Falkingham v Hoffmans (a firm)
[2014] WASCA 140
•1 AUGUST 2014
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: FALKINGHAM -v- HOFFMANS (A FIRM) [2014] WASCA 140
CORAM: PULLIN JA
BUSS JA
MURPHY JA
HEARD: 15 NOVEMBER 2013 & 24 FEBRUARY 2014
DELIVERED : 1 AUGUST 2014
FILE NO/S: CACV 135 of 2012
BETWEEN: BRENT NIGEL FALKINGHAM
Appellant
AND
HOFFMANS (A FIRM)
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram :CURTHOYS DCJ
Citation :FALKINGHAM -v- HOFFMANS (A FIRM) [2012] WADC 153
File No :CIV 251 of 2010
Catchwords:
Solicitors' negligence - Solicitors failed to pursue the appellant's common law action against a medical practitioner by commencing proceedings - Action statute barred - Loss of chance - Causation - Value of appellant's lost opportunity - Whether trial judge erred in refusing to find or infer that the appellant would have pursued the lost cause of action against the medical practitioner - Whether trial judge's provisional assessment of the value of the appellant's lost opportunity was erroneous - Whether trial judge's provisional award of damages for loss of earning capacity was erroneous - Adequacy of trial judge's reasons
Legislation:
Civil Liability Act 2002 (WA), s 3, s 5A(1), s 5A(3), s 5C(1), s 5C(3)
Civil Liability Amendment Act 2003 (WA)
District Court of Western Australia Act 1969 (WA), s 79(1)(a)
Supreme Court Act 1935 (WA), s 32
Result:
Appeal allowed
Category: A
Representation:
Counsel:
Appellant: Mr B L Nugawela
Respondent: Mr D R Clyne (15 November 2013) & Mr G P Bourhill (24 February 2014)
Solicitors:
Appellant: Havilah Legal
Respondent: Tottle Partners
Case(s) referred to in judgment(s):
Amer v Consolidated Meat Group Pty Ltd [2002] QSC 345
Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430
Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307
Bennett v Carruthers [2010] WASCA 131
Bowen v Tutte (1990) Aust Torts Rep 81-043
Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232
Cohen v Ninkovic [2000] WASCA 169
Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64
CSR Ltd v Della Maddalena [2006] HCA 1; (2006) 80 ALJR 458
Dixon v Clement Jones Solicitors [2004] EWCA Civ 1005
Dolman v Penrose (1983) 34 SASR 481
Falkingham v Hoffmans (a firm) [2012] WADC 153
Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd [1981] HCA 4; (1981) 146 CLR 336
Feletti v Kontoulas [2000] NSWCA 59
Firth v Sutton [2010] NSWCA 90
Golosky v Golosky (unreported, NSW Court of Appeal, 5 October 1993)
Griffin v Kingsmill [2001] Lloyd's Rep PN 716
Hammond Worthington v Da Silva [2006] WASCA 180
Harrison v Bloom Camillin (No 2) [2000] Lloyd's Rep PN 89
Heenan v Di Sisto [2008] NSWCA 25; [2008] Aust Torts Reports 81-941
Hendriks v McGeoch [2008] NSWCA 53; [2008] Aust Torts Reports 81-942
Horne v Cranney [2011] QCA 149
House v The King [1936] HCA 40; (1936) 55 CLR 499
Husher v Husher [1999] HCA 47; (1999) 197 CLR 138
In Vitro Technologies Pty Ltd v Taylor [2011] QCA 44
Instant Nominees Pty Ltd v Redman [1987] WAR 218
Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Kitchen v Royal Air Force Association [1958] 1 WLR 563
Leitch v Reynolds [2005] NSWCA 259; [2005] Aust Torts Reports 81‑806
MacKenzie v Middleton, Ross & Arnot [1983] SLT 286
Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638
Mallett v McMonagle [1970] AC 166
Marshall v Lockyer [2006] WASCA 58
McCartney v Orica Investments Pty Ltd [2011] NSWCA 337
Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1
Miller v Jennings [1954] HCA 65; (1954) 92 CLR 190
Minchin v Public Curator of Queensland [1965] ALR 91
Montemaggiori v Wilson [2011] WASCA 177; (2011) 58 MVR 497
Mount Lawley Pty Ltd v Western Australian Planning Commission [2004] WASCA 149; (2004) 29 WAR 273
Nigam v Harm [No 2] [2011] WASCA 221
Nikolaou v Papasavas, Phillips & Co [1989] HCA 11; (1989) 166 CLR 394
Pene v Murphy [2004] WASCA 103
Phillips v Bisley [1997] NSWCA 246
Radosavljevic v Radin [2003] NSWCA 217
Rogers v Whitaker [1992] HCA 58; (1992) 175 CLR 479
Roney v Priestman [2005] TASSC 52
Rosa v Galbally and O'Bryan [2013] VSCA 116
Rosenberg v Percival [2001] HCA 18; (2001) 205 CLR 434
Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
SNF (Australia) Pty Ltd v Jones [2008] WASCA 121
State of New Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536
Steve Masselos & Co v Young [2011] NSWCA 352
VACC Insurance Co Ltd v Lekkas [1999] VSCA 31; [1999] 2 VR 529
Van Gervan v Fenton [1992] HCA 54; (1992) 175 CLR 327
Wagga Wagga City Council v Sutton [2000] NSWCA 34
Wainright v Barrick Gold of Australia Ltd [2014] WASCA 15
Wright v Shire of Albany (1993) Aust Torts Rep 81‑239
Yammine v Kalwy [1979] 2 NSWLR 151
Table of Contents
PULLIN & MURPHY JJA's reasons...................................................................................... 7
Background
The position as at 24 February 2004
The litigation against the solicitors - overview
Legal principles
The appellant's grounds of appeal and the notice of contention
Disposition
BUSS JA's reasons.................................................................................................................. 31
The appellant's date of birth
The appellant's personal circumstances and antecedents before the accident on 21 January 1998
The appellant's medical condition after the accident and before the operation
The appellant's pre‑operation consultation with Mr Thomas
The appellant's operation
The appellant's post‑operation symptoms
The appellant's further consultations with and treatment by Mr Thomas
The cauda equina and cauda equina syndrome
Professor Nade's diagnosis of the appellant's condition and its cause
The appellant's return to the workforce
The appellant purchases a wheelchair
The appellant's Swedish knee cage
The appellant's work as a real estate sales representative
The appellant's condition at the time of the trial and his permanent disability
The respondent's retainer
The respondent's alleged duties
The trial judge's findings as to the terms of the retainer and the respondent's breach of its duties
The appellant's alleged loss or damage and Mr Thomas' alleged negligence
The trial judge's formulation of the issues in relation to the appellant's alleged loss or damage
The trial judge's assessment of the expert medical witnesses
The expert medical evidence as to the risks of microdiscectomy
Professor Nade's evidence as to the principal alternative treatments
The expert medical evidence as to the warnings Mr Thomas should have given to the appellant
The expert medical evidence as to whether the appellant's operation should have been performed when it was
The trial judge's findings as to whether the appellant's operation should have been performed when it was
The trial judge's findings in relation to Mr Thomas' duty to warn the appellant
The trial judge's findings in relation to the value of the appellant's lost opportunity to commence proceedings against Mr Thomas based on Mr Thomas' alleged breach of his duty to warn
The cause of the appellant's cauda equina syndrome
What should have been done when symptoms of the appellant's cauda equina syndrome emerged?
The trial judge's findings in relation to the value of the appellant's lost opportunity to commence proceedings against Mr Thomas based on Mr Thomas' alleged negligent peri‑operative or post‑operative care
The appellant's pre‑existing back condition
The trial judge's findings as to whether the appellant would have pursued the lost cause of action
The appellant's claim against the respondent fails
The trial judge's provisional assessment of the quantum of damages
The appellant's grounds of appeal
The respondent's notice of contention
The nature of the appellant's right of appeal and the function of this court
Ground 1.1 of the appeal
Ground 1.2 of the appeal
Ground 2.1 of the appeal and the sole ground of the notice of contention
Ground 2.2 of the appeal
Ground 3 of the appeal
Conclusion
PULLIN & MURPHY JJA: The appellant claimed, against his former solicitors (the respondent), damages for negligence because they failed to issue a writ within the limitation period claiming damages for an injury resulting from an operation which the appellant alleged would not have taken place if the appellant had been warned of the risks associated with it and, or, alternatively, that the surgeon had been negligent in his post‑operative care and treatment. The trial judge dismissed the appellant's claim. The appellant appeals against that judgment.
The trial judge found that there was sufficient evidence to support a case against the surgeon of failure to warn and that the lost chance of pursuing the claim was 55%. The trial judge found that there was sufficient evidence to found a case of negligent post‑operative treatment and that the appellant's lost chance in that regard was 40%.
However, the trial judge found that he was not persuaded on the balance of probabilities that the appellant would have pursued the lost cause of action, so the claim against his former solicitors failed and the action was dismissed. His Honour nevertheless assessed damages provisionally.
The appellant appealed on the issues of causation, the evaluation of the lost chance, and the quantum of damages with respect to lost earning capacity. The respondent solicitors by notice of contention also contested his Honour's valuation of the lost chance with respect to the failure to warn claim. On this issue, the appellant contended that his Honour's evaluation of 55% was too low and the respondent solicitors contended that that figure was too high.
For the reasons which follow, the appellant should succeed on the causation issue, there should be no adjustment to the 55% loss of chance figure ascribed by the judge to the failure to warn claim, and there should be some adjustment upwards in relation to the assessment of damages with respect to lost earning capacity.
Background
The appellant suffered an injury riding a mountain bike on 21 January 1998. He broke a collarbone, which subsequently mended, and also injured his back. He was aged 22 years. The appellant saw a general practitioner for his back pain. The general practitioner referred him to a neurosurgeon.
The appellant saw the neurosurgeon on 17 February 1998. The appellant went with his wife. He was told by the neurosurgeon that he had a prolapsed disc that was pinching on his nerves, and that a microdiscectomy at L 4/5 would be required. According to the appellant and his wife, the neurosurgeon, in response to a question about whether the operation carried with it the possibility of permanent damage, replied in the negative. The appellant and his wife said that the neurosurgeon did not warn the appellant of the prospect that nerves could be severed. The appellant accepted the neurosurgeon's advice.
The operation was carried out on 25 February 1998.
Following the operation, the appellant suffered a lack of bladder control and weakness and numbness in his left and right legs. He used crutches and underwent physiotherapy. The evidence of all the medical experts in the proceedings below was to the effect that the appellant had 'cauda equina syndrome' following the operation. The cauda equina (horse's tail) is the distribution of discrete nerve roots that emerge from the lower end of the spinal cord. A cauda equina syndrome is the name given to the clinical state where there is evidence of dysfunction of the nerve roots in the cauda equina, on both sides, manifested by signs affecting the lower limbs and the perineum, including urological dysfunction. It occurs where nerve roots are either divided, compressed, deprived of their blood supply or lose their ability to conduct impulses due to an alteration of the structure of the nerves.
By June 1998, the appellant had 'pretty much' recovered full use of his left leg, but there was no change in his right leg. On 23 September 1998, the neurosurgeon advised the appellant that the condition of his right leg was permanent. According to the appellant, the neurosurgeon told him that 'they had to push hard against the nerve to get to the disc, that callipers had been used and that his assistant, who was operating the callipers, had squashed the nerve': Falkingham v Hoffmans (a firm) [2012] WADC 153 [63].
The appellant's condition is essentially unchanged since September 1998.
In October 1998, the appellant consulted the respondent firm of solicitors in relation to a potential claim against the neurosurgeon. The solicitors applied for legal aid for the appellant in April 1999 and informed the Legal Aid office, amongst other things, that 'the treating doctors failed to explain the risks of microdiscectomy to him or inform him of the possibility of nerve damage' (GB 20 ‑ 21). The application for legal aid was rejected. The reason was, according to Legal Aid's letter dated 9 August 1999 that:
[T]he payment your client would be required to make (ie towards his/her legal costs) under the means test applied by this office to all applicants for legal aid, would be greater than the cost of the grant of aid (GB 44).
The appellant, including with the assistance of his father‑in‑law, thereafter put the solicitors in funds to investigate his claims against the neurosurgeon.
The solicitors proceeded to obtain expert medical evidence. They obtained reports from Dr Blum, Dr Bleasel and Professor Nade. They also obtained a copy of the neurosurgeon's file, including the neurosurgeon's notes, in April 2001 (GB 81).
Dr Blum's report, dated 7 May 2001, indicated that there was no evidence of negligence by the neurosurgeon, and Dr Blum could not explain the appellant's disability.
On 16 May 2002, according to their file note, the appellant's solicitors discussed with the appellant in some detail the possibility of a claim for failure to warn in accordance with the principles in Rogers v Whitaker [1992] HCA 58; (1992) 175 CLR 479.
In Dr Bleasel's report, dated 25 March 2003, he indicated that the most likely cause of the cauda equina syndrome was the retraction of a very tight nerve root in the performance of the operation. He did not express a view as to whether there was any negligence in that regard because he was not experienced in microdiscectomy. In his earlier report, dated 28 January 2003, he said that it was customary to warn a patient of the risk of paralysis or sensory loss following such an operation.
Professor Nade provided reports to the solicitors dated 21 January 2003, 25 March 2003 and 30 June 2003. His opinion was to the effect that:
(a)the most likely cause of the cauda equina syndrome was pressure on the nerve from the development of a subdural or epidural haematoma following the operation;
(b)the post‑operative symptoms should have alerted the neurosurgeon to the possibility of a haematoma, and of the need to obtain an MRI scan to check for the presence of a haematoma;
(c)had the MRI scan confirmed the presence of a haematoma, it could have been surgically evacuated and if that were done within 48 hours, the resulting decompression on the nerve would probably have resulted in a significantly better recovery for the appellant.
Professor Nade also said that the risks of microdiscectomy included cauda equina syndrome and that a patient should be advised of such risks.
The solicitors' file note of 8 April 2003 indicated that in a telephone conversation with the appellant, the solicitor handling the matter said that 'at the present time [he] would not be prepared to recommend that [the appellant] litigate a claim against' the neurosurgeon. The file note, in effect, added that given the extent of the appellant's disability, it would be appropriate to carry out further investigations. The solicitors, by letter dated 14 May 2003, in effect asked for clarification of Professor Nade's opinion and Professor Nade provided the further report dated 30 June 2003, in which he described in greater detail his reasoning process and conclusions. As indicated later (see [58] below), in relation to the question of the reliability of Professor Nade's opinion, the solicitors wrongly assumed, without checking, that Professor Nade did not have a great deal of experience in performing microdiscectomies.
In any event, on 2 December 2003, the solicitors met the appellant and recommended that he issue a writ because of the impending expiry of the limitation period. The solicitors' file note referred, in effect, to Professor Nade's report dated 30 June 2003 and read, inter alia:
Nade's main reason for believing that the cause of the complaint was a subdural haematoma rather than a complication associated with retraction of the nerve, was the distribution of the damage to that nerve.
I told the client that we thought we should have two doctors to support our case on this point. Preferably we would get a report from a neurosurgeon who had a lot of experience with micro‑discectomies.
Bleasel admitted in his letter that he was [sic - not] greatly familiar with that technique and I doubted whether Nade had performed many either.
I also explained to him that we should issue the Writ because of time limitations.
There'd be a cost involved in all of this and the client said that he would pay right away. I told him that it would cost somewhere around $1,000 for another medical report and $325 to issue the Writ.
Clearly it was worth investigating this a little more because of the potential size of the client's claim.
On 3 December 2003, the appellant paid the sum of $1,350 to cover the cost of the issue of the writ and obtaining a further report.
It became a term of the retainer that the solicitors agreed to issue a writ before the expiry of the limitation period on 24 February 2004.
The solicitors failed to obtain the further opinion which they had agreed to obtain (ts 208). They also failed to issue a writ before 24 February 2004.
The position as at 24 February 2004
It is evident that by 24 February 2004 the solicitors' investigations had led to the identification of two potential claims, one for the failure to warn and the other for negligent post‑operative care in not addressing, and dealing in a timely way, with the possibility of cauda equina syndrome caused by a subdural or epidural haematoma.
On the first claim (the failure to warn), there was strong medical evidence to the effect that the risk of sensory loss, including as a result of cauda equina, ought to have been explained pre‑operatively. That evidence could not, of course, under the common law, supplant the duty of the court itself 'to adjudicate on what is the appropriate standard of care after giving weight to "the paramount consideration that a person is entitled to make his own decisions about his life"': Rogers (487). However, there was no reason for the solicitors to doubt that the court would have taken a different view. The only real issues with respect to the failure to warn claim were (1) whether the appellant had received the appropriate warning and, (2) if not, whether he would have proceeded with the operation had he received an appropriate warning. Both of those matters were questions of fact.
As to the second claim (the post‑operative care claim), the solicitors had agreed, in effect, that they would obtain a further report, for which the appellant had put them in funds, before giving advice for the purpose of allowing the appellant to decide whether or not to proceed with or abandon his claims against the neurosurgeon. In the meantime, a writ would be issued to preserve the appellant's rights. In this regard, the judge found:
I am satisfied that as at 24 February 2004 [the appellant] would have pursued the claim to the point of reviewing the position after a further report was obtained [232].
The litigation against the solicitors - overview
In the proceedings below, the appellant sued the solicitors for the lost opportunity to commence proceedings against the neurosurgeon. The judge recorded that it was not an issue that the solicitors were negligent and in breach of contract.
Although the statement of claim against the solicitors originally cast a somewhat wider net, it appears that a number of the pleaded claims were ultimately not pressed (ts 298 ‑ 300). The judge's reasons indicate that the principal issues in the court below concerned the question of the solicitors' liability with respect to the failure to warn claim and the pre‑operative care claim.
In relation to those matters:
(a)the neurosurgeon was not called by either party to give evidence;
(b)the appellant called Professor Nade as an expert witness on the medical issues, and the solicitors called Dr Bleasel and Dr Blum as expert witnesses;
(c)the neurosurgeon's notes, which had been obtained by the solicitors in 2001 and used to brief the expert witnesses, were not adduced in evidence;
(d)there was nothing to indicate that any literature explaining the risks of the operation had been given or made available to the appellant prior to 25 February 1998;
(e)the expert medical reports at trial consisted, in general terms, of the reports obtained by the solicitors prior to 24 February 2004, supplemented by two further reports from Professor Nade dated 26 November 2009 and 1 February 2010. The first of those reports in effect updated the appellant's medical condition. The second report explained in further detail why Professor Nade concluded that a haematoma had caused the cauda equina syndrome and why he disagreed with Dr Bleasel in that regard and could not accept the views of Dr Blum.
As to the medical evidence called by the parties, the judge made the following general observations:
Professor Nade [was] a very experienced orthopaedic surgeon and had carried out many microdiscectomies. He [was] a prolific author and a senior and learned professor … His reports [were] far more detailed and analytical [than] those of Dr Bleasel and Dr Blum.
The judge found that Professor Nade was better qualified to give evidence on microdiscectomies and where opinions differed, it is likely that a 'notional court' hearing the claim against the neurosurgeon 'would have preferred the evidence of Professor Nade'. As to the experts called by the solicitors, the judge found that:
(a)Dr Bleasel was an experienced neurosurgeon but did not have the experience in performing microdiscectomies and did not have Professor Nade's academic and research experience; and
(b)Dr Blum was an experienced neurosurgeon, but the extent of his experience in performing microdiscectomies was unclear and he did not have Professor Nade's academic experience.
On the post‑operative care claim, the judge evaluated the appellant's lost chance at 40%, particularly having regard to questions of causation which he said would have arisen in the proof of the post‑operative care claim. This appeal was not fought on the basis of the judge's findings of the post‑operative care claim and those findings are not challenged by either party.
In relation to the failure to warn claim, the judge found that the appellant's loss of a chance was 55%.
However, the judge ultimately dismissed the appellant's action against the solicitors on the basis that the appellant had not established that the solicitors' negligence was causative of his loss. In that regard, the judge found, in effect, that whilst the appellant would have proceeded with the issue of the writ, he had not established whether he would have pursued the action against the neurosurgeon thereafter. His Honour noted that the arrangement in December 2003 was for the solicitors to obtain a further medical report which, as indicated, would go to the question of post‑operative care. The matter would then be reviewed, and in the meantime the writ would be issued to protect the appellant's rights.
His Honour expressed his conclusion on causation, adversely to the appellant, in the following terms:
[The appellant] did not give evidence as to whether he would have pursued the action to trial. I am therefore left to infer from the evidence that was provided whether he would have pursued the action to trial.
…
On 3 December 2003 [the appellant] responded quickly to [the respondent's] request for funds to issue the writ and to obtain a further medical report (ts 95). I am satisfied that as at 24 February 2004 [the appellant] would have pursued the claim to the point of reviewing the position after a further report was obtained.
[The appellant] had not undertaken the exercise of comparing the opportunity of what he might have gained compared to what he could lose if he proceeded. If the report had been unfavourable would he have proceeded? I simply do not know. Similarly, I simply do not know whether faced with the costs of an action compared to the potential award of damages and the risks he faced he would have proceeded to take the matter to trial.
I do not know whether [the appellant] could have funded the action. In the face of the evidence gathered by Hoffmans it is difficult to conclude that they would have proceeded on a speculative basis.
There is no basis for me to draw an inference as to what [the appellant] might have done [228], [233] ‑ [235].
Legal principles
There was no real controversy as to the relevant common law principles. They had been considered most recently in this court in Nigam v Harm [No 2] [2011] WASCA 221 and, some years earlier, in Hammond Worthington v Da Silva [2006] WASCA 180.
In summary, a plaintiff in this context who proves breach of duty of care by the solicitors must establish two things to recover damages in tort (or to recover damages beyond nominal damages in contract for breach of a cognate implied term):
(a)that he or she has suffered some loss or damage; and
(b)that the loss or damage was caused by the negligence of the solicitors.
Each of those matters must be established on the balance of probabilities. As to the first of those issues, the plaintiff must establish that the cause of action was real as distinct from being fanciful, or put another way, that the opportunity had some value, not being a negligible value. The relevant question has also been put negatively - was the plaintiff's case not viable, or doomed to fail? The plaintiff's lost chance has value even if the court, reviewing the facts with 20/20 hindsight, would assess the plaintiff's prospects at less than 50%. Even where the prospects are less than 50%, the plaintiff has lost a real chance to obtain compensation by way of a verdict, and the defendant remains at some real risk of the plaintiff ultimately succeeding at trial. Typically in that event, a valuable right has been lost by the foreclosure of the prospect of a favourable settlement.
As to the second issue, the plaintiff must establish, on the balance of probabilities, that he or she would have pursued the opportunity to obtain compensation by way of verdict or by compromise. Ordinarily, that would be established by proof that the plaintiff would have litigated the cause of action to trial or earlier valuable settlement. That is not to deny the possibility that there may be cases where the evidence might be that the hypothetical defendant would have agreed to pay or settle the claim without the need for the plaintiff to litigate.
The assessment of whether the appellant would have pursued the cause of action is determined subjectively, that is, by what the appellant (rather than a reasonable person) would have done in the circumstances: Nigam [145], [182]. That principle is enacted in s 5C(3)(a) in div 3, pt 1A of the Civil Liability Act 2002 (WA) (CLA), which applies where the 'harm' giving rise to the claim for damages arises out of an incident happening on or after 1 December 2003: s 5A(3) of the CLA. 'Harm' is defined to include economic loss (s 3 CLA) and pt 1A extends to damages sought to be recovered in an action for breach of contract or any other action (s 5A(2) CLA). Under the common law, any evidence of what the appellant would have done is normally assessed in light of the surrounding objective facts and circumstances: Nigam [118], [145]. In the absence of direct evidence, the trial judge may infer causation from the objective facts: Rosenberg v Percival [2001] HCA 18; (2001) 205 CLR 434 [17], [24] ‑ [25], [87] ‑ [91], [154] ‑ [159].
This appeal was conducted by reference to the position at common law and on the basis that the CLA did not apply to the appellant's claim against the solicitors. For present purposes, no injustice arises if that assumption is maintained, and these reasons will proceed upon the same basis. However, it may be noted that s 5C(3)(b) of the CLA provides, in effect, that where it is relevant to determine what an injured person would have done if the tortfeasor had not been at fault (in this case whether the appellant would have pursued the cause of action to judgment or earlier favourable settlement), 'evidence of the injured person as to what he or she would have done if the tortfeasor had not been at fault is inadmissible'. (Section 5C(3)(b) of the CLA would have had no application in proceedings against the neurosurgeon in relation to whether the appellant would have undergone the surgery if properly warned, as the relevant harm in that regard arose out of an incident happening prior to 1 December 2003).
The issue of causation ordinarily involves the question of what advice a reasonable and prudent solicitor, having properly obtained evidence, would have given to the plaintiff and what course the plaintiff would have taken after that advice: Rosa v Galbally and O'Bryan [2013] VSCA 116 [32]; Feletti v Kontoulas [2000] NSWCA 59 [28], [32]. Accordingly, the objective prospects of success that, properly advised, the plaintiff would or should have obtained from his or her solicitors may bear upon the issue of causation. The greater the likely prospects of success in this regard, the more likely the court may be prepared to accept that the plaintiff would have litigated his or her claim to judgment or earlier valuable settlement. Conversely, the lower, objectively, the prospects of success, the more reluctant the court might be to make a finding that the plaintiff would have litigated his or her claims to judgment or earlier valuable settlement. However, the evidence on the issue of causation, including (where admissible) any direct evidence from the plaintiff as to what he or she would have done, would need to be considered and weighed as a whole. There may be cases where there may be a dispute as to whether, and to what extent, a particular plaintiff would be swayed even by appropriately given negative advice on prospects (although, of course, the fact of loss would still need to be proved by proving that the claim nevertheless had some real, non‑negligible, value).
In some cases, the plaintiff may be able to prove that he or she would have succeeded against the hypothetical defendant, and that there are no contingencies bearing on the likelihood of that success which need to be taken into account: Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351, 366. Where there are contingencies bearing upon whether the plaintiff would have succeeded in the hypothetical action against the hypothetical defendant, the value of the lost chance is assessed by reference to the degree of probabilities or possibilities of success in the underlying action, and not on the civil standard: Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332, 354 ‑ 355. If the defendant is uninsured or potentially unable to meet an award of damages, that contingency will also ordinarily be taken into account: Johnson (366).
In the assessment of damages for loss of a chance, there must necessarily be a fair degree of informed speculation. Nevertheless, the starting point is what was proved at trial against the solicitors, particularly where there is no suggestion that the witnesses called at trial would not have been available for the purposes of the lost cause of action: Feletti [48]; Nigam [207].
In taking into account any uncertainties, evidentiary difficulties or other problems in assessing the value of the underlying litigation, the discount is global and evaluative in nature rather than mathematical: Nigam [266]; Rosa [100], [105].
In relation to appellate review of the trial judge's evaluation of the lost chance, it is to be recalled that the trial judge was dealing with hypothetical events, and that appellate restraint is generally appropriate. In McCartney v Orica Investments Pty Ltd [2011] NSWCA 337 [126] ‑ [127], Giles JA (Macfarlan and Young JJA relevantly agreeing) referred to appellate restraint:
[W]here there is necessary imprecision and evaluation in determining the likelihood that a past hypothetical event would have occurred or a future hypothetical event will occur. That will, of course, not always be the case: the likelihood may turn on a finding of fact or otherwise not be particularly evaluative. But, as was said in Harper v Bangalow Motors (CA, 24 July 1990, unreported), in an expression of relevant principles endorsed in Diamond v Simpson (No 1) at [15] – [16], the approach of appellate restraint applies '[i]f … the decision reflects a degree of judicial prophesy [sic] or speculation'.
These cases also accord with the basis for restraint endorsed in Singer v Berghouse, namely, that a different evaluation may be no better and will come at undue expense and detraction from the finality of litigation. That basis for restraint has been applied more broadly. In Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66, involving the discretion to give judicial advice to a trustee, Gummow ACJ and Hayne and Heydon JJ said at [190] that the proceedings -
'… illustrate the particular care that must be taken by appellate courts, in such circumstances, in disturbing the conclusions of a trial judge in arriving at such decisions, except in the limited circumstances explained by this Court in House v R. Unless restraint is employed in cases of the present kind, in disturbing the orders of trial judges, the risk is run that escalating litigation is encouraged; the resolution of the substantive dispute is delayed; legal costs are incurred in disproportion to the value of assets at stake; and other public and private costs are improvidently incurred. Against such outcomes, this Court has frequently expressed, and reasserted, the need for particular appellate restraint.'
In Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, Mason CJ, Deane and McHugh JJ referred with approval to the comments of Kirby P (as he then was) in Golosky v Golosky (unreported, NSW Court of Appeal, 5 October 1993) at pp 13 ‑ 14:
Unless appellate courts show restraint in disturbing the evaluative determinations of primary decision‑makers they will inevitably invite appeals to a different evaluation which, objectively speaking, may be no better than the first. Second opinions in such cases would be bought at the cost of diminishing the finality of litigation in a troublesome area and sometimes at least, with a burden of costs upon the estate which should not be encouraged (212).
The assessment of prospects in a loss of chance case has been described as 'quintessentially evaluative': Horne v Cranney [2011] QCA 149 [9]. See also Hammond Worthington [128] and Nigam [259].
The appellant's grounds of appeal and the notice of contention
The appellant's grounds of appeal allege:
Ground 1.1
1.1The learned trial Judge erred in law in determining that the relevant test for causation was whether the appellant would have pursued the action against the surgeon (the 'lost action') to an ultimate trial. His Honour should have found instead that the respondent's negligence caused the appellant to lose a valuable opportunity to (at least) settle the lost action.
Ground 1.2
1.2.In failing to find or infer that the appellant would have taken the lost action to trial, the learned trial Judge:
(a)erred in law, when there was no evidence that the appellant would not have pursued the lost action to trial;
(b)erred in law, when the most reasonable inference available on the evidence, favoured such a finding.
Ground 2.1
2.1His Honour erred in fact in assessing that the value of the lost opportunity was 55% (on account of the surgeon's failure to warn of the risks of microdiscectomy), when the evidence warranted a much higher assessment.
Ground 2.2
2.2His Honour erred in law in failing to give any or adequate reasons for the conclusion (or make appropriate findings to support the conclusion) that the appellant's evidence about his previous back injury illustrates potential concerns with his credibility [173(e)].
Ground 3
3.The learned trial Judge's award of $80,000 for past and future loss of earning capacity was so inordinately low as to amount to an error of law.
The notice of contention relates to ground 2.1 of the appeal, and alleges:
In the event the appeal on liability is allow[ed], then the Respondent contends that the reduction by the learned Trial Judge of damages to 55% of the provisional assessment is wrong in law and is a far greater award than should have been allowed given the risks and uncertainties in the potential litigation, in particular:
(a)the fact that the Appellant may not have proceeded with the action due to its inherent risks;
(b)the potential that the Appellant may have chosen to settle the claim at a lower figure given the risks, uncertainty and expense of litigation; and
(c)the potential that the Appellant may have failed at trial on the issue of negligence and causation which were not factors taken into account by His Honour.
Disposition
Ground 1.1 of the appeal involves the proposition that the judge found, in effect, that the appellant must fail on causation unless he proved that he would have litigated the action against the neurosurgeon to final judgment, as opposed to final judgment or earlier favourable settlement. If the judge approached causation on that basis, he would have been in error. However, we do not understand his Honour's reasons, read as a whole, to disclose such error.
It is true that in the passages referred to in [36] above, the judge has referred three times to the question of whether the appellant would have pursued the action 'to trial'. However, it is to be recalled that this was in the context of a finding that the appellant would have initiated proceedings against the neurosurgeon by issuing a writ. The language may be infelicitous insofar as it omits reference to litigating the matter to earlier resolution by settlement, but the real import of his Honour's finding, when his reasons are read as a whole, is that there was no basis for the inference that the appellant would have pursued the litigation beyond the issue of the writ, ie, either to the point of judgment or to earlier settlement. His Honour's finding that there 'is no basis for me to draw an inference as to what [the appellant] might have done' [235], is to be read in light of the immediately preceding paragraphs. Fairly construed, that finding is to be read as a finding to the effect that there was no basis to draw an inference as to what the appellant might have done next, ie, after the issue of the writ. Moreover, when his Honour came to summarise, under the heading 'Mr Falkingham's claim fails', the effect of his preceding discussion, his Honour said that '[a]ccordingly, based on the evidence before me, I am not persuaded on the balance of probabilities that [the appellant] would have pursued the lost cause of action' [236]. There is no mention, in his Honour's ultimate conclusion on causation, that the reason the appellant's action failed was because he had failed to prove that he would not have pursued the action 'to trial' as opposed to settlement. The way that his Honour expressed the ultimate conclusion corresponds with the formulation of the question which his Honour had earlier set himself in his reasons at [125(b)]. There his Honour said, in effect, that the relevant issue of causation that he was required to determine, on the balance of probabilities, was whether '[the appellant] would otherwise have pursued the lost cause of action'. Again, there was no attempt to raise a distinction between trial and settlement in the formulation of the relevant causation question. As the premise of ground 1 is unfounded, ground 1 should be dismissed.
Ground 1.2(a) contends that the judge erred in law in finding that the appellant would not have pursued the action to trial when there was no evidence that the appellant would not have done so. This ground should be rejected. The onus was on the appellant to prove, on the civil standard, that he would have litigated the matter to judgment or an earlier valuable settlement. Proof is not established by an absence of evidence on that topic.
Ground 1.2(b) alleges, in effect, that the judge erred in finding that there was no evidence upon which to infer causation, and that the judge should have inferred causation.
The analysis must start with the proposition that the judge found, in effect, that the appellant would have caused the issue of a writ in accordance with the solicitor's advice in order to preserve his rights before the limitation period expired. The essential question on causation is whether he would thereafter have abandoned the action.
The analysis is complicated by the fact that the solicitors not only failed to issue the writ but also failed, in breach of retainer, to seek another expert report with a view to supporting the opinion of Professor Nade in relation to the post‑operative care claim. In the absence of any evidence on this point, it may be assumed that no additional expert report would have been obtained, either supportive of, or contrary to, Professor Nade's opinion. The question then becomes whether the appellant would have abandoned the (assumed) proceedings already commenced in respect of the failure to warn claim and the post‑operative care claim based on Professor Nade's opinion.
The first point to note is that any proper advice to the appellant by a prudent solicitor would not have been to the effect that a further report was necessary or desirable on account of the fact that Professor Nade did not have the appropriate experience in performing microdiscectomies. The solicitor's assumption that he did not have the requisite experience was wrong and unreasonably held (see the solicitor's evidence ts 217 ‑ 219 and compare the judge's finding at [138]). When the judge said that in light of the evidence gathered by the solicitors, 'it is difficult to conclude that they would have proceeded on a speculative basis' [234], his Honour did not take into account that the solicitors were operating under a false assumption that the reliability of Professor Nade's opinion was diminished because he lacked relevant experience in carrying out microdiscectomies.
Next, it is to be noted that his Honour considered that the failure to warn claim had 55% prospects of success. This assessment was made on the assumption that the neurosurgeon's 'likely response' would be to 'say that a warning was given in the terms suggested by Professor Nade and Dr Bleasel' [170]. In a hypothetical advice on prospects and risks before any defence was filed in the hypothetical litigation against the neurosurgeon, that would be a reasonable assumption to make. The judge's ultimate finding that the failure to warn claim had 55% prospects of success cannot automatically be equated with the hypothetical advice on prospects which a prudent solicitor would have given the appellant before he made any decision to abandon the action. That is because the judge's assessment, unlike that of the prudent solicitor advising prospectively, includes the advantage of hearing evidence from the witnesses called by the parties in relation to the merits of the underlying claim. Nevertheless, the two may overlap to the extent that both the judge and the solicitor giving hypothetical advice would take into account the objective facts and circumstances which would be persuasive in a determination of the underlying claim. In this case, it is of some significance that to a considerable extent, the judge approached his assessment by reference to the information which was available to the solicitors as at 24 February 2004. It may be inferred from the judge's reasoning with respect to the loss of chance that, had he addressed the question directly, he would have considered that a prudent solicitor would have advised that the appellant's prospects on the failure to warn claim were reasonable and were likely to be in the order of 50%. Similarly, the judge's reasoning with respect to the post‑operative care claim would indicate that the judge would have considered that a prudent solicitor would have advised that, objectively, the appellant's prospects, although less than even, were far from poor.
The judge's ultimate estimation of prospects in relation to the failure to warn claim is considered in detail later in these reasons. Insofar as the judge's findings and reasoning may be accepted, and to the extent that they are based upon what the solicitors knew, or ought to have known, it is reasonable to suppose that a prudent solicitor, advising the appellant in 2004 as to whether or not to abandon the action already commenced, would have advised along the following lines:
(a)the appellant had reasonable prospects on the failure to warn claim. Much would depend upon the credibility of the appellant and his wife. Precise quantification of the prospects could not sensibly be made in relation to the failure to warn claim but as a rough guide, it could not be assumed that the chances of success were greater than even;
(b)the appellant had a good arguable claim to the effect that the neurosurgeon had failed to provide proper post‑operative care, but there remained a real issue as to causation which would likely mean that his overall prospects on that claim were somewhat less than even; and
(c)overall, the further pursuit of the proceedings would be attended by real risk but with, nevertheless, a significant chance of recovering substantial damages.
A prudent solicitor would also have advised on the likely adverse costs consequences if the action failed. It is in the above context that the issue of causation is to be determined.
The evidence or matters available to support an inference of causation were that:
(a)the appellant was not deterred from the pursuit of the claim against the neurosurgeon by the rejection of his application for legal aid;
(b)as the appellant's solicitors recognised at the time they were acting for him, the appellant's 'disability was great and would affect him for the whole of his life' (GB 124) and that if his claims were successful 'he [would] receive compensation that [would] total in the hundreds of thousands of dollars' (GB 39);
(c)the appellant put the solicitors in funds, apparently promptly, on the occasions he was requested to do so;
(d)the hypothetical advice on prospects would have indicated that the neurosurgeon would have also been at some significant risk in the action in respect of his pre‑operative warning and post‑operative care, and that, accordingly, there would be some real prospect that the neurosurgeon would wish to avoid a trial and negotiate a settlement;
(e)the appellant pursued an action against the solicitors to trial for their negligence in handling his claims against the neurosurgeon, and he did so essentially in reliance on the information obtained by the solicitors prior to their omission in failing to issue the writ against the neurosurgeon.
Accordingly, in light of the matters in [57] ‑ [62] above, the judge was, with respect, in error when he said that there was 'no basis for me to draw an inference as to what [the appellant] might have done' had the solicitors commenced proceedings against the neurosurgeon in accordance with the appellant's instructions [235]. It has been said that the law adopts a 'robust and pragmatic approach' to the proof of causation: Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307, 317; Leitch v Reynolds [2005] NSWCA 259; [2005] Aust Torts Reports 81‑806 [76], [83], [85]. The judge should have inferred causation in light of matters referred to above. Ground 1.2(b) should be upheld.
Ground 2.1 asserts that the value of the lost opportunity with respect to the failure to warn claim was much greater than 55%. This ground should be considered with the notice of contention, which, in effect, alleges that the value of the lost opportunity with respect to the failure to warn claim was much less than 55%.
The failure to warn claim had, essentially, two elements.
One was whether had the appropriate warning been given, the appellant would not have proceeded with the operation. The appellant's evidence was that he would not have. The judge found his evidence 'objectively credible' [162]. He found, in effect, that a court hearing the hypothetical action against the neurosurgeon would accept, or at least there was a high chance that a court would accept, that any failure to warn had 'caused the injury to the nerve root that resulted in permanent damage' [164]. In this context, it is to be noted that his Honour had previously said:
In Professor Nade's opinion … disc excision surgery should not be performed unless there is clear clinical evidence of dysfunction of a nerve root. In Dr Bleasel's opinion … the operation was warranted according to the history. A notional court was likely to find that Dr Bleasel did not have sufficient history to form a view as to whether the operation should have proceeded. It is likely that a notional court would have preferred Professor Nade's opinion.
I find that it was open to a notional court to find that there was no pressing need to perform surgery and that other treatments, including simply waiting, were available and should have been preferred [153] ‑ [154].
The other relevant element was whether the appropriate warning was given.
The trial judge considered that this was a credibility case because the 'likely response' of the neurosurgeon would have been to deny that he failed to warn of the risk of permanent injury and to say that he gave a warning in accordance with the terms suggested by Professor Nade and Dr Bleasel [170]. The following observations may be made about that finding.
It is to be inferred, from the absence of any forensic use made by the solicitors in the trial against them, that the neurosurgeon's notes and file did not disclose that the risks of permanent nerve damage had been explained to the appellant pre‑operatively. Similarly, it may also be inferred that there was no evidence of any literature having been provided to the appellant in that regard before he consented to undergoing the operation.
Given the serious nature of the underlying allegation, namely that the neurosurgeon's negligence was a cause of significant disability to the appellant, it is unlikely that the neurosurgeon would have willingly participated in the trial of the action against the solicitors, particularly as he would inevitably have been exposed to cross‑examination. It would also be difficult to contend that the solicitors' failure to call the neurosurgeon in the conduct of their defence would raise a Jones v Dunkel inference against them, and that contention was not made in this appeal. (Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298.)
Nevertheless, there was no evidence before the judge which indicated that the 'likely' response of the neurosurgeon would be to assert that he gave an appropriate warning. As noted earlier, that was an assumption which could reasonably be made for the purposes of considering a hypothetical advice on prospects before any decision was made to abandon the action which would have been commenced but for the solicitors' breach. Such an assumption could properly be made in this matter in considering the issue of causation. However, when addressing the value of the lost chance for the purpose of assessment of damages as at the date that the hypothetical litigation would likely have gone to trial, the judge was required to have regard to the state of the evidence before him. In this case, there was no evidentiary foundation for inferring what the 'likely' response of the neurosurgeon would be to the failure to warn claim. The judge could, however, properly form the view that the risk to the appellant that the neurosurgeon would have asserted that he gave an adequate warning could not be excluded, and required evaluation. In that regard, account would also need to be taken of the potential vulnerability of the medical practitioner, in giving evidence many years after the event, on a matter for which he apparently had no contemporaneous note, and in respect of which he would presumably seek to rely on evidence as to his usual practice.
The next point to note is that in concluding that the appellant's lost chance on the failure to warn claim was 55%, the judge said:
On a broad brush assessment [the appellant's] lost chance was 55%. My reasons for reaching a figure of 55% are:
(a)it is a credibility case which starts at a 50% 50% position;
(b)[the appellant and his wife] largely corroborate each other but a judge might well conclude that that the corroboration is a result of discussing the meeting with each other over many years;
(c)[the appellant and his wife] had concerns about the operation as a result of [the appellant's wife's] occupation and this objectively supports a finding that they would have paid close attention to such warnings;
(d)the subsequent decision to have the operation when there was no urgency is consistent with a failure to warn;
(e)[the appellant's] evidence about his previous back injury illustrates potential concerns with his credibility;
(f)(d) and (e) [sic (c) and (d)] raise the probability of a failure to warn above 50% but not overwhelming so.
Therefore the 50% chance, should be raised by 5% to 55% [173].
As to the matter in (a) of [72] above, the suggestion that all credibility cases are balanced evenly before all circumstances are taken into account is, with respect, incorrect. In that regard, the judge erred. The correct approach to a lost opportunity case is to identify all of the factors bearing on the prospects of success and then make a judgment about the discount to be applied to the uncertainties which may have attended the pursuit of the claim if it had not become statute barred.
As to the matters in (b) and (c) of [72] above, the judge earlier recorded, without adverse comment, the evidence of Mrs Falkingham (the appellant's wife) about the pre‑operative consultation and her concerns about the potential for and consequences of permanent damage [162]. Her evidence was that she was 'a social trainer at the time working with people with disabilities and [she] wanted to … make sure that [her husband] was not going to end up with any sort of permanent damage from the operation' (ts 18/9/12 p 115). Although his Honour made no adverse finding on Mrs Falkingham's credibility directly, his Honour appears to indicate that a trial judge at the hypothetical trial might have reservations about her evidence on the basis that her recollection might be affected by having 'discuss[ed] the meeting', 'over many years' [173].
The matter in (d) of [72] above is self‑evident.
The reference to 'potential concerns' with credibility referred to in par (e) of [72] above must be read as a recognition of risk, but against the background that the judge had found that the appellant's evidence that he would not have proceeded with the operation if appropriately warned was 'objectively credible' [162].
In contending that the judge underestimated the value of the lost opportunity, the appellant contended, in effect, that the judge ought not have taken into account that a court hearing the hypothetical litigation might find that the evidence of the appellant and his wife was influenced as a result of discussing the meeting with each other over many years. It is said that that was not put to the appellant in cross‑examination. However, even if it were not put in cross‑examination in the action against the solicitors, it remained a criticism which may have been made in the hypothetical litigation against the neurosurgeon, and was a factor to which the judge could properly have regard. The absence of cross‑examination on this point would go to weight.
The appellant also emphasised that there was no evidence at trial that the neurosurgeon would have contended that he had given an appropriate warning in accordance with the evidence of Professor Nade and Dr Bleasel. This matter has been referred to earlier. The primary court was in a difficult position. Had there been litigation against the neurosurgeon and the neurosurgeon failed to give evidence, a Jones v Dunkel inference would ordinarily have been available, but it was not suggested in this appeal that such an inference should be drawn against the solicitors. (Plainly no Jones v Dunkel inference could be drawn as to the appellant's failure to call the neurosurgeon.) Although the judge overstated the position when he said that on the evidence before him that it was 'likely' that the neurosurgeon would have asserted that he gave the appropriate warning, there remained the very real possibility that the neurosurgeon, in the hypothetical litigation, would have contested the evidence of the appellant and his wife, and stated that he had given the appropriate warning. A significant discount was required to take into account this contingency. This contingency remained a live one in assessing the value of the lost opportunity, given the inherently circumscribed nature of the evidence on this issue at the trial of the action against the solicitors. Nothing but a 'broad brush' approach could be applied here.
As to the solicitors' notice of contention to the effect that a figure of 55% was too high, the solicitors said that it was 'nominally true' that 'the starting point in a credibility case [was] 50:50 [but] what must be factored into such an assessment is what a reasonable [sic] competent solicitor would advise in those circumstances as a matter of professional judgment and advice' (WB 29 ‑ 30). The burden of the solicitors' submission was that the court should infer that the solicitors had (properly) advised the appellant, in effect, that the litigation should not be pursued at all, after the issue of the writ, unless they obtained a second favourable opinion on the post‑operative care claim, and that the appellant would have taken that advice. That submission, strictly speaking, raises a causation issue rather than an issue as to the valuation of the lost chance for the purpose of determining whether the appellant lost anything of value and, if so, by way of damages, the extent of the loss.
The solicitor who had the conduct of the matter on behalf of the appellant gave evidence at trial, but he did not give direct evidence that he gave the appellant any advice in the terms which the solicitors now invite this court to infer was given to the appellant. Certainly, there was no advice in writing to that effect (or at all) in the period prior to the solicitors allowing the appellant's cause of action to become statute barred. The solicitor handling the file gave no evidence in chief on the question of whether he advised, in particular, on the prospects of the failure to warn claim. His evidence in response to a very general question in chief on this topic was not particularly illuminating and was tentative and speculative in nature:
During that time when you were looking for further information, had you discussed the pros and cons of litigation in terms of costs and risks and that sort of thing with the plaintiff? - I - I'm pretty sure that I would have discussed those sorts of matters because that's obviously relevant to the decision about whether or not to go on and what money to spend and how certain you had to be that you had a good case before you went on. So it would be the normal thing I would do with a client, especially at this stage of the game, when so much investigation had been done and simply to tell him that, to make sure he was appraised of - of that and what trial was all about and how you actually needed to prove these - to prove these cases and damage was not enough (ts 207).
As indicated earlier, there were reasonable grounds to find that causation was proved. The solicitor's evidence does not operate to displace that inference.
The solicitors' counsel also referred to the appellant's belief that he was informed that nerves could regrow, and that this indicated that his recollection was unreliable. If it were proved that it was well known that there was no prospect of nerve recovery, that could well affect the appellant's credibility. But it was to be weighed against other factors in relation to the credibility of the appellant's evidence referred to earlier. It might also reveal some lack of clarity in communication by the doctor. Although not entirely clear, the solicitors also appeared to contend, in effect, that because it was customary to give an appropriate warning, it should be inferred that it would be improbable that a warning was not given in this particular case. That contention has a degree of question‑begging in it, although it may be accepted that the hypothetical court would not readily find a serious departure from sound practice unless there was cogent evidence to support that finding.
Finally, if, as the judge found, the appellant's evidence to the effect that he would not have proceeded with the operation if appropriately warned was 'objectively credible', the fact that he consented to undergoing the operation at all could, itself, provide good evidence that he was not warned of the risk of permanent injury.
As we have indicated, it is not correct to assume that the starting point for an assessment of the lost chance was 50/50. The judge erred in that respect and it is thus appropriate for this court to make its own estimate of the lost chance. The question of assessment ultimately involves a degree of impression. Taking into account all the facts and circumstances of this particular case, including the factors to which the judge properly referred, and the findings which were properly open on the evidence before him, including favourable findings as to the appellant's credit, the appellant's prospects were reasonable but still attended with substantial risk. Overall, and adopting what is necessarily a broad brush approach, we would also value the lost chance at 55%. Accordingly, despite error by the judge, the ultimate result is the same. For these reasons, ground 2.1 and the notice of contention should be dismissed.
Ground 2.2 alleges, in effect, that the judge failed to give any or any adequate reasons for the conclusion (or make relevant findings to support the conclusion) that the appellant's evidence about his previous back injury illustrated potential concerns with his credibility [173(e)].
There are a number of recent decisions of this court which discuss the principles to be applied when considering the adequacy of a trial judge's reasons: Mount Lawley Pty Ltd v Western Australian Planning Commission [2004] WASCA 149; (2004) 29 WAR 273; Marshall v Lockyer [2006] WASCA 58; SNF (Australia) Pty Ltd v Jones[2008] WASCA 121; Bennett v Carruthers [2010] WASCA 131 [27] ‑ [28].
Whether the content of reasons is adequate will depend on the circumstances of the case and the matters that arose for the judge's consideration. The court will look at the reasons as a whole and, if necessary, in the context of the evidence, to determine if they give the sense of what was intended in a way that achieves their required function and purpose: SNF (Australia) Pty Ltd v Jones [32].
If reasons are found to be inadequate, it does not follow that there is necessarily an appealable error; an appeal court will only interfere when no reasons have been given in circumstances in which they were required, or when the inadequacy of the reasons is such as to give rise to a miscarriage of justice. Further, where an appealable error arises from inadequate reasons, it does not necessarily follow that a new trial is required. An appeal court is entitled to consider the matter and, if it can do so (eg, where only one conclusion is reasonably open on the available evidence), may decide the matter itself: Mount Lawley Pty Ltd [29].
His Honour's reasons at [15] ‑ [22] plainly illustrated potential concerns as to the appellant's credibility with respect to an earlier back injury (not the back injury resulting from the mountain bike accident). This ground has no merit.
As to ground 3 of the appeal, concerning damages, this court noted the need for appellate restraint on this issue in Wainright v Barrick Gold of Australia Ltd [2014] WASCA 15 [88] ‑ [90]. Nevertheless, as Buss JA has observed, in this case:
(a)the appellant permanently wears a foot orthosis and uses a walking stick;
(b)he walks with a hobbling and antalgic gait which causes him hip and back pain;
(c)as a result of sensory loss, the appellant does not know where his right foot is placed and this causes him to stumble and fall on a daily basis;
(d)after walking for about 10 minutes he needs to sit because his right hip, knee and ankle begin to hurt;
(e)his right leg paralysis means that he is numb down to his foot and four toes, the sole of his foot and his big toe are hypersensitive to touch, the outside of his foot is numb and he has no sense of leg placement;
(f)the appellant was only 22 at the time of the operation and he was only 31 as at the time of the notional trial; and
(g)at all material times the appellant had limited education and limited work experience.
The judge's award of $80,000 in total for past and future loss of earning capacity was, on the facts, unreasonable and plainly unjust: House v The King [1936] HCA 40; (1936) 55 CLR 499, 505. In other words, error may be inferred.
For the reasons given by Buss JA at [352] ‑ [357], lost earning capacity should be assessed at $149,350 giving a total measure of damages, before applying any discount, of $401,850. When that amount is discounted by 45%, the result is $221,018, upon which interest should be awarded at 6% per annum from 1 November 2006 up to the date of judgment in this appeal.
BUSS JA: On 21 January 1998, the appellant broke his collarbone and injured his back when he fell from a mountain bicycle he was riding.
He consulted a neurosurgeon, Wayne Thomas, about his injured back. Mr Thomas diagnosed a prolapsed disc. On 25 February 1998, Mr Thomas carried out a microdiscectomy. The appellant suffered a permanent disability to his right leg as a consequence of the operation.
The appellant instructed the respondent, a firm of solicitors, to advise whether he had a claim for damages against Mr Thomas. The respondent failed to issue a writ of summons against Mr Thomas on or before the last day of the limitation period, namely 24 February 2004.
The appellant brought an action against the respondent in the District Court. He claimed damages for the respondent's negligence in failing to issue a writ within time.
The action was tried before Curthoys DCJ between 17 ‑ 21 September 2012 and on 24 and 25 September 2012. His Honour dismissed the appellant's claim.
The appellant appeals to this court.
The appellant's date of birth
The appellant was born on 4 July 1975. He was 22 when the accident occurred and at the time of the operation.
The appellant's personal circumstances and antecedents before the accident on 21 January 1998
The appellant completed year 10 at school. He then attended TAFE for 12 months where he undertook a course in electronic engineering.
After completing the course at TAFE the appellant worked for short periods at Casey's Linen Service and at ERG Ltd. He performed electronics assembly work at ERG. The appellant then worked for about 12 months at Mundaring Motors as a driveway attendant, a mechanic's assistant and a tyre fitter. He also delivered liquefied natural gas.
Next, the appellant worked for Sons of Gwalia at its Bullfinch mine near Southern Cross. His duties included operating a mill and crusher, operating other machinery, driving earthmoving equipment and manual labour. His employment with Sons of Gwalia ceased in December 1997.
At the time of the accident on 21 January 1998 the appellant was unemployed.
The appellant gave evidence that before the accident he was able to perform physically demanding work. His recreation was also physically rigorous. He enjoyed riding mountain bicycles, abseiling, rock‑climbing, jogging and going to the beach. He had an active social life.
Before the accident the appellant and his partner (now his wife) lived in rental accommodation. The appellant said in evidence that he carried out various domestic tasks including cleaning, gardening, wood chopping, cooking, laundry and basic handyman and maintenance work. He mowed the lawn regularly and cleaned the gutters as necessary.
At Christmas 1996 the appellant strained his back while lifting his 14‑year‑old sister.
The trial judge summarised the appellant's evidence in relation to the nature and severity of his back strain:
In examination-in-chief [the appellant] described the effect of the back strain in 1996 as giving him a bit of discomfort. He said that when he went back to the mine site he had to have a bit of time off because of it. He thought he had had a week off work and had ... spent some of his rostered days off resting as well (ts 21).
[The appellant's] explanation for leaving the mine at Christmas 1997 was that he wanted to work closer to home and did not like the travelling (ts 22).
In cross-examination, [the appellant] said that following the 1996 incident with his sister he found the drive to the mine at Bullfinch very difficult. He had to stop frequently because of back pain. He was only able to do four hours instead of 12 hours on the first nightshift and he then went back to his room at the camp and rested. He subsequently went into Southern Cross to see a Dr Ward who prescribed painkillers and anti‑inflammatories. He spent the whole week resting in bed. He was then rostered off and spent the next five days in bed. He continued to have back pain but it had eased a bit.
In February 1997 he was scheduled to start a fire fighting course in Perth. Because of the pain he saw Dr Harrison who prescribed anti‑inflammatories. He then went and saw a chiropractor in West Midland. This offered some very short-term relief. He saw the chiropractor about five or seven times over a month. He would see the chiropractor on his rostered days off. He then saw a Bowen therapist on several occasions (ts 75 ‑ 77).
[The appellant] resigned from the mine on 25 December 1997 for a number of reasons. A major reason was that his back pain was causing him discomfort (ts 77).
In contrast to what [the appellant] said in cross-examination, in examination-in-chief [the appellant] did not state that his back pain was a reason for leaving the mine. Rather, in his examination-in-chief he understated the impact of the back injury [16] ‑ [21].
His Honour found that the appellant's understatement in examination‑in‑chief of the impact of the back injury he suffered at Christmas 1996 impacted on his credibility [21].
On 21 January 1998, when the accident occurred, the appellant was, as I have mentioned, unemployed. He did not have any plans for future work and did not know what career he would pursue. The trial judge noted the appellant's evidence that he was contemplating becoming self‑employed and was 'leaning towards' becoming a lawn mowing contractor [23]. His Honour recorded the appellant's explanation in evidence that 'he had a bad back prior to the [accident] and [the operation] and did not know how he would cope with lawn mowing but he was hoping it would be alright' [24].
His Honour found it was 'probable' that, if the mountain bicycle accident had not occurred, the appellant 'would not have continued with work that was as physically demanding as the work on the mine' [26]. His Honour said, however, that in his view 'that would still have left [the appellant] with a wide range of occupations that involved a degree of physical activity' [26].
The appellant's medical condition after the accident and before the operation
After the accident the appellant was admitted to hospital. He received treatment for his broken collarbone and was discharged.
After his discharge from hospital the appellant continued to suffer pain in his back. He reported a sharp pain down his leg.
The appellant's back pain did not resolve. His general medical practitioner, Dr Harrison, ordered a CT scan. After the scan the appellant was referred to Mr Thomas.
The appellant's pre‑operation consultation with Mr Thomas
On 17 February 1998, the appellant, accompanied by his wife, had his first appointment with Mr Thomas.
Mr Thomas was not called as a witness at the trial.
The appellant gave evidence as follows:
(a)Mr Thomas diagnosed a prolapsed disc that was pushing or pinching on the appellant's nerves;
(b)Mr Thomas said the appellant could have a cortisone injection, which would provide temporary relief, or he could have surgery to fix the problem;
(c)the appellant's wife raised with Mr Thomas the possibility of nerve damage and Mr Thomas told them 'it would be very hard to damage nerves and nerves actually grow back anyway' [39];
(d)Mr Thomas recommended surgery;
(e)Mr Thomas said an L4/5 microdiscectomy would be necessary, and this would involve 'going in between the vertebra to slice off some of the disc that had protruded' [40];
(f)Mr Thomas did not raise any issue about the risks of surgery before the appellant's wife raised the issue of nerve damage;
(g)Mr Thomas did not explain any of the general risks of surgery; and
(h)Mr Thomas said the appellant would need 'four to six weeks off and be on light duties, but that after 10 weeks he should be back doing heavy duty heavy lifting' [43].
The appellant's evidence about his pre‑operation consultation with Mr Thomas was corroborated in relevant respects by the appellant's wife.
The appellant's wife said in evidence that she asked Mr Thomas whether there was any possibility of any permanent damage as a result of the operation. Mr Thomas responded 'no' [39].
The appellant's operation
On 25 February 1998, Mr Thomas carried out a microdiscectomy on the appellant.
The trial judge described the surgical procedure for a discectomy as follows:
In essence, it involves removing the subcutaneous tissue and fascia and the muscle to reveal a workspace. The bony lamina is partially removed which reveals the ligamentum flavum to give access to the epidural space. A retractor is used to push the thecal sac and nerve root medially out of the way. Using a pituitary rongeur the surgeon grabs onto the herniation and starts tearing it out chunk by chunk. The wound is closed and the surgery is complete [47].
After the operation Mr Thomas prepared a memorandum entitled 'Operation Report', which reads:
With the patient prone a small incision was made at the L4/5 level which had been verified radiologically. The soft tissues were elevated on the right and under the microscope a laminotomy carried out. The L5 nerve root proved to be extremely tight and it was difficult to retract. Anterior to it was a large protrusion of the L4-5 disc which in some respects was typical of a juvenile protrusion in that it was rather tenacious and difficult to remove. Ultimately a good clearance and decompression of the disc protrusion was achieved and the nerve root was then free. The wound was then closed in layers.
By letter dated 27 February 1998, Mr Thomas wrote to Dr Harrison as follows:
At surgery on [the appellant] on Wednesday 25th February 1998 after carrying out the usual laminotomy the L5 nerve … proved difficult to retract because of it's [sic] tension and at the completion of the discectomy a small tear in the dural covering of the nerve was noted. CSF did not escape however indicating that the tear involved only the dura not the arachnoid.
The appellant's post‑operation symptoms
After the surgery the appellant awoke with:
(a)'a bit of pain around the back area';
(b)no bladder control; and
(c)numbness in both legs and around the groin area [50].
The trial judge gave a detailed account of the appellant's post‑operation symptoms and Mr Thomas' opinion in relation to them. It is unnecessary to repeat the account.
The appellant's further consultations with and treatment by Mr Thomas
After the operation the appellant had physiotherapy three days a week for about six weeks.
He had consultations with Mr Thomas on 3 and 12 March 1998.
By 12 March 1998, the appellant had regained some feeling in his left leg. Otherwise 'not much else had changed' in relation to the numbness he experienced post‑operatively [59].
By 10 June 1998, the appellant had 'pretty much gained full use of his left leg' but there was no change in his right leg [62].
On 23 September 1998, Mr Thomas informed the appellant that the condition of his right leg was permanent. The appellant gave evidence as to Mr Thomas' explanation, namely that 'they had to push hard against the nerves to get to the disc, that callipers had been used and that his assistant, who was operating the callipers, had squashed the nerve' [63].
The cauda equina and cauda equina syndrome
Professor Nade, an orthopaedic surgeon, explained the cauda equina and cauda equina syndrome:
the cauda equina is the distribution of discrete nerve roots that emerge from the lower end of the spinal cord … [C]auda equina syndrome is the name given to the clinical state where there is evidence of dysfunction of some or all of the nerve roots in the cauda equina, on both sides, manifest by signs affecting the lower limbs and the perineum including urological and rectal dysfunction ... in simple terms the syndrome occurs when those nerve roots are either divided, compressed, deprived of their blood supply and, or lose their ability to conduct impulses due to an alteration in the structure of the nerves [177].
Professor Nade's diagnosis of the appellant's condition and its cause
Professor Nade was of the opinion that the appellant had cauda equina syndrome following the operation. Subsequently, the appellant made a partial recovery from the dysfunction of the nerve roots of his cauda equina. He was left with permanent dysfunction of the right fifth lumbar and first sacral nerve roots. The most likely cause of the cauda equina syndrome was haemorrhage within the spinal canal during or following the surgery. Such bleeding could have been into either the epidural space or the subdural space. Later resolution of the haemorrhage by normal physiological processes would account for the appellant's partial recovery. It was unlikely that any nerve root was damaged negligently by Mr Thomas. See Professor Nade's reports dated 21 January 2003 and 1 February 2010.
The appellant's return to the workforce
Between February 1998 and November 1998 the appellant was in receipt of a disability pension.
In late 1998 the appellant decided to return to the workforce. He obtained work with Romteck, an electronics company, as an electronics assembly worker in the production area. In 1999 he attended TAFE and studied civil and structural drafting. During 1999 he also worked at Romteck one day a week and during the TAFE vacations. The appellant did not pass the TAFE course, but he was able, in his work at Romteck, to use skills he had acquired in undertaking the course.
The appellant was promoted at Romteck. Two people worked under his supervision. He liaised with supply companies in connection with obtaining components for assembly. At the beginning of 2005 the appellant ceased employment with Romteck. He accepted in evidence that he could have remained with Romteck and that he made the decision to leave. The appellant said he left Romteck because 'he wanted a job that had a greater outdoor component and he found the job a bit boring' [69]. Also, he wanted to earn more money.
The factors unfavourable to the appellant's prospects and the value of his lost claim included:
(a)The trial judge's finding that it was likely Mr Thomas would have been 'well aware' of the 'legal responsibility on medical practitioners to warn' [168].
(b)His Honour's finding that it was difficult to accept Mr Thomas would have stated, as alleged by the appellant's wife, that a divided or severed nerve root would 'grow back anyway' [169].
(c)His Honour's finding that the likely response of Mr Thomas in any proceedings brought on the lost claim would have been 'to deny that the warning was given in the Falkinghams' terms and to say that a warning was given in the terms suggested by Professor Nade and Dr Bleasel' [170].
(d)Dr Bleasel said that a warning in the terms suggested by Professor Nade and him was 'customary' [170].
(e)His Honour's finding that, although the appellant and his wife largely corroborated each other, it might well be concluded that the corroboration was as a result of discussing the meeting with Mr Thomas with each other over many years [173].
(f)His Honour's conclusion that the appellant's evidence about the back injury he suffered before the accident illustrated 'potential concerns with his credibility' [173]. His Honour based that conclusion on an earlier finding that, in his examination‑in‑chief, the appellant had understated the impact of the previous back injury [21]. His Honour commented that the appellant's understatement illustrated 'how fraught with difficulty credibility cases are' [21].
(g)The risk of a subdural or epidural haematoma occurring in the course of a microdiscectomy is extremely rare [146]. This increases the prospect that the appellant would have undergone the operation if the requisite warning had been given.
(h)The possibility that the appellant may not have proceeded with the lost claim because of the risks, hazards and uncertainties attending litigation generally and his claim against Mr Thomas in particular; the possibility that the appellant may have settled his claim before trial, for less than the amount he might have recovered at trial, given those risks, hazards and uncertainties; and the possibility that the appellant may have failed at trial against Mr Thomas.
Issue was properly taken in the appeal about two of the trial judge's findings that I have enumerated at [291] above. First, there was no evidence at trial as to the likely response of Mr Thomas to the allegation that he had failed to provide a warning to the appellant in the terms suggested by Professor Nade and Dr Bleasel. However, there was a real (as distinct from a fanciful) prospect that Mr Thomas would dispute the allegations of the appellant and his wife and assert that all appropriate warnings were given. The assessment of the value of the appellant's lost opportunity had to reflect that risk. Secondly, neither the appellant nor his wife was cross‑examined about whether they had discussed with each other what had been said at their consultations with Mr Thomas and whether they had constructed an agreed position as to the questions they had asked, the answers Mr Thomas had given and the warnings he had failed to provide. Nevertheless, there was a real (as distinct from a fanciful) prospect that the accuracy and reliability of the evidence of the appellant and his wife in relation to such matters may have been adversely affected (if not compromised) by discussions between them over a number of years. The assessment of the value of the appellant's lost opportunity had to reflect that risk.
I am satisfied, after considering all factors relevant to the appellant's prospects and the value of his lost claim, that the critical points affecting the assessment of the value of the appellant's lost opportunity were these:
(a)The appellant's prospects of success against Mr Thomas on the lost claim depended, to a very significant extent, upon the honesty and reliability of his evidence, and the evidence of his wife, that Mr Thomas failed to give the requisite warning.
(b)There was a real (as distinct from a fanciful) prospect that Mr Thomas would deny having failed to give the requisite warning.
(c)It would be a remarkable breach of duty if Mr Thomas had failed to give the customary warning, especially in the context of the conservative treatment that was available for the appellant's condition and the absence of any urgency in carrying out the operation.
(d)The trial judge had a reservation (and, in my opinion, he was entitled to have a reservation) about the appellant's credibility.
(e)Even if the appellant proved, on the balance of probabilities, that Mr Thomas had failed to give the requisite warning, the appellant would not have succeeded on the lost claim against Mr Thomas unless he also proved, on the balance of probabilities, that he would not have undergone the operation. As I have mentioned, the risk of a subdural or epidural haematoma occurring in the course of a microdiscectomy is extremely rare. There was a real (as distinct from a fanciful) prospect that the appellant would not have been able to satisfy a court on that issue at trial. The fact that the appellant agreed to undergo the operation does not, of itself, indicate that a warning was not given.
(f)On the assumption that he was given proper and timely legal advice, there is a strong probability that the appellant would have pursued both aspects or claims embodied in the lost cause of action against Mr Thomas to judgment after trial unless he received a reasonable offer of settlement.
I am of the opinion, after evaluating all relevant factors, that an assessment of the fair value of the appellant's lost opportunity in relation to the claim based on the alleged breach of the duty to warn required the application of a very substantial discount to the damages he would have been awarded if he had been wholly successful in pursuing the lost claim against Mr Thomas and obtaining judgment after trial.
The trial judge made two material errors, one express and the other implied.
The express error was his Honour's approach to the assessment of the value of the appellant's lost opportunity on the basis of a starting point of 50% because it was a 'credibility case'.
The implied error involved his Honour placing a value on the appellant's lost opportunity which exceeded the upper limit of the valuation range that was reasonably open. His Honour's assessment of value was plainly unreasonable or unjust. In particular, it was not reasonably open to his Honour to assess the fair value of the appellant's lost opportunity at more than 50% of the damages he would have been awarded if he had been wholly successful in his claim against Mr Thomas.
I consider that a discount of 60% should have been applied. The fair value of the lost opportunity was 40% of the damages the appellant would have been awarded if he had been wholly successful at trial.
The accepted principle of appellate restraint in reviewing a primary judge's assessment of the value of a lost opportunity (McCartney v Orica Investments Pty Ltd [2011] NSWCA 337 [126] ‑ [127] (Giles JA, Macfarlan JA agreeing & Young JA relevantly agreeing)) and a primary judge's evaluative determination (Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, 212 (Mason CJ, Deane & McHugh JJ)) has no application in the present case. The trial judge's assessment of value was plainly vitiated by the material errors I have identified.
Ground 2.1 of the appeal fails and the sole ground of the notice of contention has been made out.
Ground 2.2 of the appeal
Ground 2.2 alleges that the trial judge erred in law in failing to give any or adequate reasons for the conclusion (or make appropriate findings to support the conclusion) that the appellant's evidence about his previous back injury illustrated potential concerns as to his credibility.
His Honour expressed that conclusion in the course of giving reasons for his 'broad brush assessment' that the value of the appellant's 'lost chance', in relation to the claim based on Mr Thomas' alleged breach of his duty to warn, was 55% of the damages he would have been awarded if he had been wholly successful at trial [173].
The reasons of a trial judge need not be lengthy or elaborate. See Beale v Government Insurance Office(NSW) (1997) 48 NSWLR 430, 443 (Meagher JA); Mount Lawley Pty Ltd v Western Australian Planning Commission [2004] WASCA 149; (2004) 29 WAR 273 [28] (Steytler, Templeman & Simmonds JJ).
It is necessary, in assessing the adequacy of the reasons, to consider them as a whole. An appellate court may take into account what can legitimately be inferred from the reasons. See Beale (444); Bennett v Carruthers [2010] WASCA 131 [27] ‑ [28] (Mazza J, McLure P & Newnes JA agreeing).
The circumstances of the particular case, including the nature and significance of the issues in dispute, are fundamental in determining whether the reasons are adequate. See In Vitro Technologies Pty Ltd v Taylor [2011] QCA 44 [19] (Fraser JA, Muir & Chesterman JJA agreeing).
The reasons must be sufficiently detailed to enable an appellate court effectively to discharge its functions and for the parties to understand why they have won or lost. See Beale (442).
In my opinion, the trial judge's impugned conclusion was supported by adequate reasons given earlier in his judgment.
His Honour's reasons in relation to the appellant's previous back injury were as follows:
The only incident of note that [the appellant] experienced in relation to his health was a back strain at Christmas 1996. This occurred as a result of lifting his 14-year-old sister.
In examination-in-chief [the appellant] described the effect of the back strain in 1996 as giving him a bit of discomfort. He said that when he went back to the mine site he had to have a bit of time off because of it. He thought he had had a week off work and had been spent some of his rostered days off resting as well (ts 21).
[The appellant's] explanation for leaving the mine at Christmas 1997 was that he wanted to work closer to home and did not like the travelling (ts 22).
In cross-examination, [the appellant] said that following the 1996 incident with his sister he found the drive to the mine at Bullfinch very difficult. He had to stop frequently because of back pain. He was only able to do four hours instead of 12 hours on the first nightshift and he then went back to his room at the camp and rested. He subsequently went into Southern Cross to see a Dr Ward who prescribed painkillers and anti-inflammatories. He spent the whole week resting in bed. He was then rostered off and spent the next five days in bed. He continued to have back pain but it had eased a bit.
In February 1997 he was scheduled to start a fire fighting course in Perth. Because of the pain he saw Dr Harrison who prescribed anti‑inflammatories. He then went and saw a chiropractor in West Midland. This offered some very short-term relief. He saw the chiropractor about five or seven times over a month. He would see the chiropractor on his rostered days off. He then saw a Bowen therapist on several occasions (ts 75 ‑ 77).
[The appellant] resigned from the mine on 25 December 1997 for a number of reasons. A major reason was that his back pain was causing him discomfort (ts 77).
In contrast to what [the appellant] said in cross-examination, in examination-in-chief [the appellant] did not state that his back pain was a reason for leaving the mine. Rather, in his examination-in-chief he understated the impact of the back injury. This impacts on his credibility and illustrates how fraught with difficulty credibility cases are.
[The appellant's wife] was unaware of the incident where [the appellant] hurt his back playing with his sister at Christmas in 1996. She heard about it later (ts 113). She stated that [the appellant] seemed fine when he came home from the mine. She was unaware that he had any back problems at any time prior to the injury other than a bit of a niggle. She was aware that he had gone to see a chiropractor every so often but there was nothing that caused him to stop doing any of the things that he was doing. She said that he was still working full-time and he was still doing his mines rescue up at the mine (ts 113 ‑ 114) [15] ‑ [22]. (emphasis added)
It is plain, on a fair reading of the trial judge's reasons as a whole, that he was aware of the critical issues, as between the appellant and Mr Thomas, in relation to Mr Thomas' alleged breach of his duty to warn.
The honesty and reliability of the evidence of the appellant and his wife to the effect that Mr Thomas did not give the appellant the requisite warning was of critical importance in evaluating the appellant's prospects of success against Mr Thomas on that claim.
His Honour's reasons disclose with sufficient clarity the reasoning which underpinned his conclusion that the appellant's evidence about his previous back injury illustrated potential concerns as to his credibility. I am satisfied that the reasons achieved their requisite function and purpose. The appellant is able to ascertain why his Honour reached the relevant conclusion. Further, this court is not impeded by any deficiency in his Honour's reasons from properly discharging its functions in the appeal.
Ground 2.2 of the appeal fails.
Ground 3 of the appeal
Ground 3 alleges that the trial judge's provisional award of $80,000 for past and future loss of earning capacity 'was so inordinately low as to amount to an error of law'. The appellant does not challenge any of the other components of his Honour's provisional assessment of the quantum of damages.
I have already recounted details of his Honour's provisional assessment including his Honour's findings and reasoning in relation to the appellant's claim for loss of earning capacity. See [197] ‑ [209] above.
A plaintiff in a negligence action is not entitled to recover damages for loss of earning capacity unless he or she establishes two distinct but related requirements. First, the plaintiff's earning capacity has in fact been diminished by reason of the injury caused by the negligence. Secondly, the diminution of earning capacity is or may be productive of financial loss. See Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1, 3 (Deane, Dawson, Toohey & Gaudron JJ).
The court must identify what capacity has been lost by the plaintiff and what economic consequences for the plaintiff will probably flow from that loss. When that is done it will be possible to assess what sum will put the plaintiff in the same position as he or she would have been in but for the injury. See Husher v Husher [1999] HCA 47; (1999) 197 CLR 138 [7] (Gleeson CJ, Gummow, Kirby & Hayne JJ).
A plaintiff is compensated for loss of earning capacity as distinct from loss of earnings. See Medlin, where McHugh J explained:
In practice, there is usually little difference in result irrespective of whether the damages are assessed by reference to loss of earning capacity or by reference to loss of earnings. That is because 'an injured plaintiff recovers not merely because his earning capacity has been diminished but because the diminution of his earning capacity is or may be productive of financial loss' (Graham v Baker (1961) 105 CLR at p 347). Nevertheless, there is a difference between the two approaches, and the loss of earning capacity principle more accurately compensates a plaintiff for the effect of an accident on the plaintiff's ability to earn income. Earning capacity is an intangible asset. Its value depends on what it is capable of producing. Earnings are evidence of the value of earning capacity but they are not synonymous with its value. When loss of earnings rather than loss of capacity to earn is the criterion, the natural tendency is to compare the plaintiff's pre-accident and post-accident earnings. This sometimes means that no attention is paid to that part of the plaintiff's capacity to earn that was not exploited before the accident. Further, there is a tendency to assume that if pre-accident and post‑accident incomes are comparable, no loss has occurred (16).
See also Husher [7] ‑ [8].
In Montemaggiori v Wilson [2011] WASCA 177; (2011) 58 MVR 497, Newnes JA and I summarised a number of general principles relating to the assessment of damages for past and future loss of earning capacity in a personal injuries claim based on negligence [28] ‑ [33]. We noted:
(a)The assessment of damages for past and future loss of earning capacity is not an exact science. The process of assessment is governed by considerations of practical common sense in the context of the facts and circumstances of the particular case. See Van Gervan v Fenton [1992] HCA 54; (1992) 175 CLR 327, 343 (Deane & Dawson JJ).
(b)Such an assessment has many of the characteristics of a discretionary judgment. See Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd [1981] HCA 4; (1981) 146 CLR 336, 381 (Mason J, Wilson J agreeing generally). An appellate court will not be justified in setting aside a trial judge's assessment of damages on the ground that the quantum of the damages is excessive or inadequate unless the amount assessed is above or below the limits of what a sound discretionary judgment could reasonably adopt. See Miller v Jennings [1954] HCA 65; (1954) 92 CLR 190, 197 (Dixon CJ & Kitto J); Minchin v Public Curator of Queensland [1965] ALR 91, 96 (Kitto J).
(c)If the plaintiff establishes that he or she has suffered a loss of earning capacity, it is then necessary, having regard to the established facts of the past and the probabilities of the future, to determine the damage that has flowed or will flow from the loss of that capacity. See Medlin (19).
(d)When account is taken of future or hypothetical events in assessing damages, the court does so in terms of the degree of probability of the events occurring. See Malec (643). The process of estimation of probabilities is necessarily imprecise and indeterminate. It must be carried out within very broad parameters. See State of New Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 [71] (Heydon JA).
(e)Although it is desirable for the plaintiff to adduce precise evidence of what he or she would have been likely to earn (but for the injury), where earning capacity has undoubtedly been reduced, the plaintiff's failure to call such evidence (particularly in relation to future loss) does not mean that the plaintiff is not entitled to damages or is entitled only to nominal damages. See Moss [66] ‑ [72].
(f)However, where evidence should have been available, it is difficult for a plaintiff who fails to call evidence, or who calls incomplete evidence, to complain about a low award. See Minchin (93) (Barwick CJ); Moss [69].
In Yammine v Kalwy [1979] 2 NSWLR 151, Mahoney JA explained the different ways in which, according to the facts, damages for loss of earning capacity may be assessed:
That for which a plaintiff is to be compensated in this regard is the loss of a capacity; that, at the beginning and the end, is the loss for which compensation is to be assessed. However, there are several ways in which, according to the facts, the assessment of that compensation may be approached. It may be approached simply by fixing the sum seen to be appropriate to that loss as such. The difficulties involved in the fixing of that sum ‑ and in verbalizing the principles upon which it is to be achieved ‑ need not be canvassed. But frequently (and this was the point to which the observations in the cases referred to in Allan v Loadsman ([1975] 2 NSWLR 789, at pp 791,792) were directed) the plaintiff, or the defendant, seeks to quantify the compensation for loss of that capacity by attempting to establish what the weekly wage loss is which will be suffered because of the loss of that capacity, and by arriving at a sum by applying the conventional tables to this, with appropriate discounts. This may be a perfectly permissible way of quantifying the loss in a particular case. It is often used, no doubt because it is felt that it will provide a greater sum than the alternative approaches. In some cases, the weekly wage loss quantification, and the sum derived from it, will alone be accepted as sufficient compensation; in other cases it may be necessary to add an additional sum by reference to such other aspects of the loss of the capacity as may not be fully compensated for by the mere weekly wage loss so dealt with (156 ‑ 157).
See also Cohen v Ninkovic [2000] WASCA 169 [18] (Miller J, Wallwork & Parker JJ agreeing).
In Montemaggiori, Newnes JA and I considered the approach taken by the Full Court of the Supreme Court of Western Australia in Bowen v Tutte (1990) Aust Torts Rep 81-043. We said:
Where an injured plaintiff has suffered a loss of earning capacity, such as a total loss of capacity to earn in an occupation in which he has previously been employed, the court should do its best to place a value on that loss, even in the absence of evidence, or where there is uncertainty in the evidence, as to the availability of employment within the plaintiff's residual capacity or the amount which could be earned in such employment. Thus, for example, in Bowen v Tutte (1990) Aust Torts Rep 81-043, it was held that in the absence of any evidence of the availability of suitable employment for an injured plaintiff, or of earnings which could be derived from such employment, a trial judge may, in an appropriate case, assess the plaintiff's residual earning capacity at a percentage of his or her pre-accident earning capacity. And in Pene v Murphy [2004] WASCA 103, it was held that the appellant's loss of earnings should be assessed as a percentage of his pre-accident earning capacity as there were considerable uncertainties associated with his prospects of obtaining work within his residual capacity. But as the court made clear in that case, such an approach is not appropriate in every case; in the end the question is one of fairness [32].
The principles enunciated in Bowen and Wright v Shire of Albany (1993) Aust Torts Rep 81‑239 form the appropriate basis for the assessment of damages for loss of earning capacity in some cases. However, those principles are not fixed and inflexible. Damages for loss of earning capacity are not always to be assessed in accordance with the principles enunciated in Bowen and Wright. See Pene v Murphy [2004] WASCA 103 [5], [8] (Miller J, Le Miere J agreeing).
Useful illustrations of approaches that have been taken to the assessment of damages for loss of earning capacity where the plaintiff has suffered a partial loss of earning capacity, including a restriction in the range of occupations available to him or her, may be found in Wagga Wagga City Council v Sutton [2000] NSWCA 34, Amer v Consolidated Meat Group Pty Ltd [2002] QSC 345 and Roney v Priestman [2005] TASSC 52.
In the present case, the appellant attempted to persuade the trial judge to assess his claim for loss of earning capacity by reference to the approach taken in Bowen. His Honour rejected the appellant's submission and assessed that part of his claim on a global basis. Neither the appellant nor the respondent challenged in this court the correctness of his Honour's approach.
At the hearing of the appeal on 15 November 2013, the court made orders, relevantly, as follows:
2.Within 7 days, the appellant is to file and serve a schedule which specifies, with particularity, the manner in which it is alleged the appellant's past and future loss of earning capacity should have been assessed, including details of relevant assumptions and calculations.
3.The respondent be at liberty to file and serve submissions in response to the appellant's schedule within 7 days thereafter.
Late on 13 November 2013 (the hearing being on 15 November 2013), the court had requested the appellant to provide a schedule in those terms at the hearing, but the appellant did not comply with the request.
On 22 November 2013, counsel for the appellant filed and served a schedule, purportedly in compliance with the court's orders.
The appellant states in par 1 of the schedule that no complaint is made about the trial judge's decision to take a 'global approach' to the assessment of economic loss. In par 2 the appellant uses algebra to convert his Honour's provisional award of $80,000 to the sum of $62 per week. The appellant submits in par 3 that the award of $80,000 was 'so unreasonably low, given the evidence and findings … , as to itself manifest error'. In par 4 the appellant asserts that an award of $250,000 'would not have been unreasonable' and purports to 'test' that assertion by using algebra to convert $250,000 to the sum of $194 per week. The appellant's schedule did not comply with the court's orders in that it did not set out the assumptions underpinning the appellant's assertion that his Honour should have provisionally awarded $250,000, and not $80,000, for past and future loss of earning capacity.
By letter dated 27 November 2013, the court directed the appellant to file and serve a schedule that complied with the court's orders.
On 2 December 2013, counsel for the appellant filed and served a substituted schedule.
At the resumed hearing of the appeal on 24 February 2014, I asked counsel for the appellant to explain the rationale for his assertion that this court should substitute an award of $250,000 (and not some other amount) for his Honour's award of $80,000. Counsel responded:
NUGAWELA, MR: Well, it just sounded right. It didn't sound exorbitant (appeal ts 78).
It is necessary, in evaluating ground 3 of the appeal, to focus on the relevant findings of fact made by his Honour. It is convenient to restate the critical findings.
As I have mentioned, the appellant was born on 4 July 1975. He was 22 when the mountain bicycle accident occurred and at the time of the operation performed by Mr Thomas. He was 31 as at the notional trial in mid to late 2006.
The appellant's pre‑existing back injury occurred at Christmas 1996 when he lifted his 14‑year‑old sister [15].
The appellant left school at the end of year 10. He then attended TAFE for 12 months where he undertook a course in electronic engineering [5].
As at 21 January 1998, when the appellant fell from the mountain bicycle he was riding:
(a)the appellant was unemployed [23];
(b)he did not know what the future held or what he was going to do in relation to future employment [23];
(c)the appellant was 'contemplating' becoming self‑employed and was 'leaning towards doing a lawn mowing round' [23];
(d)he had had a couple of days of work experience with a lawn mowing contractor and he had contacted a person who was selling his lawn mowing round [23];
(e)the appellant explained in evidence that he did not know how he would cope with lawn mowing, in view of his pre‑existing back injury, but he was 'hoping it would be all right' [24]; and
(f)before the mountain bicycle accident occurred he was considering a less physically demanding occupation [25].
The trial judge found that, as a result of his pre‑existing back injury, the appellant would not have continued with work that was as physically demanding as the work he had performed at the Bullfinch mine [26]. His work at the mine had involved operating a mill and crusher, operating machinery, driving loaders and bobcats, and using 'a shovel a fair bit' [7]. He finished work at the Bullfinch mine in December 1997 [7]. His Honour found, however, that before he had the mountain bicycle accident, the appellant still had open to him 'a wide range of occupations that involved a degree of physical activity' [26].
The appellant was in receipt of a disability pension between 25 February 1998 (when Mr Thomas carried out the microdiscectomy) and November 1998 [66].
In late 1998 the appellant decided to return to the work force [67]. He obtained work with Romteck, an electronics company, as an electronics assembly worker in the production area [67]. In 1999 he commenced studying civil and structural drafting at TAFE [67]. The course lasted one year [67]. He continued working at Romteck one day a week while he was studying at TAFE, except during vacations when he worked full time [67]. The appellant was promoted at Romteck [68]. He supervised two people and he liaised with supply companies to obtain components for assembly [68].
At the start of 2005 the appellant resigned his employment with Romteck [69]. He could have remained at Romteck but he found the work 'a bit boring' [69]. He wanted an occupation that had 'a greater outdoor component' and he wanted to earn more money [69].
While he was employed at Romteck, the appellant had difficulty moving about the workshop on crutches [72]. His hands hurt and it was difficult for him to carry anything [72]. In 2002, on the advice of his general medical practitioner, the appellant purchased a wheelchair [72]. He used the wheelchair for most of the time he remained employed at Romteck [73]. It was more convenient in that he had greater use of his hands [73]. The appellant continued to use crutches or a walking stick at home [73].
After the appellant resigned his employment with Romteck, he commenced working as a real estate sales representative in Chidlow [76]. He found it too difficult to move about in the wheelchair on the properties he was endeavouring to sell [76]. Instead, he used crutches for mobility [76]. In about March 2005 he commenced using a walking stick at work [77]. He had to be careful of the terrain, he had difficulties with stairs and he was less stable on his feet [77]. The appellant's disability adversely affected his capacity to show properties to potential purchasers [78].
After the operation the appellant's physical condition was significantly worse than his physical condition before the operation. For example, after the mountain bicycle accident and before the operation the appellant did not require the use of a wheelchair, crutches or a walking stick.
As I have mentioned, his Honour found that the notional trial would have been held in mid‑2006 at the earliest [239].
There were a number of deficiencies in the evidence adduced by the appellant at trial:
(a)It appears that the range of occupations available to the appellant after the mountain bicycle accident and before the operation were either unskilled occupations or occupations involving some limited skills such as a real estate sales representative.
(b)There was no evidence at trial as to the specific occupations open to the appellant with his education, skills and aptitude and with the disability he suffered as a result of the operation. Counsel for the appellant said at the hearing of the appeal that the appellant could do 'non‑manual work', but counsel was unable to be more specific (appeal ts 80).
(c)There was no evidence at trial as to the earnings available to people engaged in unskilled or semi‑skilled occupations, either with or without some manual or labouring work.
(d)There was no evidence at trial as to the earnings available to real estate sales representatives.
(e)There was no evidence at trial as to the national minimum wage.
(f)The evidence tendered by the appellant at trial included data as to average weekly ordinary time earnings (AWOTE). However, counsel for the appellant accepted at the hearing of the appeal that AWOTE was not a useful comparator because it represented average weekly ordinary time earnings for all employees and was not confined to those in unskilled or semi‑skilled occupations (appeal ts 84).
The trial judge found, by reference to exhibit 1, that the appellant's average net weekly earnings between the financial year ended 30 June 1994 and the financial year ended 30 June 1998 was $391.50 [256]. See [205] above.
The appellant's average net weekly earnings between the financial year ended 30 June 1999 (the operation having been performed on 25 February 1998) and the financial year ended 30 June 2005 (his Honour having found that the notional trial would have been held in mid‑2006 at the earliest) was $378.46. See the data reproduced at [205] above.
The appellant's average net weekly earnings during the financial year ended 30 June 1999 were significantly less than his average net weekly earnings in earlier and later financial years. See [205] above.
The appellant gave evidence at trial that during the year ended 30 June 2006 his taxable or gross income was $48,500 (ts 87).
His Honour's statement in his reasons to the effect that between the financial year ended 30 June 1998 and the financial year ended 30 June 2005 the appellant had suffered 'a loss of $7.61 per week' is erroneous [258]. The amount of $7.61 per week represents the difference between the running average of $391.50 between the financial year ended 30 June 1994 and the financial year ended 30 June 1998, on the one hand, and the running average of $383.89 between the financial year ended 30 June 1994 and the financial year ended 30 June 2005, on the other [256]. His Honour did not take into account the differences in the value of money over the 12 year period of the data reproduced in exhibit 1. See [205], [207] above.
As a result of the operation:
(a)the appellant permanently wears a foot orthosis and uses a walking stick;
(b)he walks with a hobbling and antalgic gait which causes him hip and back pain (ts 78);
(c)as a result of sensory loss, the appellant does not know where his right foot is placed and this causes him to stumble and fall on a daily basis (ts 35, 37);
(d)after walking for about 10 minutes he needs to sit because his right hip, knee and ankle begin to hurt (ts 50, 68); and
(e)his right leg paralysis means that he is numb down to his foot and four toes, the sole of his foot and his big toe are hypersensitive to touch, the outside of his foot is numb and he has no sense of leg placement (ts 38 ‑ 39).
I am satisfied that the appellant's earning capacity was in fact diminished by reason of the disability caused by the operation and that the diminution of his earning capacity is or may be productive of financial loss.
The determination of the extent of the appellant's loss of earning capacity is difficult in that:
(a)The appellant was only 22 at the time of the operation and he was only 31 as at the time of the notional trial.
(b)At all material times the appellant had limited education and limited work experience.
(c)The evidence adduced by the appellant at trial was deficient as I have already indicated.
However, it is apparent that the appellant's disability as a result of the operation has confined his employment opportunities to unskilled or semi‑skilled work that he can undertake with the use of a wheelchair, crutches or a walking stick. The nature and degree of this disability has seriously truncated the range of employment available to him. The disability has in that sense partly destroyed his working capacity.
In my opinion, after taking into account all relevant factors (including, especially, the deficiencies in the evidence), the amount of $80,000 was manifestly inadequate; that is, plainly unreasonable or unjust. It did not fairly compensate the appellant for the significantly reduced scope of the employment opportunities available to him. There is a real (as distinct from a fanciful) prospect that the appellant's disability as a result of the operation may impact with increasing severity on his earning capacity as he becomes older and occupations involving work on, for example, an assembly line diminish or disappear with increases in technology.
In my opinion the appellant would be fairly compensated, on a global basis, for his past and future loss of earning capacity if he was awarded:
(a)the net present value, as at 1 November 2006 (when he was 31), of 50% of his average net weekly earnings between the financial year ended 30 June 1994 and the financial year ended 30 June 1998 (that is, 50% of $391.50) for 34 years (the 6% multiplier being 763); and
(b)interest on that amount at 6% per annum, pursuant to s 32 of the Supreme Court Act 1935 (WA), from 1 November 2006 up to the date on which this court delivers judgment in the appeal.
The amount, without interest, is: $195.75 x 763 = $149,357.25. This amount should be rounded to $149,350.
The multiplier of 763 is the mid‑point between the tables published and in use in 2002 and those published and in use in 2014. I have not adjusted this amount for the usual matters (for example, superannuation and 5% for contingencies) because I have taken all the usual matters into account in determining the appellant's loss of earning capacity on a global basis. Similarly, I have not made a value of money adjustment for the fact that the average net weekly earnings of $391.50 relate to the period between 30 June 1994 and 30 June 1998, whereas the determination of the appellant's past and future loss of earning capacity is to be made as at the date of the notional trial (mid to late 2006), because I have taken that matter into account in determining the appellant's loss of earning capacity on a global basis. It is unnecessary to apportion the relevant amount as between past economic loss, on the one hand, and future economic loss, on the other.
Conclusion
I would allow the appeal.
The trial judge's judgment should be set aside.
Judgment should be entered for the appellant on his claim.
The measure of his damages (before applying the discount of 60% to reflect the value of his lost cause of action) is $401,850 as follows:
General damages
$70,000
Loss of earning capacity
$149,350
Future aids and appliances
$33,500
Future medications and attendances
$5,300
Past gratuitous services
$50,300
Future gratuitous services
$93,400
TOTAL
$401,850
When the amount of $401,850 is discounted by 60% the result is $160,740.
The appellant should therefore be awarded $160,740 together with interest on that amount at 6% per annum from 1 November 2006 up to the date on which this court delivers judgment in the appeal.
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