Stewart v Rudland-Wood and Anor Kim Messenger Real Estate Pty Ltd v Rudland-Wood and Anor

[2000] NSWCA 86

CITATION:	Stewart v Rudland-Wood & Anor Kim Messenger Real Estate Pty Ltd v Rudland-Wood & Anor [2000] NSWCA 86
FILE NUMBER(S):	CA 40604/98; 40617/98
HEARING DATE(S):	31/03/00
JUDGMENT DATE:	11 April 2000
PARTIES :	John Leonard Stewart (Appellant 40604/98) Angela Rudland-Wood (First Respondent 40604/98 & 40617/98) Kim Messenger Real Estate Pty Ltd (Second Respondent 40604/98) Kim Messenger Real Estate Pty Ltd (Appellant 40617/98) John Leonard Stewart (Second Respondent 40617/98)
JUDGMENT OF:	Stein JA at 1; Fitzgerald JA at 2; Hodgson CJinEq at 33

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	7044/97
LOWER COURT JUDICIAL OFFICER :	Williams DCJ

COUNSEL:	Mr H.J. Marshall (Appellant - Stewart) Mr P.W. Taylor SC / Mr W. Washington (Appellant - Messenger) Dr A.S. Morrison QC / Mr A.J. Stone (Respondent - Rudland-Wood)
SOLICITORS:	Messenger & Messenger (Appellant 40617/98) Henry Davis York (Appellant 40604/98) Stacks - The Law Firm (First Respondent 40617/98 & 40604/98)
CATCHWORDS:	Negligence - Landlord and Tenant - whether owner and real estate agent liable to injured tenant for collapse of a wall - whether damages awarded to tenant were excessive - ND
DECISION:	Appeal dismissed, with costs

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40604/98, 40617/98
DC 7044/97
STEIN JA
FITZGERALD JA
HODGSON CJ in Eq


TUESDAY 11 APRIL 2000

STEWART v RUDLAND - WOOD & ANOR
KIM MESSENGER REAL ESTATE PTY LTD v RUDLAND - WOOD & ANOR

JUDGMENT

1   STEIN JA: I agree with Fitzgerald JA. 2   FITZGERALD JA: On 24 July 1991, Angela Rudland-Wood (the “plaintiff”) was injured on premises at 2 Shaw Street, Bondi, which were owned by John Leonard Stewart (the “owner”). The plaintiff was a tenant of part of the property pursuant to a Residential Tenancy Agreement dated 10 September 1990, which had been signed on behalf of the owner by his agent, Kim Messenger Real Estate Pty Ltd (the “agent”). 3   The plaintiff was injured when she leaned against a low wall, sometimes referred to as a balustrade, on the first floor landing outside the only external door to her flat and the wall collapsed, causing her to fall onto the concrete surface below. 4   The plaintiff sued the owner for breach of contract and negligence and the agent for negligence. By their cross-claims, each of the agent and the owner denied liability to the plaintiff, alleged that she had been contributorily negligent, and cross claimed against the other. Each alleged that the other was in breach of their Management Agency Agreement dated 3 September 1990, and had been negligent. Each claimed an indemnity or contribution from the other pursuant to the Law Reform (Miscellaneous Provisions) Act 1946, and the agent also claimed from the owner “[d]amages] for negligence for which [it] may be held liable in answer to the Plaintiff’s claim.” 5 The District Court gave judgment for the plaintiff against the owner and the agent for $360,240 (less a “credit of $4,940” in favour of the owner), plus costs “payable on an indemnity basis from 27 August 1997”. The agent was ordered to indemnify the owner and to pay his “costs incurred in the action including costs liable to be paid by [him] to the plaintiff”, and it was ordered that the owners’ “costs on the cross claim [be paid] on an indemnity basis from 8 September 1997.” The agent’s cross claim was not expressly dismissed, but that is implicit in the orders which were made. 6 The owner and the agent have appealed, challenging both the conclusion that they are liable to the plaintiff and the damages which she was awarded.

The finding that the plaintiff was not contributorily negligent was abandoned in this Court during the course of oral argument. And, if the agent is liable to the plaintiff, it does not dispute that it is liable to indemnify the owner if he is liable to the plaintiff.

LIABILITY

7   The trial judge criticised the construction of the stairs and landing used by the plaintiff, describing their appearance from photographs as “jerry-built” and stating:

“Without a proper key factor, I would have thought that the laying of a single course brick wall on the top of … a slab in the circumstances was a less than satisfactory constructional approach to the problem of providing a balustrade to the … landing and one, that was inevitably going to fall.”

8   However, his Honour did not act on that opinion. His judgment later continued:

“Apart from my comments earlier as to the nature of the balustrading and its apparent poor quality of workmanship, there is no evidence that any defect in the wall was readily apparent to a casual observer until Ms Logan [the plaintiff’s flat mate] and the plaintiff became aware of problems associated with the wall in May 1991. ….it is doubtful whether an inspection of the premises at the time the lease was entered into would have revealed any particular problems associated with the wall that might have had any meaningful effect on either the tenant or the landlord or his agent, bearing in mind that the defect was not discovered by the plaintiff until May of the following year.”

9   It was critical to the District Court’s judgment in favour of the plaintiff that her evidence was accepted that “about May 1991 she noticed that there were problems with the balustrading”, and “… rang Mr Messenger .. and .. told him about the problem with the balustrade”. The plaintiff’s written submissions in this Court made it plain that, on her case, “…the liability of the [owner] arises through his negligence and breach of contractual obligations once the defect .. was drawn to the attention of his agent”. The owner supported the agent’s argument that the trial judge should not have found that the plaintiff informed the agent that the wall was unsafe. The agent did not dispute that it owed a duty of care to the plaintiff but argued that it should not have been held liable to either the plaintiff or the owner if, as it contended, it was not warned that the wall was unsafe. However the agent accepted that the plaintiff was entitled to succeed against it, and conceded that the owner was entitled to indemnity from it, if the plaintiff had warned it of the unsafe condition of the wall. 10   The trial judge held that the plaintiff’s evidence that she had informed the agent that the wall was unsafe was supported by evidence from her flatmate, Ms Logan, whom he considered “to be an impressive witness”. The judgment stated:

“This issue has to be decided on the balance of probabilities and had it been a question of the plaintiff’s word as against Mr Messenger’s, the plaintiff may have had some difficulties, but in my view she is substantially corroborated by Ms Logan and I have no reason to doubt that Ms Logan is telling the truth. I am satisfied, on balance, that the conversation took place.”

11   According to the agent, the trial judge:

(a) “… failed properly to evaluate the inconsistency between [the plaintiff’s] conduct in, August 1991, and the alleged conversation”;

(b) “… wrongly surmised that [the plaintiff’s] conduct had to be viewed in the light of her age, medical condition and her economic predicament at the time”;

(c) “… misstated the conflict issue as a choice between mistake by Mr Messenger and dishonest conspiracy between [the plaintiff] and Ms Logan”;

and

(d) “…resolved the conflict by rationalising that Mr Messenger forgot the conversation - but without providing any basis for rejecting Mr Messenger’s evidence - and despite implicitly accepting that it should be preferred to that of [the plaintiff].”

12   There is nothing to indicate that the trial judge overlooked any of the points now urged by the agent or that his Honour’s approach involved any error of principle. The foundation of the finding that the plaintiff reported that the wall was unsafe to the agent in May or June 1991 was the trial judge’s conclusion that the plaintiff’s evidence was “substantially corroborated" by the evidence of Ms Logan, whom his Honour considered “to be an impressive witness” who he had “no reason to doubt .. [was] telling the truth.” The finding that the plaintiff informed the agent that the wall was unsafe in May or June 1991 is unassailable if her evidence was “substantially corroborated” by the evidence of Ms Logan. Conversely, if the plaintiff’s material evidence is not “substantially corroborated” by the evidence of Ms Logan, the trial judge’s acceptance that the plaintiff informed the agent that the wall was unsafe in May or June 1991 cannot be supported on the basis which his Honour adopted. 13   In her evidence in chief, Ms Logan said that she was present when the plaintiff phoned Mr Messenger and heard the plaintiff say “something like … ‘I just wanted to mention there was a problem with the balcony, there seems to be some mortar crumbling and could you please come around and send someone around to have a look at it or come round yourself’”. 14   In cross-examination, she said that she first wrote down a record of that telephone conversation “[o]ver six years ago”, and that “the telephone conversation … was written down in my statement …” She “couldn’t tell” whether “the conversation [was] consistent with a conversation such as a person might have with an answering machine”, and “couldn’t answer” whether “all that happened … [was] that in the phone call [the plaintiff] simply left a message for Mr Messenger to contact her.” “Its possible” that “might be all that happened”. However, she “felt satisfied that some report had been made because there was a concern for [her] own safety. So [she] felt comfortable that a message had been sent.” She “felt confident that he’s been spoken to or that some message had been put across”. The telephone conversation she described “did happen”. 15   It was plainly open to the trail judge to accept Ms Logan as a reliable witness, and to conclude that her evidence “substantially corroborated” the plaintiff’s evidence that she warned the agent that the wall was unsafe. 16   The owner argued that he is not liable to the plaintiff even if she did inform the agent that the wall was unsafe in May or June 1991 because, it was submitted, the owner was not vicariously liable for the agent’s negligence. However, the owner’s address for the purpose of the Rental Tenancy Agreement with the plaintiff was care of the agent. When the plaintiff informed the agent in May 1991 that the wall was unsafe, that constituted notice to the owner, and his liability to the plaintiff is based on his own failure to remedy the defect, not the agent’s failure to do so or to inform him of the unsafe condition of the wall. 17   The challenge to the trial judge’s conclusion that the owner and agent were liable to the plaintiff accordingly fails.

DAMAGES

18   The plaintiff, who was born on 3 May 1969, was aged 22 when she was injured. She suffered an osteochondrial fracture of the left ankle and underwent arthroscopic removal of loose bone fragments and debridement of the talus at Prince of Wales Hospital. Her orthopaedic surgeon continued to treat her until about the end of 1993, after which she continued under the care of a doctor who was described by the trial judge as “her family physician”. She also consulted at least one rehabilitation specialist, a psychiatrist to deal with her pain management and a clinical psychologist. There was evidence that the plaintiff’s injury would lead to degenerative changes over time, and that a lateral ligament reconstruction would probably be necessary later. The trial judge found that the plaintiff’s injury was “disabling and painful and unlikely to improve” and had caused her “considerable upset of a psychological nature.” 19   Prior to her injury, the plaintiff had worked at various times as a waitress, a dancer, a receptionist and an exotic masseuse, and had obtained occasional work as a model. She had registered for further modelling work at an agency. There was virtually no evidence of her earnings at any time because of a lack of financial records. 20   The medical evidence broadly indicated that the plaintiff should avoid standing for prolonged periods and that, because of her injury, she was most suited to sedentary work. A medico-legal expert expressed the opinion that she was “permanently unfit for standing or walking for long periods of time”. A rehabilitation specialist recommended that she engage only in “light physically varied but basically sedentary occupations”. A clinical psychologist considered that her injury had “changed the course of her life and limited her potential”. The overall medical prognosis was of continuing physical pain which would continue to limit her working activities and adversely affect her psychological health. 21   The trial judge awarded general damages of $120,000 “[h]aving regard to the nature of the plaintiff’s physical injury and the probabilities of further pain and degeneration in the future and the probabilities of that causing further psychological difficulties in the future..”. 22   Counsel for the owner submitted that the trial judge should not have awarded more than $70,000 for general damages. 23   $15,000 was awarded for past economic loss and $150,000 was awarded for future economic loss, including “any component for superannuation”. 24   The trial judge said that it was only possible to “ conjecture” at the future earnings which the plaintiff might have earned from modelling but for her injury, and held that her main income would continue to be derived from providing massages. 25   His Honour seems to have considered that the plaintiff would remain in that work, without interruption, for example to bear and care for children, until she was 65, a period of about 36 years, but that she “would be significantly disabled from undertaking the work which she had in the past by her injury”, particularly as she grew older. No attempt was made to relate the amount awarded for future economic loss to that awarded for past economic loss. The amount of $150,000 for future economic loss was fixed “considering her age, the nature of her injuries and the nature of her disabilities. 26   No complaint was made by the appellants in respect of the award for past economic loss, but they adhered to their submission at trial that “…at best [the plaintiff] may be entitled to a cushion payment in the vicinity of $45,000 to $60,000” for future economic loss. 27   A similar broadbrush approach was adopted by the trial judge in relation to future medical expenses ($25,000), past care ($5,000) and future care ($30,000). 28   The award for future medical expenses was a “cushion payment” for the plaintiff’s “future need for operative intervention, the need to see doctors from time to time and the need for medication”, together, it seems, with possible post-operative physiotherapy and chiropractic assistance. 29   The care awards seem to have been substantially based on periodic needs for some domestic and handyman help, particularly as she grew older, in accordance with the evidence of a rehabilitation specialist. 30   The lack of detail in the evidence, the parties’ willingness to have contested issues decided without medical witnesses giving oral evidence and being cross-examined, their common view that the trial judge should make broad assessments of “cushion payments”, and the absence of any ground of appeal or submissions complaining that the trial judge’s reasons were inadequate combine to limit this court to a consideration of whether, as the owner’s counsel argued on behalf of both appellants, various of the amounts awarded were excessive. 31   The amounts awarded appear high. However, there is no satisfactory basis upon which this Court can legitimately conclude that all or any of them were unjustified. 32   In summary, I would dismiss the appeals, with costs. 33   HODGSON CJ in Eq: I agree with Fitzgerald JA.