O'Brien v Noble [2012] ACTCA 13 (24 February 2012)

Last Updated: 20 March 2012

JOSHUA O’BRIEN v MICHELLE NOBLE

[2012] ACTCA 13 (24 February 2012)

APPEAL AND NEW TRIAL – in general and right of appeal – appeal from a final decision of the Master – appeal upheld.

DAMAGES – measure and remoteness of damages in actions in tort – measure of damages for out-of-pocket expenses, past and future loss of earning capacity and provision of gratuitous services – method of evaluation – appeal upheld.

PROCEDURE – court and judges generally – action for damages for negligence – measurement of damages – no reasons for evaluation given – appeal upheld.

Civil Law (Wrongs) Act 2002 s 100

Noble v O’Brien [2010] ACTSC 29

Pettitt v Dunkley [1971] 1 NSWLR 376

Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247

Kendirjian v Ayoub [2008] NSWCA 194

Gamser v Nominal Defendant [1977] HCA 7; (1977) 136 CLR 145

Goodrich Aerospace Pty Ltd v Arsic [2006] NSWCA 187; (2006) 66 NSWLR 186

CSR Readymix (Australia) Pty Ltd v Payne [1998] 2 VR 505

Westrac Equipment Pty Ltd v King [2004] WASCA 188

Sherwood v Guneser (1992) 110 FLR 459

Fry v McGufficke [1998] ACTSC 20

Griffiths v Kerkemeyer [1977] HCA 45; (1977) 139 CLR 161

Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816

ON APPEAL FROM THE MASTER OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

No. ACTCA 13 of 2010

No. SC 218 of 2007

Judges: Refshauge, Penfold and North JJ

Australian Capital Territory Court of Appeal

Date: 24 February 2012

IN THE SUPREME COURT OF THE ) No. ACTCA 13 of 2010

AUSTRALIAN CAPITAL TERRITORY ) No. SC 218 of 2007

COURT OF APPEAL )

ON APPEAL FROM THE MASTER OF THE SUPREME COURT OF THE AUSTRALIAN CAITAL TERRITORY

BETWEEN: JOSHUA O’BRIEN

Appellant

AND: MICHELLE NOBLE

Respondent

ORDER

Judge: Refshauge, Penfold and North JJ

Date: 24 February 2012

Place: Canberra

THE COURT ORDERS THAT:

(1) The appeal be upheld.

(2) The matter be referred to the Master for a re-trial limited to the assessment of the respondent’s damages in respect of:

(a) future out-of-pocket expenses;

(b) past and future loss of earning capacity; and

(3) The respondent pay the appellant’s costs of the appeal.

IN THE SUPREME COURT OF THE ) No. ACTCA 13 of 2010

AUSTRALIAN CAPITAL TERRITORY ) No. SC 218 of 2007

COURT OF APPEAL )

ON APPEAL FROM THE MASTER OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN: JOSHUA O’BRIEN

Appellant

AND: MICHELLE NOBLE

Respondent

Judge: Refshauge, Penfold and North JJ

Date: 24 February 2012

Place: Canberra

REASONS FOR JUDGMENT

THE COURT:

Introduction

1. Before the Court is an appeal by Joshua O’Brien against a decision of Master Harper (Noble v O’Brien [2010] ACTSC 29) awarding damages for negligently-caused personal injury to the respondent, Michelle Noble, arising out of a motor vehicle accident involving the appellant and the respondent.

2. The heads of damage the subject of this appeal are the Master’s awards for:

(a) the respondent’s future out-of-pocket expenses;
(b) past and future components of damages for loss of earning capacity; and
(c) what the Master referred to as “Griffiths v Kerkemeyer” damages but which may in fact have been intended to include damages available under s 100 of the Civil Law (Wrongs) Act 2002 (ACT).

3. The appellant’s principal ground of appeal is the failure of the Master to provide sufficient reasons to support his awards in relation to these heads of damage.

Background

4. At the time of the trial in early 2010, the respondent was aged 42. In 1999, she had commenced part-time work with the ACT’s public transport operator, ACT Internal Omnibus Network (ACTION). In 2002, her position with ACTION became full-time, and she held this position at the time of the accident in 2005. The accident and its immediate aftermath were described by the Master as follows (at [1], [4]–[5]):

On 8 September 2005, the plaintiff was driving her car on Scollay Street, Greenway. She stopped at an intersection and the defendant’s car ran into the rear of her vehicle. Liability is admitted.

...

The collision was a major one. There was considerable damage to the plaintiff’s car ... The force of the impact was sufficient to push the plaintiff’s car into the intersection. She was able to drive it off the road and on to the grass verge. She felt shaken up but was not immediately aware of any injury.

She woke in the early hours of the following morning with pain in the neck and the right wrist. She was stiff and unable to sit up, having to roll sideways to get out of bed.

5. The respondent returned to normal duties at ACTION one week after the accident. She saw a number of doctors, mainly for ongoing pain in her right wrist. She commenced massage therapy and physiotherapy. An MR arthrogram of her wrist in 2006 showed a large effusion in the distal radio-ulnar joint with some slight dorsal subluxation of the distal ulna and a small tear in the triangular fibrocartilage.

6. The respondent filed proceedings in the ACT Supreme Court on 5 April 2007 seeking damages for personal injury resulting from the accident. She underwent surgery on her wrist in May 2007, but found there was no long-term improvement in her symptoms. She took six weeks long service leave after the operation, tried to start a home-based business selling scented candles (which turned out not to be viable), and returned to work at ACTION on limited duties. She was promoted to a new position at ACTION, with reduced hours. In 2008, three years after the accident, she resigned from this position, following the receipt of medical advice including that she should change careers to reduce aggravation of her wrist injury.

7. In 2009, the respondent attended a course presented by Heal Your Life Seminars Pty Ltd (Heal Your Life) and in April 2009 began a business with another woman conducting personal development workshops. There was no detailed evidence of the time devoted to this business, but the respondent mentioned having conducted three weekend workshops and two 10-week study groups with a third, a 12-week course, in progress at the time of the trial, and explained that the study groups specifically occupied about two-and-a-half hours each week plus time for printing course materials. The business had not made a profit at the time of the trial. The respondent planned to persist with it for the time being but to discontinue the business if it was not financially viable.

8. In 2009 the respondent also took up a part-time position at a childcare centre. Before working at ACTION, she had worked in childcare for about seven years. She worked 20 hours a week in the new childcare position, including three to four hours a day, for four days a week, using a computer. She used painkillers and a wrist guard to alleviate pain in her wrist, neck and shoulders resulting from the computer work. She was employed in this position at the time of the trial.

The Master’s reasons for judgment

9. In his reasons for judgment, the Master first provided a narrative outline of the respondent’s evidence and of the evidence of numerous medical practitioners who had seen her at times between the time of the injury and the time of the hearing (at

[6]–[36]). The Master accepted the respondent’s evidence as correct because he viewed her as a credible witness, making allowance for her less than perfect recollection of some events given the lapse of time. He said at [37]: “I found the plaintiff to be an honest and genuine witness ... I generally accept the plaintiff as a witness of truth and accept her evidence as correct.”

10. The Master then made a number of findings indicating his acceptance or rejection of the medical evidence summarised earlier in his reasons for judgment. First, he accepted the opinion of Dr Roberts, the orthopaedic surgeon who performed the respondent’s wrist surgery in 2007, whom his Honour described (at [40]) as “a Canberra orthopaedic surgeon with particular experience, expertise and standing in his profession in relation to hand and wrist injuries.” That evidence was that there was a causal link between the wrist injury and the car accident. In doing so, his Honour rejected the opinion of Associate Professor Oakeshott that the respondent had no injuries attributable to the car accident (at [31], [39]). The Master’s reasons for this finding were not contested by the appellant.

11. At [40], the Master accepted the other evidence of Dr Roberts, including his opinion that the respondent should move to a different career which would not involve aggravation of her wrist injury, and that she was likely to need surgery on her wrist at about 60 years of age (at [18]–[20]).

12. The Master also generally accepted the evidence of Dr Griffith (a medico-legal consultant surgeon), the evidence of Dr Bentivoglio (an orthopaedic surgeon who examined the respondent in 2007), and the respondent’s own evidence, as to her working capacity (at [40]–[41]). Dr Griffith’s evidence was that the respondent was “unlikely to improve significantly in the short or medium term” (at [32]). Dr Bentivoglio gave evidence that it was “likely that [the respondent] would continue to experience some degree of symptoms in the foreseeable future and perhaps indefinitely” and that “she should avoid activities requiring her to remain in the same position for prolonged periods”, such as computer work (at [34]–[35]).

13. The respondent’s own evidence as to her work capacity, referred to in the Master’s reasons for judgment, included that she would be “quite unable to cope with a clerical job” and could not cope with full time childcare work (at [25]–[27]). Further, she said that she resigned from ACTION following the receipt of advice from Dr Varghese, and Dr Roberts’ recommendation that she “move to a different career which would not involve the same aggravation of the wrist” (at [19], [21]). The Master also referred to other evidence of the respondent relevant to her working capacity, including:

(a) that there was no long-term improvement in her symptoms following the operation on her wrist in 2007 (at [15]);
(b) that after she returned from long service leave she found work difficult; and
(c) that by mid-2008 her symptoms worsened at work, but significantly improved during school holidays (when she presumably took leave) (at [17]).

14. The Master then accepted the evidence of Dr Perla (a medical practitioner qualified in occupational medicine) in relation to causation, but rejected his evidence that the respondent was “fit for full-time work as an administrative assistant or a childcare worker” (at [36], [40]). His reasons for rejecting this evidence were that Dr Perla’s opinion was based on only one consultation and that the evidence was contrary to the respondent’s own evidence which he accepted. He noted (at [36]) that Dr Perla was influenced by the respondent’s wrist not being “tender to palpation” nor having any restriction in movement. He also said that Dr Perla had been influenced by the respondent’s ability to work for three years at ACTION following the accident. The Master then drew an inference, from the failure of the appellant to serve a functional capacity report provided by Mr Tony de Giovanni, that the report would not have assisted the appellant’s case (at [41]).

15. The Master then made brief comments about the various heads of damage, and concluded by awarding the respondent $502,064 in total; his Honour set out the individual components of this amount at [52] as follows:

General damages:	$100,000.00
Interest on past component	$5,400.00
Out-of-pocket expenses:
Past	$36,014.00
Interest thereon	$1,400.00
Future	$25,000.00
Loss of earning capacity:
Past	$50,000.00
Interest thereon	$3,300.00
Future	$220,000.00
Loss of superannuation	$24,300.00

Griffiths v Kerkemeyer:
Past	$18,000.00
Interest thereon	$3,650.00
Future	$15,000.00
	$502,064.00

The appeal

16. The appellant’s grounds of appeal are set out in the notice of appeal as follows:

I. In assessing damages for future out of pocket expenses, past and future loss of earning capacity, and Griffiths v Kerkemeyer damages, the learned Trial Judge fell into error in the determination he was called upon to make in respect of each matter in that he:

(a) Misapprehended the relevant facts;
(b) Gave weight to extraneous or irrelevant matters in each case;
(c) Failed to give weight to relevant matters in each case;
(d) Failed to engage with the evidence relevant to each matter and find relevant facts necessary to support the allowances made;
(e) In respect of past and future loss of earning capacity, acted upon a wrong principle in that he failed to direct himself as to the second limb of the rule established in Graham v Baker [1961] HCA 48; (1961) 106 CLR 340 at 347;
(f) In each case, made a wholly erroneous estimate of the damage suffered.

II. The learned Trial Judge erred in law in failing to give sufficient reasons to support the estimate made of each head of damage challenged.

17. The specific matters challenged in this appeal are the Master’s awards in relation to the respondent’s future out-of-pocket expenses, past and future loss of earning capacity, and past and future “Griffiths v Kerkemeyer” damages.

18. Counsel for the appellant focused his arguments on Appeal Ground II, that his Honour failed to give sufficient reasons to support the estimates he made for each head of damage challenged.

The Master’s reasons

19. The Master’s comments about his assessment of damages followed directly after his Honour had concluded the summary of the medical evidence, and his reasons are set out in full below:

42. It is agreed that the plaintiff has incurred expenses, reasonable in amount, of $36,014.00, mostly for treatment. The bulk of this sum has been reimbursed to her, or paid to the treatment providers direct, by the defendant’s insurer. As to the rest of the treatment expenses, I am satisfied that the amounts claimed are recoverable in the action. Counsel for the defendant did not submit otherwise with any force. The one amount claimed which is in contention is the amount of $3,495.00 paid by the plaintiff as the fee for the course which she attended at Beechworth with the Heal Your Life organisation. I am satisfied that the plaintiff would not have attended the course and hence would not have incurred this expense if it had not been for the injuries she suffered in the motor accident. I am satisfied that her decision to attend the course was a reasonable one, motivated by a decision to gain a qualification which she thought would increase her income-earning capacity and might also help her to cope at a personal level with the physical and psychological sequelae of the accident. It was in my opinion reasonably incurred and is recoverable.

43. The plaintiff is entitled to recover $36,014.00 for past out-of-pocket expenses, plus interest at the prescribed commercial rate of 9% per annum on the portion of that amount which she has paid herself. I allow $1,400.00 for that interest component.

44. For the future, the plaintiff claims the present value of the amount she will spend on medication over the years, with an allowance for the chance that she will decide, perhaps in about twenty years, to undergo an arthrodesis, or perhaps some other kind of surgery which may be available by that time, to the right wrist. She also asks that the amount allowed for future expenses include a component for further training courses she may decide to participate in, through the Heal Your Life organisation or similar outlets. It is not possible to calculate mathematically a sum to cover all of these matters, I take account of the plaintiff’s age, and of the 3% present value actuarial tables which would be applicable if a mathematical approach were possible. I propose to allow $25,000.00 for future expenses.

45. Senior counsel for the plaintiff in submissions put forward calculations in respect of past loss of earnings, including the loss of the value of the plaintiff’s long service leave when she took that leave after her wrist surgery in mid-2007, and her loss of earnings from October 2008, calculated as the difference between what she would have earned if she had stayed in her job with ACTION and what she has earned. Extrapolating those figures to take account of the short period since the hearing, and rounding the figure, I allow $50,000.00 for past loss of earning capacity, plus interest of $3,300.00.

46. In the submission of senior counsel for the plaintiff, the most significant component of the award of damages by far is the amount to be allowed for loss of earning capacity for the future. Counsel has calculated the potential loss based on the current wage differential to age sixty-seven at almost $400,000.00, and submits that I should allow $300,000.00 to take account of the general vicissitudes of life and the particular imponderables of the present case. Counsel for the defendant submits that such an award would be far too high.

47. This is not a case where an accurate projection can be made of what lies ahead for the plaintiff during the many years of her remaining working life, or what she might have done had it not been for the car accident. I am satisfied that her injuries have resulted in a very substantial impairment of her then existing earning capacity. I allow $220,000.00 for that head of damage.

48. Counsel are agreed that I should allow 9% of the amount awarded for loss of earning capacity, past and future, (though not including the interest on the past component). I allow $24,300.00 for loss of superannuation benefits past and future.

49. The plaintiff claims damages for the commercial value of the services provided by her son and other family members. Although counsel acting for plaintiffs regularly adduce evidence about the provision of such services with an aura of precision, it is common knowledge, and something of which I can take judicial notice, that such tasks around the house are carried out over different periods on different days, often intermingled with other activities being carried out by the providers which do not have the same character. Some people take longer to perform such services than others. For example, many men will on balance take longer to perform some household tasks than many women, and teenage children may perform some such tasks more slowly again. Evidence about these matters can in realistic terms do little more than provide the Court with a general flavour of the difference which has been made to the allocation of tasks within a family following injury.

50. I propose to allow $18,000.00 for the past Griffiths v Kerkemeyer component, plus interest of $3,650.00. For the future, I allow $15,000.00.

51. At my invitation, counsel for both parties made submissions as to an appropriate award for general damages. In the event, the ranges were about the same (and as it happened, I am satisfied that both counsel put ranges to me without knowledge of the range to be put by the other side). For general damages for pain and suffering and loss of enjoyment of life I award $100,000.00. I apportion $60,000.00 of that sum to the past, and allow $5,400.00 interest on it.

The obligation to give reasons

20. A trial judge’s obligation to give reasons for his or her decision is well recognised. For present purposes the authorities can be summarised as follows:

(a) Judges at first instance, as part of the exercise of their judicial office, have a duty to state the findings and reasons for decision adequately to enable a proper understanding of the basis on which the verdict has been reached. Failure to fulfil this judicial obligation may constitute an error of law: Pettitt v Dunkley [1971] 1 NSWLR 376 at 382 per Asprey JA.
(b) An appeal court should not be left to speculate from collateral observations as to the basis of any particular finding: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 280 per McHugh JA.
(c) Although the obligation does not require the spelling out of every detail of the process of reasoning, the reasons must resolve critical points in contest and facilitate appellate review: Kendirjian v Ayoub [2008] NSWCA 194 at [169] per McColl JA.
(d) Awards for damages should not be arrived at intuitively, but a process of methodical consideration must be undertaken; in Gamser v Nominal Defendant [1977] HCA 7; (1977) 136 CLR 145 at 149, Stephen J said:
[R]easons should condescend to some degree of particularity concerning the process by which the particular award of damages has been arrived at
...
An award of damages is not, nor should it ever be, arrived at intuitively.
(e) Merely stating a preference for particular evidence as opposed to a competing body of evidence is not sufficient. In Goodrich Aerospace Pty Ltd v Arsic [2006] NSWCA 187; (2006) 66 NSWLR 186 at 191; [28], Ipp JA said:
It is not appropriate for a trial judge to merely set out the evidence adduced by one side, then the evidence adduced by another, and then assert that having seen and heard the witnesses he or she prefers or believes the evidence of one and not the other. If that were to be the law, many cases could be resolved at the end of the evidence simply by the judge saying: ‘I believe Mr X but not Mr Y and judgment follows accordingly’. That is not the way in which our legal system operates.

21. Counsel for the appellant also referred the Court to two cases (CSR Readymix (Australia) Pty Ltd v Payne [1998] 2 VR 505 (CSR) and Westrac Equipment Pty Ltd v King [2004] WASCA 188 (Westrac)) dealing specifically with assessments of damages. Both those cases support the appellant’s contentions.

22. In CSR (at 511–12), the trial judge said:

These figures [provided by counsel] are useful in that they give a general indication of the appropriate range but, of necessity, they assume a degree of precision which I regard as unrealistic. I do not doubt that the plaintiff's loss of earning capacity is substantial but, in the circumstances of this case I do not seek to approach the task of assessment in that way. I have adopted a more global approach.
...
There are too many variables to approach the task of assessing the magnitude of his loss of earning capacity in a mathematical way. It is for this reason that I choose to proceed by selecting a sum that seems to me to reflect the magnitude of the plaintiff's loss. That sum is $180,000. This figure represents the loss at this date.

23. On appeal by the defendant, counsel for the respondent sought to infer from those comments (at 512):

a rejection of the arguments made to [the trial judge] by the appellant and a substantial acceptance of those which [counsel for the respondent] had made to the trial judge on behalf of the respondent. It was Mr Meldrum's contention that when the trial judge used the words ‘these figures are useful in that they give a general indication of the appropriate range’, he could only have been referring to the figures which he had submitted because otherwise the figure ‘selected’ by the judge of $180,000 could not be relevantly explained. ... It was Mr Meldrum's submission that the trial judge's assessment of
$180,000 must have taken as its starting point the range of figures which he had submitted but incorporated a larger discount for contingencies.

24. Winneke P, with whom Hayne and Batt JJA agreed, said (at 512–13):

Seductively attractive though Mr Meldrum's argument is, I cannot accept it. I cannot accept it principally because it is not what the trial judge said he was doing. He eschewed an assessment on the basis of mathematical formulae, a basis which he discarded as leading to an unrealistic degree of precision; and, thus, he expressly stated that he would not ‘seek to approach the task of assessment in that way’. Having said that he proposed to adopt what he called ‘a more global approach’, he confirmed his view that ‘there are too many variables to approach the task of assessing the magnitude of his loss of earning capacity in a mathematical way’.
...
Such reasoning, as it seems to me, is consistent only with the conclusion that his Honour had adopted an intuitive approach. The only findings which he made were that the respondent would have ‘continued to work for as long as he could’ if the accident had not intervened; that the respondent would probably be forced to stop work ‘in the next year or two’; and that ‘he may thereafter be able to continue to do small, less demanding jobs’. Beyond that it is impossible to discern what view his Honour took as to the impact, if any, which the accident had had upon the respondent's productive capacity at the date of the trial; in particular whether he formed any view as to whether, had it not been for his injuries, the respondent would have been earning at nearly twice the rate at which he was in fact earning at the date of trial.

25. Winneke P went on (at 513–14) to acknowledge that “the calculation of the respondent’s loss of earning capacity was no easy task”, but said that this made it all the more important for the assessment to be based “strictly on the evidence, accurately stated, carefully analysed and applied to the task in hand by rational analysis exposed to scrutiny in [the] reasons for judgment”. He concluded:

[I]n my view the so-called ‘global approach’ towards the assessment of economic loss adopted by his Honour was an erroneous one and an approach which, for the reasons which I have already stated, has led his Honour into ‘selecting’ (as he put it) a sum which was unsupported by the evidence.

26. In Westrac, Steytler J with whom Malcolm CJ and McLure J agreed, indicated

at [29] that an intuitive approach is not an acceptable alternative to adequate reasons and findings on matters in dispute:

I am unaware of any recent authority which would support the proposition that intuitive awards can be made without finding facts on disputed evidence and without the benefit of disclosed reasoning. ... Where there is a right of appeal, the reasons must be sufficient to give effect to that right. If the basis for the decision is not apparent, the losing party is unable to identify error. Consequently, where one set of significant evidence is preferred to another, the trial Judge should not only express his or her conclusions in that respect, but set out sufficient findings to explain why they were arrived at.

27. Counsel for the respondent submitted that both these cases can be distinguished on their facts. However, even if that is correct, distinguishing those cases would not provide a basis for accepting that in the current circumstances either a “global approach” or an intuitive award is an appropriate alternative to findings of fact and explicit reasons.

28. Counsel for the respondent did not challenge the authority of any of the cases cited, but argued that although the Master’s reasons for judgment could have been clearer, they were adequate when read in the context of the entire judgement, the evidence and, in particular, the submissions made by counsel for the parties at trial.

Consideration of the Master’s reasons

Out-of-pocket expenses

29. The Master first considered past out-of-pocket expenses, found that the amounts claimed were reasonable, and awarded damages in the agreed amount plus interest (at [42]–[43]).

30. In assessing future out-of-pocket expenses, his Honour referred to future medication, the surgery that Dr Roberts thought might be required in about 20 years, and further training courses from Heal Your Life or similar provider, but without referring to the estimated costs of any of these items although there was specific evidence about the likely costs of all those items. He went on at [44]:

It is not possible to calculate mathematically a sum to cover all of these matters, I take account of the plaintiff’s age, and of the 3% present value actuarial tables which would be applicable if a mathematical approach were possible. I propose to allow $25,000.00 for future expenses.

31. Counsel for the appellant argued that the Master’s award of $25,000 was arrived at without rational basis or adequate explanation, and that the award should not have been higher than $13,486. Counsel pointed to evidence about the estimated costs of surgery (a range of $2,500–$4,000 emerged from the evidence of Dr Roberts and Dr Bentivoglio), Dr Bentivoglio’s assessment of the respondent’s likely costs for medication ($300 per year, which gave an amount of $7,570 when calculated over the respondent’s life expectancy and taking account of the 3% multiplier), and the cost of a single Heal Your Life course ($3,700) rather than multiple courses. He also said the Master should have referred to Dr Bentivoglio’s opinion that the respondent would not benefit from further surgery, and indicated his conclusion about the conflicting views of Dr Roberts and Dr Bentivoglio. The Court notes that the Master’s mention of the actuarial tables, while apparently hinting at an attempt to calculate an amount, was in fact made only for the purpose of pointing out that the tables were not applicable to his assessment.

32. Counsel for the respondent said that the Master’s reasons at [44] were sufficient for what was a discretionary award. He referred to evidence that Dr Roberts’ estimate of a maximum of $4,000 for the cost of the surgery did not include the fees for theatre, the anaesthetist, hospitalisation or rehabilitation. He said it was clear that at trial the Master had accepted that the respondent would need to visit her general practitioner regularly and attend specialist consultations. Finally he noted that the Master’s assessment was in the context of the respondent already having incurred over

$36,000 since the incident, and that the award was therefore a reasonable assessment of her future needs.

33. It is apparent from the submissions summarised in [31] above that there was specific evidence available on which to base an initial assessment of an appropriate award in respect of future out-of-pocket expenses. Having regard to the matters mentioned in [32] above on which there was no specific evidence, it might have been reasonable for the Master, having made the initial assessment, to round up the original figure fairly generously to account for those matters, but it is not clear from his reasons whether this was in fact what he was doing. Given his Honour’s express reference to “a component for further training courses [the respondent] may decide to participate in, through the Heal Your Life organisation or similar outlets”, and the absence of any reference to either the extra costs of surgery or to further visits to doctors, it is not possible to identify what was covered by the approximately $11,000 awarded in addition to the amount calculated by the appellant by reference to the specific evidence. The amount may in fact have represented not extra medical expenses at all but three more Heal Your Life or similar training courses.

34. We note in this context that it is not clear from the Master’s reasons whether these courses were seen as part of the respondent’s “treatment”, or as an incident of the development of the respondent’s own Heal Your Life business. In either case, the significance of these courses should have been explained so as to allow an understanding of what, if any, assumptions about the impact of future Heal Your Life courses had been made in the assessment of the respondent’s physical impairment, or of her future earning capacity.

35. It is apparent that the Master’s reasons for his award in respect of future out-of-pocket expenses left various significant issues unexplained or unaddressed.

Economic loss (loss of earning capacity)

36. The Master’s award for the respondent’s past economic loss was explained at [45] of the judgment, and at [46]– [47] his Honour dealt with future economic loss.

Past lost of earning capacity

37. The award of $50,000 for past loss of earning capacity was based on calculations in the respondent’s submissions at trial as to the difference between what she would have earned at ACTION and what she was earning in her part time position at the childcare centre. The Court is satisfied in relation to this award that although the Master did not refer to the specific amounts, his calculations could be discerned from his reasons in the light of submissions put at the hearing, and that, in turn, would reveal the degree of rounding-up that he applied.

38. It is implicit in his Honour’s comments about the award for past loss of earning capacity that he found that the respondent’s past loss of income represented her lost earning capacity. It is not so easy to infer the reasons for this finding, because there was in fact a reasonable amount of medical evidence and other evidence to support an argument that the respondent might have been fit for full-time work for most if not all of the time since the accident. As well as Dr Perla’s evidence that the Master explicitly rejected (at [40] of his judgment):

(a) the reports of Dr Bentivoglio and Dr Griffith in 2007 contained no suggestions that the respondent was not fit for the performance of full-time work at ACTION; and
(b) the report of Dr Roberts in 2009 made no suggestion that she was not fit for full-time work in another occupation, although Dr Roberts did recommend that she pursue alternative work which would not aggravate her symptoms.

39. As well as the medical evidence, there was also evidence:

(a) that the respondent had in fact continued to work at ACTION full-time for three years after the accident, maintaining her income and even gaining a promotion;
(b) that during those three years she was not receiving any “real treatment” but was having some massage; and
(c) that she had only resigned from the ACTION position in October 2008 after receiving Dr Roberts’ advice that she should pursue alternative work and Dr Varghese’s provision of medical certificates to the effect that she was fit to work only six hours per day from March 2008, and then unfit to work from 10 September 2008; and
(d) that although the respondent was only working part-time (20 hours a week) at the time of the hearing, she was also devoting significant effort (which apparently included the bulk of the necessary computer work) to her Heal Your Life business, which was not yet profitable.

40. Counsel for the respondent pointed out the significance of Dr Varghese’s certificates, and noted that, having accepted the respondent’s evidence and rejecting that of Dr Perla, the Master had clearly rejected the submission that the respondent was fit for full-time work and that his Honour was then entitled to make the award of

$50,000, particularly as the appellant did not dispute the amount (see below at [51]).

41. The Court does not consider that the Master’s explicit rejection of Dr Perla’s evidence, and explicit acceptance of the respondent’s evidence that she “could not cope” with full-time work, were an adequate explanation for his Honour’s conclusion that the respondent’s past loss of income represented her lost earning capacity. His Honour needed to explain whether and why he accepted or rejected the evidence referred to at [38] and [39] above, and, to the extent that he accepted it, why he nevertheless reached the conclusion that he did about the respondent’s lost earning capacity. Counsel for the appellant pointed out that, among other things, the Master should have made a finding about whether it was reasonable for the respondent to resign from her position with ACTION and undertake work at a reduced capacity, a matter that was clearly relevant to the degree of impairment of her earning capacity.

42. The Court is not suggesting that the conclusion reached by the Master was not sustainable on the evidence; it was clearly one of the conclusions open to the Master, but as one of multiple available conclusions, it needed to be explained by specific (although not necessarily detailed) reference to relevant evidence.

Future loss of earning capacity

43. Only when he came to consider the award for the respondent’s future loss of earning capacity did the Master make an explicit finding that the respondent’s injuries had “resulted in a very substantial impairment of her then existing earning capacity” (at [47]). His Honour did not, however, explain that finding by making explicit preliminary findings in relation to the conflicting evidence about the respondent’s capacity for full-time work, and nor did his Honour take the next step, having made a finding of impairment of earning capacity, of making an explicit finding that this impairment was likely to be “productive of financial loss” (Graham v Baker

[1961] HCA 48; (1961) 106 CLR 340 at 347). We note in this context that as well as the evidence referred to at [38] and [39] above, there was also before his Honour:

(a) evidence that the respondent was being encouraged by her current employer to retrain and obtain a better-paid position in the child care industry where she was then working part-time (possibly taking over as the director of the centre where she was then employed) but evidence from the respondent that she didn’t have “a passion to do that”; and
(b) the possibility that the respondent’s Heal Your Life business might in due course become at least sufficiently profitable to provide her with a reasonable wage for the time she was devoting to it.

44. The Master did not in his reasons respond to the appellant’s submissions that, having regard to this evidence, his Honour should award a “buffer” only, to provide the respondent with an opportunity to retrain in childcare, and that this was “not a case where there should be an arithmetic calculation of a measured loss over a number of years for the rest of her life”.

45. There is also a further aspect of his Honour’s award in respect of future economic loss that needed more explanation than was given.

46. Counsel for the respondent argued that the Master’s award of $220,000 for future loss of earning capacity should be viewed in the context of the respondent’s calculations in submissions at trial. The respondent’s proposed award for loss of earning capacity was calculated on the basis of a reduction in earnings of $432 a week (reflecting the pre-trial reduction in earnings) to age 67, amounting to $400,000, with a deduction for general vicissitudes of life and imponderables, to produce a figure of $300,000. The Master then made what counsel for the respondent conceded was “something of a discretionary judgment” by discounting for imponderables the amount representing reduction in earnings by 45% (giving a figure of $220,000) rather than the 25% submitted by the respondent. Counsel for the respondent pointed out in reliance on Sherwood v Guneser (1992) 110 FLR 459 (Guneser) and Fry v McGufficke

[1998] ACTSC 20 that the assessment of damages for past or future loss of earning capacity may appropriately involve a substantial element of discretionary judgment in cases which involve future imponderables, and that the Master had said at [47] that “[t]his is not a case where an accurate projection can be made of what lies ahead for the plaintiff during the many years of her remaining working life, or what she might have done had it not been for the car accident”.

47. In Guneser, the Court (Miles CJ, Gallop and Higgins JJ) recognised (for instance at 465) that in the assessment of the future economic loss there is inevitably an element of discretionary judgement, but it is implicit, and at certain points explicit, in that case that the discretionary judgement is to be made by reference to the trial judge's findings of fact.

48. In Fry v McGufficke the Court (Miles CJ, Gallop and Crispin JJ) said at [8]:

It was submitted that the Master had fallen into error in assessing damages for past and future economic loss on the basis of an intuitive rather than an arithmetical approach. Counsel for the plaintiff submitted that it was preferable to adopt the latter approach where that was practicable. As a matter of general principle that is correct. Furthermore, this case in particular was one in which any assessment of damages for economic loss was beset by so many imponderables that an arithmetic approach could only have given a false appearance of accuracy. Nevertheless, in our view, it was open to the Master to make a global assessment of the losses in question, based on the evidence but without express reference to arithmetical calculation, his award does not bear the appearance of gross inaccuracy. However, it is rare that the facts allow one approach to the exclusion of the other. Some arithmetical basis must be used and a lump sum cannot be plucked out of the air, but judgment must be used in the application of arithmetic to what figures the evidence may support.

49. It may be correct that both the future of the Heal Your Life business and the likelihood of the respondent retraining were “imponderables” that could not be the subject of specific findings. Although this may be so, we note that the Master’s apparent acceptance of the respondent’s evidence that she could no longer “cope” with full-time work, in the context of evidence that while working part-time she appeared to have “residual capacity” that she was devoting to the Heal Your Life business (including to the necessary computer work), and the reasonableness or otherwise of the respondent’s reluctance to pursue a better-paid job in the childcare industry because she did not have a passion for the work, could usefully have been the subject of specific comment. More generally, the Court considers that his Honour should at least have identified the imponderables he was considering, explained why he could not make specific findings, and indicated the role those imponderables played in his calculation of the proper award for loss of earning capacity. Specifically, in this case, the question arises whether the uncertainty of those possibilities was the basis for an implicit finding that the impairment of earning capacity had led to financial loss, or whether that uncertainty was in fact the explanation for discounting the amount of $400,000 (calculated by reference to the previous $432 weekly loss) by 45% rather than the 25% proposed at trial on behalf of the respondent (which the Master simply said gave an amount that was “too high”) or what counsel for the respondent conceded was the more usual 15%. That is, the Master’s failure to give this explanation could have created the same difficulties in an appeal by the respondent against the 45% discount (as compared with the proposed 25% discount) as it has in this appeal.

50. Finally, counsel for the respondent argued that the award of $220,000 was well within a reasonable range, given the finding at [47] of the Master’s judgment of a “very substantial impairment” of the respondent’s earning capacity. We have already noted the need for an explicit finding that the impairment was likely to be “productive of financial loss”. Without such a finding and the identification of the evidence on which it is based there is no obvious starting point for identifying a range, so the failure to make such a finding, and to explain its basis, seems to the Court to exclude reliance on the concept of a reasonable range in this case. We note that recognition of the discretionary element in damages awards, and the concept of a reasonable range, might well be useful in considering an appeal against a particular award where the argument is whether the reasons given by the trial judge could properly translate into the amount of the award concerned. However, this approach does not seem so useful where, as here, the central question is the absence of any substantive reasons for making any award of the kind in fact made.

Concessions as to calculations

51. Counsel for the appellant conceded that certain concessions had been made at trial about the respondent’s calculations for loss of earning capacity. However, he said, these were concessions in relation to quantum and were relevant only if the Master had actually found an impairment of earning capacity. He said that the appellant maintained throughout the trial that the respondent was capable of full-time work, and that these concessions did not relieve the Master of his obligation to give reasons for finding an impaired earning capacity, and for finding that the impairment translated into actual future loss properly compensated by an award of $220,000. We accept the appellant’s submissions in this regard.

Inability to perform domestic duties

52. As to the award described by the Master as “Griffiths v Kerkemeyer” damages (in relation to which his Honour had previously referred at [49] to the plaintiff’s claim for damages “for the commercial value of the services provided by her son and other family members”), counsel for the appellant conceded that the appeal would not have been pursued in relation to those damages alone, but despite this we find it necessary to address this challenge.

53. The relevant damages awarded were $36,650, including $18,000 for the past, plus interest, and $15,000 for the future (at [50]).

54. The appellant argued that the Master provided no reasons whatsoever for this award of damages, and that it is impossible to determine from the reasons for judgment what gratuitously-provided services were being addressed and for how long. He said there was no medical evidence to support the award, and that the reports of Dr Griffith and Dr Bentivoglio implied that the respondent’s capacity to perform domestic activities had improved so that only heavier outdoor activities, such as mowing the lawn and gardening, were restricted. He said that there was no reference to the respondent’s restricted domestic activities in other reports, including the report of Dr K T Chan whose speciality includes rehabilitation medicine.

55. Counsel for the respondent noted that by awarding $18,000 for past “Griffiths v Kerkemeyer” damages, the Master substantially acceded to the appellant’s submission that $17,160 (being half of what was claimed by the respondent) was an appropriate award.

56. In relation to the award of $15,000 for the future, counsel for the respondent pointed out that the Master “split the difference” between the submissions (the respondent’s claim for an award of $20,000 and the appellant’s proposed award of $10,000). The respondent argued that, given the imponderables in this particular case, the award for the future was a discretionary judgment open to the Master on the basis of the decisions in Guneser and Fry v McGufficke.

57. Counsel for the respondent conceded that the Master’s reasons at [49] and [50] for the award of these damages were “concise and somewhat general”, but argued that the Master’s approach to this head of damages “neatly encapsulates” why his Honour’s reasons for judgment were sufficient, emphasising again the need to examine the reasons for judgment in the context of the submissions at trial. The appellant’s submissions at trial were that the award sought by the plaintiff was too high because her son was now older and would in any case be expected to contribute more around the house, thus reducing the tasks that the plaintiff would otherwise have reasonably expected to perform and thereby diminishing the scope for treating the services provided by her son as sounding in damages. Counsel for the respondent argued that it had been open to the Master, on the evidence, having regard to the submissions and noting that there were imponderables, to exercise his discretionary judgment to make the award specified without further explanation. Further, relying on Fry v McGufficke, counsel argued that there was no need to list all the evidence and each contention in detail, particularly when considering future imponderables.

58. In relation to the “Griffiths v Kerkemeyer” award in respect of past losses, the Court is inclined to the view that the Master’s acceptance of the appellant’s submission for reduction of the respondent’s claim would have been, in the circumstances of a relatively small claim, an adequate indication of his views. However, in the light of our comments about the significance of s 100 of the Civil Law (Wrongs) Act

2002 (ACT) (at [60]–[62] below) and our conclusions in relation to the “Griffiths v Kerkemeyer” award for future loss (at [63] below), a clear finding about the relevant past losses will be required.

59. In relation to the award in respect of future losses, even accepting counsel’s submission that there was no need to list all the evidence and contentions in detail, the Court observes that, in this case, not only was there no detailed listing of the evidence and addressing of all the contentions but there was no reference at all to any of the evidence, or even to any of the particular imponderables that his Honour saw. The Master’s comment (at [49]) that evidence about the allocation of household tasks “can in realistic terms do little more than provide the Court with a general flavour of the difference which has been made to the allocation of tasks within a family following injury” is not an adequate substitute for references, however brief, to even the “general flavour” that had been provided by evidence of the difference in allocation of tasks within the respondent’s family, and to what the Master accepted as the likely impact of the respondent’s injury on the future allocation of identified tasks.

60. The Court notes also the Master’s failure to mention the distinction between:

(a) “Griffiths v Kerkemeyer” damages (Griffiths v Kerkemeyer [1977] HCA 45; (1977) 139 CLR 161) for necessary services provided gratuitously to the injured person by family or friends; and
(b) damages under s 100 of the Civil Law (Wrongs) Act for the loss of “capacity to perform domestic services which the injured person might reasonably have been expected to perform for his or her household”.

61. This issue was raised by counsel for the appellant, who pointed out that at the hearing counsel for the respondent had noted that part of the respondent’s claim was for damages available under s 100 of the Civil Law (Wrongs) Act (being the care of her younger son that was being provided by her older son) rather than under Griffiths v Kerkemeyer.

62. We do not regard his Honour’s failure to refer to the statutory head of damages as necessarily important, except that in this case it makes it even more difficult to infer what losses the Master was accounting for in the awards he described as “Griffiths v Kerkemeyer” damages, and in particular makes it difficult to respond to the appellant’s arguments about the role of the respondent’s older son. For instance, if the damages awarded were intended to reflect the likely future services provided to the respondent by her son by way of some heavier outdoor work (Griffiths v Kerkemeyer), they might have covered only the relatively short period during which the availability of an adult son to provide such services could have been assumed. In contrast, if the damages were in fact attributable to the loss of domestic services which the respondent might have been expected to perform for her household in the longer term (Civil Law (Wrongs) Act s 100), the assessment of damages might have involved a different calculation.

63. The Court is satisfied that the reasons his Honour gave for the amounts of past and future “Griffiths v Kerkemeyer” damages awarded were not adequate.

Conclusions

64. The Court is satisfied that the learned Master failed to give sufficient reasons for his awards of damages in respect of past and future loss of earning capacity, future out-of-pocket expenses and past and future “Griffiths v Kerkemeyer” (or Civil Law (Wrongs) Act s 100) damages, and that the appeal should, accordingly, be allowed.

Consideration of appropriate orders

65. Counsel for the appellant submitted that if the Court accepted that the Master’s reasons were insufficient, it should make its own assessment of whether the challenged awards of damages were excessive and decide upon the appropriate awards itself. However, he acknowledged the Court’s power to order a retrial, including a retrial limited to the question of damages: Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816, and submitted that any such retrial should include each challenged head of damage, having regard to the relationship between the various awards.

66. The Court is not inclined to undertake the task of re-assessing the damages, given the substantial issues not dealt with in the Master’s judgment and the possible significance of the Master’s assessment of the respondent’s credibility. In reaching this view, we note and adopt the comments of the Victorian Court of Appeal in CSR at 516 that

[t]he proper assessment of the respondent's loss of earning capacity, both past and future, involves the finding of critical facts bearing upon the extent to which the respondent's capacity to earn income has been reduced by [her] injuries. Those facts have not been determined by the trial judge in this case and, to that extent, this court would be placed in a position of significant disadvantage if it were to determine the matter for itself. Such a determination must inevitably involve an assessment of the respondent's credibility and the probative value of [her] evidence as to [her] present and future capacities for gainful employment.

67. The matter will be referred to the Master for a retrial limited to the assessment of the challenged heads of damage. These are the heads of damage in relation to the respondent’s future out-of-pocket expenses, past and future loss of earning capacity and, having regard to our comments at [58] above, “Griffiths v Kerkemeyer” and Civil Law (Wrongs) Act s 100 damages for both past and future.

Orders

68. The orders are:

(1) The appeal be upheld.

(2) The matter be referred to the Master for a re-trial limited to the assessment of the respondent’s damages in respect of:

(a) future out-of-pocket expenses;

(b) past and future loss of earning capacity; and

(3) The respondent pay the appellant’s costs of the appeal.

I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Date:

Counsel for the appellant: S G Campbell SC and M A McDonogh

Solicitor for the appellant: Sparke Helmore Lawyers

Counsel for the respondent: R L Crowe SC

Solicitor for the respondent: Maliganis Edwards Johnson

Date of hearing: 11 November 2010

Date of judgment: 24 February 2012

Subsequent Judicial Consideration7

Treatment Over Time

Referred to (7)