Constable v Harding & Australian Associated Motor Insurers [2000] QSC 11

SUPREME COURT OF QUEENSLAND Registry: Brisbane Number: S 8804 of 1997 Before Justice Wilson Plaintiff: SPENCER WILLIAM CONSTABLE AND First Defendant: LEONARD HARDING AND Second Defendant: AUSTRALIAN ASSOCIATED MOTOR INSURERS LIMITED (ACN 004 791 744) REASONS FOR JUDGMENT : WILSON J Delivered: 2 February 2000 CATCHWORDS: NEGLIGENCE – CONTRIBUTORY NEGLIGENCE – APPORTIONMENT OF RESPONSIBILITY AND DAMAGES – ROAD ACCIDENT CASE – Liability of driver of vehicle – turning across traffic – failure to give adequate signal – assessment of quantum of damages for future economic loss where injured plaintiff generates income through a proprietary limited company Husher v Husher [1999] HCA 47; Conley v Minehan [1999] NSW CA 432 Counsel: Mr MJ Taylor for the plaintiff Mr KN Wilson for the defendants Solicitors: Noel Woodall and Associates for the plaintiff Dunhill Madden Butler for the defendants Hearing date: 4, 5, 6 October 1999 [1] In this action the plaintiff claims damages for personal injuries sustained in a motor vehicle accident on 29 May 1995 on the David Low Way at Marcoola on the Sunshine Coast. The accident occurred when the Harley Davidson motor cycle he -- 1 of 16 -- 2 was riding collided with a Ford Econovan driven by the first defendant. Both liability and quantum are in issue. [2] The accident occurred at approximately 5 pm on a Monday afternoon. It was a fine day and still daylight. [3] The accident occurred on the highway north of the Surfair Hotel. The road was marked for one lane of traffic in either direction broken by a white centre line down the centre of the road. [4] The plaintiff was travelling in a northerly direction. As he approached the accident scene he came around a bend and then on to a straight stretch about 350 metres in length to the accident scene. The accident occurred at the entrance of the first defendant’s property which was on the eastern side of the highway. [5] Lorraine Avenue intersected with the highway on its eastern side at a point between the end of the bend and the first defendant’s property. The distance from the northern kerb of Lorraine Avenue to the centre of the first defendant’s driveway was 50 metres. [6] There was a bus shelter on the western side of the highway opposite the Lorraine Avenue intersection. For a short distance on either side of the shelter there was an additional kerbside lane. [7] The plaintiff was following a Holden Commodore driven by Pauline Neal. The two vehicles travelled around the bend to which I have referred. The speed limit was 80 -- 2 of 16 -- 3 kilometres per hour and the Commodore was travelling at about the speed limit. When the vehicles came on to the straight section of road, the plaintiff overtook the Commodore. According to Mrs Neal, whose evidence I accept, the bike’s speed as it overtook her was not excessive. The plaintiff estimated his speed at 80-85 kilometres per hour. The bike moved in front of the Commodore to a position described by Mrs Neal in cross-examination as about two car lengths ahead of her car. [8] The first defendant proceeded slowly out of Lorraine Avenue and turned right on to the highway, intending to turn right into his property. [9] According to the plaintiff, he was coming back in from overtaking the Commodore when he observed the first defendant’s van pull out of Lorraine Avenue. He was catching up on the van quickly. He commenced to overtake the van. The van commenced to turn right into the first defendant’s property, its indicator coming on at the same time it commenced to turn. It was a truncated turn at a 45 degree angle. The plaintiff attempted to go behind the van to the left, but he clipped the right side of the van pretty much in the indicator area. At the time the van was straddling the centre line. [10] According to the first defendant, as he proceeded out of Lorraine Avenue his right indicator was on. When it turned off automatically, he re-engaged it almost immediately. He was travelling at 10-12 kilometres per hour along the highway. He was at the beginning of his driveway about to turn and his body swung over as he looked in the right wing mirror. So far as he could recall he had not crossed the centre line. He saw the plaintiff in the mirror. The plaintiff was not trying to -- 3 of 16 -- 4 overtake him. The plaintiff drove up behind him and ran into the back of him. The rear door of the van was caved in; the side panels were not damaged. [11] According to the Commodore driver Mrs Neal, she did not see the van move out of Lorraine Avenue, although she recalled seeing it in the northbound lane when the bike had resumed its position on the straight after passing her. The bike was about two car lengths in front of her and about two car lengths behind the van. The next time she looked up she saw the bike beginning to overtake the van. Right hand indicators were flashing on both the bike and the van. She could not say when the van’s indicator had come on. The driver’s side wheels of the van were just over the centre line. The bike had commenced to overtake the van; it was at its back corner. Both the bike and van braked. The bike fishtailed and went to the back of the van hitting the rear bumper bar area. [12] The plaintiff and the first defendant were questioned about distances and speeds. Relying on the plaintiff’s answers, the defendant’s counsel sought to demonstrate that the plaintiff’s version could not be correct. Such estimates are notoriously unreliable, particularly in the context of an attempt mentally to reconstruct the sequence of events leading to an accident, events which all occurred in a very short space of time. Only where specific landmarks have been identified and distances between them actually measured would it be safe to act on such evidence. I have accepted the evidence of distance from the end of the bend to the accident scene and that from Lorraine Avenue to the first defendant’s property. [13] The versions of the plaintiff and the first defendant are irreconcilable. Generally I prefer the evidence of the plaintiff since it is supported in a number of relevant -- 4 of 16 -- 5 respects by that of Mrs Neal. I find that the bike had commenced to overtake the van when the van commenced to turn right. I accept the evidence of the plaintiff that the first defendant’s right indicator came on at the same time as the van commenced to turn. Both vehicles braked. The bike fishtailed and there was damage to the right rear end of the van. I do not accept the first defendant’s evidence that the plaintiff drove straight up behind him and into his centre rear. [14] In these circumstances, I find that the first defendant was negligent in not indicating before commencing to turn and in not checking his rear vision mirror until commencing to turn. [15] The plaintiff was also negligent. His was the following vehicle. The van emerged from the right and travelled very slowly over the short distance to the accident scene. He ought to have kept his bike sufficiently in control to deal with any unexpected movement on the part of the van. [16] I consider the first defendant 60% responsible for the damage sustained by the plaintiff, and the plaintiff 40% responsible. [17] The plaintiff was born on 16 February 1956. He is a concreter by occupation. Before the accident he was a fit and healthy man. [18] In the accident the plaintiff sustained a grade two compound fracture of the mid shaft of the right tibia and a comminuted fracture of the right distal fibula. He claimed also to have a back problem as a result of the accident and adjustment problems consisting of unhappiness, frustration and irritability. -- 5 of 16 -- 6 [19] He was taken to the Nambour General Hospital after the accident where he remained until 3 June 1995. While there, he was taken to theatre three times. The wound was cleaned. A pin was inserted in the right tibia. Delayed primary closure of the wound was performed. A plaster cast was put on and he was discharged on crutches. The plaster was removed approximately six weeks after the accident when he commenced some weight bearing. At the end of 1995 he went back to work for a short time but he found it physically difficult. In October 1996 further surgery was performed on the leg. This produced improvement and he returned to work about six weeks later. However, he alleges that he has never regained his pre- accident working capacity. [20] According to his wife, whose evidence I accept, before the accident he was never sick and never complained. He was a hard and enthusiastic worker. He worked hard around the house, keeping the yard and the pool immaculate, cleaning his car frequently, etcetera. Since the accident he has been physically disabled. He limps after a hard day at work or at the end of the working week. Although he does not complain, sometimes he is obviously in pain. He has suffered a significant loss of self esteem and loss of confidence. [21] From an orthopaedic perspective he has had two problems – the residual effects of the injury to his right leg including shortening of one centimetre and some restriction in ankle movement, and spondylolisthesis, a developmental disorder of his lumbar spine which is now symptomatic. I have to consider the degree of disability in his leg and whether his back has been made symptomatic by the accident and/or the degree of aggravation/acceleration of that condition caused by the accident. -- 6 of 16 -- 7 [22] As well as the evidence of the plaintiff and his wife I have that of three orthopaedic surgeons, Drs Bartlett, Curtis and Morris, and an occupational therapist, Ms Lesley Stephenson. The defendants caused the plaintiff’s activities to be videotaped on two occasions and those tapes were played to the court. The medical experts had also had the opportunity of viewing them. The first two relate to the days’ activities on a building site at Sunrise Beach on 23 and 24 September 1997, and the third relates to the activities on a building site at the Chancellor on the Park Estate at Sippy Downs on 16 April 1999. The videos show the plaintiff engaged actively in concreting work. Having viewed them, the various medical experts revised their assessment of his disabilities downwards. I, too, am of the opinion that there was some exaggeration in his oral descriptions of his symptoms and disabilities. [23] The video evidence shows the plaintiff undertaking a full hard day’s work on 23 September 1997 and most of a day’s work on 24 September 1997, and confirms that he was still doing domestic concreting work on 16 April 1999. The video evidence, particularly the first tape shows the plaintiff undertaking repetitive bending, full squatting, working with shovel and sledge hammer, operating the “helicopters,” carrying equipment, and generally working a full hard day, apart from approximately 15 minutes for lunch. In particular, it shows the plaintiff: • bending and shovelling without restriction (7:10 – 7:24) • carrying reinforcing mesh (7:28) • screeding (7:32) • repetitively bending (7:36) • shovelling on his right hand side (7:42:53) • suddenly straightening from a bent position and twisting -- 7 of 16 -- 8 (7:44:30, 7:54:45) • adopting a fully bent position for prolonged periods (7:53 – 7:58, 9:29, 9:56-9:58) • bending and reaching in front of him when working (8:45 - 8:47) • working with a sledge hammer (9:45) • lifting the helicopter with another employee (10:17 - 10:19) • carrying the 300mm plank overhead with arms outstretched (14:01:28) [24] The plaintiff’s back condition is a developmental one. There was dispute on the medical evidence as to whether the leg shortening would have caused it to become symptomatic. Dr Curtis thought this possible and postulated perhaps a two-three year acceleration, while Drs Bartlett and Morris considered that the extent of the shortening was insufficient to cause back pain in the circumstances. I prefer the evidence of Drs Bartlett and Morris. It seems that the condition was one likely to have become symptomatic at some stage anyway. [25] With respect to his leg, the plaintiff has a permanent partial disability in the order of 5% (Dr Curtis) to 9% (Dr Morris). [26] He has suffered no psychiatric illness as such, although, as I have said, he has suffered considerable loss of self esteem and confidence. Dr Mulholland has assessed the effect of these symptoms as representing a 2.5%-5% disability. This assessment bears the qualification that if the physical symptoms disappear or are overstated then the plaintiff is unlikely to suffer any disability at all due to psychological factors. -- 8 of 16 -- 9 [27] I assess damages for pain and suffering and loss of the amenities of life at $30,000. I allow interest on $20,000 of that from the accident to judgment at 2% per annum, ie $1,865. [28] So far as special damages are concerned, ultimately both counsel submitted that I should allow $2,000 including interest, and I do so. [29] On each occasion when the plaintiff came out of hospital, he needed the gratuitous services of his wife for some weeks. It was agreed that such services should sound in damages at the rate of $10 per hour. I find that on each occasion he needed his wife’s assistance for two hours per day for about six weeks and that there has since been some ongoing assistance. In all I allow $2,000 including interest. [30] I turn to loss of earning capacity before and since the trial. The plaintiff was a concreter. He and his wife were the only shareholders and directors of Ben Holdings Pty Ltd. He exercised his earning capacity through that company which contracted with others. He and his wife were the company’s only employees; otherwise it engaged sub-contractors (usually 3 or 4) as necessary. He and his wife were paid “wages” being the excess of sales over other expenses. The plaintiff was a good worker with a good reputation and the company had a steady flow of work (allowing for some fluctuations in the building industry). His wife performed some clerical work for the company. The exact extent of this is not clear. She estimated about 10 hours per week. [31] Attached to this judgment is a schedule summarizing the company’s income and expenses for the years ended 30 June 1990 to 30 June 1999. In the years ended 30 -- 9 of 16 -- 10 June 1992 and 30 June 1993 the company was undertaking “commercial” work; this involved work on highrise buildings, etcetera. Then it “sold its business” to one Clark, another concreter who had domestic work. This seems to have involved the sale of customer lists and equipment. Thereafter the company provided the plaintiff’s services to Clark in return for a fee. Seventy-five per cent of the work the plaintiff did was of a managerial nature. [32] This arrangement continued until Clark had a mental breakdown a couple of weeks before the plaintiff’s accident. The plaintiff considered reverting to the previous modus operandi of the company contracting directly with others, using his services supplemented by three or four subcontractors. [33] It must be remembered that prior to the accident, the plaintiff had the developmental condition of spondylolisthesis which could become symptomatic. According to Ms Stephenson, concreters normally change occupation in their 40’s or 50’s, either acquiring more assistance to do heavy labouring or moving into supervisory or business roles. The plaintiff had other business interests, including property development (for example a partnership with Dillon & Ongheen) and speculation in properties. [34] As is apparent from the attached schedule, Ben Holdings Pty Ltd has continued to trade since the accident. It has been engaged largely in domestic concreting. According to the plaintiff he is physically not able to do as much as he did before (although the extent of that disability was, I have found, exaggerated) and he has generally had to have one more subcontractor on site than he would have had before the accident. I find that by the year ended 30 June 1998 the trading activities were -- 10 of 16 -- 11 such that the profits of the company had returned to pre-accident levels and any downturn in the year ended 30 June 1999 was unrelated to the accident. [35] In accordance with the High Court’s decision in Husher [1999] HCA 47 I must consider what the plaintiff could have earned and what would have happened but for the accident. I have to assess the loss of income which he would (cf could) have expected to have had under his control and at his disposal by exercising his earning capacity. [36] In that case the plaintiff was a block layer. He exercised his earning capacity through a partnership at will with his wife. They were equal partners although the wife’s contribution in fact was negligible. The court assessed the loss on the basis that the income was all derived by the plaintiff and applied individual tax rates to arrive at his net loss. [37] The defendant submitted that Husher is distinguishable from the present case on the grounds that here the business structure adopted was that of a company and any loss was the company’s loss not the individual’s, and further that in the present case the wife’s contribution was greater than negligible. [38] The critical issue, according to the High Court in Husher, is where the effective control of the plaintiff’s skill and labour lay. The facts of each case require close attention. In Husher the following passage appears in the majority judgment:- “[23] … The task is not one to be undertaken by seeking to classify cases as concerning ‘sole traders’ or ‘partnerships’ or ‘wage-earners’ or ‘trading trusts’, and then attempting to deduce some rule of general -- 11 of 16 -- 12 application to all cases falling with the classification thus devised. Rather, the enquiry is about what could the plaintiff have done in the workforce but for the accident and what sum of money would the plaintiff have had at his or her disposal.” Callinan J said:- “[54] A case of this kind is a relatively simple one. However it will always be important in assessing the damages in cases in which the plaintiff is a partner or an employee of a company which he or she controls, or in which he or she has a substantial proprietary interest, to have regard to the realities and motivations underlying the arrangements which have been made, the plaintiff’s capacity to disentangle himself or herself from them, and the likelihood that such a plaintiff would be foolish to act at any time other than in his or her own best financial, matrimonial, and familial interests. On the other hand, an injured person who has entered into inextricable or virtually inextricable arrangements may be in a different position. Such a person may be one who has bound himself or herself under a restraint of trade or other negative obligation not to exploit his or her earning capacity for a period of years, or at all, or to do so in some limited way only. It is true, as many of the statements in the cases repeat, that each case will depend upon its own facts but the possibilities and likelihood of disentanglement from arrangements, and the virtual certainty that an injured plaintiff will look to his or her own total interests will always be important, if not conclusive factors in assessing economic loss.” See also Conley v Minehan [1999] NSW CA 432; 25 November 1999. [39] The arrangement with Clark had concluded. He and his wife were the sole shareholders and directors of the company. He could have withdrawn his labour from the company. An allowance can be made for the wife’s contribution. I proceed on the basis that 80% of the income from the concreting business was derived from the plaintiff’s efforts, both physical and managerial. [40] Having regard to the plaintiff’s age, the spondylolisthesis, his experience when the company was providing services to Clark and his experience in other business -- 12 of 16 -- 13 ventures, I find that it was likely that his role would have become increasingly supervisory and managerial rather than hands on physical labour. [41] The average gross income to the plaintiff and his wife from the company over the six years before the accident was approximately $23,250 per annum. The average gross income to the plaintiff and his wife from concreting in the two years before the sale to Clark when the company was doing commercial work was approximately $40,000 per annum. The sale to Clark led to a drop in their income from the company, but there were other sources of income such as plant hire. [42] I infer that but for the accident the gross income to the plaintiff and his wife from the concreting business would have been about $30,000 per annum. Making allowance for the wife’s contribution, I find that that part attributable to the plaintiff’s efforts would have been about $25,000 gross per annum or $395 net per week (tax being assessed on the individual basis). [43] In the years ended 30 June 1996 and 30 June 1997, the net income from concreting but for the accident would have been – 395 x 52 x 2 = $41,080.00. The actual income from that source was $12,000 less allowances for the wife’s contribution and tax – say $9,000. There was a prima facie loss of $32,080, which should be discounted for contingencies. In all the circumstances I allow past economic loss of $25,000. -- 13 of 16 -- 14 [44] The plaintiff has received social security benefits of $4,861. I allow interest on $20,000 of the past economic loss at 5% per annum over the period from the accident to the trial, ie $4,670. [45] For future economic loss I allow a global sum for disadvantage on the open labour market of $25,000. [46] In summary my assessment of damages is as follows:- Pain and suffering past $20,000 future $10,000 interest $1,865 Special damages including interest $2,000 Griffiths v Kerkemeyer including interest $2,000 Past economic loss $25,000 Interest on past economic loss $4,670 Future economic loss $25,000 $90,535 ______ [47] After apportionment for contributory negligence, there should be judgment for the plaintiff for $54,321. -- 14 of 16 -- BEN HOLDINGS PTY LTD YEAR ENDED 30 JUNE SALES TOTAL EXPENSES WAGES PAID TO PLAINTIFF & WIFE (50/50) DIRECTORS’FEES P PLAINTIFF & W 1990 $108,883.25 $109,637.47 $17,774.96 1991 $54,088.36 $52,916.75 $10,682.16 1992 $203,601.01 $204,174.95 $42,000.00 1993 $159,226.50 $159,257.27 $38,500.00 1994 $50,450.00 $48,776.94 $10,600.00 1995 $43,499.93 $40,349.64 $20,000.00 Plaintiff $5,000 Wif 1996 $16,241.00 $19,448.00 NIL 1997 $69,388.00 $65,345.00 $12,000.00 Plaintiff $7,000 Wi 1998 $82,258.00 $82,314.00 $33,300.00 Plaintiff $19,900 Wi 1999 $75,288.00 $70,237.00 $7,300.00 Plaintiff $7,300 W -- 15 of 16 -- 16 -- 16 of 16 --