Firth v Liaris

[2002] NSWCA 306

CITATION:	Firth v Liaris [2002] NSWCA 306
FILE NUMBER(S):	CA 41016 of 2001
HEARING DATE(S):	02/09/02
JUDGMENT DATE:	13 September 2002
PARTIES :	Stephen Paul Firth t/as Firths Compensation Lawyers v Effie Liaris
JUDGMENT OF:	Meagher JA at 1; Heydon JA at 22; Santow JA at 26

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	DC 6829 of 2000
LOWER COURT JUDICIAL OFFICER :	Gibson DCJ

COUNSEL:	Appellant: A J Meagher SC Respondent: B Hall QC
SOLICITORS:	Appellant: Connery & Partners Respondent: Brydens Law Office
CATCHWORDS:	Legal professional negligence - appellant not advised of common law rights - causation - whether damages for future economic loss were too high - appeal allowed.
LEGISLATION CITED:	Workers' Compensation Act 1987 s151G, s151H
CASES CITED:	Scott v Echeringay (1994) Aust Torts Reports 81-120
DECISION:	1. Appeal allowed; 2. Order 1 below set aside; 3. In lieu of Order 1, judgment for the plaintiff in the sum of $64,000.00; 4. No order as to the costs of the appeal.

CA 41016 of 2001

MEAGHER JA
HEYDON JA
SANTOW JA

Friday, 13 September 2002

STEPHEN PAUL FIRTH t/as FIRTHS COMPENSATION LAWYERS

v

EFFIE LIARIS

Facts
The respondent, Mrs Liaris, a trained florist, was injured when she fell at work on the 10 April 1991. She sought advice from the appellants, “Firths Compensation Lawyers”, on 6 July July 1994, and an Application for Determination was later filed seeking weekly payments, a lump sum for permanent impairment of the back, right leg at or above the knee plus compensation for pain and suffering and hospital and medical expenses. On 4 October 1995, the respondent’s Workers’ Compensation claim was settled by being commuted for a lump sum of $90 000 together with expenses of up to $6000. As part of this settlement, the respondent agreed to execute a common law release. However, any rights to sue at common law were statute barred at that stage.

In any event, the respondent had never been informed that she had common law rights and as a result, the trial judge found that the appellants were negligent. The respondent gave evidence at trial that, if she had been advised of her common law rights, she would have pursued them. The trial judge gave a verdict in favour of the respondent in the amount of $169,000.00. Furthermore, her Honour held that if the respondent had sued at common law, she would have had no difficulty in passing the test for non-economic loss contained in the s 151G of the Workers’ Compensation Act , or the requirement of “seriousness” in s 151H.

On appeal, the appellants submitted that (i) causation had not been proved; (ii) damages for future economic loss were too high.

Held: Per Meagher JA (Heydon & Santow JJA agreeing)
(i) The submission that the respondent had not proved to the requisite standard that she would have commenced common law proceedings if properly advised must fail for the following reasons: (a) It is true that the question of what the respondent would have decided and the consequences of that decision had to be judged as at the date when the appellants’ advice was sought. However, it really would not have mattered at what time one judged the matter in the present case; one would reach the same conclusion from whatever date one judged the matter; (b) The respondent’s fear of an order for costs or bankruptcy order being made against her, it was submitted, would militate against any decision to embark on common law proceedings rather than workers’ compensation proceedings. However, a reasonable solicitor would have drawn her attention to the fact that bankruptcy is not a serious peril for the destitute; (c) A trial judge trying the common law action would have found that the employer had failed in its duty to provide a safe work place.

(ii) It was not open to the trial judge to award the respondent $267,740.00 for future economic loss. The evidence would indicate that the respondent has been at all relevant stages, capable of performing light clerical or sedentary work. The correct figure for future economic loss should be $112,812.00.

Orders

1. Appeal allowed;

2. Order 1 Below set aside;

3. In lieu of Order 1, judgment for the plaintiff in the sum of $64 000;

4. No order as to the costs of the appeal.

CA 41016 of 2001

MEAGHER JA
HEYDON JA
SANTOW JA

Friday, 13 September 2002

STEPHEN PAUL FIRTH t/as FIRTHS COMPENSATION LAWYERS

v

EFFIE LIARIS

Judgment

1 MEAGHER JA: This is an appeal by a firm of solicitors against whom Gibson DCJ awarded a verdict when they were sued before her for negligence. The plaintiff, Mrs Liaris, a trained florist, when employed by Pearsons Florist Pty Ltd in Bondi Junction, suffered some accident when she fell at work, probably through a hole in the floor. The date of her fall was 10 April 1992. For reasons which nobody has been able to explain, she never complained to her employer until 1994. She was a week off work, and in October 1994 ceased work with Pearsons. She had, however, consulted a doctor on 13 April 1992.

2 On 6 July 1994 she sought advice from the appellants, a firm of solicitors who trade under the sobriquet “Firths the Compensation Lawyers”. On 24 October 1994 the appellants filed an Application for Determination in the Compensation Court seeking weekly payments from 24 October 1994, a lump sum for permanent impairment of the back, right leg at or above the knee, plus compensation for pain and suffering and hospital and medical expenses.

3 Her Workers’ Compensation claim was settled on 4 October 1995 by being commuted for a lump sum of $90,000 together with expenses of up to $6000. As part of this settlement the plaintiff agreed to execute a common law release, but any rights to sue at common law were statute barred at that stage.

4 In any event, she had never been informed that she had common law rights. She had sought advice from the appellants, but their assistance did not extend to that. For solicitors in these circumstances to fail to inform a client that common law rights exist as well as workers’ compensation rights is negligence: see Scott v Echeringay (1994) Aust Torts Reports 81-120. In the present case, Gibson DCJ found that the appellants were negligent. Before us, they did not dispute this finding.

5 The plaintiff gave evidence that, if she had been advised of her common law rights, she would have pursued them. Her Honour believed her.

6 Her Honour gave a verdict in favour of the plaintiff in the amount of $169,000. It consisted of the following components:

Non-economic loss	73,000
Past economic loss (Williams SC)	18,200
Future economic loss (less than 15% vicissitudes)	267,740
Pharmaceuticals	2,000
Superannuation	20,778
TOTAL	381,718

discounted by 30%, and from which the workers’ compensation payments were deleted.

7 Reports on the likelihood of her success in any common law proceedings, and of the probable quantum, if she were successful, were given by a Mr M Williams SC and a Mr J Watts, a solicitor. Mr Williams put her prospects of success in a common law action between 50% and 60%, Mr Watts at between 80% and 90%. (Whether the evidence was strictly admissible must be a doubtful point, but both parties acquiesced in its tender). Her Honour found they were 70%, which explains the 30% discount to which I have referred.

8 Both Mr Williams and Mr Watts agreed that if the plaintiff had sued at common law, she would have had no difficulty in passing the test for non-economic loss contained in s 151 G of the Workers’ Compensation Act, or the requirement of “seriousness” in s 151 H. Her Honour so found.

9 On appeal, the appellants made two submissions. One is that causation had not been proved; and the other is that the damages for future economic loss are too high.

10 As to causation, Mr Meagher QC, learned senior counsel for the appellants, submitted that the question of what the plaintiff would have decided, and the consequences of that decision, had to be judged as at the date when the appellants’ advice was sought, and her Honour failed in that regard (for example, insofar as she had regard to the Workers’ Compensation files of Pearsons). This must strictly be true. But I must say that, in my view, it would not have mattered at what time one judged the matter in the present case, whatever may be the situation in other cases; one would reach the same conclusion from whatever date one judged the matter.

11 Mr Meagher also relied on many of the answers which the plaintiff gave to questions put to her by the appellants’ then counsel. The plaintiff, who was living in poverty and had neither income nor capital, readily confessed that she was terrified of an order for costs being made against her, and even more so of a bankruptcy order. These, it was suggested, would militate against any decision to embark on common law proceedings rather than workers’ compensation proceedings. I was not greatly impressed by this material, particularly when it is borne in mind that a reasonable solicitor would have drawn her attention to the fact that bankruptcy is not a serious peril for the destitute.

12 Our attention was also drawn to the existence of a possibility that the plaintiff’s account of falling through a hole in the floor was itself not free of suspicion. She had stated to one of her doctors that she fell on some stairs, and in falling broke the floor. However, there was ample evidence that the floor was spotted with holes, and in my view little prospect that a judge trying the common law action would find anything other than that the employer had failed in its duty to take reasonable steps to provide a safe work place.

13 In my view the submission that the plaintiff had not proved to the requisite standard that she would have commenced common law proceedings if properly advised must fail.

14 As to quantum, Mr Meagher’s submissions were more convincing. Her Honour awarded the plaintiff $267,740 for future economic loss. Mr Williams QC and Mr Watts both opined (as if it were their business) that the correct figure should be $112,812. Her Honour’s figure represents the full capitalised value of the plaintiff’s weekly wage ($350.00) from the date of the trial until age 65, less the customary discount of 15% for vicissitudes. However, Mr Meagher submits that there is no reason to assume that the plaintiff will be permanently incapable of work. The evidence would indicate that she is now, and has been at all relevant stages, capable of performing some work, e.g. light clerical or sedentary work, although not heavy bending or lifting.

15 She had a laminectomy performed on her in August 1995.

16 She stayed away from work for no more than a week after the accident, and when she came back she worked for another two years – and, without apparent complaint.

17 At the commutation proceedings before the Compensation Court, she gave the following evidence:

“Q. Is it the case that after you were in court on the last occasion, you did in fact see a different doctor, a Dr McDowell, a neurosurgeon. A --- That’s correct.
Q. And he operated on your back in August of this year, is that correct. A --- That’s correct.
Q. That was by way of a laminectomy. A---Yes, that’s correct.
Q. And after that operation your back pain and leg pain have improved, is that correct. A ---That’s correct.
Q. They have not completely gone, but have improved, is that correct. A --- Yes, that’s correct.
Q. Is it the case that since the operation you have found it easier to move. A --- Correct.
Q. Easier to sit and easier to stand. A --- Correct.
Q. You feel more able to work now than you did at the time you in fact settled the case, is that correct. A --- That’s right.”

18 Dr A P Millar, in a letter dated 19 October 1994, opined as follows:

“OPINION
Her present condition has arisen out of the incident of April, 1992.
She is suffering from a lumbar intervertebral disc lesion due to the fall.
The prognosis is for her to continue with a slow, gradual improvement provided she is able to stop doing heavy work or jobs requiring lifting, bending or prolonged standing. She is fit for light work, preferably jobs which are alternately sedentary and ambulatory.
I assess the permanent percentage impairment of the back at 15%.
I assess the permanent percentage loss of efficient use of the right leg at or above the knee at 10%.”

19 Dr Fred Blake, in a letter of 4 November 1994, is of this view:

“She continued at work until 14.10.94, considering that deterioration was taking place in that her pain was becoming more constant and continuous, and the increasing pressure from her boss at work finally proved too much for her to continue. Her clinical presentation is consistent with significant pain and disability, and in my opinion she is unfit for her previous work. At present she appears unfit for any full time job, but with treatment she should regain fitness for light work positions. Her incapacity to work is attributed to the accident on 10.4.92.”

20 In my view, the estimates of Messrs Williams and Watts are substantially correct.

21 The orders to be made are:

1. Appeal allowed;

2. Order 1 Below set aside;

3. In lieu of Order 1, judgment for the plaintiff in the sum of $64,000.00;

4. No order as to the costs of the appeal.

22 HEYDON JA: I agree with the orders proposed by Meagher JA.

23 On causation, the appellant’s primary point was that the trial judge failed to direct attention as to when non-negligent advice would have been given, and accordingly failed to examine the position as at July 1994, when the plaintiff consulted the appellant, or perhaps August. It was submitted that at that date the plaintiff was still working (having taken only one week off); she had not reported the accident to her employer; there was the possibility that Mrs Pollak, who was her employer and had provided a statement adverse to the plaintiff’s case on liability, might give sworn evidence against her, there were other difficulties in establishing liability arising from divergences in the plaintiff’s accounts of the accident to different people, the plaintiff was concerned about the impact of an adverse costs order and consequential bankruptcy; the fact that the trial judge after hearing the plaintiff being extensively cross-examined accepted her as reliable and honest was not foreseeable in 1994; there were sources of corroboration available to the plaintiff which were not to hand in July 1994 but which were only mentioned in March 1995, and the material in the report by an investigator engaged by her employer’s insurer dated 3 December 1994 was not available.

24 Though lengthy cross-examination at a trial is often a good guide to reliability, it is commonplace for solicitors to test plaintiffs by engaging in cross-examination of their own in conference, and there was no evidence from the appellant that he had formed the view on reasonable grounds that the plaintiff would probably be rejected by any trial judge. Though the plaintiff was still working in July 1994, there can be little doubt she was suffering severe pain: video surveillance conducted on her in April 1995 revealed that though she walked her daughter to school, she held her back the entire time; and by August 1995 she had been driven by that pain to consent to a laminectomy. It was foreseeable that if she gave evidence of that pain she would be accepted. While the investigator’s report itself may not have been obtainable, information to the same effect as that which it contained was. Indeed virtually all the information which became available by the time of the trial could have been procured, if not in July 1994, at least soon thereafter, with a view to advice based on reasonably complete factual material being given. In short, the main reason why the appellant was not well equipped with relevant information about the plaintiff in July 1994 was not the earliness of the date, but his own failure to procure that information. A negligent adviser cannot escape the consequences of negligent advice by pointing to the inadequacy of the materials on which to give advice where it was his duty to assemble the materials and where the inadequacy of the materials as part of the negligence involved. I agree with Meagher JA’s observations about the plaintiff’s fear of bankruptcy.

25 For those reasons as well as those given by Meagher JA, I agree with his conclusions on causation. I also agree in relation to damages.

26 SANTOW JA: I agree with the observations of Meagher JA and Heydon JA.

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