ENGLAND v VAN DONK SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL POWELL, PRIESTLEY and STEIN JJA 14 November 1997, 5 December 1997 [1997] NSWCA 103 Motor Accidents Act 1988 s79 — damages, non-economic loss — accident prior to 26 September 1995 — whether significant impairment by the injury needs to be continuing at date of trial — absence of reasons for preference for expert evidence The appellant was injured in a motor vehicle accident in March 1993. At the trial date (June 1997) she said that she continued to suffer pain and disability, although some medical evidence suggested that these symptoms should have subsided. The trial judge, although not impugning the credit of the appellant, made no award of damages for non-economic loss on the basis that he was not satisfied that she continued to suffer any symptoms related to the accident after 2 years. On appeal: The appellant argued that Matthews v Dean did not correctly interpret s79 Motor Accidents Act 1988 as relates to motor vehicle accidents prior to 26 September 1995, and should not be followed. In any event, the trial judge was not entitled to conclude that she did not suffer significant impairment at the date of trial. Held (Priestley JA, Stein JA; Powell dissenting) The trial judge did not give any reasons why he accepted the defendant's expert over the plaintiff's on the issue of non-economic loss. Accordingly, there should be a new trial, except on the issue of future economic loss. Matthews v Dean (1990) MVR 455 Allen v Chown (1996) 24 MVR 255 Reinhardt v Huan (1996) 24 MVR 58 considered. Priestley JA I agree with the orders proposed by Stein JA. The basis of my agreement is the error of law made by the trial judge in not explaining why be preferred the evidence of Dr Fitzsimmons to that of Dr Crimmins. Although the Judge's reasons supply a slight basis for speculating what his train of thought was, I do not feel that basis is sufficient to justify anything more than speculation, and such a basis does not fulfil the accepted requirements. Although if the question of construction of s79 of the Motor Accidents Act 1988 were free from authority, I would agree with Stein JA's view of it, it seems to me that a strict application of the doctrine of precedent requires this court to follow Allen v Chown (1996) 24 MVR 225 rather than the obiter dicta in Reinhardt v Huan (1996) 24 MVR 58. The construction approved in Allen has been followed at least since 1990, so that even if leave to reargue Allen had been sought (which it was not, at least formally) I would not have favoured granting it. However, my agreement with Stein JA on the lack of reasons point is sufficient to support my agreement with his view that the appeal should be upheld and with the orders he proposes. 2 UNREPORTED JUDGMENTS Powell JA The basic facts which have given rise to this appeal are set out in the Judgment which has been prepared by Stein JA which Judgment I have had the opportunity of reading in draft. However, in the light of the conclusion to which I have come, it is desirable that I record certain additional matters. They are as follows: 1. although these proceedings were not commenced until 12 March 1996, the Plaintiff's entitlement to receive an award of damages for non-economic loss is governed by the provisions of s79(1) of the Motor Accidents Act 1988 ("the Act") as it was at the date of the accident, 21 March 1993. At that time, s79(1) of the Act provided: "No damages shall be awarded for the non-economic loss of an injured person as a consequence of a motor accident unless the injured person's ability to lead a normal life is significantly impaired by the injury suffered in the accident." 2. At all relevant times s63A of the District Court Act provided (inter alia) as follows: "63A(1) Except as provided by subs3, the Court sitting at a proclaimed place prescribed by the rules for the purposes of this section at any time may, whether of its own motion or on application, order that, in accordance with the rules, an action before it under this Part (Division 8 excepted) be referred for determination pursuant to the Arbitration (Civil Actions) Act 1983 by an arbitrator or arbitrators holding office under s5(2) of that Act. " 3. At all relevant times s18 of the arbitration (Civil Actions) Act 1983 provided (inter alia) as follows: "18(1) Except to the extent that this section and s17 otherwise provide, an award of an arbitrator made pursuant to this Act is final and conclusive and not liable to be called in question. (2) Except in the case of a referred action where the amount claimed, or the value of the property to which the action relates does not exceed the amount prescribed for the purposes of this section, the court by which an action was referred to an arbitrator, or the registrar of that court, shall order a re-hearing of the action if application for such an order is made by a person aggrieved by the award of the arbitrator an is so made before that award becomes enforceable as a judgment or order of the court. (3) Where an order is made under subs(2): (a) the award that gave rise to the order ceases to have effect; and (b) subject to subs(4), the action to which the order relates shall be heard and determined in the court as if it had ever been referred to an arbitrator. (4) The court that hears and determines an action under this section may, in addition to making an order for the payment of costs under the Supreme Court Act 1970, s148B of the District Court Act 1973, or the Local Courts (Civil Claims) Act 1970, as the case may be, makes an like order for the payment of costs in respect of the hearing before the arbitrator. " 4. at all relevant times, s148B of the District Court Act provided (inter alia) as follows: "148B(1) Subject to this Act and the Rules and subject to any other act: (a) costs in or in relation to any proceedings shall be in the discretion of the Court; URJ ENGLAND v VAN DONK (Powell JA) 3 (b) the Court has full power to determine by whom, to and to what extent, costs are to be paid or in relation to any proceedings; " 5. at all relevant times rl1A of the Pt39 of the District Court Rules provided: "1A. Subject to the rules, the costs of any action, including the costs of any proceedings ancillary to the action, shall, except where otherwise ordered by the court, follow the event of the action." 6. at all relevant times, r31 of Pt39A of the District Court Rules, which rule replaced, as from 18 October 1996, the provisions of r12 of Pt51A of the District Court Rules - although there are some linguistic differences in subr1 and subr3 of the two rules, the substance of the two rules in the same - provided as follows: "31(1) Where proceedings are heard and determined under s18(3)(b) of the Arbitration (Civil Actions) Act 1983 (the 'Arbitration Act') and the determination of the Court is substantially more favourable to the applicant for the order for rehearing (the 'applicant') than is the determination of the arbitrator, the Court may order that the fee paid by the applicant for filing the application be refunded to the applicant wholly or to the extent specified by the Court. (2) Where a party is required to pay the costs of another party in respect of a rehearing under s18(3)(b) of the Arbitration Act, those costs shall not include the fee paid for filing the application for the order for the hearing unless the Court so directs. (3) The Court shall not give a direction under subr2 unless it is of the opinion the party ordered to pay the costs unreasonably caused the making of the application for the order for the rehearing. (4) Subject to subrS where proceedings are heard and determined under s18(3)(b) of the Arbitration Act, and the determination of the Court is not substantially more favourable to the applicant than is the determination of the arbitrator, the Court: (a) shall not make any order for the payment by any other party of the applicant's costs incurred by reason of the rehearing; and (b) shall order the applicant to pay the costs of every other party incurred by reason of the rehearing. (5) The Court may in respect of a rehearing certify that the special circumstances of the case require the Court: (a) to make an order referred to in subr(4)(a) in which case the Court may make an order; or (b) to refrain from making an order referred to in subr(4)(b), in which case the Court may refrain from making that order. (7) Unless the Court otherwise orders any application for an order or direction under this rule in respect of costs consequent on the rehearing of an action must be made immediately after judgment is given on the rehearing." 7. in June 1991, the then Chief Judge of the District Court, caused to be published Practice Note No 14 which was as follows: "PRACTICE NOTE NO 14 Applications for rehearing after arbitration Pt51A r12(4) of the District Court Rules requires the Court on a rehearing to impose on the applicant for the rehearing the full burden of the cost of all the parties unless the applicant 'substantially' improves the position he held under the arbitrator's award. The Court may depart from this requirement only where 4 UNREPORTED JUDGMENTS special circumstances apply. The intent of the rule is to discourage ill-considered applications for rehearing and so to reduce waste of Court and parties' resources. The Rule Committee suggests for the guidance of the Court and of litigants that 'substantially improves' should in general be interpreted as involving an improvement by at least 20% of any amount awarded by the arbitrator. The Committee is reluctant to enact this general suggestion into the Rules because of the recognition that many different kinds of exception may arise." 8. at some time prior to March 1997, the Registrar of the District Court, in reliance on the provisions of s63A of the District Court Act referred the proceedings for arbitration pursuant to the provisions of the Arbitration Act. The proceedings so referred came before Mr Arbitrator M M G Britts who, on 25 March 1997, made an award in favour of the Appellant in the sum of $65,587.00 that amount being made up as follows: (a) non-economic loss - 25% of a most extreme $48,250.00 case - (b) out of pocket expenses - $ 4,337.00 (c) chiropractor (future) - $ 3,000.00 (d) future economic loss - $10,000.00 $65,587.00 9. thereafter, and within the prescribed time, the Respondent applied for a rehearing of the action; 10. the proceedings were called for hearing before Craigie DCJ in the District Court at Gosford on 10 June 1997. However, nothing of any consequence occurred on that day and the matter was adjourned until the following day; 11. prior to the hearing before Craigie DCJ resuming on 11 June 1997, the Respondent's solicitor delivered to the Appellant's solicitor, a letter bearing date 11 June 1997 which letter omitting formal parts, was as follows: "T advise that I am instructed to offer your client the sum of $30,270.00 inclusive of disbursements (including, but not limited to out of pocket expenses and any amount repayable to the Health Insurance Commission and/or Department of Social Security) plus her reasonable costs as agreed or taxed in full settlement of her claim. Iam further instructed to offer your client the sum of $15,000.00 in respect of her costs. The offer is an offer in writing for the purposes of the Motor Accidents Act 1988. It is made pursuant to the authority in Calderbank v Calderbank [1975] 3 All ER and is open for acceptance until 10.00 am on 11 June 1997. I reserve the right to tender this letter in relation to any application for costs or interest arising from the further conduct of these proceedings. Please advise me of your client's instructions." That offer was not accepted by the Appellant prior to the hearing resuming before Craigie DCJ on 11 June 1997. 12. the hearing before Craigie DCJ on 11 June 1990 was devoted almost entirely to the taking of the oral evidence given by the Appellant and her husband, the case for the Respondent being limited to the tender of the reports of Drs Johnson and Fitzsimmons and the handwritten notes of Dr Holliday; URJ ENGLAND v VAN DONK (Powell JA) 5 13. the hearing continued before Craigie J on 12 June 1997 when counsel's submissions were taken, following which his Honour reserved his Judgment. In the course of those submissions counsel drew his Honour's attention to the decision of Grove J in Matthews v Deane!; Allen v Chown2 and of this Court in Reinhardt v Huan3; 14. in the event, when he came to deliver his Judgment on 20 June 1997, Craigie DCJ fount a verdict in favour of the Appellant in the sum of $9,114.14, that sum being made up as to $4,114.14 for out of pockets and $5,000.00, seemingly, as a cushion against future economic loss; 15. immediately upon his Honour delivering his Judgment, application was made on behalf of the Respondent for Orders, first, that the Respondent have credit against the verdict for the sum of $2,976.32, which had already been paid on account of out of pockets, and second, that the Appellant pay the Respondent's costs of the hearing before his Honour, that latter application being based first on the letter of offer which had been delivered on 11 June 1997 and second upon the fact that the Respondent had substantially improved his position on the rehearing. After hearing submissions on the matter, his Honour said: "T conclude then that the defendant's (sic) pay the plaintiff's cost (sic) of an incidental of (sic) the action in this court, and I would order for (sic) the refund of the filing fee to the defendant on the rehearing and I will confirm the, to the extent it is necessary, the arbitrator's order for the payment of the cost (sic) by the defendant in the arbitration." 16. the Appellant having appealed against his Honour's Judgment, the Respondent then caused to be filed a Summons for Leave to Appeal against the Judgment delivered, and Orders made, by Craigie DCJ in respect of costs. As will be apparent from the Judgment which Stein JA has prepared, two issues arise for determination on the Appellant's appeal, they being: 1. whether it was incumbent on the Appellant, if she were to qualify for an award of damages for non economic loss, to demonstrate that, as at the time of the hearing before Craigie DCJ, her ability to lead a normal life was significantly impaired, or whether it was sufficient that the Appellant show that her ability to lead a normal life had in the past been significantly impaired; and 2. if the former, whether Craigie DCJ had erred in holding that any disability from which the plaintiff had suffered had ceased to exist some years prior to the hearing. With respect to Stein JA and those who may be of a like view with his Honour, it seems to me that it is not open to this Court so to construe the provisions of s79(1) of the Act as they were at the time of the accident as to authorise an award of damages for economic loss if, although at the time of the hearing the plaintiff was no longer suffering from any significant disability, the plaintiff's ability to lead a normal life had in the past been significantly impaired. As was pointed out by Clarke JA, with whom Handley and Cole JJA agreed, in Allen v Crown, the approach to the construction of s79(1) of the Act (as it then was) which had been adopted by Grove J in Matthews v Deane had been applied by a number of courts over the years between 1990 and July 1996 when the Judgment in Allen v Chown was delivered. Further, it was that approach to construction which led to the amendment of s79(1) as from 1 September 1994 when the amendments to that 1. (1990) 11 MVR 455 2. (1996) 24 MVR 225 3. (1996) 24 MVR 58 6 UNREPORTED JUDGMENTS section brought about by the relevant provisions of the Motor Accidents (Amendment) Act 1993 came into operation. That this was so is made dear by the following passage in the Second Reading speech on of the Hon C Hartcher, then Minister for the Environment, when moving the Second Reading of the Motor Accidents (Amendment) Bill in the Legislative Assembly on 19 May 1993: The proposed changes to the Act contained in this bill continue the emphasis of the original legislation in meeting the needs of persons who have sustained moderate to severe injuries in a motor vehicle accident. The proposed amendments provide for notable improvements in the availability of compensation for non-economic loss, also known as compensation for pain and suffering, and home care services, Currently, to receive any compensation for non-economic loss, s79(1) of the Act provides that injured persons must show that 'their ability to lead a normal life is significantly impaired by the injuries suffered in the accident'. This has been interpreted by the courts to mean that the ability of persons to lead a normal life must be significantly impaired at the date of assessment of damages, such as at the date of the court hearing. Therefore, people who have endured pain, suffering and trauma but who have largely recovered from their injuries by the time their damages are assessed may be unable to claim non-economic loss damages. I am pleased to be able to say that the proposed amendment to s79(1) makes damages for non-economic loss available if the injured person's ability to lead a normal life was or is likely to be significantly impaired for a continuous period of at least 6 months. This means that if at the time damages are assessed the injured person's ability to lead a normal life has already been significantly impaired for 6 months, or is likely to be significantly impaired for at least 6 months in the near future, that person is entitled to claim for non-economic loss damages, despite not being significantly impaired at the time of assessment. As a consequence of the amendments, claimants whose ability to lead a normal life has not been significantly impaired at the date of assessment, but whose injuries will almost certainly cause a period of significant impairment in the near future, will not be prevented from making a non-economic loss claim. This is not intended to provide compensation where the only impairment is likely to be some form of long-term degeneration which would have likely occurred regardless of the accident. " The approach to the construction of s79(1) of the Act adopted by Grove J in Matthews v Deane and accepted by the legislature, was confirmed by the Judgment of this Court in Allen vy Chown which Judgment was delivered on 1 July 1996. Three things may be said about the decision in Reinhardt v Huan upon which Stein JA relies to support his approach to the construction of s79(1) as it formerly was. They are: 1. as Gleeson CJ pointed out in his Judgment in Reinhardt v Huan, the argument of the appellant in that case assumed the correctness and the relevance of the decision of Grove J in Matthews v Deane, while the respondent appeared in person, facts which led Gleeson CJ to observed that he would be most reluctant to form a concluded opinion as to whether the decision should be followed or overruled in a case where (the Court had) not had the benefit of full argument and where the resolution of that question (might) be unnecessary; URJ ENGLAND v VAN DONK (Powell JA) 7 2. the decision of the Court, although delivered after the decision of the Court in Allen v Chown, was clearly delivered in ignorance of the decision of the Court in the earlier matter, 3. although Meagher JA - who would have dismissed the appeal in Reinhardt v Huan was of the opinion that s79(1) of the Act as it was in 1993 should be read as if it said "no damages shall be awarded for non-economic loss of an insignificant character" whether past or present, Beazley JA, who agreed with Meagher JA's approach to construction of s79(1), nonetheless joined with Gleeson CJ in ordering that the appeal and cross-appeal should be allowed and that there should be a new trial limited to damages since the learned trial Judge, in proceeding to assess damages, had proceeded upon the basis that the then respondent's entitlement to obtain an award of damages for economic loss was determined by the provisions of s79(1) of the Act as they were after 1 September 1994. In the circumstances, as it seems to me, the views expressed by Meagher JA and Beazley JA as to the construction of s79(1) of the Act as it was in 1993 cannot be regarded as part of the ratio decidendi of the Court in Reinhardt v Huan and are to be regarded, at best, as obiter dicta. If, as I consider to be the correct course, the construction of s79(1) of the Act as it was at the relevant time adopted by Grove J in Matthews v Deane and approved by this Court in Allen v Chown is to be applied in the present case, then it must follow that the appeal must be dismissed unless, as the Appellant submits, Craigie DCJ erred in holding that any disability from which the Appellant suffered as a result of the accident, had disappeared long before the hearing of the action before him. As Mr A Fennell, who had appeared for the Appellant at the trial before Craigie DCJ and who appeared for the Appellant on the hearing of the appeal, very properly conceded, central to his submission in this respect was his submission that Craigie DCJ had, in the course of his Judgment, made no adverse comments upon, or adverse findings in respect of, the Appellant's credibility as a witness, it following, so he submitted, that his Honour should have held that, at the time of the hearing before him, the Appellant was continuing to suffer from pain and discomfort, which pain and discomfort, notwithstanding the views expressed by Dr Johnson and Dr Fitzsimmons should have been held to be causally related to the injures which she sustained in the accident. While I accept that Craigie DCJ did not, in the course of his Judgment, make any finding that the Appellant consciously sought to mislead the Court, I am unable to accept that his Honour did not make any adverse finding as to the Appellant's credibility as a witness. In this regard it is sufficient to instance his Honour's observation that "(the) Appellant gave the impression that she was as so often plaintiff's (sic) do in the course of these sorts of cases trying to centre everything of their misery and upset on the incident involving the motor vehicle". That observation, coupled with Dr Crimmins' report that "the MRI does not show any specific nerve root irritation or entrapment which would require surgical intervention" and the views of Dr Johnson and Dr Fitzsimmons as to the absence of clinical evidence to suggest any injury beyond a simple soft tissue injury, in my view entitled his Honour to conclude, as he did, that the Appellant had not crossed the threshold which would entitled her to an award of damages for non-economic loss. 8 UNREPORTED JUDGMENTS I turn, then, to the application for leave to cross-appeal in respect of the orders for costs made by Craigie DCJ. At the outset, I set to one side the argument advanced on the basis of the decision of the Court of Appeal in Calderbank v Calderbank. Even if, as I believe is the case, notwithstanding the existence in Pt19A and Pt39A of the District Court Rules of rules specifically providing for the making of offers of compromise and the consequences of the making of those offers, it is open to the Court, when called upon to make orders for costs to have regard to the terms of 'a Calderbank letter", it seems to me that, in the present case, where the letter was delivered in the early morning of 11 June 1997 and called for an answer no later than 10.00 am on that day, no great weight should be given to that letter in the present case. The submissions of the Respondent which have been based upon the provisions of s18 of the Arbitration Act and Pt39A r31 of the District Court Rules are, however, of far more substance. The submission which has been advanced by Mr Fennell in opposition to the grant of the leave sought, and the making of the orders sought if leave be granted, is that, even if, as was the case here, the applicant for a rehearing substantially improves his position beyond that which obtained in the award of the arbitrator, the only order which the Court may make is that the fee paid by the applicant for filing the application be refunded. It seems to me that that submission should be rejected. On the contrary, it seems to me to be clear that by referring to the power of a Court to make an order under (inter alia) $148B of the District Court Act s18(4) of the Arbitration Act has indicated that the Court on a rehearing is entitled, in an appropriate case, to make orders for costs against a plaintiff who, although successful before an arbitrator and also on a rehearing, nonetheless has, on the rehearing, suffered a significant diminution in the award which he had obtained before the arbitrator (see, for example, MacDougall v Curlevski*). As the transcript of the submissions made to Craigie DCJ following his delivery of Judgment appear to indicate that his Honour was of the view that he had no power to make the order which was sought on behalf of the Respondent, it seems to me that the discretion which his Honour would otherwise have had has miscarried, and that it is for this Court to exercise that discretion. In the circumstances, it seems to me appropriate that the Appellant should have the costs of the proceedings up to and including the making of the arbitrator's award and that the Respondent should have the costs of the proceedings thereafter. For these reasons the Orders which I would propose are - 1. APPEAL dismissed. 2. ORDER that leave be and be deemed to have been granted to the Respondent to file a Cross-Appeal in respect of the order for costs made by Craigie DCJ on 20 June 1997. 3. ORDER that the Cross-Appeal be allowed. 4. ORDER that the order for costs made by Craigie DCJ on 20 June 1997 be set aside and in lieu thereof ORDER (a) that the Respondent pay the Appellant's costs of the proceedings up to and including the making of the arbitrator's award on 25 March 1997; (b) that the Appellant pay the Respondent's costs of the proceedings from and including 26 March 1997 to and including 20 June 1997. 4. (1996) 40 NSWLR 430 URJ ENGLAND v VAN DONK (Stein JA) 9 5. ORDER that the Appellant pay the Respondent's costs of the Appeal and the Cross-Appeal but, if qualified, have a Certificate under the Suitors Fund Act 1951 in respect of the Cross-Appeal. Stein JA The issues in this appeal concern a decision of Craigie DCJ to make no award for non-economic loss or for future loss of earning capacity. It is, however, an appeal which raises some important issues of principle. Whether or not the appellant/plaintiff got over the threshold of damages for non-economic loss under s79(4) of the Motor Accidents Act 1988 (which is approximately 8.2%) depended, of course, on whether she qualified under s79(1). Because the accident occurred prior to 26 September 1995 it is common ground that the section applied in its original and unamended form. Although he did not advert to the provision, the question for his Honour was whether the appellant's ability to lead a normal life was significantly impaired by the injury suffered in the accident. This raises the issue of an apparent conflict of authority in the Court between Reinhardt v Huan (1996) 24 MVR 58 and Allen v Chown (1966) 24 MVR 255. The latter approved Matthews v Dean (1990) MVR 455 while the former did not. The question, which I will return to later, is at what point of time is it necessary for a finding of significant impairment to be made? Is it at the point of trial or earlier? The appellant was injured in a motor vehicle collision on 23 March 1993. She was a front seat passenger in a motor vehicle which was involved in a head-on collision with a vehicle driven by the defendant/respondent. Liability was admitted and the task of his Honour was to assess any damages flowing from the negligence. The plaintiff was born in 1939 and was 53 at time of the accident and 57 at the trial. Immediately after the accident she had difficulty in breathing and pain in her neck. She was taken to hospital by ambulance where she was examined and had x-rays, which were apparently normal. It was noted that she had a loss of flexion in her neck, as well as sternal pain and tenderness. She was discharged later in the day. I put to one side an error in the hospital records which suggests an injury to the left side of the appellant's neck since all other available evidence points to the right side as the area of the injury. According to the trial judge, the appellant was told that she would be disabled for a number of months and was advised to see her local doctor. She saw Dr Holliday on 29 June 1993. He examined her and found that she had a loss of lateral flexion of her neck and end of range flexion which gave her neck pain. He suggested paracetamol and physiotherapy. Dr Holliday believed that she was having recurrent symptoms 'clearly related to the accident'. He noted (and this accords with the evidence of the appellant) that she had no pre-existing condition. His prognosis was that she would probably have medium term pain and stiffness. The appellant's evidence was that her symptoms, rather than resolving, worsened over time. His Honour noted that this evidence was supported by her husband. Physiotherapy did not provide her with any relief and so she saw a chiropractor on a fairly regular basis, and this helped. Her principal problem was pain in her neck radiating into the right shoulder and arm, as well as headaches. She complained that she also noticed numbness in her right arm and hand. These disabilities continued and were present at the time of the trial in June 1997. In the meantime, she saw Dr Crimmins, a consultant neurologist. On examination he found a 'marked limitation of movement in the neck'. (AB 162 U) Lateral flexion produced pain in the neck muscles radiating into the right 10 UNREPORTED JUDGMENTS shoulder. 'Great tenderness was noted over the great occipital nerve on the right'. Excerpts from Dr Crimmins' conclusions are as follows: I have little doubt that this lady has sustained injury to her neck as a consequence of her accident. There is also no doubt that this has been contributing to her ongoing pain and discomfort. I have no doubt that this lady will have ongoing symptoms for many years to come and there is probably little that can be done besides what is being pursued at present through the gentle manipulations of a chiropractor. From my point of view her ongoing problems are seen as a direct consequence of her accident and will be a long term feature of her life. It does greatly interfere with her day to day activities. Whether the pain will settle down to the extent that she is able to return to working with her Arabian horse stud it is difficult to know and is yet to be determined. [AB 162] Dr Crimmins reviewed the appellant in December 1996. His examination confirmed the continuing pain and tenderness in the neck, shoulder and right arm, as well as sleep disturbance. His conclusion was then: Unfortunately I think the long term prognosis is that this lady will be left with ongoing pain and symptoms which will not improve with the passage of time. Undoubtedly she will require ongoing physiotherapy, mobilisation programmes, the use of hydrotherapy and a graduated exercise programme which will include swimming. Unfortunately there is nothing more that can be done at this stage to help with her problem. [AB 166] The appellant was examined by Dr Johnston on behalf of the respondent. He believed that she had suffered a simple soft tissue injury to her cervico scapula musculature. He thought that the accident had probably incapacitated her significantly for 3 months and partially for a further 3 months. He could see no reason for any sustained injury past that period of time and certainly none that bore a direct relationship to the accident more than 2 years earlier. In December 1996 the appellant also saw Dr Fitzsimons, a neurologist, on behalf of the respondent. The doctor had difficulty understanding why the appellant's symptoms were getting worse. His opinion was: I think it likely that she sustained a soft-tissue whiplash injury, the effects of which should have subsided long ago - certainly within two years. She may have been left with some tendency to short-lived symptom recurrence, but even this is an unlikely sequel with such non-impinging disc bulges. [AB 186] One matter is however perfectly clear. The appellant was in good health before the accident and certainly suffered from no similar symptoms to those she suffered post-accident. There is no suggested cause of the appellant's ongoing pain and discomfort, other than the accident. Craigie DCJ said that he was driven to conclude that the appellant, at the very most, may have had some after-effects of the accident up until 2 years afterwards, ie March 1995, but not thereafter (AB 132-133). He added: I therefore come to the conclusion that the plaintiff has not as I see it and hasn't for sometime had any meaningful damage or weakening of her lifestyle such that she overcomes the threshold and I can come to the conclusion that she is not entitled to any award for non-economic loss. The impairment to her life is (sic) as a result of the incident is somewhat limited and is certainly well and truly over now. [AB 133] URJ ENGLAND v VAN DONK (Stein JA) 11 Accordingly, his Honour awarded no damages for non-economic loss. The difficulty I have with this conclusion is that nowhere in his 14 pages of reasons does his Honour make any express adverse finding as to the appellant's credit. He thought that she might have 'other worries' which might have contributed, although these were left unidentified. There was no evidence that her ongoing symptoms were the result of any cause other than the accident, it being apparent that she was in good health until the accident. It has been submitted on behalf of the respondent that his Honour may have made subtle credit findings adverse to the appellant. For example, his Honour said (at AB 128 W - 29 L): I pause here to refer to the fact that the plaintiff was asked many questions about other aspects of her medical condition at relevant times before and since the incident and the plaintiff to say the least was most reluctant to even discuss what she may have said to Doctor Holliday in pre-incident consultations. I can understand her reluctance in some aspects to talk about what is described sometimes as lady's matters or women's matters but there were some other aspects about which the plaintiff was adamant that she didn't have anything and then later was inclined to agree that she may have had that but her attitude was that they were silly questions. Indeed the plaintiff gave the impression that she was as so often plaintiff's do in the course of these sorts of cases trying to centre everything of their misery and upset on the incident involving the motor vehicle. I do not understand these remarks as diminishing the credit of the appellant in relation to her continuing pain and disability. In my opinion, his Honour did not find that she had falsified her evidence or that she exaggerated or embellished her symptoms. I do not think that the trial judge was saying that the appellant's evidence lacked credibility. He simply could not understand why her symptoms had persisted for over 4 years. In his view, they could not have lasted more than 2 years. It may be observed that some of the medical evidence supported his Honour's skepticism and it is apparent that he accepted and relied upon the opinion of Dr Fitzsimons. By inference, he preferred the opinion of Dr Fitzsimons to the contrary opinion of Dr Crimmins, although he did not say so. What is important is that his Honour accepted the opinion of Dr Fitzsimons as determinative. He described it as 'the significant evidence' and later stated 'the conclusion I come to based substantially on Dr Fitzsimons'. As I have said, his Honour did not reject Dr Crimmins or give any reason for preferring Dr Fitzsimons over him. He referred to Dr Crimmins' report at AB 129 L - S stating that the doctor had said (in a report of 10 December 1996) 'that there was as a result of the MRI [scan] no specific nerve root involvement'. A reading of the report, as well as Dr Crimmins report of 5 July 1996, leads me to doubt his Honour's finding. What Dr Crimmins appears to be saying (although it is equivocal) is that at the time of the report, the MRI scan did not show any specific nerve damage that would require surgical intervention. The preference of the trial judge for the opinion of Dr Fitzsimons over Dr Crimmins was central to the issue of non-economic loss. The issue required, at least, that his Honour provide grounds to support his preference. He gave none. I believe that his Honour was in error in failing to do so. As I have stated above, the appellant was in good health prior to the accident. She displayed no symptoms similar to those suffered post-accident. There was no evidence as to the cause of these symptoms other than the car accident. In Watts v Rake (1960) 108 CLR 158 at 163 Menzies J (Dixon CJ and Windeyer J concurring) said: 12 UNREPORTED JUDGMENTS It was for the appellant as plaintiff to prove his damages, and merely to prove his present condition and his incapacity to work would not prove that these things resulted from the accident. It was not, however, for the plaintiff to disprove that his pre-accident ill health would eventually cripple and incapacitate him. Prima facie, where a plaintiff was in apparent good health before an accident and is in bad health thereafter, the change would be regarded as a consequence of the accident and it is for the defendant to prove that there is some other explanation for it. Applying this principle to the facts leads to the conclusion that the appellant's symptoms were likely to be causally related to the accident, and the defendant has suggested no alternative cause. I turn to address the issue I referred to in the opening paragraph of these reasons. Although Craigie DCJ did not refer to s79(1) of the Act, he clearly found that the appellant's symptoms could not have lasted past 2 years from the accident and were not present some 4 years later at the time of the trial. This conclusion was arrived at by his Honour by reason of his acceptance of Dr Fitzsimons' opinion. to which I have referred. In Matthews v Dean, after referring to the words in the provision, Grove J said: I note the present tense of the verb in the proviso. I conclude that I should look at the current condition of the plaintiff in order to assess her qualification for NEL. The verbiage is not "has been" and thus, I apprehend, the litigant who has recovered from a state of significant impairment will be excluded. Nor is the language "will be" and Mr Jenkyn pointed to the hypothetical problem of a plaintiff enjoying asymptomatic existence at the time of judgment but with a definite prognosis of future disaster. The solution to that dilemma may be a construction that the existence of potential is itself a sufficient current impairment but there is no need for me to digress further on such an analysis in this case. In Allen v Chown, decided on | July 1996, the leading judgment was given by Clarke JA (with whom Handley and Cole JJA agreed). Clarke JA said: The court is bound in accordance with well known principles to interpret the words actually used in a statute. Certainly the court may and, perhaps, should adopt a purposive approach, but that does not justify the court substituting words for the words actually used in the statute except in particular well known circumstances. There is nothing in s79 which would justify, in my opinion, interpreting "is" as meaning "has been, is or will be". To give it that interpretation would be to rewrite the section which is a power that the court does not enjoy. In my opinion there is no substance in the argument that what has occurred since 1991 justifies a review of Matthew v Dean. The court approved Matthews v Dean (as the headnote states). It may be noted that Clarke JA acknowledged that to prove that there was a significant impairment at the date of trial doubtless imported an arbitrary element. Nonetheless, the court was bound to apply the test which flowed from a proper construction of the section. Prior to the decision in Allen v Chown, the Court of Appeal had faced the same issue in Reinhardt v Huan. This was heard on 16 May 1996 (prior to Allen v Chown). It was decided by the delivery of reserved judgments by the court on 12 July 1996. Not surprisingly, none of the judgments referred to Allen v Chown. Although the headnote states Matthews v Dean 'disapproved', this may not be strictly correct, for reasons which will appear for my discussion of the case. URJ ENGLAND v VAN DONK (Stein JA) 13 Gleeson CJ was concerned that the respondent appeared without representation. He said: This is unfortunate, because the argument in the appeal raised some important questions of construction of the Motor Accidents Act 1988 (NSW). In particular, the argument of the appellant assumed both the correctness, and the relevance, of the decision of Grove J in Matthews v Dean 11 MVR 455; (1990) Aust Torts Reports 81-037. In his reasons for judgment, which | have read in draft form, Meagher JA does not doubt the relevance of that decision, but concludes that it is incorrect, and should be overruled. It is a decision which has stood for several years, and has no doubt been acted upon in many cases. While I understand the force of the views expressed by Meagher JA, I would be most reluctant to form a concluded opinion as to whether the decision should be followed or overruled in a case where we have not had the benefit of full argument and where the resolution of that question may be unnecessary. [at 58-59] In addition to noting the 'force of the views expressed by Meagher JA', the Chief Justice also said: As Meagher JA has indicated, there is a cogent argument that can be put to the contrary of that construction of the section. The argument turns upon giving the word "is" a narrative, rather than a temporal, connotation. If correct, the agreement would avoid the surprising result that a plaintiff's rights can depend upon the length of delays in the court lists. However, I regard it is unnecessary and inappropriate to resolve that argument on this appeal. [at 60 (29-34)] After referring to Matthews v Dean and Grove J's reliance of the present tense of the verb in the proviso, Meagher JA stated: The appellant, on this basis, contended that no damages at all should have been awarded for nervous shock, because on the findings of fact the plaintiff had recovered from it by the time the hearing took place. I cannot accept this argument. There must be some doubt as to the correctness of Grove J's decision in Matthews v Dean; it is not immediately apparent to me that the use of the present tense "is" is temporal in its connotation. Indeed, the whole purpose of the section is simply to ensure that any impairment of normal life is significant, not trifling. In my view, it should be read as if it said: "No damages shall be awarded for non-economic loss of an insignificant character', whether it was past or present. [at 64] The third member of the court was Beazley JA. She said: Having found that s79 is relevant to the claim for non-economic loss, I agree with the construction given to that section by Meagher JA. [at 65] Thus, Meagher and Beazley JJA disapproved Matthews v Dean and the Chief Justice, while declining to resolve the argument, made comments which were indicative of acknowledging the cogency of Meagher JA's opinion. It is clear that a literal construction of s79(1) has the capacity to cause manifest injustice to a large number of people injured in motor vehicle accidents. In particular, those people whose ability to lead a normal life is significantly impaired by the injury suffered in an accident, but by the time of the trial are not suffering significant impairment, will be excluded from compensation for non-economic loss. This, of course, is relevant to accidents which occurred prior to 26 September 1995. As Gleeson CJ observed, the temporal construction would produce the surprising result that a plaintiff's rights can depend on the length of delays in court lists. This is something which is totally out of the control of a plaintiff. In addition, a plaintiff through illness, or unavailability of a witness, may obtain an 14 UNREPORTED JUDGMENTS adjournment of a trial thereby possibly depriving herself (or himself) of damages. Moreover, a defendant could seek to delay the trial in the hope or belief that by the time the hearing ultimately occurs, the plaintiff will have ceased to be significantly impaired. To my mind, the literal construction has the capacity to lead to absurdity and overwhelming unfairness. It could not have been the intention of the legislature. In my opinion, the alternative construction, afforded by a purposive approach, is to be preferred. I agree with Meagher JA in Reinhardt that 'is' in s79(1) should be given a narrative and not a temporal connotation. Such an approach is more likely to accord with Parliament's intention. To receive any damages for non-economic loss, there has to be proven that the injury suffered in the accident has significantly impaired the plaintiff's ability to lead a normal life, whether that impairment was past or present. It follows from my conclusion that I believe that Matthews v Dean was incorrectly decided on this point and the correct construction is that opined by Meagher JA (Beazley JA agreeing) in Reinhardt. Accordingly, Craigie DCJ did not need to find that the appellant was significantly impaired at the date of trial. Craigie DCJ awarded the appellant nil damages for non-economic loss. Even on the finding of symptoms of the accident persisting for 2 years, this is in my view wholly erroneous. Her injuries and continuing pain and disabilities cannot be seen as minor ones. There is no doubt that the evidence established that the appellant had been unable to lead a normal life and the she was significantly impaired for a lengthy period of time. Indeed, on her evidence, up to the date of the trial. In my opinion, even given the trial judge's concern over the medical evidence in the defendant's case, the award of nil damages for non-economic loss is grossly disproportionate to the injuries and continuing disabilities which the appellant undoubtedly suffered. On any reasonable assessment damages certainly exceed the threshold. There is also a challenge to the findings on economic loss. Here I have a little difficulty in understanding what his Honour did. It is clear that the appellant abandoned any claim for past economic loss (AB 126 G-I). His Honour found that she had no future economic loss other than a loss of capacity for work for a limited period of 2 years. He assessed this loss at $5,000. The trial judge was, however, fully justified in finding that there was no satisfactory evidence of future economic loss. No reason has been shown why this finding should be disturbed. My conclusion on the issue of damages for non-economic loss leads to the question of whether this court is in a position to substitute its own assessment or whether a new trial should be ordered. Inconvenient as a new trial may be to the appellant, I can see no alternative. We are in no position to make the assessment without seeing and hearing from the appellant. In my opinion, the appeal should be upheld, the verdict and judgment of Craigie DCJ set aside and a new trial ordered, except on the issue of future economic loss. The appellant should have her costs of the appeal and the respondent should, if entitled, receive a certificate under the Suitors Fund Act. In the circumstances of my conclusion on the appeal, the cross-appeal on costs should be dismissed. (1) Appeal upheld with costs, the verdict and judgment of Craigie DCJ set aside and a new trial ordered, except on the issue of future economic loss. URJ ENGLAND v VAN DONK (Stein JA) 15 (2) The respondent should, if entitled, receive a certificate under the Suitors Fund Act 1951. (3) Cross-appeal on costs dismissed. 5 Counsel for the appellant: A Fennell Solicitors for the appellant: Aubrey Brown & Partners Counsel for the respondent: R C Tonner 10 Solicitors for the respondent: Audrey Balla