Australia: When does the stress of proceedings impact on the assessment of damages?

Arnott v Choy [2010] NSWCA 259
Last Updated: 25 November 2010
Article by Anne Varela


The 23 year old plaintiff was injured when his car was involved in a heavy collision with a prime mover driven by the defendant. He sustained a severe closed head injury and facial fractures and was left with frontal lobe brain damage. It was accepted that he would suffer adversely from the cognitive, emotional and behavioral effects of his head injury but he had no ongoing physical disabilities.

At the time of the accident, the plaintiff was working in a junior capacity for his parents and part time as a pizza delivery boy. He had left school after completing the School Certificate although it was generally accepted that he had an above average IQ, which he maintained following the accident.

Liability was not in issue at the hearing, with the defendant having admitted that he had driven negligently, while the plaintiff accepted he had been guilty of contributory negligence.

On appeal, the defendant challenged a number of findings in relation to past and future loss of earning capacity, future attendant care and case management. In this article we focus on the findings of the NSW Court of Appeal in relation to issues of employability and the defendant's complaint that the primary judge erred in not finding that the plaintiff had failed to mitigate his damages by pursuing alternate employment opportunities.

First instance decision

The trial judge considered that the plaintiff was 'permanently unemployable'. This finding was made despite the fact that the plaintiff had conceded that he intended to seek work and acknowledged that he could perform labouring work, such as digging ditches.

The trial judge formed this view on the basis that the rehabilitation provider had not been successful in securing employment between 2004 and 2007 in addition to the plaintiff's own family being unable to find him a lasting non-sheltered productive position in their company.

The trial judge disregarded the plaintiff's own concession that he could work on the basis that it lacked insight and was a feature of his brain injury, namely an attitude of inappropriate or misplaced over-confidence.

In relation to mitigation of damages, the primary judge set out the steps that the plaintiff had taken to seek training and employment up to January 2006. This included a TAFE course in motor mechanics, two attempted trial periods as an apprentice motor mechanic and various job applications in that field up to the end of 2006. He had not sought employment for the eighteen or so months from the end of 2006 to the time of trial. The primary judge accepted the plaintiff's reasons for not seeking work in this period as he did not want the current litigation to interfere with his attempts to find stable employment. It was also accepted that the plaintiff was unable to deal with the requirements of the case as well as of employment given the sequelae of his injuries.

Decision on Appeal

The Court of Appeal found that the primary judge had erred in concluding that the plaintiff had, in effect, no residual earning capacity. It found the primary judge's frequent invocation of the notion that the plaintiff's over confidence was a disqualifying factor for him obtaining employment defied common experience which was that many people in the workplace, and in society generally, who might well be described as overconfident, managed to hold down successful positions of employment more aligned with their practical demonstrable ability to work.

The Court concluded the primary judge's finding that the plaintiff lacked practical residual earning capacity was not open to him given the medical evidence.

However, the medical evidence was generally to the effect that it would be difficult for the plaintiff to work in the open labour market. Therefore, earning capacity was to be based on the net wage the plaintiff would earn in supported employment with a 30% discount for vicissitudes to take into account the uncertainties of supported employment.

In relation to mitigation of loss, the Court referred to various case law which confirmed that the burden of proving that the plaintiff had failed to mitigate his or her damages rested with the defendant and that the reasonableness of a person's decision in respect of steps which might have mitigated damages is judged on the basis of the information he or she knew at the relevant time. A person will not have acted reasonably to avoid loss if he or she allows baseless factors to outweigh cogent ones.

Accordingly, the primary judge did not err in concluding that the plaintiff had not failed to mitigate his damages. The medical evidence suggested that the plaintiff's brain injury meant that he had difficulty coping with too much information at once and that he had some problems with insight and reasoning.

It was also found that a person with such difficulties might reasonably be overwhelmed by the prospect of having to deal with both seeking employment and complying with the demands of an impending court case, particularly where many demands are made of the person to attend medical examinations. It was the Court's opinion that it was open to the primary judge, having regard to the disabilities he concluded afflicted the plaintiff, to conclude the latter's explanation for not seeking work in the eighteen or so months prior to the trial was 'cogent' rather than 'baseless'.


This decision serves as a useful guide to the conclusions open to a trial judge in brain injury claims.

For defendants it highlights the limitation of any mitigation allegation.

That is to say, even if a plaintiff is found fit for work at some time prior to the hearing date, the demands of a hearing may be a valid reason to delay seeking employment until after the proceedings have concluded.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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