Casey v DePuy International Ltd (No 4)
[2024] FCA 724
•5 July 2024
FEDERAL COURT OF AUSTRALIA
Casey v DePuy International Ltd (No 4) [2024] FCA 724
File number: ACD 10 of 2010 Judgment of: MARKOVIC J Date of judgment: 5 July 2024 Catchwords: CONTRACTS – expert determination only reviewable for error of law – whether expert owed duty to accord procedural fairness – where no such duty owed – whether expert applied correct test of causation – whether expert erred in treatment of evidence – where no error of law established – application dismissed Legislation: Trade Practices Act 1974 (Cth) Cases cited: Australian Vintage Ltd v Belvino Investments No 2 Pty Ltd (2015) 90 NSWLR 367
Fishlock v Plummer [1950] SASR 176
Lahoud v Lahoud [2010] NSWSC 1297
Shoalhaven City Council v Firedam Civil Engineering Pty Limited (2011) 244 CLR 305
State Government Insurance Commission v Oakley [1990] Aust Torts Reports 81-003
Wallace v Kam (2013) 250 CLR 375
Zeke Services Pty Ltd v Traffic Technologies Ltd [2005] 2 Qd R 563
Division: General Division Registry: Australian Capital Territory National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 166 Date of hearing: 2; 12 April 2024 Counsel for the Applicant: Dr D Graham SC and Mr S Maybury Solicitor for the Applicant: Maurice Blackburn Counsel for the Respondents: Mr R A Dick SC and Mr D T W Wong Solicitor for the Respondents: Barry Nilsson Lawyers ORDERS
ACD 10 of 2010 BETWEEN: PAMELA CASEY
Applicant
AND: DEPUY INTERNATIONAL LTD
First Respondent
JOHNSON & JOHNSON MEDICAL PTY LTD
Second Respondent
ORDER MADE BY:
MARKOVIC J
DATE OF ORDER:
5 JULY 2024
THE COURT ORDERS THAT:
1.The amended interlocutory application filed by Mr Bradley Eaton (Applicant) on 5 April 2024 is dismissed.
2.The Applicant is to pay the respondents’ costs of the amended interlocutory application as agreed or taxed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MARKOVIC J:
In 2010 Pamela Casey as lead applicant commenced this proceeding pursuant to Pt IVA of the Federal Court of Australia Act 1976 (Cth) (FCA Act) against DePuy International Ltd and Johnson & Johnson Medical Pty Ltd (JJM) as respondents. Ms Casey alleged that a prosthesis designed to be fitted during total knee replacement surgery (Affected Implant) was not fit for purpose nor of merchantable quality: see Casey v DePuy International Ltd (Appeal from Independent Counsel) [2023] FCA 254 (Casey Appeal (No 1)) at [1].
In 2012 the proceeding settled. The terms of settlement, as approved by the Court pursuant to s 33V(1) of the FCA Act, are recorded in an amended settlement agreement dated 19 November 2012 between Ms Casey, DePuy and JJM. Ms Casey entered into the settlement agreement on her own behalf and as the representative of group members.
The settlement agreement did not provide for the payment of a global sum to group members but provided for a mechanism by which there could be an assessment of the eligibility of group members to receive compensation and, if eligible, a mechanism for the determination of the compensation payable by the respondents. Those mechanisms were referred to in cl 5 of the settlement agreement and are found in documents titled respectively Liability Protocol and Compensation Protocol.
Bradley Eaton, the applicant, is an “Eligible Group Member” for the purposes of the Compensation Protocol. That is, he is “a Group [Member] who [has been] assessed pursuant to the Liability Protocol as being eligible to receive compensation”.
As Mr Eaton could not agree his compensation entitlement with the respondents, it fell to be determined by an Independent Counsel appointed pursuant to cl 6.7 of the Compensation Protocol. Richard Sergi, who I will refer to as Independent Counsel in these reasons, was appointed to that role. He provided an independent assessment dated 5 October 2023 (Independent Assessment or IA) to the parties.
By interlocutory application filed on 31 October 2023 Mr Eaton seeks a declaration or, in the alternative, an order under s 33ZF of the FCA Act that the IA contains certain errors of law. On 5 April 2024, pursuant to leave granted during the hearing on 2 April 2024, Mr Eaton filed an amended interlocutory application in which he alleges that Independent Counsel made the errors of law set out therein.
THE COURT’S JURISDICTION
The question of the Court’s jurisdiction to hear Mr Eaton’s application was not in issue between the parties. At [4]-[22] of Casey Appeal (No 1) Perram J considered the Court’s jurisdiction to hear an appeal of the nature now before me. His Honour concluded at [21] that in order to put the question of jurisdiction beyond doubt an order should be made under s 33V(2) of the FCA Act requiring the respondents to pay compensation to Eligible Group Members in accordance with the Compensation Protocol. Accordingly, on 30 March 2023 his Honour made Orders including the following Order:
The Court orders, nunc pro tunc, that pursuant to section 33V(2) of the Federal Court of Australia Act 1976 (Cth), on and from 4 December 2012, the Respondents are required to pay such amounts as are determined to be payable under the Compensation Protocol identified in order 1 of 4 December 2012 to any group member who has established a right to such payment in accordance with the Compensation Protocol.
That Order which has been made in the proceeding and which operates from the time at which the Court approved the settlement resolves the question of the Court’s jurisdiction generally in relation to an application brought to challenge the findings of an Independent Counsel appointed pursuant to the Compensation Protocol alleging error of law and, more particularly, in relation to Mr Eaton’s application.
THE COMPENSATION PROTOCOL
Before proceeding further, it is convenient to set out the relevant clauses of the Compensation Protocol which governed the task undertaken by Independent Counsel.
Clause 1 is titled “Introduction and overview” and includes:
1.1The Liability Protocol provides a regime for assessing whether Group Members in the Proceeding are eligible to receive compensation. This Compensation Protocol:
(a)only applies to Eligible Group Members;
(b)provides a regime for assessing and processing the compensation entitlements of Eligible Group Members pursuant to the settlement of the proceeding.
1.2The Compensation Protocol provides for four different categories of claims as set out in clause 3.1.
1.3The Compensation Protocol provides for:
(a)compensation for non-economic loss and Gratuitous Care to be determined in accordance with clause 4 below;
(b)compensation for financial losses to be determined in accordance with clause 5 below.
1.4Section 6 sets out the procedure for assessing a claim. If there is a dispute between the parties in relation to an Eligible Group Member’s entitlements or assessment, the dispute is to be resolved by Independent Counsel in accordance with clause 10.
…
Clause 2 of the Compensation Protocol includes the following definitions:
…
NRA means Norton Rose Australia, the solicitors for the Respondents.
…
Revision means the surgical removal of an Affected Implant and/or the tibial component and/or the patellar component of the prosthesis of which the Affected Implant constituted a part and it also includes the primary implantation of a patella resurfacing prosthesis.
Surgical Procedure means an invasive surgical procedure involving one or more of the following:
(a) arthroscopy;
(b) arthroscopic wash-out;
(c) arthroscopic aspiration;
(d) arthroscopic instillation;
(e) arthroscopic biopsy;
(f) arthroscopic synovectomy;
(g) manipulation under general anaesthetic;
(h) removal of ectopic bone;
(i)revision of the ultrahigh molecular polyethylene component of the prosthesis of which the Affected Implant constituted a part;
(j) biopsy;
(k) staged removal of internal fixation;
(l) synovectomy; or
(m) scar excision.
TPA means the Trade Practices Act 1974 (Cth) as in force immediately before 1 January 2011.
Clause 3 concerns the process for the determination of the category of claim. It relevantly provides:
3.1An Eligible Group Member will be assessed in accordance with this clause 3 as falling into one of the following categories (Categories):
(a)Category A: Any Eligible Group Member who does not meet the criteria for Categories B, C or D of the Compensation Protocol;
(b)Category B: Any Eligible Group Member who has undergone one Revision plus one other Surgical Procedure consequent on the Affected Implant;
(c)Category C: Any Eligible Group Member who has undergone one Revision plus two or three other Surgical Procedures consequent on the Affected Implant;
(d)Category D: Any Eligible Group Member who meets one or more of the following criteria:
(i)has undergone one Revision plus four or more other Surgical Procedures consequent on the Affected Implant; and/or
(ii)has undergone more than one Revision consequent on the Affected Implant; and/or
(iii)has experienced extraordinary and significant complications or injury in excess of that to which Eligible Group Members in Category A, B or C would experience as a result of failure of an Affected Implant.
…
3.3Within three months of either of the following dates (whichever is later):
(a)the determination that an Eligible Group Member is eligible in accordance with the Liability Protocol to receive compensation; or
(b)the Eligible Group Member’s injuries stabilising,
the Group Member’s lawyer will provide to NRA (insofar as they have not previously been provided to NRA) medical records confirming the Surgical Procedures and/or Revisions the Eligible Group Member underwent consequent on the Affected Implant.
3.4Within one month of the Group Member’s lawyer either providing medical records to NRA in accordance with clause 3.3 or notifying NRA that there are no additional medical records to be provided:
(a)the Group Member’s lawyer will notify NRA if the Eligible Group Member considers that they fall within Category D(iii); or
(b)in the absence of a notification pursuant to clause 3.4(a), the Category that is applicable to the Eligible Group Member will be determined according to the following procedure:
(i)in the first instance, the Group Member’s lawyer and NRA will seek to agree on whether the Eligible Group Member falls into Category A, Category B, Category C, Category D(i) or Category D(ii);
(ii)if the Group Member’s lawyer and NRA are unable agree, the Group Member’s lawyer will within a further seven days request a report from the Eligible Group Member’s treating surgeon concerning the number of Surgical Procedures and/or Revisions which the treating surgeon considers the Group Member has undergone; and
(iii)if the Eligible Group Member’s treating surgeon is unwilling or unable to provide a report pursuant to clause 3.4(b)(ii) or if on receipt of the treating surgeon’s report the Group Member’s lawyer and NRA are still unable to agree, the Group Member’s lawyer will within a further fourteen days issue a request in the form of Schedule A for a report from an Assessor who will be:
A.if an Assessor was engaged to assess the Eligible Group Member pursuant to the Liability Protocol, the same Assessor; or
B.if an Assessor was not engaged to assess the Eligible Group Member pursuant to the Liability Protocol, an Assessor allocated by NRA using the procedure set out in the Liability Protocol for the appointment of Assessors; and
(iv)in the unlikely event that the applicable Category remains in dispute after receipt of the report from the Assessor, Independent Counsel will be requested to determine the dispute in accordance with clause 10;
(v)the onus is on the Eligible Group Member to establish, on the balance of probabilities, that the Revision and/or Surgical Procedures are consequent on the Affected Implant.
Clause 4 concerns compensation for non-economic loss and gratuitous care and provides:
4.1Eligible Group Members are entitled to compensation for non-economic loss and Gratuitous Care in accordance with the following table:
Category
Non economic loss and Gratuitous Care
Category A
$30,000
Category B
$40,000
Category C
$65,000
Category D(i)
Individual assessment
Category D(ii)
Individual assessment
Category D(iii)
Individual assessment
4.2If an Eligible Group Member notified NRA in accordance with clause 3.4(a) that they consider that they fall within Category D(iii):
(a)the Eligible Group Member bears the burden of establishing their entitlement to more compensation than they would have received under this protocol if they had not elected to be assessed under Category D(iii); and
(b)if the Eligible Group Member fails to discharge this burden, they will be entitled to receive the compensation that they would have otherwise received if they had not elected to be assessed under Category D(iii).
…
4.4If compensation for non-economic loss and Gratuitous Care is to be individually assessed pursuant to clause 4, the compensation will be determined or assessed in accordance with the provisions and principles for the assessment of non-economic loss and Gratuitous Care in Part VIB of the TPA.
Clause 5 concerns compensation for financial losses. It provides:
5.1The compensation payable to an Eligible Group Member for financial losses will be calculated, determined or assessed pursuant to the provisions and principles for the assessment of damages or compensation for personal injury in Part VIB of the TPA.
5.2The losses recoverable will be limited to losses which, on the balance of probabilities, were caused by the Eligible Group Member having been the recipient of an Affected Implant, after taking into account the effect of any unrelated contributing causes.
Clause 6 sets out a procedure for assessing compensation entitlements and requires (at cl 6.7), in the event of a dispute in relation to the quantum of an Eligible Group Member’s claim, that the parties attempt to resolve the dispute by negotiation in good faith. If they are unable to resolve the dispute, it is to be referred to “Independent Counsel” for resolution in accordance with cl 10.
Clause 10 titled “Independent Counsel” relevantly provides:
10.1A barrister may at any time be appointed by agreement between the parties to perform the role of Independent Counsel. If the parties are unable to agree, the parties agree to accept a barrister nominated by the President of the NSW Bar Association.
10.2Subject to clause 15.3 below, the following may be referred to Independent Counsel for determination:
(a)a dispute as to the Category that is applicable to an Eligible Group Member;
(b)a dispute concerning the amount of compensation for financial losses; and
(c)a dispute concerning the amount of compensation for non-economic loss and/or Gratuitous Care where it is to be individually assessed.
10.3If either party wishes to refer a matter to Independent Counsel for determination, the party intending to make the referral (Referring Party) shall notify the other party (Other Party) of its intention and shall include in the notification:
(a) its final offer or position in respect of the matter in dispute; and
(b) the name of the proposed Independent Counsel.
10.4Within 7 days of the notification pursuant to clause 10.3, the Other Party shall notify the Referring Party of:
(a)its final offer or position in respect of the matter in dispute; and
(b)whether it accepts the Referring Party’s proposal for Independent Counsel and, if not, its alternative proposal.
10.5The final offers made in accordance with clause 10.3 and 10.4 are the offers that are to be taken into account for the purpose of determining which party is liable to pay the costs of the determination in accordance with clause 13.2.
10.6If a dispute is referred to Independent Counsel for determination:
(a)the Referring Party will provide Independent Counsel with a copy of this Compensation Protocol together with the Eligible Group Member’s Claim Documents (including any additional documents or particulars provided or obtained in accordance with clauses 6.2, 6.3, 6.4 and/or 6.5 above);
(b)the parties may make written submissions to Independent Counsel and:
(i)submissions on behalf of the Referring Party are to be provided to Independent Counsel and the Other Party within seven days of the provision of the Claim Documents to Independent Counsel;
(ii)submissions on behalf of the Other Party are to be provided to Independent Counsel and the Referring Party within 14 days of the provision of the Claim Documents to Independent Counsel;
(c)the determination by Independent Counsel will be in accordance with the principles and provisions for the assessment of compensation and damages for personal injury under Part VIB of the TPA, except insofar as those principles and provisions are inconsistent with this Compensation Protocol in which case this Compensation Protocol will prevail;
(d)Independent Counsel will make a determination concerning any items in dispute and will provide a written assessment to the Eligible Group Member's lawyer and NRA within one month of receiving the Eligible Group Member’s Claim Documents;
(e)the assessment of a dispute by Independent Counsel is (subject to Court approval where required in accordance with clause 11) binding on the Eligible Group Member and the Respondents with no right of appeal except in relation to an error of law.
Finally, cl 15 titled “General” includes:
15.1For the avoidance of doubt, the extent to which loss or injury arising out of any act or omission of any doctor or hospital in connection with the failure and/or revision of the Affected Implant or the components of the prosthesis of which the Affected Implant constituted a part will be compensable under this Compensation Protocol, will be determined according to the TPA and, to the extent that the application of the TPA draws on the common law, by reference to the common law in force as at 16 August 2012.
…
15.7An Eligible Group Member or the Respondents may apply to the Federal Court of Australia in respect of any point of law arising from the implementation of this Compensation Protocol in relation to the Eligible Group Member.
THE INDEPENDENT ASSESSMENT
The Independent Assessment is detailed. A summary of it is set out below.
Independent Counsel commenced by describing the dispute between the parties. At IA [7] he noted that there were two primary aspects to the dispute between the parties: the first concerned the amount of compensation for financial loss; and the second concerned the amount of compensation for non-economic loss and gratuitous care. He noted that the “Category” in the Compensation Protocol also seemed to be in dispute, despite initial agreement between the parties about that matter.
At IA [8] Independent Counsel identified that the dispute between the parties principally required the determination of a causation issue and, depending on how that issue was resolved, the quantum of Mr Eaton’s damages may be “quite substantial or relatively modest”. He said at IA [9]:
A dispute between the Parties must be determined according to the principles and provisions for the assessment of compensation and damages for personal injury under Part VIB of the Trade Practices Act 1974 (Cth) (TPA) as in force immediately before 1 January 2011, except insofar as those principles and provisions are inconsistent with the Compensation Protocol in which case the Compensation Protocol will prevail.
Independent Counsel then turned to the background facts including: the events leading up to Mr Eaton’s total knee replacement (TKR) surgery on his right knee in which the Affected Implant was used; the clinical course following the TKR surgery and the recall of the Affected Implant after which Mr Eaton had two further surgeries, referred to as the First Revision Surgery and the Second Revision Surgery (together, Revision Surgeries); the circumstances in which, on 16 January 2012, Mr Eaton fell at home following the Second Revision Surgery (referred to as the Fall); and the extensive clinical course following the Fall. This culminated in an above the knee amputation (defined in the IA as AKA) of the right leg carried out in November 2016.
Independent Counsel returned to the topic of the nature of the dispute between the parties, saying at IA [88] to [90]:
88.As referred to above, there is a dispute between the Parties as to whether there is a causal relationship between the Affected Implant, and subsequent surgical and other procedures relating to Mr Eaton’s right lower limb that took place following the Fall which culminated in the AKA of the right lower limb. Those procedures are 14 in number. The dates and nature of the surgical and other procedures are as follows:
a.16 February 2012 – Patella tendon reconstruction with insertion of synthetic LARS ligament carried out by Dr Mansfield (ie. First Patella Repair);
b.23 October 2012 – Neurolysis of the anterolateral nerve right thigh carried out by Dr Mansfield;
c.4 April 2013 – Arthroscopy of the knee carried out by Dr Keene;
d.2 January 2014 – Second patella tendon surgery with removal of synthetic LARS ligament carried out by Dr Mansfield (ie. Second Patella Repair);
e.2 January 2015 – Debridement and synovectomy carried out by Dr Gordon;
f.22 May 2015 – Debridement and synovectomy carried out by Dr Pozzi;
g.26 May 2015 – Revision knee replacement surgery (first stage) carried out by Dr Pozzi;
h.7 August 2015 – Revision knee replacement surgery (second stage) carried out by Dr Pozzi;
i.11 March 2016 – Genicular nerve block carried out by Dr Timmins;
j.9 June 2016 – Manipulation under anaesthetic and aspiration carried out by Dr Pozzi;
k.8 November 2016 – Debridement and synovectomy carried out by Dr Pozzi;
l.14 November 2016 – Debridement and synovectomy carried out by Dr Pozzi;
m.22 November 2016 –AKA (first stage) carried out by Dr Pozzi; and
n.26 November 2016 – AKA (second stage) carried out by Dr Pozzi.
89.In addition to the procedures referred to above in relation to the right lower limb, Mr Eaton has undergone the Left Shoulder Surgery, which was performed on 1 May 2012.
90.As the Parties have identified in their respective submissions, determination of the cause of the injuries to the right patellar tendon and left shoulder that occurred on 16 January 2012 is a critical matter in assessing Mr Eaton’s entitlement to compensation.
After summarising and, in part, considering the parties’ submissions Independent Counsel commenced his consideration of the issues, observing at IA [208] that the principal issue to be determined was whether the Affected Implant caused the injuries and disabilities complained of by Mr Eaton. He said at IA [209]:
In order to establish factual causation Mr Eaton must demonstrate that the Affected Implant was a necessary condition of the occurrence of harm. It may be that there is more than a single sufficient condition for Mr Eaton’s harm. Only if one of those things is proven is it necessary to consider whether liability should be extended to DePuy for the Fall and the events that followed. Mr Eaton bears the onus of establishing, on the balance of probabilities, that but for the Affected Implant, he would not have fallen on 16 January 2012, or the consequences of the Fall would have been less severe. The standard of proof required to establish the requisite facts is on the balance of probabilities.
(Footnotes omitted.)
Independent Counsel then set out aspects of the evidence, making his findings of fact on various issues. Commencing at IA [332] he set out his conclusion on causation and at IA [338]-[340] he made the following findings:
338.First, the Affected Implant was the cause of Mr Eaton’s injury, loss and damage up to the time of the Fall.
339.Secondly, the Affected Implant did not cause the Fall. The available evidence does not establish that the Affected Implant was a necessary condition of the Fall. Mr Eaton has not proved on the balance of probabilities, that the Fall was caused by the Affected Implant, nor that the consequences of the Fall were more severe due to the Affected Implant.
340.Thirdly, I find that in large measure, Mr Eaton’s injury, loss and damage has resulted from a novus actus interveniens. Save for some relatively minor aspects of Mr Eaton’s clinical course following the Fall, the injury, loss and damage complained of is directly traceable to an unrelated and intervening event: viz. the Fall.
Next Independent Counsel considered which category of claim as defined in cl 3 of the Compensation Protocol applied to Mr Eaton. Relevantly, in 2015 the parties had agreed that Mr Eaton came within category D(iii). However, by the time that the matter was before Independent Counsel the respondents submitted that Mr Eaton did not in fact come within that category, explaining why that was so and stating that their agreement no longer applied. Independent Counsel said at IA [348]:
While contending that Mr Eaton does not fall within Category D(iii), DePuy does not make any express submission as to which of the categories Mr Eaton’s claim properly falls. In the circumstances, I have assumed that it is DePuy’s contention that Mr Eaton’s compensation should be determined in accordance with Category C.
(Footnote omitted.)
Independent Counsel concluded as follows in relation to the applicable category for the assessment of compensation for Mr Eaton’s injuries at IA [352]-[353]:
352.There is no controversy about three relevant matters affecting the determination of whether Mr Eaton satisfies the criteria for Category D. First, there is no issue that Mr Eaton has undergone the First Revision Surgery and the Second Revision Surgery. Secondly, there is no issue that the First Revision Surgery and the Second Revision Surgery were both “Revision” surgeries within the definition of that term. Thirdly, there is no issue between the Parties that each of the First Revision Surgery and the Second Revision Surgery was required as a result of the failure of the Affected Implant. Additionally, I note that there is no submission made by DePuy that cl 3.2 of the Compensation Protocol has any relevant application to each of the three uncontroversial matters referred to in the preceding paragraph. In those circumstances, I find that the criteria set out in cl 3.1(d)(ii) of the Compensation Protocol are prima facie satisfied.
353.In the circumstances, it is a moot point as to whether Mr Eaton satisfies the criteria set out in cl 3.1(d)(iii) or not as Mr Eaton otherwise satisfies the criteria for assessment in accordance with Category D. It follows that Mr Eaton’s entitlement to non-economic loss is to be individually assessed in accordance with the principles and provisions for the assessment of non-economic loss in Part VIB of the TPA.
(Footnote omitted.)
The final question for Independent Counsel was the assessment of quantum for Mr Eaton’s claim. For that purpose, he adopted as closely as possible the headings used by Mr Eaton in his submissions and assessed:
(1)Non-economic loss at 35% of a most extreme case and calculated that in accordance with s 87M and s 87Q of the Trade Practices Act1974 (Cth) (now repealed) (TPA), Mr Eaton’s non-economic loss was $138,880: at IA [438]-[439];
(2)past gratuitous attendant care services at nil because Mr Eaton failed to discharge his onus to establish that he received past gratuitous attendant care services as a result of the Affected Implant as required by s 87W of the TPA: at IA [474]-[475];
(3)past out-of-pocket expenses, made up of medical and travel expenses, as $850: at IA [501]. This assessment reflected Independent Counsel’s findings on causation: at IA [491]-[493];
(4)interest on past out-of-pocket expenses in accordance with s 87ZA of the TPA as $315.16: at IA [503]-[505];
(5)future out-of-pocket expenses as $2,500 limited to psychiatric treatment: at IA [561];
(6)past economic loss as $11,512.14 plus interest on past economic loss calculated pursuant to s 87ZA of the TPA as $4,434.76: at IA [587], [590];
(7)legal costs as $11,486.20: at IA [632]; and
(8)disbursements as $31,122.18: at IA [635].
The total assessment of Mr Eaton’s compensation including costs and disbursements was $203,035.74. Independent Counsel also found that DePuy was liable to pay $1,935 to Medicare in accordance with the bulk payments agreement between Medicare and DePuy: at IA [627].
MR EATON’S APPLICATION
In his amended interlocutory application Mr Eaton contends that the IA contains 14 errors of law, numbered (a)-(n), some of which can be addressed together. Before doing so it is instructive to consider the Court’s role.
The Court’s role and errors of law
The process for assessment of compensation for injury suffered by an Eligible Group Member is set out in the Compensation Protocol. That includes a party’s right to challenge an assessment by an Independent Counsel appointed under the Compensation Protocol. Any such challenge is limited to “an error of law”: see cl 10.6(e), Compensation Protocol. Clause 15.7 of the Compensation Protocol permits any party to apply to this Court “in respect of any point of law arising from the implementation of the Compensation Protocol in relation to the Eligible Group Member”.
A party’s right to challenge an assessment made by an Independent Counsel arises under the terms of the Compensation Protocol; it is a contractual right. Thus, to understand the Court’s role, it is necessary to construe the terms of the relevant contract, the Compensation Protocol.
The terms of cl 10.6(e) are clear. As set out above, any challenge to Independent Counsel’s assessment is limited to a right of appeal in relation to an error of law. The question that arises is, in the context of the scheme established by the Settlement Agreement, as embodied in the Liability Protocol and the Compensation Protocol, what is the nature of the error of law that must be established.
Australian Vintage Ltd v Belvino Investments No 2 Pty Ltd (2015) 90 NSWLR 367 concerned a challenge to an expert determination made pursuant to cl 4.26 of a lease between the first respondent as lessor and the appellant as lessee in respect of a vineyard. Relevantly subcl 4.26(d) provided that if the parties were unable to agree on any of the matters referred to in subcl 4.26(c) within 30 days of the “Lessee’s Notice” either party may refer the dispute to “the Expert”. Additionally, subcl 4.26(f) provided that the parties were required to co-operate with the Expert and to provide all reasonable information and assistance to enable him to determine the questions set out in that subclause and subcl 4.26(g) provided that the Expert was required make and deliver his written determination within 45 days of his appointment “which shall be final and binding on the parties” and that “[t]he Expert is deemed to act as an expert and not an arbitrator”.
The lessee brought a proceeding in the Supreme Court of New South Wales seeking, among other things, to have the expert determination set aside. The primary judge dismissed the summons. He held that the expert determination was not reviewable. The New South Wales Court of Appeal (Bathurst CJ with whom Beazley P and McColl JA agreed) disagreed with the primary judge’s conclusion. While the questions before the New South Wales Court of Appeal included whether the expert determination was reviewable, given the express term in the lease that the determination was final and binding on the parties, Bathurst CJ’s observations about the circumstances in which such a determination will be reviewable are instructive. His Honour said at [74]‑[75]:
74. … The question of whether the determination is open to review depends on whether or not the expert has carried out the task which he or she is contractually required to undertake: AGL Victoria at [51]; Holt v Cox (1997) 23 ACSR 590 at 596-597; Shoalhaven City Council v Firedam Civil Engineering Pty Ltd [2011] HCA 38; 244 CLR 305 at [26]-[27]. If the expert in fact carried out that task, the fact that he made errors or took irrelevant matters into account would not render the determination challengeable.
75.On the other hand, if the expert had not performed the task contractually conferred on him or her, but rather performed some different task, or carried out his or her task in a way not within the contractual contemplation of the parties, objectively ascertained, then the determination will be liable to be set aside.
By analogy, where the right to appoint Independent Counsel and the right to review his or her decision for errors of law arises under a contract in the nature of the Compensation Protocol, the nature of the errors that must be established are, in my opinion, of the type identified at [75] of Belvino, namely a failure by Independent Counsel to perform the task contractually conferred on him or her or the carrying out of the task conferred by the Compensation Protocol in a way not within the contractual contemplation of the parties.
The context in which the Liability Protocol and the Compensation Protocol were put in place support that approach. They were negotiated and implemented in the context of the settlement of a class action. That settlement put into effect a process by which members of the class are to have their individual claims assessed by the processes set out in the Liability Protocol and the Compensation Protocol, rather than by bringing and prosecuting an individual claim in a court of competent jurisdiction. In those circumstances an available inference is that the parties intended that the determinations under the Liability Protocol and the Compensation Protocol, including a determination by Independent Counsel appointed pursuant to cl 10 of the latter, would be final and binding and only open to challenge in limited circumstances.
Against that background I consider the grounds raised by Mr Eaton in his amended interlocutory application.
Grounds (a), (b) and (k)(i)-(ii): the applicable category of claim
Mr Eaton contends that Independent Counsel:
(1)made an error of law in determining that:
(a)part of the dispute for his determination was the category of claim that applied for the purpose of cl 3.1 of the Compensation Protocol when that issue had been agreed between the parties. The respondents should be estopped from arguing to the contrary (ground (a)); and
(b)Mr Eaton came within category D(ii) when the parties had previously agreed that he came within category D(iii) and he was not given the opportunity to tender further evidence or make submissions on that issue after the respondents had made submissions contrary to the agreement which constituted a denial of procedural fairness (ground (b)); and
(2)misapprehended the nature or limits of his functions or powers under the terms of his referral pursuant to cl 10.2 of the Compensation Protocol and as a consequence exceeded what he was authorised to decide by:
(a)considering he was engaged under cl 10.2(a) by both Mr Eaton and the respondents to determine a dispute as to the category that was applicable to Mr Eaton when he was not (ground (k)(i)); and/or
(b)determining the category that was applicable to Mr Eaton (ground (k)(ii)).
These grounds arise against the following background.
By letter dated 30 May 2022 Maurice Blackburn, the solicitors for Mr Eaton, provided their submissions on behalf of Mr Eaton to Independent Counsel. In doing so they noted that the parties agreed that Mr Eaton was eligible for compensation and that the dispute was about the quantum of his entitlement. Under the heading “Non-economic loss” Maurice Blackburn addressed the compensation category as defined in cl 3.1 of the Compensation Protocol. At [2.3] of their submissions they stated that:
The parties agree that Mr Eaton falls into Category D(iii). Therefore, it is agreed he has experienced extraordinary and significant complications or injury in excess of Eligible Group Members in Categories A – C as a result of the failure of the Affected Implant. The amount of compensation that he is entitled to receive for non‑economic loss and gratuitous care must be individually assessed.
A footnote to that paragraph referred to an email dated 12 February 2015 from N Abbey, a solicitor with Maurice Blackburn, to L Naoum, a solicitor with Norton Rose Fulbright, at the time the respondents’ solicitors, which was Annexure A to the submissions. The email provided (omitting formal parts):
We refer to your letter dated 28 January 2015 regarding our client Bradley Eaton and in particular your assessment that our client falls within Category D(iii) of the Compensation Protocol.
Our client agrees that he falls within Category D(iii).
As outlined in my email dated 14 January 2015, Mr Eaton’s injuries have not yet stabilised and he is therefore not in position to be able to finalise his claim.
We will be in touch when our client’s injuries have stabilised.
The respondents addressed the question of category of claim commencing at [6.2] of their submissions provided to Independent Counsel on 1 July 2022. The respondents said at [6.3]‑[6.4]:
6.3In 2015 the parties agreed that the Group Member is Category D(iii) on the basis that he “has experienced extraordinary and significant complications or injury in excess of that to which Eligible Group Members in Category A, B or C would experience as a result of the failure of an Affected Implant.” The Group Member is therefore is [sic] subject to individual assessment of non‑economic loss.
6.4With respect to the categorisation of the Group Member, the Respondents note the following:
(1)This agreement was six years before the Respondents became aware of the Group Member’s slip and fall incident in January 2012. The Respondents submit this event was a novus actus interveniens by which the causal chain was broken so that any injury, loss and damage from the Affected Implant ceased on 16 January 2012.
(2)It follows that the Respondents do not accept the Group Member’s complications which culminated in the above knee amputation were caused by the Affected Implant.
(3)Furthermore, no attempt has been made in the Group Member’s submissions to explain how the Group Member satisfies the second limb of category D(iii) being “in excess of that to which Eligible Group Members in Category A, B or C would experience as a result of failure of an Affected Implant”.
(4)Nor could such an explanation be proffered – there is no evidence in the Claim Documents concerning the usual injuries and complications of Group Members in those categories, or how the Group Member’s complications and injuries are extraordinarily and significantly in excess of those.
(5)To illustrate, it cannot be determined from the Claim Documents that, for example, a Group Member in Category C who has undergone a revision surgery and three other invasive surgical procedures would not experience similar injuries and complications to the Group Member. The Group Member has provided no necessary comparators and, thereby is unable to discharge his onus pursuant to clause 4.2.
(6)Regardless of this categorisation, D(iii) still requires individual assessment per clause 4.1 of the Compensation Protocol.
At [6.5] of their submissions the respondents noted that “individual assessment is pursuant to the provisions and principles for the assessment of non-economic loss pursuant to Part VIB of the TPA” and made submissions on matters relevant to such an assessment.
Faced with these submissions Independent Counsel addressed the question of category of claim in the way described at [25]-[26] above.
Mr Eaton’s submissions
Mr Eaton submits that central to the dispute between the parties is that he contends that he ruptured his patellar tendon because of his Revision Surgeries which, in turn, caused infective complications and ultimately led to him having a right leg AKA and that it is the ruptured patellar tendon and its subsequent complications which put him in category D(iii), as opposed to category D(ii).
Mr Eaton notes that he and the respondents agreed in 2015 that he fell within category D(iii), which was at a time before the amputation and when there was no suggestion of any “extraordinary and significant complications” that would have placed him in category D(iii) other than his ruptured patellar tendon and its subsequent complications. Mr Eaton submits that his submissions to Independent Counsel therefore proceeded on the basis that the category was agreed.
Mr Eaton contends that, despite the respondents’ submissions to Independent Counsel that the agreement preceded their knowledge of the Fall and that Mr Eaton had not proved that he satisfied the criteria in category D(iii), the respondents did not seek to resile from the agreement and maintained that, pursuant to category D(iii), Mr Eaton’s damages required individual assessment. Mr Eaton contends that he therefore did not need to prove that he satisfied the criteria for category D(iii); it was agreed.
Mr Eaton submits that Independent Counsel was wrong to find that the category under which his damages were to be assessed was in dispute and that, on a proper reading of the submissions before him, it was not and could not have been given the agreement reached years before.
Mr Eaton submits that when Independent Counsel made his findings that “it is a moot point as to whether Mr Eaton satisfies the criteria set out in cl 3.1(d)(iii) or not” (at IA [353]), “the consequences of the right patella tendon injury were dire” (at IA [332]) but “in large measure, Mr Eaton’s injury, loss and damage has resulted from a novus actus interveniens” (at IA [340]), he failed to have regard to the importance of the full definition of category D(iii). Mr Eaton contends that Independent Counsel also failed to give effect to the agreement between the parties and denied him procedural fairness in that he took those steps despite the clear position in his submissions and without giving him the opportunity to make further submissions or to obtain further evidence.
Consideration
By these grounds, Mr Eaton essentially contends: first, that Independent Counsel made an error of law by determining the category of claim for the purposes of cl 3 of the Compensation Protocol; and secondly that, once he embarked on that course, he denied Mr Eaton procedural fairness by failing to give him an opportunity to make further submissions or to adduce evidence about the appropriate category of claim.
As to the first contention, I am not satisfied that Independent Counsel made an error of law by determining the category of claim.
The respondents’ submissions to Independent Counsel on this issue were, in my view, ambiguous, somewhat disingenuous and less than clear.
As to their ambiguity, at [1.15] of their submissions the respondents said (as written, footnote omitted):
The disputes for determination under clause 10.2 in this matter are as follow:
(1)a dispute concerning the amount of compensation for financial losses (10.2(b)); and
(2)a dispute concerning the amount of compensation for non-economic loss and/or Gratuitous Care (10.2(c)).
At that point no mention was made about any dispute as to category. Notwithstanding that, under the heading “Categorisation”, at [6.3]-[6.4] of their submissions the respondents said (as written, footnote omitted):
6.3In 2015 the parties agreed that the Group Member is Category D(iii) on the basis that he “has experienced extraordinary and significant complications or injury in excess of that to which Eligible Group Members in Category A, B or C would experience as a result of the failure of an Affected Implant”. The Group Member is therefore is subject to individual assessment of non‑economic loss.
6.4With respect to the categorisation of the Group Member, the Respondents note the following:
(1)This agreement was six years before the Respondents became aware of the Group Member’s slip and fall incident in January 2012. The Respondents submit this event was a novus actus interveniens by which the causal chain was broken so that any injury, loss and damage from the Affected Implant ceased on 16 January 2012.
(2)It follows that the Respondents do not accept the Group Member’s complications which culminated in the [AKA] were caused by the Affected Implant.
(3)Furthermore, no attempt has been made in the Group Member’s submissions to explain how the Group Member satisfies the second limb of category D(iii) being “in excess of that to which Eligible Group Members in Category A, B or C would experience as a result of failure of an Affected Implant”.
(4)Nor could such an explanation be proffered – there is no evidence in the Claim Documents concerning the usual injuries and complications of Group Members in those categories, or how the Group Member’s complications and injuries are extraordinarily and significantly in excess of those.
(5)To illustrate, it cannot be determined from the Claim Documents that, for example, a Group Member in Category C who has undergone a revision surgery and three other invasive surgical procedures would not experience similar injuries and complications to the Group Member. The Group Member has provided no necessary comparators and, thereby is unable to discharge his onus pursuant to clause 4.2.
(6)Regardless of this categorisation, D(iii) still requires individual assessment per clause 4.1 of the Compensation Protocol.
That is, while the respondents identified that the dispute referred to Independent Counsel concerned quantification of compensation, they also raised as an issue the question of applicable category.
As to their disingenuity, despite the pre-existing agreement the respondents submitted (at [6.4]) that “no attempt has been made in the Group Member’s submissions to explain how the Group Member satisfies the second limb of category D(iii)”. That is hardly surprising and sits ill in the mouths of the respondents given that, at least until receipt of the respondents’ submissions, Mr Eaton was unaware of their intention to resile from the earlier agreement.
As to their lack of clarity, as Independent Counsel identified, having resiled from their earlier agreement, it was not clear which category of claim the respondents contended applied to Mr Eaton.
Notwithstanding those observations there was, on the face of the parties’ submissions, an issue raised about the applicable category of claim: Mr Eaton said, based on a pre-existing agreement, that he was in category D(iii); while the respondents contended that, despite the earlier agreement, because of new information that had come to light after the agreement, their position had changed. That issue having been raised, Independent Counsel was permitted by the terms of the Compensation Protocol to consider it (see cl 10.2(a) of the Compensation Protocol at [16] above).
Contrary to Mr Eaton’s submission, on a proper reading of the parties’ submissions, Independent Counsel was correct in his understanding that the category of Mr Eaton’s claim was in dispute and that he was, as contemplated by the Compensation Protocol, able to determine that dispute.
I turn to address the second contention, namely whether, in Independent Counsel’s consideration of the question of category of claim, Mr Eaton was denied procedural fairness.
As set out above, Independent Counsel’s role is created by the Compensation Protocol: he or she is appointed pursuant to its terms; and it governs the process to be adopted by Independent Counsel once appointed including the timetable for provision of written submissions and the manner in which Independent Counsel is to undertake his or her determination.
The Compensation Protocol does not provide that an Independent Counsel appointed pursuant to its terms must afford the parties natural justice. Whether such a requirement is to be implied into the terms of the Compensation Protocol will depend upon the role undertaken by Independent Counsel, namely whether once appointed their role is more akin to that of an expert or an arbitrator.
In Zeke Services Pty Ltd v Traffic Technologies Ltd [2005] 2 Qd R 563 Chesterman J considered: first, whether the clause in a share sale agreement which provided for the appointment of an expert to determine any claims for breach of warranties was void as being against public policy because it ousted the jurisdiction of the courts; and secondly, if not, whether the proceeding which had been brought should be stayed because the share sale agreement provided a mechanism for resolution of the warranties dispute.
In determining the second question Chesterman J observed at [23]:
There is a clear distinction between arbitration and expert determination. The former involves a more or less formal adjudication of the respective cases put before the arbitrator. The court exercises a degree of supervision over the conduct of arbitrations and arbitrators, and minimum standards of procedural fairness are required. There are no such safeguards with respect to expert determination. Lord Esher M.R. explained the ordinary case of an expert determination in In re an Arbitration between Dawdy and Hartcup (1885) 15 Q.B.D. 426 at 430:
“…if a man is, on account of his skill … appointed to make a valuation, in such a manner that in making it he may, in accordance with the appointment, decide solely by the use of his eyes, his knowledge, and his skill, he is not acting judicially; he is using the skill of a valuer, not of a judge … (He has) to determine the matter by using solely (his) own eyes, and knowledge, and skill.”
…
In Shoalhaven City Council v Firedam Civil Engineering Pty Limited (2011) 244 CLR 305 a plurality of the High Court (French CJ, Crennan and Kiefel JJ) relevantly said at [25]:
Hudson's Building and Engineering Contracts refers to the increasing diversity of dispute avoidance and resolution mechanisms in modern contracts. It points to the need to give careful consideration “to the true nature of the specific role described in the contract, because the consequences of the different nature of the roles can be radical”. The range of issues able to be entrusted to Expert Determination under the Contract was wide. That width, and the associated procedures, might be thought to indicate proximity to an arbitral function. In this case, however, the Contract expressly provided that the Expert was to act “as an expert and not as an arbitrator”.
(Footnotes omitted.)
The Compensation Protocol does not describe Independent Counsel’s role as either arbitrator or expert. However, in my view, having regard to the terms of the Compensation Protocol, the role of Independent Counsel is more akin to that of an expert than an arbitrator. That is because: Independent Counsel is appointed to determine a dispute about particular matters (cl 10.2); while those matters may include questions of fact and of law, the person to be appointed as Independent Counsel is a barrister and, I infer, likely to have expertise in the relevant field of law given the method of appointment (cl 10.1); the parties are entitled to provide written submissions to Independent Counsel in the time prescribed by the Compensation Protocol (cl 10.6); the principles to be applied by Independent Counsel are prescribed by the Compensation Protocol (cl 10.6); and there is no mechanism for an oral “hearing” or for the parties to test evidence through cross-examination or otherwise.
The authorities establish that an expert is not required to comply with the requirements of procedural fairness unless those requirements are imposed by the terms of the contract governing the expert’s appointment.
In Zeke Services, again in considering the second question identified at [63] above and, more particularly, whether the nature of the complaints raised were appropriate for expert determination by, in that case, an accountant because some of them raised questions of mixed fact and law, Chesterman J said at [32]:
It is at this point that the absence from the agreement of procedural rules to be observed by the expert becomes of importance. Their absence is unremarkable in a case where the expert relies upon his own senses and learning, but where he is obliged to investigate disputed questions of fact and/or law, and come to a conclusion about them, the lack of a methodology for the inquiry is significant. An expert, unless obliged to do so by the contract or the terms of his appointment, does not have to comply with the requirements of procedural fairness or natural justice. The agreement does not contain such a requirement.
In Lahoud v Lahoud [2010] NSWSC 1297 Ward J (as her Honour then was) said at [70]-[71]:
70.In John Nelson Developments, I observed that, in the absence of express agreement, the question whether an expert (or, for that matter, appraiser) is under a duty to accord procedural fairness had been said to depend on whether the task being carried out by the expert is in the nature of a judicial enquiry. I noted that, speaking extra-curially in 2007 to the Institute of Arbitrators, the Hon. Michael McHugh AC commented that the fact that a determination was being carried out as an expert and not as an arbitrator pointed against the rules of natural justice being generally applicable to expert determinations but considered that there was a strong case for saying that where the expert was required (my emphasis) to receive submissions from parties then the rules of natural justice should apply (on the basis that the expert determination in that latter situation was then analogous to a quasi-judicial enquiry). This was the approach accepted by Einstein J in Enron Australia Finance Pty Limited (in liq) v Integral Energy Australia [2002] NSWSC 753, namely that:
It is plain that when one is examining the conduct of a judicial or quasi‑judicial hearing, there is an expectation of impartiality and adherence to procedural fairness (or what was formerly referred to as natural justice).
However, where what is involved falls outside the realm of judicial or quasi-judicial determination, the issue is whether the principle of procedural fairness can be or should be maintained…
It is of assistance to address this issue by first asking whether the … task is to be seen as that of an arbitrator, i.e. a quasi-judicial determination which will automatically invoke the principles of impartiality, or whether the task is merely that of an expert, valuer or appraiser. (my emphasis)
71.I was not taken to any authority which suggested that in general it should be accepted that experts are required to afford natural justice (other than English authority to suggest that they have an implied obligation to act fairly as well as impartially). Rather, at least in Australia, the question turns on what role the expert is retained to play in the particular events in question.
At [77] of Lahoud her Honour relevantly observed that:
In John Nelson Developments, I considered whether the fact that the parties had there followed such a procedure (without being “required” to do so) would give rise to an obligation on the part of the expert to afford procedural fairness (as Mr Epstein says is here the case) and, if so, what such an obligation would entail. I there expressed the view that an agreement between the parties that there should be an exchange of submissions might lead to the conclusion that the expert, acting in good faith and impartially, would be obliged (at the very least) to read and to consider those submissions (and I have been told nothing that would lead me now to depart from that view). …
Based on my view that Independent Counsel was acting as an expert (rather than an arbitrator) and in the absence of any requirement imposed on him by the Compensation Protocol, Independent Counsel was not bound by the rules of procedural fairness. He was of course required to consider the submissions which the parties chose to put before him, which he did. Indeed, that is how he identified the question of category as an issue to be resolved.
While the Compensation Protocol made no provision for submissions in reply it seems to me that, if there was concern about the respondents raising the question of category, it was open to Mr Eaton to approach Independent Counsel and to seek to respond to that issue. He did not do so. He cannot now complain that it was incumbent on Independent Counsel to raise the issue with him, particularly given the nature of Independent Counsel’s role and the terms of the Compensation Protocol.
The respondents submit that, in the event any error is found, Mr Eaton has not demonstrated that the error is material in the sense that term is used in an application for judicial review of a decision of an administrative tribunal. It is not clear to me, nor could it be clearly explained by the parties, why the principles that apply when reviewing a decision of an administrative decision maker are applicable to the role of Independent Counsel undertaking a determination pursuant to the terms of the Compensation Protocol. In Casey Appeal (No 1) at [121] Perram J did not decide whether materiality was the “correct procedural lens through which to see” an issue raised in that case but was prepared to assume that it was for the purpose of rejecting the issue and the accompanying submission.
Putting that to one side, in the event I am wrong about my conclusion set out above and Independent Counsel should have invited comment from Mr Eaton on the question of category or if, by determining the question of category, Independent Counsel acted beyond authority I accept the respondents’ submission that Mr Eaton’s complaints and thus these grounds go nowhere. As Independent Counsel understood, the point was “moot” (IA [353]). That is because whether an Eligible Group Member is in Category D(ii), as Independent Counsel found to be the case on determination of the question, or Category D(iii), as Mr Eaton contends is the case given the parties’ prior agreement, the assessment of non-economic loss and gratuitous care is carried out on the same basis, i.e. as an individual assessment.
The categories are defined in cl 3.1 (see [12] above). In order to come within Category D an Eligible Group Member need only meet one of the criteria set out in subcl 3.1(d) although the clause also envisages that some Eligible Group Members may meet more than one of the criteria.
An Eligible Group Member in Category D(iii) is not entitled to a different form of assessment of damages for non-economic loss or gratuitous care nor is such an assessment likely to lead to a higher quantification. All Eligible Group Members within Category D(i), (ii) or (iii) will have damages for non-economic loss and gratuitous care individually assessed in accordance with cl 4.4 of the Compensation Protocol (see [13] above).
Clause 4.2 of the Compensation Protocol (see [13] above) does not suggest otherwise in relation to Eligible Group Members who consider themselves to be in Category D(iii). As I have already observed Eligible Group Members need only meet one of the criteria in cl 3.1(d) to be classified in Category D and thus be entitled to an individual assessment for damages for non-economic loss and gratuitous care. The criteria in subcll 3.1(d)(i) and (ii) are objective and concern identifiable surgical procedures. The criteria in subcl 3.1(d)(iii) are not of that nature and require demonstration of “extraordinary and significant complications or injury in excess of that to which Eligible Group Members in Category A, B or C would experience as a result of failure of an Affected Implant”. It is not surprising that in those circumstances cl 4.2 imposes an additional burden on an Eligible Group Member.
Grounds (a), (b) and (k)(i) and (ii) are not made out.
Grounds (c), (d) and (k)(iii) and (iv): causation
By grounds (c) and (d) Mr Eaton contends that Independent Counsel made an error of law in stating that s 5D of the Civil Liability Act 2002 (Cth) (CLA) applied and in applying the requirements of that section when considering the question of causation. Mr Eaton also contends that Independent Counsel made an error of law in applying the incorrect test for causation because he did not apply the test required by cll 3, 10 and 15 of the Compensation Protocol.
Relatedly by grounds (k)(iii) and (iv) Mr Eaton alleges that Independent Counsel misapprehended the nature and limits of his functions under the terms of the referral pursuant to cl 10.2 of the Compensation Protocol and thus exceeded what he was authorised to decide by: considering he was engaged, and had power, to determine a legal question of causation, when he did not; and by determining the question of whether Mr Eaton’s right patellar tendon ruptured as a result of having received the Affected Implant in accordance with the test for causation under the CLA or, alternatively, under the common law.
Mr Eaton’s submissions
Mr Eaton submits that the Compensation Protocol required Independent Counsel to determine his entitlements pursuant to Pt VIB of the TPA as in force immediately before 1 January 2011, except where its principles and provisions are inconsistent with the Compensation Protocol in which case the provisions of the Compensation Protocol prevail (cl 10.6(c)).
Mr Eaton submits that under the Compensation Protocol non-economic loss and gratuitous care damages were to be determined according to Pt VIB of the TPA and damages for financial loss were to be determined according to Pt VIB of the TPA and cl 5.2 of the Compensation Protocol. Mr Eaton contends that, despite Independent Counsel saying as much at the commencement of the IA (at IA [9]), he went on expressly to refer to the CLA multiple times, including by undertaking an analysis of case law determined pursuant to its provisions. Independent Counsel went so far as to say that to establish causation Mr Eaton must demonstrate that the Affected Implant was a necessary condition of the occurrence of his harm, citing s 5D of the CLA.
Mr Eaton submits that this was an erroneous statement of the law applicable to his claim. He notes that Independent Counsel expressly found that “… available evidence does not establish that the Affected Implant was a necessary condition of the Fall” (at IA [339]) and thereby expressly applied the CLA in reaching his conclusions.
Mr Eaton submits that Pt VIB of the TPA deals with the quantification of damages, not principles of causation and that the combined effect of Pt VIB of the TPA Act and cl 5.2 of the Compensation Protocol is that, if the Compensation Protocol itself does not govern the test of causation, then it is the common law common-sense test of factual causation that applies. In oral submissions, Mr Eaton submitted that the common-sense test of causation did not permit Independent Counsel to import notions of novus actus interveniens to interpret the term “unrelated contributing causes” in cl 5.2 of the Compensation Protocol. Mr Eaton observes that Independent Counsel said that he determined the issues “in accordance with common law principles outlined above” (at IA [341]) and then referred, among others, to the decision in Wallace v Kam (2013) 250 CLR 375, which was determined pursuant to the CLA.
Again in oral submissions Mr Eaton contended that Independent Counsel erred in strictly applying concepts of common law causation rather than using the common law as an aid to statutory construction of Pt VIB of the TPA. He relied on several authorities, including Henville v Walker (2001) 206 CLR 459 and Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568, in support of that proposition. He submits that statutory tests for causation, the test for common law causation and the test for causation under a contract are each distinct, and Independent Counsel erred in eliding those tests.
Mr Eaton submits that the vice in Independent Counsel’s inconsistent and incorrect references to the law is that he is left not knowing with any clarity what Independent Counsel did. He contends that the IA does not reflect an orderly, logical, consistent statement of principle and leaves the reader unsure as to whether Independent Counsel in fact reached his conclusions based on the correct principles. Mr Eaton submits that on one view Independent Counsel, in applying the CLA, raised the bar to satisfying causation to an unwarranted level.
Consideration
Clauses 4.4, 5.1, 5.2, 10.6(c) and 15.1 of the Compensation Protocol are relevant to these grounds. Having regard to those clauses, compensation for non-economic loss and gratuitous care is to be assessed pursuant to Pt VIB of the TPA and compensation for financial loss is to be assessed pursuant to cl 5.2 of the Compensation Protocol and Pt VIB of the TPA.
There is no dispute between the parties that the CLA does not apply to the assessment of damages under the Compensation Protocol and that the relevant framework is that imposed by the Compensation Protocol and Pt VIB of the TPA.
That said, the following two questions, on which the parties do not agree, arise: whether Independent Counsel applied the wrong test of causation; and whether the agreement in relation to category of claim meant that Independent Counsel had no power to determine causation or, put another way, whether his role was limited to an assessment of the quantum of compensation absent any consideration of causation.
Before addressing these questions, it is convenient to set out the framework for the assessment of compensation imposed by the Compensation Protocol. Given Independent Counsel’s conclusion that Mr Eaton fell into category D(ii), the following applies:
(1)compensation for non-economic loss and gratuitous care is to be individually assessed and to be determined or assessed in accordance with the provisions and principles for the assessment of non-economic and gratuitous care in Pt VIB of the TPA: cl 4.4, Compensation Protocol; and
(2)compensation for financial losses:
(a)is to be calculated, determined or assessed pursuant to the provisions and principles for the assessment of damages or compensation for personal injury in Pt VIB of the TPA: cl 5.1, Compensation Protocol; and
(b)losses recoverable are limited to those which, “on the balance of probabilities, were caused by the Eligible Group Member having been the recipient of an Affected Implant, after taking into account the effect of any unrelated contributing causes”: cl 5.2, Compensation Protocol.
In addition, cl 10.6(c) provides guidance to Independent Counsel as to the applicable principles for the assessment of compensation and damages for personal injury (see [16] above) and cl 15.1, which is of general application, directs attention to the TPA and, provides that to the extent the TPA draws on the common law, it is the common law in force as at 16 August 2012.
In other words, the Compensation Protocol requires that compensation for financial and non‑economic losses be assessed pursuant to Pt VIB of the TPA and, to the extent applicable, in accordance with common law principles.
I turn to Part VIB of the TPA as at 1 January 2011. It is titled “Claims for damages or compensation for death or personal injury” and applies to proceedings under the TPA that relate to Pt IVA, Div 1A or 2A of Pt V or to Pt VA in which the plaintiff is seeking an award of personal injury damages and which are not proceedings in relation to death or personal injury resulting from smoking or other use of tobacco products: s 87E, TPA.
Part VIB includes Div 3 “Limits on personal injury damages for non-economic loss”, Div 4 “Limits on personal injury damages for loss of earning capacity”, Div 5 “Limits on personal injury damages for gratuitous attendant care services” and Div 6 “Other limits on personal injury damages”.
Section 87D provides definitions for the purposes of Pt VIB. Relevantly, “personal injury damages” is defined to mean “damages or compensation for loss or damage that is, or results from, the death of or personal injury to a person”.
Section 87W which is in Div 5 of Pt VIB relevantly provides:
(1)A court must not, in a proceeding to which this Part applies, award personal injury damages for gratuitous attendant care services for the plaintiff, except in accordance with this section.
(2) The court must be satisfied that:
(a)there is (or was) a reasonable need for the services to be provided; and
(b)the need has arisen (or arose) solely because of personal injury to which the personal injury damages relate; and
(c)the services would not be (or would not have been) provided to the plaintiff but for the injury; and
(d)the services are provided (or are to be provided) for at least 6 hours per week; and
(e)the services are provided (or are to be provided) over a period of at least 6 months.
…
(5)Gratuitous attendant care services are services that one person provides to another person:
(a)that:
(i)are of a domestic nature; or
(ii)relate to nursing; or
(iii)aim to alleviate the consequences of a personal injury; and
(b)for which the other person has not paid or is not liable to pay.
Independent Counsel commenced his “Consideration” at IA [208] noting that the “principal issue to be determined” is whether the Affected Implant caused the injuries and disabilities complained of by Mr Eaton. At IA [209] Independent Counsel set out what he considered to be the relevant test:
In order to establish factual causation Mr Eaton must demonstrate that the Affected Implant was a necessary condition of the occurrence of harm. It may be that there is more than a single sufficient condition for Mr Eaton’s harm. Only if one of those things is proven is it necessary to consider whether liability should be extended to DePuy for the Fall and the events that followed. Mr Eaton bears the onus of establishing, on the balance of probabilities, that but for the Affected Implant, he would not have fallen on 16 January 2012, or the consequences of the Fall would have been less severe. The standard of proof required to establish the requisite facts is on the balance of probabilities.
(Footnotes omitted.)
Footnote 272 at IA [209] in part underpins grounds (c) and (d) of the amended interlocutory application. That footnote refers to s 5D(1) of the CLA. Section 5D(1) of the CLA provides:
A determination that negligence caused particular harm comprises the following elements—
(a)that the negligence was a necessary condition of the occurrence of the harm (factual causation), and
(b)that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused (scope of liability).
At IA [236] Independent Counsel commenced his “causation” analysis. He said at IA [236]‑[237]:
236.The question of factual causation under s 5D(1)(a) of the CLA involves a determination of a probable course of events had the Affected Implant not been defective. The onus of establishing factual causation rests upon Mr Eaton. It is necessary for Mr Eaton to establish, on the assumption that the Affected Implant had not been defective, that the likely outcome would have been different.
237.The CLA imposes the “but for” test as the first gateway to proof of causation. The High Court has articulated that statutory test in terms. The suggestion of a possible outcome should some alternate been taken does not satisfy the “but for” test. The “but for” test is a necessary test, save for exceptional cases to which s 5D(2) applies. In short terms, it is necessary for Mr Eaton to establish that he would not have suffered the harm complained of “but for” the Affected Implant. So long as the Affected Implant is a necessary element of a sufficient set of conditions to bring about the harm suffered, factual causation will be established.
(Footnotes omitted.)
Once again, the footnotes are at the centre of Mr Eaton’s submissions. In this instance it is fn 294 to [237] of the IA, which refers to Wallace v Kam.
Given the agreement between the parties that the CLA has no role to play, one wonders how Independent Counsel came to refer to it and to an authority in relation to its application in considering the question of causation. As to the latter, the respondents referred to Wallace v Kam in their submissions to Independent Counsel at [5.86]. Independent Counsel set out the respondents’ submissions in relation to causation at IA [163]-[195] including at IA [163]‑[166] that:
163.DePuy makes submissions in relation to what it contends is the applicable law. In support of the contention that the Fall was a novus actus interveniens, DePuy refers to a number of authorities and to Luntz’s Assessment of Damages for Personal Injury and Death.
164.DePuy’s principle submission in relation to causation is that questions of causation generally should be determined in accordance with common law principles. DePuy refers to Donoghue v Stevenson, March v E & H Stramare Pty Ltd and Wallace v Kam.
165.By reference to the decision of Mason CJ in March v E & H Stramare Pty Ltd, DePuy submits that two matters will determine legal causation at common law. The first matter is determination of factual causation as to what has occurred (ie. the “but for” test). While necessary, the “but for” test should not, however, be applied as the exclusive criterion of causation. Rather, the “but for” test should be applied subject to the second matter. The second matter to be determined is a normative question of whether legal responsibility should be imposed on the defendant. The determination of the second matter takes into account policy and value judgments. By reference to Wallace v Kam, DePuy submits that the normative question that arises at statute is properly determined by reference to the common law.
166.DePuy contends that Mr Eaton’s reliance on the decision of SGIO v Oakley “sits uncomfortably” with the common law approach to the determination of the issue of causation. In DePuy’s submission, the invocation by Mr Eaton to assign the circumstances of his claim to specific categories identified in SGIO v Oakley is not the appropriate approach. Rather, the proper approach should be informed by more recent authoritative common law decisions such as Wallace v Kam. In Wallace v Kam, the Court stated:
The normative question posed by s 5D(1)(b) is properly answered by a court through the application of precedent. Section 5D guides but does not displace common law methodology. The common law method is that a policy choice once made is maintained unless confronted and overruled.
(Footnotes omitted.)
As is apparent from that extract, while the respondents referred to Wallace v Kam, they did so in the context of their reliance on the common law test for causation as the applicable test.
Before me the respondents submitted that, in any event, there is no error in Independent Counsel referring to s 5D of the CLA because that section reflects common law principles, a matter which is evident from Wallace v Kam.
In Wallace v Kam Mr Wallace brought a claim in negligence at common law against Dr Kam in relation to a surgery performed by Dr Kam on his back. The appeal before the High Court concerned questions of duty and causation of damage. Commencing at [7] the High Court set out the “framework for analysis”. In doing so the High Court referred to the content of the common law duty of a medical practitioner to a patient as a single comprehensive duty which included as a component the requirement to warn a patient of material risks of physical injury inherent in a proposed treatment, when that duty is ordinarily breached and the compensable damage of such a breach. The High Court observed at [11]:
The common law of negligence requires determination of causation for the purpose of attributing legal responsibility. Such a determination inevitably involves two questions: a question of historical fact as to how particular harm occurred; and a normative question as to whether legal responsibility for that particular harm occurring in that way should be attributed to a particular person. The distinct nature of those two questions has tended, by and large, to be overlooked in the articulation of the common law. In particular, the application of the first question, and the existence of the second, have been obscured by traditional expressions of causation for the purposes of the common law of negligence in the conclusory language of “directness”, “reality”, “effectiveness” and “proximity”.
(Footnote omitted.)
At [12] the High Court then segued to a consideration of the CLA, observing that s 5D of the CLA requires that the two questions be kept distinct. The High Court said at [14] and [16]:
14.The distinction now drawn by s 5D(1) between factual causation and scope of liability should not be obscured by judicial glosses. A determination in accordance with s 5D(1)(a) that negligence was a necessary condition of the occurrence of harm is entirely factual, turning on proof by the plaintiff of relevant facts on the balance of probabilities in accordance with s 5E. A determination in accordance with s 5D(1)(b) that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused is entirely normative, turning in accordance with s 5D(4) on consideration by a court of (amongst other relevant things) whether or not, and if so why, responsibility for the harm should be imposed on the negligent party.
…
16.The determination of factual causation in accordance with s 5D(1)(a) involves nothing more or less than the application of a “but for” test of causation. That is to say, a determination in accordance with s 5D(1)(a) that negligence was a necessary condition of the occurrence of harm is nothing more or less than a determination on the balance of probabilities that the harm that in fact occurred would not have occurred absent the negligence.
(Footnotes omitted.)
It is evident from this extract that the High Court in Wallace v Kam was doing no more than noting that the inquiry to be undertaken pursuant to s 5D of the CLA is the same as that required by the common law. To similar effect in Strong v Woolworths Ltd [2012] 246 CLR 182 at [18] a majority of the High Court (French CJ, Gummow, Crennan and Bell JJ) observed that the determination of factual causation under s 5D(1)(a) of the CLA is a statutory statement of the “but for” test of causation, albeit noting that it has two kinds of limitations.
In any event, as is apparent from the IA, despite referring to s 5D of the CLA, Independent Counsel did not misdirect himself or apply the wrong test. He identified at IA [209] that Mr Eaton “bears the onus of establishing, on the balance of probabilities, that but for the Affected Implant, he would not have fallen on 16 January 2012, or the consequences of the Fall would have been less severe” and that the standard of proof required to prove the facts was on the balance of probabilities. Similarly, at IA [237] Independent Counsel observed that it was “necessary for Mr Eaton to establish that he would not have suffered the harm complained of ‘but for’ the Affected Implant”. That is the test mandated by the common law and by the Compensation Protocol, the test urged on Independent Counsel by the parties and the test he applied, despite his misplaced references to the CLA. After stating his conclusions Independent Counsel reinforced at IA [341] that, in arriving at his findings on causation, he had determined the issues “in accordance with the common law principles identified above”. It follows that I am not satisfied that Independent Counsel applied the wrong test of causation. Grounds (c) and (d) of the amended interlocutory application are not made out.
It is not possible to set out more than a summary of the Independent Assessment. However, a consideration of it demonstrates that Independent Counsel undertook a detailed review of the medical and the medico-legal reports relied on by the parties. He set out the reports prepared by Mr Eaton’s treating doctors and the opinions expressed by each of Dr Ganko and Dr Brumby having regard to the information provided to them and considered the parties’ respective submissions about those opinions.
Mr Eaton is critical of Independent Counsel’s observation at IA [249] (see [134(2)] above) that he could find no evidence in Dr Mansfield’s reports that the right patellar tendon was involved in the Revision Surgeries and characterises this observation as a “no evidence” finding. That is, Independent Counsel found that there was no evidence that the right patellar tendon was involved when there was based on Dr Ganko’s description of the surgical method undertaken which Independent Counsel accepted. However, Independent Counsel’s observation or finding, if it can be elevated to that level, represented no more than his analysis of Dr Mansfield’s reports and what they contained.
Mr Eaton contends that Independent Counsel made an error of law in rejecting Dr Ganko’s opinion. As is apparent from IA [269] (see [134(6)] above) Independent Counsel accepted much of Dr Ganko’s opinion. However, in determining whether the Affected Implant had caused the Fall Independent Counsel expressed the view that Mr Eaton could not rely on Dr Ganko’s opinion because he had not established the factual circumstances of the Fall and thus Dr Ganko had not identified the factual assumptions on which he based his opinion. As the respondents submit, it is entirely orthodox to say that Mr Eaton bore the onus of establishing the assumptions on which Dr Ganko relied in providing his opinion. Independent Counsel referred to the available evidence and expressed the view that evidence of the circumstances of the Fall was limited. There was no legal error in Independent Counsel’s finding that Mr Eaton had not discharged his onus.
Nor was there any error in Independent Counsel considering it was necessary for the experts to know the facts surrounding the circumstances of the Fall in order to provide an opinion on whether the patellar tendon rupture was a result of the Affected Implant. It is orthodox for an expert asked to opine on whether event A led to, or caused, event B to know the facts giving rise to event A. Otherwise, the opinion provided may be speculative and of limited utility.
Equally there was no error in Independent Counsel’s view that the statements in the medico‑legal and medical reports that the Second Revision Surgery caused the Fall or weakened the patellar tendon making it more likely to rupture were based on supposition rather than evidence. As general observations both Dr Ganko and Dr Brumby in his first report accepted that patellar tendon rupture was a known risk of the Revision Surgeries. However, neither of them expressed their opinions having regard to the facts surrounding the Fall.
Independent Counsel reasoned that he was able to reconcile the two reports prepared by Dr Brumby, despite the change in his views between the first and second reports. Mr Eaton submits that he was “incorrect” to do so and that Dr Brumby’s opinions “cannot be reconciled” but does not articulate why that is so and how any error, as alleged, would amount to an error of law. As expressed, the challenge to Independent Counsel’s analysis and his reconciliation of the opinions expressed by Dr Brumby in his two reports is no more than a disagreement with Independent Counsel’s review of the expert evidence and his preference for one opinion over the other.
As the respondents submit the true character of these grounds is a complaint that Independent Counsel preferred the evidence on which they relied over the evidence on which Mr Eaton relied. However, this of itself does not identify legal error particularly in circumstances where Independent Counsel gave detailed and cogent reasons for proceeding as he did and ultimately preferring Dr Brumby’s opinion over that of Dr Ganko.
The final question to consider is whether Independent Counsel erred in applying the rules of evidence to Dr Mansfield’s and Dr Ganko’s reports and to Mr Eaton’s statutory declaration in circumstances where those rules did not apply having regard to the Compensation Protocol, in particular cl 10.6 thereof.
Clause 10.6 of the Compensation Protocol sets out the procedure to be followed if a dispute is referred to Independent Counsel for determination (see [16] above). It makes no reference to application of the rules of evidence or to any other procedural matters. Putting that to one side, it is not apparent that Independent Counsel in fact applied the “rules of evidence” in the sense that he did not reject evidence because, for example, it did not conform to the requirements of Pt 23 of the Federal Court Rules 2011 (Cth) or this Court’s Expert Evidence Practice Note (GPN-EXPT) or any particular provision of the Evidence Act 1995 (Cth).
Independent Counsel was not satisfied that the Fall was caused by the Affected Implant. In reaching that view he noted that Dr Ganko and Dr Brumby agreed that the Second Revision Surgery rendered the right patellar tendon susceptible to a risk of rupture but noted that whether that was sufficient evidence to establish that the risk materialised as a result of the Affected Implant was another matter. Independent Counsel found that he could not rely on Dr Ganko’s opinion that the rupture was significantly related to the Second Revision Surgery because Mr Eaton had not established the factual circumstances of the Fall and thus Dr Ganko had not been able to identify the factual assumptions on which his opinion was based. Independent Counsel found that the only contemporaneous evidence was found in Mr Eaton’s response to the Questionnaire (see [133] above) and that direct evidence was limited to Mr Eaton’s statutory declaration made six years after the event and in which the circumstances of the Fall were “traversed in a cursory way”. He found that other medical and medico-legal reports that opined that the Second Revision Surgery caused the Fall or weakened the patellar tendon making it more likely to rupture were based on “supposition rather than actual evidence”. Accordingly, Independent Counsel found that Mr Eaton had not met the standard of proof required to establish to the required standard the facts causally connecting the Affected Implant to the Fall. This is no more than a factual finding that the evidence does not support a conclusion that the Second Revision Surgery caused the Fall.
It follows from the above that grounds (e), (f), (g) and (n) are not made out.
Grounds (h) and (i)
By grounds (h) and (i) Mr Eaton contends that:
(h)The Independent Counsel made an error of law in failing to consider [Mr Eaton’s] alternative argument that the fall had caused the patellar tendon rupture in circumstances where, but for the revision surgeries, the fall would not have done so. This constituted an error of law in that:
i. It was a denial of natural justice and/or procedural fairness; and/or
ii. The Independent Counsel failed to take into account a relevant consideration.
(i)Alternatively, Independent Counsel failed to give any or any adequate reasons for rejecting the Appellant’s submissions that the fall caused the patellar tendon rupture in circumstances where, but for the revision surgeries, it would not have done so.
Mr Eaton submits that Independent Counsel found that it was not possible to say the patellar tendon rupture was due to the Fall because it had been weakened by the Revision Surgeries, referring to IA [239]. Referring to his submission in support of grounds (e), (f) and (g) of his amended interlocutory application, he contends that Independent Counsel’s rejection of the medical evidence as “supposition” is a conclusion that is both erroneous and not reasoned in a way that permits Mr Eaton to understand why it was made. In oral submissions Mr Eaton contended that Independent Counsel erred in wholly rejecting the evidence of Dr Ganko as “not worth anything” without giving it due consideration.
These grounds are not particularised. Although Mr Eaton’s submissions recorded above refer to the rejection of parts of the medical evidence (a matter which is the subject of grounds (e), (f) and (g)), in their terms and having regard to the reference by Mr Eaton to [239] of the IA, the grounds seem to concern Mr Eaton’s submissions to Independent Counsel at [2.18]-[2.21] and at [2.33]-[2.36] where he submitted:
2.18Mr Eaton ruptured his patellar tendon in his right knee, and supraspinatus tendon in his left shoulder, during a fall on 16 January 2012.
2.19There is competing evidence from the orthopaedic surgeons regarding the cause of his ruptured patellar and supraspinatus tendons.
2.20The relevant rules where a plaintiff sustains further injury in a distinct subsequent accident are set out in State Government Insurance Commission v Oakley (1990) 10 MVR 570 at 573:
In my opinion, where the negligence of a defendant causes an injury and the plaintiff subsequently suffers a further injury the position is as follows: (1) where the further injury results from a subsequent accident, which would not have occurred had the plaintiff not been in the physical condition caused by the defendant’s negligence, the added damages should be treated as caused by that negligence; (2) where the further injury results from a subsequent accident, which would have occurred had the plaintiff been in normal health, but the damage sustained is greater because of aggravation of the earlier injury, the additional damage resulting from the aggravated injury should be treated as caused by the defendant’s negligence; and (3) where the further injury results from a subsequent accident which would have occurred had the plaintiff been in normal health and the damage sustained includes no element of aggravation of the earlier injury, the subsequent accident and further injury should be regarded as causally independent of the first.
2.21Therefore, if the handicap created by the first injury contributed either to the happening or the severity of the subsequent injury the factual requirement of causation will be satisfied. The following are two cases which may provide guidance to Independent Counsel on the application of this principle.
(a) In Fishlock v Plummer [1950] SASR 176 the plaintiff sustained compound fractures to both legs. He was discharged from hospital after six months as an inpatient. Three weeks following his discharge, the plaintiff was carried into a bathroom and placed on a chair, but accidentally slipped refracturing his leg. Eight months later, the plaintiff walked across a bridge of wooden planks over a culvert in the dark and put his legs between the planks displacing a bone graft. The Court held that the slip in the bathroom fell within the equivalent of the first rule in Oakley and the subsequent fall fell within the equivalent of the second rule in Oakley. Therefore, the Court awarded full damages in respect of the slip and part damages in respect of the subsequent fall.
(b)In Atkinson v Murray (1983) 108 LSJS 439 the plaintiff injured his knee in the first accident and, three years later, broke his ankle during a fall caused by instability in his knee resulting from the first accident. The defendant was held liable for the consequences of the first accident and the subsequent fall.
…
2.33Mr Eaton submits that he would not have fallen on 16 January 2012 but for the second revision surgery. This submission is supported by the following:
(a)he had undergone the second revision surgery less than six weeks earlier and had only been discharged from hospital four weeks earlier.
(b)evidence from Dr Mansfield and Dr Ganko that muscles in his right leg were acutely weakened by the second revision surgery at the time of the fall.
(c)evidence from Mrs Eaton that he was still reliant on crutches at the time of the fall.
(d)records of his admission to hospital which show that he was prescribed narcotic analgesia (Endone 5mg and Oxycontin 20mg twice per day) at the time of the fall.
2.34If Independent Counsel finds that Mr Eaton would not have fallen on 16 January 2012, but for the second revision surgery, then the Respondents are liable for the consequences of the fall pursuant to the first rule in Oakley. This would mean that they are liable for Mr Eaton’s ruptured patellar and supraspinatus tendons and all subsequent complications.
2.35In the alternative, Mr Eaton submits that his patellar tendon ruptured as a result of the fall because it was weakened during the revision surgeries. This submission is supported by the following:
(a)evidence from Dr Mansfield, Dr Ganko and Dr Brumby (in his first report) that the patellar tendon was weakened during the revision surgeries.
(b)strong support from Dr Ganko that the patellar tendon would not have ruptured, as a result of a fall, if it had not been weakened during the revision surgeries. Dr Brumby accepted this proposition in his first report as set out at [2.28] and [2.30(a) and (b)] above.
2.36If Independent Counsel finds that Mr Eaton would have fallen on 16 January 2012 had he been in normal health, but would not have ruptured his patellar tendon, then the Respondents are liable for the additional damage resulting from the aggravated injury pursuant to the second rule in Oakley. This would mean that they are liable for Mr Eaton’s ruptured patellar tendon and subsequent complications, but not the ruptured supraspinatus tendon.
(Footnotes omitted.)
It is not the case that Independent Counsel failed to consider the argument that the Fall had caused the patellar tendon rupture in circumstances where, but for the Revision Surgeries, the Fall would not have done so.
As I have already observed the IA is detailed. It sets out the parties’ submissions and addresses those submissions. Insofar as these grounds are concerned:
(1)Mr Eaton’s submissions are summarised, with some analysis undertaken of them, at IA [95]-[136];
(2)that summary includes Mr Eaton’s submissions in relation to causation. Relevantly, Independent Counsel:
(a)set out Mr Eaton’s submission that if a plaintiff sustains a further injury in a distinct subsequent slip and fall the rules to be applied are those set out in the decision of the Full Court of the Supreme Court of Western Australia in State Government Insurance Commission v Oakley[1990] Aust Torts Reports 81‑003: at IA [98];
(b)recorded Mr Eaton’s submission that “as he would not have fallen on 16 January 2012 but for the Second Revision Surgery, it follows that the first rule in [Oakley] applies and the Respondents are responsible for all of the consequences and complications that followed the Fall” and his alternative submission that “his patella tendon ruptured due to the Fall because the patellar tendon had been weakened by the Revision Surgeries, and therefore the second rule in [Oakley] applies (which is that the damage was greater because of aggravation of the earlier injury that was caused by the defendant’s negligence)”: at IA [99]‑[100];
(c)referred to Oakley as the foundation of Mr Eaton’s submission on causation and summarised the facts of that decision and Malcolm CJ’s consideration of the issues. This included the “fundamental difficulty” Independent Counsel said was identified by Malcolm CJ at 574 of Oakley that “difficult questions of fact occasionally arise” where a plaintiff suffers more than one accident and the defendant argues that “the plaintiff’s disabilities should be regarded as the separate consequences of concurrent and independent causes only one of which is the conduct of the defendant”. Independent Counsel considered the decisions referred to by Malcolm CJ in Oakley in support of that observation, Watts v Rake (1960) 108 CLR 158 and Purkess v Crittenden (1965) 114 CLR 164. Independent Counsel concluded that the effect of those decisions is that the onus remains on a plaintiff to establish that a defendant’s conduct has caused the damage complained of and if the plaintiff does establish that the defendant’s conduct is one of two or more causes, it is for the defendant to disentangle the causes: at IA [101]-[106];
(d)referred to the two additional cases relied on by Mr Eaton, Fishlock v Plummer [1950] SASR 176 and Atkinson v Murray (1983) 108 LSJS 439 and the findings in each of them. Independent Counsel identified two points of difference between the facts in Fishlock and Mr Eaton’s claim which were “not noted in the Eaton Submissions”: first, that in Fishlock “both of the subsequent injuries … involved re-injury of bone grafts of the original orthopaedic injuries. In Mr Eaton’s case, the patellar tendon injury suffered in the Fall was a new injury”; and secondly, in Fishlock “the circumstances surrounding the misstep into a culvert involved a consideration of whether the injury occurred due to the plaintiff’s own unreasonable conduct or not. In finding for the plaintiff, Mayo J noted that he could not be fully satisfied that the plaintiff was acting unreasonably. In Mr Eaton’s case, the dearth of evidence available does not permit a finding to be made either way as to whether Mr Eaton was acting reasonably at the time of the Fall”: at IA [109]-[117];
(e)referred directly to and summarised Mr Eaton’s submissions at [2.33] and [2.21] (see above): at IA [118]-[119];
(f)concluded this part of the IA by observing that “there must be sufficient facts available to find to the requisite standard that an injured person suffers from a condition which contributes either to the occurrence of a subsequent injury or to the severity of a subsequent injury”: at IA [120]; and
(3)under the heading “Consideration” Independent Counsel identified the principal issue to be determined to be “whether the Affected Implant has caused the injuries and disabilities complained of by Mr Eaton”, set out the facts relating to the Fall and then turned to the question of “causation”, having regard to those facts: at IA [208]-[247].
At IA [238] Independent Counsel repeated Mr Eaton’s submission based on Oakley in relation to the two ways in which he contended the respondents were liable for his injuries sustained after the Fall. This of course included Mr Eaton’s alternate submission which is the subject of these grounds. Independent Counsel concluded in relation to those submissions as follows at IA [239]-[240]:
239.In my view, Mr Eaton has failed to establish a factual basis for accepting either of the submissions put in the alternative. On the available facts, it is not possible to find on the balance of probabilities that Mr Eaton would not have fallen on 16 January 2012 but for the Second Revision Surgery. Further, on the same basis it is not possible to find the right patella tendon rupture was due to the Fall because the tendon had been weakened by the revision surgeries.
240.There are two points of difference between the circumstances in Fishlock v Plummer and Mr Eaton’s claim not noted in the Eaton Submissions. One, both of the subsequent injuries in Fishlock v Plummer involved re-injury of bone grafts of the original orthopaedic injuries. In Mr Eaton’s case, the patella injury suffered in the Fall was a new injury. Two, in Fishlock v Plummer, the circumstances surrounding the misstep into a culvert involved a consideration of whether the injury occurred due to the plaintiff’s own unreasonable conduct or not. In finding for the plaintiff, Mayo J noted that he could not be fully satisfied that the plaintiff was acting unreasonably. In Mr Eaton’s case, the dearth of evidence available does not permit a finding to made either way as to whether Mr Eaton was acting reasonably at the time of the Fall.
Independent Counsel made those remarks and findings having regard to his earlier analysis of Mr Eaton’s submissions and, in part, repeats that analysis and his analysis of the facts relating to the Fall. In doing so Independent Counsel considered Mr Eaton’s submissions in relation to the cause of the injuries following the Fall including the alternative argument that the Fall had caused the patellar tendon rupture in circumstances where, but for the Revision Surgeries, the Fall would not have done so. There was no failure to consider those submissions nor any denial of natural justice nor did Independent Counsel take into account an irrelevant consideration. The availability of evidence to assess whether the weakened patellar tendon was the cause of the Fall is relevant as was apparent from the authorities relied on by Mr Eaton. Further, reading the IA as a whole, as submitted by the respondents, it is not the case that Independent Counsel gave inadequate reasons for his rejection of the submission.
Finally, to the extent that Mr Eaton’s submission in support of these grounds take issue with the way in which Independent Counsel dealt with the medical and medico-legal evidence I repeat the matters set out at [117]-[131] above.
Grounds (h) and (i) are not made out.
Ground (j)
By ground (j) Mr Eaton contends that Independent Counsel erred in law by considering that Mr Eaton had an onus to establish that he was not acting unreasonably at the time of the Fall in order to establish that the Fall and the patellar tendon rupture were caused by the Affected Implant and the two Revision Surgeries.
This ground concerns Independent Counsel’s finding at IA [240] that “[i]n Mr Eaton’s case, the dearth of evidence available does not permit a finding to [be] made either way as to whether Mr Eaton was acting reasonably at the time of the Fall”.
Mr Eaton submits that there was no onus on him to provide any such evidence and that it was for the respondents to prove that Mr Eaton was acting unreasonably if that was part of their case. He contends that the reasonableness of his conduct in the lead up to the Fall is not relevant to a determination of causation on the issue of whether the patellar tendon ruptured when it otherwise would not have, and that Independent Counsel clearly took into account an irrelevant matter.
Mr Eaton submits that this course of reasoning by Independent Counsel is demonstrative of an erroneous understanding of the law of causation and proof and, as they are central to the determination, they are material errors.
The finding at IA [240] cannot be considered in isolation. Independent Counsel addressed the question of causation commencing at IA [236]. Relevantly:
(1)at IA [236]-[237] he set out the applicable test for causation (see [99] above) and said, among other things, that Mr Eaton bore the onus of establishing “factual causation”;
(2)at IA [238] he summarised Mr Eaton’s submissions in relation to causation, referring to the alternate submissions he made relying on Oakley, namely that he would not have fallen on 16 January 2012 but for the Second Revision Surgery or, in the alternative, that his patellar tendon ruptured due to the Fall because the patellar tendon had been weakened by the Revision Surgeries. Mr Eaton contended that in the case of the former, the respondents were responsible for all of the consequences and complications that followed the Fall and, in the case of the latter, DePuy was liable for the ruptured patellar tendon and subsequent complications but not his torn supraspinatus tendon; and
(3)at IA [239]-[240] Independent Counsel responded to those submissions (see [151] above).
Independent Counsel’s reference to Fishlock must also be understood in context as explained at IA [150]-[151] above. Independent Counsel’s finding at IA [240] repeated the earlier finding he made based on his decisions in Oakley and Fishlock and, I infer, his understanding of the facts in relation to the Fall.
Independent Counsel did not reverse the onus in relation to the question of causation. It was for Mr Eaton to establish that, but for the Affected Implant, he would not have sustained the injury or, as put at IA [236], that the likely outcome would have been different had the Affected Implant not been defective. At IA [239]-[240] Independent Counsel addressed Mr Eaton’s submissions based on Oakley and found that, based on the facts, he could not find on the balance of probabilities that the Fall was caused either by the Second Revision Surgery or by the weakened patellar tendon resulting from the Revision Surgeries. In coming to that view Independent Counsel considered Mr Eaton’s actions at the time of the Fall. There was no error in his doing so. Mr Eaton’s conduct at the time of the Fall was a relevant matter to take into consideration.
Insofar as Mr Eaton relied on the decision in Fishlock, Independent Counsel found that the facts in that case could be distinguished including because, unlike Mayo J in Fishlock, on the available evidence he could not make any finding as to whether Mr Eaton’s conduct at the time of the Fall was reasonable or unreasonable. In circumstances where Mr Eaton raised the decision in Fishlock as one that was relevant to an analysis of the question of causation, it cannot be said that Independent Counsel’s analysis of the findings in Fishlock, including whether there was available evidence before him to reach the same conclusion, was an irrelevant matter.
Ground (j) is not made out.
CONCLUSION
Mr Eaton has not made out any of the grounds in his amended interlocutory application. It follows that the amended interlocutory application should be dismissed.
Given that he has not succeeded, Mr Eaton should pay the respondents’ costs.
I will make orders accordingly.
I certify that the preceding one hundred and sixty-six (166) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Markovic. Associate:
Dated: 5 July 2024
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