Black v Lipovac
[1998] FCA 699
•04 JUNE 1998
PETER BLACK v. TOMISLAV LIPOVAC bhnf MARIA LIPOVAC, HAMILTON HOLDINGS PTY LTD, TOM GAVRANIC and THE AUSTRALIAN CAPITAL TERRITORY
No. ACT G 65 of 1996
FED No. 699/98
Number of pages - 49
Negligence - Damages - Appeal
IN THE FEDERAL COURT OF AUSTRALIA
CANBERRA DISTRICT REGISTRY
GENERAL DIVISION
MILES, HEEREY AND MADGWICK JJ
Negligence - medical negligence - asthmatic child suffers brain damage after use of suppository prescribed by general practitioner - whether theophylline contained in suppository caused brain damage - whether trial judge entitled to reject strong views of paediatric pharmacologist based on reports of limited laboratory tests performed on other children - whether trial judge entitled to prefer contrary medical evidence based on clinical experience and reading of medical literature - advantage of trial judge in assessing witnesses - appeal court should acknowledge such advantage - question of fact - no error shown.
Negligence- medical negligence - conflicting evidence as to practice by general medical practitioners at relevant time - trial judge required to choose - advantage of trial judge in assessing witnesses - question of fact - no error shown.
Negligence- medical negligence - asthmatic child suffers brain damage after use of phenobarbitone prescribed by locum to combat effects of prior use of suppository - whether phenobarbitone caused damage - question of fact - no error shown.
Negligence- manufacturer's liability - drug contained in suppository - lack of warning as to possible consequences on packaging - doctor prescribing would not have read packaging anyway - causation not established - question of fact - no error shown.
Damages - various heads - questions of fact - interest on past component of Griffiths v Kerkemeyer award to await decision of Full Court in another pending appeal - otherwise no error shown.
Appeal - appeal on questions of fact - expert evidence - conflict between opinions of experts - advantage of trial judge - principles applicable.
Law Reform (Miscellaneous Provisions) Act 1955 (ACT), s 11(4)
Trade Practices Act 1974 (Cth), s 52, s 82(2)
Adelaide Stevedoring Co Ltdv Frost (1940) 64 CLR 538 at 563
Tubemakers of Australia Ltd v Fernandez (1976) 50 ALJR 720
Griffiths v Kerkemeyer (1977) 139 CLR 161
Van Gervan v Fenton (1992) 175 CLR 327
Hodges v Frost (1984) 53 ALR 373
Arvind v Greco (1995) Aust Torts Reports 81-357
Harris v Briggs (1994) Aust Tort Reports 81-301
Calderbank v Calderbank [1975] 3 All ER 333 at 342
Gould v Vaggelas (1984) 58 ALJR 560
Lackersteen v Jones (No.2) (1988) 93 FLR 442
George Wimpey Ltd v BOAC [1955] AC 169
Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1995) 160 CLR 626
March v E & M H Stramare Pty Ltd (1991) 171 CLR 506 and 507
Warren v Coombes (1979) 142 CLR 5 3 1
Wyong Shire Council v Shirt (1980) 146 CLR 40
Abalos v Australian Postal Commission (1990) 171 CLR 167
Lowns & Another v Woods & Others (1996) Aust Torts Reports 81-376
Koziol vAnasson, a decision of the Full Court of this Court (18 August 1997, unreported)
Fitzgerald v Penn (1954) 91 CLR 268
Daubert v Merrell Dow Pharmaceuticals Inc (1993) 113 S Ct 2786
Frye v United States (1923) 293F 1013
Fernandez v Tubemakers of Australia Ltd (1975) 2 NSWLR 190 at 194
Janssen (Cilag) Pty Ltd v Pfizer Pty Limited (1992) ATPR 41-186
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
University of Wollongong v Metwally (No. 2) (1985) 59 ALJR 481 at 483
Dare v Pulham (1982) 148 CLR 658 at 664
Water Board v Moustakas (1988) 180 CLR 491
Andjelic v Marsland (1996) 186 CLR 20
Autodesk v Dyason (No 2) (1992-3) 176 CLR 300
Koeck v Persic (ACT Supreme Court, Miles CJ, Gallop and Foster JJ, 26 March 1996, unreported)
Cutts v Head [1994] Ch 290
Messiter v Hutchinson (1987) 10 NSWLR 525 at 528
WCW Pty Ltd v Charthill Ltd (Olney J, 7 July 1992, unreported)
John S Hayes & Associates Pty Ltd v Kimberley-Clark Australia Pty Ltd (1994) 52 FCR 201 (Hill J)
Sanko Steamship Co Ltd v Sumitomo Australia Ltd (Sheppard J, 7 February 1996, unreported)
MGICA v Kenny (1996) 140 ALR 707 (Lindgren J)
Fasold v Roberts (Sackville J, 11 September 1997, unreported)
Multicon Engineering Pty Ltd v Federal Airports Corporation (20 June 1996 unreported)
Mutual Community Ltd v Lorden Holdings Pty Ltd (unreported, 28 April 1993) at 12-13
Grincelis v House (AG 59/97)
CANBERRA, 16-20 June 1997 (hearing), 4 June 1998 (decision)
#DATE 4:6:1998
Counsel for the appellant: P. Brereton
Solicitors for the appellant: Blake Dawson & Waldron
Counsel for the 1st respondent: B. Donovan QC
Solicitors for the 1st respondent: Cashman & Partners
Counsel for the 2nd respondent: J.R. Sackar QC with A.R. Harris
Solicitors for the 2nd respondent: Fisher Jeffries
Counsel for the 3rd and 4th respondents: P.M. Donohoe QC with P. Burton
Solicitors for the 3rd and4th respondents: ACT Government Solicitor
THE COURT ORDERS THAT:
1. The appeal be dismissed.
2. The cross-appeal insofar as it relates to questions of liability, be dismissed.
3. The cross-appeal insofar as it relates to quantum of damages, and questions of costs of the appeal and cross-appeal, be stood over to a date to be fixed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
MILES, HEEREY AND MADGWICK JJ
I INTRODUCTION
1. On 5 August 1977 the first respondent Tomislav Lipovac ("Tom"), then aged 14 months, suffered hypoxia brain damage (damage caused by a reduced level of oxygen) and as a result is permanently and profoundly disabled.
2. Earlier that day Tom's parents administered a 100 mg aminophylline suppository which had been prescribed by the appellant Dr Peter Black, the Lipovac family's general practitioner. The suppository was manufactured by the second respondent Hamilton Holdings Pty Ltd ("Hamilton"). The active ingredient of aminophylline is theophylline. The aminophylline (marketed by Hamilton as Cardophyllin) was contained in a base called witepsol, which was designed to melt rapidly on application of the suppository, thus enabling absorption of aminophylline into the bloodstream.
3. Prior to 5 August 1977 Tom's health had been generally good. However, he had some continuing bronchial problems and asthmatic symptoms. On 10 May 1977 Dr Black had diagnosed him as suffering from bronchitis and considered him to be a probable asthmatic. Moxacin and ventolin (syrup) were prescribed and the use of a vaporiser was recommended. On 25 June 1977 Tom was examined by a locum who noted Tom to be febrile, that is suffering from an elevated temperature, but no diagnosis was recorded. On 27 June 1977 Dr Black noted coughing and vomiting and coarse rhonchi (nasal passages) and prescribed septrin, ventolin and maxolon.
4. The next consultation was on 5 August 1977 at about 5.30 pm when Tom's parents took him to Dr Black's surgery. Dr Black noted similar symptoms, although worse than before. He made a diagnosis of bronchitis and asthma and prescribed steam, ventolin, maxolon, moxacin and aminophylline 100 mg suppository.
5. Following the consultation Tom's parents went to two pharmacies. They obtained the prescribed suppositories from the second. They inserted the first suppository in Tom's rectum at some time close to 6.45 pm and before 7.00 pm.
6. About 20 to 30 minutes later Tom manifested a dramatic behavioural change, described by the trial judge as a seizure. He suddenly stopped playing with his toys. He went pale, stared vacantly ahead and became almost motionless. His father picked him up. He seemed limp. He was retching or attempting to do so. His breathing was laboured. His father rushed him to the kitchen sink. He vomited a quantity of mucousy brown liquid. Then he went almost completely motionless, save for some apparent slight twitching of the limbs and laboured breathing. There may have been some movement of some of the facial muscles.
7. Mr Lipovac telephoned Dr Black, but was referred to a locum, the third respondent, Dr Tom Gavranic. Dr Gavranic received the call at 7.15 pm and arrived at the Lipovac home about 10 to 15 minutes later.
8. Dr Gavranic observed that Tom's arms and legs were "twitching" and his jaw and throat "clenching and unclenching". He knew that Tom had suffered an elevated temperature earlier. Dr Gavranic did not take Tom's temperature. To him, the child felt neither hot nor cold. He made a provisional diagnosis of febrile fitting, applied a wet towel to lower temperature, and injected 75 ml of phenobarbitone intramuscularly to control the fit. He noticed some symptoms of cyanosis (a blueness around the lips). Dr Gavranic considered Tom's breathing to be compromised. He telephoned for an ambulance and requested that oxygen be brought. The call for an ambulance was received at 7.35 pm. It arrived at the Lipovac home at 7.47 pm. On arrival the ambulance officers administered oxygen to Tom. The ambulance departed at 7.58 pm and arrived at the Royal Canberra Hospital ("RCH") Casualty Department at 8.11 pm. Mrs Lipovac accompanied her son in the ambulance. At some stage during the journey there was a sudden change in Tom's condition, accompanied by severe cyanosis. Oxygen was then administered by the ambulance officers. At 8.40 pm Tom was admitted to Intensive Care.
9. By this time his temperature was 38[integral]C. At 9.30 pm Tom was transferred from Intensive Care to the Paediatric ward. Care was concentrated upon treatment of his respiratory infection and preventing an asthmatic attack. At the time of his transfer to the Paediatric ward Tom was conscious though heavily drugged. He was placed in a humidified oxygen tent.
10. Tom was discharged from RCH on 11 August 1977. From then on he displayed symptoms of severe brain damage, his disabilities in that regard are profound and have remained so.
11. Tom, by his mother, brought a claim against Dr Black, Hamilton as manufacturer of the aminophylline, Dr Gavranic and the Australian Capital Territory as successor to the Commonwealth, which at the time was the employer of Dr Gavranic and the ambulance officers.
12. After a lengthy trial Higgins J gave judgment for Tom against Dr Black in the sum of $7,364,345.55. His Honour dismissed the claims against Hamilton, Dr Gavranic and the ACT and also Dr Black's claim for contribution against Hamilton.
II TOM'S CASE AT TRIAL
13. The case brought on behalf of Tom was that the suppository prescribed by Dr Black caused the seizure which the child suffered twenty to thirty minutes after administration. The effect of that seizure was exacerbated rather than ameliorated by the treatment administered by Dr Gavranic. Dr Black was alleged to have been negligent in prescribing aminophylline based suppositories at all, or at least without ensuring a monitoring of blood levels of aminophylline's active ingredient (theophylline) at a hospital. Dr Gavranic was alleged to have been negligent in that, being aware that aminophylline had been administered by rectal suppository, he failed to recognise the possibility that the plaintiff was suffering a theophylline induced seizure. The phenobarbitone was said to be counter-indicated. It exacerbated the theophylline induced seizure so that hypoxic brain damage occurred. The ACT was alleged to have been responsible vicariously for the negligence of Dr Gavranic and the ambulance officials and any negligent failure of other employees of the Territory in Tom's treatment at RCH.
14. It was alleged that Hamilton was negligent in failing to warn general practitioners that use of 100 mg suppositories for a fourteen month old, 10 to 13 kg child carried with it a real, not fanciful, risk of a seizure such as occurred to Tom.
15. There were many disputed issues in this complex trial, however, it is fair to say that the major questions were whether the aminophylline caused Tom's disability, and, if it did, whether in prescribing that treatment and/or in failing to monitor Tom's condition thereafter Dr Black breached the standard of care required of a reasonably competent general practitioner in Canberra in 1977.
III THE JUDGMENT BELOW
Causation
16. His Honour found there was no evidence of any event from the time of Tom's conception up to the time immediately following upon the aminophylline administration which would have resulted in hypoxic brain damage. Neither the records of the local Baby Health Centre nor of Dr Black, who had been consulted concerning Tom on twelve occasions, revealed any indication of abnormal development. His Honour noted that by 5 August 1977 it was reasonable for Dr Black to have concluded that Tom had chronic respiratory difficulties, including asthma, which had not been satisfactory controlled by ventolin syrup. However there was nothing in Tom's presentation to cause more than mild concern. The infection needed to be attacked and the asthma controlled. There had however been no asthma attack involving breathing compromise. This appeared to his Honour significant because it seemed to rule out prior hypoxic brain damage as the result of an asthma attack. His Honour found that Tom's brain damage occurred between the time of the seizure at his home around 7.15 pm and arrival at RCH around 8.15 pm. His Honour thought it "impossible not to be impressed by the force of the sequence of events". He referred to what was said by Rich ACJ in Adelaide Stevedoring Co Ltdv Frost (1940) 64 CLR 538 (at 563):
"I do not see why a court should not begin its investigation, ie, before hearing any medical testimony, from the standpoint of the presumptive inference which this sequence of events would naturally inspire in the mind of any common-sense person uninstructed in pathology."
17. The learned trial judge went on to point out that this was no more than a presumption of fact. If the evidence showed that the connection suggested by a sequence of events was improbable or no more than a possibility, then it would be not be justifiable to draw the suggested inference: Tubemakers of Australia Ltd v Fernandez (1976) 50 ALJR 720.
18. His Honour noted that all relevant experts in the case agreed that the toxic effects of aminophylline include nausea, vomiting, obtundation (going limp and pale), convulsions and shock. The disagreement was as to whether it was possible, or likely, that a 100 mg suppository would cause such a reaction. Aminophylline is administered so as to improve breathing - principally by relaxing bronchial muscles. However, it also relaxes the arteries so as to restrict blood vessels in and the blood supply to the brain. It can suppress the oxygen supply to the blood. The therapeutic range of theophylline (the active ingredient of aminophylline) would not exceed 20 micrograms per millilitre of blood (mcg/ml).
19. His Honour found that it was "at least reasonably possible" that the suppository in question could within twenty minutes both release the drug and provide a large quantity of it for almost immediate absorption in that time. His Honour said (at 42):
"There is no doubt in my mind that the seizure the plaintiff suffered was a seizure caused by aminophylline approximately twenty minutes after the insertion of the suppository. Nausea, vomiting and seizure are, as Prof Hendeles attested, recognised signs of theophylline toxicity. Further, the very fact that the seizure re-asserted itself in the ambulance is, in itself, supportive of that finding. Prof Hendeles remarked in his evidence on the need for aggressive treatment of theophylline induced seizures. They are resistant even to phenobarbitone. The plaintiff's condition was clearly resistant to the phenobarbitone injected by Dr Gavranic. Further, the poor outcome is another feature supporting the probability that theophylline toxicity caused the plaintiff's seizure. That was another feature remarked upon by Prof Hendeles as characteristic of theophylline induced seizures. As to the mechanism for the cause of that toxic reactions, it seems to me there are only two hypotheses which are reasonable. In either scenario it is clear that the suppository melted rapidly. It follows, therefore, that either because of unseen distribution in the base or otherwise, a large percentage of the drug became bio-available in a short space of time by being rapidly absorbed through the wall of the rectum, in a similar manner to an enema. In other words, there was a rapid meltdown of the suppository leaving a large quantity of the drug then available for rapid absorption. Alternatively, the quantity of the drug in the suppository may have been greater than the 100 mg it was supposed to contain. That would presuppose some fault in the manufacturing process. There was no direct evidence of any such fault."
20. As to the role of the phenobarbitone administered by Dr Gavranic, his Honour concluded that the only effect was to produce temporary relief from the effects of the effects of the theophylline toxicity, depressing the seizure.
Breach of duty by Dr Black
21. It was not in dispute that Tom was correctly diagnosed by Dr Black as suffering from respiratory tract infection and persistent asthmatic wheeze. There was coughing leading to vomiting. It was therefore, his Honour thought, a reasonable conclusion that preparations taken orally could be ineffective because of the risk of being expelled by vomiting. Dr Black chose the 100 mg suppository rather than injection because it was marketed as a paediatric dose. He knew that suppositories were not ideal, due to irregular absorption. He was aware that nausea and vomiting were possible side-effects of aminophylline. His Honour said (at 51):
"The reason for the prescription of 100 mg twice daily was that Dr Black considered it to be equivalent to 7 mg/kg administered three times daily. Assuming an 80% theophylline concentration, that would, of course, have been 5.6mg/kg of theophylline. It would have been assumed by Dr Black, had he calculated it, that the actual dosage initially would be 8.34 mg/kg if 12kg was the child's true weight and up to 10mg/kg if the child had lost weight due to his illness."
22. His Honour referred to a number of medical texts available in 1977. Dr Nelson's Textbook of Paediatrics in the 8th edition (1964) stated that aminophylline:
"... should be used with extreme caution. Severe reactions, occasionally fatal, may occur, especially when it is administered in an excessive dose. The physician must be familiar with the signs of toxicity. The first signs are increasing restlessness and vomiting. If they appear aminophylline should be immediately discontinued. With progressive intoxication there is increasing excitement or delirium and the vomitus may contain partly digested blood. This stage is followed by a convulsion which is a manifestation of the cerebral edema. In cases of this severity there is a high mortality rate. ... Aminophylline is commonly given in rectal suppositories or instillations. Doses should not exceed 3 to 4 mg per kilogram of body weight or be given more frequently than every eight hours. A safe and effective oral dose of theophylline is 5 mg/kg given every six hours. Because theohylline has a relatively short life, administration greater than eight hour intervals results in wide fluctuation in levels of theophylline and inadequate therapeutic responses."
23. In the 10th edition of Dr Nelson's work published in 1975 it was said:
"(a) safe and effective oral dose of theophylline is 5 mg/kg given every 6 hours. Because theophylline has a relatively short half life, administration at greater than 8 hour intervals results in wide fluctuations in plasma levels of theophylline and inadequate therapeutic responses. ... A child receiving theophylline should always therefore be observed for signs of theophylline toxicity."
24. The 1973 edition of the Handbook of the Royal Alexandra Hospital for Children advised:
"Aminophylline given by suppository in a dose of 7 mg/kg each 8 hours is convenient for use in toddlers and young children."
25. His Honour commented (at 53):
"The dosage recommended is consistent with that taken by Dr Black to be appropriate for aminophylline. Why there should be such a difference between the dosage regarded as safe for intravenous administration and rectal administration is not explained. The need for available oxygen therapy is, or should have been of interest. It should have indicated a risk of respiratory compromise which might need to be addressed."
26. In March 1977 Professor Landau published an article in the Medical Journal of Australia. He recommended dosage regularly at 4-6 mg/kg. He commented:
"The use of rectal preparations of aminophylline has led to most of the complications from this drug in children. Higher doses are given unwittingly, and the absorption is erratic, so that vomiting haematemesis, convulsions, arrhythmias and death have been seen most frequently after the use of suppositories. Very occasionally a child will vomit and be unable to take an oral preparation and will reject an aerosol, so that a suppository may be of value. However, suppositories should be prescribed cautiously and not for very small children."
27. Dr Black was aware of the risk associated with rapid absorption of aminophylline into the blood stream. In his evidence Dr Black said:
"There were severe problems if it was given too quickly, and so I suppose one would suggest that with extreme care."
28. He also stated that he was aware that one of those "severe problems" was hypoxia.
29. His Honour's finding of negligence as against Dr Black is summarized in the following passage (at 91):
"It seems to me, after consideration of all of this evidence, that certain conclusions stand out as conclusions to which Dr Black should have come, Aminophylline was an effective broncho-dilator. It had a beneficial effect if it delivered a therapeutic dose into the blood stream of the patient. The level of dose to achieve that result would vary from person to person. Text writers had recommended dosages for home administration by unqualified persons varying between 4 and 7mg/kg, assuming or including suppositories. To exceed recommended dosages risked theophylline toxicity the consequences whereof could be serious, even fatal. Although the risk did not materialise, Dr Black might have been expected to consider that because suppositories were usually slow and less effectual because of incomplete absorption, the second suppository might mistakenly have been given whilst the first one was still about to be absorbed. There is also the fact that although Dr Black assumed the plaintiff to be 12kg, for all he knew he may have been as light as 9kg, whether due to loss of weight because of his illness or otherwise. If Dr Black had given due weight to the above matters, granted that the plaintiff's asthma was no more than of mild to moderate severity, it would, I believe, have been more prudent for him to have continued the previous treatment and to advise the parents to seek further medical advice if it worsened. The mere fact that the drug had dangerous but rarely encountered side-effects is not enough to find negligence. Nor is it enough that Dr Black did not advert to that risk. If the plaintiff's condition had been serious enough to outweigh the risk then that it would not be a breach of the duty of care to take it. Even so, some precautions have been taken. Ideally, the child should have been hospitalised and treated there. He would have been had his condition really warranted the dosage of aminophylline which was prescribed for him. Of course, it should not be overlooked that some quite respectable medical authorities would have found nothing wrong with Dr Black's treatment. As has been noted already, following an accepted practice, albeit one that carries more risk than another, may be justifiable. It is certainly true that Dr Black could not be adjudged as other than a caring, well-experienced and qualified general practitioner. However, if a practice is flawed, it is the duty of the courts to say so, see Lowns v Woods, unreported NSW CA, Kirby P, Mahoney and Cole JJA, 5 February 1996. There were several logical fallacies that the practice of using suppositories embraced. That flowed from a failure on the part of the medical experts generally to draw logical inferences so as to predict what might happen as opposed merely to explaining what had happened. In doing so, this plaintiff was subjected to a form of medication which could and did cause serious harm. It was a risk which Dr Black was aware of though he did not believe it would materialise. Nevertheless, the situation was not sufficiently serious to warrant the taking of that risk. It may be he did not appreciate the extent of the risk. In my opinion, the seizure and consequent brain damage were caused by the negligence of Dr Black as I have set out above."
3. CLAIM AGAINST HAMILTON
30. His Honour found that Hamilton must be taken to have known that there was a theoretical possibility that aminophylline in a suppository could be as high as 91 per cent theophylline, that the whole of the aminophylline in a witepsol base could become available and be absorbed quickly after melting, that the sudden absorption of 100 mg of aminophylline in a small child, albeit not in dosages markedly above those recommended, could result in adverse effects, including nausea, vomiting, abdominal pain, taxhyarrhythria, hypotension seizure and death.
31. His Honour found that Hamilton failed to provide proper advice to physicians as to the possible toxic effects of aminophylline. The dosage recommendations given by the manufacturer were deficient in that they did not make it clear that the dose should be weight related.
32. However, Dr Black, in making his decision to prescribe the 100 mg suppository for Tom, did not rely on Hamilton's dosage recommendations, nor any information it provided.
33. His Honour also found that Hamilton failed to give warnings directed to lay persons (and in particular the parents of young children) who were likely to administer the drug. But for present purposes, all the manufacturers could have recommended was that upon manifestations of aminophylline toxicity - such as loss of consciousness, limpness or seizure - medical assistance should be sought immediately. This is what Tom's parents in fact did. Any appropriate remedial treatment, such as anticonvulsant medication, could only be administered by a physician.
34. Thus his Honour concluded that Hamilton's omissions were not causative of the harm suffered by Tom.
4. Claim against Dr Gavranic
35. The case against Dr Gavranic was that, first, he wrongly assumed that Tom was suffering a prolonged febrile convulsion and, secondly, that he administered an excessive dose of phenobarbitone. Those two errors, it was contended, caused or triggered Tom's sudden seizure in the ambulance.
36. His Honour found that when the ambulance officers arrived at the Lipovac house they applied suction and oxygen. Dr Gavranic himself administered 75 mg of phenobarb intramuscularly. His Honour said (at 97):
"It was not Dr Gavranic's opinion that the seizure he observed was aminophylline related. If it was, however, the required treatment would have been administration of phenobarbitone and oxygen."
37. As to the amount of the dosage, his Honour noted expert evidence which conceded that the administration of phenobarbitone can be used to control major convulsions - including convulsions caused by aminophylline poisoning. In contrast with the situation facing Dr Black, Dr Gavranic had a serious emergency facing him. He had no time to undertake tests and could not "wait and see". Although one expert regarded 60 mg as at the upper level of normal dosage and another noted that 3mg/kg was the then recommended dosage for febrile convulsions, a higher dosage was warranted if a seizure was prolonged and still in progress. That was the situation as it presented itself to Dr Gavranic. Neither of the experts was prepared to say if, the situation was as Dr Gavranic described it, his treatment was other than appropriate, whether the cause of the seizure was aminophylline toxicity or a febrile convulsion.
38. His Honour concluded that Dr Gavranic did not, by any negligent act, cause or contribute to damage suffered by Tom.
5. Claim against the ACT
39. Having found no negligence on the part of Dr Gavranic, obviously there could be no vicarious liability on the part of the Territory in respect of Dr Gavranic. As to vicarious liability for the ambulance officers, his Honour said (at 99):
"I am satisfied that the ambulance officers did not maintain ventilation with oxygen on the journey to hospital. The attending officer recommended oxygen when the plaintiff's condition worsened suddenly. That followed from Mrs Lipovac's observations. I do not know, however, why they did not do so or whether that omission played any part in the result. Nor did the plaintiff address any case against the fifth defendant [ACT] otherwise than vicariously through Dr Gavranic. Accordingly, it would not be appropriate, without the matter having been addressed, to make any finding adverse to the fifth defendant based on the possible negligence of anybody other than Dr Gavranic."
6. Damages
40. The learned judge reviewed the evidence as to the impact on Tom's life of his injuries. His Honour considered Tom's disabilities "enormous" and on a par with a quadriplegic injury. His Honour's award of general damages of $300,000, apportioned as to $100,000 to the past with $38,000 interest, is not attacked on appeal.
41. As to loss of earning capacity, his Honour allowed average net weekly earnings over 45 years (age 20 to 65) as a guide to the value of lost earnings. Taking average weekly earnings at 17 February 1995 as $679.50 resulted in a current value of lost earning capacity of $658,526. After reduction for contingencies, his Honour allowed $560,000. The additional employer funded superannuation component would be $55,450. After provision for contingencies his Honour allowed $47,130.
42. As to other items of damage, his Honour in his judgment on 13 September 1996 provided some detailed figures based on the evidence and adjourned for further hearing the question of final calculations, as well as costs.
43. On 17 January 1997 his Honour handed down a further decision as to the issues of damages and costs.
44. As to loss of expectation of life, his Honour noted the parties had agreed that damages should be assessed on the assumption that Tom's expectation of life was to be regarded as shortened to age sixty. His Honour therefore made an allowance for "lost years" on the basis of twelve years rather than the five he considered the evidence would otherwise have justified. His Honour accepted that it was "wholly improbable" that Tom would suffer any realisation of this loss. Further there was to be an award for earnings foregone during the lost years, although probable living expenses necessary to achieve those earnings were to be deducted. It was conceded that fifty per cent was an appropriate allowance for living expenses. His Honour allowed $7,000 for loss of expectation of life together with $56,000 for lost earnings.
45. Because there had been an agreement as to the loss of expectation of life in Tom's case, his Honour considered the rule of thumb fifteen per cent reduction was not appropriate. His Honour thought that only a five per cent reduction should be applied to calculations terminating at age sixty, the assumed end of life for Tom.
46. As to interest on damages, an issue was raised as to whether an allowance for interest should be made in respect of the sum allowed for past care assessed in accordance with Griffiths v Kerkemeyer (1977) 139 CLR 161 and Van Gervan v Fenton (1992) 175 CLR 327. Notwithstanding the decision of the Full Court of this Court in Hodges v Frost (1984) 53 ALR 373, his Honour considered that he should follow the later NSW Court of Appeal decision in Marsland v Andjelic (No. 2) (1993) 32 NSWLR 649 and Arvind v Greco (1995) Aust Torts Reports 81-357 which held that interest on the sum to be allowed for past voluntary services is payable at full commercial rates on the liability notionally incurred from time to time as the need for care had been experienced and met.
47. An issue arose as to overseas travel expenses. A claim had been made for the costs of Tom's parents in two visits to Europe, the first in 1982 and the second in 1988. Those journeys included a visit to Lourdes, seeking miraculous intervention. His Honour applied Harris v Briggs (1994) Aust Tort Reports 81-301 and allowed expenses of those trips insofar as they were directed to medical consultations. His Honour thought that, given the correctness of the diagnosis of brain damage, it was objectively unlikely that European doctors would be able to do any better than Australian doctors had. However, in the words of Derrington J in Harris v Briggs, his Honour was not persuaded that the hope of more beneficial treatment was "palpably bogus". His Honour thought it was not "discouraged" by responsible authorities, albeit there was no evidence that there was any encouragement sought from or given by such authorities. Including interest, his Honour awarded $22,730 and $11,365 for the 1982 and 1988 trips respectively.
48. As to Social Security and Disability Pension payments, his Honour allowed a credit to the defendant against the sums to be awarded for interest reflecting prior receipt of those payments. The figure was $98,660. As to respite care, his Honour held expenses of $13,680 to November 1994 to be deductible from the defendant's liability for interest. As with other past care, these expenses were paid for by government and non government agencies.
49. His Honour made allowance for various future medical and like expenses. His Honour allowed future care on a 24 hour home care basis. The weekly expense was $3,456.63 and the total to be allowed after contingencies $4,071,670. His Honour allowed $612,265 for loss of earning capacity and $24,405 for superannuation. Future household renovations including air conditioning, maintenance, running costs, professional fees and planning approval were allowed at $469,250. His Honour allowed $250,000 as the present value of professional fund management charges on a fund of $5 million over forty years.
50. As a consequence his Honour entered judgment for $7,583,768.55.
7. Costs
51. There was no dispute that there should be an order for costs in favour of Tom against Dr Black. However Tom sought an order for indemnity costs based on two offers made in Calderbank letters (see Calderbank v Calderbank [1975] 3 All ER 333 at 342). Neither offer was accepted, nor was there any counter-offer.
52. Each offer was less than thirty per cent of the sum for which judgment was entered. His Honour considered that the issues in the case were far from clear. He was not persuaded that Tom's offers of settlement, though reasonably made, were unreasonably or imprudently refused. In his Honour's view, the case was not one where any defendant took up an "obviously unsustainable position or made any insupportable allegations". Accordingly, his Honour refused the application for indemnity of costs.
53. His Honour considered that there were no grounds for denying an order of costs in favour of the successful defendants. The question then remained whether the order should be against Tom, or against Dr Black by way of a Sanderson order. Counsel for Dr Black contended that before a Sanderson (or Bullock) order could be made it was not enough to show that it was reasonable for the plaintiff to join the successful defendants. Rather it had to be shown that the conduct of the unsuccessful defendant (in the present case Dr Black) contributed to that joinder. In any event, it was argued that Tom sought to make out a separate and distinct case against each defendant. His Honour referred to the authorities and in particular Gould v Vaggelas (1984) 58 ALJR 560 and Lackersteen v Jones (No.2) (1988) 93 FLR 442. In the latter case Asche CJ said (at 449):
"... The following principles seem to be established before a Judge can make a "Bullock" or "Sanderson" order. 1. It must be seen to have been reasonable and proper for the plaintiff to have sued the successful defendant. 2. The causes of action against two or more defendants need not be the same but they must be substantially connected or dependant the one on the other. 3. While it is essential to find that the plaintiff has acted reasonably and properly that alone is not sufficient. The court must find something in the conduct of the unsuccessful defendant which makes it a proper exercise of discretion. 4. Finally, in considering whether to make such an order, the court should, in the exercise of its discretion balance overall two considerations of policy: the first, that an unnecessary multiplicity of actions should not be forced on litigants, so that a plaintiff who acts reasonably in joining two or more defendants should not be penalised or lose the fruits of his victory in costs on the basis that he should have either elected or taken separate actions; secondly, that an unsuccessful defendant should not have to pay more than one set of costs merely because he is unsuccessful."
54. His Honour noted that the case was one of considerable factual complexity. The cause of Tom's disabilities might have been found to be a result of the administration of aminophylline, or the phenobarb, or neither or both those drugs. It was possible that the cause of injury could have been a febrile fit unconnected with either of the drugs, but insufficiently treated. Assuming a link between the injury and the aminophylline, Hamilton by its product information might or might not have induced directly or indirectly the prescription of it by Dr Black for unsupervised home administration. His Honour noted that all those issues were alive until the evidence was complete and findings of fact made. Each of the defendants sought contribution from each of the others on the basis that Dr Black's case against each of the others might be made out. Thus his Honour concluded it was clearly reasonable and proper for Tom to have joined all defendants. The causes of action against each, whilst not relying on the same antecedent facts, did rely on the same general fact situation and sought to recover the same damages for the same injury. His Honour considered that, in denying any adverse role for the administration of aminophylline, as he did from the outset, Dr Black made it inevitable that Dr Gavranic and his employer should be joined to allow for an alternative case that their negligence, rather than Dr Black's, caused Tom's injury. In allowing for his alternative case that he acted reasonably in prescribing aminophylline, Dr Black made it inevitable that Hamilton should be joined to allow for another alternative case that its defective product information had caused or contributed to the opinion of at least that part of the body of medical opinion on which Dr Black had in fact relied. His Honour considered that the case "overwhelmingly" favoured the making of a Sanderson order.
8. AMENDMENT OF CONTRIBUTION NOTICE AGAINST DR GAVRANIC AND ACT
55. Following the handing down of his Honour's findings in September 1996, counsel for Dr Black applied on notice to amend his contribution notice against Dr Gavranic and the ACT by relying on the allegation that Dr Gavranic negligently contributed to Tom's injury because he failed to insist on oxygen ventilation throughout the ambulance journey and failed to accompany Tom in the ambulance in a supervisory capacity. Further, it was sought to allege that the ACT, as successor to the employer of the ambulance officers, was vicariously negligent because of the failure to administer oxygen throughout the journey. This application was based on his Honour's finding of fact that he accepted Mrs Lipovac's evidence concerning the apparent administration of oxygen part of the way through the ambulance journey.
56. His Honour rejected this application. He accepted the argument of counsel for Dr Gavranic and the ACT that the allegations against the ambulance officers had been made earlier, more stringent enquiry would have been undertaken to establish what equipment they had and what the situation was as they saw it in the light of Dr Gavranic's instructions to them.
57. In any event, it appeared to his Honour on the evidence that the allegations sought to be made against Dr Gavranic and the ACT could not be sustained. Dr Gavranic's evidence suggests that, consistently with his diagnosis of febrile fit, by the time Tom left the Lipovac home he appeared to have recovered colour and was breathing. Continued administration of oxygen would not have been perceived to be necessary unless, as happened, hypoxia reappeared.
58. Further, his Honour relied on the decisions of the House of Lords in George Wimpey Ltd v BOAC [1955] AC 169 and the High Court in Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1995) 160 CLR 626 as a ground for holding that s 11(4) of the Law Reform (Miscellaneous Provisions) Act 1955 (ACT) did not apply. That legislation provides:
"A tort-feasor liable in respect of the damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise."
59. His Honour pointed out that Dr Gavranic and the ACT had been sued in respect of the same tort, namely the negligent injury to the plaintiff. They have been found not liable. The second limb of the provision was not applicable. They are not defendants who would if sued have been liable. They have in fact been sued.
9. Trade Practices Act
60. Counsel for Dr Black pointed out that his client's contribution notice against Hamilton picked up one of the claims which alleged false or misleading advertising contrary to s 52 of the Trade Practices Act 1974 (Cth). As mentioned, apart from the Trade Practices Act, his Honour found no causal connection between any conduct of Hamilton in relation to advertising or product information and the injury to Tom. However, counsel submitted that, but for the false or misleading product information, Dr Black would not have prescribed the drug and the parents would not have administered it. He submitted that it was not necessary for a cause of action under s 52 to prove reliance by a party on the false or misleading information; rather it was sufficient to demonstrate causation in the sense referred to by the High Court in March v E & M H Stramare Pty Ltd (1991) 171 CLR 506.
61. His Honour held that even if that submission was accepted, the finding already made that the product information or lack of it did not cause or contribute to Tom's injury seemed an effective answer. Counsel for Hamilton also relied on s 82(2) of the Trade Practices Act which made any such claims statute barred. This however was not pleaded. Moreover, on the Wimpey and Oceanic basis Tom's claim against Hamilton had failed. It followed that claim for contribution by Dr Black against Hamilton must also fail.
IV. NATURE OF THE APPEAL
62. The appeal is on the facts. It is not alleged and it is not shown that his Honour erred in any way on any relevant question of law.
63. The task of the trial judge was to find the facts on which he could proceed to determine the issues raised on the pleadings. The issues raised on the pleadings limited the range of facts that it was necessary to find. The necessary facts to be determined were primary facts, the subject of direct observation by witnesses and, further, facts drawn by way of inference from the primary facts. In the present case the trial judge was not left to his own devices in the drawing of inferences but was assisted by expert medical evidence as to the inferences to be drawn.
64. It is well established that where the finding of primary facts depends, even if only in part, upon the credibility of witnesses, then an appellate court will defer to the advantage enjoyed by the trial judge who has seen and heard the witnesses. In deference to the trial judge, an appellate court will not interfere with the findings of the trial judge or substitute its own findings of fact unless the trial judge has misused the advantage. On the other hand, where the factual findings challenged on appeal are made by way of inference drawn from primary facts, an appellate court is regarded as being in as good a position as the trial judge and the appellate court "should not shrink" from drawing its own inferences: Warren v Coombes (1979) 142 CLR 531.
65. It has become common for appellate courts in Australia to be asked to determine almost as a threshold point whether a particular appeal is one in which the trial judge's findings depend upon the credibility of witnesses or whether the appellate court is in as good a position as the trial judge to draw its own conclusions. However, primary facts and facts established by way of inference are often bound up together and it is not always easy to distinguish between them, particularly where much of the evidence is given by way of expert opinion. Moreover, the Warren v Coombes approach still requires weight to be given to the conclusions of the trial judge drawn by way of inference in the sense that it has to be shown that some contrary inference should be drawn. Further, where there is expert opinion as to what inferences should be drawn, the trial judge's advantage in assessing the credibility of the witnesses who express the expert opinion is to be recognized.
66. The major grounds of appeal are the challenges to the trial judge's findings in relation to the causative link and in relation to the breach of duty on the part of Dr Black. Those findings depended in part on his Honour's assessment of the opinion evidence given by expert witnesses. For the purposes of the appeal it is important to distinguish between the two categories of findings.
67. Whether there was a causative link between the administration of an aminophylline suppository and Tom's hypoxic brain damage was a question of fact in the sense that it was to be answered, first, by establishing what had happened and, further, by assessing the relationship of past events to other past events. Insofar as the assessment lay outside the area of common experience, it could not be made without the assistance of expert evidence. Had the experts all been of one view, their evidence might have been accepted without the need for discussion or even understanding of precise technical and scientific issues. However, because there were conflicting views in the expert evidence, the trial judge had the task of considering the whole of the evidence, analysing it and ultimately deciding the question, giving reasons for his decision.
68. On the other hand, the question of whether Dr Black, in prescribing an aminophylline suppository, had acted in accordance with his duty to Tom, was a question of fact of a different nature. It involved not only establishing what had happened but also evaluating the conduct against a standard of reasonableness, that is, of what was reasonably expected of a competent general practitioner in 1977. Ultimately, the latter question was for the Court, to be answered after performing the balancing exercise referred to by Mason J (as he then was) in Wyong Shire Council v Shirt (1980) 146 CLR 40. That exercise could not be performed without consideration of the expert evidence as to what a competent general practitioner would have advised with regard to the administration of an aminophylline suppository in 1977. Here again, his Honour had the advantage of seeing and hearing the witnesses in deciding how the expert evidence was to be applied in performing the balancing exercise.
69. In this respect it is instructive to look more closely at some of the several decisions which were the subject of analysis and comprehensive submissions by counsel in the present appeal.
70. Abalos v Australian Postal Commission (1990) 171 CLR 167 is of particular importance because it reviewed at the highest judicial level the respective functions of the trial judge and of an intermediate court of appeal such as this Court. In that case the trial judge had rejected some of the evidence from an impressively qualified expert which contradicted that of another less qualified witness. The High Court held that the evidence of the latter provided a basis for the trial judge's findings which was not to be interfered with by a court of appeal.
71. McHugh J (with whom the other members of the High Court agreed) said (at 179):
"Öwhen a trial judge resolves a conflict of evidence between witnesses, the subtle influence of demeanor on his or her determination cannot be overlooked It does not follow that, because her Honour made no express reference to the demeanor or credibility of either Professor Ferguson or Mrs. Archer, demeanor or credibility played no part in her findings on the supervision issue. But in any event, no matter how impressive Professor Ferguson's evidence may appear, it cannot claim the consideration of an appellate court to the extent necessary to overcome the advantage which her Honour enjoyed in seeing and hearing Mrs. Archer give evidence. There is simply no basis for concluding that, in so far as her Honour preferred the evidence and demonstrations of Mrs. Archer to the evidence of Professor Ferguson, she failed to use or palpably misused the advantage which she had of seeing and hearing the witnesses. In any event, her Honour may well have taken the view, not without justification, that Professor Ferguson's evidence on the issue of supervision was too limited and tenuous to outweigh the effect on her of the video cassette and in-court demonstrations given by Mrs. Archer."
72. Lowns & Another v Woods & Others (1996) Aust Torts Reports 81-376 was relied upon by counsel for Dr Black in the appeal. In that case the trial judge decided that the defendant neurologist had acted "in accordance with the overwhelming, if not invariable practice of specialist neurologists in Australia at the relevant time" and was therefore not in breach of his duty to the plaintiff. Kirby P and Mahoney JA in the NSW Court of Appeal acknowledged the advantage enjoyed by the trial judge but held that the decision was nevertheless wrong. In coming to that conclusion their Honours took the view that the Court of Appeal could and should form its own judgment in the light of the overwhelming evidence that the defendant's conduct was in accordance with professional practices and established standards. However, it is of importance to recognize that their Honours considered that (as Mahoney JA put it) the trial judge had not "resolved differences between medical experts on the basis of the impression which their demeanor made upon him but used the technique of applying what he saw as proper principles of rationality, logic and reasonableness to reject the testimony given". Mahoney JA considered, in addition, that in applying those principles, the trial judge was in error in making his own assessment of the incidence of risk to a patient, in preference to the clinical judgment of the doctor, without "assigning reasons in the nature of the factual material warranting such a factual decision."
73. In Koziol v Anasson, a decision of the Full Court of this Court (18 August 1997, unreported), the issue was whether the trial judge was correct in holding that a general practitioner was negligent in omitting to inquire into a patient's gynaecological history when she presented for the first time and complained of symptoms of post-pill amenorrhea. Such an inquiry would have elicited matters which would have led a competent general practitioner to advise the patient to undertake further tests. Such tests, in turn, would have disclosed carcinoma at an early stage which could have been treated. The evidence was that there was a common practice among general practitioners not to make a general inquiry into the gynaecological history of a patient with the plaintiff's symptoms presenting for the first time. But there was also evidence from one general practitioner that the symptoms of post-pill amenorrhea would have caused him to make some further inquiry into the patient's gynaecological history for the purpose of advising the patient whether she should have further tests. Another general practitioner said that she would have made a similar inquiry by the time of the third visit but not necessarily on the patient's first visit.
74. The Full Court held that the trial judge was in error in finding that the general practitioner was negligent in following what was the common practice at the time. Although the Full Court did not discuss all of the broader principles, it is clear that it took the Warren v Coombes approach that the appeal court was in as good a position as the trial judge to draw inferences from the primary facts. That approach was consistent with the statement of the trial judge in his reasons that there was nothing in the demeanor of any of the witnesses which led him to give less than full credibility to the evidence of each of them.
75. It was therefore submitted on behalf of Dr Black that his Honour in the present case had fallen into the same sort of error as had the trial judge in Lowns v Woods, in that his Honour made his own analysis of the state of medical science and practice and applied his own principles of rationality and logic to contradict the opinions of distinguished experts for reasons not to be found in the opinions of other medical experts. In other words it was put that, as in Lowns v Woods, the present case was one in which the trial judge had misused the advantage of seeing and hearing the witnesses by advancing reasons that could not depend upon that advantage and which were shown to the satisfaction of the appeal court to be wrong.
76. In our view, too close an analogy with Lowns v Woods is not helpful for the present case. First, although the evidence that what the defendant did in that case was in accordance with established medical practice was described as "overwhelming", the further and ultimate question whether that conduct, although in accordance with established practice, was in breach of the duty of care, was, as Rogers v Whitaker (1992) 175 CLR 479 indubitably establishes, a question for the court itself and the standard of reasonableness was not necessarily to be decided in accordance with standards of professional practice current at the time of the defendant's conduct. Secondly, in Lowns v Woods the ultimate finding as to whether the conduct was in breach of the duty of care was a finding of fact by way of inference from other facts found and that inference was one which, according to Warren v Coombes, an appeal court is in as good a position as the trial judge to be able to draw from those facts found and not disputed at the appeal level. Thirdly, the medical evidence in the present case was directed not only to the issue of breach of duty but also to the issue of causation. On the former, it was the state of medical opinion and practice in 1977 that was relevant. On the latter, it was enlightened opinion in the field of medical science at the time of the hearing. On matters of scientific knowledge, a court is not authorised, let alone bound, to impose its own standards in the face of established scientific opinion. Fourthly, in the present case, there was expert evidence to support the plaintiff's case on both the issue of causation and the issue of breach of duty. Lastly, although some aspects of his Honour's reasons not dependent upon the credit of witnesses were properly called into question, it is not every error of that nature that justifies intervention by an appeal court on significant findings of fact.
77. Ultimately, as we will show, the state of the evidence before the trial judge requires the application by the Court of the Abalos approach on both the issue of causation and the issue of breach of duty. If the finding of the causative link between the use of an aminophylline suppository and Tom's brain damage and the finding that the prescription of the aminophylline suppository by Dr Black was not in accordance with the standards of a reasonable general medical practitioner in 1977 were supported by evidence, then the appeal will not succeed. We turn then to the evidence on those issues.
V. CAUSATION
78. We make some preliminary observations on causation as a legal concept, the role of scientific evidence and the nature of legal reasoning as it relates to those matters.
79. Causation in the context of legal responsibility is a concept that has attracted increasing attention from legal and scientific writers. At the judicial level the nature of proof of causation was the subject of the decision of the High Court in Adelaide Stevedoring Co. Ltd v Frost (1940) 64 CLR 538. The passage from the judgment of Rich ACJ quoted by his Honour and referred to above is well known and is often relied on, as if there were a principle of law that cause is to be presumed from sequence.
80. In the same case a contrary view was put by Dixon J, as he then was, who said (at 568):
"It is impossible to treat the question raised as anything but an unmixed question of fact, medical and scientific in character, and therefore to be decided upon expert testimonyÖThe problems are medical, and the fact that in the present case of medical knowledge and opinion a uniform and decisive answer cannot be given on each occasionÖis anything but a ground for the courts of law attempting to supply by legal reasoning a solution to what is entirely a question of fact."
81. More recently, the nature of causation as a legal concept was discussed by the High Court in March v E & M.H. Stramare Pty Ltd (1991) 171 CLR 507. That case was concerned with the apportionment of damages between drivers of vehicles involved in a collision. Causation (in a sense slightly different from that in the present case) was relevant to that apportionment. Mason CJ said (at 509):
"It has often been said that the legal concept of causation differs from philosophical and scientific notions of causation. That is because 'questions of cause and consequence are not the same for law as for philosophy and science', as Windeyer J pointed out in National Insurance Co. of New Zealand Limited v Espagne (1961) 105 CLR 569 at 591. In philosophy and science, the concept of causation has been developed in the context of explaining phenomena by reference to the relationship between conditions and occurrences. In law, on the other hand, problems of causation arise in the context of ascertaining or apportioning legal responsibility for a given occurrenceÖ"
82. Deane J said at 522, citing Clark and Lindsell on Torts, 16th ed (1989) par. 1-103 and referring to papers delivered at a symposium on causation in the law of torts and published in 63 (1987) Chicago Kent Law Review:
"Causation in the context of the elements of the torts of negligence is not the same thing as the 'scientific term descriptive of sequence in physical phenomena'."
83. McHugh J discussed the question of causation at greater length, especially in the context of the distinction between the view that a necessary condition of an occurrence is sufficient (the sine qua non theory or "but for" theory) and the view that cause for legal purposes means more than a necessary condition and must also constitute cause according to commonsense principles. His Honour stated that the commonsense requirement had always had strong judicial support (eg. Fitzgerald v Penn (1954) 91 CLR 268) and the powerful support of Hart and Honore in their influential textbook, Causation in the Law 2nd ed (1985). However, McHugh J (at 533) ultimately came down against the "commonsense" approach on the ground that it allowed tribunals of fact under the guise of commonsense to determine legal responsibility by applying their own idiosyncratic values. His Honour continued that, where expert evidence is called to explain a connection between an act or omission and the occurrence of damage:
"Öthe educative effect of the expert evidence makes an appeal to commonsense notions of causation largely meaningless or produces findings concerning causation which would often not be made by an ordinary person uninstructed by the expert evidence."
84. In the United States litigation over drugs and other toxic substances appears to have spawned a huge amount of academic literature concerned with scientific proof as opposed to legal proof and allied matters. Because the trial of such issues in the United States is commonly by jury much of the concern is with the admissibility of scientific opinion rather than its weight, although it appears that appeal courts are concerning themselves increasingly with the latter. A decision of the US Supreme Court, Daubert v Merrell Dow Pharmaceuticals Inc (1993) 113 S Ct 2786 (overruling Frye v United States (1923) 293F 1013, which was referred to by his Honour in the present case) has apparently contributed much to the debate. The debate has spread to these shores: see eg. Edmond and Mercer, Keeping Junk History etc out of the Courtroom (1997) 20 Uni NSW LR 48, The Secret Life of (Mass) Torts Op. Cit. 66, E. Adeney, Factual Causation in Toxic Tort Litigation (1993) 19 Monash LR 22. In the latter article the author concludes, after a survey of the Australian authorities, including March v E. & M. H. Stramare Pty Ltd:
"It is suggested that circumstantial evidence, viewed in the light of commonsense should in fact be used sparingly in toxic tort decisions. Given that the tribunal of fact will be almost without exception scientifically ignorant, there is an acute risk of injustice to the defendant in the use of the test. The other problem is that commonsense is so subjective a commodity that it can be used as an excuse for decisions that affront logic and the notion of justice."
85. We acknowledge these developments, but do not deem it necessary to discuss them at length. There is much to be said for the view that the reference by Rich ACJ to a "presumptive inference" from a sequence of events did not lay down a principle of law. It should be emphasised that the sort of inference to which Rich ACJ referred had to be one which would be naturally inspired "in the mind of any commonsense person". The judgment of Rich ACJ is sometimes invoked as if it cast an onus upon a defendant to rebut a "commonsense" presumption of causation established by a sequence of events, by the calling of expert evidence. In our opinion, this is not so and it is as well to remember the caution of Dixon J, although in dissent.
86. Such a caution appears to have been in the contemplation of Reynolds JA in Fernandez v Tubemakers of Australia Ltd (1975) 2 NSWLR 190 (at 194):
"Difficulty arises when an expert witness speaks only in terms of possibility in circumstances where it can be seen that he declines to draw the inference which the lay tribunal is invited to draw. It seems to me that the answer to the question which is posed in such cases begins with an understanding of the real content of the medical opinion relied upon. An expression of opinion that a condition could be or might be related to a suggested cause will have different meanings in different contexts. If nothing is known as to the etiology of a condition or disease, no cause can be excluded as a matter of logic, and so it might be said that any suggested cause might have or could have caused it. In such case the assertion is not in the full sense and an expression of expert opinion and has no probative force. If very little is known of the relevant etiology, a similar expression of opinion may mean that present scientific knowledge does not exclude the possibility of a causative relationship. If much is known and the knowledge is explained and expounded to the tribunal of fact, an expression of opinion which does not pass beyond possibility may be regarded as a precise and guarded scientific statement which leaves the ultimate question on probability to the tribunal to pronounce upon, having regard to all the facts."
87. This appears to us, with respect, to be the appropriate approach to the present appeal. Whilst the sequence of events should not be taken to raise a presumption that the use of the aminophylline suppositories caused Tom's seizure and subsequent hypoxic brain damage, that sequence was a powerful piece of evidence to be considered in the light of the evidence of medical knowledge as to the propensities of theophylline and the use of aminophylline suppositories.
88. Theophylline is a drug formerly in widespread use for various purposes including the treatment of asthma. It is often or usually combined with another drug, ethylenediamine, in order to enhance solubility. This combination is called aminophylline. Aminophylline may be administered orally, intravenously, by rectal enema or by rectal suppository. It is known and was known in 1977 to have undesirable consequences in some circumstances. Its use in suppository form for children was under question in the Australian medical world in 1977.
89. Aminophylline suppositories were manufactured in Australia by Hamilton prior to 1977 and until about 1984. The manufacturer imported the theophylline and added the other drug. The product, aminophylline, was marketed as Cardophylline. The suppositories manufactured by Hamilton contained 85 percent by weight aminophylline and 15 percent of a base solid at ordinary room temperature and expected to melt at rectal temperatures. In 1977 the base was witepsol.
90. In 1977 aminophylline suppositories were listed in the Commonwealth Pharmacy Benefit Schedule, and were thus available at a subsidised price. In July 1983 the Commonwealth Department of Health notified Hamilton that theophylline was no longer approved for treatment of cardiac disease. In September 1983 Hamilton informed the Department that a search had revealed that rectal absorption was unpredictable and that suppositories would no longer be recommended for children. In November 1984 the Department informed Hamilton that aminophylline suppositories would be removed from the Pharmaceutical Benefits Schedule on 1 April 1985.
91. Aminophylline remains available for intravenous administration in emergencies and general practitioners carry it in liquid form in their emergency bags.
92. In general terms the medical knowledge of which evidence was given was not concerned with "cause" in the sense of establishing an inference which had to be drawn by the tribunal of fact if the plaintiff was to be successful. The state of medical knowledge was that harmful events had been known to follow the use of theophylline with such frequency and in such circumstances that it was widely, if not universally, accepted that toxicity could not be excluded as a possible result of the use of the drug. In lay terms it could hardly be doubted that in certain circumstances theophylline was a cause of changes in the blood cells and that those changes were a cause of hypoxia and brain damage. As his Honour observed, the question was whether the circumstances were such in the present case.
93. The causation issue as it falls to be considered in this appeal should be more precisely identified. It was established that the harm for which Tom was to receive damages, if the harm had been negligently caused, was brain damage and its consequences. It was established that the brain damage was caused by hypoxia. It was established that hypoxia was known to have followed the use of theophylline. More particularly, symptoms of hypoxia were known to have followed the use of aminophylline suppositories in children.
94. Although the point was not conceded, it is clear that there was abundant evidence that signs of the "seizure" (which his Honour found to be part of the chain of causation) were consistent with aminophylline toxicity. They included paleness followed by cyanosis, obtundation, retching, vomiting, twitching and hypotension. They were summed up in the statement of Dr Roberts, called by the defence:
"The troubling feature is the clear history and the scientific literature attesting to the ability of theophylline to produce CMS injury of the very nature that this patient appears to suffer."
95. Mr. Brereton, who appeared for Dr Black on the appeal and for whose careful analysis of the scientific issues and the evidence relating to it we are grateful, submitted that the question of causation was essentially a question of pharmacology, not of medicine, and that the pharmacological evidence was all one way. It was submitted that the trial judge had ignored or misunderstood this essential feature of the case or had given it insufficient weight. There was evidence from only one witness with the relevant specialised background. The witness was Professor Hendeles. The relevant speciality was paediatric pharmacology.
96. The Court acknowledges the force of Mr. Brereton's submissions in this regard. On a reading of the transcript and of the reports in evidence, there was a powerful case made out on Dr Black's behalf that, at least in the English speaking world, no case had ever been recorded of the administration of a single aminophylline suppository resulting in a peak serum theophylline concentration sufficiently high to cause a seizure or to cause hypoxic brain damage. On that basis, so it was argued, it was impossible that it could have done so in Tom's case. Professor Hendeles stated that a causal connection was a matter of scientific impossibility. Other witnesses with qualifications in various branches and sub-branches of medical science and practice supported that conclusion. If the issue could not be decided without reliance on the evidence of a paediatric pharmacologist, then it is difficult to see how Professor Hendeles' views could be rejected.
97. Yet, from our reading of the evidence and from what we were told on appeal, the case on causation was not conducted below as if it were to be decided solely or predominantly on the pharmacological issue, paediatric or otherwise. Nor could it have been. The doctors who gave evidence ranged from general practitioners to persons qualified in medicine engaged in academic research and teaching in highly specialised areas. It appears that not all had personal experience or expertise in the use of theophylline or aminophylline suppositories with children with respiratory problems. They were all qualified to express opinions (and did) about the effect of the drug (or the suppositories) on persons to whom it was administered. Some of the opinions were based largely upon reading of the scientific and medical literature rather than upon first-hand studies applying research methodology. Apart from Professor Hendeles, none of the witnesses saw the causation question as one of pharmacology (or, as was suggested to Professor Beveridge, one of bio-pharmaceutics, pharmacodynamics or pharmacokinetics). Professor Beveridge, against whom Professor Hendeles' views were so strongly opposed, acknowledged that his own views as to causation were based on clinical experience and a reading of textbooks and peer reviewed articles. Thus the trial judge was entitled - and bound - to take the whole of this expert evidence into account on the causation issue. It is not to be overlooked that Professor Hendeles was not the only witness with a background in pharmacology. It was generally accepted that all those persons with medical qualifications have some knowledge of pharmacology. Impressive as the qualifications were of Professor Hendeles as a paediatric pharmacologist, his evidence on the causation issue had to be weighed in the light of the other evidence.
98. It was appropriate for his Honour to give special attention to Professor Hendeles in his reasons, and his Honour did that. His Honour came to the conclusion that Professor Hendeles (and another witness from California, Professor Newth) had adopted roles "as advocates for aminophylline" and that the reliability of their opinion evidence was affected accordingly. This judgment as to the quality of the evidence of these two witnesses was a robust one, even, on the face of it, harsh. Mr. Brereton submitted that it should be rejected. It bears examination.
99. Professor Hendeles, it should be said, did not put himself forward as primarily a pharmacologist. He corrected counsel who introduced him as a Professor of Paediatrics and Pharmacology and stated that he was a Professor of Pharmacy and Paediatrics. He described himself as a clinical pharmacist with a Doctor of Pharmacy degree. His association with paediatrics, a branch of medicine concerned with the care of children, was not that of a medical practitioner but of a member of a multi-disciplinary paediatric-pulmonary training program who worked in a clinic with physicians "to design pharmacological regimes to circumvent the problems they are having."
100. It would be an over simplification to say that the issue of causation could be reduced to a comparison between the opinions of Professor Hendeles and those of Professor Beveridge or that it was a matter of choosing one lot of opinions rather than the other. However, it does appear that the case for the respective parties was put at its highest in the views expressed by each of these learned and distinguished men. Each of them furnished reports and gave evidence and the whole of that evidence could not stand together.
101. There was a basic difference in the approach of Professor Hendeles and most of the other witnesses. Professor Hendeles believed that the crucial question was the bio-availability of the theophylline 20 to 30 minutes after administration and that studies in the field of paediatric pharmacology had established the truth of two basic propositions relating to the bioavailability of the drug. They were-
Theophylline toxicity can be shown to have occurred only by measuring the concentration of theophylline in the blood serum. The measurement is made by laboratory tests and the result is expressed in terms of micrograms per millilitre, or ug/ml.The blood serum level at a particular time after administration of an aminophylline suppository (if not measured by laboratory tests) may be calculated by relating the dose to the weight of the child.
102. Professor Hendeles acted on these basic propositions in the following way. He said that tests of blood serum established that blood toxicity sufficient to cause hypoxia occurred commonly at levels above 100 ug/ml, rarely at between 100 ug/ml and 40 ug/ml, and never below 40 ug/ml. He considered that a toxic effect short of hypoxia could occur at a level in excess of 20 ug/ml and that a therapeutic level, that is a level sufficient to produce a result but not a harmful result, was between 10 and 20 ug/ml. Professor Hendeles further considered that peak serum levels were not reached until a period of about 30 minutes after the administration of the suppository. His evidence was that in the example of a 100 gram aminophylline suppository administered to a 12 kilogram child, the bio-availability of the drug could not result in a toxic level within 30 minutes, let alone sufficient toxicity to produce brain damage.
103. Professor Hendeles, who, for reasons of personal convenience gave evidence at the commencement of the trial, was scathing in his criticism of Professor Beveridge and of the views and other material set out in Professor Beveridge's report. It is unnecessary to repeat the terms of his criticisms. They could be interpreted as an unnecessarily personal attack on Professor Beveridge. On the other hand, if accepted, Professor Hendeles' criticism of Professor Beveridge would have left the credibility of Professor Beveridge in shreds.
104. It is fair to say that cross-examination of Professor Hendeles does not appear to have caused Professor Hendeles to have retracted any of his opinions either in substance or in degree, nor to have exposed any internal contradictions or inconsistencies. However, Mr. Donovan QC, for Tom, established with some persistent questioning that Professor Hendeles had been a consultant to a manufacturer of theophylline from 1977 to 1986 and had received "a stock option for 500 shares of stock in that company". Although it appears also that the association did not continue, and although Professor Hendeles denied any conflict of interest between that of his consultancy and that of an objective clinical scientist, the association was a matter that his Honour was entitled to consider in coming to the view that Professor Hendeles had adopted the role of an advocate for the drug.
105. With regard to Professor Newth, his Honour considered that this witness was at times "evasive" and concerned to make points rather than to give objective evidence.
106. His Honour had similar reservations about Professor Isles from Brisbane, who had written relevant articles jointly with Professor Newth. Of this witness his Honour said that it was "disturbing" that Professor Isles was "so dismissive of the views of qualified persons who held views contrary to his on the matter of a proper dosage of theophylline".
107. In the light of the above, it is clear that his Honour was influenced by the demeanor of witnesses and in that regard he had the advantage over this Court. Unless the evidence of Professor Beveridge was inherently unacceptable, it cannot be shown that his Honour misused the advantage.
108. Professor Beveridge and most of the other witnesses adopted what might be called a clinical approach, that is to say, an approach based on observation of events and behaviour rather than laboratory or other controlled means of scientific testing. This approach rejects the proposition that conclusions as to theophylline toxicity can be reached only after calculation of blood serum levels. On this approach there was significance in reported instances of children displaying symptoms of toxicity after administration of theophylline, including administration of a single aminophylline suppository. The significance was such that the use of aminophylline suppositories had come to an end at the Royal Alexander Hospital for Children in Sydney by 1977 and some individual practitioners were no longer prescribing the use of aminophylline suppositories. In March 1977 Professor Landau had written in his article already quoted that the use of aminophylline suppositories involved high dosages of theophylline, erratic absorption and reported symptoms of haematemesis and convulsions (as in Tom's case) and even death after the use of aminophylline suppositories. He expressed the view in the article that such suppositories were to be prescribed cautiously and not for small children. All that evidence was strong indication of widespread medical opinion that the risks attached to the use of aminophylline suppositories outweighed their utility or, in other words, that there was a likelihood of a causative link between their use, even in the therapeutic range, and the sorts of symptoms seen at the time of Tom's seizure.
109. Towards the beginning of his report dated 5 June 1995, Professor Beveridge took the series of events leading to the seizure (which events were proved to have occurred) and commented:
"It would be commonsense (and it would be good medical practice) to consider first of all that the medication that had been administered to him (namely the rectal suppository of aminophylline) is what caused the change in him".
110. Further, in his evidence, Professor Beveridge said that, for medical purposes, reliance was not made exclusively on rigorous analytical material and that "on occasions, commonsense is very important".
111. These statements, and the approach of Professor Beveridge generally, were criticized as being insufficiently scientifically rigorous. However, for the purpose of the issue of causation as it was to be determined by the trial judge, Professor Beveridge's comments are stated in terms consistent with the "commonsense" approach which is to be made for the purpose of deciding legal liability. Far from detracting from the force of Professor Beveridge's evidence, it appears to us to strengthen it, or at least to justify his Honour accepting the clinical approach rather than the laboratory approach.
"The Lipovacs are by far the most difficult family to place carers with, either on a short term or a long term basis. No doubt this is due to Tom's behaviour and the incredible stress his family is under."
194. The possibilities are not only in one direction.
195. In our view, insufficient basis has been shown for us to interfere.
(B) GARDENING AND MAINTENANCE
196. Dr Black's submission does not deny the necessity for allowance to be made for the performance of such services for Tom. While there is some quibble with the amount awarded, $128,949, the principal submission is that his Honour erred in rejecting a submission that the carers could provide those services. Why his Honour rejected that submission has not been made clear to us but we intend no criticism of his Honour in that regard. In a case of the complexity and size of this one, this was a very small issue indeed. In such a case a trial judge cannot be expected to give reasons as to every allowance of an item of damages. It must be questionable whether carers, faced with the formidable task of caring for Tom, would be prepared to do the gardening for nothing. The award was made by the trial judge exercising his judgment in the context of his findings on all the evidence and on all the issues. It should not be interfered with simply because the appeal court would not have made a similar award.
(c) House modification and air conditioning
197. His Honour dealt with this as follows:
"Household renovations
It is reasonable to allow for future modifications to any house Tom is able to purchase. The claim is for -
Conversion costs $237,965.00
Air-conditioning $ 15,862.00
Maintenance and running costs $195,431.11
Professional fees and planning approval $ 19,995.00 $469,253.11
My impression was that these figures were somewhat high but neither they, nor the evidence on which they have been based, has been the subject of dispute. In round figures, I allow $469,250.00."
198. Dr Black asserts that all these matters were in dispute. Tom's submissions seem to acknowledge that the need for air-conditioning was not conceded by Dr Black and that some submission was made that much less than then the claimed amount for house-modification ought to have been allowed. Dr Black's main submission was that there was no need for air-conditioning and a need for home alterations only insofar as would be necessary to augment Tom's safety and to allow accommodation for live-in carers; in particular there was no need for the kinds of alterations necessary for a wheelchair-bound person, which the first respondent is not.
199. It is most unfortunate that the matter comes before us as it does, although we intend no criticism of anyone, least of all his Honour. This was, as we have said, a big, complex case for all concerned. While the sums involved are in absolute terms, quite large, relatively to other matters in issue they are fairly small. The choices seem to be (a) that we take a narrow view that, as detailed submissions were not made to his Honour, regard should not be had to them on appeal; (b) that we leave it to Dr Black to approach his Honour under the "slip" rule, or in the broader jurisdiction available where the tenets of justice demand it: Autodesk v Dyason (No 2) (1992-3) 176 CLR 300; (c) that we remit the matter to his Honour for reconsideration on the analogy of the "slip rule" or (d) that we deal with the matter ourselves, as best we can. We think the last course is the most practical and, ultimately, the fairest.
200. As to the necessity for air-conditioning, a report from an occupational therapist, Ms Broad, dealt with the matter. In view of Tom's gross disabilities, her proposals appear not unreasonable. Ms Broad included:
"Heating: Air-Conditioning:
Maintenance of a comfortable internal-air temperature through the use of appropriate house heating and cooling systems, due to Tom's health and weight loss problems."
201. Thus, air conditioning seems reasonably to be required.
202. As to the costings of building modification, and of the installation of air-conditioning, these were provided by an architect, Mr Hardiman.
203. The matter can only be viewed in a broad-brush way. We agree with his Honour that, on their face, the costings do look high. Such considerations alone cannot lead very far as we have indicated above. As to a possibly assumed need for wheelchair access, there was included only a small sum which might be thought to have been related thereto. The matter is small enough not to warrant intervention. More broadly, there are two considerations as to which it is surprising that no evidence was led about them by Dr Black. The first is that the incorporation of the necessary features into a house would, one surmises, be more cheaply accomplished by the construction of a new, purpose-built house, than by the alteration of an existing one. The second is that, to the extent that the house, after construction/alteration, would be larger and/or better equipped than Tom would require but for his injury, the value of his property might well, to some extent, be increased. The same applies to the installation of air-conditioning. Had there been an evidentiary basis for so doing, it might well have been fair to make some offset for those factors. It does not appear that his Honour was urged, in terms, so to do, even without evidence. We should not now interfere on a factual matter simply because we might, at first instance, have taken a different approach from his Honour.
(d) ACT 10% regional costs
204. In his second report the Architect includes:
"ADD Regional area building indices for
A.C.T. 10% for the unchanged costs as
per the original report $16,782 - 16,998"
205. The submission that there is no evidentiary support for the figure of $16,782 allowed, appears, with respect, to be the result of a misreading of what appears at 3285 and 3286 of the Appeal Book (AB). As far as we can see, there is no substance at all in the submission.
(e) Discount for long-term arrangements
206. Dr Black makes the point that long-term arrangements ought to result in cheaper wages than a series of short-term arrangements, particularly for the anticipated weekend carers. If this be true, the Dial-an-Angel estimates have already made the same assumption by providing a rate for permanent part-time carers. With respect, this submission seems to be misconceived.
(f) Placement fees while parents provide care
207. The case seems to have been conducted on the assumption that for about the next 10 years Tom's parents would continue to be, as they have so faithfully been, the primary carers. It is then argued that for 10 years there would be no agency "placement" fees for funding such employees. That seems to be right. However, an examination of the materials supporting the award (AB 3271-2) indicates that for that 10-year period such fees were not included.
(g) "Keep" for parents
208. The same is true of "keep". It was not included in the calculations for the first 10 years after trial. We need not, therefore, consider the matter further but would not wish to be thought to have decided that Dr Black's (and the consulting actuary's) assumption that such keep ought not to have been included was necessarily correct.
3. Overseas trips
209. His Honour dealt with this matter in a way that bears repeating:
"Transport overseas
It was made clear to Tom's parents that medical science, as far as Australian medical practitioners could advise them, was unable to reverse Tom's brain injury. They could offer no significant prospect for improvement. Consistently with my impression of them as concerned parents, Mr and Mrs Lipovac took Tom overseas to Croatia on two occasions. There were about 15 individual trips throughout Europe including a visit to Lourdes, the latter seeking miraculous intervention, the others sought conventional medical advice hoping that new developments in Europe might be of assistance.
I indicated earlier that I did not regard those trips as being, from an objective viewpoint, likely to have benefited Tom. However, I have now been persuaded that that is not the test for determining whether an allowance should be made on account thereof. The test, as explained in Kostik v Giannakopoulos [1989] Aust Torts Reports [partialdiff]80-274 (SASC), is whether it was 'reasonable' to pursue the prospect of such treatment and undertake the associated expenditure. Also persuasive is the recent case of Harris v Briggs [1994] Aust Torts Reports [partialdiff]81-301 (QSC) in which Derrington J allowed the costs of unorthodox and, ultimately, futile treatment.
The test his Honour applied was expressed in the following terms at 61,721:
These [costs] were incurred in relation to investigation of Tom and instruction to her mother as to future treatment by the Brain Therapy Centre, an organisation with unorthodox ideas. Its offer of hope was attractive to the vulnerable parents of a child so badly disabled. It was not palpably bogus and there was no discouragement at a responsible level of medical advice available to them. It was only when competent medical advice discountenanced the continuation of the treatment that its justification ceased.
While as it turned out none of this treatment was beneficial to Tom, it was reasonable, taking into account the severity of her injury, to pursue possible means of amelioration such as this. Had it been successful, its benefit to Tom would have been substantial, and so far as Tom's parents were concerned, it was not so devoid of credibility that it was unreasonable to pursue it. On the contrary, it is understandable that they did so.
On that basis, the expenses were allowed.
The decision in that case, sub nom Harris v Northern Sandblasting Pty Ltd, was reviewed by the Queensland Court of Appeal, see (1995) Aust Torts Reports [partialdiff]81-365. Whilst the appeal was allowed, the grounds of appeal considered did not call into question the test applied by Derrington J at first instance in relation to the allowance of the expense of the treatment referred to.
There are two trips in question in this case. The first was in 1982, the second in 1988. There was no challenge to the reasonableness of the expenses themselves, due allowance for non-treatment purposes being made. The expenses were directed to seeking amelioration of Tom's condition. In 1982, one trip, costing, after allowances, $2,460.00, was to Lourdes. I understand that the parents' religious beliefs would have made that trip seem reasonable but I do not believe that any medical practitioner would have considered this an option worth trying. Nevertheless, the other consultations and trips were medical in nature and I have no evidence that they were considered hopeless by competent Australian medical advisers.
At the time, 1982, the cause of Tom's disabilities were not entirely clear. The extent of them could be judged only from the exhibition of symptoms. Given the correctness of the diagnosis of brain damage, it was, objectively, unlikely that European doctors would be able to do better than Australian doctors had. However, in Derrington J's words, I am persuaded that the hope of more advanced and beneficial treatment was not 'palpably bogus' and it was not 'discouraged' by responsible authorities, albeit there is no evidence that there was any encouragement sought or given by such authorities. Allowing deletion of the trip unassociated with seeking medical treatment, the sum of $11,950.00 is allowable plus interest of $10,780.00, a total of $22,730.00.
The trip in 1988 was similar, save that it embraced only medical consultations. There was no religious component. It certainly could be said that, the 1982 trip having produced no beneficial result, it was unlikely that the 1988 trip would do so. Nevertheless, given the lack of any challenge to the evidence of Tom's parents, or to the methodology of the calculation of the added expense, I am persuaded that the additional expenses of this trip over and above a family holiday component should be allowed so far as they are referable to that purpose. That expense was $7,865.00 plus interest of $3,500.00, making a total of $11,365.00. It was not unreasonable to suppose that, after six years, some advances in medical science may have occurred in Europe.
I would allow that sum also."
210. In the circumstances, including Tom's ethnic background, the extreme nature of his disabilities and the relatively modest amounts claimed and awarded, we consider there was no error in his Honour's approach and that the allowances he made were not unreasonable.
4. The vicissitudes of life
211. His Honour applied a discount rate of 5% to "future care" items and 7.5% to loss of earning capacity items (wages and employer superannuation contributions). Dr Black says that 15% should have been applied to the latter items. We are not persuaded that appellable error has been shown. His Honour appreciated that there was room for movement in particular cases from the customary 15%: Koeck v Persic (ACT Supreme Court, Miles CJ, Gallop and Foster JJ, 26 March 1996, unreported) and that, in any event, "there is nothing sacrosanct about that percentage": ibid. His Honour gave reasons for selecting a figure less than 15%. They do not, in our view, fall outside the range of a sound exercise of the available discretion.
212. Tom, by his cross-appeal, challenged the application of any discount to economic loss claims predicated on his shortened life expectancy. We agree with his Honour that there are contingencies other than loss of life to be taken into account. It seems to us that his Honour's approach was right in principle and well within the discretion available to him.
X COSTS
1. Indemnity Costs
213. In Calderbank at 342 the English Court of Appeal sanctioned the taking into account for costs purposes offers of compromise expressed to be without prejudice but reserving the right to refer to the offer on the issue of costs. The significance of Calderbank is that up until then the only general remedy available to a party who wished to protect its position on costs by making a reasonable offer was the procedure for payment into court. But that procedure was only available to a defendant faced with a money claim. It was no use to a defendant against whom a claim was made for other relief, such as injunction or the return of property. Nor was the procedure available to a plaintiff who wanted to put forward a figure it would accept. Parties could of course make offers of any kind expressed to be without prejudice, but such communications were privileged and thus could not be referred to in any costs argument.
214. What Calderbank did was to apply generally the principle underlying procedures used in specialist areas where a payment in mechanism was not available. One was the use of sealed offers in Lands Tribunal proceedings. Another was the practice of offers as to apportionment between ship owners in Admiralty collision cases.
215. In Cutts v Head [1994] Ch 290 the English Court of Appeal held that the use of a Calderbank letter was not confined to family disputes but could not be used as a substitute as a payment into Court where that was appropriate. However in Messiter v Hutchinson (1987) 10 NSWLR 525 at 528 Rogers J said:
"The public policy on which the judgments in Cutts rest argue against a hard and fast exclusion of the availability of this method for disposition of disputes by compromise. The purpose of a Calderbank letter is, after all, essentially the promotion of settlement of disputes. ... In my view, at least as a matter of principle, a Calderbank letter should be permitted to be taken into account by the Court in determining whether a special order displacing that which generally obtains costs following the event should be made ... Considering what weight should be given to an offer, the Court will no doubt pay regard to all relevant circumstances including the reason why no payment in was made, the security of payment payable to the plaintiff and the time in which the Court letter was received by the plaintiff."
216. As we have noted, his Honour refused the application on behalf of Tom for indemnity costs from the date of refusal of Calderbank offers because such offers were not "unreasonable or imprudently refused".
217. There is a line of authority in the Federal Court supporting the proposition that the mere refusal of a Calderbank offer does not of itself warrant an order for indemnity costs and the offeror needs to show the conduct of the offeree was unreasonable. The cases are WCW Pty Ltd v Charthill Ltd (Olney J, 7 July 1992, unreported), John S Hayes & Associates Pty Ltd v Kimberley-Clark Australia Pty Ltd (1994) 52 FCR 201 (Hill J), Sanko Steamship Co Ltd v Sumitomo Australia Ltd (Sheppard J, 7 February 1996, unreported), MGICA v Kenny (1996) 140 ALR 707 (Lindgren J), Fasold v Roberts (Sackville J, 11 September 1997, unreported). To the contrary is the decision of Rolfe J in the Supreme Court of New South Wales in Multicon Engineering Pty Ltd v Federal Airports Corporation (20 June 1996, unreported). His Honour considered that the non-acceptance of an offer more favourable to the offeree than the judgment ultimately awarded prima facie demonstrated unreasonable conduct and the offeree bore the onus of showing why indemnity costs should not be ordered.
218. In reality there is not a substantial difference between the two views; both accept that the reasonableness of the conduct of the offeree, viewed in the light of the circumstances which existed when the offer was rejected, is relevant to the exercise of the discretion to award indemnifying costs. To the extent there is a difference, we would prefer the by now well established line of authority in decisions of single judges of this Court. However, we would not, with respect, necessarily endorse the view of Sheppard J in Sanko that the conduct of the offeree has to be "plainly unreasonable". To adopt an especially high standard of unreasonableness would operate as a fetter on the discretion to award indemnity costs and diminish the effectiveness of the Calderbank offer as an incentive to settlement. There is in our view force in the comments of Byrne J in the Supreme Court of Victoria in Mutual Community Ltd v Lorden Holdings Pty Ltd (unreported, 28 April 1993) at 12-13:
"The policy of the Court is to encourage litigating parties to undertake genuine settlement negotiations and, for that purpose, to face up to serious offers of settlement. The response of a litigant in receipt of an offer of settlement will always be affected by the prospect that the sum which the Court might order including party and party costs may be less advantageous than the terms of the offer. Experience, however, shows that this prospect alone is not always sufficient to compel a litigant to face up to the offer. The further prospect of a super-added costs penalty if a reasonable offer be not accepted is a salutary inducement to an offeree to undertake this often painful task."
219. As we have noted, his Honour refused the application on behalf of Tom for indemnity costs from the date of refusal of Calderbank offers because such offers were not "unreasonable or imprudently refused."
220. In the present case there were two Calderbank offers; the first dated 24 October 1994 and the second dated 5 June 1995.
221. The first offer was well before the reports of expert witnesses critical to Tom's case were served on Dr Black's solicitors. The Day/Quinn report was served on 1 November 1994 and the Beveridge report on 8 June 1995. Before these reports were served there was no expert material which set out the basis on which Tom claimed to be entitled to succeed.
222. The second offer was not received until 8 June 1995 and by its terms lapsed on the following day. It accompanied Professor Beveridge's report which contained a substantial and new hypothesis for Tom's case. At this stage Dr Black's solicitors already had in their possession evidence from a distinguished international expert, Professor Hendeles, which disputed any relationship between aminophylline and Tom's disabilities.
223. His Honour's finding that Dr Black did not act unreasonably or imprudently in rejecting the offers was clearly open in the evidence. Thus the exercise of the discretion to refuse indemnity costs did not miscarry.
2. Sanderson Order
224. In our view it has not been shown that his Honour's discretion miscarried in making this order. In particular, it was open to his Honour to find that the stand Dr Black took in the case was conduct which played a part in the decision of Tom's advisors to sue the successful respondents.
XI FURTHER DISPOSITION OF THE APPEAL
225. All questions raised in the appeal have been answered by the foregoing reasons except the question of interest on the past component of the award of damages under the principle in Griffiths v Kerkemeyer. We propose to adjourn the further hearing of the appeal until the decision of the Full Court in Grincelis v House after which the appeal will be relisted for mention before a single member of the present bench. We are hopeful that by that time the parties will be agreed on the answer to the outstanding question and that the quantum of Tom's damages and costs of the appeal and cross-appeal will therefore be also agreed. If agreement is not reached then directions will be given as to further submissions.
XII ORDERS ON APPEAL
1. Appeal dismissed.
2. Cross-appeal insofar as it relates to questions of liability and costs of the trial, dismissed.
3. Cross-appeal, insofar as it relates to quantum of damages, and questions of costs of appeal and cross-appeal, stood over to a date to be fixed.
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