Young v Percival
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MEGAW |
| Judgment Date | 26 July 1974 |
| Judgment citation (vLex) | [1974] EWCA Civ J0726-3 |
| Date | 26 July 1974 |
| Court | Court of Appeal (Civil Division) |
[1974] EWCA Civ J0726-3
Lord Justice Megaw,
Lord Justice Stephenson and
Lord Justice James.
In The Supreme Court of Judicature
Court of Appeal
(Appeal of Plaintiff from judgment of Mr. Justice Waller, London, without a jury, November 9, 1973.)
MR A. BATESON, Q.C. and MR E. ADEANE, (instructed by Messrs. Roney & Co.) appeared on behalf of the Appellant (Plaintiff).
MR K. JUPP, Q. C. and MR M. LEWER, (instructed by Messrs. Hall Clark; appeared on behalf of the Respondent (Defendant).
The judgment which I am about to read is the judgment of the court.
This is an appeal by the plaintiff against the judgment of Mr. Justice Waller who awarded damages of £18,200 and a sum for funeral expenses to the plaintiff. The plaintiff's claim was brought under the Fatal Accidents Acts and the Law Reform Act. It arose out of the death of the plaintiff's husband in a motor accident on 14th December, 1970, Liability was admitted by the defendant and the only issue was quantum of damages.
At the time of his death the deceased was 29 and the plaintiff was a year or so younger. They were married in 1965 and had two children aged 3½ years and 3 months. After leaving school the deceased had six different employments, one of which he held for about three years, before entering the employment of Blue Cars Ltd. in August, 1970, five months before his death. From 1967 he had been employed as a salesman. His main interest was in travel. His work in the employment of Blue Cars and his immediately preceding employment, from which he was made redundant, was in the travel industry. He served as a Special Constable for five years. He had passed the driving test for advanced motorists and had completed a course of instruction in the St. John's Ambulance Association. His previous employers spoke well of him and he was held in high regard by his latest employers. He very much enjoyed the kind of work he was required to do in that employments travelling about, rather than working full-time in an office, and exercising his gifts of salesmanship. He showed efficiency in that employment, and would have been likely to wish to continuein it, or in similar employment with other employers if the need arose to move elsewhere or if better prospects should offer elsewhere.
Mr. Bruno, a director of Blue Cars, and Mr. Mackensie, the financial director of that company or one of its associates, gave evidence at the trial as to his ability, prospects of promotion and future earnings within that company. An affidavit, in which Mr. Laker, the Managing Director of Laker Airways Ltd., deposed to the personality and ability of the deceased, was put in evidence.
The earnings of the deceased at the time of his death were £2,000 p.a. gross, £1,165 p.a. net. He was in receipt of an expense allowance of £15 per week out of which he had to run the car provided for him by his employers. He was allowed to use the car for private and domestic purposes. The learned judge assessed the dependency at death as £1,100 p.a. He took the multiplier of 12 years and thus arrived at what he called a "rock bottom" figure of £13,200 without taking into account the deceased's prospects of promotion and increased earnings. The judge found that the prospects of promotion were "quite good" and that the prospects of increased earnings were better still. "It was clear from the evidence that over the years the deceased man could have increased his earnings very considerably, provided that he had stayed in the same firm or provided that he had moved to other jobs which were similar to the kind of work which he was doing within ten years he might well have been earning something of the order of £4,000, or perhaps more, according to how well he did. On the other hand, he might not." The learned judge found that "some of theincreases would be increases simply due to inflation, and to some extent, though not wholly, those increases would be covered in the management of the fund." He did not attempt to specify what part or portion of the increases would be "due to inflation"; and it is not clear whether he proceeded with his "assessment of either the amount of the dependency, or the appropriate multiplier in respect of the increases, on the basis of excluding all prospective increases which would be due to inflations or on the basis of taking account of some part of such increases to the extent, whatever it was, that he did not regard them as "covered in the management of the fund". What he in fact did was, in respect of future increases in the earnings of the deceased, to add £5,000 to the sum of £13,200. The sum of £5,000 was arrived at by taking the median between gross earnings of £2,000 at death and £4,000 within ten years of death and using the multiplier of five.
For the appellant plaintiff, Mr. Bateson argues that the evidence reveals a dependency of 75 per cent, of the net income, namely, £1,200 p.a. at the date of death, and that the evidence as to future prospects justifies the assessment of dependency of £2,400 p.a. over a period of sixteen years. To compensate for taxation upon that part of the dependency distributed out of the interest earned by the damages awarded, and to provide against inflation, Mr. Bateson argues that the figure should be increased to £2,500 p.a. The multiplier of sixteen years is said to be appropriate to the ages of the deceased and the appellant. Words used by Lord Diplock in Mallott -v- McMonagle (1970 A.C. p. 166, at p. 177) were cited in support of the argument. "In cases such as the present whore the deceasedwas 25 and his widow about the same age, Courts have not infrequently awarded sixteen years' purchase"; and "sixteen years would appear to represent a reasonable maximum number of years" purchase where the deceased dies in his twenties". The amount of damages would thus be, not £18,200, but £40,000. In addition to arguments more specifically directed to the evidence in the present case, Mr. Bateson sought support for a figure of the order of £40,000 from the unreported decision in this court in Mulligan -v- Holmes decided on 16th December, 1970. But in our view the facts of that case were so different as not to give any real help in this case.
One of the reasons for this startling difference between £40,000 and £18,200 emerged in the course of the argument. It was not specifically indicated in the formal grounds of appeal, It was the question of inflation. It was not merely the £800 or so extra which was involved in Mr. Bateson's suggested addition of £100 a year, at sixteen years' purchase, which he said should be included to cover partly inflation and partly taxation liability on interest, From a schedule of figures which Mr. Bateson produced as justifying his £40,000, it became apparent that his calculation depended upon the acceptance in full of forecasts given by witnesses of prospective future increases of gross earnings referable to forecasts of the future increase in the cost of living — inflation. Thus the argument on the appeal, which at first sight appeared to be concerned with questions of fact and or estimates, involved substantial argument on a difficult question of principle.
For the defendant, Mr. Jupp argues that the evidence justifies the judge's findings as to the dependency at deathand as to the future prospects of the deceased, and that the learned judge was right in excluding, if he did indeed exclude, from the damages any element related to inflation. It is argued that the incidence of tax is not a factor to be considered in this case where the income of the widow will not attract liability to taxation. Mr. Jupp argues that the uncertainties arising in particular from the unpredictability, as shown in the evidence, of commercial prospects and future profitability in the travel industry as a whole, from the deceased's predisposition to changes of employment and from his lack of any particular technical or commercial qualifications, and from the short duration of his employment with Blue Cars, justify the use of the multiplier of twelve in respect of the dependency related to the existing earnings. He also submits that the multiplier of five in respect of the more uncertain prospects of increases in future earnings is correct.
It is necessary to refer to the evidence in a little more detail. The deceased was employed to sell "travel" — contracts for holidays - in London and the counties bordering the north of London. His position was that of a salesman, but he was described as an Area Sales Manager. In 1971 Blue Cars reorganised their sales staff. It is probable that the deceased would have been appointed to the position of General Sales Manager in that year. There was a prospect of the deceased being promoted to director status as Marketing Director, the next step in the organisation above General Sales Manager, by the age of 40. In November, 1973, at the date of the trial, the then Marketing Director's salary was £4,200 p.a. At that date the man who had been appointed tothe position of General Sales Manager was earning £3,150 p.a. The evidence was that the deceased would have received an increase of £500 p.a. in 1971, and had he been appointed to General Sales Manager his salary would have been increased by £200 p.a. more than the man who was in fact appointed. On that basis the deceased's prospective gross earnings were £2,500 by August, 1971, £3,000 by November, 1971, £3,350 by November, 1973. Mr. MacKenzie envisaged increases in salary of a General Sales Manager of £250 to £500 p.a. dependent upon the achievement of satisfactory results, provided that such increases were permissible within any then existing counter inflation legislation, and presumably provided that there was continuing profitable trading on the part of the...
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