Lost earning capacity is the key – not loss of earnings

AAI Limited & Anor v Marinkovic [2017] QCA 54

Morrison JA with Fraser JA and Mullins J concurring

The respondent was involved in a motor vehicle accident in April 2010 where he suffered personal injuries to his neck and back. The trial judge awarded $461,249.

The appellants contended that the award was erroneously too high based on the findings of the trial judge regarding the respondent’s tax returns and his credibility and reliability.

Credit and reliability

As to the respondent’s credibility and reliability, Morrison JA found:

[22] One aspect relied upon by the appellants were alleged inconsistencies in the histories given by Mr Marinkovic to different medical practitioners. This was a springboard for the submission that Dr Byth’s report should not have been relied upon, nor what was reported to him.  I have reviewed those passages, and believe the contention cannot be sustained.

[25] … the learned trial judge did not make a blanket rejection or acceptance of the evidence of Mr Marinkovic.  His Honour was quite careful to make express findings on matters where he rejected his account, either because it was inconsistent with documents or evasive, or simply because he was not persuaded of its reliability.  However, the learned trial judge was equally careful to make findings as to what he accepted from that evidence and whether Mr Marinkovic was credible and reliable.

[26] A significant proportion of the appellants’ attack on Mr Marinkovic’s credit at trial (and on appeal) was based on the learned trial judge’s findings as to the tax returns. The appellants’ contention on appeal was that to find that the tax returns were works of fiction was tantamount to a finding of dishonesty, and that should have influenced the learned trial judge to wholly reject Mr Marinkovic’s evidence…

[30] In any event, a finding that there has not been honest compliance with taxation laws does not inevitably mean that loss of earning capacity or economic loss cannot be made on other evidence.

After discussing the trial judge’s analysis of the respondent’s reliability, Morrison JA was not persuaded that the trial judge erred in accepting the respondent’s evidence.

Existence of lost earning capacity and economic loss

As to whether it was open for the trial judge to find that the respondent had an impaired capacity for work, Morrison JA held:

[60] The start point for this discussion is the fact that the learned trial judge found that there was a loss of earning capacity as a consequence of the second accident…

[63] … his Honour’s task was to assess the economic loss that resulted from the reduced earning capacity.  Therefore the position that Mr Marinkovic was actually in at trial had to be compared to the position he would have been in, but for the second accident.

[65] In my respectful view the reasoning to reach that finding is unimpeachable.  His Honour has worked on accepted evidence as to a rate, applied to an assessment, based on his Honour’s findings as to credit and reliability, of how long Mr Marinkovic was likely to work for each day and week.

Of the trial judge’s analysis of the offer of employment the respondent obtained after the first accident, but prior to the second, Morrison JA found:

[81] In my view, the challenge to the learned trial judge’s assessment of this aspect of the damages cannot be shown to be in error.  His Honour has accepted particular evidence as to what could have been earned, based on an acceptance of the evidence of particular witnesses including Mr Marinkovic, and then applied an orthodox analysis, applying a number of discounting factors to take into account the varying probabilities for and against the continuity of the loss.  Contrary to the appellants’ submissions, the evidence as accepted by his Honour was cogent and reliable.

Dominant injury

As to whether the shoulder injury should have been taken as the dominant injury, Morrison JA held:

[123] Senior counsel for the appellant contended that the shoulder injury should not have been taken to be the dominant injury.  That also cannot be sustained.  As the learned trial judge pointed out, the dominant injury is not assigned by reference to which is the most severe injury, but simply which injury has the highest ISV at the top of the range for that injury in Schedule 4.131  The shoulder injury had an ISV at the top of the range of 15.  The top of the range ISV for the back injury was 10.

[129] … The inability to separately assess an ISV for the psychiatric injury meant that there was a real risk of the award not properly reflecting the true extent of the injuries.  Such a separate assessment would likely have produced an ISV of 30 or more.  Instead the application of the scheme meant that the dominant injury (the shoulder) attracted an ISV of 15, which was “quite inadequate”.  An uplift of only 25 per cent still produced an inadequate assessment.  Therefore the uplift was higher and produced an ISV of 25.

The appeal, to the extent of reducing the interest on past economic loss was allowed, but otherwise dismissed. The trial judge’s decision was set aside and substituted for an award of $458, 528.10, together with the costs of the appeal payable by the appellant on the standard basis.

David Cormack – Brisbane Barrister & Mediator

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