FAI General Insurance Co Ltd v Lucre

[2000] NSWCA 346

Reported Decision: [2000] 50 NSWLR 261
[2000] 32 MVR 540

New South Wales

Court of Appeal

CITATION:	FAI GENERAL INSURANCE & ANOR v LUCRE [2000] NSWCA 346
FILE NUMBER(S):	CA 40469/99
HEARING DATE(S):	14 November 2000
JUDGMENT DATE:	29 November 2000
PARTIES :	FAI GENERAL INSURANCE CO LTD & ANOR v ALBERT LUCRE
JUDGMENT OF:	Mason P at 1; Meagher JA at 35; Giles JA at 36

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	DC 5610/98
LOWER COURT JUDICIAL OFFICER :	Garling DCJ

COUNSEL:	Appellant: J D Hislop QC/ R Tonner Respondent: S Galitsky
SOLICITORS:	Appellant: Moray & Agnew Respondent: Papanicolaou & Antoniou
CATCHWORDS:	Duty of care - nervous shock - respondent involved in head on collision due solely to the negligence of the deceased - respondent suffers post-traumatic stress disorder blaming himself for his role in crash - discussion of dictum of Deane J in Jaensch v Coffey that duty of care negated where psychiatric illness sustained as a result of death or injury of tortfeasor - Deane J’s dictum not followed - s4(1) Law Reform (Miscellaneous Provisions) Act 1944 does not entrench Deane J’s dictum - discussion of Deane J’s dictum in light of cases following Jaensch v Coffey - liability established - s141 Motor Accidents Compensation Act 1999 - respondent not characterised as a rescuer - respondent distinguished from the "mere bystander" by immediacy of his involvement in crash that caused death - respondent’s reaction foreseeable in circumstances of the crash - appeal dismissed with costs - D.
DECISION:	Appeal dismissed with costs.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40469/99
DC 5610/98

MASON P
MEAGHER JA
GILES JA

Wednesday 29 November 2000

FAI GENERAL INSURANCE CO LTD & ANOR v
Albert LUCRE

The respondent was driving a large truck in Lidcombe in an outside lane, when a car approached in the opposite direction, also travelling in its outside lane. When it was about two to three car lengths away, the car made a sudden right turn into the path of the truck. The car and its driver were crushed under the truck, the driver dying soon afterwards. The crash was caused solely by the negligence of the deceased. The respondent suffered no physical injury. However, it was undisputed that he suffered a post-traumatic stress disorder. The respondent suffered ongoing guilt feelings in which he continually questioned his own role in the crash, blaming himself for it nothwithstanding that such accusation was never made against him. In the District Court Judge Garling concluded that the deceased owed a duty of care. Accordingly, he entered a verdict in the respondent’s favour in the agreed sum of $154,000.

The appellant accepted that psychiatric injury was reasonably foreseeable. However, it submitted that there was no duty of care. The duty was said to have been negated because the psychiatric illness was sustained as a result of the death of the negligent deceased.

HELD (by Mason P, Meagher and Giles JJA dismissing the appeal, with costs):

1 Discussion of the dictum of Deane J in Jaensch v Coffey (1984) 155 CLR 549 at 604 that a duty of care will not exist unless the reasonably foreseeable psychiatric injury was sustained as a result of the death, injury or peril of someone other than the person whose carelessness is alleged to have caused the injury (the “immediate victim exclusion”). Jaensch v Coffey (considered and not followed in part).

2 The principled development of the common law cannot sustain drawing the line represented by the immediate victim exclusion. Declining to follow Deane J’s dictum, in the present case there was a duty of care. Shipard v Motor Accident Commission (1997) 70 SASR 240 (followed); Morgan v Tame (2000) 49 NSWLR 21 (referred); Klug v The Motor Accidents Board (1991) ATR 81-134 (not followed); Churchill v Motor Accidents Insurance Board Supreme Court Tasmania, unreported 2 December 1993 (referred); Bourhill v Young’s Executor (1941) SC 395 (referred).

3 The respondent was distinguished from the “mere bystander” by the immediacy of his involvement in the crash that caused the death which in turn caused the psychiatric injury. The circumstances and inquiries which ensued were so clearly capable of generating a sense of unresolved anxiety and guilt that it is reasonable to impose a duty of care upon the deceased. Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310 (referred and followed in part); Dooley v Cammell Laird & Co Ltd [1951] 1 Lloyd’s Rep 271 (referred); Galt v British Railways Board (1983) 133 NLJ 870 (referred); Wigg v British Railways Board (1986) 136 NLJ 446 (referred); Robertson v Forth Road Bridge Joint Board [1996] SLT 263 (referred); State of New South Wales v Seedsman [2000] NSWCA 119 (referred).

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40469/99
DC 5610/98


MASON P
MEAGHER JA
GILES JA

Wednesday 29 November 2000

FAI GENERAL INSURANCE CO LTD & ANOR v
Albert LUCRE



JUDGMENT

1    MASON P: The respondent was driving a thirteen and half ton truck along Railway Street, Lidcombe. He was in the outside lane. A car approached in the opposite direction, also travelling in its outside lane. When it was about two to three car lengths away, it made a sudden right hand turn into the path of the truck. The car and its driver were crushed under the truck. The respondent rang triple 0 from his mobile phone and then climbed out of the truck, stepping onto the car. The driver was hanging out of the car door and there was a large pool of thick red blood. She had a very faint pulse, and died soon afterwards. The respondent covered her body with a track suit and blanket. 2    The accident (which occurred in 1995) was caused solely by the negligence of the deceased. 3    The respondent suffered no physical injury. However, it was undisputed that he suffered a post-traumatic stress disorder. Judge Garling concluded that the deceased owed a duty of care. Accordingly, he entered a verdict in the respondent’s favour in the agreed sum of $154,000. 4    The appellant accepts that psychiatric injury was reasonably foreseeable. However, it submits that there was no duty of care. The duty is said to have been negated because the psychiatric illness was sustained as a result of the death of the negligent deceased. The appellant invokes the dictum of Deane J in Jaensch v Coffey (1984) 155 CLR 549 where he said (at 604) that:

…on the present state of the law, … a duty of care will not exist unless the reasonably foreseeable psychiatric injury was sustained as a result of the death, injury or peril of someone other than the person whose carelessness is alleged to have caused the injury ….

(See also at 602.)
I shall call this the immediate victim exclusion.

5    (In the form stated by Deane J in this passage, it would preclude a duty of care even if the plaintiff were put in fear of imminent physical harm. As Doyle CJ points out in Shipard v Motor Accident Commission (1997) 70 SASR 240 at 245, it is unlikely that Deane J intended such an unqualified preclusionary rule, because elsewhere in Jaensch he refers with apparent approval to Dulieu v White [1901] 2 KB 69. That was the case in which the plaintiff suffered nervous shock because she apprehended physical injury to herself as a consequence of the negligent driving of a “pair-horse van”.) 6 Deane J’s dictum was a step, but not an essential step (see at 602-3), in his reasoning towards the conclusion that foreseeability alone does not establish a duty of care in relation to pure psychiatric injury. Jaensch showed that liability in this area rests upon additional foundations (see generally Morgan v Tame (2000) 49 NSWLR 21). 7 Judicial and academic commentators have read Jaensch as a decision in which Deane J alone supported the immediate victim exclusion in his reasons (see, eg Shipard at 245-6). Gibbs CJ agreed “in general” with the reasons of Deane J (see at 551). Dawson J acknowledged the possibility of the correctness of the immediate victim exclusion (at 612). The other justices said nothing about it. 8 In the present case the learned trial judge declined to follow Deane J’s dictum. 9 He also rejected the guidance of two interstate decisions one of which had followed Deane J in obiter dicta (Harrison v State Government Insurance Office (Qld) (1985) ATR ¶80-723 (Vasta J)) the other of which had applied the immediate victim exclusion (Klug v The Motor Accidents Board (1991) ATR ¶81-134 (Zeeman J)). Judge Garling distinguished those cases on the basis that in them the negligent driver was the spouse or de facto spouse of the plaintiff, whereas, in the present case, the plaintiff was unknown to the negligent driver. He also emphasized the foreseeability of the psychiatric injury suffered by the respondent in a case such as the present, stating that he was not prepared to exclude a duty of care on policy reasons. He cited the decision of the Full Court of the Supreme Court of South Australia in Shipard. 10    I cannot agree with the reasons offered for distinguishing Harrison and Klug. Nevertheless, I too would decline to follow Deane J’s dictum. I have concluded that there was a duty of care in the present case. 11 Although mentioned by Deane J and relied upon by the appellant, s4(1) of the Law Reform (Miscellaneous Provisions) Act 1944 (with its reference to injury caused by an act, neglect or default by which “any other person is killed, injured or put in peril”) does not establish or entrench the immediate victim exclusion. The section does not purport to restrict the continuing development of the common law of Australia, so long as consistent with its terms (see Coates v Government Insurance Office of New South Wales (1995) 36 NSWLR 1). As Deane J recognised, the section did no more than recognise the common law as it was perceived at the time by the New South Wales Parliament. 12 Reasons of principle, policy and precedent can be offered to justify the law’s present insistence upon something more than reasonable foreseeability to generate a duty of care. Nevertheless, this is an area where logic is in extremely short supply. This said, I do not think that the principled exposition and development of the common law can sustain drawing the line represented by the immediate victim exclusion. 13 The mere fact that the death, injury or peril is that of the defendant (or the defendant’s deceased) cannot justify invariable rejection of a claim for damages for negligently inflicted psychiatric injury. I agree with Zeeman J in Klug (at 69,274) that the exclusion cannot be supported in principle. See also Churchill v Motor Accidents Insurance Board (Supreme Court Tasmania, unreported 2 December 1993, noted (1993) 2 Tas SR (NC) N30) where Green CJ doubted Deane J’s dictum, saying:

It is worth observing that the policy reasons for denying liability in cases where psychiatric injury arises out of the death of the negligent person are not self-evident.

14    Unlike Zeeman J, I would take the cautious step of declining to follow Deane J’s dictum as to the common law in 1984. I am content to adopt as my own the criticism expressed by Des Butler, “Psychiatric Injury Resulting from a Tortfeasor’s Death, Injury or Peril: Debunking an unfortunate dictum” (1996) QLSJ 557 and Law Commission (UK), Liability for Psychiatric Illness, Law Com No 249 (1998) pp72-5. I summarise this criticism as follows:

(a) Deane J (at 602) based his stance upon a passage in the judgment of Lord Robertson in Bourhill v Young’s Executor (1941) SC 395 at 399:
At the debate a case was figured of a window cleaner at work on the outside of a window high above the street who carelessly loses his grip and falls down, and is impaled upon spiked railings. If such an occurrence were to be witnessed by a pregnant woman looking out of the window of a house situated on the opposite side of the street, she might well suffer a nervous shock with most serious consequences. But I am unable to hold that window cleaners rest under a duty of care towards opposite householders not to allow themselves to fall down in the possible view of the householders. Any such duty would evidently extend, if it existed, to the case of all possible spectators, and I do not think that it could be limited logically to cases of nervous shock received through the medium of sight. If a window cleaner actually fell upon a passer-by, or so near to him that he feared for his bodily safety, the case would be different. The difference is not easy to state in terms of strict logic, but to my mind it has a solid and substantial existence. There must be an end at some reasonable point to the legal consequences of a careless act - there must be a limit at some reasonable point to the extent of the duty of care towards third parties which rests upon everyone in all his actings.


Contrary to Deane J’s apparent understanding, Lord Robertson was saying the very opposite of a general immediate victim exclusion. He was acknowledging that a duty of care would extend to a passer-by put in fear for personal safety by the falling window-cleaner, but not to the startled observer watching at a distance. I would offer the same respectful criticism of Lord Ackner’s approach to Bourhill in Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310 at 401.


(b) Cases before and after Bourhill did not invoke the immediate victim exclusion when they might have done (see eg Bunyan v Jordan (1936) 36 SR(NSW) 350, (1937) 57 CLR 1, Rowe v McCartney [1976] 2 NSWLR 72, Mt Isa Mines Ltd v Pusey (1970) 125 CLR 383).

(c) There is no reason in principle or logic why a primary tortfeasor, who may even have acted intentionally as well as negligently, should escape liability to another who suffers psychiatric injury simply because no third party was also injured. Take the present situation. The application of Deane J’s dictum might see liability turning upon whether or not the deceased was the only occupant of the vehicle that careered into the respondent’s truck. A variant of this criticism is suggested by Lord Oliver in Alcock at 418, where he posits two persons contributing by their several acts of negligence to the plaintiff’s psychiatric illness, one of them being the negligent immediate victim.

(d) There is no medical support for any distinction between the psychiatric injury suffered as a result of the self-inflicted death, injury or peril of a defendant and one stemming from the death injury or peril of a third party caused by a defendant.

15    I also draw support from Shipard. The Full Court of the Supreme Court of South Australia refused to strike out a claim on the basis of Deane J’s dictum. The facts were not dissimilar to the present case. A motor cyclist careered into a truck driven by the plaintiff. The plaintiff suffered no bodily injury, but it was alleged that the incident triggered post traumatic stress disorder. The alleged causes of the nervous shock were said by Doyle CJ (at 244) to be the plaintiff’s awareness of the impending collision and his observation of the actual collision; the observation of two consequences of the collision, the escape of diesel fuel and the fatal injury to the deceased; and statements by third parties to the effect that the plaintiff was fortunate that he could not be blamed for the accident. Doyle CJ held (at 247-8) that the case should go to trial because the immediate victim exclusion was not an absolute principle and because these additional factors arguably took it outside the situation discussed in Deane J’s dictum. (The Chief Justice also thought that the pleading alleged that the plaintiff held a reasonable fear of his own imminent physical injury and that this situation was not intended by Deane J to be excluded - see at 245, 248. The present case does not involve this possibility.) Lander J agreed with Doyle CJ. Bleby J also held that the statement of claim should not be struck out, for reasons broadly similar to those of Doyle CJ. 16    Accordingly, I reject the submission that the duty of care is negated simply because the primary victim is the defendant or the defendant’s deceased. This however, is not enough to establish liability. Since reasonable foreseeability is no longer the touchstone, it behoves the Court to state what is, or at least where lines should be drawn. 17    The appellant submits that the respondent is in the category of a “mere bystander” (cf McLoughlin v O’Brian [1983] 1 AC 410 at 422, Alcock, White v Chief Constable of South Yorkshire Police [1999] 2 AC 455 at 462, 499H). The appellant submits, and I agree, that something more is required. 18 In the case of a motor accident the circumstances must also comply with s141 of the Motor Accidents Compensation Act 1999 which (like its predecessor, s77 of the Motor Accidents Act) provides:

141. Damages for psychological or psychiatric injury (cf s77 MAA)
No damages for psychological or psychiatric injury are to be awarded in respect of a motor accident except in favour of:
(a) a person who suffered injury in the accident and who:
(i) was the driver of or a passenger in or on a motor vehicle involved in the accident, or
(ii) was, when the accident occurred, present at the scene of the accident, or
(b) a parent, spouse, brother, sister or child of the injured person or deceased person who, as a consequence of the injury to the injured person or the death of the deceased person, has suffered a demonstrable psychological or psychiatric injury and not merely a normal emotional or cultural grief reaction.

19    It is necessary to return to the facts. The case was not fought on the basis that the respondent was in fear of injury in the accident. There was an agreed statement of facts that included:

The medical reports of both the plaintiff and the first defendant, who was the third party insurer of the vehicle driven by the deceased, cite as the cause of the post-traumatic stress disorder, the plaintiff experiencing the death of Gabriel Sobb.

20    The respondent also gave evidence, both oral and written, as to the circumstances of the accident. He was not cross-examined. 21    Statements from psychologists and psychiatrists were tendered. None of the experts was required to attend for questioning. The reports record histories taken from the respondent and express confident diagnoses of post-traumatic stress disorder arising from the accident. 22    Common to the experts’ reports are histories that the respondent experienced ongoing guilt feelings in which he continually questioned his own role in the accident, blaming himself for it notwithstanding that such accusation has never been made against him, and despite his having been exonerated by the coronial investigation (see AB 57Q, 57L-N, 60M, 61L-N, 64Z, 75S-W, 76B, 79K, 82T, 83G). 23    I cannot accept the appellant’s submission that the reference in the agreed statement of facts to the stress disorder being caused by “experiencing the death” of the deceased is inconsistent with or preclusive of this body of unchallenged expert opinion tendered at trial. Some of the medical reports came from the appellant’s experts. 24    During argument in the appeal I enquired whether the respondent submitted that he was in the category of a “rescuer” having regard to the fact that he moved to the car, examined the mortally injured deceased and held her hand as life quickly ebbed from her. Counsel for the respondent appeared willing to embrace this suggestion, but the appellant objected, contending that the trial was not run on this basis and suggesting that, had it been, then it might have been conducted differently. I have some difficulty with this submission given that there was never dispute about the facts as presented by the respondent in his own unchallenged evidence. Nevertheless, the duty of care owed to a rescuer who is not also an employee is problematical (White, cf Mount Isa Mines). Characterisation of the respondent as a rescuer is also forced, because the deceased was sadly and obviously beyond rescuing. I shall not pursue this possibility. 25    In my view, what distinguished the respondent from the “mere bystander” was the immediacy of his involvement in the accident that caused the death that caused the psychiatric injury. That immediacy is quite obvious in both time and space. But there is a deeper connexion stemming from those circumstances. According to the laws of physics, the vehicle under the control of the respondent contributed directly to the death of the deceased. This distinguished the respondent from a bystander, even one who was a passenger in his truck. This circumstance and the inquiries that inevitably ensued from it (both official and informal) were so clearly capable of generating a sense of unresolved anxiety and guilt that it is reasonable, fair and just to impose a duty of care upon the deceased. One does not need to be a psychiatrist to understand the reality of the respondent’s reaction. Like the trial judge, I would emphasise the foreseeability of this reaction in these circumstances. It is a foreseeability that far outstrips the law’s undemanding test of foreseeability of damage. 26    These factors in combination suffice in my mind to establish what, until recently, would have been termed “proximity” capable of generating the necessary duty of care. 27    The situation is closely analogous to a category discussed by Lord Oliver in Alcock (at 408) being cases:

…where the negligent act of the defendant has put the plaintiff in the position of being, or of thinking that he is about to be or has been, the involuntary cause of another’s death or injury and the illness complained of stems from the shock to the plaintiff of the consciousness of this supposed act. The fact that the defendant’s negligent conduct has foreseeably put the plaintiff in the position of being an unwilling participant in the event establishes of itself a sufficiently proximate relationship between them and the principal question is whether, in the circumstances, injury of that type to the plaintiff was or was not reasonably foreseeable.

(See also Lord Keith at 397E, Lord Jauncey at 420 D-G.)

28    Lord Oliver cited three first instance decisions, Dooley v Cammell Laird & Co Ltd [1951] 1 Lloyd’s Rep 271, Galt v British Railways Board (1983) 133 NLJ 870 and Wigg v British Railways Board, The Times, 4 February 1986. In Dooley, a crane-driver suffered psychiatric illness after seeing a defective rope on his crane snap thereby causing the crane to drop its load onto a hold in a ship where he knew his fellow employees were working. Although no-one in fact was injured, he feared for their safety. In Galt, a train driver came upon two workmen as he rounded a bend, and being unable to stop, feared that he had killed them. In Wigg, a train driver came upon the body of a dead person who had been struck by the door of the train he was driving very soon after it pulled out of the station. 29    Henry LJ in Frost (at 277) and Lord Hoffmann in White (at 507) have interpreted these three cases as involving employer negligence, Lord Hoffmann linking his comments with a dismissive rejection of Mount Isa Mines and the conclusion that an employer owes no duty of care (contrast Lord Goff at 485 and State of New South Wales v Seedsman [2000] NSWCA 119). 30 I find persuasive guidance in this portion of Lord Oliver’s reasoning in Alcock. I am fortified in the discussion in the Scottish case of Robertson v Forth Road Bridge Joint Board [1996] SLT 263 (First Division). Three employees were asked by their employer to remove a sheet of metal from the Forth Bridge in windy conditions. A gust of wind caught the sheet of metal and one employee was blown over the side of the bridge and killed. The accident was witnessed by the second employee and heard by the third, both of whom subsequently suffered psychiatric illness. The Court ruled that the plaintiffs could not recover since there was no suggestion that they believed that they had been the cause of the accident. Without this, they were mere bystanders. Lord President Hope distinguished the case from the category referred to by Lord Oliver in Alcock (par 27 above). Speaking of Lord Oliver’s category, he said at (268):

The plaintiff may actually have caused the death or injury or he may think that he is about to or has done so. Whichever of these alternatives applies is immaterial. What matters is that it was his own hand, or his own act, which was the cause or supposed cause of it. This is the essential characteristic which distinguishes the category from that of the bystander who, while present at the time of the accident and saw it happen, was not directly involved in it as the actor by whose hand the death or injury was caused to the third party.

31    Lord Allanbridge also held that the plaintiffs were not in the situation of having been the “involuntary cause” of their fellow workman’s death. He continued (at 271):

But unless they were in a position to consider they were personally, or at least partly, responsible for the accident they remained in the class of bystanders who were not entitled to damages for nervous shock. Lord Oliver, in my view, is indicating that in cases of accidents at work it is only where a workman is placed in a position where he has reason to consider at the time of it that he himself was the involuntary cause of it, so that he suffered from such anxiety and guilt about it as to sustain this trauma, that his employers could be liable in damages for his psychiatric illness caused as a result of his witnessing the accident.

32    Elsewhere, I have explained why, in my view, Australian law differs from English and Scottish law as regards an employer’s duty of care to protect employees from psychiatric injury (see State of New South Wales v Seedsman). This does not affect the force of the passages in Robertson indicating that a determinative element in creating a duty of care is that the negligent act of the defendant or the defendant’s deceased foreseeably caused the plaintiff to participate in the event causing the death or injury. 33    There may be exceptional situations where it proves just to restrict recovery against the immediate victim (see Law Commission (UK) loc cit pp74-5). But the present case is not one of them. 34    I would dismiss the appeal, with costs. 35    MEAGHER JA: I agree with Mason P. 36    GILES JA: I agree with Mason P.

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