PROPRIETORS OF STRATA PLAN NO 121 v PUFLETT [1989] NSWCA 169

PROPRIETORS OF STRATA PLAN NO 121 v PUFLETT

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

SAMUELS, MEAGHER and Hope JJA 29 August 1989, 17 October 1989

[1989] NSWCA 169

COMMON LAW — PERSONAL INJURY — CALCULATION OF DAMAGES — NO QUESTION OF PRINCIPLE

Samuels JA I agree with Meagher JA.

Meagher JA This is an appeal by the defendant in an action of negligence brought by the plaintiff, the present respondent, which was heard by Lee J sitting without a jury. His Honour on 12 February 1987 gave the respondent judgment in the sum of $179,177.00 against the appellant.

The judgment related to injuries which the respondent (who is a gynaecologist and obstetrician) suffered on 30 May 1982 when alighting from a lift in premises of which the appellant is her body corporate.

His Honour, as I have said, found the appellant negligent; and there is no appeal on the question of its liability. The present appeal relates solely to the quantum of damages awarded by his Honour.

His Honour's award of damages comprised the following factors:

(i) general damages: $37,500.00 (ii) interest on general damages: 6,650.00 (iii) loss of earnings to date of hearing: 67,000.00

(iv) interest on item (iii): 22,027.00 (v) future economic loss: 46,000.00

(vi) out-of-pockets: 4,163.05

As can be seen, the award of $179,177.00 contains a mathematical mistake. It should have been $183,340.00.

The respondent, in her accident, sustained an injury in the nature of a Potts dislocation of the right ankle, an intra-articular fracture of the superior surface of the right oscalcis and a fracture of the subluxation of the right tabo navicular and calcineo cuboid joint complex. At the time she felt great pain in her right kneecap and left elbow and observed that her foot was at right-angles with itself. Her right knee caused problems. She was in hospital for two weeks, plaster was put on the whole leg from mid-thigh downwards. She has been operated on. She was given initially crutches and later a wheelchair. She now uses a stick. She resumed her practice (which had been very busy) after five or six weeks. Operating in these circumstances was extremely painful. This pain was to some extent, but not entirely, obviated by wearing men's shoes of different sizes, other special shoes, and an iron brace. She could no longer conduct operations in the operating theatre for long hours in these conditions. She was unable to drive her motor car for six months, and finds great difficulty in using public transport as an alternative. She has to walk slowly, has difficulty in negotiating steps and sometimes loses her balance. A later arthrodesis may or may not be necessary. She has also

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experienced depression. In these circumstances it is hardly to be wondered at that his Honour awarded her general damages of $37,500. That award is not challenged. Nor is the interest factor on that award. Nor, for that matter, are the out-of-pockets.

However, his Honour's award of $67,000.00 for loss of earnings to the date of the trial was challenged. In order to evaluate this challenge it is necessary to examine the facts found by his Honour as to her position both before and after she sustained her injuries. Before her injuries, she had for thirty one years been conducting her specialist practice, operating in her rooms one day a week from early in the morning until six o'clock in the evening without a lunch break, visiting hospitals and clinics for pre-operative and post-operative visits nearly every day. Her operations were often major ones. She had given away her obstetrical practice about five years before her injuries, and thereafter carried on an exclusively gynaecological practice, which she intended to pursue "into her eighties". She had been awarded the Order of Australia. After her injuries, her practice dropped off. (As the learned trial judge remarked, one might speculate that the sight of an elderly limping gynaecologist would lead to a loss of confidence in her both amongst her patients and amongst referring physicians). Nor is she fit to do some of the major operations which she used to perform, and would still perform if her state of health permitted it. She could not, of course, do any work at all for many weeks immediately after the injuries. There was no doubt that her injuries caused her practice to decline. The appellant did not, and could not, suggest otherwise. The problem which faced his Honour was to determine the monetary value of that decline. It is obviously peculiarly difficult to do so with mathematical accuracy. His Honour found that were it not for the accident, she would have worked for many years with unabated vigour, earning during those years the same income she had previously earned. He came to this conclusion after consideration of evidence that there had been a drastic reduction of elective surgery in hospitals, that she had other business interests, that she had sold her professional rooms to her daughter, that she was hoping to spend more time with her husband, that her husband had suffered a cerebral haemorrhage, and that she was 60 years of age at the date of the accident. All these matters had been put to her in cross-examination and answered by her. She maintained that despite them she would have worked at the same pace as heretofore until she was in her eighties. The judge believed her and was entitled to do so. There can be no quarrel, therefore, with the basis on which his Honour approached the assessment of her loss of earnings.

But, granted the correctness of the fundamental assumption that she would have continued working, how could a monetary figure be arrived at? His Honour reached his conclusion of $67,000.00 by a consideration of her income tax returns. From these documents he deduced that immediately before her accident her average weekly earnings were $612.55; he then calculated the amount by percentage increases for each of the following years; he then calculated what total income would have been earned on the assumed earnings so calculated; and from that figure he deducted the sum of income actually received and tax hypothetically payable in respect of the total income calculated. Granted that the tax returns were the only evidence available to his Honour (and in the circumstances, the only evidence which could have been available), I can see no error in his Honour's methodology. However, counsel for the appellant made a number of criticisms of his Honour's results. In the first place, it was said that his Honour's initial figure was calculated on a 49-week year instead of a 52-week

URJ PROPRIETORS OF STRATA PLAN NO 121 v PUFLETT (Hope AJA) 3

year, the accident having occurred four weeks before the end of a financial year. Strictly speaking this does have a distorting effect, but only slightly so because 75% of her accounts were paid at the time of treatment. The ultimate distortion, in my opinion, is so minimal it can fairly be overlooked. Secondly, it was said that the method was vitiated by a failure to make any deduction for the expenses incurred in conducting her practice; but an examination of those expenses demonstrated that they would have been incurred in any event - for example, the rent of her rooms. Thirdly, it was submitted that no weight was placed on the fact that her returns disclosed that each year she made a loss. That is true, but irrelevant. If she lost income because of her injuries, it is entirely irrelevant that from a tax point of view her deductions usually exceeded her assessable income; she is still entitled to be compensated for the income lost. I am therefore of the view that no criticism of his Honour's calculations can be sustained. I am fortified in this view by the appellant's concession that there was no other way a loss of income which had incontrovertibly occurred could be quantified. Why should the court chose a purely arbitrary figure for that loss when one way of quantifying it was available?

Similar considerations were urged to dislodge the figure of $46,000.00 for future economic loss. But in my view that figure is equally immune from attack. Indeed, in view of the fact that she would be working for another 15-20 years, that figure seems to err on the side of parsimony rather than generosity.

For these reasons I am of the view that the appeal should be dismissed with costs. However the order appealed from must be set aside in order to correct the mathematical error to which I have alluded.

In my view the following orders should be made: 1. Appeal dismissed with costs. 2. The judgment for the plaintiff in the sum of $179,177.00 be set aside. 3. In lieu thereof, judgment for the plaintiff should be entered in the sum of $183,340.00 4. Interest on the judgment should run as from 12 February 1987.

Hope AJA I agree with Meagher JA.

1. Appeal dismissed with costs. 2. The judgment for the plaintiff in the sum of $179,177.00 to be set aside. . In lieu thereof, judgment for the plaintiff should be entered in the sum of $183,340.00 4. Interest on the judgment should run as from 12 February 1987.

Counsel for the Appellant: PJ Deakin

Solicitors for the Appellant: Abbott Tout Russell Kennedy Counsel for the Respondent: RD Cogswell and AJ Reynolds Solicitors for the first Respondent: PJ Straton and Associates

Solicitors for the second Respondent: Dawson Waldron