Bon Appetit Family Restaurant Pty. Limited v Synnerdahl

[2002] NSWCA 368

CITATION:	Bon Appetit Family Restaurant Pty. Limited v. Synnerdahl & Anor. [2002] NSWCA 368
FILE NUMBER(S):	CA 40336/01
HEARING DATE(S):	25 October 2002
JUDGMENT DATE:	14 November 2002
PARTIES :	Bon Appetit Family Restaurant Pty. Limited - appellant Cheryl Synnerdahl - 1st respondent Mount Pritchard Community Club - 2nd respondent
JUDGMENT OF:	Handley JA at 1; Beazley JA at 11; Hodgson JA at 12

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	DC 3285/00
LOWER COURT JUDICIAL OFFICER :	Naughton DCJ

COUNSEL:	Mr. I. Harrison SC with Mr R. Cavanagh for appellant Mr. G.B. Hall QC with Ms. I. Ryan for 1st respondent Mr. M.J. Neil QC with Mr. M. Minehan for 2nd resondent
SOLICITORS:	Holman Webb, Sydney for appellant Brydens, Liverpool for 1st respondent Hicksons, Sydney for 2nd respondent
CATCHWORDS:	PROCEDURE - Costs - Costs on indemnity basis - Re-hearing of action referred to arbitrator - Defendant successful before arbitrator - Evidence not called by defendant before arbitration, but called in District Court - Whether occasion for indemnity costs. - TORT - Negligence - Employee of club slips on floor in area of club used by a caterer - Failure to clean floor - Whether caterer liable - Whether club entitled to contractual indemnity.
CASES CITED:	Bright v. Sampson & Duncan Enterprises Pty. Ltd. (1985) 1 NSWLR 346 Darlington Futures Limited v. Delco Australia Pty. Ltd. (1986) 161 CLR 500 East End Dwellings Co. Ltd. v. Finsbury Borough Council [1952] AC 109 Ex parte Walton (1881) 17 ChD 746 H & E Van Der Sterren v. Cybernetics (Holdings) Pty. Ltd. (1970) 44 ALJR 157 Hill v. East & West India Dock Co. (1884) 9 App Cas 448 MacDougall v. Curlevski (1996) 40 NSWLR 430 Muller v. Dalgety & Co. Ltd. (1909) 9 CLR 693 Najdanovic v. Brown, unreported 22/9/92, Finlay J Quach v. Mustafa, Court of Appeal 15/6/95 Sydney City Council v. West (1965) 114 CLR 481
DECISION:	1. Caterer's appeal dismissed with costs. 2. Club's appeal allowed to the extent that the primary judge's order for indemnity costs against the Club in favour of the plaintiff is set aside, and otherwise dismissed. 3. No order as to the costs of the Club's appeal, to the intent that each party to that appeal should bear its own costs.

CA 40336/01
DC 3285/00

HANDLEY JA
BEAZLEY JA
HODGSON JA

Thursday 14 November 2002

BON APPETIT FAMILY RESTAURANT PTY. LIMITED

V SYNNERDAHL & ANOR.

Judgment

1 HANDLEY JA: In this appeal I have had the benefit of reading the judgment of Hodgson JA in draft form. I agree with his Honour’s reasons and the orders he has proposed but will add some brief supplemental reasons on the issue of costs which arise on the cross-appeal.

2 Section 18B (1) of the Arbitration (Civil Actions) Act 1983 provides that if an order is made for a full rehearing, as happened in this case, the award ceases to have effect “and the action is to be heard and determined in the court concerned as if it had never been referred to an arbitrator”. The section introduces a statutory fiction which requires the court undertaking the rehearing to ignore reality. Statutory fictions are common and as Griffith CJ said in Muller v Dalgety & Co Ltd (1909) 9 CLR 693, 696, “It becomes very important to consider the purpose for which the statutory fiction is introduced”.

3 In East End Dwellings Co Ltd v Finsbury Borough Council [1952] AC 109, 132 Lord Asquith said:

If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it.

4 That was a case where the Court was required to treat an imaginary situation as real. In the present case the Court is required to ignore reality. However in every case the Court has to determine the extent of the fiction. Thus in Ex parte Walton (1881) 17 ChD 746, 756 James LJ said in a passage approved in Hill v East and West India Dock Co (1884) 9 App Cas 448, 455, 458:

When a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to.

5 There is no doubt that as a result of s.18B(1) the court undertaking a rehearing is not in any way bound by the arbitrator’s findings of fact or exercises of discretion. In that sense the hearing in the court is to be a hearing all over again, a complete rehearing. However in Najdanovic v Brown (22 September 1992, unrep) Finlay J held that what is now s.18B (1) precludes either party on a rehearing from using any transcript of the evidence before the arbitrator or from making any reference to evidence given before the arbitrator except by consent.

6 Although that evidence would not have been given if the action had never been referred to an arbitrator, it is far from clear that the statutory fiction extends to the point of quarantining the evidence given in the arbitration so as to require the Court to ignore its existence. Can a party who tenders documents in the arbitration and thereby waives legal professional privilege rely on the privilege at the trial? Can a party who calls a witness in the arbitration but not at the trial resist a Jones v Dunkel direction at the trial? It seems to me that s.18B(1) by providing that the action is to be “heard and determined” as if it had never been referred may only be dealing with the duty of the judge. If so it may leave the parties free to make use of the evidence given at the arbitration if it is otherwise relevant.

7 This ruling by Finlay J has created real difficulties for defendants faced with fraudulent or exaggerated claims who have feared, with some justification, that if they used their damning evidence in the arbitration plaintiffs would be free to give different evidence before the court without any risk of being cross-examined on their prior inconsistent evidence before the arbitrator. Defendants are entitled to avoid this risk by reserving evidence to the trial as the Court recognised in MacDougall v Curlevski (1996) 40 NSWLR 430, 433-4. However when they have done so and successfully exposed fraudulent or exaggerated claims they have been ordered to pay the costs of the plaintiffs on an indemnity basis, including the costs of the arbitration. See Quach v Mustafa (Court of Appeal, 15 June 1995, unrep) and MacDougall v Curlevski (above).

8 This is a most unsatisfactory state of affairs which rewards plaintiffs whose attempts to propound fraudulent or exaggerated claims have been successfully exposed. The situation is such as to call for further consideration by this Court of the decision of Finlay J on the admissibility of the evidence or the decisions of this Court awarding plaintiffs indemnity costs or both.

9 For the reasons given by Hodgson JA it would not be appropriate to apply, or rather extend, the decision in MacDougall v Curlevski to a situation where the defendant rightly judged that the plaintiff was going to fail in the arbitration and elected not to call further evidence.

10 I agree with the orders proposed by Hodgson JA.

11 BEAZLEY JA: I agree with Hodgson JA and with the further comments of Handley JA.

12 HODGSON JA: On 4 April 2002, Naughton DCJ gave judgment in proceedings brought by the first respondent Cheryl Synnerdahl (the plaintiff) against the second respondent Mount Pritchard & District Community Club Limited (the Club) and the appellant Bon Appetit Family Restaurant Pty. Limited (the Caterer). He entered judgment for the plaintiff against the Club for $378,808.00; for the plaintiff against the Caterer for $450,348.00; and on a cross-claim brought by the Club against the Caterer, for the Club for $378,808.00. He ordered that the Club pay the plaintiff’s costs of her action against the Club on an indemnity basis; that the Caterer pay the plaintiff’s costs of her action against the Caterer; that the Caterer pay the Club’s costs of its cross-claim against the Caterer; and that the Caterer pay the Club’s costs incurred on a party and party basis against the plaintiff in the plaintiff’s action against the Club.

13 The Caterer has appealed against those orders. The Club has also appealed, primarily to challenge the judgment against it in favour of the plaintiff in the event that it lost its indemnity from the Caterer, but also challenging the order for indemnity costs and the lack of a complete indemnity as to costs from the Caterer.

CIRCUMSTANCES

14 The proceedings arose out of an accident at the Club’s premises on 15 May 1998, in which the plaintiff slipped and fell, sustaining injury to her back.

15 The plaintiff was born on 18 August 1967 in Australia. She left school in 1983, without achieving the School Certificate. She worked as a check-out operator at Jewel’s Food Stores from 1984 to 1986, and then did clerical work for a forklift company in 1986 and 1987. She married in 1985. She stopped work between 1987 and 1994, and had three children: a son born on 2 May 1987, and daughter born on 21 January 1991, and another daughter born on 27 July 1993.

16 In November 1994, the plaintiff’s husband was killed in a road accident. The plaintiff received compensation under the Compensation to Relatives Act 1897, from which she purchased a home at Bradbury near Campbelltown.

17 In mid-1995, the plaintiff re-joined the workforce. She worked as a barmaid at the Grand Central Hotel, Seven Hills, and then at Lockier Hotel, Leppington. On 27 March 1998, the plaintiff commenced employment with the Club, as a changebar attendant in the gaming department, as a permanent casual. On average, she worked about twenty-five hours per week.

18 The accident occurred at about 8.10am on Friday 15 May 1998. The plaintiff had begun work at 7am, and had gone to the bistro restaurant at the Club for breakfast. The Club provided, through the Caterer, free breakfasts to its early shift staff members between 8am and 8.20am. The plaintiff had put two slices of bread into a toaster, and sat down at a nearby table to wait for them to toast. When that had happened, she walked towards the toaster, and she slipped and fell on the tiled floor of the bistro, injuring her back.

19 The plaintiff has not resumed work. She was paid weekly workers compensation by the Club’s insurer until mid-2001.

20 The Caterer carried on business at the Club pursuant to a licence agreement dated 17 June 1994. Clause 1 of this agreement provided that “the Caterer shall have the exclusive right to provide catering services at the Club including service in the Bistro, Coffee Lounge, Snack Bar, Dining Room, Function Room, and at any Club Function from the date upon which the Club’s Bistro opens for business and for a period of five (5) years thereafter, subject to the terms and conditions of this agreement.”

21 Clause 2 sets out the Club’s obligations. The most relevant paragraph is paragraph (c), which contains an obligation for the Club to “clean daily the dining areas and toilets in the areas used to supply the catering services”.

22 Clause 3 contains the Caterer’s obligations. The relevant paragraphs are paragraphs (k) and (n), which set out the following obligations of the Caterer:

(k) take good and proper care of all parts of the Club it uses and of all plant, articles of equipment, fittings, fixtures and chattels of the Club that it uses and clean and maintain them as and when required and in addition to any other responsibilities under this Agreement to repair or replace any property of the Club destroyed or damaged through misuse or negligence as herein referred to.
…
(n) clean daily the kitchen areas and bain maries and every two (2) months from the date of the opening of the Bistro or more frequently as determined by the Caterer any grease pits.

23 Clause 4 of the agreement was headed “Indemnity and Insurance”, and provided as follows:

The Caterer hereby covenants with the Club that the Caterer shall indemnify and keep indemnified the Club against all actions, suits, claims, debts, obligations and other liabilities during the continuance of this Agreement incurred in respect of the business carried on pursuant to this Agreement or arising out of anything done or left undone by the Caterer or any member of his staff AND FURTHER that the Caterer shall take out with some reputable Insurance Office or Offices approved by the Club a policy insuring them and it against such of the said matters as can be insured against in such Office or Offices including a Public Risk Policy with a sum assured of at least $10,000,000.00 with the Club named as Principal in the policy. The General Manager of the Club or his nominee may at any reasonable time inspect the policy and the receipt for the last premium paid.

24 In the bistro, there was an L-shaped area with a tiled floor, having four bain-maries situated along one arm of the L-shape, with access on all sides of each bain-marie; while the other shorter arm of the L-shape led to the kitchen area, and has been referred to as a service corridor. The toasters were located in this service corridor, and this was the area where the plaintiff slipped and fell.

25 The primary judge found (and this is not challenged) that there was an informal arrangement between the Club and the Caterer to the effect that Club cleaning staff would clean the bistro floor once a day between 5am and 8am, at which time the bistro opened; and that thereafter during meal times every day the Caterer would keep the floor clean, in particular by dealing with spills as they occurred and came to the Caterer’s notice.

FINDINGS OF THE PRIMARY JUDGE

26 The primary judge found that the plaintiff’s accident was caused by an accumulation of uncleaned greasy food and/or fluid substances which had been on the floor for a significant period of time, and which because of inadequate cleaning procedures had been allowed to remain there, and not by any particular very recent spillage just before the plaintiff slipped and fell.

27 The primary judge found the Club liable, because as the plaintiff’s employer it had a non-delegable duty to take reasonable care to avoid exposing the plaintiff to unnecessary risk; and in any event, failed in its own primary duty to clean the floor properly or to put down appropriate non-slip matting.

28 The primary judge also found that the Caterer was an occupier of the bistro, having a duty of care to entrants to take reasonable care to avoid foreseeable risks of injury; and that it breached its duty to the plaintiff by failing to have and/or or to implement an adequate cleaning system or have an appropriate non-slip matting in the bistro, thereby causing the plaintiff’s injury.

29 The primary judge rejected allegations of contributory negligence. He found each defendant equally to blame for the accident, so that, but for cl.4 of the licence agreement, he would have apportioned liability accordingly. However, he found that under cl.4 of the licence agreement the Club was entitled to a complete indemnity from the Caterer.

30 The primary judge assessed damages against the Club pursuant to the Workers Compensation Act 1987. He found that the plaintiff’s non-economic loss was 37% of a most extreme case, giving a figure of $84,490.00. He awarded $18,612.00 for past out-of-pocket expenses. Turning to past economic loss, he found that the plaintiff had received serious injury for the purpose of s.151H of the Act, that she had been unemployable since the accident, and that on the basis of the average net weekly earnings of comparable employees her loss was $103,124.00 less 10% discount for vicissitudes, giving $92,812.00. As regards future economic loss, he took $516.00 net weekly wage as an appropriate starting point, and discounted it by 35% to take account of the plaintiff’s residual capacity for work. Applying the 5% discount specified by s.151J of the Act over the assumed remaining thirty-one years of the plaintiff’s life, this produced a figure of $279,323.00, which the primary judge then discounted by 27% for vicissitudes, giving $204,000.00. He awarded $20,000.00 for future out-of-pocket expenses, $19,000.00 for loss of future superannuation, and $11,777.00 for Fox v. Wood damages. This then gave a total of $450,691.00. To this he added interest of $4,886.00, and deducted workers compensation payments and medical expenses paid by the Club’s insurer totalling $76,769.00; giving the judgment figure of $378,808.00.

31 As against the Caterer, there were the following differences in the damages. The primary judge assessed non-economic loss at $93,000.00. Loss of future earning capacity was discounted at 3% rather than 5%, giving an ultimate figure of $259,000.00. Loss of superannuation was assessed at $24,000.00, and interest totalling $7,916.00 was awarded. The resulting figure was $450,348.00.

GROUNDS OF APPEAL

32 The Caterer relied on the following grounds of appeal:

1. The Trial judge erred in finding that the Appellant was liable to the Plaintiffs.

2. (Removed)

2A. The Trial Judge erred in finding that the Appellant was negligent.

3. The Trial judge erred in finding that the Appellant was an occupier of the area where the accident occurred.

4. The Trial judge erred in failing to have proper regard to the relationship between the Appellant and the Second Respondent as governed by the Agreement between the Appellant and the Second Respondent.

5. (Removed)

5A. The Trial Judge erred in having found that the cause of the Plaintiffs fall was that she slipped on a grease encrusted area and that there was no recent spillage on the floor then finding that the accident was caused by inadequate cleaning on the part of the appellant.

5B. The Trial Judge erred in failing to have regard to the evidence that breakfast for the staff commenced at 8:00am and the accident occurred at 8:10am when considering whether any failure on the part of the Appellant caused or contributed to the accident.

5C. The Trial Judge erred in failing to find that there was no causal connection between any inadequate cleaning on the part of the Appellant and the accident.

5D. The Trial Judge erred in finding that the Appellant had an obligation to clean the floor when there was no evidence of such an obligation and the imposition of such an obligation was contrary to the agreement between the Appellant and the Second Respondent.

5E. The Trial Judge erred in finding that the Appellant was negligent in failing to place non-slip mats on the floor.

5F. The Trial Judge erred in finding that the Appellant was negligent in circumstances where the was no evidence that the Trial Judge erred in assessing damages without proper regard to the oral and medical expert adduced in the proceedings.

6. The Trial Judge erred in failing to have any regard or any proper regard to the medical evidence tendered by the Defendant.

7. The Trial Judge erred in finding that the Appellant was liable to indemnify the Second Respondent under the terms of the agreement between the Appellant and the Second Respondent.

8. The Trial Judge erred in finding that the Appellant was in breach of the terms of its agreement with the Second respondent.

9. The Trial judge erred in finding that the Second Respondent was entitled to indemnity from the Appellant pursuant to clause 4 of the agreement in circumstances where clause 4 did not specify that the indemnity applied in respect of a liability arising out of negligence of the Second Respondent.
(a) The Trial Judge erred in assessing contribution between the Defendant and the Second Respondent on an equal basis.


10. The Trial Judge erred in failing to properly assess damages.

11. The Trial Judge erred in assessing damages without proper regard to the oral and medical expert adduced in the proceedings.

12. The Trial Judge erred in failing to have any regard or any proper regard to the medical evidence tendered by the Defendant.

(a) The Trial Judge erred in assessing damages primarily on his consideration of the Plaintiff's behaviour in the witness box and failing to have regard to the absence of medical evidence and the contrary exposition of the Plaintiff by film.


13 The Trial Judge failed to make finding as to the Plaintiffs loss of earning capacity or, to the extent that such findings were made they were contrary to the weight of the evidence.

14. The Trial Judge erred in allowing the sum of $93,000.00 on account of general damages in that such an allowance was excessive and contrary to the weight of the evidence.

33 The Club relied on the following grounds of appeal:

In the event, which is not admitted, that the Court finds that the Cross-Appellant is not entitled to a complete indemnity from the Appellant/Second Cross-Respondent, the Cross-Appellant appeals on the following grounds:
1. The Trial Judge erred in finding that the Cross-Appellant was liable to the Plaintiff.

2. The Trial Judge erred in finding that the Cross-Appellant was liable to the Plaintiff in circumstances where the responsibility to clean the floor rested with the Appellant/Second Cross-Respondent.

3. The Trial Judge erred in failing to properly assess damages.

4. The Trial Judge erred by not admitting into evidence the report of Dr James K Evans, Orthopaedic Surgeon, dated 22 June 2001.

5. The Trial Judge failed to make findings as to the Plaintiff’s loss of earning capacity or, to the extent that such findings were made, they were contrary to the weight of the evidence.

6. The Trial Judge erred in allowing the sum of $84,490 for non-economic loss (37% of the most extreme case), such amount being excessive and contrary to the weight of the evidence.

In any event, the Cross-Appellant appeals on the following grounds:
7. The Trial judge erred in ordering the Cross-Appellant to pay the Plaintiffs costs on an indemnity basis.

8. The Trial Judge erred in failing to order that the Appellant/Second Cross-Respondent fully indemnify the Cross-Appellant in respect of the order that the Cross-Appellant pay the Plaintiffs costs on an indemnity basis.

On the hearing of the appeal, Grounds 1 and 2 were not pressed.

34 Consideration of the grounds of appeal can be dealt with under the following headings: liability, indemnity clause, damages and costs.

LIABILITY
Submissions

35 Mr. Harrison SC for the Caterer submitted that the primary judge was in error in finding that the Caterer occupied the area where the accident occurred: the Caterer occupied the kitchen, and although it used the bistro area it did not exercise control over this area or control entry to it and did not occupy it. The role of the Caterer was to provide catering services only, and it was not responsible for cleaning.

36 Mr. Harrison submitted that the primary judge found the tiles were not slippery if kept clean. The evidence did not establish that the Caterer knew the floor was slippery, knew of the build-up of grease on the floor, received complaints from the Club or customers, or knew that the Club was not adequately cleaning the floor (and in particular, had not adequately cleaned the floor on the morning of the accident). Although shortly before the accident the Club had carried out a slip test and was in the process of organising a non-slip surface to be applied, there was no evidence that the Caterer was involved in this or knew about it.

37 As regards the finding based on failure to provide non-slip mats, Mr. Harrison submitted that this was not alleged in the pleading. Such mats had been supplied by the Club for use in the kitchen, but none had been supplied for use in the bistro.

38 Finally, Mr. Harrison submitted that if the Caterer was liable, its responsibility was far less than that of the Club and the 50/50 apportionment was wrong.

39 Mr. Neil QC for the Club submitted that, even if the Caterer was not an occupier of the area, it owed a duty of care to the plaintiff to cater safely. It had a clear obligation to take reasonable care to ensure the areas used by persons for whom it was catering were safe. There had been two slipping accidents in the area on 16 November 1997 and 13 April 1998. There was evidence of many spillages in the service corridor, to which the Caterer responded on an ad hoc basis: the build-up of grease was contributed to by the Caterer’s failure to deal appropriately at the time with such spillage. Inferences of knowledge of the danger and of failure to respond were open, and the Caterer had called no evidence, so that the inferences could properly be drawn.

40 Mr. Hall QC for the plaintiff adopted Mr. Neil’s submissions, and also pointed to evidence of observable gradual build-up of grease on the floor, which must have been apparent to the Caterer.

Decision

41 I accept Mr. Harrison’s submission that the Caterer was not an occupier of the bistro: however, it provided services there and extensively used the area; and in my opinion, in providing those services and using the area including the service corridor, the Caterer was under a duty to take reasonable care with a view to ensuring that persons to whom it was providing the services were not exposed to unreasonable risks. I do not think there was material error resulting from the primary judge’s finding that the Caterer was an occupier.

42 The primary judge found, as it was open to him to find, that the grease on which the plaintiff slipped had built up over a substantial period of time (which I would take to mean at least a number of days and probably longer), that this was due in part to the failure of the Caterer to deal adequately with the spillages as they occurred, and that this failure was a breach of duty to the plaintiff. In my opinion, it was also a breach of the Caterer’s obligation under cl.2(k) of its agreement to “clean and maintain” “all parts of the Club it uses” “as and when required”. The circumstances of the arrangement as to cleaning and the occurrence of spillages were such as to require the Caterer to deal properly with spillages as they occurred and came to the Caterer’s notice.

43 Also the primary judge found that this breach of duty caused the injury to the plaintiff, and this finding too was open to him. Even though proper cleaning by the Club on the morning before the accident would have dealt with the danger, the opportunity for the Club to properly clean and its failure to do so did not in my opinion break the chain of causation so as to defeat the Caterer’s liability. Indeed, this failure was itself foreseeable, having regard to the period over which the Club had permitted the grease to build up.

44 As regards the non-slip mats, negligence in this regard was not specified in the particulars supplied in the Statement of Claim, but evidence of it was introduced without objection, and in my opinion it is too late now for the Caterer to claim that the plaintiff cannot rely on it. In the absence of evidence from the Caterer, it was open to the primary judge to infer that the Caterer was aware of the prior slipping and of the danger, and it was in my opinion open to the primary judge to find the Caterer negligent on this basis also.

45 Finally, as regards apportionment, I do not think the apportionment of 50/50 is appealably wrong. Many cases support the reluctance of appeal courts to interfere with this kind of apportionment.

INDEMNITY
Submissions

46 Mr. Harrison submitted that the indemnity clause should be construed contra proferentem: Darlington Futures Limited v. Delco Australia Pty. Limited (1986) 161 CLR 500 at 509-510, Sydney City Council v. West (1965) 114 CLR 481 at 486-488. Further, the wording of the clause should not be interpreted so that the Club is entitled to be indemnified in respect of its own negligence, particularly its negligence as an employer: Bright v. Sampson & Duncan Enterprises Pty. Limited (1985) 1 NSWLR 346 at 359, 367, H & E Van Der Sterren v. Cybernetics (Holdings) Pty. Limited (1970) 44 ALJR 157 at 158. Mr. Harrison submitted that the claim in this case was not in respect of the Caterer’s business, that is catering, nor did it arise out of anything done or left undone by the Caterer.

Decision

47 I accept that, to the extent of uncertainty or ambiguity, the clause should be construed contra proferentem and so as not to give the Club an indemnity in respect of its negligence as an employer. However, in my opinion, the claim against the Club was incurred in respect of the business carried on by the Caterer: it was a claim for an injury suffered while the person concerned was being provided with the services contemplated by the agreement. Furthermore, having regard to my opinion on the question of liability, the claim certainly did “arise out of anything done or left undone by the Caterer”.

48 Accordingly, no ground is shown for overturning the decision of the primary judge on this question.

DAMAGES
Submissions

49 Mr. Harrison relied on written submissions supplied for the Caterer. It was submitted that the primary judge rejected certain medical evidence on the basis of his observation of the plaintiff without referring to expert medical evidence on which he based his conclusion: and that he erred in finding the plaintiff to be unemployable to the date of the trial. It was submitted that the primary judge erred in basing his findings as to economic loss in treating as comparable two employees who worked between 32 and 38 hours per week, rather than 25 hours per week as in the case of the plaintiff. The submissions also challenged the findings as to future out-of-pocket expenses.

50 These submissions for the Caterer were also supported by the Club.

51 Mr. Hall QC for the plaintiff submitted that the rejection of medical evidence was open to the primary judge; and that future out-of-pocket expenses were in the range open to the primary judge. As to the finding that the plaintiff was unemployable to the date of the trial, this was also open, particularly in circumstances where the plaintiff had attempted unsuccessfully to resume light duties. As regards economic loss, Mr. Hall submitted that the results reached by the primary judge were supportable on a different basis set out in written submissions; and the Court granted leave for him to file and Notice of Contention seeking to rely on that calculation.

Decision

52 In my opinion, the rejection of medical evidence, the finding that the plaintiff was unemployable to the date of the trial, and the future out-of-pocket expenses were open to the primary judge.

53 As regards economic loss, there is force in the submission concerning the longer hours worked by the employees treated as comparable. However, there was evidence that at the time of the accident the plaintiff was earning $427.00 gross per week, equivalent to about 350.00 per week net. That sum, calculated over 4.91 years from the accident to the trial, gives a figure of $89,326.00. When one allows for probable increases in rates of pay over those 4.91 years, the figure of $92,812.00 reached by the primary judge was not excessive. In the light of the primary judge’s finding that the plaintiff was unemployable up to the time of the trial, there would seem to be no requirement for a deduction of 10% for vicissitudes.

54 As regards future economic loss, the deduction of 27% for vicissitudes was in my opinion excessive. It was based on a view that the plaintiff may well re-marry. However, that in itself is not in my opinion a justification for departing from the usual 15% allowance for vicissitudes, particularly in circumstances where the plaintiff had worked after marriage prior to having three children, and had returned to work in mid-1995; and also in circumstances where the plaintiff may well have been able to work more than 25 hours per week as her children got older. If one takes the usual 15% for vicissitudes, and worked back from the figures awarded by the primary judge, one reaches in each case a weekly figure of $288.00. If one assumes that the $350.00 per week which the plaintiff was earning at the time of the accident would have increased to between $380.00 and $390.00 by the time of the trial, adoption of a weekly figure of $288.00 would give an allowance of about $100.00 per week for the plaintiff’s residual capacity. In my view, this would be close to the mark: I think the 35% adopted by the primary judge was too high, because although the plaintiff could do light duties for about 12 hours per week, the chance of her obtaining such work was very small.

55 Accordingly, in my opinion a case is not made out for disturbing the amount of damages awarded by the primary judge.

COSTS

56 In ordering that the Club pay the plaintiff’s costs on an indemnity basis, the primary judge gave the following reasons:

The plaintiff succeeded to a significant extent, but not completely, by reason of evidence from a number of witnesses called by the defendant who had not been called at the arbitration. I have not been persuaded, although an attempt was made to persuade me, that the result would not have been different if those witnesses had given evidence at the arbitration. I think it might well have been different. The ultimate result might then have been that the parties would have accepted the arbitrator's award, or settled the case.

In those circumstances an indemnity costs order is appropriate in my opinion, exercising the wide discretion which I have as to costs.

Submissions

57 Mr. Neil for the Club submitted that there was no basis on which the primary judge could properly have awarded indemnity costs against the Club. The plaintiff had not succeeded at the arbitration, and the reasonable inference from the circumstance that the Club did not call certain witnesses at the arbitration was that the Club correctly judged that the case made by the plaintiff on her evidence did not need to be answered by those witnesses. That could not possibly be a basis for awarding indemnity costs.

58 Mr. Hall submitted that the primary judge had a wide discretion as to costs and a basis was not shown for interfering with the exercise of that discretion. Whilst the right of a party to determine what evidence it will adduce is acknowledged, the better view was that the system of arbitration in the District Court envisages that parties will adduce all their evidence at an arbitration; and where a party does not call evidence at an arbitration and then, at a subsequent trial, leads evidence which, had it been led at the arbitration could have altered the result, the arbitration was a waste of time and costs, and the Court was entitled to penalise the party concerned in costs: MacDougall v. Curlevski (1996) 40 NSWLR 430 at 438.

Decision

59 Section 18B(1) of the Arbitration (Civil Actions) Act 1983 provides that, where an order is made for a full re-hearing of a matter referred to an arbitrator, the arbitrator’s award “ceases to have effect and the action is to be heard and determined in the Court concerned as if it had never been referred to an arbitrator”. There may be a question as to whether and to what extent the circumstances of an arbitration can be taken into account in determining costs, having regard to that provision; although MacDougall is authority to the effect that the Court can take into account the result of the arbitration and the failure to call evidence at the arbitration, and an inferred resulting wastage of costs, in making its costs order. It is not necessary or appropriate to re-consider that matter in this appeal.

60 Where one party allows an adverse decision before an arbitrator, by holding back evidence which is decisive in its favour in the subsequent Court hearing and would have been decisive before the arbitrator, there may be reason to say, as was said in MacDougall, that costs have been wasted through the fault of that party. However, I do not think the same can be said where the defendant, said to be guilty of withholding evidence, wins the case before the arbitrator, that is, correctly determines that the evidence is not necessary before the arbitrator. In my opinion, that provides no ground whatsoever for ordering indemnity costs against the defendant, and the primary judge was in error in doing so.

61 It is not necessary to consider whether the primary judge was in error in not giving the Club an indemnity against the Caterer in respect of the difference between indemnity and party and party costs; although it does seem to me that an indemnity such as relied on by the Club would not extend to costs incurred by reason of some unreasonable or improper conduct by the indemnified party.

CONCLUSION

62 For those reasons, in my opinion the following orders should be made:

1. Caterer’s appeal dismissed with costs.
2. Club’s appeal allowed to the extent that the primary judge’s order for indemnity costs against the Club in favour of the plaintiff is set aside, and otherwise dismissed.
3. No order as to the costs of the Club’s appeal, to the intent that each party to that appeal should bear its own costs.

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