Lloyd v Thornbury

[2019] NSWCA 154

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Lloyd v Thornbury [2019] NSWCA 154

Hearing dates:

5 April 2019

Date of orders:

25 June 2019

Decision date:

25 June 2019

Before:

Meagher JA at [1];
Gleeson JA at [2];
White JA at [183].

Decision:

(1)   Appeal allowed, in part, on damages and is otherwise dismissed.

 

(2)   Set aside order 1 made by the District Court on 31 August 2018 and in place, order:

 

(a)   Judgment for the plaintiff against the second defendant with damages to be assessed.
(b)   The plaintiff’s claim against the first defendant is dismissed.
(c)   The plaintiff to pay the first defendant’s costs of the proceedings.
(d)   The first cross-claim and the second cross-claim are each dismissed with no order as to costs.

 

(3)   Remit the proceedings to the District Court for a rehearing on the assessment of damages.

 

(4)   Order that the issue of damages be referred to mediation before any rehearing takes place on the assessment of damages in the District Court.

 

(5)   Cross-appeal dismissed.

 

(6) The appellant (Mr Lloyd) pay 40 per cent of the costs of the first respondent (Mr Thornbury) in this Court, and to have a certificate under the Suitors’ Fund Act 1951 (NSW) in respect of such costs if eligible.

 

(7)   The appellant (Mr Lloyd) pay the costs of the second respondent (the Treuers) in this Court.

(8)   Costs of the proceedings below as between Mr Thornbury and Mr Lloyd, including any application for a Bullock or Sanderson order, to abide the outcome of the rehearing on damages.

Catchwords:

TORTS – negligence – content of duty of care of landlord to tenant – where tenant fell in hole in rear yard and suffered injury

 

TORTS – negligence – Civil Liability Act 2002 (NSW), s 5B – whether primary judge erred in identification of risk of harm – reasonable precautions to prevent risk of harm – whether landlord should have ensured hole was backfilled or fenced

 

APPEAL AND NEW TRIAL – where absence of finding of primary fact – whether substantial miscarriage justifying retrial – no entitlement to retrial where absent finding not determinative of breach

 

TORTS – negligence – factual causation – Civil Liability Act 2002 (NSW), s 5D – whether primary judge erred in finding causation made out

 

CIVIL PROCEDURE – Court of Appeal – notice of contention – new ground raised on appeal – where other party objects – whether new ground could possibly have been met at trial

 

TORTS – Negligence – contributory negligence and apportionment – Civil Liability Act 2002 (NSW), ss 5B, 5R and 5S – whether primary judge erred in finding tenant contributorily negligent – whether primary judge erred in assessing extent of tenant’s contribution – causal significance of tenant’s own negligence

 

DAMAGES – measure and remoteness of damages in actions for tort – economic loss – whether primary judge erred in assessment of past economic loss and residual earning capacity – significance to findings of future economic loss – Civil Liability Act 2002 (NSW), s 13 – whether primary judge adequately engaged with employment history evidence – where plaintiff suffered from pre-existing injuries – whether primary judge adequately engaged with medical evidence to determine extent of exacerbation – whether allowance for future medical expenses was supported by evidence

 

DAMAGES – measure and remoteness of damages in actions for tort – non-economic loss – Civil Liability Act 2002 (NSW), s 16 – whether primary judge erred in assessment of the degree of severity of non-economic loss – significance of pre-existing injuries – whether primary judge’s assessment susceptible to appellate review

  APPEAL AND NEW TRIAL – new trial on particular grounds – whether retrial should be ordered on the assessment of damages – where reliability of evidence in issue

Legislation Cited:

Civil Liability Act 2002 (NSW), ss 5B, 5D, 5E, 5R, 5S, 13, 16
Constitution Act 1902 (NSW), s 53
Evidence Act 1995 (NSW), s 128
Judicial Officers Act 1986 (NSW), Pts 6 and 7
Motor Accidents Act 1988 (NSW), s 79
Suitors’ Fund Act 1951 (NSW)
Supreme Court Act 1970 (NSW), s 75A
Uniform Civil Procedure Rules 2005 (NSW), r 51.53

Cases Cited:

Amoud v Al Batat [2009] NSWCA 333
Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146
Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430
Berkeley Challenge Pty Ltd v Howarth [2013] NSWCA 370
Boral Bricks Pty Ltd v Cosmidis (No 2) (2014) 86 NSWLR 393; [2014] NSWCA 139
Bullock v London General Omnibus Co [1907] 1 KB 264
Clifton v Lewis [2012] NSWCA 229
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Crystal Wall Pty Ltd v Pham [2005] NSWCA 449
Dell v Dalton (1991) 23 NSWLR 528
Ellis v Rantzos [2005] NSWCA 266
Gordon v Truong; Truong v Gordon [2014] NSWCA 97; (2014) 66 MVR 241
Graham v Baker (1961) 106 CLR 340; [1961] HCA 48
Hall v State of NSW [2014] NSWCA 154
Hornsby Shire Council v Viscardi [2015] NSWCA 417
House v The King (1936) 55 CLR 499; [1936] HCA 40
HSH Hotels v Multiplex [2004] NSWCA 302
Hull v Thompson [2001] NSWCA 359
Jackson v Mazzafero [2012] NSWCA 170
Jones v Bartlett (2000) 205 CLR 166; [2000] HCA 56
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20
McKenzie v Wood [2015] NSWCA 142
Mason v Demasi [2012] NSWCA 210
Metaxoulis v McDonald’s Australia Ltd [2015] NSWCA 95
Mifsud v Campbell (1991) 21 NSWLR 725
Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 357 ALR 408
Nemeth v Westfield Shopping Centre Co Management Pty Ltd [2013] NSWCA 298
Nobarani v Mariconte [2018] HCA 36; (2018) 92 ALJR 806
Officeworks Ltd v Christopher [2019] NSWCA 96
Perisher Blue Pty Ltd v Nair-Smith (2015) 90 NSWLR 1; [2015] NSWCA 90
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Purkess v Crittenden (1965) 114 CLR 164; [1965] HCA 34
Roads and Traffic Authority (NSW) v Dederer (2007) 234 CLR 330; [2007] HCA 42
Sanderson v Blyth Theatre Co [1903] 2 KB 533
Southgate v Waterford (1990) 21 NSWLR 427
Sretenovic v Reed [2009] NSWCA 280
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35
Taupau v HVAC Constructions (Queensland) Pty Limited [2012] NSWCA 293
Uniting Church in Australia Property Trust (NSW) v Miller; Miller v Lithgow City Council (2015) 91 NSWLR 752; [2015] NSWCA 320
Varga v Galea [2011] NSWCA 76
Wallace v Kam (2013) 250 CLR 375; [2013] HCA 19
Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9
Watts v Rake (1960) 108 CLR 158; [1960] HCA 58
White v Redding [2019] NSWCA 152
Wynn Tresidder Management v Barkho [2009] NSWCA 149

Category:

Principal judgment

Parties:

Gerard Gregory Lloyd (Appellant / First Cross-Respondent)
Dustin Thornbury (First Respondent / Cross-Appellant)
G M Treuer & J A Treuer t/as Corindi/Red Rock Plumbing & Metal Roofing (Second Respondent / Second Cross-Respondent)

Representation:

Counsel:
Mr P M Morris SC (Appellant)
Mr B Dooley SC and Mr T Willis (First Respondent)
Mr N Polin SC (Second Respondent)

Solicitors:
Hall & Wilcox (Appellant / First Cross-Respondent)
LHD Lawyers (First Respondent / Cross-Appellant)
Moray & Agnew Lawyers (Second Respondent / Second Cross-Respondent)

File Number(s):

2018/207526

 Decision under appeal 

Court or tribunal:

District Court of New South Wales

Jurisdiction:

Civil

Citation:

(District Court (NSW), Maiden SC DCJ, 8 June 2018, unrep)

Date of Decision:

8 June 2018

Before:

Maiden SC DCJ

File Number(s):

2013/110336

HEADNOTE

[This headnote is not to be read as part of the judgment]

In the early hours of one Monday morning in April 2012, the first respondent, Dustin Thornbury, slipped and fell into a hole in the rear yard of the residential premises he was renting at Corindi Beach on the north coast of New South Wales. He was rushing across the yard in the dark to break up a fight involving his two dogs and a third dog that had entered the property. As a consequence of the fall, Mr Thornbury claimed to have suffered injuries, including to his neck and lower back. The hole into which Mr Thornbury fell was one of several dug in the week prior to the incident for the purpose of resolving a drainage problem. Present when the hole was dug were Mr Thornbury, local plumber Jeffrey Treur, and the owner of the premises, Mr Gerard Lloyd.

In 2013, Mr Thornbury brought negligence proceedings in the District Court seeking damages for his injuries from the second respondent being the partnership through which Mr Treur conducted his plumbing business (“the Treurs”), and from the appellant, Mr Lloyd, who was joined subsequently as a defendant. The Treurs and Mr Lloyd filed cross-claims against each other. The trial was heard in August 2015. The evidence was that Mr Lloyd had sought to erect barriers around the holes on the Friday prior to the incident but he had run out of materials to complete the work. An issue at trial was whether Mr Lloyd had instructed Mr Treur or another party to fence or fill the holes either on the Friday evening, or on the Sunday following a telephone call from Mr Thornbury advising that the holes remained open.

The primary judge delivered an oral judgment in June 2018 almost three years after the hearing, giving judgment for Mr Thornbury against Mr Lloyd but finding 40 per cent contributory negligence on the part of Mr Thornbury. On the cross-claims, his Honour gave judgment for the Treurs against Mr Lloyd. The parties were ordered to make calculations according to his Honour’s reasons, and the parties agreed an award of $345,043.17 to Mr Thornbury, for which judgment was subsequently entered.

Mr Lloyd appealed against the whole of the decision. Mr Thornbury cross-appealed primarily challenging the finding of contributory negligence. The Treurs sought to uphold the finding of liability against Mr Lloyd.

The principal issues raised on the appeal and cross-appeal were:

(1)   Whether the primary judge’s reasons were inadequate;

(2)   With respect to liability:

i.   whether the primary judge erred in failing to identify the content of the duty of care owed by Mr Lloyd to Mr Thornbury,

ii.   whether the primary judge erred in failing to identify the relevant risk of harm,

iii. whether the primary judge erred in failing to determine under s 5B(2) of the Civil Liability Act 2002 (NSW) the precautions which a reasonable person in Mr Lloyd’s position would have taken against the identified risk of harm,

iv.   whether the primary judge erred in failing to make a finding that Mr Lloyd requested Mr Treur to backfill the holes prior to Mr Thornbury’s fall,

v.   whether the primary judge’s finding of factual causation under the Civil Liability Act, s 5D(1) was erroneous,

vi.   Mr Treur’s alleged liability to Mr Thornbury in negligence in the event that Mr Lloyd’s appeal on liability was successful.

(3)   With respect to damages:

i.   whether the primary judge failed to make findings concerning Mr Thornbury’s most likely future circumstances but for the injury with the consequence that he erred in his assessments of non-economic loss, past and future economic loss and future medical expenses,

ii.   whether the primary judge misdirected himself as to the evidence concerning Mr Thornbury’s residual earning capacity and failed to provide sufficient reasons for his findings with respect to non-economic loss, economic loss and medical expenses,

iii.   whether a retrial should be ordered on the question of damages.

The Court (Gleeson JA, Meagher and White JJA agreeing) allowed the appeal in part and held:

(1) As to the complaint of an asserted deficiency of reasons, on an appeal to this Court by way of rehearing, s 75A(10) of the Supreme Court Act 1970 (NSW) grants power to make all findings necessary to sustain the order that ought to have been given or made at first instance. This power ought to be used where possible to avoid the need for a retrial: [8]-[10].

Officeworks Ltd v Christopher [2019] NSWCA 96 at [10]; Nobarani v Mariconte [2018] HCA 36; 92 ALJR 806 at [36]-[38]; Uniform Civil Procedure Rules 2005 (NSW), r 51.53 applied.

(2)   As to the issue of liability:

i. It is implicit from his Honour’s finding of liability on the part of Mr Lloyd as owner, that the content of Mr Lloyd’s duty was to take reasonable care to avoid foreseeable risk of harm to the tenants and other members of the tenant’s household from their slipping or falling into the holes: [44].

Jones v Bartlett (2000) 205 CLR 166; [2000] HCA 56 at [57] (Gleeson CJ), [84] (Gaudron J), [100] (McHugh J) and [168], [171] (Gummow and Hayne JJ) applied.

ii. Although his Honour did not make an express finding as to the relevant risk of harm, he correctly identified the “true source of potential injury” as the open holes and the absence of any barricading, and the “general causal mechanism of the injury sustained” as slipping or falling into the open holes: [51].

Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 at [43] applied.

iii. A reasonable person in Mr Lloyd’s position on the Sunday prior to the incident, having identified on the Friday that the required response to the risk of harm was to backfill or barricade the holes, would have taken this precaution on the Sunday when Mr Thornbury advised him that the holes remained open. As such, there is no error in his Honour’s finding that Mr Lloyd breached his duty: [70]-[71].

Roads and Traffic Authority (NSW) v Dederer (2007) 234 CLR 330; [2007] HCA 42 at [18]; Civil Liability Act 2002 (NSW), ss 5B(1)(c), 5B(2)(a), 5B(2)(b) & 5B(2)(c) applied.

Civil Liability Act, ss 5B(1)(a) & 5B(1)(b) cited.

iv. No substantial wrong or miscarriage was occasioned by the primary judge’s failure to make a finding as to whether Mr Lloyd phoned Mr Treur on the Friday and instructed him to backfill or barricade the holes in light of the finding that Mr Lloyd breached his duty of care by failing to take reasonable precautions on the Sunday to barricade or backfill the holes when Mr Thornbury advised him that the holes remained open: [74].

Uniform Civil Procedure Rules, r 51.53(1) considered.

v.   The primary judge’s finding that Mr Lloyd’s breach caused Mr Thornbury’s injuries should be upheld because:

a.   the breach did not depend upon the absent finding as to whether Mr Lloyd had phoned Mr Treur on the Friday evening and instructed him to cover or fence the holes: [83],

b.   it is appropriate that the scope of Mr Lloyd’s liability for the delay in remedying the open holes extends to the injury suffered by Mr Thornbury as there was evidence before the primary judge that there sufficient time for this to be done before the incident occurred: [84]-[85],

vi. the primary judge’s finding that Mr Thornbury was contributorily negligent as to 40 per cent was neither manifestly inadequate or excessive: [101]-[104].

Boral Bricks Pty Ltd v Cosmidis (No 2) (2014) 86 NSWLR 393; [2014] NSWCA 139 at [54] (McColl JA), [94] Basten JA, Emmett JA agreeing; Gordon v Truong; Truong v Gordon [2014] NSWCA 97; (2014) 66 MVR 241 at [14]-[15] (Basten JA) cited.

vii. Given Mr Lloyd’s liability to Mr Thornbury is upheld on appeal, it is unnecessary to determine Mr Thornbury’s contingent challenge to the primary judge’s dismissal of his claim against the Treurs: [172].

(3)   With respect to damages:

i. In relation to past economic loss, the primary judge’s finding of a diminution in Mr Thornbury’s earning capacity of 20 hours per week on average since the incident in April 2012 is inconsistent with the evidence of the number of hours worked by Mr Thornbury leading up to trial: [138]-[141].

ii. In relation to future economic loss, the award ordered by the primary judge is unsupportable based upon his Honour’s erroneous finding as to Mr Thornbury’s future earning capacity and the absence of a finding as to his most likely future circumstances but for the injury, and his Honour’s findings are infected by a failure to analyse the expert medical evidence to determine the effect of Mr Thornbury’s pre-injury medical conditions on his most likely future circumstances but for the injury: [146]-[150], [155].

Taupau v HVAC Constructions (Queensland) Pty Limited [2012] NSWCA 293 at [132], [135] (Beazley JA, Basten and Macfarlan JA agreeing); HSH Hotels v Multiplex [2004] NSWCA 302 at [87] (Tobias JA, Mason P and Hodgson JA agreeing); Hull v Thompson [2001] NSWCA 359 at [21] (Rolfe AJA, Sheller JA and Davies AJA agreeing); Mifsud v Campbell (1991) 21 NSWLR 725 at 728; Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 442 (Meagher JA); Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [67] applied.

Amoud v Al Batat [2009] NSWCA 333 at [28] (Basten JA, Allsop P and Ipp JA agreeing) citing Watts v Rake (1960) 108 CLR 158; [1960] HCA 58; Purkess v Crittenden (1965) 114 CLR 164; [1965 HCA 34 cited.

iii. In relation to future medical expenses, the award of $20,000 should be set aside as it was not supported by the evidence available at trial: [160].

iv.   In relation to non-economic loss, whichever approach to the correct standard of appellate review is taken, the primary judge’s assessment of the degree of severity of non-economic loss under the Civil Liability Act, s 16 cannot stand due to an absence of findings or any reasoning process identifying the precise nature of Mr Thornbury’s injury or grappling with the significance of his pre-existing medical conditions: [173].

Dell v Dalton (1991) 23 NSWLR 528 at 533-534 (Handley JA, Kirby P and Priestley JA agreeing); Hornsby Shire Council v Viscardi [2015] NSWCA 417 at [67]; Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9; House v King (1936) 55 CLR 499; [1936] HCA 40; Berkeley Challenge Pty Ltd v Howarth [2013] NSWCA 370 at [13]; Hall v New South Wales [2014] NSWCA 154 at [28]-[32]; McKenzie v Wood [2015] NSWCA 142 at [21] considered.

v. A retrial on damages is required given that the reliability of the evidence is in issue and to resolve the competing possible conclusions available on the lay and medical evidence: [142], [157], [174].

Graham v Baker (1961) 106 CLR 340 at 347 (Dixon CJ, Kitto and Taylor JJ); [1961] HCA 48; Sretenovic v Reed [2009] NSWCA 280 at [80] (McColl JA, Beazley JA agreeing) cited.

Judgment

1. MEAGHER JA: I agree with the orders Gleeson JA proposes and, subject to one qualification, with his Honour’s reasons for the making of those orders. It is not necessary in this case, particularly where the issue was not the subject of any submissions and is not dispositive, to consider any controversy as to the standard and principles of appellate review to be applied to a determination under the Civil Liability Act 2002 (NSW), s 16. As Gleeson JA observes at [173] below, whichever standard and process of reasoning is engaged the primary judge’s assessment cannot stand and must be set aside.

2. GLEESON JA: On 16 April 2012 at about 2am, the first respondent, Dustin Thornbury, slipped and fell into a hole in the rear yard of residential premises at Corindi Beach near Woolgoolga, on the north coast of New South Wales. Mr Thornbury claimed that as a result of the fall he suffered injuries, including injury to his neck and lower back, stress, anxiety and depression.

3. Mr Thornbury commenced proceedings in 2013 in the District Court against the second respondent, a partnership conducting a plumbing business (the Treuers), seeking damages for his injuries. The principal of the plumbing business was Mr Jeffrey Treuer. Mr Thornbury later joined the appellant, Mr Gerard Lloyd, the owner of the property, as the second defendant in the proceedings below. The Treuers and Mr Lloyd filed cross-claims against each other.

4. Following a trial over five days commencing on 17 August 2015, the primary judge delivered an oral judgment almost three years later on 8 June 2018. His Honour found that there should be a judgment for Mr Thornbury on his claim against Mr Lloyd taking into account a finding of 40 per cent contributory negligence, a verdict for Mr Treuer on Mr Thornbury’s claim against him, and that there should be judgment for the Treuers against Mr Lloyd on the Treuers’ cross-claim. His Honour directed the parties to make calculations in accordance with his reasons: Thornbury v GM Treuer and JA Treuer t/as Corindi/Redrock Plumbing and Metal Roofing (District Court (NSW), Maiden SC DCJ, 8 June 2018, unrep).

1. On 31 August 2018, judgment was entered for Mr Thornbury against Mr Lloyd in the amount of $345,043.17, in accordance with figures agreed by the parties. No orders were made on the cross-claims. The judgment was stayed pending further order. Judgment on the question of costs was reserved. No judgment on the costs issue has yet been delivered.

2. The delay in giving judgment is unsatisfactory to the litigants. However, like in Officeworks Ltd v Christopher [2019] NSWCA 96 at [5], it is inappropriate to say anything more about the delay in circumstances where a process under s 53 of the Constitution Act 1902 (NSW) and Parts 6 and 7 of the Judicial Officers Act 1986 (NSW) is presently pending, one aspect of which concerns the decision of the primary judge from which this appeal and cross-appeal have been brought.

The appeal and cross-appeal

7. Mr Lloyd appeals against the whole of the decision. Mr Thornbury has cross-appealed challenging the finding of contributory negligence, and contingently challenging the dismissal of his claim against the Treuers, in the event that Mr Lloyd succeeds on his appeal with respect to liability.

8. An overarching issue raised on the appeal is whether the reasons of the primary judge are deficient. Mr Lloyd complained that some matters of primary fact were not the subject of findings, and that clear findings were not made with respect to the pre-existing and progressive impairments which Mr Thornbury suffered prior to the incident or how those conditions would have affected his earning capacity in the future, which in turn affected the assessment of economic loss, future medical expenses and non-economic loss. Mr Lloyd submitted that the assessment of damages involved issues of reliability of Mr Thornbury’s evidence and a retrial was necessary.

9. Mr Thornbury and the Treuers sought to uphold the finding of liability against Mr Lloyd, arguing that it is not necessary to resolve the matters of primary fact identified by Mr Lloyd. Mr Thornbury also sought to uphold the assessment of damages. In the alternative, Mr Thornbury submitted that the assessment of damages did not involve issues of credit and this Court should make any necessary findings, rather than remit the matter to the District Court.

10. The appeal to this Court is by way of rehearing: Supreme Court Act 1970 (NSW), s 75A. This Court has power, under s 75A(10), to make all findings necessary to sustain the order that ought to have been given or made at first instance. As stated in Officeworks Ltd v Christopher at [10], that power should be exercised where possible in order to avoid the necessity for a retrial, in accordance with the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 51.53, as considered in Nobarani v Mariconte [2018] HCA 36; 92 ALJR 806 at [36]-[38].

11. For the reasons that follow, the matters of primary fact left unresolved by the primary judge do not require a retrial on the issue of liability. However, given the deficiencies in the reasons with respect to the assessment of damages, which raise issues as to the reliability of Mr Thornbury’s evidence, the proceedings must be remitted to the District Court for a retrial on damages. An order should be made that the dispute in relation to the assessment of damages be referred to mediation. The cross-appeal by Mr Thornbury should be dismissed. The appropriate costs orders are explained at the conclusion of these reasons.

The circumstances of the accident

12. Mr Thornbury and his wife were tenants of the premises which had a large rear yard where they kept their dogs. The backyard also provided a recreation area for their family, including their young children and any visitors.

13. In April 2012, a drainage problem became apparent in the rear yard and the managing agent contacted Mr Lloyd and advised that a plumber had been engaged. That plumber was Mr Treuer. He first attended the property on 3 April 2012 and identified what he considered was an issue with the septic tank.

14. Mr Lloyd lived in Gerringong on the south coast of New South Wales, where he conducted a motel business. On Monday, 9 April 2012, Mr Lloyd and his mother travelled to Corindi Beach. There was a conflict in the evidence of Mr Lloyd and Mr Treuer as to whether they first met at the property on the Monday or the Tuesday. Ultimately, nothing turns on this. It is common ground that during the week, a number of inspections took place, and a friend of Mr Thornbury’s, Mr Matthew Wisz, was engaged by Mr Lloyd to dig a trench and four pilot holes with an excavator, the latter to assess the ground moisture content.

15. It is also common ground that Mr Lloyd, Mr Thornbury and Mr Treuer were all present when the four pilot holes were dug, that the dimensions of the holes were approximately 600 mm in length, 600 mm in width and 300 mm in depth, and that the holes were left in that condition to facilitate an examination of the area by a geotechnical engineer.

16. Following rain on the Thursday and Friday, the holes filled up with water. On Friday, 13 April 2012, Mr Daryl Jarvis, a geotechnical engineer, inspected the property in the presence of Mr Lloyd, Mr Treuer and Mr Thornbury. Mr Jarvis advised that the holes at the rear of the property did not need to be left open and could now be back-filled.

17. There was a dispute at trial as to who was responsible for back-filling the holes that had been left unbarricaded in the rear yard. Mr Treuer gave evidence that Mr Lloyd said to him at the property on the morning of Friday, 13 April that he had organised barrier fencing and that he was going to make it “all safe” before travelling back “to Kiama” later that day.

18. Consistently with Mr Treuer’s evidence, Mr Lloyd attended Bunnings on the Friday and returned to the property several hours later with poles and safety barrier mesh. Mr Lloyd, with the assistance of Mr Thornbury, erected the stakes and meshing at the side of the house to create barricades around the trench and two holes in that area at about 5pm, but ran out of fencing materials for the two holes in the rear yard.

19. After the work concluded on the Friday evening, Mr Thornbury asked Mr Lloyd when the holes would be filled. Mr Lloyd replied that Mr Treuer would do it. On Mr Lloyd’s account, first given in response to leading questions in cross-examination by counsel for Mr Thornbury, he contacted Mr Treuer on the Friday evening and told him he needed to get back to the motel but had been unable to cover all of the holes and asked him if he could attend the property, inspect what had been done and cover the two remaining holes. Mr Lloyd’s account of the conversation did not expressly include a timeframe, or any response by Mr Treuer. Mr Treuer denied that such a conversation ever took place.

20. On Saturday, 14 April 2012, Mrs Thornbury attempted to call Mr Treuer on one or two occasions, but did not get a response. Mr Treuer denied receiving any calls from MrsThornbury. He said he ran a 24-hour plumbing maintenance service and returned all of his calls and there were none in regard to the property at Corindi Beach.

21. On Sunday, 15 April 2012, Mr Thornbury contacted Mr Lloyd about 11am or 12 noon and informed him that the holes still remained uncovered. Mr Thornbury gave evidence that he was told by Mr Lloyd that he would ring Mr Treuer straight away. Mr Thornbury offered to fill the holes himself, but was told by Mr Lloyd not to do this as it was a “plumber’s job”.

22. In his evidence-in-chief, Mr Lloyd did not give evidence of any conversation with Mr Treuer on Sunday, 15 April. When asked in cross-examination by counsel for Mr Thornbury, whether he had tried to contact Mr Treuer, Mr Lloyd initially gave evidence:

I either contacted Geoff directly, or my real estate agent ….

23. In response to the suggestion that he was not certain whether he telephoned the agent or Mr Treuer, Mr Lloyd gave the following answer:

That’s correct, because I explained to my tenants that I had a managing agent looking after my property, and that I was extremely busy at the motel. I was renovating and so forth, and that if they could deal directly with my managing agent in respect of the issue.

24. Mr Lloyd gave further evidence in cross-examination that he was uncertain whether he rang his managing agent or Mr Treuer following his conversation with Mr Thornbury on the Sunday, and he was also not sure whether he contacted that person on the same day or the following day. When asked what he said, Mr Lloyd responded:

I expressed my concerns in relation to the two holes, and explained that the tenants had contacted me in relation to … the two holes in the backyard.

25. Mr Treuer said he heard nothing further until he was contacted by Mr Lloyd on the following Tuesday, 17 April, and told that an accident had occurred and asked to return to the property to “make it safe and fix up the fence”. This he did, albeit after a delay of some days as he was afraid to enter the property unless someone was home to protect him from Mr Thornbury’s dogs.

26. At trial, Mr Lloyd tendered at the end of Mr Treuer’s cross-examination an affidavit sworn by Mr Treuer. That affidavit deposed (par 28) to the telephone conversation with Mr Lloyd on Tuesday, 17 April and included the following:

When I asked the landlord why he hadn’t backfilled or fenced off the holes and trenches, the landlord conceded to me that he should have taken those steps.

Accident – early hours on Monday, 16 April 2012

27. Mr Thornbury gave evidence that he and his wife were awakened in the early hours of Monday morning, 16 April 2012, by his dogs barking in an aggressive manner that he described as a “fighting bark”. This caused his son to wake up and commence screaming. Mr Thornbury turned his back light on and his wife turned on the front light. Mr Thornbury made his way from the back of the house about 30 metres towards the dogs. He realised there was another dog in the yard. Three dogs were fighting and Mr Thornbury intended to “pull them apart before they killed each other”. Mr Thornbury accepted that he knew this would be a dangerous exercise, but said he wanted to avoid any injury to either his dog or the other dog.

28. Mr Thornbury described the lighting in the rear yard as “quite dark”. He did not have a torch with him. He could see the (trench) barrier on his left-hand-side and he could see a pile of dirt on his right. He moved to what he thought was the left side of the pile of dirt and believed that he had moved far enough away to avoid the hole, however, his right foot slipped into the hole which was full of water. He fell backwards, hurting himself.

29. In cross-examination, Mr Thornbury accepted the following matters. First, when he entered the backyard, he knew of the existence of the holes and of the risk that he could fall into one. Second, he had gone into the backyard knowing that it was only partially lit, knowing that there was a danger of which he was conscious and without a torch. Third, he entered the backyard knowing that he could fall into one of the holes if he mis-stepped. Fourth, a hospital note recording that he fell “after chasing your dog”, was probably a fair record of what he had said to the attending doctor on admission on 16 April 2012.

The primary judge’s findings on liability

30. The primary judge did not make a finding on the critical issue of who was to backfill or barricade the holes in the rear yard after the geotechnical engineer had stated on Friday, 13 April that they need not remain open. His Honour remarked:

I am unable to find appropriately whether they were to be covered up by Mr Treuer, [Mr Thornbury], or someone else for that matter.

31. A little later in his reasons, the primary judge repeated this point when observing that he was unable to decide whether or not Mr Treuer understood that he was to come back to fill in the holes or whether it was to be up to “the plaintiff” to effectively secure the yard. The reference to “the plaintiff” may be an error. Read in context, his Honour seems to have intended to refer to the owner, Mr Lloyd.

32. However, the primary judge did make a finding that “Mr Lloyd was effectively in charge of what was happening”, noting that Mr Lloyd went to Bunnings and obtained the barricading materials.

33. The primary judge accepted Mr Treuer’s evidence of his conversation with Mr Lloyd on Friday, 13 April that Mr Lloyd said that he would relevantly complete the works. This may be taken to be a reference to the conversation at the property on the Friday morning, before Mr Lloyd went to Bunnings to obtain barricading materials.

34. After observing that the need for securing the holes was apparent because of the two young children of Mr Thornbury and his wife who used that area of the residence, his Honour found that Mr Lloyd, as owner of the property:

1. was responsible “to ensure that that obvious danger was corrected”;

2. directed that two of the four holes were not be re-filled and that he would arrange to place safety material tape in the yard so as to provide a barrier/warning to persons who may enter the yard; and,

3. must take responsibility for leaving the two holes without adequate barrier or warning.

35. With respect to the telephone conversation between Mr Lloyd and Mr Treuer on the morning of Tuesday, 17 April, his Honour found that Mr Treuer asked Mr Lloyd why the holes or the trenches had not been backfilled and properly fenced and that Mr Lloyd “accepted in the affirmative that he should have taken those steps”.

36. His Honour found that Mr Treuer acted appropriately and that the responsibility for the safety of the works to be concluded in the yard of the premises was that of Mr Lloyd. Accordingly, there should be judgment for Mr Treuer on his cross-claim against Mr Lloyd.

37. After referring to s 5B of the Civil Liability Act2002 (NSW), his Honour stated that he did not need to deal with breach in detail because leaving unfilled holes in the yard of a residential house where there were young children present had led to a recognition by all persons involved that this situation needed to be fixed.

38. As to causation, his Honour found that this was not a problem because Mr Thornbury fell in the hole that had been left uncovered.

39. His Honour gave two reasons for reducing the damages by 40 per cent for contributory negligence by Mr Thornbury. First, although understandable, Mr Thornbury was “rushing” out to the area in the rear of the yard. Second, he knew the area was dark and that there were unfilled holes. His Honour rejected Mr Lloyd’s submission that the reduction for contributory negligence should be 100 per cent, finding that the situation was an emergency and Mr Thornbury was intending to resolve any injury to the dogs involved in the fight.

A. Liability

40. The following issues are raised on the appeal and the cross-appeal with respect to liability:

1. the content of the duty of care (ground 1),

2. the relevant risk of harm (ground 2),

3. the precautions which a reasonable person in Mr Lloyd’s position would have taken against the risk of harm (grounds 3–4),

4. the failure to determine whether Mr Lloyd requested Mr Treuer to backfill the two holes on Friday, 13 April 2012 (ground 7),

5. causation and contributory negligence (grounds 5 and 6, and cross-appeal, ground 1),

6. whether the primary judge failed to provide sufficient reasons (ground 8), and

7. Mr Treuer’s alleged liability to Mr Thornbury in negligence in the event that Mr Lloyd’s appeal on liability is successful (cross-appeal, grounds 2–4).

41. As will be seen, the focus of the parties’ submissions was on the issues of reasonable precautions, causation and contributory negligence.

Content of duty of care

42. It is well established that the common law duty of care owed by a landlord to a tenant and other members of the tenant’s household is to take reasonable care to avoid foreseeable risk of harm to those persons having regard to all the circumstances of the case: Jones v Bartlett (2000) 205 CLR 166; [2000] HCA 56 at [100] (McHugh J), at [57] (Gleeson CJ), at [84] (Gaudron J), [168] (Gummow and Hayne JJ). As to the content of the landlord’s duty to the tenant at common law, Gummow and Hayne JJ remarked in Jones v Bartlett (at [171]):

Broadly, the content of the landlord’s duty to the tenant will be conterminous with a requirement that the premises be reasonably fit for the purposes for which they are let, namely, habitation as a domestic residence.

43. Ground 1 asserted that the primary judge erred in failing to identify the content of the duty of care owed by Mr Lloyd to Mr Thornbury. This ground was not addressed in Mr Lloyd’s written submissions or oral argument. Nor was there any controversy as to the scope of the owner’s duty raised at trial. The focus of the submissions at trial was on whether Mr Lloyd took reasonable precautions against the risk of harm, and whether Mr Thornbury was contributorily negligent in failing to take precautions against that risk.

44. It is implicit in his Honour’s finding that Mr Lloyd, as owner, must take responsibility for leaving the two holes in the rear yard without adequate barrier or warning, that the content of Mr Lloyd’s duty was to take reasonable care to avoid foreseeable risk of harm to the tenants and other members of the tenants’ household from their slipping and falling into the holes. What precautions against the relevant risk of harm were reasonable in the circumstances is to be determined taking account of s 5B of the Civil Liability Act.

Risk of harm and reasonable precautions

45. Grounds 2 to 4 are related. Mr Lloyd contended that the primary judge erred in failing to properly identify the relevant risk of harm (ground 2), in failing to determine under s 5B(2) the precautions which a reasonable person in Mr Lloyd’s position would have taken against that identified risk of harm (ground 3), and in failing to find that Mr Lloyd had taken precautions against a risk which a reasonable person in his position would have taken, namely, requesting Mr Treuer to backfill the holes and informing Mr Thornbury that this would be done in the near future (ground 4).

46. These grounds direct attention to s 5B of the Civil Liability Act:

General principles

(1)   A person is not negligent in failing to take precautions against a risk of harm unless:

(a)   the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and

(b)   the risk was not insignificant, and

(c)   in the circumstances, a reasonable person in the person’s position would have taken those precautions.

(2)   In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):

(a)   the probability that the harm would occur if care were not taken,

(b)   the likely seriousness of the harm,

(c)   the burden of taking precautions to avoid the risk of harm,

(d)   the social utility of the activity that creates the risk of harm.

Identification of the risk of harm

47. It is well established that the correct identification of the risk of harm is necessary before “one can assess what a reasonable response to that risk would be”: Roads and Traffic Authority (NSW) v Dederer (2007) 234 CLR 330; [2007] HCA 42 (Dederer) at [59] (Gummow J).

48. In Uniting Church in Australia Property Trust (NSW) v Miller; Miller v Lithgow City Council (2015) 91 NSWLR 752; [2015] NSWCA 320 at [118]-[122], Leeming JA (Basten and Simpson JJA agreeing) emphasised two matters. One is that the risk is not to be confined to the precise set of circumstances which are alleged to have occurred, although it must encompass those circumstances. The other is that while there may commonly be a range of appropriate formulations of the generality of the risk of harm, ordinarily it is unnecessary and undesirable to define the relevant risk of harm with too much particularity. See also: Perisher Blue Pty Ltd v Nair-Smith (2015) 90 NSWLR 1; [2015] NSWCA 90 at [106] (Barrett JA, Gleeson JA and Tobias AJA).

47. In the present case, Mr Lloyd pointed to the reference by his Honour to the danger of leaving unfilled holes on the property where young children were present, and submitted that his Honour focused erroneously upon the risk of harm to young children who were not appropriately cognisant of the risk and necessary precautions. I do not agree that his Honour defined the relevant risk of harm in terms of the risk to young children. This part of his Honour’s reasons may be taken as identifying the range of persons to whom the duty of care is owed by the landlord, namely, to the tenant and members of the tenant’s household: Jones v Bartlett at [100].

48. Mr Lloyd further submitted, and Mr Thornbury did not argue to the contrary, that the proper characterisation of risk of harm in the present case is the risk that an adult might suffer harm as a result of the unfenced and unfilled holes in the rear of the tenanted, but fenced, premises. That may be accepted.

49. Although his Honour did not make a finding of the relevant risk of harm in the express terms articulated by Mr Lloyd on appeal, on a fair reading of his Honour’s reasons he formulated the risk of harm in the manner identified by Mr Lloyd in this Court. His Honour correctly identified the “true source of potential injury” as the open holes and the absence of any barricading, and the “general causal mechanism of the injury sustained”, namely, slipping or falling into the open holes: Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 at [43] (Payne JA, McColl JA agreeing).

Whether Mr Lloyd failed to take precautions against a risk of harm: s 5B(1)

52. In determining whether Mr Lloyd breached his duty of care to Mr Thornbury, s 5B(1) directs attention to three matters: whether the risk of harm was foreseeable, not insignificant and, in the circumstances, a reasonable person in Mr Lloyd’s position would have taken precautions.

Whether the risk was foreseeable: s 5B(1)(a)

53. The primary judge found that the open holes presented a foreseeable risk: s 5B(1)(a). There is no challenge to this finding.

Whether the risk was not insignificant: s 5B(1)(b)

54. Although no express finding was made, it was not in dispute at trial that the risk was not insignificant: s 5B(1)(b). No submission to the contrary was advanced by Mr Lloyd on appeal.

Whether Mr Lloyd took reasonable precautions: s 5B(1)(c)

55. Mr Lloyd’s essential complaint is that the primary judge neither acknowledged nor determined his case that he took reasonable precautions against the risk of harm. This was a reference to the case advanced by Mr Lloyd at trial that, in circumstances where he had dealt with the majority of the risk presented by the two holes in the rear yard, but had run out of time on the Friday, he took reasonable precautions against that remaining risk by ensuring that the tenants knew that the two holes were unguarded and unfilled and had “set in motion [their] repair”. The latter step involved the contested primary matter of fact as to whether Mr Lloyd asked Mr Treuer on the Friday night to come back as soon as possible to fill those holes.

56. Mr Lloyd submitted in this Court that a two-day delay to have the risk of harm remediated did not, in the circumstances, constitute a breach of duty because Mr Thornbury was an adult fully aware of the risk.

57. Mr Thornbury and the Treuers responded that the manner in which the primary judge approached the issues and resolved the case on liability did not require a finding as to whether Mr Lloyd rang Mr Treuer on the Friday night. They submitted that his Honour correctly concluded that Mr Lloyd had accepted and was in fact responsible for taking the precaution of backfilling or properly fencing the holes.

Consideration – reasonable precautions

58. The starting point is that breach must be assessed prospectively not retrospectively with the wisdom of hindsight: Dederer at [18]. The precaution which Mr Thornbury contended that Mr Lloyd failed to take against the relevant risk of harm was backfilling or barricading the holes. In determining whether a reasonable person in the position of Mr Lloyd would have taken those precautions against the risk of harm, s 5B(2) directs attention to a number of non-exhaustive considerations: the probability of the harm occurring, the likely seriousness of the harm, the burden of taking precautions, and the social utility of the risk-taking activity. Mr Lloyd did not place any reliance on the last matter.

59. As to the probability of the harm (s 5B(2)(a)), this could be considered relatively low in the daytime as the tenants were aware of and could readily observe the location of the open holes. However, the position was different at night, given the absence of sufficient lighting in the rear yard. If the tenant needed to traverse the rear yard at night, particularly at speed, there was a realistic possibility of physical harm being occasioned if the tenant misjudged the location of the open holes.

60. As to the likely seriousness of the harm (s 5B(2)(b)), plainly a severe injury might result to a tenant from a fall into one of the holes if steps were not taken to backfill or barricade the holes.

61. As to the burden of taking precautions (s 5B(2)(c)), the foreseeable risk of harm was present on the Friday evening, when Mr Lloyd failed to complete the temporary barricading of the holes in the rear yard. It is no answer, as senior counsel for Mr Lloyd suggested, that Mr Lloyd had “set in motion the repair” on the Friday evening.

62. Whether or not Mr Lloyd called Mr Treuer on the Friday evening, Mr Lloyd knew on the Sunday morning that the precaution that he had identified on the Friday as the required response to the risk of harm, namely, backfilling or barricading the holes, had not been taken. The account given by Mr Lloyd of the disputed conversation with Mr Treuer on the Friday evening did not expressly include a time frame. However, the inference from Mr Thornbury’s phone call with Mr Lloyd on the Sunday morning is that the tenants were expecting that the plumber would come on the weekend to backfill the holes. So much was accepted by senior counsel for Mr Lloyd.

63. Plainly, Mr Lloyd recognised on the Sunday morning that the risk of harm that had presented itself on Friday had not been addressed over the weekend as the tenants had been anticipating.

64. Mr Lloyd argued that he took appropriate precautions on the Sunday by telephoning either the managing agent or Mr Treuer, and expressing his concerns in relation to the two holes. That Mr Lloyd asserted in his evidence that he had expressed concerns on the Sunday to either the managing agent or Mr Treuer is at odds with his submission that a two-day delay in remediating the risk of harm should not constitute a breach of duty.

65. In any event, putting aside the difficulty that Mr Treuer denied having any conversation with Mr Lloyd on the Sunday, Mr Lloyd’s evidence on this topic was so vague and imprecise as to whether he contacted either the managing agent or Mr Treuer, and if so, whether this occurred on either the Sunday or the Monday, that his Honour was correct in not making a finding that Mr Lloyd took any such step on the Sunday.

66. There are other difficulties with Mr Lloyd’s submission that he took reasonable precautions on the Sunday . One difficulty is that Mr Lloyd did not call the managing agent to give evidence. Another difficulty is that the proposition that Mr Lloyd contacted Mr Treuer on the Sunday was never put to Mr Treuer by counsel for Mr Lloyd. Mr Treuer gave his evidence at trial before Mr Lloyd and he was later recalled to give further evidence. Counsel for Mr Lloyd did not challenge Mr Treuer’s further evidence-in-chief that at no time before Mr Thornbury’s accident on the Monday morning had Mr Lloyd telephoned him and asked him to go and check his fencing and deal with the holes that had not been barricaded. Mr Treuer said that this conversation with Mr Lloyd occurred after Mr Thornbury’s accident, being a reference to their telephone conversation on Tuesday, 17 April.

67. Nor was Mr Treuer challenged on his affidavit evidence, which Mr Lloyd had tendered, concerning the telephone conversation with Mr Lloyd on Tuesday, 17 April, in which Mr Lloyd made the admission referred to at [26] above. Mr Treuer relied upon this admission by Mr Lloyd as being inconsistent with Mr Lloyd having any conversation with him on either the Friday evening or the Sunday in which Mr Lloyd asked him to backfill the holes.

68. Mr Lloyd submitted that the admission on the Tuesday that “he should have taken those steps” had no probative significance. Mr Lloyd argued that this statement was not identified or explored in the oral evidence or relied upon in submissions at trial. That may be accepted as an accurate statement of what occurred at trial. Next, Mr Lloyd argued that the admission was simply a statement of regret and is not to be taken as being inconsistent with Mr Lloyd having had a conversation with Mr Treuer on the Sunday. However, given that Mr Lloyd tendered the affidavit of Mr Treuer in Mr Lloyd’s case, it was a matter for Mr Lloyd to explain the admission as not being inconsistent with his oral evidence that he contacted Mr Treuer on the Sunday, or the Monday, and “expressed his concern” that the holes remained open. Mr Lloyd did not do so.

69. It was not suggested that a landlord in Mr Lloyd’s position, residing a significant distance from the leased premises, could not be reasonably expected to have arrangements in place with a managing agent for tradespersons to be engaged to deal with emergencies notified by the tenant on an urgent basis: for example, a plumber to repair broken taps or pipes to ensure that water did not damage the premises or create a slip hazard, or an electrician to repair faulty electrical connections or resolve blackouts, or a roof tiler to repair a damaged roof. Nor was it suggested that there was any impediment to Mr Lloyd contacting Mr Treuer on the Sunday, who on the evidence maintained an emergency 24-hour phone service.

70. In the circumstances, a reasonable person in Mr Lloyd’s position on the Sunday, having identified the required response to the risk of harm on the Friday and been informed by Mr Thornbury on the Sunday that the two holes in the rear yard had not been filled, would have taken the precaution of ensuring that the holes were backfilled or barricaded on the Sunday. Those steps would have required that Mr Lloyd contact his managing agent to arrange for the work to be undertaken, or contact Mr Treuer directly to perform the work. It was not suggested that either step was cost prohibitive. On the evidence, Mr Lloyd took neither step on the Sunday to address the risk of harm.

71. There is no error in his Honour’s finding that Mr Lloyd breached his duty of care to Mr Thornbury.

Significance of absence of finding of primary fact

72. Mr Lloyd contended that the primary judge erred in failing to determine whether or not Mr Lloyd called Mr Treuer on the evening of Friday, 13 April and requested that Mr Treuer backfill the two holes.

73. Senior counsel for Mr Lloyd submitted that this issue raised credit issues which could not be determined by this Court and accordingly the matter should be remitted to the District Court for a retrial.

74. Given the conclusion above that Mr Lloyd breached his duty of care by failing to take reasonable precautions on Sunday, 15 April to ensure that the two holes were backfilled or barricaded, this ground does not arise. Nonetheless, I will briefly indicate my reasons why the absence of a finding on the primary matter of fact as contended for by Mr Lloyd is not a sufficient reason for this Court to order a retrial on liability.

75. The starting point is to acknowledge that this Court is not in a position to determine questions of credit as between Mr Lloyd and Mr Treuer. However, it does not follow that if error is established, then Mr Lloyd is entitled to a retrial. It is necessary for Mr Lloyd to establish that some substantial wrong or miscarriage has been occasioned by the failure to make the finding on the matter of primary fact: UCPR, r 51.53(1).

76. For the reasons given above, the significance of the disputed conversation on the evening of Friday, 13 April for the s 5B(1)(c) issue of whether Mr Lloyd took reasonable precautions against the risk of harm, was overtaken by the subsequent events on the Sunday. Mr Lloyd knew on the Sunday morning that the two holes had not been filled when Mr Thornbury telephoned him to express his concern.

77. Further and importantly, the disputed conversation on the evening of Friday, 13 April was never put expressly to Mr Treuer by counsel for Mr Lloyd. Mr Lloyd sought to avoid this difficulty by pointing to the following passages of earlier cross-examination of Mr Treuer by counsel for Mr Thornbury:

Q:   Sir, as at Friday, were you not instructed by Mr Lloyd to in fact come and backfill the holes.

A:   No. I would have jumped at the chance.

Q:   So you say that you were not instructed at that time by Mr Lloyd to either come back –

A:   As in at any time.

Q:   To come back and fill the holes or to do something –

A:   I will rephrase that. Not at any time. I won’t say that. I’ll rephrase that. At that stage, I had not been instructed by Mr Lloyd to backfill the holes.

Q:   Even though you’d said to him after the inspection that he should do it.

A:   Yes.

…

Q:   If I were to suggest to you Mr Lloyd directed you to refill the holes or to make them safe on Friday, you would say that’s wrong.

A:   Yes.

Q:   When did he, in fact, instruct you to refill the holes?

A:   The following Tuesday.

Q:   Right.

A:   After the accident.

Q:   After the accident. Certainly are you saying that he did not make any contact with you on either Saturday or Sunday?

A:   No.

Q:   He made no contact with you before the Tuesday.

A:   No.

…

Q:   You understood that Mr Lloyd was going to attend to the filling in or the making safe of the holes.

A:   He told me he would.

Q:   Yet on the Tuesday, at his request, you returned and filled in the holes.

A:   No.

Q:   When did you fill them in?

A:   Later in the week.

78. On a fair reading of this cross-examination, the possibility that an instruction was given by Mr Lloyd to Mr Treuer on Friday, 13 April to return to backfill the holes was only faintly raised with Mr Treuer. Counsel did not squarely challenge Mr Treuer’s evidence that no such instruction was given and that he was first requested by Mr Lloyd to return and fill the holes on Tuesday, 17 April.

79. Mr Lloyd’s closing submissions at trial contained only passing reference to the alleged request made by Mr Lloyd of Mr Treuer on Friday, 13 April to return and backfill the holes. Counsel for Mr Lloyd put it somewhat equivocally in the following closing submission:

… and there you have the hanging proposition of did he or did he not, as Mr Thornbury thought, and he seemed to think himself, that he had in fact done what he’d done and that he had in fact requested Mr Treuer to fill it in. So had he adequately fulfilled any duty that he had, but what duty did he have? This case is perverse in some respects.

80. A little later, counsel for Mr Lloyd submitted:

… Well, the question is, does leaving it in an unfenced state add anything to the danger? It only adds to the danger if the plaintiff is cerebrally dead, because he’s aware of the danger.

It’s effectively a clear warning case, and therefore the non-erection is immaterial, ….

81. In summary, Mr Lloyd’s case in closing submissions at trial was that while Mr Lloyd “seemed to think” … “that he had in fact requested Mr Treuer to fill [in the holes]”, leaving them unfenced or unfilled was immaterial because Mr Thornbury was aware of the danger. In the absence of cross-examination of Mr Treuer squarely challenging his evidence that Mr Lloyd first requested him to return to the premises and backfill the holes on Tuesday, 17 April, I am not persuaded that the primary judge erred in failing to make the factual finding now contended for by Mr Lloyd. Even if the failure to make such a finding was an error, this would not amount to a substantial miscarriage justifying a retrial on liability for the reasons given above in relation to ground 4 addressing the issue of reasonable precautions.

Factual causation

82. It was necessary for Mr Thornbury to establish factual causation that any harm to his back would not have occurred on 16 April 2012 but for Mr Lloyd’s negligence: Civil Liability Act, s 5D(1)(a); Wallace v Kam (2013) 250 CLR 375; [2013 HCA 19 at [16] (the Court). It was not suggested that the present case is an exceptional one for the application of the approach referred to in s 5D(2). The onus lay with Mr Thornbury of proving any fact relevant to the issue of causation: s 5E.

83. Mr Lloyd submitted that a determination of factual causation could not be made in the absence of a primary finding of fact as to whether Mr Lloyd called Mr Treuer on the evening of Friday, 13 April and requested that he attend the premises and backfill the holes. For the reasons given above concerning the breach of duty by Mr Lloyd, that submission should be rejected. The question of causation is to be addressed having regard to the breach of duty by Mr Lloyd on Sunday, 15 April.

84. Next, it was submitted that, even if a delay in some days in the backfilling of the holes was a result of neglect on Mr Lloyd’s part, it would be inappropriate for the scope of Mr Lloyd’s liability for the delay to extend to the injury suffered by Mr Thornbury. According to the submission, there was insufficient time or opportunity to carry out the work before the incident on the Monday morning. I do not agree.

85. As mentioned, Mr Treuer maintained an emergency 24-hour phone service and his unchallenged evidence was that he would have jumped at the opportunity to perform the work if asked. The available inference is that if Mr Lloyd had contacted Mr Treuer on the Sunday, Mr Treuer would have performed the work on that day. It was not suggested that the work involved in backfilling the two holes was in any way complex or time consuming.

86. The challenge by Mr Lloyd to the finding on causation has not been made out.

Notice of contention

87. Given the conclusion on causation, it is not necessary to determine the matters raised in Mr Thornbury’s amended notice of contention, in particular, the contention that Mr Lloyd’s direction to Mr Thornbury on Sunday, 15 April that he not fill the holes was a breach of Mr Lloyd’s duty of care and causative of the subject accident (ground 2). However, as Mr Lloyd objected to this new point being raised on appeal, I will briefly indicate my reasons why this objection should be upheld.

88. Mr Thornbury submitted that his contention that Mr Lloyd had breached his duty by directing Mr Thornbury on the Sunday not to fill the holes was not outside the particulars of negligence, which included that Mr Lloyd “failed to ensure the refilling of the holes so as to remove the hazard presented by same”. I do not agree. The particulars of negligence did not encompass the contention now raised.

89. Nor was it suggested by Mr Thornbury that the parties departed from the pleadings and conducted the trial on the wider basis that the negligence of Mr Lloyd included the direction given to Mr Thornbury on the Sunday not to backfill the holes. Insofar as Mr Thornbury relied upon this direction at trial, it was for a different submission directed to the issue of contributory negligence. According to the submission at trial, it was reasonable for Mr Thornbury as a tenant to comply with his landlord’s direction and that the accident occurred in the situation in which Mr Thornbury was “effectively innocent”.

90. It is fundamental that a party seeking to advance for the first time on appeal a new ground not taken at trial will be precluded from doing so if the new ground could possibly have been met by calling evidence at the hearing or if, had the ground been raised below, the respondent might have conducted the case differently at trial: Suttor vGundowdaPty Ltd (1950) 81 CLR 418 at 438 (Latham CJ, Williams and Fullagar JJ); [1950] HCA 35; Coultonv Holcombe (1986) 162 CLR 1 at 7-9; [1986] HCA 33.

87. The new point could possibly have been met by the calling of evidence from Mr Lloyd as to why he considered that a plumber and not Mr Thornbury should backfill the holes. It is entirely conceivable that Mr Lloyd’s reasons not to leave such work to the tenant were reasonable, such as the potential liability of Mr Lloyd for any personal injury suffered by Mr Thornbury in carrying out physical works on the property.

Contributory negligence

92. The question of whether a person has been guilty of contributory negligence is to be determined objectively – whether the plaintiff has taken that degree of care for his or her own safety that an ordinary reasonable person would take: Boral Bricks Pty Ltd v Cosmidis (No 2) (2014) 86 NSWLR 393; [2014] NSWCA 139 at [54] (McColl JA); see also at [94] (Basten JA, Emmett JA agreeing).

93. Section 5S provides that, when apportioning responsibility, a court may determine a reduction of 100 per cent in the claimant’s damages by reason of contributory negligence.

94. The principles applicable in determining whether a person has been negligent, which include those in s 5B, also apply in determining whether the person who has suffered harm has been contributorily negligent in failing to take precautions against a risk of harm which materialised and resulted in injury: s 5R. Accordingly, the existence and extent of a claimant’s contributory negligence is to be assessed by reference to the risk of harm which is the subject of his or her claim for damages, and the precautions that a reasonable person in the claimant’s position would have taken against that risk: Gordon v Truong; Truong v Gordon [2014] NSWCA 97; (2014) 66 MVR 241 at [14]-[15] (Basten JA).

95. In the present case, the particulars of contributory negligence relied upon by Mr Lloyd included that Mr Thornbury failed to keep a proper lookout, failed to take care for his own safety, failed to observe an obvious risk and that, in the dark, he ran in an area where he knew or ought to have known holes had been dug. His Honour rejected the submission that Mr Thornbury’s failure to take reasonable precautions was the sole cause of the incident but accepted that he was contributorily negligent for the reasons set out at [39] above.

Challenge to factual finding

96. It is convenient to first address Mr Thornbury’s challenge to the factual finding that he was “rushing” out to the area in the rear yard of the premises where the dogs were fighting. Mr Thornbury submitted that there was no evidentiary basis for this finding. I do not agree.

97. First, the hospital notes in relation to Mr Thornbury’s admission for treatment on 16 April 2012 record that Mr Thornbury presented with neck pain after falling into a ditch “6 cm deep whilst chasing his dog”. In cross-examination, Mr Thornbury agreed that he was “chasing” his dog. He gave the following evidence (emphasis added):

Q:   When you went to the hospital, it would appear that you said that you fell in a hole after chasing your dog. Is that right?

A:   I guess so.

On a fair reading of that question and answer, Mr Thornbury confirmed both the history of the incident recorded in the hospital note, and the accuracy of its contents.

98. Second, the finding that Mr Thornbury was “rushing” is also consistent with the instructions given by Mr Thornbury’s solicitors to Dr John Cooke, consultant architect, who was retained to provide an expert report. Those instructions included that as Mr Thornbury proceeded out the back door to investigate the source of the disturbance, “he has run and fallen into one of the subject holes”.

99. The challenge by Mr Thornbury to the factual finding that he was “rushing” is not made out.

Causal significance of Mr Thornbury’s neglect for his own safety

100. Mr Thornbury gave the following evidence of the circumstances in which the incident occurred:

Q:   As you made your way towards the dogs, just outline what occurred.

A:   Well, it was pretty dark. It was quite dark. I could see the barrier on my left side of me and I could see the dirt pile to my right. And I just – I don’t know what it was. I just assumed that I have gone to the right of those potholes – to the left, sorry, of those potholes enough, but I didn’t.

Q:   And what happened?

A:   I slipped straight in – went straight in with my right foot.

Q:   Straight into what?

A:   Into the hole. The hole was chocker block full of water. It was dark – water completely right up to the top.

101. Mr Lloyd contended that the primary judge erred in failing to find that the sole cause of Mr Thornbury’s injury was his neglect for his own safety by “rushing” into his rear yard at night and without a torch, and by failing to allow a wide clearance of the mounds of dirt he was able to observe and which he knew marked the position of the two holes. I do not agree.

102. First, the causal significance of Mr Thornbury “rushing” into the rear yard was lessened by the primary judge’s finding that the situation was one of emergency, and that Mr Thornbury was intending to avoid any injury to the dogs involved in the fighting at the rear of the yard.

103. Second, the use of a torch as a safety mechanism was not a precaution that was available to a reasonable person in Mr Thornbury’s position, given his unchallenged evidence that he did not take a torch with him.

104. Third, the causal significance of Mr Thornbury’s failure to make a wide enough clearance of the mounds of dirt on his right in the rear yard where the two open holes were situated was lessened by his Honour’s acceptance of Mr Thornbury’s evidence that the path he took avoided the danger presented by the first hole but given the poor lighting conditions and his speed of travel in an emergency, he misjudged the position of the second hole relative to the mound of dirt such that he slipped and fell into the hole.

Adequacy of reasons

105. The complaints by Mr Lloyd and Mr Thornbury that his Honour failed to provide adequate reasons for his findings with respect to contributory negligence should be rejected. His Honour provided succinct reasons for finding that Mr Thornbury was contributorily negligent, and for not apportioning sole responsibility to Mr Thornbury.

Conclusion on contributory negligence

106. In my view, there was no error by the primary judge in not finding a reduction of 100 per cent in Mr Thornbury’s damages by reason of contributory negligence. Nor do I consider that the reduction of 40 per cent in Mr Thornbury’s damages by reason of contributory negligence to be either manifestly inadequate, as Mr Lloyd contended, or manifestly excessive, as Mr Thornbury contended.

Insufficient reasons

107. Given the conclusions above, it is not necessary to further address ground 8.

B. Damages

108. His Honour’s’ assessment of total damages of $345,043.17 is made up as follows:

�	Non-economic loss (based upon quantification of 30% of a most extreme case pursuant to s 16 of the Civil Liability Act 2005 (NSW)	$141,000.00
�	Future out-of-pocket expenses	$ 20,000.00
�	Past economic loss	$132,800.00
�	Future economic loss	$281,271.96
Sub-total:	$575,071.96
�	Deduct 40% contributory negligence	$230,028.79
Total:	$345,043.17

Background

109. Mr Thornbury was aged 29 years at the time of the incident and aged 32 years at the time of the trial. He left school at the age of 15 years and had worked as a labourer in connection with shearing and concreting activities, as well as on various farms, and as a removalist. In May 2010, he commenced operating his own removalist business. The trading results of the business, which were incorporated into his personal income tax returns, showed net losses as follows:

30 June 2010 – ($4,992);

30 June 2011 – ($40,139);

30 June 2012 – ($39,719).

110. In support of his claim for economic loss, Mr Thornbury relied upon an accounting report of Mr Mark Thompson. That report recorded Mr Thornbury’s instructions that his personal income tax returns were in the process of being amended to include unreported income and GST payments in the years ended 30 June 2011 and 2012 respectively. The accountant provided restated results of the removalist business showing net profits in the financial years ended 30 June 2011 and 2012 as follows:

30 June 2011 - $56,920;

30 June 2012 - $46,575.

111. As to the claim for past economic loss, Mr Thornbury’s solicitors provided particulars of Mr Thornbury’s employment status and work since the 2012 incident in a letter dated 2 June 2015. Relevantly, following the incident Mr Thornbury relocated to Walcha and undertook employment involving general farming and labour work with a number of employers between May 2012 and the date of the letter.

112. The particulars given in the solicitor’s letter were generally consistent with Mr Thornbury’s claim for economic loss in his amended statement of particulars filed 11 August 2015. However, in his oral evidence Mr Thornbury disputed or qualified some of the particulars of his employment and income since the 2012 accident.

113. Mr Thornbury sought damages for economic loss on the basis that at the time of the incident his average earnings were $1,136 net per week. As will be seen, the primary judge adopted a different approach, and in this Court Mr Thornbury did not seek to maintain his claim for economic loss on the basis of pre-injury average earnings of $1,136 net per week.

Medico-legal reports

114. An MRI of Mr Thornbury’s cervical spine on 17 April 2012 reported multi-level disc osteophytic spurring at C4/5, C5/6, C6/7 and C7/T11 and moderate canal stenosis, at C4/5; narrowing stenosis and nerve root impingement at C6/7 and C7/T1, and a left intramuscular, small presumed haematoma post-fall at the paravertebral muscle at the C4/5 level.

115. A number of doctors provided medico-legal reports, but none were cross-examined.

116. Dr John Davis, consultant in occupational medicine, concluded that Mr Thornbury had suffered a disc injury to his cervical spine, as well as trauma to a number of facet joints by compression forces and an aggravation of pre-existing asymptomatic degenerative changes resulting in weakness and sensory changes to his right upper arm. His prognosis was for continued pain and impairment.

117. Dr Drew Dixon, consultant orthopaedic surgeon, diagnosed a neck strain and back strain injury with post-traumatic stiffness. Dr Dixon noted that Mr Thornbury weighed 125 kg (as at July 2014). His prognosis for returning to heavy manual work was guarded.

118. Dr Alan Hopcroft, specialist general surgeon, diagnosed a wrenching injury to Mr Thornbury’s cervical spine, bleeding into his posterior cervical musculature causing aggravation to a pre-existing cervical spondylitic condition and some weakness and paraesthesia into his right arm. Dr Hopcroft noted that Mr Thornbury was significantly obese and weighed 124.5 kg (as at September 2012).

119. Dr Hopcroft gave further reports in July 2013 and August 2015. The latter report noted Mr Thornbury’s massive weight gain – then 132 kg. Dr Hopcroft noted that Mr Thornbury continued to complain of ongoing and significant neck pain and right arm paraesthesia, and the development of some back pain which he dated to the incident on 16 April 2012. Dr Hopcroft expressed the opinion that Mr Thornbury had aggravated a cervical spondylitic problem demonstrated on the MRI scan dated 17 April 2012. He noted that Mr Thornbury would be likely to see a deterioration in his spondylitic problem in the future. He did not believe that the injury in the incident would lead to his retirement prematurely, but noted that Mr Thornbury’s problem would restrict his work offers in the open labour market given that Mr Thornbury said that he worked only 20-21 hours per week in casual farm labouring jobs, particularly farm maintenance activities and that he can usually complete those hours of work in a period of three days.

120. Dr John Stephen, orthopaedic surgeon, diagnosed a mechanical low back pain, together with the lesser degree of ongoing mechanical cervical pain. Dr Stephen expressed the view that Mr Thornbury’s back pain in the long term would probably be sufficiently troublesome to prevent him from getting back to the heaviest types of work, including that of a removalist.

121. Dr Seamus Dalton, consultant in rehabilitation medicine, expressed the view that Mr Thornbury most likely suffered acute strains to the cervical and lumbosacral spine, but that the effects of those injuries which had resolved and his current back pain was attributable to mild pre-existing degenerative changes affecting his lumbar spine and constitutional factors such as his obesity and lack of fitness. Dr Dalton could find no underlying cause for the subjective weakness affecting Mr Thornbury’s right upper limb which was not supported by objective clinical findings. Dr Dalton concluded:

There is no indication that he suffered a significant acute injury to his cervical or lumbar spine. These injuries are best described as acute strains and it is difficult to correlate his current complaints with the extent and nature of injuries sustained in the subject accident. On the balance of probabilities I consider that there is a significant degree of psychological or functional overlay attached to Mr Thornbury’s current presentation and reported disabilities.

122. Prior to the incident, Mr Matthew Jepsen, psychologist, expressed the view on 22 June 2011 that Mr Thornbury suffered panic disorder with agoraphobia and that Mr Thornbury also described having an alternating pattern of discrete episodes of depressive and hypomanic symptoms.

The primary judge’s findings on damages

123. The primary judge commenced by addressing the attack on Mr Thornbury’s credit arising from the unexplained differences between the initial tax returns for his removalist business and the subsequent amended tax returns that were lodged. While the former showed that the business was making a loss and the latter showed that the business was making a profit, there was an absence of supporting documentation that the business was in fact making a profit. Although a certificate was given under s 128 of the Evidence Act 1995 (NSW) in relation to Mr Thornbury’s evidence on this topic, the primary judge found that Mr Thornbury was “in most ways reliable in his evidence and that he did not deliberately set out to exaggerate or mislead in respect of his evidence”.

124. After referring to various opinions expressed in the medico-legal evidence of Dr Stephen, Dr Dalton, Dr Hopcroft, and Dr Dixon, his Honour made the following findings:

• Mr Thornbury does have an ongoing lower back condition, which is permanent and he does have issues arising from his deteriorating spine;

• Mr Thornbury suffered from an unrelated condition that he was allergic to potassium and the treatment for that problem had led to a significant weight gain following the 2012 incident;

• Mr Thornbury has a degenerating congenital back condition which was exacerbated by the injury suffered on 16 April 2012 however, there was insufficient evidence to make a finding of total incapacity;

• Mr Thornbury had suffered a permanent injury which had continued and caused disability notwithstanding that he also suffered from a condition related to a potassium issue.

125. The primary judge found that:

[Mr Thornbury] had continued to do the lighter work and effectively was working or had lost 20 hours per week on average, either working three days a week for longer hours or five days a week for shorter hours, but what is clear that he will at some point of time, if he continues to be overweight have difficulties in the future. I do find that those difficulties are related to his back conditions exacerbated by the injury here. However, I do not feel that there is sufficient evidence to make any finding of total incapacity based upon Dr Dixon’s opinion.

126. With respect to economic loss, both past and future, the primary judge took the approach, having reviewed the accountant’s report and considered average weekly earnings (it seems both in the furniture removalist industry and for mixed crop and livestock work), that the appropriate comparator for Mr Thornbury’s pre-injury earnings was the position of an average worker, that is average weekly earnings. His Honour quantified the diminution in Mr Thornbury’s ability to earn, both in the past and in the future, as 20 hours per week at $20 per hour, giving a loss of earnings in the past and an impairment of earning capacity in the future, of $400 per week. His Honour assessed Mr Thornbury’s earning capacity as being only to the age of 65, rather than to the age of 67, and applied a deduction of 25 per cent for vicissitudes. His Honour also found that an allowance should be made for loss of future superannuation.

127. With respect to non-economic loss, the primary judge assessed the severity of Mr Thornbury’s loss as 30 per cent of the most extreme case: Civil Liability Act, s 16(3).

128. With respect to future out-of-pocket expenses, the primary judge awarded a lump sum of $20,000 to allow for medication, physiotherapy and the occasional consultation of doctors with respect to his orthopaedic condition.

Grounds 10 and 11

129. Ground 10 asserted that the primary judge erred in failing to specifically refer to s 13(1) of the Civil Liability Act and that he failed to make findings concerning Mr Thornbury’s most likely future circumstances but for the injury with the consequence that he erred in the assessments of non-economic loss, past and future economic loss and past and future medical expenses.

130. Ground 11 asserted that the primary judge misdirected himself as to the evidence concerning Mr Thornbury’s residual earning capacity and failed to provide sufficient reasons for his findings with respect to non-economic loss, economic loss and medical expenses.

131. Mr Lloyd made an overarching submission that the assessment of damages required a retrial because it involved a determination of issues which the primary judge left unresolved and undecided and that the issues were too complicated, fact intensive and dependent upon findings as to the reliability of Mr Thornbury’s evidence for this Court to determine the quantification of damages.

132. Mr Thornbury submitted that this Court could decide the issue of damages without the necessity of a retrial, given that only one credit finding was made and it was favourable to Mr Thornbury.

(a) Past economic loss

133. The amount awarded for past economic loss was $132,800. The parties accepted that this amount was calculated as $400 per week for 332 weeks (16 April 2012 to 31 August 2018 – the date of judgment).

134. Mr Lloyd challenged his Honour’s finding that following the accident on 16 April 2012, Mr Thornbury “effectively was working or had lost 20 hours per week on average, either working three days a week for longer hours or five days a week for shorter hours”. Although this finding was somewhat elliptical, it was common ground that his Honour found that Mr Thornbury’s earning capacity was diminished by the incident by 20 hours per week.

135. Mr Lloyd submitted that this finding was contrary to the particulars given by Mr Thornbury’s solicitors.

136. Mr Thornbury responded that the solicitor’s letter of particulars of 2 June 2015 was incorrect and referred to evidence given by Mr Thornbury disputing or qualifying those particulars.

Consideration

137. Compensation for loss of earning capacity is awarded because diminution in the plaintiff’s earning capacity is or may be productive of a financial loss: Graham v Baker (1961) 106 CLR 340 at 347 (Dixon CJ, Kitto and Taylor JJ); [1961] HCA 48. It is for the plaintiff to prove the loss for which compensation is claimed: Sretenovic v Reed [2009] NSWCA 280 at [80] (McColl JA, Beazley JA agreeing).

138. Accepting that Mr Thornbury’s oral evidence qualified and disputed some of the particulars given by his solicitors, I am satisfied that the primary judge erred in finding a diminution in Mr Thornbury’s earning capacity of 20 hours per week on average after the incident in April 2012.

137. The finding is inconsistent with the evidence of the number of hours worked by Mr Thornbury in the period May 2012 to May 2015. First, in the period mid-May 2012 to December 2012, the combined hours worked by Mr Thornbury were 20 hours per week with Karori Merinos and approximately 6 hours per week (based on $120 net per week) as caretaker for Mr Locke’s property “Miamba”, and on occasions additional hours of approximately eight hours per week (based on $150 net per week).

138. Second, in the period February to July 2013, accepting that Mr Thornbury disputed the particulars given in his solicitors’ letter that he was earning approximately $1,000 net per week with W & T Spraying, the document appended to the accountant’s report (Appendix 8) disclosed that Mr Thornbury was employed on a casual basis and on five of the ten weeks reported on, the hours worked exceeded 20 hours: 50.5, 53, 37.5, 40, 32 and 24 hours respectively.

139. Third, in the period April 2014 to May 2015, Mr Thornbury worked between 35 and 40 hours per week with Petali Merinos, earning approximately $800 net per week.

140. Unfortunately, this Court is not in a position to make its own finding on the evidence of the past economic loss, given that it is not in a position to make an assessment of the reliability of Mr Thornbury’s evidence as to the difficulties he experienced in working in heavy rural jobs, and whether he was exaggerating the severity of his condition having stopped taking prescribed medication in 2014 and only relying upon over-the-counter painkillers.

(b) Future economic loss

143. The parties accepted that the award of future economic loss of $281,271.96 was calculated as follows: $400 per week for 822 weeks ($328,000) plus future loss of superannuation ($328,800 x 0.1406 = $46,229.28) less 25 per cent for vicissitudes.

144. Section 13 of the Civil Liability Act is relevant to an award of future economic loss. It provides:

Future economic loss—claimant’s prospects and adjustments

(1)   A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant’s most likely future circumstances but for the injury.

(2)   When a court determines the amount of any such award of damages for future economic loss it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events might have occurred but for the injury.

(3)   If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.

145. It is common ground that the primary judge did not refer to s 13 of the Civil Liability Act. Nonetheless, although not expressly stated as assumptions, the reasons of the primary judge contain the following assumptions:

1. a diminution in Mr Thornbury’s pre-injury earning capacity of 20 hours per week at $20 per hour, giving a total of $400 per week;

2. that Mr Thornbury would have worked until the age of 65 years;

3. an allowance should be included for superannuation as an employee;

4. a discount for vicissitudes of 25 per cent.

146. There are three substantial difficulties with the award of future economic loss. The first difficulty is that the finding that Mr Thornbury’s future earning capacity post-accident was limited to 20 hours per week is unsupportable for the reasons already given in relation to the claim for past economic loss.

147. The second difficulty is that his Honour did not expressly address Mr Thornbury’s most likely future circumstances but for the injury: s 13(1). It is not clear entirely whether his Honour assumed that Mr Thornbury would have continued work as a furniture removalist but for the injury, or in some other category of employment, such as general farm labouring, because Mr Thornbury’s pre-existing conditions made it unlikely that he could continue for many years as a furniture removalist. In either case, it was necessary to make a finding as to the pre-incident earnings as a furniture removalist or as a general farm labourer.

148. Accepting, as his Honour found, that no reliance could be placed on Mr Thornbury’s disclosed income in his amended tax returns, and that average weekly earnings was an appropriate base comparator, his Honour’s assumption that Mr Thornbury’s most likely future circumstances but for the injury, was earnings of $800 per week, seems to have been based on the average weekly earnings of a general farm labourer. However, if his Honour had intended to assume that that Mr Thornbury’s most likely future circumstances but for the injury was as a furniture removalist, then the evidence in the accountant’s report (par 8.8) was that the average weekly earnings of a furniture removalist as at November 2012, as adjusted and before superannuation, were $963 per week. The latter figure was not used by his Honour in his assessment of likely future earnings but for the injury.

149. The third difficulty is that his Honour failed to grapple with the medical evidence of the effect on Mr Thornbury’s most likely future circumstances but for the injury, of his pre-injury conditions, relevantly: his congenital canal stenosis and pains arising from his obesity operating on his pre-existing pathology: Amoud v Al Batat [2009] NSWCA 333 at [28] (Basten JA, Allsop P and Ipp JA agreeing) citing Watts v Rake (1960) 108 CLR 158; [1960] HCA 58 and Purkess v Crittenden (1965) 114 CLR 164; [1965] HCA 34, cf Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20.

150. While his Honour acknowledged the opinions of Dr Dixon and Dr Stephen that Mr Thornbury would have ongoing difficulties because of injury related to his degenerating congenital back condition, he did not make clear findings as to whether the aggravation to Mr Thornbury’s lumbar spine as a result of the fall continued to be the source of pain and disability for him, or whether the effects of the aggravation had ceased and his pains arose from his obesity operating on the significant pre-existing pathology.

151. Mr Thornbury submitted that the higher deduction of 25 per cent rather than 15 per cent for vicissitudes could be taken as reflecting matters going to his weight and pre-existing factors. The submission continued that there is no real evidence to justify that higher deduction other than the report of Dr Dalton which, it was submitted, ought to have been rejected. That submission suffers from the difficulty that the primary judge simply did not address the differences in the medical evidence, and did not make any express finding rejecting the opinion of Dr Dalton.

152. In the absence of cross-examination, the primary judge was required to analyse the expert evidence in order to make findings on the issues to which the experts' evidence was directed. This may, and usually does, involve the acceptance of one expert or group of experts over another, not on the basis of a demeanour finding, which is unavailable when none of the experts are cross-examined, but on the cogency of the evidence, given the issues addressed: Taupau v HVAC Constructions (Queensland) Pty Limited [2012] NSWCA 293 at [132] (Beazley JA, Basten and Macfarlan JA agreeing); HSH Hotels v Multiplex  [2004] NSWCA 302 at [87] (Tobias JA, Mason P and Hodgson JA agreeing).

153. An unchallenged expert report may be rejected or subject to criticism or doubt; for example, if the report is ex facie, illogical or inherently inconsistent; or where it is based on an incorrect or incomplete history; or where the assumptions on which it is founded are not established: Hull v Thompson [2001] NSWCA 359 at [21] (Rolfe AJA, Sheller JA and Davies AJA agreeing).

154. Nonetheless, as observed by Beazley JA in Taupau at [135], where there has been no cross-examination:

... there has to be a reasonable basis as to why some evidence is accepted and other evidence is not. In that regard, the evidence cannot be considered in isolation from other evidence. The cogency of the experts' evidence is dependent upon there being a basis established in the evidence for the views expressed.

155. It is apparent from the reasons for judgment that the primary judge failed in any meaningful way to deal with the expert evidence in the manner required by the authorities: Mifsud v Campbell (1991) 21 NSWLR 725 at 728 (Samuels JA); Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 442 (Meagher JA). That error infected his Honour’s assessment of future economic loss.

156. Where an appellate court concludes that the primary judge has failed to give adequate reasons, it has a discretion as to whether a new trial should be ordered. If the only conclusion open on the evidence available at trial was the conclusion reached by the primary judge, then, notwithstanding an inadequate statement of reasons, the matter need not go to a new trial: Beale v GIO at 444 per Meagher JA; Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [67] (McColl JA, Ipp JA and Bryson AJA agreeing).

157. This is not a case where the evidence was, in effect, all one way so that the only conclusion open on the evidence was that which the primary judge reached. Unfortunately, the proceedings must be remitted for a new trial on damages. There is no alternative to this course, notwithstanding the hardship on the parties which will be occasioned in respect of an accident which occurred over seven years ago.

(c) Future medical expenses

158. Mr Lloyd complained that there was no reasoning to support the award of $20,000 for future medical expenses. It was submitted that it is unclear whether this figure makes any allowance for the problems associated with Mr Thornbury’s pre-existing and progressive spinal disorder.

159. Mr Thornbury sought to uphold the award of $20,000 for future medical expenses as being by way of a buffer, which it was submitted, was appropriate, modest and supportable. The submission continued that given Mr Thornbury’s present age of 33 years and life expectancy of another 52 years, the lump sum awarded represents approximately $20 per week (using the five per cent multiplier of 984.9).

160. The difficulty with this submission is that, as counsel for Mr Thornbury fairly acknowledged, no costings were provided of the six to eight (non-prescription) tablets per day that Mr Thornbury was taking, nor was any costing provided for the three monthly reviews recommended by Dr Hopcroft, or the provision for physiotherapy of 15 visits over five weeks and thereafter 12 visits per year to physical therapies for the next three to four years as recommended by Dr Davis. This award should be set aside.

(d) Non-economic loss

161. No damages may be awarded for non-economic loss unless its severity is at least 15 per cent of a most extreme case: Civil Liability Act, s 16(1). Non-economic loss is defined to mean any of: (a) pain and suffering; (b) loss of amenities of life; (c) loss of expectation of life; and (d) disfigurement. At trial, Mr Lloyd and the Treuers submitted that Mr Thornbury’s injury was in the range of 15 per cent to 20 per cent of a most extreme case. Mr Thornbury submitted that it was a 30 to 35 per cent of the most extreme case.

162. In awarding damages for “non-economic loss”, it is appropriate for the trial judge to consider and make findings on those elements in the evidence which are relevant to such loss. It is then necessary for the Judge to conceive “a most extreme case”. An assessment must then be made of the severity of the non-economic loss percentage of a most extreme case: Southgate v Waterford (1990) 21 NSWLR 427 at 440 (the Court), in relation to s 79(2) of the Motor Accidents Act 1988 (NSW).

163. The primary judge found:

In respect of non-economic loss, I find that there has been a permanent injury and that that injury has continued and has caused disability, notwithstanding the condition relating to the potassium issue … In respect of non-economic loss, this is a matter that falls within the range where there is to be a discount, … having considered the matter I am of the view that it should be 30 per cent of a most extreme case.

164. The reference by his Honour to the “potassium” issue was a reference to the substantial weight gain by Mr Thornbury following the prescription of steroids for an unrelated condition. The reference by his Honour to the need for a “discount” is unclear. It might be read as being directed to the need to distinguish between the consequences of the injury suffered in the 2012 incident and Mr Thornbury’s pre-existing conditions. Alternatively, it could be read as referring to discounting Mr Thornbury’s claim from the higher end of the range the subject of submissions to the lower end of the range.

165. Mr Lloyd submitted that given Mr Thornbury’s pre-existing medical conditions and the absence of clear findings in relation to the medical evidence, the award of non-economic loss as 30 per cent of a most extreme case was unsupportable.

166. Mr Thornbury responded that given his young age, the lifetime of impaired earning capacity and significant pain in relation to his neck and back, the assessment of 30 per cent of the most extreme case was within the range.

Consideration

167. The parties did not make any submissions as to the principles applying to a challenge on appeal to a finding of 30 per cent of a most extreme case. In Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 357 ALR 408 at [46]-[49], Gageler J discussed the differences between the general “correctness” standard of appellate review and the deferential standard applicable to appellate review of an exercise of judicial discretion and stated that the line drawn is:

[49] … Whether the legal criterion applied or purportedly applied by the primary judge to reach the conclusion demands a unique outcome, in which case the correctness standard applies, or tolerates a range of outcomes, in which case the House v The King standard applies. The resultant line is not bright; but it is tolerably clear and workable.

168. Some authorities in this Court refer to s 16 of the Civil Liability Act as involving an evaluative assessment which reasonably admits of different conclusions not readily susceptible of appellate review, analogous to the exercise of a discretion: Dell v Dalton (1991) 23 NSWLR 528 at 533-534 (Handley JA, Kirby P and Priestley JA agreeing): see, for example, Ellis v Rantzos [2005] NSWCA 266 at [43]; Crystal Wall Pty Ltd v Pham [2005] NSWCA 449 at [53]; Wynn Tresidder Management v Barkho [2009] NSWCA 149 at [110]-[111]; Varga v Galea [2011] NSWCA 76 at [75]; Jackson v Mazzafero [2012] NSWCA 170 at [21]; Mason v Demasi [2012] NSWCA 210 at [23]; Clifton v Lewis [2012] NSWCA 229 at [56]; Nemeth v Westfield Shopping Centre Co Management Pty Ltd [2013] NSWCA 298 at [11]; Metaxoulis v McDonald’s Australia Ltd [2015] NSWCA 95 at [38]; Hornsby Shire Council v Viscardi [2015] NSWCA 417 at [67].

169. As Leeming JA stated in Hall v State of NSW [2014] NSWCA 154 at [31], the cases that describe the task under s 16 as “discretionary” are to be understood in the context of the statement in Dell v Dalton at 533 that the assessment involves matters of “opinion, impression, speculation, and estimation”. The reasoning in these cases is that given that the applicable legal criteria for an assessment under s 16 permit an assessment that is “neither scientific nor normative” and involves matters of “opinion, impression, speculation, and estimation”, the Court will not intervene in the assessment as to the appropriate proportion of a most extreme case, except on well-established grounds that the judge has in some way mistaken the facts or the legal principles to be applied or otherwise demonstrated error, which may be discernible only on the basis that the result is outside a reasonable range.

170. Other authorities favour the correctness standard of appellate review, that is, a determination under s 16(2) is reviewable in accordance with the principles in Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9, rather than House v The King (1936) 55 CLR 499; [1936] HCA 40. See Berkeley Challenge Pty Ltd v Howarth [2013] NSWCA 370 at [13] (Basten JA); Hall v State of NSW at [28]-[32] (Leeming JA, Meagher JA and McDougall J agreeing); McKenzie v Wood [2015] NSWCA 142 at [21] (the Court).

171. In White v Redding [2019] NSWCA 152, after referring to Minister v SZVFW; Macfarlan JA reviewed Hall v State of NSW, McKenzie v Wood and Hornsby Shire Council v Viscardi and concluded (at [26]) that the test for establishing judicial error with respect to an assessment of damages for non-economic loss under s 16 of the Civil Liability Act is the correctness standard of review in Warren v Coombes because s 16 calls for a decision where there is one correct answer, or adopting the language of Gageler J in Minister v SZVFW at [49], the conclusion for which s 16 calls demands “a unique outcome”. I disagreed with Macfarlan JA and concluded at [74] that the appropriate standard of appellate review is the test referred to at [169] above. White JA agreed with my opinion on the appropriate standard of appellate review.

172. It should be immediately said that given the “intrinsically imprecise nature of the statutory task” under s 16, in many cases nothing will turn upon the different formulation of the applicable principles of appellate review: Hall v State of NSW at [32] (Leeming JA).

173. In the present case, whichever approach is taken, the primary judge’s assessment cannot stand. No findings were made, nor reasoning process given, with respect to the relevant elements of non-economic loss, here, pain and suffering and loss of amenities of life. In finding that there had been a permanent injury which had continued and caused disability, his Honour failed to make findings as to the precise nature of the injury and the disability and did not grapple with the significance of Mr Thornbury’s pre-existing conditions of congenital canal stenosis and obesity.

174. His Honour’s assessment of the degree of severity of non-economic loss should be set aside and that issue determined on the retrial on damages.

Cross-appeal

175. Given the outcome of the appeal, it is not necessary to address grounds 2, 3 and 4 of Mr Thornbury’s cross-appeal directed to challenging the dismissal of Mr Thornbury’s claim against the Treuers.

Conclusion, costs and orders

176. Mr Lloyd’s appeal on liability has failed, while his appeal on damages has succeeded. The cross-appeal by Mr Thornbury should be dismissed.

177. The proceedings should be remitted to the District Court for a rehearing on damages. An order should also be made that the issue of damages be referred to mediation.

178. As to costs in this Court, rather than make separate orders for costs in favour of each party reflecting the extent of their success, it is preferable to set off the appropriate costs orders, taking a broad brush view of the time spent on liability and damages. On my estimation, the majority of the written submissions and oral argument, approximately 70 per cent, was directed to the issue of liability. Mr Lloyd should pay 40 per cent of Mr Thornbury’s costs in this Court, and Mr Lloyd should pay the costs of the Treuers in this Court.

179. As to the costs of the hearing below, as between Mr Thornbury and the Treuers, costs should follow the event of Mr Thornbury’s unsuccessful claim against the Treuers.

180. As between Mr Lloyd and Mr Thornbury, the appropriate order is that the costs of the first hearing should abide the outcome of the rehearing on damages. Such costs include any application by Mr Thornbury that the costs to be paid by Mr Lloyd to Mr Thornbury include the costs which Mr Thornbury has to pay to the Treuers (a Bullock order – see Bullock v London General Omnibus Co [1907] 1 KB 264) or that Mr Lloyd be ordered to pay the costs of the Treuers (a Sanderson order – see Sanderson v Blyth Theatre Co [1903] 2 KB 533).

176. With respect to the first and second cross-claims, the Treuers and Mr Lloyd agreed in this Court that the cross-claims should be dismissed with no order as to costs. Such an order should be made.

177. Accordingly, I propose the following orders:

1. Appeal allowed, in part, on damages and is otherwise dismissed.

2. Set aside order 1 made by the District Court on 31 August 2018 and in place, order:

1. Judgment for the plaintiff against the second defendant with damages to be assessed.

2. The plaintiff’s claim against the first defendant is dismissed.

3. The plaintiff to pay the first defendant’s costs of the proceedings.

4. The first cross-claim and the second cross-claim are each dismissed with no order as to costs.

3. Remit the proceedings to the District Court for a rehearing on the assessment of damages.

4. Order that the issue of damages be referred to mediation before any rehearing takes place on the assessment of damages in the District Court.

5. Cross-appeal dismissed.

6. The appellant (Mr Lloyd) pay 40 per cent of the costs of the first respondent (Mr Thornbury) in this Court, and to have a certificate under the Suitors’ Fund Act 1951 (NSW) in respect of such costs if eligible.

7. The appellant (Mr Lloyd) pay the costs of the second respondent (the Treuers) in this Court.

8. Costs of the proceedings below as between Mr Thornbury and Mr Lloyd, including any application for a Bullock or Sanderson order, to abide the outcome of the rehearing on damages.

183. WHITE JA: I agree with Gleeson JA.

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Decision last updated: 25 June 2019