GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES vy KELLY SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, CLARKE and HANDLEY JJA 15 October 1991, 14 November 1991 [1991] NSWCA 112 DAMAGES — schizophrenia — motor vehicle accident — whether caused symptoms of acute schizophrenia — whether aggravated symptoms — plaintiff's medical reports read — defendant's medical witness called — judge prefers opinions of plaintiff's medical witnesses — opinions based on facts different from those proved at trial — basis of reception of facts — held: (1) The judge erred (a) in holding that the expert evidence supported a finding that the accident had caused (as distinct from exacerbated) the schizophrenia; and (b) In using the 3% tables as a guide to determining the award for impaired capacity; (2) Having regard to the differences between the evidence proved at trial and the factual bases for the plaintiff's medical experts' opinions, the Court of Appeal could not safely proceed to reassess damages. Ramsay v Watson (1963) 108 CLR 642; Paric v John Holland (Constructions) Pty Limited (1984) 62 ALR 85 consd; (3) Accordingly new trial limited to damages ordered. Kirby P I agree with Clarke JA. Clarke JA The respondent sued to recover damages in respect of injuries suffered by him in an accident on 10 October 1985 when a motor cycle upon which he was a passenger collided with another vehicle. The major physical injury suffered by him was a fracture of the left femur but he also claimed that the accident had caused or exacerbated a condition of schizophrenia from which he continued to suffer. Liability for damages was admitted by the appellant and the damages were assessed by Kirkham DCJ in the sum of $237,957.30. That amount was made up of the following components: $37,957.30 for past out of pocket expenses and loss of wages, $50,000 for general damages and $150,000 for the impairment of future earning capacity. The appellant has challenged the last two figures, complaining that they are excessive. Two substantial grounds of appeal were argued. First, the trial judge erred in concluding that the schizophrenia had not manifested itself prior to the accident and secondly that, in any event, his Honour had erroneously referred to the 3 per cent tables, rather than the 5 per cent tables, and this had led him to award an excessive amount in respect of the respondent's impaired earning capacity. Following the accident the respondent was taken to Concord Hospital where he submitted to two operations. On 10 October a Steinmann pin was inserted in his left tibia and on 23 October there was an open reduction and plate fixation of his fractured left femur. Between the two operations the respondent developed haemoptysis which continued over a few days. The respondent was discharged from hospital on 12 November under the care of Dr Lennon. He was readmitted to hospital in April 1987 when the plate was removed. Following his discharge from hospital in April 1987 he developed symptoms of acute schizophrenia and in August 1987 he was referred to a psychiatrist, Dr Michael Ng. A diagnosis of schizophrenia was then made and neuroleptic 2 UNREPORTED JUDGMENTS medication prescribed. He subsequently came under the care of another psychiatrist, Dr Beckett, and at the time of trial was in the care of yet another one, Dr Keshava. The major issue upon which counsel fixed at the hearing was the relationship, if any, between the accident and the schizophrenia. Very little evidence was given concerning his leg disability. The respondent said that he had walked with a limp following the operation until about a year before the trial. At the time of the hearing he felt physically capable of going to work and seems to have made little of his leg problems. Dr Conrad, who was called by the respondent, thought that he was left with a weakened left leg but was fit for light work not involving a lot of standing, walking, going up and down stairs or ladders, or heavy repetitive use of the left leg. Dr Barry, whose report was tendered by the appellant, thought that he may be slightly less active than before the accident but would be fit for all normal forms of work and recreation. The trial judge seems to have accepted Dr Barry's view for he said: "Orthopaedically it would seem to me there is very little in the way of economic loss that would flow from his orthopaedic injuries, that is his left leg fracture. The only real component in the question of future economic loss really is in the area of his psychiatric condition." The respondent had smoked marijuana and drunk alcohol from about the age of 17. This had caused numerous disagreements between himself and-his parents. Prior to the accident his work record had not been particularly good although it must be said that he worked regularly for two years after leaving school at the end of 1981 and lost his apprenticeship when his employer went into liquidation. Thereafter he had a number of jobs and fairly lengthy periods of unemployment. Some jobs he left simply because he was bored with the work. One job he lost because he took a day off work without permission to go surfing. In October 1984 he was involved in a car accident when he hit his head and was knocked out and during 1985 he left home for about five months when he went to live with a girlfriend. In his judgment his Honour indicated that he was not impressed with the opinion of Dr Maguire, who had given a report to and been called by the appellant, that because no symptoms of schizophrenia emerged within three weeks of the October 1985 motor vehicle accident there was no causal connection between the accident itself and the appearance of schizophrenia. His Honour's actual finding, however, was as follows: "... the motor vehicle accident was causative in a substantial sense of the production of schizophrenic symptoms or, expressed another way, the unmasking or provocation to the point of emergence of this condition to the stage at which some considerable time after its emergence the condition was accurately diagnosed and properly treated." One of the major reasons which led his Honour to that conclusion was his finding that the respondent's long term marijuana usage up to the date of his injury "had not produced any symptoms of schizophrenia that were identified to me". It is the last finding which is the subject of the appellant's first ground of appeal. What is submitted is that the great preponderance of the evidence established that the respondent was suffering from schizophrenia prior to the accident, and that it did no more than cause a temporary exacerbation. The UBMVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v KELLY (Clarke JA) 3 question which this submission raises is a difficult one but for reasons which will, I think, become obvious I will put it to one side for the moment and turn to the second ground. That is, that his Honour wrongly used the 3 per cent tables as a guide in determining the award for impaired earning capacity. This error was conceded by Mr Donohoe, senior counsel or the respondent, and the question arises what consequences flow from it. The trial judge did not seek to assess the amount to be awarded for impairment of earning capacity directly by reference to a weekly loss capitalised with the use of discount tables. Rather he took the approach that guidance could be afforded by reference to those tables saying: "As some sort of guide reference to the 3 per cent tables show that $100 per week as a loss represented in the tables over a period of forty years would be a component of $122,500. It is impossible for me, as I have said, on a dollar-for-dollar, week-by-week basis, to calculate his future economic loss arising out of his condition due to the injury so I must provide him... with a buffer... It is my view that the figure of $150,000 in part of his general damages would be a fair, just and reasonable estimate as a buffer...". One approach would be simply to carry out a mathematical correction. That could, perhaps, be effected by substituting for the sum of $122,500 the figure of $91,700 which represents $100 for forty years capitalised at 5 per cent and reducing the award of $150,000 by $30,800. I do not think, however, that that approach is open to this court. It involves an element of speculation and attributes to his Honour a use of the guiding figure which might be greater than the use which he actually made. Furthermore, his Honour said little about the effect of the accident on the respondent's future mental condition and its consequent impact upon his probable employment in the future. His Honour did, however, observe that his pre-injury net wage was $210 per week and by the adoption of $100 his Honour would seem to have indicated that there was a permanent loss of about 50 per cent of capacity or, to put it another way, that the appropriate buffer should equate that percentage. In my opinion the error which was made requires that the damages be re-assessed and a further question arises whether that should be carried out by this court or whether there should be a new trial. Both parties have asked that this court reassess damages and, in the normal event, that would be the appropriate course to follow. But there are problems in following that course in this case which are exemplified by the first ground of appeal and which require that the question raised by that ground be submitted to closer examination. In his particulars the respondent claimed that the onset of schizophrenia had resulted from the accident. The trial judge substantially accepted this claim. His Honour thought that the accident was causative in the sense that it produced schizophrenic symptoms which had not been present before the accident. The respondent did not call any medical witness but tendered reports of two psychiatrists and a psychologist, Mr Goard. Neither the psychiatrists, Drs Beckett and Fischer, nor Mr Goard expressed the opinion that the accident had caused the respondent's schizophrenia. What was suggested was that the symptoms of schizophrenia had emerged prior to the accident and that its effect had been an aggravating one. For instance Dr Emanuel Fischer, whose opinion was set out in full in the judgment, noted that: "... some four years ago (in 1984) he had an 4 UNREPORTED JUDGMENTS admission to Rozelle Psychiatric Centre, where he remained for a couple of days. He was also seen but not admitted at Gladesville Psychiatric Hospital. I was told that since the accident he has markedly deteriorated and his mental state particularly so, since the plate from his fractured femur was removed.' In Dr Fischer's opinion: "There is no doubt whatsoever that Mr Kelly is suffering from a schizophrenic illness. He presents with the classical symptoms of that disease. He suffered from schizophrenia prior to the accident but there is equally no doubt that since the accident he has markedly deteriorated." Dr Beckett, who was a treating psychiatrist, noted the following history: "Four years ago he lost his apprenticeship as a wood machinist. Either at that time or subsequently he became a heavy user of alcohol and marijuana. His behaviour deteriorated and he was asked to leave home. At a later date it was realised that he was suffering from serious psychological problems. He was taken to Gladesville Hospital but was apparently not admitted." In summing up the history he says: "It is difficult to say precisely when the illness began. It is likely to have been present for some years and may well have been present before the accident in 1985." In his prognosis he returns to the causal nexus between the 1985 accident and the schizophrenia saying: "T cannot argue that the accident precipitated the illness in the first place: the history is too indefinite to comment either way. Once the illness had developed, however, a number of factors are likely to have contributed to the picture of recurrent relapse and, therefore, to the picture of increasing chronic disability. These factors would include the following the stress and distress of the accident... I cannot offer an opinion as to the relative importance of these disparate factors. I can only say that the accident and injuries must have significantly contributed to Mr Kelly's present psychiatric disability." The opinions of these doctors obviously depended to a large extent upon the history which in each instance was given by the respondent and his parents. An obvious matter of significance in Dr Fischer's opinion that the respondent suffered from schizophrenia prior to the accident, and Dr Beckett's opinion that the condition may well have been present before the accident, was the information that the respondent had been taken to Gladesville Psychiatric Hospital and, in the case of Dr Fischer, Rozelle Psychiatric Centre, prior to October 1985. It is difficult to know, however, whether Dr Fischer based his opinion only on that information or whether there were other factors which played a part. It is unlikely that the doctor based his conclusion on the visits to Gladesville Hospital and the Rozelle Psychiatric Centre alone for those visits do not necessarily indicate schizophrenia. Dr Beckett on the other hand was clearly influenced by a number of the factors which he mentioned. These included the heavy use of alcohol and marijuana, the deterioration of behaviour and the fact that he was asked to leave home prior to the accident. In addition to those factors it is clear that Dr Beckett was told, either by the respondent or one of his parents, that it was realised prior to the accident that he was suffering from serious psychological problems and that he was taken to Gladesville Hospital. But as Dr Beckett points out there was no indication of the nature of the problems from which the respondent was suffering at the time he was taken to Gladesville Hospital. In the end it was the vagueness of the history that caused Dr Beckett to have reservations on the question of causation. UBMVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v KELLY (Clarke JA) 5 What is clear, in my opinion, is that the expert evidence called by the respondent did not support a finding that the accident caused the schizophrenia. On the other hand that evidence did provide powerful support for the conclusion that it aggravated or exacerbated that condition. I should add that Mr Goard did not feel able to express a firm opinion on the question whether there was any nexus between the accident and the developing schizophrenia. The appellant tendered the report of a psychiatrist, Dr Maguire, in which he noted that the respondent had used marijuana and alcohol and said: "Over time his behaviour deteriorated and there was a lot of conflict at home to do with violent and aggressive outbursts. He also became disinterested in work and his parents found it difficult to get him up in the mornings. Following one particular outburst he was taken to Gladesville Psychiatric Hospital for assessment but remained there only one day." These observations clearly related to the period prior to the accident. Dr Maguire then offered the following opinion: "On the basis of all the available information and my assessment of him, I believe Mr Kelly suffers from a chronic paranoid schizophrenia and that this developed in an insidious manner shortly after he began abusing marijuana when he turned sixteen. I believe the earliest manifestation of this disorder was the behavioural difficulties his parents described, such as aggressive behaviour as well as lack of motivation and difficulty in getting him up for work in the morning. One can therefore say the motor bike accident played no part in provoking or causing the onset of this disorder." Dr Maguire then went on to say that he thought it was reasonable to accept that periods of stress following treatment, in particular the plate removal operation, caused a deterioration in his condition and led to the acute symptoms, involving hallucination, which developed in the months following that operation. The doctor summed up his view in these terms: "T believe Mr Kelly was suffering from chronic schizophrenia prior to the accident and the accident played no part in provoking this disorder." All of these doctors, therefore, tendered opinions which on the issue under discussion were markedly similar. The respondent had suffered from schizophrenia prior to the accident. Perhaps it could be said that Dr Maguire's evidence was qualified by his later oral evidence but, leaving that to one side for a moment, the views which they expressed were quite inconsistent with his Honour's conclusion that there were no symptoms of schizophrenia until the accident which, together with the treatment, triggered the development of symptoms. In his oral evidence Dr Maguire adhered to the viewpoint expressed in his report. He said, for instance: "Q. What about in the case of this patient, how would you define or diagnose the nature of his schizophrenia? A. Well, my impression from the history - and of course that is all I have to go on since I didn't see him years ago - is that he has had a slow and insidious onset to his disorder and that it progressed to a point where he had a more florid presentation of the symptoms, about a year or so after the accident, and once anti-psychotic medication was instituted he lost the positive symptoms of schizophrenia; though to my mind he still shows some of the, what we call the negative features that can be present, such as slowness of thinking and lack of motivation and that sort of thing. So that is my impression of how his disorder has progressed." 6 UNREPORTED JUDGMENTS In cross-examination he was asked whether his understanding that the respondent had been given to violent and aggressive outbursts before the accident was significant to his conclusion. He agreed that it was and conceded that if that history was incorrect his opinion would be affected although to what extent he did not say. At the conclusion of his cross-examination he was asked some questions by the trial judge and because the first question and answer seem to have been regarded as important I set them out in full: "Q. Doctor, just so that we are on all fours and I understand the broader brushes and the broader strokes of your evidence, the condition of schizophrenia, is a condition which pre-exists in a person but does not manifest any signs of the condition or the illness until some sort of emotional or physical trauma brings about or triggers a manifestation of symptoms or, in the alternative, can an emotional or physically traumatic experience induce the condition per se? A. Well it generally starts off as a genetic or a theoretical predisposition to the disorder, it is a vulnerability of the nervous system. In most cases - especially in the early onset - it normally comes on in the late teenage/early twenties years - in most cases it comes on with the normal stresses of life, leaving school, starting work; a very common trigger starts it tickling along - leaving home, getting sacked from a job, an emotional break-up - and in most cases, as I say, it just evolves. The evolvement of it can be hastened by a physical insult such as drug usage - not specifically alcohol, alcohol I don't think really plays a part in bringing about schizophrenia - but certainly marijuana is notorious for it and LSD is notorious, and amphetamines, which he hasn't used, they are notorious for bringing out schizophrenia. In terms of psychological stresses it is births - no, not births deaths in the family can trigger it; in theory car accidents, the shock of a car accident but, you know, we don't see much of it, this purely psychological shock. One of the commonest stresses that leads to certainly the exacerbation of the disorder when it is present is family dynamics and in this regard the number of hours face to face contact in a family which are over-involved -and which, we haven't discussed it here, but I suspect this family is a bit emotionally over-involved with him -it is what we call expressed emotion and in this sort of family they are the triggers that tend to be related to recurrences of the condition and need for further treatment." It is possible I think to see the seeds of his Honour's opinion in this passage and I will return to this aspect of the matter after referring to the evidence concerning the respondent's pre-accident condition. Some support for the view that the respondent displayed no signs of schizophrenia before the accident is to be found in the evidence of the respondent and his mother who, as it seems to me, tended to play down any pre accident problems. The respondent conceded that he had had a lot of trouble with his parents prior to the accident because he drank and smoked marijuana but I do not think it could be said that he conceded that he was aggressive at that time. When asked about the visit to Gladesville Hospital he said his mother had taken him there after he had had a fight with his brother because "Mum thought there was something wrong with me mentally", but when pressed as to whether this was before or after the accident he said he couldn't remember and that his mother might be better placed to assist the court. When his mother was asked whether this incident was before or after the accident she said that she had been searching her memory and could not remember. In fairness to her she said the same thing to Dr Maguire, whom she saw the week preceding the trial. More importantly she denied that the UBMVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v KELLY (Clarke JA) 7 respondent had shown any aggression prior to the accident and, although her later evidence demonstrated some confusion as to the meaning of aggression, I think it would have to be said that while she recognised that there was conflict between herself and her husband on one hand and the respondent on the other she denied that he had been antagonistic before the accident or had behaved in the way that he later did. The divergence in this case between the evidence given by the respondent and, in particular, his mother and the histories given to each of the psychiatrists created substantial difficulties in the resolution of the case. In a sense it may have been theoretically open to his Honour to accept at face value the evidence given by the respondent and his mother and, taking that evidence in conjunction with the last answer I have quoted from Dr Maguire, conclude that this was a case in which a predisposition to schizophrenia had been transformed into the actual condition by the accident and its sequelae. As it seems to me this is what his Honour did. However, that course involved the rejection of the opinions of the three psychiatrists who were called and who had, on histories which are markedly similar but different from the evidence, expressed quite a different conclusion. If those opinions are not to be disregarded I would conclude that his Honour's decision could not be supported and that the proper view was that the accident and its sequelae had exacerbated a pre existing condition which had been exposed prior to the accident. If, on the other hand, the opinions of those doctors are to be disregarded upon the basis that they were dependant upon histories which had not been proved then I think there are difficulties in reaching a firm conclusion having regard to the fact that they were the only medical opinions which were given. The essential problem concerns the status of the histories given to the doctors and this depends upon a number of factors including the manner in which the case was fought. In broad terms the statements which constitute the history given to a doctor, and upon which his opinion is based, are in the nature of hearsay evidence and do not prove the facts appearing in that history (see Ramsay v Watson, (108 CLR 642, at 648-9). The history may, however, be furnished by a party and the statements he or she then made may be available as admissions against interest. Under DCR Pt28 r8 a doctor's report which has been served in accordance with that Part is admissible as evidence of the doctor's opinion and any fact stated in it which is known to the doctor either of his own observation or of his general professional knowledge or experience. However, in my view, this rule does not, in the absence of some factor, eg an adoption of the statement, enable the court to treat a statement made to the doctor by someone other than a party, and forming part of the history, as evidence of the truth of the facts conveyed by the statement (cf Evidence Act 1898 s14B, s14CE). In this case the reports of Drs Fischer and Beckett were simply admitted into evidence without objection. This was perfectly proper for they were admissible under Pt36 r13B. Nonetheless, those reports contained opinions which were based on histories which diverged in significant respects from the evidence given in the trial and this was not a case in which the divergence was so small as to be disregarded according to the principles expressed in Paric v John Holland Constructions Pty Ltd (NSW Court of Appeal, 26 April 1984, unreported and 62 ALR 85). 8 UNREPORTED JUDGMENTS Bearing in mind this divergence it seems to me that there is something to be said for the view that counsel for the respondent tendered those reports upon the basis that the court should treat the histories as reliable (and therefore as evidence of the facts contained in them). If this were not so it is difficult to understand how the respondent could have relied on the opinions expressed in the reports in the trial. Were it not for one other feature of the case I would therefore be inclined to the view that the case had been conducted upon the basis that the histories given to the doctors were admitted as some evidence of the facts in those histories. My reluctance to do so stems from that part of the cross-examination of Dr Maguire in which counsel obtained a concession from him that if the facts were not entirely as he had understood them his opinion would be modified. This suggests to me that counsel was seeking at that stage to put forward a case based on the evidence given by the respondent and his mother and not the histories recorded by the doctors whose reports he had tendered. But at no stage did he seek to adduce medical evidence to support a case based on the history given in evidence nor did he, and this is significant, put that history to Dr Maguire and seek his agreement with the proposition that the accident caused the schizophrenia. In all these circumstances I am unsure of the basis on which the histories were admitted into evidence. That this is an important feature of the case is, I think, beyond doubt. If the statements be regarded as evidence of the truth of the facts contained in them then the evidence of the three doctors to the effect that this was merely an exacerbation case should clearly be accepted. Upon this basis I would be disposed to the strong view that the respondent's damages should be considerably less than the sum awarded by his Honour and indeed should be a relatively moderate sum. If, on the other hand, the histories are not treated as evidence of the facts contained in them then the court is left in a position where there is no expert opinion, based on an accurate history, of the causal connection between the accident and the development of the respondent's schizophrenia. The only possible basis for the judge's conclusion was Dr Maguire's answer to his Honour but I do not regard that answer as a sound basis for concluding that the court should disregard the medical opinions, and particularly those (eg Dr Beckett) which pointed out the difficulty of expressing an opinion on the causation question in the absence of a clear history, and determine that, given that the history was as appeared in the evidence, the accident did cause the schizophrenia. No medical evidence supported this conclusion and in these circumstances I would regard it as one which it would be quite unsafe to adopt. These difficulties have led me to the conclusion that this court could not properly assess the damages. I say that with some reluctance for two reasons. First, it is always a matter of regret that the parties are put to the extra expense and delay occasioned by a new trial. Secondly, because in this case the parties may well have adopted the sensible expedient of tendering the medical reports as proof of the opinions and, as well, the statements which made up the histories upon which those opinions were expressed. It may be that, in the manner in which cases of this nature are now contested in the courts it, is convenient to, and the parties do, proceed upon that basis in order to achieve an expeditious resolution of the case (see, for instance, Batista v Citra Constructions Pty Ltd, (1986) 5 NSWLR 351, at 361). However, as I have said, I am not sure that the parties did adopt that approach. For these reasons I propose the following orders: \GROVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v KELLY (Handley JAD (1) Appeal allowed; (2) Judgment of Judge Kirkham set aside; (3) A new trial be had limited to damages; (4) Costs of the trial to be costs in the proceedings; 5 (5) Costs of the appeal to be paid by the respondent who is to have a certificate under the Suitors Fund Act in respect of those costs. Handley JA I agree with Mr Justice Clarke. Appeal allowed; Judgment of Kirkham DCJ set aside; A new trial be had limited to damages; Costs of the trial to be costs in the proceedings; Costs of the appeal to be paid by the respondent who is to have a 15 certificate under the Suitors' Fund Act 1951 in respect of those costs. WRWNE Counsel for the Appellant: R F Sutherland Counsel for the Respondent: P M Donohoe / T J Wolf 20 SOLICITORS for the Appellant: J Gray, Government Insurance Office of New South Wales Solicitors for the Respondent: Mannix Enright