Metron Medical Australia Pty Ltd v Windahl
[2007] VSCA 40
•21 March 2007
SUPREME COURT OF VICTORIA
COURT OF APPEAL
IN THE MATTERS OF:
| METRON MEDICAL AUSTRALIA PTY LTD |
| No. 3800 of 2004 |
| v |
| MICHAEL WINDAHL |
| METRON MEDICAL AUSTRALIA PTY LTD |
| No. 3801 of 2004 |
| v |
| VICTORIAN WORKCOVER AUTHORITY |
| and |
| VICTORIAN WORKCOVER AUTHORITY |
| v |
| METRON MEDICAL AUSTRALIA PTY LTD |
| AUSTRALIAN HOSPITAL CARE (RINGWOOD) PTY LTD |
| No. 3802 of 2004 |
| v |
| METRON MEDICAL AUSTRALIA PTY LTD |
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JUDGES: | BUCHANAN and NETTLE, JJA and BONGIORNO, AJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 17 and 18 May 2006 | |
DATE OF JUDGMENT: | 21 March 2007 | |
MEDIUM NEUTRAL CITATION: | [2007] VSCA 40 | |
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Negligence – Faulty design of machine which applied electrical stimulation to soft tissue – Power surge – Failure to incorporate protective device in electrical circuit negligent – Australian standard not relevant – Absence of evidence of past failures not decisive – Adequacy of reasons for judgment – Contributing negligence of employer – Adoption in cross-examination of account of the accident given to another rendered the account admissible – Claim for indemnity under s 138 of the Accident Compensation Act 1985 – Whether factors in statutory formula were properly assessed.
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| APPEARANCES: | Counsel | Solicitors |
| For Metron Medical Australia Pty Ltd | Mr M A Dreyfus, QC with Mr G Wicks | Norris Coates |
For Michael Windahl | Mr W F Lally, QC with Mr M C O’Connor | Callahans |
For Victorian WorkCover Authority | Mr J Ruskin, QC with Mr B R McTaggart | Hall & Wilcox |
| For Australian Hospital Care (Ringwood) Pty Ltd | Mr J H L Forrest, QC with Mr D Masel | Dibbs Abbott Stillman |
BUCHANAN JA:
I agree with Bongiorno AJA.
NETTLE JA:
I agree with Bongiorno AJA for the reasons his Honour gives.
BONGIORNO AJA:
Michael Windahl is a nurse who twisted and injured his right knee at his place of employment, Ringwood Private Hospital, on 4 March 1997. The accident occurred whilst Mr Windahl was manoeuvring a hospital bed on a slope in the hospital grounds. His injury was to the soft tissues surrounding his knee.
In the course of being treated for this injury, on 4 July of the same year, Mr Windahl attended a physiotherapist who applied electrical stimulation to the soft tissues of his right knee using a machine known as a Vectrosurge-40, manufactured by Metron Medical Australia Pty Ltd. Mr Windahl alleges that in the course of receiving this treatment he received an electric shock which caused him substantial further injury including a heart condition which is permanent.
On 4 September 2003 Mr Windahl filed a writ in the County Court seeking damages for his injuries from his former employer, the operator of the Ringwood Private Hospital, Australian Hospital Care (Ringwood) Pty Ltd (“AHC”) and Metron Medical Australia Pty Ltd as the manufacturer of the electrical stimulation machine which he alleges caused him further injury.
The trial of this proceeding commenced before a County Court judge sitting alone on 2 August 2004. However, before it had progressed very far the plaintiff withdrew his claim against AHC so that it then proceeded only against Metron. His claim against it alleged a faulty design in the circuitry of the Vectrosurge machine. Upon the plaintiff’s discontinuance of his claim against AHC, Metron brought a third party claim for contribution or indemnity against it and the case proceeded on pleadings adjusted to accommodate the situation which then obtained.
In another proceeding, which was ordered to be heard immediately after Mr Windahl’s proceeding, the Victorian Workcover Authority (“VWA”) sued Metron for indemnity pursuant to s.138 of the Accident Compensation Act 1985 in respect of any liability which it may have to pay compensation under that Act to Mr Windahl in respect of his injuries. This proceeding was in fact tried at the same time as Mr Windahl’s action against Metron.
In giving evidence in support of his claim, Mr Windahl described the event in which he said he received an electric shock. He said that on 4 July 1997 at about 9.15am he was having physiotherapy at the Ringwood East Physiotherapy Centre, a practise conducted by a Mr Dimitropoulos. He said stimulation was being applied to his right knee by Mr Dimitropoulos using the Vectrosurge machine when he noticed the room lights dim. This occurred more than once. As they did so his body went tense; his muscles clamped and he screamed because of the unpleasant sensation in his legs which affected both sides of his body to the back of his neck and up the back of his head. He said he thought that the physiotherapist then switched the machine off. The sensation ceased and the physiotherapist helped him stand. He said he felt alright after the event was over.
Mr Windahl’s version of the events at the physiotherapy clinic were largely corroborated by Mr Dimitropoulos. He said that whilst he was treating Mr Windahl the lights dimmed three times and that as they came back on, Mr Windahl screamed. He said that he immediately turned the machine off. He placed the incident as having occurred about half way into Mr Windahl’s treatment which would have taken about 15 minutes had it been completed.
Mr Windahl left the physiotherapy clinic and drove home. He described his driving during this journey as erratic. He nearly hit a stationary car at an intersection and at one point almost ran off the Mount Dandenong Road. When he got home he said he was unable to tell his wife what had happened. He was stuttering and the words would not come out. He felt sore – worse than before the treatment - and there were red marks from the pads of the Vectrosurge machine visible on his leg where they had been attached. He said he had trouble with his balance.
Mr Windahl’s wife phoned Mr Dimitropoulos who advised her to take him to his doctor. For his part, Mr Dimitropoulos made arrangements for the Vectrosurge machine to be returned to Metron to be checked for faults.
Mr Windahl’s wife took him that day to a Dr Rizio, who examined the plaintiff and referred him to the Maroondah Hospital. A number of tests were performed at that hospital, which, among other things, demonstrated that Mr Windahl had a raised CK (creatinine kinase) reading.
Mr Windahl told the Court that after the accident at the hospital, and before the incident on 4 July 1997, he had been treated by Mr Dimitropoulos both with conventional physiotherapy and by use of the Vectrosurge machine. Before 4 July he had no adverse reaction to treatment with the machine which normally caused a slight tingling in the muscles around his knee. On each occasion the machine and its pads were set up in the same way. Mr Windahl said that after the incident he had no further treatment from Mr Dimitropoulos on that day.
Mr Windahl said that from the time he arrived home after the incident of 4 July, he had trouble with his balance, he was unable to stand properly and often felt faint. He eventually attempted to return to work but was unable to do so and has, in effect, been a semi-invalid since 4 July 1997.
Dr Angas Hamer, a cardiologist, reviewed the results of Mr Windahl’s tests on 4 July 1997. It was his opinion that Mr Windahl had suffered contraction of his skeletal muscles consequent upon the electric shock of which he had complained. This opinion was based partly upon objective pathological findings, the abnormally high CK reading, which specifically pointed to an episode of contraction of his skeletal muscles. A normal CK reading is in the band 25-200. Mr Windahl’s reading, as recorded at the Maroondah Hospital, was 255.
Dr Hamer also confirmed, partly at least by objective observation, the veracity of Mr Windahl’s account of his ongoing symptoms, particularly those of fainting or feeling faint, since the episode at the physiotherapy clinic. He treated Mr Windahl unsuccessfully with medication and then, with limited success, by the insertion of a pacemaker.
The trial judge accepted Dr Hamer’s evidence and accepted that Mr Windahl was and had been effectively unemployable since 4 July 1997.
The trial judge’s judgment
The trial judge accepted Mr Windahl’s evidence as to what occurred in Mr Dimitropoulos’ rooms on 4 July 1997, corroborated as it was, by Mr Dimitropoulos himself. He accepted that the event in which the plaintiff was injured occurred as a result of a power surge to the Vectrosurge machine which caused a fuse to blow and another component of that machine, the bridge rectifier, to be damaged. This power surge resulted in Mr Windahl receiving an electric shock as a result of which he suffered the injuries of which he now complains.
His Honour found that had the Vectrosurge machine been fitted with a “varistor”, an inexpensive protective device of a type commonly found in electrical circuits, the power surge, which was of unknown aetiology, would probably not have injured Mr Windahl. In reaching these conclusions His Honour extensively reviewed the evidence, including technical expert evidence, as to the operation of the Vectrosurge machine and the precautions which could have been designed into the machine to guard against the possibility of a current surge having the effect he found it did on Mr Windahl. In doing so he rejected the evidence proffered by the defendant that upon its being inspected upon its return to the Metron factory by Mr Dimitropoulos, no damage was found to the fuse or the bridge rectifier in it. He accepted expert evidence as to the availability of the varistor device which could have been incorporated into the circuit of the Vectrosurge machine and rejected the defendant’s case on the technical aspects of the operation of the machine as being within appropriate limits. He noted that at least one of the defendant’s experts (a Mr Ball) accepted that the inclusion in the machine circuit of a varistor would have afforded protection to a patient being treated with the machine in the event of a current surge. He accepted expert evidence proffered by the plaintiff that it was surprising and unexpected that a machine which was designed to apply an electric current directly to the human body did not have a protective device on its input side to prevent a power surge causing an increased current to be applied to a patient being treated.
The defendant claimed that the Vectrosurge machine complied with all relevant Australian standards, that it had sold some 600 of the machines without similar complaint, that there were no design defects in the machine and that it was not negligent in its design or manufacture. His Honour rejected these arguments, preferring to rest his decision partly on an acceptance of the relatively simple proposition that Mr Windahl had received an electric shock which, on the evidence, could have been prevented by the incorporation of a readily available cheap component in the Vectrosurge circuit.
Having made the findings of fact referred to, the trial judge applied a non‑contentious principle of law then recently restated in clear terms by McHugh, J in Dovuro Pty Ltd v Wilkins[1] that the manufacturer of a product owes a duty to a consumer to take reasonable care to prevent the product causing injury and loss to the consumer, and concluded that Metron was liable to Mr Windahl.
[1](2003) 215 CLR 317.
The trial judge assessed Mr Windahl’s damages at $866,514.33 being $200,000 for general damages and the balance as proved quantifiable loss, including lost earnings and earning capacity.
The third party claim
As to Metron’s claim, by then brought by a third party notice against AHC, the operator of the Ringwood Private Hospital, the judge found that its negligence contributed to the injuries which Mr Windahl suffered as a direct consequence of his electric shock. It was the negligence of AHC which caused him to attend Mr Dimitropoulos and thus to suffer the injury which he did. His Honour found that AHC was negligent in requiring him to push a hospital bed over uneven ground on a slope without the assistance of another employee, particularly in circumstances where such assistance had been denied, notwithstanding Mr Windahl’s request for it. His Honour applied Mahoney v J Kruschich (Demolitions) Pty Ltd[2] and a number of other well known High Court authorities[3] to reach the conclusion that AHC was liable to contribute to Mr Windahl’s damages because it was liable for the same damage as Metron in terms of Part IV of the Wrongs Act 1958. His Honour assessed such contribution pursuant to s.24(2) of the Act at 20% of Mr Windahl’s damages.
[2](1985) 156 CLR 522.
[3]Chappel v Hart (1998) 195 CLR 232, Naxakis v Western General Hospital (1999) 197 CLR 269 and Chapman v Hearse (1961) 106 CLR 112.
Proceeding by VWA against Metron
The second proceeding tried with Mr Windahl’s claim against Metron was a claim by the Victorian Workcover Authority against Metron pursuant to s.138 of the Accident Compensation Act 1985. That section provides a statutory indemnity to (in this case) the VWA in circumstances where a person other than an employer has a legal liability to a recipient of benefits paid or payable pursuant to the Act.
In his reasons for judgment the trial judge applied the calculation provisions of s.138 to arrive at a conclusion that the VWA was entitled to an indemnity in respect of payments made to or on behalf of Mr Windahl up to 80% of $866,514.33 or $693,211.46. However, as will later be discussed, his Honour’s findings, this figure and the way it was calculated were all the subject of a further hearing after judgment was delivered. As a result of this hearing a number of alterations were made to the result originally set out in the trial judge’s judgment.
These appeals
Following the County Court judgment four appeals were instituted in this Court:-
·by Metron against Mr Windahl on the issue of its liability to him and on issues of costs;
·by AHC against Metron with respect to the Court’s finding that it should contribute to Metron’s liability to Mr Windahl to the extent of 20%.
·by Metron against the VWA on the issue of Metron’s liability, pursuant to s.138 of the Accident Compensation Act 1985, to indemnify the VWA in respect of payments made or to be made to Mr Windahl and on the issue of the Court’s quantification of various items required to be calculated under s.138; and
·by the VWA against Metron as to the Court’s determination of the value of the components of various factors prescribed by s.138 of the Accident Compensation Act 1985.
Amended notices of appeal were subsequently filed by Metron, replacing its original notices against Mr Windahl and the VWA. It also abandoned its appeal as to the calculation of the matters prescribed by s.138 of the Accident Compensation Act 1985.
Metron’s appeal against Mr Windahl
Metron argued that it should not have been found liable for Mr Windahl’s injuries. It relied upon 11 numbered grounds, the first of which, 1A, was a compendious complaint that the trial judge had failed to deliver adequate reasons for his conclusions such as to amount to appealable error. This ground can conveniently be dealt after those grounds which allege specific error.
Grounds 1 and 2
These grounds concerned compliance by the Vectrosurge machine with Australian and international standards for medical electrical equipment and the failure by Mr Windahl to adduce evidence of any similar incidents involving the machine, notwithstanding significant sales and usage of the machine both nationally and internationally. Metron argued that because the machine complied with such standards the trial judge erred in finding that a failure to fit a varistor to the machine constituted a breach of its duty of care to those who might use it, including Mr Windahl. Further, it argued that, as there was no evidence that any similar incident had ever occurred, it could not be found negligent in failing to fit a varistor or similar device to the Vectrosurge machine.
The trial judge rejected the appellant’s argument as to the standard on a number of different bases. He expressed doubt as to whether the possibly relevant Australian standard, AS3200:1995, applied to the Vectrosurge “… either because (the Vectrosurge) does not fit squarely within the definition of medical electrical equipment or because interferential muscle stimulators are not specifically caught.” His Honour considered that the value of the standard as evidence in the case lay in the fact that it was informative as to the risks posed by the use of the machine for physiotherapy and for evaluating Metron’s defence.
In a report of 15 July 2004, which was in evidence before the County Court, a Dr Peter Hart evaluated the Vectrosurge, after having tested a specimen of it. He proffered opinions as to its safety and as to its compliance with AS3200: 1995. He described the machine as applying “… a time-varying electrical voltage to the plaintiff’s muscles via two pairs of electrodes that make good electrical contact with the skin.” He expressed the purpose of the machine as being to electrically stimulate the repair of damaged muscle.
Dr Hart considered that although the Vectrosurge was probably a medical item covered by the Therapeutic Goods Act 1989 (C’th), the standard applied by the Therapeutic Goods Administration in evaluating the machine in the administration of the Act, namely AS3200:1995, did not purport to be applicable to electro-stimulation machines which are designed to apply an electric current directly to a patient, such that an incoming electrical disturbance would also be transmitted through the machine directly to the patient. As he pointed out, AS3200:1995 does not specify a limit for the transmission of an incoming voltage disturbance to a patient. It merely specifies that the machine shall not be damaged or misbehave if a transient over-voltage disturbance occurs on the input.
Dr Hart considered that the evidence of Mr Dimitropoulos, the physiotherapist, that the lights dimmed three times, was consistent with the operation of auto-release circuit breakers on the electrical power system supplying power to Mr Dimitropoulos’ physiotherapy clinic. These circuit breakers are designed to open and close the power supply in response to a fault. Such a fault is often transient and may be the result of say, a tree branch falling across power lines. Dr Hart said that the circuit breakers are programmed to open and close three times to allow the fault to clear. He thought that the size of an over-voltage transient likely to have occurred at the time Mr Windahl said he was injured was, two, three or more times the nominal voltage (240 volts AC). Dr Hart was also of the view that if, as found by the trial judge, a fuse and the bridge rectifier on the machine were damaged when it was subsequently inspected, such damage would be consistent with an over-voltage transient having occurred.
Dr Hart was of the opinion that a very high level of protection against voltage disturbances is required on machines such as the Vectrosurge because, by their nature, they have electrical connections directly to a patient. He thought that the “zener diode clamps”, which the machine did have and which are intended to limit the voltage that can be applied to a patient, are not effective protection against over-voltage because the diode is relatively slow to conduct and because it had substantial breakdown impedance at higher current levels. He considered that a better level of protection against over‑voltages would be provided by “Transorb” devices of which the varistor is one. Such devices are designed to absorb some of the energy in the transient or current surge. Such devices are well known to circuit designers and are relatively inexpensive. Finally, Dr Hart considered that the fact that AS3200:1995 was silent about the limitation of transmitted voltage disturbances in machines such as the Vectrosurge was a failing in the standard.
Another expert, a Mr Cousins, whose evidence was also accepted by the trial judge was of very similar views to Dr Hart. Indeed he went further and costed the varistor at $1.45 retail or considerably less wholesale. He agreed with Dr Hart as to the non-application of AS3200:1995 to the regulation and control of purposefully injected currents into the human body.
The trial judge’s characterisation of the relevance of the Australian standard, AS3200:1995, was entirely consistent with the evidence of the plaintiff’s experts. To say that the Vectrosurge complied with that standard says nothing as to whether, in the exercise of reasonable care, a manufacturer designing a circuit in such a machine ought to have reasonably foreseen and taken adequate precautions against an over-voltage on the input side of the machine which might cause it to deliver an unintended electric shock to the patient, as Mr Cousins described. Both of the plaintiff’s experts regarded the standard as being effectively irrelevant to the problem in this case. Its function is to set certain standards in respect of those matters it does regulate, not for those it doesn’t. In one sense Metron’s argument that compliance with the standard equates to a successful denial of negligence is not unlike that of the allegedly negligent motorist who seeks to defend a claim that he travelled too fast by proving that he was on the correct side of the road.
Accordingly, the fact that the Vectrosurge machine complied with AS3200:1995 as deposed to by experts called by it (Mr Ball and Mr Zombolas) does not preclude the finding the trial judge made that Metron was negligent in failing to provide appropriate protection in the circuit of the machine against the possibility of an abnormal transient input voltage which had the effect of causing a person being treated with the machine to suffer an electric shock.
The second matter argued by Metron in support of its submission that the trial judge was in error in finding it negligent was that there was no evidence adduced by Mr Windahl as to any previous similar incidents, either in respect of the Vectrosurge machine or other similar devices.
That such evidence would have been relevant is undoubted; it would have gone directly to the question of foreseeability, but there was already evidence from experts which was accepted by the trial judge from which an inference of reasonable foreseeability was able to be drawn. Both Dr Hart and Mr Cousins gave evidence which led the trial judge to infer that a reasonable manufacturer of the Vectrosurge machine would have foreseen a risk of injury to a patient if adequate protection against the effect of a voltage surge was not built into the machine’s circuit. The trial judge found that, having regard to Metron’s record keeping with respect to complaints about its product, the lack of evidence of similar problems with respect to the Vectrosurge machine prior to Mr Windahl’s incident was not surprising. Further, Mr Payne, Metron’s quality manager, gave evidence that in searching Metron’s records he did not search for any complaints prior to an electronic system of record storage being introduced in November 1997. He said he would not know where any earlier records were. And there was no evidence as to any system of receiving or recording complaints from outside Australia where, apparently, a number of Metron’s products were sold. The trial judge’s finding that he doubted whether any useful conclusion as to design safety with respect to over-voltage supply or over-current delivery could be made from the lack of any evidence of similar mishaps is entirely consistent with and supported by the defendant’s evidence, particularly that of Mr Payne and the documents he produced.
There is no substance in Metron’s appeal in so far as it is based on Grounds 1 and 2.
Ground 3
This ground, which complains that the trial judge took into account matters that were irrelevant and failed to take into account matters which were relevant, is a general ground which was argued together with Grounds 4 to 7 and 10. These grounds are, in effect, particulars of Ground 3. It is convenient to deal with them seriatim.
Ground 4
This ground complains that a finding by the trial judge that Mr Windahl was injured as a result of a substantial over-supply of current, was against the evidence and appeared to be “… posited upon the assumption of the presence of burn marks on the respondent’s leg”.
The trial judge accepted Mr Windahl’s account of what happened in Mr Dimitropoulos’ rooms on 4 July 1997. That account was corroborated by Mr Dimitropoulos both in evidence and in a letter he wrote to Metron when he returned the machine. It was not challenged by Metron in cross-examination. Mr Windahl’s account included reference to red marks on his skin where the Vectrosurge electro-pads were attached. His evidence as to his post-event condition and symptoms was not challenged. Mr Cousins’ description of the effect of a power surge (or spike) on an electrical circuit (lights dimming three times etc.) further corroborated that that was the phenomenon which occurred at the time Mr Windahl said he was injured. It is difficult to see how the judge could have come to any other conclusion than that Mr Windahl was injured in the way he claimed. His finding is not posited solely or even principally on the existence of burn marks on Mr Windahl’s leg. His finding in that regard was incidental.
There is no substance in this ground.
Ground 5
This ground again takes up the question of burn marks and asserts that the trial judge’s finding in respect of this issue was wrong and contrary to the evidence.
In his judgment the trial judge made reference to the reddening of Mr Windahl’s skin at [42] where he parenthesised the word “burning”, [89] where he referred to “superficial burns” and [97] where he referred to “burn marks”.
Mr Windahl had given evidence of reddening of his skin which was not challenged. There is no error in describing such marks in the way the trial judge did. In common parlance a reddening of the skin following an event involving an electric shock could properly be described as a “burn” without doing violence to the language.
The fact that Mr Dimitropoulos’ evidence was that there were no burns or reddening on Mr Windahl’s leg after the relevant event hardly creates a conflict which requires resolution by the trial judge other than by his stating his conclusion as he did. As already noted this question was not one of central importance to the case, particularly in light of the graphic description by both Windahl and Dimitropoulos as to what actually happened.
There is no substance in this ground.
Ground 6
This ground complains that the “shock” received by Mr Windahl was neither “identified” nor “quantified” by the evidence.
It is difficult to see what “identified” and “quantified” mean in this context. The event itself was well and sufficiently described in the evidence in the terms accepted by the trial judge. No error is demonstrated by this ground.
Ground 7
This ground concerns the trial judge’s rejection of Metron’s quality control manager’s evidence as to his examination of the Vectrosurge machine after it was returned to Metron by Mr Dimitropoulos. The effect of his evidence was that the principal fuse in the machine had not burnt nor had the bridge rectifier in it been damaged. Accordingly, Metron complains that the trial judge’s finding to the contrary was against the evidence and the weight of the evidence.
The trial judge did not accept Metron’s case that upon inspection after the incident in Mr Dimitropoulos’ rooms, the Vectrosurge was found to be undamaged. It is undenied by Metron that both a fuse and the bridge rectifier of the Vectrosurge were replaced after it was inspected. Its quality control manager, Mr Payne, explained that replacement as having been performed as a matter of caution, even though no defective parts were found on inspection or testing of the machine. However, a document under Mr Payne’s own hand from the records of Metron, described those components of the Vectrosurge which were in fact replaced as having been “… affected by overvoltage” (emphasis added).
Mr Payne’s explanation of what, on its face, was a clear admission that parts of the Vectrosurge machine required replacing because they had been “affected” by an over-voltage, was that he was merely recording what the physiotherapist had said. He then went on to say that what he had written was perhaps “… a poor choice of words”.
The trial judge was unimpressed with Mr Payne. On his explanation of the above document alone he could probably have gone further and made a finding of disingenuity. He was entitled to make the finding he did.
There is nothing in this ground.
Ground 10
This ground makes complaints about three discrete alleged failings of the trial judge to take certain matters into account. The first two allege a failure to take into account a lack of particular pieces of evidence which, it was submitted, ought to have caused him to reject some of Mr Windahl’s complaints, namely of falls and/or blackouts.
Metron submits that as there was not any record of complaints in Mr Windahl’s GP’s clinical notes concerning falls, blackouts, collapses or even dizziness between 4 July 1997 and 26 December 1997, this should have caused the judge to reject Windahl’s evidence that such symptoms were in fact present. The trial judge had evidence from Mr Windahl and his wife that events of blackouts, dizziness etc. and other symptoms occurred during the period referred to. This evidence was largely unchallenged by cross-examination as was copious evidence of other symptoms. He also had evidence from a neighbour whom he erroneously (and irrelevantly) referred to as a doctor.
The third part of this ground complained that the trial judge did not take into account evidence from Dr Hamer, Mr Windahl’s treating cardiologist to the effect that an absence of symptoms between 4 July 1997 and 26 December 1997, made tenuous the connection between the event of 4 July and Mr Windahl’s neurocardiac condition.
This part of Ground 10 fails as a matter or logic. For it to have any basis there would have to have been the lack of evidence upon which the doctor’s opinion operated. However, as already noted, the trial judge had sufficient evidence of symptoms in Mr Windahl during the relevant period to render Dr Hamer’s evidence as to a tenuous connection irrelevant in this case. The factual basis for his opinion to be valid in this case did not exist.
There is no basis for this appeal succeeding on Ground 10.
Grounds 8 and 9
Ground 8 in the amended notice of appeal, which stated that a finding that the cause of any injury to Mr Windahl was a capacitor discharge which would have caused no harm should have been made, was not argued and need not be further considered.
Ground 9 complained that the trial judge should have addressed the question of the respondent’s “abnormal sensitivity” to injury.
This ground appears to have had its genesis, not from any evidence in the trial, but from a comment made by counsel for Metron in his final address in respect of which he referred to Tame v New South Wales[4]. But there was no evidence led on the trial by either side in which the question of any “abnormal sensitivity” of Mr Windahl was discussed.
[4](2002) 211 CLR 317.
In the circumstances, the judge’s dismissal of the point is entirely understandable.
Ground 1A
Finally, with respect to those grounds of Metron’s appeal which go to the merits of Mr Windahl’s case, it is necessary to deal with its first ground of appeal, namely that the trial judge’s reasons for judgment failed to disclose an intelligible explanation of the process of reasoning which he went through to reach the conclusion he did (including his reasons for accepting or rejecting evidence).
The principles upon which this ground falls to be determined were not the subject of contention. In Fletcher Construction Australia Limited v Lines Macfarlane and Marshall Pty Ltd (No 2)[5] this Court set out those principles.[6]
[5](2002) 6 VR 1.
[6]Ibid, 30.
A judge has an obligation to provide reasons for his judgment. Such obligation is a normal incident of the judicial process. Without such reasons a Court of Appeal would not be in a position to determine whether a decision of the trial judge contained appealable error or not. An adequate statement of reasons is a necessary foundation for the acceptability of the decision by the parties and the public and, furthermore, enhances judicial accountability so as to guard against an unconsidered or impulsive decision.
The content of a judge’s reasons in any particular case will depend upon the circumstances of that case. Their Honours in Fletcher Construction cited with approval a statement of Meagher JA in Beale v Government Insurance Office of New South Wales[7] in which his Honour identified three specific requirements. He said that a judge should refer to relevant evidence, that he should set out any material findings of fact and that any conclusions or ultimate findings of fact reached should provide reasons for reaching those conclusions or making the relevant findings of fact. It is necessary for the trial judge’s reasons to be such as to enable a proper understanding of the basis upon which he has come to his decision.[8]
[7](1997) 48 NSWLR 430, 441 (Meagher, JA).
[8]Sun Alliance Insurance Limited v Massoud [1989] VR 8 at 18 (Gray, J); Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 279-280, 282 (McHugh, JA); Hunter v TAC [2005] VSCA 1 at [21], [22] and [28] (Nettle, JA); VCP Investments Pty Ltd & Ors v Jane McCubbin & Sons Pty Ltd & Ors [2006] VSCA 50 at [4] (Callaway, JA) and at [12] (Maxwell, P).
In the instant case, as has already been discussed with respect to those specific complaints raised by Metron in its other grounds of appeal, his Honour found that the event described by Mr Windahl occurred in the way he described it. He was satisfied that the experts called on Mr Windahl’s behalf, namely Dr Hart and Mr Cousins provided a cogent, logical and acceptable explanation for that event and that that explanation demonstrated negligence on the part of Metron. He found that such negligence was a relevant cause of Mr Windahl’s subsequent injuries and the loss and damage flowing from them.
In reaching those findings his Honour made many subsidiary findings of fact, some of which he articulated and some of which he did not. However, even where he did not specifically refer to such findings, that they were made is an inescapable inference from the conclusions he reached. For example, when considering what he described as the voltage surge which he found accompanied the event in the physiotherapist’s rooms described by Mr Windahl, the trial judge considered it of sufficient magnitude to blow the fuse and damage the bridge rectifier in the Vectrosurge machine, which finding necessarily involved a finding that Mr Payne’s description of the result of his inspection of the machine after the incident was erroneous. Or again, in being satisfied as to the causation of Mr Windahl’s medical condition, he must necessarily have found that there was the necessary proximity between the onset of symptoms and the causative event to enable acceptance of Dr Hamer’s opinion that one was the cause of the other.
So far as the case of the defendant Metron is concerned, his Honour rejected the evidence of Mr Ball and Mr Payne, finding them both unimpressive. As he pointed out, Mr Ball’s evidence did not account for the happening of the event described by Mr Windahl at all. His Honour found that he gave no cogent explanation for it. As far as Mr Payne was concerned, the trial judge rejected his evidence concerning the inspection of the machine after the event and concluded that Metron had no answer to the evidence of Dr Hart and Mr Cousins. He concluded by summarising, in four numbered paragraphs his conclusions as to why he preferred the evidence of the plaintiff’s experts to Messrs Ball and Payne.
The trial judge dealt with each of the substantive defences put up by Metron in terms which have already been described with respect to other grounds of appeal.
Whilst it is true to say that there were some errors of fact or misdescription in the trial judge’s reasons for judgment, none of them alone nor all of them together constitute such a defect in those reasons as to render them other than adequate.
There is no basis for upholding Ground 1A of Metron’s grounds of appeal.
Costs
Grounds 11, 12, 13 and 13 (sic) of Metron’s amended notice of appeal concern orders for costs made by the trial judge.
Grounds 11, 12 and 13 (the 2nd) complain that the trial judge ordered Metron to pay Mr Windahl’s costs on an indemnity basis, certified daily fees for counsel rather than brief fees with refreshers and fixed junior counsel’s fee at other than the County Court scale and that in doing so his discretion as to costs miscarried.
A perusal of the transcript where his Honour made these costs orders does not reveal any miscarriage of discretion so as to require correction in this Court. The fact that his Honour dealt with the costs questions without extensive explanation does not constitute error when the questions were argued by counsel at such length as they considered necessary so that his Honour had a proper basis for the exercise of his discretion as to costs. Accordingly these grounds cannot be made out.
Ground 13 (1st)
This ground concerns an order for costs thrown away by reason of an adjournment granted at Mr Windahl’s counsel request during the trial. Metron submitted that it should have those costs because of the circumstances in which the adjournment was granted.
The transcript in the appeal book records Mr Windahl’s counsel’s application to adjourn the trial at 3.25pm on Thursday 12 August 2004 and that the trial was in fact adjourned until 16 August 2004. The transcript also shows that the question of these costs was determined by the trial judge after he delivered his judgment and in the course of dealing with costs generally. No error has been demonstrated with respect to this matter.
Conclusion as to Metron’s appeal
Metron’s appeal against Michael Windahl should be dismissed.
Third party appeal
In the proceeding in which Mr Windahl was successful against Metron that company joined AHC as a third party seeking contribution or indemnity from it pursuant to the Wrongs Act 1958. The basis upon which contribution or indemnity was sought by Metron against AHC was that AHC was liable in respect of the damage suffered by Mr Windahl as a result of his mishap with the Vectrosurge machine because it negligently caused the injury to his right knee for which he was being treated when the mishap occurred.
In its defence AHC denied negligence, pleaded that the mishap with the Vectrosurge machine was a novus actus interveniens, that Mr Windahl’s injuries were too remote and that, in any event, as the Victorian Workcover Authority’s agent had not determined that he had a serious injury to his right knee as a result of any accident suffered in the course of his employment with AHC, it was not liable to him in respect of the injuries for which he sued Metron.
The fundamental basis of liability to contribution under the Wrongs Act 1958 is that the person against whom contribution is sought must be liable in respect of the same damage as the claimant. In the present context that damage is the damage suffered by Mr Windahl as a result of the incident with the Vectrosurge machine of 4 July 1997. That is the only damage for which Metron is liable.
The trial judge determined the issue of AHC’s liability definitively in Metron’s favour. He found that AHC was negligent in the system of work which it required Mr Windahl to undertake and that his mishap with the Vectrosurge machine was a foreseeable consequence of necessary treatment to his right knee necessitated by that negligence.
His Honour determined the issue of negligence against AHC largely on the basis of Mr Windahl’s description of his accident at the Ringwood Private Hospital. Such description was put before the Court by Mr Windahl’s adoption and verification of information he gave an ergonomist who investigated the incident on the instructions of his solicitors. The ergonomist repeated what Mr Windahl told him in a report to those solicitors. The relevant portion of that report was put to Mr Windahl in cross‑examination by counsel for Metron and was verified by him. The trial judge admitted this portion of the ergonomist’s report over objection by counsel for AHC.
Mr Windahl’s evidence was that on 4 March 1997, in the course of his duties as a nurse at the Ringwood Private Hospital, he was required to move beds and equipment from a ward to a storage area known as “the garage”. He had done this of many prior occasions. The distance Mr Windahl had to move the bed was between 75 and 100 metres and the route he had to take involved movement along a footpath section and an area of a carpark. The beds had to be lifted over a small garden bed and a drainage gutter to travel across that carpark. In traversing the garden bed Mr Windahl had to push, pull and lift the beds as he had been told by a supervisor to be careful not to harm the plants in the garden. The carpark area across which the beds had to be moved had a slope of about 10 degrees.
On the day in question Mr Windahl spent between one and two hours moving equipment between the ward and the garage storage area. He completed this task by about 10.30am but some time later that morning he was again asked to move equipment between the two locations. He asked the charge nurse if he could have assistance as he was feeling tired from having previously carried out the moving work as well as completing other nursing and orderly tasks. He was told there was no assistance available and he should move the equipment himself. Whilst pushing a bed from the garage storage area across the carpark towards the main building, Mr Windahl sustained injury to his right knee.
The bed Mr Windahl was moving had four swivel castors with brakes fitted to two castors at the end of the bed. It was not possible to prevent these castors from swivelling. The incident in which his knee was injured occurred when the bed oversteered towards a stationary car as it rolled across a drainage gutter. In an attempt to control the movement of the bed he quickly moved the front corner of the bed to position himself in front of it so that he could apply force to slow the bed down. His right leg was positioned awkwardly in front of the bed and in the process underwent a twisting movement. He recalled hearing a “grinding crunching” noise in his right knee.
Mr Windahl did not recall any policy or procedure of his employer relating to bed movement and he had not received any manual handling training regarding the movement of beds or in procedures for moving beds and equipment to and from the garage storage area and the ward.
Mr Windahl was cross-examined by counsel for AHC during which cross‑examination he verified again the substance of the circumstances in which he injured his right knee. It was not suggested that his account of the event was not accurate and AHC called no evidence concerning the incident at all.
The trial judge found that AHC was negligent as Mr Windahl’s employer and that that negligence contributed to Mr Windahl’s subsequent injury by the Vectrosurge machine because it “put the plaintiff on the physiotherapist’s table leading to the electric shock”. He rejected arguments of novus actus interveniens and remoteness and found that AHC was a person liable in respect of the injuries Mr Windahl suffered as a result of the mishap with the Vectrosurge machine. As it was the same damage for which Metron was liable, AHC was liable to contribute towards Mr Windahl’s damages. His Honour referred to Mahoney v J Kruschich (Demolitions) Pty Ltd[9].
[9](1985) 156 CLR 522.
The trial judge did not accept that the absence of a serious injury certificate in respect of Mr Windahl’s right knee injury was a bar to a successful claim by Metron for contribution, particularly as a certificate in respect of the injuries suffered by Mr Windahl as a result of the electric shock – the only injuries for which he claimed damages in this proceeding – had been granted by the Workcover agent.
The trial judge compared the departure by AHC from the standard of care expected of a reasonable employer in requiring Mr Windahl to move the bed in the circumstances it did with the departure from the standard of care reasonably expected of Metron as a manufacturer of electrical equipment and decided that AHC should contribute 20% of the damages awarded against Metron.
AHC appealed against the trial judge’s findings and his conclusions on a number of grounds, not all of which were pressed when the appeal was heard. It is convenient to deal with AHC’s grounds of appeal in the order in which they were argued.
The admissibility of the ergonomist’s report
As already noted, Mr Windahl’s account of the circumstances in which he injured his right knee was placed before the Court by counsel for Metron during his cross-examination of Mr Windahl by having Mr Windahl adopt as true and correct a description of those circumstances which Windahl had given to an ergonomist. The admissibility of the part of this document which was sought to be tendered was argued at length before the trial judge. A number of different bases of objection were apparently raised but, in the end, the trial judge admitted that portion of the document continuing Windahl’s account of the event in which he injured his right knee. That he did so he made clear his reasons for judgment.
In this Court AHC has maintained its objection to the tender of this document. Its argument was that, if that document was inadmissible, then, there was no basis upon which AHC could have been found liable to contribute to Mr Windahl’s damages.
Counsel for AHC argued that the method of adducing evidence of Mr Windahl’s accident in which he injured his right knee was not permissible. It was not permitted by any statutory provision or rule of evidence and such a course was “… inimical to the proper way to adduce evidence”.
At the time he tendered the relevant document, counsel for Metron was cross‑examining Mr Windahl, a party generally adverse to his client’s case even if, on the particular matter of the accident at the Ringwood Private Hospital, he may not have been as antipathetic to Metron’s case as he could have been expected to be with respect to its case concerning the Vectrosurge machine. Metron’s counsel was entitled to ask leading questions of him and could, had he wished, put the contents of the ergonomist’s report to him as a long series of leading questions to have him adopt serially each fact which the ergonomist said he had described to him. By adopting the course he did the cross-examiner was simply taking full forensic advantage of the situation he found himself in and ensuring, as far as possible and subject to any disagreement by the witness, that the version he was contending for was placed before the Court.
The document as admitted by the trial judge assumed no more importance or significance as evidence than as the convenient repository of a summary of the circumstances in which Mr Windahl said he injured his right knee. Had the trial been before a jury the trial judge might have withheld the document from the jury, if, to ensure a fair trial, he thought that the written word might convey an over emphatic description of the event with a risk that the jury might give it more weight than it deserved. However, in the circumstances of this case where AHC neither suggested any contrary version of the event to Mr Windahl in cross‑examination nor called any evidence disputing his version, it is difficult to see what harm would have been caused had the hypothetical jury read the account Mr Windahl gave to the ergonomist.
These days the trials of most civil witness actions in this Court are conducted using witness statements, where the evidence-in-chief of each witness is adduced by proving and tendering a statement in writing of that evidence. Such a statement is simply a convenient and efficient way of putting evidence before the Court. It is, of course, subject to cross-examination as was Mr Windahl’s account in this case and the use of any particular witness statement is always subject to the trial judge’s direction that the evidence in chief of any particular witness be given viva voce. The practice is too well entrenched in modern litigation to suggest now that such statements are inadmissible. But this case is a fortiori that situation; here the statement was tendered not by counsel calling the witness but by a cross-examiner. It is clearly admissible as what it was, namely, Mr Windahl’s description of how he injured his right leg.
In any event, even if the part of the ergonomist’s report tendered before the trial judge had been inadmissible, its reception would not have been a proper ground for this Court to order a new trial, as no wrong or miscarriage of justice, let alone a substantial wrong or miscarriage of justice, would have been demonstrated by AHC in the circumstances.[10]
[10]RSC r. 64.23(2).
This ground of appeal has no merit.
Breach of duty by AHC
The second argument put by AHC was to the effect that there was no evidence upon which the judge could properly hold that AHC was negligent in requiring Mr Windahl to undertake the task which he was undertaking at the time he injured his right knee. It submits that as the only evidence before the Court was Mr Windahl’s version as set out in the ergonomist’s report, there was no proper basis for the trial judge’s finding.
AHC owed Windahl as its employee a duty to take reasonable care to avoid the risk of his being injured in the course of caring out the duties of his employment. The trial judge found that Windahl ought not to have been required to undertake the task he did without assistance. He had asked for assistance but it had been denied to him.
In the circumstances the trial judge was entitled to reach a conclusion that AHC had been negligent. The reasonable response to the risk posed by undertaking the job on its own would have been to have provided another person to ensure that the bed remained under control whilst it was being manoeuvred in the way Windahl described. That injury to a person trying to control a runaway bed in the circumstances (particularly where, as appears to have been the case, it had something on top of it) is foreseeable. The reasonable response to that foreseeable risk was simple: the provision of another person to ensure that the bed did not get out of control. The employer did not provide that other person.
In the circumstances there is ample basis for the finding of negligence against AHC and those grounds of appeal which suggest that the judgment is not supportable cannot succeed.
Apportionment
Section 24 of the Wrongs Act 1958 provides that the amount of contribution recoverable in a proceeding such as the present must be such as is found by the Court to be just and equitable having regard to the extent of responsibility for the damage suffered by the plaintiff of the person against whom contribution is claimed.
In the circumstances of this case the trial judge decided that the principal cause of the plaintiff’s injury was the mishap with the Vectrosurge machine, but that the negligent employer bore some responsibility because it had “put (him) on the physiotherapist’s table …”. In assessing liability at 80/20 as he did the trial judge reflected his opinion that the principal liability lay with Metron.
In a unanimous judgment in Podrebersek v Australian Iron & Steel Pty Ltd[11] the High Court (Gibbs, CJ, Mason, Wilson, Brennan and Deane, JJ) said:-
“It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination. The significance of the various elements involved in such an examination will vary from case to case; for example, the circumstances of some cases may be such that a comparison of the relative importance of the acts of the parties in causing the damage will be of little, importance.”
[11](1985) 59 ALJR 492.
Apportionment of responsibility between tortfeasors is approached in much the same way as the assessment of contributory negligence. It should be “dealt with somewhat broadly and upon commonsense principles”[12]. An appeal court should be slow to interfere with a trial judge’s apportionment of responsibility unless he has obviously proceeded on a misunderstanding of the evidence or clearly put a wrong value on parts of it.[13] In the circumstances of this case the judge has expressed himself adequately in finding both Metron and AHC liable for Mr Windahl’s injuries and no error is disclosed in the apportionment of 80/20 which he made.
[12]The Volute [1922] 1 AC 129 at 144 (Viscount Birkenhead) (contributory negligence). See also Bristol Fame (Owners) v Macgregor (Owners) [1943] AC 197 at 201; Scott v Bowyer [1988] 1 VR 207; Esso Australia Ltd v VWA [2000] 1 VR 246 at 253 (Winneke P).
[13]Eg. Watt v Bretag (1982) 56 ALJR 760.
There is no basis for interfering with the trial judge’s decision on the issue of apportionment or its quantification.
Conclusion
The third party’s appeal against the defendant in this proceeding should be dismissed.
The Section 138 proceeding
The second proceeding tried with the proceeding brought by Mr Windahl against Metron was a proceeding against Metron brought by the VWA pursuant to s.138 of the Accident Compensation Act 1985 for an indemnity from Metron in respect of its liability to pay compensation to Mr Windahl pursuant to the Act. Liability to such an indemnity arises where the injury for which compensation is payable under the Act is suffered in circumstances creating a legal liability in a person other than the employer to pay damages. The limit of the indemnity provided by the statute is the lesser of the amount of compensation paid or payable under the Act and an amount calculated in accordance with a formula set out in the section.
Consistently with his determination of the case brought by Mr Windahl against Metron, the trial judge found Metron liable to indemnify the VWA pursuant to s.138. The limit of that indemnity he found to be $693,211.46. He calculated this figure according to the statutory formula:-
“”
Section 138 defines the elements of this formula as follows:-
“Xis the extent, expressed as a percentage, whereby the third party's act, default or negligence caused or contributed to the injury or death;
Ais the amount of damages (disregarding the extent, if any, whereby any other person's act, default or negligence caused or contributed to the injury or death) for pecuniary loss and non pecuniary loss which the third party is or would have been liable to pay in respect of the injury or death were it not for the provisions of this Act and the Transport Accident Act 1986;
Bis the amount recovered or recoverable by the Authority, the self-insurer or the employer under section 137 from the Transport Accident Commission (otherwise than under a settlement);
Cis the amount paid by the third party in respect of the injury or death to the worker or the dependants of the worker under any settlement of, or judgment in, an action by the worker or dependants of the worker against the third party.”
His Honour assessed X as being 80% - that is to say the same percentage liability for Mr Windahl’s injuries suffered as a result of the mishap with the Vectrosurge machine which he attributed to Metron in the third party proceeding between it and AHC. He assessed A as being $866,514.33, the same figure he had awarded Mr Windahl as damages against Metron, which did not include any amount for Griffiths v Kerkemeyer damages as such damages are precluded by s.135A (10)(b) of the Accident Compensation Act 1985. The figure was calculated as follows:-
General Damages
$200,000
Past Loss of Income Earning Capacity of $203,100.04 reduced by 20%
$162,480.03
Loss of future income earning capacity at $672,045.72 reduced by 25%
$504,034.30
Total
$866,514.33
Having reached that figure he considered the issue of Griffiths v Kerkemeyer damages in relation to Factor A in the following paragraph:-
“I reject the view that Griffiths v Kerkemeyer damages are not included within A. I think they are. To the extent that they are being paid by VWA, they should be included within A. To the extent that they are claimed for the future, they should be reduced for vicissitudes at the rate of 25%.”
As the trial judge did not award any value to either B or C, the result of the application of the statutory formula was a maximum indemnity figure of $693,211.46. His Honour added a rider to that conclusion in the following terms:-
“I further declare that no allowance has been made for unpaid services of a domestic nature or relating to nursing and attendance, nor, is Metron to be liable for it in the future unless it is first paid for by VWA.”
Although the trial judge delivered extensive reasons for his decision on 24 November 2004 to which most of the issues raised in these appeals relate, on 26 November he heard further argument on a number of different matters and altered his judgment as a result. There seems to have been at least some degree of consent from various of the parties in the case to this irregular procedure which may explain why no complaint is made in this Court about its having occurred in the way it did. Although the trial judge at one stage in the discussion referred to the judgment he had delivered as a “proposed judgment” no revised version of it appears to have ever been delivered and, for the most part, it has been accepted by the parties as being the trial judge’s actual judgment subject to the changes he made and the matters he added during the subsequent hearing.
It is necessary to examine what occurred in the hearing of 26 November to place in context the appeal by the VWA against the quantum of the indemnity to which it is entitled against Metron.
The extract of transcript added to the appeal book shortly before the hearing of these appeals shows that counsel for the plaintiff commenced the post judgment discussion on 26 November by pointing out an error in the trial judge’s computation of Mr Windahl’s damages. His Honour corrected the error and adjusted the figure for damages accordingly. This adjustment was accepted as appropriate by the trial judge so as to express his intention with respect to the plaintiff’s damages properly. It was not opposed by counsel for Metron. Other uncontroversial adjustments were then made to the amount for which judgment would be entered for Mr Windahl to take account of payments of compensation already received and interest. These latter adjustments are, of course, unremarkable and normally follow the determination of litigation such as this. Eventually the figure for which judgment should be entered for Mr Windahl was determined to be $736,678.58 after taking into account all outstanding matters. Costs were then discussed and orders made in the ordinary way.
Counsel for the VWA then made submissions to the trial judge concerning his Honour’s assessment of the limit of the indemnity provided by s.138 of the Accident Compensation Act 1985. As already noted, in his judgment he had fixed factor A to be $866,514.33 and had included in that figure no amount for Griffiths v Kerkemeyer damages. It appears that the parties themselves agreed that his Honour was in error on the latter point and an adjustment was agreed to be made.
As there was no argument between the parties as to the way Griffiths v Kerkemeyer damages should be calculated as a matter of arithmetic for inclusion in factor A, the only question remaining was by what percentage the element of those damages which related to the future should be discounted for vicissitudes. The VWA had submitted to the trial judge that the discount should be 20%, apparently without demur from Metron. Whilst in his judgment of 24 November the trial judge mentioned a discount of 25%, on 26 November, without any application by any party, he decided that the discount should be 33%. He gave as the only reason for reaching this conclusion that he considered that with respect to the domestic services required by Mr Windahl in the future which will or may be provided by his wife:-
“… as time goes by they’ll adjust and manage without the necessity to put in a number of hours that they’ve had to invest in the past.”
Having regard to the way in which the trial judge dealt with the issue in his judgment and in the passage of transcript following its delivery one could not be confident that his Honour had reached a correct understanding of the role of Griffiths v Kerkemeyer damages in the computation of factor A and the nature of the indemnity provided by s.138 of the Accident Compensation Act 1985. However, his ruling as to the 33% discount for vicissitudes is the subject of appeal by the VWA in this Court and will be dealt with hereunder.
The next matter which was raised on 26 November was the calculation of factor X, that is to say, the extent, expressed as a percentage, to which Metron’s negligence caused or contributed to Mr Windahl’s injury. In his judgment the trial judge fixed factor X at 80% by simply applying his finding on the third party proceeding between Metron and AHC to the s.138 proceeding. But the parties, depending upon whether Metron was held liable in negligence or not, had agreed at trial that factor X had to be either 100% or 0%, the negligence of the employer AHC being agreed (rightly or wrongly) to be irrelevant. However, despite the concession made by Metron and the earlier agreement between the parties, his Honour did not, in this instance, revise his judgment. This too is an issue on this appeal raised by the VWA.
Although the trial judge had given Factor C a nil value in his reasons for judgment he accepted subsequently that it did have a value and that that value was the amount of the judgment in the plaintiff’s favour against Metron; that is to say the amount of that judgment without taking into account Metron’s right to recover 20% from Mr Windahl’s employer, AHC. This determination was made against the VWA’s submission that Factor C should be the net amount to be provided to Mr Windahl for damages by Metron after taking into account Metron’s right to re‑imbursement from AHC of 20%.
The transcript concludes before final calculations were provided to the Court although it does appear that no further hearing took place. The judge was apparently provided with minutes of orders calculated using agreed figures and applying the rulings he had made after delivering his judgment as to the values of Factors A, X and C. It must be assumed that the orders included in the appeal book as having been authenticated reflect a partial consensus between the parties to this litigation even if some of the figures in those orders do not appear to be able to be reconciled with any which appear in any other material before this Court. This is not important, however, as the only issues which are still alive on these appeals can be determined with leave reserved to the parties to bring in actual figures to enable a judgment to be formulated.
The remaining appeals
There are still two appeals to be determined. The first, and simpler, is that by Metron against the trial judge’s finding that it is liable to indemnify the VWA pursuant to s.138 of the Accident Compensation Act 1985. Metron’s notice of appeal, after amendment, relied upon the same grounds as its amended notice of appeal against the judgment given in Mr Windahl’s favour against it. For the reasons that that appeal should fail this appeal should also fail. The VWA is entitled to an indemnity pursuant to s.138 of the Accident Compensation Act 1985 from Metron in accordance with the provisions of that section.
The other appeal is that by the VWA against Metron. Although expressed more fully in its notice of appeal there are really only three relatively concise matters raised by the VWA against the trial judge’s judgment in its favour against Metron. These relate to the computation of factors A, X and C for use in the formula prescribed by s.138 of the Accident Compensation Act 1985 for calculating the limit of the indemnity Metron must provide to the VWA pursuant to that section.
The first complaint concerns the trial judge’s computation of factor A and, in particular, his application of a 33% discount for vicissitudes in calculating the component of factor A concerned with Griffiths v Kerkemeyer damages as they relate to the future.
Counsel for the VWA did not contend that the trial judge should not have discounted that element of the Griffiths v Kerkemeyer damages attributable to the future included in factor A. His complaint was only as to the amount of the discount. He took the Court to a number of passages in the evidence which, he submitted, demonstrated that, contrary to the trial judge’s final conclusion, Mr Windahl’s dependence upon others for essential services is not likely to decrease in the future as the judge prognosticated in the comment quoted above. Counsel for Metron did not point to any evidence before the trial judge which would have supported this comment or justified a discount of 33% in respect of Griffiths v Kerkemeyer damages for the future. He relied rather upon a general submission that the trial judge’s advantage in seeing the witnesses, including Mr and Mrs Windahl, placed him in a better position to make an assessment of the appropriate discount.
That in accordance with the principles applicable to the assessment of damages for postponed losses some discount should have been applied to the calculation of Griffiths v Kerkemeyer damages for the future was not in dispute, but I am unable to understand how his Honour came to fix upon a discount of 33%. That Mr Windahl’s health is stable and not improving did not seem to be in contention at the trial. Why he should require fewer services (in the Griffiths v Kerkemeyer damages sense) in the future, as he gets older, is unexplained. The VWA position is correct. A discount of 20% only should be applied to the total Griffiths v Kerkemeyer damages assessed for the future for the vicissitudes and contingencies of life including mortality. Damages thus discounted would adequately compensate Mr Windahl if he was to receive these damages (which, of course, he is not) for this element of his loss.[14]
[14]Factor A represents an assessment of common law damages. Mr Windahl’s actual damages had to be assessed ignoring Griffiths v Kerkemeyer because of s.135A(10)(b) of the Accident Compensation Act 1985.
The second matter complained of by the VWA is the trial judge’s assessment of factor X as being 80%. The complaint is put on a number of bases, only two of which need to be dealt with here. The first is, that on the case as conducted before the trial judge, both the VWA and Metron accepted that factor X would be either 100% or 0% depending upon whether Metron was found liable in negligence to Mr Windahl or not. They agreed that the negligence of Mr Windahl’s employer, AHC was irrelevant. That the case was conducted on that basis was not resiled from in this Court by Metron. It merely submitted that the concession made as between the parties did not bind the trial judge to determine the issue in accordance with their jointly adopted position.
In civil litigation concessions made by a party or agreements reached between parties in the course of that litigation should normally be regarded as not able to be disturbed by a finding inconsistent with such concessions or agreements by the tribunal hearing the dispute. There are a number of reasons for this principle. Parties are encouraged to limit the issues debated in a case in the interests of economy by making concessions where appropriate. The course of any particular piece of litigation is plotted by each of the parties bearing in mind concessions made by or agreements reached with opposite parties as to certain aspects of the case. In some circumstances concessions given may be themselves consideration for enforceable agreements. Questions of estoppel may arise. The trial judge is not to know what prompted any particular concession, why it was made when it was and what its consequences for the party making it or the party in whose favour it is made might be. The parties are their own masters in such matters and should be able to order their affairs without fear that the Court will override their freely adopted positions.
Of course, there could be cases where overriding public interest considerations would require this general principle to be qualified but it is difficult to see how, outside litigation in an area of public law, or in circumstances of fraud or the like, a Court would be justified in imposing its view of an issue of fact upon the parties where that view is contrary to the freely adopted position which they have taken.
The second issue concerns the state of the pleadings. On the case between the VWA and Metron no issue was raised by the pleadings which would have enabled the trial judge properly to make the finding as to the value of factor X that he did. It was not alleged in Metron’s defence that any negligence by AHC contributed to Mr Windahl’s injury by the Vectrosurge machine. In Dare v Pulham[15] the High Court restated the long established principle that apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on those pleadings.
[15](1982) 148 CLR 658.
The trial judge’s assessment of the value of factor X at 80% was an error, in the circumstances of this case, which should be corrected. The proper value of factor X in this instance was 100%.
The final matter raised by VWA’s appeal is the value of factor C. The competing contentions are that factor C should be the amount finally settled upon by the trial judge, namely the full amount of Mr Windahl’s judgment against Metron, and the position taken by the VWA that that amount should be discounted by 20% for the contribution to which Metron is entitled from Mr Windahl’s former employer. In other words, when determining the amount “paid” by Metron for the purposes of factor C, must Metron give credit against that payment for the amount it is entitled to recoup from AHC?
Section 138 of the Accident Compensation Act 1985 exists to provide an indemnity to an employer who is or will be obliged to pay compensation to an injured worker where that worker’s injures were caused in circumstances giving rise to a legal liability to pay damages in a third party. Such a statutory right to indemnity has been a feature of workers’ compensation legislation since at least s.6 of the Workmen’s Compensation Act 1906 (UK),[16] although from time to time, the extent of that indemnity and the method of determining it has varied. Section 138 in its present form appears to seek, by use of the statutory formula, a result whereby the third party tortfeasor is required to provide an indemnity for the whole of the compensation paid to the injured worker up to a limit fixed by reference to what the third party’s liability would have been in a hypothetical common law action.
[16]VWA v Esso Australia (2001) 207 CLR 520 at 527; Tickle Industries Pty Ltd v Hann (1974) 130 CLR 321, 326 and Scott v Bowyer [1998] 1 VR 207.
In this case, by reason of the issue joined between Metron and the VWA at trial and the concession made by Metron in the course of that trial that it was either not responsible for the worker’s injuries at all or was 100% responsible for them, the total maximum liability for Metron for the mishap involving the Vectrosurge machine is in fact equal to an award of common law damages.
The part played by factor C in achieving the overall statutory intention is to give credit to the third party tortfeasor for any amount which it has “paid” to the injured worker either because it has settled an action with him or suffered judgment in an action brought by him. If factor C was calculated by reference only to the amount of the judgment entered against the third party at the suit of the worker ignoring the amount the third party is entitled to recover from another tortfeasor, the third party would obtain a windfall benefit which would have the effect of distorting the purpose of the indemnity provision. Thus the word “paid” in the definition of factor C should be given a construction consistent with the purpose of the section, that is to say consistent with the purpose of making the third party tortfeasor liable to the extent of an award of common law damages. The third party should be entitled only to a credit against its liability to indemnify the compensation payer equal to the net amount it has “paid” the injured worker in damages. In this case that amount will be the amount of the judgment for damages against it at the suit of Mr Windahl less the amount it is entitled to recover from AHC.
Finally, it is necessary to explain, in its context, the word “paid” in the definition of factor C. On its face the definition would appear to contemplate that factor C would only exist after the third party tortfeasor had actually paid the injured worker his damages. However, the difficulty that this interpretation would create for the application of the formula in s.138 has already been noticed by this Court. In Esso Australia Limited v VWA[17] Winneke, P accepted that a construction of s.138 which enabled the Court to ascertain, once and for all, an entitlement to indemnity against the negligent third party which will not exceed that party’s proportion of responsibility for the worker’s notional damages at common law for pecuniary and non-pecuniary loss should be adopted. Although his Honour expressed difficulty in construing the section in this way, his construction was subsequently specifically approved by the High Court.[18] Thus the application of the formula provides a “ceiling” so that the extent of the indemnity required to be provided by the third party can be calculated, even before any payment is made by it to the injured worker.
[17][2000] 1 VR 246, 252. See also the comment by Batt and Vincent, JJA in VWA v Kenman Kandy Pty Ltd [2002] 6 VR 666, 680.
[18](2001) 207 CLR 520, 530.
Factor C in this case should be determined as 80% of the damages awarded by the Court to Mr Windahl against Metron.
The appeal by VWA against Metron with respect to the calculation of the amount of the indemnity which Metron must provide pursuant to s.138 of the Accident Compensation Act 1985 should be upheld and the amount of that indemnity recalculated in accordance with these reasons. As has already been noted, because this Court does not have the data required to make those calculations, the parties should be given leave to bring in minutes of orders conformably with this judgment.
Orders
The following orders should be made on these appeals:-
·Metron Medical Australia Pty Ltd v Michael Windahl No. 3800 of 2004
Appeal dismissed.
·Metron Medical Australia Pty Ltd v Victorian Workcover Authority No. 3801 of 2004
Appeal dismissed.
·Victorian Workcover Authority v Metron Medical Australia Pty Ltd No. 3801 of 2004
Appeal upheld. Judgment of the County Court varied in accordance with these reasons for judgment.
·Australian Hospital Care (Ringwood) Pty Ltd v Metron Medical Australia Pty Ltd No. 3802 of 2004
Appeal dismissed.
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