CSR Ltd v Della Maddalena - [2006] HCA 1

HIGH COURT OF AUSTRALIA
GLEESON CJ,
KIRBY, HAYNE, CALLINAN AND HEYDON JJ
CSR LTD & ANOR  APPELLANTS
AND
ARTURO DELLA MADDALENA  RESPONDENT
CSR Ltd v Della Maddalena [2006] HCA 1
2 February 2006
P36/2005
ORDER
1.        Appeal allowed.
2.Set aside paragraphs 2 and 3 of the orders of the Full Court of the Supreme Court of Western Australia made on 13 October 2004 and, in their place, order that:

(a)the judgment and orders of the District Court of Western Australia made on 17 December 2002 be set aside; and

(b)there be a new trial of the action.

On appeal from the Supreme Court of Western Australia
Representation:
B W Walker QC with J G Mengler for the appellants (instructed by Jackson McDonald)
B F Quinn with P D Nicholas for the respondent (instructed by Slater & Gordon)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS
CSR Ltd v Della Maddalena
Practice and procedure – Appeal – Credibility of witness – Whether intermediate appellate court entitled to substitute its own findings as to credibility for that of trial judge – Whether court erred in ordering retrial limited to assessment of damages.
Courts – Appeal – Procedural fairness – Expert witnesses – Court expressed preference for evidence of particular expert witnesses – Whether court's reference to such expert witnesses as "well known to the court" constituted a breach of procedural fairness – Whether matter should be remitted for rehearing.
Words and phrases – "procedural fairness", "retrial".
Supreme Court Act 1935 (WA), s 58(1)(a).

GLEESON CJ. I agree with the orders proposed by Kirby J. For the reasons explained by Kirby J, the Full Court of the Supreme Court of Western Australia was justified, in accordance with the principles re-affirmed by this Court in Fox v Percy[1], in reversing the decision of the primary judge on the principal issue in the appeal. The remark about the Full Court's high regard for some of the expert witnesses in the case was capable of being misunderstood, but in the end it is not a matter to which I would attach importance. I also agree that the disposition of the case by the Full Court was inappropriate in that there should be a retrial.
[1](2003) 214 CLR 118.
KIRBY J. This is an appeal from a judgment of the Full Court of the Supreme Court of Western Australia[2]. By that judgment, the Full Court unanimously[3] ordered that a judgment of the District Court of Western Australia (O'Sullivan DCJ)[4] against Mr Arturo Della Maddalena (the respondent) and in favour of his former employers, CSR Ltd and Midalco Pty Ltd (the appellants), be set aside.
[2]Maddalena v CSR Ltd [2004] WASCA 231.
[3]Templeman J (Steytler and Wheeler JJ concurring).
[4]Della Maddalena v CSR Ltd [2002] WADC 260.
In place of the judgment at trial, the Full Court concluded that the respondent "suffered a psychiatric injury caused by his exposure to asbestos while in the employ of at least one of the [appellants] at Wittenoom and that his injury was caused by the [appellants'] negligence"[5]. Because of an unresolved conflict as to the respective liabilities of the former employers[6], the Full Court ordered that the proceedings be remitted to the trial judge for determination in accordance with the Full Court's judgment. This required that the trial judge determine the liability of the first appellant, CSR Ltd, having regard to the denial in its defence that it owned, occupied or managed the mine and mill at Wittenoom where the subject exposure to asbestos was alleged to have occurred. Subject to the resolution of that question, the Full Court determined that the primary judge should assess the damages to which the respondent was entitled[7].
[5][2004] WASCA 231 at [169].
[6][2004] WASCA 231 at [170].
[7][2004] WASCA 231 at [171].
The starting points for an understanding of the foregoing conclusions, reached by the Full Court, must be stated at the outset of these reasons. Only by appreciating them may the conclusion reached, and the orders made, by the Full Court be understood. The starting points involve what are substantially uncontested propositions, respectively of fact and law.
The uncontested or established facts
Physiological and psychological injuries:There were many disagreements between the parties, at trial and on appeal, concerning the facts of this case. However, by the time the proceedings were concluded in this Court certain issues of fact were not in serious contest.
The respondent had alleged in his pleading and in his case as initially presented at trial that, in the course of the work that he had performed as a young man between 1961 and 1966 at the asbestos mill in Wittenoom, the appellants had negligently exposed him to asbestos. As a result, he initially claimed that he suffered asbestosis, pleural disease, respiratory degeneration and pain and breathlessness as a consequence of his heavy exposure to asbestos dust and the physical injuries that it had produced.
By the time the evidence at trial had concluded, as found by the primary judge[8], the respondent's symptoms "could not be explained by the extent of his physical degeneration"[9]. The physiological condition produced by exposure to asbestos dust (known as asbestosis) was found to be unproved on the evidence[10]. In the Full Court (and before this Court) the respondent did not suggest otherwise. Nor did he contest the primary judge's rejection of the alternative contention that his symptoms of pain, breathlessness, lethargy and depression were the result of pleural disease or pleural plaques caused by exposure at work to asbestos dust[11]. In this way, at both levels of appeal, the question became whether the respondent had established that he was suffering from a psychiatric injury (with depression, morbidity and anxiety symptoms), causing incapacity, because of his reaction to the exposure to asbestos.
[8][2002] WADC 260 at [45], [49].
[9]See [2004] WASCA 231 at [22]-[23].
[10][2002] WADC 260 at [45].
[11][2002] WADC 260 at [49].
For the reasons that he gave, the primary judge rejected this additional or alternative claim advanced by the respondent[12]. It was this part of the primary judge's reasoning that the Full Court found to have been erroneous, authorising that Court to substitute its own conclusions, based on the evidence, favourable to the respondent. It is the Full Court's conclusion in this regard that, by special leave, the appellants now challenge in this Court.
[12][2002] WADC 260 at [106].
Uncontested objective facts:Before going to the detail of the issues argued in the appeal, it is necessary to collect the most important, uncontested, objective facts that provide the circumstances that help to explain the conclusions of the Full Court. Those facts were that:
(1)The respondent migrated to Australia from Italy at the age of eighteen, following an older brother (or step-brother), Walter, who had preceded him and who introduced the respondent to the work at Wittenoom, eventually with both of the appellants, between 1961 and 1966;
(2)Between the stated years, the respondent was heavily exposed to asbestos dust at the asbestos mill in Wittenoom;
(3)In about 1985, at the Perth Chest Clinic, nearly twenty years after quitting the work at Wittenoom, the respondent was informed that he had evidence of asbestosis. The fact that, eventually, a diagnosis of asbestosis was not made is irrelevant to the impact on the respondent of this communication;
(4)In 1988, the respondent saw Walter die a slow and painful death at the age of 54 years. His death was explained at the time as related to Walter's exposure to asbestos at Wittenoom, for part of a working period overlapping the employment of the respondent in the same place;
(5)After Walter's death, the respondent consulted Professor A W Musk, Professor of Respiratory Medicine, and underwent tests that revealed that he did in fact have evidence of asbestos in his lungs;
(6)Whilst establishment of asbestosis and pleural disease was not affirmatively demonstrated, the existence of "benign asbestos lung disease in the form of pleural plaques" was shown, with changes in the lung bases from early in 1997, and with a CT scan showing some areas of pleural thickening;
(7)Although physical injury to the requisite degree was not established by reference to the "rather artificial criteria" of the diagnostic protocol "which devalues the reality of these disorders through overuse"[13], the possible future progression of the respondent's "very early"[14] interstitial lung disease could not be ruled out simply because, to the time of the trial, the likelihood of such a development had not been affirmatively proved;
(8)After Walter's death from asbestos-related causes, the respondent saw several friends die painful deaths from mesothelioma and other asbestos-related conditions. By the late 1990s, there were "at least" twenty friends whom he had visited in hospital and who suffered from diseases related to asbestos exposure;
(9)The respondent knew thirteen people from his village in Italy who had come to Australia and, like him, worked at Wittenoom. All but four of them had died of mesothelioma, related to asbestos exposure;
(10)In 1997, the respondent had attended the funeral of a friend at Karrakatta cemetery. Whilst there he had purchased a grave plot for himself. It was close to Walter's grave;
(11)The respondent's educational level in Italy was extremely limited. He had grown up in a small village and attended school only to about fourteen years of age. After he left school he worked as a labourer[15]. In more recent years, before the trial, the respondent's limited social connections had included the Asbestos Diseases Society of Western Australia, where he met, and worked as a volunteer with, friends and colleagues, attending to their medical and hospital care and their funerals when they died; and
(12)A psychiatric disorder, involving severe depression, in persons who have been exposed to asbestos dust, and are thus at special risk of later developing asbestos-caused cancers and serious disabilities, is a "recognisable psychiatric injury ... of some substance"[16]. The existence or absence, in the respondent's case, of that recognised psychiatric injury was the essential issue for trial, once it was accepted that the respondent had not (yet) been able to prove a diagnosis of asbestosis based on the "rather artificial criteria" which medical protocols laid down for a progressing pleural disease of physiological origin.
[13]Professor German's report quoted by the Full Court: [2004] WASCA 231 at [34].
[14]Professor Musk's report quoted by the Full Court: [2004] WASCA 231 at [21].
[15][2004] WASCA 231 at [10].
[16]The report of Professor German: see [2004] WASCA 231 at [34].
The great bulk of the evidence called in the trial described the respondent as an unsophisticated person "of a basically credulous cultural background"[17]. He presented to his medical advisers as "terrified" that he would die, just as his brother and many friends had done, and for the same reasons. With high uniformity, the treating doctors described the respondent as a person with morbid self-concern and depression resulting from a life of living in fear of death from his undoubted heavy exposure to asbestos at Wittenoom[18]. These medical witnesses, virtually with one voice, were not impressed with the appellants' evidentiary "trump card", namely video surveillance film suggesting disparities in the respondent's medical condition and his evidence. After reserving his decision for eight months, the primary judge was persuaded by the arguments of the appellants to find against the respondent.
[17][2004] WASCA 231 at [34].
[18][2004] WASCA 231 at [34].
Against the background of the foregoing facts, it is unsurprising that the Full Court, in the appeal before it, decided to look very closely at the premises upon which the primary judge had reached his conclusion adverse to the respondent. That close scrutiny led the Full Court to a conclusion which was seemingly more harmonious with the uncontested facts just described. The primary question for this Court in this appeal is whether, in giving effect to that conclusion, the Full Court erred in its approach or in its conclusion.
In affirming another decision of the Full Court, also correcting a judgment of the District Court[19], this Court recently pointed out that it must approach an appeal before it in a particular way:
"[T]his Court's function is to correct any error that has been shown in the decision and hence the resulting orders of the Full Court. It is not, as such, to exercise for itself the powers of the Full Court, absent demonstrated error."
[19]Manley v Alexander [2005] HCA 79 at [14] per Gummow, Kirby and Hayne JJ.
The powers and duties of the Full Court
Statutory foundations: The second starting point for an appreciation of the reasoning of the Full Court is an understanding of the powers and duties of the Full Court in discharging its appellate functions in the appeal before it. There was no contest in this Court concerning the ambit of those powers and functions[20]. However, it is important to restate them in order to avoid the risk of a return to erroneous past legal understandings.
[20]They had been so expressed in Commissioner of Main Roads v Jones (2005) 79 ALJR 1104 at 1117-1118 [71]-[73]; 215 ALR 418 at 434-436.
The source of the respondent's appellate right was s 79 of the District Court of Western Australia Act 1969 (WA). At the relevant time, s 79(1) permitted "[a] party to an action or matter [in the District Court] who is dissatisfied with ... a final judgment" of the District Court, to appeal from that judgment to the Full Court constituted under the Supreme Court Act 1935 (WA). Section 58(1)(a) of the Supreme Court Act, as it stood at the relevant time, conferred on the Full Court jurisdiction to hear and determine "applications for a new trial or rehearing of any cause or matter". Under the Rules of the Supreme Court (WA), the Full Court was empowered "to draw inferences of fact and to give any judgment, and make any order which ought to have been made, and to make such further or other order as the case may require"[21].
[21]Rules of the Supreme Court (WA), O 63, r 10(2) (since repealed).
The powers so conferred are "very ample, indeed generally unconfined"[22]. They envisage an appeal by way of "rehearing"[23]. The rehearing contemplated is the same as that described by this Court in Fox v Percy[24]:
"The 'rehearing' does not involve a completely fresh hearing by the appellate court of all the evidence. That court proceeds on the basis of the record and any fresh evidence that, exceptionally, it admits."
No fresh evidence was admitted by the Full Court in the present appeal.
[22]See Jones (2005) 79 ALJR 1104 at 1117 [72]; 215 ALR 418 at 435.
[23]See Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 at 619-622; Eastman v The Queen (2000) 203 CLR 1 at 40-41 [130]; Allesch v Maunz (2000) 203 CLR 172 at 180-181 [23], 187 [44].
[24](2003) 214 CLR 118 at 125 [22]. See also Shorey v PT Ltd (2003) 77 ALJR 1104 at 1107 [15]; 197 ALR 410 at 413; Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598 at 1610-1611 [65]-[68]; 200 ALR 447 at 464-465; Hoyts Pty Ltd v Burns (2003) 77 ALJR 1934 at 1942-1944 [49]-[59]; 201 ALR 470 at 481-484; Pledge v Roads and Traffic Authority (2004) 78 ALJR 572 at 581-582 [43]; 205 ALR 56 at 67-69.
Requirements and limitations: The form of rehearing so provided "shapes the requirements, and limitations, of such an appeal"[25]. The relevant "requirements" are that the appellate court is obliged to conduct a thorough examination of the record and a real rehearing. It is not confined to reconsideration of the record in order to correct errors of law, although that will certainly be encompassed in such an appeal. It is required to consider suggested errors of fact-finding. Experience teaches that many errors of this kind arise at first instance, more perhaps than errors of law. Having conducted a rehearing as so described, the appellate court is obliged to "give the judgment which in its opinion ought to have been given in the first instance"[26]. This involves, where, as here, there is no jury, conducting a thorough review of the primary judge's reasons and engaging in the tasks of "weighing conflicting evidence and drawing … inferences and conclusions"[27].
[25]Fox v Percy (2003) 214 CLR 118 at 125 [23].
[26]Dearman v Dearman (1908) 7 CLR 549 at 561 cited in Fox v Percy (2003) 214 CLR 118 at 125 [23].
[27]Dearman v Dearman (1908) 7 CLR 549 at 564 cited in Fox v Percy (2003) 214 CLR 118 at 127 [25].
The "limitations" introduced into the rehearing based on the record of the trial are those necessarily involved in that form of appellate procedure[28]. Such limitations include those occasioned by the resolution of any conflicts at trial about witness credibility based on factors such as the demeanour or impression of witnesses; any disadvantages that may derive from considerations not adequately reflected in the recorded transcript of the trial; and matters arising from the advantages that a primary judge may enjoy in the opportunity to consider, and reflect upon, the entirety of the evidence as it is received at trial and to draw conclusions from that evidence, viewed as a whole[29].
[28]Dearman v Dearman (1908) 7 CLR 549 at 561; Scott v Pauly (1917) 24 CLR 274 at 278-281; Fox v Percy (2003) 214 CLR 118 at 125-126 [23].
[29]State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) (1999) 73 ALJR 306 at 330 [90]; 160 ALR 588 at 619; cf Fox v Percy (2003) 214 CLR 118 at 125-126 [23]; Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207 at 209-210.
When performing its function of deciding an appeal to it, it was common ground that the Full Court was bound by the principles stated by this Court in its then recent decision in Fox v Percy[30]. The Full Court referred to that authority and to other decisions of this Court which had applied that authority. No party suggested that such authority was inapplicable or that, for any reason, it should be reconsidered or re-expressed.
[30](2003) 214 CLR 118.
Adhering to Fox v Percy: In Fox v Percy there was an important change in the statement by this Court of the jurisdiction and powers of intermediate appellate courts. Like many other principles re-expressed by this Court in recent years, the change was one founded in a close analysis of the statutory provisions governing the legal task in issue[31]. It involved a shift to some degree from the more extreme judicial statements commanding deference to the findings of primary judges said to be based on credibility assessments. It involved a reminder of the obligations of the appellate court, so far as it properly could, to perform its statutory functions of appellate review by way of rehearing, in a real and substantive way as the enacted law mandates.
[31]cf Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vict) (2001) 207 CLR 72 at 89 [46]; The Commonwealth v Yarmirr (2001) 208 CLR 1 at 111-112 [249]; Visy Paper Pty Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 1 at 10 [24]; Weiss v The Queen [2005] HCA 81 at [41].
In the present appeal the Full Court recognised the shift in instruction expressed in Fox v Percy[32] and as restated and applied in Pledge v Roads and Traffic Authority[33]. Correctly, the Full Court examined whether the reasoning of the primary judge in the present case fell within the category that could properly be described as resting on a credibility determination. Or whether, alternatively, such reasoning rested on inferences drawn from facts that were undisputed or found by the trial judge[34].
[32](2003) 214 CLR 118 at 139 [66] cited in [2004] WASCA 231 at [154].
[33](2004) 78 ALJR 572 at 581-582 [43]; 205 ALR 56 at 67-69 cited in [2004] WASCA 231 at [155], [163].
[34]This is an important and often decisive distinction, as recognised by McHugh J in Fox v Percy (2003) 214 CLR 118 at 146 [88].

Even in the case of expressed credibility findings, the statutory duty to conduct a real "rehearing" remains. It may sometimes justify reversal of a decision by a primary judge who has "failed to use or has palpably misused his advantage" or where "incontrovertible facts or uncontested testimony" demonstrates the findings to be erroneous; or where they are "glaringly improbable" and "contrary to compelling inferences"[35].
[35]Fox v Percy (2003) 214 CLR 118 at 128 [28]-[29], 139 [66], 165-166 [148]. Cases treated as turning on credibility findings include Jones v Hyde (1989) 63 ALJR 349; 85 ALR 23; Abalos v Australian Postal Commission (1990) 171 CLR 167; Devries v Australian National Railways Commission (1993) 177 CLR 472; State Rail Authority (NSW) (1999) 73 ALJR 306; 160 ALR 588; Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599.
However, where the conclusion of the primary judge depends on inferences drawn from undisputed facts or facts that have been found but can equally be redetermined by the appellate court, without relevant disadvantage, the duty of the appellate court is clear. It derives from the parliamentary enactment. It "will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it"[36].
[36]Warren v Coombes (1979) 142 CLR 531 at 551. See eg Voulis v Kozary (1975) 180 CLR 177; Fox v Percy (2003) 214 CLR 118; Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598; 200 ALR 447; Hoyts Pty Ltd v Burns (2003) 77 ALJR 1934; 201 ALR 470; Pledge v Roads and Traffic Authority (2004) 78 ALJR 572; 205 ALR 56.
It would be a misfortune for legal doctrine if, so soon after Fox v Percy corrected the non-statutory excesses of earlier appellate deference to erroneous fact-finding by primary judges, the old approach was restored, as, for example, by reversion to the previous formulae about the "subtle influence of demeanour" that could have affected the primary judge's conclusion, even though no express reference was made to such consideration[37]. A survey of the history of the approach by this and other appellate courts to the principles of appellate review bears witness to varying attitudes over time to questions of this kind[38]. However, this Court should not now restore the pre-Fox v Percy approach. It has no foundation in the statutory provisions governing intermediate courts. On the contrary, it frustrated the performance by those courts of their statutory obligation to conduct an appeal by rehearing. It would involve such courts returning to non-statutory inhibitions upon the provision of appellate relief based on nothing more than the suggestion that the present is "one case" in which (by inference exceptionally) "the subtle influence of demeanour" cannot be overlooked[39]. If that proposition is sustained, the important gain of Fox v Percy stands in peril of being lost. This Court would then re-endorse a serious impediment to the performance of the jurisdiction and powers of intermediate appellate courts in Australia. This should not be done.
[37]cf Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179. See reasons of Callinan and Heydon JJ at [180].
[38]State Rail Authority (NSW) (1999) 73 ALJR 306 at 323 [74]; 160 ALR 588 at 610.
[39]Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179. See also Fox v Percy (2003) 214 CLR 118 at 139 [66].
Instead, this Court should apply its uncontested authority in Fox v Percy. Effectively, that is what the Full Court set out to do. It helps to explain the Full Court's reasoning and to endorse its main conclusions.
The facts and earlier dispositions
The background facts:Many of the facts necessary to gain an appreciation of the issues argued in this appeal are contained in the reasons of Callinan and Heydon JJ[40]. The respondent claimed damages for negligence on the basis of his exposure to asbestos dust in the course of his employment with the appellants. Leaving aside the contest concerning which of the appellants, if either, was responsible for any damage caused by such exposure, the contest at trial was reduced, essentially, to two points. The first was the suggestion that the respondent had failed to prove physiological damage that would support the severe symptoms that he had recounted to the medical witnesses and in his oral evidence. The second, assuming that the claim was to be treated as one relating to a morbid psychiatric injury suffered by the respondent in consequence of the exposure, was the suggestion that the respondent's complaint of psychiatric injury should be rejected because of considerations that emerged during evidence. Most especially, those considerations included:
(a)Video surveillance film, tendered in evidence and shown to the medical experts, which, the appellants argued, indicated that the respondent could perform a range of physical activities beyond those stated or conceded in his oral testimony and reports to the medical witnesses;
(b)Evidence from the respondent's lung function tests and records at the Chest Clinic that was said to be inconsistent with, because prior to, the respondent's suggested onset of psychiatric injury and symptoms occurring after the death of his brother from a dust-related disease in 1988 blamed by the respondent as the effective triggering event that had initiated his severe symptoms;
(c)The suggested falsehood of the respondent's statement to a psychologist (Mr Burns) to the effect that he had preceded his deceased brother to Australia and felt remorseful over his responsibility for persuading the brother to follow him to Wittenoom, whereas the fact was that the brother had preceded him, not vice versa; and
(d)The conclusion of the appellants' expert psychiatrist, Dr Febbo, after seeing the video film of surveillance of the respondent's activities that a diagnosis of psychiatric injury should not be accepted and the primary judge's conclusion favourable to that opinion, in preference to the contrary opinions expressed by all of the respondent's medical witnesses.
[40]Reasons of Callinan and Heydon JJ at [116]-[140].
Many other factual issues were raised in argument both at the trial and before the Full Court. However, the foregoing represents the major battle ground between the parties.
The earlier dispositions:The primary judge did not doubt that an exposure to asbestos could cause a person so exposed to suffer a serious psychiatric illness as a consequence[41]. However, having rejected the establishment of a physiological injury to a degree sufficient to explain the respondent's symptoms and complaints, the primary judge considered that the diagnostic process for a psychiatric illness was "a complicated one" involving "examination of an extensive range of considerations"[42].
[41][2002] WADC 260 at [104].
[42][2002] WADC 260 at [104].
Because the primary judge concluded that "the absence of any objective evidence to support the plaintiff's complaints" was a "real cause for concern"[43], he turned to the foregoing four factors, most especially the video surveillance film, in order to resolve the conflict in the medical testimony. Essentially, this involved a conflict between medical witnesses called for the respondent (especially Professors German and Musk and Dr Skerritt) and a psychiatric expert called for the appellants (Dr Febbo)[44]. A consideration of the identified factors in the evidence led the primary judge to his ultimate conclusion[45]:
"In my opinion the absence of any objective evidence to support the plaintiff's complaints in this case is a real cause for concern. In addition, in my view, the evidence of the video tapes, the results of the lung function tests, the notes from the Chest Clinic and the evidence of inaccuracies in the history given by the plaintiff concerning the death of his brother and the onset of symptoms of breathlessness add weight to that concern. Against this background the conclusion to which I have come is that the opinion of Dr Febbo is to be preferred. In my view the plaintiff has not established that he has suffered any psychiatric injury."
[43][2002] WADC 260 at [106].
[44][2002] WADC 260 at [88]-[96].
[45][2002] WADC 260 at [106].
In the Full Court, by reference to its own powers and functions in the appeal and to its analysis of the considerations mentioned by the primary judge (including its own inspection of the video film that was so important for the primary judge's decision), a conclusion was reached that the primary judge had erred. This is why the Full Court set aside his judgment in favour of the appellants and remitted the matter for the limited purposes noted[46].
[46]See above, these reasons at [3].
It is necessary, in these reasons, to deal with each of the four identified factors. Doing so will explain why no finding on the credibility of the respondent's evidence ultimately stood in the way of the Full Court's proceeding to consider the conclusion that it reached for itself about the preponderance of the evidence in the trial. However, on each side of this central question lies another issue that must first be considered.
It is necessary to deal immediately with the comment of Templeman J, for the Full Court, that each of Professor German and Dr Skerritt was "well known to the Court as an eminent psychiatrist" of many years standing[47]. This comment is given prominence in the reasons of Hayne J and of Callinan and Heydon JJ[48]. It is suggested there that it inflicted a procedural unfairness on the appellants by revealing a predisposition in favour of the evidence of the respondent's witnesses which had not been disclosed during the hearing, so that it could be answered and corrected.
[47][2004] WASCA 231 at [32], [36].
[48]Reasons of Hayne J at [106]-[109]; reasons of Callinan and Heydon JJ at [144]-[147].
As well, there emerged during argument in this Court a consequential question concerning the appropriateness of the orders finally made by the Full Court. Was it appropriate in the present case to remit the assessment of damages to the primary judge, disjoined from the other issues of negligence liability[49]? At least, was it appropriate to do so having regard to the potential importance of hearing and seeing the evidence on the suggested psychiatric injury, which was sharply divided?
[49][2004] WASCA 231 at [171].
The issues
The issues for decision in this appeal are therefore the following:
(1)The procedural fairness issue:Did the reference in the reasons of the Full Court to the fact that Professor German and Dr Skerritt were well known to that Court, as a fact undisclosed during the hearing, constitute a breach of the rules of procedural fairness ("natural justice"), requiring, without more, relief to the appellants and, at the least, a reconsideration of the entire appeal by the intermediate court differently constituted[50]?
(2)The credibility issue:Having regard to the principles governing the conduct of an appeal by rehearing on the basis of the record, did the Full Court err in substituting its preference for the evidence favourable to the respondent over the primary judge's preference for the evidence favourable to the appellants? In particular, did the Full Court err in its:
(a) treatment of the video surveillance evidence;
(b) use of the lung function tests and the records of the Chest Clinic;
(c)treatment of the suggested mis-statement by the respondent as to the bringing of his brother from Italy to Wittenoom and its effect on his psychiatric condition; and
(d)expressed preference, ultimately, for the evidence of Professor German and Dr Skerritt over that of Dr Febbo?
(3)The orders issue:If all other issues are determined in the respondent's favour, did the Full Court err in the orders that it made disposing of the appeal and remitting only limited matters to the primary judge for redetermination?
[50]Since the Full Court's decision in the appeal, the Court of Appeal of the Supreme Court of Western Australia has been established and it was agreed that, if there were a remitter to an intermediate appellate court, it would be to that Court.
The procedural fairness issue
The issue explained:The first issue, although mentioned by the appellants in their submissions, did not appear in argument as prominently as it has in the reasons of Hayne J and of Callinan and Heydon JJ[51].
[51]Reasons of Hayne J at [106]-[109]; reasons of Callinan and Heydon JJ at [144]-[147], [161]-[164].
The complaint voiced by Callinan and Heydon JJ is not only about the reference to the fact that Professor German was "well known to the Court as an eminent psychiatrist"[52] but is also about various factual mistakes said to have arisen in describing the respective years of experience of the respondent's medical witnesses and the appellants' medical witness, Dr Febbo.
[52][2004] WASCA 231 at [32].
Counsel for the respondent conceded before this Court that the Full Court's reference to the respondent's psychiatrists as being "well known" was "unfortunate"[53]. However, he argued that it was not, in the ultimate, significant. I agree. Similarly, I regard the corrections of the precise years of experience of the respective medical experts as immaterial to the point being made by the Full Court in its reasons on this issue. The appellants were correct not to make this a central submission in their arguments. Viewed in context, the Full Court was stating, with minor factual errors, no more than the obvious.
[53][2005] HCATrans 875 at 1374.
An immaterial comment:Professor German's qualifications were established in evidence. They were stated on the letterhead of his reports. They were not the subject of cross-examination or questioning. Moreover, whilst Dr Febbo was retained by the appellants' legal representatives, and qualified to give evidence on the appellants' behalf, Professor German was the respondent's treating psychiatrist. He had been so for four or five years. He therefore had a much greater "involvement" with the respondent, arising from his added responsibility of treatment[54].
[54][2004] WASCA 231 at [32].
Over the course of the consultations and treatment of the respondent, Professor German had spent "probably 20 or 30 hours" talking to him. It is not unusual, in the assessment of conflicting medical opinions, for courts to find the assessments of treating doctors more useful than those of forensic experts. Nor is it unusual for courts to compare the respective levels of experience and eminence of conflicting witnesses.
Inescapably, in specialised courts but also in general trial courts obliged to hear repeatedly the evidence of medical and other experts, impressions will be formed as to their respective skills and reliability. In a community such as Perth, it would be unsurprising that Professor German (and Dr Skerritt) would, over time, become "well known to the Court". This observation does not therefore state more than the facts that would have been known at least to local practitioners, appearing in proceedings such as the present. No one questions that Professor German and Dr Skerritt were "eminent" in their field of expertise. The Full Court itself went on to acknowledge that eminence, experience and standing in the profession of psychiatrists did not make a witness "infallible"[55]. The only complaint can therefore be whether the Full Court erred in stating the obvious and doing so without first raising it expressly during argument. In the circumstances of this case, I regard that complaint as without merit.
[55][2004] WASCA 231 at [32].
To take a point that Professor German had been a consultant for thirty-six years and not "over 40 years" as the Full Court said[56], is also to miss the proposition that the Full Court was advancing. When he began treating the respondent, Professor German had been practising as a medical practitioner for almost forty years. In rounded terms, his experience was unquestionably much longer in years, and also more intimate with the respondent, than was the case with Dr Febbo. Likewise, to quibble over the precise years of experience as a psychiatrist of Dr Skerritt and to suggest that the Full Court should have described his experience as "nearly thirty years"[57] rather than "of some 30 years' standing" is in my opinion clutching at forensic straws.
[56]Reasons of Callinan and Heydon JJ at [144].
[57]Reasons of Callinan and Heydon JJ at [145].
The correction of the years of specialist experience of Dr Febbo is also quite trivial[58]. It is not a proper basis for criticising the fundamental observation which the Full Court was making. Dr Febbo first saw the respondent in September 1996. That was three years after 1993 when he began practice as a consultant psychiatrist. One might have added a couple of years to Dr Febbo's then experience in the light of his period in training as a psychiatric registrar. One might have added a few more years to cover the consultations of Dr Febbo with the respondent to the date of the trial in 2002. However, two facts were indelible and they were the facts that the Full Court saw as critical. Professor German and Dr Skerritt were eminent, highly experienced psychiatrists with longstanding practices and experience accumulated over decades. By comparison, Dr Febbo was less eminent in professional terms. And he certainly had much less clinical experience. Moreover, Professor German, in particular, had responsibility for treating the respondent. Dr Febbo was an expert retained for the litigation. He had neither the long intervals of responsibility nor the frequency of consultations that Professor German did. And he had not, so far, reached the rank in the profession of psychiatrists that Professor German (and Dr Skerritt) had reached.
[58]Reasons of Callinan and Heydon JJ at [147].
No procedural unfairness:The Full Court might have worded its explanation for preferring the respondent's medical evidence to that of Dr Febbo in a different and more prudent way. However, it would seriously overstate the approach that the Full Court took to suggest that its preference for Professor German and Dr Skerritt over Dr Febbo governed the outcome of the appeal. The many other considerations to which I will now turn afford the real explanation for that outcome. There was a conflict of opinion at the trial between the medical experts. Properly, the primary judge did not endeavour to resolve that conflict by expressing a preference for the opinions of Dr Febbo over the respondent's witnesses on the basis of his credibility, demeanour or in-court appearance[59]. Such an approach, sometimes inappropriate in the case of lay witnesses, would even more frequently be an unsuitable and unconvincing way to resolve differences between the testimony of experts. Instead, the trial judge used other indicia to lead him to his conclusion. Correctly, the Full Court examined those considerations.
[59]Ahmedi v Ahmedi (1991) 23 NSWLR 288 at 291. See also State Rail Authority (NSW) (1999) 73 ALJR 306 at 321 [68]; 160 ALR 588 at 608.
Ultimately, it is to such other indicia that this Court must also turn in judging the acceptability and correctness of the Full Court's conclusions. The appellants' submission that they suffered a breach of procedural fairness by reason of the statement of the obvious as to the qualifications and reputation of the respondent's psychiatrists should be rejected[60].
[60]cf reasons of Gleeson CJ at [1].
The credibility issue
Foundations of the primary judge's decision: The present was not a case where the primary judge expressly or impliedly based his rejection of the respondent's case on the conduct or demeanour of witnesses in court. In order to view the conclusions at trial in this light, it would be necessary to revive the notion of an unexpressed and unstated "subtle influence of demeanour".

Such a revival would not only be inconsistent with the new emphasis contained in this Court's reasons in Fox v Percy. It would also inflict a procedural unfairness on the respondent greater than that of which the appellants complain by reference to the stated reliance of the Full Court on the reputations of Professor German and Dr Skerritt. That reference was a consideration, right or wrong, that the Full Court disclosed transparently in its reasons. To rely on a "subtle influence" that has not been mentioned or even hinted at by the primary judge is to inflict on the respondent an injustice in this Court of which the primary judge is wholly guiltless. We should not do so.
A judge cannot, in his or her reasons, expound all of the considerations that influence the decision in hand. "[T]ime and language do not permit exact expression" of every factor that has contributed to a judicial decision[61]. However, trial judges in Australia know the common disapproval of appellate courts of attempts to render trial conclusions appeal-proof by expressed reliance on the demeanour and appearance of witnesses where that is unnecessary or inappropriate. They also know the scientific unreliability of many such assessments. They are aware of the general desirability of founding judicial conclusions (as far as possible) on rationality and logic.
[61]Biogen Inc v Medeva Plc [1997] RPC 1 at 45 per Lord Hoffmann.
In fairness, I believe that this was the approach that the primary judge took to the evidence in the present trial. In doing so, he may have been affected by the substantial delay (eight months) between the conclusion of the hearing and the delivery of his reasons. Such delay (as the Full Court noted) rendered the impact of any judicial recollection of the respondent's demeanour unlikely to be such as would "justify any credibility findings on that basis"[62].
[62][2004] WASCA 231 at [157]. See Mount Lawley Pty Ltd v Western Australian Planning Commission (2004) 29 WAR 273 at 283 [30]; cf NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77 at [85].
In the Full Court, counsel for the appellants, properly, was not willing to overstate the unexpressed significance of demeanour upon the primary judge's conclusions. He accepted that the trial findings "did not depend on demeanour, although that was 'possibly an element'"[63]. Correctly, in my view, this approach led the Full Court to conclude that the primary judge's credibility findings were based (as the primary judge's own reasons suggested) on an "analysis of the recorded evidence"[64]. It was therefore both the entitlement and duty of the Full Court, in the appeal before it, to conduct its own analysis of the evidence and, whilst showing respect for the advantages that the primary judge enjoyed, to give effect to the conclusions derived from such analysis.
[63][2004] WASCA 231 at [157].
[64][2004] WASCA 231 at [158].
The video surveillance tapes:From his inspection of the video surveillance tapes tendered by the appellants at the trial, the primary judge concluded that the respondent was "capable of a much greater level of activity than that claimed by him"[65]. In describing the "significance of the video tapes", the primary judge contrasted the impression that he had derived from viewing them with the level of activity recounted by the respondent in the histories recorded by the several medical witnesses. It was the disparity between the medical histories and the evidence in the video tapes that the primary judge considered to be most relevant to his conclusion rather than any suggested incongruence between the images shown in the video tapes and the lengthy evidence of the respondent at the trial, including under cross-examination.
[65][2002] WADC 260 at [96].
If it had been the respondent's oral evidence that had given rise to the trial judge's conclusion, appellate disturbance of that conclusion would have been more difficult, according to conventional principles. However, where, as here, it was the perceived disparities between the histories given to the medical witnesses and the appearances of the respondent in the video tapes, a different consideration was brought into play. This was whether the propounded variance led the several medical witnesses to change their opinions or not. In short, the relevant consideration was whether the disparities indicated that the medical witnesses had been misled by the respondent[66].
[66]cf reasons of Hayne J at [112].
On that issue, only Dr Febbo concluded – and then not in his written report but in oral testimony – that a significant disparity was shown. The other medical experts were unimpressed by the appellants' trump card. They could not have expressed their opinions in that regard more clearly. Moreover, those opinions were stated by reference, for the most part, to the histories recorded by them at or near the times of the filming recorded in the video tapes.
The video surveillance tapes were procured by the respondent by pre-trial procedure. They were provided to, and viewed by, several of the respondent's medical witnesses. Professor German, having recorded key impressions about the chief elements of activity and conduct shown in the video tapes, stated, in his report of 5 July 2001:
"I do not think there was anything in these video passages that sheds any light on his fundamental mental state and the state of mind which I have described in my previous reports."
Dr Skerritt was even more emphatic:
"This film was as unimpressive as I have ever seen. … None of [the activities shown in the tapes] is inconsistent with a man with moderate respiratory distress, which is what [the respondent] believes himself to be. Nor does it seem to be particularly inconsistent with the descriptions that he gave to my colleagues. None of the behaviour on film has any relevance whatsoever to his psychiatric symptoms as described."
Likewise, Professor Musk saw no reason to change his opinion. In a report of 28 March 2002, after viewing the video surveillance material, he noted:
"The activities that I observed were consistently within what I would expect from a person with mild lung function impairment and during the exercise he would not have approached his maximum predicted oxygen uptake or the maximum oxygen uptake that he reached on his exercise test in November 1999. ... [He] was observed doing light work, mainly installing reticulation including digging shallow trenches. He loaded tools and other items into the back of his car. He tipped some light loads into a rubbish tip and pushed a wheelbarrow lightly laden. He walked and worked steadily but not fast taking rests although he did not appear particularly breathless. These were my impressions."
In light of the foregoing, the Full Court was in as good a position as the primary judge to compare the video surveillance tapes with the recorded histories given to the medical witnesses. The primary judge was in no better position to evaluate such disparities. Both the histories and the video tapes comprised objective evidence available as much to the appellate court as to the primary judge.
Because the video film of the respondent's activities was part of the record of the Full Court, it was made available to this Court. I too have viewed it. With all respect to the more impressionable eyes of others, I can only repeat Dr Skerritt's opinion. Considering that the video film in question amounted to a mere eighty-two minutes of footage edited from "about 150 hours of surveillance between February 1997 and July 2001"[67], it is fair to infer that what was provided was the footage most favourable to the appellants' case. Yet it left the respondent's treating physicians and the Full Court singularly unmoved. I share their reaction.
[67][2004] WASCA 231 at [50].
This is unsurprising when the basic features of the respondent's claim are remembered. These were not that the respondent was totally incapacitated and bed-ridden. Instead, he complained of breathlessness, pain, lack of energy and depression. Nothing in the tapes gainsays these complaints. Moreover, the morbid character of the respondent's condition meant that his symptoms varied significantly. In his evidence, Professor German explained that the respondent's mental state fluctuated and that he could be distracted from his anxiety when his "morbid and tearful trains of thought" were disrupted[68]. The respondent was recorded as having gained some relief from anti-depressant medication which Professor German had prescribed. In such circumstances, it was unsurprising that the respondent's physicians were unimpressed with the evidence of the surveillance tapes.
[68][2004] WASCA 231 at [86].
The primary judge said that he found the unanimous lack of impression on the part of the respondent's medical witnesses "puzzling"[69]. However, he did not explain why this was so, except by an inference that the three physicians, two of whom had treatment responsibilities, were unduly protective of the respondent and of their own earlier expressed opinions. I would reject that inference. In my view, Templeman J for the Full Court reached a conclusion that was open to that Court and which I also would have reached[70]:
"From my analysis of the video recordings, it appears that during the entire period of the surveillance, the [respondent's] activities were minimal. He exerted himself very little: and on the only occasions when he exerted himself to a greater extent – the two digging incidents – he did so for only a short time. There was much standing and moving slowly about.
It must, I think, be kept in mind that the [respondent's] activities were not limited by his physical condition, but by his perception of his condition. Given a fluctuating mood, and a capacity to be distracted from his morbid thoughts, it is not surprising that he occasionally undertook tasks which at other times he would not feel able to tackle."
[69][2002] WADC 260 at [96].
[70][2004] WASCA 231 at [124]-[125].
Upon this basis, no error is shown in the Full Court's approach to, and use of, the video film tendered at the trial. In so far as any credibility finding of the primary judge rested on the film, the Full Court was in as good a position as the primary judge to reach its own conclusions. It did. Those conclusions were, in my view, correct. However, it is enough to say that they were open to the Full Court on the basis of the evidence before it and in the conduct by it of an appeal by way of rehearing.
The lung function and Chest Clinic evidence:The second class of evidence by reference to which the primary judge explained his conclusion adverse to the respondent concerned recorded evidence about the respondent's breathlessness and other symptoms.
In part, the primary judge relied on what he described as the "objective evidence" of lung function tests that indicated that the respondent's lung functionality was within a normal range[71]. However, whilst this evidence was relevant to so much of the respondent's original case as was based on the claim that his condition had a physiological basis, it was not really relevant (certainly not critical) to the claim so far as it was based on a psychiatric disorder, dependent on what the respondent believed or perceived was his condition because of his morbid state of anxiety and depression. In respect of this second aspect of the respondent's claim, the absence of a measurable physiological basis for his morbid condition was not crucial, still less determinative. The Full Court was therefore entitled to treat the lung function tests as substantially irrelevant to the question to be answered[72].
[71][2002] WADC 260 at [66], [106].
[72][2004] WASCA 231 at [74].
There was another consideration that the primary judge mentioned as bearing on his conclusion adverse to the respondent. Records produced from the Perth Chest Clinic showed that, on various dates between April 1968 and March 1987, the respondent had mentioned symptoms of breathlessness or chest pain when presenting to the clinic for regular check-ups. The primary judge regarded this as important because the respondent had given a history to Professor German and Dr Skerritt that he had first experienced symptoms of breathlessness after his brother had died of mesothelioma in 1988. The primary judge, concluding that the respondent had been "complaining of breathlessness and chest pain for a very long time" yet had continued to work, sometimes in very strenuous physical activities, until 1995, saw an inconsistency between the presence of the recorded symptoms and the suggested onset of a serious psychiatric condition[73].
[73][2002] WADC 260 at [66], [103].
Because those who recorded the entries in the records of the Perth Chest Clinic gave no oral evidence on this point, the Full Court was as well placed as the primary judge to examine the records, to compare them with the complaints of the respondent that were in evidence and to reach conclusions as to the acceptability of those complaints. There are strong reasons to support the Full Court's opinion that the primary judge had misinterpreted the Chest Clinic records and that the correct interpretation of those records did no damage to the respondent's case[74].
[74][2004] WASCA 231 at [69]-[74], [160].
As the Full Court observed, it was incorrect to view the Chest Clinic records as "complaints" made by the respondent concerning breathlessness and chest pain. They were simply reports of the respondent's then symptoms. They were recorded in the course of regular check-ups, mandated by his employment exposure to asbestos dust. They were not, as such, "complaints" pertinent to requests for medical treatment, such as caused the respondent to seek medical attention after 1988. The Chest Clinic records could not be characterised as indicating persistent or regular complaints of pain and breathlessness requiring medical treatment. On the contrary, there is no suggestion in those records that the respondent was experiencing real difficulties with the performance of his work duties before his brother's death in 1988.
If anything, the Chest Clinic records provide support for the respondent's evidence that it was not until 1989 that he began to experience breathlessness and chest pain of such a magnitude that he felt obliged to reduce, and ultimately terminate, his employment. Thus, the Chest Clinic records for 1970, 1972, 1973, 1975, 1976, 1981, 1985 and 1988 all noted that the respondent was "keeping well" or "keeping fit" or had "no complaints".
In these circumstances, the conclusion of the Full Court on this issue was sound. In so far as the primary judge had rested his rejection of the respondent's claim of psychiatric injury following his brother's death on the suggested inconsistency of the earlier chest records, this is not borne out by a fair reading of those records. The sequence of events was, in any case, of a general character. To a vulnerable person who had been exposed to asbestos dust and who showed concern and anxiety warranted by his history and certain physical signs was added the special blow caused by his brother's agonising death, reinforced by the deaths of other friends and colleagues. Mathematical precision in the time sequence, of the kind apparently expected by the primary judge, was an illusion. The Full Court was correct to expose this error of reasoning and to reject that part of the primary judge's explanation for his conclusion.
The sequence of sibling arrivals:It was also open to the Full Court to conclude that the primary judge had overemphasised the significance of the suggested sequence of events concerning the arrival of the respondent's brother, Walter, in Australia and that of the respondent and the postulated feeling of special guilt on the respondent's part on the ground of introducing his brother to exposure to asbestos dust. The objective fact was that Walter had come to Australia some ten years before the respondent. It was thus Walter who introduced the respondent to work at Wittenoom, not the other way around.
In their reasons, Callinan and Heydon JJ suggest that in the evidence it was open to the primary judge to conclude that the respondent had deliberately fabricated the sequence of the arrivals of the respondent and his brother, suggesting that his brother had come to Wittenoom later than the respondent in order to lend credence to a claim based upon a psychiatric injury following the brother's death[75]. Whilst this is a conceivable interpretation of the evidence, it is scarcely persuasive. Indeed it was, as the Full Court found it, "glaringly improbable"[76].
[75]Reasons of Callinan and Heydon JJ at [170]-[173].
[76][2004] WASCA 231 at [161].
The Full Court's opinion in this regard was clearly available to it. This is because the suggested mis-statement of who had introduced whom to Wittenoom was never made by the respondent in oral testimony. Its source can be traced to a history recorded by the respondent's psychologist, Mr George Burns. Mr Burns' report was then copied by other medical witnesses. Thus Dr John Penman conceded that the incorrect statement of the time sequence was not in his own notes of his consultation with the respondent. He accepted that he had probably taken the incorrect history from Mr Burns' earlier report made available to him[77].
[77][2004] WASCA 231 at [145].
The extreme unlikelihood of the respondent's mis-stating the sequence of arrivals can be seen when the objective facts are examined in the way that the Full Court undertook. The respondent was much younger than Walter. Walter had arrived in Australia earlier. That fact, and the employment dates at Wittenoom, would, to the respondent's sure knowledge, have been known to, and recorded by, the appellants. The possibility of hoodwinking the appellants on such an issue was incredible. The respondent's fluency in English, as disclosed in the trial transcript[78] and as acknowledged by Dr Febbo, who was himself Italian-speaking, was imperfect. In these circumstances, a misunderstanding on the part of Mr Burns, in recording the respondent's history in this respect, could easily occur. This conclusion is reinforced by the fact that the respondent was recorded by Professor German as expressing guilt as a result of "bringing some of his friends to Australia".
[78][2004] WASCA 231 at [151].
It was therefore well open to the Full Court to conclude that Mr Burns had misunderstood a similar statement made to him because of language difficulties. He had transposed Walter for the friends. Had the respondent embarked upon such a foolish and deliberate deception, one would have expected it to have been continued. Everywhere else (save in Mr Burns' report) both in oral testimony and medical histories, the correct sequence appears when attributed to the respondent himself.
It follows that no error is shown in the Full Court's treatment of this issue. Another foundation for the primary judge's rejection of the respondent's claim of psychiatric injury was thus knocked away.
Preference between the medical opinions:The Full Court had therefore rejected the bases nominated by the primary judge for disbelieving the factual foundation of the respondent's claim for damages for psychiatric injury. It found the video tape surveillance evidence unpersuasive. It rejected the results of the lung function tests as relevantly immaterial and the Chest Clinic records as undamaging to the respondent's case. It dismissed, as a mistake, the suggested reliance on an inaccurate statement that the respondent felt guilty because he had brought his brother to Wittenoom. To these conclusions were then added the compelling ingredients of the objective and substantially uncontested facts that supported the respondent's case and the powerful evidence of the treating physicians, Professors German and Musk and Dr Skerritt, who supported the respondent's case, having seen the video tapes. To all these considerations was further added the delay of eight months between the trial and the primary judge's decision that made his conclusions about the facts proved at trial potentially unreliable.

Yet was it open to the Full Court to dispose of the appeal by preferring the opinions of Professors German and Musk and Dr Skerritt over the opinion of Dr Febbo, which the primary judge accepted? It would have been natural for the Full Court to endeavour to bring the proceedings to a close. Certainly, that Court was empowered to do so, provided there was no relevant disqualifying disadvantage compared to the position enjoyed by the trial judge. The Full Court had before it a considerable quantity of medical material. Many reports and clinical notes had been tendered. The Full Court also had the record of the oral testimony, relevantly of Professors Musk and German and Drs Skerritt and Febbo and Mr Burns. On the basis of that record, the objective of substantial finality that influenced the Full Court is understandable.
However, a question remains whether, having found the defects that it did in the reasoning of the primary judge, the Full Court was correct to dispose of the respondent's substantive claim for itself or whether it ought to have ordered a retrial. This is the final issue for our decision.
The appellate orders issue
The appellants' submission:The appellants argued that, whilst allowing for the undoubted amplitude of appellate review available to the Full Court, that Court had erred in concluding that it was able adequately to judge the oral and documentary evidence and to reach conclusions, as it did, disposing of most issues of liability and requiring the damages to be assessed. The appellants submitted that, in the premises accepted by the Full Court, the proper order was one of retrial.
Under the Rules of the Supreme Court the Full Court, on any appeal, had "all the powers and duties … of the Court … appealed from … with full discretionary power to receive further evidence upon questions of fact"[79]. It is implicit in the powers contained in this Rule that they must be carried out with justice to both parties so as to achieve the statutory object of providing the facility of an appeal by way of rehearing, based substantially on the record.
[79]Rules of the Supreme Court 1971 (WA), O 63, r 10(1) (since repealed).
In their reasons, Callinan and Heydon JJ have considered, but rejected, the substitution of an order for retrial[80]. However, their rejection of that course follows their Honours' conclusion that the premises nominated by the primary judge for disbelieving the respondent's claim of psychiatric injury, and preferring the evidence of Dr Febbo to that of the respondent's medical witnesses, should stand. Because I do not share this conclusion, it is necessary to consider the correctness of the Full Court's orders in this case, upon the basis, accepted by that Court, that the primary judge's reasoning was flawed, such that the Full Court was required, for itself, to dispose of the proceedings in the exercise of its own powers.
[80]Reasons of Callinan and Heydon JJ at [165].
A retrial should be had:There are several difficulties in the orders that the Full Court made, limiting the conduct of the retrial.
First, it is not clear that the Full Court gave any, or any adequate, attention to the difficulties that can arise in ordering a retrial limited to particular questions. In Pateman v Higgin[81], Kitto J, discussing the power of an appellate court to order a retrial[82], said:
"[I]t remains … a sound general proposition from which to start in the consideration of each particular case according to its own circumstances that if there is to be a new trial it ought to be of the case as a whole unless the Court thinks that 'they shall do more injustice by setting the matter at large again'."
[81](1957) 97 CLR 521 at 527 quoting Hutchinson v Piper (1812) 4 Taunt 555 at 556-557 [128 ER 447 at 448].
[82]Under the Common Law Procedure Act 1899 (NSW), s 160.
This principle was considered by this Court in Waterways Authority v Fitzgibbon[83]. In that case, the Court decided an appeal brought from a new trial order made by the Court of Appeal of New South Wales. That Court had substituted a factual finding decisive to the issue of causation in a claim for damages for negligence which had been dismissed at trial. The question before this Court was whether the Court of Appeal had erred in ordering a new trial on a limited basis. By majority[84], this Court concluded that the Court of Appeal had erred. It substituted an order that there be a new trial generally. It is a fair inference from the reasoning of the majority in that case that the principle in Pateman v Higgin still represents the approach to be taken by intermediate appellate courts in formulating their orders, once an appeal is allowed. In his reasons, Hayne J[85], citing Fox v Percy[86], drew particular attention to the "natural limitations" that exist in the case of any appellate court proceeding wholly or substantially on the record. He said[87]:
"The defect in the primary judge's fact finding lay in the failure to evaluate all of the evidence bearing upon the relevant issue of fact. The Court of Appeal could not substitute its finding when that too was based on only part of the material which ought properly to have been considered by the primary judge. Yet that is what the Court of Appeal did."
[83](2005) 79 ALJR 1816 at 1834 [119]-[120]; 221 ALR 402 at 426-427.
[84]Gleeson CJ, McHugh, Gummow and Hayne JJ; Kirby, Callinan and Heydon JJ dissenting.
[85](2005) 79 ALJR 1816 at 1836 [133]; 221 ALR 402 at 429.
[86](2003) 214 CLR 118 at 125-126 [23].
[87](2005) 79 ALJR 1816 at 1836 [133]; 221 ALR 402 at 429.
It cannot be gainsaid that a consideration, relevant to the proper disposition of the proceedings between the present respondent and the appellants, was the evidence of the respondent himself and of the several witnesses, including the medical witnesses who disagreed with Dr Febbo. Because of the disagreement between the witnesses and because that disagreement related to the psychiatric injury claimed by the respondent, its existence, duration and degree were not as susceptible to determination on the basis of the record as would be the case where, for example, the injury amounted to a clearly provable, objectively demonstrated physiological one. The respondent was entitled to damages for any psychiatric injury that he had proved. However, proving that injury carried with it added difficulties. The proof was not susceptible to a decision on the record, at least in the circumstances of this case.
Secondly, the fact that the Full Court considered it proper to remit the matter to the trial judge for the assessment of damages also presents a difficulty. Untangling the damages attributable to the physical injury suffered by the respondent and those attributable to the psychiatric injury that he claimed was not without problems[88]. Although it is true that the evidence adduced at the trial suggested a conclusion that any physical injury suffered by the respondent had not manifested itself, according to current protocols, in a way justifying the respondent's symptoms and complaints, the fact remained that there were some physical signs. Thus, Dr Peter Bremner, in a report of February 2002, whilst concluding that the respondent's life expectancy "will not be altered by his present lung disease", nevertheless stated:
"There is an increased risk of him developing malignant mesothelioma as a result of his asbestos exposure and this risk is high in comparison with the general population. … Absence of progression of his asbestos-related lung disease between 1994 and 2002 is encouraging. ... [His] asbestos related lung disease is most likely due to his exposure to asbestos at Wittenoom."
[88]cf Neindorf v Junkovic [2005] HCA 75 at [50].
Disentangling any consequences, however slight, of the pleural plaques and physical injuries suffered by the respondent from the consequences of his psychiatric injury would not be simple. In the end, it might not be necessary. However, it would be desirable that the task should be performed by a judge acquainted with both aspects of the respondent's case, able to differentiate, so far as was necessary, between the causative factors for which the appellants were responsible and those for which liability had not been proved.
Thirdly, because damage is an essential element in the cause of action in negligence, it can sometimes be difficult to dissect that element of the action, and the related questions of duty and causation, so as to permit damage to be resolved, disjoined from other issues of liability. Whilst it is not unknown for questions of liability and damages on other issues to be severed and for retrials to be ordered, including in negligence claims, limited to damages where liability is otherwise clear, the present is not a case where that course was appropriate[89]. By the order of the Full Court, the respective liabilities of the two appellants had still to be decided. This could not be done before the precise nature and extent of the damage suffered by the respondent was clear. Consistently with the approach of this Court in Waterways, the proper course was for a general order of retrial.
[89]cf Waterways (2005) 79 ALJR 1816 at 1820 [19]; 221 ALR 402 at 408.
Fourthly, that order is also more appropriate to the errors found in the reasoning of the primary judge. Those errors concerned, as the Full Court put it, the unpersuasive reasons advanced for rejecting the respondent's claim in its entirety and the delay that had occurred in delivering the primary judge's reasons. That delay was treated by the Full Court as pertinent to the unsatisfactory determinations of the conflicting evidence in the trial[90]. In this case the proper way to cure that feature of the trial was not to make a further effort, on the basis of the record, and by judges who had not conducted the trial, to sort out the correct or preferable conclusion. It was to require the matter to be retried, allowing fully for the disappointment, expense and further delay that that course necessarily entails[91].
[90]cf NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77 at [85].
[91]Waterways (2005) 79 ALJR 1816 at 1836 [135] per Hayne J; 221 ALR 402 at 429.
Conclusion: order for retrial:It follows that I consider that the Full Court erred in the dispositive orders that it made. In some ways this case is similar to Waterways. By reference to the entirety of the evidence, the decision at trial was shown to be flawed. The reasoning of the primary judge was defective. The proper course was to order a retrial generally. That is the course that this Court should now adopt.
Orders
The appeal should be allowed in part. Paragraphs 2 and 3 of the orders of the Full Court should be set aside. In place of those orders, this Court should order that the proceedings brought by the respondent against the appellants be remitted to the District Court for retrial. As each party has partly succeeded and partly failed in this Court, no order should be made for the costs of this appeal.
HAYNE J. The respondent, Mr Arturo Della Maddalena, was born in Italy in January 1943. He came to Australia in August 1961 and, in September that year, began work at the Wittenoom asbestos mine and mill. Mr Della Maddalena worked in the mine and in the mill at Wittenoom, on and off, for a total period of about three and a half years until operations at Wittenoom were closed at the end of 1966. In the course of his employment he was heavily exposed to dust containing asbestos.
In 1994, Mr Della Maddalena commenced an action against the appellants in the District Court of Western Australia claiming damages for personal injury. He alleged that the Wittenoom mine and mill had been owned, occupied or managed by one or other of the appellants. The second appellant, Midalco Pty Ltd, admitted that it had owned, occupied or managed the mine and the mill. The first appellant, CSR Ltd, denied that it had owned, occupied or managed the mine or the mill but no issue in this appeal turns on that question. In his amended statement of claim, Mr Della Maddalena alleged that by reason of the exposure to asbestos in the course of his employment, he had suffered, and would continue to suffer, injuries as a result of which he was permanently incapacitated. Five forms of injury were alleged: asbestosis, pleural disease, respiratory degeneration, pain and breathlessness, and psychological reaction.
At trial, Mr Della Maddalena's claim was dismissed with costs. The trial judge (O'Sullivan DCJ) found that "the evidence does not warrant the conclusion that as a result of his exposure to asbestos the plaintiff has suffered any physical or psychiatric injury"[92].
[92]Della Maddalena v CSR Ltd [2002] WADC 260 at [107].
Mr Della Maddalena appealed to the Full Court of the Supreme Court of Western Australia. That Court (Steytler, Templeman and Wheeler JJ) allowed the appeal[93], holding that the trial judge should have found that Mr Della Maddalena had suffered a psychiatric injury. The Court ordered that there be judgment for the plaintiff against the second respondent, Midalco, for damages to be assessed, and that the issue of the claim against CSR be remitted to the trial judge. By special leave, CSR and Midalco now appeal against those orders. In order to understand the issues that arise in the appeal to this Court, it is necessary to say something more about the facts and about the decisions in the courts below.
[93]Maddalena v CSR Ltd [2004] WASCA 231.
At trial, Mr Della Maddalena gave evidence that he first became aware that exposure to asbestos may have been dangerous some time before 1980. His brother (or step-brother), Walter, had worked at Wittenoom and in 1988 died of mesothelioma. Watching the deterioration in his brother's condition caused Mr Della Maddalena to consult his general medical practitioner. He was referred to Professor A W Musk, a respiratory physician. Thereafter, Mr Della Maddalena consulted Professor Musk on a number of occasions during the succeeding years. He was referred to other respiratory physicians and various diagnostic tests were undertaken.
Mr Della Maddalena gave evidence that, after about 1990, he started to experience some shortness of breath, chest pain and tiredness. He said that he became increasingly worried about his condition and the reports of his treating doctors tendered in evidence remarked upon what appeared to them to be symptoms of depression. Mr Della Maddalena's general practitioner referred him to a psychiatrist and he consulted a clinical psychologist. Subsequently, Mr Della Maddalena consulted, and was treated by, Professor G A German, a consultant physician in psychological medicine and he was also examined by three other psychiatrists, Dr J Penman, Dr P W Skerritt and Dr S D Febbo. There was, therefore, a very considerable body of material available to be called at the trial concerning the physical and psychiatric condition of Mr Della Maddalena.
A consistent theme running through all the medical evidence was that Mr Della Maddalena had complained to the doctors of breathlessness and chest pain. From at least the late 1990s he described these symptoms as interfering with his ability to carry out many (sometimes any) significant physical activities.
Videotapes were tendered in evidence at trial which, it was submitted, showed Mr Della Maddalena undertaking activities inconsistent with his suffering the symptoms of breathlessness and pain he reported to medical practitioners. These videotapes were compiled from much longer videotapes of surveillance that had been undertaken. The trial judge was evidently persuaded that what was shown on the videotapes tendered in evidence was not consistent with Mr Della Maddalena suffering from breathlessness or chest pain. He concluded that "the claim that [Mr Della Maddalena] now suffers from breathlessness and chest pain should not be accepted". Three reasons were given in support of that conclusion. First, there was the videotape evidence. Secondly, the trial judge contrasted the evidence which Mr Della Maddalena gave at trial, to the effect that he had first suffered from breathlessness in or after 1990, with notes kept by the Perth Chest Clinic of consultations with Mr Della Maddalena from 1968 onwards. Those notes recorded that Mr Della Maddalena had complained on a number of occasions of shortness of breath and, at least once, of pain in the left side of the chest. Thirdly, the trial judge referred to evidence given by Professor Musk that the results of lung function tests of Mr Della Maddalena were "within the normal range".
All of the psychiatrists who gave evidence at the trial had expressed the opinion that Mr Della Maddalena was suffering from a psychiatric illness. At the risk of undue abbreviation of the opinions, each had concluded that Mr Della Maddalena was suffering from a major depression associated with significant anxiety. Each had expressed an opinion attributing this condition to his concern about the consequences of his exposure to asbestos. Each founded the diagnosis, in important respects, upon Mr Della Maddalena's description of his incapacities.
Dr Febbo, who had been retained by CSR and Midalco to assess Mr Della Maddalena's condition, gave evidence at trial that the diagnosis he had originally made (of "a partially treated Major Depression") was based on the premise that Mr Della Maddalena's history was reliable. He said that he considered that there were inconsistencies between that history and what he, Dr Febbo, had observed when looking at the video surveillance tapes. Dr Febbo concluded, in effect, that because of his concern about the veracity of the history Mr Della Maddalena had provided, he could no longer adhere to the opinions he had earlier expressed about Mr Della Maddalena's psychiatric condition. By contrast, neither Professor German nor Dr Skerritt considered the activities that were shown on the videotapes required any modification of the opinion each had formed, that Mr Della Maddalena was suffering from a psychiatric illness.
The trial judge, having concluded that the videotapes demonstrated that Mr Della Maddalena was capable of a much greater level of activity than that claimed by him, said that he found the views expressed by Professor German and Dr Skerritt to be "puzzling". Rather, he concluded, "the opinion of Dr Febbo is to be preferred".
Exactly what the trial judge meant by saying that the opinion of Dr Febbo was to be preferred may be open to some doubt. What Dr Febbo had said was that if Mr Della Maddalena's history was accurate, he was suffering a major depression and anxiety. If, however, Mr Della Maddalena's history was not accurate, Dr Febbo could not make that diagnosis. The better view may be that the trial judge is to be understood as holding that Mr Della Maddalena had failed to discharge the onus of proving that he suffered the psychiatric injury of which he complained because Mr Della Maddalena had failed to prove that he had been experiencing the symptoms which he had reported to medical practitioners.
The principal reasons of the Full Court were given by Templeman J. His Honour characterised the trial judge's decision as turning upon the view that the trial judge had formed about the credibility of Mr Della Maddalena. Having referred to a number of decisions of this Court including Fox v Percy[94], Devries v Australian National Railways Commission[95] and Pledge v Roads and Traffic Authority[96], Templeman J identified three matters as underpinning the conclusions reached by the trial judge. Those matters were: first, what was seen as a significant inconsistency between the degree of Mr Della Maddalena's claimed disability and his actual disability; secondly, the apparent disconformity between what Mr Della Maddalena said in evidence about the time at which symptoms of breathlessness first appeared and what was recorded in the notes of the Perth Chest Clinic; and, thirdly, inaccuracies in the history which Mr Della Maddalena had given about the death of his brother and, in particular, whether Mr Della Maddalena had introduced his brother to working at Wittenoom. Because trial of the action finished on 9 April 2002, and judgment was not delivered by the trial judge until 17 December 2002, Templeman J concluded that demeanour could have played no significant part in the trial judge's deciding whether to accept Mr Della Maddalena's evidence.
[94](2003) 214 CLR 118.
[95](1993) 177 CLR 472.
[96](2004) 78 ALJR 572; 205 ALR 56.

The impact of the video recordings. A further basis advanced by the Full Court for the reversal of the trial judge's findings on credibility adverse to the respondent, requires separate and somewhat more lengthy consideration. Templeman J did watch the video recordings, and the concurrence of the other judges suggests that they did too. They were in as good a position to make an assessment as the trial judge. They were also in an equally good position to make a comparison between what the recordings showed, and the written reports of the doctors and the transcripts of their evidence, and the transcripts of the evidence of the respondent. That opportunity was a substantial one, but it still fell far short of the real advantage that the trial judge enjoyed in this case, of actually seeing and hearing the evidence of the witnesses, particularly the respondent, and of observing his reaction to each segment of the film as it was shown to him.
There are cases in which the advantages enjoyed by trial judges over appellate courts are exaggerated. A complete written record, a degree of detachment from the trial itself, and the sum of the collective knowledge and experience of three or more judges may themselves on occasions place the appeal court in a superior position to that of the trial judge to decide the case. But this is not such a case. This is one case in which "the subtle influence of demeanour" cannot be overlooked; it is a case in which it "does not follow that, because [the trial judge] made no express reference to … demeanour … , demeanour … played no part in [his] findings"[105]. The position of the appellants' counsel before the Full Court and in this Court was that demeanour was not critical in determining credibility issues at trial, but that it could not be eliminated. In truth it must have been of some significance and, although the advantage which the trial judge had may have been reduced by the time between when he heard the evidence and when he gave judgment, it has not been shown to have been reduced to nothing. The trial judge formed a certain impression of the respondent judged in relation to the video recordings and his reaction to them. The way in which the respondent visibly responded to questions, any delays, evasions or reluctance in answering them, and the extent of his fluency in English, were all matters of especial relevance in a case of this kind, and ones which only the trial judge, and not a court of appeal could perceive and weigh against all of the other relevant evidence in the case. They bore directly upon the weight to be given to the respondent's evidence at the trial, his statements to the medical practitioners, and their opinions of him. The Full Court's opinion that the trial judge had given no reasons for the key conclusion that the video recordings undermined the credibility of the histories given by the respondent, and the Full Court's handling of the issue relating to the respondent's guilt about his brother, were both erroneous, and they appear to have led the Full Court into a further error of not paying any regard to the trial judge's advantages because their Honours appeared to think he had failed to use or palpably misused them. In consequence, this was not a case in which a different opinion from the trial judge's, of what the video film showed, judged in relation to testimony, particularly from the respondent, about it could justify the reversal of a finding of credibility adverse to a party.
[105]Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179 per McHugh J.
That conclusion is reinforced by the fact that the Full Court, in analyzing what the video recordings revealed, did not deal with Dr Febbo's view of them. That was a consequence of their Honours' decision to adopt a particular approach to the video recordings. Their Honours did "not think it appropriate to compare the [respondent's] activities as shown on the video recordings with everything he had ever said to the doctors who had examined him." They thought "the better approach is to compare the [respondent's] description of his symptoms at or as close as possible to the relevant periods of surveillance." Dr Febbo first saw the respondent on 3 September 1996 and 26 November 1996, and the date of his report on those interviews was 23 December 1996. The first video recordings were apparently made on 1, 2, 10, 19 and 20 September 1997. On that basis the Full Court did not discuss his reactions to the video recordings, and began with Dr Penman's report of 16 September 1997 on his consultation with the respondent on 9 September 1997. The Full Court then dealt with a report of Professor Musk on 5 November 1997 and two films made on 9 and 11 December 1997. The next films were made on 13 March 1998; on 1 April 1998 Professor German reported on an attendance by the respondent on or about that day. On 17 March 1999 the respondent saw Dr Tarala, who reported on 23 April 1999. On 23 March 1999 a further film was made. The Full Court next dealt with the film of 16 November 1999, and a report by Dr Lee dated 23 March 2000 on an examination on 23 February 2000.
The Full Court then turned to various aspects of the respondent's evidence before concluding that it was internally consistent and not inconsistent with the video recordings. The Full Court pointed out that the video surveillance did not commence until after the respondent had seen Dr Febbo in 1996.
Dr Febbo's reaction on 31 August 2000 to the video recordings was that he could not reconcile them with the history given in 1996 "assuming that there had not been a considerable improvement in [the respondent's] condition" between 1996 and the time when the recordings were made. The Full Court noted that between 1996 and 2000 the respondent had been under Professor German's care, and "derived some benefit" from Aropax and from the consultations with Professor German. The finding that he had "derived some benefit" sits badly with what Professor German reported on 16 October 1998:
"I cannot see any substantial change in his impaired functioning, which is very considerable, even with vigorous anti-depressant and other forms of psychiatric therapy. I note that although he reported to Dr Gidley that he felt better with anti-depressants, he later denied this to Dr Febbo and indicated that these had done nothing for him except to make him feel 'dopey'. Certainly his response to date to anti-depressants, although, I think, present, is not dramatic."
The finding that the respondent had "derived some benefit" also sits badly with Professor German's evidence in chief. After being referred to the passage just quoted, he said the prognosis was the same. After referring to the "fairly potent medication" which the respondent had been taking, he said:
"He has some capacity now to enjoy things he used to enjoy before although not at the same level and that reflects the effect of treatment but his major problem which is his total preoccupation with his gloomy prognosis, as he understands it, continues and with this ritual of going for repeated chest scans and assessments by respiratory physicians every year always bringing the possibility of further bad news and sometimes in reality further bad news I can't see how his conviction of a miserable death in the future could be changed."
These items of evidence do not support the view that "a considerable improvement" had taken place after Dr Febbo first saw the respondent in 1996.
The Full Court had another reason for explaining any difference between what the respondent's capacities as filmed appeared to be and the respondent's capacities as reported to doctors. The reasoning proceeded in this way. First, so far as the respondent said in histories that he was not "able to undertake any form of physical activity", or that for more than a year "all he had done in terms of activities was water the garden", or that he was "not doing anything because of pain" or that he was unable to "do anything" to fix a house his son had purchased, he was speaking in an exaggerated or figurative way, not literally. Secondly, some contrast between what the video recordings showed and what the respondent said in the histories could be explained thus:
"[The respondent's] activities were not limited by his physical condition, but by his perception of his condition. Given a fluctuating mood, and a capacity to be distracted from his morbid thoughts, it is not surprising that he occasionally undertook tasks which at other times he would not feel able to tackle."
The difficulties in this reasoning are as follows. The first ten words of the passage just quoted involve a massive departure from the respondent's case at trial, in which he contended that he had asbestosis, pleural disease, respiratory degeneration, chest pain and breathlessness. The rejection of most of this case by the trial judge, and the failure of the respondent to challenge that rejection in either appeal, itself points strongly against his credibility.
Secondly, the respondent couched his histories and his evidence in chief in general and universal terms. Dr Febbo was entitled to feel disquiet about the respondent's reliability in view of those parts of the video recordings which contradicted the generality of the histories. In cross-examination Dr Febbo was never asked to retract or qualify any part of his evidence on the basis that he had failed to take account of any supposed variation in the respondent's conduct caused by fluctuations in mood and distractions from his morbid thoughts, either in general or in relation to what he perceived in the video recordings. The respondent faced a dilemma. Either the picture of general and universal incapacity presented in the histories was right or it was wrong. So far as it was right, it might support the opinions of the doctors, but only so far as the video recordings were not adverse to it. So far as it was wrong, whether because of exaggeration or because of fluctuations in mood, the histories lost validity as a basis for professional opinions favourable to him.
It cannot be said that the Full Court's method, considered by itself, was without utility. But in necessarily excluding Dr Febbo's reports from integration into the reasoning, it overlooked the fact that Dr Febbo's perceptions of the video recordings were not challenged in cross-examination. It is one thing to pay attention to the reports of doctors close to the time of the events filmed. It is another wholly to exclude from consideration evidence of Dr Febbo's reactions which, though not close in time to the events filmed, were not challenged, particularly where no convincing reason has been postulated to explain why the respondent's capacities as filmed were more extensive than those reported to doctors.
In all the circumstances, just as it was wrong to conclude that Dr Febbo expressed no clear opinion, so it was wrong to ignore, or at least marginalize, Dr Febbo's reaction to the video recordings.
The Full Court, concentrating on the video film, the internal consistency of the respondent's evidence as recorded in the transcript, and the consistency of the respondent's evidence as recorded in the transcript with the video film, found no basis for doubting the respondent's credibility. However, in the circumstances of this case, the different impression formed by the Full Court in the light of the factors it examined could not justify the reversal of the trial judge's finding about the respondent's credibility in a manner adverse to the appellants in the light of the rather different factors he bore in mind. Unlike the Full Court, we do not consider an inference favourable to the respondent to be any more compelling than the inference drawn by the trial judge, particularly having regard to the fact that the respondent bore the onus of proving his case.
Because Templeman J's appreciation of the video film loomed so large in his Honour's reasons, we also viewed it. For what it is worth, our opinion of it is much closer to that of the trial judge than to his Honour's. It left us with a clear impression of a physically fit man able to move, lift, push a wheelbarrow, bend and dig efficiently and freely, and apparently painlessly.
The trial judge's treatment of Professor German. Another error in the Full Court's reasoning is to be found in the following passage:
"It is … to be implied from the trial Judge's reasons that he would have accepted Professor German's diagnosis (and therefore his assessment that the [respondent] was credible and genuine) but for his Honour's perception that there was inconsistency between the [respondent's] activities as shown on the video recordings and as described to his doctors."
This is erroneous. The trial judge advanced several reasons apart from the video recordings for rejecting the respondent and therefore rejecting Professor German's diagnosis: the absence of objective support for the respondent, the results of the lung function tests, the demonstration by the notes from the Chest Clinic that the respondent had asserted breathlessness many years before his brother's death, during which period the respondent worked full time until 1995, and the erroneous statement about the respondent's guilt in relation to his brother's death. Secondly, the passage is circular. In large measure Professor German's diagnosis depended on the respondent's history being credible and genuine. The fact of the diagnosis did not establish that it was.
The passage is related to another unsatisfactory element of the Full Court's reasoning – its treatment of the Perth Chest Clinic records. One of the reasons why the trial judge rejected the respondent's claim that he suffered from breathlessness and chest pain (apart from the video tapes and the lung function tests) was that although he worked until 1995, he had complained of breathlessness and chest pain on six occasions in 1968, 1971, 1977, 1979, 1983 and 1987, according to the records of the Chest Clinic. The Full Court said that the records did not show "complaints", but "symptoms, presumably described in response to enquiry." This semantic point is of no substance. The fact is that the records were inconsistent with the respondent's claim in testimony that his first experience of breathlessness was in 1990, and the Full Court did not reconcile the testimony with the records.
The other two criticisms by the Full Court of the trial judge's reasoning were that there was no suggestion that the respondent had difficulty in working until after 1988, and the Chest Clinic records also record the respondent as being well. However, these criticisms miss the point which the trial judge was making about the Chest Clinic records: the contradiction between what the respondent told the Chest Clinic before 1988 and what he told other medical professionals and the court after 1995 radically undercuts his reliability as an historian of his own symptoms.
Is an alternative case available to the respondent?
It has been a matter of some concern to us whether, despite the fact that the trial judge rejected, and not incorrectly so, the contention that the respondent suffered the psychiatric condition that he claimed, and that the respondent had any physical disabilities as a consequence of it, the respondent may nonetheless have made out a case of some non-minimal compensable injury[106]. There is uncontradicted evidence of the presence in his body of some asbestos fibres. There may also have been some basis for a holding that the respondent genuinely believed himself to be suffering disabilities, either or both physical and psychiatric, as a result of exposure to asbestos, even though there was no medical basis for them: that his case was one of functional overlay or psychosomatism, but still disabling for all that.
[106]See Cartledge v E Jopling & Sons Ltd [1963] AC 758.
Psychosomatism and functional overlay, whatever may be the correct definition of them, are expressions used interchangeably by lawyers. Of the former, recognizing that it may sound in damages, Windeyer J in Mount Isa Mines Ltd v Pusey[107] said this[108]:
"Sorrow does not sound in damages. A plaintiff in an action of negligence cannot recover damages for a 'shock', however grievous, which was no more than an immediate emotional response to a distressing experience sudden, severe and saddening. It is, however, today a known medical fact that severe emotional distress can be the starting point of a lasting disorder of mind or body, some form of psychoneurosis or a psychosomatic illness. For that, if it be the result of a tortious act, damages may be had."
[107](1970) 125 CLR 383.
[108](1970) 125 CLR 383 at 394. See Tame v New South Wales (2002) 211 CLR 317 at 374-375 [171] per Gummow and Kirby JJ.
In Bunyan v Jordan[109], Dixon J said[110]:
"On the medical evidence, the jury might find that the defendant's actions threw the plaintiff into a sufficiently emotional condition to lead to a neurasthenic breakdown amounting to an illness.
I have no doubt that such an illness without more is a form of harm or damage sufficient for the purpose of any action on the case in which damage is the gist of the action, that is, supposing that the other ingredients of the cause of action are present."
"Functional overlay" was recently discussed in the Court of Appeal of New South Wales (Hodgson and McColl JJA and Cripps AJA) in J & K Clothing Pty Ltd v Mahmoud[111], a case which, by reason of the way in which the plaintiff chose to conduct it, and the consequential ambiguity of his claim, has some similarities with this one. And although the plaintiff there ultimately failed, the Court of Appeal accepted that had he set out to make a claim of, allege and prove functional overlay, he could well have been entitled to be compensated for it.
[109](1937) 57 CLR 1.
[110](1937) 57 CLR 1 at 16. See also Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383 at 395.
[111][2004] NSWCA 207.
One reason why a reasonably high degree of precision about the true nature of a condition of psychosomatism or functional overlay is important is that, as the primary judge said in Mahmoud[112], a functional overlay may not so much be a psychiatric condition as an idiosyncratic reaction to a perceived, perhaps imagined, problem. Precision is also desirable because experience tells that after the successful conclusion of litigation a functionally overlaid plaintiff may sometimes make a speedy recovery.
[112][2004] NSWCA 207 at [14].
In this case however, as the Court of Appeal did in Mahmoud, we have formed the view that the respondent cannot succeed upon any basis that he was suffering at least a compensable psychosomatic condition or functional overlay. The reason why this is so is that, as the Full Court observed in its reasons, in essence, the respondent's claim was based on the diagnosis of anxiety and depression made by a number of psychiatrists, and that these were productive of an incapacity to work and to lead an active physical life. That observation is generally consistent with the respondent's notice of appeal to the Full Court. For example, ground three was that the trial judge erred in failing to find that there was a psychiatric basis for the respondent's symptoms of chest pain and breathlessness, and that he also erred in finding that the respondent had not suffered psychiatric injury.
Had the respondent presented and argued either a primary or an alternative case of psychosomatism or functional overlay, different factual issues would have had to be explored, including as we have pointed out, because of its relevance to quantum, the likely post-litigation duration of the condition. Questions of the kind raised in Watts v Rake[113] and Purkess v Crittenden[114] as to the respective causes of or contributions to the respondent's true condition, would also have had to be answered, such as the relevance of non-compensable sorrow or grief to it. Even in this Court, the respondent never argued a case of psychosomatism or functional overlay. Indeed neither party ever mentioned such a possibility. His case throughout was that his psychiatric condition produced actual physical incapacity. Once he was disbelieved about that, he was left with no arguable basis for it. This being so, it is unnecessary to consider whether the presence of a functional overlay or psychosomatism might provide any basis for an award of damages in favour of the respondent.
[113](1960) 108 CLR 158.
[114](1965) 114 CLR 164.

The appeal should be allowed with costs. We would order that:
1. The appeal be allowed with costs.
2.The orders made by the Full Court of the Supreme Court of Western Australia on 13 October 2004 be set aside and in lieu thereof order that the appeal to the Full Court be dismissed with costs.