Commonwealth of Australia v Stankowski - [2005] NSWCA 106

No judgment structure available for this case.

CITATION:
COMMONWEALTH OF AUSTRALIA v STANKOWSKI [2005] NSWCA 106

HEARING DATE(S):
1 February 2005, 2 February 2005, 3 February 2005

JUDGMENT DATE:

13 April 2005

JUDGMENT OF:
Sheller JA at 1; Hodgson JA at 142; Bryson JA at 153

DECISION:
1 Appeal allowed; 2 Set aside the verdict and judgment for the plaintiff in the sum of $377,851.14 and in lieu thereof order that there be a verdict and judgment for the plaintiff in the sum of $369,956.90; 3 Otherwise confirm the orders of O'Keefe J in relation to the payment of costs of the trial and interest on costs; 4 The appellant to pay the respondent's costs of the appeal; 5 Cross-appeal dismissed with costs.

CATCHWORDS:
Negligence - post traumatic stress disorder - whether trial Judge failed to use or palpably misused his advantage - whether findings were inconsistent with facts incontrovertibly established by the evidence or which were glaringly improbable - Evidence - expert opinion evidence - whether histories assumed by experts must be sufficiently like those established to render the opinion of the expert of any value - Damages - whether general damages manifestly excessive - damages for loss of chance - duplication of damages - Procedure - discharge of jury - whether apprehended bias - whether procedural unfairness suffered - Costs - interest on costs - interest on costs to accrue from 21 days of the filing or lodgement for assessment by the plaintiff of the bill of costs - whether award permitted by section 95(3) of the Supreme Court Act 1970.

LEGISLATION CITED:
Evidence Act 1995
Legal Profession Act 1987
Migration Act 1958

CASES CITED:
Brittain v The Commonwealth of Australia [2004] NSWCA 83
Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638
Minister Administering the Environmental Planning qnd Assessment Act 1979 v Carson (1994) 35 NSWLR 342
Minister for Immigration & Multicultural Affairs v Jia Legeng (2001) 205 CLR 507
Norris v Blake (No 2) (1997) 41 NSWLR 49
Paric v John Holland (Constructions) Pty Limited (1985) 59 ALJR 844
Re Bank Employees Union; ex parte Citicorp Australia Ltd (1989) 167 CLR 513
SBBA v Minister for Immigration & Multicultural & Indigenous Affairs (2003) FCAFC 90
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (1999) 73 ALJR 306
Todorovic v Waller (1981) 150 CLR 402
Webb v The Queen (1994) 181 CLR 41

PARTIES:
Commonwealth of Australia - Appellant
Stephen Stankowski - Respondent

FILE NUMBER(S):
CA 40304/04

COUNSEL:
R J Burbidge QC/G T Johnston - Appellant
A G Melick SC/K Sant - Respondent

SOLICITORS:
Australian Government Solicitor - Appellant
James Taylor & Co - Respondent

LOWER COURT JURISDICTION:
Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S):
21240/95

LOWER COURT JUDICIAL OFFICER:
O'Keefe J

CA 40304/04
SC 21240/95
SHELLER JA
HODGSON JA
BRYSON JA

COMMONWEALTH OF AUSTRALIA v STANKOWSKI

This appeal is from a judgment of 22 March 2004, whereby the trial Judge held that as result of the negligence of the Commonwealth in relation to the collision of the HMAS Voyager and the HMAS Melbourne on 10 February 1964, Mr Stankowski, a sailor on board the HMAS Melbourne at that time, suffered post traumatic stress disorder (PTSD).

During the course of the trial, the trial Judge discharged the jury on the ground of apprehended bias after the jury posed a number of questions to the trial Judge, which included, relevantly, “is Mr Stankowski an Australian citizen.” After discharging the jury the trial continued before the trial Judge sitting alone.

Both parties adduced evidence from medical expert witnesses. The evidence given by Mr Stankowski at trial was different in some respects from the history that was given by Mr Stankowski to the medical witnesses. In awarding Mr Stankowski damages, the trial Judge accepted the opinions expressed by Mr Stankowski’s medical witnesses.

The issues for determination include:

(i) whether the jury should have been discharged and whether the Commonwealth suffered any procedural unfairness as a result of the discharge;

(ii) whether the trial Judge failed to take into account relevant evidence, failed to use, or palpably misused his advantage, or acted on evidence that was inconsistent with facts incontrovertibly established by the evidence, or which was glaringly improbable;

(iii) whether the award of general damages was manifestly excessive;

(iv) whether there was any proper basis for awarding damages for the loss of chance of becoming entitled to a pension and whether the award of damages involved some duplication; and

(v) whether the award of interest on costs was correctly assessed to accrue from 21 days of the filing or lodgement for assessment by Mr Stankowski of his bill of costs.

Held in relation to the discharge of the jury:

Per Sheller JA (Hodgson and Bryson JJA agreeing):

1. The jury should not have been discharged. The question as to Mr Stankowski’s citizenship could at most be interpreted as suggesting that whether or not Mr Stankowski was an Australian citizen was a relevant concern to the jury. The trial Judge gave the correct direction, namely that the question was irrelevant. The jury had been told by Mr Stankowski that he was an Australian citizen. There was no reason to assume that the jury would not have abided by the trial Judge’s direction or to assume that the fair minded and informed member of the public might have some doubt about that.

2. It is always open to counsel to put to a jury that particular matters have not been put to the plaintiff or a witness in cross-examination and to rely upon that failure in the same way that it would be relied upon in a hearing before a judge alone. There was no ground for suggesting that in making the application Mr Stankowski was forum shopping. No substantial wrong or miscarriage of justice was occasioned by the discharge of the jury and the continuance of the trial before judge alone.

Held in relation to the trial Judge’s factual findings:

Per Sheller JA (Bryson JA agreeing):

It is not for the Court of Appeal to gainsay the trial judge’s acceptance of the opinions of the medical witnesses for the plaintiff by attempting a diagnosis of its own. The trial judge did not fail to use or palpably misuse his advantage, nor did he act on evidence that was inconsistent with facts incontrovertibly established by the evidence or which was glaringly improbable in reaching the factual conclusions which he did.

Per Hodgson JA:

1. When considering the Commonwealth’s complaint in relation to the trial Judge accepting the evidence of Mr Stankowski’s medical opinions based on inaccuracies, it is pertinent to have regard to the extent to which the evidence and submissions raised issues that called for explicit discussion. In circumstances where the appropriate question was not squarely put to Mr Stankowski in cross-examination and where there was unchallenged evidence upon which the trial Judge could rely, the trial Judge did not err in his assessment of the credibility of the respondent’s evidence.

2. In relation to the differences between the histories relied on by the Commonwealth’s experts and the facts established, the relevant principle is that histories assumed by experts must be “sufficiently like” those established “to render the opinion of the expert of any value”. Since this issue was exhaustively explored in cross-examination without causing the relevant experts to resile from their opinions, the trial Judge did not need to give more specific attention it.

Paric v John Holland (Constructions) Pty Limited

Held in relation to general damages:

Per Sheller JA:

In relation to the Commonwealth’s claim that the amount of general damages is excessive, there was no exact measure of this and no precise error of principle was suggested. While generous, the award of general damages should not be interfered with.

Per Hodgson JA (otherwise agreeing with Sheller JA):

It is not necessary to express a view as to whether the assessment of general damages was generous or moderate: it suffices to say it was not outside the available range.

Per Bryson JA (otherwise agreeing with Sheller JA);

It is possible that, if damages were assessed again, the award for general damages might be exceeded. Such a possibility is sufficiently recognizable to weigh as a factor against granting a new trial on the application of the Commonwealth.

Held in relation to damages for the loss of chance of Navy Pension:

Per Sheller JA (Hodgson and Bryson JJAs agreeing):

1. In relation to the award of damages for loss of chance of a navy pension, there is no difficulty in accepting that there was a chance that, but for the accident, the plaintiff would have re-enlisted and, having re-enlisted, remained in the service until the right to the pension accrued. Further, had Mr Stankowski re-enlisted there was a good chance that he would remain until he qualified for the pension and the estimate of this chance as being 25% was within the appropriate range. For like reason, the claim in the cross-appeal for a higher percentage is rejected.

2. The trial Judge’s calculation of the value of the lost pension right must be moderated to correct the double counting of the cost of psychiatric care.

Held in relation to interest on costs:

Per Sheller JA (Hodgson and Bryson JJAs agreeing):

In awarding interest on costs to accrue from 21 days of the filing or lodgement for assessment by the plaintiff of the bill of costs, the trial Judge appropriately took account of the length of the proceedings and the amount the plaintiff would be out of pocket until such time as the costs were assessed and paid. Such an award was within power; see s95(3) of the Supreme Court Act 1970.

Legislation cited:

Evidence Act

1995

Legal Profession Act

1987

Migration Act

1958

Cases cited:

[2004] NSWCA 83

(1999) 47 NSWLR 473

(2001) 52 NSWLR 705

(1990) 169 CLR 638

(1994) 35 NSWLR 342

(2001) 205 CLR 507

(1997) 41 NSWLR 49

(1985) 59 ALJR 844

(1989) 167 CLR 513

(2003) FCAFC 90

(1999) 73 ALJR 306

(1981) 150 CLR 402

(1994) 181 CLR 41

ORDERS

1. Appeal allowed;

2. Set aside the verdict and judgment for the plaintiff in the sum of $377,851.14 and in lieu thereof order that there be a verdict and judgment for the plaintiff in the sum of $369,956.90;

3. Otherwise confirm the orders of O’Keefe J in relation to the payment of costs of the trial and interest on costs;

4. The appellant to pay the respondent’s costs of the appeal;

5. Cross-appeal dismissed with costs.

**********

CA 40304/04
SC 21240/95
SHELLER JA
HODGSON JA
BRYSON JA

Wednesday, 13 April 2005

COMMONWEALTH OF AUSTRALIA v STANKOWSKI

Judgment

1 SHELLER JA:

Introduction

Supreme Court Rules

2 The hearing of the proceedings began on 29 September 2003 before O’Keefe J and a jury of four. On 7 October 2003, the fifth day of the hearing, O’Keefe J discharged the jury after his Honour received a note from the jury on 1 October 2003 asking three questions. His Honour held that in the circumstances the apprehension by the plaintiff that the jury, or at least one member of the jury, might not bring an impartial and unprejudiced mind to the resolution of the case was not unreasonable. On 10 October 2003, O’Keefe J ordered that the trial continue before him sitting alone. After written and oral submissions, his Honour reserved his decision, which he gave on 22 March 2004.

3 His Honour found for the plaintiff and awarded damages as follows:

“(i) $239,437.50 for general damages and interest on the component relating to the past;

(ii) $7,500 to cover the cost of future psychiatric consultations;

(iii) $12,500 to cover the cost of future medication;

(iv) $56,250 in respect of the lost chance of rejoining the Navy in 1981;

(v) $62,163.64 as interest on the amount referred to in (iv) above.

4 On the same day his Honour ordered the defendant to pay the plaintiff’s costs on an indemnity basis between 28 January 2000, when the plaintiff made a formal offer to settle the proceedings on the basis that the defendant pay $200,000 plus party/party costs which the defendant did not accept, and 18 December 2002, the day before the plaintiff made a further offer of compromise in accordance with the Supreme Court Rules to settle the proceedings on the basis the defendant pay $450,000 plus party/party costs which the defendant did not accept, and from 19 September 2003, two days after the plaintiff wrote a Calderbank offer letter to the defendant offering to settle the proceedings for the sum of $225,000 plus party/party costs, to date, and ordered the defendant to pay interest on the amount of the costs assessed to be paid by it, such interest to accrue as from 21 days of the day of filing or lodgement for assessment by the plaintiff of its bill of costs.

5 The defendant appealed from O’Keefe J’s decisions on the following grounds:

“1. His Honour erred by discharging the jury and proceeding to conduct the trial before judge (himself) alone:

(a) apprehended bias was not ‘firmly established’;

(b) it was not established that there was reasonable basis to apprehend that the jury had prejudged the matter and had closed mind to argument or evidence in support of a contrary conclusion;

(c) nothing had occurred that could not be dealt with by the direction already given to the jury, alternatively, by further direction to the jury;

(d) his Honour erred in principle by not appreciating any or all of (a) – (c);

(e) no question of balance of convenience arose, but, if it did, the balance of convenience was in favour of continuing with the jury, as were the interests of justice;

(f) alternatively, another jury ought to have been empanelled and the trial should have proceeded before it.

2. His Honour’s decision was vitiated by procedural unfairness.

3. His Honour failed to determine the Commonwealth’s case upon a consideration of the real strength of the evidence upon which it relied. His Honour did not deal with much of what was submitted by the Commonwealth.

4. His Honour failed to use, or palpably misused his advantage, or acted on evidence that was inconsistent with facts incontrovertibly established by the evidence, or which was glaringly improbable.

…

6. As his Honour’s acceptance that the plaintiff had suffered, and continued to suffer PTSD, was vitiated by error, his Honour’s award of $150,000 general damages was excessive and there was no proper basis for his award of damages for future psychiatric consultations and future medication.

7. No damages ought to have been awarded for loss of chance of a pension. In specifically awarding damages for the alleged loss chance of a pension, his Honour:

(a) applied the wrong test in so far as he addressed the chance of the plaintiff rejoining the Royal Australian Navy (RAN) in 1973, rather than the chance of him doing that and remaining until the completion of the further term of service required to qualify for a pension;

(b) ignored evidence from the plaintiff and Mrs Stankowski to the effect that it was not intended that the plaintiff rejoin the RAN;

(c) erred in allowing any amount when the plaintiff had failed to establish that the value of any lost chance of a pension exceeded any amount by which his actual earnings outside the Navy between 1973 and 1981 exceeding what he would have earned in the Navy during that period had he continued to serve;

(d) ignored that the Cumpston Sargeant Truslove report dated 6 October 2003, upon which he relied for his base figure of $298,682 (rounded up by his Honour to $300,000) included an amount of $17,839 for future psychiatric care (Ex N, page);

(e) erred in failing to take into account that the date on which the Plaintiff would become entitled to a pension was 1984 not 1981.

…

9. His Honour also erred in awarding interest on costs assessed to accrue from 21 days of the filing or lodgement for assessment by the Plaintiff of its Bill of Costs.”

6 The plaintiff cross-appealed on the ground that the trial Judge erred by assessing the chance that the respondent would have re-joined the Navy in 1973 at only 25 per cent.

Factual summary

7 The plaintiff enlisted in the Navy in 1961 for 12 years and, after serving in various other RAN vessels, was posted to the Melbourne on 28 December 1962. At the time of the collision on 10 February 1964 the Melbourne and the Voyager were engaged in night flying exercises with other vessels. As part of those exercises it was necessary for the Voyager to change position from the starboard to the port side of Melbourne. For reasons never adequately explained in subsequent naval enquiries and two Royal Commissions, the Voyager accelerated and cut sharply across the bows of the Melbourne. The Melbourne was proceeding at 22 knots.

8 The bow of the Melbourne struck the Voyager at the after end of her bridge at a time when she was almost at right angles to the Melbourne. The force of the impact heeled the Voyager sharply onto her starboard side. Debris from the Voyager was thrown up onto the Melbourne’s flight deck. High pressure, steam and black smoke cascaded from one of the Voyager’s ruptured boilers. The momentum of the Melbourne, a vessel of 16,000 tons standard, 19,950 tons deep load, pushed the Voyager, a vessel of approximately 3,000 tons, bodily through the water until the Voyager broke in two. Her bow section then passed down the port side of the Melbourne and the stern section down the starboard side. The bow section of the Voyager turned over on its side off the port quarter of the Melbourne and sank about 10 minutes later taking down with it a large number of the Voyager’s crew.

9 The Voyager’s stern section, with the stern facing aft scraped slowly down the Melbourne’s starboard side, emitting quantities of steam and black smoke. The Melbourne’s engines were reversed and the vessel was brought to rest with the Voyager’s stern section some 600 feet off Melbourne’s stern. Subsequently the vessels drifted apart to a distance of approximately 1000 yards. A little later the Melbourne was moved away to avoid a second collision. The stern section of the Voyager sank at 18 minutes after midnight on 12 February 1964.

10 Sailors from the stern section of the Voyager leapt into the water in which there was a deal of debris and oil. Some were able to get onto life rafts. The survivors were spread over an area of up to half a mile around the Voyager and there were bodies of dead sailors amongst the living. Initially the sea was calm but there was a four to five foot swell that made it difficult for rescue boats launched from the Melbourne. Later the weather became a cause for concern with a gale warning being issued for the Bass Strait area.

11 Orders were given for accommodation ladders, drifter ladders and scrambling nets to be put over the side of the Melbourne to facilitate the taking on board of survivors. Rescue operations by the sailors of the Melbourne proceeded under the command of individual officers. Helicopters arrived in the area, but darkness and other factors prevented more than two of the helicopters from operating safely. A rescue was effected by one helicopter, but in the main the survivors in the water were not anxious to be winched up from the water. Most of the survivors were picked up by boats that had been launched from the Melbourne.

12 The rescue operations continued for some time and just before 3 am the Melbourne began to leave the area, slowly, because of the extensive damage that had been occasioned to its bows. She arrived back in Sydney early on the morning of 12 February 1964, berthing at Garden Island.

13 The plaintiff did not see the collision. When it occurred, he was below decks. However, he claimed to have seen the aftermath of the collision and at least part of the rescue operations.

Findings

14 According to O’Keefe J’s findings, at the time of the collision the plaintiff was in the shower five decks down into the body of the ship. The plaintiff gave evidence describing the crash, the lights going out in the bathroom and he and others going up a hatchway on to the mess deck where he quickly donned a pair of overalls and a pair of sandals before going to his muster point one deck up from where he had been showering. He said that “curiosity got the better of me and I went on the upper deck to have a look”. He said that he saw the back half of the Voyager still with lights on and with steam coming out of it. The events described accorded with the description included in the official report prepared by Captain Robertson RAN, the captain of the Melbourne. The plaintiff said that he saw men jumping into the water and boats milling around the back of the Voyager picking up the survivors. He observed large cargo nets that had been rigged over the side of the Melbourne, alongside which the boats that were bringing the survivors, attempted to pull. The survivors were helped up the nets by members of the crew of the Melbourne including the plaintiff. He said that the survivors were “very dirty, very stunned, shaking and, yeah, their eyes just looked dead”. O’Keefe J said that the evidence revealed that the plaintiff was not the only one to observe this. His reaction to what he saw when engaged in this task was that he felt “terrible”. The official reports indicated that some of the survivors appeared too shocked or too injured to swim when they were rescued. Some were bleeding, some were stretcher cases, and some were vomiting. Although the plaintiff did not give chapter and verse concerning this, the official record shows that the bringing of survivors aboard the Melbourne was a very “impactive” event. O’Keefe J observed that the effect which the plaintiff asserted it had on him at the time was not only understandable but was something that one might well expect.

15 Later that night the plaintiff was directed to help clean up the survivors by wiping the oil out of their faces and out of their eyes. When engaged in these various activities he said that he had particular concern in that he thought “we might be next”, and was very concerned for the safety of one of his mates named Nick. O’Keefe J said that it was apparent from the description of the events around the Melbourne following the collision that there was a lot of lighting, probably search lights from the Melbourne, lights from the vessels that had been launched to rescue survivors and, a little later, from the helicopters. The plaintiff said that he was observing the stern section of the Voyager when the lights on it began to dim, the steam stopped gushing out and it slowly turned stern-up and sank to the bottom.

16 The Melbourne set out for Sydney at approximately 3 am on 11 February at a very slow speed, described as slow ahead. At a later time the speed was increased to “revolutions for 8 knots” but this produced at best 6.5 knots through the water and the weather and wind conditions slowed the Melbourne down even further, so that its best speed was in the order of 4.5 knots. It took over 24 hours for the vessel to reach Sydney. At that time of year it was getting light at 4.26 am, ie even before sunrise at 5.25 am.

17 According to Captain Robertson’s report, which was dated 19 February 1964, at about 9 am on Tuesday, 11 February, in the course of the voyage to Sydney, Captain Robertson addressed the ship’s company over the main broadcast. Later in the day, after directions regarding communications with the press had been received, Captain Robertson gave the ship’s company some advice on this subject and asked that whatever they may say to persistent reporters they should not quote his account given to them earlier that day. Captain Robertson said in his report that so far as he was aware this confidence had been respected by both the Melbourne’s ship’s company and the survivors from the Voyager who were on board at the time.

18 The plaintiff said that when he came ashore he and his mates took to the bottle. The feelings experienced were exacerbated when, late on his first night ashore, he was called a murderer by some civilians in a hotel where he was drinking. Drinking to excess became a common occurrence for him after the collision. He would drink until he had to be “carried back on board or stagger back on board”. He said that he had not engaged in behaviour of that kind before the collision. Even after he left the Navy in 1973 he persisted with excessive drinking. At one stage, in about 1985, this was sufficiently bad to put his employment in jeopardy. As a consequence he moderated his intake of alcohol.

19 The plaintiff remained on board the Melbourne until March 1965. He said that he did not feel comfortable living below decks and asked to be transferred closer to the weather decks. His next posting was to Manus Island where he was watch keeper of the powerhouse. The atmosphere of the tropical island suited him better than being confined below decks. He found the atmosphere on Manus Island “very unwinding, very relaxing”. He continued to drink more than he should, but slept well, at least in the early part of his stay, in a bunk near to a door with big louvre windows. The room did not have any doors and was very open. However, while on Manus Island he claimed to have had his first nightmare about events surrounding the sinking of the Voyager.

20 This occurred in the latter part of his posting to Manus Island. He described it as “very nasty”, and although he had others, it was the first nightmare that shook him most. He described the nightmares as involving him and a bunch of other men “trapped in a mess in a sinking ship and going down in very, very black water”. The evidence indicated, according to O’Keefe J, that once he had experienced such nightmares they were recurrent. O’Keefe J said:

“26 … He gave a history of recurrent nightmares to Dr Holwill. Dr Holwill was a consulting psychiatrist who spent some time as a psychiatrist at the Repatriation General Hospital at Heidelberg, Victoria. He had made a particular study of veterans and, in company with a Dr Kitson, had undertaken a study to establish a formal treatment programme for veterans with Post Traumatic Stress Disorder (PTSD). The plaintiff also gave a history of nightmares to another psychiatrist, Professor McFarlane. One of these was that he was drowning in a black sea. Another was that he saw himself hanging over boom nets with the people looking up at him turning into skeletons with their flesh falling from their bones. Outside the context of litigation he told Dr Robert Black, to whom he had been referred by his General Practitioner, of dreams involving him drowning in a black sea – nightmares that Dr Black thought would probably never leave him. This is significant because in my opinion it indicates that not only had the plaintiff complained to his General Practitioner of problems that had necessitated reference for treatment, but it also suggests that nightmares may well have been discussed with his General Practitioner, quite outside the context of litigation.”

21 In May 1972 the plaintiff married. His wife, Vera Stankowski, who gave evidence, was a bank officer who first met the plaintiff about six years after the collision. Mrs Stankowski said that the plaintiff had been referred to a PTSD programme after which and with the benefit of anti-stress medication from his local general practitioner he had become a different person to live with having been moody prior to that time. She gave evidence of nightmares experienced by her husband. She said he would wake up with a gasp, get up, walk about and look out the window. When she would ask him what the problem was “he’d just say a nightmare and he wouldn’t say any more about it.”

22 O’Keefe J said:

“29 Changes in the plaintiff that occurred after the collision were noted by people other than the plaintiff and his wife. Mrs Peach, who first came to know the plaintiff in 1961, knew him as a very happy, cheerful type of person who would socialise and sometimes have a drink but never a great amount. After the collision he was depressed and would just sit very quietly. She also noticed “a definite difference in him” and that he drank a lot more alcohol than he had previously. This change was observed by her from the time she first saw him after he had returned to Sydney following the collision and was on furlough. This continued up to the time she and her husband moved from suburban Adelaide to Ceduna, which is in the country. She stated:

‘His character had changed. It definitely had changed. He wasn’t the happy-go-lucky type of lad that he used to be.’

30 The cross examination of Mrs Peach was to the effect that sailors had ‘a significant tradition’ of drinking when they came ashore and that she had seen many of them ‘pretty tipsy’. Mrs Peach said that this was not always the case, although it was true of some. The cross examination did not in any way seek to undercut her evidence about the change in the plaintiff following the sinking of the Voyager. There is no reason based on the cross examination or on my impression of her in the witness box to treat her other than as a witness of truth. I accept her evidence.

31 Another witness who spoke about the change in the plaintiff following the collision was Mr Neil Windle. He had served with the plaintiff in the Royal Australian Navy. They fraternised in the course of their work and socially and were both transferred to Melbourne at about the same time. Mr Windle was on board Melbourne at the time of the collision. He described the plaintiff as ‘outgoing, extroverted … friendly’ prior to the collision. By comparison he said that after the collision he recalled the plaintiff when he went ashore ‘getting completely drunk’. What is more his smoking increased to the extent of posing an annoyance for Mr Windle. Several complaints by Mr Windle urging the plaintiff to cut down on his smoking were to no avail.

32 Mr Windle described his observation of the plaintiff following the collision as follows:

‘There was a visible change in his character. He became moody and short tempered. In fact, he did get in trouble several times for his temper and trouble. He was a moody person and still was a drinker... His drinking had increased and I know that because when he came back drunk to get in his bunk he had to stand on my bunk to use it as a platform to get in, and he used it as a springboard so I knew every time he came back drunk.

Q. How often did this occur? A. Every time he went ashore.’

33 From the foregoing it can be seen that there was evidence from several sources confirming the change in the plaintiff following the collision. There is also evidence confirmatory of the fact that he had recurrent nightmares that had extended over a very, very long period. I am satisfied that from a time very shortly after the collision the plaintiff underwent a change. He drank to excess, whereas before he had been a very moderate drinker. He smoked excessively, whereas before he had not. He became depressed, whereas before he has been happy, friendly and outgoing. I am further satisfied that from the time he was at Manus Island he experienced nightmares that were frequent, persistent and redolent of the events surrounding the sinking of Voyager by Melbourne on 10 February 1964.”

23 The PTSD programme in which the plaintiff participated followed an examination, required by the Commonwealth, in October 1998 by Dr Phillips. Dr Phillips, whose report was not admitted into evidence, apparently diagnosed the plaintiff as suffering from PTSD. In about October 1999 the condition of the plaintiff was reported on by Dr Linda McCarthy, a senior staff specialist at the Repatriation General Hospital, Daw Park, a teaching hospital at Flinders University, who expressed the opinion that according to DSM IV (Diagnostic and Statistical Manual of Mental Disorders, 4th ed, text revision) criteria, the plaintiff had a diagnosis of chronic PTSD the symptoms of which had worsened in the two previous years. Dr McCarthy thought that attending the PTSD course at the hospital would aid his treatment and recommended his attendance. The plaintiff was referred to a programme at the hospital which he attended between 8 November 1999 and 15 December 1999. The course was a full time course from 9 am to 5 pm, five days a week. The plaintiff responded favourably to the course and to a prescription for anti-stress medication for his depression and for sleeping problems. Two of the drugs nominated were Arima and Diazepam. Since about 1999 and over the time of the trial, the plaintiff had gradually been feeling better. He was, as Professor McFarlane testified, in partial remission.

The medical evidence

24 The principal medical evidence led by the plaintiff was given by Dr Holwill and Professor McFarlane and that led by the defendant by Dr Roldan and Dr Champion. At an early stage in the preparation of the case, the plaintiff’s solicitor referred him to a psychiatrist, Dr Wu. Dr Wu died before the hearing. The plaintiff saw Dr Wu in late 1995 in a motel room in Adelaide for about one hour. Dr Wu’s diagnosis of the plaintiff was not PTSD but rather a psychiatric or psychological condition described as dysthymic disorder. In Dr Wu’s opinion the trauma of the collision and subsequent experience within the Navy would have been sufficient to initiate and maintain this disorder.

25 O’Keefe J said:

“62 The principal contest in relation to the medical issued [sic] raised by the case was between Dr Holwill and Professor McFarlane on the one hand and Drs Roldan and Champion on the other. In large part the contest depended on the interpretation of the criteria for the diagnosis of PTSD that are included in the Diagnostic and Statistical Manual for [sic] Mental Disorders, fourth edition, that is generally known as DSM-IV and their application to the plaintiff’s condition and history. The DSM-IV was published by the American Psychiatric Association and became effective on 1 October 1996. It included what is described as ICD-9-CM. The DSM-IV, as published in 1996, has been the subject of revision in 2000. The ICD-9-CM is an equivalent of DSM-IV published as part of the World Health Organisation’s volume known as ‘The International Classification of Disease’. It includes a specific section on psychiatric disorders. A revision of that document, ICD-10, has been published. However the criteria in ICD-9 and ICD-10 are not precisely the same as those in DSM-IV. It is unnecessary to detail the differences between the two sets of standards, suffice it to say that both standards are empirical, should not be regarded in the same way as a statute, but should be interpreted and applied reasonably flexibly. One matter that should be perhaps adverted to is that ICD-10 places more emphasis on the objective circumstances of the event and in this sense differs from criterion A2 in DSM-IV. PTSD involves the development of certain symptoms following exposure to an extreme traumatic stressor involving direct, personal experience. The highest rates of it, ranging from between one third and more than one half of those exposed, are to be found amongst people involved in, inter alia, military combat situations. Such situations would be apt to include the collision between Voyager and Melbourne on 10 February 1964. PTSD can occur at any age and there may be a delay of months or even years before symptoms appear.

63 DSM-IV sets out diagnostic criteria that are grouped under six headings or criteria (A to F). Each of the criteria has various subheadings and each looks to compliance with all or one or more of the indicators referred to in respect of each criterion.”

26 It is useful at this point to set out the relevant parts of DSM IV. Under the heading “309.81 Posttraumatic Stress Disorder” appears the following:

“Diagnostic Features

The essential feature of Posttraumatic Stress Disorder is the development of characteristic symptoms following exposure to an extreme traumatic stressor involving direct personal experience of an event that involves actual or threatened death or serious injury, or other threat to one’s physical integrity; or witnessing an event that involves death, injury, or a threat to the physical integrity of another person; or learning about unexpected or violent death, serious harm, or threat of death or injury experienced by a family member or other close associate (Criterion A1). The person’s response to the event must involve intense fear, helplessness, or horror (or in children, the response must involve disorganized or agitated behaviour) (Criterion A2). The characteristic symptoms resulting from the exposure to the extreme trauma include persistent reexperiencing of the traumatic event (Criterion B), persistent avoidance of stimuli associated with the trauma and numbing of general responsiveness (Criterion C), and persistent symptoms of increased arousal (Criterion D). The full symptom picture must be present for more than 1 month (Criterion E), and the disturbance must cause clinically significant distress or impairment in social, occupational, or other important areas of functioning (Criterion F).”

27 The diagnostic criteria for 309.81 are as follows:

“A. The person has been exposed to a traumatic event in which both of the following were present:

(1) the person experienced, witnessed, or was confronted with an event or events that involved actual or threatened death or serious injury, or a threat to the physical integrity of self or others

Note:

B. The traumatic event is persistently reexperienced in one (or more) of the following ways:

Note:

(4) intense psychological distress at exposure to internal or external cues that symbolize or resemble an aspect of the traumatic event

(5) physiological reactivity on exposure to internal or external cues that symbolize or resemble an aspect of the traumatic event.

C. Persistent avoidance of stimuli associated with the trauma and numbing of general responsiveness (not present before the trauma), as indicated by three (or more) of the following:

(1) efforts to avoid thoughts, feelings, or conversations associated with the trauma

(2) efforts to avoid activities, places, or people that arouse recollections of the trauma

(3) inability to recall an important aspect of the trauma

(4) markedly diminished interest or participation in significant activities

(5) feeling of detachment or estrangement from others

(6) restricted range of affect (eg, unable to have loving feelings)

(7) sense of a foreshortened future (eg, does not expect to have a career, marriage, children, or a normal life span).

D. Persistent symptoms of increased arousal (not present before the trauma), as indicated by two (or more) of the following:

(1) difficulty falling or staying asleep

(2) irritability or outbursts of anger

(3) difficulty concentrating

(4) hypervigilance

(5) exaggerated startle response.

E. Duration of the disturbance (symptoms in Criteria B, C, and D) is more than 1 month.

F. The disturbance causes clinical significant distress or impairment in social, occupational, or other important areas of functioning.

Specify if :

Acute:

Chronic:

Specify if:

With Delayed Onset:

28 The trial Judge said this about Dr Holwill:

“64 Dr Holwill is a consulting psychiatrist. He had held staff positions at the Royal Melbourne Hospital, been senior lecturer in psychiatry at the University of Melbourne and was later responsible for the conduct of the Affective Disorders and Lithium Clinic. In the course of his career he was transferred to the Repatriation General Hospital, Heidelberg, where he was senior consultant. In 1992 he went into private practice and in that practice has been looking after a large number of veterans. He has published a number of learned papers and, together with another specialist, he undertook a study of morbidity rates (psychological illness) amongst veterans. He was clearly a psychiatrist of the highest qualifications and experience. He was of the firm opinion that the plaintiff was suffering from PTSD that was chronic and moderately severe. He expressed the view that:

‘The development of Mr Stankowski’s chronic psychiatric condition is directly attributable to his experiences aboard HMAS Melbourne at the time of the collision with HMAS Voyager and to no other significant factors. It would be a minor contribution to his overall level of Post Traumatic Stress Disorder by his experiences whilst serving in South Vietnam.’

and

‘Mr Stankowski’s quality of life has been seriously, adversely affected by experiences at the time of the collision, as has the quality of life of his family. It is unlikely that there will be any further significant improvement in his condition with the passage of time or ongoing treatment.’

65 In the course of his evidence Dr Holwill dealt with the phenomenon that people such as the plaintiff:

‘… typically try and deny their symptoms to themselves. They often feel ashamed of having symptoms and are very reluctant to admit to others that they have symptoms, even to medical people.’

66 He was then asked:

‘Q. Doctor, is there any medical hypothesis or theory as to why it is that police officers or former police officers or members of the armed forces or ex members of the armed forces should engage in the sort of denial you’ve spoken of?

A. Well, I mean, first of all it is a clinically observed fact that they do. The explanation probably lies in the sort of people that they are and the sort of service that they have decided to undertake, whether in the armed services or in the police force, and they typically have a belief that they should be strong, that they should serve their community or their country, that they should be brave and they should be able to tolerate these things on the basis that they are trained for it. So when they develop symptoms they often try and hide it from their colleagues or comrades fearing that they will be perceived as weak and they feel shame about the symptoms and try and deny it to themselves and see themselves as a failure.’

Evidence Act 1995

29 His Honour went on to say that Professor McFarlane was a mainstay in the plaintiff’s case, a person who possessed formidable qualifications and experience. His Honour said:

Treatment Planning for Trauma Survivors with PTSD

70 In addition, Professor McFarlane sees and treats patients, particularly in the field of trauma related psychological disabilities. He sees and has seen many patients suffering from PTSD. He is a medical professional with outstanding qualifications and experience both national and international. …”

30 In O’Keefe J’s opinion, Professor McFarlane was a most impressive witness. His Honour said that it was no exaggeration to say that he was, in his Honour’s experience, one of the best equipped and impressive medical witnesses that he had seen. The trial Judge continued:

“71 In the course of his evidence Professor McFarlane analysed each of the criteria included in DSM-IV for the diagnosis of PTSD, insofar as they related to the plaintiff. He said that certain of the criteria were self evident, some were critical and some involved clinical judgment. He expressed the opinion that criteria A1 and 2 had been met. Both of these were specified as requirements for meeting DSM-IV criteria for PTSD. He further expressed the opinion that criteria B1, 2, and 5 had also been met. Dr Roldan, for the defendant accepted that there was evidence establishing criteria B1, 2, 4 and 5. The DSM-IV requirements are that for [sic] only one of these matters needed to be met. He said that in respect of criterion C, factors 1, 2 and 5 had been met. DSM-IV required at least three of the factors under this heading to be present. In addition there was strong evidence of criterion C4. Dr Roldan agreed that criteria C2 and 4 had been established and that the history he obtained went a long way to satisfying criterion C5. Professor McFarlane testified that the plaintiff satisfied criteria D1, 2, 3 and 4. The defendant’s Dr Roldan agreed that there was evidence to satisfy criteria D2, 3 and 4. DSM-IV required the presence of only two (or more) of the factors listed under this heading. It was accepted that if the plaintiff’s symptoms commenced soon after the accident and have continued since, criterion E was met. Similarly it was not gainsaid that if the disturbance produced clinically significant distress or impairment of the kind that I have found, criterion F was met.”

31 Professor McFarlane was of the opinion that:

““Mr Stankowski has a post traumatic stress disorder that is in partial remission, following his involvement in the Repatriation Hospital program and the prescription of anti-depressant medication. In particular his avoidance symptoms, interpersonal withdrawal, irritability and mood have improved. Furthermore his alcohol abuse has very significantly decreased in recent times.”

32 O’Keefe J said:

“73 Professor McFarlane was cross-examined by senior counsel of long experience and acknowledged skill in the art of cross-examination. His cross-examination extended over the course of two full days. Various possible scenarios were put to him arising out of parts of histories given by the plaintiff either to medical practitioners or taken from various documents. The delay in the emergence of nightmares was also dealt with. The plaintiff’s drinking problems and possible alternative explanations for them were put to the Professor. The plaintiff’s ability to perform his naval duties, achieve promotion and hold down a responsible job at Moomba for any years were adverted to, as were many other matters too numerous to detail in these reasons. Reference was also made to various learned papers, of which Professor McFarlane demonstrated a knowledge, even without having the papers put before him. He further demonstrated his encyclopaedic knowledge of the subject and the literature relating to it. It is fair to say that virtually nothing that could have been put to Professor McFarlane was not put to him. It was a very searching, thorough cross-examination conducted with real skill. Various matters that were the subject of the cross-examination were suggested to be inconsistent with the diagnosis arrived at by Professor McFarlane. Professor McFarlane did not agree. He adhered to his opinion and, in the course of dealing with the various matters raised he not only dealt with them convincingly but further demonstrated the depth of his knowledge and experience of PTSD and associated mental disorders.”

33 His Honour next referred to the evidence of Dr Fernando Roldan, a consulting clinical psychologist and neuro psychologist, who saw the plaintiff in March and June 2002 and prepared a report dated 25 April 2003 in which he detailed the history taken from the plaintiff and the tests that he conducted. In the final analysis, Dr Roldan said:

In my opinion, the available objective evidence indicates that any psychological distress that Mr Stankowski may have experienced in relation to the accident did not result in the level, range and duration of psychological and behavioural disruption that is now claimed and if there was any such disruption that it is likely to have been very short lived. In my opinion, the evidence available to me suggests that Mr Stankowski is now engaging in a distorted and self-serving report of his history due to the potential for monetary compensation that such report carries with it.”

34 O’Keefe J, commenting on Dr Roldan’s opinion, said:

“77 From the foregoing it can be seen that Dr Roldan characterised the plaintiff as untruthful and as having embarked on a deliberate course of deception for the purposes of obtaining monetary compensation. That conclusion in part depended on the assessment of the plaintiff and his history by Dr Roldan. It is an assessment of the plaintiff and his truthfulness with which I have already disagreed. Moreover his conclusion does not in terms negate the existence of a psychological disturbance or its causal connection with the collision. In the very passages referred to … above, Dr Roldan accepts:

(i) that the plaintiff may have been distressed or upset by the events of 10 February 1964;

(ii) that the plaintiff may have experienced psychological and behavioural disruption as a result of the collision;

is likely to have been very short lived

78 The cross examination of Dr Roldan took him through each of the criteria in DSM-IV and related them to various paragraphs of the witnesses report in which he recorded various information given to him by the plaintiff. He accepted that criteria A1 and 2 had been met. Initially he did not agree that criterion A2 had been met, but a little later conceded that, if what the plaintiff had told him in answer to specific questions directed towards such criterion were to be accepted, then criterion A2 had been met. His problem with the meeting of the criterion was that he did not accept what the plaintiff said. In this regard it should be said that the factual findings are matters for the Court, not the expert witness. In rejecting parts of the history given by the plaintiff that were not obviously absurd, I am concerned that Dr Roldan may have strayed beyond his field of expertise. The same methodology was applied to the various other criteria in cross-examination, as a result of which Dr Roldan conceded that if the history given to him by the plaintiff were correct, then each of criteria B1, B2, B4, B5, C1, C2, C4, C5, C7, D2, D3, D4, E and F were met. The difference therefore between Dr Roldan on the one hand and Dr Holwill and Professor McFarlane on the other, was that the two last mentioned specialists formed their opinions on the basis of the history they were given, whereas Dr Roldan formed his opinion largely on the basis of the rejection of such history. The essence of the histories on which Dr Holwill and Professor McFarlane formed their opinions are in accordance with the essential facts that I have found; Dr Roldan’s relevant rejections are not.”

35 O’Keefe J next turned to the evidence of the defendant’s second medical witness, Dr J R Champion, who was a member of the Royal Australian and New Zealand College of Psychiatrists (1976). In 1972 to 1973 he was the Registrar at the Neuropsychiatric Institute and between 1976 and 1978 was the visiting psychiatrist to the Renal Unit at Sydney Hospital. Dr Champion had extensive experience in general psychiatry and deposed to a special interest in the area of post traumatic stress disorder and other manifestations of stress related psychopathology. His Honour said:

“80 Dr Champion reported that he had seen the plaintiff at his Mosman rooms on 7 March 2002. Although Dr Champion prepared six reports for the Australian Government Solicitor concerning the plaintiff, this was the only occasion that he saw the plaintiff. Dr Champion took a history from the plaintiff as to his personality and background. He noted his mien, reviewed a number of documents, referred to a number of older learned papers and expressed the view:

‘On the basis of the history he now gives as set out in his written statement it would seem likely that he may have suffered with a mild PTSD.’

‘not convinced… that the history he now gives and that present in his written statement, in terms of his emotional reactions and the behavioural changes claimed, can be relied upon as an accurate indication of the presence of that condition.’

‘I do not believe that Mr Stankowski has suffered with PTSD as a result of his experiences in the Melbourne/Voyager collision. I believe that Mr Stankowski has been currently focussed upon these experiences as an explanation for some of the difficulties he has experienced in relation to personality vulnerability, alcohol consumption and anxiety/depression.’ “

36 O’Keefe J considered there were difficulties standing in the way of accepting this conclusion which he described as follows:

“81 … The first is that it involves a rejection of the plaintiff’s history – a history that is substantially in accordance with the facts as I have found them. One example of this is the rapid onset of excessive consumption of alcohol; another is the change in his personality that came closely on the heels of the collision. A second difficulty is that a vulnerable personality may more readily be adversely affected psychologically by an event such as the collision. A third difficulty in the way of accepting the opinion proffered by Dr Champion is that the plaintiff experienced a partial remission in symptoms as a result of his attendance at the PTSD course conducted by the Commonwealth and taking the drugs that were prescribed for him. A fourth difficulty is that the methodology used by Dr Champion in eliciting the plaintiff’s history was open to criticism in that it was contrary to that utilised by every other expert called in the case, including Dr Roldan. A fifth difficulty arises out of the cross-examination of Dr Champion. In his cross examination he was taken through the histories given by the plaintiff and questioned as to whether or not they fulfilled various of the criteria. The upshot of this was that Dr Champion agreed that criteria A1, possibly A2, B4, B5, C2, C5, C6, D2, D3, D4, E and F were satisfied. Those matters of history which gave rise to this concession are supported by the findings of fact that I have made. In relation to criterion A2, Dr Champion’s concession was qualified on the basis that the material put to him went ‘some of the way’ towards the fulfilment of this criterion. He did not accept that criterion B2 had been satisfied. The view that he expressed in relation to criterion B2 had two bases. This was that he, ‘personally’ did not subscribe to the theory of symbolic transfer. The other depended on the interpretation of the criterion.

82 Whilst the concessions made by Dr Champion are valuable to the plaintiff’s case and ultimately supportive of the diagnosis of PTSD made by Dr Holwill and Professor McFarlane, they are not, perhaps, as important as they appear to have been to the parties during the course of the case. The cross-examination to elicit them was lengthy. However, as the first extract from the report of Dr Champion referred to in paragraph 80 above indicates, if the history given by the plaintiff as set out in Dr Champion’s report is accepted, then the plaintiff did suffer PTSD. Such history, as I have said, accords with the findings of fact that I have made. Furthermore the use of the adjective “mild” is not warranted. It is not in accordance with what the plaintiff experienced over many years, albeit that he is somewhat better since the PTSD course and appropriate pharmacotherapy.”

37 Having analysed the medical evidence in the way I have set out, O’Keefe J expressed himself satisfied that the plaintiff suffered from severe, chronic PTSD that was caused by his exposure to and involvement in the events surrounding the collision between the Melbourne and the Voyager on 10 February 1964. His Honour found that most of the effects of PTSD had been present from a time proximate to the collision and had resulted in a change of attitude to life, depression, excessive consumption of alcohol, difficulties with marital, family and other relationships and nightmares that had been recurrent since 1966. There were other less significant manifestations of PTSD referred to in the medical evidence from which the trial Judge accepted that the plaintiff had suffered. His Honour found that PTSD has had a significant adverse effect on the plaintiff’s life. Although he had improved somewhat since he attended the PTSD Clinic conducted by the Commonwealth and pharmacological intervention, he still suffered from symptoms. These included nightmares, which were unlikely ever to disappear. He would need drug therapy and psychiatric help in the future. On this aspect of the case, his Honour concluded:

“84 PTSD is a psychiatric disorder. The occurrence of psychiatric disorders of the same or cognate kind as a result of wartime trauma is well known. Going back to the 1860’s the effect of traumatic incidents in producing psychiatric disturbances was well known. Studies done in relation to World War I and World l [sic] War II veterans have demonstrated the causal relationship between involvement of service personnel in traumatic events and the development of psychiatric disorders. They have been variously described in everyday speech. A common description used following World War I was ‘shell shock’, no doubt related to the trench warfare experience of troops in Europe. A common description following the warfare in the jungles in which a large part of World War II was fought was ‘troppo’. According to Professor McFarlane, they are the same thing. Studies relating to Vietnam veterans have been undertaken with a similar outcome. The World Health Organisation’s publications of the late 1940’s and the early 1960’s recognise the problem. I have no doubt that it was not only foreseeable, but likely, that some of the sailors involved in the traumatic events of 10 February 1964 would suffer psychological injury, as the plaintiff did.

85 The plaintiff is entitled to damages.”

38 O’Keefe J went on to consider damages which he awarded as I have set out.

Appeal and cross-appeal

Discharge of the jury

39 After the Court adjourned on Wednesday, 1 October 2003 a note was received from the jury asking the following questions:

“Questions for his Honour 1/10/03:

1. Is S Stankowski an Aust citizen?

2. If S Stankowski doesn’t wear his medals because of his ‘condition’, what is his lapel badge?

3. Does S Stankowski attend RSLs and, if so, does he attend at night?

Signed Jury Foreman.”

40 At the beginning of proceedings on Thursday, 2 October 2003 these questions were brought to the attention of the parties and debate took place about the nature and extent of directions that should be given in relation to such questions. Particular emphasis was directed towards the first question. Mr Burbidge QC, who appeared for the defendant, agreed that the proper direction to the jury in relation to question 1 was that the matter was not a relevant consideration for them and stated he had no objection to the plaintiff giving evidence which dealt with questions 2 and 3. Mr Melick SC, who appeared for the plaintiff, said the jury was entitled to ask questions at any stage of the trial. As to question 1 he stated that he would rather it be asked and answered by the plaintiff. In the result, O’Keefe J gave the following directions:

“I have advised counsel that after we adjourned yesterday I received a note from your foreman and I have given copies of the note in typewritten form to counsel. As to the first question, namely is Mr Stankowski an Australian citizen, the first thing I would say to you is that is entirely irrelevant. In this country under our rule of law all persons who are in Australia are entitled to be treated in precisely the same way in relation to a claim such as the present. It is not a passport to consideration by a jury of a claim made by a plaintiff that that plaintiff is an Australian citizen. To take a contrary view may suggest bias, it may suggest prejudice, and neither of those factors has anything to do with your adjudication in this case.

Similarly, sympathy has nothing to do with your adjudication in this case. The role that you are performing as a jury is as judges of the fact and as judges of the fact you are required to be impartial and free from influences such as prejudice or favour; that is, adverse or in favour of a party, either party. Neutrality in judgment is of the essence. So the answer to the first question is simply not relevant.

Secondly, the answer on the evidence to date is we don’t know and absent there being evidence on a matter it is not a matter for speculation.

The answer to the third question, does Mr Stankowski attend RSLs and, if so, does he attend at night, is as follows. First, there is evidence about his joining the RSL and about his attendance or lack of attendance at the RSL. That’s the evidence and it is on the basis of that that you must judge the matter. To date no-one has asked Mr Stankowski whether he goes at night or not, and in cases such as we are engaged in at the present time it is the parties who present the case and the parties who test the case. The court is, in essence, in the hands of the parties. They control the litigation and so what evidence they adduce or don’t adduce is a matter for them and their professional judgment, but there isn’t any evidence about night time at the moment.

Gentlemen, is there anything further you wish me to add to those answers?

MELICK: No, your Honour.

HIS HONOUR: Mr Burbidge, anything you wish me to add to that?

BURBIDGE: No, your Honour.”

41 The plaintiff was re-sworn and gave the following evidence:

Q. Mr Stankowksi, are you an Australian citizen? A. Yes, sir.

Q. What is the lapel badge you are wearing? A. Blood donors.

Q. Do you attend any RSL clubs at night? A. No, sir.

MELICK: Thank you, your Honour.

HIS HONOUR: Do you have anything arising out of that?

BURBIDGE: No, thank you, your Honour.

HIS HONOUR: You may stand down, Mr Stankowski.”

42 The evidence continued after which the hearing was adjourned until Tuesday, 7 October 2003. On 7 October Mr Melick said he had instructions to ask for a discharge of the jury on the basis that the plaintiff was concerned about the nature of the question that was asked about his citizenship and this had caused him an apprehension of bias on the part of at least one member of the jury, unknown. He considered members of the jury might be biased against him because of his background and added as a rider to that independently that the question indicated that at least one member of the jury was considering matters irrelevant to the matters before them. Counsel made no complaint about the direction O’Keefe J had given to the jury on 2 October 2003.

43 Counsel for the defendant opposed the application to discharge the jury. In particular it was submitted that the matter could be dealt with by an appropriate direction. The defendant had no objection to the trial Judge so dealing with it, preferably in the course of summing up.

44 As already stated, on 7 October 2003 O’Keefe J gave judgment on the application for the jury to be discharged. His Honour said that the plaintiff was born in Germany just before the end of World War II and came to Australia when he was five years old. “His appearance could be viewed as Teutonic, and his manner is certainly such as could be considered somewhat abrupt, and such as might fit within a stereotype that coincided with his origin.” His Honour made no reference to evidence by the plaintiff given at the beginning of Mr Burbidge’s cross-examination on 29 September 2003 as follows:

“Q. Mr Stankowski, could I start with some understanding of your move to Australia. You told us that you were born in Germany in 1945? A. That’s correct, sir.

Q. Which of course was, as you would know, the last year of the Second World War?

HIS HONOUR: It was less than a month before the end of the war in Europe.

BURBIDGE: I didn’t look at the actual month but, with respect, yes.

HIS HONOUR: 20 April, I thought he said. The war in Europe ended 15 May 1945 as I recall.

BURBIDGE: Q. The question I ask you is this. You spent your early years, did you, in Germany? A. The first five years, yes, sir.

Q. Were you a German speaking family? A. No, sir.

Q. What language did you speak at home? A. Polish.”

45 For the reasons given in his judgment of 7 October 2003, O’Keefe J discharged the jury.

46 Webb v The Queen (1994) 181 CLR 41 concerned a jury trial of a man and woman charged with the murder of another man with whom they had been drinking. On the morning of the day the judge commenced his summing up, one of the jurors gave a bunch of flowers to the deceased’s fiancée’s mother at the courthouse with the request that it be given to the deceased’s mother. The juror was identified and apologised for her conduct. Counsel for each of the accused applied for the jury to be discharged. The trial judge asked the juror for an explanation of her conduct. She told the trial judge “I didn’t consider it of importance, I’m afraid I am an impulsive person.” (at 53). The trial judge accepted that the contact between the juror and the mother of the deceased’s fiancée was spontaneous. In dismissing the application his Honour stressed to the jury the need for them to have regard only to the evidence, which they were to consider in a dispassionate manner, putting aside all feelings of sympathy or emotion. By contrast, in the present case, O’Keefe J did not enquire from the foreman why the jury sought an answer to the first question. In Webb both accused were convicted. The convictions were upheld in the South Australian Court of Criminal Appeal.

47 Both accused were granted special leave to appeal to the High Court on the ground that the learned trial Judge ought to have discharged the jury. In their joint judgment, Mason CJ and McHugh J said at 46-47:

“In our opinion, the test that his Honour should have applied was whether, despite the warning that he proposed to give to the jury, the circumstances of the incident would still give a fair-minded and informed observer a reasonable apprehension of a lack of impartiality on the part of the juror.

When it is alleged that a judge has been or might be actuated by bias, this Court has held that the proper test is whether fair-minded people might reasonably apprehend or suspect that the judge has prejudged or might prejudge the case. … Although the role of the juror is not the same as that of the judge, a commissioner or a member of a quasi-judicial tribunal, we do not think that the difference between the role of the juror and the role of those persons warrants any different test for alleged bias.”

48 At 53 their Honours said:

“It follows that the test to be applied in this country for determining whether an irregular incident involving a juror warrants or warranted the discharge of the juror or, in some cases, the jury, is whether the incident is such that, notwithstanding the proposed or actual warning of the trial judge, it gives rise to a reasonable apprehension or suspicion on the part of a fair minded and informed member of the public that the juror or jury has not discharged or will not discharge its task impartially.”

49 At 53-4 their Honours pointed out that the decision of the judge in such a situation is a discretionary judgment in the sense that it involves a value judgment:

“Where no error of principle is involved, an appellate court is naturally slow to substitute its opinion for the trial judge’s opinion. The law reports contain many cases where the decision of the trial judge to continue a trial has been upheld, notwithstanding irregular incidents, … including conversations or contact between a juror and outsiders before deliberations have commenced.”

50 At 55 their Honours said:

“The incident indicated that the juror felt strongly for the plight of the mother. Her sympathy, manifested as it was by disobedience of the judge’s warning, raised a serious question as to her ability to consider the evidence dispassionately and impartially.”

51 Brennan J, who dissented, thought that the suspicion of unfairness was not wiped away by what happened or was said after the incident (page 60). At 68 Deane J, who also dissented on this ground of appeal, pointed out that although it is of fundamental importance that the parties to litigation and the general public have full confidence in the integrity, including the impartiality, of those entrusted with the administration of justice, the test is an objective one and the standard to be observed in its application is that of a hypothetical fair minded and informed lay observer. At 79 Deane J expressed his conclusion as unavoidable that a fair minded lay observer with knowledge of the material objective facts would be most likely to entertain a reasonable apprehension that the juror concerned would not approach the task of the determination of guilt or innocence either objectively or with an impartial and unprejudiced mind.

52 Toohey J at 88 said that when the correct test was applied, the charge of apparent bias in the case of the juror could not be sustained:

“There can be no reasonable apprehension of her actions being construed as bias against the appellants or either of them as distinct from sympathy for the mother of the deceased. While that sympathy was manifested in an unusual way, it remained to the fair minded observer a case of sympathy. Any dangers associated with it were readily capable of being avoided by the express directions the trial judge gave to the jury. And the juror’s own reaction, her apology and expression of concern, points to the likelihood that she, as well as the other jurors, would observe those directions.”

53 In support of its appeal against the discharge of the jury the appellant referred to the Full Federal Court in SBBA v Minister for Immigration & Multicultural & Indigenous Affairs (2003) FCAFC 90 at [15]. In a joint judgment the Full Court (Weinberg, Stone and Jacobson JJ) said:

Sun v Minister for Immigration and Ethnic Affairs

Attorney-General (NSW) v Quin

Minister for Immigration & Multicultural Affairs v Jia Legeng

54 In Jia Legeng the majority of the Full Federal Court had held that the Minister for Immigration and Multicultural Affairs had made a decision which was induced or affected by actual bias, being the ground of review specified in s476(1)(f) of the Migration Act 1958. However imputed bias must be “firmly established”. In the language of Kirby J in Jia Legeng at 549:

“It is not enough that the reasonable bystander has a vague sense of unease or disquiet.”

55 In this case each of the questions raised in the note to the trial Judge were answered. It was agreed that the only question likely to give rise to an apprehension of bias was the first. But at most that question could be interpreted as suggesting that whether or not the plaintiff was an Australian citizen was a relevant concern to the jury. O’Keefe J had given the correct direction, namely, that the question was irrelevant. The jury had been told by the plaintiff that he was an Australian citizen. With due respect, and bearing in mind the trial Judge’s direction to the jury, I cannot accept that a fair minded and informed member of the public might, in the circumstances, have had a reasonable apprehension that the jury might not discharge its task impartially. There was no reason to assume that the jury would not have abided by the trial Judge’s direction or to assume that the fair minded and informed member of the public might have some doubt about that. While O’Keefe J’s decision was one made in the exercise of his discretion, in my opinion that discretion miscarried and the jury should not have been discharged. However, the defendant does not argue that having discharged the jury, O’Keefe J had no power to order that the proceedings continue before him sitting alone.

Procedural unfairness

56 The grounds in support of the contention that he should not have ordered that the trial continue before himself alone were two; first, that the defendant was prejudiced because a substantial part of the evidence was given while the jury was hearing the case which meant that the witnesses were handled in a way differently from that which would have obtained if the judge had been sitting alone throughout the trial; secondly, that if this Court did not order a new trial it would be encouraging “forum shopping”. I should say immediately that in the present case there is nothing to support the view that the plaintiff was engaging in forum shopping which is, as I understand it in this context, meant to suggest that as the trial progressed the plaintiff or his advisers took the view that the plaintiff would be more likely to succeed before the judge sitting alone than before the jury. No doubt, once the plaintiff or his advisers apprehended bias, they realised that if the point were not taken immediately it would be lost and not open to be raised on appeal if, ultimately, the jury found a verdict for the defendant.

93 I award an amount of $12,500 in respect of the costs of future medication. In doing so I note that it has been conceded by the defendant through its counsel that in the event that the plaintiff is found to have compensable PTSD, he has no entitlement to government assistance for the cost of such medication.”

110 No submissions were put on behalf of the defendant to this Court challenging his Honour’s findings or the reasonableness of the amounts awarded. I will deal separately with the inclusion of an amount representing the cost of psychiatric care in the actuarial calculation of the loss of the chance of qualifying for a pension.

Loss of pension – Ground 7

111 The plaintiff claimed that, as a result of the psychiatric injury he sustained, he lost the value of the pension he would have received had he served twenty years in the Navy under the Defence Force Retirement Benefit Scheme (DFRBS) which was replaced in 1972 by the Defence Force Retirement and Death Benefits Scheme (DFRDBS). The plaintiff when he enlisted on 8 January 1961 was 15 years and 9 months old. His period of enlistment was for twelve years, that is until January 1973. He left the Navy at the end of this period of enlistment. He said in his evidence that before the collision he intended to remain in the Navy for the rest of his working life. Had he remained in the Navy for twenty years from the age of 18 (20 April 1963) the plaintiff would have been entitled to a Navy pension at least by 20 April 1983 or by January 1981 if he exercised the “buy back” entitlement whereunder after the introduction of the DFRDBS he elected to pay contributions for the service that occurred before he turned 18 so that his DFRDBS contributory service would have had a start date aligned with the start date of his joining the Navy; see exhibit M material supplied on 8 September 2003 by the Commonwealth Superannuation Administration (ComSuper). When the plaintiff was cross-examined about his claim to be compensated for the loss of his pension, he said that before the collision at the end of his twelve years of enlistment he “would probably have signed on” again. He intended to make the Navy his career. However, he said that after the collision he “would rather not go back to sea”. Had he signed on again he would have had to go back to sea.

112 O’Keefe J said:

“95 I have no doubt that at age 15 years and 9 months or even at 19 years of age, the plaintiff may have been quite determined to make the Navy his career. But attitudes change over time and the possibility that he may not have re-joined the Navy in 1973 must be regarded as real. On 27 May 1972, he married a lady he had known for approximately 18 months, during most of which time he had been at sea. Even after he was married he was at sea most of the time. The result was that he and his wife saw each other for two weeks when they were married, one weekend the following August and thereafter not until he actually got out of the Navy. This is a consideration that goes to the likelihood of a young man re-joining the Navy. However, whilst he may not have rejoined, many young men who have wives whom they seldom see because of sea duties, still join or rejoin the Navy. The plaintiff and his wife did not have their first child until August 1974, so there would have been no pressure to leave the Navy arising from such a consideration. Furthermore it is relevant to note that for 25 years he has worked at Moomba, spending two weeks in Moomba and two weeks at home. Notwithstanding this he and his wife are still together. Mrs Stankowski would appear to be a person who tolerates the absence of her husband.

96 I do not doubt the sincerity of the plaintiff in saying that he had intended to rejoin the Navy when his term of enlistment expired in 1973. Whether he would have done so is however, another matter. At this remove in time it is difficult to determine whether he would or would not have rejoined the Navy. However there is a significant prospect that he might have done so, i.e. that there was such a chance.

Malec v JC Hutton Pty Ltd

98 I am satisfied that there was a chance that the plaintiff would have rejoined the Navy in 1973 had he not suffered the adverse effects of the psychological disorder that resulted from his involvement in the collision between Voyager and Melbourne. That chance is certainly not speculative. It is however less than 50%. The assessment of the degree of probability of such an event occurring is a matter of judgment. I assess the chance that was lost at a degree of probability of 25%.”

113 Based on actuarial calculations prepared by Cumpston Sarjeant Truslove Pty Ltd, consulting actuaries, on 6 October 2003, which were not challenged, his Honour awarded the plaintiff $56,250 “in respect of the losses consequent upon the loss of the chance of rejoining the Navy in 1981 [sic]”. What O’Keefe J must have meant was rejoining the Navy in 1973 and continuing in service until 1981 having elected to pay contributions for his service back to the date of his enlistment in January 1961 (the buy back election).

114 The defendant’s submissions on appeal were substantially directed to the 25 per cent probability said not to take account of the probability that the plaintiff, even if he re-enlisted in 1973, would leave the Navy before the expiry of the twenty year period.

115 A conventional approach to a claim for the loss of the right to a pension as from a future retirement date is described by Gibbs CJ and Wilson J in Todorovic v Waller (1981) 150 CLR 402 at 426; compare per Murphy J at 454-5 and see Luntz, Assessment of Damages for Personal Injury and Death, 4th ed at 5.3.5. In Todorovic the pension payable on his retirement to the plaintiff, who had suffered personal injuries rendering him virtually unemployable before the age of thirty-five, was a percentage of his gross salary at retirement. The Court of Appeal, from which the appeal to the High Court was brought, assumed one of the several choices open to the plaintiff to enhance his pension entitlement, then determined what the plaintiff’s expectation of life would have been had he survived until the postulated date of retirement, worked out the figure he would have received had the pension been paid and after making a small deduction for what the plaintiff in fact received on retirement, made a percentage deduction for the vicissitudes of life, thus arriving at the amount of his loss. In that case it was unnecessary for the High Court to pass upon the appropriateness of that approach, though the High Court noted that the Court of Appeal had calculated the plaintiff’s expectation of life from the assumed date of retirement not from the date of trial.

116 In Norris v Blake (No 2) (1997) 41 NSWLR 49 at 67 Clarke JA (with whom Handley JA and I agreed) pointed out that Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 did not change the way damages are assessed for future economic loss. His Honour said:

Malec

Wynn v NSW Insurance Ministerial Corporation

Malec

117 In Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473 at 505-6, this Court (Sheller, Stein and Giles JJA) said:

“Therefore the customary course of taking a hypothetical exercise of an uninjured earning capacity until retirement, then making an allowance for vicissitudes, is a way of arriving at the degree of probability of the future hypothetical event of the exercise of that earning capacity. Although in many cases the hypothetical exercise of earning capacity is not controversial, it may be, so that the vicissitudes include allowance for the validity of the hypothesis as well as for the imponderables or chances affecting its realisation.”

118 That was the exercise that O’Keefe J was required to undertake in the present case. Neither party challenged his methodology at trial or on appeal.

119 During argument on the appeal, members of the Court expressed doubt about a claim based solely on the loss of a chance to qualify for a pension in the early 1980s about ten years after the plaintiff had chosen not to re-enlist and had left the Navy of his own accord without paying regard to his earnings during the period between retirement in 1973 and pension eligibility in 1981 or 1983. The period was a closed period at the end of which, if the plaintiff had remained in the Navy, he would have been entitled to the pension. Evidence was put before the Court about the value of that pension. The trial Judge treated the claim as one for the loss of a chance, an approach which seems to have been duplicated in a similar claim, Brittain v The Commonwealth of Australia [2004] NSWCA 83 at [20] and following in the judgment of Handley JA.

120 The plaintiff submitted in argument that the only issues were whether the plaintiff would but for the collision have spent the whole of his adult life in the Navy or alternatively served the further term required to qualify for a pension and what, if any, promotion would have occurred before his right to the pension accrued. In Ground 7(c) of the grounds of appeal the defendant claims that O’Keefe J erred in allowing any amount when the plaintiff had failed to establish that the value of any lost chance of a pension exceeded any amount by which his actual earnings outside the Navy between 1973 and 1981 exceeded what he would have earned in the Navy during that period if he continued to serve.

121 It is not clear to me that this point was ever argued at the trial. In his Pt 33 particulars the plaintiff gave particulars of employment history which included particulars of past earnings from civilian employment expressed as gross earnings and totalling $86,335.71. The particulars continued:

“The plaintiff claims no economic loss from the 8.1.81 to the present save the loss of his Navy pension from 8.1.81 for life based on the rank of WO1.

The difference between what the plaintiff would have earned had he stayed in the RAN and what he actually earned between 8.1.73 and 8.1.81 is:

‘RAN - $100,313.31 less tax 23% $77,241.25

Approx civilian - $86,335.71 less tax 23% $66,478.50

Net loss between 8.1.73 and 8.1.81 $10,762.75’

The plaintiff claims interest thereon from 8.1.81.”

122 As counsel for the defendant put it, before written submissions were furnished to the trial Judge, when referring to the Cumpston Sarjeant report:

“Ultimately, on the question of damages which we will address against the possibility.

HIS HONOUR: I haven’t any evidence at all about that, have I. Have I got – I sorry I’ve got the report from the accountant.

BURBIDGE: Yes. Cumpston Sarjeant.

HIS HONOUR: But there is nothing contrary to that in the defendant’s case, is what I am trying to get at.

BURBIDGE: No, the mathematics of that report are common. Are agreed. The application of it, we will simply say is that there is no evidence of any emotional loss and it fails to deal with it. Second, we will submit there is clear evidence that the plaintiff did not fail to rejoin the navy, in 1973, by reason of the collision, and reference will be made to his evidence and that of his wife, in that regard. And perhaps even in the absence of any assertion to that effect to any of the doctors, but we will look at that.

Ultimately, we will be saying that if your Honour came to consider the matter it would fall to give him general damages only. Perhaps there may be some evidence on which it will be open to find some future outgoing component but other than that we believe that to be the totality of the heads of damages which are open on the evidence.

HIS HONOUR: But, in any event, I suppose the defendant says, as you said in the course of the argument at one stage, that the most that the plaintiff could claim to have lost was the chance of serving time again in the navy for the duration that would get him a pensionable age.

BURBIDGE: Yes.

HIS HONOUR: That’s the critical thing in the largest component that is put forward by the plaintiff, I think.

BURBIDGE: We will wait to see how my learned friend puts it in due course but I think we may be in agreement as to the methodology, that which has to be proved on the balance of probabilities and becomes a 100 per cent or nothing concept versus that area which is loss of chance area. We may agree on the approach in that area. That is the general outline of the defendant’s case.”

123 Counsel for the plaintiff said:

“MELICK: … I should mention just for my learned friend’s benefit; we say in relation to the loss of chance there is no evidence of any other causative factor for the plaintiff to leave the navy except for hypothesis – there may be some suggestion it was because he got married or something like that.

HIS HONOUR: It did occur to me, I must say, when I was looking at a sequence of events, a timeline, that I had mapped out, that it might have been put to the plaintiff that he left the navy because he had been married and was expecting a family. But I don’t recall that being put to the plaintiff.

MELICK: It wasn’t. And the evidence from both the plaintiff and his wife was that so far as his wife was concerned, if I remember him correctly, he had indicated to her he was determined to leave the navy at the 12 year mark. He had already made that determination. He said that some time, not that long after the Melbourne/Voyager collision, and it’s also relevant to note of course he had no job to go to. And because there are no other reasons advanced, or put to the plaintiff, that speculation should not amount to any more than what we say would be a very generous one third reduction. That is, generous from the defendant’s point of view. Your Honour should also note we have been very conservative. The plaintiff’s evidence was he would have stayed in the navy until 55. We haven’t even attempted to evaluate a pension until the age of 55, we have done it on the bare 20 years. There will have to be some calculation about how much it would have cost the plaintiff to buy back the two years and one month.

HIS HONOUR: That is two or two-and-a-half years, whatever it is, up to 18?

MELICK: I think it is under $300.

HIS HONOUR: Is that in evidence?

MELICK: No, But the way to work it out, it is contained in the ComSuper report which tells you how to work it out, and the Cumpston and Sargeant report contains the pay rates for those years. I understand that the pay rates themselves aren’t to be in dispute, it’s a question of whether you would have achieved certain pay rates by virtue of achieving higher rank.

HIS HONOUR: You no doubt will refer to those in your written submissions.”

124 The ComSuper report was dated 8 September 2003 and was in evidence. Under the heading “What is the Role of this Office” the report contained the following:

“After turning 18, Mr Stankowski would have joined the Defence Force Retirement Benefits (DFRB) scheme.

The Defence Force Retirement and Death Benefits (DFRDB) scheme came into existence on 1 October 1972, and replaced the DFRB scheme. All contributors to the DFRB scheme became contributors to the DFRDB scheme, and were eligible for benefits under the DFRDB scheme.

Following the introduction of the DFRDB scheme all members who joined the DFRB scheme under the age of 18 had the opportunity to elect to pay contributions for the service that occurred before they turned 18, so that their DFRDB contributory service start date would then align with the start date they joined the Navy.”

125 In the plaintiff’s statement of claim the plaintiff gave particulars of loss of earning capacity as follows:

“(d) Prior to the said collision the Plaintiff had anticipated a full naval career with regular promotional advancement and, thereafter; to commensurate DFRDB pension entitlements. His career was cut short by reason of his injuries. Further, as a result of his untimely discharge from the Navy and subsequent dislocation in civilian employment the plaintiff’s earning capacity has been, and continues to be adversely affected. More precise particulars will be supplied prior to trial.”

126 The statement filed pursuant to Pt 33 r8A dealt first with “Past Earnings from Civilian Employment” which I have already set out and claimed the difference between what the plaintiff would have earned had he stayed in the Navy and what he actually earned between 8 January 1973 and 8 January 1981. This claim was not pressed. There followed “Particulars of Economic Loss”. The plaintiff asserted that his naval career was ended prematurely by reason of the injuries he sustained in the collision and that but for those injuries he would have continued in his service with the Navy with an anticipated retirement date on 8 January 1981 and would have attained at least the rank of Warrant Officer. The statement said:

“The plaintiff claims no loss of earnings from the 31st May 1977 to the present save that represented by the loss of his Navy pension which was to take effect on the 8th January 1981.”

127 The particulars that followed related to his actual naval earnings from 1 January 1967 and what, but for his injuries, he could have earned in the Navy from 1 January 1967 to 7 January 1973 with stipulated average promotion times in rank as set out. That claim was not pressed. The particulars then went on to deal with income, assuming promotion, at the average maximum time in each rank. That claim was not pressed. Under the heading “Loss of Navy Pension” appeared the following:

“In addition, the Plaintiff claims that had he retired from the Navy on 7.1.81 at the rank of W.O.1 he would have been entitled to a lump sum (Superannuation) Comsuper payment of $27,068.86

In addition, the Plaintiff would have been entitled to weekly Comsuper pension of $115.08 per week.”

128 There followed calculations on this assumption. In the result, the trial Judge described the calculation for loss of pension as follows:

“99 The actuaries calculations relating to the level of pension and its present value make certain assumptions as to the possible promotion of the plaintiff had he re-enlisted in the Navy and remained as an enlisted man until he had completed 20 years of service. Their figures vary according to the assumption made as to the rank attained. I think it would be appropriate to take a figure of $300,000 as the present full lump sum value of pension rights, the chance to secure which was lost by the plaintiff. This figure is based on a mathematical computation. It takes no account of the vicissitudes of life. Whilst all such vicissitudes are not adverse, many are, especially in the way of life assumed for the purposes of this element of the damages. In my opinion a discount of 25% is appropriate for the vicissitudes of life. This reduces the figure of $300,000 to $225,000. This figure needs to be further reduced to the 25% referred to above as the assessment of the chance. The result is $56,250.”

129 The plaintiff has filed a cross-appeal claiming that the trial Judge’s assessment of the chance that the respondent would have re-joined the Navy in 1973 at only 25 per cent bespoke error. The plaintiff relied upon the report of Cumpston Sarjeant of 6 October 2003, which computed the value of the pension in various circumstances. It is not at all clear from the pleading or particulars what precisely was the issue on this part of the claim.

130 The impression I have from reading the material is that the plaintiff abandoned any claim for past economic loss during the closed period until 8 January 1981 and concentrated on the claim for the loss of the pension entitlement. As to that, the issues joined were whether he would have re-enlisted in 1973 and if he did so whether he would have remained until his pension right accrued. While the evidence given by the plaintiff is less emphatic than O’Keefe J’s account of it, I have no difficulty in accepting that there was a chance that, but for the accident, the plaintiff would have re-enlisted and, having re-enlisted, remained in the service until the right to the pension accrued. I would have no difficulty in finding that had he re-enlisted there was a good chance that he would remain until he qualified for the pension bearing in mind that that would have allowed him to leave the Navy with either a lump sum or a significant regular payment while he was young enough to seek other employment. I accept that his Honour gave no clear indication of where the rounded figure of $300,000 was taken from but again I would conclude that it was taken from the actuary’s report.

131 Under the heading “Scenario Three – Promoted to Petty Officer” a total is shown of $298,682 arrived at as follows:

DFRDB lump sum D1 21,419

DFRDB pension received to 29/9/03 D3 112,693

DRFDB pension received from 29/9/03 to
age 65 D4 42,012

DFRDB pension received from age 65 D5 110,184

Less DFRDB member contributions D6 5,485

Total loss of DFRDB 280,843

Plus cost of psychiatric care 17,839

Total

132 The references to D1 etc under the heading Source are to appendix D to the report where the after tax superannuation benefit or lump sum and then the pension amounts receivable after the assumed date of retirement, 8 January 1981, are calculated. No challenge was made to these calculations, but the claim for cost of psychiatric care was disputed by the defendant as duplicating the award of damages that O’Keefe J made under that head, to which I have already referred. The trial Judge awarded $7,500 to cover the cost of future psychiatric consultations and a further $12,500 for future medication. The trial Judge’s calculation of the value of the lost pension right must be moderated by reducing the starting figure of $300,000 to $280,000, that is to say rounding off the Cumpston Sarjeant total loss of DFRDB in its report “Scenario Three”, namely $280,843, before adding the cost of psychiatric care. If the same discount figure of 25 per cent chosen by O’Keefe J is adopted as appropriate for the vicissitudes of life, this produces $210,000. Applying the degree of probability of 25 per cent, favoured by O’Keefe J, this produces $52,500 which should be substituted for the award of $56,250 in respect of the lost chance of re-joining the Navy in 1973 and remaining in the Navy until 1981, having made the appropriate contribution to produce the pension entitlement in that year. The interest awarded on the damages for the lost chance by his Honour was $62,163.64 which must also be adjusted to $58,019.40. The total damages then become $369,956.90.

133 The defendant resisted this claim on two grounds at the trial, first that the trial Judge should not be persuaded that, even if the accident had not occurred, there was any chance that the plaintiff would remain in the Navy after 1973 and, secondly, if there was such a chance, that it was a 25 per cent chance. The trial Judge had already made a significant reduction for vicissitudes. As I have said, I am quite satisfied that there was a chance that the plaintiff would have stayed on and become entitled to the pension and I am not persuaded that his estimate of 25 per cent is outside the appropriate range. For like reason I am not persuaded that as claimed by the plaintiff in his cross-appeal a higher percentage should have been awarded. The plaintiff referred to his evidence that he thoroughly enjoyed the Navy, that despite substantial problems with naval life after the collision he fulfilled his twelve year contract, that he was aware of the benefits to be gained from serving twenty years from the age of twenty, that after leaving the Navy his employment involved similar skills to those he utilised in the Navy and that his work at Santos involved long periods away from home after his marriage. The point was also made that the defendant led no evidence as to the percentage of 1961 enlistees who served twelve years and then remained in the Navy for at least twenty years. The plaintiff claimed that 75 to 80 per cent would be appropriate. No doubt the figure chosen by O’Keefe J was chosen as a matter of impression but that is an impression reached after having heard the plaintiff and his wife give evidence. I do not think this Court can interfere. Accordingly, the cross-appeal should be dismissed.

Interest on costs

134 In a separate judgment on 22 March 2004 O’Keefe J dealt with an application by counsel for the plaintiff that pursuant to s95(3) of the Supreme Court Act 1970 the plaintiff was entitled to an order that interest be paid on the costs that the defendant was ordered to pay. O’Keefe J said:

“Since the costs in an action as long as this will be an important matter, it seems to me that the interests of justice support a conclusion that the plaintiff should not be deprived on the interest on the amount of costs assessed. Accordingly I am of opinion that the correct order to make is that interest on the amount of the costs assessed be paid by the defendant, such interest to accrue as from 21 days of the day of filing or lodgement for assessment by the plaintiff of its bill of costs, and I so order.”

135 The defendant submitted that O’Keefe J erred in awarding interest on costs assessed to accrue from 21 days of the filing or lodgement for assessment by the plaintiff of its bill of costs. It is now settled that the Court has power to award interest to be paid on the amount of costs ordered.

136 Section 95(4) of the Supreme Court Act is a particular power to order that interest be paid “from the date or dates when the amount in respect of costs was duly paid”. That power was not invoked in this case. Section 95(1) provides that where judgment is given or an order is made for the payment of money, interest shall, unless the Court otherwise orders, be payable at the prescribed rate from the date when the judgment or order takes effect on so much of the money is from time to time unpaid. However, this has to be read with s95(3) which provides that notwithstanding subs(1) “where, in proceedings for damages on a common law claim, the court makes an order for the payment of costs and the costs are paid within 21 days after ascertainment of the amount of the costs by assessment under Division 6 of Part 11 of the Legal Profession Act 1987 or otherwise, interest on the costs shall not be payable under subs(1) unless the court otherwise orders”. O’Keefe J was asked otherwise to order.

137 There has been a running debate which was described in the judgments of this Court in Minister Administering the Environmental Planning and Assessment Act1979 v Carson (1994) 35 NSWLR 342 about whether, once the costs payable are ascertained, such interest could or should be ordered to be payable from the date upon which the order for costs was made (the incipitur rule) or from the date of ascertainment of the amount of the costs by assessment (the allocatur rule). In Carson this Court held that interest is payable on such costs from the date upon which the order for costs was made, not from the date of ascertainment of the amount of the costs by a certificate of taxation or otherwise.

138 O’Keefe J chose a mid-way point, namely 21 days of the day of filing or lodgement for assessment by the plaintiff or its bill of costs. There is no doubt that O’Keefe J had power to make such an order. The only question is whether there was some error in the exercise of his discretion. The argument submitted was that no proper basis for the making of the order existed and that it failed to recognise the reality of the negotiations which inevitably follows submission of an ambit assessment. The effect of the order was said to be punitive since no crystallised sum was available when the order commenced to operate and the respondent would have no incentive to negotiate with the appellant. But this observation is true of the recognised incipitur rule and overlooks the fact that interest only runs on the amount ultimately appropriately assessed or ascertained. The power invoked was that under s95(3) the substance of which I have set out.

139 I am not inclined to interfere with the exercise of his Honour’s discretion which appropriately took account of the length of the proceedings and the amount the plaintiff would be out of pocket until such time as the costs were assessed and paid. I would reject this ground of appeal.

Costs

140 The defendant has succeeded in varying the amount of damages by a relatively small amount. In my opinion, having failed on the principal issue about liability, the defendant as appellant should pay the respondent/plaintiff’s costs of the appeal.

Orders

141 I propose the following orders:

1. Appeal allowed;

2. Set aside the verdict and judgment for the plaintiff in the sum of $377,851.14 and in lieu thereof order that there be a verdict and judgment for the plaintiff in the sum of $369,956.90;

3. Otherwise confirm the orders of O’Keefe J in relation to the payment of costs of the trial and interest on costs;

4. The appellant to pay the respondent’s costs of the appeal;

5. Cross-appeal dismissed with costs.

142 HODGSON JA: I agree with the orders proposed by Sheller JA.

143 On the issues arising from the discharge of the jury, I agree with the conclusions and reasons of Sheller JA.

144 On the issues arising under grounds 2, 3, 4 and 6 of the Notice of Appeal, I agree substantially with the reasons of Sheller JA, but make the following additional observations.

145 The primary thrust of the appellant’s complaints was that the primary judge did not address the case it sought to make out, in particular as to inaccuracies in the histories on the basis of which the respondent’s medical experts reached their opinions, and as to the (lack of) admissibility and or weight of these opinions, having regard to the differences between these histories and the facts as established by evidence in the case. Mr. Burbidge QC for the appellant drew attention particularly to the appellant’s case against acceptance (1) that the respondent felt intense fear, helplessness and/or horror at the time of the traumatic event, and (2) that he had recurrent distressing dreams of the event (nightmares); and also to the weight placed by the respondent’s medical experts on histories involving these two elements.

146 When considering that kind of complaint, it is pertinent to have regard to the extent to which the evidence and submissions raised issues that called for explicit discussion: cf. Misfud v Campbell (1990) 21 NSWLR 725 at 728.

147 The main bases of the appellant’s case were, on the first of the two matters identified, an admission by the respondent that he did not believe the Melbourne was sinking, and a withdrawal of an assertion of panic; and on the second of them, a lack of complaint of nightmares to medical practitioners for many years after they allegedly commenced.

148 On the former matter, however, the relevant question and answer in cross-examination about sinking related to a particular time, and it was not put to the respondent, nor did he admit, that at no time did he think the Melbourne would sink; and there was no withdrawal by him of assertions of fear, shock and horror. And on the latter matter, the respondent’s evidence of nightmares was supported by unchallenged evidence from his wife. In those circumstances, I do not think the appellant’s case against acceptance of the respondent on the matters identified required more specific attention than that which was given by the primary judge, in his assessment of the credibility of the respondent’s evidence.

149 Turning to the appellant’s complaints about differences between the histories relied on by the respondent’s experts and the facts established, the relevant principle is that histories assumed by experts must be “sufficiently like” those established “to render the opinion of the expert of any value”: Paric v John Holland (Constructions) Pty. Limited (1985) 59 ALJR 844 at 846. That issue was exhaustively explored in cross-examination of the relevant experts, who nevertheless maintained their opinions. So again, I do not think the appellant’s case based on differences between histories and facts established required more specific attention than was given by the primary judge.

150 On issues concerning damages, again I agree substantially with the reasons of Sheller JA, but make some additional observations.

151 I do not think it necessary to express a view as to whether the assessment of general damages was generous or moderate: it suffices to say it was not outside the available range.

152 On the question of the loss of the pension, in my opinion it would have been open to the appellant, at the trial, to submit that this should be considered as part of a claim for the economic consequences of loss of earning capacity, or at least that the respondent had an onus to show that the loss of the pension (or loss of the chance of a pension) was not counter-balanced by higher earnings outside the Navy. However, the appellant permitted the claim for loss of the pension (or chance of a pension) to be dealt with as a discrete and independent head of damages; and in those circumstances it is too late to contend to the contrary on appeal.

153 BRYSON JA: There may have been room to compare all earnings and superannuation which the respondent would have received if he had remained in the Navy with all earnings and gains from the employment he actually obtained. This approach to assessment of damages for loss of chance of superannuation was not in issue at the trial, or on appeal. The issues which the parties contested set confines within which the allowance of damages for this element, with the variation proposed by Sheller JA, is the correct outcome.

154 In my opinion the award of general damages made by O’Keefe J was moderate, in relation to the findings made by his Honour. I respectfully differ from the view of Sheller JA at para [108] that the award was generous. To my mind it is possible that, if damages were assessed again, this award might be exceeded: the possibility is sufficiently recognizable to weigh as a factor against granting a new trial on the application of the appellant.

155 The observations I have made are of small significance overall. In other respects I agree with Sheller JA. I agree with the orders which his Honour proposes.

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Citations

Commonwealth of Australia v Stankowski [2005] NSWCA 106

Most Recent Citation

Wright v Commonwealth of Australia [2005] VSCA 309

Cases Citing This Decision

7

Rees and Military Rehabilitation and Compensation Commission [2005] AATA 690

Talanoa and Comcare [2005] AATA 609

Covington-Thomas v Cth of Australia [No 3] [2007] NSWSC 1062

Cases Cited

12

Statutory Material Cited

3

Brittain v The Commonwealth of Australia [2004] NSWCA 83

Fightvision Pty Ltd v Onisforou [1999] NSWCA 323

Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305

CITATION:	COMMONWEALTH OF AUSTRALIA v STANKOWSKI [2005] NSWCA 106
HEARING DATE(S):	1 February 2005, 2 February 2005, 3 February 2005
JUDGMENT DATE:	13 April 2005
JUDGMENT OF:	Sheller JA at 1; Hodgson JA at 142; Bryson JA at 153
DECISION:	1 Appeal allowed; 2 Set aside the verdict and judgment for the plaintiff in the sum of $377,851.14 and in lieu thereof order that there be a verdict and judgment for the plaintiff in the sum of $369,956.90; 3 Otherwise confirm the orders of O'Keefe J in relation to the payment of costs of the trial and interest on costs; 4 The appellant to pay the respondent's costs of the appeal; 5 Cross-appeal dismissed with costs.

CATCHWORDS:	Negligence - post traumatic stress disorder - whether trial Judge failed to use or palpably misused his advantage - whether findings were inconsistent with facts incontrovertibly established by the evidence or which were glaringly improbable - Evidence - expert opinion evidence - whether histories assumed by experts must be sufficiently like those established to render the opinion of the expert of any value - Damages - whether general damages manifestly excessive - damages for loss of chance - duplication of damages - Procedure - discharge of jury - whether apprehended bias - whether procedural unfairness suffered - Costs - interest on costs - interest on costs to accrue from 21 days of the filing or lodgement for assessment by the plaintiff of the bill of costs - whether award permitted by section 95(3) of the Supreme Court Act 1970.
LEGISLATION CITED:	Evidence Act 1995 Legal Profession Act 1987 Migration Act 1958
CASES CITED:	Brittain v The Commonwealth of Australia [2004] NSWCA 83 Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 Minister Administering the Environmental Planning qnd Assessment Act 1979 v Carson (1994) 35 NSWLR 342 Minister for Immigration & Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 Norris v Blake (No 2) (1997) 41 NSWLR 49 Paric v John Holland (Constructions) Pty Limited (1985) 59 ALJR 844 Re Bank Employees Union; ex parte Citicorp Australia Ltd (1989) 167 CLR 513 SBBA v Minister for Immigration & Multicultural & Indigenous Affairs (2003) FCAFC 90 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (1999) 73 ALJR 306 Todorovic v Waller (1981) 150 CLR 402 Webb v The Queen (1994) 181 CLR 41
PARTIES:	Commonwealth of Australia - Appellant Stephen Stankowski - Respondent
FILE NUMBER(S):	CA 40304/04
COUNSEL:	R J Burbidge QC/G T Johnston - Appellant A G Melick SC/K Sant - Respondent
SOLICITORS:	Australian Government Solicitor - Appellant James Taylor & Co - Respondent

LOWER COURT JURISDICTION:	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S):	21240/95
LOWER COURT JUDICIAL OFFICER:	O'Keefe J