Allwood v Wilson & Anor [2011] QSC 180

Issue – the assessment of damages.

McMeekin J very helpfully sets out in the decision a number of principles to assist in assessing damages.

General Damages – the Procedure

[19] I am required to assess an injury scale value (“ISV”) for the injuries from the range of injury scale values set out in Sch 4 of the Regulation in order to determine the level of general damages (as defined) in accordance with the rules laid down in Part 2 of Sch 3 of the Regulation.[4]

[20] This case concerns multiple injuries. In such a case it is necessary to determine the dominant injury as it is defined[5], have regard to the range of ISVs applicable to that injury, determine where in the range of ISVs provided for that injury it should fall, and determine whether the maximum ISV in that range (“the maximum dominant ISV”) adequately reflects the adverse impact of all the injuries.[6] If the maximum dominant ISV is not sufficient then the ISV may be higher but not more than 100 and only rarely more than 25% above the maximum dominant ISV selected.[7] In arriving at an appropriate ISV the court needs to bear in mind that the effects of multiple injuries commonly overlap.[8]

[21] Whilst the regulations indicate that the purpose of the elaborate scheme set out there is to promote consistency in awards[9], sight must not be lost of the overriding purpose of the ISVs prescribed – to reflect the level of adverse impact of the injury on the injured person.[10]

[22] The court is required to have regard to the guidance provided by the provisions in Schedule 4 concerning its use in so far as they are relevant to the particular case but is not necessarily limited to those factors: Sch 3 s. 8.

[23] Additionally, in assessing an ISV, a court may have regard to other matters to the extent they are relevant in a particular case: Sch 3 s 9. The examples provided of other matters are the injured person’s age, degree of insight, life expectancy, pain, suffering and loss of amenities of life. In assessing an ISV for multiple injuries, the range for, and other provisions of schedule 4 in relation to, an injury other than the dominant injury of the multiple injuries can be considered.

[24] The extent of whole person impairment is an important consideration “but not the only consideration affecting the assessment of an ISV”: Sch 3 s 10. The dictionary defines “whole person impairment” (“WPI”) in relation to an injury as an estimate “… expressed as a percentage, of the impact of a permanent impairment caused by the injury on the injured person’s overall ability to perform activities of daily living other than employment.”

Past Economic Loss

[36] Mr Allwood has been a plant operator throughout his life. He holds numerous tickets qualifying him to operate plant, graders, loaders, backhoes and rollers. In 1980 he joined his father in an earth working business. In 1996 he and his wife commenced business in partnership. He has worked in the construction of rural roads, rural earth works and civil earthworks. He has performed contract work on commercial sites including bitumen spraying. His business has included the wet hire of equipment and operators. Tax returns going back to 1993 were tendered and demonstrate that he conducted a very successful business over the years and there is no reason to doubt his claim that he was highly experienced and hard working.

[37] The medical and lay evidence is plain that the consequences of the subject accident have had a very significant effect on Mr Allwood’s capacity to work as a plant operator. He tires easily. He is greatly restricted in what he can do. His concentration he says is affected by pain. His father gave compelling evidence of his difficulties in operating plant, difficulties that Mr Allwood Snr had observed. Mr Allwood Snr was an impressive witness.

[38] However the assessment of damages is considerably complicated by the two issues that I mentioned earlier – Mr Allwood’s separation from his wife and the asthma problems that he suffered. The asthma significantly restricted Mr Allwood’s capacity to work in the years before the subject accident. It seems likely that the separation had a significant effect on him as well. In the year ended 30 June 2006 the partnership Profit and Loss statement shows gross earnings of $92,397.95 – a 40% drop in earnings from the previous year. The business recorded a loss of $4,454. In the 2007 year the gross earnings were much worse again at $43,701 and the net profit before tax $7,911. No financial papers were available for the 2008 year. Mr Allwood says that all papers are with an accountant but are under the control of his wife and there is no co-operation, or indeed trust.

[39] The defendant submitted that these figures, immediately predating the year of the subject accident, are the best guide to the prospective earnings and any assessment had to be extremely modest. My attention was drawn to the statements of principle by Thomas JA in McDonald v FAI General Insurance Company Limited [1995] QCA 436. His Honour was there in the minority in not allowing any damages for economic loss past or future. Nonetheless there is no reason to doubt the principles discussed. Thomas JA said[11]:

“It is helpful to see assessments of this kind as part of a wider spectrum of marginal cases such as those where appropriate proof is lacking, cases where the evidence leaves the Court in such a state of speculation that either nil damages or low damages are the result, through cases where the issues are of their very nature incapable of precise proof and the Court does the best it can on the available material.

In a case where damage is capable of precise proof, and a plaintiff fails to produce such proof, no assessment (or a nil assessment) will be made (Sunley and Co v Cunard [1940] 1 KB 740, 747; Woodham v Rasmussen (1953) St.R.Qd. 202, 215; Holmes v Jones [1907] HCA 35; (1907) 4 CLR 1692, 1703, 1717; Ted Brown Quarries v General Quarries (1977) 16 ALR 23 37). In cases where some loss has apparently been suffered but the plaintiff has failed to take the trouble to produce evidence that would reasonably be expected to be available, no more than a very conservative estimate of damages will be made (Minchin v Public Curator (1965) ALR 91, 93; Ashcroft v Curtin [1971] 3 All ER 1208; Aerial Advertising Co v Batchelors Peas [1938] 2 All ER 788, 796). This may be contrasted with the familiar exercise of assessing damages upon issues which of their very nature are incapable of precise proof, such as future economic loss, and, quite frequently, past economic loss, where the Courts do the best they can on necessarily imprecise matter. (Malec (above); Chaplin v Hicks [1911] 2 KB 786, 795; Wheeler v Riverside Coal Transport [1964] Qd.R. 113, 124; Biggen and Co v Permanite Ltd [1951] 1 KB 422, 438, 447). Even in cases of that kind a plaintiff is expected to place before the Court the essential facts upon which the necessary inferences and projections are to be made. There is no difference in the approach of the Courts according to whether the case is based on contract or tort. In all cases the extent of proof required depends upon the nature of the issue to be proved.”

[40] However the evidence here is far removed from the situation in McDonald of which Thomas JA was speaking. Here there is ample evidence demonstrating not only that the plaintiff had a fine pre accident work history and was capable of generating a very significant income, but further that there was ample work available for a man of his skills since the subject accident and reasons were given for the poor performance of his business in the two years highlighted by the defendant. That is not to say that the plaintiff’s poor health and domestic situation may not be discounting factors. But they do not justify an assumption of only very modest potential earnings.

Past Economic Loss

[36] Mr Allwood has been a plant operator throughout his life. He holds numerous tickets qualifying him to operate plant, graders, loaders, backhoes and rollers. In 1980 he joined his father in an earth working business. In 1996 he and his wife commenced business in partnership. He has worked in the construction of rural roads, rural earth works and civil earthworks. He has performed contract work on commercial sites including bitumen spraying. His business has included the wet hire of equipment and operators. Tax returns going back to 1993 were tendered and demonstrate that he conducted a very successful business over the years and there is no reason to doubt his claim that he was highly experienced and hard working.

[37] The medical and lay evidence is plain that the consequences of the subject accident have had a very significant effect on Mr Allwood’s capacity to work as a plant operator. He tires easily. He is greatly restricted in what he can do. His concentration he says is affected by pain. His father gave compelling evidence of his difficulties in operating plant, difficulties that Mr Allwood Snr had observed. Mr Allwood Snr was an impressive witness.

[38] However the assessment of damages is considerably complicated by the two issues that I mentioned earlier – Mr Allwood’s separation from his wife and the asthma problems that he suffered. The asthma significantly restricted Mr Allwood’s capacity to work in the years before the subject accident. It seems likely that the separation had a significant effect on him as well. In the year ended 30 June 2006 the partnership Profit and Loss statement shows gross earnings of $92,397.95 – a 40% drop in earnings from the previous year. The business recorded a loss of $4,454. In the 2007 year the gross earnings were much worse again at $43,701 and the net profit before tax $7,911. No financial papers were available for the 2008 year. Mr Allwood says that all papers are with an accountant but are under the control of his wife and there is no co-operation, or indeed trust.

[39] The defendant submitted that these figures, immediately predating the year of the subject accident, are the best guide to the prospective earnings and any assessment had to be extremely modest. My attention was drawn to the statements of principle by Thomas JA in McDonald v FAI General Insurance Company Limited [1995] QCA 436. His Honour was there in the minority in not allowing any damages for economic loss past or future. Nonetheless there is no reason to doubt the principles discussed. Thomas JA said[11]:

“It is helpful to see assessments of this kind as part of a wider spectrum of marginal cases such as those where appropriate proof is lacking, cases where the evidence leaves the Court in such a state of speculation that either nil damages or low damages are the result, through cases where the issues are of their very nature incapable of precise proof and the Court does the best it can on the available material.

In a case where damage is capable of precise proof, and a plaintiff fails to produce such proof, no assessment (or a nil assessment) will be made (Sunley and Co v Cunard [1940] 1 KB 740, 747; Woodham v Rasmussen (1953) St.R.Qd. 202, 215; Holmes v Jones [1907] HCA 35; (1907) 4 CLR 1692, 1703, 1717; Ted Brown Quarries v General Quarries (1977) 16 ALR 23 37). In cases where some loss has apparently been suffered but the plaintiff has failed to take the trouble to produce evidence that would reasonably be expected to be available, no more than a very conservative estimate of damages will be made (Minchin v Public Curator (1965) ALR 91, 93; Ashcroft v Curtin [1971] 3 All ER 1208; Aerial Advertising Co v Batchelors Peas [1938] 2 All ER 788, 796). This may be contrasted with the familiar exercise of assessing damages upon issues which of their very nature are incapable of precise proof, such as future economic loss, and, quite frequently, past economic loss, where the Courts do the best they can on necessarily imprecise matter. (Malec (above); Chaplin v Hicks [1911] 2 KB 786, 795; Wheeler v Riverside Coal Transport [1964] Qd.R. 113, 124; Biggen and Co v Permanite Ltd [1951] 1 KB 422, 438, 447). Even in cases of that kind a plaintiff is expected to place before the Court the essential facts upon which the necessary inferences and projections are to be made. There is no difference in the approach of the Courts according to whether the case is based on contract or tort. In all cases the extent of proof required depends upon the nature of the issue to be proved.”

[40] However the evidence here is far removed from the situation in McDonald of which Thomas JA was speaking. Here there is ample evidence demonstrating not only that the plaintiff had a fine pre accident work history and was capable of generating a very significant income, but further that there was ample work available for a man of his skills since the subject accident and reasons were given for the poor performance of his business in the two years highlighted by the defendant. That is not to say that the plaintiff’s poor health and domestic situation may not be discounting factors. But they do not justify an assumption of only very modest potential earnings.

[58] A check on the hypothetical exercise performed by Vincents can be found in the detail that Mr Allwood has supplied about the work he was doing. Mr Allwood says that during 2007 and into 2008 he was working for a company Platinum Earthworks Pty Ltd as a grader operator up to 2-3 days at a time as well as with Epoca Constructions. He was paid $26 per hour labour only by Platinum Earthworks. As well he worked in his own business. He says in his quantum statement that he could work up to 30 hours per week but as I have mentioned he told the accountants he could work only 20 hours per week. That suggests an earnings capacity of around $520 to $780 gross per week or $460 to $650 net after tax. I assume that the income postulated by the plaintiff in his submission ($1,077 net per week) represents a reasonable estimate of his unimpeded earning capacity.

[59] I am conscious that larger incomes are available in the mining industry[25] but Mr Allwood did not seem attracted to that work,[26] at least not on a full time basis and was not shown to have black coal competencies. I am conscious too of the claim that Mr Allwood was offered work by Platinum Earthworks at $55 per hour[27] but he did not take up this work. It seems to me too speculative to assume the offer would have supported any long term employment. Certainly Mr Allwood did not find it attractive.

[60] There are three further factors relevant to the claim for past loss of earnings – the availability of work, the motivation to work, and the limited residual capacity that Mr Allwood had. The Vincent report prepared in August 2010 does support the claim that there was ample work available to plant operators since mid 2008 – I refer to the long term forecast published by the Construction Forecasting Council.[28] So does the evidence of Mr Muller from Legra Mining Services. Demand in the mining industry has fluctuated but is presently high and has previously been high.[29] While Mr Allwood may not have involved himself in that work the attractive rates of pay available in the mining industry would have the tendency to reduce competition in areas that did interest Mr Allwood.

[61] Dr Chalk says that Mr Allwood was not depressed at the time he assessed him in November 2010.[30] That indicates a recovery from the situation in mid 2008. By that time there seems to be no reason why Mr Allwood would not have been capable of full time work but for the consequences of the subject accident. Whether his motivation would have continued to be affected by his ongoing and bitter matrimonial dispute is unclear to me. That aspect of Mr Allwood’s life has certainly not resolved.

[62] Mr Allwood has a residual capacity as evidenced by the limited work that he has attempted. However, he is not commercially employable. He has been of only limited assistance to his 74 year old father. He has performed work for charities but the working hours would seem to be well short of a commercially viable level.

[63] Doing the best I can on uncertain materials I assess the past loss at $110,000. Essentially I have taken what I consider to be Mr Allwood’s best case – unimpeded earning capacity from the date of the accident adopting the Vincents’ calculation[31] – and discounted that figure by about 35% to reflect the restrictions on earning capacity that would have been present in any case, the potentially limited motivation to maximise earnings and the limited residual capacity that he has had since attaining optimal recovery post accident. Alternatively one could assume earnings at 20 hours per week initially, gradually increasing over time, to full capacity in the relatively recent past. The result is much the same.

Future Economic Loss

[64] The significant issue for the assessment of the future is assessing the impact of hip replacement surgery that Mr Allwood will have as soon as he can. It is likely to be successful and if successful will markedly increase his function.

[65] There was a debate about the capacities that Mr Allwood would probably have following successful surgery. While both the orthopaedic surgeons who gave evidence were plainly experienced and knowledgeable, I was particularly impressed with Dr Journeaux’s evident great experience with the surgery in question[32] and on patients of a similar age to the plaintiff.

[66] With successful surgery, and there is a 5% risk of failure, Mr Allwood could potentially return to full employment as a plant operator. He may have difficulties with everyday aspects of the work such as accessing the machines, loading and unloading items, getting under machinery and into confined spaces. Then again he may not. The probability is that those difficulties, if there are any, would not prevent him from performing those tasks but rather render them more difficult and time consuming.

[67] Dr Journeaux pointed out that he has operated on linesman who are required to work up and down power poles and carry heavy equipment over uneven ground – work “that would be regarded as heavy work in the occupational dictionary of titles” as he put it[33] – who have returned to full employment.

[68] Mrs Coles, the occupational therapist, was cautious about Mr Allwood returning to plant operating and no doubt there are risks. But I have little doubt that Mr Allwood will be very attracted to returning to his plant operating activities as soon as he can. I am satisfied that with successful surgery he will very likely be able to. He will need to take some care. The award must protect him from the chance of risks eventuating, his probable slower pace and the risk that the surgery will not be as successful as I anticipate: Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638.

[69] I observe that Mr Allwood is not suited to alternative forms of work particularly given his age and background. That is not to say that he would be unemployable but any employment he would be likely to obtain would not be congenial or particularly remunerative.

[70] With modern materials and techniques Mr Allwood could expect to need a revision of the surgery in about 15 years.

[71] The defendant contends for an assessment of $60,700 based on $300 per week for 26 weeks to cover Mr Allwood for lost earnings until he can have and recover from surgery and thereafter an assumed loss of $100 per week for 14 years to take Mr Allwood to a retirement age of 65.

[72] The plaintiff contends for an assessment of $375,000 based again on Vincents’ calculations (ie $1,077 net per week), applied to age 67 years and discounted by 40% to allow for contingencies and residual capacity. The plaintiff points out that his father is working as a plant operator at 74 years of age, albeit semi retired.

[73] I will assume that but for the subject accident Mr Allwood would be maximising his earning capacity now. I assume that he will have surgery in the near future and that his convalescence will take some three months. Obviously there would be a gradual return to full earnings as he would need to get his business back on its feet. For this period I will allow $1,077 net per week for 26 weeks with some discounting for the future aspect of the loss – an assessment of $25,000.

[74] I will allow a global sum to reflect the various possibilities to age 65 years. There is the risk of total failure initially as well as the chance of failure along the way.[34] I will allow $50,000 for these possibilities. While any attempt at precision is probably misleading I have allowed about $30,000[35] for the possibility of initial failure and the balance for the chance of failure along the way.

[75] For the chance of restrictions despite a successful outcome I can only assess a global sum. The range seems to be from nil restriction, an unlikely outcome, to a need to limit the range of machinery driven to avoid climbing and difficult tasks. I will allow $120,000 bearing in mind the potential for these matters to overlap and for the consequent risk of double counting.

[76] I have been considering the loss to age 65 years as reflecting a prospective retirement date. There is the possibility that if he had not suffered this injury the plaintiff would have wished to work on, like his father. He is much less likely to do so now given the need for revision of the hip replacement surgery at about that time. On the other hand he might be well enough to do so – the chance is not negligible. I will allow $25,000 for the potential loss from 65 years on.[36]

[77] I assess the future loss of earning capacity at $220,000.

[82] The need for such services is a compensable loss and that loss is measured by, in general, the market cost of providing the services: Van Gervan v Fenton.[37] The parties were agreed that the market cost of provision of services was $27 per hour for the past claim and $29 per hour for the future claim.

[83] It was submitted that the plaintiff had failed to demonstrate that services were required when in hospital as s 59(4)(b) requires. That is so.

[84] The defendant submitted that no further amounts should be allowed, other than those I have mentioned, by reason of s 59(1)(a) and (b) and s59(3). While those provisions clearly require some moderation of the award they do not require a nil assessment.

[85] For the period immediately following discharge from hospital, Mr Allwood was significantly disabled. He lived in his mother’s residence. He needed assistance with showering and toileting, meal preparation, driving to and from hospital, washing, ironing and grocery shopping. As is evident from Mrs Allwood’s evidence she managed to combine many of these tasks with those of the household generally. The defendant’s submission assumes a need for 6 hours care per week and I think that no more is justified.

[86] For the period of about four months thereafter until Mr Allwood became ambulant his need for assistance increased – he was no longer living in his mother’s home but he still required help with cooking, travelling, cleaning, washing and ironing. No longer could Mrs Allwood combine her chores to minimise the extra services her son needed. I would assess the need then at about eight hours per week.

[87] Thereafter a considerable difficulty is that while the evidence of Mrs Allwood would justify the amounts the plaintiff claims it is evident that she is undertaking tasks that he can do himself albeit that he may have to take his time and spread chores out over the week. Mr Allwood has demonstrated a capacity to shovel and lay pipes for between 30 minutes and two hours.[38] That being so it is difficult to accept that normal household chores are beyond him. Clearly Mrs Allwood provides companionship for him. I am satisfied that there was a modest need for services after becoming ambulant but not at the same level. That the services may have fallen below the six hour per week level mentioned in s 59(1)(c) is not a difficulty: Kriz v King [2006] QCA 351; [2007] 1 Qd R 327.

[88] Further it seems clear that Mr Allwood is deteriorating and his present need is probably greater than at an earlier time. I accept Mr Allwood’s complaint that he cannot mow – he lives on a 100 acre block – and the evidence is consistent that he would have difficulty with heavier domestic chores. I assess the need at about three hours per week averaged over the entire period.

[89] I assess this head of loss at $15,600.[39]

Future Gratuitous Assistance

[90] Until Mr Allwood has the hip replacement surgery he will continue to need some assistance. While I assume the surgery will occur relatively soon there will inevitably be some delay. After the surgery he will be considerably disabled through his convalescent period.

[91] I will assume a need for assistance at four hours per week leading up to surgery, say for two months and then eight hours per week thereafter for three months. I will allow $3,900 adopting the agreed rate of $29 per hour.

[92] If the surgery is successful then Mr Allwood would have a very limited need for any assistance thereafter – perhaps only for the heaviest domestic chores. I would assess that at about one hour per fortnight. For the next 15 years I would allow $8,050.

[93] The surgery may not be successful and that chance is not so small that it can be disregarded. I will allow $7,500.[40]

[94] There will be a probable revision of surgery in 15 years time and an increased need for help leading up to the surgery and during convalescence. I will allow $1,900, adopting the same assumptions as for the first surgery but deferring the amount by 15 years adopting a 5% discount rate.[41]

[95] The plaintiff’s life expectancy is about 34 years. For the remainder of the statistical life expectancy I will assume a continuing need at about one hour per fortnight and allow $4,500.

[96] I assess the future component at $25,850

Summary

[102] In summary I assess the damages as follows:

Pain, suffering and loss of amenities of life $45,000.00
Past economic loss $110,000.00
Interest on past economic loss[44] $9,307.00
Future loss of earning capacity $220,000.00
Past gratuitous services[45] $15,600.00
Future gratuitous assistance $25,850.00
Miscellaneous future expenses $43,500.00
Special damages $4,600.80
Interest on special damages[46] $313.00
Total Damages $474,170.80

 

Brisbane Barrister – David Cormack

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