Borg v The Owners of Strata Plan 64425
[2010] NSWDC 203
•10 June 2010
CITATION: Borg v The Owners of Strata Plan 64425 [2010] NSWDC 203 HEARING DATE(S): 15, 16, 17 April 2009, 29, 30, 31 March and 1 April 2010
JUDGMENT DATE:
10 June 2010JURISDICTION: Civil jurisdiction JUDGMENT OF: Johnstone DCJ DECISION: 1. Judgment for the plaintiff against each of the first five defendants for $517,074.00.
2. Judgment for the 2nd defendant against the 3rd defendant for $258,537.00.
3. Judgment for the 3rd defendant against the 2nd defendant for $258,537.00.
4. Judgment for the 3rd defendant against the 5th defendant for $413,659.20.
5. Judgment for the 5th defendant against the 3rd defendant for $103,414.80.
6. Judgment for the 6th defendant against the plaintiff.
7. Costs are to follow the event and are awarded on the ordinary basis unless a party applies for some other costs order.
8. Leave for any such application to be made by notification to the other parties and the court within 14 days, in writing, specifying the costs order sought.CATCHWORDS: PERSONAL INJURY - claim in contract and tort by a guest at premises for injuries sustained in a fall at the top of the entrance steps - whether any of the defendants owed a duty of care as occupier of the premises at the point of the plaintiff’s fall - if so, whether the duty of care as occupier was breached - contributory negligence - whether Trade Practices Act 1974 applies - if so, whether there was a breach of an implied warranty DAMAGES - out-of-pocket expenses - future medical expenses - economic loss - paid domestic assistance - non-economic loss LEGISLATION CITED: Civil Liability Act 2002
Law Reform (Miscellaneous Provisions) Act 1946
Strata Schemes Management Act 1996
Trade Practices Act 1974 (Cth)CASES CITED: Action Paintball v Clarke [2005] NSWCA 170
Australian Safeway Stores Pty Limited v Zaluzna [1987] HCA 7
Brady v Girvan Bros Pty Ltd (1986) 7 NSWLR 241 Hackshaw v Shaw [1984] HCA 84
Hampton Court Ltd v Crooks (1957) 97 CLR 367 Jones v Bartlett [2000] HCA 56
State of New South Wales v Broune [2000] NSWCA 3
Stojan (No 9) Pty Ltd v Kenway [2009] NSWCA 364 Wheat v E Lacon & Co Ltd [1966] AC 552PARTIES: Sarah Jane Borg (Plaintiff)
The Owners of Strata Plan 64425 (1st Defendant)
QCron Tenancies Pty Ltd (2nd Defendant)
The Owners of Strata Plan 64426 (3rd Defendant)
The Owners of Strata Plan 64428 (4th Defendant)
Quest Cronulla Pty Limited (5th Defendant)
Sutherland Shire Council (6th Defendant)FILE NUMBER(S): 69/08 COUNSEL: Mr A Lidden SC with Mrs I Ryan/Ms M Fraser (Plaintiff)
Mr P Dodson (1st, 3rd and 4th Defendants)
Mr G Gemmell (2nd and 5th Defendants)
Mr N Polin (6th Defendant)SOLICITORS: Brydens Law Office (Plaintiff)
Curwoods Lawyers (1st, 3rd and 4th Defendants)
McCabe Terrill (2nd and 5th Defendants)
DLA Phillips Fox (6th Defendant)
REASONS FOR JUDGMENT
The proceedings and the issues
1. The plaintiff claims damages in respect of injuries received in the early hours of Sunday 13 May 2007 when she fell at the top of a set of steps leading from the footpath down to the reception area of the Quest Apartments at 1 The Kingsway, Cronulla. She claims her fall was caused by a cracked tile. At the time of her fall the plaintiff was returning to an apartment in the building where she and her family were staying pursuant to a contract of accommodation entered into with the 2nd defendant, QCron Tenancies Pty Ltd trading as Quest Cronulla Beach.
2. It was alleged that each of the original five defendants occupied and controlled the premises at the point that the plaintiff’s fall occurred and that they all owed her a duty of care, the breach of which caused her injuries. In addition, it was alleged that the 2nd defendant was in breach of the warranty implied into the contract with the plaintiff by s 74 of the Trade Practices Act 1974, in that the services were not rendered with due care and skill, and the materials supplied in connection with the services were not reasonably fit for the plaintiff’s purposes, whereby she fell and injured herself. As against the Council, which was subsequently added as the 6th defendant, it was alleged that if the point at which the plaintiff fell was in fact part of the footpath, the Council was in breach of its duty of care to the plaintiff.
3. The first five defendants denied they occupied the area in which the cracked tile was located and denied breach of any duty of care. In the alternative, they alleged contributory negligence by the plaintiff. The Council also denied liability and contended in particular that it had no actual knowledge of the particular risk alleged: s 45 of the Civil Liability Act 2002. The plaintiff ultimately abandoned her claim against the 6th defendant Council, but pressed her claim against the other defendants.
4. There were various cross-claims between certain of the defendants seeking contribution or indemnity pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946.
5. The principal issues in relation to liability are:
· What caused the plaintiff’s fall?
· On whose premises did the plaintiff fall?
· Did the plaintiff’s fall occur on premises occupied by any of the defendants?
· If so, was there a foreseeable risk of injury to the plaintiff?
· Did the defendants take such care as was reasonable in the circumstances?
· Did the defendants breach any duty that caused the plaintiff’s injury?
· If so, did the plaintiff fail to take reasonable care for her own safety?
· Was there a warranty implied into the accommodation contract by s 74 of the Trade Practices Act?
· If so, was the 2nd defendant in breach of the implied warranty?
· The extent of any contribution or indemnity under the cross-claims between the various defendants required pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946.
The Quest Apartments
6. In 2007 the Quest Apartments were located in “Sur Mer”, a 12 storey apartment building at 1 The Kingsway, Cronulla. The building was subdivided into three separate components owned by three separate strata plans:
· Strata Plan 64425 (owned by the 1st defendant) comprising levels 3 to 5. This consisted of 40 “Investment Apartments”.
· Strata Plan 64426 (owned by the 3rd defendant) comprising levels 1 and 2. This consisted of 3 commercial lots and 30 “Tourist Apartments”.
· Strata Plan 64428 (owned by the 4th defendant) comprising levels 6 to 12. This consisted of 89 “Residential Apartments”.
7. Each of these three owner corporations was bound by a Strata Management Statement (Exhibit X) under which the management and operation of the building was regulated: Clause 1. Pursuant to this Statement, each owner corporation was a member of a building management committee (“BMC”) charged with responsibility for the operation and management of the building: Clause 5. The BMC managed all common property, including the set of steps leading down to the reception area of the Quest Apartments at the top of which the plaintiff fell (Exhibit M at No 7).
8. The Tourist Apartments on levels 1 and 2 were in fact the Quest Apartments, operated as a hotel by the 2nd defendant, trading as Quest Cronulla Beach (Exhibit FF). The 5th defendant, a related company, was the “Caretaker”, appointed by the 3rd defendant pursuant to a Tourist Apartments Caretaker Agreement, with responsibility for performing the duties of the owner corporation in respect of the administration, maintenance, repair and replacement of common property (Exhibit 7 at the Recitals on page 1).
The plaintiff’s case
9. As part of her 30th birthday celebrations the plaintiff booked overnight accommodation for the night of Saturday 12 May 2007 in a studio apartment in the Quest Apartments operated by Quest Cronulla Beach (Exhibit FF). She was staying in the apartment with her husband and baby daughter.
10. After checking in during the course of the Saturday afternoon, the plaintiff and her husband attended her birthday party in the restaurant next door, with about 30 guests, from about 7.00pm to 12.00 midnight. She was still breastfeeding her daughter at that time and only consumed 2 alcoholic drinks during the evening. After the party, her husband returned to the apartment where the grandparents were babysitting the plaintiff’s daughter. The plaintiff and her friend, Jessica Agnew, went to a nearby nightclub, but there was a queue so she decided to return to the apartment.
11. In the course of returning to the apartment, between 12.30 and 1.00 am on the morning of Sunday 13 May 2007, she fell at the top of a set of steps leading from the footpath down to the reception area of the Quest Apartments.
12. The plaintiff’s evidence was that just prior to turning to walk down the stairs to the reception area from the footpath, she felt the heel of her left shoe catch and she suddenly fell forwards across the top step, striking her left knee. She felt severe pain. After the accident occurred she looked at the spot where she felt her heel catch and saw a broken tile with a small hole. Her friend Jessica helped her onto her feet and back to the apartment where she was staying.
13. At the time of her fall the plaintiff was wearing heeled shoes and the heel of her left shoe fitted perfectly into the hole in the tile (Exhibit B2). She said the area was very dark and it had been raining.
14. On the morning after the plaintiff’s fall, her husband made a quick inspection of the area where she fell. He saw the broken tile. It had a hole in it and several cracks around the hole. It was quite dark and dirty.
15. About two weeks after his wife’s accident, Mr Borg returned and took photographs of the tile with the hole and the cracks (Exhibit B). He said the photos depict the condition of the tile on the morning after her fall when he made his inspection. He returned again a number of months later and observed that some material had been placed in the hole in the tile. He took a photograph (Exhibit C).
16. It was not conceded that the cause of the plaintiff’s fall was the defective tile. However, it was never put to her that it wasn’t, nor was there any evidence to refute her account or her husband’s description of the tile. Nor were there any convincing submissions to the contrary at the conclusion of the evidence. The inescapable conclusion from the evidence is that the heel of the plaintiff’s shoe caught in the hole in the cracked tile.
On whose premises did the plaintiff fall?
17. A considerable amount of time and focus was spent during the course of the trial in relation to the question of whether the cracked tile that caused the plaintiff’s fall was part of the Council footpath, or part of the “Sur Mer” building in which the Quest Apartments were located. The confusion as to the location of the tile was evident from the various amendments to the pleadings after the commencement of the hearing. It became clear, however, that the tile was situated in the adjacent Council footpath, which was the principal reason for the adjournment on 17 April 2009 (Day 3), to enable the joinder of the Council as the 6th Defendant. The hearing did not resume until 29 March 2010 (Day 4), but it was not until the very end of addresses on the final day (Day 7) that senior counsel for the plaintiff drew to the court’s attention a survey report (in Exhibit Y) which established that the cracked tile in fact formed part of an encroachment of the “Sur Mer” building into the adjacent Council footpath. Hence the parties were given leave to address that issue, and the question of occupation and control, in supplementary written submissions.
18. It was not seriously disputed that the cracked tile formed part of an encroachment. Rather, the debate shifted to the question of ownership and control of the encroachment and whether the encroachment formed part of the “Sur Mer” building from which it encroached.
19. As a matter of legal ownership, even the plaintiff concedes that, by definition, encroachments are not owned by the party from whose land they protrude. The owners of the “Sur Mer” building were not the owners of the area constituting the encroachment that included the defective tile. For this reason I find that the plaintiff did not fall on property owned by any of the defendants. Rather, her fall occurred on the cracked tile that protruded into the Council footpath from the “Sur Mer” building.
20. Ownership, however, is to be distinguished from occupation.
Occupation and control
21. The next issue for consideration is which, if any of the first five defendants was an occupier of the area adjacent to the top of the set of entrance steps leading from the footpath down to the reception area of the Quest Apartments, in which area the defective tile was located, so as to impose upon that defendant a duty of care to the plaintiff and other users of the area. This requires firstly a determination as to occupation of the entrance stairs themselves, and secondly a determination as to whether the occupiers of the entrance stairs exercised control over the adjacent protruding tiles sufficient to constitute occupation of that area, including the cracked tile.
22. As to the 1st, 3rd and 4th defendants, the owner corporations, as members of the building management committee, they were charged with responsibility for the operation and management of all common property in the “Sur Mer” building, including the entrance stairs leading from the footpath down to the reception area of the Quest Apartments. They were clearly occupiers of the stairs. Indeed, I did not understand that to be in dispute.
23. The 2nd defendant disputed that it was an occupier of the stairs. The plaintiff submitted that the 2nd defendant, as the hotel operator, was also an occupier of the stairs. The stairs formed part of the access and entranceway to the hotel reception area. In my view, in the absence of evidence to the contrary, the inference to be drawn is that the hotel operator exercised control over the stairs.
24. The 5th defendant also disputed that it was an occupier of the stairs. But it was the caretaker appointed by the 3rd defendant as owner of levels 1 and 2, and was responsible for the maintenance, repair and replacement of common property, of which the stairs formed a part. As such, it also exercised control over those steps.
25. I find, therefore, that each of the first five defendants was an occupier of the entrance steps.
26. The tiled area at the top of the entrance steps, as may be observed from the various photographs tendered, was clearly constructed to create an alignment with the footpath. The plaintiff submitted that the encroaching tiles, including the cracked tile, formed part of the “Sur Mer” building from which it encroached at the point of the landing at the top of the steps. Senior counsel for the plaintiff suggested that, “You occupy your own encroachment”. He went on to point to a series of indicators of control and occupation of the encroaching tiles by the first five defendants.
27. The plaintiff pointed firstly to the absence of a cross-claim by any of the first five defendants against the Council, and more importantly, the failure of any of those defendants to call evidence as to the arrangements concerning the protruding tiles between them and the Council. Senior counsel submitted:
“The point is, if the defendants 1 to 5 wish to say, ‘Look, this tile has got nothing to do with us. It looks the same as our tiles but really it’s the responsibility of defendant 6,’ then one would have expected firstly a cross-claim and secondly and more importantly, which is what the cross-claim submission is leading to, some evidence. Some evidence that they, defendants 1 to 5, did not exercise control over this tile and presumably, unless it was just in no man’s land, somebody else did.” (T299)
Senior counsel went on to refer to the well known passage in Brady v Girvan Bros Pty Ltd (1986) 7 NSWLR 241 at 247, where Kirby P referred Dixon CJ’s approach in Hampton Court Ltd v Crooks (1957) 97 CLR 367, and ‘spoke of the way in which courts should regard parties who do not go into evidence on issues which they know all about’. He cited the passage, including the following:
“To say this is not to shift the onus of proof to the respondent. It is simply to stress the peril which attends the failure to call evidence. Any system of law which rewards those in the best position to call highly relevant evidence for not doing so is scarcely one worthy of respect. At the end of the evidence, such as it is, the inferences must be drawn by the court.”
28. Senior counsel for the plaintiff next pointed to the absence of evidence as to what the cleaning arrangements were. The inference may therefore be drawn that those responsible for the maintenance of the stairs also took responsibility for the landing at the top, including the protruding tiles. Senior counsel submitted:
“Another issue on which defendants 1 to 5 had every interest in calling a witness about is to suggest, "Well we knew all about this. We treated those few inches of tiles as belonging to someone else. We did not clean them, we did not maintain them. We did nothing in respect to them. We notified the Council for example". A decision not to go into evidence on that crucial point leads to the alternative inference because what you do if there are competing inferences and you decide not to dispel the ones that hurt you, you decide not to call any evidence at all, what you're doing is shouldering the burden of the worst inference against you that can reasonably be drawn.” (T 303)
29. The plaintiff’s next submission related to the nature of the building alignment, and the control exercised by the occupiers of the “Sur Mer” building over the adjacent Council footpath. It was contended that the building management committee, as the body responsible, managed all necessary aspects of the building and that management extended to items on the property and off the property. (T 301). It was pointed out that the alignment of the building boundary was constructed to preserve an even line of sight, and that the tiles positions were adjusted to accommodate that objective:
“And that's so that it looks attractive.” (T 302)
30. The significance of the alignment, it was explained, is that the development conditions run with the land, and in the absence of any change effected by subsequent occupiers, they are bound by them:
“Because, your Honour, the legal position is quite different. The development of buildings and the interaction of owners with councils would be brought to a halt if a developer could simply transfer his developed premises to another perhaps related company and thereby avoid the conditions of the consent… such conditions run with the land. They bind the council, they bind subsequent occupiers, and we know that the conditions imposed on the first, third and fourth defendants were obeyed by them. That’s the reason that they were maintaining the palms. The only palms are the ones your Honour sees in the sketches and photographs lining the adjacent streets. They are not owned by the first, third or fourth defendants at all. They are on council property. The developer installed them, the council required a condition or imposed a condition of the consent that they and other matters were to be maintained, gardens and so on, and they are being maintained.” (T 302)
31. The inference to be drawn, it was submitted, is that the occupiers of “Sur Mer” treated the area adjacent to the entrance stairs as their own:
“And the inference which in my submission is the most persuasive one in the circumstances is that none of these defendants 1 to 5 had any idea until this case started and someone did a survey that the tile was off their premises and indeed they still don't know it… This area had to be cleaned by someone but this is a resort development. The purpose of the Cabbage Tree palms is to make it look presumably as though it's a tropical seaside or something of the sort. No-one's going to leave the main means of entry in a filthy state. It must be cleaned regularly at least each day. It is moreover maintained and there one finds the significance of the fifth defendant, Quest Cronulla Pty Ltd.” (T 304)
32. The next factor pointed to by senior counsel for the plaintiff was the subsequent repair carried out to the cracked tile:
“The point I wish to make was that we know the tile was repaired. Your Honour knows as far as a council ever proves anything which is generally by its records, in Exhibit 9 the Council didn't do it. Moreover in Exhibit 9 there's no suggestion the Council did anything in respect to the tiled area generally as distinct from the footpath and the surroundings. Now this is persuasive in my submission evidence that defendants 1 through to 5 fixed this hole and they fixed it after service of the Statement of Claim. It was not there, the repair I mean, in November 2007 when Mr Adams did his first report. It was there on a date I think he said was October 2008 when he went back. What had happened in the intervening period, the service of the Statement of Claim. From that my submission by inference prompted a repair because after all, the vast majority of people who traversed this area would not come to grief. People - men - unless they were cross-dressing for the evening - would have big heels on their shoes which could not descend into the hole. Ordinary women's shoes - if I can call them that, court shoes as they call them - would not have such small heels. But of course one category of women that is, those going out for the evening, the very category which the second defendant and the third defendant, wish to attract to those holiday units...” (T 305).
33. The inference to be drawn, it was submitted, is that the occupiers of “Sur Mer” must have effected the repair, and that is a further indicator of the exercise of control of the protruding tiles:
“Who did it? Well, the defendants have known for a long time that it was likely to be an issue in the case. It would have been so easy for them to call someone to say, we did not do it, we did not arrange for that hole to be repaired, we did not rectify the danger and yet, without explanation, they failed to call anyone. The inference that your Honour would draw in those circumstances, in my submission, is that it was done by the defendants, by one of them on behalf of all of them. It may have been something which those down on the desk did, simply going out and buying some sort of proprietary compound and plonking it in there… one would think ordinarily it would be something a caretaker would do, but then again the role of the caretaker, as I’ve said, was somewhat restricted. So it would be something, in my submission, which your Honour would regard, absent any evidence from these defendants one to five, as something done on behalf of all of them because there would be an interest in, let’s say Mr Dodson calling someone to give evidence, well the caretaker did that, that wouldn’t help him much or Quest apartments did that, it had nothing to do with us and the reverse with Mr Gemmell… So the inference would be that whoever did it, did it for the benefit of all of them and that’s the reason neither group of defendant has called anyone because that would be the outcome of such evidence, that it was beneficial for all of these interested defendants in the circumstances.” (T 306 – 7)
34. I turn now to the submissions made on behalf of the first five defendants on the issue of occupation and control of the cracked tile. Their contention is encapsulated in the following proposition:
“Although Mrs Borg fell as a result of a defect only centimeters from the boundary line of the 3rd defendant’s common area, her prospects of establishing liability were as bad as if she had fallen kilometres away.” (Paragraph 2)
The essence of the submissions was that the use of or the carrying out of activities on premises does not amount to control. ‘Control’ sufficient to constitute ‘occupation’ requires some form of regulation, normally evidenced by the right to regulate the presence or conduct of entrants, the right to alter the physical attributes of the premises, or the right to regulate the activities or processes that occur on the premises. (Paragraph 39)
35. The first five defendants submitted that the various matters identified as establishing the sort of control necessary to constitute any of them as an occupier fell far short of doing so. (Paragraphs 7 – 8). The assumptions relied upon were flawed - specifically, that an occupier of land owes a duty of care to persons travelling near or towards that land, the occupier’s duty extends beyond the boundary if the hazard looks like it might be part of the occupier’s land; and the occupier had a right and a duty to enter upon the land of the Council and to make repairs to the surface of the footpath. (Paragraph 25 of the written submissions.) There was no evidence to support the proposition that the first five defendants treated the relevant area as their own, and that the subjective mental state of person associated with them was not a substitute for proof of conduct in the nature of regulation. (Paragraph 13)
36. The submissions go on to address the various allegations of control for which the plaintiff contends. Each of these submissions I set out in full, setting out the assertion followed by the response:
· The fact that the tiling crosses the boundary: “None of the defendants caused this to occur. They have no responsibility for errors by any surveyor, builder, tiler, developer or owner. The reason is obvious. They did not exist when the building was under construction. Furthermore, it is irrelevant that the area ‘looked like’ it was part of the hotel. The reason is obvious. Boundaries govern the extent of land, not ground treatments.” (Paragraph 15 of the written submissions.)
· The placement of an advertising board, from time to time, at the head of the steps supported partly within the boundary and partly on the footpath: “Assuming in favour of the plaintiff that one or more of the defendants (rather than, eg, the managing agent, or a lot owner) is responsible for this trivial trespass, it does not follow that any defendant assumed control over the footpath in the area surrounding the sign. The sign could have no regulating effect over people walking over the damaged tile.” (Paragraph 16 of the written submissions.)
· The existence of an awning affixed above the footpath: “It is not an encroachment, permissive or otherwise: rather it is a property right created by statute and by strata plan. It is specifically identified in the strata plan. The easement does not create any rights of any kind at ground level. To describe it as ‘an assertion of control’ is fanciful”. (Paragraph 17 of the written submissions.)
· The maintenance of palm trees on the footpath area: “As the conditions of development consent run with the land to bind subsequent owners to maintain the palm trees, compliance with that condition is self-explanatory. The maintenance of the trees does not amount to a demonstration of an asserted right to regulate activities on the footpath, it constitutes obedience to a binding legal situation.” (Paragraph 18 of the written submissions.)
· The first five defendants ‘cleaned and maintained the area’: “There is not a shred of evidence to support this assertion. The mere fact that none of the defendants has led evidence that any of them caused the footpath area to be cleaned cannot be refashioned into a deemed admission that they asserted a right to control the footpath. One might easily draw an inference that from time to time persons employed at the hotel swept the area near the top of the stairs. It is far-fetched to contend that anybody who carried out such activities acted in a manner which created a deemed assertion of control over the footpath by one or more of the defendants. Voluntary superficial cleaning of the area near the top of the stairs is incapable of demonstrating a power to regulate activities on the footpath (see Jones v Bartlett (2000) 205 CLR 166 at [150] [155] per Gummow and Hayne JJ).” (Paragraph 19 of the written submissions.)
· There were ‘planter boxes in the vicinity of the accident site which are maintained by the defendants: “The assertion that ‘the defendants’ maintained the planter boxes is an irrelevant speculation. Even if the plaintiff’s legal advisers had taken the relatively simple steps which would enable evidence to be given about this, such ‘maintenance’ falls far short of the evidence necessary to constitute ‘control’ in the relevant sense of the area where the plaintiff fell.” (Paragraph 20 of the written submissions.)
· An unidentified person ‘fixed the hole in the tile’ after the defendants were served with the Statement of Claim: “Counsel for the plaintiff speculates that the tile was repaired on behalf of the five defendants as a consequence of the service of the Statement of Claim. The evidence is that the repair occurred at some unspecified time after the service of the Statement of Claim. Whether or not the inference is drawn that some person associated with one or more of the defendants repaired the tile, that constitutes no admission. Nor does it provide evidence of control, any more than the video evidence of the lady who swept up broken glass and orange juice. Whoever repaired the tile was a benign trespasser on the Council’s land.” (Paragraph 21 of the written submissions.)
· The fact that the defendants failed to seek an adjournment after seeing video which depicted a woman who worked in the building cleaning up broken glass scattered around the boundary line three years after the plaintiff’s fall: “This video has zero probative value for reasons which are obvious.” (Paragraph 22 of the written submissions.)
37. The written submissions proceed to consider the case law relevant to the issue of occupation and control, and referred in particular to State of New South Wales v Broune [2000] NSWCA 3 and the recent decision in Stojan (No 9) Pty Ltd v Kenway [2009] NSWCA 364. It was submitted that Australian courts have treated a ‘right’ or ‘entitlement’ to regulate as being important. The duty to take care is imposed because of the right or entitlement to make the premises safe. If a defendant cannot alter premises to make them safe, it would be unjust to impose on it the responsibility for damage caused by a defect it cannot prevent. (Paragraph 41 of the written submissions.) But in the present case:
· None of the defendants built the hotel, or caused the tiles to be laid on the public footpath. The owner corporations were all subsequent purchasers of strata in the building, those strata extending only to defined boundaries.
· None of the defendants exercised a right to invite individuals to use the footpath outside the hotel in the relevant sense.
· The removal or repair of the cracked tile could not be carried out by the defendants unless so authorised by the Council. Unauthorised repair work would involve trespass, albeit benign, on the Council’s footpath. (Paragraph 39 of the written submissions.)
38. Further written submissions on the issue of occupation and control were made on behalf of the first five defendants in response to the encroachment issue.
39. The submissions were, in summary: that none of the first five defendants created the encroachment; encroachment does not inevitably involve occupation, unless the necessary degree of control is exercised, which is a question of fact and degree in each case; the trespass constituted by the original encroachment does not ‘run with the land’; there is no licence actual or implied, from the Council, to encroach onto the footpath, and even if there was, such a licence is not transferable and would not pass with the land.
40. In my view, the fact that the first five defendants did not create the encroachment is irrelevant. What is important here is that the owner corporations assumed ownership and therefore control of the “Sur Mer” building. With that building came the encroachment, which they continued to use and hold out as constituting a part of the building. It is trite law that an occupier need not have exclusive possession, or total control. It is a question of fact in each case whether there is a sufficient degree of control to make the person an occupier. I do not agree with the contention that the required degree of control must amount to ‘some form of regulation’. On the contrary, any degree of control over the state of the premises is enough: Wheat v E Lacon & Co Ltd [1966] AC 552 at 579.
41. Because the question of control is a question of fact, attempts to evaluate the question by reference to notions of legal rights are flawed, such as whether the encroachment gave rise to any equitable interest, or whether the effecting of repairs might constitute an unauthorised technical trespass. What matters is the exercise of immediate supervision and control. In this case, that exercise is demonstrated by the continuing assumption of possession and the representation of control, by reason of the continuing retention of the encroachment, and the invitation that the configuration of the tiles relative to the footpath represented to users of the stairs to cross that land with a view to accessing or egressing the entranceway.
42. The following passage in Stojan (No 9) is apposite (per McColl JA at [87]):
“…the stairs were constructed on land which the Council permitted Stojan to use as part of the Plaza… At least insofar as users of the Plaza were concerned (which included the plaintiff) it extended that invitation to such people for the purposes of its business…”
In the present case, there was no evidence as to how the Council and the defendants regulated their respective entitlements in respect of the encroachment, and the only logical inference is that the Council permitted the continuation of the encroachment on an ongoing basis for the benefit of the occupiers of the stairs, and those occupiers, for their part, continued to invite entrants onto their stairs over that encroachment. In my view, that degree of possession or control over the cracked tile was sufficient.
43. For these reasons I am satisfied that occupation of the stairs extended to the outer limit of the tiling on the landing, which area included the cracked tile on which the plaintiff fell. Each of the first five defendants was, as I have found, an occupier of the stairs, including the landing within the curtilage of “Sur Mer”. I find also that they were occupiers of the adjacent cracked tile. Accordingly, each of the first five defendants owed to the plaintiff a duty to take such care as was reasonable in the circumstances.
Breach of duty and causation
44. The duty to take reasonable care requires the occupier to protect entrants from risks of injury that can be foreseen and avoided: Stojan (No 9) Pty Ltd v Kenway [2009] NSWCA 364 at [90]. What is reasonable will vary with the circumstances of the plaintiff’s entry upon the premises: Australian Safeway Stores Pty Limited v Zaluzna [1987] HCA 7. The measure of the discharge of the duty is what a reasonable person would, in the circumstances, do by way of a response to the foreseeable risk: Hackshaw v Shaw [1984] HCA 84. Section 5B(1) Civil Liability Act 2002 applies:
“(1) A person is not negligent in failing to take precautions against a risk of harm unless:
(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and
(b) the risk was not insignificant, and
(c) in the circumstances, a reasonable person in the person’s position would have taken those precautions.
(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):
(a) the probability that the harm would occur if care were not taken,
(b) the likely seriousness of the harm,
(c) the burden of taking precautions to avoid the risk of harm,
(d) the social utility of the activity that creates the risk of harm.”
45. The plaintiff’s case on liability is simple: the cracked tile was a foreseeable risk of which, it may be inferred, the defendants were aware. If not, they ought to have been aware. It was submitted that when you call no evidence you run the risk of adverse inferences:
“The facts which defendants 1 to 5 have chosen not to refute include typically in a slipping or tripping type of case the evidence of Mr Borg as to the condition of the tile where he said that the break and some material in it was dirty and discoloured, obviously leading to an inference which defendants 1 to 5 have no wish or ability to dispel that the tile had been broken for a considerable period.” (T 300)
46. But even if the damage to the tile was a recent occurrence, there was nevertheless a duty to do something about it. The effective remedy was simple: fill in the hole with a suitable substance, as was in fact done after the accident. The risk was not insignificant, and there was a probability of serious harm if not addressed, not counterbalanced by any notion of social utility. A reasonable person in the circumstances would have repaired the cracked tile.
47. The submissions made on behalf of the first five defendants sought to refute all these elements. It was contended, for example, that the risk of injury was insignificant and it was not reasonable that some action should be taken to alleviate it.
48. Secondly, it was contended that there is no evidence that the first five defendants knew or ought to have known of the cracked tile, and no evidence as to how the tile was cracked or how long it had been in that condition. The tile may have been “dirty” but that was insufficient evidence to infer that it had been cracked for any significant period of duration. Further, they had no power or authority to effect repairs to the Council footpath.
49. In my view, the cracked tile was a substantial hazard that was readily observable in daylight conditions to those responsible for maintenance of the common property at and around the hotel entrance, such as the stairs, the landing and the protruding tiles, including the cracked tile. In the absence of any evidence about any system of inspection or risk management procedures adopted by or distributed between the various defendants, it may readily be inferred that none of them took reasonable care to prevent or minimise the risk of substantial injury occurring to guests of the hotel or other entrants to the “Sur Mer” building, however long it had been in that condition. In the absence of any evidence about the nature of the crack, the repair of it some time after the accident, and having regard to the evidence of Mr Borg about the condition of the crack, it may also be inferred that the tile had been in that condition for longer than mere days.
50. It might also be inferred that there were no inhibitions to the first five defendants carrying out the necessary repairs. Senior Counsel for the plaintiff made the point this way:
“Now we can see where the boundary actually runs but we can also see the preservation of that - I'll call it a building alignment - a site building alignment that's shown in photograph G. We can see it run across that little ramp to the wall where the planter boxes are and so on. So the council did not know this had occurred and unless they do their street inspections with a surveyor measuring a few inches here or there, they would never know from the visual cues provided by the area. This is something that's commented on by both Mr Clark and Mr Adams that from a visual point of view all of these tiles look as though they're part of the Sur-Mer development.” (T 303)
“And the inference which in my submission is the most persuasive one in the circumstances is that none of these defendants 1 to 5 had any idea until this case started and someone did a survey that the tile was off their premises and indeed they still don't know it. It's only the lawyers here in the case who know it...” (T 304)
51. I am satisfied that there was a foreseeable risk of serious injury that was not insignificant from this cracked tile. As senior counsel for the plaintiff put it:
“But of course one category of women that is, those going out for the evening… would be women…who would come for the purpose of a short stay holiday and who would go out for the evening. Most of those women would not come to grief because they would not have the bad fortune to put that small heel down into that small hole. But the risk is real, it’s not far fetched and fanciful, but the very class of people they wish to attract wearing the very type of clothing which could be expected might put a heel into the very hole that was likely to trap it. It was well foreseeable.”
52. I am further satisfied that the probability was that harm would have occurred if care was not taken, of a likely serious nature. The burden of the precautions that could and should have been taken was simple and inexpensive, and there was nothing in the social utility of any activity that created the risk of harm that would gainsay the need for remedial steps to be undertaken. In all the circumstances, a reasonable person in the position of these occupiers would have taken precautions against the risk of harm presented by this cracked tile.
53. For these reasons I find that the first five defendants did not take such care as was reasonable in the circumstances and were in breach of their duty of care, that breach having caused the plaintiff’s injury.
Contributory negligence
54. I turn now to the defence of contributory negligence. This issue now falls to be considered in the context of s 5R of the Civil Liability Act 2002, which provides:
“(1) The principles that are applicable in determining whether a person has been negligent also apply in determining whether the person who suffered harm has been contributorily negligent in failing to take precautions against the risk of that harm.
(2) For that purpose:
(a) the standard of care required of the person who suffered harm is that of a reasonable person in the position of that person, and
(b) the matter is to be determined on the basis of what that person knew or ought to have known at the time.”
55. The defendants carry the onus of proving contributory negligence. They contended that a person in the place of the plaintiff, keeping a proper lookout, could and should have seen the cracked tile, and avoided it. She should have been taking particular care having regard to the slope, the rainy conditions, and because she was wearing heeled shoes. She should have grasped the adjacent handrail before turning to descend the steps.
56. I do not accept that this cracked tile was something the plaintiff could or should have seen. However apparent the defect in the tile might have been in broad daylight, it is not the conduct of a reasonable person on the landing of a set of stairs to a reputable suburban hotel of this type to scrutinise the ground ahead against the possibility of a hole in a tile. Having regard to the time of night, and the state of the lighting, it cannot be inferred that the defect was readily observable to someone in her position. The proposition that she could have grasped the rail was not supported by the evidence, but even if it was within her normal reach, it is in my view the retrospective counsel of perfection to suggest she should have reached out for it prior to her fall. Nor is there any evidence that the care she was taking having regard to the slope, her shoes, or that there had earlier been some rain, was not commensurate with those circumstances. It is not suggested, for example, that she was rushing.
57. I am not satisfied that the plaintiff failed to take reasonable care for her own safety. I find, therefore, that she was not guilty of any contributory negligence.
The claim against the 2nd defendant under the Trade Practices Act
58. In addition to the claim in negligence, the plaintiff makes a claim against the 2nd defendant under s 74(1) of the Trade Practices Act 1974 (Cth). The section provides:
“(1) In every contract for the supply by a corporation in the course of a business of services to a customer there is an implied warranty that the services will be rendered with due care and skill and that any materials supplied in connexion with those services will be reasonably fit for the purpose for which they are supplied.
59. The second defendant submitted that the implied warranty relates only to matters directly associated with the accommodation services. The plaintiff made no submissions on the question.
60. In my view, the services contemplated by the section do not extend to the means of access constituted by the area in which the plaintiff fell: Action Paintball v Clarke [2005] NSWCA 170 at [21]. The claim fails.
The cross-claims
61. There were various cross-claims claims brought, in which certain defendants seek contribution or indemnity from other defendants pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 in respect of any damages awarded to the plaintiff. These cross-claims were brought by the 2nd and 5th defendants against the 3rd defendant, and in turn by the 3rd defendant against the 2nd and 5th defendants.
62. There were no cross claims against the 6th defendant, the Council.
63. I have determined that the 2nd, 3rd and 5th defendants were concurrent tortfeasors whose separate breaches of duty caused damage to the plaintiff. I am required, therefore, to apportion culpability between them, and determine the amount of contribution recoverable by each of them that is just and equitable having regard to their respective responsibility for the damage.
64. The task of apportionment is rendered the more difficult by the failure of these defendants to lead evidence as to any system of inspection or risk management procedures adopted by or distributed between the various defendants, other than the Tourist Apartments Caretaker Agreement between the 3rd and 5th defendants.
65. The 2nd defendant submitted that its duty to the plaintiff is circumscribed by the contractual relationship between it and the owner corporations (the 1st, 3rd and 4th defendants). The problem is that no evidence was led about a contract between those parties, or more particularly, as between the 2nd and 3rd defendants relating to the operation of the hotel in connection with the Tourist Apartments on levels 1 and 2 of the building. It is not known, therefore, what the arrangements between those defendants were as regards their respective obligations as occupiers of the entranceway and access steps to the hotel reception area.
66. In the absence of such evidence, the only possible just and equitable apportionment as between the 2nd and 3rd defendants is a 50% contribution, one from the other.
67. The 5th defendant drew attention to various provisions of the Tourist Apartments Caretaker Agreement into which it had entered with the 3rd defendant and submitted that the standard of care owed by the 3rd defendant owner must be higher than that of the caretaker, whose duty is circumscribed by the contract. Counsel submitted:
“…in what is plainly a large and complex building with many strata and a variety of occupiers in the traditional sense there needs to be some method of integrating their activities in a suitable way…”
68. The provisions relied upon are: Recital A and clauses 1.3, 1.4, 3.11(a), 3.14, 4(f) and 20.1(d). Most of these provisions are in my view irrelevant to the question of apportionment. I will deal with those that have the potential to be relevant:
· Recital A: This provides that the 3rd defendant was to have the principal responsibility for the ‘proper administration, maintenance, repair and replacement of Common Property”.
· Clause 4(f): This provides that the 3rd defendant ‘maintain, repair and replace Common Property according to the Act and By-Laws’, subject to the duties and obligations of the 5th defendant as caretaker under the agreement.
69. The obligations imposed on the 5th defendant as caretaker under the agreement appear in Schedule 2, being the Regular Duties it was required to perform (Clause 3.1). The relevant provisions in Schedule 2 include the following obligations:
· 1.1: To ‘caretake’ the Common Property.
· 1.8: To arrange for repairs to Common Property that was damaged.
· 2.5: To conduct regular inspections of Common Property.
· 3.1: To carry out minor “handyman” repairs to Common Property.
· 3.2: To immediately report to the 3rd defendant hazards or dangers in Common Property that came to the 5th defendant’s attention.
· 3.5: To keep a log of maintenance inspections.
70. It may be concluded from these provisions that the 3rd defendant effectively delegated to the 5th defendant caretaker responsibility for minor ‘handyman’ repairs, which would include temporary repairs to the hole in the cracked tile, such as were later carried out, and to inspect and report more serious defects and arrange for their repair, including replacement of the cracked tile.
71. No reliance was placed on indemnity and exclusion provisions in Clauses 20 and 21 or Clauses 30.2 and 30.3 of the Tourist Apartments Caretaker Agreement, either by way of a claim in contract, or as relevant to the apportionment between the 3rd and 5th defendants.
72. In these circumstances, I am satisfied that the 5th defendant’s contribution to the plaintiff’s damage was substantially more culpable than that of the 3rd defendant. I determine the amount of contribution recoverable by the 3rd defendant from the 5th defendant that is just and equitable having regard to their respective responsibility for the damage at 80%. Correspondingly, I determine the amount of contribution recoverable by the 5th defendant from the 3rd defendant that is just and equitable having regard to their respective responsibility for the damage at 20%.
Assessment of damages
73. I turn now to the determination of the plaintiff’s entitlement to damages. The damages to be awarded fall to be assessed under the general law as modified by the Civil Liability Act 2002. The plaintiff was born on 8 May 1977 and is now 33. At the time of her fall she was 30. She is married with two young children.
74. There is no dispute that she suffered a displaced two part fracture of her left knee and was taken to the St George Hospital, then transferred to the Kareena Private Hospital where surgery was performed the next day, under general anaesthetic. The fracture was reduced and fixed with two K-wires and tension band wiring. She stayed in hospital for a further 5 days before going home with her leg in a brace. After her discharge she was on crutches for some 5 or 6 weeks.
75. In addition to her knee injury, the plaintiff claims that due to its instability she had a further fall on 18 May 2008 in which she injured her right wrist and elbow.
76. The plaintiff said she was at a Thai restaurant in Cronulla for her father’s 60th birthday lunch on 18 May 2008. She was walking when her left knee gave way and she started to fall. She put her right arm out to break the fall, injuring her wrist and elbow. She was taken to hospital and diagnosed with a fractured right wrist and elbow, which required immobilisation in a plaster backslab and a sling.
77. She was cross-examined about the fall, and as I understand the defendants’ position, causation is disputed.
78. There is, however, no reason to doubt that this second fall was a result of instability in her left knee caused by the original accident on 13 May 2007. I find, therefore, that the fall on 18 May 2008 and the consequential injuries to the plaintiff’s right arm were caused by the original accident the subject of these proceedings.
79. The defendants do not dispute that the plaintiff has been left with permanent disabilities. They do dispute, however, the extent of her ongoing problems and difficulties and the alleged effect on her earning capacity and the claimed need for domestic assistance and future medical costs.
The medical evidence
80. The plaintiff’s original treating doctor was Dr S P Tan who performed her open reduction operation on 14 May 2007 and attended to her post-operative treatment. After removal of the knee brace on 21 June 2007, the plaintiff underwent knee flexion exercises and physiotherapy. He removed the K-wires and tension band wiring under general anaesthesia on 29 October 2007.
81. The plaintiff continued to experience ongoing pain, swelling, stiffness and instability in the knee, and sought further medical advice in February 2008. She was then examined by Dr George Pitsis, a physician, on 17 March and 7 April 2008. He diagnosed a patellofemoral pain syndrome and instability, with tendinopathy, with the possibility of an underlying osteochondral defect and step deformity of the articular cartilage of the retropatellar surface. He recommended exercise and other remedial activity, including medication, and referred her to Dr Michael Dixon, an orthopaedic surgeon, for a possible arthroscopy.
82. Dr Michael Dixon saw the plaintiff on 18 April 2008. He noted ongoing pain and swelling in the knee, but considered there was no notable pathology apart from tendinopathy of the tendons. Her symptoms persisted and he then performed an arthroscopy on 28 July 2008, by way of day surgery, at Kogarah. He found evidence of a small chondral step at the patellar fracture, which was lightly debrided and stabilised. Subsequently she reported significant improvement in the knee in follow up visits. He did not see her after August 2008 until 25 November 2009. At that examination he found no effusion, but noted her complaint of effusion at the end of each day. He found her knee to be tender along the margins of the patella, but otherwise stable. He did not consider a further arthroscopy was indicated, or that an MRI was required at that time.
83. The plaintiff was referred by her solicitors to Dr James Bodel, an orthopaedic surgeon, for medico-legal assessment. He first saw her on 11 March 2008, before the arthroscopy, and again on 20 August 2008 after the arthroscopy and after the fall in which she injured her right arm. Dr Bodel noted ongoing pain and restriction in movement in the knee but decreasing pain in the right elbow and wrist. He again saw the plaintiff more recently on 4 March 2010 when she was complaining of pain in the knee, but told him the swelling was less troublesome. He also noted some stiffness and restricted movement, in particular when kneeling and squatting. She still had episodes of instability in the knee. Her right wrist had some pain and stiffness, and mild intermittent discomfort over the lateral aspect of her right elbow. He recommended she continue with strengthening exercises.
84. The plaintiff was also referred by her solicitors to Dr Peter Conrad, a surgeon, for medico-legal assessment. He first saw her on 11 March 2008, before the arthroscopy, then again on 18 August 2008. On examination of her knee he noted a limp, pre-patellar swelling, a diminution in extension and flexion, and slight irregularity palpated over the front of the patella, with clicking and crepitations. He considered that she will probably develop arthritis in the foreseeable future. He also noted a very prominent scar. He noted pain in the fractured wrist and elbow as a result of her recent fall.
85. The plaintiff was also referred by her solicitors to Dr Leana Teston, a plastic and reconstructive surgeon, for medico-legal assessment. This doctor saw the plaintiff on 15 May 2008. On examination of the plaintiff she noted a long 22cm scar running over the centre of her left knee, which is a permanent deformity, as to which revision surgery will not improve its appearance.
86. The defendants also arranged for medico-legal assessments of the plaintiff. The first of the defendants’ experts was Associate Professor Oakeshott, who examined her on 28 August 2008. She complained to him of a constant ache in her left knee, made worse with walking or prolonged sitting or standing, and numbness. There was also swelling at the end of the day. She described her right wrist as generally okay, with a full range of movement, but with some discomfort from activity. Activities such as running, squatting and kneeling are restricted by her knee. There was an obvious 18cm scar. He considered her complaints consistent with her injury. He regarded her as permanently and partially incapacitated for work. He also believed her knee would improve with continuing physiotherapy and exercise. He also regarded her as at risk of developing traumatic arthritic changes in the knee.
87. Finally, there are reports from Dr Kim Edwards who also assessed the plaintiff for medico-legal purposes on behalf of the defendants. He first saw her on 18 August 2008. He recorded similar complaints to those given to Dr Oakeshott. Dr Edwards noted that she walked with a slight valgus deformity in her left knee, tending to drag her left foot a little. She did not make any complaints about her right wrist or elbow. He also considered her complaints consistent with her knee injury. Dr Edwards re-examined the plaintiff on 8 March 2010. For some reason he did not have his report from the examination on 18 August 2008. His report of 23 March 2010 is remarkably optimistic in comparison. He now expressed opinions such as “the knee appears to have settled” and, “she continues to complain of symptoms, but there is little to find on examination” and “ I am not convinced there is any continuing disability”. He then expressed the view that the prognosis “should be good”, presumably for the same reasons. The doctor’s second report is most unsatisfactory. It is peremptory in tone, and, having regard to the marked change in position from his first report, it is hard to dispel a sense of partisanship on his part. There has not been one single previous suggestion by any medical expert of exaggeration by the plaintiff. Indeed, her honesty might be measured by her consistent history of improvement in her right arm problems. As to her left knee, from my assessment of her and from that of all other doctors who examined her, there is no reason to doubt that her complaints of continuing problems are genuine. For these reasons, I have discounted the views of Dr Edwards in his most recent report as unobjective, unconvincing and unreliable.
88. The plaintiff has presented a consistent picture to all the doctors she saw. In the end, apart from Dr Edwards, they all expressed substantially similar opinions about her, and there is very little conflict between their assessments. So far as her right arm is concerned, I find that her injuries have substantially resolved, and any ongoing symptoms are minimal. Her left knee, however, is productive of permanent symptomatology, and will always trouble her. She is permanently restricted as to movement and from engaging in certain activities, in particular kneeling and squatting. I am also satisfied that activity will produce swelling from time to time, and that activities such as prolonged walking, standing and sitting will result in discomfort. I find that there is a high probability of the onset of traumatic arthritis.
89. Against this medical background and the findings I have made, I proceed to consider the individual heads of damage claimed: see the written submissions for the plaintiff dated 30 March 2010.
Out-of-pocket expenses
90. The plaintiff claims out-of-pocket expenses for the past totalling $25,252.00. The details are set out in exhibit EE, which amount to $24,772.53, plus a further $480.00 relating to fees paid to a personal trainer. The mathematics was agreed, but certain aspects of the claim were not conceded: podiatry expenses were disputed ($105.00) and removalist expenses were conceded only to 50% ($240.00).
91. It is not entirely clear why podiatry expenses are opposed, but in view of the valgus deformity observed by Dr Edwards, the expense was clearly reasonably incurred. I will deduct $240.00 in respect of 50% of the removalist expenses.
92. I therefore find past out-of-pocket expenses proved in the sum of $25,012.00.
93. The plaintiff claims future out of pocket expenses in an amount of $25,000.00. The defendants conceded a sum of $5,000.00. But having regard to the probability of arthritic deterioration, likely ongoing consultations with her general practitioner over her life expectancy of 55 years, physiotherapy and pharmaceutical needs, the claim for $25,000.00 is in my view reasonable, and I will allow it.
Economic loss
94. The plaintiff claims economic loss for the past and a loss of earning capacity for the future.
95. The claim for past economic loss is $53,443.00. This amount is calculated by reference to her pre-accident earnings in a part-time morning job of $312.00 nett per week and an allowance for an additional afternoon job she was seeking, and an allowance for modelling work, less a period off work after the birth of her second child. It was submitted her weekly earnings would have been $500 nett.
96. The defendants take issue with both the calculations and the premises upon which the plaintiff’s claim is based. It was submitted on their behalf that the documentary evidence only supported a calculation that the plaintiff was earning in the vicinity of $150 - $200 nett per week at the time of her accident, and that a fair way of calculating past economic loss is to allow $150 per week from the date of the accident to one month before the birth of her second child (18 May 2009) and then at $150 per week from February 2010 to date. This would produce an amount of about $17,500.00.
97. In my view, the proper approach is to award damages for past economic loss somewhere between the polarised positions. The defendants’ approach gives too little weight to the prospect of the plaintiff having obtained additional afternoon work, and makes insufficient allowance for lost modelling income.
98. Taking these factors into account and allowing a weekly amount of $350.00 nett per week including lost modelling work, and applying the plaintiff’s methodology, the following calculation may be made:
2.5 years x $350 nett per week = $45,500.00
Less earnings to date: $8,840.00 + $2,960 = $11,800.00
Past loss of earnings = $33,700.00
99. It is not disputed that an allowance must be made for occupational superannuation: $33,700.00 + 11% ($3,707.00) = $37,407.00. I allow that amount to compensate the plaintiff for past economic loss.
100. Turning to the future, the assessment of damages is made difficult because of the plaintiff’s involvement in starting up a nanny agency with her friend Jessica Agnew, which by reason of her injury and the birth of her second child, is still in the formative stages. The business is operated within a company structure and the analysis of her likely income by way of profit as opposed to a wage was not readily discernible. It was submitted in the written submissions:
“The plaintiff started a nanny agency with a friend, but this business has not proved profitable for her because the plaintiff is unable to do the actual nannying work. It is likely that the plaintiff would have obtained more work as her children grew older. This may still occur but as the plaintiff is incapacitated for work other than very light work, her earning capacity is much reduced. The plaintiff was born on 8 May 1977. She…has 34 years remaining in the work force. The condition of her knee is deteriorating, and arthritic change is expected to intensify… The plaintiff claims $500 per week x 865.9 less 15% for vicissitudes = $368,007.”
101. The defendants, on the other hand, submitted that the assessment should be minimal:
“…there is a valid basis for an award of future economic loss… but the Plaintiff is capable of full time work. …the Court would allow $150 net per week for 5 years (to age c.38), by which time her younger child will have started school. ($150 x 231.5 = $34,725), after which the plaintiff could easily revert to a sedentary job without loss. If the Court were to adopt that approach an award for future economic loss could be converted to a cushion.” (The written submissions for the 2nd and 5th defendants.)
This was developed in oral submissions:
“Now what I suggest, your Honour, in relation to future economic loss, one must take into account that the plaintiff has to mitigate a loss. It can’t be that she can’t do any work or employment for the rest of her life. What would be fair, in my submission, would be to allow $150 nett per week for five years by which time her younger child will have started school, and then the calculations I’ve set out there, if you then reduce that by less than 15%, you come out with a cushion of $30,000. Could I indicate to your Honour to assist, if your Honour was to say that $150 is too light and it should be $250 a week, for five years that works out at $57,875. If you reduce that by 15% or around 15% you come out at $50,000.” (T 358)
102. Damages for future economic loss are to be assessed having regard to s 13 of the Civil Liability Act 2002:
“Future economic loss - claimant’s prospects and adjustments
(1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant’s most likely future circumstances but for the injury.
(2) When a court determines the amount of any such award of damages for future economic loss it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events might have occurred but for the injury.
(3) If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.”
103. Doing the best I can on the information available to me, I am satisfied that the following assumptions about the plaintiff’s future earning capacity accord with her most likely future circumstances but for her injury: she would have worked till the age of 67 in a nanny business with her friend Jessica Agnew, earning an average nett weekly income of $450.00.
104. The amount of the award of damages for future economic loss that would have been sustained by the plaintiff would in the ordinary course be adjusted by reference to a possibility that the events concerned might have occurred but for his injury: s 13(2) of the Civil Liability Act 2002. There should, therefore, be a 15% reduction for vicissitudes.
105. The plaintiff’s ability to perform aspects of the nannying work has been reduced by reason of her disability. I consider, however, that she can do most of the duties attendant upon that occupation and those she cannot do she will adjust to in conjunction with her partner and others involved in the business as it develops. Her physical limitations, however, will be productive of reduced income because of the things she can’t do, and this will become increase to some extent with the development of arthritic change in her knee. I find that her reduced income, averaged over her working life will be in the order of $150 to $200 per week. I therefore award her future economic loss on the basis of a reduced earning capacity of $175 a week for the next 34 years. The calculation is:
$175.00 x 865.9 = $151,532.50 less 15% for vicissitudes = $128,802.63
106. An allowance must be made for occupational superannuation: $128,802.63 + 11% ($14,168.29) = $142,970.92. To this amount I add a cushion of $15,000.00 for the reduced ability to perform modelling work, and I allow a total round figure to compensate the plaintiff for future economic loss of $157,971.00.
Domestic assistance
107. There is no claim for gratuitous attendant care services, but the plaintiff claims damages for past and future paid domestic assistance. The claim was based upon cleaning assistance from Ms McKenzie at the rate of $50 per week in the past ($7,540.00) and 4 hours a week in the future for 55 years at the rate of $33 per hour ($131,524.00).
108. The claim was articulated by senior counsel as follows:
“I wanted to say something briefly about past and future domestic assistance. Mr Borg is doing a lot of work around this house. I suppose it’s a demonstration of the fact that the threshold of six hours a week is deliberately set to stop compensation for this sort of help. However, he can only do as much as he can, and paid domestic assistance has been necessary for the past. We know what it costs, it’s once a fortnight, about three hours cost $100 an hour and it’s about 2.9 years since the accident. A small sum is therefore derived.
Paid domestic assistance is claimed for the future although Mr Borg is helping with the children, particularly the young one, and there was no cross-examination about it but it’s not suggested that’s more than six hours a week. He does the bathing and some other attendant tasks. He also does other household tasks. Once again, if you add those up separately it’s not more than six hours a week. So you can have 11 hours a week, for example, of attendant care and gratuitous domestic assistance and get nothing because neither threshold is reached. It seems very unfair but that’s the way it is. The two thresholds are separate.
I remind your Honour of Mr Borg’s evidence that before this accident he was able to work two jobs and that he had to confine himself to one, but of course these loss of consortium type claims, which is what that once would have been, a claim for the job he gave up, aren’t available. What is claimed, though, is paid domestic assistance for heavy household tasks but more than has been required in the past because it’s reasonable - particularly as the plaintiff goes out and finds some part time work within her abilities, although she hasn’t managed to yet - that more help will be needed.
Delaney J was the subject of a Court of Appeal decision some time ago where he allowed paid domestic assistance when there was no evidence to support it, but the evidence is here in this case not only that they want it but that they are having it to the extent they can afford at present. I think it’s claimed in the statement of particulars at $38 an hour but it’s presently occurring at $33 an hour because about three hours costs $100, so I’ll just leave it at $33 an hour. So we have claimed four hours a week for the balance of a life expectancy, that’s the 55 year tables, and we have not made any reduction for vicissitudes from that because the main vicissitude involving such an exercise would be early mortality and the life tables already take that into account.” (T 323 - 4).
109. The claim for the past was not opposed, but it was submitted that it should be halved on the basis that the paid assistance is beneficial also to the plaintiff’s husband.
110. As I understand the relevant principles relating to paid domestic assistance, it would be inappropriate to reduce the plaintiff’s entitlement having regard to the benefits derived by her husband. The loss is the plaintiff’s loss. I therefore find past domestic assistance in an amount of $7,540.00.
111. I agree that her claim of 4 hours a week for the future is not reflective of what has occurred in the past. However, the claim must be assessed having regard to the likely deterioration of the plaintiff’s disability in the future by reason of the onset of arthritic changes. In those circumstances, I find that her probable need for paid domestic assistance averaged over her life will be 3 hours a week. The calculation is:
3 hours per week x $33 for 55 years (996.4) = $98,644.00.
Non-economic loss
112. The final head of damages to be considered and assessed is non-economic loss. Counsel for the plaintiff submitted that the severity of the non-economic loss as a proportion of a most extreme case should be assessed at 38%.
113. The defendant submitted that the appropriate assessment is in the range of 25% of a most extreme case.
114. A knee injury in which the patella is permanently impaired, with the prospect of a lifetime of discomfort and restricted movement, is in my view a serious disability. There is permanent disfiguring scarring, not amenable to surgery, the worse for a young woman who has modelling experience and continuing aspirations in that regard. There is, on the evidence, a high probability of her developing arthritis. I assess the appropriate proportion at 35% of a most extreme case. That currently produces a statutory amount of $165,500.00: s 16(3) of the Civil Liability Act 2002.
Total damages
115. The calculations as to the damages are set out in the table below, which tabulates the total amounts foreach individual head of damages as I have found them, in summary form, on a rounded up basis, together with the total damages assessed.
Table
Past out-of-pocket expenses Future medical expenses Past economic loss (including superannuation) Future economic loss (including superannuation) Past domestic care Future domestic care Non-economic loss Total damages
Costs
116. Orders for costs are to be made in accordance with r 42.1 and r 42.2 of the UCPR, unless some other order or orders are appropriate.
Disposition
117. There was no claim for interest.
118. There will, therefore, be verdicts as follows:
· A verdict for the plaintiff against each of the first five defendants for $517,074.00.
· A verdict for the 2nd defendant against the 3rd defendant for $258,537.00.
· A verdict for the 3rd defendant against the 2nd defendant for $258,537.00.
· A verdict for the 3rd defendant against the 5th defendant for $413,659.20.
· A verdict for the 5th defendant against the 3rd defendant for $103,414.80.
· A verdict for the 6th defendant against the plaintiff.
119. I direct the entry of judgments in accordance with these verdicts.
120. Costs are to follow the event and are awarded on the ordinary basis unless a party applies for some other costs order. I give leave for any such application to be made by notification to the other parties and the court within 14 days, in writing, specifying the order sought.
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