Dorothy Ruby Peattie v Gregory Eric Murray

[1982] FCA 101

Re: DOROTHY RUBY PEATTIE
And: GREGORY ERIC MURRAY
A.C.T. No. G8 of 1981
Damages

COURT

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Blackburn J.
Northrop J.
Ellicott J.

CATCHWORDS

Damages - assessment of damages for personal injury - mitigation - assessment of future economic loss.

HEARING

CANBERRA

#DATE 10:6:1982

ORDER

1. The appeal be allowed.

2. The judgment of the Supreme Court of the Australian Capital Territory set aside and in lieu thereof order that there be judgment for the plaintiff against the defendant in the sum of $80,000.

3. That the respondent pay the appellant's costs of this appeal and of the trial.

JUDGE1

This is an appeal from a judgment of the Supreme Court of the A.C.T. constituted by a single Judge given on 3 March 1981 in which the appellant, Dorothy Ruby Peattie, was plaintiff and the respondent, Gregory Eric Murray, was defendant. The judgment was for the sum of $48,811.90 with costs to be taxed being damages for personal injuries sustained by the appellant on 12 April 1979 when the motor car being driven by her was struck in the rear by a motor car being driven by the respondent. At the trial, the respondent did not dispute liability to pay damages and the only issue before the trial Judge was the assessment of damages to be awarded to the appellant. The substantial issues raised by the appellant as set out in the notice of appeal are:

"1. The learned trial Judge erred in law in taking the view that the appellant's damages should be assessed upon the basis that she had been advised to have an operation.

2. The learned trial Judge erred in law in holding that the appellant's damages should be assessed on the basis that she had unreasonably refused to undergo an operation.

3. The learned trial Judge erred in law in finding that the appellant had failed to mitigate her damage.

4. The learned trial Judge was in error in discounting the appellant's future economic loss.

5. The sum awarded for general damages was too small."

Grounds 1 to 4 inclusive relate to the issue described as the failure by the appellant to mitigate her damages. Ground 5 relates to general damages, excluding damages relating to loss of earning capacity.

The appellant is now fifty-eight years of age. She has led a strenuous life and has suffered hardship and a number of injuries. She has undertaken many different types of occupation and has suffered a number of injuries which have restricted the type of work she was able to do at the time of the accident in April 1979. She was then suffering from the results of injuries to her two ankles, she had arthritis in both wrists and she suffered from hypertension and vertigo, the latter resulting from a blow to her head. She suffered also from osteoarthritis in both knees, but that condition was and is painless and not disabling. In February 1979 she suffered a whiplash injury as a result of another accident, but the injuries then received did not affect her capacity to do the work she was then engaged in doing. A full history relating to the appellant is set out in detail in the reasons for judgment of the trial Judge and are not challenged.

In about 1971 the appellant commenced employment in the Australian Public Service with the Postmaster-General's Department. Her basic classification was a Clerical Assistant Grade 1, but at the time of the accident in April 1979 she occupied the position of Assistant Technician Grade 1 and was receiving a higher duties allowance. She had occupied that position since 1974 and it was anticipated that she would continue to occupy that position until her retirement on her attaining the age of sixty-five years. The injuries she suffered in the accident in April 1979 have resulted in her being unable to continue to carry out her duties in the Australian Public Service. Following the accident she had numerous absences from work through the injuries then sustained and on 17 April 1980 she was retired on the grounds of invalidity. Since then she has remained unemployed, although the evidence shows that if she were able to carry out the work she was doing in April 1979, she would, in all probability, obtain a similar position in the Australian Public Service.

As a result of the accident in April 1979, the appellant suffered aggravation of pre-existing spondylosis with disc protrusions at L3-4 and L4-5. She received routine conservative care including physiotherapy and traction. Dr. Newcombe, the neurosurgeon to whom she was referred by her general practitioner, reported in August 1980 that it may be necessary in due time to treat her condition surgically. In October 1980 he reported that if in the future her symptoms got worse and she developed consistent low back pain and sciatica he would want to see her to consider the need for disc excision, but he considered that in October 1980 there did not seem much likelihood of the problem developing to the point where surgery needed to be undertaken. At no stage has Dr. Newcombe advised the appellant that she should undergo surgery.

In June 1980 Dr. Andrews, a consultant neurologist, examined the appellant on behalf of the respondent. In a report given at that time he said:

"IMPRESSIONS: This lady appears to be quite genuine and does present with continuing mid lumbar back pain with pain in the anterior thighs which possibly could be due to nerve root irritation although the description is not typical. She probably would benefit from further treatment, possibly a prolonged period of pelvic traction in hospital for a week may aid her recovery. I feel that this form of treatment should be attempted rather than manipulation at this stage."

He did not suggest that the appellant undergo surgery.

In cross-examination the appellant said that Dr. Newcombe had not suggested to her that she undergo surgery but that he did say that if she could learn to live with the pain he would prefer that, but if it got so bad that she could not stand it, then the disc would have to be removed. He did not explain to her the ramifications of the operation required to remove the disc. When asked in cross-examination what her attitude was towards a disc removal some time in the future the appellant said:

"Well, I have seen such - even in my close family I have seen results of these operations that have not done much good to the people so I feel a bit wary about that. If I can learn to live with it I think I would rather than try to get them start cutting me about."

Dr. Andrews was interposed as a witness during the appellant's case and gave evidence before Dr. Newcombe gave evidence. He had seen the appellant on the one occasion only. He said that if conservative treatment did not resolve the symptoms of the injury, the appellant should undergo surgery being a laminectomy with removal of the disc. He did not think fusion would be warranted. In his opinion the surgery should result in a seventy percent success rate and that thereafter she should be able to return to "full sort" of activity being:

"20% to sort of partial activity and I suppose a 10% chance that she might not be much better than she is now."

Dr. Newcombe, in regard to the success rate of surgical treatment, said:

"Not as high as if there were no lumbar spondylosis present and it was a simple disc protrusion. I would think that one would expect a fairly high level of confidence, say, 80 per cent in terms of modification of pain, reduction of any lower limb pain or abolition of it and modification of back pain to perhaps a mild ache particularly under any prolonged standing, sitting situation."

He said the dangers involved in such an operation were minimal and acceptable:

". . . given the - that the condition warrants operation, in other words you have a good indication. Obviously the stronger the indication the more acceptable the risk."

The following questions and answers were then given:

"Well your view is that it may be necessary in the future? ---Yes. At the present time I do not think the indications strong enough, principally because - not working I think she is finding life more tolerable and so forth, and it is just in that sort of middle ground - bad enough but not bad enough to operate on. Have you discussed the possibility of surgical intervention with the plaintiff? ---I do not think - well, I think I mentioned it, I think I probably made up her mind for her in the sense that I did not advise an operation at the moment. I can see a point of view would say 'lets do an operation to see if we can get her back to work' but I felt that that was not a reasonable thing, sufficient indication in itself in this particular lady at the present time. Yes, right. You say that it would seem best at this stage, that is at August 1980 to continue with routine conservative care? ---Yes."

Later the following question and answer was given:

"If in fact the operative procedure you envisage were carried out on Mrs. Peattie and it achieved success within that 80 per cent rate that you speak of, would you envisage then that she would be capable of returning to a job such as a receptionist? ---I think it is possible, yes. Her age and so on comes into the situation, a general thing, but certainly it is - if we were to undertake an operation I think we would want to take it - undertake it with a view to improving her to that degree."

Thereafter the following questions were asked by the trial Judge and answers given: "Doctor, would you have regard to her heightened blood pressure as being a factor militating against surgical intervention?

---It certainly would need to be considered. I personally do not have information as to how hypertensive she might be. If there were evidence that she were hypertensive, would that trouble you? ---Not particularly so long as it was not of a very high order. You could not say it did not - it had no influence in the sense - it would add something to the risk but usually we cope with these things. Usually. Would it increase the risk though? ---It would increase the risk but not unduly provided it is of a reasonable level to control, you know, the blood pressure is not too high. Just normal hypertensive situations we would usually accept. Anesthetists cope pretty well with that. Is it the sort of thing you should discuss with the patient before you undertake surgery? ---The hypertension? Yes? ---Yes, we would certainly go into the - such a general medical condition in some detail. Would it be a condition which would render her refusal to have the operation unreasonable? ---If it - if she had been hypertensive for some years, if there are any associated things such as ECG abnormalities, then the answer would certainly be yes. If it was mild hypertension not requiring much in the way of treatment, then probably not. It certainly is a factor. The question of reasonableness as to accepting an operation is of course a difficult one and I always think it is reasonable for a patient to refuse an operation in those circumstances, although it may be nevertheless advisable in the ordinary sense; free consent is essential. It has not really arisen in Mrs. Peattie's case because I have not really put an operation to her as being specifically indicated. She would be obviously better off and she obviously cannot carry on in her present situation with any reasonableness and so it is not really important."

In re-examination, Dr. Newcombe answered as follows:

"Doctor, just in relation to that hypertension, she has told us in evidence that she has suffered from it for a period of time, it seems to be under control and she takes only half a tablet a day? ---Yes. She has had no real problems from it? ---No, I would not think that that was a real problem. Doctor, you mentioned before that age was a factor? ---Yes. In contemplating operations? ---With a view to return to work. Put it this way: looking at it from a medical point of view rather than in the legal context, I would say, well, if she was a young woman of twenties, early thirties, I would be - I feel that one was more impelled to do a procedure with the aim of specifically getting her back to work. I think it would not feature strongly in my indications in this situation. What would feature strongly would be if her pain and disability was enough to make her life pretty miserable the way she is now, and she really wanted to be better the way - and able in less discomfort. I mean, if she was confined to bed and in acute back pain, sciatica every month and life was pretty miserable at home, then I think that that would constitute more of an indication, but ability to return to work would be a by-product, as it were. Certainly it is to be hoped for; certainly it would be an aim. Doctor, you have not suggested an operation to her? ---No. What, if anything? ---At least not with any - I may have said it would be something to contemplate. What, if any, factors are there about her that would, in her condition, cause you to be cautious about operations? --The principal factor as I say is that I just do not see the overall picture as one that demands an operation at the present time and for that reason I was cautious, simply because I only operate when I find I particularly need to. There is also a factor of caution implied by any medical conditions which may be present which I have not gone into in detail. But in addition to the hypertension which has been already mentioned I have a note that she was having a glucose tolerance test because her general practitioner found a high blood sugar. And it may be also that she has late onset diabetes, for example, and this would be another factor. That sort of thing would need to be gone into. But as far as I know it would not constitute a contraindication but when it was looked at in more detail by a physician perhaps it would."

In relation to the medical evidence, in his reasons for judgment the trial Judge said:

"From the whole of the medical evidence I am satisfied that the Plaintiff would, if she underwent the appropriate surgery, have a 70% chance of amelioration of her pain to the point where she could again do the work which she was doing at the time of the accident. I am further satisfied that there is a very good chance that if she did undergo surgery which was successful she would be re-employed and, so re-employed, would have been able to work to that age when she would, in due course, have, but for the accident in April 1979, finally finished work. I take into account the laborious life she has led and make some allowance for the possibility that she would have been forced to finish work in any event earlier than age 65. I take into account, too, her manifest enjoyment of the work she used do and her gregariousness coupled with her pleasant personality. I think it reasonble to assess the possibility of her having to retire in any event prior to age 65 at 10% and against that to balance the high likelihood that, if fit enough, she will be re-employed. The question is then whether her failure to have an operation is reasonable. From the medical point of view it is at present undoubtedly reasonable. I do not understand either of the doctors called to say otherwise. She has pain which does not interfere sufficiently with her daily life to require drastic intervention by surgery but which does prevent her from working. But it is another question whether she ought to be entitled to visit upon the Defendant the consequence in loss of earning capacity of her failure to undergo surgery. Although the Plaintiff has not been advised to undergo surgery I take the view that that advice ought to be considered as having been tendered to her at latest by now, having regard to all the medical evidence. Her refusal to take that advice would, I find, be an unreasonable refusal and would constitute a failure on her part to mitigate her damages. '. . . if a finding is made that a Plaintiff in the face of an uncertain prognosis acted unreasonably in not submitting himself to surgery or treatment, then it would seem that his damages should be assessed having regard to his condition as it is, discounted by the evaluation of the lost chance, or as one would if the assessment were made in advance of the carrying out of the advised treatment. Cf. Newell v. Lucas (1964-5) N.S.W.R. 1597 per Walsh, J. at p.1604 and per Asprey, J. at p.1606.' Plenty v. Argus, (1975) W.A.R. 155 at p.159. See also Zafiris v. Morrow, S.C.589 of 1979 in this Court, as yet unreported, in which judgment was delivered on 24 December 1980. I cannot regard the Plaintiff's failure to undergo surgery before this date as unreasonable. The lack of advice by her medical advisers that she should undergo surgery with a reasonable prospect of success does not constitute, in my opinion, in all the circumstances a novus actus enterveniens (sic). The situation would, I think, be otherwise were it the case that there was a continuing failure to advise the Plaintiff that, while her continuing failure to undergo surgery would be medically reasonable, it would not be reasonable to expect the Defendant to compensate her for loss of earning capacity due to her painful back when the prospects of alleviation of that pain by surgery were of the order indicated by the medical evidence. Balancing all the known factors and making some allowance for the as yet unguessed at vicissitudes of life which the Plaintiff may be required to face, I assess her loss of earning capacity at 30%."

In the result, in assessing the amount of damages to be awarded, the trial Judge assessed the appellant's future loss of earning capacity at $26,000, being thirty percent of the amount otherwise allowable on the basis of total and permanent loss of earning capacity. After making due allowance for the probability that a laminectomy would relieve the pain in her lower back to tolerable limits he allowed $10,000 in respect of pain and suffering and loss of amenities of life. He allowed $2,350 being the estimated costs of the surgery and hospitalization in connection with the surgery and $461.91 being the agreed out-of-pocket expenses. These amounts totalled $48,811.90 being the amount of the judgment.

Subsequent to the judgment being given the High Court has given judgment in Todorovic v. Waller (1981) 56 A.L.R.J. 59, and Fazlic v. Milingimbi Community Inc. (1982) 56 A.L.J.R. 210.

In McGregor on Damages, 14 Ed., para. 209 the doctrine of mitigation of damage is stated as follows:

"The first and most important rule is that the plaintiff must take all reasonable steps to mitigate the loss to him consequent upon the defendant's wrong and cannot recover damages for any such loss which he could thus have avoided but has failed, through unreasonable action or inaction, to avoid. Put shortly, the plaintiff cannot recover for avoidable loss."

In Halsbury's Laws of England, 4th Ed., Vol. 12, para. 1193 the doctrine is stated as follows:

"The plaintiff must take all reasonable steps to mitigate the loss which he has sustained consequent upon the defendant's wrong, and, if he fails to do so, he cannot claim damages for any such loss which he ought reasonably to have avoided."

The doctrine of mitigation applies in the area of workers' compensation and in tort where personal injury cases are in question, Fazlic's case at p.214. That was a workers' compensation case. The worker had refused medical advice to undergo surgery. In considering whether that refusal was unreasonable or not, the Court, in a joint judgment, said at p.212:

"On appeal to the Full Court of the Federal Court of Australia the approach of the Supreme Court was described as revealing no error of method and the appellant's refusal to submit to surgery was accordingly held to be unreasonable. In its joint judgment the Full Court relied extensively upon the reasonableness of the proposed operation and upon the unreasonableness of the appellant's fear, which was regarded as the only substantial factor standing in the way of the operation. No doubt it will be but rarely that an employer does not succeed in establishing that a worker's refusal is unreasonable when the worker has allowed baseless fear to decide his choice, outweighing his knowledge of cogent factors favouring his undergoing an operation. But this is not such a case. All that the appellant had to place in the scales and weigh against his strong and genuinely held fear of operation was the knowledge, gained from his treating surgeon, that the operation would be relatively major, carrying some risk, the chances being that it would improve his condition. He knew almost nothing about the objective reasonableness of the operation. The substance of the evidence of each of the two surgeons about the slight risks involved in the operation and the high prospects of complete success which it offered, much relied upon in the Federal Court, as it had in the Supreme Court, was unknown to him. Any assessment of the reasonableness or otherwise of a worker's refusal of treatment must depend upon the worker's state of knowledge at the relevant time. This accords both with good sense and with authority. A worker's choice cannot be said to be unreasonable because he has failed to give effect to factors unknown to him. And in the case of complex medical or surgical procedures he will know little except what he is told. In the present case he was told very little indeed."

The Court then considered a number of authorities and stated that the correct test of unreasonable refusal to undergo surgery was based upon what the patient knows and not upon the reasonableness of a refusal reached after evaluating the medical evidence, p.213. The Court then considered the principle lying behind the rule as to unreasonable refusal to undergo treatment and rejected the concept that it was based on causation, pp.213-4. At p.214 the Court said:

"To regard the rule as founded upon causality is likely to distract attention from the true issue, the reasonableness of the refusal viewed in the light of the worker's knowledge, and at the same time to encourage investigation of what, at the trial, proves to be the best medical assessment of the reasonableness of the operation viewed in a quite objective sense. Yet one and the same ultimate physical state of disability can scarcely be said to have been 'caused' by the initial injury if the refusing worker was at the time unaware of certain facts concerning a recommended treatment (and hence was not unreasonable in his refusal) but to lack the necessary causal relationship when his refusal was made with knowledge which should have led to his acceptance of that treatment. The doctrine of mitigation of damage appears to us to provide a more rational basis for the rule. It permits of the same considerations being applied in the area of workers' compensation as are habitually applied in tort where personal injuries cases are in question."

In the present case, the trial Judge appears to have based his reasons on a view that medical advice was tendered to the plaintiff at the time of the hearing of the action and that, having regard to the medical evidence of the two doctors called, the appellant would be unreasonable in refusing to accept that advice. That view is not supported by the opinions contained in Fazlic's case which were published subsequently. It is not based upon what the patient knows, but in substance is based upon the objective reasonableness of the operation and an evaluation of the medical evidence. In substance his Honour was applying the test of causation as is illustrated by his reference to a novus actus interveniens.

On appeal, counsel for the respondent sought to support this part of the judgment by stressing that what was being considered was the determination of an amount representing loss of earning capacity. He contended that that loss of earning capacity resulted from a refusal to undergo the surgical treatment and the fact that Dr. Newcombe had not advised the operation because the symptoms were not sufficient to interfere with her ordinary activities should not be used as a reason why she should not undergo surgery to enable her to recover her earning capacity. He contended that this was not a true mitigation case but an assessment of future loss resulting from loss of earning capacity and that in assessing that loss the trial Judge was entitled to look into the future and consider what was likely to happen. In support of his contentions counsel relied upon a number of authorities including Newell v. Lucas (1965) N.S.W.R. 1597, Smajik v. Bonic (1968) 88 W.N. N.S.W. (Part 1) 588, and Xenos v. Curnow (1975) 12 S.A.S.R. 301. He contended that on the evidence the appellant had failed to show that her total loss of earning capacity had resulted from the accident since if she had the operation she would in all probability have regained her earning capacity. In other words counsel relied upon causation.

In approaching the issues raised in this appeal it is necessary, in our view, to keep distinct two quite separate principles.

The first is that the appellant had a duty to mitigate her damages. The onus of establishing a breach of that duty was on the respondent. Where the alleged failure to mitigate is an unreasonable refusal to have an operation, the test is whether, judged in the light of medical advice given to the appellant and all the circumstances known to her and affecting her, her refusal is unreasonable, Fazlic's case at p.214. Contrary to the respondent's submission the same principles apply in our view to an action for damages for negligence such as this as to actions to recover workers' compensation. In this case we do not think it was open to the learned trial Judge to find that the appellant had unreasonably refused to have surgical treatment because she was never actually given medical advice that she should have it.

The second principle is that in assessing damages for future economic loss it is necessary to take into account the contingencies which might increase or reduce that loss. Included among those contingencies in a case such as this is the possibility that the appellant may undergo successful surgical treatment which will reduce the amount of that loss by enabling her to resume paid employment. This may occur, for instance, because she wishes to relieve the pain of her injury or because, confronted by medical advice, she decided it is a risk worth taking in order to enable her to resume a busy working life. It is a possibility which the Court must take into account in deciding what discount (if any) should be allowed for contingencies.

It is possible to contemplate a case where a plaintiff has not been advised to have an operation but the medical evidence before the Court clearly establishes that if the plaintiff had an operation there was a very strong chance that he or she would be able to resume his or her normal occupation. Counsel for the respondent argued that in essence, the present case comes within this category. We do not think it does. If it were, it may well justify a discount greater than otherwise applicable. For in assessing the likelihood of a plaintiff having such an operation in the future we do not think the Court must assume that the plaintiff would be entitled to act unreasonably in relation to an operation so advised. On the contrary, the Court, in our view, is entitled to assume that the plaintiff will act reasonably having regard to the medical advice likely to be given in the light of the evidence and the circumstances likely to affect his or her decision.

On the evidence it is clear that as a result of the injuries caused to the appellant by the accident in April 1979 she is presently totally incapacitated for work. This, however, does not end the matter. On this aspect of the case the Court is concerned to assess future economic loss based upon that loss of earning capacity. At the present time the loss of earning capacity is total. At the hearing of the appeal the Court permitted evidence to be given by an actuary quantifying the present value of future loss to the appellant by adopting a discount rate of three percent and making no allowance for inflation or for the tax upon income on investment of the sum awarded. The value is calculated as at 17 February 1981 and on the basis of the weekly amount based on the retiring age of the appellant payable so long as she remains alive but ceasing in any event at age sixty five, generally see Todorovic's case. On those calculations the appellant's loss of earning capacity is to be valued at $73,113. As a matter of calculation that amount was not disputed by counsel for the respondent.

The assessment of damages for future economic loss can never be a mere matter of mathematics. In the present case there is no evidence that the appellant would have been likely to have gained promotion. There is no certainty that she would have continued in her employment until she reached sixty five years of age. There is a possibility that the symptoms of her injury could become so severe that she will undergo surgical treatment and there is a possibility that thereafter she would be able to engage in paid employment. At the same time, she is no longer young and has a number of other injuries lessening the range of work that she could do. In all the circumstances a discount of $14,000 should be allowed to cover all contingencies. That discount is just under a discount rate of twenty percent. In the result an appropriate amount to allow for loss of earning capacity would be $59,118. Accordingly the appeal must be allowed.

In allowing the amount of $10,000 as being the appropriate amount to allow the plaintiff for pain and suffering and loss of amenities of life, the trial Judge made "due allowance for the probability that a laminectomy would relieve the pain in her back to tolerable limits". In making that allowance he applied principles which were not open to him and which have already been discussed. In those circumstances the question is whether this Court should order a new trial on the assessment of damages or whether this Court should itself assess the amount of damages to be awarded.

In his reasons for judgment the trial Judge said:

"I accept the Plaintiff as a witness of truth. Indeed I considered her to be an impressive witness. So much was conceded by counsel for the Defendant."

This finding was not challenged before this Court. There is no real conflict in the medical evidence. In all the circumstances it is appropriate that this Court should assess the damages to be awarded to the appellant.

For the reasons already expressed, an amount of $10,000 for pain and suffering and loss of amenities of life is too small. An appropriate amount would be $20,000.

On the views expressed no amount should be allowed by way of anticipated cost of surgery and hospitalization in connection with surgery. By adding together the items of damage being the present value of loss of earning capacity, $59,113, the item for pain and suffering and loss of amenities of life, $20,000, and out-of-pocket expenses, $461.90, the total figure is $79,574.90. This is a figure which, considered alone, is of an order which in all the circumstances of this case appears reasonable. In the result we assess damages at $80,000.