GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v RIX SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY ACJ, SAMUELS and CLARKE JJA 7 July 1988, 15 July 1988 [1988] NSWCA 54 KEY WORDS: NEGLIGENCE — DAMAGES — QUANTUM — NO QUESTION OF PRINCIPLE NEGLIGENCE — employer's liability — employed solicitor — solicitor required to handle suitcase with large number of files — employer's duty to provide safe system of work — supervisor's grudging acquiescence in use of courier — held: evidence supports failure to provide safe system — no error — no question of principle — appeal (from Yeldham J) dismissed. DAMAGES — quantum — solicitor employed by GIO — injury to right shoulder — trial judge finds "fragile personality" — appeal and cross-appeal — description as "fragile" not supported by evidence — appeal dismissed — cross-appeal allowed — allowance for loss of earning capacity increased — no question of principle. PRACTICE — Court of Appeal — damages appeal — non jury trial — reassessment by Court of Appeal — not necessary to embark on that reassessment of all damages — Robinson v Riley [1971] 1 NSWLR 403; Richards v Lincoln, unreported, CA, 22 September 1987; (1987) NSWJB 176 applied. Kirby ACJ I agree with Clarke JA. Samuels JA I agree with Clarke JA. Clarke JA The respondent completed an Arts/Law Degree at Macquarie University at the end of 1980 and was admitted as a solicitor in July 1981. On 10 July she began work as a Grade 1 Solicitor with the appellant. By September 1982 she had progressed to Grade 2 and worked in the District Court section of the appellant which had its offices on 13th Floor of the St. James Building in Elizabeth Street, Sydney. Initially she was responsible for the preparation and presentation of cases which were to be heard, at sittings at Wollongong, Cooma, Bega, Moruya and Nowra. She did not herself appear in those cases but did instruct counsel to do so. In August or September 1982 the Gosford circuit was added to those already her responsibility. She first attended Gosford District Court instructing counsel on Monday 20 September 1982 and was engaged during that week instructing counsel in, and mentioning, cases being heard in that Court. At the end of the circuit she began to suffer significant symptoms in her right shoulder and neck and on | October 1982 she consulted Dr Stone, a general practitioner, who was the partner of her usual doctor, Dr Pollitt, who was then away, with a history of pain in the right shoulder which had come on after carrying a heavy suitcase. She has continued to suffer pain in the shoulder from that time and has been under fairly constant treatment both for her physical condition and a depressive reaction. Taking the view that her shoulder problems had been caused by the repetitive carrying of a heavy suitcase full of the appellant's files she claimed damages against the appellant asserting that her injuries resulted from its negligence. 2 UNREPORTED JUDGMENTS Her case was heard by Yeldham J who, on 15 October 1987, found in her favour and directed the entry of judgment for the sum of $384,957.22. The appellant has appealed contending that his Honour erred in finding that it was liable and, in addition, asserting that there were errors in the assessment of the damages. It is convenient to deal first with the issue of liability. The evidence which was accepted by his Honour established that the respondent was required to take to Gosford Court House a large bag or suitcase, which had been supplied by the defendant, into which she had placed between 45 and 60 files. The case was about 22.5 cms deep, 53 cms high, 83 cms wide and when filled with the files weighed approximately 26 kilograms. The respondent, at the time, was a 40 year old woman who was only five foot four inches in height and weighed about nine and a half stone. During the week of the sittings she was obliged to carry the suitcase to and from the Court House on a number of occasions. It is true that she was assisted in this task by counsel instructed by her but that is of littke moment as his Honour accepted that her carriage of the suitcase caused her shoulder condition and there is no appeal from this finding. Her case was that there was no proper system in operation designed to ensure that she was able to have access to the files at court without being exposed to the risk of injury resulting from carrying the case herself. In particular she asserted that the respondent should have set in place a system whereby a courier service transported the case full of files to and from the court and instructing officers directed to use this service. Alternatively, the relevant solicitors should at least have been instructed of the availability of couriers. The appellant's denial of negligence was based upon an assertion that couriers were available for use by instructing solicitors at all relevant times and the system enabled each officer to use these couriers at their discretion. It was, according to the appellant's case, left to the judgment of each individual solicitor whether and when to use couriers. In the particular circumstances of this case it had been left to the discretion of the respondent to decide whether or not to use a courier which was available if she elected to take advantage of its services. Furthermore the appellant pointed out that the evidence established that the respondent was of superior intelligence and accordingly it could not be said that it was negligent to leave to her the decision whether to use a courier or not. Accordingly the Court was required to determine whether the respondent had made good her claims that couriers were not generally available or, if they were, no system was in operation whereby employees were directed to use the couriers or, at least, instructed as to their availability. His Honour found that the evidence supported the conclusion that in fact couriers were available to transport suitcases in September 1982 but added that "it was only those who were fortunate enough or inquisitive enough to ascertain this fact who became aware of it". He continued: "Certainly no general information was disseminated as to the availability of couriers or as to the desirability of using them for heavy bags, and no instruction was ever given that they should be employed in circumstances analogous to those encountered by the plaintiff in the Gosford District." He expressed his ultimate finding in these terms: "Tn failing to instruct the plaintiff that couriers were available to be used, and in particular in failing to require her to use them for the transport of a heavy case such as that involved at Gosford, it being readily foreseeable that serious injury URGOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v RIX (Clarke JA) 3 might result, the defendant was negligent. What was done after the plaintiff's injury is eloquent evidence of what could and should have been done beforehand." Senior Counsel for the appellant argued that this ultimate finding by his Honour was affected by error. Pointing out that his Honour had found that couriers were available at the relevant time, and that the failures identified could only be regarded as causative of the respondent's injuries if the evidence supported the conclusion that the respondent was ignorant of the availability of couriers, he sought to demonstrate that in fact the evidence was quite to the contrary. That is, that it established that the respondent was aware of that availability of couriers at all relevant times. There was clear evidence, according to its counsel, that the respondent was well aware of the availability of couriers. She had used one on the Friday night before the start of the circuit. The learned judge had, however, been led by a mistaken view that the respondent had described the consent of her superior, Mr Thompson, to her use of a courier on the evening of Friday 17 as "grudging" to conclude that she was ignorant of the general availability of couriers. Counsel pointed out that nowhere in the evidence was there to be found any statement by the respondent that Mr Thompson had given a "grudging consent" and that consequently his Honour's derogatory description of Mr Thompson's response was both unjustified and led to an erroneous view of the extent of the respondent's knowledge. It is unnecessary to dwell on the submission concerning the grudging nature of the consent. That is because the fate of this appeal depends upon the submission that the implicit finding that the respondent was unaware of the availability of couriers was incorrect. However, I should not leave the subject without saying that I can see nothing wrong with his Honour's description. What occurred on Friday 17 was that the respondent was told fairly late in the piece that there was a special fixture to be heard on Monday about which she had not previously been informed. She was therefore placed in a position where she had to prepare a large number of cases including one which had been fixed to commence on the first day of the sittings. Accordingly she was very busy on the Friday afternoon and evening. Having packed the suitcase full of files and wishing to continue work on the case which was specially fixed for hearing she said to Thompson that she would have to get a courier to take the bag home. She was then asked: "Q. What did Mr Thompson say? A. He assented, did he? She answered: "He didn't say anything, he just grunted." While obviously I was not present when Mr Thompson acted in this manner I would myself have been disposed to the view that he was being non committal. However, it does appear that the respondent interpreted the grunt as a form of assent, albeit somewhat inelegant. In these circumstances I do not think it erroneous to describe the respondent as understanding that the assent was grudging. The only significance of the events of the 17th was that they may have tended to show that the respondent was aware of the general availability of couriers. If that evidence, when regarded as part of the totality, supported the conclusion that she did have that awareness then it may be that the description "grudging consent" used by his Honour served to deflect him from the true nature of the evidence. However, I do not believe that the respondent's evidence concerning Thompson's assent on the 17th to her use of a courier supports a conclusion that 4 UNREPORTED JUDGMENTS she was aware of this general availability of couriers. Nor do I think that his Honour failed to appreciate its significance. The judgment under review is comprehensive and includes lengthy citations of the relevant evidence and a detailed exposition of his Honour's reasons. In my opinion those reasons are compelling and are not affected by error. While I believe that an adoption of those reasons would be sufficient to dispose of this appeal I feel that I ought, in deference to the careful arguments of senior counsel for the appellant, to state shortly the reasons which lead me to the same conclusion. The appellant's primary submission that the respondent was aware of the availability of couriers depended upon the evidence of their general availability, which was accepted by his Honour, and the respondent's concession that she had used a courier to take the case to her home on the Friday evening before the commencement of the circuit. Obviously the use by a person of a facility may in particular circumstances provide cogent evidence of that person's knowledge of the general availability of that facility. Whether that will be so in a given case depends essentially on the particular facts. In the present case the respondent gave evidence that she believed that instructing solicitors were permitted to use couriers only in_ special circumstances. The appellant's argument invited the court to reject that evidence as inconsistent with the weight of evidence concerning the knowledge of employees of the appellant of the fact that couriers were available. However in my opinion the argument proceeds upon a mistaken view of the weight of evidence of the knowledge of employees. The respondent called evidence from a number of employees and former employees of the appellant to establish that there was no system in operation for the carriage of heavy suitcases to country circuits by couriers. While some of these witnesses said they were aware of the availability of couriers they tended to support the respondent's own evidence that couriers were only to be used in special circumstances. The evidence from those witnesses is extensively quoted in Yeldham J's judgment and it is sufficient for me to say that they included two supervising solicitors, Mr Dunn and Mr Silvas, and the the respondent's predecessor in charge of the Gosford District Court circuit. The latter, Miss Gourlie, gave evidence, which was of particular relevance given the statements by other witnesses that new employees were encouraged to learn from their predecessors on the circuit, to the following effect: "Q. Did you ever use couriers? A. No, never. Q. Why not? A. I did not know that couriers were available. To my recollection it was never discussed." Both Dunn and Silvas made it quite plain that so far as they were aware there was no system under which employees were instructed of the availability of, or directed to use, couriers for the transportation of heavy cases. Furthermore his Honour accepted the evidence from other witnesses called in the respondent's case who were, according to his Honour, "unanimous in saying that they had not been given any instructions at any time on the manner of getting files to country circuits when there were a large number of them." His Honour added: "it was left to them to ascertain, whether by discussion with others or by some other means, how this should best be done." URGOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v RIX (Clarke JA) 5 This evidence and finding is to be contrasted with the uncontradicted evidence which established that following, and because of, the respondent's injuries a definite system was employed in the appellant's organisation under which solicitors were instructed to use couriers whenever they were obliged to carry heavy cases full of files to country courts. His Honour accepted the evidence to which I have referred and in these circumstances it is not to the point to say that there was other evidence which was to a contrary effect. The evidence which was accepted denied the respondent's knowledge of the existence of that system now said by the appellant to have been in place. Furthermore it seems to me that the appellant's arguments are based upon a false premise. That is, that it was sufficient for the appellant to make couriers available whether or not it directed employees to use the couriers in appropriate circumstances or implemented a system designed to ensure that employees knew of that availability. The obligation cast upon the appellant employer was to take reasonable care to employ and maintain a proper system of work. I do not understand how it could be said that that obligation had been complied with simply by the provision of means for the transportation of heavy suitcases where the availability of those means were not communicated to employees in accordance with the system. Obviously an essential part of any system is the communication to the employees of the availability of means for the carrying out of the task under consideration and, depending on the circumstances, the issuing of instructions or directions for the use of those means. The system operated by the appellant in this case was clearly deficient in that no provision was made at the relevant time for ensuring that employees were made aware of the availability of couriers. Indeed the thrust of much of the evidence is that many employees believed, as did the respondent, that you had to make a good case for a courier before you could persuade the appellant to provide one for the task at hand. It must also be borne in mind that the provision of couriers involved expenditure of public moneys and this fact alone would have tended to create an apprehension in employees who wished to use a courier and who were unaware of their general availability. Accordingly the appellant has failed to make good its challenge to his Honour's judgment on the question of liability. The appellant also challenged two aspects of the assessment of the damages. Its counsel complained that his Honour had failed properly to evaluate the respondent's residual working capacity, which his Honour assessed at $100,000 and had awarded an excessive amount in respect of general damages. The complaints made about these two aspects of his Honour's judgment were developed in general terms in the light of the fact that each involved a broad assessment by his Honour of components which could not, in the circumstances of this case, be determined with any measure of accuracy by the use of mathematical tables. Subject to what appears hereafter I can see no error in his Honour's approach and I am content to adopt his reasoning for his conclusion in both respects. The assessment of the interference with the future earning capacity of the respondent was also the subject of a cross appeal. Arguments were advanced in support of the cross-appeal which challenged two aspects of his Honour's approach. In the first place it was said that his Honour erred in increasing what was said to be the normal 15 per cent allowance for the vicissitudes of life to 25 per cent because of "her somewhat fragile personality", and in the second place 6 UNREPORTED JUDGMENTS that there had been no allowance for the vicissitudes in respect of the residual earning capacity. It was put that in order to be consistent it was necessary to make an appropriate allowance in respect both of the preaccident and the residual earning capacity. There is no doubt that his Honour decided to make a larger than usual discount because of his view that the respondent's previous visits to a psychiatrist demonstrated that she had a somewhat fragile personality. It is submitted that that conclusion is not supported by the evidence. There is no doubt that the respondent had had a fairly eventful life. She married in 1961 shortly after leaving school. By 1966, having had two children, she was active in her husband's landscaping business and was undertaking an accountancy course at Hornsby Technical College. Her participation in the landscaping business continued for many years even beyond her divorce from her husband. The work that she did included the bookwork, the preparation of income tax returns, the organisation of materials for use in the landscaping and the hiring of sub-contractors. She did not complete her accountancy course but in 1973 commenced a part-time Arts Degree at Macquarie University. In 1975 she was divorced and it was during this year that she first saw the psychiatrist Dr Argall. The evidence concerning that consultation appears in one of his early reports which simply said that she had first consulted him at the time of her divorce for counselling about her marital issues and then had not seen him until she sought advice about handling her daughter's illness. She graduated with an LLB in 1981 and commenced her employment with the appellant soon after. During the early part of 1982 she consulted Dr Argall again. The doctor had this to say in a report which he prepared in May 1984 relating to her post-accident depression. "The psychological problems that Mrs Rix is suffering from were not present during the early part of 1982. I am able to make a direct comment on that because I had seen her at that time when she sought counselling about handling the management problems presented by her daughter Elizabeth who suffers from a bi-polar affective disorder which has created many management problems at the family level. I had several discussions with Mrs Rix about the nature of her daughter's problem and about ways of coping with it. At that time early in 1982 she was coping not only with the problems of her daughter but also with full time work and the running of a household all very competently. The change in her psychological state since her arm injury is very marked. I should comment in passing about her daughter's affective illness. It is a biologically based affective disorder of bi-polar type and the history indicates that the genetic predisposition for this can probably be traced through Elizabeth's father's family. There is no history of a similar disorder in Mrs Rix or in her family or in her family of origin...... She has a strong history of coping and she is not a problem avoider." In a later report Dr Argall returned to the topic of her problems at the time of her marriage breakdown in 1975. He commented: "She had a typical mixed affective reaction being both tense and sad over the loss of her marriage and of the hope she had originally held for it, and particularly distressed at having had to take the initiative of dissolving the unhappy situation of their incompatibility." The appellant referred the respondent to Dr K H Dyball for assessment and his observations were quite inconsistent with the viewpoint that the respondent had a fragile personality. He said: "Assessing this woman psychiatrically depends URGOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v RIX (Clarke JA) 7 exclusively on the realistic diagnosis with regard to her neck and arm. She is clearly, on the history as given, a woman able to tolerate quite a deal of stress and this includes the marital break-up, a single parent role, studying at university and a serious illness in her daughter." The evidence which I have quoted constitutes substantially all the evidence available upon which to judge the condition of the respondent's preaccident personality. In my opinion it does not support the existence of a fragile make-up. Not only does it explain the reasons for her visits to Dr Argall in terms which are not supportive of the conclusion of fragility but it demonstrates the opinion of both psychiatrists that the respondent was relatively robust and had managed before the accident to take a number of problems in her stride. It should not be overlooked that Dr Argall was in a position of great advantage. He had first seen the respondent about seven years before her accident and had sufficient contact with her to be able to offer to the court informed assessments of her psychological state before the accident and the fairly dramatic effect which the accident had upon it. He was in no doubt that she had a strong history of coping and was not a problem avoider and the only other evidence on the topic, that of Dr Dyball, supported his viewpoint. In these circumstances I am driven to the conclusion that his Honour's description of her personality before the accident as "fragile" is not supported by the evidence. On the contrary the evidence establishes affirmatively that she had quite a robust make-up. Accordingly the increased discount which was based solely on the fragility of her personality cannot be justified. The second complaint which was made requires an examination of the steps taken by his Honour in arriving at an allowance of $130,000 for this component. Various tables were handed up to his Honour which provided a number of differing figures which represented the sum required to return to the respondent a particular weekly loss for the period of her probable working life upon the basis that the sum was invested at 3 per cent and a discount of 15 per cent for the vicissitudes was applied. His Honour accepted that table which demonstrated a loss of $262,523 and held that figure should be accepted as representing the value of her preaccident earning capacity after, as I have said, a discount had been made of 15 per cent for the vicissitudes. Because of the view that he had formed that an additional discount was necessary he reduced that sum to $230,000. He then directed his attention to the residual capacity and, noting the difficulties of any mathematically precise calculation and taking into account a number of factors to which he had earlier referred in his judgment, his Honour assessed that at $100,000. The difference of $130,000 was the allowance actually made. Counsel for the respondent submitted that the approach demonstrated inconsistency. There had been an effective 25 per cent discount for vicissitudes in the assessment of the preaccident capacity but no discount at all in respect of the post-accident capacity. Counsel submitted that the learned trial judge had departed from the normal procedure of calculating the value of pre- and post-accident capacity and then deducting the latter from the former before applying the discount for vicissitudes and had thus failed properly to take account of the vicissitudes when considering the post-accident capacity. Counsel for the appellant sought to answer this charge by saying that his Honour had made it plain that he had not failed to make an appropriate deduction by saying that he was taking into account matters to which he had previously adverted. Whilst I was initially minded to the view that his Honour might have 8 UNREPORTED JUDGMENTS taken that course I have decided, on reflection, that the matters to which his Honour was directing attention were matters of fact and were quite unrelated to the discounting problem. It must be accepted that there is no express statement in the judgment to the effect that his Honour had regard to the vicissitudes on both sides of the formula and I think the better view is that the procedure actually adopted has led to an omission to consider the discount in assessing the post-accident capacity. The respondent also sought to challenge his Honour's award of $5,600 to cover future medical, hospital and allied expenses. The gravamen of this complaint was that his Honour only directed attention to the need to compensate the respondent in respect of five years future consultations with Dr Argall and failed altogether to have regard to the strong possibility that she would need to incur expense for treatment in respect of her physical condition. That treatment would, so the argument ran, include physiotherapy, analgesic tablets and irregular visits to medical practitioners. There is necessarily a large element of uncertainly regarding the respondent's future and the extent to which she will need to seek medical and hospital treatment both in respect of her physical and her psychiatric conditions. It may well be, for instance, that her mental state recovers much more quickly once the case, which was conceded to be a very serious complicating factor, is concluded. In that event his Honour would have awarded too much in respect of compensation for psychiatric treatment. On the other hand she may need all the treatment his Honour said. Looking at the matter overall, as one is bound to do, I do not think it can be said that the allowance which was actually made represents an erroneous estimate of the compensation which should be awarded for future medical expenses. In saying that I bear particularly in mind the possibility that any need to incur expense in respect of her physical condition may well be compensated for by an earlier recovery from her psychiatric disability. I am therefore not persuaded that the Court should interfere with this component of the damages. It follows that the only area of the damages award which has been shown to be in error is the allowance for the impairment of future earning capacity. This aspect of damages may sometimes overlap with, for instance, the allowance for general damages. On those occasions it would not be practicable to reassess only one component. In this case, however, the matters to which attention has been drawn seem to me to be completely distinct from the award for general damages or any of the other components in the final award. Accordingly, it is not inappropriate to reassess this single aspect of the damages rather than to embark on a total reassessment of all the damages. (See Robinson v Riley, [1971] 1 NSWLR 403 and Richards v Lincoln, NSW Court of Appeal, unreported, 22.9.87). In addition, the parties have agreed that the Court should, in the event that this aspect of the damages could not be supported, limit the reassessment to that component which is in question. In the particular circumstances of this case this is a sensible course and I see no reason for not approaching the matter upon the basis of the agreement of the parties. The trial judge adopted calculations based upon the premise that respondent would work until 60 years of age and would be promoted to Grade IV wage levels. That seems to me to be an appropriate approach and the figure which is derived from the use of the 3 per cent tables is $308,851.72. It is necessary to deduct from this the appropriate allowance for the residual capacity which, like his Honour, I am satisfied she now has. She has not done any significant URGOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v RIX (Clarke JA) 9 remunerative work since ceasing employment shortly after the accident and an assessment of the remaining capacity is difficult. However I agree with the trial judge that the probability is that she will undertake some limited or part-time employment, possibly from her home, which will return earnings significantly less than would have been earned in full employment. For myself, and adopting the reasons given by his Honour, I would assess her remaining capacity as justifying an allowance of $100,000. Deducting that sum from $308,851.72, applying the 15% discount, which I regard as appropriate in this case, and rounding off results in a figure of $175,000 which, in my opinion represents a proper award for the impairment of her earning capacity. This sum is $45,000 more than his Honour's allowance and adjusting the amount of the judgment to take account of this sum results in an award of $429,957.22. The orders I would propose are as follows: 1. The appeal be dismissed. 2. The cross-appeal be allowed. 3. The judgment below set aside and in lieu thereof direct the entry of judgment for the respondent in the sum of $429,957.22 to date from 15 October 1987. 4. The appellant should pay the respondent's costs of the trial, the appeal and the cross-appeal. 1. Appeal dismissed. 2. Cross-appeal allowed. 3. Judgment below set aside and in lieu thereof direct the entry of judgment for the respondent in the sum of $429,957.22 to date from 15 October 1987. 4. Appellant to pay the respondent's costs of the trial, the appeal and the cross-appeal. COUNSEL: Appellant: M IRELAND QC/P PERRY Respondent: B GROSS QC/R GRACE SOLICITORS: Appellant: HUNT & HUNT Respondent: G H HEALEY & CO