Author: Nathan Morehead
Judgement Date: 1st June, 2010
Citation: Fkiaras v Fkiaras (2010) NSWCA 116
Jurisdiction: New South Wales Court of Appeal
Mr Fkiaras suffered multiple injuries, including significant brain damage, in a motor vehicle accident which occurred on 23 August 2004.
Prior to the accident, Mr Fkiaras and his wife owned a number of properties and businesses which were successful. This was largely because he was a competent and astute businessman, had a sound understanding of financial matters and plans, performed construction work and routine maintenance and always looked for new deals. Following the accident Mr Fkiaras allegedly sustained significant economic loss due to the incapacity arising from his injuries.
District Court of NSW – Truss DCJ
It was found that Mr Fkiaras’ cognitive deficits were such as to destroy his ability to make appropriate business decisions and then implement them. In effect, he had no residual earning capacity with respect to his own businesses or on the open labour market.
The appellants submitted that Mr Fkiaras was entitled to an award for past economic loss for the 2005 financial year only, calculated at $23,765, on the basis that, with the exception of that year, his business income after tax on a weekly basis exceeded the s 125(2) threshold.
This submission was rejected by Judge Truss as it “offended commonsense” and failed to acknowledge three factors. Firstly, the full extent of Mr Fkiaras’ input and efforts in the past. Secondly, the likelihood that, but for injury, he would continue to contribute value input and effort into the existing businesses and apply his entrepreneurial skills to create further business ventures, consistent with what he had done in the past and which had a real prospect of being successful. Thirdly, the submission incorrectly assumed the businesses existing at the time of the accident would have been no more successful than they had been had he not been injured.
Judge Truss concluded that Mr Fkiaras was the driving force behind the operations, which depended upon his input and entrepreneurial skills. Notwithstanding that other members of the family had contributed to the success of those operations, it was decided that the focus ought to be on what Mr Fkiaras’ input would have been but for his injuries, not the family’s input.
It was determined that Mr Fkiaras was entitled to be compensated for the loss to him of the benefits “of his contribution” to the family businesses. This was incapable of being calculated on a strictly mathematical basis using financial records and, for that reason, was quantified by reference to the cost of engaging another person to do what Mr Fkiaras would have done had he not been injured. Judge Truss assessed damages of $322,920 for past economic loss and $269,813 for future economic loss, the latter calculated to 70 years of age.
The Court of Appeal
was the following remark by Judge Truss that formed the basis of the issue on appeal:
“The mathematical method by which post-accident earnings were determined fails to acknowledge that the (respondent) has had such earnings not because of any exertion on his part, but because of his efforts in the past.”
It was submitted that the correct approach to the assessment of damages for economic loss involved three questions:
- What would the respondent’s probable earnings have been had he remained uninjured, including his earnings from businesses already established at the time of the accident, together with any additional earnings from new businesses of opportunities?
- What have the respondent’s actual earnings been since the accident, notwithstanding his lack of personal input due to his injuries?
- Is the difference compensable having regard to s 125?
In answering those questions, the appellants made two primary submissions. Firstly, s 125 required all of Mr Fkiaras’ post-accident earnings to be taken into consideration when assessing whether he had sustained any compensable economic loss. What was to be deducted from his net weekly earnings but for his injuries was his actual post-accident earnings from his businesses, notwithstanding his injuries had deprived him of any earning capacity. Secondly, the word “earnings” in s 125(1)(a) and s 125(2) is not confined to earnings from Mr Fkiaras’ exercise of any earning capacity but for his injuries. Rather, it extends to any earnings from those businesses to which he had contributed prior to his injuries.
The appellants maintained that, apart from the 2005 financial year, Mr Fkiaras’ actual earnings in the years following, and in the future, exceeded the s 125(2) cap and, therefore, an award of damages for past and future economic loss could not be made.
The Court rejected the appellant’s submissions. It held that the authorities upon which the appellant relied, clearly construed the word “earnings” wherever they appeared in s 125 of the Act as earnings which were the product of the exercise of a person’s earning capacity, that is, through the personal exertions or input of the injured person that results in a particular output.
The flaw in the appellant’s submission was that it depended on an acceptance of the proposition that the effect of s 125(2) was to deprive Mr Fkiaras of any award of damages for economic loss where his “residual earnings” exceed the relevant cap notwithstanding that, as a consequence of his injuries, he has been deprived of any residual earning capacity. In an attempt to overcome this deficiency, the appellants submitted it was sufficient if the post-injury earnings of Mr Fkiaras resulted from the exercise by him of his pre-injury earning capacity in that there was some causative link between the exercise of that capacity and his post-injury earnings. The Court found this approach was not permitted by the statute.
The Court also noted it was impossible to determine the extent to which the exercise by Mr Fkiaras of his pre-injury earning capacity contributed to the earnings that he received following the accident, or the extent to which his weekly business income after tax was contributed to by other external factors and related to his personal exertions in the years preceding the accident.
In confirming the assessment by Judge Truss, the Court remarked:
“Once it is accepted, as in my opinion it should be, the reference in s 125 to the word ‘earnings’ is a reference to income earned by the exercise of the injured person’s earning capacity, it follows that the appellant’s construction of s 125(2) must be rejected. This section is concerned with the awarding of past or future economic loss due, relevantly, to the deprivation of the respondent’s earning capacity as a consequence of his injuries. Post-accident, that earning capacity was nil. But for his injuries he had full earning capacity which if exercised would have earned him in excess of a cap the subject of s 125(2).
Accordingly, he was not entitled to be compensated for any loss of earnings on a weekly basis that exceeded that cap. Once it was determined that his post-injury incapacity was nil, it followed that he was entitled to an award of damages for past and future economic loss.”
When insurers are responding to a claim for economic loss, particularly where the injured person was/is self-employed, what needs to be taken into consideration is the extent to which the earnings of the business are attributable to the exercise of the injured person’s earning capacity. This will involve a consideration of at least two factors. Firstly, the activities of the injured person, as distinct from other persons, prior and subsequent to the accident, and the extent to which they contribute to the income derived by the business. Secondly, the injuries arising from the accident and the extent to which they affect the injured person’s earning capacity and, in turn, the income derived by the business.
In June 2023, a Canadian Court in South-West Terminal Ltd v Achter Land and Cattle Ltd, 2023 SKKB 116, held that the "thumbs-up" emoji carried enough weight to constitute acceptance of contractual terms, analogous to that of a "signature", to establish a legally binding contract. Facts This case involved a contractual dispute between two parties namely South-West Terminal ("SWT"), a grain and crop inputs company; and Achter Land & Cattle Ltd ("ALC"), a farming corporation. SWT sought to purchase several tonnes of flax at a price of $17 per bushel, and in March 2021, Mr Mickleborough, SWT's Farm Marketing Representative, sent a "blast" text message to several sellers indicating this intention. Following this text message, Mr Mickleborough spoke with Mr Achter, owner of ALC, whereby both parties verbally agreed by phone that ALC would supply 86 metric tonnes of flax to SWT at a price of $17 per bushel, in November 2021. After the phone call, Mr Mickleborough applied his ink signature to the contract, took a photo of it on his mobile phone and texted it to Mr Archter with the text message, "please confirm flax contract". Mr Archter responded by texting back a "thumbs-up" emoji, but ultimately did not deliver the 87 metric tonnes of flax as agreed. Issues The parties did not dispute the facts, but rather, "disagreed as to whether there was a formal meeting of the minds" and intention to enter into a legally binding agreement. The primary issue that the Court was tasked with deciding was whether Mr Achter's use of the thumbs-up emoji carried the same weight as a signature to signify acceptance of the terms of the alleged contract. Mr Mickleborough put forward the argument that the emoji sent by Mr Achter conveyed acceptance of the terms of the agreement, however Mr Achter disagreed arguing that his use of the emoji was his way of confirming receipt of the text message. By way of affidavit, Mr Achter stated "I deny that he accepted the thumbs-up emoji as a digital signature of the incomplete contract"; and "I did not have time to review the Flax agreement and merely wanted to indicate that I did receive his text message." Consensus Ad Idem In deciding this issue, the Court needed to determine whether there had been a "formal meeting of the minds". At paragraph , Justice Keene considered the reasonable bystander test: " The court is to look at “how each party’s conduct would appear to a reasonable person in the position of the other party” (Aga at para 35). The test for agreement to a contract for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract (Aga at para 36). The question is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be bound (Aga at para 37)." Justice Keene considered several factors including: The nature of the business relationship, notably that Mr Achter had a long-standing business relationship with SWT going back to at least 2015 when Mr Mickleborough started with SWT; and The consistency in the manner by which the parties conducted their business by way of verbal conversation either in person or over the phone to come to an agreement on price and volume of grain, which would be followed by Mr Mickleborough drafting a contract and sending it to Mr Achter. Mr Mickleborough stated, "I have done approximately fifteen to twenty contracts with Achter"; and The fact that the parties had both clearly understood responses by Mr Achter such as "looks good", "ok" or "yup" to mean confirmation of the contract and "not a mere acknowledgment of the receipt of the contract" by Mr Achter. Judgment At paragraph , Keene J said: "I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before except this time he used a thumbs-up emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions." The court satisfied that the use of the thumbs-up emoji paralleled the prior abbreviated texts that the parties had used to confirm agreement ("looks good", "yup" and "ok"). This approach had become the established way the parties conducted their business relationship. Significance of the Thumbs-Up Emoji Justice Keene acknowledged the significance of a thumbs-up emoji as something analogous to a signature at paragraph : "This court readily acknowledges that a thumbs-up emoji is a non-traditional means to "sign" a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a "signature" – to identify the signator… and… to convey Achter's acceptance of the flax contract." In support of this, Justice Keene cited the dictionary.com definition of the thumbs-up emoji: "used to express assent, approval or encouragement in digital communications, especially in western cultures", confirming that the thumbs-up emoji is an "action in an electronic form" that can be used to allow express acceptance as contemplated under the Canadian Electronic Information and Documents Act 2000. Justice Keene dismissed the concerns raised by the defence that accepting the thumbs up emoji as a sign of agreement would "open the flood gates" to new interpretations of other emojis, such as the 'fist bump' and 'handshake'. Significantly, the Court held, "I agree this case is novel (at least in Skatchewan), but nevertheless this Court cannot (nor should it) attempt to stem the tide of technology and common usage." Ultimately the Court found in favour of SWT, holding that there was a valid contract between the parties and that the defendant breached by failing to deliver the flax. Keene J made a judgment against ALC for damages in the amount of $82,200.21 payable to SWT plus interest. What does this mean for Australia? This is a Canadian decision meaning that it is not precedent in Australia. However, an Australian court is well within its rights to consider this judgment when dealing with matters that come before it with similar circumstances. This judgment is a reminder that the common law of contract has and will continue to evolve to meet the everchanging realities and challenges of our day-to-day lives. As time has progressed, we have seen the courts transition from sole acceptance of the traditional "wet ink" signature, to electronic signatures. Electronic signatures are legally recognised in Australia and are provided for by the Electronic Transactions Act 1999 and the Electronic Transactions Regulations 2020. Companies are also now able to execute certain documents via electronic means under s 127 of the Corporations Act. We have also seen the rise of electronic platforms such as "DocuSign" used in commercial relationships to facilitate the efficient signing of contracts. Furthermore, this case highlights how courts will interpret the element of "intention" when determining whether a valid contract has been formed, confirming the long-standing principle that it is to be assessed objectively from the perspective of a reasonable and objective bystander who is aware of all the relevant facts. Overall, this is an interesting development for parties engaging in commerce via electronic means and an important reminder to all to be conscious of the fact that contracts have the potential to be agreed to by use of an emoji in today's digital age.
The McCabes Government team are pleased to have assisted Venues NSW in successfully overturning a District Court decision holding it liable in negligence for injuries sustained by a patron who slipped and fell down a set of steps at a sports stadium; Venues NSW v Kane  NSWCA 192 Principles The NSW Court of Appeal has reaffirmed the principles regarding the interpretation of the matters to be considered under sections5B of the Civil Liability Act 2002 (NSW). There is no obligation in negligence for an occupier to ensure that handrails are applied to all sets of steps in its premises. An occupier will not automatically be liable in negligence if its premises are not compliant with the Building Code of Australia (BCA). Background The plaintiff commenced proceedings in the District Court of NSW against Venues NSW (VNSW) alleging she suffered injuries when she fell down a set of steps at McDonald Jones Stadium in Newcastle on 6 July 2019. The plaintiff attended the Stadium with her husband and friend to watch an NRL rugby league match. It was raining heavily on the day. The plaintiff alleged she slipped and fell while descending a stepped aisle which comprised of concrete steps between rows of seating. The plaintiff sued VNSW in negligence alleging the stepped aisle constituted a "stairwell" under the BCA and therefore ought to have had a handrail. The plaintiff also alleged that the chamfered edge of the steps exceeded the allowed tolerance of 5mm. The Decision at Trial In finding in favour of the plaintiff, Norton DCJ found that: the steps constituted a "stairwell" and therefore were in breach of the BCA due to the absence of a handrail and the presence of a chamfered edge exceeding 5mm in length. even if handrails were not required, the use of them would have been good and reasonable practice given the stadium was open during periods of darkness, inclement weather, and used by a persons of varying levels of physical agility. VNSW ought to have arranged a risk assessment of the entire stadium, particularly the areas which provided access along stepped surfaces. installation of a handrail (or building stairs with the required chamfered edge) would not impose a serious burden on VNSW, even if required on other similar steps. Issues on Appeal VNSW appealed the decision of Norton DCJ. The primary challenge was to the trial judge's finding that VNSW was in breach of its duty of care in failing to install a handrail. In addition, VNSW challenged the findings that the steps met the definition of a 'stairwell' under the BCA as well as the trial judge's assessment of damages. Decision on Appeal The Court of Appeal found that primary judge's finding of breach of duty on the part of VNSW could not stand for multiple reasons, including that it proceeded on an erroneous construction of s5B of the Civil Liability Act 2002 and the obvious nature of the danger presented by the steps. As to the determination of breach of duty, the Court stressed that the trial judge was wrong to proceed on the basis that the Court simply has regard to each of the seven matters raised in ss 5B and 5C of the CLA and then express a conclusion as to breach. Instead, the Court emphasised that s 5B(1)(c) is a gateway, such that a plaintiff who fails to satisfy that provision cannot succeed, with the matters raised in s 5B(2) being mandatory considerations to be borne in mind when determining s 5B(1)(c). Ultimately, regarding the primary question of breach of duty, the Court found that: The stadium contained hazards which were utterly familiar and obvious to any spectator, namely, steps which needed to be navigated to get to and to leave from the tiered seating. While the trial judge considered the mandatory requirements required by s5B(2) of the CLA, those matters are not exhaustive and the trial judge failed to pay proper to attention to the fact that: the stadium had been certified as BCA compliant eight years before the incident; there was no evidence of previous falls resulting in injury despite the stairs being used by millions of spectators over the previous eight years; and the horizontal surfaces of the steps were highly slip resistant when wet. In light of the above, the Court of Appeal did not accept a reasonable person in the position of VNSW would not have installed a handrail along the stepped aisle. The burden of taking the complained of precautions includes to address similar risks of harm throughout the stadium, i.e. installing handrails on the other stepped aisles. This was a mandatory consideration under s5C(a) which was not properly taken into account. As to the question of BCA compliance, the Court of Appeal did not consider it necessary to make a firm conclusion of this issue given it did not find a breach of duty. The Court did however indicated it did not consider the stepped aisle would constitute a "stairway" under the BCA. The Court of Appeal also found that there was nothing in the trial judge's reasons explicitly connecting the risk assessment she considered VNSW ought to have carried out, with the installation of handrails on any of the aisles in the stadium and therefore could not lead to any findings regarding breach or causation. As to quantum, the Court of Appeal accepted that the trial judge erred in awarding the plaintiff a "buffer" of $10,000 for past economic loss in circumstances where there was no evidence of any loss of income. The Court of Appeal set aside the orders of the District Court and entered judgment for VNSW with costs. Why this case is important? The case confirms there is no obligation in negligence for owners and operators of public or private venues in NSW to have a handrail on every set of steps. It is also a welcome affirmation of the principles surrounding the assessment of breach of duty under s 5B and s 5C of the CLA, particularly in assessing whether precautions are required to be taken in response to hazards which are familiar and obvious to a reasonable person.
The recent decision in New Aim Pty Ltd v Leung  FCAFC 67 (New Aim) has provided some useful guidance in relation to briefing experts in litigation.