WCRA: Phillips v MCG appeal – assessment of damages

Phillips v MCG Group Pty Ltd [2013] QCA 83

JUDGES: Fraser   and White JJA and Daubney JSeparate reasons   for judgment of each member  of the Court, each concurring as to the order made
ORDER: Appeal   dismissed with costs.
CATCHWORDS: DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT   – MEASURE OF DAMAGES – PERSONAL INJURIES – NON- PECUNIARY  DAMAGE    –    PAIN    AND  SUFFERING    –where appellant suffered spinal injury while working for   respondent as scraper driver on mine site – where respondent   accepted liability – where appellant had prior spinal injury in different part of lumbar spine to latter   injury – where parties   in dispute about how much pain attributable to latter injury – whether error is identifiable in primary judge’s assessment of general   damages – where appellant   had no residual earning capacity after   injury – where parties in dispute about   what employment the appellant would   otherwise have had between injury and judgment – whether   error is identifiable in primary judge’s assessment of damages for   loss of earning   capacity, such   as double discounting   – where parties in dispute about   what employment the   appellant would   have otherwise   had for the remainder of his working life – where   parties in dispute about date appellant would   otherwise have   retired – whether error is identifiable in primary judge’s assessment   of damages for   loss of future earning capacity

White J

Discussion

  1. Her Honour was correct to conclude that the submissions on behalf of the appellant did not reflect the reality of the situation. Indeed, denying that he experienced any difficulty or pain doing the many activities which he enjoyed – for example, that doing all the renovation work in the garden did not aggravate his back, nor any of the other recreational activities that he enjoyed, nor any of the work which he carried out, – was neither consistent with his presentation to Dr Clubb nor the other notifications referred to in Dr Senior’s notes (mentioned above at [23]). It is true that he expressed more optimism to Dr Cassar in 2004. But the appellant’s enjoyment of life was diminished by the accident because he had managed a relatively active lifestyle formerly which was no longer achievable.
  2. The compensatory principle which applies to the assessment of damages for personal injury is relatively limited in its exactness. As long as the trial judge makes an assessment which is, in all the circumstances, reasonable and takes into account the relevant evidence and is broadly comparable with like awards there can be no complaint of error. That another judge might have awarded $10,000 more or less does not lead to appellate intervention provided the process is correct. There is no error identified in her Honour’s assessment of general damages.

Past economic loss

  1. It was uncontentious that the appellant had no residual earning capacity after he was injured at the mine site. The appellant advanced a case below that he would have continued to work as a scraper driver, or advanced to higher paying positions in the mine, and would have remained working in one or other capacities to the age of 67.
  2. The respondent contended below that even though it had employed the appellant after assessment by its own medical assessors, he was not qualified to work in the industry because of his pre-existing back condition and the medication regime under which he operated. The respondent based this contention on the appellant’s misleading statements about the effect of his prior injury and his work history. The primary judge found that the mine doctors were concerned to evaluate only the appellant’s functionality for the job of a machine operator. Her Honour noted that the plaintiff had disclosed his significant narcotic medication. It was well understood that drug screening occurred in the mines. He did misstate the extent and nature of his immediate work history orally and in his application resume, but her Honour concluded that his actual experience and qualifications did fit him for the job as a scraper driver. She referred to the fact that he was able to perform the training, and ride his motorcycle the 800 kilometres to the mine site, to take up the job.
  3. Her Honour concluded:

    “I therefore reject the defendant’s contention that the plaintiff was not qualified for employment as a scraper driver, but I proceed on the basis that the reality of the plaintiff’s pain from his pre-existing back injury, his extensive medication regime, and his work history in the preceding 10 years meant that he was unlikely to continue at that job for any length of time.”[34]

    Her Honour continued:

    “Although the fact that the defendant ceased its operations at the subject mine site on 22 December 2009 did not necessarily mean that that would be the end of the plaintiff’s employment on a mine site if he would have managed to remain employed until then, his prospects of continuing to work on a mine site must have been extremely limited or minimal, so as not to be worth quantifying.”[35]

    It is those two propositions which the appellant principally attacks on the basis that neither is supported by the evidence.

  4. Her Honour correctly set out the principles applicable to the assessment of damages for loss of earning capacity between the date of the accident and judgment. Her Honour noted that this case raised the application of Malec v JC Hutton Pty Ltd.[36] The appellant had contended below that the approach in Purkess v Crittenden[37], as applied in Hopkins v WorkCover Queensland[38], should be applied. The respondent sought an approach similar to that applied by McMeekin J in Bell v Mastermyne Pty Ltd.[39]
  5. In Seltsam Pty Ltd v Ghaleb[40] Ipp JA, with whom Mason P agreed[41], said:

    “104 What was said in Watts v Rake and Purkess v Crittenden now has to be qualified by these principles (cf Commonwealth of Australia v Elliott [2004] NSWCA 360 at [81]). Malec has an important bearing, for example, on the way in which a court must determine whether a defendant has discharged the “disentangling” evidentiary burden on it of showing that part of the plaintiff’s condition was traceable to causes other than the accident and that, had there been no accident, the plaintiff would have suffered disability from his pre-existing condition.

    105 Where a defendant alleges that the plaintiff suffered from a pre-existing condition, the evidential onus as explained in Watts v Rake and Purkess v Crittenden remains on the defendant and must be discharged by it. Nevertheless, to the extent that the issues involve hypothetical situations of the past, future effects of physical injury or degeneration, and the chance of future or hypothetical events occurring, the exercise of “disentanglement” discussed in those cases is more easily achieved. That is because the court is required to evaluate possibilities in these situations – not proof on a balance of probabilities.

    106 Without intending to give an exhaustive list of possibilities, it may be that, had the defendant’s negligent act not occurred, a pre-existing condition might have given rise to the possibility that the plaintiff’s enjoyment of life and ability to work would have been reduced and to a susceptibility to further injury; in addition, other causes entirely unrelated to the defendant’s negligent act might have contributed to the plaintiff’s ultimate condition.

    107 Appropriate allowances must be made for these contingencies. A proper assessment of damages requires the making of a judgment as to the economic and other consequences which might have been caused by a worsening of a pre-existing condition, had the plaintiff not been injured by the defendant’s negligence. A pre-existing condition proved to have possible ongoing harmful consequences (capable of reasonable definition) to the plaintiff, even without any negligent conduct on the part of the defendant, cannot be disregarded in arriving at proper compensation.

    108 As was pointed out in Newell v Lucas [1964-5] NSWR 1597 (at 1601 per Walsh J, with whose judgment Hardie and Asprey JJ agreed), the court must determine whether a comparison may be made between the plaintiff’s condition prior to the injuries sustained by the defendant’s negligence (including the plaintiff’s economic and other prospects in that condition) and the plaintiff’s condition and prospects after the injuries. Nothing in Watts v Rake and Purkess v Crittenden precludes the judge from carrying out this exercise.

    109 Of course, if the evidence does not adequately establish the pre-existing condition or its possible consequences (as was the case in Purkess v Crittenden), it would not be possible to carry out such a comparison and assessment. In regard to the possible consequences, a scintilla of evidence would not suffice. The evidence must be such that a reasonable person could draw from it the inference that the possible consequences contended for by the defendant existed (see McCormick, Evidence, 5th ed, para 338, p511).”


    [34] AR 711; reasons [55].

    [35] AR 711; reasons [56].

    [36] (1990) 169 CLR 638.

    [37] (1965) 114 CLR 164 at 168.

    [38] [2004] QCA 155.

    [39] [2008] QSC 331.

    [40] [2005] NSWCA 208.

    [41] Basten JA dissented but not with respect to the principles enunciated by Ipp JA.


  6. In that case a claimant in the Dust Diseases Tribunal alleged that his employers had negligently caused him to be exposed to asbestos so that he suffered pleural disease. The defendants contended that the claimant suffered from another restrictive condition that was pre-existing and affected his lung functioning: obesity. It was therefore for the employer to demonstrate that the claimant’s pre-existing condition was a contributing factor to his injury.
  7. Here the appellant accepted that he had a greater vulnerability because of the state of his lumbar spine.
  8. The primary judge’s approach to this issue was conventional. She found of assistance McMeekin J’s approach in Bell v Mastermyne. McMeekin J discounted an employee’s past economic loss in the mining industry to 10 per cent. This was because he had a pre-existing degenerative spinal disorder and also suffered from Crohn’s disease. His Honour then discounted the calculated amount by 35 per cent.
  9. Here, the parties were in agreement about the calculations. They also agreed that there had been a high demand for truck drivers and plant operators in Central Queensland. The case advanced below for the appellant for past economic loss was a calculation of the wages he would have earned if he had graduated to driving trucks at the mine site. That resulted in past economic loss to the date of trial of about $280,000. An alternative calculation was on the basis of the maintenance of the existing employment as a scraper driver which resulted in a figure of $190,000. Damages for past economic loss were sought in the sum of $240,000. That sum is maintained on this appeal.
  10. Below the respondent relied on the approach in Bell v Mastermyne and contended that the appellant’s prospects of staying in the mining industry were no more than 10 per cent. The respondent submitted that the date at which the respondent’s mine closed was the appropriate date to calculate loss of earning capacity, that is, 22 December 2009. Thereafter, the respondent allowed a likely wage that the appellant could have earned as a taxi driver. Without setting out those calculations, which are in her Honour’s reasons, past economic loss contended for by the respondent below was approximately $100,000. The respondent’s alternative calculation was on the basis that the appellant retained mine site employment to the date of trial in the figure of $214,500, applied 10 per cent to that figure and added 90 per cent of what he would have earned as a taxi driver. This resulted in a figure of about $110,000. This, her Honour observed, was “the high end of the plaintiff’s calculation of past economic loss”.
  11. Her Honour observed:

    “Just as McMeekin J recognised in Bell at [95] the artificiality of the exercise that was undertaken in that case in calculating economic loss for a plaintiff based on full employment in the mining industry where the plaintiff had been injured after a very short time working at a mine site and that calculation bore no relationship to the plaintiff’s prior earnings, I have the same difficulty in this case.”[42]

  12. Her Honour noted that the appellant was tenacious in obtaining the job and was technically capable of carrying it out for the two weeks before the accident, however:

    “…his aspirations for continuing that work have to be tempered by the reality of his pre-existing condition that meant he suffered from chronic lower back pain, his medication regime and his prior work history to which I have already referred in detail.”[43]

  13. Her Honour mentioned alternate ways of approaching the calculation of damages for past economic loss but said:

    “Although it is arbitrary in some respects, it accords better with the conclusion that I have reached about the plaintiff’s real prospects of continuing to work on a mine site in the medium to long term to do the calculations on the basis of what he could have earned on the mine site until the defendant ceased its operations and after that by calculating lost earnings on the basis of the average of what he earned from the Mac Services Group and as a taxi driver, taking into account the percentage increases in average Queensland earnings from the Australian Bureau of Statistics Figures that are shown in exhibit 30.”[44]

    Her Honour then proceeded to assess damages on the basis that the appellant earned $17,468 in 24 weeks with the Mac Services Group and $29,996 for one year as a taxi driver, his average weekly net wage was $625. Before discount this amounted to $154,066. Her Honour said:

    “Having regard to this manner of calculation, the discount that I will apply to reflect the Malec approach and the vicissitudes of life is 20 percent. That results in damages for past loss of earning capacity of $123,000.”[45]

  14. The appellant is critical of this approach on the basis that the primary judge has treated as certain the cessation of mining employment after the closure of the respondent’s mine site; that her Honour erred in using the average of the employment with Mac Services Group and as a taxi driver, because the appellant actually had a higher capacity for work than those figures would suggest; and her Honour had engaged in double discounting, which led to a discount of 20 per cent rather than 12 per cent.

Discussion

  1. In postulating that the appellant would work to the closure of the mine, the primary judge was using that event as a sensible device for measuring the chance of continuing employment in the mining industry – a period of some 16 months. Inherent in that conclusion is all that had gone before in her Honour’s reasons – the appellant’s prior back injury resulting in significant debilitating pain which made daily life manageable only with a high dosage of medication; his past “patchy” employment history; and his increased vulnerability to trauma. Apart from those few days at the mine, there was no evidence over the previous 18 years of a capacity to achieve higher wages than the average selected by her Honour. There was no double discounting; as her Honour evaluated the chance that the appellant would not maintain regular employment through the period after the closure of the mine, even at the rate of his pre-mine site employment (which had been selected by her Honour as the appropriate measure for calculations).
  2. In Koven v Hail Creek Coal Pty Ltd[46] McMeekin J observed of the prospects of remaining in employment in the mining industry:

    “It needs hardly to be said but work in the mining industry is not for everyone. It involves working in difficult conditions and usually in remote areas. Long periods can be spent away from home. Plant operation in such conditions has its risks as evidenced by the occasional claim for damages for personal injury that comes before the courts. There are more reasons to limit time in this industry than in many others particularly as one ages. It is not inherently surprising that the statistical evidence, limited though it is, points strongly to the likelihood that, on average, drag line operators do not generally stay on in the industry.”[47]

    His Honour also observed:

    “…the prospects of the plaintiff maintaining employment in the mining industry diminish. Plainly men do go on past 60 years of age in the industry. But they are relatively few. There are good reasons for the plaintiff to have continued in high paying work as identified in the submissions. However quite apart from he [sic] becoming wearied with age there is the prospect that the present mining boom will not last. I think that I can take judicial notice of the fact that commodity prices are at record levels and hence so are employment levels in that industry. But it has not always been so. Much depends on overseas demand for Australia’s mineral wealth which is unpredictable.”[48]

    In that case his Honour assumed continued employment of a person with an injured ankle but discounted the possibility by 50 per cent.


    [42] AR 713; reasons [63].

    [43] AR 713; reasons [64].

    [44] AR 714; reasons [66].

    [45] AR 714; reasons [68].

    [46] [2011] QSC 51.

    [47] Reasons [44].

    [48] Reasons [48].


  3. In McMeekin J’s earlier decision of Craddock v Anglo Coal (Moranbah North Management) Pty Ltd[49] his Honour spoke of the discounting percentage for the vicissitudes of life. His Honour referred to Barwick CJ’s description, in Arthur Robinson (Grafton) Ltd v Carter, of the contingencies which affect the assessment of loss of earning capacity:

    “Ill health, unemployment, road or rail accidents, wars, changes in industrial emphasis, so that industries move their location, or are superseded by new and different techniques, the onset and effect of automation and the mere daily vicissitudes of life.” [50]

  4. His Honour accepted the conventional discount of 15 per cent on the basis that it was “essentially an assessment of imponderables that apply generally”.[51] He observed that the mining industry has “more than its share of risks …”.[52] Observations by the Central Judge about the mining industry deserve considerable respect. His locations makes him experienced in this field of personal injury litigation.

Loss of future earning capacity

  1. At trial the appellant based his calculations for loss of future earning capacity on the assumption that he would have remained in employment until 67 years of age while the respondent contended for 65. He contended for a figure of $630,000 as appropriate for loss of future earning capacity on the basis that he would work for a further 12 years to age 67 and that the minimum earnings/position be his earnings as a taxi driver or with the Mac Services Group – the average of which the primary judge used. The appellant then argued for an increase over that average figure to take account of the chance that the appellant may have continued operating heavy equipment on mine sites earning significantly greater remuneration to retirement age.
  2. The respondent contended that there was no demonstrable reduction in the appellant’s earning capacity compensable in damages, a contention plainly and correctly rejected by the primary judge. Alternatively, the respondent submitted for a sum of $500 net per week for a further 10 years resulting in $206,500 discounted at 25 per cent. Her Honour concluded:

    “In view of the matters that I have already emphasised in this judgment that affected the continuity of the plaintiff’s employment prior to the accident, I consider it appropriate to do the calculations on the basis of a further 10 years employment for the plaintiff (multiplier 413). Consistent with the approach that I have taken to past economic loss, I will use the net weekly wage of $695 per week for the purpose of calculating future economic loss. That results in a gross sum of $287,035. In addition to the usual approach of applying a discount in the calculation of future economic loss for the vicissitudes of life, the discount also has to reflect the Malec approach. It should be higher than the discount used for past economic loss. Because of using the lower net weekly wage of $695, the discount does not need to be as high as that used in Hopkins[53] or Smith.[54] I will discount the calculated figure by 25 per cent. That results in future economic loss of $215,276.”[55] (footnotes added)

  3. No error is discernable in this approach.

Conclusions about the assessment of damages

  1. Recently the Court of Appeal in Western Australia made some reference to past authorities in the High Court about the assessment of damages for personal injuries in an action for negligence.[56] Buss and Newnes JJA said:

    “28 …as Deane and Dawson JJ pointed out in Van Gervan v Fenton [1992] HCA 54; (1992) 175 CLR 327, 343, the assessment of damages for personal injuries in an action for negligence is not an exact science. The process of assessment must be governed by considerations of practical common sense in the context of the facts of the particular case. In a similar vein, in Paul v Rendell(1981) 34 ALR 569 the Privy Council observed:

    The assessment of damages in actions for personal injuries is not a science. A judgment as to what constitutes proper compensation in money terms for pain, suffering or deprivation of amenities of life, can only be intuitive, and the assessment of future economic loss involves a double exercise in the art of prophesying not only what the future holds for the injured plaintiff but also want the future would have held for him if he had not been injured (571).

    29 Such an assessment has many of the characteristics of a discretionary judgment: Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd [1981] HCA 4; (1981) 146 CLR 336, 381. In order to justify the review by an appellate court of an assessment of damages on the grounds they are excessive, the compensation so assessed must be so excessive as to be beyond the limits of what a sound discretionary judgment could reasonably adopt: see Miller v Jennings [1954] HCA 65; (1954) 92 CLR 190, 197; Minchin v Public Curator of Queensland[1965] ALR 91, 96.”[57]

    Their Honours continued:

    “The plaintiff who seeks damages has the legal onus of proving loss of earning capacity and the extent to which that loss produces, or might produce, financial loss: Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402, 412; Medlin v State Government Insurance Commission[1995] HCA 5; (1995) 182 CLR 1, 3. If it is determined that there has been a loss of earning capacity it is then necessary, having regard to the established facts of the past and the probabilities of the future, to determine the damage that will flow from the loss of that capacity: Medlin v State Government Insurance Commission (19). As the plurality pointed out in Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638, 643, when the law takes account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. Unless the chance is so low as to be speculative or so high as to be practically certain, the court will take that chance into account in assessing damages. The inquiry – the process of estimation of probabilities – is thus an imprecise and indeterminate one to be carried out within very broad parameters: State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536, 553. Accordingly, damages for financial loss likely to result from personal injury can only be an estimate, often a very rough estimate, of the present value of the prospective loss: Todorovic (413).”[58]


    [49] [2010] QSC 133.

    [50] Craddock per McMeekin J at 13 para [73] quoting Barwick CJ in Arthur Robinson at 459.

    [51] Craddock at 14 para [76].

    [52] Craddock at 14 para [77].

    [53] Hopkins v WorkCover Queensland [2004] QCA 155.

    [54] Smith v Topp [2003] QCA 397.

    [55] AR 714; reasons [71].

    [56] Montemaggiori v Wilson [2011] WASCA 177.

    [57] Reasons [28] and [29].

    [58] Reasons [30].


  2. Her Honour referred to all the relevant evidence. She applied the correct legal principles in reaching her assessment. It was incumbent upon her to bring her judgment to bear with respect to the evidence, which she did. The appellant contends her Honour ought to have embraced more fully the evidence of Dr Fenner, Dr Campbell and the occupational therapist, Ms van der Heyden. Her Honour had the benefit of seeing and hearing from the appellant. While she accepted him as, overall, credit worthy, and to be admired for his determination in seeking employment while the subject of so much pain, she did not fall into error in injecting a dose of reality into his evidence that no activities aggravated his pre-existing back condition. As her Honour recognised, only large doses of narcotics kept him going and his past employment history demonstrated that, in truth, he could not maintain full employment in positions that were relatively demanding in terms of his back.

Conclusion

  1. I am not persuaded that the appellant has demonstrated any error in her Honour’s approach to her assessment of his damages.

    79. Order

  1. I would dismiss the appeal with costs.
  2. DAUBNEY J: I respectfully agree with White JA

 

David Cormack – Brisbane Barrister

 

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