Suncorp Insurance & Finance v Blakeney

[1993] QCA 495

IN THE COURT OF APPEAL

[1993] QCA 495

SUPREME COURT OF QUEENSLAND

Appeal No. 163 of 1993.

Brisbane

[Blakeney v. Suncorp]

BETWEEN

JAMES JOHN BLAKENEY

(Plaintiff) Respondent

- and -

ADELGUNDE WILHELMINA SCHEULEN

(Defendant)

- and -

SUNCORP INSURANCE AND FINANCE

(Defendant by Election) Appellant

REASONS FOR JUDGMENT - PINCUS J.A.

Judgment delivered 07/12/93.

I have read the joint reasons prepared by McPherson J.A. and Williams J. The principal factual issue below was whether or not the evidence that the deceased driver Scheulen's blood alcohol reading was 0.302 should be accepted. The learned primary judge found that evidence to be accurate and, as I read his Honour's reasons, the inference was drawn that the respondent "must have known that he was travelling with a driver seriously affected by drink". As to the respondent's evidence that Scheulen "seemed all right", the primary judge took "that statement with some circumspection", but accepted that the "plaintiff probably did not observe signs of gross intoxication".

The respondent was in Scheulen's company for some hours while Scheulen drank to excess and became very drunk. In that condition Scheulen's conduct, the judge held, "must have been observedly unsteady and alcohol affected". The accident was a typical drunken-driver single vehicle accident; the vehicle ran along in the gravel on the right hand side of the road, at considerable speed, for some distance before it crashed into a pole; it did so on a gentle curve in the road, and the obvious cause of this was the driver's being drunk.

I read the primary judge's findings as implying that the respondent did not appreciate how badly Scheulen was in fact affected by the very large quantity of alcohol which he had consumed. On the other hand, since that consumption took place wholly or substantially in the company of the respondent, it seems evident that the respondent must have been aware that Scheulen had had far too much to drink to be relied on to drive safely.

It is a question whether, in those circumstances, the respondent was entitled to judgment. If one were to apply the test mentioned by Latham CJ in Insurance Commissioner v. Joyce (1948) 77 C.L.R. at 39 and 46, it is difficult to see how the judgment in favour of the respondent could be upheld. His Honour remarked:

"In the case of the drunken driver, all standards of care are ignored. The drunken driver cannot even be expected to act sensibly. The other person simply 'chances it'. Accordingly, the case may be described as involving a dispensation from all standards of care, so that...there was no breach of duty...The same facts would also show that the plaintiff voluntarily encountered the risk which was obviously associated with the drunken condition of the driver".

On the findings made by the primary judge here, and having regard to the very high blood alcohol level, the passage just quoted seems applicable to the respondent's position. But as Mr White Q.C. who led for the respondent emphasised, the definition of the volenti defence accepted in Roggenkamp v. Bennett (1950) 80 C.L.R. 292 at 300 places a heavier burden on a defendant in a case of this sort. McTiernan and Williams JJ held that the elements of a defence of volenti non fit injuria were conveniently stated in the then current edition of Halsbury:

"In order to establish the defence, the plaintiff must be shown not only to have perceived the existence of danger, for this alone would be insufficient, but also that he fully appreciated it and voluntarily accepted the risk".

In my opinion the trend of decision since these two High Court cases has been towards the latter view. For example, in Wilkinson v. Joyceman [1985] 1 Qd. R. 567 at 576, Campbell CJ said:

"I am persuaded that the doctrine of volenti should be applied with extreme caution and only in rare cases."

Attempts to define precisely the stage at which the passenger's knowledge of the drunken driver's condition and the extremity of that condition combine to require the dismissal of the action have not produced any easily applicable formula. It is unclear what criteria are to be used in determining whether the passenger voluntarily accepted the risk or, as it was put in Wilkinson v. Joyceman, consented to take the legal risk of injury upon himself: see per Campbell CJ at 578. Cases of this kind seem to form a continuous range of sets of facts, with the mildly intoxicated driver at one end and the hopelessly drunken driver at the other; there is a degree of artificiality in deeming the passenger, at some point along that range, to have consented to take the risk of injury.

There is ground for thinking that each of the defences of volenti and of failure to prove a breach of duty is practically a dead letter in cases of this kind, where the defence is that the driver was drunk and the plaintiff passenger knew it.

I respectfully agree with the view upon which the learned primary judge acted, that the proper course was to apportion liability. I am, however, as are McPherson J.A. and Williams J, of opinion that, on the facts found, the apportionment was too greatly in favour of the respondent. I agree with the orders proposed by McPherson J.A. and Williams J.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 163 of 1993

Before Mr Justice Pincus

Mr Justice McPherson

Mr Justice Williams

BETWEEN:

SUNCORP INSURANCE AND FINANCE

Appellant

and

JAMES JOHN BLAKENEY

Respondent

JUDGMENT - McPHERSON JA. and WILLIAMS J.

The appellant appeals against a judgment for $433,109.85 given in favour of the respondent with costs to be taxed on a solicitor and client basis. The action involved a claim by the respondent for damages arising out of a motor vehicle incident which occurred on 15th March 1985. At the time in question the respondent was a passenger in a Triumph sedan which was being driven by one Scheulen. The vehicle failed to take a left hand bend in Maroochydore Road, and travelled through gravel for more than 100 metres before crashing broadside at great speed into a telegraph pole. The vehicle burst into flames on impact. Scheulen was killed and the respondent received very serious injuries including severe burns to most of his body.

The appellant was the licensed insurer of the motor vehicle being driven by Scheulen. In its defence to the respondent's claim for damages it raised various defences based upon the intoxication of Scheulen at the material time. It alleged that the respondent should not succeed because the defence of volenti non fit iniuria was made out on the facts. Then as an alternative it alleged that in the circumstances the driver owed no relevant duty of care to the respondent. In the further alternative it alleged contributory negligence.

For reasons which he gave the learned trial Judge rejected the defences of volenti and "no duty", but found the respondent guilty of contributory negligence to the extent of 15 percent. The appellant submits that on the findings of fact made by the learned trial Judge he should have found either that the defence of volenti was made out or that in the circumstances there was no relevant duty owed by the deceased driver to the respondent. It was also submitted that, if those defences failed, a finding of contributory negligence to a far greater extent should have been made against the respondent.

The relevant findings made by the learned trial Judge can be summarised as follows. At the time of the accident the deceased driver had a blood alcohol reading of .302 (and a urine alcohol reading of .374). Such a reading was consistent with the driver having consumed no less than 240 ounces of full strength beer, that is to say at least 24 ten ounce glasses, during the period 3 p.m. to 9 p.m. Then his Honour said:-

"Were I to conclude that the blood alcohol reading, or some reading in that general area, is even approximately a correct measure of his blood alcohol content at the time of death, the evidence of Dr Lynch suggests that obvious changes in the conduct of Mr Scheulen must have been apparent, including indicia such as swaying, clumsy hands, unsteady gait, indistinct speech, confusion and, in the latter stages, falling about. In other words if the reading is to be regarded as close to accurate, it is inevitable that the plaintiff must have known that he was travelling with a driver seriously effected by drink, and he must be answerable for whatever consequences that may entail in law."

The learned trial Judge then dealt with a number of submissions addressed to him to the effect that the blood alcohol reading of .302 should be rejected on grounds such as that the specimen was not properly obtained or what was analysed was a contaminated specimen. His Honour rejected all of those arguments then said: "In the end it could only be a confident acceptance of the plaintiff's evidence which would induce me to suppose that for some reason the testing must have produced wrong results". He then went on:-

"Although I regard the plaintiff as an honest witness I do not think his recollection of the last 3 hours before the accident is reliable. There is some loss of memory of a period before the accident, and the plaintiff was anything but confident in relation to details of the periods spent in Caloundra and Maroochydore. I can only conclude that during those periods Scheulen must have consumed a very substantial quantity of alcohol. Whether this was directly observed by the plaintiff does not in the end matter greatly, although it seems likely that the plaintiff at the time would have had a fair idea of what his companion was doing. The main point is that Scheulen's conduct, at least whilst they were at Maroochydore, must have been observably unsteady and alcohol affected.

By the same token, it is quite possible that Scheulen held his liquor better than most, and that the signs he manifested were not gross. While I am satisfied that he must have displayed sufficient symptoms to put even a 16 year old youth on his guard, I am not constrained to find that he was rolling drunk or that he showed signs of a gross order. In other words it is not necessary that I infer the worst possible scenario against the plaintiff. In this respect I give at least some credit to the plaintiff's assertion that he `seemed alright'. Whilst I take that statement with some circumspection, I accept that the plaintiff probably did not observe signs of gross intoxication."

The evidence clearly established, and findings to this effect were made by the learned trial Judge, that the respondent had been with the deceased over the whole 6 hour period during which the drinking occurred. His Honour also concluded that the respondent had consumed considerably less alcohol than the deceased.

The findings made with respect to the observable indicia of the driver's intoxication were based on the evidence of Dr Lynch, principally his report of 27th March 1991. That evidence was not seriously challenged by the respondent at trial; rather his case was that the reading of .302 was erroneous and therefore evidence as to signs of intoxication at that level was irrelevant.

In the opinion of Dr Lynch a person with a blood alcohol level of .302 would suffer from "severe depression of his critical self appraisal". A number of his capacities would be "grossly impaired" and he would show signs of disturbance of those senses that control muscle co-ordination. The doctor said that such "disturbance is manifested in slurred speech, clumsiness in movements and unsteadiness when walking." There would be at that level "severe muscle inco-ordination". There would be a "sever adverse effect on the sense of balance". In his view a person with such a blood alcohol level would be very heavily intoxicated and appear drunk to the average lay observer.

In the course of his submissions to this court senior counsel for the respondent sought to challenge the finding by the learned trial Judge that the blood alcohol reading of .302 was accurate. No prior notice had been given that such a contention should be raised. The issue was fully litigated at the trial, and the evidence relevant thereto was carefully analysed by the learned trial Judge; it is not necessary to quote what he said. The finding made was perfectly open on the evidence and there is no reason at all for this court interfering with it. One of the arguments advanced by counsel for the respondent was that, the learned trial Judge having found the respondent to be an "honest witness", should have had serious doubts as to whether or not Scheulen could have consumed, or did in fact consume, the quantity of alcohol necessary to produce such a reading. But any force that argument might otherwise have is taken away by the finding that the respondent had "some loss of memory for a period before the accident" and was "anything but confident in relation to details of the period spent in Caloundra and Maroochydore". It was accepted that some time at least was spent in a hotel at Caloundra. The findings made by the learned trial Judge with respect to the blood alcohol reading must stand.

Counsel for the appellant did attack the conclusion reached by the learned trial judge that he was "not constrained to find that he [the driver] was rolling drunk or that he showed signs of a gross disorder. In other words it is not necessary that I infer the worst possible scenario against the plaintiff." It was submitted that such a conclusion was inconsistent with the earlier findings of fact made; in particular it was said to be inconsistent with the finding that it was "inevitable that the plaintiff must have known that he was travelling with a driver seriously affected by drink". That finding was, as indicated above, made after specific reference to the evidence of Dr Lynch as to the signs which would have been evident.

It is difficult to reconcile those passages but we are not entirely convinced that they are totally irreconcilable. If the conclusion challenged by counsel for the appellant is not regarded as diminishing the findings made earlier, but as merely observing that even Dr Lynch's evidence did not necessitate a finding that the driver was "rolling drunk", then the passages can stand together. The later statement that "the plaintiff probably did not observe signs of gross intoxication" in context is not a finding that objectives signs of gross intoxication were not present, but rather a finding that because of his age and inexperience the respondent did not interpret what he saw as "signs of gross intoxication".

The defences raised by the appellant must be evaluated in the light of the findings made by the learned trial Judge read as has just been said. That is consistent with this passage from the judgment which follows shortly after:-

"The finding that I make against the plaintiff is that he must have observed some signs of intoxication and have known that Scheulen had been drinking too much to be a safe driver and that the signs must have been sufficient to induce a person who was observing reasonable care for his own safety to decline to travel with such a driver. In short I consider that the plaintiff showed insufficient care for his own safety and that he was guilty of contributory negligence."

In determining the degree of contributory negligence the learned trial Judge took into account the fact that the respondent was aged 16 at the time and it was the first occasion on which he had been drinking in hotels.

His Honour then said: "I reject the submission that this is a case in which the defendant owed no duty of care to the plaintiff; or that the principle of `volenti non fit iniuria' applies so as to deprive the plaintiff of any right to claim damages." His Honour did not elaborate any further on his reasons for so deciding, save that he rejected the submission that the reasoning in Gala v. Preston (1991) 172 C.L.R. 243 indicated that the High Court had adopted a new and harsher attitude towards plaintiffs who travel with drunk drivers.

The learned trial Judge then concluded that the respondent should be held to have been contributorily negligent to the extent of 15 percent.

We have come to the conclusion that the learned trial Judge was correct in concluding that on the evidence the defence of volenti non fit iniuria had not been made out. The elements of that defence, and its possible application in situations such as this, have been considered by the courts in a number of cases; reference need only be made to The Insurance Commission v. Joyce (1948) 77 C.L.R. 39, Roggenkamp v. Bennett (1950) 80 C.L.R. 292, Standfield v. Uhr (1964) Qd.R. 66, Jansons v. The Public Curator of Queensland (1968) Qd.R. 40, O'Shea v. The Permanent Trustee Company of New South Wales Limited (1971) Qd.R. 1, and Wilkinson v. Joyceman (1985) 1 Qd.R. 567. It is clear from a reading of those authorities that for the defence to be established there must be a voluntary choice available to the plaintiff and then some form of election, agreement, or consent to accept the risk. The defence is not established merely by proving, for example, that the driver of the motor vehicle was grossly intoxicated. In determining whether or not the defence has been made out the court must direct its attention primarily to the relevant conduct of the plaintiff. As was pointed out in the reasoning of the Full Court in O'Shea the belief of the plaintiff as to the driver's capability of driving safely was a important consideration. If it is accepted that the plaintiff, at the material time, thought that the driver was quite capable of driving safely, then that, if it does not rule out the defence, makes it very difficult to establish. In this case the learned trial Judge concluded that the respondent, then a relatively inexperienced 16 year old, thought that the driver "seemed alright". Effect must be given to that. In the light of those considerations we are of the view that the evidence does not show that in the circumstances of this case this particular respondent should be held to have voluntarily accepted the risk in the sense that he elected or agreed to undertake the risks involved.

For similar reasons we are of the view that the learned trial Judge was correct in declining to find that in the circumstances the driver owed no duty to the respondent. The large number of cases in which the courts have found that a passenger was contributorily negligent in allowing himself to be driven by an intoxicated driver clearly establish that something more than mere intoxication is necessary before a defence of "no duty" can be made out. In theory a person could be well over the legal permissible limit for driving, yet not manifest indicia of intoxication such as to cause a reasonable person to think that his driving capacities were impaired. Again the court must carefully scrutinise the evidence relating to the passengers awareness and state of mind before concluding that his conduct prevented the normal duty situation arising from the relationship of driver and passenger.

The considerations which result in a conclusion here that the defence of volenti has not been made out, also lead to the conclusion that the normal driver passenger duty relationship exists.

That leaves for consideration the question whether or not the apportionment made by the learned trial Judge was correct in the circumstances. The cases do not establish that as a matter of law any particular degree of contribution must be found merely because the evidence establishes that the driver's blood alcohol level was above the legal permissible limit. The facts of each case will determine the proper apportionment and that is why the cases indicate a range of findings of the extent to which the passenger was contributorily negligent. On the facts in the cases before them Mack J. in Duncan v. Bell and S.G.I.O (1967) Qd.R. 425 and McPherson J. in Walker v. Waller (1986) 4 M.V.R. 69 apportioned liability 50-50, but Cooper J. in Morton v. Knight (1990) 2 Qd.R. 419 held the passenger to have been contributorily negligent to the extent of 20 percent. We are aware of other unreported cases in which apportionments of between 20 percent and 50 percent against the passenger have been made.

Here the respondent had been with the driver for a period of 6 hours prior to the accident, and during that time the driver had consumed enough alcohol to produce a reading of .302. As the learned trial Judge said that it was "inevitable that the plaintiff must have known that he was travelling with a driver seriously affected by drink". The respondent failed to take reasonable care for his own safety in that he did not make a decision "to decline to travel with such a driver". The general findings made by the learned trial Judge, and those two observations in particular, establish to my satisfaction that the respondent to a very significant degree failed to take reasonable care for his own safety. The only facts in his favour are his age and his evidence that the driver "seemed alright". Were it not for those matters this may well be a case where a 50-50 apportionment was called for.

An apportionment of 15 percent against the respondent in the circumstances of this case bespeaks some error on the part of the learned trial Judge. The only conclusion open is that he must have misapprehended some vital fact in arriving in the exercise of his discretion at such an apportionment. In those circumstances this court can, and should, interfere with the apportionment.

Taking all matters into account a finding that the respondent was contributorily negligent to the extent of 40 percent should be made.

The appellant also challenged the assessment of damages made by the learned trial Judge with respect to future economic loss.

The respondent was in the early stages of his apprenticeship as a motor mechanic when the injuries were sustained. He has subsequently completed his apprenticeship and is currently working as a motor mechanic. He is, however, grossly disabled, and there is no doubt that his earning capacity as a mechanic has been severely impaired. Because of the severe burning to his hands, his skin is sensitive and breaks down from time to time. Further, he has an 80 percent loss of function in his right hand; his thumb is grossly distorted and some of his fingers are missing.

Partly because of a sympathetic employer he has been able to work fairly regularly since obtaining his qualifications. But he cannot work long hours, and periodically loses time from work because of problems with his skin. He has been able to earn around the current award wage of approximately $340 per week net. The learned trial Judge accepted evidence that but for the accident the respondent "would probably have looked for heavier work such as that which a mechanic might obtain in a mining project or on a site where heavy plant or equipment is used". Such opportunities are now denied him. Evidence was given that in the mining areas earnings in the range $800-$1000 per week were readily available; there were also other situations in which a fit motivated mechanic could earn at that level. Based on all that the learned trial Judge determined that the measure of the respondent's future economic loss was $300 per week for 30 years. Such a finding was clearly open on the evidence, and is not unreasonable. The appellant's submission in this regard should be rejected.

Finally, the appellant challenged the order that costs be paid on a solicitor and client basis. That order was made because the learned trial Judge accepted that the respondent had recovered more than the amount contained in an "offer to settle" made in April 1992. Counsel for the appellant contended that the documents in question did not constitute an "offer to settle" within O.26.

The rules do not require that any particular form be used for an "offer to settle". What is important is that the writing, said to constitute the offer, must contain a statement that it is made in accordance with O.26, and further there should be a statement to the effect that the offer is open for acceptance for a period of not less than 14 days after service. The learned trial Judge, correctly in my view, concluded that those requirements had been met.

The "offer to settle" was said to be contained in a letter dated 16th April 1992, and an accompanying document headed "offer to settle". In both documents the specific statement was made that an "offer to settle" was being made pursuant to O.26, and further that it was open for 14 days after service. The amount at which the respondent was prepared to settle was also readily ascertainable. It is true that in the document headed "offer to settle" no final figure was given; the appellant would have had to perform a simple arithmetical calculation from the figures contained therein in order to establish that amount. But such amount ($282,073.42) was clearly stated in the accompanying letter. In our view the letter itself can stand as a valid "offer to settle" and therein the amount is clearly specified.

The problem arises because particular figures were given for each of the heads of damage which the respondent sought to recover. To that extent there was a confusing and unnecessary element introduced into the offer. All that is required in an "offer to settle" in a case like that is a statement of the final figure. In our view it is not even necessary to specify an amount for damages, a figure for contributory negligence, and then the conclusion. All that is required is the final figure, and that is all that should be stated in an "offer to settle".

Notwithstanding the form used, in our view there was here a final figure clearly stated, and the respondent recovered more than that. In consequence the learned trial Judge was entitled to make the order for costs which he did.

The total assessment of damages made by the learned trial Judge came to $509,541. That has now to be reduced by 40 percent on account of contributory negligence; that leaves a net figure for the judgment of $305,724.60.

That figure is still in excess of the amount of the "offer to settle", and in consequence the respondent is entitled to an order that his costs of trial be taxed on a solicitor and client basis.

The orders of this court should therefore be as follows. Appeal allowed. Substitute the amount $305,724.60 for the amount $433,109.85 in the judgment of the court below. Orders made by the learned trial Judge with respect to the costs of the action to stand. Order that the respondent pay the appellant's taxed costs of the appeal.