amount of superannuation, as he had changed jobs during his life: plaintiff p 36.
[45] Strictly speaking this I think calculates the loss as at 1 July 2013. It is probably therefore a slight underestimate of the true figure, but it is as close as I can conveniently get.
[46] Exhibit 36 p 11; Maynes p 9-10.
[47] Exhibit 48 p 24. I am also taking into account the possibility that, if the deceased kept going for some time into his 70’s, he may allow his turnover to fall off as his capacity for work decreases.
[48] The requirements of the Civil Liability Act 2003 s 59A(2) appear to be met.
[49] Giving a life expectancy of 20.9 years.
[50] Using a multiplier of 684.