THE NOMINAL DEFENDANT v MARTIN SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MASON P, HANDLEY JA and SHEPPARD AJA 1,, 26 September 1997 [1997] NSWCA 227 Motor Vehicles — contributory negligence — effect of alcohol — funds management — past and future care The respondent was crossing a busy road, near an intersection, when he was hit by a motorised tricycle. The respondent was measured with a blood alcohol reading of 0.206gms/100ml. The Nominal Defendant was sued because the tricycle was exempt from registration. The evidence at trial consisted of a number of eyewitnesses whose evidence conflicted in every material respect. The principal eyewitness accepted at trial was a government bus driver, Mrs Camatsos. The trial judge's reliance on her evidence meant that the appellant failed to establish contributory negligence. Held: Appeal allowed in part: 1. Contributory Negligence - The trial judge misunderstood Mrs Camatsos' evidence in two respects. First, the driver of the trike, Mr Hanna, did not necessarily enter the intersection against a red light. It follows that the respondent may not have left the footpath in reliance upon no one coming through a red light. Second, the respondent would have had sufficient time to take reasonable care for his own safety and avoid impact. Accordingly, damages should be reduced by one-third on the basis of contributory negligence. 2. Past and Future Care - The allowance of 3 hours per day was within the permissible range. 3. Funds Management - The allowance for funds management was made consequent upon the injury suffered (which is recoverable) and was not based on the need to manage a large verdict (which is not recoverable). Nominal Defendant v Gardikiotis (1996) 186 CLR 49 followed. 4. Future Medical Expenses - There was adequate evidence to support the trial judge's finding that ten shunt revision operations would be needed over the respondent's life. Mason P The respondent, who was the plaintiff in the court below, was severely injured u hen struck as a pedestrian by a motorised tricycle being driven by Mr Arne Hanna. The tricycle was designed so that a wheelchair could be conveniently taken aboard, allowing the operator of the wheelchair to drive the vehicle. The appellant was properly nominated as defendant in the action, because the vehicle was exempt from registration. At trial before Newman J both liability and damages were in issue. There was also a defence of contributory negligence. The learned judge found in favour of the respondent, with no discount for contributory negligence. The judgment (including interest) was $824,418.89. The appellant challenges the findings referable to negligence and contributory negligence, and disputes the assessment of damages with respect to past and future care, investment expenses, and future medical expenses. Some facts are not now in issue. The accident occurred shortly after midnight. The respondent emerged from the Lakes Hotel on the southern side of Gardeners Road, Rosebery and started to cross the road. Gardeners Road had two lanes in 2 UNREPORTED JUDGMENTS each direction and ran east-west. The judge found that there were no parked cars in the vicinity. The respondent was struck and thrown in the air. No skid;narks were observed by the police officer who came upon the scene. The point of impact was close to the centre line of the road, in the second lane out from the kerb. Approximately 50 metres to the east was the western alignment of the intersection between Gardeners Road and Dalmeny Avenue. There were street lights at that intersection. A blood sample taken from the respondent in hospital indicated that he had a blood alcohol reading of 0.206gms/100ml. The trial judge accepted the evidence of Professor Starmer, an acknowledged expert in the field, that the respondent's ability to negotiate safely the crossing of Gardeners Road would have been greatly impaired. There was a sharp, if not total, conflict of evidence as to who was at fault. The respondent had no recollection of the accident. His principal witness was Mrs Camatsos who was the driver of a government bus heading in an easterly direction along Gardeners Road, towards the intersection with Dalmeny Avenue. This was the opposite side of the road from which the respondent commenced crossing. Mrs Camatsos stopped the bus at a bus stop directly opposite the Lakes Hotel. She was about to move off when a whistle or shout from one of the passengers drew her attention to the respondent. She said that she swivelled to her right and looked across the street, seeing the respondent on the footpath next to the gutter outside the hotel. She saw him look to the right and then to the left before commencing walking across the road to catch the bus. There was nothing unusual about the way he crossed the road. She then looked ahead towards the traffic lights at the intersection of Dalmeny Avenue and Gardeners Road. They showed red. She also saw the motorised tricycle heading "quite fast" in a westerly direction coming towards her along Gardeners Road. At that stage it was in the intersection. Her evidence was that the vehicle had no lights showing, and that it did not deviate or lessen speed before it struck the respondent. The appellant's case on liability and contributory negligence consisted of the evidence of the driver of the tricycle, Mr Hanna, and of a taxi driver Mr Perl, who was following the bus. (There was a third eyewitness, Mr Dellaquilla, but his evidence was quite unsatisfactory, and was rejected by the trial judge.) Mr Hanna denied that he had gone through a red light. He said that the light on his vehicle was switched on, and he estimated his speed at the time when he saw the respondent as 55km per hour. He only observed the respondent when he was a few metres from him. He said that the respondent was staggering and had his head turned away from Mr Hanna's vehicle. He braked but was unable to avoid the accident. Mr Perl said that when he was some ten metres behind the bus he observed the respondent running from the door of the hotel across the road directly in front of Mr Hanna's vehicle. Credibility was critical to the assessment of the evidence, as the learned judge recognised. His Honour preferred the evidence of Mrs Camatsos whom he found to be a "very impressive witness". In his view she withstood the challenges made to her testimony in a searching cross examination by counsel for the appellant. With one exception (her evidence that the lights on the tricycle were not lit), the judge preferred her evidence and accepted her evidence to that given by all other eye witnesses. (Mr Hanna's evidence that the light was illuminated was supported by that of a man who came on the scene shortly after the accident.) Not only did the judge prefer and accept the evidence of Mrs Camatsos, he also held that the responses of Mr Perl, both in chief and in cross examination, did not impress him that Mr Perl was a reliable observer. URJ THE NOMINAL DEFENDANT v MARTIN (Mason P) 3 Counsel for the appellant shouldered the difficult task of attempting to demonstrate that the trial judge misused his advantage with respect to assessing the demeanour of the eye witnesses to the accident. He submitted that there were three significant matters which demonstrated that reliance upon the evidence of Mrs Camatsos was unsound. It was said to be glaringly improbable that the respondent was walking normally, as deposed to by Mrs Camatsos, in the light of evidence about the respondent's blood alcohol reading. Secondly there were inconsistencies between the evidence of Mrs Camatsos and a file note tendered without objection that had been prepared by the appellant's solicitor following an interview with Mrs Camatsos. Thirdly, it was said that the judge should have rejected Mrs Camatsos' evidence as a whole when he found that her dogmatic assertion that the motorised tricycle's headlight was not illuminated was not correct. In my view these matters, taken singly and together, do not provide a basis upon which this court could overturn the findings below, in the light of the well known principles in Abalos v Australian Postal Commission (1990) 171 CLR 167 and Devries v Australian National Railways Commission' (1993) 177 CLR 472. A witness may be rejected on some points yet accepted as to the balance. In any event, it was not inevitable that the respondent would have been seen staggering when briefly observed by Mrs Camatsos. It is true that there were some discrepancies between the solicitor's file note (which Mrs Camatsos had not been asked to sign) and Mrs Camatsos' oral evidence. In the file note she described the respondent as having "half ran and half walked". She also said, according to the file note, that she saw the respondent in the external rear vision mirror, whereas her oral evidence was that she turned around in the first place. However the clear thrust of the file note justified the appellant's solicitor in closing the conversation with Mrs Camatsos in the way which she deposed, namely by telling her: "Thank you but you are no use to us". In my view the inconsistencies were fairly minor. The trial judge had the opportunity to observe how Mrs Camatsos dealt with them when confronted in cross examination. The challenge to the finding in negligence must be rejected. On the issue of contributory negligence, his Honour found that the appellant had failed to establish that the respondent's intoxication contributed to the accident. The reason given was the acceptance of Mrs Camatsos' evidence. Relevantly, this evidence was that the respondent looked to the right and the left before starting to cross at a walking pace. Shortly before addressing the issue of contributory negligence, the learned judge had also stated that he concluded Mr Hanna had passed through a red light at the intersection of Dalmeny Avenue and Gardeners Road, and that this finding was based on Mrs Hanna's accepted evidence. The appellant seeks to challenge the finding on contributory negligence in two ways. First, the finding that Mr Hanna came through a red light is attacked on the basis that the judge misunderstood Mrs Camatsos' evidence. In chief, Mrs Camatsos said that the lights at the intersection were red when she looked at them and saw Mr Hanna coming through the intersection. Since however this was shortly after she had observed the respondent leaving the footpath after having looked first right (towards the intersection) and left, it is submitted that it does not follow that (a) Mr Hanna entered the intersection against a red light or (b) that the respondent would have left the footpath in reliance upon no one coming through the red light. In the file note of her conference with the appellant's solicitor, Mrs Camatsos is recorded as saying that she saw the vehicle "coming 4 UNREPORTED JUDGMENTS through a changing light". The second basis of the challenge is more by way of confession and avoidance. Given that (in Mrs Camatsos' words) "a number of seconds" elapsed between the time when the tricycle was first seen by her and the impact, there was sufficient time for a pedestrian taking reasonable care for his own safety to avoid impact. The road was well lit, there were no parked cars at the kerbside, and the respondent was struck down near the centre of the road. The appellant further submits that, if Mr Hanna's vehicle was visible to Mrs Comatsos and Mr Perl, it should have been visible to the respondent. In my view the appellant's submissions should be accepted on this matter. The respondent points to the fact that Mrs Comatsos was firm in cross examination (AB 87) that the lights were red when she looked at them. It is said that the judge was entitled to accept her evidence on this matter (see Abalos). However the passage referred to deals with the state of the lights when Mr Hanna's vehicle was in the intersection. In other words, the answer does not detract from the force of the appellant's submissions. Nor does it provide an evidentiary basis for the critical finding referable to the absence of contributory negligence. If follows that the trial judge misunderstood Mrs Comatsos' evidence when he used it to find that Mr Hanna passed through a red light (in the sense of having entered the intersection against a red light). This answers the respondent's argument based upon Trompp v Liddle (1941) 41 SR(NSW) 108, and makes it unnecessary to consider the universality of the principles there discussed (cf Sibley v Kais (1967) 118 CLR 424), or their application to the issue of contributory negligence. The case then becomes one in which the respondent walked from the footpath into a vehicle travelling at SSkph whose headlight was on. The street was well lit and there were no parked cars. Given these stark facts I would find one third contributory negligence. In dong so it is irrelevant whether the respondent's inadvertence and/or failure to avoid the vehicle was due to his intoxicated condition, although it most probably was. I tum to the damages issues. (a) Past and future care The appellant challenges the allowance by Newman J of 7 hours per day for past and future care. The learned judge accepted the respondent's case at trial which was a claim for 21 hours per week less the statutory deductible of 6 hours (see Motor Accidents Act 1988, s72(2)). The appellant submits that it was necessary to have expert evidence both as to the need for care and quantifying that need in terms of hours. Alternatively, it is submitted that the allowance was excessive. In relation to the first submission, the appellant conceded that there was expert evidence from Dr Bell which established that there was a need for care. Dr Bell advised that: "The frontal syndrome creates such serious social problems that he will need the constant supervisory attention of others such as his parents." However, the appellant submits that there was a need for expert evidence to support quantifying the claim at 21 hours per week of care. In my view this submission cannot be supported. It is true that one normally sees such evidence, and that the plaintiff who eschews calling it is running a risk. But it is ultimately a matter for the court to determine in the light of well-established principles, and the totality of the evidence relating to the injured person's lifestyle and needs. Here domestic services had been provided by members of the plaintiff's family. URJ THE NOMINAL DEFENDANT v MARTIN (Mason P) 5 The judge was entitled to regard what was in fact being done, week by week, as evidence of the extent of the respondent's need. In the alternative, the appellant contended that the allowance of 3 hours per day for domestic services was excessive. In my view, the combined effect of the plaintiff's gambling and drinking problems; his suicidal tendencies; his short term memory problems (which resulted in his being apprehended by the police when he once slept in the wrong house); his habit of not shaving and wearing inappropriate clothing; his need to be driven to and from work; and his failure to get out of bed unless prompted were all matters which demonstrated the need for care. During the course of the appeal, Counsel for the respondent made the following submission which accurately justifies the allowance made by Newman J: "Quite often in brain damage cases... the person doesn't need any assistance to actually dress or to wash, what they need assistance in is to get up and get dressed, get up and have a wash, go to work, they need to be told.... They need someone to order their life as well as to get them to and from wore " [Transcript p38] In this context it is relevant that the trial judge calculated future economic loss on the basis of the respondent's current earnings of $225 per week, assuming a working life to 65, and discounting by the conventional 15% for contingencies. Yet without significant assistance and prompting from a carer the respondent may well become unemployable. The award of a substantial sum for future care therefore aims to ensure that the somewhat optimistic assumptions taken by the reamed judge in calculating future economic loss are not dashed: cf Robinson v Riley [1971] 1 NSWLR 403. Taken together, these matters indicate that the allowance of 3 hours per day was within the permissible range, and should not be disturbed by this Court. (b) Funds management Leaving aside interest, the respondent's damages were computed as follows: Non-economic loss 132,000.00 Past out of pocket expenses 11,371.89 Future out of pocket expenses 20,524.00 Past wage loss 69,834.00 Future economic loss 178,168.00 Past care 43,150.00 Future care 208,114.00 Investment expenses 142,402.00 $805,563.00 The trial judge made an allowance of $142,402 in respect of the costs of funds management. That amount was calculated by reference to the cost of the management of the damages fund by Westpac Investment Management Pty Ltd. The appellant submits that there should have been no allowance for this head of damage, or alternatively that the allowance was excessive. The case was decided by Newman J before the High Court gave judgment in the Nominal Defendant v Gardikiotis (1996) 186 CLR 49. In Gardikiotis, the High Court reversed the decision of the Court of Appeal (reported in (1994) 19 6 UNREPORTED JUDGMENTS MVR 307) and held that an allowance for the cost of fund management could only be made where the tortious act gave rise to the need for funds management. In that case the High Court made the distinction between an allowance for funds management consequent upon injury (which is recoverable) and an allowance for funds management which may be necessary to manage a large judgment (which is not recoverable). While Newman J made reference to Court of Appeal decision in Gardikiotis, his allowance for funds management was not based on that part of the decision which led the High Court to overrule it. I refer in particular to the passage where Newman J stated: "While he has [the respondent], in my view, done his best to protect his funds, on the totality of the medical, psychological and lay evidence, the plaintiff does have great difficulty in managing his funds - a problem which is a consequence of the subject accident." [emphasis added] His Honour's finding was supported by the evidence of Dr Bell (at AB 170D) and Dr McCarthy (at AB 200K). That evidence clearly established that the respondent's mental injuries impaired his ability to manage funds. Accordingly, the challenge to the funds management award must fail on the ground that the award was made in consequence of the respondent's injury. The appellant's also submits that the funds management allowance made by Newman J was excessive. The plaintiff was awarded $142,402 on the basis of the cost of administering the Westpac Investment Management fund. The evidence in relation to the cost of fund management consisted of a letter from Westpac Investment Management Pty Ltd to the respondent's solicitors. It contained a brochure detailing the services offered by Westpac. The letter quoted an all inclusive management fee of 1.25% per annum for amounts up to $5 million (subject to a minimum of $7,500). This evidence was accepted and applied by the trial judge. $7500 per annum represents $144 per week. The respondent's life expectancy was 53 years. Applying the appropriate 5% multiplier for that period produced the sum of $142,402 that was awarded. The appellant's submission that that allowance of $142,402 was excessive was based upon "common experience in litigation of this type". It was also submitted that some of the respondent's capital sum was likely to be expended on capital items such as a house, with the result that what was left would not reasonably cost $7500 per annum to manage. The appellant also criticised the apparent failure of the respondent and his solicitors to have "shopped around" for a better rate than Westpac, and the absence of evidence as to what the respondent intended to do referable to the award of damages he was seeking from the court. I would not disturb the trial judge's allowance, especially having regard to the evidence at trial. The appellant did not tender evidence disputing the Westpac rates or cross examine to suggest they were unreasonably high. "Common experience" is no substitute for evidence in such matters. The submission that the trial judge's award did not take account of the depletion of the fund through capital purchases such as a house belies the fact that the Westpac fund charges a minimum of $7,500 per annum for amounts over $500,000. Accordingly, even if the plaintiff was to purchase a house in the Taree area and immediately deplete the fund by $200,000, the $7,500 per annum charge would still apply. Furthermore, there is no evidence that the plaintiff intends to use the funds to purchase a house given that he resides with, and is fairly dependent on, his parents. URJ THE NOMINAL DEFENDANT v MARTIN (Sheppard AJA) 7 The appellant also submitted that the trial judge should have awarded the cost of fund management on the basis of the Protective Commissioner's rates. As in Mortimer v Burgess (Court of Appeal, unreported, 16 May 1997), the evidence and the trial judge's finding does not support the contention that the plaintiff would come under the care of the Protective Commissioner. My reasoning should not be interpreted as saying that the Westpac Investment Management rates are appropriate or reasonable in all cases where funds management is awarded. However, for the reasons set out above, the challenge to the award of the cost of funds management must fail in this case. (c) Future medical expenses The appellant's challenge to some of the components of the $20,524 allowance for future medical expenses should be rejected. There was adequate evidence to support the conclusion that ten shunt revision operations might be expected over the respondent's life: see AB 138, 192. The challenge to an allowance of the cost of one psychiatric visit per annum was hopeless, especially given that it was based upon the finding that the respondent had shown suicidal tendencies and that he suffered from depression. Indeed it seems highly appropriate for a severely injured man with the permanent disabilities of the respondent and all the frustrations they will necessarily generate, for whom no more than the conventional discount., was made for anticipated future job loss prospects. The capacity to have annual psychiatric consultations seems a conservative safety valve. Since the appellant has been partly successful in the appeal I would make no order for the costs of the appeal. I propose the following orders: 1. Appeal allowed in part. 2. Set aside the judgment for $824,418.89 and substitute judgment for the respondent in the sum of $549,612.59, to take effect from 13 April 1995. 3. No order as to costs of the appeal. Handley JA I agree with Mason P. Sheppard AJA I agree with the judgment to be delivered by Mason P and with the orders he proposes. 1. Appeal allowed in part. 2. Set aside the judgment for $824,418.89 and substitute judgment for the respondent in the sum of $549,612.59, to take effect from 13 April 1995. 3. No order as to costs of the appeal. Counsel for the Appellant: L King Solicitors for the Appellant: Henry Davis York Counsel for the Respondent: R V Letherbarrow Solicitors for the Respondent: Stacks The Law Firm