MVA: 17 year old – loss of earning capacity & credit issues

Reitano v Shearer [2014] QCA 336

Holmes JA delivered the judgment with whom Fraser JA and Philipides J concurred.

Liability was not in issue for the motor vehicle incident. The Appellant/Plaintiff was 17 years of age at the time and sustained a prolapse at her T10-11 in the context of advanced pre-existing degeneration in her thoracic spine.

The trial judge made adverse credit findings of the Plaintiff.

On appeal her Honour found nevertheless an error in the allowance for General Damages, but whilst it increased future special damages, it did not translate into increased lost earning capacity. By the same token, the allowance was not set aside despite the trial judge having failed to set out the methodology in s 55(3) of the Civil Liability Act. Similarly, despite the credit issues and lack precision as to the productive cause for the lost earning capacity, her Honour did not set aside as sufficient the trial finding:

“cause her intermittent pain and suffering into the future … occasionally … productive of lost income. [It was] likely to cause pain and restriction at work and in life from time to time…”[5]

Holmes JA

Future economic loss

[4] The trial judge did not accept that the appellant had any serious intention to pursue a career as a journalist. Nor did he accept any medical opinion as to limitations on her capacity to earn income, given that it was based on her own account. The appellant had completed a degree with a major in psychology and was undertaking a master’s qualification in human resources. His Honour considered that any disability caused by the accident would not significantly interfere with her capacity to pursue a career in that area.

[5] However, the trial judge accepted that the appellant’s injury might:

“cause her intermittent pain and suffering into the future … occasionally … productive of lost income. [It was] likely to cause pain and restriction at work and in life from time to time…”[5]

It was impossible, his Honour considered, to say with any precision to what extent the appellant’s pre-existing spinal degeneration was responsible for her injury, as opposed to the accident, or the degree of acceleration or aggravation of the injury by the accident. However, the possibility of the appellant’s suffering from a painful condition in her thoracic spine, independent of the accident, was a contingency to be taken into account. Having assessed past economic loss, his Honour went on to say:

“A similar lump sum or global assessment for future economic loss is also indicated for the same reasons. The plaintiff is a young woman and has approximately 44.5 years before a notional retirement age at 67. In my view there is a probability that the plaintiff’s injury will be productive of economic loss in the future though I do not consider that the loss will be significant in terms of the capacity to perform the sort of work to which her tertiary education is directed. In the circumstances I assess that loss at $75,000.”[6]

[6] The appellant complained that the trial judge had not complied with s 55(3) of the Civil Liability Act, which provides that, where an award of damages is to be made for a loss of earnings which is incapable of precise calculation,

“the court must state the assumptions on which the award is based and the methodology it used to arrive at the award”.

It was contended that the award of $75,000 could not properly represent the appellant’s future economic loss, given that she was only 17 when injured, with a long working life ahead. By way of illustration, it was said, the $75,000 figure would represent an eight per cent chance of a loss of $1200 net per week, discounted by a further 20 per cent for the contingency of the appellant’s having arrived at the same physical state by reason of her existing degeneration.

[7] It is plain that the trial judge set out the assumptions on which he awarded economic loss; but he did not articulate any particular methodology by which he arrived at the $75,000 figure. The failure to state methodology does not necessarily invalidate an assessment, although it may cause the court “to scrutinise the award rather more closely than ordinarily it would do…”.[7] In the present case, there were a number of ways in which one might reasonably arrive at a figure, without any one of them having superior validity.

[8] The trial judge’s conclusions as to the nature of the injury, its context and its significance for the future were not challenged. Having regard to them, the figure of $75,000 over 44.5 years can readily be justified. It represents an allowance of roughly $4100 per year on the five per cent table; about four weeks loss of income a year on the figure which the appellant contended at trial would represent her nett earnings as a journalist or psychologist. That assessment broadly, and relatively generously, reflects his Honour’s conclusion that there might occasionally be some income loss attributable to the injury.

[9] On the trial judge’s findings, I do not consider that the award of damages for future economic loss was inadequate.

David Cormack – Brisbane Barrister & Mediator

 

 

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