COMMONWEALTH OF AUSTRALIA v DE CASTRO SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY and MEAGHER JJA and ROLFE AJA 30 March 1995, 28 April 1995 [1995] NSWCA 88 INJURY SUSTAINED DURING EMPLOYMENT — PRIOR INJURY — ASSESSMENT OF DAMAGES EXCESSIVE. FACTS: The respondent claimed that as a result of a fall sustained in 1985 in the course of her employment in the Australian Army she suffered injuries to her right knee and to her head. The appellant admitted liability. The trial judge found that although the respondent had suffered a knee injury while playing soccer in 1981, the evidence did not disclose the probability of this prior injury becoming symptomatic. The trial judge also found that, although there was no physical cause linking the fall with the respondent's complaint of head injury, the relevant symptoms (seizures) were attributable to the respondent's army service. Damages were awarded on the basis that the 1985 injury was the cause of her knee complaint, and the cause of her seizures. The appellant contended that the trial judge's assessment of damages was excessive. HELD: (1) Apart from a torn meniscus, uncontradicted evidence established that the respondent's right knee complaints did not result from the 1985 injury. The appellant had discharged the evidentiary onus of establishing that the respondent's incapacity of the knee, except for the torn meniscus, stemmed from events other than those for which the appellant was liable. Watts v Rake (1960) 108 CLR 158, Purkess v Crittenden (1955) 114 CLR 164 considered. (2) The trial judge having made no findings from which the conclusion could be drawn that the seizures were owing to the 1985 accident, that conclusion of the trial judge was unjustified. (3) There being no suggestion that the respondent would not continue to be engaged in gainful employment, the trial judge was not justified in finding a future loss of earning capacity in the sum of $70,000. (4) (By Rolfe AJA with whom Meagher JA agreed, Mahoney JA dissenting) Because it is not necessary to see the respondent or any witness for the purpose of reassessing damages, there should be no new trial limited to damages. The Court should reassess damages. (5) (By Mahoney JA) The Court of Appeal must give proper effect to the advantage enjoyed by a trial judge in determining whether evidence is to be accepted or rejected, insofar as the trial judge is influenced in doing so by what he or she has seen of a witness. But, even in such a case, the Court of Appeal may come to a different conclusion where the judge's finding has been made without taking account, or proper account, of acceptable objective evidence. Voulis v Kozary 180 CLR 177, referred to. ORDERS: (1) Appeal allowed. (2) The trial judge's verdict and judgment for the respondent being in the sum of $159,702.90 be set aside. (3) In lieu thereof judgment for the respondent being in the sum of $69,133. (4) The trial judge's orders as to costs of the trial confirmed. (5) The respondent to pay the appellant's costs of the appeal and to have a certificate under the Suitors Fund Act if she is otherwise entitled to it. 2 UNREPORTED JUDGMENTS CASES CITED: Watts v Rake (1960) 108 CLR 158 Purkess v Crittenden (1955) 114 CLR 164 Voulis v Kowary 180 CLR 177 Mahoney JA The plaintiff suffers from physical and psychological difficulties which are of some significance. She claims that they are due, in whole or in part, to an accident which happened to her on 19 March 1985 while she was a member of the Army. Simpson J accepted the substance of the plaintiffs case and awarded her $159,702.90. The defendant, the Commonwealth, has appealed to this Court against her Honour's judgment. One cannot but have sympathy for the plaintiff having regard to the difficulties from which she suffers. But to recover the damages from the Commonwealth, she must show that the Commonwealth was, in law, responsible for them. As the case has been presented to the Court, the Commonwealth is responsible for them only if the accident of 19 March 1985 was the, or a, cause of her difficulties and in the relevant sense only to the extent that it was. As Simpson J suggested in her judgment, the evidence presented to her at the trial made the determination of the present question difficult. Rolfe AJA has referred to the main portions of the evidence and I shall not repeat what his Honour has said. I agree with the conclusion of Rolfe AJA that, in relation to the plaintiffs physical injuries the trial judge's assessment of the evidence should not be accepted. Simpson J, after a detailed examination of the medical and other evidence, concluded - and acted upon the basis - that, before the 1985 accident, the plaintiff displayed no relevant signs or symptoms of injury to her leg. Stated generally, her Honour's approach to the assessment of damages in respect of the condition of her leg assumed that all of the signs and symptoms from which she suffered after the 1985 accident were produced by that accident. However, as Rolfe AJA has pointed out, there was substantial evidence from medical witnesses and from Army documents, suggesting that before the 1985 accident the condition of her leg caused her significant difficulties. If this was so, then the damages awarded for the signs and symptoms suffered by her after the 1985 accident would have to be assessed taking into account the difficulties that she had before that accident. Simpson J, in approaching the assessment of damages, appears to have put aside that evidence. I do not think that her Honour considered the evidence and rejected it as unreliable. If she did so, this Court should, in my respectful opinion, come to a different conclusion. I am conscious that, in determining whether evidence is to be accepted or rejected, a trial judge may have the advantage of seeing a plaintiff in evidence before her and may reject documentary evidence by reason of her acceptance of the witness that she has seen before her. Insofar as she is influenced in doing so by what she has seen of the witness, this Court, on a rehearing, must give proper effect to the advantage that she had. But, even in such a case, this Court may come to a different conclusion where the judge's finding has been made without taking account, or proper account, of acceptable objective evidence: see generally Voulis v Kowary 180 CLR 177. In the present case, there was material of this kind evidencing signs and symptoms which existed prior to the 1985 accident. Reference was made in the medical reports to what the plaintiff herself had said in this regard. And there was in the notes made by those who had examined the plaintiff shortly before that accident, clear indication of difficulties experienced by her prior to the accident. It was not suggested that that evidence could or should be put aside in the present case. URJ COMMONWEALTH OF AUSTRALIA v DE CASTRO (Rolfe AJA) 3 Accordingly, I agree with the conclusion of Rolfe AJA that this Court should approach the assessment of damages, if it may undertake that task, upon a basis different from that adopted by the trial judge. The plaintiff also claimed that psychological difficulties resulted from the 1985 accident. There are, in my opinion, difficulties in assessing the evidence in this regard. The judge accepted, in my opinion correctly, that her seizures were not caused by brain damage but were psychogenic in origin. Her Honour held, though psychogenic in origin, they were caused by circumstances for which the Commonwealth was responsible in negligence. The only negligent act pleaded in this regard was the accident of 19 March 1985. As I understand the terms of the trial judge's judgment, she did not find that that accident produced the psychogenic consequences of which the plaintiff complained. If she did, I find difficulty in accepting that that accident produced those consequences. Rolfe AJA has referred to the evidence discussed in argument and it is not necessary for me to recapitulate what then was said. It follows from my conclusions on these two aspects of the plaintiffs loss that her Honour's judgment should be set aside. It is therefore necessary to determine whether this Court can and should re-assess the damages or whether there should be a retrial. Mr Cummins QC for the plaintiff has submitted that, if the judgment be set aside, there must be a retrial. He submitted, in my opinion correctly, that the assessment of damages will be affected by the view taken by the court of the plaintiffs credit and credibility as a witness. He submitted that this Court is not in a position to determine either of these matters. Accordingly, he submits, there must be a retrial limited to the assessment of damages. Reluctantly, I have come to the conclusion that Mr Cummins' submissions should be accepted. The view taken of the plaintiff's credit and credibility as a witness will affect, for example, the damages to be awarded for the physical injuries caused by the 1985 accident. If those damages are to be assessed for - I put the matter in an over-simplified form - the difference between the plaintiff's physical condition and her physical condition after the 1985 accident, it is necessary to determine what her condition was at those two points in time. Her own evidence and the extent of the acceptance of it will bear upon these matters. I do not feel able to form a proper assessment of the evidence in that regard merely upon the basis of the material now before the Court. No concessions have been made by the parties which would enable an acceptable basis of approach to be made to her evidence by this Court. The evils of retrials are well known. The effect of a retrial upon the plaintiff may possibly be detrimental. But, in the circumstances as they now are, I see no alternative to ordering that the judgment be set aside and that the matter be returned for a retrial limited to the assessment of damages. The respondent-plaintiff should pay the costs of the appeal to this Court and should have a certificate under the Suitors Fund Act. The costs of the trial and of the retrial should be reserved to the judge before whom the retrial is held. Meagher JA I agree with Rolfe AJA. Rolfe AJA INTRODUCTION The plaintiff/respondent, who was born on 31 October 1961, applied to join the Australian Army. She was accepted as a recruit on 13 March 1985 and posted to Kapooka Camp near Wagga Wagga. On 19 March 1985 she was directed to engage in an activity, which included running around a tree at a fast pace. She said, AB76: 4 UNREPORTED JUDGMENTS "As I went around the tree I heard a crunch in my knee and I hit my head and I don't remember anything after that." Her next recall was waking up in the camp hospital. The respondent sued the defendant/appellant in respect of the injury she sustained to her right knee, and she also made a claim that in the fall she hit her head and sustained an injury to it, which has had very substantial sequelae. The learned trial Judge, Simpson J, found this was a more significant and difficult claim than that arising from the knee injury, and at AB226-267, her Honour, after stating the notes of examination following her admission made no reference to a head injury, continued: "The nursing notes similarly disclose no complaints about, or treatment for, head injury. I cannot accept the plaintiff's evidence that she complained to the Army medical staff of headaches or head injuries, but was told to keep quiet; the Army medical records disclose considerable attention to the plaintiff's problems and complaints and quite detailed investigations, even before the date of this injury. The first mention of head injury in any documentation appears to be in the history taken by Dr Ling on 28 April 1985 - after a number of seizures. Similarly, there is no suggestion in the medical reports of loss of consciousness. There is, then, no evidence which corroborates the plaintiff's complaint of head injury at the time she fell, and the inference which has to be drawn from the hospital records is that no such complaint was made, and, if there was any blow to the head, it was of a very minor and insignificant degree. From this I must conclude that there is no PHYSICAL cause linking the fall in March 1985 with the seizures or the headaches. I accept that they are psychogenically based. The two psychologists who conducted a variety of tests both were of this opinion, as was the psychiatrist who examined her for the defendant." (Her Honour's emphasis.) The appellant admitted liability and the matter proceeded before her Honour as an assessment of damages. Past wage loss was agreed from 19 March 1985 to July 1987 at $16,800. Her Honour allowed interest on this amount at 7.5 per centum per annum for nine and a half years, which is $11,970. Her Honour found after July 1987, ie for a period of slightly in excess of seven years before the hearing, the respondent had various forms of employment and the evidence did not permit her to determine any loss of wages from July 1987 to the date of hearing. So far as loss of future earning capacity is concerned her Honour was asked to assess that on the basis that the nett weekly figure for a registered nurse in a State public hospital was $448, that this was work the respondent may have engaged in, and that her loss of earning capacity should be assessed at fifty per cent of that figure. Her Honour noted two difficulties in relation to that submission, the first being that the respondent's academic record made it unlikely she would be able to train as a nurse, and the second being the condition of her knee prior to 19 March 1985. She concluded she thought it likely the respondent would increase her working capacity but that her employment "will suffer interferences both by reason of her knee, and her psychological condition, interferences which are likely to diminish as time goes on". This, her Honour thought, demanded her losses be heavily discounted and, after taking into account the limited forms of employment available to the respondent and the likelihood of periods of unemployment in the future, she assessed her loss of earning capacity at $ 120 nett per week, which she discounted by forty per cent to about $72 per week and she allowed $70,000 for future loss of earning URJ COMMONWEALTH OF AUSTRALIA v DE CASTRO (Rolfe AJA) 5 capacity. Her Honour did not disclose the source of the $120 per week, nor how she justified it in view of the fact that the respondent had suffered no wage loss from July 1987 to August 1994. Her Honour awarded general damages in the sum of $50,000, at which she arrived by taking into account "the difficulty with the knee, her continuing headaches, the long period over which she suffered the seizures, and her inability to maintain permanent employment". She allowed interest on general damages at two per cent per annum for nine and a half years, which amounted to $6,270. Out-of-pocket expenses and the Fox v Wood component were agreed at $2,792.90 and $1,870 respectively.These sums provided for a judgment of $159,702.90. The appellant contends that her Honour's assessment of damages was excessive. The three matters, which were principally agitated on appeal, were the extent of the right knee injury, the cause of and extent of the seizures, and the allowance made for future loss of earning capacity. THE RIGHT KNEE The evidence was that in about April 1981 the respondent, whilst playing soccer, suffered a serious injury to her right knee. The history is provided firstly by Dr RF Clark, an orthopaedic surgeon, under whose care the respondent first came on 30 April 1984. She gave a history of playing soccer some three years previously "when she felt a crack in her right knee", and since then "her knee has been swelling and giving way, particularly with twisting strains". Dr Clark noted there was marked swelling initially and prior to his examination the respondent had been horse riding and developed further pain in her knee. He observed she was complaining of pain with swelling and instability, that there was a clicking sensation and she had trouble playing sports. She complained of tenderness around the lateral joint line and had difficulty relaxing her knee fully. To determine the problem Dr Clark performed an arthroscopic examination of her knee on 11 May 1984. He found both menisci were intact, but that there was a large area of chondromalacia ie natural degenerative change, over her lateral femoral condyle and that the respondent had "an old completely ruptured anterior cruciate ligament but examination under anaesthesia did not really reveal a great deal of instability". She saw Dr Clark next on 10 April 1985 and underwent an arthroscopic examination. She was seen again on 10 May 1985, by which time she had been discharged from the Army, and she was complaining of instability in the knee. Dr Clark offered the following opinion: "The patient suffered a rupture of the anterior cruciate ligament of her right knee some time in 1981 whilst playing soccer. When she was seen here in 1984 the cruciate rupture was diagnosed on arthroscopy and she was found to have evidence of chondromalacia of her lateral femoral condyle. It is noted that even at examination under anaesthesia there were no real signs of instability in her knee. She now has increasing pain and discomfort in her knee and she feels it giving way on occasions. She may require attempts at secondary reconstruction." Dr Clark re-examined the respondent on 17 November 1986, on which day he wrote a report: AB108. He repeated his earlier findings and said: "She was later found to have evidence of chondromalacia around her lateral femoral condyle and it was felt that if the symptoms of instability were to continue, then re-construction of the knee ligaments would be required. This has apparently now been performed and has not as yet led to any great improvement in her symptoms." 6 UNREPORTED JUDGMENTS Dr RM Tooth, a consultant orthopaedic surgeon, saw the respondent on 20 November 1985 and received a history of the injuries to her knee. He formed the opinion that she could have sustained a torn medial meniscus on 19 March 1985, as an arthrogram carried out then confirmed the presence of a definite tear in that meniscus. His opinion was that the meniscus could be repaired and, if that were to be done "it would also be advisable to carry out an extra-articular ligament re-construction for the cruciate ligament problem". It does not seem to have been in issue that prior to 19 March 1985 the plaintiff had a ruptured anterior cruciate ligament, and that as a result of falling on 19 March 1985 she suffered a torn medial meniscus. Dr Tooth was of the opinion that some degenerative change in the knee was probably a natural progression of injuries pre-existing 19 March 1985, and he recommended surgery to seek to repair the knee. Dr Tooth carried out an operation on 27 May 1986 at which there was a ligament re-construction to compensate for her previous anterior cruciate ligament injury, and the posterior detachment of the medial meniscus was repaired rather than removed and, as I understand it, certain chondromalacia was removed. He was of the view she would be in hospital for about six days and in a cast for about six weeks. On 22 August 1986 Dr Tooth advised the respondent was progressing more slowly than normal and, on 16 October 1986, he reported he thought she was improving. He reviewed her on 14 January 1987, and expressed the view that her knee "is coming along quite well and although she has not yet regained full movement, it is quite stable and she is walking well". He saw her again on 28 July 1987, and reported she was having "no real problem with her knee which feels quite stable and she attends aerobics and a gymnasium". He said she was having no problems with instability, that her knee would improve further as the muscles built up and that she would be fit for most types of work. On 18 January 1988 he reviewed the respondent and found her knee stable, although "for the last few months she has been getting pain in the knee with intermittent swelling and she has not been able to work". On 27 April 1988 he reviewed the respondent, noted her knee had settled down, although it ached from time to time, and that she was working as a receptionist. On 11 May 1990 Dr Tooth wrote a report in which he reviewed the history and offered the opinion that "due to the chondromalacia affecting the patella she was still getting some pain and some swelling and due to this she would have some persisting disability". He was of the view she was unable to partake in strenuous recreational or work activities, which involved a lot of walking, going up or down stairs or squatting, and that he would not expect the knee to deteriorate in the near future "although obviously the risk of arthritis is a possibility in later years". He assessed the loss of efficient use of the leg "in the region of twenty per cent". On 11 March 1992 Dr Tooth reported in relation to a further injury the respondent suffered to her knee in May 1991, for which it is not suggested the appellant was responsible. He said that the respondent had "some degree of chondromalacia patellae prior to the injury in May 1991", and that if she was having no problems until then it must be accepted that this injury aggravated her knee and that the aggravation persisted. Dr Tooth thought the injury she suffered in May 1991, when she put her foot in a hole in the footpath, fell and hurt her knee again, required an arthrogram. That was performed and it suggested she had damaged the medial meniscus. An arthroscopy disclosed a tear of the medial meniscus, which was excised. URJ COMMONWEALTH OF AUSTRALIA v DE CASTRO (Rolfe AJA) 7 On 22 December 1992 Dr Tooth reported that the respondent's knee "felt really good and she was virtually symptom free. She then went to the gymnasium and did exercises which included step ups and trampolining which has caused aching discomfort in the knee with cramp-like discomfort in the back of the thigh and calf in which she actually develops a cramp". He found no effusion in the knee and the range of movement and stability to be unchanged. He said: "Her symptoms are consistent with chondromalacia patellae which she has aggravated with her gym activities." On 29 November 1993 Dr Tooth expressed the opinion that the permanent loss of efficient use of the right leg at or above the knee would be in the region of twenty five per cent, which he apportioned as to sixty five per cent due to injuries prior to joining the Army, thirty per cent due to aggravation by the injury sustained in the Army, and five per cent due to the 1991 injury. On 3 August 1994 he was of the opinion that the respondent was only fit for sedentary work, within her mental capacity, and not involving a lot of standing and walking. He said she would not be fit for nursing duties. It is important to note, for present purposes, that both Dr Clark and Dr Tooth were given histories of various problems in the knee after the accident in 1981 and prior to the accident on 19 March 1985, which problems were related by them to the injury she received playing soccer in 1981. Dr RL Thomson, a medico-legal consultant, saw the plaintiff on 2 April 1990, examined her and wrote a report. He noted the following history: "As to relevant prior history, she said she had an injury to the right knee associated with playing soccer in 1982. SHE SAID SHE NEVER RECOVERED THEREFROM AND CONTINUED TO HAVE ONGOING PROBLEMS IN THE NATURE OF PAIN, SWELLING AND INSTABILITY. She claims that the injury on 18th March, 1985 however, significantly aggravated that pre-existing knee disability and she said that aggravation never reverted to its particular pre-aggravation level." (My emphasis.) Dr Thomson diagnosed deranged right medial meniscus and ruptured anterior cruciate ligament with ligamentous re-construction of the right knee and emerging degenerative changes and, under the heading "Attributability/Liability", he said "The patient had a deranged right knee following the soccer injury in 1982 when she had a documented ruptured anterior cruciate ligament thereout. It was noted at the relevant arthroscopy that "both menisci were intact' whereas in the right knee arthrogram on 21st November, 1985 (after falling into the ditch on 18th March, 1985), there was noted 'definite vertical tear through the posterior half of the medial meniscus'. The patient said the second incident made the right knee considerably worse than previously and that aggravation never reverted to its particular pre-aggravation level. She said the right knee is "100% worse" than it was prior to the incident of 18th March, 1985 and I think on that basis there is obviously room for apportionment of liability. On that basis, I would apportion fifty per cent of the liability to the soccer incident and fifty per cent to the incident of falling in the ditch on 18th March 1985." What the evidence to which I have referred revealed, and so much was not in issue, was that she suffered a ruptured anterior cruciate ligament in the soccer accident in 1981 and a torn meniscus in the fall on 19 March 1985. The histories she gave Dr Clark and Dr Thomson indicated that she had symptoms and signs prior to 19 March 1985. 8 UNREPORTED JUDGMENTS I should also refer to some evidence of examination at the time she entered the Army. On 14 March 1985 she reported to a medical officer at Kapooka, who received a history that after the knee injury in 1981 she had recurrent pain and swelling over the ensuing two seasons. Dr Huntsdale, an orthopaedic surgeon, was asked to review and comment on her fitness prior to her commencing a rigorous training programme including jumping from heights. Dr Huntsdale seems to have seen her on 18 March 1985 and reported unfavourably on her knee, including the observation that he did not feel she should have been admitted to the Army because of her condition. In her oral evidence the respondent disclosed the injury in 1981 and that in 1984 she again hurt her knee playing soccer and attended upon Dr Clark. She said her knee was "fine" before joining the Army and she "was able to run, I could do a lot of things, it was good". However she noted, soon after joining the Army and before the accident on 19 March 1985, she had a problem with her knee after doing "a lot of marching", "and my knee was very swollen, it was sore". That led to her seeing Dr Huntsdale. She said, in cross-examination, AB89, that when she joined the Army she was playing sport and soccer but the knee "wasn't to the extent where I can't do anything with it now. At the time I was able to play sport but I can't do anything now". Her Honour noted, AB252, that the appellant accepted there was some injury and/or aggravation to the respondent's knee at the time of the fall in March 1985, and that the respondent "effectively denied" she was experiencing considerable problems with her knee when she saw Dr Clark in 1984, although she found the respondent appeared "to accept that she had some symptoms". Her Honour reviewed the medical records and the reports of Dr Clark and Dr Tooth. She referred to the history given by the respondent to Dr Thomson although, the portion quoted at AB255 line G is not a totally accurate quotation, Dr Thomson having said that "she said...". However, as I understand it, her Honour accepted what Dr Thomson said was the history he was given. Her Honour also referred to a report of Dr RWD Middleton of 25 June 1993, which was given to the appellant. He recorded a detailed history and confirmed her disabilities were consistent to the previous rupture of the anterior cruciate ligament and the consequent necessity for ligament repair, which injuries pre-dated the accident on 19 March 1985. That accident, in his opinion, "could be considered to have aggravated the pre-existing condition and such aggravation could be considered to be of short duration and did not necessitate the reconstructive surgery which she subsequently had performed". At AB255 her Honour referred to that opinion and, at AB256, to that of Dr Parker, who in a report of 22 September 1987, agreed the 1981 injury, which he said occurred in 1982 whilst playing football, was responsible for the total rupture of the right cruciate ligament. On | July 1993 Dr Parker gave a detailed report and he expressed the view that the percentage responsibility was sixty per cent for the initial 1981 injury, twenty per cent for the 19 March 1985 injury, and twenty per cent for the injury in 1991. At AB260 her Honour said the medical evidence in relation to the knee was not easy to reconcile and she pointed out no doctors were called to give oral evidence, which did not assist her task. She continued: "Although a number of the medical practitioners have attempted to apportion responsibility for the plaintiff's present condition to the various injuries, it does not seem to me that they have performed this exercise in a way which is of real URJ COMMONWEALTH OF AUSTRALIA v DE CASTRO (Rolfe AJA) 9 assistance. This, of course, is no criticism of them; in the absence of evidence that the pre-Army injury would in some way have become significantly symptomatic, its contribution to the ultimate condition is not relevant." At AB261 her Honour said, and this may be regarded as a critical finding: "What the evidence does not disclose is the probability of this prior injury becoming symptomatic in the absence of the 1985 injury." This finding was strongly attacked on appeal on the basis that the histories given by Dr Clark and Dr Thomson and certain of the evidence given by the respondent made it clear she was suffering not only symptoms, but also signs, resulting from the ruptured cruciate ligament prior to 19 March 1985. It was not suggested that the histories given to Dr Clark and Dr Thomson were in error, nor that, for example, her evidence of swelling shortly before the relevant accident should not be accepted. The evidence of Dr Clark and Dr Thomson was tendered by the respondent and no attempt was made to cast any doubt upon the recording of her history. However there is no unequivocal statement by her Honour that she accepted the respondent as truthful in so far as she denied any real problems after 1981 and before March 1985. To the contrary her Honour adopted part of the history given to Dr Thomson, without any apparent demur, and she found, in relation to the head injury, the respondent should not be accepted. After making the finding at AB261 to which I have just referred, she said: "Tn any event, the plaintiff is clearly entitled to damages for the immediate after effects of the accident whether an aggravation of pre-existing symptoms, or an aggravation of a pre-existing asymptomatic injury. The difficulty lies in determining whether the 1981 injury was likely to have given rise to symptoms in any event. I think it is fair to infer that since 1981 the plaintiff was more vulnerable to injury than before." The first sentence I have just quoted is somewhat at odds with the critical sentence, which immediately preceded it, and, further, it seems to be internally inconsistent. It is inconsistent in the sense that her Honour does not make it clear whether she was finding an aggravation of pre-existing symptoms or of a pre-existing asymptomatic injury. Her Honour then considered Watts v Rake (1960) 108 CLR 158 and Purkess v Crittenden (1955) 114 CLR 164. After referring to Watts v Rake she said: "Unless it is established that the pre-existing vulnerability would have brought the plaintiff to her present condition or to some intermediate symptomatic condition even without the accident, it has no bearing on the claim (except where, as here the defendant's knowledge of that vulnerability is evidence of negligence)." It was submitted on behalf of the appellant that this statement effectively reversed the onus of proof and failed to apply Watts v Rake, as explained in Purkess v Crittenden. Her Honour said she was unable to conclude that the respondent's pre 1985 knee injury "would have brought her to her 'post-accident state of health"'. In the circumstances she stated she was concerned with the cause of the present symptoms and that she proposed "accordingly to award the plaintiff damages on the basis that the 1985 injury is the cause of her present condition". In my respectful opinion this finding cannot stand. In Purkess v Crittenden, Watts v Rake was explained by Barwick CJ, Kitto and Taylor JJ at 167 in the following terms: "We do not regard that case as formulating the proposition that once a plaintiff has established a prima facie case that he has been incapacitated as a result of the injuries inflicted upon him by the defendant's negligence the 10 UNREPORTED JUDGMENTS burden of establishing that his incapacity is wholly or partially the result of, or the total or partial incapacity would, in any event, have resulted from, some pre-existing condition in the plaintiff passes to the defendant in the sense that, when the whole of the evidence in the case has been given, the onus of proof on this issue rests upon him." The present case demanded a consideration of the condition of the respondent's knee at the time of the accident on 19 March 1985. At that stage there was a ruptured cruciate ligament with the condition of chondromalacia, which, on the evidence, gave rise to swelling and pain. In these circumstances I do not see how the finding can stand that the knee was not symptomatic. In my opinion the respondent is only entitled to damages, in relation to the knee, based on the torn meniscus, the necessity to have it repaired, and such inconvenience as she suffered in relation to it. Save for this the evidence establishes that the problems are clearly attributable to the ongoing effects of the cruciate ligament rupture and the 1991 accident, for neither of which the appellant is responsible. In my opinion the appellant discharged the evidentiary onus of establishing that such incapacity as the respondent is suffering from, save to the extent to which I have referred, stemmed from events other than those for which it is liable. This is not a case in which her Honour was in any better position than this Court to reach the conclusion I have just stated. The evidence upon which it is based arises, essentially, from uncontradicted evidence of the history the respondent gave and her evidence of the knee swelling after she joined the Army, but prior to the accident on 19 March 1985. SEIZURES In his report of 23 June 1987 Dr O'Sullivan, a neurologist, concluded the respondent had nocturnal epilepsy which, in his view, "would not be related to the accident that occurred on" 18 (sic) March 1985. The respondent gave Dr O'Sullivan a history, following her head and knee injury, of left sided headaches, which she described. He said the clinical diagnosis was of epilepsy and he did not "feel that these are pseudo-seizures". He thought it important for the respondent to continue with long term anti-convulsant therapy and repeated: "T do not consider they are related to the accident on the 18.3.85, because of the lapse of time between the accident and the onset of the seizures. The highest incidence of epilepsy after head injury is within the first twenty four hours and it steadily reduces and by three months after the accident the incidence is significantly reduced and therefore I would have to conclude that the seizures are not related to the events of the 18.3.85, particularly as there did not appear to be a very severe head injury." Dr O'Sullivan reviewed the respondent on 6 August 1987. Certain tests established her epilepsy was not severe and he discussed future treatment. He saw her next on 5 December 1988 and repeated the respondent had nocturnal epilepsy, which he did not consider was related to the events of 18 March 1985. On 15 May 1990 he furnished a further report, having read that from a consulting clinical psychologist, Mr Norman Rees. He said: "Although it is clearly documented in his report that in assessing her personality it revealed a emotional hypochondriacal person who experiences a high level of fear and inadequacy, I cannot agree that the seizures that Miss de Castro suffers from are functional in origin. As stated in my previous report and also documented by Dr Burke in his report, this patient suffers from epilepsy which is predominantly nocturnal and as stated in my report, I do not consider that her nocturnal epilepsy relates to the events of the 18.3.85." URJ COMMONWEALTH OF AUSTRALIA v DE CASTRO (Rolfe AJA) 11 Her Honour considered various medical views as to the cause of the seizures. The psychologists, Mr McCallum and Mr Rees, considered them to be functional and a form of conversion reaction and Dr Leicester considered them to be functional pseudo seizures. On the other hand Dr Weinman, a neurologist, and Dr Mellick, a neurologist, regarded them as epilepsy, as did Dr O' Sullivan. Her Honour found the medical evidence "extremely difficult to reconcile". She referred to Dr O'Sullivan's diagnosis, but noted that Dr Mellick diagnosed epilepsy shortly after the accident. On the other hand Dr O'Sullivan gained support from the fact that the head injury was not severe, while Dr Mellick seems to assume it was. Her Honour referred to the problems in Dr Mellick's opinion, in view of her finding that the head injury was not severe. I have referred to this evidence. The medical evidence, as opposed to the evidence from psychologists, strongly favoured the view that the seizures were the result of epilepsy, which was not related to the accident. Her Honour did not say she rejected this medical evidence. No psychiatric evidence was called on behalf of the respondent. She was examined by a consulting psychologist, Mr McCallum, and a psychologist, Mr Rees. Mr McCallum wrote a report dated 27 October 1986. He noted her stated ongoing worries were headaches at the site of the blow and "overshadowing everything else is the effect of her seizures". She stated they were decreasing in frequency, but claimed they still occurred about every four weeks "and after each she is completely exhausted for three days". She described the problems and the difficulty in obtaining a job. The respondent was psychologically assessed and Mr McCallum said the pattern of results "is paradoxical in that the intelligence test items requiring long range recall (Information and Vocabulary) show very poor results, while those requiring short range recall (Digit Span and Digit Symbol) give her best scores". He said: "Such a pattern of results makes it difficult to draw firm conclusions as to the presence of brain damage as a factor in her seizures." He suggested her personality showed a propensity to functional disorders, which may be instigated by severe physical and/or psychological shock or trauma. In giving his conclusions and recommendations he said: "Firstly the problem of clear diagnosis of Miss de Castro's condition is exacerbated by the atypical pattern of test results. It is clear however that she has the emotionally labile personality to which functional disorders are unique. Nevertheless such people can still suffer traumatic brain damage resulting in a mixed pattern of physical symptoms with functional overlay. Her memory problem is paradoxically the reverse of most brain damaged subjects and could be affected by lack of concentration. Another speculation which could possibly account for her poor long range recall and relatively good short range recall is that she has suffered anoxia at some stage causing mild diffuse frontal lobe damage. Finally it is well documented that Miss de Castro is suffering from an embarrassing, inconvenient and atypical form of disturbance consciousness. It appears likely that this is functional in origin rather than being directly due to brain tissue damage. The pattern of test results while not completely excluding the possibility of brain damage does not offer strong support for this as a causal factor. The aetiology of the problem is attributable to the trauma she experienced, even if not purely in a physical sense. The shock and stress associated with the event have proved enough to provoke a conversion reaction with significant disability and reduction in employment prospects. Theoretically the frequency 12 UNREPORTED JUDGMENTS and severity should reduce over time and she would be likely to benefit from counselling to assist in this. If there is some slight brain damage then the majority of her symptom pattern COULD BE CAUSED by a functional overlay." (My emphasis.) She was seen by Mr Rees, a colleague of Mr McCallum, in March 1990 for re-assessment. He carried out extensive testing and found the overall pattern of results to be similar to that observed in 1986. He concluded the results from the various abilities' measures administered did not clarify the issue of traumatic brain damage, the distribution of her skills was unusual and her capacity to concentrate noticeably deteriorated on conceptually more difficult material. He said: "This is most probably due to adverse features in her personality such as anxiety, depression and low self-confidence." He continued: "Assessment of personality functioning shows an emotional, hypochondriacal person who experiences an (sic) high level of fear and inadequacy. I agree with comments previously made by Jim McCallum in 1986 that she has an emotionally labile personality which is vulnerable to the development of functional disorder." He proffered the view that the continued suffering from seizures was "probably functional in origin rather than due to brain damage". He suggested they represented a form of conversion reaction "where stresses and conflicts are converted into a physical manifestation". When one has regard to her Honour's finding that the head injury was not severe it seems unlikely in the extreme that the respondent suffered any form of brain damage. In considering the reports of Mr McCallum and Mr Rees her Honour said, AB269: "Mr McCallum's report is a little difficult to rely on because he has not taken any history which discloses what was 'the event' he was here describing. Similarly Mr Rees did not disclose in his report any history of injury on which he based his opinion, but referred to 'the trauma she suffered'. For reasons which shall appear below, it is not possible to assume that 'the event' or 'the trauma' are merely the fall. There is an additional difficulty with Mr Rees' opinion. This appears in that part of his report in which he said: 'This (sic) symptoms and other adverse features in personality such as low confidence and depression are most likely attributable to the trauma she suffered.' One can readily understand the attribution of symptoms to the trauma she suffered, even though Mr Rees does not state what was his understanding of that trauma. But it is much more difficult to accept that 'other adverse features in personality such as low confidence and...' are attributable to that trauma." Her Honour observed that her overall impression from the reports was that the respondent's pre-accident personality predisposed her to the type of disorder from which she was suffering and, whilst that may have been triggered by the fall, she was confronted with a more difficult dilemma. She continued: "Firstly, I must decide whether she suffers from any psychological or psychiatric condition following the accident from which she did not suffer prior to the accident; and if so I must determine whether that condition is causally related to the accident. Thirdly, I must make some assessment of the probability of arriving at that condition in any event. It is the absence of any specificity about the accident itself and the understanding of it which the two psychologists URJ COMMONWEALTH OF AUSTRALIA v DE CASTRO (Rolfe AJA) 13 injected into their reports which makes it difficult to place great reliance upon them when it comes to questions of causation. And to this must be added an additional and extremely significant complication." Her Honour then considered material contained in a report from Dr John Shand, a psychiatrist, being a history the respondent gave him about conditions in the Army generally, which appertained to her very short period of service. These were not matters about which the respondent made any complaint in her pleadings or in her evidence and they certainly were not matters of history she gave to either psychologist. Her Honour set out the evidence of her complaints to Dr Shand in some detail: "\.. because it is part of the defendant's case that the plaintiff's present emotional condition is attributable, not to the sequelae of the fall on 19 March, but, at least partially, to these other events which occurred while the plaintiff was in the Army. Should that be so, they can form no basis for recovery of damages on the present pleadings. That undoubtedly is true, even if it is a somewhat surprising position for the defendant to adopt. The defendant explicitly accepted these histories." Dr Shand formed the view the respondent was suffering from an hysterical disorder including fits and other milder symptoms "apparently as a result of her experiences in the Army", and that she had "obvious personality problems which had nothing to do with Army service", "except perhaps for aggravation due to her alleged experiences during Army service". He maintained the view her fits were psychogenic. In his final report of 24 June 1993 Dr Shand said: "From the history obtained, this patient's nervous disorder has settled down a great deal and she is left with only potential for anxiety during stressful experiences such as the one mentioned above. She is not in need of treatment. She showed no signs of clinical nervous disorder at interview." Her Honour considered there was a difficulty with Dr Shand's "scenario". The difficulty was that the respondent's seizures, which she considered on any view occurred with considerable frequency between April 1985 and early 1994, were the psychogenic result of her experiences in the Army other than the fall on 19 March 1985. She continued: "The defendant quite clearly accepts that the plaintiffs post Army condition was, at least in part, attributable to her Army service. What it does not accept is that that condition is attributable to the physical injury she sustained on 19 March, in a single incident, but puts that it is attributable to the indignities to which she had been subjected during the very short period of her service." Her Honour agreed, as the respondent's case was pleaded and presented, that if her emotional condition, whether it included the seizures or not, was attributable to general conditions in the Army as opposed to the single incident, she could not recover in the present case. She also considered that if the respondent had a pre-existing vulnerability to a psychological or psychiatric condition and the symptoms of that condition were triggered by the appellant's negligence in relation to the event of 19 March 1985, "then this is a classic example of the 'egg shell skull' case". Her Honour stated her conclusions at AB,274-275: "The defendant urges upon me the conclusion that the plaintiff's seizures are properly diagnosed as epilepsy but that they are not causally related to the accident. IT HAVE COME TO THE CONCLUSION THAT THE SEIZURES WERE PSYCHOGENICALLY INDUCED AND THAT THEY ARE ATTRIBUTABLE TO HER ARMY SERVICE. In this regard, I note, as I have ", 14 UNREPORTED JUDGMENTS previously, that the bulk, and the worst of the matters described by Dr Shand, occurred while she was in hospital following the injury. I therefore propose to treat the seizures as part of her psychiatric condition which followed the accident and which, in a modified form, continues to the present time. The nature and extent of the seizures has been described in some detail in various of the medical reports and I do not think it necessary further to canvass their effect on the plaintiff. It is sufficient to say that she clearly suffered very significantly for many years after the accident and, having regard to the fact that, after a lapse of time, there was another seizure earlier this year, there can be no guarantee they have now ceased." (My emphasis.) The first difficulty I have with her Honour's reasoning is that she had expressed grave reservations about the evidence of the psychologists, which was a central plank in asserting psychogenically induced injuries. The second difficulty I have is how her Honour proceeds from the seizures being psychogenically induced and attributable to "her Army service" to the point of finding that they resulted from the accident. A possible link would be that as a result of the accident the respondent was hospitalised and, during her hospitalisation certain incidents occurred as a consequence of her being hospitalised for which the appellant is liable. However the respondent's case was never put in this way and it seems clear, from the passages I have already quoted from her Honour's reasoning, that she accepted that and distinguished between "general conditions in the Army" and "the single incident". By "the single incident" she was referring to the fall on 19 March 1985. The submissions on behalf of the appellant were that her Honour had made no findings, which would justify the conclusion, if that be her Honour's conclusion, that the psychogenically induced seizures were related to the fall. Mr Cummins of Queen's Counsel, in his submissions on behalf of the respondent, pointed out the difficulty which arose because he thought "her Honour was neglecting to say was, they were triggered by the incident on 19 April (sic) 1985. She does not say that". He continued: "Of course Army service would embrace most things that happened, but she seems to have not said that, but bearing in mind what she properly put as the law, that the general conditions of the Army as opposed to a single incident she could not recover, the plaintiff could have recovered, it seems extraordinary that fifteen lines later her Honour would reverse that." This submission, in effect, disavowed her Honour's reasoning in so far as it may have impliedly linked the seizures with the fall on 19 March 1985. Mr Cummins said he sought to uphold the reasoning "only on the basis that the sentence does not mean what it grammatically says", and that it meant: "We say whatever her Army service would mean triggered by the incident of 19 April 1985." Mr Cummins also sought to relate the evidence of Mr McCallum and Mr Rees to the problem, although her Honour had already pointed up the difficulties with that evidence. In my respectful opinion her Honour's reasoning does not state, nor lead to the conclusion, that she found the seizures were due to the accident on 19 March 1985. That was the only case the respondent sought to make in this regard and, in my opinion, there are no findings from which the conclusion can be drawn that her Honour was satisfied this case had been made out. Indeed her Honour's findings and analysis of the pleadings and the evidence led effectively to a contrary result. URJ COMMONWEALTH OF AUSTRALIA v DE CASTRO (Rolfe AJA) 15 FUTURE LOSS OF EARNING CAPACITY In my view her Honour was not justified in finding a future loss of earning capacity in the sum of $70,000. The respondent had worked from July 1987 to the date of trial and there was no suggestion she would not continue to be engaged in gainful employment. If any amount was to be included for loss of future earning capacity it should only have been in the nature of a "cushion" or "buffer" intended to provide against the contingency that, at some stage in the future, the respondent may, by virtue of the meniscal tear, be precluded from engaging in gainful employment. However, even this approach would be extremely favourable to the respondent because she has the other problems with the knee, which are in no way related to the accident. RE-ASSESSMENT OR NEW TRIAL For the reasons I have given I consider her Honour's judgment must be set aside. The question arises whether there should be a new trial limited to damages, or whether the Court should re-assess the damages. Mr Maconachie submitted it was an appropriate case for the Court to re-assess the damages. Mr Cummins submitted there should be a new trial. S107 requires the Court to be satisfied that, without seeing or hearing the plaintiff or defendant or other witnesses, it is fully able to assess the amount of damages. In my view it is not necessary to see the respondent or any witnesses for the purpose of re-assessing damages. I say this because I am satisfied, on the evidence, that the only injury she sustained in the fall of 19 March 1985 was a tear to the meniscus, which has been repaired, and that she has not suffered, as a result of that accident, any psychogenically induced injury. On these bases there is no difficulty, as I see the matter, in re-assessing damages. Past loss of wages was agreed at $16,800 on which her Honour awarded interest of $11,970. Out-of-pocket expenses and the Fox v Wood component were agreed at $2,792.90 and $1,870 respectively. For the reasons I have given I would not allow any amount for future loss of earning capacity. Her Honour awarded general damages in the sum of $50,000. In doing so she allowed an amount for the seizures, which, in my opinion, constituted an error. Even if she had not, taking the percentages suggested by the doctors as representing the differences between the knee condition from which she was then suffering and the knee condition caused by the accident on 19 March 1985 at approximately fifty per cent, the award of general damages should, in my view, be reduced quite substantially. I would propose in lieu of the figure of $50,000 a figure of $30,000. Her Honour allowed interest on general damages at two per cent for nine and a half years. Adopting the same percentage figure and the same period the interest on general damages is $5,700. I would allow the following figures: Past Loss of Wages $16,800.00 Interest on Past Loss of Wages 11,970.00 General Damages 30,000.00 Interest on General Damages 5,700.00 Out-of-pocket Expenses 2,792.90 Fox v Wood Component $1.870.00 $69.132.90 ORDERS 16 UNREPORTED JUDGMENTS The orders I propose are that the appeal be allowed, that her Honour's verdict and judgment for the respondent in the sum of $159,702.90 be set aside, and that in lieu thereof there be judgment for the respondent in the sum of $69,133. I confirm her Honour's orders as to costs of the trial and I order the respondent to pay the appellant's costs of the appeal. The respondent is to have a certificate under the Suitors Fund Act if she is otherwise entitled to it. Representation Counsel for the appellant: J Maconachie QC/M Barko Solicitors for the appellant: Australian Government Solicitor Counsel for the respondent: J Cummins QC/M Boyd Solicitors for the respondent: Greg Walsh and Co