McDonald v Moore
[2003] WASCA 21
•26 FEBRUARY 2003
McDONALD -v- MOORE [2003] WASCA 21
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASCA 21 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:51/2002 | 16 OCTOBER 2002 | |
| Coram: | MURRAY J ANDERSON J TEMPLEMAN J | 26/02/03 | |
| 30 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed Damages reduced from $882,885 to $738,199 | ||
| B | |||
| PDF Version |
| Parties: | DONALD ALEXANDER McDONALD PATRICIA ELSPETH MOORE |
Catchwords: | Negligence Personal injuries Motor vehicle accident Assessment of damages Whether assessment took sufficient account of problems which were treatable Adequacy of reasons Whether assessment proceeded on correct factual foundation Whether allowance for loss of amenities excessive Whether amounts for past and future earning capacity excessive Relevance of payments by insurer under loss of income policy |
Legislation: | Motor Vehicle (Third Party Insurance) Act 1943, s 3C(2), s 3C(3) |
Case References: | Bradburn v Great Western Railway Co (1874) LR 10 Exch 1 Federal Commissioner of Taxation v Scully (2000) 169 ALR 459 Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377 Graham v Baker (1961) 106 CLR 340 Hendrie v Rusli [2000] WASCA 249 McCamley v Cammell Laird Shipbuilders Ltd [1990] 1 WLR 963 National Insurance Co of New Zealand v Espagne (1961) 105 CLR 569 Wylde v Aristondo-Arriaza, unreported; FCt SCt of WA; Library No 970359; 23 July 1997 Fane v Smart [2002] WASCA 62 Gamser v Nominal Defendant (1977) 136 CLR 145 Gibson v Smith, unreported; FCt SCt of WA; Library No 970317; 19 June 1997 Haines v Bendall (1991) 172 CLR 60 Husher v Husher (1999) 197 CLR 138 Lloyd v Faraone (1989) WAR 154 Osborne & Co v Anderson [1905] VLR 427 SGIC v Hitchcock, unreported; FCt SCt of WA; Library No 970089; 11 March 1997 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : McDONALD -v- MOORE [2003] WASCA 21 CORAM : MURRAY J
- ANDERSON J
TEMPLEMAN J
- Appellant (Defendant)
AND
PATRICIA ELSPETH MOORE
Respondent (Plaintiff)
Catchwords:
Negligence - Personal injuries - Motor vehicle accident - Assessment of damages - Whether assessment took sufficient account of problems which were treatable - Adequacy of reasons - Whether assessment proceeded on correct factual foundation - Whether allowance for loss of amenities excessive - Whether amounts for past and future earning capacity excessive - Relevance of payments by insurer under loss of income policy
Legislation:
Motor Vehicle (Third Party Insurance) Act 1943, s 3C(2), s 3C(3)
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Result:
Appeal allowed
Damages reduced from $882,885 to $738,199
Category: B
Representation:
Counsel:
Appellant (Defendant) : Mr J G Staude
Respondent (Plaintiff) : Mr T H Offer
Solicitors:
Appellant (Defendant) : John G Staude
Respondent (Plaintiff) : Trewin Norman & Co
Case(s) referred to in judgment(s):
Bradburn v Great Western Railway Co (1874) LR 10 Exch 1
Federal Commissioner of Taxation v Scully (2000) 169 ALR 459
Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377
Graham v Baker (1961) 106 CLR 340
Hendrie v Rusli [2000] WASCA 249
McCamley v Cammell Laird Shipbuilders Ltd [1990] 1 WLR 963
National Insurance Co of New Zealand v Espagne (1961) 105 CLR 569
Wylde v Aristondo-Arriaza, unreported; FCt SCt of WA; Library No 970359; 23 July 1997
Case(s) also cited:
Fane v Smart [2002] WASCA 62
Gamser v Nominal Defendant (1977) 136 CLR 145
Gibson v Smith, unreported; FCt SCt of WA; Library No 970317; 19 June 1997
Haines v Bendall (1991) 172 CLR 60
Husher v Husher (1999) 197 CLR 138
Lloyd v Faraone (1989) WAR 154
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Osborne & Co v Anderson [1905] VLR 427
SGIC v Hitchcock, unreported; FCt SCt of WA; Library No 970089; 11 March 1997
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1 MURRAY J: I have had the advantage of reading in draft the reasons to be published by Templeman J. I agree with them and with the orders his Honour proposes.
2 ANDERSON J: I agree with the judgment of Templeman J and with the orders which he proposes. There is nothing I can usefully add.
3 TEMPLEMAN J: Dr Patricia Elspeth Moore, who is the respondent to this appeal, sustained head injuries in a motor vehicle accident in Western Australia on 10 March 1994, when she was holidaying here. Dr Moore was then 37 years old and was practising as a general medical practitioner in Newcastle, New South Wales.
4 Dr Moore brought an action in negligence in the District Court against the driver of the motor vehicle, who was then her fiancé and is now her husband. He is, nominally, the appellant, but his insurers have the conduct of the matter. Liability was admitted. The action proceeded to trial on the issue of quantum only.
5 In her statement of claim, Dr Moore claimed damages flowing from her "continuing and permanent disabilities as a result of the accident". These were said to include:
" … expressive aphasia, fatigue, memory loss, poor concentration, reduced verbal fluency and an impaired attention span."
6 (It is not clear what, if anything, the complaint about reduced verbal fluency was intended to add to that of aphasia).
7 In his defence, the appellant made no admission about any of these matters. However, Dr Moore gave evidence that she suffered from these problems: and medical evidence was given on her behalf, to the effect that they were caused by permanent brain damage.
8 The learned trial Judge held that Dr Moore had suffered brain damage which, although it did not prevent her from practising medicine, severely restricted her ability to do so. The Judge awarded damages to Dr Moore as follows:
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The accident, and its immediate aftermath
10 It was common ground that the accident happened after the motorcar Dr Moore had been driving stalled on a hill. The appellant then took control and attempted to roll the car back onto the verge. While he did so, Dr Moore sat in the front passenger seat. The appellant lost control of the car, which rolled back down the hill and hit a tree. On impact, Dr Moore suffered a moderate to severe head injury, and soft tissue injuries.
11 The medical record tendered at the trial, disclosed that Dr Moore was reported to have lost consciousness for about 10 minutes after the accident, which had occurred at about 5 or 6 pm on 10 March 1994. She was admitted to Augusta hospital, where she stayed overnight under the care of Dr M J Williams. She was flown to Perth on the following day, by the Royal Flying Doctor Service.
12 In Dr Williams' referral letter, he referred to Dr Moore as remaining in a state of cerebral irritation: "She is quite disoriented, confused and regressive. She will not permit anyone to touch her, and any attempt to take her blood pressure or to suture her lacerated forehead is met with physical aggression …. She appears to have no cognisance of her situation. She does not even recognise her boyfriend …".
13 Those symptoms persisted at Royal Perth Hospital. On admission, Dr Moore did not know her name, or where she was. She did not know the time and had no recollection of recent events. She progressed slowly
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- from being confused to being oriented, some 36 hours after the accident. A CT scan of Dr Moore's head, on 11 March, showed a small number of petechial haemorrhages. A follow-up scan two days later showed no change.
14 By 14 March, the hospital reported "no significant cognitive defects apparent. Day to day memory intact. Patient feels concentration still is improving".
15 Dr Moore was discharged on 15 March 1994. A letter of referral from a neurosurgical medical officer at Royal Perth Hospital to a doctor in Newcastle stated that Dr Moore had "essentially fully recovered".
16 Consistently with the medial records of confusion and disorientation, it was Dr Moore's evidence that her first recollection after the accident, was waking up in Royal Perth Hospital about three days later. She said she then experienced a dreaming sensation, which persisted for at least four to five days. Although Dr Moore returned to New South Wales about a fortnight after the accident, she was still suffering from bruising, headaches, double vision and low back pain. All of these symptoms had resolved by about three or four months after the accident. However, Dr Moore soon found that she had lost the ability to concentrate and had become very forgetful. Despite that, she returned to her medical practice, on a part-time basis, about a month after the accident. It was too soon: but she did so because she was in a two-doctor practice. The practice, with Dr Anand Kumar, had no contingency plans for the situation which had arisen as a result of Dr Moore's accident.
17 On her return to Newcastle, Dr Moore consulted Dr Kumar. He referred her to Dr A J Bookallil, a neurosurgeon. In a report dated 10 June 1994 to the State Government Insurance Commission, Dr Bookallil said that Dr Moore "has had a severe head injury with petechial haemorrhages on a CT scan". He continued:
" … she may need to have psychological assessment if she has ongoing problems with memory, concentration and speech. Psychological assessment could well demonstrate intellectual deterioration as a result of the accident. I think the chances are that she will make a complete recovery. At this stage I do not think that the claim is capable of finalisation as I do believe that everyone needs to be certain that she has not suffered any impairment of intellect as a result of the injury and I think from
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- that point of view she probably does need to have a psychological assessment."
- That was, as the trial Judge said, a prophetic statement.
18 It was Dr Moore's evidence that on her return to practice, she realised she had suffered a substantial impairment of her short-term memory. This required her to take particular care in dealing with patients, because she would often lose the thread of a conversation, particularly if distracted. Dr Moore found she had to concentrate to a much greater extent than previously, and to resort to notes as reminders. As a result, Dr Moore found she was taking much longer over her consultations. The effort of concentration was so exhausting that she was unable to cope with the pre-accident volume of work.
19 A child was born to Dr Moore and the appellant in July 1995. However, this event had no significant effect on her ability to practise. That is because Dr Moore and the appellant had agreed that her practice was of prime importance, and would be her full-time career. The child would be looked after by the appellant or a nanny.
20 Dr Moore's perception of her problems was supported by the evidence of Dr Kumar. He spoke also about Dr Moore's reduced fluency, particularly in relation to medical terminology. However, Dr Moore and Dr Kumar ceased practising together on 31 May 1996. That was because Dr Kumar needed a full-time doctor in his practice. Dr Moore was then able to work only part-time. And because she was seeing fewer patients than previously, she was unable to generate a sufficient income to pay her rent and her share of the practice expenses.
21 Following her departure from Dr Kumar's practice, Dr Moore joined a group practice of about 10 doctors, some of whom worked full-time, while others worked on a part-time basis.
22 Dr Moore said that in the new practice, she was initially working five mornings each week although she was usually unable to complete her list until 2.30 or 3.00 pm, about two hours after the end of her scheduled session.
23 After the birth of a second child in January 1997, Dr Moore was away from the practice for six or seven weeks and then returned to a different schedule. She then worked for two full days and a half-day, so as to fit in with her husband's work roster.
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24 Dr Moore said that because she was not working a regular roster, she made a number of mistakes about her working hours. On some occasions she would attend surgery when not expected. On other occasions, she would fail to appear on the days on which she was supposed to be working.
25 Dr Moore said also that she had a problem about forgetting to write prescriptions or referrals for patients or forgetting to provide them to the patients during the consultation. Dr Moore said also that if she left her surgery for a particular purpose, she would have to talk to herself as a constant reminder of the purpose of her errand.
26 At the beginning of 1998, Dr Moore changed to fixed days, amounting to some two and a half days each week. However, Dr Moore said her workload had increased in the two years before the trial because some full-time doctors had left the practice.
27 Dr Moore explained the strategies she used to cope with her difficulties. These were mainly reminder notes and signs, and a policy of dealing with matters immediately, so that she did not have to rely on her memory or write notes to remind herself to carry out the tasks. When asked, in cross-examination whether there was anything she could not remedy in terms of dealing with her short-term memory problem, Dr Moore answered:
"No, as long as I've got the mobile phone and a piece of paper and pen, I seem to be able to keep up with that. My major problem is my inability to organise myself."
28 Dr Moore did not call any witness from her present practice to corroborate her evidence. However, although Dr Moore's evidence was tested in cross-examination, it was not suggested that she did not have the problems she described.
The principal issue between the parties
29 The real issue between the parties was not the nature of Dr Moore's problems, but their cause and whether they were treatable. This does not emerge from the pleadings but from the submissions made to the learned trial Judge.
30 At trial, the appellant accepted that Dr Moore was entitled to damages, but on the basis that her problems were treatable and that she should have "psychological therapy and cognitive behavioural
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- programmes to help her adjust to the problems that she has". Dr Moore's case was that she had suffered permanent and irreversible brain damage.
The findings made at trial
31 In the reasons for decision, the learned trial Judge referred to Dr Moore's evidence in considerable detail and then went on to review the medical evidence. This included the evidence of four neuropsychologists, three of whom had seen Dr Moore. They were Mr Peter Rawling and Dr Linda Hayward, who gave evidence for Dr Moore, and Dr Wendy Roberts, who gave evidence for the appellant. The fourth expert, Mr Michael Hunt, had commented on the reports produced by the other three. He had not seen Dr Moore himself. Mr Hunt gave evidence for the appellant.
32 The gravamen of the evidence given by Mr Rawling and Dr Hayward, was that Dr Moore had suffered brain damage. This was the cause of her problem: and there was unlikely to be any improvement in her condition. Against that, it was Dr Roberts' opinion that Dr Moore's problems reflected an emotional response to the accident and were therefore treatable. That opinion was shared by Mr Hunt.
33 After an extensive review of the medical evidence, the learned trial Judge said:
"I prefer and accept the evidence of Dr Hayward and Mr Rawling including their test results. The weight of numbers support them for a start and they each now spend more of their time dealing with brain damaged people than does Dr Roberts. No doubt Mr Hunt spends as much time, but he did not do an assessment of the plaintiff, nor did he see the plaintiff. Furthermore, I was impressed with the plaintiff as a witness, the impression that I had was that she was a sensible person who was honestly reporting her position and that she was genuinely distressed by the losses that she had suffered in the motor vehicle accident. And that distress was made harder by the fact that these are not injuries that anyone else can see and to maintain her previous standards causes her enormous fatigue."
34 A little later in the reasons, the Judge referred to the following submission made by counsel for the appellant in relation to Dr Moore's problems:
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- "It's a situation that can be addressed and remedied and if a person believes that they have got a head injury and every time they forget where their car is or forget to get the vaccine from the fridge they think it's because they've got a head injury, then it does become a disabling and intrusive feature of their health."
35 As to that, the Judge said:
"Since the plaintiff is said to have no brain damage, I am not exactly sure what it is she is said to be reacting to since she has no injury. I do not accept that this particular plaintiff has convinced herself that she has brain damage even though she has not, and is acting accordingly. She acts the way she does because of the brain damage.
Apart from Dr Robert's evidence, there is nothing in the evidence, the plaintiff's past history or her presentation in court to lead me to the finding that this confident, practical general practitioner has, for no good reason, convinced herself that she has brain damage and is acting accordingly. Unless she makes notes and lists and concentrates every moment, it is not that she may not remember, she will not remember: [sic] She lives every moment the way the rest of us live in times of intense concentration and, if she does not, she cannot maintain her life as it was. No one can maintain intense concentration every moment without becoming extremely fatigued. It is also the case that if she does not maintain the intense concentration, she cannot, as she says, "retrace her tracks". For the first years after the accident, the plaintiff did put in the same hours, even more on occasions in an endeavour to maintain her previous workload, but the physical strain was simply enormous and could not continue.
I accept that she will never again be able to work at the level she would have been able to work had she not had the accident and her damages will be assessed accordingly."
36 The ultimate finding is, of course, based on more than the Judge's preference for the evidence of Mr Rawling and Dr Hayward over that of Dr Roberts and Mr Hunt. However, that preference was crucial to the decision.
37 When a trial judge is faced with conflicting expert evidence, it is not sufficient for the judge simply to express a preference for one view or the
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- other. It is necessary for the judge to give reasons for the preference. This point is made very clearly in Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377. There, a County Court Judge tried a case in which one of the issues was whether the plaintiffs' property was affected by structural movement. The Judge heard expert evidence from witnesses called by the plaintiffs and the defendants respectively. This occupied some four days of an eight day trial.
38 In his reasons for judgment, the County Court Judge reviewed the evidence carefully, and in some detail. However, on the crucial issue, the Judge said only that he had had the advantage of hearing the witnesses and seeing the way they reacted to the questions they were asked. He concluded:
"Having done so, I prefer the expert evidence that was given for the defendants to that which was given for the plaintiffs."
39 The plaintiffs appealed on the sole ground that the Judge had failed to give reasons for his decision. They sought an order that the judgment be set aside and a new trial ordered. The appeal succeeded, for reasons which appear sufficiently from the headnote:
"Held, allowing the appeal, that a judge was under a duty to explain why he had reached his decision; that the scope of what was required to fulfil that duty depended on the subject matter of the case; that where reasons and analysis were advanced on either side a judge had to enter into the issues canvassed and explain why he preferred one case over the other; that failure to supply reasons in those circumstances offended against requirements inherent in the duty of showing fairness to both parties and of producing a decision soundly based on the evidence and constituted a good free-standing ground of appeal; that, accordingly, since the judge heard reasoned analysis and accepted the defendants' expert evidence, he was under a duty to supply reasons in the form of a coherent rebuttal of the plaintiffs' expert evidence; and that his failure to do so justified setting aside his judgment and remitting the case for retrial."
40 In the present case, I have considerable doubt about the adequacy of the reasons of the learned trial Judge for preferring the evidence of Mr Rawling and Dr Hayward, over that of Dr Roberts and Mr Hunt. The "weight of numbers" is not necessarily an indication of the quality of the evidence. And although the Judge accepted the evidence of Dr Moore,
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- that evidence cannot assist in resolving the difference in expert opinion. As I have said, there was no dispute about the existence of the problems affecting Dr Moore, or about the distress which they cause her. The question on which the experts differed was the cause of the problems and the prognosis.
41 Although I have reservations about the adequacy of the reasons of the learned trial Judge, the point was not taken on appeal and it is not necessary, therefore to explore it any further. It is sufficient to say that (subject to one reservation to which I shall refer below) the finding that Dr Moore "acts the way she does because of the brain damage" was clearly open to the Judge on the evidence adduced at trial.
42 Against that background, I turn to the grounds of appeal.
Ground 1
"1. The appellant (defendant) respectfully contends that the assessment of damages herein miscarried, resulting in an overall award of damages which is grossly disproportionate to the injuries actually suffered and their consequences, for the reasons that:-
(a) the learned trial judge misapprehended the significance of the issue with respect to the conflict of neuropsychological opinion and reduced the question of brain damage to an 'either/or' proposition (Reasons, para 95), without proceeding to make the necessary qualitative and quantitative findings as to the nature and extent of the respondent's (plaintiff's) injury and disability, and failed altogether to take into account the effect of the psychological consequences of injury which the appellant (defendant) contended were amenable to appropriate therapy, such as the respondent (plaintiff) admitted undergoing (but of which no evidence was given), and manageable by reasonable strategies which the respondent (plaintiff) was actually employing.
(b) the learned trial judge failed to take into account at all the evidence of two specialist rehabilitation physicians, Dr Kim Fong and Dr John Ker, to the
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- effect that the respondent (plaintiff) had made an excellent recovery from her initial head injury, that she was competent to practise as a general medical practitioner without risk to her patients, that her disabilities were manageable with appropriate strategies, that her perceived problems were common to many people who were balancing professional and family life;
- (c) the learned trial judge's findings wrongly excluded any other reason for the respondent's (plaintiff's) professed memory problems and fatigue when the evidence as a whole strongly supported the finding that the instances of forgetfulness complained of were of an organisational nature and did not create unacceptable risks to the respondent (plaintiff) or her patients, or cause significant disruption to the respondent's (plaintiff's) professional and domestic life, and the trial judge failed to evaluate the significance of these problems in objective and relative terms,
- and consequently the assessment proceeded upon an incorrect factual foundation."
43 The appellant contends in ground 1(a), that the learned trial Judge reduced the question of brain damage to an "either/or" proposition. I do not accept that is so. The view attributed to the Judge is that Dr Moore's symptoms were caused either by brain damage, or some emotional response to a brain injury which had long since healed. But that was not the Judge's view: the Judge appreciated that the issue is by no means as clear-cut. This emerges clearly from a passage in Dr Hayward's final report of 26 September 2001, which the Judge set out, as follows:
"In her final report of 26 September 2001, Dr Hayward said:
'It seems most likely to me that Dr Moore's presentation is contributed to by a number of potential factors including emotional reaction to her cognitive problem. The fact that radiological evidence exists for injury to the left frontal lobe, that Dr Moore's difficulties did not exist prior to the accident, Dr Moore's self-reported problems and other
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- observations of the changes in her outlined in various reports, that test data in my opinion reveals difficulties consistent with her self-reported problems all suggest to me that they are most probably a mixture of direct and secondary consequences of the accident. According to Lezak (1995): 'Few brain damage patients experience personality changes that are plainly either direct consequences of the brain injury or secondary reactions to impairment and loss. For most part, the personality changes, emotional distress and behaviour problems of brain damaged patients are the product of extremely complex interactions involving their neurological disabilities, present social demands, previously established behaviour patterns, and ongoing reactions to all of those.'
Further 'it is rare to find a case in which the behavioural manifestations of brain disease are uncomplicated by the patient's emotional reaction to the mental changes and consequent personal and social disruption.'
She goes on to say that it is rare for a person to 'present with clear cut symptoms of brain damage without some functional contribution to the picture'."
44 Having accepted Dr Hayward's evidence, the Judge was well aware that Dr Moore's problems were probably the result of "direct and secondary consequences of the accident". The important point, however, is that Dr Moore's cognitive difficulties, which were the fundamental, underlying cause of the problems, were not treatable.
45 Dr Hayward recognised (as did other experts) that Dr Moore "could experience worsening of psychological state, depending on how she copes with ongoing agitation …". In the same report (of 26 September 2001) Dr Hayward said that if Dr Moore's mood deteriorated, she might well need to see a psychiatrist or a psychologist.
46 The situation is, therefore, that before the accident Dr Moore, was (on her own, and on Dr Kumar's unchallenged evidence) an extremely able general practitioner. In the accident, she suffered a moderate to severe head injury, which caused petechial haemorrhages in the left frontal lobe. On her return to practice following the accident, Dr Moore complained of several problems, many of which have persisted largely unabated. She became a somewhat plodding, disorganised practitioner,
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- who found it impossible to cope safely with anything more than part-time work: and even then, only with difficulty. The learned trial Judge accepted Dr Moore's evidence about the nature and extent of her problems. They are consistent with injury to some part of the frontal lobe. And on the evidence of Dr Hayward and Mr Rawling, which the Judge accepted, Dr Moore's underlying condition is untreatable.
47 This conclusion answers the appellant's contention that the learned trial Judge did not make "the necessary qualitative and quantitative findings" as to the nature and extent of Dr Moore's injury and disability. Such findings were not "necessary", once it was found that the problems were all caused directly or indirectly, by brain injury.
48 The applicant then contends that Dr Moore admitted undergoing therapy for "the psychological consequences of the injury". This is a reference to Dr Moore's evidence in cross-examination, when she said she had consulted Professor Trevor Wareing, a clinical psychologist, on a few occasions in the year preceding the trial. Dr Moore said:
"I've seen him mainly for understanding of some of my anxiety behaviours and my lack of confidence, and just to get a different perspective on how I've been interpreting things for myself."
49 Dr Moore went on to say, however, that anxiety was a problem of recent onset, which really started after April 2001, following the vacation of an earlier trial date. This came about because of the serious illness of her then counsel. From July 2001, Dr Moore had been taking an anti-depressant drug known as Cipramil. She was suffering from anxiety and loss of confidence.
50 I accept that these more recent problems of anxiety, loss of confidence and depression may well be treatable. Indeed, they are the kind of problems which Dr Hayward foreshadowed in her report of 26 September 2001, to which I have already referred. However, these problems are not the subject of the claim for damages. Despite that, as I shall explain in due course, the learned trial Judge appears to have taken these new problems into account when assessing damages. This is the reservation I have about the Judge's finding that Dr Moore acts the way she does because of brain damage.
51 The final element of this ground of appeal is the contention that the learned trial Judge failed to take account of the fact that Dr Moore was able to manage her problems (essentially, her inability to organise herself) by the strategies she was actually employing.
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52 This contention is also unfounded, in my view. As is clear from the passage in the Judge's reasons which I have set out above, the Judge accepted that unless Dr Moore made lists, and maintained a high level of concentration, she would not be able to cope. In other words, the Judge accepted that Dr Moore is able to cope by employing these strategies.
53 The point is, however, that although Dr Moore is able to cope in this way, she is no longer able to function at the very high level of ability she enjoyed before the accident, in her professional and personal life.
54 In ground 1(b), the appellant complains about the failure of the learned trial Judge to take account of the evidence of two specialist rehabilitation physicians, Dr Kim Fong and Dr John Ker.
55 Dr Fong, who gave evidence for the appellant, saw Dr Moore on 22 March 1999 and 11 December 2000. Dr Fong expressed the view in a report dated 19 April 1999 that:
" … Dr Moore should be considered capable of performing adequately as a GP for at least 35 hours per week."
56 This opinion was based largely on Dr Moore's performance on her return to work after the accident, but before the birth of her first child in July 1995. In that period Dr Moore worked 30 hours per week, over five less than full days. However, Dr Fong said in cross-examination that Dr Moore told him she was "struggling to cope with the work load": and he doubted whether she would continue to work long hours if that would compromise the care of her patients.
57 It was Dr Moore's evidence that she could not cope with the demands made of her in the practice with Dr Kumar. She felt that patient care would be compromised.
58 Given that the learned trial Judge generally accepted Dr Moore's evidence, Dr Fong's opinion of her capabilities seems to me to carry little weight.
59 Dr Ker, who is a consultant physician in rehabilitation medicine, saw Dr Moore on 22 March 1999, 22 May 2000 and 4 September 2001. It was Dr Ker's opinion that Dr Moore would be unable to increase her workload: and that her capacity is reduced permanently to part-time work. Dr Ker thought that any attempt by Dr Moore to increase her hours would be likely to lead to inefficiencies in the strategies she had adopted to cope
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- with her short-term memory problem and would therefore be likely to compromise her ability to deal competently with her patients.
60 In cross-examination, Dr Ker was asked why he thought Dr Moore would be unable to work for longer than the equivalent of three days per week. He said, in effect, that Dr Moore's history was the best indicator. She found she could not work for longer periods without becoming increasingly tired, and hence, more forgetful.
61 Dr Ker said also that there was a question whether Dr Moore did want to work full time, "because of normal family living issues". That question was, however, answered by Dr Moore, who said that she would work full-time if she was able to do so, despite family commitments. The learned trial Judge clearly accepted that evidence.
62 Having considered the reports produced by Dr Fong and Dr Ker and the evidence each gave during the trial, it seems to me that, taken together, their evidence tends to support Dr Moore's case, given that the learned trial Judge accepted her evidence.
63 It is not necessary for a trial Judge to refer to every piece of evidence. In the circumstances of this case, I am not persuaded that the fact that the Judge made no reference to the evidence of Dr Fong or Dr Ker is of any significance.
64 Turning to ground 1(c), I do not accept the appellant's assertion that Dr Moore's forgetfulness was of "an organisational nature". It is true that Dr Moore had difficulty in organising herself in both her professional and her private life. However, as the learned trial Judge found, the problem was caused by the brain damage she had sustained in the accident.
65 The learned trial Judge evaluated the significance of Dr Moore's problems, in terms including loss of income, future economic loss and loss of amenities. Whether the damages awarded under those heads was "grossly disproportionate to the injuries actually suffered", as the appellant contends, is the question raised by the other grounds of appeal. However, in my view the assessment did proceed on the correct factual foundation.
Ground 2
"2. The learned trial judge's allowance of $75,000.00 for loss of amenities, such sum representing a proportional severity of injury of 32.3% of a most extreme case for the
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- purposes of Section 3C of the Motor Vehicle (Third Party Insurance) Act 1943, was manifestly excessive, beyond the range of a sound discretionary judgment and wrong for the reasons that:-
- (a) the relevant factual findings (Reasons, p108) as to the effect of the respondent's (plaintiff's) injuries overstated the effect of the respondent's (plaintiff's) evidence as tested in cross-examination, took no or insufficient account of the expert evidence, and were otherwise unsupported by any evidence of family members, friends or professional colleagues.
(b) the uncritical and complete acceptance of the respondent's (plaintiff's) self-serving evidence of the effects of her injuries was, of itself, an unsafe basis upon which to assess such damages in all the circumstances of the case;
(c) the respondent (plaintiff) having failed to call her treating psychologist, the evidence did not permit a finding that 'her confidence in herself and as a working person generally has deteriorated to such an extent that by July 2001 she was taking an anti-depressant and attending upon a psychologist' or that 'there is no possibility of the respondent's (plaintiff's) mental capacity improving'; and
(d) on the contrary, the objective evidence showed a substantial and quick recovery with no physical or neurological disability, minimal treatment, no impairment of professional competence and no apparent compromise of her capacity for marriage and family life."
66 The maximum amount of damages for non-pecuniary loss which it was open to the Court to award pursuant to s 3C(2) of the Motor Vehicle (Third Party Insurance) Act 1943, was $230,000. But, by s 3C(3) that amount may be awarded "only in a most extreme case". In a less serious case, s 3C(2) limits the amount of damages to "a proportion, determined according to the severity of the non-pecuniary loss, of the maximum amount that may be awarded".
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67 In Hendrie v Rusli [2000] WASCA 249, this Court followed and applied its earlier decision in Wylde v Aristondo-Arriaza, unreported; FCt SCt of WA; Library No 970359; 23 July 1997. In that case, as Murray J pointed out in Hendrie v Rusli (supra) at par 18:
"It was accepted that the task was to find the right proportion between a most extreme case and the present. As to what might constitute a most extreme case, it was appreciated that a number of different types of cases of horrific injury involving extreme pain, loss of enjoyment of life, physical disability and the like might fall into that class. Paraplegia would certainly do so, particularly in a young person who might have an unaffected expectation of life and many years of disability and suffering ahead. As to how the right proportion is to be struck, appellate courts have simply reminded trial Judges that damages will continue to be awarded by reference to common law principles of assessment, and that there is, particularly in respect of non-economic loss, a wide measure of discretion."
68 Dr Moore's injuries clearly fall far short of the kind of "horrific injury" contemplated by Murray J in this context. The learned trial Judge's assessment of $75,000 represents 32.6 per cent of the maximum (not 32.3 per cent, as the appellant contends). The Judge made that assessment in the following way:
"The plaintiff's loss is quite considerable because she now has brain damage which means that she cannot perform either at work or socially in the way in which she did before and in the way in which she would have expected to for the future. Her hobbies have been affected in that she cannot read biographies or complicated stories, she previously liked to sketch but now she cannot organise a picture in the way in which she used to and the difficulties with her memory are enormous. She no longer feels comfortable in groups because her concentration is poor and she cannot concentrate on two things at once, she lacks confidence in the information she has to make conversation and has a tendency to withdraw. Her confidence in herself and as a working person generally has deteriorated to such an extent that by July 2001, she was taking an anti-depressant and attending upon a psychologist. There is no possibility of the plaintiff's mental capacity improving and it is a devastating loss. In addition, she has some physical disabilities which have, no doubt, faded into insignificance
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- given her major concerns with the effects of the brain damage. Nevertheless, she does have continuing problems with her neck and, on occasions, the pain goes down into her arm and elbow and sometimes as far as her palm. She gets headaches with this as well. In the circumstances, I assess her loss of amenities at $75,000." (my emphasis)
69 In my view, it is apparent from the part of this passage which I have italicised, that the Judge fell into error. That is because, as I have noted above, Dr Moore made no claim for loss of confidence, anxiety or depression. There is no doubt that Dr Moore suffers from these problems, but they are amenable to the treatment which she was receiving when the action came to trial. The finding made by the learned trial Judge that there was "no possibility of (Dr Moore's) mental capacity improving" must therefore be taken to exclude the symptoms of loss of confidence and depression. These are matters which have no bearing on Dr Moore's "mental capacity" in any event.
70 I therefore consider that it was not open to the learned trial Judge to assess damages for non-pecuniary loss which included an element for loss of confidence and depression. In so doing, the Judge's discretion miscarried. It is therefore necessary for this Court to exercise the discretion anew.
71 In performing that exercise, I do not accept the appellant's contention that the Judge overstated Dr Moore's evidence. Nor do I think it appropriate to criticize that evidence as "self-serving", nor to criticize the Judge for accepting it, in the absence of supporting evidence. The Judge was entitled to accept Dr Moore's evidence. Although it may have been forensically risky not to call supporting evidence, it is relevant to note that none of the medical experts who had assessed Dr Moore expressed any doubt that her problems were genuine. All those experts seem to have been impressed by Dr Moore, as the Judge was. I am not persuaded, therefore, that grounds 2(b) or 2(d) are made out.
72 It was submitted by counsel for Dr Moore, on the hearing of the appeal, that the severity of her non-pecuniary loss is increased by reason of the dramatic effect on her life brought about by her injury, and the insight she has into her current problems.
73 While I accept that the effect which an injury has on a plaintiff is a matter which it is proper to take into account in assessing the appropriate proportion of the maximum amount that may be awarded, I think that
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- 32.6 per cent is too high in all the circumstances of this case. I accept the appellant's submission that the damages should be in the lowest quartile. I would therefore reduce Dr Moore's damages for non-pecuniary loss from $75,000 to $50,000.
Ground 3
"3. The learned trial judge erred in assessing past loss of earning capacity ($316,482.00, plus $50,004.00 interest)(Reasons, para 102) by:-
(a) adopting a figure of $100,000 per annum gross as the measure of pre-accident earning capacity, instead of a net figure after tax and Medicare levy of $60,784.00;
(b) comparing expected income on a gross basis with actual income on a net basis;
(c) not including in the calculation of actual earnings the amounts voluntarily paid annually by way of superannuation fund contributions;
(d) alternatively, not comparing both expected and actual earnings in gross and applying the relevant marginal tax rate to the difference;
(e) not making any allowance whatsoever for childbearing and nurturing notwithstanding the birth of two children following the accident, events which were clearly discernible on the available empirical evidence as having affected the respondent's (plaintiff's) work;
(f) finding erroneously that the respondent (plaintiff) left Dr Kumar's practice for other than commercial reasons unrelated to the injuries in question (Reasons, para 98) when the evidence was clear that the reason was that the respondent (plaintiff) and Dr Kumar failed to agree on financial matters;
(g) erroneously failing to find that the respondent's (plaintiff's) decision to practise at the Bunker
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- Road Medical Practice was made for reasons other than the effects of her injuries;
- (h) erroneously failing to find that the respondent's (plaintiff's) earnings in the first two financial years following the accident disclosed net annual losses not exceeding $15,000, and assessing past loss on that basis;
(i) finding erroneously that the respondent (plaintiff) could not cope with the level of work she actually performed in the first two years following the accident (Reasons, para 96);
- and in consequence arrived at a wholly erroneous estimation of the respondent's (plaintiff's) actual loss of earnings."
74 The learned trial Judge found that but for the accident, Dr Moore would probably have continued to work with Dr Kumar and increased her income: par [98]. That finding was open on the evidence.
75 The Judge assessed Dr Moore's loss down to the trial, as follows:
"I have started at $100,000 and added 3 per cent per annum to June 2001, giving a total of $47,333. From that, I have deducted the $261,235.87 the plaintiff actually earned, leaving $316,482 to June 2001. On that basis, there is a loss of approximately $844 per week. So from July 2001 to March 2002, there is a further loss of $30,384, giving a total past loss of $316,482. I have allowed interest at 2 per cent for a period of 7.9 years, giving $50,004."
76 The appellant does not contend that there is any error in principle in this approach. Indeed, in his outline of submissions, counsel for the appellant contends that the comparison between Dr Moore's actual and expected income provides "the fairest guide to the effect of (her) injury on her capacity to work".
77 However, I have been unable to discern from the learned trial Judge's figures set out above, precisely how they were calculated. I have therefore recalculated the figures, using the same approach.
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78 The starting point of $100,000 per annum seems to be the average of the gross amounts earned by Dr Moore in the years ended 30 June 1992 and 1993, as disclosed in her income tax returns. These figures were extracted by counsel for the appellant at trial. They became Exhibit C. I am not persuaded that the Judge erred in starting at an income of $100,000 per annum. This seems to me to have been appropriate. Nor do I see any error in using gross income: provided that like is compared with like, and due allowance made for the effect of taxation.
79 There is a large element of speculation in this approach to past loss because it is based on an expected performance of Dr Kumar's practice. Yet, as the Judge observed, Dr Kumar gave no evidence about that: nor was there any evidence about typical earnings of general practitioners. However, the appellant makes no complaint about this in the grounds of appeal.
80 The annual increase of three per cent was presumably intended to take account of inflation. If Dr Moore's income had increased at that rate during the period from the year ended 30 June 1994 to 31 March 2002, then on my calculations, her gross income for that period would have been $897,841.
81 Dr Moore's actual gross income for the years ended 30 June 1994 to 30 June 2001 (including superannuation contributions) was $445,020. Assuming a further $35,000 from 30 June 2001 to 31 March 2002, Dr Moore's actual gross income may be taken as $480,020. Her gross loss on this basis was therefore $417,821, not $316,482 as the Judge calculated it. However, as I have already noted, in assessing damages, the effect of taxation must be taken into account. Most, if not all of the income which Dr Moore has lost, would have been subject to income tax at the highest marginal rate; approximately 50 per cent when the Medicare levy is included.
82 Making some allowance for loss of income when her two children were born, I would have assessed her damages for loss of earning capacity down to the date of trial as $200,000. To this, I would add interest at 3 per cent, for a period of 7.8 years, giving $46,800.
83 Because of the way in which I have assessed damages for past loss, it is unnecessary to consider grounds 3(a) to (e) inclusive. That is because I have subtracted actual gross income from expected gross income: and I have brought superannuation contributions into account. I have had regard to the incidence of taxation: and I have made an allowance for loss
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- of income due to childbirth and nurturing. This is a relatively modest allowance because Dr Moore in fact returned to work quite soon after her children were born.
84 I am not persuaded that grounds 3(f), (g) and (i) are made out. The learned trial Judge clearly accepted Dr Moore's evidence that she left Dr Kumar's practice because she was unable to cope with the work required of her in that practice. This funding was open on the evidence: as were the Judge's findings that the Brunker Road practice gave Dr Moore the flexibility and support she needed in order to cope with the post-accident problems she experienced.
85 It is not necessary to deal with ground 3(h). It contains an incorrect assertion about Dr Moore's post-accident income. This ground was not pursued in submissions or argument.
Ground 4
"4. The learned trial judge erred in the assessment of future loss of earning capacity $440,399.00)(Reasons, para 103) by:-
(a) erroneously failing to find on the evidence that at the time of the trial the respondent's (plaintiff's) annual income was increasing significantly on a year by year basis and expected to continue to do so;
(b) adopting a figure of $884.00 net per week as the measure of loss which was demonstrably wrong and unsupported by the evidence;
(c) finding erroneously that the respondent's (plaintiff's) problems with work inasmuch as they may be found to be due to the respondent's (plaintiff's) head injury, wee not amenable to therapy;
(d) erroneously failing to find that the respondent (plaintiff) was working five sessions per week over two and a half days, appointing the same number of patients per hour as she did before the accident, and working two other days per week making house calls and preparing medico-legal,
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- social security and insurance reports, as well as completing continuing professional education requirements;
- (e) failing erroneously to make any allowance at all in terms of contingencies or otherwise, for the fact that some modification of working arrangements would likely be necessitated by the respondent's (plaintiff's) responsibilities towards her two children, particularly taking into account the evidence that it was relatively common for female general practitioners with children to work part-time, and that in fact 6 of the 10 practitioners in the respondent's (plaintiff's) practice were working part-time."
86 The learned trial Judge assessed Dr Moore's damages for future loss of earning capacity in the following way:
"For the future, there is a loss of $844 per week for approximately 15 years. On the first scenario put by plaintiff's counsel, it allowed for retirement or a reduction in hours to the present level at age 60. Using a multiplier of 521.8, it gives a future loss of $440,399. [par 103-4]
I have not applied a discount to that. On the one hand, she may still be able to earn a little more in the future than she anticipates. While it is true that if she had not had the accident, she would not have gone to part-time work with the birth of her children: No doubt many women do, but this woman had a husband and father readily available and willing to care for the children, and in 2000, he was made redundant, so it is vital that her career continue to prosper. However, she did have the accident and factoring in two small children no doubt brought to a head her problems because anything that adds to her load must have an outlet somewhere else and she is not in the position of others where she can adapt quickly to a changed situation or have additions to her load. It may be that when the children are older, she could work a little longer but I repeat my finding that she will never again be able to work at the level she would have been able to work at had she not had the accident. On the other hand, but for the accident, she may have earned more and taken
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- on more speciality areas and there is no chance that a woman general practitioner would ever be out of work."
87 In ground 4(a), the appellant contends that Dr Moore's annual income was increasing significantly and was expected to continue in this way. Reference to Exhibit C shows that Dr Moore's gross income (including superannuation) from 1997 to 2001 was as follows:
1997 | $ 29,168 |
1998 | $ 24,281 |
1999 | $ 33,643 |
2000 | $ 48,221 |
2001 | $ 52,371 |
88 In her evidence-in-chief, Dr Moore explained that her increased income in years 2000 and 2001 was due to a heavier workload. This was necessitated by the departure of two full-time female doctors from the practice. In addition, Dr Moore's percentage of gross receipts had increased from 50 to 54.5: and the Medicare payment for aged care health assessment had increased considerably. This evidence was not challenged in cross-examination.
89 Dr Moore said further, in her evidence-in-chief, that the increased workload resulted in her inability to cope properly, causing stress and inefficiency.
90 In cross-examination, Dr Moore said she would not maintain her practice if that put her patients at risk. She had not notified her professional indemnity insurer that she was under any sort of disability. She felt that working two full days and one half day per week was "a manageable risk". This view is supported by the expert opinion which the learned trial Judge accepted.
91 On this basis, I am not persuaded that the whole of the increase in Dr Moore's income in more recent years is a reliable indicator of her future income. Dr Moore said she would wish to reduce her consultations by about one fifth, in order to cope adequately with the workload. This would reduce her income accordingly: but the increase in Medicare payments and standard charges will have a permanent effect.
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92 I would therefore assess Dr Moore's reasonable gross earning capacity, at present, to be $45,000 per annum, working part-time and slowly in a group practice, so as to accommodate the problems caused by her injury. In all the circumstances, I do not think it reasonable to assume that this level of income would increase.
93 Against that, on the learned trial Judge's assessment, Dr Moore should have been earning about $130,000 per annum in Dr Kumar's practice (that is, from a pre-accident starting point of $100,000 per annum, grossed up by 3 per cent per annum). The difference is $85,000, or $1,635 per week. This would need to be reduced to about $800 - $900 per week, to take account of the effects of taxation.
94 The learned trial Judge, apparently by a different route, arrived at a figure of $844 per week as the measure of Dr Moore's future loss. Although it is not clear how the Judge calculated that figure, I am not persuaded that it is "demonstrably wrong", as the appellant contends in ground 4(b). I would not, therefore, disturb the Judge's conclusion.
95 I have already dealt with the appellant's contention in ground 4(c).
96 Ground 4(d) summarises Dr Moore's current working regime. The learned trial Judge did not refer expressly to all of the matters set out in this ground. However, they are reflected in Dr Moore's current income: and that is the basis on which her future loss is assessed. I am not persuaded, therefore, that the omission of some of these matters from the Judge's reasons, discloses any error.
97 The Judge declined to apply a discount to the damages of $440,399 for future loss, for the reasons set out in par [104] of the judgment, which I have quoted above.
98 The appellant challenges that decision in ground 4(c), on the basis that Dr Moore's responsibility to her children would be likely to necessitate "some modification of working arrangements". The learned trial Judge considered that possibility, but rejected it, having accepted Dr Moore's evidence that she had committed herself to full-time medical practice and would have taken steps to realise that ambition. In my view, it was open to the Judge to reach that conclusion on the evidence. I am not persuaded, therefore, that ground 4(c) discloses any error.
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Ground 5
"5. The learned trial judge erred in law in finding that the insurance payments in the sum of $16,000.00 paid to the respondent's (plaintiff's) company should not be taken into account to reduce the respondent's (plaintiff's) damages for economic loss (Reasons, para 105) and should have found that:-
(a) the onus of proof was on the respondent (plaintiff) to establish that such payment should not be taken into account in reducing damages;
(b) on the evidence the payments were not shown to be in the nature of a collateral benefit; and
(c) to the extent that such payments compensated loss of earnings, the respondent (plaintiff) suffered no loss."
"Toward the end of counsels' addresses, an issue arose as to liability insurance that the plaintiff had received. The evidence in relation to this is meagre and, as far as I can work out, there was $16,000 paid to the plaintiff I presume that was gross. The plaintiff's final schedules of damage were calculated on the basis that that is not included in what they say should be deducted as actual earnings, but the defence say that that figure should be deducted. The defence relied upon Graham v Baker (1961) 106 CLR 340 and the plaintiff relies upon Husher v Husher & Anor (1999) 165 ALR 384. In the circumstances of this case, I am not prepared to take that sum into account and I refer to the National Insurance Co of NZ Ltd v Espagne (1960-1961) 105 CLR 569. Further, in this case, I do not know whether it is repayable and I know very little about the nature of the benefit."
100 The evidence was that Dr Moore had established a company known as P Moore Pty Ltd, which employed her, and which had insured against her loss of income by reason of disability.
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101 It is well settled that in an action for damages for personal injuries, no account is to be taken of the proceeds of an accident insurance policy taken out by the plaintiff: Bradburn v Great Western Railway Co (1874) LR 10 Exch 1.
102 In Federal Commissioner of Taxation v Scully (2000) 169 ALR 459, at [33], four members of the High Court, in a joint judgment, referred to passages in the judgment of Dixon CJ and Windeyer J in National Insurance Co of New Zealand v Espagne (1961) 105 CLR 569, to the effect that the benefit of an insurance policy is intended to be enjoyed by the insurer independently of any right of action for damages which the insurer may have against a third party.
103 As the High Court said in Scully, those statements of principle have been approved expressly in later decisions of the Court.
104 In my view, it matters not that the policy of insurance has been effected by an employer, for the benefit of the employee. In McCamley v Cammell Laird Shipbuilders Ltd [1990] 1 WLR 963, the Court of Appeal held that the proceeds of an accident insurance policy should not be deducted from the plaintiff's damages, even though he had been unaware of the existence of the policy, which had been taken out by his employer. The payment was akin to an act of benevolence on the employer's part.
105 The position in McCamley v Cammell Laird Shipbuilders Ltd (supra) is, I think, a fortiori, when, as here, the employer is the alter ego of the employee. It may be inferred that it was Dr Moore who caused her company to effect the insurance: no doubt, effectively, at her expense. Indeed, in her evidence-in-chief, Dr Moore said she had taken out the policy and paid the premiums.
106 This is not a case such as Graham v Baker (1961) 106 CLR 340 (on which the appellant relies) in which an employee has continued to receive remuneration from his employer, notwithstanding illness or accident. In such a case, the remuneration is taken into account in assessing damages, because the employee's injury has not affected his earning capacity.
107 In my view, therefore the learned trial Judge was correct in applying National Insurance Co of New Zealand v Espagne (supra), and not taking the insurance payments into account. This ground of appeal must therefore fail.
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Conclusion
108 For the reasons set out above, I would allow the appeal to a limited extent, as follows:
(1) reducing damages for past loss of income by $116,482, from $316,482 to $200,000;
(2) reducing interest on past loss of income by $3,204 from $50,004 to $46,800;
(3) reducing damages for loss of amenities by $25,000, from $75,000 to $50,000.
109 I would therefore set aside the award of $882,995 and substitute an award of $738,199.
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