Sretenovic v Reed - [2009] NSWCA 280

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Sretenovic v Reed [2009] NSWCA 280

FILE NUMBER(S):
40424 of 2008

HEARING DATE(S):
9 June 2009

JUDGMENT DATE:
7 September 2009

PARTIES:
Rados Sretenovic - First Appellant
Monica Sretenovic - Second Appellant
James Reed by his next friend Sharlene Sullivan - Respondent

JUDGMENT OF:
Beazley JA McColl JA

LOWER COURT JURISDICTION:
District Court

LOWER COURT FILE NUMBER(S):
DC 5558 of 2007

LOWER COURT JUDICIAL OFFICER:
Levy SC DCJ

LOWER COURT DATE OF DECISION:
10 September 2008

LOWER COURT MEDIUM NEUTRAL CITATION:
[2008] NSWDC 202

COUNSEL:
RR Stitt QC with EE Beilby - Appellants
AS Morrison SC with AD Campbell - Respondent

SOLICITORS:
Sparke Helmore - Appellants
Gerard Malouf & Partners - Respondent

CATCHWORDS:
APPEAL AND NEW TRIAL – appeal – excessive damages – cost of future treatment and non-economic loss – review of conclusion as to plaintiff’s psychological condition – whether findings of fact unsupported by evidence – whether primary judge applied personal opinion as to potential for recovery
JUDGES AND COURTS – judicial obligation to make findings of fact on proved evidence
EVIDENCE – medical evidence – assessment of psychological condition of witness – assessment based on inadequate evidence
DAMAGES – measure of damages in actions for tort – personal injuries – future economic loss – considerations for the assessment of future loss of earning capacity in the case of a minor – whether buffer should be awarded

LEGISLATION CITED:
Civil Liability Act 2002 (NSW)
Civil Procedure Act 2005 (NSW)
Companion Animals Act 1998 (NSW)
Supreme Court Act 1970 (NSW)

CATEGORY:
Principal judgment

CASES CITED:
Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167
Graham v Baker [1961] HCA 48; (1961) 106 CLR 340
Halvorsen Boats Pty Ltd v Robinson (1993) 31 NSWLR 1
Hornsby Shire Council v King [2005] NSWCA 67
K-mart Australia Ltd v McCann [2004] NSWCA 283
Leichhardt Municipal Council v Montgomery [2005] NSWCA 432
Penrith City Council v Parks [2004] NSWCA 201
Reed v Sretenovic & Anor [2008] NSWDC 202
State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536
Strinic v Singh [2009] NSWCA 15
Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402
Watts v Rake [1960] HCA 58; (1960) 108 CLR 158
Wynn Tresidder Management v Barkho [2009] NSWCA 149

TEXTS CITED:
American Medical Association Guides to the Evaluation of Permanent Impairment (5th ed)

DECISION:
1. Appeal allowed. 2. Judgment of the Court below set aside. 3. The parties should bring in Short Minutes of Order within 14 days setting out the sum to be awarded to the respondent on the basis of the above reasons. 4. Respondent to pay the appellants’ costs of the appeal.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA No: 40424/08
DC No: 5558/07
Beazley JA
McColl JA
Monday 7 September 2009

Rados Sretenovic & Anor v James Reed by his next friend Sharlene Sullivan

Judgment

BEAZLEY JA: I agree with McColl JA.
McCOLL JA: James Reed, the respondent, was injured on 28 April 2005 when he was 11 years old, when he was bitten by a domestic dog owned by Rados and Monica Sretenovic.
The respondent’s mother, Sharlene Sullivan acting as his next friend, brought proceedings against the appellants to recover damages pursuant to s 25 of the Companion Animals Act 1998 (NSW). The appellants admitted liability at the outset of the trial before Levy DCJ. The trial, which lasted four days, proceeded as an assessment of damages.
The primary judge gave verdict and judgment for the respondent in the sum of $344,723 and costs. The judgment included an award of $154,500 for non-economic loss, $170,923 for loss of future earning capacity and $16,700 for future treatment: Reed v Sretenovic & Anor [2008] NSWDC 202 (at [201]).
The appellants appeal from that part of the judgment relating to the assessment of damages for non-economic loss, for future economic loss and future treatment.
Statement of the case
The primary judge’s findings as to the circumstances of the dog’s attack, the respondent’s physical injuries and the physical consequence were uncontroversial:
“12. At about 4.30pm on Thursday 28 April 2005 the Plaintiff and his friend were walking in a westerly direction along Vincent Street St Marys. As they approached the vicinity of the Defendants’ premises situated at 21 Vincent Street, an unleashed dog belonging to the Defendants escaped through an open passenger’s door of the Second Defendant’s stationary vehicle which was parked in the driveway of the Defendant’s premises.
13. … The dog chased the Plaintiff and caught up to him near the driveway to his home. The dog bit the Plaintiff at least 3 times on the right forearm, once on the right leg above the knee and once on the abdomen.
14. The Plaintiff described how he had repeatedly tried to fend off the attack. The dog eventually released its grip on the Plaintiff when it was called away by the Second Defendant. The Plaintiff stated he felt scared during the attack. He said he was in physical pain. He described the bleeding from the attack and he described how he felt sick and afraid on seeing the bleeding from an open cut on his arm. In a police witness statement the Plaintiff’s companion described seeing skin coming off the Plaintiff’s wounds like diced cubes. He also described seeing the dog push the Plaintiff to the ground before continuing the attack with further episodes of biting.
15. When the dog released its grip on him the Plaintiff ran into his home. The Plaintiff’s mother wrapped his arm in a towel and called an ambulance. The Plaintiff estimated that it took about 15 minutes for the ambulance to arrive.
…
Physical injuries
57. The Nepean District Hospital notes describe that the Plaintiff had 10 lacerations and puncture wounds to his right forearm and a small puncture wound to the right knee. The hospital progress notes also describe a wound on the left side of the abdomen that required dressing. Fortunately, the lacerations to the right forearm only involved the skin and muscle fascia without involvement of the nerves or tendons. The coloured photographs of the Plaintiff’s right forearm that were taken in hospital (Exhibit “D”) show what I infer would have been very painful lacerations. Under general anaesthesia the right forearm wounds were washed out with saline, debrided, sutured and a drainage tube was inserted. The Plaintiff was treated with antibiotics. His forearm was packed with gauze, bandaged and the forearm was elevated in a splint.
58. The Plaintiff remained an in-patient at Nepean District Hospital for 4 days between 28 April 2005 and 1 May 2005. The hospital progress notes record that post-operatively the Plaintiff reported a dull sensation in his right upper forelimb.
59. On his discharge from hospital the Plaintiff was followed up at the plastic surgery out-patients clinic at Nepean District Hospital on 9 May 2005 for removal of the sutures. At that time it was noted he was well and that his wounds were clean. He was again reviewed in the plastic surgery out-patient’s clinic on 8 June 2005. No specific treatment was recorded and he was then presumably discharged from further follow-up.
Treatment from general practitioners
60. The records of the Plaintiff’s treating general practitioners were produced on subpoena and were tendered by the Defendant for the purpose of demonstrating that, following his discharge from hospital, the Plaintiff made a good recovery and had required very little in the way of treatment for his physical injuries and had made no recorded complaints of a psychological nature. It is therefore relevant to review those records in that context.
61. The subpoenaed records of Dr Sor show that on 3 May 2005, two days after his discharge from hospital, the Plaintiff attended on Dr Sor for a change of the dressings that had been applied in hospital.
62. The subpoenaed records of Dr Looi show that two weeks after his discharge from hospital the Plaintiff attended Dr Looi’s surgery on 16 May 2006 at which time the physical injuries were recorded and a note was made for a scheduled follow-up in three months’ time. On 30 June 2005 the Plaintiff again attended Dr Looi who noted the wounds had healed. The records show that on that occasion reassurance was given. On 19 January 2006 the Plaintiff again attended Dr Looi’s surgery.
63. Dr Looi’s progress notes are difficult to read in their entirety but it appears the Plaintiff had developed a dermatitis on the dorsal aspect of his injured arm which was noted to be weeping and for which he was prescribed a steroid cream. It is possible that this dermatitis was causally linked to the injuries the Plaintiff sustained in the dog attack but the medical evidence does not deal with this issue. I note that the Plaintiff has complained of itching symptoms in relation to his forearm scars.
64. Although the medical evidence is silent and therefore uninstructive on the issue of a possible causal relationship between the dog bites the Plaintiff sustained to the right arm and the later development of dermatitis and itching on that arm, it seems to me reasonable that these complaints were linked to the aftermath of the wounds the Plaintiff received to those areas in the dog attack. In the absence of medical evidence to the contrary, and on the balance of probabilities, I find on the basis of a commonsense presumptive inference that such symptoms are causally linked. See Adelaide Stevedoring Co. Ltd -v- Forst [1940] 64 CLR 538 at 563 to 564 per Rich ACJ; Commissioner of Police -v- Rea [2008] NSWCA 199; Commonwealth -v- McLean [1996] NSWLR 389 at 410D.
65. In the subpoenaed records of another general practitioner, Dr Lam, it is noted that on 27 October 2006 the Plaintiff was referred to as being overweight from drinking a lot of cordial associated with an abnormal lifestyle for which modification advice was apparently given. Again, although the possible causal relationship of the Plaintiff’s abnormal lifestyle and him being overweight was not the subject of an instructive medical opinion, I draw the commonsense presumptive inference that the Plaintiff’s excess weight and abnormal lifestyle was due to the psychological effects of the dog attack upon him, such effects including a change in his personality. See Forst, Rea and McLean previously cited.
66. I am aided in coming to this view by the evidence of Mrs Sullivan and Mr Sullivan as to the Plaintiff’s normal disposition and lifestyle before the dog attack compared with the situation afterwards, including their descriptions of a personality change in the Plaintiff.”
As to the physical sequelae the primary judge accepted (at [68]) that “apart from having residual scarring from his dog bite wounds, [the respondent] has undergone a relatively uneventful physical recovery”. He made the following findings about the respondent’s scars:
“70. I have viewed the scars on the Plaintiff’s forearm and I have noted them to be obviously disfiguring, indurated, puckered and unsightly.
71. To my observation the Plaintiff was obviously embarrassed about his scars and showed marked awkwardness when he was asked to display them. The Plaintiff tends to wear long sleeved garments to conceal the scars on his right forearm. He obviously prefers to keep them covered.
72. The limited nature of the Plaintiff’s post-injury physical symptoms as set out in the foregoing summary does not of course take into account the psychological consequences of his injury.”
Dr Meares, a plastic surgeon qualified by the respondent’s solicitor, examined the respondent eight months after the dog attack and noted that he was embarrassed about his scars. The primary judge recorded Dr Meares’ evidence, and his own observations of the respondent’s scarring, as follows:
“73. … Dr Meares recorded that the Plaintiff reported he was still experiencing pins and needles sensation in the area of scarring of the right forearm which sometimes occurred when he was writing.
74. Dr Meares noted that the Plaintiff’s right dominant forearm was functionally normal. He reviewed the Plaintiff’s scarring and expressed the view that it is unlikely that any further treatment would be required to the areas of his scarring. Dr Meares described the right forearm scars as being of pink appearance and obviously capable of being seen from a distance of 2 metres. Dr Meares described them to be of unsightly appearance comprising six scars on the volar-aspect** of the right forearm which are irregular in size, shape, quite pink and quite thick and/or hypertrophic in parts and three smaller scars towards the ulnar border of the right forearm.
75. Dr Meares also identified a raised hypertrophic scar to the anterior aspect of the right knee which he described as moderate with another smaller scar nearby. Dr Meares also identified a very feint scar on the left abdomen. I infer these two scars are related to skin puncture wounds from the dog’s jaws.
76. Although the scars to the right forearm have matured and were no longer pink as described by Dr Meares, when I viewed them they were still obviously visible from a distance of 2 metres as was observed by Dr Meares, nearly three years ago. I also viewed the scar to the right thigh which was less disfiguring but nevertheless noticeable when it was exposed. The scars appeared more prominent to actual viewing than appeared in the photographs which were incorporated into the report of Dr Meares. I did not view the scar to the Plaintiff’s abdomen.
Psychological problems due to the dog attack
77. It was obvious to me that when the Plaintiff exposed his right forearm and right knee scars to viewing in court he was very embarrassed. I find the Plaintiff feels very embarrassed by his scars and that he will continue to do so.
78. In reviewing the Plaintiff’s physical injuries I do not ignore the deleterious psychological effects the dog attack and the resultant scarring has had on the Plaintiff. I believe those effects required a separate consideration. It is therefore relevant for me to review the evolution of the Plaintiff’s psychological problems.” (emphasis added)
** Meaning located on the same side of the respondent’s arm as the palm of his hand.
Dr Meares’ evidence was uncontroversial. It is appropriate, therefore, to record some aspects of it to which the primary judge did not refer. Dr Meares described the respondent as having “significant severe scarring of his right forearm … moderate scarring of his right knee and faint scarring of his left abdomen”. In his view the respondent’s scarring constituted a continuing disability which would always be significant in his right arm. He thought the respondent’s prognosis was guarded from the point of view of improvement in his scarring. In his view the respondent fitted into class one, Table 8 – 2 (P178) of the American Medical Association Guides to the Evaluation of Permanent Impairment (5^th ed), that is, as having:
“Skin disorder, signs and symptoms present or intermittently present and no or few limitations on the performance or activities of daily living … and requires no or intermittent treatment”.
Dr Meares did not believe the respondent’s scarring would prevent him from working to the age of 65. He believed that the respondent would be able to live a normal life and would not be significantly impaired, but may be impaired to the extent of the scarring of his right forearm.
Psychiatrists’ evidence
The principal area of controversy on appeal lay in the primary judge’s treatment of the psychiatric evidence.
Both parties qualified psychiatrists to examine the respondent. The respondent qualified Associate Professor Carolyn Quadrio and the appellants qualified Dr Neville Whan. The primary judge (at [159]) preferred Professor Quadrio’s opinion to Dr Whan’s, whose written opinions he rejected. Dr Whan gave evidence. The primary judge rejected his oral evidence to the extent it contradicted Professor Quadrio’s opinions. The appellants do not cavil with the primary judge’s rejection of Dr Whan’s evidence. They submit their appeal is entitled to succeed on the basis of Professor Quadrio’s opinions. They contend that in assessing the damages he should award for non-economic loss and future economic loss, the primary judge made findings as to the respondent’s disabilities which were not supported by Professor Quadrio’s (or Dr Whan’s) opinions.
Having regard to the appellants’ submission, it is important to set out Professor Quadrio’s opinion verbatim. It is set out under headings which presumably corresponded with those set out in the respondent’s solicitor’s letter requesting her opinion. (That letter was clearly in pro forma layout which bore no acknowledgement of the fact that the respondent was a schoolboy).
“7. Assessment of condition.
Chronic Post Traumatic Stress Disorder (DSM)
Depression and Personality Change
As a direct result of the injury, James has developed Chronic Posttraumatic Stress Disorder (PTSD). He manifests the following features:
He has recurrent dreams, flashbacks and reaction to triggers that remind him of the trauma and he avoids thoughts and situations that will trigger reactions. He has a numbing of responsiveness with a diminished capacity for relatedness and enjoyment and a shortened sense of the future. He now manifests a chronic low grade depressive adjustment. The latter might be termed an Adjustment Disorder with Depressed Mood, Chronic but the features of these disorders overlap considerably and it is not uncommon for PTSD to become complicated over time with chronic depressive symptoms.
There is a further complication in that James has now manifested these symptoms over the critical years of personality development so that some of this depressive adjustment has become entrenched and characterological and may now constitute a degree of personality change that may be enduring. Thus, he is no longer as sociable, he is more self conscious, he is generally gloomy in his demeanour and more irritable than he was premorbidly.
8. Nature and extent of any present or continuing disabilities.
See above: fearfulness, diminished capacity for relatedness and enjoyment; chronic low grade depression; personality change, less sociable, more self conscious, more irritable.
9. The nature and extent of any impairment.
See above.
10. Your opinion as to whether the claimant ought to be able to resume pre-accident occupation.
His pre-accident occupation was that of school student and James has largely been able to return to school albeit with some diminution in his capacity for motivation, enjoyment, social interaction and participation in sport. However, his long term outlook in terms of occupational and social adjustment is compromised because of the psychological disturbances described.
11. If unable to resume normal duties opinion as to when that may be expected.
James is now able to attend school but in the long term he may have some limitations in terms of future career and social adjustment.
12. If unable to resume normal duties opinion as to what duties may ultimately resume and when it might be expected.
James does not have any clear ideas about a career path yet; it is unlikely that any physical disability will impede him in this respect but ongoing psychological difficulties may cause him to have difficulties in his overall psychosocial and occupational adjustment. His gloominess, lack of self confidence and general wariness will most likely diminish his chances of success in the career world as well as compromising his social well being.
13. If your opinion is only able to return to restricted/light duties how many hours per week.
James is able to attend school full time.
14. As a result of permanent disability and an acceleration to the degenerative process will the claimant be able to work up until the age of 65. If not at what age will he.
Not in my field of expertise but it appears unlikely that James will suffer any ongoing physical disability related to this accident.
15. Prognosis and any details of any recommended treatment.
James has been quite seriously affected by this injury in that he has suffered more than a temporary post traumatic reaction – his symptoms have persisted and become chronic and, in particular, he now manifests a low grade depressive adjustment which suggests that he has undergone some personality change. That there has developed this chronic outcome suggests some lack of resilience – an innate factor which greatly influences the capacity of children to cope with trauma. Children with reasonable resilience can be expected to make a full recovery within two years – this has not been the case with James. If he does not make a complete recovery after a 12 months programme of treatment as outlined, then it is likely that he may continue with some residual psychological disability indefinitely.
16. Details of any recommended rehabilitation.
James has had no psychological treatment thus far. His PTSD symptoms could be ameliorated with an appropriate treatment programme: a combination of medication – an SSRI antidepressant – and a course of cognitive behavioural psychological therapy. The more pervasive depression and possible personality change would require a longer period of psychological treatment.
17. In terms of any future treatment or rehabilitation opinion as to duration of treatment, nature and if possible approximate cost.
Cognitive behavioural therapy aimed at treating both PTSD phenomena and depressive symptoms should be provided by a clinical psychologist with appropriate expertise. If it were uncomplicated PTSD this would require six to 12 sessions over six to 12 months. However, his chronic depressive adjustment and indications of personality change, suggest that James may need a more extended period of psychotherapy, most likely weekly sessions over a period of 12 to 24 months. This would cost approximately $200 a session and Medicare would provide a rebate of around half that amount for up to 50 sessions a year; beyond that the fees would need to be met privately.
Because of his age, antidepressant SSRI medication should only be prescribed by a child and adolescent psychiatrist working in conjunction with the clinical psychologist. Again if it were uncomplicated PTSD James would probably need to be seen at least six times over a 12 month period; but because of the depressive and personality issues, this might need to be a longer period – up to 24 months and twice that number of sessions. The cost would be between $200 and $250 a session and Medicare will rebate about half that amount.
18. Opinion as to extent that ability to lead a normal life is significantly impaired by the injury.
See above: ongoing psychological difficulties may cause him to have difficulties in his overall psychosocial as well as his occupational adjustment.
19. Any other relevant observations.
The mother’s history is also suggestive of some personality change.
It is difficult to know exactly what determines a relative lack of resilience in one child and solid resilience in another.
20. Requirements for past and future care, extent required and whether it is reasonable as a consequence of the injuries and disability.
It may be necessary for James to have ongoing counselling aimed at improving his chronic depressive adjustment – this has been estimated at up to 24 months but occasionally can take three to five years.” (emphasis added)
The primary judgment

The primary judge (at [149]) said he accepted the opinions of Professor Quadrio concerning the diagnosis and prognosis of the respondent’s psychological problem. He summarised Professor Quadrio’s opinions as follows:
“107. On 4 April 2008, at the request of his solicitors, the Plaintiff was examined by Associate Professor Carolyn Quadrio, a consultant psychiatrist. She expressed the opinion that the Plaintiff has chronic post-traumatic stress disorder, depression and a personality change characterised as an adjustment disorder complicated by symptoms being manifest over the critical years of personality development such that there has been a personality change.
108. Professor Quadrio noted the Plaintiff’s depression to be pervasive and she noted the Plaintiff had a pattern of avoidance due to the dog attack.
109. Professor Quadrio expressed the opinion that the Plaintiff’s occupational and social adjustment is compromised due to the post-traumatic psychological disturbance. Professor Quadrio pointed to potential difficulties for the Plaintiff with his future psycho-social and occupational adjustment. She was of the opinion that such problems were as a direct result of his injury.
110. Professor Quadrio was of the opinion that the Plaintiff was quite seriously affected by the injury and she characterised his post-traumatic reaction as being chronic rather than temporary. In her view the manifestation of a low grade depressive adjustment in the Plaintiff was suggestive of a personality change. This was consistent with Mrs Sullivan’s observation concerning the Plaintiff.”
His Honour also set out the factual basis of Professor Quadrio’s opinion:
“111. Professor Quadrio based her opinions on the very detailed history she had taken of the Plaintiff’s problems. It is relevant to highlight that history in order to identify the basis of her opinions and to assist with the resolution of the conflicting psychiatric opinions in this case.
112. At the outset of her report Professor Quadrio recorded her factual observation that the Plaintiff was ‘clearly shy and at times had difficulty responding’. In my view, having observed the Plaintiff give evidence, this is a matter of some importance to the assessment of his evidence. Her view in this regard coincided with my own assessment of the Plaintiff and reinforces my view that the Plaintiff has understated his problems.
113. When Professor Quadrio examined the Plaintiff she recorded that he told her he felt terrified and very scared at the time of the attack. He described himself as very distressed and scared. He recounted how the owner of the dog blamed him for the incident. He described the wound as looking ‘freaky’, he described how he was feeling shocked and, almost three years after the event, he became tearful and questioning when describing the details to Professor Quadrio.
114. The Plaintiff told her that when he returned to school he still felt pain at the site of injury. He found it upsetting when people asked to see his scars. His personality changed in that he became more touchy and nervous. He told Professor Quadrio he was the object of jokes and teasing. He also disclosed to her that such teasing included the descriptions ‘dog meat’ and ‘chew toy’. He told Professor Quadrio that he feels more touchy, nervous and edgy.
115. Professor Quadrio recorded that when she examined the Plaintiff she observed that he had a very gloomy demeanour, was unsmiling, humourless, somewhat depressed, manifestly lacking in enthusiasm about his future and was quite tearful.
116. The Plaintiff told Professor Quadrio that the sight of his scars makes him think about the incident all over again. He gets visual flashbacks in response to triggering events, such as when he is teased. He told Professor Quadrio that when he is teased he becomes upset and angry. The triggers for his upset and anger also includes hospitals and ambulances. He told Professor Quadrio he prefers to wear long sleeves to avoid displaying his scars to others.
117. Professor Quadrio observed in the Plaintiff a numbing of responsiveness, a diminished capacity for relatedness and a shortened sense of the future and that the Plaintiff is no longer sociable and is self-conscious.
118. The Plaintiff told Professor Quadrio that he still suffers from sleep disturbance. He told her he still thinks about the dog attack. He still has realistic dreams about it which wake him in the middle of the night. Initially this occurred nightly but in 2008 the frequency had lessened to about once per month. He told her that he feels haunted by memories of the dog attack and feels nervous and edgy. He said he wakes up feeling flat in the mornings and at times, about once a fortnight, he feels life is not worth living because he feels that people put him down. Mrs Sullivan told Professor Quadrio that the Plaintiff regularly says that life is not worth living. The Plaintiff told Professor Quadrio he feels depressed four days out of seven and this lasts for hours.” (emphasis added)
Although the primary judge said he rejected Dr Whan’s written opinions, he set out a passage from Dr Whan’s report in a manner which indicated he accepted its contents. I reproduce it as it appears to be reflected in his Honour’s assessment of damages:
“119. On 22 May 2008 Dr Neville Whan saw the Plaintiff at the request of the solicitor for the Defendants. He prepared a report dated 19 June 2008 in which he expressed the opinion which, in summary, is to the effect that the Plaintiff’s reaction to the trauma of the dog attack was within the normal reaction to such a trauma. He considered what he described as the Plaintiff’s mood changes to be a reaction to the scarring and the attention this brings upon him. Dr Whan accepted that the scars would continue to adversely affect the Plaintiff’s experience of life and undermine his confidence and self-esteem which may lead to a pattern of avoidance limiting his level of achievement and social life in the future as well as maybe pre-disposing him to developing depression in later life.” (emphasis added)
The two psychiatrists were asked to provide written comments about each other’s reports. The primary judge accepted Professor Quadrio’s criticisms of Dr Whan’s commentary about her report, in terms which again indicate reliance upon it for the purposes of assessing damages and it is set out for that reason:
“James talked about being teased and Dr Whan relates this to some withdrawal and mood disorder.
CQ Comment: Teasing is often related to depression, mood disorder and withdrawal. There is a circular relationship between teasing and mood disorder in children. Teasing leads to mood disturbance and children with mood disturbance are more often the target of teasing.
James told Dr Whan he tries not to think about it.
CQ Comment: Avoidance.
James told Dr Whan about dreams and reliving experiences.
CQ Comment: PTSD symptoms.
James also told Dr Whan if he sees a dog he feels scared; he doesn’t like reminders. He avoids them.
CQ Comment: PTSD phenomenon, avoidance.
James told Dr Whan he is not happy at school because he works slower but said his concentration was okay.
CQ Comment: Working slower suggests problems with concentration, focus or mood disturbance.
James told Dr Whan he has trouble with sport because of his arm.
CQ Comment: This is avoidance, the scarring is a trigger.
…
Dr Whan says fear of dogs is a normal reaction to trauma.
CQ Comment: It is only normal if it is not part of the constellation of PTSD symptoms.
Dr Whan says James does have mood change but it is related to the scarring.
CQ Comment: The scarring is a sequel of the trauma and is also a trigger, i.e. when he sees the scar it activates the PTSD symptoms
Dr Whan comments on the reaction of the dog owners which may have contributed.
CQ Comment: That is all part of the trauma experience in that James felt shocked by the reaction of the dog owners.
…
Dr Whan says the mood disturbance change is only related to scarring so therefore is not a mood disorder.
CQ Comment: It is the residual manifestation of the trauma. It is not relevant what aspect of the trauma makes him feel depressed. If he feels depressed about it he has some disturbance of mood.
CQ: I note Dr Whan acknowledges the scars have led to the loss of confidence and self esteem and I note it is likely to lead to avoidance and decreased achievement.
Dr Whan says that the difference with CQ’s report is PTSD in children is controversial because there is some question over the long term outcome.
CQ Comment: We are dealing with the present situation not the long term that had led to the diagnosis of PTSD.
CQ Comment: There is an enormous literature correlating negative mental health outcomes correlated with childhood trauma.
Dr Whan agrees that CQ has provided symptoms of PTSD but Dr Whan comments that checklists are unreliable.
CQ Comment: I did not use checklists. My assessment used the same clinical method as used by Dr Whan.
…
Dr Whan says his dreams are less frequent.
CQ Comment: Nevertheless he continues to have dreams of the trauma.
PTSD does not rely on a certain frequency of dreaming.
When he feels safe he is okay. That doesn’t mean he does not have PTSD.
He feels okay in his classroom and at home but he avoids a variety of other situations.
Dr Whan says he thinks it is a reaction to the scarring more than the dog.
CQ Comment: I would say it is difficult to suggest this because the scarring is a residual and permanent reminder of the trauma and therefore a trigger.
Dr Whan doesn’t think cognitive behaviour therapy will help with James’s (sic) reaction to dogs.
CQ Comment: Cognitive behaviour therapy is widely accepted as a treatment of choice for fears and phobias.
Dr Whan says that it is not mood disturbance and his demeanour at interview was probably a reaction to the interview situation.
CQ Comment: CQ is an experienced interviewer of children and is generally able to engage children and enable them to relax at least at some time during an interview situation of some 90 minutes which includes discussion about other interests such as sports, activities, TV, etc.” (italics in original)
Other passages in the primary judge’s analysis of the psychiatrists’ evidence critical to the appellants’ argument should be set out:
“144. Dr Whan’s evidence included the following:
‘Q. I just want to ask you about a couple of things that were ventilated in the evidence to see where they fit into the scheme of things psychologically. I’ve noted in the evidence that he has described not wanting to have people see his scar, being angry with everyone and wishing he was dead, keeping very much to himself a lot, and within that constellation it’s also been described that he has changed his personality since the incident. If one accepts those descriptions, where does that put him in the range of diagnosis within DSM-IV?
A. At the stage he was showing those - and I don’t think he was showing all those things you’ve just described at the point I saw him - I'm acknowledging that for a significant part of the period he would have met the criteria for post-traumatic stress disorder and probably would meet criteria for - even for major depression.
Q. Putting aside DSM criteria and just looking at it in terms of your alternative formulation of just the practicalities, would all of those matters potentially serve to adversely affect his self-esteem and ability to function as one would normally expect a young man to function?
A. His self-consciousness about the scars and sort of his feeling victimised by other children putting him down, teasing him, would be expected to affect confidence and self-esteem. I also gained the impression that he did believe via the attack actually affecting the use of his arm that he seemed to believe that his arm was making him slower with the work at school and sort of therefore sort of less able. So I - I do believe that he showed clear evidence of sort of feeling that sort of he had been handicapped as a result of what had happened to him.
Q. Those matters that I’ve summarised to you, if they were current matters affecting him would not that describe a more serious psychological condition that the one you’re describing?
A. Yes.”
145. The assumptions within the foregoing questions, which I accept as fact and which comprise the problems that are presently current for the Plaintiff, and Dr Whan’s answers as outlined above indicate to me that the Plaintiff has a more serious psychological condition in the nature of a major depression and not the lesser picture which Dr Whan was describing in his initial analysis.
…
147. Dr Whan seemed to downplay the role of cognitive behavioural therapy in the Plaintiff’s situation, suggesting a delay of six months following the finalisation of the case to see if therapy would be warranted. I do not think that such an approach is reasonable in the context of a medico-legal assessment as it seems to proceed upon an unwarranted assumption that the outstanding litigation is, in some way, impeding the Plaintiff’s progress. That notion is inconsistent with my finding that the Plaintiff has permanent scarring linked to the identified psychological problems which lead him to experience cyclical and unpredictable adverse psychological sequelae and I reject Dr Whan’s views in this regard.
148. Significantly, Dr Whan has conceded that the Plaintiff still has unresolved feelings of anger and upset over the dog attack. I find these feelings that are held by the Plaintiff are now entrenched and will affect him permanently.
…
154. In my analysis Dr Whan appears not to have considered what to me seems an obvious causal relationship between the Plaintiff’s negative experiences at school which involved injury related teasing, slow handwriting and the consequent negative teacher attention over this and, in this context, the pressure of tests the Plaintiff was required to do. In this regard I note that although Dr Whan is unconvinced of the relationship between the Plaintiff’s dislike of school and the negative attention he receives at school, the terms of Dr Whan’s evidence does not exclude that there could be such a connection. I find that on a commonsense analysis such a connection is compellingly established and I find that this has had and continues to have a deleterious consequence to the Plaintiff’s psychological wellbeing. See Forst; Rea and McLean. I find that such adverse consequences will extend beyond the Plaintiff’s school years.” (emphasis added)
The primary judge accepted (at [160]) that the assessment of damages in a case such as this was inherently difficult:
“…[B]ecause the Plaintiff is aged only 14 years and his ongoing problems relate to his embarrassment over and reaction to the cosmetic defects constituted by his permanent scarring. These scars serve as regular reminders and triggers for him causing him to re-experience the traumatic events surrounding the dog attack. These matters have caused him to suffer chronic post-traumatic stress disorder, mood disorder and a personality change. These problems will have ongoing adverse manifestations for the Plaintiff’s psycho-social and occupational future.”
At trial counsel for the respondent submitted the respondent should be assessed as “at least 30%” of a most extreme case while the appellants contended for 18 – 30 per cent. However his Honour found that damages for non-economic loss should be assessed at 35 per cent ($154,500), which he described (at [171]) as “the upper end of the range” of the most extreme case for the purposes of s 16 of the Civil Liability Act 2002 (NSW). He made the following findings in support of that figure:
“162. The Plaintiff’s injuries and residual disabilities have had a serious and significant adverse impact upon his life and on his ability to lead a normal life. That deleterious impact has been particularly pronounced because the Plaintiff’s injuries were sustained by him at a critical stage of his personality development and this has resulted in the Plaintiff undergoing a personality change with deleterious consequences for his future.
163. The Plaintiff has significant and disfiguring scars to his right forearm and to a lesser extent his right thigh and abdomen.
164. This means that the Plaintiff is in a situation where he finds himself caught up in a circular problem. His physical scars are permanent and will not improve. When he sees his scarring or is reminded of them this triggers a depressive reaction in him which is associated with anger and social withdrawal. This problem not only occurs when he sees his scarring but when the conduct of others remind him of his scars. He is then reminded of the terrifying experience of the horrific attack he experienced.
165. The Plaintiff’s personality change due to the dog attack has resulted in the psychological symptoms described and which I have accepted. I accept that he finds himself depressed four days out of seven with resultant depression that persists for hours as he recounted to Professor Quadrio. Professor Quadrio has referred to the depression as pervasive and she has noted that the Plaintiff’s behaviour shows a pattern of avoidance. I find that the dog attack in question has caused the Plaintiff to suffer mental harm of a chronic nature. It also constitutes recognised psychiatric illness as has been described by Professor Quadrio whose evidence I have accepted.
166. Although some psychological treatment has been recommended, and for that reason alone in view of the Plaintiff’s age it is worth attempting, I find that the prospects of success of such treatment are poor in the Plaintiff’s particular circumstances because of the nature of the trauma and because the symptoms are entrenched. The evidence does not suggest the Plaintiff will undergo a cure or complete remission of his chronic symptoms.
167. I find that the prospect for the Plaintiff is that he will live a psychologically impaired life in which he will experience chronic depression much the same as he experiences now, if not worse. His current symptoms support a diagnosis of major depression as has been acknowledged by Dr Whan in his oral evidence. I find there is little if any prospect of the Plaintiff’s psychological symptoms receding because there is no prospect for removal of the trigger, namely his permanent scarring and the traumatic memories they re-enliven for him.
168. This is a devastating consequence for a young person with a normal life expectancy. I accept that he will remain prone to significant depression throughout his life and I accept that this will adversely affect him in his everyday life, including in his ability to work.
169. It is against this background that damages for non-economic loss have to be assessed. The parties have made submissions on the appropriate percentage of a most extreme case for the assessment of non-economic loss. The Defendant has submitted the appropriate range to be between 18% and 20%. I consider the range submitted by the Defendant represents a serious under-estimation of the effects of the dog attack on the Plaintiff. The Plaintiff has submitted that the assessment of non-economic loss should be in the range 30% to 35%. In my view that submission is a realistic summation of the range.
170. The complexity for assessment of non-economic loss in this case relates to the interlinked problems of the unsightly permanently disfiguring scars and the emotional distress suffered by the Plaintiff which is liable to be randomly triggered by a range of every day events including just seeing the scars. The prospect for psychological treatment being successful is bleak. The consequence of this combination of factors for the Plaintiff represents a serious and permanent impairment in his ability to enjoy the amenity of his life which warrants a significant assessment of damages for non-economic loss.” (emphasis added)
The primary judge noted (at [173]) that there was a conflict between the psychiatrists concerning the respondent’s need for future medical treatment and the potential for such treatment to be of benefit. Professor Quadrio “recommended a combination of antidepressant medication and a short course of cognitive behavioural therapy for the post-traumatic stress disorder and a longer period of psychological treatment for the more pervasive depression”, whereas “Dr Whan was not as encouraging of such treatment”: primary judgment (at [173]). His Honour concluded (at [180]) that cognitive behavioural therapy should be attempted despite his conclusion “that such treatment will be of doubtful benefit in view of the now chronic nature of the Plaintiff’s condition”.

In reaching this conclusion his Honour observed (at [174]) “that Professor Quadrio’s treatment recommendations are aimed at improvement, not a cure or complete remission”. He found that “a cure or complete remission [was] unlikely to occur given the entrenched nature of the problems experienced by the Plaintiff”. He added:
“179. I think it would be reasonable to provide the Plaintiff with access to consultations with an adolescent psychiatrist to try to assist him with his ongoing issues with chronic pervasive depression and adjustment problems, his pattern of avoidance and personality changes. Notwithstanding my view that such treatment is unlikely to ameliorate the problems to which it would be directed, I make an allowance of such costs to enable the Plaintiff to seek further insight into his psychological problems as he matures. I think it is reasonable to allow for this to occur because in the case of psychological symptoms of a chronic nature, even when there is no prospect of a remission of symptoms, as a matter of basic humanity some support of this kind is required to help him deal with his chronic problems is better than no support at all. Further, in view of the Plaintiff’s statements to the effect that at times he feels life is not worth living, I am of the view that such thoughts should be professionally monitored during his adolescent years, when according to common understanding, he is likely to be most at risk as a result of such thoughts…” (emphasis added)
His Honour allowed damages for future treatment in the sum of $16,700.
When he came to future loss of earning capacity the primary judge found for the purposes of s 13(1) of the Civil Liability Act (Future economic loss) that:
“184. [B]ut for the dog attack the most likely circumstances of the Plaintiff would have been that he would have had no impediment to ordinary progression through the remainder of his secondary education to the end of Year 12 and to enter the workforce in the normal course at the age of 18 years.
185. I am satisfied that following the deleterious physical and emotional effects of the dog attack, as I have already outlined, the Plaintiff’s future earning capacity has been adversely affected such as to require an award of damages for future economic loss”
His Honour made the following assumptions for the purposes of s 13(3) of the Civil Liability Act (at [186]):
“(a) At the time of the dog attack I find that the Plaintiff was a normal 9 year old boy [sic, this should be ‘eleven year old boy’] who was free from physical or psychological difficulties. He was an average student who had not repeated any grades at school. I base this finding on my acceptance of the evidence of his mother, Mrs Sullivan, to the effect that prior to the dog attack the Plaintiff had no significant psychological problems.
(b) I find that, at the time he was attacked by the Defendant’s dog the Plaintiff was at a critical phase of his psychological and personality development. In this regard I accept the opinion of Professor Quadrio to this effect.
(c) I find that the circumstances surrounding the dog attack caused the Plaintiff to feel scared, afraid and shocked. In this regard I accept the inherent plausibility and reasonableness of the Plaintiff’s description of the immediate and lasting effects of the dog attack upon him. I also accept Professor Quadrio’s opinions in this regard.
(d) I find that the trauma of the dog attack and the resultant scarring have created a psychological sensitivity in the Plaintiff which triggers in him the symptoms of post-traumatic stress disorder, adjustment problems and depression when he sees his scarring or is reminded of them.
(e) I find that the Plaintiff’s psychological reaction to the dog attack as recounted by the Plaintiff, his mother and Mr Sullivan was consistent with and comprised an ordinary, natural and foreseeable probable consequence of that attack.
(f) I find that it is unlikely and improbable that the Plaintiff’s post-traumatic stress disorder, adjustment disorder, depression and proneness to depression will recede or diminish.
(g) I find that the Plaintiff’s proneness to depression caused by the dog attack and its aftermath will cause him to suffer worsening depression in the future.
(h) I find that the long term effects of the Plaintiff’s psychological reactions to the dog attack and its aftermath have compromised his self-confidence, his wellbeing and his future occupational opportunities to a marked degree that is difficult to quantify.
(i) I accept Professor Quadrio’s observation of the Plaintiff’s gloominess, lack of self-confidence and general wariness and I find that these matters will most likely diminish his chances of success as a competitor in the labour market as well as compromising his social wellbeing.
(j) I find that the Plaintiff’s psychological symptoms will, on the balance of probabilities, impede his ability to obtain and maintain regular employment so that in the future, throughout his working life he will suffer a loss of earning capacity.
(k) I find that any employment the Plaintiff does manage to secure in the future will, on the balance of probabilities, have gaps in continuity within it so that he will lose income.
(l) I find that the foregoing matters will continue to be adversely influenced by the Plaintiff’s problems with self-esteem and self-confidence.
(m) The parties have agreed that the current value of Average Weekly Earnings for Males in New South Wales is $1,260.30 per week gross which is the equivalent of $960 per week net in round figures.” (emphasis added)
The appellant submits there was no evidence to support the italicised sub-paragraphs.
His Honour concluded (at [187]) that the foregoing matters required that he assess damages for future loss of earning capacity notwithstanding “the difficulty of such a task in the case of a 14 year old youth who has not yet formed final views on a preferred career path let alone attempted to find employment” and “the imponderable factors involved in such a task”.
He found:
“188. I find that at the age of 14 the prediction of what probable career path and earnings the Plaintiff would have achieved had he not been injured is an inherently difficult task to approach let alone to approach with precision. It is therefore necessary for me to refer to a broad economic yardstick as the basis for the assessment of damages for the Plaintiff’s future loss of earning capacity.
189. Given my findings on the chronic nature of the Plaintiff’s post-traumatic stress disorder, adjustment disorder, depression and personality change and the improbability of these conditions abating with treatment it is necessary for me to fix upon a figure to fairly represent the Plaintiff’s loss over his projected working life of 47 years between ages 18 and 65.
190. In view of the foregoing factors that I have listed and weighed, doing the best I can to be fair to the Plaintiff and not unfair to the Defendants I assess the impairment of the Plaintiff’s future earning capacity over the entire period of his anticipated working life to the equivalent of 30% of net average weekly earnings between the ages of 18 and 65 years, i.e. $288 per week net.
191. Giving effect to the foregoing findings, the projection of a loss of $288 per week net at 5% over 47 years (x 961.5) but deferred for 4 years since the Plaintiff is presently aged 14 and given that the loss will not commence until the Plaintiff reaches the age of 18 (x 0.823) yields the sum of $227,898.
192. My assessment of future loss of earning capacity contains no separately identifiable component for the consequential loss of future employer funded superannuation contributions but I have taken that factor into account in assessing the weekly sum to be projected for future loss of earning capacity as such contributions are an ordinary incident of paid employment.
193. In considering the sum I have assessed I must have regard to the conventional contingencies. Amongst these contingencies is the possibility that the ordinary vicissitudes of life may have adversely affected the Plaintiff’s capacity to earn an income irrespective of his injury related disabilities by reason of accident or illness and the like. In assessing these contingencies I also have regard to the possibility that notwithstanding the Plaintiff’s psychological problems he may from time to time find himself able to secure some periods of well paid remunerative employment at rates that may be higher than net average weekly earnings so that the impact of his overall loss of earning capacity may be lessened to a degree which I am unable to determine.
194. To give effect to these considerations and to the requirements of section 13(2) of the Civil Liability Act, 2002 I assess the appropriate adjustment to allow for a discount for all these contingencies at 25%. Applying this discount I assess the Plaintiff’s damages for future loss of earning capacity in the sum of $170,923.”
Appellants’ submissions: future loss of earning capacity
The appellants submitted that the primary judge’s assessment of the respondent’s damages for future economic loss were based on the following findings for which there was no evidentiary foundation, namely that:
(a)It was improbable that the respondent’s post-traumatic stress disorder, depression and proneness to depression would recede or diminish (at [186(f)])
(b)that the respondent would suffer worsening depression in the future (at [167], [186(g)])
(c)that the respondent would have gaps in continuity of employment so that he would lose income (at [186(k)]); and
(d)that it was improbable that the respondent’s post-traumatic stress disorder, depression and personality change would be cured with treatment (at [166], [174], [179]).
The appellants also contended that there was no evidence that “a cure or complete remission is unlikely to occur given the entrenched nature of the problems experienced by the Plaintiff” as the primary judge found (at [174]) when dealing with future treatment. They submitted that in so finding the primary judge failed to give any, or any adequate weight to the following evidence:
(a)Professor Quadrio’s evidence that the respondent had had no psychological treatment and that his post-traumatic stress disorder symptoms could be ameliorated with an appropriate treatment programme. They argued that the outcome of such course of treatment was unknown because the respondent had not taken it.
(b)The respondent’s evidence that he was prepared to undergo a programme of treatment as recommended by Professor Quadrio:
(c)Professor Quadrio’s evidence that the respondent was able to attend school full-time and that it was unlikely he would suffer ongoing physical disability related to the accident.
(d)The fact that Professor Quadrio said that if the respondent did not make a complete recovery after the twelve months’ programme of treatment she outlined, it was likely that he may continue with some residual psychological disability indefinitely, but that she did not quantify the possible extent of such residual disability.
As to the primary judge’s findings that the respondent’s depression may worsen, the appellants submitted that Professor Quadrio’s evidence did not rise higher than the possibility that the respondent may continue with an indefinite and unspecified residual psychological disability if he did not have the relevant treatment. The appellants submitted that in concluding the respondent’s depression may worsen, the primary judge appeared to have applied his own knowledge to the respondent’s likely prognosis. They contended that a failure to apply the proven evidence and the substitution of his own opinions and assessments was a breach of the obligation to afford procedural fairness: Strinic v Singh [2009] NSWCA 15.
The appellants illustrated their Strinic argument by reference to the following passage from his Honour’s judgment:
“166. Although some psychological treatment has been recommended, and for that reason alone in view of the Plaintiff’s age it is worth attempting, I find that the prospects of success of such treatment are poor in the Plaintiff’s particular circumstances because of the nature of the trauma and because the symptoms are entrenched. The evidence does not suggest the Plaintiff will undergo a cure or complete remission of his chronic symptoms.” (emphasis added)
The appellants contended there was no evidence to support the emphasised finding and that, at its highest, Professor Quadrio’s evidence was that because treatment had not been commenced, the respondent may need a longer course of treatment, but that she did not suggest the treatment would be futile or unsuccessful.
The appellants next contended the primary judge also erred in the Strinic sense when he said:
“167. I find that the prospect for the Plaintiff is that he will live a psychologically impaired life in which he will experience chronic depression much the same as he experiences now, if not worse. His current symptoms support a diagnosis of major depression as has been acknowledged by Dr Whan in his oral evidence. I find there is little if any prospect of the Plaintiff’s psychological symptoms receding because there is no prospect for removal of the trigger, namely his permanent scarring and the traumatic memories they re-enliven for him. “
The appellants also argued that the respondent’s claim for economic loss should have been disallowed in part, because such loss could be avoided by the respondent receiving the treatment Professor Quadrio recommended. They argued they had discharged their Watts v Rake [1960] HCA 58; (1960) 108 CLR 158 burden and that the primary judge had failed to consider appropriately the issue of avoidable loss.
Finally the appellants submitted that the correct approach to the assessment of future economic loss in circumstances where the respondent was still at school, had not lost any time from school and did not have clear ideas about a career path, and in the absence of a treatment regime, was to award him a “buffer” or a “cushion” to reflect any loss of future earning capacity, rather than a sum calculated by reference to a notional loss over the whole of his working life.
Appellants’ submissions: non-economic loss
The appellants also challenge the primary judge’s finding (at [171]) that the Plaintiff’s damages for non-economic loss should be assessed at 35 per cent of a “most extreme” case, in the sum of $154,500. They argued his Honour’s assessment of the respondent’s damages for non-economic loss was based on the erroneous findings they contended tainted his assessment of future economic loss.
The appellants submitted the proper assessment of the respondent’s disabilities required a finding that the severity of his non-economic loss was between 18 – 21 per cent of a most extreme case, having regard to the superficial nature of his physical injuries, his uneventful physical recovery, the fact that he returned to school shortly after the dog attack, and that no further medical or cosmetic treatment was necessary.
Appellants’ submissions: future treatment
The appellants also mounted what I understand to be a fallback argument concerning the costs the primary judge awarded the respondent for future treatment. In essence, they argued, that the primary judge erred in awarding that sum notwithstanding his finding (at [180]) that “such treatment will be of doubtful benefit”. They submit that if, contrary to their earlier submissions, his Honour’s conclusion in this respect was correct, there was no basis upon which his Honour could award any amount for future treatment “as a matter of basis humanity”: primary judgment (at [179]).
Respondent’s submissions
The respondent submitted that the primary judge’s findings were not “glaringly improbable” and were open to his Honour on the evidence. They pointed to the fact that the primary judge had the advantage of seeing the respondent give evidence, of inspecting his scars and of hearing from his mother. They argued that the appellants’ submissions that the primary judge found it was improbable that the respondent’s PTSD, depression and proneness to depression would recede or diminish overstated his Honour’s findings in relation to the prognosis for the respondent’s psychological condition.
The respondent also took issue with the appellants’ submissions about his prospects if treated. He argued that Professor Quadrio’s report did not suggest he would improve with treatment, but rather indicated that his psychological state “will most likely diminish his chances of success in the career world as well as compromising his social wellbeing” He drew attention to passages in Professor Quadrio’s report which pointed to his personality change ([7]) and the possibility that he may have some limitations in terms of his future career and social adjustment (Quadrio [11], [12]) and possible indefinite residual psychological disability (Quadrio [15]).
The respondent contended that because he had not yet undertaken the treatment to which Professor Quadrio referred, it was a matter for the primary judge to assess with the benefit of seeing him giving evidence, as well as his mother and stepfather’s evidence, the prospect whether treatment would lead to a complete recovery or permanent disability. Accordingly, he argued, it was a matter for the primary judge to make some allowance for the possibility of complete recovery and some for indefinite residual psychological disability. Thus he contended that his Honour’s conclusion (at [170]) the “prospect of psychological treatment being successful was bleak” was open to him on the evidence. He submitted that demeanour and credit were vital in his Honour’s assessment in this respect and that an appellate court could not and would not readily interfere with such findings: Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167; Halvorsen Boats Pty Ltd v Robinson (1993) 31 NSWLR 1.
The respondent pointed out that in assessing damages for future economic loss, the primary judge deferred the commencement of that loss for four years (until the respondent was 14), reduced his assessment for the ordinary vicissitudes of life and the prospect of a better outcome from time to time by 25 per cent and that, in fact, the 25 per cent discount had a greater “real” effect because the primary judge included employer superannuation contributions of nine per cent in the gross economic loss figure.
Finally, the respondent criticised the appellants’ fallback submission concerning the costs of future treatment. He argued that was based on the fallacious premise that future treatment must be wholly successful or its cost is unrecoverable. The respondent argued that palliative treatment which reduces pain and suffering without removing its cause is clearly recoverable as a head of damage.
Significantly, in my view, with the exception of seeking to justify the primary judge’s conclusion that the respondent suffered from major depression, the respondent did not point to evidence which would support the parts of the primary judge’s findings the appellants impugned.
Consideration
In Strinic, Beazley JA (Ipp and Basten JJA agreeing) considered the principles concerning judicial fact-finding in a case involving expert evidence. In that case, the primary judge (who had extensive judicial experience in personal injury litigation – see [62]) made findings of critical fact which Beazley JA concluded (at [127]) were based on his own medical knowledge. Her Honour explained the relevant principles as follows:
“60 The fundamental judicial obligation to make findings of fact on proved evidence (not being matters of common knowledge or judicial knowledge) has been emphasised by the courts in a variety of different circumstances. In Saunders v Adderley [1999] 1 WLR 884, Sir John Balcombe, in delivering the judgment of the majority of the Privy Council, stated, at 889:
‘It is, of course, an error of law for a judge to make a finding of fact which there is no evidence to support, unless the matter is one of which the judge is entitled to take judicial notice.’
See also Holland v Jones [1917] HCA 26; (1917) 23 CLR 149; ABC v Lenah Game Meats Pty Ltd [2001] HCA 63; 208 CLR 199; Coombes v RTA [2006] NSWCA 229; Ohlstein bht Ohlstein v E & T Lloyd t/as Otford Farm Trail Rides [2006] NSWCA 226.
61 In Ohlstein, Ipp JA observed, at [155], that the risk to a young child in undertaking a guided horse ride and a child’s ability to undertake the ride:
“… should not be determined by a personal judicial opinion, based on common knowledge and experience, that differs from the opinions expressed by the experts … .”
…
64 Even if a particular judge sitting in a court of general jurisdiction is experienced in adjudicating medical cases, that experience does not replace the requirement to base findings on the evidence. A court cannot assume that its knowledge of any particular matter is correct, even if the individual judge has a great deal of experience dealing with, for example, medical issues, as was the case here. In Saunders v Adderley [1999] 1 WLR 884 it was said that such a process involved an error of law. Underlying that error is a fundamental breach of procedural fairness. A party is not afforded procedural fairness where a trial judge makes findings of fact based upon that judge’s own purported knowledge or understanding of matters that do not form part of the evidence.
65 I have put that proposition in blunt terms, because it is the underlying fundamental principle upon which courts must act. Procedural fairness does, however, take its colour and hue from the particular circumstances at hand. … a trial judge would be entitled to advise the parties that he understood certain medical evidence to have a particular meaning, even if that meaning was not stated in the evidence. If all parties agreed that the judge’s understanding on that matter was correct, then, the matter being transparent and not in dispute, there would be no breach of procedural fairness in the trial judge’s acting on that understanding.”

The consequence in Strinic of the failure to afford procedural fairness was that the appellant was denied “his fundamental right to the determination of his claim based on the evidence”: (at [128]).
Beazley JA concluded that although the Court was entitled to make any order that the trial judge could have made (s 75A Supreme Court Act 1970) as there was a “real question” as to the extent of the appellant’s damage given a challenge to the his credit and the differing medical opinions as to his injury and continuing disability which had not been properly determined at trial, it was not appropriate for this Court to assess damages. Accordingly the matter was remitted to the District Court for reassessment.
Regrettably, in my view, the primary judge in this case appears either to have made findings of fact unsupported by evidence and/or (it matters not which) has applied his personal opinion concerning the respondent’s present and future psychological condition.
Conclusions: the worsening depression and treatment issues
The primary judge, as I have said, said (at [149]) that he accepted Professor Quadrio’s diagnoses and prognosis of the respondent’s psychological problem.
The substance of Professor Quadrio’s first report (at [7]) was that the respondent had chronic post-traumatic stress disorder overlapping with Adjustment Disorder with Depressed Mood and a chronic low-grade depressive adjustment. These disorders were complicated by the fact they had been manifested over the critical years of the respondent’s personality development so that, as Professor Quadrio said, “some of this depressive adjustment has become entrenched and characterological and may constitute a degree of personality change that may be enduring.” (emphasis added). Under the heading “Present or Continuing Disabilities”, Professor Quadrio identified (inter alia) “personality change”.
When Professor Quadrio came to consider the issue of the respondent’s prognosis, while she acknowledged the serious effect the injury had had on him, she also clearly contemplated that it was possible he could make a complete recovery after the 12-month programme of treatment she outlined. If he did not then it was “likely he may continue with some residual psychological disability indefinitely” (emphasis added). In her opinion the respondent’s PTSD symptoms could be “ameliorated” with an appropriate treatment programme while the “more pervasive depression and possible personality change would require a longer period of psychological treatment”. (emphasis added)
Dealing with the respondent’s future employment, Professor Quadrio’s emphasis fluctuated. On the one hand she suggested, “his long term outlook in terms of occupational and social adjustment is compromised because of the psychological disturbances described”, however, in response to the next question, (clearly a pro forma one) relating to “his ability to resume normal duties”, pointed out that “in the long term he may have some limitations in terms of future career and social adjustment.” (emphasis added) That qualified response was repeated in answer to question 12 although Professor Quadrio did add that the respondent’s:
“gloominess, lack of self confidence and general wariness will most likely diminish his chances of success in the career world as well as compromising his social well-being.” (emphasis added)
Nowhere in Professor Quadrio’s reports did she say that the respondent’s depression might worsen (cf primary judgment at [167], [186(g)]). Nor, in my view, did Professor Quadrio’s reports support the primary judge’s findings that the prospects of psychological treatment for the respondent were poor ([166]) and had little prospect of succeeding ([167], [186(f)]). Rather, Professor Quadrio’s opinion was that the respondent’s PTSD symptoms “could be ameliorated with an appropriate treatment programme” (at [16]), although the duration of that programme might differ depending upon the psychological condition being treated (at [16]).
While the primary judge recognised (at [174]) that Professor Quadrio’s recommendations were “aimed at improvement”, and notwithstanding that he said he accepted her diagnoses and opinions, he clearly rejected this opinion (see [179]) in concluding that psychiatric consultations were “unlikely to ameliorate” the respondent’s problems and that there was “no prospect of a remission of symptoms”.
In my view there was no evidence to support the primary judge’s conclusions that that none of the respondent’s psychological conditions would “recede or diminish” (at [167], [186](f)), or indeed that his depression would worsen (at [167], [186](g)),
Conclusions: the major depression issue
Although the primary judge said (at [150]) that he was unassisted by Dr Whan’s opinions and his analysis in his two reports, he set out (at [144]), and appeared to adopt (at [167]), a passage from Dr Whan’s evidence responding to his Honour’s questions in that part of his judgment in which he explained why he preferred Professor Quadrio’s evidence to Dr Whan’s. However, in my view, the primary judge used that evidence to go beyond Professor Quadrio’s opinion and to find (see [145] and [167]) apparently in addition to her diagnosis, that the respondent suffered from “major depression” from which there was little prospect of him recovering.
The passage of evidence from which this conclusion appears to have been drawn was the following, already set out above when quoting the primary judgment (at [144]), but which should be repeated for convenience:
“HIS HONOUR:
…
Q. I just want to ask you about a couple of things that were ventilated in the evidence to see where they fit into the scheme of things psychologically. I’ve noted in the evidence that he had described not wanting to have people see his scar, being angry with everyone and wishing he was dead, keeping very much to himself a lot, and within that constellation it’s also been described that he has changed his personality since the incident. If one accepts those descriptions, where does that put him in the range of diagnosis within DSM-IV?
A. At the stage he was showing those things – and I don’t think he was showing all those things you’ve just described at the point I saw him – I’m acknowledging that for a significant part of the period he would have met the criteria for post-traumatic stress disorder and probably would meet criteria for – even for major depression.
Q. Putting aside DSM criteria and just looking at it in terms of your alternative formulation of just the practicalities, would all of those matters potentially serve to adversely affect his self-esteem and ability to function as one would normally expect a young man to function?
A. His self-consciousness about the scars and sort of his feeling victimised by other children putting him down, gained the impression that he did believe via the attack actually affecting the use of his arm that he seems to believe that his arm was making him slower with the work at school and sort of therefore sort of less able. So I – I do believe that he showed clear evidence of sort of feeling that sort of he had been handicapped as a result of what had happened to him.
Q. Those matters that I’ve summarised to you, if they were current matters affecting him would not that describe a more serious psychological condition that [sic, as in original – should be “than”] the one you’re describing?
A. Yes.”
It is important, to examine the circumstances in which Dr Whan’s answer was elicited. As can be seen, his Honour asked Dr Whan to assume that the evidence disclosed that the respondent had described “not wanting to have people see his scars, being angry with everyone and wishing he was dead, keeping very much to himself a lot, and within that constellation it’s also been described that he has changed his personality since the incident.” Dr Whan’s first response was directed to the stage the respondent was exhibiting “those…things”, which the respondent was not doing when he saw him. At that stage he acknowledged the respondent “for a significant part of the period … would have met the criteria for post-traumatic stress disorder and probably would meet criteria for – even for major depression.” If the primary judge relied on this answer to support his conclusion (at [145]) that the respondent had “a more serious psychological condition in the nature of a major depression”, then, in my view, he took that answer out of context.
It should be noted that the primary judge put these assumptions to Dr Whan in circumstances where the latter had accepted that in the first year after the accident where there was “definite evidence of social withdrawal, decline [sic, declined] functioning at school” the respondent met DSM – IV criteria for a psychological disorder. However, by the time Dr Whan saw the respondent in June 2008 he did not regard the respondent as meeting the required number of the criteria in DSM – IV for such a diagnosis anymore.
Dr Whan had also accepted prior to the exchange on which the primary judge relied, that on the history Professor Quadrio obtained in April 2008, the respondent met the criteria for PTSD at that interview but had opined that he had apparently improved by the time Dr Whan saw him in June the same year.
In asking the last (“current matters”) question in the exchange extracted above, the primary judge used the indefinite article “a more serious psychological condition”. It was unclear whether he was putting, and whether Dr Whan understood, the question to relate back to a particular identified psychological condition or to either post-traumatic stress disorder (which was Professor Quadrio’s diagnosis) or major depression. Dr Whan’s last answer did not, in my view support a finding that at the time of trial, the respondent was suffering from major depression.
Further, the primary judge (at [145]) said he accepted the assumptions in the questions he put to Dr Whan as fact. However, in my view the evidence did not, with respect, provide a factual foundation for the premise in the final question as to “current matters”. There is no doubt that the respondent gave evidence at the trial that he wore long sleeved clothes because he did not want people to see him and keep on asking him about his scars. However, he did not give evidence that he was “angry with everyone”, nor did he make such a statement to either Professor Quadrio or Dr Whan. While he had told Professor Quadrio in April 2008 that at times he felt “life is not worth living … because people put me down”, he did not repeat any such statement when he saw Dr Whan or give any evidence at the trial to the effect to that he wished that he was dead.
The respondent gave no evidence to the effect that at the time of trial he was “keeping very much to himself a lot”. Indeed he said that he still did things with his mates and rode bikes with them. He did not see them as much as he had previously, but he explained this on the basis that he had gone on to high school. Nevertheless he and his mates tended to get together on weekends when they played soccer, touch football, Game Boy and computers if it was raining. He said he was happy hanging out with his friends at school.
Some of these matters were put to Dr Whan in his evidence in chief. He opined that they accorded with his opinion that there had been a significant improvement in the respondent’s condition between him seeing Professor Quadrio and that that improvement had continued.
The respondent’s mother gave evidence, which tended to move between time periods but which, in my view, disclosed that at first after the dog attack, the respondent became “a recluse … [and] wouldn’t talk to anybody” and “hated his life, wished he was dead”. Speaking in the present tense, Mrs Sullivan said several times that the respondent was “just very angry all the time”, “just angry with everyone”, “just very angry”. There were clear inconsistencies between the respondent’s and his mother’s evidence as to the respondent’s condition at the time of trial.
It might be accepted that the primary judge found that the respondent tended “to understate and play down the extent and the full effect of his injuries” (at [51]) and that because of what he described as the respondent’s “reticence”, his Honour decided it was necessary “to review in detail the medical records and the medical reports … to identify the historical matters which affected the respondent in the treatment and recuperation phase following his injuries” (at [53]). (emphasis added) The primary judge observed (at [88]) that when the respondent was asked whether he felt able to talk to doctors about his emotional problems “he became choked with emotion and gave no verbal reply”, a response the primary judge regarded as “tellingly indicative of significant ongoing emotional distress which he tries to conceal” and which confirmed his Honour’s assessment about the respondent’s understatement of his problems.
The primary judge referred to the respondent’s mother’s evidence about the respondent keeping to himself a lot (at [98]) but did not refer to the respondent’s evidence about the extent to which he played with his mates, the games he played and the fact that he told Professor Quadrio that he went both to the beach and to swimming pools with his friends.
In my view Dr Whan’s evidence did not support the primary judge’s finding that the respondent suffered from “major depression”, let alone a depression from which there was little prospect of him recovering
Conclusions: non-economic loss
It is in this context that I return to the primary judge’s conclusion.
In my view, Professor Quadrio’s report, while recognising that the respondent was suffering from PTSD and an Adjustment Disorder and personality change, also contemplated that those conditions may not be permanent and, indeed, that he may have either recover, or his condition may be ameliorated, in the event he undertook psychological treatment. Although his Honour said he accepted Professor Quadrio’s opinion, his reasons did not, with respect, reflect it. In contrast to the moderately hopeful picture Professor Quadrio foresaw, his Honour found the repondent suffered from major depression (at [145], [167]), that the prospects of him being successfully treated were poor or “bleak” ([166], [170]), that his depression would worsen (at [167], [186(g)]) and that was unlikely and improbable that his post-traumatic stress disorder, adjustment disorder, depression and proneness to depression would recede or diminish. (at [167], [186(f)]), and that he would remain prone to significant depression throughout his life (at [167]) and that he had undergone permanent personality change ([162] and [167]), in short that his conditions were entrenched (at [174]) and chronic (at [189]).
There was no evidence, in my view, from which the primary judge could draw the conclusion, that the prospects of success of psychological treatment were poor. Professor Quadrio did not express that opinion, instead contemplating that such treatment may lead to recovery or, at least, amelioration of the respondent’s psychological disorders.
Further, the primary judge’s finding (at [167]) that the respondent would live “a psychologically impaired life in which he will experience chronic depression much the same as he experiences now, if not worse” not only took no account of Professor Quadrio’s views as to the prospects of treatment but, further, was not based on any evidence that the respondent’s depression would worsen.
In the same paragraph ([167]), the primary judge also concluded that the respondent’s “current symptoms support a diagnosis of major depression as had been acknowledged by Dr Whan in his oral evidence”. I have already analysed Dr Whan’s evidence in this respect. In my view, with respect, it was not open to the primary judge to make this finding.
Further, the primary judge’s conclusion, apparently, that the respondent’s current condition supported a diagnosis of major depression of which there was little prospect of diminution appeared to have been the basis of his Honour’s finding (at [168]) that the respondent would remain “prone to significant depression throughout his life [which would] adversely affect him in his everyday life, including in his ability to work”.
In Wynn Tresidder Management v Barkho [2009] NSWCA 149 (at [110] – [111]), I said (with Tobias and Young JJA’s agreement):
“The approach taken when an appellate court is asked to review a primary judge’s conclusion as to the severity of a plaintiff’s non-economic loss by reference to a “most extreme case” was discussed in Crystal Wall Pty Ltd v Pham [2005] NSWCA 449 (at [49]) as follows:
‘49 The exercise in which the primary judge was involved in determining non-economic loss is neither scientific nor normative. While it is not wholly at large, it involves an exercise of discretion with which the Court will rarely intervene: Southgate v Waterford (1990) 21 NSWLR 427 at 440. Having regard to the nature of the exercise, a finding that a particular case is or is not ‘a most extreme case’ has been said to be not ‘readily … susceptible of appellate review’ as ‘its resolution … involve[s] questions of fact and degree, and matters of opinion, impression, speculation and estimation calling for the exercise of common sense and judgment’: Dell v Dalton (1991) 23 NSWLR 528 at 533 per Handley JA (with whom Kirby P and Priestley JA agreed); Rabay v Bristow [2005] NSWCA 199 at [62] – [67]. Unless it can be demonstrated that the trial judge has erred in the application of principle, in order to attract appellate review it will be necessary to show that the conclusion reached by the primary judge was manifestly erroneous: Ellis v Rantzos (t/as Rantzos Hairdressing) [2005] NSWCA 266 at [43] per Basten JA (with whom Handley and Santow JJA agreed).’
A like approach has been taken by the West Australian Court of Appeal: see Hammond Worthington v Da Silva [2006] WASCA 180; Den Hoedt v Barwick [2006] WASCA 196; (2006) 46 MVR 30; Insurance Commission of Western Australia v Weatherall [2007] WASCA 264.”
In my view the errors I have identified in the primary judge’s reasons were of such substance that the conclusion reached by his Honour concerning the s 16 most extreme case issue and future economic loss were manifestly erroneous. It is open to this Court to accede to the appellants’ application to re-assess those awards.
Mr Morrison submitted that if the Court came to this view, it should not reassess damages but, rather, the matter should be remitted to the District Court for rehearing so that a trial judge could view the respondent’s scars. In my view a rehearing is unnecessary. The approach Mr Morrison suggests would not be consistent with the overriding purpose in s 56 of the Civil Procedure Act 2005 (NSW). The Court can reassess the respondent’s damages for non-economic loss on a basis which accepts Dr Meares’ evidence about the respondent’s scars as well as the clear description of them in the primary judgment, taken with the photographic exhibits in the Blue Book. That approach would facilitate the just, quick and cheap resolution of the real issues in the appeal, rather than lead to the parties incurring additional costs for a hearing the only additional advantage of which, according to Mr Morrison’s submissions, would be to enable a trial judge to see the respondent’s scars firsthand.
For the purpose of reassessing the respondent’s non-economic loss, I accept the findings the primary judge made (at [162] – [165]). I reject, however, the primary judge’s conclusions (at [166] – [168]). It is also appropriate to take into account Professor Quadrio’s view that, with appropriate treatment, the respondent’s PTSD symptoms could be ameliorated and that his depression and possible personality change could also be the subject of psychological treatment. It is apparent that the respondent’s psychological issues can be ameliorated with an appropriate treatment programme. In addition it is appropriate to take into account that the respondent will suffer no physical disability. While he will continue to have scarring of the nature of that the primary judge and Dr Meares described, as the photographs in the Blue Book reveal, and those scars will remain a reminder of the original incident, he will not suffer any physical disability in the future. Further, while he can cover up the scars easily by wearing long sleeves, it is significant in my view that he already goes to the beach and to swimming pools with his friends. It is unlikely, in my view, in the light of that evidence that the scars will significantly, if at all, impede his social interaction as he matures.

Taking those matters into account I would assess the respondent’s damages for non-economic loss at 20 percent of a most extreme case.
Conclusion: future economic loss
I turn then to the issue of future economic loss. The primary judge’s finding in this respect was also tainted by reason of the erroneous findings I have identified. It was also, in my view, inappropriate for his Honour to assess the impairment of the respondent’s future earning capacity over the entire period of his anticipated working life. Rather this was a case where, as the appellants submitted, a buffer should have been awarded.
Compensation for lost earning capacity is awarded because diminution in an injured plaintiff’s earning capacity “is or may be productive of financial loss”: Graham v Baker [1961] HCA 48; (1961) 106 CLR 340 (at 347). It is incumbent upon the plaintiff to prove the loss for which compensation is claimed: Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402 (at 412).
It is appropriate to award damages by way of a buffer, including in a case such as this where damages are to be determined pursuant to the Civil Liability Act, when the impact of the injury upon the economic benefit from exercising earning capacity after injury is difficult to determine. In such a case where the plaintiff has an earlier demonstrated earning capacity, the Court undertakes a comparison between the economic benefits the plaintiff derived from exercising that earning capacity before injury and the economic benefit derived from exercising earning capacity after injury, although the difference cannot be determined otherwise than by the broad approach of a buffer: Penrith City Council v Parks [2004] NSWCA 201 (at [3] - [5]) per Giles JA; applied K-mart Australia Ltd v McCann [2004] NSWCA 283 (at [62]) per Pearlman AJA (Handley and Ipp JJA agreeing); see also Hornsby Shire Council v King [2005] NSWCA 67 (at [23]) per Ipp JA (Mason P and Brownie AJA agreeing); Leichhardt Municipal Council v Montgomery [2005] NSWCA 432 (at [33]) per Hodgson JA (McColl JA agreeing). In the latter case Mason P (at [2]) opined that "a buffer or cushion award is usually reserved to the situation where there is a smallish risk that otherwise secure employment prospects may come to an end, in consequence of the tort-related injury, at some distant time in the future".
As the primary judge acknowledged, the fact that the respondent was 14 years old at the time of trial made the task of assessing the diminution of his earning capacity very difficult. Clearly the comparative exercise referred to in the previous paragraph cannot be undertaken. However that does not mean that the plaintiff was entitled only to a nominal sum. The Court has to do its best to give the injured plaintiff sufficient recompense: State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 (at [72]) per Heydon JA.
I accept the primary judge’s finding (at [184]) about the most likely circumstances of the respondent for the purposes of s 13(1) of the Civil Liability Act being that he would have had no impediment to ordinary progression through the remainder of his secondary education to the end of Year 12 and would have entered the workforce in the normal course at the age of 18 years. However, for the reasons I have already given, I reject the assumptions the primary judge made for the purposes of s 13(3) of the Civil Liability Act (at [186(f), (g), (h) (j) and (k)]).
While I accept that his Honour was entitled to accept Professor Quadrio’s assessment (set out at [186(i)]) concerning the probability that the respondent’s “gloominess, lack of self-confidence and general wariness will most likely diminish his chances of success in the career world”, I am of the opinion that it is appropriate to recognise that likelihood having regard to the inherent uncertainties in what the future held for him in terms of earning capacity to reflect that finding in a buffer amount.
Having regard to the fact that the respondent suffers no physical limitations on his ability to work, that it is probable his psychological conditions will be ameliorated by treatment and that, even to the extent some aspect of his work life might be limited by the matters to which Professor Quadrio referred that is not likely to be substantial, I am of the view that his future earning capacity will not be substantially diminished.
Having regard to the matters to which I have referred, and having regard to the uncertainties arising by reference to the respondent’s youth, I would assess the impairment of his future earning capacity before discount for vicissitudes at $50,000. That amount must be reduced for vicissitudes and, in that respect, I would accept the primary judge’s discount figure of 25 per cent. I have taken into account in assessing the figure of $50,000, as the primary judge did (at [192]) the possible loss to the respondent of future employer funded superannuation contributions.
Having regard to the findings I have made, I would not interfere with the primary judge’s award in respect of future treatment.
Accordingly, I propose the following orders:
1.            Appeal allowed.
2.            Judgment of the Court below set aside.
3.The parties should bring in Short Minutes of Order within 14 days setting out the sum to be awarded to the respondent on the basis of the above reasons.
4.            Respondent to pay the appellants’ costs of the appeal.
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LAST UPDATED:
8 September 2009