NYMAN v VALMAS SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL Mason P, PRIESTLEY JA and BEAZLEY JA 12 May, 26 June 1997 [1997] NSWCA 235 As a result of the appellant solicitor's negligence, the respondent's common law personal injury proceedings became statute barred. The trial judge awarded the respondent damages in respect of his physical injuries and disabilities, as well as damages for stress and anxiety suffered as a direct result of the appellant's negligence. The appellant appealed against the award of damages for stress and anxiety on the basis that there was no evidence to support such an award, or alternatively, on the basis that the award was excessive. The appellant also argued that the trial judge erred in the calculation of interest. HELD: (1) Appeal allowed. (2) There was no evidence of stress or anxiety suffered by the respondent relating to the appellant's tortious conduct upon which to base the award of damages. (3) As the cost of a notional trial against the employer assessed as at the notional trial date should have been deducted from the notional judgment, interest should be assessed on the award only after deduction of those costs. (4) The filing of a submitting appearance in the form of Part 51 r 13B does not denote consent to the orders sought. It is a means of facilitating notice to the Court that the party does not propose to put any argument to the Court. Mason P. I agree with Beazley JA. Priestley JA. I agree with Beazley JA. Beazley JA. This appeal raises two short points. First, whether the trial judge erred in awarding the respondent damages for stress and anxiety suffered as a result of the appellant's negligence in allowing the respondent's common law proceedings to become statute barred. A subsidiary question to that issue arises as to whether, in any event, the damages awarded were excessive. Secondly, whether his Honour erred in the calculation of interest. Background The respondent had been injured on 18 May 1983 in the course of his employment on a building site. He sustained head, chest, spinal and neck injuries in the accident andsuffers from ongoing disability in respect of those injuries. He had retained the appellant as his solicitor in respect of a claim for personal injuries against his employer arising out of these work related injuries. The appellant failed to commence proceedings against the employer on behalf of the respondent, with the result that the claim became statute barred. The respondent thereupon brought proceedings in negligence against the appellant (the negligence proceedings). There was no issue as to liability in respect of that claim. 2 UNREPORTED JUDGMENTS In the negligence proceedings, the respondent was awarded damages in respect of his physical injuries and disabilities. There is no issue on the appeal as to the award of those damages. The issue relates to the award of the sum of $20,000 for stress and anxiety arising out of the appellant's negligence. The appellant conceded that damages were recoverable for stress and anxiety suffered as a result of a party's tortious conduct: see Brickhill & Anor v Cooke & Anor [1984] 2 NSWLR 396; Campbelltown City Council v MacKay & Anor (1989) 15 NSWLR 396; Rentokil Pty Limited v Channon (1990) 19 NSWLR 417. It was submitted, however, that there was no evidence to support an award of such damages in this case. Alternatively, it was submitted that the damages awarded were excessive. The respondent had relied on the evidence of Dr Dent, psychiatrist, in support of this aspect of the claim. In a medico-legal report dated 31 May 1994, Dr Dent reported that the respondent gave a history of his feelings on being informed by the appellant that his claim was statute barred that: I have been angry and worried, but with news from Nyman and there is nothing to be done, it has been stuck in my head, if I could have a shot gun I would shoot him. Dr Dent considered that the news from the appellant had: exacerbated the situation of helplessness and despair to the point of him never being free from worry "black and gloomy no improvement ever" and where he now feels it as if a part of him is dead and gone. The appellant did not give any direct evidence as to the stress and anxiety he felt as a result of the appellant's negligence. He was cross-examined, however, as to his feelings of anger. He was asked: 'Do you feel angry?'. The question was not qualified in any way or relevantly confined to anger arising out of or related to the appellant's tortious conduct. Notwithstanding that, the question was not the subject of objection. The respondent replied affirmatively. In the same passage of cross-examination, the respondent denied feeling angry with people and in particular, denied that he felt anything towards Mr Nyman. It should also be noted that in the same passage of cross-examination, three questions after originally stating that he felt angry, he said that he did not 'ever feel angry'. The trial judge considered that the respondent's claim for stress and anxiety was based on four matters: (1) the evidence which the respondent gave as to his feelings of anger; (2) the evidence the respondent gave about how he felt during cross-examination by counsel for the appellant; (3) evidence contained in Dr Dent's report, and in particular the passage which contained a history allegedly given by the respondent to Dr Dent that when he found out that the appellant had not 'put the claim in', he was so angrythat he could have shot the appellant; (4) damages for what was described in submissions as 'presumptive stress'. His Honour rejected the first three of these matters as giving rise to a claim in this case. He preferred other psychiatric evidence to that of Dr Dent, finding that the 'the statement of the plaintiff's symptoms in Dr Dent's report is exaggerated. The report itself is expressed in florid language and reads like a piece of advocacy'. As to the fourth basis of the claim, his Honour said at 364: T accept that the plaintiff suffered some anxiety and stress in attempting to check with the defendant about the progress of the proceedings which should have been brought (the common law proceedings) discovering that no proceedings had been brought within the limitation period, having to instruct other lawyers, having to wait until the URJ NYMAN v VALMAS (Beazley JA) 3 present proceedings reached court and having to undergo a trial against his former solicitor in which some allegations were made against him which might not have been made in a trial of his original claims. Save for evidence contained in Dr Dent's report, which the trial judge did not accept, there was no direct evidence that the respondent suffered any anxiety and stress arising out of the appellant's tortious conduct. His Honour rejected that the respondent felt any homicidal anger towards the appellant and preferred the evidence given by the respondent in the courtroom to that contained in Dr Dent's report. I have referred to that evidence above. His Honour concluded that the respondent did not have any 'emotion over and above what would ordinarily be expected in a person in his position'. It is a well known feature of litigation that parties to it may feel anxious both whilst litigation is pending and during the course of proceedings. The respondent's claim for damages for stress and anxiety did not relate to that type of situation, which is normally not compensable, but to additional stress and anxiety which he suffered directly because of the appellant's negligence. As with any such claim, it must be based upon evidence. It is not sufficient for the court to infer or imply that a party did in fact suffer stress or anxiety of that kind when there is no evidence from which the inference may be drawn or the implication made. In the absence of any evidence to support the claim, it should have been dismissed. The question which arises therefore is whether the evidence to which I have referred supported the claim. In my opinion, it did not. It is always open, of course, to a trial judge, just as it is to a jury, to accept part of a witness" evidence and to disregard other parts. Thus the trial judge could properly have ignored the respondent's denial that he ever felt angry. However, the only evidence of anger relating to Mr Nyman was of denial of such feelings. There was no other evidence of stress or anxiety relating to the appellant's tortious conduct. Given the specific question relating to Mr Nyman, the respondent's evidence that he felt angry was far too general to support a finding that the respondent experienced stress and anxiety relating directly to the appellant's negligence. Even if there was a basis for the claim, the award of damages in the sum of $20,000 was excessive in the circumstances. A modest sum only was called for. However, as I do not consider the question arises, it is not necessary for this Court to specify what that amount should have been. Question of Interest. It was agreed between the parties that had the common law proceedings been commenced within the limitation period, the proceedings would have been tried on 30 June 1992. The trial judge found that the net cost of the common law proceedings to the respondent, that is the solicitor/client costs less the party/party costs, would have been $8,000. The trial judge held that that amount should not be deducted from the amount of the notional judgment for the purposes of calculating interest. The amount of $8,000 was therefore deducted after his Honour's calculation of interest on the amount of damages. Counsel for the appellant submitted that the cost of the notional trial should have been deducted from the notional judgment against the employer at the notional trial date and before the calculation of interest. It was submitted that his Honour erred in failing to do so, as the respondent would have had to pay the costs of the notional trial assessed on a solicitor/client basis either before or substantially contemporaneously with the trial. Accordingly he should only have received interest on the award after deduction of those costs. 4 UNREPORTED JUDGMENTS In my opinion, the appellant's submission is correct. Section 94 interest is compensatory: see Haines v Bendall (1991) 172 CLR 60 at 66. The court is entitled to have regard to the fact that the judgment amount in this matter would have been paid relatively quickly and that the amount the respondent would have received would have been the judgment sum less $8,000. In my opinion, interest should have been calculated on the net amount. The trial judge assessed the notional judgment amount to be $157,456.00, upon which sum interest was then assessed at 12% per annum for 4 1/3 years (from the notional hearing date of 30 June 1992), amounting to $81,877.00. Accordingly, as the costs of the notional trial, agreed at $8,000.00, should have been deducted from the judgment sum before the calculation of interest, the respondent's damages must be reduced by $4,160.00, calculated as follows: $8,000.00 x 12% p.a. x 4 1/3 years = $4,160.00 Effect of a submitting appearance One further matter should be mentioned. The respondent made a submitting appearance only. At the commencement of the hearing counsel for the appellant submitted that the appellant was entitled to the orders sought in the Notice of Appeal without the necessity for the Court embarking upon the merits of the appeal. The respondent had filed a submitting appearance in the form of Part 51 r 13B which provides: A respondent to an appeal or an opponent to proceedings commenced by summons who wishes to submit to the orders of the Court of Appeal, save as to costs, may file a notice of appearance with a statement that the party submits to the orders of the Court, save as to costs. Part 52 r 11A is also relevant. It provides: (1) Subject to rule 11C, where a respondent or opponent adds to that party's notice of appearance a statement pursuant to Part 51 rule 13B (which relates to a submitting appearance) and takes no active part in the proceedings, the appellant or claimant shall, unless the Court otherwise orders, pay the respondent's or the opponent's costs as a submitting party. (1A) A party whose costs are payable under subrule (1) may tax the costs after the conclusion of the proceedings and, if the taxed costs are not paid within 4 days after the signing of a certificate of the taxation, may enter judgment for the taxed costs. (2) Any costs that an appellant or claimant to pay pursuant to subrule (1) to a submitting party properly joined in proceedings shall, unless the Court otherwise orders, be included in any costs payable by any other respondent or opponent to the appellant or claimant in respect of those proceedings. It was submitted that the terms of r 11A indicated that a submitting appearance was tantamount to consent to the orders sought. Reliance was also placed upon Trust Co of Australia Ltd v Perpetual Trustees WA Ltd (1995) 36 NSWLR 654. The court was not prepared to accede to the appellant's request stating that it would give reasons in its judgment. In Trust Co of Australia Ltd v Perpetual Trustees WA Ltd, Young J considered the operation of Part 11 r 3 of the Supreme Court Rules, introduced in 1991 against the background of the practice and procedure of Courts of Equity and Courts of Common Law prior to the enactment of the Supreme Court Act 1970. His Honour also considered the practice relating to submitting appearances prior to the introduction of Part 11 r 3. With respect to counsel I do not find this decision of assistance. His Honour was dealing with the position which applied URJ NYMAN v VALMAS (Beazley JA) 5 in respect of first instance appearances only. Part 11 relates to proceedings in the Supreme Court and does not relate to proceedings in the Court of Appeal. This is apparent from the terms of the rule itself. See also the explanatory note to r 3, which states that the 'object of theamendment [was] to provide for entry of a submitting appearance (other than the Court of Appeal).' In my opinion, the filing of a submitting appearance does not denote consent to the orders sought. A submitting appearance (both at first instance and in this Court) may be filed for a variety of reasons. The typical situation is where a party has no vested interest in the outcome of proceedings. This typically occurs in statutory appeals where a necessary respondent is the Court or Tribunal from which the appeal is brought. Another is where a party holds funds as a stakeholder or on trust. However, the occasions where a submitting appearance is filed are by no means limited to such obvious circumstances. A party might submit where the costs of appeal outweigh the amount in dispute so that it was too prohibitive or simply not worth the while of a party to contest the matter. The procedure provided by the submitting appearance is a means of facilitating notice to the Court that the party does not propose to put any argument to the court. In the present case, the Court was not advised of the reason why the respondent filed a submitting appearance although it was informed that the respondent's solicitor had made it known that the respondent did not consent to the appeal being allowed. I do not consider that a submitting appearance, without more, has the effect of a consent to the orders sought. Unless the Court was satisfied that a party had intended, by the filing of a submitting appearance, to consent to the orders sought, there is no basis for treating the submitting appearance as a consent. I should add that to the extent that Part 51 R 11A is relevant, its terms, in my opinion, contain an opposite indication to that submitted by counsel for the appellant. The orders I propose are: 1. Appeal allowed. 2. Judgment for the sum of $251,333 be set aside and, in lieu thereof, judgment for the respondent in the sum of $227,173 to be entered. 3. The respondent to pay the appellant's costs of the appeal and to have a certificate under the Suitor's Fund Act if so qualified. 1. Appeal allowed 2. Judgment for the sum of $251:333 be set aside and: in lieu thereof: judgment for the respondent in the sum of $227:173 to be entered. 3. The respondent to pay the appellant's costs of the appeal and to have a certificate under the Suitor's Fund Act if so qualified. Counsel for the appellant: R MacFarlan QC/C Simpson Solicitors for the appellant: Messrs Minter Ellison Counsel for the respondent: Submitting Solicitors for the respondent: Andrews Solicitors