HEAD v AUSTRALIAN AIRLINES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL GLEESON CJ, MEAGHER and POWELL JJA 16-17 November 1994, 17 November 1994 [1994] NSWCA 125 DAMAGES — ASSESSMENT — industrial accident — permanent disability — challenge to award for future medical expenses — challenge to assessment of past and future loss of earning capacity — medical evidence of inappropriateness of pre-trial treatment regime — no allowance should be made for Medicare benefits — immaterial error — no error in assessment of loss of earning capacity. ASSESSMENT OF DAMAGES The appellant, who suffered injuries to his right elbow in an industrial accident, was left with a permanent disability in the form of irritation to the ulnar nerve, chronic pain syndrome, and depression. Damages were assessed at $388,857. The only challenges on appeal related to the assessment of costs of future medication and medical services, past loss of earnings and future loss of earning capacity. In relation to the first item the judge had taken into account medical benefits in one minor respect. HELD 1) The judge was in error in taking medical benefits into account in one minor respect, but in the circumstances the error was not material. Handley v Datson [1980] VR 66 followed. 2) No other material error was shown. ORDERS 1. Appeal dismissed with costs. Gleeson CJ The appellant sued the respondent for damages for personal injurieswhich he suffered in an industrial accident whilst in the employment of the respondent. Liability was admitted and the details of the accident are not of particular importance. It suffices to say that whilst the appellant was assisting in certain unloading operations which involved the use of a forklift, and was guiding a forklift driver who was manoeuvring his tynes on a pallet, the forklift driver negligently caused the pallet to move forward. The result was that the appellant's right elbow came sharply into collision with a metal part. The appellant suffered a fracture of the right olecranon spur and ulnar nerve damage. He is left with a permanent disability in the form of an irritation to the ulnar nerve which has, in turn, been responsible for chronic pain syndrome. The appellant also suffered depressive and emotional problems. The matter came before Abadee J for the assessment of damages. His Honour assessed damages in an amount of $388,857.66. It agreed that there was contributory negligence on the part of the appellant to the extent of 10%. In the result his Honour entered judgment for the appellant in the sum of $349,927 with costs. The appeal is against the assessment of damages. However, the issues are limited to some only of the items that went to make up the damages awarded to the appellant. The items taken into account by Abadee J in the assessment of damages were as follows: 2 UNREPORTED JUDGMENTS General damages $100,000.00 Interest on past general damages 5,591.84 Past out of pocket expenses 17,109.87 Future out of pocket expenses 9,000.00 Past loss of earnings 98,791.28 Interest on past wage loss at 8 per cent 17,669.13 Fox v Wood 7,143.34 Future loss of earning capacity 133,552.00 TOTAL $388,857.46 The items in dispute in this appeal are the amounts allowed for future out of pocket expenses, past loss of earnings and future loss of earning capacity. If the appellant is successful in relation to either of the second or third items an adjustment of interest would also be necessary. Before coming to the disputed items it is convenient to make some general observations as to the findings of Abadee J concerning the appellant's injuries. The accident occurred in August 1986. At the time the appellant was aged 40. He is a married man with one daughter. He is right handed. The appellant's employment history up until the time of the accident is set out in detail in the reasons for judgment of the trial judge and it is unnecessary to repeat or to summarise it. It suffices for present purposes to say that the appellant left school at the age of 16 and completed an apprenticeship as a panel beater. Thereafter he worked as a coolroom hand, a forklift driver and then a salesman. At the time of his accident he was the supervisor of a bonded warehouse. He had considerable clerical and administrative skills. The appellant has not worked since the accident. He has had medical treatment and operative procedures detailed in the judgment of Abadee J but these have not eliminated pain resulting from the damage to his elbow. Since the accident the appellant has assumed the household and care responsibilities for his family. He has not been able to pursue sporting activities which he once enjoyed. He has travelled overseas with his wife, who is a business executive, on a number of occasions. Details of the medical treatment and operative procedures undergone by the appellant are set out in the judgment of Abadee J, and I shall not repeat them. He has seen approximately 15 treating doctors, medico-legal experts and therapists. A psychiatrist Dr Klug, and a general practitioner, Dr Gottlieb, prescribed for him an extensive regime of drugs. At the time of the hearing before Abadee J, which took place in April 1992, the appellant had been prescribed three tablets per day of Prothiaden, four tablets per day of Xanax, a number of tablets daily of Doloxene, Codral Forte and Digesics and morphine tablets. The evidence showed that the appellant's actual drug consumption substantially exceeded what had been prescribed by the doctors. For example, Dr Klug prescribed 20 Doloxene tablets per month. The appellant was in fact consuming four such tablets per day. This exceeded what was prescribed by a factor of six. The trial judge found that the appellant was suffering from drug dependency and that he exhibited physical ill effects from excessive drug consumption. There was disagreement amongst the appellant's medical experts as to the need for or the appropriateness of the appellant's drug regime and this will be referred to in more detail later. URJ HEAD v AUSTRALIAN AIRLINES (Gleeson CJ) 3 The trial judge found the appellant was suffering from a permanent disability relating to his elbow injury, a nerve irritation and chronic pain syndrome. However, he also found, for reasons that he gave in detail, that the appellant had exaggerated his symptoms both in evidence and in the information which he had provided to the doctors who had prescribed drugs for him. One of the appellant's treating surgeons, Dr Isaacs, who was called as a witness for the appellant, gave the following information in July 1991, which was accepted by Abadee J: "On the basis of this further examination, my recommendations remain unchanged. There would appear to be numerous overlying emotional factors contributing to this man's discomfort but he does have evidence of a persistent ulnar neuritis and because of this is going to have a chronic pain syndrome in his right arm. I do not believe any surgical procedure is going to eliminate this and recommend that his treatment remain conservative. He is going to be limited to positions where there is only light non repetitive tasks which require using the right hand. My assessment of his disability remains unchanged at 25 per cent loss of efficient use of the right upper extremity". We were informed in the course of argument that in this context the expression "upper extremity" means arm. Abadee J made the following finding: "As a result of his accident the plaintiff suffered a fracture olecranon spur. He also sustained a damaged right ulnar nerve causing intra articular problems with the joint. The various operative and other procedures have not been wholly successful in curing the plaintiff. The plaintiff has suffered and continues to suffer from a persistent ulnar neuritis, chronic pain syndrome with depression, stress and emotional reaction to injury. I accept that the plaintiff has suffered emotional reaction to his injury with some loss of self esteem and self image. The pain is organically based, its physical foundation being irritation of the ulnar nerve. The plaintiff has had problems accepting the pain suffered and has searched for cure and relief. The plaintiff has been on a drug regime, which has increased considerably in 1991. The chronic pain syndrome has not been relieved". His Honour's finding that the appellant had exaggerated the nature and extent of his pain was supported by the following reasons. First, his Honour referred to the fact that he had seen and heard the appellant in the witness box. He said he appeared comfortable, relaxed, alert and not in any real pain. This was to be contrasted with evidence that the appellant had given as to the severity and consistency of his pain, bearing in mind that he also told the court that so as to be fully alert for the purpose of the trial he had, over the days leading up to it, significantly reduced his drug consumption. Second, his Honour referred to films that were taken of the appellant, without the appellant's knowledge, in March and October 1991. He referred, in particular, to evidence of the appellant as to a sling which he said he needed to wear, at least in certain circumstances, and to what was shown in the film concerning that matter. He also observed that the films showed the appellant as apparently relaxed and not in discomfort. This Court has seen the films and his Honour's observations appear to be correct. Third, his Honour gave weight to the observations of Dr Langeluddecke, who said in a report in February 1991 that the appellant's behaviour in relation to pain and discomfort was quite bizarre. Abadee J concluded: "T find that the plaintiff's degree, level and extent of pain is somewhat exaggerated, whilst accepting that there is, has been and will be an ongoing pain syndrome". 4 UNREPORTED JUDGMENTS I turn now to the first matter in issue in this appeal, which concerns the award of $9,000 in relation to future out of pocket expenses. The issue between the parties in relation to this item of damages concerned the appellant's future expenses for the cost of medication, and for medical consultations. The claim, as it was presented to this court and to Abadee J, although the detailed figures may have varied somewhat, was put on the following basis. In relation to the cost of future medication, there was a calculation of cost to the appellant, as at the date of trial, of the drugs that were prescribed for him by Dr Klug and Dr Gottlieb. Next, it was assumed that the appellant would live for a further 31 years and that over the whole of that period he would continue to require the same medication. Then there was a calculation of the lump sum necessary to meet the cost of medication at the weekly rate operative at the time of the hearing, for a further 31 years. That amount was $38,459.55. In relation to the future medical consultations, once again it was assumed that for the next 31 years the appellant would require the same level of consultation with a psychiatrist and a general practitioner as was in force at the time of the hearing. The assumed cost of future medical consultations was $51,625.40. By far the largest element of that was the assumed cost of one consultation per month with a psychiatrist for 31 years. In approaching this problem Abadee J accepted that the primary question to be asked concerned the reasonableness of the assumed conduct of the appellant in continuing to consult doctors and to consume drugs at the level current at the time of the hearing. Also relevant, of course, was the reasonableness of the assumption that such conduct would continue for 31 years. No suggestion has been made that his Honour was in error in his identification of the relevant principle to be applied. The difficulties which then confronted the trial judge were as follows. First, as was mentioned, he found as a fact that the appellant had exaggerated his pain to Dr Klug and Dr Gottlieb when seeking from them prescriptions for medication. Second, he observed that the extensive medication which the appellant was taking at the time of the trial, and which substantially exceeded what the doctors had prescribed, had not been effective for the purpose for which it was intended. Third, his Honour was not prepared to accept or to find as a fact that once the litigation concluded the appellant's drug use would continue at its previous level. Fourth, he found that the appellant over the period prior to the hearing had made excessive and unnecessary use of the service of medical practitioners and had consumed a substantially greater quantum of drugs than they, in their opinion, thought appropriate. That excessive drug use had, in turn, resulted in loss of concentration and memory problems. Finally, there was a body of medical evidence, to be found in the views of Dr Isaacs, Dr Middleton and Dr Marsh, which the trial judge regarded as supporting the conclusion that extensive drug use of the kind indulged in by the appellant, or even of the kind recommended by Dr Klug and Dr Gottlieb, was "contraindicated" and should cease after a weaning off period. Although Abadee J did not make specific reference to the matter, it might also be observed that there might be thought to be an inherent improbability in the proposition that the appellant could reasonably be expected to continue for another 31 years consuming drugs at the very high level here in question. His drug consumption at that level had already produced some adverse consequences and if continued for another 31 years might be expected to produce very serious consequences indeed. URJ HEAD v AUSTRALIAN AIRLINES (Gleeson CJ) 5 Dr Middleton said, when asked about the desirability of continuing with the appellant's medication: "Q. What is your view of the desirability of continuing that indefinitely? A. Well, any combination of those sorts of medications has potential for very major side effects, both in terms of acute side effects from direct toxicity of the drugs and long term dependency and habituation problems and I personally would not recommend it. Q. Would you try to recommend weaning him off it? A. I personally would, certainly". That evidence was given in chief, the doctor having been called as a witness on behalf of the appellant. Dr Marsh expressed concern at the amount of medication the appellant was taking. Of particular importance, as the trial Judge saw the matter, was the evidence of Dr Isaacs which was as follows: "Q. Do you see ongoing treatment by way of medication by way of painkillers, anti-depressants, anti-anxiety tablets, perhaps morphine derivatives, as a good long term way of treating a person like this? A. No. to be honest, I prescribe very few medicines. I don 't routinely prescribe analgesics to my patients long term. I prescribe the occasional anti-inflammatory medication, usually the first line one that I can remember. Sometimes I prescribe antibiotics. I probably have the original prescription pads that I was given when I first started in medical practice; I haven't bothered to re-order them. It is not something that I get myself into. I know very little about - I don't keep up with the newer drugs. I am a surgeon, and most surgeons are in the same boat.... I would not favour anybody having long term pain medication of anything other than what you can buy in a pharmacy without prescription for long term pain - that is my belief. I know that people do get it, but it seems to me from what I have seen that the stronger the tablet is, the more tolerant the patient gets to it, so they then go to the next step, and the next step, and the next step, until they get to stronger and stronger pain tablets. Q. Is there also a risk of dependency? A. Absolutely. That is what the problem is". The appellant's attack upon the reasoning of Abadee J on this issue commenced with what, in my view, was a considerable over-estimation of the importance which his Honour attached to the views of Dr Isaacs. The reasoning treated those views as significant, but there were also a number of other important matters which were taken into account. They have been mentioned earlier in summary form. The next step in the argument was to the effect that Abadee J misunderstood what Dr Isaacs was saying. I am unable to accept this submission. What Dr Isaacs said was clear enough and there is no reason to conclude that its effect was in any way misapprehended. Finally, it was argued that Abadee J attached undue weight to the views of Dr Isaacs. There is rather more force in this submission. Abadee J said that he preferred the opinion of Dr Isaacs to that of Dr Klug and Dr Gottlieb. They were, amongst other things, willing to prescribe very large quantities of drugs for the appellant. Dr Isaacs, the surgeon, on the other hand made it clear that he was personally not in favour of resort to drugs, especially in such large amounts, and for such a substantial period of time. 6 UNREPORTED JUDGMENTS However, he disclaimed expertise in the subject of pain management. He said that pain management was itself an area of expertise and noted that although this had not come to fruition at the time of the trial, the appellant was endeavouring to make arrangements for treatment by the specialist pain management unit at the Royal North Shore Hospital. One of the complicating factors is that on the findings made by the trial judge to the effect that the appellant had exaggerated his pain when communicating with Dr Klug and Dr Gottlieb, the factual basis for their opinions was to an extent undermined. As was noted, this was a case in which the trial judge was confronted by a wide range of medical opinions, and thus we have on the one hand the views of Dr Klug, the psychiatrist, and Dr Gottlieb, the general practitioner and, on the other hand, the views of Dr Isaacs, the surgeon, supported to an extent by Drs Middleton and Marsh. It should also be observed that the reservations expressed by Dr Isaacs as to the appropriateness of this type of regime were, to an extent, supported by the evidence as to what had actually happened to the appellant. He had become drug dependent, he was suffering from physical symptoms attributable to his drug overuse, he was consuming drugs in a much greater quantity than had been prescribed by his doctors, and they did not appear to be doing him a great deal of good. I am not persuaded that the appellant has demonstrated that Abadee J was in error in rejecting the approach urged upon him on behalf of the appellant in relation to the calculation of this item of damages. That rejection arose from the combination of a number of considerations, and it has not been shown that his Honour was in error in declining to hold that it would have been reasonable for the appellant to continue for a substantial period, and has urged, effectively, for the remainder of his life, with the level of drug use and medical services in effect over the period up to the hearing. In arriving at his figure of $9,000, Abadee J gave careful consideration to a variety of possibilities and probabilities relevant to the appellant's future need for, and the cost of, medication and medical services. Subject to one minor qualification, the appellant has not demonstrated error in the approach taken to that subject. It may be remarked that, especially in the circumstances of a case such as the present, this is an issue in which hypotheses are multiplied at various levels and the element of uncertainty is necessarily large. A spurious appearance of accuracy may be created by mathematical calculations, but the assumptions upon which those are based are almost always highly speculative. As Abadee J remarked, in the determination of the cost of future drugs and medical treatment there are many imponderables and matters of conjecture and surmise. Abadee J accepted that there would be an ongoing need, for a certain period, for certain medical care and medication. However, he took the view that after a weaning off period the ongoing pain syndrome should be capable of being treated by medication which could be purchased at a pharmacy without prescription. He accepted that there would be need for future visits to medical practitioners such as Dr King and Dr Gottlieb, but not to anything like the extent in effect at the time of the hearing. He referred to the possibility of admission to the pain control clinic at Royal North Shore Hospital, but felt unable to take that matter into account in any particular fashion, because there was no evidence before him of the nature of the care likely to be recommended, or its costs. URJ HEAD v AUSTRALIAN AIRLINES (Gleeson CJ) 7 The minor qualification earlier mentioned is as follows. In commenting upon the various imponderables and matters of conjecture and surmise his Honour made, in passing, a remark which has been criticised as involving legal error. He said: "As to the cost of Dr Gottlieb's future consultations it seems to me that one has to have regard to her evidence that future consultation costs may well not be actually incurred in any event. She gave evidence that if the plaintiff was not on compensation 'T bill all my patients Medicare only'. This is not to say that she would not or could not change her mind in terms of charging the plaintiff after he recovers damages, a matter to be considered. Further, or alternatively, the plaintiff may change his mind about seeing Dr Gottlieb or a different general medical practitioner from time to time in the future". Senior counsel for the appellant has submitted that insofar as the trial judge took into account in some fashion the possibility that Dr Gottlieb might bill Medicare only, he was taking into account a legally irrelevant consideration. The appellant, it was submitted, was entitled to damages on the basis of an estimate of the expenses for medical treatment by Dr Gottlieb that might reasonably be expected to be incurred, and the fact that those expenses were recoverable by claiming on Medicare was irrelevant. When doctors engage in what is sometimes called bulk billing, from a practical point of view that is often understood as meaning that the patient does not have to pay for the doctor's services. Technically, however, what is involved is that the patient incurs a liability to the doctor and then claims on Medicare for the cost of the treatment, and the value of the claim is assigned to the doctor who accepts that in satisfaction of the doctor's fees. That, at least as I understand it, was the way in which the matter was put to this court and it does not appear to have been in dispute. This is apparently a matter that was not the subject of any submissions at the trial. Counsel for the respondent accepts that as a matter of principle the argument for the appellant is correct - (Handley v Datson [1980] VR 66; cf Barber v Meadwell (1980) 32 ALR 162). In allowing for medical expenses no deduction should be made in respect of medical benefits. However, the respondent argues that the error was immaterial. It is observed that this is not a matter in respect of which Abadee J made any separate allowance. It is also observed, correctly, when one has regard to the totality of the reasons expressed by Abadee J for arriving at his conclusion of $9,000, this is a matter that seems to have played a very small part. Furthermore, before referring to this subject, his Honour had expressly adverted to the possibility that the appellant might in future change his general medical practitioner, and he went on to refer to that action as a countervailing consideration. Noting that this error has been made, it is appropriate for this court to reconsider the reasoning undertaken by Abadee J in relation to this item and to consider the views and arguments that have been put on one side and the other in relation to the entire subject. Following that consideration, however, I am not persuaded that the sum of $9,000 has been shown to be inadequate as an assessment of this item of damage. I would add that it might also be noted that it is common ground that Abadee J, in another part of his judgment, made an arithmetical error which was in favour of the appellant and which involved a sum of $4,990. There has been no cross appeal in relation to that sum. 8 UNREPORTED JUDGMENTS In the result I am of the view that the error was not a material error and, further, that no successful attack has been made upon the assessment of this item of damage. The submissions on behalf of the respondent in relation to past wage loss and loss of future earning capacity turned substantially upon a challenge to the findings made by Abadee J as to the extent of the appellant's residual earning capacity over a certain period prior to the date of the trial, and to the view he formed as to the appellant's capacity following the trial. This attack of course, was closely related to a challenge to the finding that the appellant had exaggerated his symptoms. In relation to the matter of past wage loss, Abadee J dealt with different periods of time and the only challenge concerns his reasoning in relation to the period 30 June 1988 to 1 April 1992. In respect of that period he found that the appellant had a 40 per cent residual earning capacity. It is submitted, on behalf of the appellant, that his Honour should have found that the appellant had no residual earning capacity over that period. In relation to future loss of earning capacity, the reasoning of the trial judge proceeded upon the basis that over the period in question the appellant had a residual earning capacity somewhat higher than 40% and this again was argued to involve error. The findings of fact underlying the approach taken by the trial judge to this issue were as follows. First, his Honour said: "T accept the views of Dr Isaacs (see his report of 23 November 1988) that the plaintiff was then fit to resume work performing light non repetitive tasks using the right hand. Such work should include some supervisory or managerial duties. The plaintiff, prior to injury, had some work qualifications answering both these descriptions. l accept the oral and written evidence of Dr Isaacs to the effect that the plaintiff has been and is fit for work not involving highly repetitive work with the right hand. In that evidence he referred to the plaintiff not being able to tolerate highly repetitive or heavy manual work. I accept his view that the plaintiff has not been and will not be fit for work involving full time writing and should not be retained to do typing, which I would take to mean full time typing On the evidence, the plaintiff I find is able to write and do some typing. The matter then becomes one of determining to what extent since April 1989 the genuine level of pain increased the physical incapacity for work. The question is a difficult one. I think it has but a limited extent and not to any additional significant degree. I propose to bring it into account along with the fact of the plaintiffs increased use of drugs in 1991 with some side effects in my assessment. However, it is also appropriate to bring into account the fact of exaggeration of pain during 1991 and to date. In the assessment of past loss of earnings and future loss of earning capacity, it is also appropriate to have regard to the fact that the plaintiffs pre-injury work record reveals that the plaintiff had considerable clerical skills. He also had supervisory, administrative and junior management skills, having worked as an area manager and accounts manager. The plaintiff has acquired some warehouse supervisor's skills. The plaintiff has sales and communications abilities acquired from earlier employment. It would also appear to be that the plaintiff has some URJ HEAD v AUSTRALIAN AIRLINES (Gleeson CJ) 9 business qualifications capable of being exploited. The plaintiff is able to write but would not be capable of writing continuously throughout a working day. He can type and has a typewriter. He would not be capable of being retrained as a typist. He is able to do some driving. In terms of actual physical work outside of the activities mentioned there is a residual capacity to do work not involving highly repetitive work. There is a capacity for using the right hand in non repetitive tasks". The above does not set out the whole of his Honour's findings on this subject, but is a fairly representative sample of those findings. It was submitted on behalf of the appellant that the contrast between the finding of a 40 per cent residual earning capacity for the period currently up to April 1992 and the higher earning capacity taken for the period for the remainder of the appellant's working life following April 1992 was, itself, indicative of error. Further, it was argued that Abadee J must have misunderstood the evidence of Dr Isaacs. In his report and in his evidence Dr Isaacs on occasion referred to a capacity to do work not involving highly repetitive work and also, on occasion, to a capacity to use the right hand in light, non repetitive tasks. It was argued by senior counsel for the appellant that Abadee J might well have confused what was being spoken of in that regard and, in particular, might have fallen into the error of treating a statement that there was no capacity to do highly repetitive work as meaning in substance the same thing as a statement that there was a capacity to engage in light, non repetitive tasks. In that respect, I would comment that the way in which Abadee J referred to and repeated the evidence of Dr Isaacs in his Honour's reasons does not indicate to me that he misunderstood what Dr Isaacs was saying or made an error of the fairly obvious kind attributed to him by counsel. It was argued that his Honour failed to take account of the risk of aggravation of the appellant's injury that would accompany any future work that he might undertake. The particular risk referred to was that the nerve might be irritated by work activity. It was acknowledged that there is inevitably a degree of unpredictability as to how a person in the appellant's position might respond to an industrial situation; but it was argued that this was a matter that should specifically have been taken into account. Reference was made to the reasoning of the trial judge about his observations of the video and, in particular, his remarks about the sling worn on occasion by the appellant. It was observed by counsel that the video does not show the appellant doing anything that the doctors said that he was unable to do; or, for that matter, that the appellant said he was unable to do. This is fair comment. This is not a case in which, for example, a person who claims to be unable to bend over is shown by the video to be bending; or a person who claims to be unable to use his right arm is shown playing right handed tennis. However, these are matters that would have been perfectly obvious to the trial judge, and having seen the video myself I see no error in the way in which his Honour assessed its significance for the purpose of the task he was undertaking. There was a specific challenge to the reasons advanced by the trial judge for his conclusion that the appellant was exaggerating his symptoms. Those reasons have already been referred to. 10 UNREPORTED JUDGMENTS The assessment of this question was not an easy matter, but I am not persuaded that Abadee J has been shown to be in error in the conclusion that he reached. In my view no successful challenge has been made to the reasoning underlying his Honour's assessment of past loss of earnings or future loss of earning capacity. In the result I consider that the appeal should be dismissed with costs. Meagher JA I agree. Powell JA I also agree. Gleeson CJ: The order of the Court will be as I have proposed. 1. Appeal dismissed with costs. Counsel for the Appellant: BJ Gross QC/LA Levy Instructed by: GJ Sharah Henville and Co Counsel for the Respondent: PI Rose QC Instructed by: Phillips Fox