DRAZIC v LIDCOMBE HOSPITAL SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P CLARKE and HANDLEY JJA 23 April 1992, 29 May 1992 [1992] NSWCA 60 DAMAGES — jury verdict — female plaintiff aged 27 at trial recovers verdict of $100,000 — disc protrusion at L5-S1 level proved — spinal operation advised but declined for the time being by plaintiff — past economic loss and expenses total $51,247 — cost of operation and loss of time $12,462 — 10% chance of failure of the operation with consequent impact on future work capacity — whether misdirection to jury on proper approach to refusal of operation — whether verdict so inadequate that no jury could reasonably have awarded it — whether Court of Appeal authorised to reassess — held: (1) The evidence fell far short of establishing that the plaintiff had acted unreasonably in not having the operation before trial. EVIDENCE — rejection of — letter to solicitors of defendant retained by insurer — tender of letter requests assurance of permanent employment — tender of letter rejected Fazlic v Milingimbi Community Inc (1982) 150 CLR 345 applied; (2) By reference to the undisputed or indisputable amounts making up the verdict, the resulting imputed allowance for past and future general damages of $16,291 was appealably low; Precision Plastics Pty Ltd v Demir (1975) 132 CLR 362 and Progress and Properties Ltd v Craft (1976) 135 CLR 651 applied; (3) The first trial having been conducted before a jury, it was not appropriate that the Court of Appeal should reassess and the matter which should be sent back for retrial. Shehata v Montague Myer Pty Ltd (1976) 51 ALJR 77 (HC) applied. Held: (per Handley and Clarke JJA; Kirby P reserving his opinion): In the absence of proof of the authority of the insurer on behalf of the hospital to commit the hospital to future employment of the plaintiff, no error arose in the rejection of the evidence. Supreme Court Act 1970, s107. Kirby P I would reserve the admissibility of the letter sent to the solicitor for the Government Insurance Office. It is not necessary to determine this point in order to reach the orders proposed by Handley JA. They are sustained because the jury's verdict was appealably inadequate. The solicitor was retained by the respondent to represent it pursuant to its right to subrogation under its statutory insurance policy. The solicitor was representing the respondent when the letter was sent. The point raised may have general significance for the admissibility of letters sent to solicitors in a like position and to the general practice followed in common law proceedings where the defendant is nominal and the real party interested is the defendant's insurer, represented by its solicitor. I would therefore leave the question for another day. Doing so causes no difficulty for the retrial because Handley JA has indicated the way in which the letter can, upon any view, be made admissible. Otherwise, I agree entirely with Handley JA. Clarke JA I agree with Handley JA. 2 UNREPORTED JUDGMENTS Handley JA This is an appeal by the plaintiff from a judgment in the District Court based upon a jury's verdict in her favour for $110,000 damages. She had brought proceedings against the hospital for damages for breach of the duty of care it owed to her as one of its employees. The plaintiff was born in Yugoslavia and came to Australia when she was six years of age. She left school when she was fifteen and a half and thereafter, until her accident, she was in full time employment apart from two years when she was out of the work force because of having two children. At the time of her accident on 4 September 1985 she was employed as a hospital assistant. Her duties included serving meals and morning and afternoon teas to patients, and then collecting and washing up the dirty dishes. On the day in question she slipped on the wet floor of the hospital kitchen and fell heavily injuring her back. For a considerable time she was unable to work because of her injuries. She sought work on light duties from the hospital some eighteen months after the accident but work of that kind was not then available. Subsequently her back condition further improved and she was able to return to her old job in May 1988. Unfortunately she was only able to remain in this job for three weeks before she again had to go off work because of the pain in her back. She returned to work in August 1988 in the porter's office on clerical duties and she remained there for a year with occasional time off. She was then moved to Medical Records where she was required to climb a stool to fetch and replace files. This work led to increasing back pain and she was only able to remain at this job for three weeks. After a further period off work the plaintiff was given a job in the Salaries Department where she could sit or stand to suit herself. She was able to cope with that job although she still had one or two days off because of pain. There was no evidence as to how long she had been working in that job before the trial but it could not have been long because the trial began on 22 November 1989. The medical evidence called for the plaintiff established that she had a protrusion of the disc at the L5-S1 level which interfered with the nerve roots and caused back pain and sciatica with associated swelling of her ankles. She was a single woman who had been living in a de facto relationship at the time of her accident. She had two children from this relationship who were living with her. At some stage after the accident and before the trial the father left her. He did not contribute to the support of the children and at the time of trial the plaintiff did not know where he was. The plaintiff's credit and the evidence of the two doctors called in her case were not challenged. Her case was also uncontradicted because the defendant called no evidence. There was one significant contentious issue on the medical evidence and this concemed a possible operation to produce a spinal fusion at the site of the plaintiff's disc injury. The plaintiff had received advice from her treating orthopaedic specialist Dr Guirgis about such an operation before the trial. She said that she was very frightened of having it because there were no guarantees that such an operation would make her better. She said that if she could not manage without it she would have to have it. In cross-examination she said that she would accept the advice of her doctors and she again agreed that if she became immobile because of back pain and could not manage she would have to have the operation. This evidence was qualified in re-examination. Dr Bannister said that most patients prefer not to undergo spinal surgery unless they cannot tolerate the pain because there is a phobia about such surgery. He said however that it was not major surgery and the results are reasonably good but he URJ DRAZIC v LIDCOMBE HOSPITAL (Handley JA) 3 understood the attitude of the lay patient. The operation had a ninety per cent chance of success as far as pain relief was concerned and if successful the patient was able to return to light to moderate work. He agreed that there was some risk, following a successful fusion operation, of later injury to discs above the site of the fusion because these would have to take increased strain from the residual mobility of the spine. He later referred to a possible complication due to scarring forming around the nerve root where the disc had been removed but maintained his opinion that the success rate was ninety per cent. Dr Jakovac, the plaintiff's general practitioner, agreed that the plaintiff might need such an operation in the future and that if it became necessary she would advise the plaintiff to have the operation. However she had not discussed this matter with the plaintiff prior to the trial. This evidence fell far short of establishing that the plaintiff had acted unreasonably in not having the operation before the trial. See Fazlic v Milingimbi Community Inc (1982) 150 CLR 345. The jury still had to weigh the chances that the plaintiff would be advised in the future to undergo the operation, might refuse to do so, the reasonableness of such refusal and the prospects of the operation being successful. The trial Judge at the request of the defendant, and without objection from the plaintiff, redirected the jury as follows: ".. in respect of the issue of mitigation of damages... in this case an operation, the defendant bears the onus of proving on a balance of probabilities that the plaintiff unreasonably failed to mitigate her damages by declining to submit to some surgical procedure or medical treatment. So the onus is on the defendant. If you are going to take into account, if you are going to find really and truly she should have this operation and she would not have half as much pain and discomfort, then in the whole circumstances of this case first of all the onus of proving that lies on the defendant. The test for whether a refusal to undergo treatment must depend particularly when you are talking about surgery in a large measure upon the chances of the treatment being successful." Counsel for the plaintiff did not seek a further direction to make clear to the jury that the question whether the plaintiff would be unreasonable if she refused in the future to undergo the surgical procedure had to be decided on the basis of the information and advice that would be given to her before or at the time her consent was sought to the operation. The jury were directed to include in the plaintiff's verdict, if any, the plaintiff's past economic loss of $43,275 and her past medical and hospital expenses of $7,972, a total of $51,247. From the verdict returned this left a balance of $58,753 for past and future general damages, future medical expenses and future economic loss. The defendant's case at the trial, and before this Court, was that the plaintiff should and would have a spinal fusion operation and that with a ninety per cent success rate this would substantially reduce her future pain disability and economic loss. If the jury, acting on the trial Judge's directions, assessed the plaintiff's damages on this basis, they would have been bound to take proper account of the direct and opportunity costs of that operation. The uncontested evidence of Dr Bannister was that the hospital and medical costs associated with this operation would be approximately $5,000 and that the plaintiff should be off work for six months to enable proper union to occur. The plaintiff's net wages at the time of trial were $287 per week. Hence the operation would cost the plaintiff overall 4 UNREPORTED JUDGMENTS $12,462. If these costs are deducted from the balance of the verdict one is left with $46,291 for past and future general damages and the rest of her future economic loss. The uncontested medical evidence was that the fusion operation had a ninety per cent chance of success, and therefore of course a ten per cent chance of failure. If the operation was a failure the plaintiffs future prospects would be bleak indeed. In all probability she would be unemployable and would face a lifetime of severe pain and disability. The jury acting reasonably had to allow an appropriate sum for the chance that the plaintiff would be left in this condition. See Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 decided after the trial but on established principles. See at 642 - 643. Such a chance called for a significant allowance in the jury's overall verdict. Even if the operation was successful the plaintiff would be left with impaired working capacity, only fit for light or medium work. She had limited education and no special skills. She had been employed either as a waitress or on the staff of the Hospital since leaving school. She had no security of employment at the Hospital. On this issue the trial Judge directed the jury: "... She is still left with a limitation of bending and lifting. She is left with a back that has a damaged disc and she is left with it for the rest of her life. To what extent is that likely to diminish her earning capacity? You have to put a round lump sum on that. You have evidence that the plaintiff is still in employment with the hospital. Whether she will be there in a week's time is something neither you nor I can say.... you have not heard anybody from the hospital come along... and say we will keep her on forever. That is the realities of life. She has to take her chances in the open world.... You may well think that certainly in the future, if she loses that job - and who goes through life doing the same job forever - she will have some limitation on her ability to get another job... So in summary it might be said that you are asked to provide a sum of money now to be a cushion against those eventualities in the future." The chance that at some stage the plaintiff would be thrown onto the general labour market required the jury to include a substantial allowance for her future economic loss in their verdict. She was twenty seven at the date of trial with a future working life of thirty three years. I would think that allowances of $15,000 on each of the last two heads of damage to cover such a long period would be too low to be supportable. However on that assumption the plaintiff would be left with only $16,291 for her past and future general damages. Despite being highly motivated by the need to support herself and her two children she had been in too much pain to return to her pre-injury employment for nearly three years after the accident. Even after that she had experienced substantial periods off work due to her back injury. In my view an allowance as low as $16,291 for past general damages for the full five year period before trial would have been extremely, if not unreasonably low. During this period the plaintiff had to look after herself and her two young children despite her pain and weakness. As I have said her credit was never challenged. Assuming that such a miserable allowance for past general damages was within the jury's discretion there would be nothing left in the verdict for future general damages and even if the spinal operation was successful she would still have significant disabilities. The fact that the miserable and arguably unreasonably low awards for the chance of the operation being a failure, future economic loss and past general damages would leave nothing at all for future general damages demonstrates to URJ DRAZIC v LIDCOMBE HOSPITAL (Handley JA) 5 my complete satisfaction that this verdict was so unreasonably low as to require appellate intervention. This Court's task in reviewing the evidence in an appeal such as this was stated by Jacobs J in Progress and Properties Ltd v Craft (1976) 135 CLR 651 at 672 as follows: "Tn the case of a jury's verdict the Court of Appeal has no power to review the evidence except for the purpose of determining what view on the evidence or on any particular aspect of it was reasonably open to the jury. The Court must assume that the jury took a view of the evidence most consistent with the size of the verdict which it returns." The test to be applied to determine whether appellate intervention is justified was stated by Gibbs J in Precision Plastics Pty Ltd v Demir (1975) 132 CLR 362 at 369 as follows: "... Where the award was made by a jury... the appellate court will only interfere if it arrives at the conclusion that the damages are... so small as to be unreasonable -... so inadequate that no jury could reasonably have awarded them or, as is sometimes said, out of all proportion to the circumstances of the case." In my opinion this test is satisfied in the present case. The appellant also relied upon what was said to be the wrongful rejection by the trial Judge of evidence that the solicitors for the plaintiff on 16 August 1989 had written a letter to the solicitors for the Government Insurance Office, acting by subrogation for the defendant Hospital which was in the following terms: "As you are aware the plaintiff is currently employed by the defendant in a light duty capacity performing clerical work in the Porter's office. We seek the defendant's written assurance that subject to good conduct and satisfactory performance the plaintiff will retain her job after the hearing of her claim for damages arising out (of) the incident which occurred on the 4th September 1985. Please accept this letter as a notice to produce this letter at the hearing of the matter." I have not been persuaded that the trial Judge fell into error in rejecting this letter. It was sent to the solicitors for the employer's liability insurer who were conducting the defence of the common law proceedings brought by the plaintiff. There was no evidence that the insurer had any authority on behalf of the Hospital to commit it to any representation assurance or promise relating to the plaintiff's future employment with the Hospital. In particular no attempt was made to establish that the terms of the compulsory policy under the Workers Compensation Act 1926 conferred any such authority or power on the insurer. In these circumstances the failure of the insurer to reply to the letter could not, in my opinion, provide any evidence admissible against the Hospital in these proceedings. The remaining question is whether this Court can and should reassess the plaintiff's damages or whether a new trial limited to damages should be ordered. S107 of the Supreme Court Act authorises this Court to reassess the plaintiff's damages if the Court is satisfied that "without seeing or hearing the plaintiff... or other witnesses" the Court can be satisfied that "it is fully able to assess the... damages... on perusal of the evidence contained in the documents before it." The decision in Shehata v Montague Myer Pty Ltd (1976) 51 ALJR 77 establishes that this Court will rarely have the power to reassess damages where the trial was conducted with a jury. Although the plaintiff's credit was not challenged and her evidence on damages and the evidence of her doctors was uncontradicted this Court would have to decide on a reassessment whether or not she would be faced with the 6 UNREPORTED JUDGMENTS decision to undergo the operation, whether she would then have it, and if not whether her refusal would be unreasonable. While these are not strictly credit issues this Court cannot decide them without having ever seen or heard the plaintiff. I conclude therefore that this Court has no option but to order a new trial on the issue of damages. There are other reasons in this case why it is appropriate to order a new trial. It is now some two and a half years since the first trial. Neither party sought to adduce further evidence as to events which have occurred in the meantime. This Court therefore does not know whether the plaintiff is still employed at the Hospital, whether she has been advised to have the operation, agreed or refused to do so, and if so whether it was a success. These matters could have a profound effect on the amount of damages which should now be awarded. These uncertainties could be clarified by evidence given at a new trial and in the light of that evidence the new verdict, whether by a judge or a jury, is far more likely to produce a just result than an assessment undertaken by this Court on the basis of material in the appeal book which is now two and a half years old. In my opinion therefore the following orders should be made: 1. Appeal allowed with costs. 2. Judgment of the District Court set aside. 3. Direct that there be a new trial of the proceedings limited to the issue of damages. 4. The defendant to pay the plaintiff's costs of the first trial. 5. Costs of the second trial to abide the further order of the District Court. 6. The respondent, if qualified, is to have a certificate under the Suitors Fund Act. Appeal allowed with costs; Judgment of the District Court set aside; Direct that there be a new trial of the proceedings limited to the issue of damages; The defendant to pay the plaintiff's costs of the first trial; Costs of the second trial to abide the further order of the District Court; and 6. The respondent, if qualified, is to have a certificate under the Suitors' Fund Act 1951. YenNr ws Counsel for the appellant: B Toomey QC/P Seery Solicitors for the appellant: Flannery Mura and Costello Counsel for the respondent: D Campbell Solicitors for the respondent: E Scarparo for Government Insurance Office of New South Wales