Norris v Routley

[2015] NSWSC 1875

Supreme Court

New South Wales

Medium Neutral Citation:	Norris v Routley [2015] NSWSC 1875
Hearing dates:	7 December 2015
Date of orders:	11 December 2015
Decision date:	11 December 2015
Jurisdiction:	Common Law
Before:	Harrison J
Decision:	(1)    Direct the parties to bring in short minutes of final order giving effect to my conclusions in [49] of these reasons. (2)    List the proceedings before me on a date to be arranged in consultation with my Associate for the purpose of hearing argument on costs.
Catchwords:	DAMAGES – past and future losses – discount for vicissitudes – whether appropriate to apply rate other than 15 percent
Legislation Cited:	Civil Liability Act 2002 Compensation to Relatives Act 1897
Cases Cited:	Berkeley Challenge Pty Ltd v Howarth [2013] NSWSC 370 De Sales v Ingrilli [2002] HCA 52; (2002) 212 CLR 338 Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 Norris v Routley [2015] NSWSC 883 Robinson v Ng [2014] ACTSC 227 Urban Transit Authority of New South Wales v Seitis (unreported, New South Wales Court of Appeal, 17 May 1995)  Wynn v NSW Insurance Ministerial Corporation [1995] HCA 53; (1995) 184 CLR 485
Category:	Procedural and other rulings
Parties:	Dr Mary Helen Norris (Plaintiff) Dr Douglas Routley (Defendant)
Representation:	Counsel: D R Toomey SC with S J Holmes (Plaintiff) J K Kirk SC with Z Heger (Defendant)   Solicitors: Whiteley, Ironside & Shillington (Plaintiff) Avant Law Pty Ltd (Defendant)
File Number(s):	2013/111968
Publication restriction:	Nil

Judgment

1. HIS HONOUR: Three issues remain for determination following publication of my principal judgment on 7 July 2015: Norris v Routley [2015] NSWSC 883. They are as follows:

1. Whether the amount of $84,370 for certain anti-viral pharmaceutical costs associated with the deceased’s anticipated liver transplant ought to be included as a probable out-of-pocket expense.

2. Whether anything, and if so what, ought to be allowed by way of discount for the vicissitudes of life upon the deceased’s income and domestic services provided by him.

3. Whether anything, and if so what, ought to be allowed by way of discount for the vicissitudes of life upon Dr Norris’s income.

2. I note that the third issue was originally framed as an inquiry into what were described as “the deceased’s consumption and care costs”. However, in the manner in which the argument before me proceeded, it became clear that the issue was concerned with the discount, if any, that should apply to Dr Norris’s income predictions to take account of vicissitudes. The incomes of the deceased and of Dr Norris together combine in a calculation to arrive at a final figure for consumption costs. This has already been referred to in the principal judgment and is once again referred to briefly below.

Issue one

3. My initial understanding was that the sum of $84,370 referred to by the defendant in his original submissions was the cost of the deceased’s anticipated liver transplant surgery: principal judgment at [112]. That was incorrect. The sum of $84,370 in fact refers to the cost that Dr Routley contends would have been incurred by the deceased as (predominantly) pharmaceutical expenses and travel costs associated with his condition as a liver transplant recipient infected with the Hepatitis C virus. The figure is produced by the calculations set forth in the following table:

Year	Pharmacy	Sofobuvir	Daclavasvir	Travel to RPAH
2011	1	1,400	4692
2012	2	800	1020
2013	3	800	1020
2014	4	800	180,000	120,000	1020
2015	5	300	1020
Future 2016 to 2030	6 to 20	3.260 (Present value of future loss)	4,435 (Present value of future loss)
Discount by 66.66%: 60,000	Discount by 66.66%: 40,000
Total	7360	60,000	40,000	13,207	$120,567
Discount 30% for vicissitudes	$84,370

4. The drugs Sofobuvir and Daclavasir are touted as being capable of curing Hepatitis C infections. Dr Routley contends that the sum of $300,000 would more probably than not have been expended by the deceased. He submitted that in all likelihood the drugs will, or would have, become available by somewhere between 1 December 2015 and 1 April 2016 and that there is a one in three chance that the deceased would have paid the unsubsidised amount of $300,000 in an attempt to cure his Hepatitis C infection. This is said to be so because, if left untreated, that viral infection would have continued to imperil the continuing viability of the deceased’s transplanted liver with potentially fatal consequences. As will be apparent, the total cost of the drugs has been discounted in Dr Routley’s calculation first by two thirds to account for the chance or possibility that the deceased would not have undertaken the expensive treatment in accordance with Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 at 643 and secondly by a further 30 percent for vicissitudes.

5. Dr Norris submits that the sum of $84,370, or any lesser fraction of it, should be completely ignored as a cost that would have been incurred. There are a number of reasons for this.

6. First, she submitted that there is no evidence that the drugs would have been necessary or appropriate for someone in the deceased’s position who had undergone a liver transplant in November 2010. She also contended that the “unchallenged evidence” is that the anti-viral drugs would not have been available for use in Australia until at least 27 April 2015.

7. Associate Professor Gow’s opinions regarding these matters were as follows:

“What would be his need for ongoing medications to avoid organ rejections and what would be the likely cost of these medications?

Patients after liver transplantation need lifelong immune suppression therapy. The immune suppression therapy changes with time. In the first 3-6 months after transplantation patients are typically on three different immune suppression medications in addition to a number of other medications to prevent infection, also disease etc. However, these drug needs reduce significantly with time, and a hepatitis C patient at one year may just be on two medications and someone at five years may just be on one medication.

The pharmacy costs for a typical patient are $36.90 per prescription dispensed her [sic, per] medication. Each medication script would supply the patient with 2 months medication. Once a patient has spent $1400 in a calendar year, the script cost per medication changes to $6. In the first year after transplantation we would expect the majority of patients would reach this $1400 mark. In the second year after transplantation patients may be spending in the order of $800 for their pharmacy costs and in the fifth year maybe $200 to $400 for their pharmacy costs.

What treatment is now available to cure hepatitis C and what is the cost of this treatment?

The treatment for hepatitis C infection is changing. Currently the only PBS reimbursed medication for hepatitis C is interferon based. These medications can cause rejection after liver transplantation and therefore are only used in extreme cases. These medications are available on the PBS and therefore would have the normal script costs. These medications typically involve two or three different medications used for a total of 48 weeks.

There are new medications emerging for the treatment of hepatitis C that look to be safe to use after liver transplantation with no risk of causing rejection, have much lower rates of side-effects than interferon based therapy and are much more effective. As yet there is no black or white information about the efficacy of the use of medications used after liver transplant, but we would expect that 24 weeks of therapy involving two drugs would have a cure rate that may be as high as 80%-90%. The actual duration of therapy needed to treat patients after liver transplantation has not yet been resolved, but the feeling is that it is currently 24 weeks. These medications are currently not available through the pharmaceutical benefits scheme. Sofosbuvir is the most evolved of these medications and 24 weeks of sofosbuvir would cost in the order of $180,000. The purchase price of the second most evolved medication (daclavisir) [sic, Daclatasvir] has not yet been made publicly aware from my understanding, but I would expect it to cost in a similar range to sofosbuvir. Therefore, these two medications given to someone for 24 weeks would cost in the order of $300,000.”

8. Dr Vickers commented upon Associate Professor Gow’s opinions in these terms:

“The new drugs mentioned by Gow have been tested in controlled trials over the past three years and have been shown to be highly efficacious and superior to other current drugs used to cure HCV infection. They have already been approved and are in current use in the United States and Europe.

Approval of the drugs Sofosbuvir and Daclatasvir were granted by the PBAC, Federal Department of Health on 27 April 2015 for use in Australia.

Efficacy in liver transplant patients

Cure of HCV infection after liver transplantation is achievable with the new drugs of Sofosbuvir/Ledispavir and Ribaviron. Other combinations of Sofosbuvir with Simeprevir (already available in Australia) and Daclatasvir are under evaluation.

The cure rate is certainly above 50% probability as required by the Courts, with the real results estimated at about 90% from clinical trials presented at international meetings.

Cost

The new drugs come at high cost. In the United States a course of 12 weeks for one drug (Sofosbuvir/Ledispavir) is $90,000 USD. This treatment time of 12 weeks seems to be the right duration to achieve a high cure rate.

The cost of Daclatasvir would be similar one could expect.

Thus one ought to allow at least the cost of $90,000 USD as drug cost.

The cost of the drug in Australia is currently being negotiated by the PBS and the manufacturer. These discussions would be commercial in confidence.

Availability

The new drug treatments are expected to be listed on the PBS for available prescription between 1 December 2015 and 1 April 2016.”

9. Clearly the costs associated with pharmaceuticals would be minimal unless Dr Routley can demonstrate that the unsubsidised cost of these new drug treatments would have been incurred. The medical evidence referred to above is the only evidence in the proceedings about the availability, cost or efficacy of these drugs. Dr Norris submitted that it did not address the questions of whether:

1. as at April 2015 it would have been appropriate for a person who had undergone a liver transplant in November 2010 to be prescribed these new drug treatments;

2. as at April 2015 it would have been necessary for a person who had undergone a liver transplant in November 2010 to have been prescribed these new drug treatments.

10. Secondly, Dr Norris submitted that, even if the anti-viral drugs had been available for purchase from the date of the deceased’s anticipated liver transplant, there is no evidence that there would have been any urgency for that medication to be used. She and the deceased may in fact have waited until the drugs were listed on the Pharmaceutical Benefits Scheme.

11. Dr Norris contended that her evidence on this issue does not in any event support the likelihood that the treatment would have been undertaken. She was cross-examined on this topic on 22 June 2015 as follows:

“KIRK: You’ve read Associate Professor Paul Gow's report?

A. Yes.

Q. And I recognise by the way that the world is moving on in relation to that treatment, and there will be some evidence about that tomorrow, or indeed it is in the tender bundle, but that treatment that Professor Gow refers to was an antiviral treatment, some new antiviral drugs, in effect, to treat the Hep C. You understand that?

A. Yes, I do understand that.

Q. The costs that Professor Gow identifies for that treatment is of the order of AUD$300,000. Do you recall reading that?

A. Yes. I've seen that report.

Q. If you and your husband had been advised that such a treatment was available, such treatment had a good chance of bringing to an end the hepatitis C infection, and in that way avoiding new risk to the new liver, you would have seriously considered paying that amount of money for that treatment?

A. Well that would depend whether that drug was available at the time that he would have been offered his liver transplantation.

HIS HONOUR: That's the assumption that's built into the question.

A. Yes, that's right.

KIRK: If it was, you would have seriously considered paying that amount of money?

A. It would depend on the medical advice, so I would only make that decision with my husband after I had spoken with the physician.

Q. But you

A. So I can't answer that question because I don't know what was available at that time.

Q. You certainly don't rule it out as a possibility if the drug had been available?

A. I would not rule that out, but I would be

HIS HONOUR: Sorry. Hold on. Even though we're recording this electronically, it's still impossible to transcribe it if two people speak at once.

A. I'm sorry.

Q. Would you mind waiting for the question and then Dr Kirk will wait until you have answered.

A. Yes.

KIRK: On the assumption that the drug was available at the time, at some time after your husband had had his transplant and on the assumption that it cost of the order of AUD$300,000, and on the assumption that it would have had a significant chance of killing the hepatitis C infection and in that way removing that threat to the new transplanted liver, on all those assumptions, you certainly can't rule out being prepared to pay that money?

A. My goodness, I'd have to probably take out a small bank loan for that.

Q. The answer to my question is yes; is that right?

A. Look, these are - this is - if it was available at the time, it would depend. It would depend, but at $300,000, I don't know whether our family would have coped with that.

Q. Sorry, have you finished?

A. Well, you're putting words in my mouth. That would depend on the advice at that time that he received his liver transplantation?

Q. If the advice was to have it, you would have seriously considered it?

A. We would have considered it. Whether we could do it is another matter. Okay?”

12. In summary, Dr Norris contended that the evidence simply does not permit me to draw an inference that these drugs can be accessed in Australia. She submitted that there was no direct or specific technical medical evidence that the drugs are now available, or any reliable evidence of when they might become available. Dr Norris submitted that Dr Routley is simply asking me impermissibly to infer that the drugs will become available when there is no evidence upon which to base any such inference. Moreover, Dr Norris’s own evidence raises considerable doubt about whether the treatment would have been utilised having regard to the very high costs involved. The medically supported suitability or advisability of undertaking the treatment, assuming that it became available, has also not been established.

13. According to Dr Norris, the Malec v Hutton approach for which Dr Routley contends requires a court to “assess the degree of probability that an event would have occurred, or might occur, and adjust its award of damages to reflect the degree of probability.” Dr Norris submitted that the “evidentiary vacuum” to which she has referred means that there is no context in which, or by reference to which, that decision can operate. For example, Dr Norris submitted that there is no evidence upon which I could proceed to find that the new drug treatments would either be necessary or appropriate for a person of the deceased’s particular clinical circumstances. There is also no evidence to suggest that the deceased could not safely have delayed his use of the new drugs until they were available at a reasonable cost, presumably but not certainly between 1 December 2015 and 1 April 2016, as subsidised medicine under the Pharmaceutical Benefits Scheme.

14. Dr Norris also correctly observes that the deceased has been found to have had a 17 year life expectancy at the date of the notional transplant procedure. My finding to that effect was made by adopting Associate Professor Gow’s median figure for a patient who had not been prescribed the new drugs now being considered. Dr Norris therefore argues that it would be inconsistent if I were now to consider, far less conclude, that there was even a possibility that these drugs would have been prescribed to the deceased where his life expectancy has already been calculated without reference to them. In other words, Dr Routley cannot simultaneously embrace the limited 17 year life expectancy calculated for a patient with a continuing Hepatitis C infection without the anti-viral drugs and yet also attempt somehow to utilise an inconsistent assumption that if established would in all probability have extended his life well beyond that estimate.

15. In my opinion, Dr Norris’s contentions are to be preferred. The likely availability of the new anti-viral drugs remains undecided and effectively unknown. I can safely assume, as there has been no attempt to suggest otherwise, that they are not available yet, despite having been approved for use. Even if they were I am not possessed of an expert opinion that says anything specific about their use or suitability for the deceased, having regard to his particular age and circumstances, had he survived. The unsubsidised cost would certainly have caused both Dr Norris and the deceased to think carefully about expending such a large sum with uncertain prospects of success, especially having regard to the ever present risk of an early death at any time, and the need for Dr Norris and the deceased to evaluate the continuing future needs of their two sons. There is nothing in Dr Norris’s evidence that impels me with confidence to the view that she or the deceased would necessarily have taken up the use of these drugs had they only been available at very high cost.

16. More fundamentally, however, Dr Routley’s arguments fail to take account of the life expectancy calculation, and the unavoidable fact that it was arrived at upon a combination of expert opinions and factual assumptions that did not include the prospect that the deceased’s Hepatitis C infection could or would have been arrested at some time by the use of these drugs. Life expectancy predictions rely upon a mix of certainties and uncertainties to produce a final estimate. The likelihood of the deceased’s continuing exposure to his virus must undoubtedly have been one of them. Correspondingly, one might have expected that the successful eradication of his infection, and its consequent effects upon a newly transplanted liver, would have assumed some prominence in those calculations and assumptions if it were significant. I have no way of knowing whether a liver transplanted into an infected person would not in any event have sustained some damage that would or could not have been eradicated by the subsequent arrest of the infection.

17. The approach proffered by Dr Routley raises procedural concerns as well. The new drug regime would appear never to have been factored into the life expectancy calculations. I have now decided that issue. Dr Routley’s argument raises the spectre of that issue being revisited, which in the particular circumstances of this case could hardly be considered to be a realistic prospect. The calculations associated with my 17 year life expectancy finding would necessarily also have to be revisited with forensic considerations and consequences to which I have not been alerted.

18. The probability that the costs associated with the administration of these new drugs would have been incurred by the deceased had he survived is something that Dr Routley must establish. I am not satisfied that he has done so. I am also not satisfied that it would be fair to permit him to do so in the circumstances.

Issue two

19. I found in my principal judgment that, absent the facts giving rise to these proceedings:

1. The deceased would have survived until the date of Dr Norris’s retirement at the age of 65 in 2026;

2. The deceased would have continued to work as his wife’s practice manager until she retired at the age of 65 in 2026;

3. The deceased would have provided domestic services until at least the date of his wife’s retirement in 2026.

20. The question that arises is whether the deceased’s income and the value of his domestic services should be discounted for vicissitudes over the assumed 17 years of life he would have enjoyed and if so at what rate. Dr Norris submitted that these sub-issues should be dealt with differently. With respect to domestic assistance, Dr Norris argues that no discount should apply. However, Dr Norris concedes with respect of the deceased’s income that the position is different and that some discount is appropriate. Dr Routley contends in both respects that all past losses should be discounted by 20 percent and future losses should be discounted by 30 percent. These different approaches reflect the respective positions of the parties about whether Dr Norris can establish, or indeed whether she has established, the existence of a net loss to the household following the death of her husband.

21. With respect to the claim for loss of domestic services, the difference between Dr Norris and Dr Routley on this issue can be shortly stated. Dr Norris contends that my finding of a 17 year life expectancy for the deceased forecloses the application of a further discount upon the basis that the deceased may have died sooner. This is said to be so because vicissitudes for the unexpected and unanticipated events in life must necessarily have been assumed and included in the life expectancy calculations and the finding at which I arrived. Dr Norris argued that Dr Routley has not identified any basis upon which the loss of domestic services to be provided by the deceased ought to be reduced for vicissitudes, other than that he might have lived less than the life expectancy determined by me. If that calculation was influenced by his liver pathology and what he would have faced as a surviving transplant patient, it had already been taken into account once and could not be taken into account again. Dr Norris submitted that there should be no discount applied in respect of domestic services.

22. With respect to the settled issue of the deceased’s 17 year life expectancy, Dr Routley argued on the contrary that the assessment of life expectancy in this or any case did no more than calibrate the multiplier for damages calculations in accordance with usual practice. The usual process, of applying a discount of 15 percent, should apply in circumstances where the injury which is the subject of the proceedings had no particular influence on the calculation of the discount for vicissitudes. Once the assessment has been made by reference to factors special or particular to the individual in question, according to Dr Routley, factors of general or universal application common to all individuals come into play. For example, the deceased would have been no more and no less likely to be struck down with a fatal illness or to be hit by a bus as a liver transplant recipient than any other person of good health with an ordinary life expectancy.

23. However, not content with 15 percent, Dr Routley went further. He contended that discounts could and should in this case be applied “to reflect the significant risk that Mr Norris would not have survived for very long after his hypothetical liver transplant in November 2010.” In support of that contention Dr Routley referred to a number of authorities. For example, in Berkeley Challenge Pty Ltd v Howarth [2013] NSWSC 370 at [23] and [25], Meagher JA indicated that the standard discount should be increased to 25 percent to take account of a pre-existing injury. In Robinson v Ng [2014] ACTSC 227 at [209], reference is made to the discount being increased to 25 percent to take account of the plaintiff’s pre-existing back injury as well as the age of her husband, which may have required her to cease work early. Finally in Urban Transit Authority of New South Wales v Seitis (unreported, New South Wales Court of Appeal, 17 May 1995)  the Court increased the vicissitudes discount from 25 percent to 40 percent in circumstances where the plaintiff had cerebral palsy.

24. Dr Routley’s contention that it can be appropriate, in a claim made pursuant to the Compensation to Relatives Act 1897, to make adjustments for contingencies is uncontroversial. The question is whether it is appropriate to do so here by particular reference to the possibility that the deceased might not have survived more than a few years after his transplant. Dr Routley contends that it is appropriate.

25. The difficulty with that proposition is that I have already dealt with the question of how long the deceased would have survived following that hypothetical procedure. I said this at [64]–[65] of the principal judgment:

“[64] In purely statistical terms based on medical comparisons, Mr Norris would have had a life expectancy of 17 years at the date of his notional transplant operation. That estimate is the median survival figure presumably calculated by reference to a broad range of liver transplant patients with diverse medical histories, with all of the attendant and associated risks of illness, organ rejection and disability, but with hepatitis C as the common presenting cause of their liver failure. Some of the individuals would have been hypothetically better placed to outlive Mr Norris and some would not.

[65] I consider that it is appropriate to adopt the median figure of 17 years described by Professor Gow as applying to Mr Norris in this case. The availability of as yet unavailable anti-virals need not be considered. Professor Gow’s evidence is that there is as yet ‘no black or white information about the efficacy of the use of medications used after liver transplant’ and the projected difference in outcomes is only three years. These would in my analysis be years in which neither Dr Norris nor the deceased would in any event have been working so that the loss calculations from Dr Norris’s perspective could be no better.”

26. Moreover, Dr Routley does not appear to distinguish the factors that might have led the deceased to die prematurely as a transplant recipient, which have informed his life expectancy calculation, from factors that are removed from that calculation. For example, if the deceased were himself known to suffer from some other medical condition unrelated to his liver problem, such as cerebral palsy or chronic congestive airway disease, then that could be factored into the equation in accordance with the approach adopted in the cases to which Dr Routley has referred. It would however amount to double counting to utilise the deceased’s liver pathology, and any morbidities associated with it, in arriving at a discount for vicissitudes that was exceptional or unusual.

27. The present issue is in a sense similar to the first, where the special or particular question of the use of the new drugs bore directly upon the question of life expectancy. In the present context the special or particular vulnerabilities of the deceased as a transplant recipient have already been utilised to inform the same life expectancy calculation. This issue is instead concerned with the general and universal vicissitudes of life that affect everyone. I am, therefore, unattracted to the arguments advanced by Dr Routley that some more significant discount should apply.

28. I am, however, equally unattracted to Dr Norris’s argument that where there has been evidence directed to the question of someone’s life expectancy, there is no remaining justification for considering any discount for the contingencies of life. As I trust I have already made clear, the fact that the deceased has been considered, in the light of his particular clinical condition, to have had a particular life expectancy of specified years does not immunise him from what might be called the usual slings and arrows to which everyone in the community is subjected.

29. In summary, Dr Routley has not established any particular factor that should increase the usual discount for vicissitudes above 15 percent. Correspondingly, Dr Norris has not demonstrated why the deceased’s contribution by way of domestic services should be quarantined from such a discount, if factors particularly affecting his position as a vulnerable liver transplant recipient are put aside. It follows in my view that there is no justification for either increasing or reducing the discount for vicissitudes from the rate of 15 percent that would apply in the usual case to the claim for loss of the deceased’s domestic assistance.

30. Dr Norris has taken a different approach to the discount to be applied to the deceased’s income because of what she contends in effect are the predominance of favourable vicissitudes. Dr Norris relied upon what I said at [75]–[78] of my principal judgment as follows:

“[75] An alternative, competing and in my view preferred assessment is that Mr Norris could well have managed both roles. First, his prospective employer was his wife. Although it may not necessarily or universally be the case, having regard to the evidence in this case it seems likely, if not highly probable, that Mr Norris’s work environment and his working relationship with his employer would have been uncharacteristically friendly and industrially benign. It would surprise me if a considerable amount of flexibility were not in those circumstances one of its predominant characteristics.

[76] Secondly, despite Dr Norris’s endorsement of the onerous nature of the tasks involved in performing the job, her view is to some extent belied by an examination of precisely what it involved. The individual tasks are set out in paragraphs [32] and [33] of Dr Norris’s statement and are quoted earlier in these reasons. Doing the best I can, taking into account my experience of the world and of small professional undertakings, the individual matters to which it was anticipated Mr Norris would have been required to attend were in no obvious or apparent respects particularly onerous or even time consuming. The majority of the tasks appear to be either one-off establishment or set-up tasks or ones that only required attention on an annual or other periodic basis.

[77] Thirdly, the responsibilities were also not obviously related to patient numbers. Although there may be some minor exceptions to the proposition, I find it difficult to identify in paragraphs [32] and [33] of Dr Norris’s statement any single activity whose scope or content rose or fell in response to the level of patients attending the practice. Certainly income and outgoings would reflect patient numbers but I do not perceive there to be any corresponding increase in the need for practical management of the consequences.

[78] Fourthly, in a related fashion, none of the tasks identified for Mr Norris as a practice manager appears to be tied to attendance at the surgery on a regular basis or at all. Home office facilities or the equivalent provision of electronic equipment is now the norm and Mr Norris could largely and conveniently have managed the job from his home. There is also no apparent requirement that the work be performed on weekdays or in normal office hours and Mr Norris would undoubtedly have had the option of seven day weeks and after hours to complete his tasks. Inasmuch as the business world is as close as the mobile telephone and the computer, a great majority of Mr Norris’s tasks as a medical practice manager with no patient/client interaction could have been performed from home or at other locations and at almost any time that suited him.”

31. Dr Norris argued that when one has regard to these conclusions, and to the undoubted tax benefits that would have flowed from the deceased’s position as his wife’s employee, it becomes clear that the many factors that are taken into account in applying the standard discount of 15 percent are not applicable. The deceased’s risk of unemployment was minimal. His employer would undoubtedly have accommodated him in respect of periods of sickness. He would have been immune from industrial disputes or the prospect of dismissal. Dr Norris contended in such circumstances that nothing exceeding a 5 percent discount was appropriate.

32. In my view these arguments are persuasive. I have attempted so far to emphasise the need to establish both factors that have not already been taken into account on the one hand, and which are factors that are unique or particular to the individual in question on the other hand, in order to influence a variation either way of the usual vicissitudes discount. It will be recalled that I was not persuaded that either Dr Norris or Dr Routley had done so with respect to the deceased’s domestic assistance. I am also not persuaded that Dr Routley has done so with respect to the deceased’s income. I am however persuaded that Dr Norris has done so with respect to the deceased’s income, by the identification of the series of positive factors that are likely to improve the chances that he would have earned the income that has been projected. I consider that a discount of 7.5 percent should apply in the circumstances to that income calculation.

Issue three

33. The deceased’s consumption costs are a function of the interaction between his anticipated income and that of his wife. I have already dealt with the deceased’s income. Dr Norris argues that there should be a very substantial discount on her own income in the order of 50 percent for the purpose of calculating the deceased’s consumption of household income, but nothing exceeding a 5 percent discount in relation to his own income. The former discount is said to reflect such variables as the number of pregnancies she might have expected to receive per month and the associated number of consultations per patient.

34. As with several issues in these proceedings, the parties’ respective positions have somewhat opportunistically changed from time to time to accommodate the particular perspective from which the issue was being viewed. The present issue is an exemplar of that fact.

35. Dr Norris was examined at the trial by her counsel on the issue of her anticipated income from practising as an obstetrician. That evidence was being led in support of the argument that she was in need of a practice manager, which was the role that she anticipated would be performed by the deceased had he survived. That evidence was in in the following terms:

“Q. At 2010 how did you contemplate your husband would execute his role as practice manager and as carer for the boys and homemaker?

A. Well, he would have been flexible in that role, so he could allocate so many hours per day with the school hours, of course. It's nine to three for school hours, and then other times to if he would allocate to the out of hours or weekends or whatever he needed to because he had to he had two roles. He had a role of primary carer and he would have a role as a practice manager, but that could be a flexible one.

Q. What was your intention when you commenced in private practice concerning the building up of the volume of patients in private practice?

A. Well, I was hoping to you want to achieve a certain level of deliveries per month. You're wanting to know how many per months?

Q. What was that level?

A. You would be looking at approximately 20 deliveries per month, or perhaps a little bit more than that if the yes, so at least 20.

Q. Do you know now how many deliveries per month you are averaging?

A. I'm averaging at seven per month.

Q. Or what period of time did you anticipate you would build up your practice to the point where you would be managing 20 pregnancies per month?

A. Well, from 12 months maybe to 12 months to a 24 month period.

Q. To what extent did you anticipate that your husband would be involved once the practice reached the 20 pregnancies per month?

A. He would be a fulltime practice manager.

Q. Knowing, as you do, what practices an obstetrician and gynaecologist involves, do you see any way that you could manage that volume of patients without a practice manager?

A. No, you could not.

Q. Do you see any way that you could manage that volume of patients without a practice manager who was effectively working on a fulltime basis?

A. I'm sorry, say that again?

Q. Do you see any way that you could manage that volume of patients…

A. Yes.

Q. …without a practice manager working effectively on a fulltime basis?

A. No. Because you need a fulltime practice manager to manage that workload.

Q. You have some secretarial staff now; is that right?

A. That's right. That's correct.

Q. You have two secretaries each working on a part time basis?

A. That's right. Yes.

Q. What's the total number of hours per week you have secretarial services now?

A. Well, there's someone present for I'll just add those up. So there's 32 hours per week, so three, eight hour days and two four hour days per week, and two secretaries share those secretarial roles.

Q. What is the position now? You've told his Honour that you were doing point 4 of a fulltime equivalent as staff specialist at John Hunter Hospital. In addition to that, what is your schedule in your private practice?

A. So I work three short days. I work Mondays, Wednesdays and Thursdays from about approximately nine to three, to work in with the kids' schedule, with my boys' schedule. That was initially with Henry was and now he's gone to Melbourne, but now William is still in year 10, so I'm still limiting my hours to so three, six hour days. So Monday, Wednesdays and Thursdays.

Q. Why are you limiting your hours in such fashion?

A. Well, because they need supervision. Well, William needs supervision still, and I'm not going to that's my job. I'm his mother first and foremost, so that's my job.”

36. On the second day of the hearing, when objection was taken by Dr Routley to the admission of paragraph 2.16 of Mr Gaudian’s 22 August 2014 report, the following discussion took place:

“HIS HONOUR: Let's just go back a space and deal with fundamentals. It was not put by Mr Kirk to Dr Norris in the witness box yesterday and correct me if I'm wrong that her anticipated pregnancies per month at the current time was false or misguided or that her projections into the future were unlikely to be accurate. Am I right about that?

TOOMEY: It was not, your Honour.

KIRK: It's not, but I would say it's not before me to have to prove that point; that the projections are achievable, and there is some evidence that they are not achievable.

HIS HONOUR: No. No. But this sentence in 2.16 goes to the achievability of the projections, doesn't it? And the evidence is where it stands and Dr Norris was whatever be the worth of her projections not put to task or contradicted by her

KIRK: It was her prediction.

HIS HONOUR: Yes.

KIRK: She didn't give evidence that it was achievable.

HIS HONOUR: But she's an obstetrician of some significant experience in the local area. She wasn't criticised by you as unqualified to make that prediction upon the basis of her experience.

KIRK: But it's for her to establish that within this area she can achieve those figures.

HIS HONOUR: Yes.

KIRK: That she hopes to achieve those figures, as she hoped to achieve other figures which have not been achieved, does not establish that she would have been able to achieve those figures.

HIS HONOUR: Well, the evidence is what the evidence is and it wasn't you didn't seek to deal with it in a way that contradicted her, and there is no evidence to the contrary. That doesn't mean that it establishes the point. It is a question for me to determine the worth of that evidence.

KIRK: That's true. And where it gets to. That's right.”

37. It will be clear from these transcript extracts that Dr Routley was attempting to limit any evidence that supported the proposition that Dr Norris was, or would become, a successful medical practitioner in her field of specialty, thereby casting doubt upon the deceased’s realistic prospects of working as her practice manager earning what had been predicted. Conversely, Dr Norris was attempting to achieve the opposite result. In the mildly curious events that have now occurred, each party has adopted the other’s original position. Dr Norris submits that her income predictions were “blue sky” predictions, or what I understand using plain English to mean overly optimistic, and Dr Routley now wishes to contend that they were achievable. Dr Norris now contends that her anticipation of 20 pregnancies per month was no more than her hope, whereas Dr Routley disputes that characterisation.

37. It is not to be overlooked that I effectively favoured Dr Norris’s original approach at [55], and also at [104] of my principal judgment, when I concluded in these terms:

“[104] Secondly, the available assumption that Dr Norris’s practice would have become busier over the years as her experience increased and her reputation became more widely known in my opinion diminishes the likelihood that the domestic work arrangements would have altered. The progressive reduction in Dr Norris’s spare time as her work increased rather suggests that her ability or inclination to assume a greater role in domestic chores would have been more likely to diminish than expand. The opposing view is counterintuitive. In a related way, the reduction in the number of hours of domestic work required following the boys’ departure from the household would in my view have increased the likelihood that Mr Norris would have maintained his monopoly on the provision of domestic services. The house would by then have consisted of only two people, thereby further reducing the prospect that Dr Norris would have become a greater contributor to the reduction of Mr Norris’s workload.”

39. Those matters notwithstanding, Dr Norris continued to maintain that the discount to be allowed for vicissitudes on her income “ought to be significantly greater than the standard allowance of 15 percent.” She argued that the standard allowance takes account of matters that would otherwise affect earning capacity, such as sickness, accident, unemployment and industrial disputes: Wynn v NSW Insurance Ministerial Corporation [1995] HCA 53; (1995) 184 CLR 485 at 497. Dr Norris argued that these were matters that could have an impact upon the future earnings of an employed person in a secure job where future earnings can be predicted with some certainty. The standard allowance can of course be adjusted up or down to take account of particular circumstances. In this case Dr Norris argued that the particular circumstances included those which create greater uncertainty as to whether she would proceed to earn the income that I have accepted is likely.

40. In this respect Dr Norris drew attention to what I said in the principal judgment at [51] and [54]:

“[51] Nevertheless, Dr Norris’s income remains as an important fraction of the whole family income in the years of Mr Norris’s projected economic contribution to the home. Its precise calculation is, however, fraught with some uncertainties and difficulties.

[54] … Even though the accountants had unrestricted access to Dr Norris’s income tax particulars, unknown and unpredictable circumstances made the calculation of Dr Norris’s contribution to the family income over the anticipated life of Mr Norris a less than scientific process.”

41. It is not in dispute that Dr Norris’s income claim is one to which s 13 of the Civil Liability Act 2002 applies. The calculation of Dr Norris’s own earning capacity involves an “assumption about future earning capacity or other event upon which [it] is to be based”: s 13(1). Accordingly, a discount must be made for the percentage possibility that the events that have been taken into account might not have occurred. Moreover, quite apart from s 13, legal principle mandates that there be a consideration of “the degree of probability that an event would have occurred, or might occur, and adjust its award of damages to reflect the degree of probability”: Malec v Hutton. For presently relevant purposes in this case, Dr Norris contended that this must include the overly optimistic or hopeful predictions she made about her probable future earnings.

42. In this respect my attention was drawn to what was said by the High Court in De Sales v Ingrilli [2002] HCA 52; (2002) 212 CLR 338 at [68] as follows:

“[68] How is account then to be taken of life's uncertainties? Had the deceased not died as he or she did, who is to say how long a life the deceased would have led? What would have happened? Would the deceased have continued to earn at the level being earned before death? Or would death, incapacitating illness or financial calamity (in one form or another) have intervened? If it had, would any of the survivors have then contributed to the financial well-being of the family? Even if there were no disaster (physical, financial or other) would the financial contribution made by the surviving spouse or de facto spouse, have changed anyway? And if action is brought on behalf of a surviving spouse, or de facto spouse, can it be assumed that the relationship would have endured? Will the surviving spouse remarry after the date of judgment, or form some continuing relationship which will have some financial consequence for any of those for whose benefit the action is brought? All these, and more, are possibilities that may have to be reflected in any assessment of the present value of the economic loss suffered by all of the relatives as a result of the deceased's death, not just a surviving spouse. Because the assessment requires estimation and judgment rather than calculation, seldom, if ever, will it be right to express the result as if it were correct to the nearest dollar. That falsely asserts a degree of accuracy in the assessment that is impossible. All that can be done is to select a percentage or lump sum to allow for the estimated value of those possibilities which may or may not have eventuated if the deceased had lived and those which may or may not eventuate in the future.”

43. Dr Routley contended that the appropriate discount to apply to Dr Norris’s income was 15 percent. He submitted that that was the appropriate rate because it reflected the fact that there were fewer risks attending her income than in the case of the income of the deceased. In particular, Dr Routley submitted that Dr Norris did not face any greater degree of risk of illness or early death than anyone else of her age and attributes.

44. I have come to a different view about the rate of discount for vicissitudes that should apply to the deceased’s income. However, that difference of opinion does not also lead me to conclude that the rate of discount for which Dr Routley contends should not be adopted. I accept that the calculation of Dr Norris’s income is attended with the uncertainties to which I referred in my principal judgment, and which for present purposes Dr Norris has enthusiastically embraced. However, those uncertainties attend the calculation of the sum to which the discount currently being considered would apply. For example, the so-called overly optimistic assessments made by Dr Norris about her projected success inform the income calculation in the first place. They also include all of matters of the kind listed by Dr Norris in paragraph 40 of her counsel’s written submissions as follows:

1. the number of pregnancies per month;

2. the number of consultations per delivery;

3. the type of delivery – complicated or uneventful;

4. the fees charged per consultation;

5. the number of ultrasound scans per pregnancy;

6. the fees charged per ultrasound;

7. insurance costs;

8. the cost of replacing capital items, such as sonographic equipment;

9. sonographers’ wages;

10. secretarial costs;

11. medical supplies;

12. advertising;

13. bank fees;

14. locum fees.

45. I take these matters to be specifically concerned with the original calculation, so that they have already been taken into account, and not with the unpredictable and uncertain negative and positive events that the future may produce, which are the type of vicissitudes currently being considered, such as injury, incapacity or early death.

46. Dr Norris has not to my mind established any unusual or extraordinary negative factors that would influence or warrant a departure from the usual rate to be applied.

47. It makes no difference to the final outcome in arithmetical terms whether the discount for vicissitudes is applied to the income figures of the deceased and Dr Norris in the first place or to the final consumption figure arrived at as a product of each by applying the Luntz percentages in the second place. The result will be the same provided discounts are not applied to both sides of the equation. It was however necessary for me to approach the matter adopting the former method as I have chosen variously to apply a different discount for vicissitudes to the income of the deceased on the one hand and the income of Dr Norris on the other hand.

48. Finally Dr Norris conceded that no discount should apply to the sum of $10,000 that I originally allowed for care costs which was an assessment that did not warrant further reduction. That concession is both appropriate and uncontroversial.

Conclusions

49. It follows in my opinion, and I find, that:

1. The amount of $84,370 for certain anti-viral pharmaceutical costs associated with the deceased’s anticipated liver transplant ought not to be included as a probable out-of-pocket expense.

2. A discount of 7.5 percent ought to be allowed by way of discount for the vicissitudes of life upon the deceased’s income.

3. A discount of 15 percent ought to be allowed by way of discount for the vicissitudes of life upon the value of the loss of domestic services provided by the deceased.

4. A discount of 15 percent ought to be allowed by way of discount for the vicissitudes of life upon Dr Norris’s income.

Costs

50. I have been asked to make no orders with respect to costs in anticipation of further submissions from the parties in due course.

Orders

51. The following orders should be made:

1. Direct the parties to bring in short minutes of final order giving effect to my conclusions in [49] of these reasons.

2. List the proceedings before me on a date to be arranged in consultation with my Associate for the purpose of hearing argument on costs.

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Decision last updated: 11 December 2015