Brown v Hale [1995] QCA 3 [1996] 1 Qd R 234

IN THE COURT OF APPEAL [1995] QCA 003 SUPREME COURT OF QUEENSLAND Appeal No. 140 of 1994 Brisbane [Brown v. Hale] BETWEEN: GLENDA MAREE BROWN Plaintiff Respondent AND: SPENCER MORAY HALE Defendant Appellant Davies JA McPherson JA Lee J Judgment delivered 03/02/1995 Judgment of the Court Appeal dismissed with costs CATCHWORDS: PERSONAL INJURIES - assessment of damages based on favourable credit findings - interference with - economic loss - whether non-compensible injury would have excluded respondent from work force in any event - rule in Watts v. Rake - general approach on appeal - whether totality of award excessive - Griffiths v. Kerkemeyer damages - appropriate rate of interest Counsel: D Fraser QC for the appellant A J H Morris QC, with him R J Pack, for the respondent Solicitors: Lang Hemming & Hall for the appellant Suthers and Taylor for the respondent Hearing date: 2 November 1994 -- 1 of 12 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND Appeal No. 140 of 1994 Brisbane Before Davies JA McPherson JA Lee J [Brown v. Hale] BETWEEN: GLENDA MAREE BROWN Plaintiff Respondent AND: SPENCER MORAY HALE Defendant Appellant JUDGMENT - THE COURT Judgment delivered 03/02/1995 This is an appeal against an assessment of damages for personal injuries in the Trial Division. The respondent was injured in a motor vehicle accident at Brisbane on 12 July 1982 when the driver's side of the vehicle which she was driving was struck at an intersection by a vehicle driven by the appellant. Liability was admitted on the basis that the respondent's damages were to be reduced by 15 percent for contributory negligence. The net award was in the sum of $561,570. After the accident the respondent was treated as an outpatient at the Princess Alexandra Hospital. The following day she visited her general practitioner complaining of pain in the cervical spine and left leg. Her complaints having substantially improved, she returned to -- 2 of 12 -- 2 her former work as a clerk at the Australian Tax Office (the "ATO") approximately two weeks later. On 9 August 1982 she again visited her general practitioner complaining of headaches and problems with her left knee. She ceased employment with the ATO soon after, claiming an inability to cope as a result of her injuries from the accident. She also resigned her long standing position in the army reserve due to an inability to perform the tasks required of her. She moved to Lismore to commence study at the Lismore teachers' college and married in July 1983. Soon after she and her husband returned to Townsville. Throughout this period she continued to suffer pain in the leg and neck areas. On 29 March 1984 the respondent underwent an arthroscopy to the left knee which revealed a tear of the medial meniscus displaced in the intercondylar notch. There was also a ruptured anterior cruciale ligament which was considered irreparable. The joint appears to have normalised for a time but soon reverted to its troublesome state. The medical evidence, which his Honour the learned trial Judge accepted, established that this condition has resulted in and will continue to result in an unstable joint with a permanent disability of 25 percent to 30 percent of the left leg. The onset of arthritis is also likely. There is also the possibility that the plaintiff may at some future time require a total knee replacement which will probably result in a 40 percent disability to the leg. The respondent returned to work at the ATO in -- 3 of 12 -- 3 Townsville in mid-August 1984. Although her duties were slightly different she continued to experience a deal of pain and discomfort especially in the neck area when bending or leaning over. She had a fall in December 1984 which resulted in some time off work and on her return experienced problems similar to those which she had encountered in the past. She then obtained a medical certificate from her general practitioner certifying as to her unfitness to work for a period of three months. At the end of that period she returned to work for one week after which she commenced maternity leave. She did not return to work after that time and was retired on 27 March 1987. In making his findings, the learned trial Judge relied substantially on the evidence of the respondent, whom he considered genuine in relating her complaints of pain. Issue was taken on appeal to reliance being placed on the respondent's testimony, the principle assertion apparently being that she failed to relate all of her complaints to every doctor she consulted at every available opportunity. It is not necessary to traverse this aspect of the case as extensively as it was canvassed during oral submissions. As the appellant conceded, any party who seeks to overturn a general finding of credit faces an uphill battle. It is sufficient to say that even if some of the appellant's specific complaints as to the respondent's reliability are justified, they do not compel the conclusion that she must have been rejected as an untruthful witness on more general and crucial issues. -- 4 of 12 -- 4 His Honour was satisfied that there was an organic basis for the respondent's cervical spine complaint. The evidence which was accepted suggested a soft tissue injury in that area which was manifested in the relatively constant onset of headaches and dizziness. His Honour concluded that it was primarily those symptoms which had caused the respondent to cease her work at the ATO, and which prevented her and would continue to prevent her from engaging in clerical or similar work which, his Honour concluded, she would have engaged in but for the accident. The respondent had also at times complained of lower back problems but these were found to have resulted from a degenerative condition not attributable to the accident. She has also suffered pain and instability from her knee injury. The respondent was also diagnosed as suffering from a psychiatric condition, manifesting itself in a form of neurotic hypochondria, which his Honour attributed to the accident. The respondent was 26 at the time of the accident having been born on 6 August 1955. She is married with four children. His Honour was satisfied that but for the accident she would have continued to work until age 55. His Honour found that it was the onset of the respondent's problems resulting from the accident which caused her to cease work and which have since then effectively excluded her from the work force. It is convenient to deal with the appellant's complaints in the order in which they were addressed during oral submissions. -- 5 of 12 -- 5 The first centres on the award for economic loss and comprises the main area of attack. His Honour in assessing $125,000 for past economic loss took into account various discounting factors including the respondent's proneness to periods of absence from work due to her lower back condition. As to the future, based upon the conclusion that the respondent would have worked until age 55, his Honour substantially discounted the full present value of her likely income over that period, $360,000, for various contingencies again including those stemming from her lower back condition. He awarded the sum of $225,000 for future economic loss. The appellant's principal attack on that award rests on the assertion that there was clear and cogent evidence on the basis of which his Honour was, in effect, bound to find that the respondent's pre-existing degenerative lower back condition would have excluded her from the work force in any event. It was said that there were two possible operative causes which prevented the respondent from working and that the respondent had not discharged the ultimate onus of showing that her inability to work was not due to her lower back condition. It was nevertheless accepted that the appellant bore the evidentiary onus not only of demonstrating that such a result was likely but also of establishing the approximate time at which it would have occurred: Watts v. Rake (1960) 108 C.L.R. 158; Purkess v. Crittenden (1965) 114 C.L.R. 164. His Honour was not satisfied that the appellant had discharged that onus concluding that "[n]o attempt was made -- 6 of 12 -- 6 in the evidence of the various medical witnesses to identify the effects of the [lower] back symptoms upon her considered in isolation". The principal piece of evidence relied on by the appellant in support of the contention that his Honour fell into error in this regard comes from a report of the respondent's treating doctor, Dr Watson, on 21 March 1988. In that report it was said that the respondent's lower back pain prevented "almost all physical activities". But in our opinion that statement went far from establishing "with some reasonable measure of precision, what the pre-existing condition was and what its future effects, both as to their nature and their future development and progress, were likely to be": Purkess v. Crittenden, 168. Indeed the only expert who tried specifically to isolate the limitations imposed on the respondent as a result of her complaints, the occupational therapist Mrs Coles, was of the opinion that few of the respondent's difficulties stemmed from her lower back problems. This conclusion also accords with the respondent's own evidence that her lower back problems were of much less significance to her than her other complaints. His Honour found that the evidence did not support the conclusion that the lower back symptoms would have been sufficient to exclude the respondent from the work force and specifically accepted Mrs Coles' assessment concerning the respondent's capacity to work without any significant reference to her lower back problems. -- 7 of 12 -- 7 In that state of the evidence there is no substance in the submission that his Honour was obliged to conclude that the respondent would have inevitably been excluded from the work force by her lower back condition. In the absence of evidence to that effect which his Honour was prepared to accept, his Honour was correct in simply treating the respondent's degenerative lower back condition as a discounting factor, albeit a substantial one in the way referred to above. It was also suggested that substantial discount should have been made for the fact that, had the respondent returned to work, she would have expended considerable amounts on child care. It is obviously preferable that substantial discounting factors such as that suggested be expressly brought into account in any damages assessment. Nevertheless his Honour was clearly conscious of the fact that the respondent would require substantial periods off work for various reasons, including pregnancy, and that seems to be the major reason for discounting the award for economic loss as heavily as was done. There was also evidence which was accepted that her employer would have provided her with generous maternity leave entitlements. It cannot be said that these issues were wholly ignored by his Honour in reaching the figure that he did for economic loss. The appellant's second substantial ground of appeal centred on the Fox v. Wood component of the assessment. It was conceded on both sides that the evidence led on this point did not allow for a precise quantification of the -- 8 of 12 -- 8 respondent's loss. It was not in dispute that the respondent was in receipt of disability payments from the Commonwealth of Australia, in effect, by way of income substitution. It was also not in dispute that his Honour seems merely to have taken the Fox v. Wood component from a schedule annexed to the respondent's submissions at trial, a schedule which it was conceded, was inaccurate in certain respects. Nevertheless his Honour was required to make the best of the material before him and if that required a fairly broad approach to this aspect of the assessment that is what had to be done. His Honour allowed the sum of $29,500. The submissions of the appellant centred around certain evidence that the respondent had in some financial years so structured her affairs as to either reduce or completely eliminate her tax liability. In particular it appears that she was able to take advantage of losses incurred in respect of certain investment properties jointly owned by herself and her husband to reduce her taxable income. In those years when her tax incidence was reduced it was said that the application of correspondingly lower tax rates would reduce the amount of her loss. In those years in which the respondent was able to avoid all tax liability it was said that she suffered no loss because the full amount of any tax deducted from the payments would be refunded to her in due course. It was said that the award should have been no more than $20,000 so that the maximum error would be in the order of $10,000, or on one view up to about $15,000, although -- 9 of 12 -- 9 the amount of any reduction in the award would have to take into account the respondent's contribution. There is certainly a logical attraction in the submissions advanced by the appellant, based as they are on the identification of the respondent's actual loss in any particular year having regard to her personal circumstances. Nevertheless it is not a point which this Court need at this stage consider. The case below was not fought on a basis which required a detailed analysis of the respondent's tax affairs and that, to some extent, detracts from the force of the appellant's submission that in this case the Court should move to correct any error. The principles on which this Court will act on an appeal against an assessment of damages for personal injuries are clear. Even if it be shown that the assessment, or a particular component of it was based on an error, whether of law or fact, this Court will not intervene merely for the sake of obtaining arithmetical perfection. In particular, even if an individual component of the assessment is shown to be excessive this Court is entitled to look at the totality of the award to determine whether it is substantially in accord with acceptable levels: Elford v. FAI General Insurance Company Limited [1994] 1 Qd.R. 258. Even assuming that his Honour's award under this head was excessive, bearing in mind the substantial discount which had been applied to other components of the assessment and the proportion which the amount of that error is said to bear to the total award, it cannot be said that the final -- 10 of 12 -- 10 figure is so excessive as to justify intervention by this Court. Although it is not entirely clear, the assessment of general damages appears to have been the next target of criticism. His Honour awarded the sum of $55,000 under this head and allowed $4,000 for interest calculated at the rate of 2 percent on $20,000 pre-trial. It was submitted that a sufficient factual foundation for the expert psychiatric opinions, and in particular that of Dr Richards, had not been laid. It was said that the basis for his opinion linking the accident to the respondent's psychiatric condition was not established. Whilst it is true that Dr Richards had, to some extent, been misled about the respondent's history none of those matters were essential to his diagnosis. The acceptance of the respondent as a generally truthful historian puts to rest any real criticism in this regard. It was also suggested that no sufficient basis had been shown for any conclusion that the accident contributed to the respondent's migraines. The lay evidence of the respondent was that the frequency of their occurrence increased after the accident. Accepting her as a truthful witness and accepting the expert evidence that this increase may have been contributed to by the accident, the necessary foundation was clearly laid. No other basis was advanced to justify disturbing this part of the award. The final complaint of the appellant can be similarly disposed of. The sum of $25,000 was allowed for past -- 11 of 12 -- 11 Griffiths v. Kerkemeyer damages. Interest was allowed on that sum at the rate of 4 percent per annum for 10 years, producing a figure of $10,000. Issue was taken with the rate of interest applied. It is beyond doubt that a Griffiths v. Kerkemeyer award is a component of the plaintiff's general damages: Van Gervan v. Fenton (1992) 175 C.L.R. 327. As such considerations which might apply to an award of interest on past economic loss are not easily transferable: MBP (SA) Pty Ltd v. Gogic (1991) 171 C.L.R. 657. There are two principal considerations which support the view that the rate of interest to be applied to past Griffiths v. Kerkemeyer damages should be the same as that applied to other components of general damages such as pain and suffering. They are, firstly, that the award is generally based on the current value of the services gratuitously provided and, secondly, that the plaintiff has not been put out of pocket or been placed in a disadvantageous financial position by virtue of the need so created. Although we are conscious of the fact that the practice among the various States appears to differ, on principle it seems to us that 4 percent is the correct rate to be applied, that figure being halved to 2 percent to take account of the fact that the loss was progressively sustained. In the present case though that conclusion would only produce a reduction in the award of damages by $5,000 which, in the context mentioned above, again would not justify the interference of this Court. The appeal is dismissed with costs. -- 12 of 12 --