Colmark Pty Ltd v Hall [1998] QCA 105

IN THE COURT OF APPEAL [1998] QCA 105 SUPREME COURT OF QUEENSLAND Appeal No. 7507 of 1997 Brisbane [Colmark (Aust) P/L v Hall] BETWEEN: COLMARK (AUSTRALIA) PTY LTD ACN 010 479 473 (Defendant) Appellant AND: BRUCE EDWARD HALL (Plaintiff) Respondent McPherson JA Pincus JA Derrington J Judgment delivered 26 May 1998 Separate reasons for judgment of each member of the Court; each concurring as to the orders made. APPEAL ALLOWED WITH COSTS. JUDGMENT BELOW SET ASIDE AND IN LIEU THEREOF JUDGMENT FOR THE RESPONDENT AGAINST THE APPELLANT IN THE SUM OF $89,658 TOGETHER WITH COSTS ON THE DISTRICT COURT SCALE. CATCHWORDS: DAMAGES - Excessive - whether amounts awarded for economic loss up until trial and for future economic loss were excessive given respondent’s poor work history - discounting - general damages - loss of amenities of life - “egg-shell skull” - effect of psychological affliction upon recovery from physical injury. Counsel: Mr P.A. Hastie for the appellant Mr J.W. Lee for the respondent Solicitors: Cleary Hoare for the appellant Goodfellow & Scott for the respondent -- 1 of 15 -- HearingDate: 27April1998 -- 2 of 15 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND Appeal No. 7507 of 1997 Brisbane Before McPherson J.A. Pincus J.A. Derrington J. [Colmark (Aust.) P/L. v. Hall] BETWEEN: COLMARK (AUSTRALIA) PTY. LTD. ACN 010 479 473 (Defendant) Appellant AND: BRUCE EDWARD HALL (Plaintiff) Respondent REASONS FOR JUDGMENT - McPHERSON J.A. Judgment delivered 26 May 1998 For the reasons given by Derrington J., I agree that the appeal should be allowed with costs, and the judgment varied to the extent specified in those reasons. -- 3 of 15 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND Appeal No. 7507 of 1997. Brisbane Before McPherson J.A. Pincus J.A. Derrington J. [Colmark (Aust.) P/L v. Hall] BETWEEN: COLMARK (AUSTRALIA) PTY LTD ACN 010 479 473 (Defendant) Appellant AND: BRUCE EDWARD HALL (Plaintiff) Respondent REASONS FOR JUDGMENT - PINCUS J.A. Judgment delivered 26 May 1998 I have read the reasons of Derrington J. Claims for damages for personal injury present particular difficulties where, as here, there is a relatively minor soft tissue injury which is said to have brought very serious consequences. It is true that the soft tissue injury in the present case had added to it a flake fracture; but it does not appear that this made any significant difference. The assessments of disability were 3% of the right leg (Dr Tuffley) and 5% (Dr Gillett). This is an injury low in the range of seriousness, suffered by a man who had been unemployed for 85% of the decade prior to the accident; it was thought by the learned trial judge to be properly compensated by an award of over $150,000 damages. -- 4 of 15 -- Such an award was in the circumstances of this case plainly excessive. In my opinion a cautious approach to assessments of damages in such cases - i.e. those in which an injury of no great significance is alleged to have been seriously disabling - is generally justified and should have been adopted with respect to this respondent. In my opinion the amount proposed by Derrington J. does not by any means represent a miserly approach. I am in general agreement with his Honour’s reasons and concur in the order proposed. -- 5 of 15 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND Appeal No. 7507 of 1997 Brisbane Before McPherson JA Pincus JA Derrington J [Colmark (Aust) P/L v Hall] BETWEEN: COLMARK (AUSTRALIA) PTY LTD ACN 010 479 473 (Defendant) Appellant AND: BRUCE EDWARD HALL (Plaintiff) Respondent REASONS FOR JUDGMENT - DERRINGTON J Judgment delivered 26 May 1998 The appellant's liability is not in issue and the appeal is directed only to the quantum of damages. The damages awarded were $154,078.34. The components said to be manifestly excessive are– (1) General Damages $30,000 (2) Economic Loss up until Trial $50,000 (3) Future Economic Loss $78,200 There was an error in the learned trial judge’s calculation of future economic loss. The amount awarded is about $13,300.00 below the figure that would correspond with his stated intention. -- 6 of 15 -- 3 The Injuries On 2 September 1994 the respondent was struck on the arch of his right foot, which became swollen, bruised and tender. The initial diagnosis was of soft tissue injury but after persistence of the pain and delayed healing, a frake fracture was discovered on the dorsal aspect on the base of the third metatarsal. It was treated conservatively, and with physiotherapy and acupuncture. His permanent residual incapacity was assessed by two orthopaedic surgeons at between 3 per cent and 5 per cent of his right lower limb. The appellant’s orthopaedic specialist expressed surprise at the persistence of the injury after approximately two years. Superimposed upon that physical injury was an emotional or psychological overlay. There is a moderate depressive disorder and a generalised anxiety disorder with some panic attacks, and these are said to have caused a change in the respondent’s personality and psychological adjustment. It was also said that he displayed a “narcissistic injury” syndrome which caused his self-esteem to be greatly reduced because of his incapacity to work. Unfortunately this evidence of his specialist psychiatrist, Dr Curtis, was incorrectly based on the demonstrably erroneous belief that "He (the respondent) was rarely unemployed." Much of his opinion as to the respondent’s reaction was based on a theory that took this fact as an important part of its foundation. Despite his Honour’s finding as to the extent of the respondent’s history of unemployment, he embraced Dr Curtis’ views, and in doing so adopted favourable explanations that were, with respect, untenable assumptions that justified the respondent’s evidence, even when the latter did not reasonably match the objective facts. -- 7 of 15 -- 4 Dr Grant, a psychiatrist who examined him on behalf of the appellant, agreed that there has been an emotional reaction by the respondent to his injury, but he said that this is due to the value he placed upon physical prowess rather than upon work. He recommended psychiatric treatment in part to see if respondent could achieve better control of “alcohol abuse” and overcome his emotional reaction, but he was not very optimistic. He also thought that “There seems no doubt that his emotional state is greatly exaggerating the disability which he is experiencing . . . Indeed it may be that, at this stage, the psychiatric problems are the cause of the major disability." If that is so, any improvement should see a corresponding improvement in his physical disability. The learned trial judge did not accept the submission that this psychiatric condition was of reasonably late origin. He thought that the respondent's pre-accident condition seemed to be somewhat analogous to an “egg-shell skull” case, that is, a largely dormant psychological disturbance awakened by the physical injury. He did not advert to Dr Grant’s evidence that the respondent had had some marked anxiety symptoms after the breakdown of his marriage, and he expressly found that some of the present symptoms were associated with the recent breakdown of his latest relationship. Nor did he advert to the inconsistency of the view that, despite his vulnerability, the respondent claimed to have suffered no loss of self-image from his sustained involuntary unemployment. He also said: “I have also concluded that the breakup of the plaintiff’s relationship with Pauline (and which occurred some months after injury) has not been shown to establish that it was, in whole or part, causative of his present state. He presents, in my view, as a man who can move on from past associations (including a marriage) to new associations without any serious or lasting detrimental effect to himself.” Though the respondent has in fact entered into a new relationship this hardly takes into account the evidence as to his earlier reaction to his marital breakdown, his unemployment history which implies -- 8 of 15 -- 5 some weakness, and his present reaction to his disability. If his Honour's view were correct, the “egg- shell” factor would seem to be unusually selective as to the areas of his vulnerability. His Honour also found: “I have reached the conclusion that the matter of the plaintiff’s past periods of unemployment has not been, on the balance of probabilities, shown to establish that he was, when injured, a person exhibiting low self-esteem and proneness to depression.” It would have been surprising if his serious unemployment had not had some effect on him, particularly since he had the vulnerability that his Honour described. That vulnerability would also have been a factor in the future contingencies of life for which allowance had to be made in the assessment of future economic loss. This is particularly so since he is a motor-cyclist, which heightens the risk of injury when it seems that he is very vulnerable to a severe reaction to even a comparatively mild injury to his leg. He has already had one serious motor-cycle accident with injury, among other things, to his knee, but it is said that he escaped permanent disability on that occasion. General Damages The main features of the respondent's claim for loss of amenities of life were that he could no longer play football of an informal recreational or garden variety. He says that he could no longer ride a motor-cycle, but he could have purchased a leftside change or automatic one, either of which would have overcome his disability. He says that he cannot drive a car other than for short periods of less than an hour. And he could not play with his former girlfriend's children. His physical pain and suffering endured for some time after the accident before abating to its present level, and it is now aggravated by long standing and walking and by walking on uneven surfaces. -- 9 of 15 -- 6 His perception of his pain is exacerbated by his emotional state. The extent of his psychological suffering attributable to the accident is not clear. This will be further discussed in more detail later. Employment History At the time of the accident he was thirty-eight years of age and he was forty-one at trial. Since leaving school in late 1970 until the accident, he was unemployed for some 50 per cent of that period, and for the decade prior to the accident he “may be described as probably having been unemployed for 85 per cent of the decade.” For the two years prior to the accident, with the exception of the two weeks employment with the appellant immediately prior to it, he was continuously unemployed. The reason for such heavy unemployment was not satisfactorily explained, and explanations were accepted that were unpersuasive. This was not a question of credibility but of reasoning. The Award for Past Economic Loss Based on a weekly wage of $345 nett, if he had been employed for the whole three years less one month prior to trial, his wages would have amounted to about $52,500. This was discounted by the trial judge to the round figure of $50,000, a surprisingly small reduction in the circumstances. The Award for Future Economic Loss For the twenty-four years from the trial until the respondent's putative retirement age, the learned trial judge allowed for a loss of six years, the large discounting being attributed among other things to the respondent's poor work history. The figure allowed for damages was still substantial because he thought that, having a job, the respondent would probably try to retain it, as he said, and because his employer was satisfied with his work. -- 10 of 15 -- 7 This reasoning suffers from insufficient regard to the implications flowing from the respondent's pre-accident personality as revealed in his work history, for he seemed to work satisfactorily when he was employed, and yet his history was very poor overall. There seems also to have been little allowance for the possible beneficial consequences of the psychiatric treatment the cost of which formed part of the damages, but this is not a large factor. General Discussion While the learned trial judge's assessment of the respondent’s credibility should be accepted, it does not follow, as he seems to have thought, that his evidence was equally reliable as to his future employment intentions or their fulfilment. He may have been honest when he spoke of them but that is far from meaning that reality would have matched his optimistic speculation. His extremely poor work history almost up to his injury, must give grave cause to doubt that he would have changed the habit of decades in that respect. Consequently, though he may have been found to be honest, little reliance should have been placed upon his retrospective assessment of his good intentions. Associated with this is his pre-existing vulnerability to excessive emotional response to adverse factors. Physically, his injury was comparatively mild, and his response to it is out of all proportion to a normal reaction. His acute vulnerability is very consistent with his former work history, and it is difficult to accept that he would not have suffered some adverse consequences of the effect of his unemployment on that condition prior to his injury. Conversely, the condition would certainly account for his unsettled domestic life and unusually high unemployment. In the face of these strong objective indications, independent evidence as to his pre-accident state was highly desirable, and its absence is unfortunate. -- 11 of 15 -- 8 It should be accepted that he has had an adverse emotional reaction to his injury because of a reduction in his self-image, but it is not reasonable to attribute the whole of his present emotional state to the injury. Treatment may effect some improvement in that condition, and on the orthopaedic evidence it would appear to be the major source of difficulty associated with his physical injury. Of course, it will not remove the physical disability which, persisting, will have some long-term effect upon his earning capacity, particularly as he is an unskilled worker, but any improvement should gradually enlarge the area of employment open to him. There will still be a moderate impact on his capacity to perform work within his ability, but the effect of this is reduced by the likelihood that he would not have pursued work diligently. In allowing the respondent almost the whole of his pre-trial economic loss and the present value of his loss for the next six years, the learned trial judge purported to apply a substantial discounting which reflected his employment history. He said that he was allowing six years out of a future working life of eighteen to twenty-four years from the date of trial, implying that he was allowing the respondent only one quarter to one third of what would have been the total loss if he had been fully employed. Quite apart from insufficient allowance for the implications of the history of serious unemployment, this has some flaws. The first is that he has almost allowed the entire wages for the first three years after the accident, so that in total he was allowing the respondent his full income for nine years out of the twenty-one to twenty-seven years after the accident. The second point is that by allowing a discounting that was limited to the six years next after the trial, he took that end of the period that would produce the highest present value. The figure he adopted was over one third of the discounted figure for a twenty-four year period when it was intended to represent only one quarter of it. -- 12 of 15 -- 9 The result was that the allowance to the respondent for his economic loss from the date of his injury would have amounted to about 47 per cent of the maximum possible loss. This would seem to be excessive even on the standards adopted by his Honour. In addition to the discounting attributable to the respondent's employment history and emotional vulnerability, there should have been a further discounting for the ordinary contingencies of life and those which were special to him, including his extensive motor-cycling activities. Given the imprecision of prediction as to his economic future if his injury had not occurred, it is necessary to assess a global sum for each period of economic loss. After allowing suitable force to those matters that rightly found favour below, he should have been allowed no more than $30,000 for pre-trial loss, which would not attract interest because of payments he received, and $40,000 for future economic loss. The question of general damages is more difficult. The award is plainly too high but whether it is excessively so is another matter. The respondent's physical injury was not gross nor associated with surgery and hospitalisation, but it will involve some chronic episodes of pain for the rest of his life. His emotional state magnifies his perception of pain and disability, but the appellant must take him as he found him. It should be accepted that his injury has precipitated some of his emotional reaction and that that has endured. Its probable amelioration through treatment will ameliorate his physical condition as well. On the state of the evidence, the best award for this component that should have been allowed the respondent is $25,000, and that figure should be adopted in order to conform as nearly as possible with the general approach of the learned trial judge. Interest on that would be $900. -- 13 of 15 -- 10 Summary The damages that should have been awarded are as follows– Pre-trial economic loss and interest $30,000 Future economic loss 40,000 General damages 25,000 Interest thereon 900 Cost of future psychiatric treatment 3,500 Gratuitous domestic care 260 Interest thereon 21 Special damages 1,586 Cost of foot supports 2,000 Fox v Wood factor 2,015 $105,282 Less Workers’ Compensation $15,624 Balance: $89,658 -- 14 of 15 -- 11 This reveals that the award below was manifestly excessive, and so it should be set aside and replaced by one in accord with those figures. Orders The appeal is allowed with costs. The judgment below is set aside and in lieu thereof there is judgment for the respondent against the appellant in the sum of $89,658 (Eighty-Nine Thousand, Six Hundred and Fifty Eight Dollars) together with costs on the District Court scale appropriate to that sum. -- 15 of 15 --