Refresher on damages for economic loss and domestic assistance where there are pre-existing conditions.
Gulic v Angelovski
Mr Gulic was injured in a motor vehicle accident (MVA) in 2004. In 2013, he commenced proceedings in the District Court of NSW at Sydney against separate firms of solicitors, alleging breach of duty by the solicitors in failing to initiate proceedings within the limitation period against the driver responsible for the MVA.
The primary judge dismissed Mr Gulic’s claim against the first firm of solicitors. The second firm of solicitors (the second firm) admitted liability. The question at trial and on appeal was the value of the chance lost by Mr Gulic.
Decision at first instance
At trial, the second firm accepted that it breached its duty of care owed to Mr Gulic by failing to institute proceedings claiming damages for personal injury against the driver of the vehicle within the limitation period. It also accepted that had proceedings been instituted within the limitation period, then the liability of the driver would have been established at the notional trial, and that the notional date of the trial would have been 11 April 2009.
As a result, the sole question for the primary judge, Gibb DCJ, was the value of the chance Mr Gulic lost by reason of the second firm’s breach of duty. To answer that question, her Honour had to assess the quantum of damages that a court would have awarded Mr Gulic had his claim against the driver been heard on 11 April 2009. Mr Gulic conceded that he could not have recovered damages for non-economic loss. As such, the focus of the hearing before Gibb DCJ was on the notional claim against the driver in respect of lost earning capacity and the need for domestic assistance.
Mr Gulic’s claim was complicated by the fact that he had sustained prior injuries in incidents in 1998, 2002, and 2003. It was common ground that Mr Gulic had been wholly disabled from working as a brick cleaner as a result of the injuries sustained in 2003.
During the trial, Mr Gulic relied on a letter said to be signed by a Mr Djakovic, stating that Mr Gulic had worked as a brick cleaner from 1998 and 2003 and, in January 2004, been offered driving work for $900 per week. Mr Gulic did not call Mr Djakovic to give evidence, however the second firm did. Mr Djakovic’s evidence was that he had never offered to employ Mr Gulic, and that Mr Gulic had instructed him to write the letter.
Gibb DCJ, awarded modest damages past economic loss and dismissed the claims for future economic loss and assistance. In doing so, her Honour:
- Allowed a claim for past economic loss in the sum of $25,000 for the notional period of 2004 to April 2009, mainly on the basis of a concession made by the second firm that a trial judge might have awarded that amount in the nominal trial (her Honour having doubts about the veracity of the claim). Notwithstanding the concession, her Honour formed the view that the second firm had discharged its onus that Mr Gulic’s incapacity for work was due to a pre-existing condition and, further, that: (1) the letter from Mr Djakovic had been fabricated; and (2) Mr Gulic had identified no capacity for work aside from that letter.
- Declined to award any damages for future economic loss under s126(1) of the MACA (which is similar to s13 of the Civil Liability Act 2002 (CLA)) on the basis that there was no evidence:1. That Mr Gulic held a commercial driving licence of any type;
2. That Mr Gulic was capable/able to work as a driver;
3. That Mr Gulic was able to do work as a driver on the open market, given his injuries, actual capacity, and lack of command of English;
4. That the earnings for a driving job on the open market;
- Declined to award any damages for domestic assistance on a gratuitous basis, having rejected evidence given by Mr Gulic’s son concerning the level of domestic assistance he provided to Mr Gulic, and found that there was no need for the services the son did provide in the sense contemplated by s128 of MACA (noting that the provision is similar to s15 of the CLA).
A total of $13,247.27 was awarded to Mr Gulic as damages for the opportunity lost by reason of the second solicitor’s negligence, once deductions had been made.
Issues on appeal
Mr Gulic appealed her Honour’s findings on economic loss and domestic assistance.
Decision – Beazley P, McColl JA, Sackville AJA (lead judgment by Sackville AJA, with whom Beazley P and McColl JA agreed)
Mr Gulic contended that the primary judge erred by not making essential “anterior findings” as to the nature of the injuries sustained in the MVA. Mr Gulic submitted:
- He was entitled to damages for any diminution in his earning capacity resulting from the injuries sustained in the MVA (Sackville AJA agreed with that proposition); and
- Gibb DCJ should have identified the injuries sustained in the MVA and made findings as to the extent to which the injuries were new or aggravated his existing injuries or disabilities. In the absence of such findings, her Honour could not determine the extent to which the injuries sustained in the accident diminished Mr Gulic’s earning capacity.
Sackville AJA firstly examined the legal principles governing a situation where a plaintiff who claims damages for loss of earning capacity by reason of the defendant’s negligence suffered from pre-existing injuries or disabilities prior to the date the negligence occurred.
His Honour firstly noted that s5D of the CLA was in force at the notional trial date of April 2009. That section provides that a determination that negligence caused particular harm requires the negligence to be a necessary condition of the relevant harm. His Honour noted that s5E of CLA provides that in proceedings relating to liability for negligence, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation.
From there, his Honour noted that:
- A plaintiff is entitled to damages for any diminution in his or her earning capacity resulting from injuries sustained by reason of the defendant’s negligence, but, is not entitled to damages for the degree of incapacity that arose from conditions pre-dating the defendant’s negligence. Therefore, it is ordinarily necessary to assess the plaintiff’s earning capacity prior to and following the accident. That task includes assessing the plaintiff’s economic prospects at the relevant times;
- The plaintiff must adduce evidence that the injuries sustained as a result of the defendant’s negligence are or may be associated with his or her post-accident inability to exploit fully his or her earning capacity. Evidence of this character ordinarily establishes a prima facie case that the defendant’s negligence caused the plaintiff’s diminished earning capacity;
- If the defendant contends that the plaintiff’s current diminished earning capacity is due in whole or in part to a pre-existing injury or condition, then the defendant has the burden of adducing evidence to that effect. The evidence must be such as to enable the court to draw an inference as to the consequences for the future of the pre-existing condition. If evidence of this kind is adduced, then the plaintiff retains the burden of proving that the loss of earning capacity was caused by the injuries sustained as a consequence of the defendant’s negligence;
- When applying the principles noted in 1-3 above, it may be necessary to allow for possibilities and contingencies. For example, a defendant may discharge the evidential onus by adducing evidence that, had the accident not occurred, the plaintiff’s ability to work might have been compromised in any event by a pre-existing condition. His Honour noted that in such a case, an allowance must be made for the possibility of a deterioration in the plaintiff’s earning capacity occurring independently of the defendant’s negligence. Conversely, a plaintiff whose earning capacity is diminished at the date the accident occurred may be entitled to damages that take account of the chance that his or her earning capacity would have increased but for the injuries sustained in the accident.
After examining the evidence of Dr Giblin (orthopaedic specialist whose reports were relied upon by Mr Gulic), his Honour found that the problem confronting Mr Gulic was not the absence of evidence that he had sustained injuries in the MVA or any difficulty in determining the extent of those injuries, nor was there an absence of evidence that those injuries were capable of diminishing such pre-accident earning capacity as Mr Gulic had. Rather, the problem was that Gibb DCJ found that the second firm had discharged the burden of adducing evidence capable of demonstrating that by reason of Mr Gulic’s pre-MVA injuries he had little or no earning capacity. The evidence satisfied her Honour (and was not in dispute) that at the date of the MVA, Mr Gulic was totally disabled from pursuing his previous occupation as a brick cleaner. His Honour also referred to the evidence that Mr Gulic lacked command of English and had sustained significant injuries as the result of the incidents pre-dating the MVA.
His Honour found that none of Mr Gulic’s grounds of appeal challenged Gibb DCJ’s finding that the second firm had discharged the onus of adducing evidence suggesting that Mr Gulic had little or no earning capacity at the date of the MVA. To counter the evidence adduced by the second firm, it was open to Mr Gulic to adduce evidence:
- Demonstrating that despite his pre-existing injuries and his inability to work in his previous occupation as a brick cleaner, at the date of the MVA he was capable of gaining remunerative employment;
- That even if he had no residual earning capacity in February 2004, his circumstances might have changed thereafter and his chances of gaining employment improved.
His Honour noted that had Mr Gulic adduced such evidence then he could have submitted to Gibb DCJ that damages should be assessed on the basis that but for the MVA he had at least a prospect of obtaining remunerative employment and that the injuries sustained in the MVA deprived him of that chance. However, Mr Gulic failed to adduce such evidence, other than the fabricated letter. As a result, his appeal on the findings on economic loss failed.
His Honour found that Mr Gulic established no grounds for overturning Gibb DCJ’s credibility-based findings regarding Mr Gulic’s son. His Honour noted that once that evidence was rejected, Mr Gulic was unable to demonstrate a need for domestic services resulting from the MVA injuries that could satisfy the conditions imposed by s 128(3) of the MACA. As a result, the appeal failed.
Why is this decision important?
- The case is a reminder that plaintiffs and defendants (and their representatives) must be always mindful of onus in cases involving pre-existing injury – particularly when preparing the matter for trial. It is the plaintiff’s onus to adduce evidence that the injuries sustained as a result of the defendant’s negligence are or may be associated with his or her post-accident inability to exploit fully his or her earning capacity. The defendant then has the onus to adduce evidence if a contention is being made that the plaintiff’s current diminished earning capacity is due in whole or in part to a pre-existing injury or condition. That evidence must be able to permit the court to draw an inference as to the consequences for the future of the pre-existing condition. If evidence of this kind is adduced, then the onus shifts back to the plaintiff to prove that the loss of earning capacity was caused by the injuries sustained as a consequence of the defendant’s negligence.
- The evidence going to residual work capacity needs to includes evidence as to:
- The kind of job that a plaintiff would be able to carry out;
- What jobs are open to a person with such capacity; and
- The plaintiff’s prospects of obtaining employment for such a job at a place within a reasonable distance of where he or she lives.
- In order to establish gratuitous assistance damages, a plaintiff needs to establish who has provided the assistance and the level of assistance provided. Typically this is achieved through calling family members and, often, defendants assume from the outset that that evidence will be accepted. Parties need to be mindful of the possibility that, when challenged, the evidence will not “hold up” and the ramifications to the plaintiff’s claim if that occurs.
This article was first published in the LexisNexis Australian Civil Liability Newsletter Volume 15 Number 5.
This case note was written by Principal, Robert Crittenden and Senior Associate, Lachlan Heather. For further information, please feel free to contact them.
  NSWCA 161