McKenzie v Wood

[2015] NSWCA 142

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

McKenzie v Wood [2015] NSWCA 142

Hearing dates:

18 May 2015

Decision date:

18 May 2015

Before:

Ward JA at [1];
Leeming JA at [1];
Sackville AJA at [1]

Decision:

1.  Appeal allowed in respect of grounds 6 and 7, and otherwise dismissed.

2.  Costs to be dealt with upon submissions being made.

3.  Direct that the parties prepare draft minutes of order to reflect the Court’s reasons and that any submissions in relation to the matters identified by the respondent be served within 21 days, with a response from the appellants within 7 days thereafter. If the matter cannot be resolved by agreement, then the matter will be dealt with on the papers.

Catchwords:

DAMAGES - personal injury - liability conceded - challenge to inclusion of cost of hip replacement - plaintiff suffering from early primary osteoarthritis prior to accident - accident caused hip replacement to become urgent - challenge to assessment of non-economic loss - challenge to allowance of 15% for vicissitudes - no appellable error shown to be established - no question of principle

Legislation Cited:

District Court Act 1973 (NSW), s 127
Uniform Civil Procedure Rules 2005 (NSW) Pt 51, rr 51.18, 51.36

Cases Cited:

Berkeley Challenge Pty Ltd v Howarth [2013] NSWCA 370
Gray v Richards (No 2) [2011] NSWSC 1502
Hall v State of New South Wales [2014] NSWCA 154
House v The King (1936) 55 CLR 499
Purkess v Crittenden (1965) 114 CLR 164
Thiering v Daly [2013] NSWCA 25
Warren v Coombes (1979) 142 CLR 531
Watts v Rake (1960) 108 CLR 158

Category:

Principal judgment

Parties:

Brad McKenzie (Appellant)
Mark Wood (Respondent)

Representation:

Counsel:
S Harben SC (Appellant)
A Stone, K James (Respondent)

Solicitors:
McInnes Wilson Lawyers NSW (Appellant)
John McGuire & Associates (Respondent)

File Number(s):

2013/191985

 Decision under appeal 

Court or tribunal:

District Court of New South Wales

Jurisdiction:

Civil

Date of Decision:

3 June 2013

Before:

Murrell SC DCJ

File Number(s):

2012/53231

ex Tempore Judgment

1. JUDGMENT of the COURT delivered by LEEMING JA: On 4 September 2009, the respondent Mr Mark Wood was very badly injured when a front seat passenger in a vehicle accident on a work-related journey. The defendant, now the appellant, was the driver of the other vehicle. Liability was admitted. Following a five day trial, the primary judge delivered careful and full reasons on the following Monday ordering a judgment in the amount of $1,796,450 plus costs. The appeal is confined to particular aspects of her Honour’s assessment of damages.

2. The appeal to this Court is as of right, pursuant to s 127 of the District Court Act 1973 (NSW). Complete success by the appellant on the grounds raised in his notice of appeal would diminish the damages awarded by an amount in the order of $300,000.

3. There were originally nine grounds of appeal. One (ground 8) has been withdrawn, and it is acknowledged that another (ground 9) is wholly derivative upon the remaining grounds. Two others (grounds 6 and 7) have been resolved by agreement. The primary judge correctly applied the law as stated in Thiering v Daly [2013] NSWCA 25 and Gray v Richards (No 2) [2011] NSWSC 1502. However, after the primary judge had given judgment, appeals were allowed from each of those decisions. The agreed consequence is a reduction in the damages of some $21,039. It is convenient to follow the course taken in the appellant’s written and oral submissions and deal with the remaining grounds under three headings: the hip replacement, the award of non-economic loss, and the allowance made for vicissitudes.

The $13,000 hip replacement

4. The first and second grounds of appeal challenge one aspect of the damages: the amount of $13,000 for a hip replacement. The operation occurred prior to the trial, and was paid for by Mr Wood’s workers’ compensation insurer, and was a small component of the amount of $189,726 past out-of-pocket expenses for which the appellant was found liable. Although this is less than 1% of the total amount ordered, it was obviously a live issue at trial.

5. The primary judge addressed this point at [31]-[37]. Her Honour found, in accordance with what was common ground at trial, that the respondent had suffered symptoms of early primary osteoarthritis in his left hip in 2007. Her Honour found that but for the accident, it was likely that he would require left hip surgery in the near future. However, there was evidence from his orthopaedic surgeon that the accident had a significant role in accelerating the need for a hip replacement.

6. The primary judge rejected the appellant’s submissions that the cost of a hip replacement might have been avoided because of private insurance, or because of the public hospital system, given that there was ample notice of the need for the operation. Although her Honour said at [37] that there was no evidence about whether the respondent had private health insurance, in fact his tax return showed that at the relevant time he did not have private health insurance. The inference is that if the respondent had to undergo surgery as a result of his progressive condition, he would have chosen to utilise the public health system at little or no cost to himself.

7. Her Honour concluded that the defendant had failed to prove on the balance of probabilities that the plaintiff would have incurred the expenses of the hip replacement, although her Honour did deduct 12 weeks of income attributable for lost time from work. That approach was not entirely correct. Applying Watts v Rake (1960) 108 CLR 158 and Purkess v Crittenden (1965) 114 CLR 164, it was for the defendant to satisfy the evidentiary burden when raising the issue, although the ultimate burden of proof remained at all times upon the plaintiff.

8. An elaborate submission was advanced on appeal to the effect that (a) there was other unchallenged evidence that the hip replacement was inevitable, and (b) her Honour had failed to expose her reasoning process in rejecting the appellant’s case. There is nothing in these points. It was common ground that the hip replacement was inevitable, but what was not inevitable was whether it would become urgent, thereby costing $13,000. The primary Judge’s finding that the accident necessitated an urgent hip replacement was supported by the evidence of the only medical practitioner who was cross-examined, Dr Davison. Dr Davison saw the respondent some six months after his accident, and gave the opinion that he was “in urgent need of hip replacement”. He also said “The treatment of his other disabilities will be made much easier by a successful hip replacement”. Her Honour’s conclusion that the need for a hip replacement had been accelerated by the accident was also borne out by other medical evidence, including that of Professor Nade (called by the appellant), who said that his injuries “may well have accelerated his path to hip replacement surgery”.

9. In determining whether the respondent would be likely to incur the expense of a hip replacement in any event, it was relevant to consider whether he had health insurance. As noted above, her Honour proceeded on the basis that there was no evidence that the respondent had private health insurance. In fact, although neither party seems to have taken her Honour to them, and certainly he was not cross-examined about it, the respondent’s tax returns disclosed that he did not have private health insurance at the time of the accident or the time of his hip surgery; that is confirmatory of the conclusion her Honour reached upon this issue.

10. The appellant, properly, accepted that he bore an evidential burden to show that the respondent would have to bear the cost of a hip replacement operation in due course. The issue was squarely raised at the outset of the trial by counsel for the respondent. The appellant did not cross-examine the respondent as to how he would have arranged for the surgery required by his progressive condition, nor did the appellant adduce evidence to suggest that the respondent would have had to pay for the surgery out of his own pocket. It must be borne in mind that the operation the respondent underwent following the accident was urgent, whereas the operation that would have been required because of his progressive condition was unlikely to involve urgent intervention and thus could have been undertaken in the public hospital system without cost of the kind the respondent incurred. In these circumstances, no appellable error is made out in her Honour’s reasoning. Further, her Honour’s reasoning process was clearly exposed. These grounds should be dismissed.

Non-economic loss

11. Grounds 3 and 4 challenge her Honour’s award of an amount of $425,000 for non-economic loss. Her Honour addressed this in considerable detail at [6]-[30]. In those paragraphs, her Honour addressed the respondent’s severe traumatic head injury, leading to his being in an induced coma for 14 days, the consequential obvious deformity to the left side of his skull, the fact that he fractured 15 ribs and a suffered a punctured lung, that he suffered permanent cognitive deficits detailed at [12] and [13] of her reasons, that he had undergone a personality change, is now seriously visually impaired, and is in pain when he turns his head because a fracture at T3. He was for some time unable to open his mouth and chew. He suffered some permanent hearing loss, although surgery has improved the position. His balance has been affected, such that “he has to walk slowly and carefully and is unable to climb a ladder”. He can no longer drive, play golf which he played very well (he had a handicap of 11-12), go rock fishing, surfing, walking or running, read a novel or use a computer. He is no longer a keen handyman, because he cannot safely use tools, which he has given away. He can no longer work, and has “lost the enjoyment of a fulfilling work-life, the camaraderie of workmates, and the status of being a breadwinner”. He no longer enjoys an intimate relationship with his long-standing partner.

12. Against all this, the appellant said that surveillance video showed the respondent walking normally, rather than “slowly and carefully”. He invited the Court to draw the “inevitable conclusion” that her Honour did not have regard to the video. Her Honour was shown the video on the fourth day of the trial, together with commentary from both counsel, over somewhat more than an hour. This Court was taken, in the course of the hearing of the appeal, to some 20 or 30 minutes of footage selected by the appellant. The video shows the respondent walking, at a relatively slow pace, in various locations, and drinking beer and playing poker machines in his local club. Where he climbed stairs, he used a handrail. The written submissions go so far as to say that “He was able to walk quite quickly and cross roads without assistance and seemingly without any difficulty at all”. However, the video of the respondent crossing the road does not show him walking quite quickly; in fact, it shows him leaning, a little awkwardly, at the traffic lights while waiting for them to change. More than once, he looked down while he was walking, and on one occasion when crossing the road he showed no reaction to a car approaching and stopping immediately in front of him to his right.

13. There was a submission that the video negated many of the findings in [19] which was as follows:

“One of the most serious impairments is a visual impairment. The plaintiff suffers from permanent right homonymous hemianopia, i.e. narrow ‘tunnel vision’ and the almost complete loss of peripheral vision on the right side. He is unable to judge distances. It is dangerous for him to cross roads other than at traffic lights and he is unable to drive a vehicle or ride a bicycle. He has difficulty navigating and often bumps into objects. He has a tendency to bump into people when in a crowded environment and this agitates him to the extent that he is most reluctant to venture into such an environment. The Guide Dog Association has provided some training, including training in the use of a walking stick when in a crowded environment. The widespread and subtle impact of such a visual impairment is reflected in a whole person impairment of 62%.”

14. No such conclusion can be drawn from the video footage. By way of example, the fact that he was not seen to stumble, and was able to pick up a glass in his right hand, did not demonstrate error in her Honour’s assessment, based on all of the evidence, including seeing the respondent giving evidence in the witness box.

15. Her Honour said at [5] that the surveillance film “merely confirmed that the plaintiff spent his days in the manner alleged”. This was a case where the plaintiff gave evidence-in-chief that he could walk some five or six kilometres from his home to and from the shops; that is principally what is shown by the footage. The footage shows him in an area and location in which he was familiar and comfortable, and as to which he had received assistance from the Guide Dogs Association as to the safest ways to navigate.

16. In short, the Court was not taken to any particular video footage which demonstrated error in the assessment by the primary judge. Her Honour’s conclusion is not shown to be affected by appellable error.

17. The course taken in this appeal, where a substantial challenge was made to what was obtained from video footage without it being identified in written submissions, should not be taken as a model for future appeals. Especially in such cases, appellants need to have regard to the obligations in the Uniform Civil Procedure Rules 2005 (NSW) Pt 51, r 51.18(2) to specify any material facts which should, or should not, have been found, and the narrative statement required by r 51.36. Had the appellant’s failure to comply with those provisions occasioned additional costs, a special costs order may have been warranted.

18. Secondly, the appellant focusses upon the fact that at [19] her Honour referred to “[t]he widespread and subtle impact of such visual impairment is reflected in a whole person impairment of 62%”. This paragraph commenced with the statement that “One of the most serious impacts is a visual impairment”, and her Honour then described the “tunnel vision” from which the respondent now suffers, and the consequences for his lifestyle and quality of life.

19. The appellant’s written submissions assert that the 62% whole person impairment was not relevant to the calculation of non-economic loss. However, it was accepted in oral address that, as an indication of the seriousness of the respondent’s injuries, the assessment was not irrelevant.

20. It cannot fairly be inferred from her Honour’s reasons that the reference to a 62% WPI has played any improper part in her Honour’s assessment of non-economic loss. Reading the reasons at [6]-[30] as a whole, the reference at [19] is but one element of the description of the total impact of the accident upon the respondent.

21. There is a further point to be made in respect of these grounds of appeal. The primary judge saw the appellant over five days. Her Honour gave an attentive description of the respondent’s physical, intellectual and psychological injuries, before concluding that the non-economic loss was $425,000. Her Honour’s finding is reviewable in accordance with the principles in Warren v Coombes (1979) 142 CLR 531 rather that House v The King (1936) 55 CLR 499: see Berkeley Challenge Pty Ltd v Howarth [2013] NSWCA 370 at [13] and Hall v State of New South Wales [2014] NSWCA 154 at [28]-[32]. Nevertheless, in a case such as the present, a large measure of appellate deference is to be accorded to the determination of the primary judge. With respect, the appellant’s focus on relatively minor aspects of her Honour’s overall assessment does not come close to establishing appellable error.

Vicissitudes

22. Ground 5 challenges her Honour’s conclusion at [62] that “I see no need to depart from the standard allowance of 15% for vicissitudes”. The appellant pointed to evidence which suggested that because of the respondent’s left hip, there was a real chance that he would not be able to continue in employment until 67. However, this was addressed by a positive finding at [55], in these terms

“I am satisfied that, but for the accident, the plaintiff’s most likely future circumstances are that he would have worked continuously for Zauner Constructions until the usual retirement age of 67 years. Zauner was happy with the plaintiff’s work and the plaintiff was very happy with his employer. Employment opportunities within the company have expanded and the number of safety officers employed by the company has increased since 2009. The plaintiff’s colleague, Brian Owen, undertook similar work to the plaintiff at Orange. Mr Owen remains in employment with Zauner. Although the plaintiff’s position involved him working on construction sites, it was a supervisory position that did not involve heavy work. He could have managed the work until 67 years of age. It is likely that the plaintiff would have worked on the South Coast. However, when work was not available on the South Coast, the plaintiff would have worked elsewhere in the State and been compensated by payment of the appropriate allowances. In the unlikely event of a hiatus in work opportunities, the plaintiff would readily have found employment with another employer or, in the case of short periods, could have taken paid leave. There was some prospect of promotion and the associated opportunity to increase earnings.”

23. The appellant pointed to two matters said to undermine that finding. The first was that the respondent’s income would be less than as tendered at trial if he ceased to receive a travel allowance (at the time of the accident, he was working away from home for at least part of the time). However, this was reflected in the admittedly conservative nature of the agreed amount of weekly earnings of $970, and the possibility of promotion in the future.

24. The second was that there was evidence that the respondent might need a further hip replacement before the conclusion of his working life. On that issue, the evidence was that his present replacement should last for around two decades, so that it might be needed at around the end of his working life, or shortly after retirement. This is precisely the sort of possibility which is already built into the calculation of vicissitudes, and in any event, even if taken at full value, a temporary loss of income many years in the future would have a negligible impact upon the assessment of damages. In any award of damages of some $1.7 million, there will be many aspects which are, necessarily, determined in a relatively approximate fashion and cannot be the subject of exact calculation.

25. No appellable error is made out in respect of the use of a figure of 15% for vicissitudes.

Orders

26. The appeal must be allowed in respect of grounds 6 and 7, and otherwise dismissed. The judgment ordered on 3 June 2013 should be set aside, and the parties should bring in agreed orders, in accordance with the above, for the judgment which should be given in its place. Subject to hearing from the parties, costs should follow the event (noting that the respondent has successfully resisted the outstanding points in issue at the hearing of this appeal).

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Decision last updated: 25 May 2015