University of New England v Larsen

[2000] NSWCA 261

CITATION:	University of New England v Larsen [2000] NSWCA 261
FILE NUMBER(S):	CA 40250/00
HEARING DATE(S):	4/9/00; 8/9/00; 12/9/00
JUDGMENT DATE:	12 September 2000
PARTIES :	University of New England v Uta Frida Larsen
JUDGMENT OF:	Priestley JA at 1

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	DC 5103/97
LOWER COURT JUDICIAL OFFICER :	Robison DCJ

COUNSEL:	Claimant - G.A. Farmer Opponent - R.E. Quickenden
SOLICITORS:	Claimant - Moray & Agnew Opponent - Richardson Burgin Steer
CATCHWORDS:	Stay of execution of judgment
DECISION:	Stay granted. Appeal expedited.

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40250/00

PRIESTLEY JA

Friday, 8 September 2000
Tuesday, 12 September 2000

UNIVERSITY OF NEW ENGLAND v LARSEN

8 September 2000 :

1 HIS HONOUR: This motion was heard by the court on Monday of this week, 4 September 2000. It was an application by the University of New England, which I will call the appellant, for an order staying the judgment given against it by his Honour Judge Robison of the District Court on 16 March 2000, in favour of Mrs U. Larsen, whom I will call the respondent, for the sum of $753,838, pending determination of the appeal brought by the appellant against that judgment. 2 The respondent began her proceedings against the appellant in April 1989 in the Supreme Court. They were transferred to the District Court, by consent, on 17 October 1997. Stated summarily the respondent’s case against the appellant was that while employed by the appellant she was required to carry out her duties in premises of the defendant in which she was exposed to toxic fumes, chemicals and waste products in unventilated and/or poorly ventilated areas, as a result of which she suffered a number of symptoms which damaged her health, her ability to work and her enjoyment of daily life. 3 The respondent also brought proceedings against the appellant in the Compensation Court under the Workers Compensation Act 1987. These proceedings were decided by his Honour Judge Neilson of that Court on 20 May 1997. In his reasons he said that the respondent alleged that between 22 August 1977 and 31 January 1989 she was exposed in poorly ventilated conditions to the fumes from chemical additives in artists’ materials and other toxic substances, which exposure occurred frequently and continued for extended periods of time. He said that the injury alleged by her was a severe chemical sensitivity, an anxiety state and multiple chemical sensitivity syndrome. Neilson J found that the facts concerning the respondent’s exposure to fumes were as she alleged. He also found that the symptoms which she gave evidence of were related to her exposure to chemical substances in the appellant’s premises. Neilson J accepted that the respondent’s symptoms deteriorated the longer she remained in the premises in which she had to work. 4 After recounting the basic facts Neilson J said that the diagnosis proffered in the respondent’s case of her symptoms was of a multiple chemical sensitivity (MCS). He noted that there was a dispute between the medical practitioners whether such a condition existed. He said he was unable to determine that dispute. He went on to set out some of the differing medical opinions about the possible causes of the set of symptoms from which the respondent suffered, such a set of symptoms having been recognised in many earlier cases. He then said:

“ The respondents [the appellant in the present proceeding] say the condition does not exist organically and therefore it must be psychiatric. The psychiatrists say it is not psychiatric or that the applicant [the respondent] is psychiatrically normal. There is one datum however that can be accepted: the applicant has told me of the onset and development and the presence of symptoms, certainly of a very wide nature. Some of the symptoms as I have already mentioned, may have good physiological explanations that cannot be linked with the respondent. However, as to the existence of those symptoms, the applicant was not challenged to any great extent. There was no challenge in essence to credit, although there certainly was a challenge to the applicant’s perception of the extent of her incapacity and her perception of her inability to work.
I accept that the applicant does have the symptoms of which she complains. True it is that she complained of poor memory and lack of concentration, although her demeanour in the witness box does not support a lack of concentration. However, it would support some memory loss and it is clear that the applicant has studied material in recent times in order to give her evidence. That means her evidence as to the early stages of her illness may not be completely accurate. However, I accept her as being truthful in her statement as to the existence, onset and presence of the symptoms which she has.
Whatever the explanation for them, whether it be organic or psychiatric really does not need to be determined. However, I accept that the symptoms can be assigned the cognomen of multiple chemical sensitivity and ... I accept that it is a convenient diagnostic label, although it is clear that the condition is not well understood at the current time and its exact nature is unknown.
... The applicant’s case is that this condition was caused by her work. ”

5 After discussing some of the technical issues raised by the differing experts Neilson J held that the case fell within s 16 of the Workers Compensation Act 1987. Because of the terms of s 16, his holding to this effect necessarily meant he was finding that the respondent’s employment by the appellant was a substantial contributing factor to the symptoms which he identified in his reasons that she was suffering at the time of the hearing before him because of her exposure to toxic fumes. That is, he was finding, putting it in the simpler terms in which he had earlier described her case, her “condition was caused by her work”. 6 In subsequent parts of his reasons, Neilson J found that the respondent had been totally incapacitated until some time in 1991 and that afterwards she was partially incapacitated. He also found that a later recurrence of total incapacity was attributable to subsequent employment in New Zealand for which the appellant was not liable. He therefore made an award for partial incapacity from 1991. 7 The various awards made by Neilson J pursuant to the Workers Compensation Act were made on the basis of the findings I have set out. 8 In the proceedings in the District Court, Robison DCJ gave his reasons and pronounced judgment on the day following three days of evidence and argument. In his reasons he mentions that on a number of factual issues he thought that issue estoppels were operative because of the factual findings of Neilson J. He appears to have applied one issue estoppel in the appellant’s favour. In regard to some facts he based his findings on his own assessment of the evidence and not on any issue estoppel. Early in his reasons he said that on the previous day the appellant had admitted breach of duty of care so that he had only had to consider the matter “on the basis of assessing the damages claimed by the plaintiff [the respondent] as a result of the injuries and disabilities she sustained during the course of her employment after August 1977”. 9    A notice of appeal without appointment was filed by the appellant on 7 April 2000. (This form of notice contains no grounds of appeal.) 10    During May and June the respondent’s solicitors were pressing for payment of the judgment moneys. The appellant’s solicitors were saying they should not have to pay pending the appeal, or at least not the whole of the judgment moneys. The parties came close to agreement. The respondent’s solicitors offered to agree to a stay if $350,000 was paid pending the outcome of the appeal. On 20 June 2000, the appellant’s solicitors counter offered with $300,000. This was rejected. There was no evidence of any further offers. 11    On 5 July 2000 the appellant filed a notice of appeal containing grounds of appeal alleging error by the trial judge in his refusal to allow the appellant to adduce evidence or cross-examine the respondent’s witnesses concerning the nature of her injury. Another ground alleged error in the trial judge’s failing to apply estoppels from the Compensation Court proceedings in the appellant’s favour. Other grounds of appeal raised other questions concerning the trial judge’s assessment of damages. The orders sought in the notice of appeal were that the case be remitted to the District Court for a re-trial as to damages or alternatively that the Court of Appeal assess the appropriate damages. No challenge was made to the trial judge’s finding of liability against the appellant. 12    The appellant’s notice of motion asking for the stay was filed on 3 August 2000, returnable on 14 August 2000. On 10 August 2000 an amended notice of appeal was filed. This contained twenty-one grounds challenging the finding of liability against the appellant and a further twenty grounds directed to damages. 13    In one of the affidavits supporting the notice of motion a solicitor for the appellant said that the trial judge had declined to allow cross-examination of the respondent’s witnesses in respect of the nature of the respondent’s injury and condition and asserted that issue estoppels applied by the trial judge resulted in the appellant being unable to introduce medical evidence. This statement was made the basis of submissions to the effect that the judge’s rulings had shut the appellant out from contesting liability at the trial and thus formed an arguable basis for challenging in the appeal the appellant’s liability to the respondent. 14    On my seeking particulars of the actual rulings made by the trial judge, I was told that transcript of only parts of the proceedings at the trial had as yet been made available to the solicitors for the appellant. It thus became impossible for me to form an accurate idea of the extent of the trial judge’s rulings on evidence complained about by the appellant. 15    However, some transcript was available which was of some assistance. This was pp 9 and 10 from the third day of the hearing (15 March 2000). Counsel for the respondent was re-examining an expert witness called in the respondent’s case. The witness was asked whether he remembered being asked some questions in cross-examination. From the next question it is clear that this medical expert at least, had been cross-examined about MCS, although to what extent cannot be deduced. He was then asked about how long the toxic effects of the materials used in the respondent’s work area had been known. He answered that their injurious properties had been known since they were manufactured. A 1973 publication of an Australian standard was then produced which substantiated the expert’s statement. Upon its being entered into evidence without objection, counsel for the appellant said:

“ I can see after seeing that document, your Honour, that I don’t propose to address on the question of foreseeability so there’s no contest. That being so, there’s no contest on liability, your Honour.
HIS HONOUR: So this is now a matter for assessment, is it?
COUNSEL: Yes your Honour. ”

16    A little later the trial judge asked:

“ Well really this comes down now to a question of damage, does it not?
COUNSEL: Well basically it has by and large throughout, your Honour, really, I don’t think we’ve taken much time on liability. ”

17    In the amended notice of appeal the obvious difficulties which the course of events at the trial might cause to the appellant’s wish to challenge the finding of liability against the appellant were recognised. Ground 21 was as follows:

“ His Honour erred in finding that the appellant was liable to the respondent on the basis of an admission made on the last day of trial. The appellant denied liability on the pleadings. During the course of the proceedings his Honour ruled that the appellant was estopped from cross-examining the respondent’s experts and arguing its own case as to the nature and cause of the respondent’s symptoms on the basis of the estoppels referred to above. There was no evidence admitted to support the appellant’s denial of liability and there was evidence which, based on the estoppels, made out the respondent’s case. In that context counsel indicated that he admitted liability and the matter was one for assessment . That admission was premised upon the Court’s ruling that the appellant was estopped from arguing its case on the existence of injury and was without prejudice to the present appeal and future re-hearing . ” (Underlining added.)

18 If the appellant’s counsel had made it clear when admitting liability that he was doing so only on the premises stated in the underlined part of Ground 21, then there might be a possibility of arguing Ground 21 with some hope of success. However, the passage that I have set out above from the transcript in which the admission of liability was made shows no sign that the admission was premised upon the matters alleged in the underlined sentences (or in the entire ground). The passage indeed gives a fairly plain indication of the exact opposite. 19 There was nothing wrong with the trial judge’s having recourse to the doctrine of issue estoppel. It would only be if he misused the doctrine that the appellant could have a ground of complaint. Findings on contested issues in proceedings under the Workers Compensation Act material to the orders made in such proceedings have been recognised as creating issue estoppels operative in subsequent common law proceedings between the same parties for many years: Somodaj v Australian Iron & Steel Ltd (1963) 109 CLR 285, and, in this court, Egri v DRG Australia Ltd (1988) 19 NSWLR 600. 20 Undoubtedly, in my opinion, a number of the findings made by Neilson J in his 1997 decision created issue estoppels operative in the proceedings before Robison DCJ. In the absence of a transcript of the full course of proceedings at the trial, it is impossible to be completely sure of the technical correctness of the application of issue estoppels by the trial judge at the hearing. I was told by counsel for the appellant that his solicitor had been trying to obtain the balance of the transcript with all diligence but had not yet been able to get it and that it might be some months, such is the parlous state of court reporting at the present time, before he would have it. 21 Since it is not the appellant’s fault that I do not have the full transcript, and because therefore I cannot be completely sure of the extent of Robison DCJ’s rulings, I am left in some slight uncertainty about the issue of liability in the appeal. Everything I know about the case at the present time leads me to think that the prospects of the appellant succeeding on the liability issue at the appeal are very slim. What the appellant’s counsel said at the trial, the appellant’s solicitors’ assessment of the situation, reflected in their offer to pay $300,000 as a condition for obtaining a stay of the judgment and the approach of the first notice of appeal all seem to me to have shown a realistic appreciation that their client was liable to the respondent for damages, and that the only real contest with her was about how much they should be. On the question of issue estoppel, even if the appellant succeeded in the appeal in showing that the trial judge had misapplied the doctrine in some way, the most the appellant could hope for would be a new trial. At any new trial, correct application of the doctrine would make it almost inevitable that the respondent would be entitled to judgment. 22 Nevertheless, the absence of the transcript left a slight doubt in my mind, which caused me to ask counsel for the respondent whether his client would be prepared to make her home, about which there was considerable evidence in the materials before me, available as security for any repayment she might be ordered to make if the appellant were to succeed either in obtaining judgment for itself or so reducing the judgment in her favour as to entitle some repayment from any judgment moneys she received as a condition of a stay. I further indicated that in my opinion the chances of judgment eventually being entered in the appellant’s favour were very small. Counsel, after obtaining instructions, told me his client would be willing to offer her home as security against that possibility. He also told me that the current value of the home was estimated at $300,000 and that it was unencumbered. Ordinarily I would need more precise evidence of these matters, but I did not think what in my view are the slim chances of the appellant escaping liability in any event made it necessary for me to ensure that the amount to be paid to the respondent be absolutely fully secured by the home. I was therefore prepared to act on what was relayed to me by counsel. 23 On this footing I said that I proposed to order a stay on condition of immediate payment to the respondent of $300,000. There was then some discussion of the form of the security to be given by the respondent. I stood the matter over until 9.30 am Friday 8 September, requesting the parties, if they could not agree on the form the security should take, each to lodge with my associate no later than midday on 7 September a written submission concerning that form. I further said I would publish my reasons on 8 September and if possible make formal orders which would deal with the appropriate form of security.

12 September 2000 :

24    HIS HONOUR: On Friday of last week I published my reasons for deciding that I would grant a stay of execution of Robison DCJ’s judgment in this case, on condition that $300,000 of the judgment sum be paid to the respondent. I also said that I was of the view that the respondent should provide security for the repayment of all or part of the $300,000 in the event that the eventual fate of the proceedings required such repayment. 25    I then heard argument on the form of the orders that should be made in the motion, in particular in regard to the form of the security. There was some discussion of the possibility that an undertaking to the court by the respondent that she would not encumber or deal with her home pending the resolution of the case would be sufficient protection for the appellant. I have now come to the conclusion that such an undertaking would be simpler and more practical than a security by way of mortgage or charge which I was previously considering. 26    The respondent by her counsel has today given an appropriate undertaking to the court. 27    Also, in this particular case, I think it will be fairer to postpone a decision about the costs of this application until the result of the appeal is known, and so will make the order about costs which appears in Order 4 below. 28    In the result, I make the following orders:

1. Proceedings on the judgment of Robison DCJ of 16 March 2000 stayed upon condition that the appellant pay the respondent the sum of $300,000 within fourteen days from today, on account of the judgment sum.
2. I note that the respondent has today undertaken to the court by her counsel that she will not encumber, charge, dispose of or otherwise deal with her property at Black Mountain, Armidale, without the leave of the court, any application for such leave to be served on the solicitors for the appellant not less than seven days before the hearing date of such application.
3. The appeal be expedited.
4. Costs of this application reserved for decision by the court that decides the appeal.
5. Liberty to apply.

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