Vicki Marie Morris v Ivan Krizaic & William Douglas & Yarrowlumla Shire Council

[2001] ACTSC 117

Vicki Marie Morris v Ivan Krizaic & William Douglas & Yarrowlumla Shire Council [2001] ACTSC 117 (7 December 2001)

CATCHWORDS

DAMAGES – Fall accident resulting in death - Liability of first respondent – Breach of duty of care – Insufficient warning of danger of steep flight of stairs – Whether or not second defendant breached building code – Rate of dependency of plaintiff on deceased.

Compensation (Fatal Accidents) Act 1968

Compensation to Relatives Act 1897 (NSW)

Fatal Accidents Act 1846 (United Kingdom)

Allan v The Commonwealth (1980) 24 SASR 581 at 583

Flynn v Commonwealth [1987] ACTSC 75

Hardham v Flood [2001] ACTSC 21

JohnPfeiffer Pty Ltd v Rogerson (2000) HCA 36

Luntz, Assessment of Damages for Personal Injury and Death, third edition, 9.3.1.

No. SC 650 of 1997

Coram:        Master T. Connolly
Supreme Court of the ACT
Date:           7 December 2001

IN THE SUPREME COURT OF THE     )
  )          No. SC 650 of 1997
AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: VICKI MARIE MORRIS

Plaintiff

AND: IVAN KRIZAIC

First Defendant

AND: WILLIAM DOUGLAS

Second Defendant

AND: YARROWLUMLA SHIRE

COUNCIL

Third Defendant

ORDER

Coram:  Master T. Connolly
Date:  7 December 2001
Place:  Canberra

THE COURT ORDERS THAT:

1. Judgment for the plaintiff against the first defendant in the sum of $729,318.75.

2. Judgment for the second defendant in respect of the cross-claim by the first defendant and the notice of contribution by the third defendant.

3. Costs reserved.

1. This is a claim brought pursuant to the Compensation (Fatal Accidents) Act 1968 by the plaintiff Vicki Marie Morris following the death of her husband Richard Allan Morris who died at the Canberra Hospital on 13 March 1996 as a consequence of injuries sustained in a fall on the premises of Ivan Krizaic near Hall in New South Wales. Mr Morris was a dinner guest of Mr Krizaic, and fell down the stairs of Mr Krizaic’s wine cellar. The second defendant, Mr Douglas, was the designer of the premises, and the third defendant was the local council authority who approved the plans.

1. The second defendant compromised the action with the plaintiff on the basis that a judgment be entered for the second defendant with no order as to costs, but the cross claim by the third defendant against the second defendant remained on foot. The action between the first defendant and the third defendant was also resolved on terms not to be disclosed, and the matter proceeded before me essentially as a claim by the widow against the owner and occupier of the premises, with a cross claim by the occupier against Mr Douglas, the architect.

1. Although the claim was brought pursuant to the Compensation (Fatal Accidents) Act 1968, the accident occurred in New South Wales, which is also the state of residence of the plaintiff widow, and it seems to me that following the decision of JohnPfeiffer Pty Ltd v Rogerson (2000) HCA 36 the law to be applied to this accident must be the law of New South Wales. The relevant statutory cause of action is broadly similar in all Australian jurisdictions, being modelled on the original United Kingdom Fatal Accidents Act 1846, widely referred to as Lord Campbell’s Act. The relevant statutory provision for this accident is the Compensation to Relatives Act 1897 of New South Wales.

1. When the action was commenced, the plaintiff was acting quite appropriately in bringing the action pursuant to the ACT legislation. To the extent that the action, if now brought under New South Wales legislation, could be argued to be statute barred, as was raised by the second defendant, it seems to me that there has been a satisfactory explanation, in that the plaintiff was entitled at the time to assume on the state of the law before John Pfeiffer Pty Ltd v Rogerson (2000) HCA 36 that the claim would lie pursuant to ACT law, and for the reasons set out in Hardham v Flood [2001] ACTSC 21 I would extend any time limits pursuant to New South Wales law as are necessary.

1. The deceased was born in October 1956 in the United States, and held a degree in Business Administration from the University of Arizona. He had developed a career in the hotel and hospitality industry in a range of management positions in the United States before coming to Australia to take up an appointment as Director of Food and Beverages of the Rydges Hotel Group in Sydney in May 1990. The plaintiff, who was born in 1956, also worked for this hotel group, and commenced a relationship with the deceased in December 1990. In 1993 they both returned to the United States, where the deceased again held senior positions in the hotel industry. They returned to Australia in September 1995, and were married on 7 January 1996. At this time the deceased was again Director of Food and Beverages for the Rydges group, and the plaintiff was employed as a restaurant manager at the Rydges North Sydney hotel.

1. The accident occurred when the deceased was in Canberra on a business trip. Mr Krizaic is a builder and developer, and he had been involved in the development of the Eagle Hawke resort hotel complex on the Federal Highway near Canberra. He had arranged a dinner on Friday, 8 March with a Mr Allen and his wife, who were resident in Melbourne, but had been responsible for the sale of the hotel. After the Allens arrived, Mr Krizaic telephoned Mr King, who was involved with the Rydges group, and who was a friend of Mr Krizaic, to join them for dinner. Mr King had Mr Morris with him, and so he was also invited to attend. Mr Morris and Mr Krizaic had not met previously.

1. I am satisfied from the evidence that the guests enjoyed their dinner and the various wines that were served over the course of the evening, and Mr Krizaic says that in the early hours of the morning he and Mr Morris were discussing wines, which is a mutual interest, and he offered to show Mr Morris his wine cellar. He says that at around 2.45 am he took the deceased to see the wine cellar, which is situated in the family room of his home. Access to the cellar is obtained by lifting a trap door and going down a set of stairs. Mr Krizaic acknowledged that the stairs were steep, and he was aware that this could constitute a danger to a person unfamiliar with the stairs. It is his case that he opened the door and then said “wait” while he turned on a light. In that time, he says Mr Morris fell down the stairs. He says that he then raised the alarm, and in due course ambulance officers attended.

1. There is a report from the attending ambulance officer which states that:

“People in the house state patient was at a party in the house when he went to get more wine from cellar. Patient unseen for at least 30 minutes, when found patient was in a pool of blood on floor of cellar.”

1. Mr Owen, who was the ambulance officer, gave evidence that he obtained this history from asking the other persons who were present while he was moving to aid the deceased. He could not recall precisely who told him that the plaintiff had not been seen for thirty minutes prior to being found.

1. This account of the circumstances of the accident is quite different from Mr Krizaic’s account. Mr Krizaic’s account is supported by his wife, who confirms the version that the deceased and Mr Morris went together to the cellar. The other persons who were present on the night were all clearly identified, and none of them were called to contradict this version. While I accept that Mr Owen was a truthful witness giving evidence to the best of his recollection, I am not satisfied that his version of events, obtained during his first attendance to treat what he acknowledged was apparently a critically injured patient, is accurate. I am satisfied that the deceased and Mr Krizaic went together to the cellar, and the deceased fell as described by Mr Krizaic.

1. It seems to me that little, in fact, turns on this point in respect of establishing liability. Mr Krizaic admitted that he was aware that the stairs were very steep. There is engineering evidence from Dr Cook which it seems to me establishes that these stairs were not safe. Mr Krizaic, in-cross examination, agreed that it was always his practice to go down the stairs first if he had a guest because descending the stairs was very difficult. He admitted that he usually descended the stairs as if they were a ladder, because of their steepness. This was also the evidence of the ambulance officer, who said that he had to go down that way because of the steepness. He agreed that the reason he always went first was to ensure that the people following him did not fall.

1. It seems to me that from this evidence I am able to be satisfied, on the balance of probabilities, that Mr Kriziac was aware that the stairs were so steep as to cause a significant risk of falling, particularly if a person was unfamiliar with the stairs. At the time there was an inadequate handrail, since remedied. Mr Kriziac, by admitting that he always went first to prevent guests from falling, has it seems to me in effect admitted awareness of the significant risk. His counsel appeared to accept as much by stating that he was not going to submit that the stairs were not dangerous and that the real issue for determination was, “whether the response of the defendant to the danger with his knowledge of it was reasonable in the circumstances. Was it sufficient for him to just say ‘Wait here” in all the circumstances”. With respect this seems to me to well summarise the central issue in dispute.

1. Mr Krizaic was well aware of the danger, and I am satisfied that he had a clear duty to warn Mr Morris of the danger. In his statement to police he does not say anything about any warning.  His evidence, which I accept, is that he and Mr Morris made their way to the cellar discussing wines, and in the room from which the cellar is located they were discussing fishing, due to the display of certain items in that room. He said “we went together and I said wait here, I opened the door to put the light on, I put the light on, he only step in it with the leg and trip and gone. But I told him to wait here.” But he does not say that he warned Mr Morris that the stairs were steep or dangerous. I am not satisfied that merely saying “wait here” amounts to a warning sufficient to discharge the duty of care which Mr Krizaic owed to Mr Morris due to his knowledge of the dangerous condition of the stairs.

1. Mr Krizaic acknowledged that he and the deceased, and the other guests, had been consuming wines throughout the evening, and it seems to me that if anything this only goes to increase the need for an adequate warning. Mr Krizaic invited Mr Morris to inspect his wine cellar, took him to the cellar, opened the trapdoor, and then turned away to turn on an electric light, saying only “wait”. He did not warn Mr Morris of the clear and apparent danger, and did not tell Mr Morris that the stairs were so steep, and the handrail was so inadequate, that the normal and safe way to descend was facing the stairs as if they were a ladder, or that it was always his practice to descend in front of guests so that guests would not fall. I am satisfied that Mr Krizaic was in breach of his duty of care to Mr Morris, and so find liability.

1. It was put to the plaintiff that the stairs did not comply with good building practice. He disagreed with this, on the basis that the stairs did not lead to a habitable room. There was a report tendered in the plaintiff’s case from Mr Nicholson, a consulting engineer, concerning the stairs. He had the opportunity to attend the site and examine the stairs. He said that the stairs comprised a single flight of 13 stair treads made of Oregon timber and fixed between two timber stiles. There was a timber handrail down the left hand side of the stairs, but no handrail extending to the top of the stairs, the handrail terminating below the level of the door in the floor.

1. Mr Nicholson said that the slope of the stairs was 51degrees to the horizontal, “which is very steep for a set of stairs”. He said:

“It is noted that an estimate of the slope shown on the step ladder shown in the architect’s drawing shows a slope of about 63 degrees which being between 60 degrees and 70 degrees would comply with AS 1657-1992 for a ‘step ladder’”. 

1. Mr Nicholson concluded that the stairs were a, “very steep and hazardous set of stairs” and that they would not have been approved as access to a restricted area in industry. Mr Nicholson acknowledges, however, in his addendum of 16 February, that at the time the plans were drawn and submitted to council, the Building Code of Australia 1990 applied, and this code, “commences the section on stairways by saying that the code does not cover stairways in a private home, and specifically excludes Classes 1 and 10 buildings.” He also noted that the 1996 Building Code would apply. It seems to me from all of the evidence that I am not satisfied that Mr Douglas was negligent as the designer of the cellar, in that the step ladder that he showed on the drawings was not in breach of the building code as it applied at the time. There was limited evidence about Mr Douglas’s involvement, but I am satisfied that he drew the plans for the house for Mr Krizaic, an experienced and accomplished builder, and included in those plans a wine cellar with the steep ladder type stair access as shown on the plans. This was not, on the evidence before me, in breach of the relevant requirements at the time, and I do not find that Mr Douglas was negligent.

1. Moreover, the evidence satisfies me that the plaintiff fell through the opening of the trap door before commencing his descent.  Dr Cook, who reported for the plaintiff, noted that if this was the case, the handrail design and the stair geometry are not relevant, although he would have said that a barrier or guard rail would have been required around the trap door. It can be concluded from the expert reports that the design of the stairs does not meet the criteria for a step ladder, which would be permissible, because the very steep stairs do not include a hand rail device to enable a person safely to descend the stairs as if it was a ladder. But the only evidence before me, both by way of Mr Krizaic’s recollections and Mr Nicholson’s expert views on how the accident occurred, lead me to the conclusion that the plaintiff simply fell down the open trap door as he attempted to descend assuming, no doubt, an ordinary staircase. The fault of the defendant Douglas in not designing a step ladder with appropriate hand rails was not causally related to the fall - Mr Morris fell because he was expecting an ordinary staircase, and the person who knew that this was not the case, and that there was a danger, was Mr Krizaic. Again, it seems to me, this shows that the breach of duty of care in this accident lies with Mr Krizaic in not properly warning Mr Morris of the unusual risk, rather than with Mr Douglas, who designed the stairwell in a manner which I am satisfied was within the relevant code at the time. The cross-claims against Mr Douglas should be dismissed.

1. I am satisfied that the accident occurred as a consequence of the negligence of the first defendant in failing to warn Mr Morris of the hazardous nature of the stairs which was well known to the first defendant.

1. I turn to the question of assessment of damages. The method of assessment of damages under Lord Campbell’s Act type legislation does not vary between the Australian Capital Territory and New South Wales for an accident such as this, not being a motor accident.

1. Special damages are claimed in respect of medical expenses, ambulance expenses and funeral expenses in the sum of $16,341.75, and I award this amount.

1. There was a degree of agreement between counsel for the plaintiff and the first defendant on issues relating to assessment of damages. It was agreed that the deceased’s net weekly earnings should be taken as $1,500. This is supported by the evidence, and it is apparent that the deceased had developed a successful and well remunerated career in the hospitality industry, and he had been able to hold senior positions in both the United States and Australia. His salary had been adjusted just prior to his death to the figure of $132,787 per annum.

1. The approach to the calculation of damages in a Lord Campbell’s Act claim is well set out in Luntz, Assessment of Damages for Personal Injury and Death, third edition, 9.3.1, and those passages have been referred to with approval by Miles CJ in Flynn v Commonwealth [1987] ACTSC 75. His Honour there said:

“The usual difficulties in a case of this kind have to be faced. On the one hand it has been said many times that complete mathematical accuracy is impossible, but on the other hand, there has to be a mathematical framework in which the calculation of the present financial value of the loss of the support of the deceased can be cast, so that the parties are able to measure the justice or otherwise of what sum is awarded.”

1. The task of the court in determining this type of claim is to assess the degree of financial dependency of the plaintiff in respect of the deceased. In Flynn, the Chief Justice said:

“There were some figures before me relating to household expenditure and the like, but I think that it is appropriate to use the tables taken from the Household Expenditure Survey 1975-1976 set out in table 9.1 on page 412 of Luntz, Assessment of Damages 2^nd edition. This table was in effect accepted by counsel for both parties as providing a suitable basis for assessing the value of the dependency of the plaintiff and the two children on the earnings of the deceased, but naturally there was some emphasis as to how it should be applied in the individual case.”

1. In this case, counsel for the plaintiff submitted that the table was an appropriate basis, and submitted that the appropriate figure for dependency should be 66%, being the mid point of the range for a widow with no dependent children. Counsel for the defendant submitted that the evidence lead from the plaintiff suggested that a lower figure was appropriate. The plaintiff had herself developed a career in the hospitality industry, although at a lower level of remuneration and responsibility to that of the deceased, and she agreed that she would probably have continued at least in part time employment.

1. She gave evidence of the household expenditure from the deceased’s income. This was somewhat complicated by the fact that they had not long been married, and it was apparent that they were still in the process of building up the household in terms of furnishings and household items. Nevertheless, there was a substantial gap between what could be identified as expenditure and the deceased’s income. Moreover, the plaintiff acknowledged that, although he had been in receipt of that type of income for some years, he did not have any substantial assets at the time of his death. Mrs Morris said that her husband had spent extensively on personal effects such as clothes, watches, glasses, brief cases and the like. She was asked whether he liked to spend money on clothes for himself, and said, “Only the best, yes.” She was asked whether it would be fair to say that at the time of his death she was getting the benefit of about one third of his income, and said, “At least, maybe more.” She later calculated this at 40%-45%, but the figures given in evidence as to the expenditure of the household would fall somewhat below this figure.

1. It seems to me that to simply apply the average expenditure and dependency table to this case would fly in the face of the evidence, which is that the deceased, while he enjoyed a substantial income, and had for many years, applied that income to a large extent on personal purchases of luxury clothing and accessories, and that the amount of his income that could be said to be applied for the benefit of the plaintiff falls below the statistical average. Taking all of the evidence into account, I consider the appropriate rate of dependency in this matter to be 45%.

1. I take past income loss on the basis of a net weekly loss of $675 per week, being 45% of the net salary of the deceased which amounts to an award of past loss of $201,730. Interest can be awarded on such an award, but the evidence is that the plaintiff received benefits by way of insurances that exceeded this sum, so she is not in fact out of pocket.

1. For the future, I will allow the ongoing loss of $675 for a period of 20 years, taking to the normal retirement period for the deceased, who would have been 45 at the date of trial. This amounts to an award, applying the 3% tables, of $531, $663 without adjustment for contingencies. Counsel agreed that an appropriate figure for contingencies would be 25%, and I accept this figure. I made the observation at trial that reaching agreement on this figure was most appropriate, as it avoids the need for the type of speculation that can occur in this type of case in relation to future prospects of marriage and the like, which seem inappropriate to modern circumstances, a matter commented on by Wells J in Allan v The Commonwealth (1980) 24 SASR 581 at 583. This results in an award for future loss of dependency of $398,747.

1. There was evidence of the deceased’s superannuation entitlements, and I accept the plaintiff’s claim to this, being based on the sum of $150,000 reduced by 25% for contingencies, being a figure of $112,500.

1. This amounts to a total award of $729,318.75 which I award. Given the presence of the cross-claim against the second defendant, I will hear the parties as to costs.

   I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of Master T. Connolly.

   Associate:

   Date:     7 December 2001

Counsel for the Plaintiff:  Mr M Maxwell with Mr A D Campbell

Solicitor for the Plaintiff:  Robin M Gibson

Counsel for the 1^st Defendant  Mr M W Robinson

Solicitor for the 1^st Defendant  Phillips Fox

Counsel for the 2^nd Defendant  Mr D Harper

Solicitor for the 2^nd Defendant  Abbott Tout

Counsel for the 3^rd Defendant:  Mr M Neil QC with Mr G McNally

Solicitor for the Defendant:  Hunt & Hunt

Date of hearing:  22, 23 & 24 October 2001

Date of judgment:  7 December 2001