Walker v Hamm
[2008] VSC 596
•19 December 2008
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
BETWEEN
No. 6503 of 1999
| DONALD WALKER AND DR MARCUS WALKER | Plaintiffs |
| v | |
| RUTH HAMM, GRAEME CARTER AND THE STATE OF VICTORIA | Defendants |
| AND BETWEEN | |
| No. 6504 of 1999 | |
| DONALD STEWART WALKER AND MARCUS TASMAN WALKER (As Executors of the will of Marcia Walker deceased) | Plaintiffs |
| v | |
| GRAME CARTER AND THE STATE OF VICTORIA | Defendants |
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JUDGE: | SMITH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARINGS: | 9-31 May 2007, 1-29 June 2007, 30 October 2007, 5-30 November 2007, 3-20 December 2007. | |
DATE OF JUDGMENT: | 19 December 2008 | |
CASE MAY BE CITED AS: | Walker & Anor v Hamm & Ors and Walker & Anor v Carter and Anor | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 596 | |
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ASSAULT AND BATTERY – police officers – defences.
ASSAULT AND BATTERY – Physical and psychiatric injury to victims – psychiatric injury to person not present at incident – mental distress – Wilkinson v Downton – and Battista v Cooper.
DAMAGES – Causation – remoteness.
DAMAGES – Whether economic loss recoverable by individual or company.
DAMAGES – Assessment; loss of opportunity – past and future pain and suffering – mental distress – past and future economic loss.
DAMAGES – Aggravated and exemplary damages – estate claim – one plaintiff not present at incident.
EVIDENCE – Credibility – failure to call witnesses – Jones v Dunkel.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr R Meldrum QC with Mr J Lee | Allan McMonnies |
| For Carter | Mr J Langmead SC with Mr S Wotherspoon | John Cain, Victorian Government Solicitor |
| For the State of Victoria | Mr P Lawrie | Ebsworth and Ebsworth |
TABLE OF CONTENTS
Section 1 The Proceedings
Section 2 The Parties2
section 3 the incident – common ground...................................................................................................... 2
section 4 plaintiff’s claims....................................................................................................................................... 6
4.1......... Action number 6503 of 1999......................................................................................................................................... 6
4.2......... Action number 6504 of 1999......................................................................................................................................... 7
section 5 defence positions....................................................................................................................................... 8
5.1......... Action number 6503 of 1999......................................................................................................................................... 6
5.1 (a)Donald Walker’s claim................................................................................................................................................. 8
5.1 (b)Marcus Walker’s claim............................................................................................................................................... 10
5.2......... Action number 6504 of 1999...................................................................................................................................... 10
section 6 onus of proof............................................................................................................................................... 11
section 7 legal issues................................................................................................................................................... 12
7.1......... Power of the police to prevent breach of peace............................................................................................... 13
7.2......... The test to be applied in determining whether police acted in self defence......................................... 14
7.3......... The scope of the police power to arrest.............................................................................................................. 15
7.4......... Test of reasonableness and the use of reasonable force............................................................................ 15
7.5......... Liability to third parties........................................................................................................................................... 17
7.5 (a)Introduction.................................................................................................................................................................. 17
7.5 (b)Plaintiffs’ submissions; Battista v Cooper.............................................................................................................. 18
7.5 (c)Defence criticisms of Battista v Cooper.................................................................................................................. 21
Failure to adhere to principles of Wilkinson v Downton...................................................................................................... 21
The principles stated in Wilkinson v Downton.................................................................................................................... 21
The required intention.......................................................................................................................................................... 21
The presence of the plaintiff and an act “calculated to cause harm”................................................................................... 23
Whether Wilkinson v Downton should have been adhered to in Battista v Cooper............................................................ 25
Did Battista v Cooper extend Wilkinson v Downton and was that sound?.......................................................................... 27
Statements of principle in Battista v Cooper too broad....................................................................................................... 29
Recent developments in the law inconsistent with Battista v Cooper................................................................................. 30
The relevance of normal fortitude....................................................................................................................................... 30
Leading text......................................................................................................................................................................... 32
Recent cases......................................................................................................................................................................... 33
7.5 (d)Analysis of Battista v Cooper claim......................................................................................................................... 34
Present case and existing authority...................................................................................................................................... 34
The approach of Bray CJ in Battista v Cooper.................................................................................................................... 35
The Battista v Cooper elements........................................................................................................................................... 37
The test and its application in this case............................................................................................................................... 38
Liability to third parties – an alternative; an application of Wilkinson v Downton............................................................. 39
Battista v Cooper and Wilkinson v Downton; preferred analysis........................................................................................ 40
7.5 (e)Conclusion regarding liability to third parties – Rejection of defence position.............................................. 42
section 8 factual issues regarding the liability of police.................................................... 43
8.1......... Introduction.................................................................................................................................................................. 43
8.2......... Liability and factual issues – Major areas in dispute................................................................................... 44
8.2 (a)Pre-event – police observations and the behaviour of Donald Walker prior to and immediately after entry by the police and the behaviour of Mrs Waker.................................................................................................................. 44
The initial observations and entry to the premises by the police......................................................................................... 44
Conversation in kitchen – Sesin and Ms Hamm.................................................................................................................. 45
Mrs Walker, her entry and its immediate consequences..................................................................................................... 45
The alleged loss of the shirt incident................................................................................................................................... 45
8.2 (b)The event....................................................................................................................................................................... 46
How the torch came to be shone in the face and/or eyes of Mrs Walker............................................................................ 46
The respective positions of Carter, Sesin and Donald Walker in relation to Marcia Walker when the torch shone in her face and/or eyes...................................................................................................................................................................... 46
The sequence of events leading to physical contact between Sesin and Donald Walker and Sesin placing Donald Walker in a headlock and the reasons for those events and contacts...................................................................................... 47
In relation to Donald Walker, the sequence of events, and their consequences, after Sesin placed Donald Walker in a headlock up to and including the handcuffing of Donald Walker; including the reasons for those events................................. 47
In relation to Marcia Walker, the events surrounding her injury; including....................................................................... 50
8.2 (c)Whether the circumstances were such as to justify Carter and Sesin in attempting to arrest Donald Walker and, if so, whether their actions went beyond what was necessary for that purpose or for self-defence....................... 51
8.2 (d)Whether the actions of Carter which resulted in the injury to Mrs Walker were in self defence or reasonably necessary to secure Donald Walker’s arrest.......................................................................................................... 51
section 9 the people directly concerned in the incident and their histories.......... 51
9.1......... Donald Walker............................................................................................................................................................. 51
9.2......... Marcia Walker.............................................................................................................................................................. 54
9.3......... Carter and Sesin........................................................................................................................................................... 56
9.3 (a)Lives prior to the incident.......................................................................................................................................... 56
9.3 (b)General training, postings and experience............................................................................................................. 57
9.3 (c)Training for domestic violence situations and the use of batons........................................................................ 59
Domestic violence............................................................................................................................................................... 59
Certain techniques............................................................................................................................................................... 60
9.3 (d)Carter and Sesin – a comparison............................................................................................................................. 62
section 10 credibility issues..................................................................................................................................... 62
10.1....... Introduction.................................................................................................................................................................. 62
10.2....... The realities of the case............................................................................................................................................ 64
10.2 (a)Liability......................................................................................................................................................................... 65
10.2 (b)Damages........................................................................................................................................................................ 65
10.2 (c)Credibility of Donald Walker.................................................................................................................................... 66
10.2 (d)Credibility of Marcus Walker.................................................................................................................................... 69
10.2 (e)Conclusions regarding the credibility of Donald Walker and Marcus Walker................................................ 69
10.2 (f)Conclusions regarding the credibility of Carter and Sesin.................................................................................. 72
section 11 evidence of injuries received by the participants.................................................. 74
11.1....... Injuries to Carter and Sesin..................................................................................................................................... 74
11.1 (a)Carter and Sesin - statements.................................................................................................................................... 74
11.1 (b)Carter and Sesin – hospital records......................................................................................................................... 75
11.1 (c)Evidence of Carter and Sesin.................................................................................................................................... 77
11.2....... Injuries to Donald Walker....................................................................................................................................... 78
11.2 (a)Police evidence............................................................................................................................................................ 78
11.2 (b)Evidence of Donald Walker....................................................................................................................................... 79
11.2 (c)Photographs................................................................................................................................................................. 79
11.2 (d)Medical evidence......................................................................................................................................................... 80
11.3....... Injuries to Marcia Walker....................................................................................................................................... 82
11.3 (a)Medical evidence......................................................................................................................................................... 82
11.4....... Comparison of injuries, accounts of the event and evidence...................................................................... 82
section 12 evidence relating to the incident......................................................................................... 84
12.1....... Approach.......................................................................................................................................................................... 84
12.2....... Evidence relating to the preliminary events................................................................................................... 84
12.2 (a)Assessment of defence evidence................................................................................................................................ 84
12.3....... Findings in relation to preliminary events........................................................................................................ 86
12.4....... Evidence relating to the central events........................................................................................................... 88
12.4 (a)Introduction.................................................................................................................................................................. 88
12.4(b)The Carter, Sesin, Donald Walker altercation....................................................................................................... 89
Overview – Defence Evidence............................................................................................................................................ 89
12.4 (c)The first physical act in issue – the headlock......................................................................................................... 91
Sesin’s evidence and statement........................................................................................................................................... 91
Sesin’s account - conclusions.............................................................................................................................................. 93
The defendants’ case – Sesin’s evidence modified............................................................................................................. 94
The remaining alternative – Carter’s statement and evidence............................................................................................. 95
12.4 (d)The Carter, Marcia Walker altercation................................................................................................................... 97
12.4 (e)Conclusions and consequences............................................................................................................................... 103
The credibility of defence witnesses.................................................................................................................................. 103
The fate of the defence of the defendants.......................................................................................................................... 103
12.5....... Findings relating to the central events.......................................................................................................... 104
12.5 (a)Introduction................................................................................................................................................................ 104
12.5 (b)Overview of evidence................................................................................................................................................ 104
12.5 (c)The call to D24.......................................................................................................................................................... 105
12.5 (d)The torch incident..................................................................................................................................................... 106
12.5 (e)The headlock and subsequent beating of Donald Walker up to his arrest...................................................... 106
12.5 (f)The intervention of Mrs Walker.............................................................................................................................. 108
12.5 (g)Evidence of Donald Walker not accepted............................................................................................................. 108
section 13 liability - conclusion....................................................................................................................... 109
13.1....... The defences fail........................................................................................................................................................ 109
13.2....... The reasons for the actions of Carter and Sesin.......................................................................................... 109
13.2 (a)The individuals.......................................................................................................................................................... 110
13.2 (b)The sequence of events – Carter’s role................................................................................................................. 110
13.2 (c)Other factors.............................................................................................................................................................. 111
section 14 damages - introduction................................................................................................................... 113
section 15 general damages claim – donald walker...................................................................... 113
15.1....... Plaintiff’s Pleadings................................................................................................................................................ 113
15.2....... Plaintiff’s Submissions............................................................................................................................................. 114
15.3....... Defence submissions.................................................................................................................................................. 117
15.4....... Examination of evidence......................................................................................................................................... 121
15.4 (a)Overview – injuries and impact.............................................................................................................................. 121
15.4 (b)Lay evidence – Pre-incident health and lifestyle of Donald Walker; findings............................................... 121
Donald Walker’s youth...................................................................................................................................................... 122
Employment history........................................................................................................................................................... 122
Lifestyle and health............................................................................................................................................................ 123
Social life and skills........................................................................................................................................................... 125
Coping with pressure......................................................................................................................................................... 126
Smoking............................................................................................................................................................................. 127
Domestic skills................................................................................................................................................................... 127
Driving............................................................................................................................................................................... 127
15.4 (c)Lay evidence – immediate impact of the incident................................................................................................ 127
Testimony of Donald Walker............................................................................................................................................ 127
Testimony of Marcus Walker............................................................................................................................................ 128
Testimony of Donald Walker’s friends............................................................................................................................. 129
15.4 (d)Lay evidence – long term effects of the incident.................................................................................................. 129
Overview............................................................................................................................................................................ 129
Psychological consequences – fear, anxiety and depression............................................................................................. 129
Psychological consequences – dreams and sleeping difficulties....................................................................................... 132
Psychological consequences – major change of personality, temperament and moods.................................................... 134
Psychological consequences – drinking and smoking....................................................................................................... 137
Psychological consequences – office and work................................................................................................................. 138
Psychological consequences – social life.......................................................................................................................... 138
Psychological consequences – pain, headaches and effects of medication....................................................................... 139
Psychological consequences – libido................................................................................................................................. 141
Psychological consequences – inability to perform household chores.............................................................................. 141
Psychological consequences – driving.............................................................................................................................. 142
15.4 (e)Lay evidence – conclusion....................................................................................................................................... 143
15.4 (f)Medical evidence – progress of physical and psychological health................................................................ 143
Physical and psychological injuries................................................................................................................................... 143
Physiotherapy and medical treatment – marginal improvement then stabilisation (1993 – 1995)................................... 144
X-ray and MRI examination – worsening of conditions (1995 – 1996)............................................................................ 146
Deterioration leading to surgery (1996 – 1999)............................................................................................................... 147
Surgery and worsening of condition and pain (2000)....................................................................................................... 148
Myofascial pain syndrome (2000)..................................................................................................................................... 149
No improvement by 2001.................................................................................................................................................. 150
No improvement by 2002.................................................................................................................................................. 151
2004 to present................................................................................................................................................................... 151
15.4 (g)Psychological and Psychiatric Expert testimony................................................................................................ 152
Mr Crewdson..................................................................................................................................................................... 153
Dr Cole............................................................................................................................................................................... 158
Assessment of psychological future.................................................................................................................................. 160
Mr Crewdson’s opinion..................................................................................................................................................... 160
Dr Cole’s opinion.............................................................................................................................................................. 160
Defence arguments regarding the expert testimony.......................................................................................................... 161
Comparison of expert testimonies..................................................................................................................................... 162
15.5....... Examination of evidence - conclusion............................................................................................................... 163
15.6....... Quantum of general damages for Donald Walker...................................................................................... 167
section 16 general damages claim – marcus walker..................................................................... 171
16.1....... Plaintiff’s Pleadings................................................................................................................................................ 171
16.2....... Causation issues - introduction........................................................................................................................... 171
16.3....... Causation issues – common ground..................................................................................................................... 172
16.4....... Plaintiff’s submissions on causation.................................................................................................................. 172
16.5....... Defence submissions on causation....................................................................................................................... 175
16.5 (a)Introduction................................................................................................................................................................ 175
16.5 (b)Denial of initial causal connection........................................................................................................................ 175
16.5 (c)Initial link – psychiatric evidence.......................................................................................................................... 175
Testimony of Dr Sale......................................................................................................................................................... 175
Testimony of Dr Pargiter................................................................................................................................................... 176
16.5 (d)Initial link – other evidence..................................................................................................................................... 176
Marcus Walker’s immediate reaction not outside normal range....................................................................................... 177
Submissions of the parties................................................................................................................................................. 177
Marcus Walker’s immediate- his evidence........................................................................................................................ 178
Marcus Walker’s immediate- evidence of Shenton and Pluim......................................................................................... 178
Marcus Walker’s immediate- his behaviour at the scene.................................................................................................. 179
The injustice overlay.......................................................................................................................................................... 180
Time sequence of illness.................................................................................................................................................... 180
Defence submissions......................................................................................................................................................... 180
16.5 (e)Causation: initial link - conclusion........................................................................................................................ 182
16.5 (f)Intervening or true causes – defence arguments................................................................................................. 183
16.5 (g)Defence submissions on causation - conclusion.................................................................................................. 184
16.6....... Issues of remoteness of psychiatric damage................................................................................................... 185
16.7....... General damages - assessment.............................................................................................................................. 187
16.7 (a)Plaintiff’s Submissions on general damages........................................................................................................ 187
16.7 (b)Defence Submissions on general damages........................................................................................................... 188
16.7 (c)Pre-incident health and lifestyle of Marcus Walker – lay evidence................................................................. 189
Work and scholastic achievements.................................................................................................................................... 189
Sports and activities........................................................................................................................................................... 190
Other interests and hobbies................................................................................................................................................ 190
Psychological health.......................................................................................................................................................... 191
Personal habits, social life and libido................................................................................................................................ 191
16.7 (d)Immediate and long-term effects of the incident on Marcus Walker............................................................... 192
Evidence of McRae, Williams and DeCesare.................................................................................................................... 192
Evidence of Marcus Walker.............................................................................................................................................. 194
Depression, sleeplessness, tremors, shaking and loss of self-esteem................................................................................ 194
Anxiety, handling stress, intellectual abilities and motor movements.............................................................................. 196
Impact on social life and libido......................................................................................................................................... 197
Loss of interest in sports and hobbies................................................................................................................................ 198
Current therapeutic pursuits............................................................................................................................................... 198
16.7 (e)Medical assessments and prognosis...................................................................................................................... 200
16.7 (f)Defence arguments regarding medical and lay evidence.................................................................................. 201
Marcus Walker’s condition not as dire as he claims......................................................................................................... 201
Relationships...................................................................................................................................................................... 201
Activities............................................................................................................................................................................ 201
16.8....... Assessment of evidence - conclusion.................................................................................................................. 202
16.9....... Quantum of general damages for Marcus Walker..................................................................................... 205
section 17 general damages claim – estate of marcia walker............................................ 206
17.1....... Plaintiff’s Pleadings................................................................................................................................................ 206
17.2....... Marcia Walker’s life and health prior to the incident............................................................................. 207
17.3....... Immediate effects of the incident........................................................................................................................ 208
17.3 (a)Plaintiff submission.................................................................................................................................................. 208
17.3 (b)Defence submissions................................................................................................................................................. 208
17.3 (c)Examination of evidence.......................................................................................................................................... 208
17.3 (d)Conclusion.................................................................................................................................................................. 209
17.4....... Long-term effects of the incident – acceleration of deterioration.................................................... 209
17.4 (a)Introduction................................................................................................................................................................ 209
17.4 (b)Acceleration of Marcia Walker’s loss of independence..................................................................................... 210
Plaintiff’s submissions....................................................................................................................................................... 210
First defendant’s submissions............................................................................................................................................ 210
Second defendant’s submissions – the evidence of Dr Thomson...................................................................................... 212
Plaintiff’s responses........................................................................................................................................................... 212
Lay evidence regarding acceleration of deterioration....................................................................................................... 213
Testimony of Donald Walker............................................................................................................................................ 213
Testimony of Marcus Walker............................................................................................................................................ 213
Premature loss of independence - analysis........................................................................................................................ 215
The acceleration of deterioration and loss of independence - conclusion......................................................................... 213
17.4 (c)Long-term effects of the incident – compensation for distress.......................................................................... 217
Submissions....................................................................................................................................................................... 217
Analysis............................................................................................................................................................................. 217
17.5....... Quantum of general damages for Marcia Walker...................................................................................... 219
section 18 economic loss claim – joint ventures............................................................................... 219
18.1....... Preliminary issue – appropriate plaintiff......................................................................................................... 219
18.1 (a)Defence submissions................................................................................................................................................. 220
18.1 (b)The corporate argument – Husher v Husher........................................................................................................ 222
18.1 (c)Conclusion – appropriate plaintiff......................................................................................................................... 225
18.2....... Alleged lost opportunities – joint ventures................................................................................................... 226
18.2 (a)Eco-bin proposal....................................................................................................................................................... 226
18.2 (b)InsureCard................................................................................................................................................................. 227
18.2 (c)The Master Agency proposal.................................................................................................................................. 229
18.2 (d)Chess Sets................................................................................................................................................................... 230
18.2 (e)The Dance Party........................................................................................................................................................ 230
section 19 economic loss claim – Donald Walker............................................................................. 232
19.1....... Plaintiff’s submissions............................................................................................................................................. 232
19.2....... Defence submissions.................................................................................................................................................. 233
19.3....... Examination of evidence......................................................................................................................................... 236
19.3 (a)Donald Walker’s industry performance prior to and after the incident.......................................................... 236
19.3 (b)Impact of the incident on Donald Walker’s earning capacity........................................................................... 237
Issues to be resolved.......................................................................................................................................................... 237
Evidence of struggle to sustain his business...................................................................................................................... 238
Reduction in the number of clients.................................................................................................................................... 238
Reduced commission earnings and increased expenditure................................................................................................ 239
Chronology of commission earnings................................................................................................................................. 240
Conclusion regarding commission earnings...................................................................................................................... 244
Reduction in trailer commissions...................................................................................................................................... 245
Inability to expand the business......................................................................................................................................... 245
Impact of the incident on Donald Walker’s earning capacity - conclusion....................................................................... 246
19.4....... Assessment of damages for loss of earning capacity................................................................................. 247
19.4 (a)Plaintiff’s submissions.............................................................................................................................................. 247
19.4 (b)Defence submissions................................................................................................................................................. 250
19.4 (c)Analysis of expert evidence..................................................................................................................................... 253
Evidence of Mr Ivey.......................................................................................................................................................... 254
Erroneous assumptions of Mr Ivey.................................................................................................................................... 257
(a) Hours of work in the two periods were comparable.................................................................................................... 257
(b) Similar mix of income sources..................................................................................................................................... 258
(c) Fluctuations normal...................................................................................................................................................... 259
(d) The expense/income percentage used.......................................................................................................................... 260
(e) Addition of clients and quality of insurance book....................................................................................................... 261
Analysis of Mr Ivey - conclusion...................................................................................................................................... 261
19.4 (d)Assessment of economic loss of Donald Walker – Relevant data..................................................................... 262
19.4 (e)Party positions........................................................................................................................................................... 264
19.4 (f)Mitigation costs and specific losses....................................................................................................................... 265
19.4 (g)Adjusting for erroneous assumption as to hours of work pre-incident............................................................ 266
Assumption re hours of work in base years....................................................................................................................... 266
Effect of other erroneous assumptions.............................................................................................................................. 268
Vicissitudes........................................................................................................................................................................ 268
Conclusion......................................................................................................................................................................... 269
19.4 (h)Future Loss................................................................................................................................................................. 270
Approaches of Donaldson and Ivey................................................................................................................................... 270
Issues to be resolved.......................................................................................................................................................... 270
Retirement age................................................................................................................................................................... 270
The future scenario............................................................................................................................................................ 271
The base figure to be used................................................................................................................................................. 272
Assessment........................................................................................................................................................................ 272
19.5....... Quantum of Donald Walker’s damages for economic loss...................................................................... 273
section 20 economic loss claim – marcus Walker............................................................................. 274
20.1....... Plaintiff’s submissions............................................................................................................................................. 274
20.2....... Defence submissions and analysis....................................................................................................................... 275
20.2 (a)Claim overstated....................................................................................................................................................... 275
20.2 (b)No proof of loss having flowed from any loss of earning capacity.................................................................. 276
Introduction........................................................................................................................................................................ 276
Defence Submission – no desire for academic or other careers........................................................................................ 276
Defence Submissions – different priorities........................................................................................................................ 278
Priority: mother’s care not employment?.......................................................................................................................... 278
Priority: company ventures not paid employment?........................................................................................................... 278
Priority arguments: conclusion.......................................................................................................................................... 279
Defence submissions – personal problems........................................................................................................................ 279
Alleged narcissistic personality......................................................................................................................................... 279
Emotional difficulties........................................................................................................................................................ 279
Physical and emotional difficulties.................................................................................................................................... 279
Conclusion......................................................................................................................................................................... 280
20.3....... Impact on past earning capacity – incident and non-incident factors................................................. 280
20.4....... Likely use of earning capacity – 1993 - 2007.................................................................................................... 281
20.4 (a)Issues........................................................................................................................................................................... 281
20.4 (b)Scenarios.................................................................................................................................................................... 282
20.5....... Past loss of earning capacity – quantum......................................................................................................... 283
20.5 (a)Mr Ivey’s approach................................................................................................................................................... 283
Mr Ivey’s assessment of past loss...................................................................................................................................... 284
20.6....... Past loss of earning capacity – 1993 - 2001...................................................................................................... 286
20.6 (a)First defendant’s submissions................................................................................................................................. 286
20.6 (b)Second defendant’s submissions............................................................................................................................. 287
20.6 (c)Analysis – 1993 to 2001........................................................................................................................................... 288
20.6 (d)Past earning capacity loss – 2002 - 2007............................................................................................................. 290
Defence Submissions......................................................................................................................................................... 290
First defendant’s submissions............................................................................................................................................ 290
20.6 (e)Analysis – 2002 - 2007............................................................................................................................................. 291
20.7....... Future loss quantum................................................................................................................................................ 292
20.7 (a)Mr Ivey’s approach................................................................................................................................................... 292
20.7 (b)Defence submissions................................................................................................................................................. 294
First defendant’s submissions............................................................................................................................................ 294
Second defendant’s submissions....................................................................................................................................... 295
Defence submissions - Analysis........................................................................................................................................ 296
20.7 (c)Future loss - Assessment.......................................................................................................................................... 298
20.8....... Quantum of Marcus Walker’s damages for economic loss...................................................................... 300
section 21 damages assessed - conclusion................................................................................................. 300
APPENDICES
appendix a floor plan of 46 essex road.......................................................................................................... 302
appendix b battista v cooper – defence criticisms – brooking J’s comments in fagan v crimes compensation tribunal................................................................................................................................. 303
appendix c attacks on the credibility of donald walker......................................................... 308
C.1......... Alleged lies in evidence and statements.......................................................................................................... 308
C.1 (a)Allegation 1: Donald Walker lied in his evidence about the tea party............................................................ 309
C.1 (b)Allegation 2: Donald Walker lied in his evidence about being struck with a baton on his head and neck 310
C.1 (c)Allegation 3: Donald Walker lied in his evidence about losing consciousness for 45 minutes.................. 314
C.1 (d)Allegation 4: Donald Walker alleged amnesia.................................................................................................... 317
C.1 (e)Allegation 5: Donald Walker exaggerated symptoms........................................................................................ 318
C.1 (f)Allegation 6: Donald Walker lied about his vocational performance being adversely affected as a result of the incident........................................................................................................................................................................ 318
Allegation in General......................................................................................................................................................... 318
Trailer Commissions.......................................................................................................................................................... 319
General decline in business............................................................................................................................................... 320
Submissions....................................................................................................................................................................... 320
The evidence of Crewdson................................................................................................................................................ 321
The evidence of Donald Walker........................................................................................................................................ 322
Analysis............................................................................................................................................................................. 323
C.1 (g)Allegation 7: There was inconsistency between Donald Walker’s answers to the Cornell questionnaire and his complaints.................................................................................................................................................................. 325
C.1 (h)Allegation 8: Donald Walker lied about not resisting Sesin in a headlock and that he did not punch Sesin at all 326
C.1 (i)Allegation 9: Donald Walker lied when he denied a visit by Mrs Gough to is home on the night in question 328
C.1 (j)Allegation 10: Donald Walker falsely alleged that the police had pre-assembled outside his house........ 331
C.1 (k)Allegation 11:Donald Walker lied in his evidence that he was handcuffed as and after police reinforcements arrived 331
C.1 (l)Allegation 12:Donald Walker falsely alleged that his shirt was ripped when Sesin grabbed him............. 332
C.1 (m)Allegation 13:Donald Walker lied to Donaldson about his insurance proposals......................................... 333
C.2......... Conduct revealing dishonesty of Donald Walker...................................................................................... 334
C.2 (a)Allegation 14:Performance as a witness............................................................................................................... 334
C.2 (b)Allegation 15:Alleged inconsistency between physical demonstration and evidence of injuries............... 335
C.2 (c)Allegation 16:Fanciful claims in respect of the companies such as the dance party and other claims..... 336
C.2 (d)Allegation 17: The Maxwell incident..................................................................................................................... 336
C.2 (e)Allegation 18: Dishonest tampering with figures in The Pritchard Report.................................................... 340
C.3......... Allegations raising issues of reliability and not dishonesty................................................................. 343
C.3 (a)Allegation 19: Donald Walker lied in alleging in his evidence that he saw Carter punch his mother causing her to fall to the ground....................................................................................................................................................... 343
C.3 (b)Allegation 20: Donald Walker lied about being beaten while handcuffed..................................................... 345
Issues................................................................................................................................................................................. 346
Conclusion......................................................................................................................................................................... 348
C.3 (c)Allegation 21: Some of Sesin’s injuries self-inflicted......................................................................................... 348
C.3 (d)Allegation 22: Donald Walker’s claim regarding his social life was false.................................................... 349
C.3 (e)Allegation 23: Donald Walker’s claim of an inability to travel was false...................................................... 351
C.3 (f)Allegation 24: Abandonment of conspiracy claim but clinging to the belief that it was correct................ 354
C.4......... Conclusion.................................................................................................................................................................... 354
C.5......... Attacking Donald Walker’s evidence through Sheehan.......................................................................... 355
Donald Walker’s behaviour after the incident in business was normal............................................................................. 355
Donald Walker not concerned about security.................................................................................................................... 355
appendix D attacks on the credibility of marcus walker......................................................... 356
D.1......... Allegation 1: Marcus Walker’s manner of giving evidence was not plain or straightforward 356
D.2......... Allegation 2: Marcus Walker embellished his evidence in alleging that police broke Marcia Walker’s arm................................................................................................................................................................................... 357
D.3......... Allegation 3: Marcus Walker embellished his testimony to meet Ruth Hamm’s allegations... 359
D.4......... Allegation 4: Marcus Walker’s claim of etntitlement to use Harvard letterhead was false 362
D.5......... Allegation 5: Marcus Walker expressed grandiosity about himself and his career.................... 363
D.5 (a)His level of achievement.......................................................................................................................................... 363
D.5 (b)His reasons for leaving Harvard............................................................................................................................ 364
D.5 (c)Invention of a machine to cure his mother........................................................................................................... 364
D.5 (d)Significance of his research at Harvard............................................................................................................... 365
D.5 (e)role at Monash University....................................................................................................................................... 366
D.5 (f)Drafting skills............................................................................................................................................................ 366
D.5 (g)Prizes won.................................................................................................................................................................. 367
D.5 (h)Dance Party proposal, the best seen by the Essendon Mayor.......................................................................... 367
D.6......... Allegation 6: Credibility issues relating to the economic loss claim of Marcus Walker.......... 368
D.6 (a)Intellectual tasks........................................................................................................................................................ 368
D.6 (b)Powers of conversation............................................................................................................................................ 369
D.6 (c)Ability to read and absorb information................................................................................................................. 370
D.6 (d)Capacity for detailed work...................................................................................................................................... 371
D.7......... Other matters............................................................................................................................................................. 372
appendix E analysis of evidence of carter and sesin and other police of preliminary events on 15 august 1993.................................................................................................................................................... 372
E.1......... Reconstruction and exaggeration – the initial D24 call and events from it to the alleged scream 373
E.1 (a)The information from D24 – a Carter reconstruction........................................................................................ 374
E.1 (b)Viewing through the kitchen window..................................................................................................................... 375
E.1 (c)An alleged verbal exchange between Ms Hamm and Donald Walker............................................................. 375
E.1 (d)Evidence of a scuffle, thud, thump and banging and crashing.......................................................................... 376
E.2......... Reconstruction and exaggeration – the alleged scream......................................................................... 377
E.3......... Reconstruction and exaggeration – Events following entry................................................................ 378
E.3 (a)The issue of the cause of the picture falling......................................................................................................... 379
E.3 (b)The positions of Ms Hamm and Donald Walker and whether Donald Walker was restraining Ms Hamm 379
Prior statements of Carter and Sesin.................................................................................................................................. 379
The evidence of Carter and Sesin...................................................................................................................................... 380
Conclusion......................................................................................................................................................................... 382
E.3 (c)The level of violence and resistance of Donald Walker towards Carter......................................................... 383
E.3 (d)Reconstruction – Allegation by Ms Hamm of an assault with a knife............................................................. 384
E.3 (e)Deliberate omission – failure to mention shirt incident..................................................................................... 387
appendix f extracts from the pluim tape................................................................................................... 389
appendix g review of statements and evidence of carter, sesin and others about the central event........................................................................................................................................................................... 397
G.1......... The central events - reconstructions............................................................................................................... 397
G.1 (a)The “Code 9” call..................................................................................................................................................... 397
G.1 (b)The alleged standoff.................................................................................................................................................. 399
The evidence...................................................................................................................................................................... 399
Pluim tape.......................................................................................................................................................................... 400
Rodgers notes..................................................................................................................................................................... 400
Carter’s formal statement.................................................................................................................................................. 401
Analysis of the evidence.................................................................................................................................................... 402
The probabilities................................................................................................................................................................ 403
Evidence of other police officers....................................................................................................................................... 405
Conclusion......................................................................................................................................................................... 406
G.1 (c)The physical altercation with Donald Walker...................................................................................................... 406
The formal statements of Carter and Sesin........................................................................................................................ 406
G.2......... Inconsistencies in Carter and Sesin’s statements and evidence............................................................. 410
G.2 (a)The punch and the headlock.................................................................................................................................... 410
G.2 (b)The timing and circumstances of the headlock.................................................................................................... 410
G.2 (c)Donald Walker holding Sesin................................................................................................................................. 411
G.2 (d)Carter’s description of his first blows................................................................................................................... 412
G.2 (e)Carter and Sesin – the reasons for their difficulties........................................................................................... 413
(a)Comparison of their accounts and the injuries......................................................................................................... 413
(b)The headlock and failure of Donald Walker to use limited opportunities for violence........................................... 413
appendix H assessment of defence evidence – causes of the disarray............................. 415
H.1........ Encouragement by colleagues to blame the Walkers............................................................................... 415
H.2........ Atmosphere of hostility and contempt towards the Walkers................................................................ 418
appendix I events prior to police arrival – analysis of the evidence of donald walker 422
appendix J attacks on the credibility of mr crewdson............................................................... 424
appendix K attacks on the credibility of mr de cesare................................................................ 424
appendix L mr crewdson’s diagnosis of ptsd............................................................................................ 425
L.1......... A traumatic event..................................................................................................................................................... 425
Re-experiencing the events and intrusive thoughts........................................................................................................... 426
Avoidance of stimuli.......................................................................................................................................................... 427
Elevated arousal................................................................................................................................................................. 428
Appropriate duration.......................................................................................................................................................... 429
Disruption to psycho social circumstances........................................................................................................................ 429
appendix M donald walker and the centres of influence issue............................................ 429
M.1........ Introduction................................................................................................................................................................ 429
M.2........ Donald Walker’s personality.............................................................................................................................. 430
M.3........ the Centres of Influence system an unattractive option......................................................................... 431
M.4........ No evidence that Donald Walker wanted access........................................................................................ 432
M.5........ Conclusion.................................................................................................................................................................... 433
appendix N General damages claim of marcus walker................................................................. 433
N.1......... Causation – initial link; Dr Sale.......................................................................................................................... 433
N.1 (a)Dr Sale’s evidence.................................................................................................................................................... 433
First report......................................................................................................................................................................... 434
Second report..................................................................................................................................................................... 434
N.1 (b)Defence argument in support.................................................................................................................................. 437
Submissions of First Defendant......................................................................................................................................... 437
Plaintiff’s Submissions...................................................................................................................................................... 437
Conclusion......................................................................................................................................................................... 438
N.1 (c)Causation – Meaning of “Case Stress”................................................................................................................ 439
N.2......... Causation issues – other causes........................................................................................................................... 440
Among other things, Marcus Walker said in his evidence that he had never had any experience like this experience in his life. It involved his only living parent and his only sibling. It affected every facet of his life and, as he said, every facet of one’s life is dependent on well being.
I am satisfied that there is a clear and unbroken chain of causation from the incident to his depression and adjustment disorder. It begins with the profound shock of what he saw and heard at the scene of the incident, and the strong sense of injustice, and that something was wrong, that he took away from it. His sense of injustice only increased when he heard the accounts of his mother and brother and observed their injuries and physical and mental state. Those disabilities continued and they worsened as time progressed. It is understandable that he sought to rectify the injustice, but the results of his attempts only strengthened the sense of injustice and provided evidence that fuelled a conspiracy theory.
To the extent that the defence counsel sought to isolate the conspiracy theory, the belief of an injustice, the mother ‘s illness and the legal dispute as causes, that cannot be done because the issues were caused by and inextricably connected to the assaults and batteries. They operated as constant reminders of what happened and fuelled Marcus Walker’s sense of a profound injustice. Further, most of those causes were allowed by the first defendant to continue and so Marcus Walker’s condition worsened. The first defendant could have significantly addressed the sense of injustice and avoided the development of the conspiracy theory, the litigation and the development of the chronic psychiatric injuries, by acknowledging the truth at the outset.
Looking at the reality and the importance of the causal factors, as a matter of common sense, the assault and battery of Donald Walker and Marcia Walker caused Marcus Walker’s psychiatric illness.
Proof of loss
Defence submissions
Counsel for the first defendant submitted that Marcus Walker's explanation for his conduct between 1988 and 1993, that he had put his academic and other career options on hold to pursue business ventures with his brother and care for his mother, should be rejected. Counsel argued that it was a convenient way to try to make acceptable the fact that he had turned away from his academic career and from using that earning capacity. Counsel submitted that these pursuits were extraneous and reflected the reality that he had no real desire or need to utilise his earning capacity. Counsel submitted that Marcia Walker's medical condition provided him with a convenient justification for not pursuing his scientific career or an academic career, and so long as Donald Walker was prepared to pay his mortgage and other outgoings, there was no economic pressure for him to use that earning capacity. Some specific aspects of his evidence relating to these matters were criticised.
Explanation for leaving Monash University.
Counsel submitted that his explanation for leaving Monash - that his preferred research proposal did not obtain funding support - should be rejected in preference for Dr Pargiter's explanation, which was that he had found his last position with the Monash IVF program an unhappy one and had decided to take time out. This time out seemed to have persisted for no particular reason other than getting involved in business enterprises. He added that there was the matter of caring for his ailing mother.
In my view, all explanations should be accepted; he took time out, explored business opportunities and while he did so, cared for his mother whom he loved dearly.
Little or no evidence of an intention to return to academia.
Counsel submitted that the nearest Marcus Walker came to giving evidence that he intended to return to academia was a statement that he could eventually do so.
I disagree with this interpretation. The submission is restricted to part of a long answer, in which he spoke of his plans when he left Monash. That answer finished with the following statement of intention:
“…but my primary intention was to get them, the business projects, to the point such as finishing one dance party and proceeding on with others perhaps, and eventually moving back towards that which has been referred to as perhaps one’s better talent, such as one’s training.”
Counsel was also dismissive of his evidence concerning career opportunities that he had pursued, requiring university qualifications, describing it as confused and referring to the lack of success -- all attempts being prior to 1993.
The fact was, however, that from November 1992 he had explored possible lateral entry into medicine. He was also considering the possibility of an MBA. While his attempts may be more fairly described as preliminary exploration, he was plainly at that time thinking about his future, and that future included further university education. He still had choices to make.
Counsel for the second defendant joined in this submission, arguing that while there was evidence of applications to universities, there was no evidence that they would have been successful. He submitted that the incident did not cause the demise of his academic career, it had already stalled. I note, however, that the application to Sydney University to study law was successful. He had also attended the advanced courses at the Hammersmith Hospital.[354] While they did not offer certificates or qualifications and the science involved concerned matters relevant to his mother’s illness, it showed a continuing interest in science and scientific research. It may fairly be said that prior to 1993 he was, while pursuing possible business ventures and caring for his mother, also considering academic courses and other careers. Plainly, however, a career as a scientific researcher was not at the forefront of his mind, even though he was researching his mother’s illness. His academic scientific career would be more accurately described as being on hold.
[354]He did three or four advanced courses, each about two weeks in length. He studied, amongst other things, modern immuno-cytic chemistry and monoclonal antibodies. The laboratory part of the work was tested.
Counsel for the first defendant submitted that other conduct demonstrated that he had no particular commitment to an academic career despite his potential. Counsel referred to his evidence that he had begun researching commercial ideas in America although, as he alleged, he was also involved at the same time in groundbreaking research. Counsel also sought to criticise his lack of research output and publications. Counsel submitted that on his evidence he had authored or co-authored only four journal articles, plus an article to a book between 1980 and 1987, and that the last journal article was published in 1983. No papers were published by him as author while in America, or in respect of his work there. Counsel for the second defendant also referred to his failure to complete his Harvard research, and argued that notwithstanding a promising start to his academic career in science, it had stalled and that that had nothing to do with the incident.
Analysis
In my view, the above matters point to a shift in the priorities of Marcus Walker, in particular, returning to Australia and caring for his mother. His academic career in science, as I have stated above, was on hold. Even if it was “stalled”, which carries with it the connotation of forces beyond his control, that did not mean it could not be started again. To restart it, however, would require time and effort. But it was still part of his options.
Through the earlier part of the 1980s, Marcus Walker had demonstrated a commitment of a very high order to an academic career. He was obviously a person of outstanding ability. To be accepted for post-doctorate scientific research at Harvard University was a significant achievement. The comments of his supervisor at Harvard, Dr Anderson, in his reference, also speaks volumes for his commitment and ability. Dr Anderson referred to a substantial body of material that was likely to result in up to six manuscripts for publication. He described Marcus Walker as intelligent, industrious, an independent worker and a person with a high degree of moral integrity. He described him as having “done a superb job” and gave Marcus Walker his “highest recommendation”. His PhD supervisor at the University of Queensland, Dr Hughes, also had a very high opinion of him. In his reference, in particular, he described Marcus Walker as having no hidden faults, and having shown a superiority and excellence in all activities that he had so far undertaken. He gave his unqualified recommendation.
His life and work history prior to his academic career also demonstrated a high level of ability, intelligence and commitment. He was, and is, a person, however, who is multi-talented with a wide range of interests. He has shown in his work history prior to the incident, a variety of work activities and experiences and change.
The question of what work he might have undertaken after 1993, or might in the future, needs to be approached, because of his past history, on the basis that there could have been, or could be, change in the nature of his work. That does not mean that he would not have returned to the same form of academic career in scientific research, but his conduct up to 1993 suggested that that was not certain and as time went by, this would have required a degree of re-training or further post-graduate work. It would be wrong, however, to say that he had rejected all academic careers. In the years since the incident, he has explored that possibility on a number of occasions, notwithstanding the development of his disorder.
Since his return from America, however, there has been the initial complication of his mother’s illness. This, in my view, was a significant factor in him not pursuing his academic career after Monash University. During this period he also did work on various business ventures. Accepting that the business ventures were unlikely to succeed, the most likely career future for Marcus Walker would have been further academic training leading on to a professional career, including at a university.
No desire to pursue a serious career
Counsel for the first defendant submitted that Marcus Walker’s conduct after the incident pointed to the likelihood that he would not have resumed any serious career and would have “muddled along ineffectually for many years”. Counsel pointed to the evidence that he continued to pursue the Dance Party project and the Ecobin project after August 1993. Counsel also referred to the evidence about him and Donald Walker purchasing land in Tasmania after the incident, for a possible theme park.
Counsel submitted that the alternative of some sort of commercial and business career was not going to be successful because Marcus Walker was incapable, even absent the incident, of successfully exploiting the opportunities he was researching. His evidence that he had the potential to rise to a position of responsibility in a large and complex organisation was compared with evidence which, it was suggested, showed that he did not really know what a directors’ board meeting was. I note, however, that the evidence referred to is a further example of the difficulties he had with expression and focusing on the questions. What he in fact said on fair analysis was that he had attended a full meeting of company directors with his brother, and that he and his brother as directors had attended other meetings with directors of other companies.Counsel submitted that the commercial ventures would have come to nothing because of the lack of the necessary expertise and resources. Counsel also relied on the evidence of Dr Sale, that the ventures provided a convenient distraction for Dr Walker, enabling him to resile from having to confront the failures in his life. I have indicated above, however, why Dr Sale's opinions should be rejected.
Conclusion
Plainly, Marcus Walker was pursuing a number of business possibilities with his brother prior to the incident, but they were all directed to what were intended to be financially successful enterprises. He was not “muddling along”. They involved a significant change of direction away from the academic life of scientific research that he had pursued up to that date. They did not point to a decision not to use his earning capacity. He was also very troubled by his mother's state of health, a person with whom he and his brother were very close. They had no other siblings who might have helped and, when regard is had to the sort of income that Donald was able to earn, it is not surprising that Marcus became the primary carer and devoted a lot of his time to her care and used his scientific ability to investigate the illness she had, in the hope that he might be able to assist her and at least prolong her life.
The argument fails to takes into account the evidence referred to above, of his prior life and work experience and character. Further, what had occurred between 1988 and 1993 was actually consistent with that earlier work and life experience in that he applied himself with great energy and ability to the pursuit of the various business projects and also to the care of his mother. The business efforts were unsuccessful, but he and his brother were, and are, highly intelligent people and they were unlikely to persist in unsuccessful ventures.
Keys to the issue of past earnings loss are the assessment of the extent to which he was likely to have engaged in paid employment, having regard to his mother’s ill health and whether, and at what point, he and Donald Walker would have decided not to continue to pursue the various business plans that they had.
Economic loss claim of Donald Walker
Donald Walker and the Centres of Influence issue
Counsel for the first defendant submitted that the reason for lack of access to Centres of Influence had nothing to do with the incident of 1993 but was a consequence of Donald Walker's personality. Counsel referred to the evidence of the witness, Mr Parton, of IFMA, of complaints about Donald Walker's behaviour. Counsel submitted that such behaviour was consistent with his personality before the incident and argued that his personality was not suited to Centres of Influence business. Counsel relied on the so-called Maxwell incident in May 1992 in which he was struck and in which Counsel said Donald Walker could be said to have engaged in pugilism. He said that there are very few people who can describe such an experience. Counsel argued that on any sensible view, the problem was his personality, not the alleged myofascial pain syndrome or post-traumatic stress disorder or the medication or his tiredness or his inability to concentrate.
This is an argument based more on what counsel might have hoped the evidence would be, rather than what it was. The argument essentially relies upon the alleged Maxwell incident which was an isolated incident. Donald Walker’s evidence was that the incident occurred in his home and arose because he would not allow Maxwell to ring an escort agency and that Maxwell attacked him and that he, Donald Walker, did not throw any punches. Contrary allegations were put to Donald Walker in cross-examination by the defence, but no contrary evidence was led. There was no evidentiary basis to suggest, from the Maxwell incident, that Donald Walker had any personality problems.
There was no evidence from his history in selling insurance to suggest that there was anything about his behaviour or personality prior to the incident to cause concern. His success in the past, in fact, provides strong evidence to the contrary. So, too, does the description of the man they knew prior to the incident given by McRae, De Cesare and Williams.
Accepting the considerable physical, psychological, emotional and medication difficulties under which the Donald Walker has been attempting to function, all the result of the injuries inflicted, it is hardly surprising that he should have acted impatiently, rudely and inappropriately on occasions when his patience was tested or he was disappointed. The argument advanced attempts to quarantine the behaviour from its causes by ignoring reality. It also ignores a substantial part of the evidence of Mr Parton. The problem facing Donald Walker was not just the complaints. Mr Parton was concerned about the unpredictability of Donald Walker's behaviour and how he could on occasions react aggressively. He gave evidence that the behaviour varies from appropriate to aggressive on a 50/50 basis. He gave evidence that when he rings him he wonders in what sort of mood he will be. As I understood Mr Parton's evidence, it was the “uncertainty of his behaviour” that was the reason why he was denied access to Centres of Influence. These problems must also affect his capacity to sell insurance generally.
Counsel for the first defendant also submitted that selling insurance by cold calling was not harder than selling insurance through Centres of Influence. It was put that what matters is the ability to develop a relationship and work it through. Commonsense would suggest, however, that selling insurance through Centres of Influence would be much easier than the cold calling approach. For a start, the agent would not face the initial challenge of getting the "foot in the door". In my view gaining business through the cold calling approach would require significantly more patience and person skills than gaining business through Centres of Influence. I note that of IFMA agents, only one other in Victoria uses cold calling. Plainly that is not the preferred mode of business.
Counsel for the first defendant also argued that Donald Walker had given no evidence of desiring access to the Centres of Influence. Counsel submitted that that would be understandable bearing in mind that
· in a transaction made through the Centres of Influence system, the agent gets $700 out of the commission of $1000 paid by the insurance company
· Mr Sheehan who is paid $25 an hour, has had a superior strike rate over IFMA's own cold calling strike rate
· Donald Walker can receive the whole of the commission.
Counsel also submitted another reason why Centres of Influence would be unattractive was that, according to Mr Parton, an association with Centres of Influence presented greater risks to the salesman’s business because, if the association is lost, the insurance salesman loses the opportunity to generate leads and the trailer commissions would also be lost. I note, however, that Mr Parton in his evidence referred to the risk but did not attempt to compare the risk with other risks. The popularity of the use of the Centres of Influence approach, suggests that this risk is not a disincentive. Counsel further argued that it would be understandable that Donald Walker would seek to exercise his considerable earning capacity by using his tried and proven sales methods. As to that, it is plain on the evidence that he was not able to use his “tried and proven sales method” – he was forced to engage others to cold call and was churning policies.
As to the primary issue raised, that Donald Walker did not himself give evidence of a desire to have access to Centres of Influence, the issue is a false issue. It needs to be put in context. The issue emerged in the following sequence:
· Mr Parton gave evidence, which was interposed within Donald Walker's evidence, to the effect that Donald Walker approached him every year for access to Centres of Influence. There is no reason to reject Mr Parton's evidence about the annual request.
· Following Mr Parton's evidence, Donald Walker went back into the witness box and was cross-examined about matters including his evidence of the attempts with his friends to set up a special relationship with St George Bank, the Insurecard exercise and how they compared with Centres of Influence. It was plain from Donald Walker's evidence about these not dissimilar approaches to selling insurance that he would have wanted access to Centres of Influence.
· The practical forensic reality was that it was for defence counsel to challenge the strong prima facie position that had been reached on the evidence that Donald Walker wanted to gain the benefit of access to Centres of Influence.
I am satisfied that, if he had been in the physical and psychological state he was in before the accident when the opportunity presented itself to become involved in the Centres of Influence system, Donald Walker would have seized the opportunity and done well. He may have continued with some cold calling done by himself, particularly if Centres of Influence was lost. His focus, however, would have been Centres of Influence.
Analysis of expert evidence regarding Donald Walker’s loss of earning capacity
Evidence of Mr Donaldson – submissions of defence counsel
Defence counsel attacked the credibility of Mr Donaldson on a number of bases.
Allegation of bias
Firstly, counsel for the second defendant submitted that Mr Donaldson had, in a report provided to Donald Walker in 2001, but not relied upon in the proceedings, revealed a significant bias in favour of the plaintiffs.
There is no doubt that in that document he appears to be an extremely enthusiastic and unquestioning supporter of the Walker brothers and their case. It is not a detached objective assessment by an expert confined to his expertise. His explanation for the content and tone of the report was that it was not his expectation that that report would form part of any evidence in proceedings. Accepting that that was the case, nonetheless it does not explain or justify the content and tone of the report. A bias in favour of Donald and Marcus Walker was apparent at that stage.
The subsequent report provided in 2007, however, and his evidence presented a more detached and considered approach but his approach still showed a lacked of independence. I refer in particular to the fact that his datum point of 1981 was chosen because that was what counsel requested. He described himself as comfortable with that approach (see second defendant’s submission).
Unsuitable starting point chosen
His starting point for commission earned in 1981 was an unsuitable starting point, it being so far removed from the date of the incident. Further, between 1981 and 1993, substantial changes had occurred in the insurance industry. These included:
· Changes in the industry;
· Types of insurance;
· Commission changes;
· Use of information – from 1988 and 1989;
· Use of AWOTE figures;
· Failure to use 1993 information.
Changes in the industry
Donald Walker gave evidence that When he joined National Mutual in Victoria they had probably 2,000 agents Australia-wide. He said he had to build up his clientele in Victoria from scratch. He took various approaches including using the electoral roll, phone books, lists of people who might be joining new jobs and he attempted to join associates for the purpose of getting business. When he left National Mutual in November 1998 the number of agents of National Mutual in Victoria were 180.[355]
[355]Previous year 400.
Changes in types of insurance policies.
When he first joined National Mutual in Tasmania they had a limited type of policy that they could sell – the whole of life policy which had a savings element and a death cover and the policyholder could cash the policy in and receive the surrender value. It was also tax deductible at the time. The other type of policies mainly sold were endowment policies for a selected number of years. There was only a little bit of risk insurance back then for income protection.
By the late 1980s, as endowment and life insurance lost its attraction, agents turned to risk insurance and superannuation. Donald Walker was selling both but did not focus on risk insurance until about 1995.
Commission changes
In addition, in the period from 1981-1993, there were changes in insurance commissions on life insurance which moved the emphasis from the initial premium to the trailer commissions.
Donald Walker gave evidence that the commission arrangements have changed. In Tasmania he received 80% of the commission in the first year and 20% in the second, provided that policy was still current. There is now a higher upfront commission and a trailer commission payment each year as long as the policy is on the books. He said most companies pay the same type of commission. In year one it is about 110% of the annual premium that people pay, year two it varies from 12% to 15% of the premium. In year three it is around 12%. If the premium is indexed it will go up.
Use of information – from 1988 and 1989
Another concern is that Mr Donaldson saw fit to use the limited financial information available for the financial years ending 30 June 1988 and 30 June 1989 for the purpose of determining the percentage of expenses over earnings, but chose not to use those years in determining the appropriate earnings figure for the purpose of his calculations. While this may have exaggerated the cost percentage figures, detrimentally to Donald Walker, the approach taken shows a lack of rigour.
Use of AWOTE figures
As to his use of AWOTE figures, counsel for the second defendant questioned whether they would have resulted in any major difference when compared with the use of the CPI.
Mr Donaldson’s explanation for his use of AWOTE figures appears to have some justification to the extent that Donald Walker was earning commission on selling risk insurance including income protection insurance; for the returns from that work were likely to go up in line with any rise in earnings rather than the CPI figures. This form of insurance, however, only became popular in the late 1980s. On the other hand, a rise in earnings would increase the ability to pay premiums generally. His evidence was that while in the past the CPI figures had risen faster than the AWOTE figures, in recent years the latter had increased at a faster speed. Accepting that evidence, the use of the AWOTE figures might logically be justified in recent years because of the connection between Donald Walker’s insurance earnings and wages. Prior to that, it would, if used, produce a lower increase than use of the CPI.
Mr Donaldson’s approach was also challenged, however, on the basis that his projections from the starting point of the 1981 earnings using the AWOTE figures produced expected earnings in years following which greatly exceeded the actual earnings. For example, for the financial year 1987/1988, there was an excess of approximately $54,000[356] or 42% and for the 1988/1989 financial year an excess of approximately $67,000[357] or 52%. I am satisfied that there were reasons such as driving licence problems and the focus on other business interests which were significant factors in reducing his commission income. It is difficult to accept, however, that, bearing in mind the actual income of approximately $128,000 in each year, such factors could explain such a large difference.[358] The size of the difference has thrown into doubt the validity of using the AWOTE figures.
[356]$182,402 minus $128,231
[357]$196,504 minus $128,985
[358]By 1993 the difference was $237,000 projected and $130,000 actual
Other matters
Failure to use 1993 information
Mr Donaldson said that he was asked not to use 1993 figures. As to those figures, I accept the evidence that in the early 1990s and prior to the incident, there had been adverse publicity in the program “Four Corners” about National Mutual and its agents which resulted in a sharp drop in National Mutual sales. The precise timing of this is not clear but it appears to at least be in the early 1990s and to have adversely affected the 1993 year. Donald Walker’s commissions in 1993 were approximately $130,000. Defence counsel also relied on the alleged acceptance by Mr Donaldson of the proposition that, assuming the Four Corners program was aired in February 1993, it would not have affected receipts for the 1993 financial year. The transcript records him accepting that proposition but it was immediately preceded by considerable confusion on his part on the same question and I have no confidence that his mind was any clearer when he appeared to accept the proposition. I consider it highly improbable that the program did not adversely affect agents in the latter half of the 1993 financial year, particularly those associated with National Mutual, if it was aired in February 1993.[359]
[359]Donald Walker had accepted that it occurred in the first six months of the calendar year 1993. The programme would have had an instant impact.
Other non-representative years
Neither side used the years 1990, 1991 or 1992. It was common ground that 1990 and 1991 would not have been representative because of Donald Walker’s involvement in the other business activities.
I am also satisfied that in the late 1980s, and early 1990s, Donald Walker’s income was affected by the loss of his driver’s licence. It was put by counsel for the first defendant that concessions of Mr Donaldson in evidence contradicted that conclusion. First, it was put that Mr Donaldson conceded that the engagement of drivers had not reduced earnings of the company and that thus it could not affect Donald Walker’s earning capacity. What Mr Donaldson in fact agreed to, however, was that his calculation relating to income was concerned with gross income – expenses were not deducted.
Economic loss of Marcus Walker - Ivey past-loss tables
Mr Ivey produced tables indicating the application of his approach to the assessment of past loss as follows:
Assessment of past loss of income
Alternative 1
Alternative 2
Alternative 3
Effect of the Incident:
30%
60%
90%
Effect of Other Factors:
70%
40%
10%
1994
$0
$0
$0
1995
$6,285
$11,340
$16,129
1996
$6,497
$11,705
$16,735
1997
$6,644
$11,977
$17,127
1998
$6,876
$12,377
$17,766
1999
$7,036
$12,624
$18,128
2000
$7,250
$13,045
$18,615
2001
$7,688
$13,970
$19,793
2002[360]
$13,804
$24,772
$35,348
2003
$15,669
$27,993
$39,775
2004
$17,670
$31,422
$44,208
2005
$19,435
$34,643
$48,913
2006
$21,263
$38,176
$53,811
2007
$23,791
$41,907
$59,878
Total
$159,910
$285,951
$406,225
[360]The prior years, Mr Ivey used the adjusted Monash University earnings. He also reduced them by 40% to allow for the disruption caused by the plaintiff’s care of his mother. From 2002 onwards he used university graduate earnings in recognition of the feat and Marcus Walker then had, his obligation to care for his mother having ceased.
Assessment of superannuation loss
Alternative 1
Alternative 2
Alternative 3
Effect of incident
30%
60%
90%
Effect of Other Factors
70%
40%
10%
Loss of Superannuation
$13,050
$26,099
$39,149
This figure was arrived at on the basis of a calculation that the salary and superannuation lost by
Dr Walker in 2007 dollars was $75,460 per annum. This was based on Mr Ivey’s figures in his second report, grossed up to 100% (reflecting a total loss of capacity) and deducting 6% for work related expenses saved. The annual figure translates to a weekly salary of $1,450. Using a retirement age of 65 and 5% tables (multiply 428.6) a present value of $621,470 was arrived at.
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