Alves v Patel - [2002] NSWSC 1057

CITATION: ALVES v PATEL [2002] NSWSC 1057

CURRENT JURISDICTION: Common Law

FILE NUMBER(S): SC 12957/94

HEARING DATE(S): 12/2/01, 15/2/01, 16/2/01, 19/2/10, 20/2/01,
21/2/01, 22/2/01, 23/2/01, 26/2/01, 27/2/01, 28/2/01, 2/3/01, 5/3/01, 6/3/01, 7/3/01, 8/3/01, 12/3/01, 13/3/01, 14/3/01, 15/3/01, 16/3/01, 19/3/01, 21/3/01, 22/3/01, 1/7/02, 16/8/02

JUDGMENT DATE: 19 December 2002

PARTIES :

Manuel Barata Alves (Plaintiff)
v
Praful Patel (Defendant)

JUDGMENT OF: Adams J at 1

COUNSEL : Mr John Crumpton QC with Mr John Pender (Plaintiff)
Mr Alan Sullivan QC (Defendant)

SOLICITORS: Gray & Perkins (Plaintiff)
Blake Dawson Waldron (Defendant)

CATCHWORDS: Damages - successful businessman - loss of business ability - assessment of loss - profit on sale of successful business - whether should be brought into account

CASES CITED: Malec v JC Hutton Pty Limited (1990) 169 CLR 638;
Norris v Blake (No 2) (1997) 41 NSWLR 49
Husher v Husher & Anor (1999) 197 CLR 138
Medlin v State Government Insurance Commission (1995) 182 CLR 1
Donellan & Anor v Watson & Anor (1990) 21 NSWLR 335
Perri v Flavell & Anor (No 2) (unreported NSWCA 20 September 1995)
Hayden v NRMA Limited & Ors [2001] NSWCA, 445 [31]
Wilson v McLeay (1961) 106 CLR 523
Griffiths v Kerkemeyer (1977) 139 CLR 161

DECISION: Judgment and verdict for the plaintiff in the sum of $3,470,172 plus costs; I grant a stay to the defendant in respect of $2,000,000 of the verdict; The balance of $1,470,000 to be paid within 28 days of 20 December 2002; As to the $2,000,000, it is to be invested in accordance with the Undertaking to the court except that the account is to be one that pays interest monthly and that such interest is to be paid to the plaintiff; I give liberty to each party to apply within 7 days; These orders are made subject to further order.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ADAMS J

Tuesday 12 November 2002

12957/94

MANUEL BARATA ALVES v PRAFUL PATEL
JUDGMENT

1 HIS HONOUR The plaintiff, Dr Manuel Barata Alves, underwent an operation performed by the defendant, Dr Patel, on 2 June 1988. This operation was a cholecystectomy, the removal or excision of his gall bladder. Although the operation must be done with great care, removal of the gall bladder will not usually significantly affect the patient’s health. As the history which it is necessary to outline in this judgment shows, the consequences Dr Patel’s failure to take adequate care when performing this operation on the plaintiff may fairly be described as catastrophic.

2 Liability is admitted and this judgment is therefore restricted to the issue of damages. The parties were in dispute in respect of two major, though connected, questions. The first of these is whether the plaintiff’s history of continuing significant symptoms is reliable both as to their intensity and persistence, and whether, even if the plaintiff’s history was substantially accepted, the extent to which the seriously disabling symptoms he describes were caused by the surgery. The second dispute concerns the extent of the plaintiff’s economic loss, having regard particularly to the financial returns he made by business activity in Portugal.

3 It is convenient to start with the plaintiff’s situation before 2 June 1988. The plaintiff was then fifty-six years of age and was an exceedingly successful businessman. The plaintiff, born in Portugal in May 1932, came to Australia in January 1964 with his wife whom he had married in July 1960. They became Australian citizens in 1969. They have two children, a son, Andre and a daughter, Shirley, both now married. Whilst employed in Portugal, the plaintiff had, though without formal qualifications, developed a practical understanding of engineering with steel. When he came to this country, he commenced working in Whyalla, South Australia for Transfield, a well-known major engineering and construction company.

4 In 1967, the plaintiff, together with a Mr Romano del Bianco, formed an engineering company of their own. Its first contract, as it happened, was with Transfield for the installation of the discharge tunnel for the Blowering Dam. The company has changed the form of its name from time to time and acquired or incorporated various subsidiary companies. For convenience, I will generally refer to it as Allco or Allco Steel. The business went from strength to strength as a constructing engineer, eventually moving from its base in South Australia to Newcastle in New South Wales in about 1969. Although, of course, their work overlapped, Mr del Bianco concentrated on dealing with the company’s labour force at site level whilst the plaintiff concentrated on management.

5 The headquarters of the company moved from Newcastle to Tomago just north of Newcastle centre in 1978. During this period the company had been steadily growing and the reason for the move to Tomago was that it was necessary to build a plant there for specialised steel fabrication. That plant was built to the plaintiff’s own design and specification. It will, perhaps, give a sufficient indication of Allco’s position to note that Allco was given the contract to construct the structural steel component of the Exhibition Centre at Sydney’s Darling Harbour project. The Centre is the largest physical component of the project, with five halls each 57 metres by 52 metres in area with a general clear height of 15 metres. The design brief required a completely column-free exhibition centre with a capacity to house the largest possible exhibitions under one roof. This was achieved through the then novel concept of supporting the roof through suspension rods back to the four main columns of each hall using a mast and cable structure utilising solid rods and tubular steel. The major members forming the structure were of a type and size not frequently used in Australia. Almost three thousand tonnes of steel were used, with primary roof trusses and braces fabricated at Allco’s Tomago works, the remaining work going to three sub-contractors operating under Allco’s supervision. It is unnecessary to say anything more about this project; that Allco was chosen for it demonstrates convincingly to my mind its major status in the steel fabrication business in Australia. Other major contracts over the years involved very substantial works in the electricity generation, food, metal smelting, oil and gas, coal handling/mining, steel making, water treatment, lime and cement and minerals industries together with a very large mechanical plant steel works involving design, fabrication, installation, erection and maintenance. Having been commenced, as I mentioned, in 1967 by the plaintiff and Mr del Bianco, Mr Antonio Parisi joined them in 1970. These three persons controlled, at the material time, something over 90% of the company’s issued ordinary share capital. Its annual turnover rose from about $3.5 million in 1977/78 to $75 million in 1986/87. For the purposes of the present case, it is reasonable to accept (and it was not disputed) that Allco was a leading heavy steel fabricator in Australia working in steel fabrication, structural and mechanical engineering and civil engineering areas. Nor is it disputed that the plaintiff had played a very significant, perhaps the major, role in the development of the company. He enjoyed an Australia-wide reputation both as a business leader and a leader in the engineering field and structural steel work. Allco was regarded in the industry as a well-run company; the plaintiff was recognised having played a key role in its success and as a very competent and astute businessman. He was also widely regarded as an innovator. He was a pioneer in the use of computers in the engineering industry and had (amongst other things) introduced technologies for continuous welding of structural steel members, which gave Allco a competitive edge. Such was his reputation that in 1984 he was selected by the Australian Government as a member of one of the first Australian delegations to China, being the only person from the Newcastle area which, of course, contained a number of much larger engineering and steel fabrication works than Allco’s. He had a long connection with the University of Newcastle and, in April 1988, was admitted to the degree of Doctor of Engineering Honoris Causa by that University – timing which, as shall be seen, was ironic in the extreme as, regrettably, the results of the negligent surgery giving rise to this litigation had already prevented him from continuing in his profession, though he did not fully appreciate this at the time.

6 Mr Glenn Turner, who became managing director of Allco in February 1987, in circumstances to which it will be necessary to refer, was called on the plaintiff’s behalf. I considered Mr Turner to be a fair, balanced and conscientious witness. Indeed, the contrary was not suggested on the defendant’s behalf. Mr Turner came to work for Allco in 1983 as General Manager (Administration), becoming a director of the company in 1984 and at one time the finance director. Although an accountant by training and qualifications, he did not practice as such. In early 1986, he was appointed deputy managing director of Allco answering to the plaintiff, then becoming, as I have mentioned, managing director in February 1987, a position from which he resigned following the takeover of Allco in September 1991. Mr Turner described the plaintiff in the period he knew him from 1983 to 1988 as a very determined, driving (I think, also driven), forceful, successful businessman. He said –(838.4)

“He was not just a competent manager; he was an extraordinary person in that he was, my experience, one of the very few people that I had met at that stage that exhibited vision, passion and I guess those attributes which had not only made the company successful but which differentiated him from basically just a run-of-the-mill managing director.”

7 I mention now, because it is a substantial issue in the case, that Mr Turner gave very significant evidence about the plaintiff’s memory – (841.37)

“He had an extremely good memory. He had an ability to get across all aspects of the business and also retain a great deal of information and detail. His attention to detail was quite legendary and I saw it in a number of aspects but particularly in his written word. Whilst English is not his first language, and that is apparent, his written word, when he wanted it to be, was extremely good – extremely good. And his attention to the core detail was very good.”

8 Mr Robert Fletcher, by training and qualification a civil engineer, joined Allco in 1982 as chief design engineer and, in about 1984, became marketing manager. He also was an impressive witness. Mr Fletcher also considered that, of the three partners, the plaintiff was the leader and “the one with the ideas and the visions of where the company could go”. He said that the plaintiff was extremely skilled at adapting his style to suit the circumstances and the people he was dealing with. He thought he was a natural leader who paid a lot of attention to individuals and was one of the few managing directors who would actually know his day labour workforce by name and could “walk through the workshop and would know individual circumstances behind various tradesmen”.

9 It is clear that Mr Fletcher admired the plaintiff’s business capacities. Indeed, he described him as “far and away the best managing director I have ever worked with and I have worked closely with at least six now”. Mr Fletcher gave particular details of the plaintiff’s skills which it is not necessary to set out. It is enough to say that, accepting Mr Fletcher’s description of the plaintiff’s exercise of his responsibilities within Allco, as I do, the opinion which I have just quoted is completely justified. Mr Fletcher was marketing manager at the time that the plaintiff stepped down as managing director of Allco, to be replaced by Mr Turner, as I have previously mentioned. Mr Fletcher was intimately involved in the proposal in 1987 to purchase an engineering company (for convenience referred to as Babcock Australia) while the plaintiff was in England and described the plaintiff’s presence there at the time as “fortuitous” since he was able to undertake negotiations at a high level with Babcock Australia’s parent company. In the meantime, whilst the plaintiff was in England and Europe, he was in regular contact with Allco, and Mr Fletcher in particular, concerning the obtaining of technology related licences and linking with European suppliers and designers. Mr Fletcher described the plaintiff’s activities in this respect as being “very important”. He said that part of the plaintiff’s mission in Europe was to facilitate Allco’s expansion into design and technologies to permit and enhance the development of competitive advantages in the Australian environment. In this respect, Mr Fletcher considered that the plaintiff’s personal communications with senior management of the European and UK connections was of significant importance to Allco’s business plans. When the possibility of purchasing Babcock Australia arose, the plaintiff, together with Mr Fletcher, undertook the major responsibility for shaping and finalising this transaction. When Babcock Australia was purchased, Mr Fletcher took the position of executive director of Babcock in a general management role. The plaintiff, amongst other things, had directed that Mr Fletcher and he should have adjoining offices in the company’s accommodation and this was arranged well before their return from Europe after negotiating the acquisition. Mr Fletcher was unequivocal that, when the plaintiff returned, he would report to the plaintiff in respect of the management of Babcock Australia although, until this occurred, he reported to Mr Turner. Mr Fletcher said (giving details which I do not need to set out) that the plaintiff’s vision and drive was, he thought, going to be a very significant, indeed vital, factor in ensuring the company’s success especially in light of what appeared (and, indeed, proved) to be tough times ahead. Much was made in cross-examination of the relatively informal character of the plaintiff’s position following his resignation as managing director of Allco. But both Mr Fletcher and Mr Turner explained that the plaintiff was impatient of titles, seeing them as unduly limiting the scope for innovative management. The mere fact that no formal structure had been created in anticipation of the plaintiff’s return, or, for that matter, afterwards, does not seem to me to be significant. I am persuaded by both the evidence of Mr Fletcher and Mr Turner that the plaintiff’s resignation as managing director in 1987 was for the purposes which the plaintiff stated in evidence (as set out below) and that he was in no real sense relinquishing his predominance over the direction of Allco’s affairs. I am satisfied that his actions at this time only amounted to a tactical withdrawal to facilitate the reorganisation of the company’s affairs. Furthermore, I am persuaded that, upon the acquisition of Babcock Australia, the plaintiff intended to take control of that company for the purpose of ensuring that the conglomerate of both it and Allco (together called the Allco Group) moved forward as a significant player in the engineering/construction business in Australia. Both Mr Fletcher and Mr Turner at all material times thought of the plaintiff as their boss. I have no doubt that this was the fact.

10 The above account is a very brief summary of the much more detailed material, both oral and documentary, that was tendered as to the plaintiff’s business attributes and experience. Except so far as the significance of the plaintiff’s resignation as managing director and move to the UK was concerned, its thrust was not seriously disputed. I have no hesitation in accepting that, before his operation, the plaintiff had exhibited skills and capacities as a businessman and entrepreneur at the highest level. I feel bound to say (anticipating somewhat) that the person I saw in the witness box bore very little relationship to the man described in the evidence. Indeed, to state that the plaintiff is now but the pale and feeble shadow of the man that he once was, is sadly in no sense to be guilty of exaggeration. I will return to this matter in due course.

11 At the time of his operation, the plaintiff had been residing in London for some little time. It is convenient now to deal with the circumstances in which he came to be there, not only as part of the relevant history but because the defendant relies upon this as a most significant factor in reducing the damages which might otherwise be payable.

12 What follows is the plaintiff’s account of his situation and that of Allco unless specifically stated otherwise. The plaintiff said that in early 1987 he came to the view that it was necessary to look to the succession of executive leadership and also at opportunities for market increase, as the company was then in a position to develop its business significantly. The plaintiff said that he decided to resign his position of managing director in favour of Mr Turner and, in order to enable him, as it were, to demonstrate his competence where he would not be overshadowed by the plaintiff, he decided that he should go to London for a year or so. There seems to be little doubt that both the plaintiff and his partners considered that Mr Turner was indeed a likely successor and that his demonstrated capacity warranted his being given a chance to show that he could be the future managing director of the organisation. The plaintiff regarded his own role at this time as attempting to discover new markets and he thought that London was a good place from which to do this. He said that he thought that, with the expansion of the company’s operations, he would return after about a year to Newcastle to take overall control but there was no formal structure proposed by which this would be effected. Mr John Muir was appointed executive chairman of the group at the same time, having been for some years non-executive chairman.

13 On 10 February 1987, the Board of Allco was advised by the plaintiff that he would resign from his executive position at the next board meeting but that he intended to be present for three or four board meetings per year thereafter, it being clear that he intended to remain a director. The Board resolved -

“That following resignation from an executive staff position, directors/shareholders could be engaged by the company as consultants and remunerated at the following rate:-

Annual Retainer of $20,000 plus $40 per hour worked with a maximum payable in any calendar year of $80,000.

… that on resignation from their executive staff position each of the executive shareholders be repaid in cash 30% of their respective Shareholder Loan Accounts.”

14 On 21 January 1987, that is to say about three weeks earlier, the plaintiff had prepared and circulated a detailed paper on strategic planning. This involved a brief but comprehensive survey of the prospects and situation of the company. The heart of the document is a detailed consideration of the position of what are described as “the major shareholders”, namely, the plaintiff and Messrs del Bianco and Parisi. After having made the point that “Allco Steel is where it is today because of the unconditional commitment of the major shareholders”, the plaintiff stated that the company “is today in the excellent position where it can develop further if professional management is allowed to take over from the Major Share Holders management style” and proposed, therefore, that the company’s existing management must be reviewed. The plaintiff proposed that the major shareholders would resign their current management positions “as soon as practicable” and provide their skills to the company as non-executive directors and consultants in areas of their expertise. The plaintiff’s proposed financial arrangements were the same as those adopted at the meeting of 10 February 1987, referred to above. The plaintiff made the observation that the “major shareholders would be free to pursue other endeavours of their own choice with the proviso that they do not enter into any business that competes with Allco Steel”. On 24 February 1987 the Board resolved to appoint the plaintiff as deputy chairman and noted his resignation as managing director, paying “tribute to the significant achievement of Mr Alves in his seventeen years as managing director in building Allco Steel to the successful organisation it is today” and confirming that all Departmental Managers should report to the new managing director.

15 These documents appear to indicate that, although the plaintiff may well have considered that resignation from their executive positions was appropriate for all the major shareholders, he intended to do so unilaterally and that he had no intention at that time of resuming executive responsibility for the company. Not surprisingly, the character of the proposal in the strategic paper and the purpose underlying the plaintiff’s resignation were the subject of significant controversy in the trial. Before dealing with the submissions of the parties on this point, I should complete a brief account of the material evidence.

16 Mr Turner who, of course, was taking over as managing director, gave evidence which I regarded as very significant in interpreting the true import of the Strategic Plan in its contemporaneous context. Mr Turner said that he discussed the Plan with the plaintiff at the time. He said that it represented the structure that the plaintiff wished to see operating whilst he was away. He was concerned lest the other major shareholders, who had executive positions, would get in Mr Turner’s way and frustrate what he saw was an important management plan (which I do not think it necessary to set out). In substance, Mr Turner thought that the plan was a management model designed to avoid the situation where Messrs Parisi and del Bianco could impede his executive role. Mr Turner said that the plan did not advert to the possibility of the plaintiff’s return to an executive role and it was hoped that the proposal would induce the other two shareholders to leave, in part, by receiving substantial sums. Mr Turner pointed out that at about this time the other two shareholders were agitating to “take some money out” of the company. The open-ended departure of the major shareholders from executive control together with the financial inducements including employment as consultants, was designed to secure a management structure which would work according to the plaintiff’s design as stated in the Strategic Plan without any impediments being put in place by the other shareholders in the plaintiff’s absence. Mr Turner regarded the Strategic Plan as a blueprint for the future development of the business as the plaintiff saw it but (and this is crucial to properly understanding it) it was contingent upon all major shareholders resigning their executive positions. Mr Turner said, in effect, that the plaintiff’s own plans were affected by the absence of the resignations of the other two major shareholders from executive positions. I should mention (for later reference) that Mr Turner’s evidence was that, so far as the plaintiff was concerned, he regarded the consultancy fees (which were paid) as being significantly less than market rate.

17 Mr Turner’s evidence was that the plaintiff’s resignation was a planned move which followed his (Mr Turner’s) appointment twelve years previously as deputy managing director and appointment as managing director in 1987 on the plaintiff’s departure. I accept as accurate Mr Turner’s evidence that -

“Mr Alves was the major shareholder of this business and its driving force. It never entered my contemplation that he was going to walk away from this business and allow people to manage it and not to have a lifeline whereby he could come back. And in fact we did discuss the fact that he would look for new business.”

18 Mr Turner said that the plaintiff went to London for two reasons. The first was to look for opportunities to expand the business (as had been discussed on a number of previous occasions) but particularly to acquire licences and technology which would sustain business growth. Mr Turner said that the plaintiff was adept at uncovering marketing opportunities and that, whilst he was in the United Kingdom, he probably uncovered four or five significant markets. Secondly (and Mr Turner described this as equally important), “the other reason was, as he said, so we didn’t have two cockies in the same cage”. Mr Turner said that it was planned that the plaintiff should be absent for about twelve months representing the business in Europe, for the reasons I have described. He said that there were no specific discussions about what would happen on the plaintiff’s return, although he acknowledged that the plaintiff could have returned as managing director and replace Mr Turner in that role. However, it appeared that both Mr Turner and the plaintiff were confident that significant business expansion would follow from the plaintiff’s investigations and that this would provide a new role for the plaintiff in the company’s affairs. Indeed, this is precisely what happened in the acquisition of Babcock Australia. Mr Turner’s evidence was that, although the matter had been left at large, it became clear in the course of negotiations over the purchase of Babcock that the plaintiff was “the right person to come back and drive that”. He added, “that organisation [Babcock Australia] had dimensions of business which, frankly, we had no one in the organisation capable of managing”. He described it as “basically tailor-made for Manuel [Alves]”. Mr Turner said that he reached an explicit understanding with the plaintiff as to his role following Babcock’s acquisition and that this understanding was communicated to the other members of the Board of Allco. Mr Turner said that it was agreed that the plaintiff would return to take over Babcock’s business, leaving him as chief executive officer of Allco. Although Mr Turner understood the formal arrangement in somewhat different terms to that described by the plaintiff, he always regarded the plaintiff as “the boss and on his return I would clearly report to Mr Alves”. He was unaware that the plaintiff had any intention of taking up residence again in Newcastle and managing the Allco Group but he considered that this was unlikely. As to the suggestion that the plaintiff would create a new position of chief executive to manage the business of the two companies, Mr Turner responded that effectively, although not formally, the plaintiff did this. He pointed out that it was always open to the plaintiff to return as governing director or executive chairman but that he was not privy to such a plan.

19 It will be necessary for me to return to the circumstances of the acquisition of Babcock Australia and what happened when the plaintiff returned to Australia. So far as his departure from the board of Allco and his resignation as managing director is concerned, I am satisfied that he did not intend to retire from active involvement in the company’s affairs, let alone from full-time business activities although the precise nature of those activities was somewhat undefined. Because of his predominant role (and close relationship with one, if not both, of the other major shareholders) the plaintiff could afford to react to the circumstances as they unfolded and whose direction he was directly influencing.

20 I thought that Mr Turner was a candid and reliable witness and I accept his evidence without hesitation. In the circumstances, I have not found it necessary to set it out in extenso. The defendant has pointed to a number of contemporaneous documents which, on one reading, appear to be inconsistent with the thrust of Mr Turner’s evidence concerning the plaintiff’s plans. I have carefully considered that material but do not intend in this judgment to analyse it or Mr Turner’s responses to it. I am satisfied that nothing in the documentary material should be regarded as contradicting Mr Turner’s evidence on this point. The defendant submits that, more probably than not, when the plaintiff resigned from his position as managing director with Allco in early 1987, he intended to retire, at least from full time work. I do not accept this submission. As Mr Fletcher put it -

“[As at 1987] … growth was very important to the business. There’d been a lot of effort put into making the Company grow, moving its centre of balance from Newcastle to Sydney. Manuel was intimately involved in that and was very keen to take it further as it continued. He saw himself as taking … Allco/Babcock or Allco as one of Australia’s leading engineering contracting businesses that would expand not just nationally but overseas once we got the right in Asia.

Q. At that time – that is, in 1987 – what would you say to any suggestion that Dr Alves was going to retire?

A. I wouldn’t – I think on my knowledge of Manuel that he was not a retiring type. He lived for work. If there was any problem in his view, he solved the problem by working harder. I certainly didn’t believe that he would be retiring from the business.”

21 Mrs Alves (whose evidence I accept) also gave evidence supporting that of the plaintiff so far as his future intentions were concerned -

“(772) Q. He resigned as managing director; we know that…what did he tell you, if anything, about why he did that and what his future intention was?

A. He didn’t talk about the future, but I knew – he told me that he wanted to try to expand the company and he wanted to study the market in Europe, in London where we went. So, if possible, if he could buy another company to associate with Allco, it was his dream to make the company bigger and bigger – prosperous because it was already on top, but he still has ambition to go on and on.”

22 Indeed, Mrs Alves added that she and her husband bought a house in Sydney in 1989 because he intended to be managing director of Babcock Australia which meant, the company’s operations being centred in Sydney, that it was necessary to live here.

23 The plaintiff, like many businessmen in his position, worked very long hours. He thought – and this does not seem to have been controversial – that he worked on average fifty-five hours a week. He also needed to travel very often. He led an active and extremely successful business life. Allco Steel was obviously of enormous personal interest to him and he had played a major, if not the major, role in creating, sustaining and expanding its business. There is no reason to doubt his evidence that he saw that business as expanding – and needing to expand – even more. When the plaintiff moved to London after his resignation as managing director, he returned about four times a year during which time he would meet with, amongst others, Mr Turner. As well, there were frequent written communications between them, Mr Turner, in particular, keeping the plaintiff informed of Allco’s business between board meetings. The plaintiff made regular monthly reports on particular enquiries concerning the acquisition of technology for Allco. A volume of written material was tendered covering this period. For present purposes, it is sufficient to state that it demonstrates the plaintiff’s very significant involvement with Allco’s business both strategically and as to technical matters of considerable complexity. It presents a convincing picture of the plaintiff’s major role in Allco entirely at odds with the defendant’s case that he had, in substance, retired from substantial involvement in its affairs. Even having regard only to the plaintiff’s history with and involvement in the company, it is difficult to accept that he would, as it were, and as is essentially submitted by the defendant, not only simply have decided to leave but also to substantially retire from active business life. (His hope that his partners would do so was soon shown to be also unreal.) Such an action would be so eccentric as to be unlikely in the extreme. Accordingly, I consider that the accounts of the circumstances of and the reasons for the plaintiff’s departure in February 1987 from formal office given by the plaintiff and Mr Turner are, in substance, true. This conclusion depends not only on my assessment of them as witnesses but also on a common sense view of the logic of events.

24 As I have mentioned, whilst the plaintiff was in London, Babcock Australia, a subsidiary of a major English engineering and fabrication company, became available for purchase. The acquisition appeared advantageous because Babcock Australia offered Allco new design skills for the cement, power and chemical industries, thus permitting expansion of Allco’s turnkey business. This, in substance, was a business model in which the company sought to tender for the entire provision of a particular works or installation from design through to final completion. It was the plaintiff’s evidence that he intended, when he came back to Australia following the purchase of Babcock, to be chief executive of the conglomerate comprising both Babcock and Allco (the Allco Group), leaving Mr Turner as I understand it, with executive control of Allco. The plaintiff agreed that there had been no written or oral communications between him and any of the other directors about his returning to Australia to take the Group CEO role, even though he returned to Australia for board meetings from time to time. He pointed out, however, that in his negotiations with Babcock’s parent company in England he undertook that he would become chief executive of the joint business and that it was this undertaking which (in part) induced that company to take 20% equity in Allco Group in exchange for Babcock Australia – for obvious reasons an advantageous arrangement. Although the plaintiff returned to Australia initially as a consultant, Mr Turner said that it had already been arranged that he would take the position of managing director of Babcock Australia, retaining his position on the board of Allco Limited, which was the controlling company. By virtue of his deputy chairmanship of Allco, Mr Turner thought that he would have overall supervision of the Group but not hands-on control of Allco, which was a mature business that did not need his direction; the plaintiff would, however, have hands-on control of Babcock Australia. Mr Turner expected, together with the plaintiff, that the driving force in the Group so far as business expansion was concerned, would be Babcock Australia. At the time that the plaintiff returned, there was no managing director of Babcock Australia, executive responsibility being with Mr Robert Fletcher who reported to Mr Turner.

25 The plaintiff said that, even before the purchase of Babcock Australia was contemplated, he thought that he needed to return to Australia to take back executive control of Allco from Mr Turner because of an adverse view he had formed of some aspects of Mr Turner’s management. Considering the whole of the circumstances as the evidence discloses it to be, I think that this evidence was somewhat overstated. I accept, however, that the plaintiff had indeed contemplated return in the short term and that he intended to resume overall control but whether this meant a restoration of the previous situation when he was managing director is doubtful: more probably, this would have depended on unfolding events. To be fair to Mr Turner, I think I should say that the plaintiff’s concern may not have meant much more than a perception that Mr Turner’s management style was in some respects significantly different from the plaintiff’s. I think that the plaintiff found it difficult to cope with the notion that he was not directly in charge of the company’s affairs. Thus, despite the plaintiff’s views about this matter, during the course of 1987 it is not necessarily the case that, had the Babcock purchase not intervened, he would have actually sought to replace Mr Turner. The plaintiff’s position in the company and the status that he had acquired by virtue of his key involvement in its past success both made it difficult for him to step aside and also gave him good reason to believe that he would ultimately have his way if he wished to resume the reins of executive management. But this is not to accept that the position was quite so simple as the plaintiff described it in evidence. I think it highly likely that his recollection has become adjusted by the process of time. In substance, however, I consider that the probabilities are that the plaintiff did expect to develop significant new business and that he saw himself returning in due course to Australia to take charge, in one form or another, of the larger enterprise.

26 In short, I conclude that the plaintiff, although wanting to “move on” as it were, did not intend to retire in any sense.

27 Having regard to the controversy between the parties as to the plaintiff’s situation immediately before his operation, it is, I think, useful to set out Mr Turner’s view of the company which it was envisaged (with Mr Turner’s evident support) the plaintiff would manage. I have taken this brief summary of the position from Mr Turner’s evidence, which I accept. The management team at Allco thought that Babcock Australia was significantly under-performing as a result, to a significant degree, of what was regarded as inadequate management. Babcock Australia had been a very substantial company with annual turnover in the 1970s in excess of $100 million, in today’s terms equivalent to a turnover in excess of $600 million. During due diligence, Allco management noticed that Babcock Australia had two extremely good years followed by two very poor years. It was this latter factor which had induced the United Kingdom parent company to sell its subsidiary for a substantial equity position in the new conglomerate, an obvious expression of confidence in the business acumen of Allco management and the plaintiff. Allco management considered that the business was “very good” but very substantial changes in management and business culture were necessary to make a success of it. Mr Turner’s view was that the plaintiff was particularly suited to achieve this. As I have mentioned, Babcock Australia had its own capability for designing and engineering, which distinguished its character as a business from that of Allco. That Mr Turner and, I think I am entitled to infer, the other members of the board (with the possible exception of Mr Parisi) thought that the plaintiff was capable of managing this company back into success is a most significant tribute to his talents as a businessman. Mr Turner’s cross-examination covered all these matters. However, none of the points made in cross-examination, to my mind, significantly qualify the substance of the evidence which I have summarised above and which I accept.

28 Mr Fletcher was in executive control of Babcock Australia and thus held a senior position within the Allco Group. His evidence was unequivocal that he expected that, when the plaintiff returned from the United Kingdom, he would be reporting to the plaintiff, although the precise executive position that the plaintiff was to fill was uncertain. I am satisfied that, having regard to the plaintiff’s dominating position within the company, not only as a major shareholder with practical control of the company through his close relationship with Mr del Bianco, but also because of his pre-eminent management and marketing skills, the plaintiff would have returned from the United Kingdom to control, in one position or another, the Allco business although I accept that he would focus on the challenges and opportunities presented by the acquisition of Babcock Australia. Mr Fletcher said, that when he saw the plaintiff after he first returned to Australia in April 1988 before his initial surgery, that he was very well and looking forward to his work as chief executive of Babcock Australia. After Babcock Australia was acquired, its offices were refurbished. Amongst other things, it was planned (as I mentioned) to have Mr Fletcher’s and the plaintiff’s offices adjoining. Initially, their offices were to be on the top floor but, because the plaintiff thought that senior management “needed to be closer to the action and who came in the door” they were moved to the ground floor. This was arranged by communications between London and Australia whilst the plaintiff and Mr Fletcher were still abroad negotiating the purchase. This evidence indicates, not only that the plaintiff was to play a leading role in Babcock Australia, but also that he made decisions even as to such apparently minor matters as where the offices of senior management were to be situated which, it seems, were accepted without demur and made well before his return to Australia. During the brief five week period after the plaintiff’s return from the UK and his disastrous operation, there were matters to which he needed to attend in Newcastle before moving to Sydney. His involvement both with Allco and with Babcock Australia was therefore cut short.

29 Although the plaintiff travelled in Europe during the period after his resignation as managing director of Allco until his return to Australia following the purchase of Babcock Australia, he lived in London during that time with his wife. In 1987, the plaintiff returned to Australia for the June and September board meetings and also for the January 1988 Board meeting. He had hitherto been in excellent health. Indeed, he described himself as “a health fanatic”. He played golf once or twice a week although, as I understand it, only, or at least, mainly, in summer.

30 It is self evident that, in order to undertake the very considerable responsibilities of managing director of Allco, together with his other activities, the plaintiff must indeed have been fit and well, both physically and mentally. However, during 1987 he developed what he described as a problem in his liver, suffering severe abdominal pain during his visit to Australia for the September 1987 board meeting. He said that he felt better and returned to London. When he again returned to Australia in January 1988 the pain returned somewhat more severely and the plaintiff was unable to work for perhaps up to a week or so. It is undisputed that it was necessary to remove the plaintiff’s gall bladder (a cholecystectomy), which was performed on 2 June 1988. This is usually an unremarkable operation but, regrettably, was conducted negligently by the surgeon. I need to refer in due course to the plaintiff’s own evidence about the effects of this upon him but a useful starting point is the evidence of Professor Ham into whose care in the gastrointestinal surgical unit at Prince of Wales Hospital, Sydney, the plaintiff was admitted on 18 June 1988, having been referred by Dr David Walker of the Mater Hospital, Newcastle, to which hospital the plaintiff had been transferred following his operation by Dr Patel. Professor Ham notes that the plaintiff had developed abdominal pain and fever following the operation and was referred to the Mater Hospital with signs of peritonitis. Investigations there revealed a large sub-hepatic collection of fluid. A further laparotomy was performed and drains inserted. Later, a further two drains were inserted, continuing to drain large amounts of bile, in the order of a litre a day.

31 On admission to the Prince of Wales Hospital, Professor Ham noted that the plaintiff was mildly jaundiced, did not look well and had lost weight. He also complained of abdominal pain. X-rays showed, amongst other things, that Dr Patel had placed three surgical clips across the common bile duct just above the duodenum, which completely obstructed it. This was confirmed on surgery carried out on 17 June 1988 by Professor Ham. There was also a second injury to the bile ducts which, as it happened, had a profound effect on the plaintiff’s subsequent clinical course. Leakage from this region was noted on a cholangiogram carried out after arrival at the Prince of Wales Hospital. This injury above the completely obstructed common bile duct resulted in leakage of large amount of bile into the peritoneal cavity, associated with excruciating pain. Severe peritonitis ensued, including significant inflammation in the region of the bile ducts, which made subsequent repair of the latter much more difficult. In addition, the leakage resulted in the complete decompression of the biliary system above the common bile duct obstruction (that is, the common hepatic duct was collapsed) and its small size also made the repair difficult. It is agreed that the placement by the defendant of the three surgical clips across the common bile duct was negligent and could only be explained by a failure to accurately identify the relevant anatomy, which can sometimes be difficult in operations of this kind. If, however, accurate identification of the anatomy was difficult or impossible, then the procedure should not have been performed and other options should have been chosen. On the other hand, if the anatomy could have been clearly established, then it was negligent to have placed the clips across the common bile duct. The damage to the small bile duct to which I have referred may have had little or no clinical relevance had it not been for the complete obstruction of the common bile duct.

32 It was clear after assessment on the plaintiff’s admission to the Prince of Wales Hospital, that a further operation was essential with a view to reconstructing the extra-hepatic biliary tract which had been damaged. The operation would be a difficult one; it was recognised that later admissions would almost certainly be required and further surgery would also be necessary in due course. The reconstruction was necessary to be done in two phases for reasons which it is unnecessary to set out. Part of the reconstruction was the creation of a so-called “roux-en-Y” loop of a little more than 60 centimetres in length going from the bile duct to the small bowel. It is accepted that the procedures performed by Professor Ham were essential to deal with the very serious, indeed life-threatening, condition in which the plaintiff found himself as a result of Dr Patel’s operation. However, the repair undertaken by Professor Ham could not (and was not designed to) entirely restore the integrity of the plaintiff’s biliary tract. Indeed, the repair itself, though essential, was likely to cause problems of a greater or lesser extent in the future and did so. In the result, the plaintiff never recovered his former good health. Medically speaking, the plaintiff’s post-operative course after 20 June 1988 was without significant complications but, as expected, he continued to drain bile from the site of previous leakage. This gradually diminished, the drain was finally removed on 13 July 1988 and he was then discharged home.

33 There is no question but that this whole experience was horrific from the plaintiff’s point of view. It is uncontroversial that his pain and distress were almost unbearable. Even now, the plaintiff becomes distraught when being asked to recall his circumstances following the operation and was markedly distressed when giving evidence about it. I have no doubt that this experience has left lasting scars, not only physical but also in the plaintiff’s psyche. He still has distressing flashbacks. One of the number of incidents which he recalled with particular pain and, I think, considerable humiliation, was the necessity to submit to the manual evacuation of his bowel by one of the nursing staff to relieve constipation brought about his condition. The plaintiff describes the sense of helplessness and despair preceding the operation performed on 20 June as being “the most demoralising, the most soul destructive experiences...” I have no doubt that this is an accurate description of what he felt at the time and that these experiences have continued their malign influence on his life to the present time although, as I understand it, the worst, in the sense of physical distress, was over after he was discharged on 13 July 1988. The plaintiff then returned to his home in Newcastle accompanied by his wife. He was still, however, suffering from what he described (and I accept) as “terrible pain”. His release from hospital was, unfortunately, of short duration. On 17 July 1988, he was readmitted with fever and low abdominal pain and an ultrasound examination demonstrated free peritoneal fluid. He was discharged on 28 July but again readmitted on 5 August with fever, rigors, abdominal and shoulder pain. He was discharged on 10 August. On 26 August the plaintiff was returned to hospital with a history of abdominal pain for 4 to 5 days with associated fever and rigors for a day and constipation. He was discharged on 3 September. On 16 November the plaintiff was readmitted at the Prince of Wales Hospital with a two week history of intermittent fever and rigors and three days of generalised pruritus (itching), together with jaundice, abdominal and shoulder tip pain and constipation; he was discharged on 23 November 1988. Generally speaking, the crises giving rise to these admissions were symptoms of acute cholangitis. It was necessary to treat each episode with antibiotics which proved effective, at least in the short term. The symptoms indicated a partial biliary obstruction. I accept that they were associated with debilitation, considerable pain and discomfort, not to speak of anxiety and frustration.

34 Cholangitis is an infection in the bile ducts, in most situations involving partial or complete obstruction, often resulting in jaundice, itching (which may be severe) and possibly a number of other systemic symptoms including blood stream infection. The itching occurs all over the body as a result of elevated levels in the blood of certain substances which, in a healthy person, are (as I understand it) removed by the liver. I do not doubt that, though it may be described as itching, it was painful and distressing. The plaintiff complained that on a number of occasions he also suffered from rigors, which is the shaking accompanying very high fevers. As the bile is necessary for digestive functions, disturbance of the bile ducts results in digestive problems as well. As well, the plaintiff suffered – and continues to suffer – from flatulence, wind pain, excessive burping, constipation and general abdominal upset.

35 Professor Ham continued to review the plaintiff, who was suffering from relatively frequent attacks of cholangitis of greater or lesser severity and it became clear that further reconstructive surgery would, indeed, be necessary. The full reconstruction, which was a major procedure, was delayed until the obstruction to the bile duct induced its enlargement. A result of this delay, of course, was the severe pain and discomfort suffered by the patient whilst this dilation developed sufficiently for optimum results.

36 A number of reports from Professor Ham during 1988 indicate a picture of generally improving health with episodic crises. Whilst, in a general way, I accept this as an accurate picture from Professor Ham’s point of view, I do think that it very significantly understates the actual suffering affecting the plaintiff during this time. His physical appearance belied his actual state of health, although he had started to put on weight and there was reference to an increased appetite, and I do not think that he was given to complaint at this time. He had developed painful frozen shoulders whilst in hospital, most likely the result of enforced inactivity and this was giving him continuing problems through 1988 in respect of which he received physiotherapy, although with only slight utility it seems. The repeated attacks of cholangitis, especially when they were associated with fever, were extremely painful. I do not doubt the correctness of Professor Ham’s description in January 1989 of the plaintiff as being “obviously much better than he was”. Given the state he was in but a few months before, this is scarcely a description of radiant good health. Continuing significant digestive and related problems are plainly reflected in the Doctor’s somewhat clinical observation that it “is obvious that he has some degree of biliary obstruction”. The plaintiff, however, was by no means an invalid, expressing the hope to Professor Ham at this time that he would be able to travel overseas for some weeks late in March of that year. Professor Ham’s response was, I think, cautious: “I think he may well be able to do this”. Professor Ham reported, following an examination of the plaintiff on 7 March 1989, that the plaintiff had reported intermittent episodes of fever and other abdominal discomfort during the previous two months and that these episodes did not always respond well to antibiotics. He noted that this weight had slightly decreased and also that the plaintiff had itching which was “his most significant symptom”. This statement was not so much the opinion that this was the plaintiff’s only discomfort but rather it was significant because it indicated that he was developing an obstruction of the anastomosis, which indicated that further corrective surgery may be necessary. Waiting for the bile duct to dilate naturally to permit optimum reconstruction is good practice but from the plaintiff’s point of view it was, as Professor Ham described it, “very unpleasant”. An ultrasound showed minimal dilatation of the ducts in both lobes of the liver but no evidence of major biliary obstruction. The plaintiff indicated that he had postponed his plans to go to Europe until late April and Professor Ham thought “this is wise”. He repeated his advice that a full reconstruction of the plaintiff’s biliary anastomosis was necessary but this could not be done at that stage. As is to be expected, this report (as indeed all the reports of Professor Ham) attempts to describe in clinical language both the patient and his history. I am quite satisfied that the phrase “upper abdominal discomfort”, whilst perfectly adequate for the Professor’s purposes, does not describe the extent of the considerable suffering actually undergone by the plaintiff during these episodes. Professor Ham then saw the plaintiff in early April and noted considerable improvement in his symptoms, a result largely brought about by a change of medication. He noted also that the plaintiff’s liver function tests were markedly improved. The plaintiff confirmed that he intended to go abroad at the end of the month for about four or five weeks.

37 Towards the end of June 1989, Dr J A Dickinson, in practice with Dr H Rose who was the plaintiff’s usual general practitioner, wrote to Professor Ham that the plaintiff had “really done remarkably well” and noted that during his overseas trip he had “no problems at all” although after his return he suffered an attack of rigors which settled down after only a few hours. As I have pointed out, this is a symptom of high fever and, accordingly, the doctor suggested to the plaintiff that when these episodes occurred and lasted for more than twenty-four hours, he should take antibiotic medication. Dr Dickinson questioned whether the foreshadowed reconstructive surgery was then necessary as the plaintiff “appears to be doing very well” and sought Professor Ham’s opinion about the matter. A few weeks after this, the plaintiff was examined by Professor Ham who thought that “he seemed extremely well”. However, he was still of the view that a further operation would certainly be necessary in due course. In early December 1989, Professor Ham noted a history that one further attack of cholangitis had occurred since July which was, he said, “obviously quite severe” although he had returned to “normal” as at the date of the examination. However, Professor Ham reported “some tenderness in the right upper quadrant of the abdomen”. Two weeks later, Professor Ham reported, on a further attendance by the plaintiff, that “he is certainly worse than he was” with a recent ultrasound demonstrating more duct dilatation. Accordingly, he thought that it was time to undertake the operation which had previously been envisaged and arrangements were made for this to occur in early January of the following year. Accordingly, on 4 January 1990, reconstruction of the anastomosis was performed together with excision of the stricture of the previous hepato-jejunostomy and the plaintiff was discharged a week later and returned home.

38 Professor Ham’s report stated, somewhat contrastingly with his previous brief reports to Dr Rose that “in recent months [the plaintiff] had experienced increasing problems with episodes of cholangitis and cholestatic liver function tests”. Professor Ham saw him at the end of January for a follow-up examination and noted that the plaintiff “has been pretty well since his discharge, apart from some epigastric (ie in the upper central abdomen) discomfort, together with excessive wind and burping and occasional constipation”. Professor Ham noted, on the positive side, that the plaintiff’s appetite was good and his weight had started to increase. On examination there was some tenderness in the epigastrium although the wound was soundly healed. Professor Ham thought that the symptoms would subside over the next week or two.

39 So far as doctors’ records are concerned, over the period I have been just discussing, the plaintiff was seen for the first time by Dr Rose on 17 October 1988, when he had complained of what was described by the doctor as “a mild recurrent cholangitis” which, however, had given rise to a fever. The plaintiff also complained of a painful right shoulder for which, a few days later, the doctor prescribed Naprosyn, describing the condition as a “shoulder cuff syndrome”. I accept the plaintiff’s evidence that this had been chronic since his first hospitalisation. About two weeks later, the doctor noted that the plaintiff had a further episode of cholangitis including fever and abdominal discomfort which was then settling. Two days later, however, the plaintiff was still suffering from fever and night sweats with some weight loss being noted. Two weeks later, as I have noted, he was admitted to hospital. Itching had been added to his symptoms, medication was needed for night sedation and antibiotics were continued. On 30 December 1988, the plaintiff complained of further abdominal pain at night, but without fever, and was told to take antibiotics if a fever developed. In mid-February 1989, the plaintiff reported to Dr Rose that his abdominal pain was slowly resolving and he was then putting on weight and starting to exercise more. He expressed a desire to go overseas in April, which the doctor thought would be all right. However, a month later, the plaintiff complained that he had not been well and had suffered continuing fever with itching. It appeared that medication then prescribed had improved his situation and, by the end of April, the plaintiff told Dr Rose that he had put on weight, was active and energetic and felt “very good”. However, this did not last long as sometime later (probably a week or so) a home visit was necessary with the plaintiff complaining of episodes of fever for the previous five days and pain in his upper abdomen consistent with cholangitis. Antibiotic and pain relief medication was prescribed. Some time after this, the plaintiff went overseas with no significant symptoms. However, three days after his return, he suffered from fever and sweats with aches and pains. It was agreed that he should take Noroxin for his fever if rigors lasted over twenty-four hours. A little over a week later the plaintiff complained again of fever and abdominal pains and was prescribed antibiotic.

40 The doctor did not need to be called, it appears, for another six months when, in early December, the plaintiff suffered high fever with rigors although with “no real abdominal tenderness”. Two weeks later, the doctor noted jaundice and recurrent fever. The plaintiff expressed to Dr Rose his anxiety about his ability to work and the extent to which the illness was interfering with his life. I will return to this matter shortly, but it is obvious that the plaintiff’s recurrent, indeed almost chronic, condition with associated anxiety and stress, was adversely affecting other aspects of his life to a significant degree. Two weeks later the doctor noted again the plaintiff suffering a further episode of fever together with severe pain in both thighs on mild exercise. After seeing the plaintiff following his operation in the latter half of January 1990, he did not see him again until early November of that year. The doctor noted, however, that he had been suffering from cholangitis during the year requiring further referral to Professor Ham although it appeared that he had made a full recovery. The doctor noted that the plaintiff was “well now” with increased weight.

41 I accept (and it does not seem to be seriously disputed) that attacks of cholangitis are extremely painful and debilitating. There is some (I consider insignificant) dispute between Professor Ham on the one hand called by the plaintiff and Dr Yeo on the other called by the defendant as to the precise character of a diagnosis of cholangitis. It is unnecessary, however, for me to resolve this. The defendant did not submit that I ought not rely on Professor Ham and it seems to me, especially in light of the fact that the plaintiff has continued to be his patient since the initial operation in the Prince of Wales Hospital, that I should give considerable weight to his evidence. Professor Ham considered that the plaintiff suffered from episodes of cholangitis over the whole of the period between his initial operation and the present time. Following the operation on 4 January 1990, he thought that, although the attacks could last hours or days and sometimes even as long as a week, they were not as severe as the attacks suffered before that procedure and responded fairly rapidly to antibiotics although not all attacks required antibiotics. I readily accept that, considered as a whole, the attacks of cholangitis suffered by the plaintiff after January 1990 were not quite so intensely painful nor so serious as those that had occurred before but I have no doubt that they were, nevertheless, very painful, debilitating and distressing. Professor Ham explained that, as occurred here, where a section of the bowel is taken to be used as a loop to connect with the biliary system, symptoms such as those described by the plaintiff are recognised sequelae of the procedure. A significant minority of patients who have reconstructive surgery such as that undergone by the plaintiff suffer from such attacks. It is believed that a likely explanation is that the loop, or piece of bowel, does not empty properly. This, together with the colonisation of bacteria, causes inflammation, pain, fever and infection. Other factors (which I do not think need to be stated here) may also contribute to this dysfunction. The combination of these factors might well result in abdominal symptoms varying from a mere feeling of discomfort or nausea up to very severe pain and fevers. The plaintiff complained also of pain elsewhere in his body during severe attacks. Whatever might be the explanation for the episodes of severe bowel symptoms (to use a neutral description) after January 1990, there is no doubt that, up to the operation which then occurred, the plaintiff had suffered severe cholangitis. I will need to deal with the post-January 1990 situation in a little detail later, but I regard it as significant that the plaintiff himself considered, as did Professor Ham, that the similar symptoms suffered by him after January 1990 – though perhaps less intensely – were likely to have arisen from essentially the same cause, namely the insult to his biliary system. Although it is true that Professor Ham did not say, in terms, that this was more probably than not the case, I have no doubt that this was the thrust of his evidence and is the best explanation for the plaintiff’s symptomatology. Dr Yeo would not, it appears, diagnose cholangitis in the absence of jaundice; however, he accepted that the retention of food and build up of bacteria in the roux loop might well cause symptoms though, in the absence of nausea or jaundice he would not describe them as cholangitis. Subject to these qualifications, which I do not think it important for present purposes, Dr Yeo agreed with Professor Ham’s evidence. Dr Yeo raised the possibility, perhaps even the likelihood, that some of the plaintiff’s attacks were urinary tract infections or caused by some other condition than the biliary problem but he was careful to qualify these general observations by pointing out that he had not examined the plaintiff on the occasions of these attacks and it is clear that he deferred to Professor Ham as the treating doctor. In the result, I am satisfied that, more probably than not, although from time to time a urinary tract infection may have caused problems for the plaintiff, the disabling attacks which he described were the result of the injury to his biliary system caused by the defendant’s negligent operation.

42 It is now necessary to deal with the other evidence as to the plaintiff’s situation in this period, namely between June 1988 and the early part of 1990. The business problems that occurred at this time and the plaintiff’s practical inability to contribute to their resolution (whether or not he could have effectively done so had he been healthy) was a significant factor in his presentation in this period and subsequently, in at least two respects. The first is that I think he was so anxious to get back to work and return to good health and his pre-surgery level of effectiveness that he tended on the one hand to discount the extent of his problems and minimise his difficulties and, on the other hand, to exaggerate the extent of good health when his symptoms receded – until resurgence of symptoms and events themselves ruthlessly forced him to accept his true situation. To paraphrase Dr Johnson’s well-known epigram (Boswell’s Life of Johnson, vol ii, p126, 1770), the triumph of his hopes over his experience, though hard won and (more or less convincingly) surviving for some years, was to prove temporary. The second is that, when this happened, he suffered a serious blow to his self-confidence; despair and depression became endemic though mostly controlled. Inappropriate anger, fuelled by frustration, caused a crisis in his marriage and surfaced in his business dealings. He was not helpless, however, and, no doubt, from time to time, his strength of will, together with his accumulated experience, enabled him to function with apparent effectiveness but I am persuaded that this was little more than shadow boxing or the repetition of old routines, no doubt sound as far as they went but only striking the target by happenstance. I am convinced that the plaintiff never in this period or since even approximately approached the level of his pre-surgery business drive and acumen, quite apart from resolving continuing psychological and physical health problems.

43 I have mentioned Mr Fletcher’s evidence as to his understanding of what role the plaintiff was to play in the affairs of Babcock Australia after his return from England in April 1988. In Mr Turner’s view, the plaintiff’s management of Babcock Australia, in the context of Allco’s business as a whole was critical to its success. It is clear that this involved a major challenge and that management and entrepeneurial expertise of a very high order was essential to the success of the venture. In his opinion, Allco did not have the requisite management strength in the absence of the plaintiff to undertake this task. By any standards, this was a job that required not only skills and experience but physical and mental vitality of the very highest order. It is clear from the evidence of both Mr Fletcher and Mr Turner (whose opinion as to this matter I accept) that the plaintiff was well able to undertake this task before his operation but that, after it, he could not. According to Mr Fletcher, the plaintiff occasionally came into the office and would work on a tender but would rarely come in for a full day. He described him as very much a changed man. He was not well and this showed, Mr Fletcher thought, in the way he did his business -

“He didn’t have the persistence. Again, if we were [considering] a large tender, he was always a very challenging man as far as far as, ‘Have we looked at this? Have we thought of that?’ A lot of that was gone. The innovations that he used to come up with weren’t there. He was not a well man, and I think it showed in the way he did his business … it made him less valuable to us because of that.”

44 By the time of trial, in March 2001, Mr Fletcher did not recall any specific occasion in which he had seen the plaintiff at all in 1990 but, although his evidence is unclear, I think that he did see him from time to time. I have no doubt that Mr Fletcher’s description of the plaintiff’s markedly changed character was evident to him from the first occasion (whenever it was) that he saw him after mid-1988 and that it never altered. Although there is no doubt a psychological element in this change in the plaintiff (and I will deal with the evidence of this in due course) I do not think it is beyond the ordinary experience of a lay person (such as myself in this context) to understand that the plaintiff had been through a terrifying and massively painful experience which had commenced, as it were, explosively on 2 June 1988 in Newcastle Hospital and which had carried him along in a horrifying sequence of events, the shockwaves of which in terms of pain and debilitation continued on with only occasional remission until the operation of 4 January 1990, a period of eighteen months. I do not find it difficult to accept the plaintiff’s evidence of the effect on his psyche of these events and that his ability to concentrate and that the energy both of body and mind was seriously affected, although it was not for some time that he obtained the insight that his abilities had been seriously compromised.

45 Mr Turner saw the plaintiff frequently after the operation and before the reconstructive surgery at the beginning of 1990, both at work and at his home in Newcastle. He said that, before his surgery, the plaintiff had “an extremely good memory” with an ability “to get across all aspects of the business and also retain a great deal of information and detail”, describing this as “quite legendary”. However, after the surgery, he thought the plaintiff had “lost the plot”. Mr Turner said that the plaintiff had become erratic with a generally heightened irritability, being irrationally suspicious, “almost paranoid” about the motives and behaviour of one of his co-shareholders and generally more distrustful. His ability to deal with complexity was adversely affected. He lacked decisiveness and “on a number of the dimensions that he was outstanding, he became less than ordinary” although from time to time “there were flashes of what was the vision before”. At board meetings he contributed much less than earlier and he became rather backward than forward looking. Mr Turner recalled that the plaintiff’s physical presentation was also very different. He said that he had clearly lost weight and was obviously suffering and frequently tired.

46 At the end of October 1989, sixty percent of the equity in Allco was sold to EPT, a subsidiary of ASEA Brown Boveri Limited, in substance, to alleviate working capital concerns that had resulted from a very substantial increase in growth, which put great pressure on Allco’s working capital. This crisis in the affairs of the Allco Group was not caused by or contributed to (as the case was litigated before me) by the plaintiff’s inability to involve himself effectively in the Group’s affairs but arose out of matters beyond his control. His need to acquire other work did not result from his ill-health and the impact of Allco’s problems on his future employment must therefore be distinguished from the consequences of ill-health. Mr Turner’s evidence was that, by this time, it was clear that the plaintiff was neither mentally nor physically capable of undertaking the responsibilities of being managing director of a substantial company, let alone Allco or Babcock Australia.

47 When EPT acquired the remaining forty percent of shares in Allco in May 1990, the plaintiff’s final link with Allco was cut, although there was still, as I understand the evidence, some further consulting work. Precisely what the plaintiff’s role in terms of direct responsibility was in this respect is uncertain. However, it appears that he could still do some useful work of a limited kind.

48 Taking the period between the June operation and that of January 1990, I am satisfied, in general terms, that the plaintiff made genuine attempts to return to his active role in the affairs of Allco, in particular being involved in re-developing Babcock Australia, attending board meetings and at Babcock Australia’s offices. However, I am satisfied that this was at a level of competence much below that which he had previously demonstrated. I also accept that he perceived a change in attitude towards him, especially on the part of his co-shareholders, Mr del Bianco and Mr Parisi. The plaintiff said, and I accept, that he did not appreciate the extent to which he had been adversely affected by his illness. He undertook consulting work during this period, indeed, well into 1990 but I the level of his actual performance was very much reduced and very likely reflected only his erstwhile dominant position; the company was not getting value for money.

49 Since the sale of Allco to EPT, completed in May 1990, the plaintiff has attempted a variety of investments and work. Of course, these activities occurred in the context of his state of health at the time. The defendant’s case is, in substance, that although the plaintiff’s health had been to some extent compromised, he has exaggerated its adverse effects and that, overall, he has been able to undertake significant business activity, accompanied by a real degree of success. It was also suggested by the defendant that the plaintiff’s somewhat idiosyncratic business style may have impacted negatively on his chances of obtaining senior or chief executive positions where he was not an owner or significant shareholder of the employing company, even had he been well. This, together with the continuation of the desire for semi-retirement (if not full retirement) said to be evidenced by the plaintiff’s resignation from Allco in early 1987 and his move to London, rather than health problems, was submitted to be the explanation for the plaintiff’s failure to find employment at a level equivalent to that which he had with Allco. This submission should not be accepted, especially having regard to Mr Turner’s and Mr Fletcher’s detailed evidence of the plaintiff’s capacities.

50 It was also submitted that Allco was not a profitable business by reference to return on capital and that this would also hinder the plaintiff in seeking alternative employment. I accept Mr Turner’s evidence, however, that Allco’s profit was acceptable especially in light of the need, not so much to maximise profits, but to expand the business. He said that not only was Allco’s profitability within its industry quite acceptable but that the acquisition of Babcock Australia had added “immense value to the business”. This also puts in context, I think, the importance of the plaintiff’s intended role on his return from the United Kingdom.

51 On the other hand, the plaintiff’s case is that he has had continuing problems with his health, varying in intensity from time to time but, overall, causing mental and physical debility, which has significantly affected his ability to earn an income. Certainly, the plaintiff has involved himself in significant business activity over this period and it will be necessary for me to deal with this aspect of the case in due course. I intend, however, to firstly state my findings concerning his health.

52 Before dealing with the plaintiff’s evidence and that of his family about his health issues, it is convenient to summarise the evidence of his general practitioner, Dr Rose, who gave evidence and whose clinical notes were tendered. I thought Dr Rose was a thoughtful and candid witness. As it happened, he made a most perceptive observation at the outset of his evidence which, I think, summed up in two sentences the plaintiff’s situation. Speaking of the plaintiff when he first saw him in late 1989, and referring to his anxiety which, in retrospect, may well have been pathological depression, noting that he had been very sick and had required multiple surgery, Dr Rose commented: “He survived a lot of what he described as very severe pain. So he certainly had a lot of scars both in his abdomen and his soul, I’d say”. I have mentioned Dr Rose’s retrospective view about the plaintiff that he may well have had pathological depression at this time. It seems clear that Dr Rose, as the occasion for viewing his patient’s history as a whole arose (out of the litigation) felt that he had underestimated the psychological impact of the plaintiff’s physical condition. He made the following observation -

“Manuel presents himself very well. He’s a tall man, a handsome man, with obviously a strong sense of pride and he takes care of his appearance, so that he is somewhat deceiving in trying to assess his emotional state. I don’t know if its ethnic or not, but he probably doesn’t present his feelings as readily as many of my patients would. I suppose in many ways he’s a good deal socially superior to many of the patients I have, so perhaps that might in some ways colour one’s judgment and interfere with one’s ability to assess how he was feeling at the time.”

53 When the plaintiff gave evidence about his health since the operation, he was often and obviously upset. This marked contrast with Dr Rose’s description is, I think, cogent evidence of the powerful and destructive effects of long-term chronic illness. Dr Rose’s view was, in substance, that the plaintiff tended to significantly understate the extent of his symptoms, a realisation that only came to the doctor relatively late in the piece. In this context it is, I think, relevant to note that the doctor has a significant practice in palliative care. The doctor said that the plaintiff was probably “a deal more ill than I imagined”. Dr Rose summed up the plaintiff as not being a patient who volunteered information very readily and needed to be “specifically interrogated about matters”. My own impression of the plaintiff was that, in some way, he felt quite humiliated by the fact that he was not well and not functioning well and that this exhibited itself not only in frustration and anger but also in reticence. Dr Rose expressed the same view, stating in a letter to Professor Ham that he thought the plaintiff had a classical depressive illness with associated hypochondriasis which he was satisfied had exhibited itself quite early but which he had not perceived because he was focused on treating particular symptoms. Dr Rose reported in October 2000 that he thought it very likely the plaintiff would suffer from permanent residual disability related to his biliary tract and upper gastro-intestinal changes and the surgery that was necessary for a resolution. In the same report, the doctor said that the plaintiff had “coped very well with what has been quite a distressing illness but I believe that I could not find significant cognitive or memory difficulties on my examinations”. The doctor pointed out in his evidence, however, that “significant” (as used in this particular context) was misleading. The doctor’s practice comprised care of many demented people. This meant, as he put it, “my judgment of significant dementia is fairly extreme” and that a “significant” difficulty was of the kind that he had seen in these patients. He had not undertaken any formal assessment of the plaintiff’s cognitive abilities or memory and thought, indeed, that he had overlooked this aspect of the plaintiff’s presentation. In more recent times, as Dr Rose saw the plaintiff more often, he began to recognise that the plaintiff was more ill than the doctor had earlier appreciated. Dr Rose added that his report of October 2000 concerning the absence of “significant cognitive or memory difficulties” was a prognosis for the plaintiff’s living skills in the near future (considering that they were satisfactory) and was not intended as an opinion about his cognitive ability compared to what it was in the past. This distinction is important in respect of the task I face in assessing the plaintiff’s work capacity following the surgery by comparison to what it was before the surgery.

54 A general survey of Dr Rose’s notes shows three attendances in 1991 of which only the last, in November, seems to have been connected with his abdominal surgery, in that the plaintiff complained of intermittent bladder pain and dysuria with nocturnal frequency, apparently dating the condition since his operation of January 1990. The following year the plaintiff saw Dr Rose only once, in May, complaining of episodic fever and right hypochondrium pain lasting some minutes and recovering with weakness for the rest of the day. Dr Rose also noted nocturia and dysuria.

55 The plaintiff saw Dr Rose twice in 1993, in January and July. On the first occasion he reported being well and active with an increase in weight although in July he was reporting occasional bi-monthly transient episodes of colicky pain and wind lasting “minutes” (which I take to be as distinct from hours, not necessarily being very brief).

56 The plaintiff saw Dr Rose only once in 1994, reporting some weight increase and an episode of central chest pain which lasted some days but which appears unrelated to his cholecystectomy. In March 1995, some ten months later, the plaintiff attended once more on Dr Rose, complaining of intermittent epigastric pain over two days with some relief after belching and a low-grade temperature although he had no jaundice. This was likely to have resulted from his biliary problems. It appears that the unpleasant and, indeed, painful symptoms continued for another month or so, with the plaintiff reporting to Dr Rose that although there had been some pain relief on taking the medication prescribed he still had wind and abdominal pain and on 4 May reported a fever with rigors which cleared up over night.

57 In 1996 the plaintiff attended in February, complaining of flatulence and abdominal discomfort with wind and associated pain with occasional febrile episodes of short duration although his health was generally good. He also complained at this time of nocturia but whether this was caused by an incipient prostate problem or was a sequelae of his abdominal surgery is uncertain. Two months later, the plaintiff reported a recurrence of fever, successfully treated with antibiotics. In August and November 1996, further complains were made by the plaintiff to Dr Rose concerning frequency and urgency of micturition. I will return to this problem in due course.

58 During 1997 and 1998, there were further attendances, the focus of which appears to be a bladder problem but the doctor also noted that the plaintiff needed to take Normacol (to assist with bowel motions) continuously and reported episodic severe but transient abdominal pain in the morning if, on morning exercise, he did not burp a lot. In May and August 1998 the plaintiff complained of severe headaches. To exclude possible neurological significance, Dr Rose took a history in which, for the first time, the plaintiff mentioned that his memory was poor. This is the first note of such a complaint in the medical records, but both the plaintiff and other witnesses attest to his difficulties of memory and concentration since the operation. I think that this evidence was reliable, despite the fact that Dr Rose made no note of such a complaint until August 1998. A CT scan conducted shortly after was normal and Dr Rose ascribed the headaches to tension and prescribed medication. I think that it reasonable to infer that the tension suffered by the plaintiff was a result of his ill-health.

59 In January 1999, the plaintiff complained of continuing problems with motility, disturbance of his gastro-intestinal tract with resulting flatulence and wind and episodic right epigastric pain relieved by burping and wind release. It is clear that diet changes were necessary and had, indeed, been made. He was still suffering from fever, although he did not take medication for it unless it persisted for more than twenty-four hours. I infer from the terms of the doctor’s clinical note that the plaintiff had conveyed the information that these problems had been long standing with both severe discomfort and debilitative effect but had not always or, indeed, usually resulted in an attendance on the doctor. This inference is supported by the doctor’s own evidence about the plaintiff’s tendency to minimise his complaints. In April 1999, the plaintiff suffered acute anaphylaxis after taking Ibilex (antibiotic) capsules for fever and it became clear that it was essential he should avoid not only Ibilex but also related antibiotics. These were necessary for continuing attacks described, perhaps loosely, as cholangitis but I am satisfied resulted from the operative procedures of 1988 and 1990. The defendant submitted that the anaphylactic attack was not caused by the plaintiff’s biliary problems. In one sense that is true, but his need for and taking of Ibilex did arise from those problems and provides a sufficient causal link to render the defendant liable for the resulting condition, requiring hospitalisation.

151 Further claims in respect of gardening and maintenance of two hours a week are made. Although there is some inconsistency between the plaintiff’s evidence and what he said to one of the defendant’s experts, I am prepared to accept that the plaintiff was mostly unable undertake these tasks. However, the extent to which his difficulties are caused by the injuries resulting from the operation is unclear and there is no useful medical evidence on this point. The most probably correct position is that his general ill-health (physical and emotional) is a substantial cause of his inability to garden and undertake house maintenance. I think that 6 hours a month is a reasonable allowance in respect of this work. The periods spent overseas should be excluded. So far as the applicable rates are concerned, the plaintiff’s claim is based on the (in substance, undisputed) average cost of a handyman gardener, with a 3% reduction to the 1990 rate for 1988 and 1989 and a 3% increase over the stated average rate for 1998 for 1999 to judgment. This seems to me to be appropriate. A claim for weeding twice a year is made at $150 each. This is reasonable. So far as lawn mowing is concerned, in respect of the periods spent in Australia, it is reasonable to allow for this to be done 20 times a year (taking into account seasonal changes) for an hour a time at an (averaged) rate of $30 an hour to the date of judgment. The plaintiff is now moving to his 71st year. I have no doubt that had his health been unaffected by the operation of June 1988 he would have carried on with gardening and lawn mowing as long as he was physically able to do so. No doubt in due course his ability to undertake these activities would be reduced. It would be possible to calculate an average figure over his remaining life expectancy, however, I think that an appropriate and convenient way of assessing this matter is to award an amount identical to that applying at the date of judgment for a further five years.

152 I now come to the issue of the plaintiff’s out of pocket expenses arising out of the defendant’s negligence. The first category concerns a claim for various expenses the plaintiff alleges arose in London because of his inability to return as planned following his gall bladder operation. His evidence was that he had planned to return to London at the end of June 1988, about three weeks after the gall bladder operation. In the result, he was unable to do so until just over a year later in 1989. The expenses of his return to London would have been paid by Allco but this arrangement no longer applied when he did return. The plaintiff claims for rent paid for 25 July to 5 August 1988 ($2,561), being the extra time it took for his London agent to identify, in the plaintiff’s absence, his goods from those of the landlord’s. The defendant submits that this was payable at all events and hence the fact that the plaintiff was unable to occupy the flat because of the negligent operation is irrelevant. In my view the delay in departure is causally linked to the plaintiff’s enforced stay in Australia and, accordingly, this sum is allowed. For the same reason I allow insurance of $53. A claim for a telephone account of $39.24 is disallowed for the reason that there is no evidence that it was incurred by virtue of the defendant’s negligence: I reject the plaintiff’s evidence on this point as unreliable. The claim for $111.20 for gas used up to 5 July 1988 is rejected since the plaintiff would have incurred it at all events. The claim for $116.50 for electricity cannot be related to the relevant period and is rejected. The claims for removal and storage of the plaintiff’s furniture prior to shipment to Australia cannot be allowed as there is no basis for inferring that they would not have been incurred at all events; the claim in respect of the plaintiff’s motor vehicle must be rejected for the same reason. Nor is there an adequate evidentiary basis for making the defendant liable for the damage to the plaintiff’s computer and printer. The plaintiff’s claim for agent’s fees of $4,184 seems to me to be referable to his being unable to return to London when he had arranged to do so and thus needing to obtain these services. The total sum allowed for London expenses incurred as a result of the plaintiff’s inability to return as planned is therefore $6,798.

153 So far as medical expenses are concerned, these were quantified by agreement between the parties at $20,915. There is a dispute as to $3,987, which was incurred in connection with the plaintiff’s prostate problems. As this would have eventually needed attention, regardless of the plaintiff’s injuries, this amount is not compensable at the defendant’s hand. The plaintiff’s claim for $2,274 for psychological and psychiatric treatment is included in the agreed total. The defendant submits that some of this may have been referable to disability that would have arisen at all events from the events surrounding the demise of Allco. I have no doubt that the substantial cause of the plaintiff’s need for this help was the impact of his illness caused by the defendant’s negligence. The sum of $33 relating to the plaintiff’s anaphylactic reaction to the use of antibiotic medication should not be deducted, as this occurred as a consequence of the need to take such medication to treat the plaintiff’s illness caused by the defendant’s negligence. The defendant submitted that I should also deduct the probable number of medical consultations that the plaintiff would have undergone at all events, by reference to the alleged average number of those consultations that occurred pre-operatively. As the medical records were tendered and clearly show the reasons for the post-operative consultations, the crucial question is whether the actual reason for the consultation claimed is relevant or not. I do not consider that there should be a deduction from the agreed total as submitted by the defendant. Accordingly, the amount allowed under this head is $16,928. Further medical expenses may have been incurred between the date of the agreement with the defendant and the date of judgment. Hopefully, this is a matter which can also be agreed between the parties. Failing this, it will be necessary for me to take further evidence and rule on the matter.

154 The plaintiff is liable to pay his medical benefits insurer (NIB) $17,975. The plaintiff submits that he is at risk of being required to pay interest on this sum under the NIB Rules. I accept the submission of the defendant that the Rules do not give any right to NIB to levy interest on the sum recovered by way of compensation or damages. Accordingly, the defendant is liable to pay the plaintiff $17,975 as claimed by NIB. There is agreement between the parties, not surprisingly, that the defendant is also liable to pay to the plaintiff the difference between the actual medical expenses and the amount defrayed by NIB and Medicare. The parties, however, are at odds as to the quantification of this sum. I have not found the evidence or the submissions easy to follow on this point, but it seems to me that the plaintiff’s submission that the true gap is $4,711 plus interest of $4,412 is correct. However, I am willing to receive further submissions on this point, if required by the parties.

155 For the future, the plaintiff claims for medical expenses the cost of four consultations a year with a general practitioner, a monthly consultation with a psychiatrist, an annual consultation with a gastrointestinal specialist, an annual liver function test, biannual biliary study tests, an ultrasound to check for bowel obstruction once every five years, and an assessment and review by an occupational therapist every three years. Having regard to the past frequency of attendances on his general practitioner and to the increasing fragility which comes with age, I consider that allowance for three attendances a year is reasonable, at $35 per consultation. There is a substantial controversy between the parties as to the appropriate number of psychiatric consultations that should be allowed for. Dr Brash, who has been treating the plaintiff since May 2000 recommended that the plaintiff should receive ongoing supportive counselling “approximately every month”. Dr Baz, who was called by the plaintiff, recommended fortnightly visits for two months, monthly visits for a year and bi-monthly visits for two years. Ms Fogarty, also consulted by the plaintiff, considered that he needed four to six treatment sessions of 1½ hours each. Mr Cipriani, a clinical psychologist retained by the defendant recommends a total of twelve sessions with a psychologist. The defendant also submits that the plaintiff would have needed psychiatric treatment even had their been no surgery, arising out of the demise of Allco. I reject this submission for the reasons previously given. I am inclined to give greatest weight to the opinion of Dr Brash, who has the considerable advantage of being the plaintiff’s treating specialist. However, I do not think that his report should be read as proposing monthly consultations for the rest of the plaintiff’s life, although no qualification is expressed. I consider that an appropriate allowance is for monthly attendances on the psychiatrist for eighteen months, bi-monthly visits for three years and twice yearly consultations thereafter. One review in the next twelve months by an occupational therapist is appropriate, but a sufficient basis has not been established to justify further reviews. There is no dispute as to annual review by a gastrointestinal specialist nor, I think, to the abdominal studies described above. I think that they are reasonably necessary.

156 The plaintiff claims the sum of $1,635 for pharmaceutical expenses as to which receipts have been tendered plus the cost of Normacol laxative at 7 kilograms a year at an estimated cost of $34 a kilogram (less that already included in the receipted claim) and twelve boxes of Panadol a year since 1988 at an average cost of $24. These total a claim of $4,831. The defendant points to the medical records specifying the prescriptions actually given by those doctors for antibiotics as demonstrating that many of the prescriptions for medication in the plaintiff’s tender bundle did not relate to this medication or to his illness as caused by the defendant. Having regard particularly to the lay evidence, the likelihood of repeat prescriptions and the evidence concerning the completeness of the medical records, I have little doubt that the defendant’s submission significantly understates the plaintiff’s need for medication. Of course, the plaintiff had other unrelated conditions from time to time that required prescription medication and which is, no doubt, reflected in the tendered bundle. On the other hand, I am satisfied that the plaintiff did not keep anything like a complete record of his medication expenditure, in part because of his emotional state. I consider that the plaintiff’s claim for a sum in the order of $1,600 for medication, including antibiotic and anti-depressants for the period to January 2001 is reasonable and was probably incurred for relevant purposes. As with medical expenses, there may well be additional sums incurred since the evidence closed and, failing agreement as to these between the parties, it may be necessary to receive further evidence on this matter. The claim for laxative medication seems to me to be reasonable, having regard especially to the evidence to which I have already referred. The claim for $312 for Panadol use over thirteen years seems to me to be reasonable, although the evidence of its actual use is slight. Accordingly, I allow the sum of $4,800 for past pharmaceutical expenses, subject to clarification of additional expenditure under this head as mentioned above. The claim of $4,000 interest seems to me to be a reasonable assessment.

157 So far as future needs for pharmaceutical products is concerned, The plaintiff claims for (on average) one script a month for anti-depressants and Valium, antibiotic medication every three months, Coloxyl, Normacol (mistakenly calculated), Gaviscon, glycerine suppositories, retinol and paracetamol (one $3 packet a week), costing (as corrected) in all $18.44 a week. The defendant disputes the need for paracetamol, Normacol and antibiotic and proposes the sum of $9.85 a week. I agree that the claim for paracetamol is excessive and allow a packet of Panadol every two months but otherwise consider that the plaintiff’s claim is reasonable. The defendant also submits that the defendant should pay only that sum which the plaintiff needs to pay having regard to the provisions of s87 of the National Health Act 1953. These schemes, however, vary from year to year depending on political expediency and the application of the present scheme to the plaintiff’s medications is uncertain. I reject this submission. Accordingly allow the sum of $15.94 a week.

158 The plaintiff relies on Ms Fogarty’s report to support claims for a dressing stick ($19.50 every five years), an “easy reacher” ($30 every five years), long-handled shoe-horn ($7.50 every five years), shower chair with arms ($74.90 every five years), 45cm grab rail ($47.50), screen raiser ($205) and an ergonomic desk chair ($350). This claim totalling $908 is disputed by the defendant, in part for the reason that “they are all relatively inexpensive items and the plaintiff is obviously a man of some means”. A more substantial reason, so far as a safety rail, is concerned is that there is no evidence that the plaintiff suffered loss of movement or from weakness in his legs. However, I accept the evidence that the plaintiff, when he suffers from cholangitis-type attacks is somewhat debilitated. The estimated cost of installation of the grab rail is $300 and a safety rail to the garage in the plaintiff’s home is $750 is not supported by evidence but I think I am entitled to take a common sense view of the cost. In all, I allow $1,900.

159 Professor Ham is the plaintiff’s treating specialist and it is not disputed that he has a continuing need to consult him, and travel to Sydney for this and related purposes. The defendant suggests that such attendances are not required for the rest of the plaintiff’s life but, in the result, does not dispute the claim. The parties agree that the sum of $2,266 should be allowed under this head. The plaintiff submits that there is a possibility that further abdominal surgery will be necessary. The all-in cost of such a procedure is estimated at $10,000, although there is no evidence directed to this issue. The plaintiff submits that and amount of $2,000 should be allowed against the risk of such surgery being required. Although the defendant accepts that it is possible that surgery will be required, it is submitted that, as it is not probable, no allowance should be made. It seems to me that the plaintiff must make prudential provision against the risk and that this is occasioned by the defendant’s negligence. The amount sought by the plaintiff is reasonable. I allow it.

160 The parties have agreed on $14,225 as the quantification of the plaintiff’s claim for hospital admissions. The defendant, however, contends that the plaintiff’s admission to Lingard Hospital in January 1998 should not be compensable, as it related to his prostate surgery. For the reasons previously given as to this issue, this submission should be accepted and, accordingly, $2,170 should be deducted from the total. Although the defendant also contends that the admission relating to the plaintiff’s anaphylactic reaction to antibiotic should not be paid by him on the ground that the evidence is insufficient to connect this event with the plaintiff’s biliary illness, I am satisfied that it did follow his taking of antibiotic medication for the purpose of allaying his biliary symptoms and that this was probably the cause of the reaction that required hospitalisation. Accordingly, this amount is allowed. There is some further dispute as to trivial amounts, which I do not think it necessary to discuss. A further $116 should be deducted in this respect. In the result, I allow the sum of $11,939 under this head. This sum has been paid by NIB and will have to be refunded by the plaintiff. For the reasons already given in connection with the claim of interest on medical expenses paid by NIB, I do not consider that interest is either claimable or payable on this debt.

161 Although a pleading point is taken by the defendant on the issue of the plaintiff’s travelling expenses between Sydney and Newcastle, I am satisfied that this was obviously in issue and the defendant had a fair opportunity to deal with it in the trial. This matter aside, the major dispute between the parties concerns the significance of the plaintiff’s purchase of a home in Gladesville in Sydney in December 1989, since it is clear that he continued to live in Newcastle from this date. I am satisfied that the plaintiff spent much of the period between 1989 and 1997 in Newcastle – when, of course, he was not abroad. The plaintiff points out that he has made no claim for travelling expenses related to his many attendances on doctors both in Sydney and Newcastle referrable to his illness. The claim is calculated on the basis of a return trip between Sydney and Newcastle of 330 kilometres at a rate of $0.60 per kilometre. Overall, I consider that this is a reasonable rate, it having been claimed and not controverted by the defendant in respect of future expenses. The plaintiff submits that, having regard to the moderation of his claim as mentioned above, there should be no reduction in expenses for the earlier period, when they may have been less. I think that this is a matter that should be determined in a commonsense way, having regard, of course, to the state in which the evidence has been left by the parties, principally by the plaintiff, upon whom the onus of proof lay. Accordingly, I allow the sum of $2,750 for travel expenses plus interest of $2,000.

162 As to general damages, it is unnecessary for me to repeat the account given above of the plaintiff’s painful journey since Dr Patel’s operation, the malignant effects of which will affect him for the rest of his life. Not only has his physical health been seriously affected, but also the attributes of personality and mental ability that, in large part, provide the means of coping and, indeed, of rebuilding – even if incompletely and on a humbler scale – that which has been destroyed or damaged. In addition to chronic physical, mental and emotional pain, the plaintiff has experienced the devastating destruction of what had given his life much of its meaning and value, namely his success as a businessman, the reputation and respect it conferred in the community of his peers and the valuable contribution that it made to his adopted country. In the end, the Court can award only money and the relationship between the sum granted and the loss suffered is necessarily arbitrary. I consider that the appropriate sum under this head is $150,000.

163 I have not calculated the total verdict. It will be necessary for the parties to do so, including interest. I direct the plaintiff to draft orders to give effect to this judgment. Failing agreement, I grant liberty to apply on 7 days’ notice. The defendant must pay the plaintiff’s costs.

**********

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ADAMS J

10 JANUARY 2003

12957/94

MANUEL BARATA ALVES v PRAFUL PATEL

ADDENDUM TO JUDGMENT

164 ADAMS J I referred in paragraph 97 above to the tender of Dr Parmagiani’s report. As it happened, the tender of the report was later withdrawn and did not become part of the case of either party. Although I understood Dr Parmagiani’s opinion was supportive of certain aspects of the plaintiff’s case, I was at all events persuaded by the other evidence, including the psychiatric evidence set out in the judgment, of my conclusions concerning the plaintiff’s mental and emotional condition. The error was, accordingly, inconsequential.

165 It will be obvious from the history of the matter that there has been a considerable period between the time of commencement of proceedings and trial. The defendant submits (without descending into detail) that this delay justifies disentitling of the plaintiff to some amount of interest. However, Mr Sullivan QC frankly conceded, “The true principle is that, ‘interest is almost invariably to be allowed when claimed.’” Donellan & Anor v Watson & Anor (1990) 21 NSWLR 335 at 345, per Handley JA, quoting Faulkner v Bourke (1990) 19 NSWLR 574 at 576 and “The circumstances in which a claim for interest can be refused are rare”: Perri v Flavell & Anor (No 2) (unreported NSWCA 20 September 1995).” In effect, the defendant must be able to show that the true cause of the delay was the plaintiff’s fault in the sense of some significant blameworthiness. Mr Sullivan QC did not suggest to the plaintiff in cross-examination any motive or other matter from which any blameworthiness might be inferred. Nor is there any other evidence in place that would justify such a conclusion. Accordingly, although the defendant has taken the point, it must be rejected.

166 The defendant also submits that the Schedule J rates are inappropriate in this case because they do not represent the commercial rates of interest over the relevant period. However, I am bound to apply those rates: Hayden v NRMA Limited & Ors [2001] NSWCA, 445 [31]. Mr Sullivan has taken the point but again it must be rejected.

**********

Last Modified: 01/15/2003

CITATION:	ALVES v PATEL [2002] NSWSC 1057
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	SC 12957/94
HEARING DATE(S):	12/2/01, 15/2/01, 16/2/01, 19/2/10, 20/2/01, 21/2/01, 22/2/01, 23/2/01, 26/2/01, 27/2/01, 28/2/01, 2/3/01, 5/3/01, 6/3/01, 7/3/01, 8/3/01, 12/3/01, 13/3/01, 14/3/01, 15/3/01, 16/3/01, 19/3/01, 21/3/01, 22/3/01, 1/7/02, 16/8/02
JUDGMENT DATE:	19 December 2002
PARTIES :	Manuel Barata Alves (Plaintiff) v Praful Patel (Defendant)
JUDGMENT OF:	Adams J at 1

COUNSEL :	Mr John Crumpton QC with Mr John Pender (Plaintiff) Mr Alan Sullivan QC (Defendant)
SOLICITORS:	Gray & Perkins (Plaintiff) Blake Dawson Waldron (Defendant)
CATCHWORDS:	Damages - successful businessman - loss of business ability - assessment of loss - profit on sale of successful business - whether should be brought into account
CASES CITED:	Malec v JC Hutton Pty Limited (1990) 169 CLR 638; Norris v Blake (No 2) (1997) 41 NSWLR 49 Husher v Husher & Anor (1999) 197 CLR 138 Medlin v State Government Insurance Commission (1995) 182 CLR 1 Donellan & Anor v Watson & Anor (1990) 21 NSWLR 335 Perri v Flavell & Anor (No 2) (unreported NSWCA 20 September 1995) Hayden v NRMA Limited & Ors [2001] NSWCA, 445 [31] Wilson v McLeay (1961) 106 CLR 523 Griffiths v Kerkemeyer (1977) 139 CLR 161
DECISION:	Judgment and verdict for the plaintiff in the sum of $3,470,172 plus costs; I grant a stay to the defendant in respect of $2,000,000 of the verdict; The balance of $1,470,000 to be paid within 28 days of 20 December 2002; As to the $2,000,000, it is to be invested in accordance with the Undertaking to the court except that the account is to be one that pays interest monthly and that such interest is to be paid to the plaintiff; I give liberty to each party to apply within 7 days; These orders are made subject to further order.