MITCHELL v FISHER SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MASON P, MEAGHER and STEIN JJA 1 July 1998, 8 September 1998 [1998] NSWCA 146 NEGLIGENCE — whether trial judge faded to consider inference of novas actus — lack of evidence to justify such an inference — whether inference arose from failure of party to testify — no onus to give evidence in the negative DAMAGES — award for general damages and future economic loss manifestly inadequate — award for future medical expenses ought not be incorporated within general damages This appeal and cross-appeal arises from a claim for damages for injuries received by the first respondent during a fall from an external first floor landing on 25 September 1987. The claim was initially brought against the owner of the building (the second respondent). The claim was later amended to include the builder of the landing (the appellant) and the tenant of the adjacent unit (the third respondent) was added as a third party. A multiplicity of pleadings and cross-pleadings ensued. Central to the dispute was the condition of the top railing on the landing. All parties to the proceedings called expert evidence, however, none had examined the site until several years after the fall occurred. The trial judge held that there was insufficient evidence on which to conclude that the railing had been damaged by some novus actus or that the owner or tenant knew, or should have known, that the railing was dangerous. He concluded that the railing was loose because it had not been properly attached when the staircase was constructed and that the builder was solely liable. Issues raised by the appeal and cross-appeal included: 1. whether the trial judge failed to apply available inferences when considering the possibility of a novus actus; 2. whether the judge failed to apply available inferences when considering the failure of the third respondent to testify; 3. whether the award for general damages and future economic loss was manifestly inadequate; 4. whether the failure to make an award for future medical expenses was an error; Held: 1. There was no evidence to justify an inference that the railing was damaged by a novus actus. 2. There was no onus on the tenant; in the absence of any evidence of a novus actus, to give evidence in the negative. 3. The award for damages and future economic loss was manifestly inadequate. 4. The award for future medical expenses should not have been included within the award for general damages. Mason P I agree with Stein JA. Meagher JA I agree with Stein JA. Stein JA This appeal arises from a claim for damages for injuries received by Christine Fisher (the first respondent) in a fall from a first floor external landing on 25 September 1987. She was then 15 years of age. Her claim was initially brought against the owner of the building (the second respondent) where the 2 UNREPORTED JUDGMENTS incident occurred. The initial process, filed in March 1989, escalated into a multiplicity of pleadings and cross-pleadings that continue into the present hearing. The owner filed third party notices against the builder (the appellant) of the staircase and landing, the tenant (the third respondent) who occupied the apartment adjacent to the landing and Ms Fisher's mother (subsequently abandoned). The plaintiff later amended her claim to include the builder as second defendant and the tenant joined the owner and builder as third parties. It is important to note, however, that the builder did not join the tenant and owner as third parties in the court below. Notwithstanding, the appellant seeks leave to do so in the appeal. BACKGROUND The brief history of the matter is as follows. On 25 September 1987 the plaintiff and her cousin called at a flat where her brother was visiting. The flat was situated above a butcher's shop. In 1983 the flat was occupied by the tenant with her husband and two children. At the time the lease commenced, the butcher's shop was operated by the building owner. The flat was rented for $100 per week on the condition that the tenant 'looked after the place'. Access to the upstairs flat was then via a staircase inside the butcher's shop. In mid-1985 the owner sold the business and leased the shop to another business. It became necessary to provide alternative access to the upstairs flat. Accordingly, the appellant builder was engaged to construct a timber staircase and landing against the back wall of the building. The building work was completed in July 1985. The tenant continued to live at the flat with her two boys aged 11 and 12 years. On the day in question the two girls (the plaintiff and her cousin) climbed the staircase and stood on the landing outside the first-floor flat. After knocking on the door, they stepped back and leaned lightly against the top rail of the landing. The railing gave way at both ends simultaneously and the girls fell approximately 2 metres onto the roof of a carport below. While her cousin was not seriously injured, the plaintiff received a crush fracture to her lower spine which necessitated a stay in hospital of approximately five days and left her with continuing pain and disability. THE PLEADINGS This appeal by the builder was instituted on 24 April 1996. He appealed against the award of damages against him. The appellant sought a new trial. On 29 May 1996 Ms Fisher filed a notice of cross-appeal on damages. At the commencement of the hearing Mr Barry QC, counsel for the appellant, sought leave to file an amended notice of appeal. As the respondents had been in receipt of a copy of the proposed amendment for some time and did not oppose the application, the court granted leave. During the course of the hearing of the appeal the appellant filed a notice of motion seeking leave to further amend the amended notice of appeal in order to claim contribution or indemnity from the owner and the tenant. Counsel appearing on behalf of the owner and tenant respectively opposed the amendment. They argued that no challenge had been made to the trial judge's findings in favour of the second and third respondent and the appellant lacked standing to bring such a challenge. In addition, counsel for the first respondent (plaintiff) sought leave to amend the notice of cross-appeal by adding (in her pleading) grounds 2-17 of the appellant's amended notice of appeal and sought judgment for the cross-appellant URJ MITCHELL v FISHER (Stein JA) 3 against the second and third respondents, ie, the owner and the tenant. This was apparently a defensive action, in the event the appellant succeeded in his appeal and the plaintiff was left with no avenue of relief against the other parties. At the conclusion of the hearing of the appeal, the Court refused leave to amend the notice of appeal as sought in the appellant's notice of motion and to amend the notice of cross-appeal sought by the first respondent. We indicated that reasons for refusing leave would be adverted to in the judgment. Counsel for the owner and the tenant had no more than a few hours notice of the proposed amendment sought by the appellant. The second and third respondents were not required to attend the appeal hearing. They attended having perused the appellant's written submissions and fearing exposure to a possible claim of contribution by the builder or to some other claim. They rely on the fact that neither the appellant nor the cross-appellant have sought to have the findings of Viney DCJ in favour of the owner and tenant set aside and submit that the builder lacks standing. If they had not been present before us, there would have been no question but that leave to amend would have been refused. I see no reason to penalise those parties for their caution. The tenant and owner may well have chosen to conduct their case and other affairs in a different manner if put squarely on notice that they may face a verdict. The lateness of the proposed amendment would be likely to cause, in my view, real and substantial prejudice to the owner and the tenant were the amendment to be granted. The days of judicial ambush are over. The refusal of the plaintiff's proposed amended cross-appeal must follow from the refusal of the motion of the appellant. JUDGMENT OF VINEY DCJ I turn now to the substantial issues raised by the appeal and cross-appeal. On 29 March 1996, Viney DCJ gave judgment. He summarised the issues that emerged during the hearing in the following manner: 1. Whether the top rail which gave way was "loose" to such an extent that the slightest pressure of two 15 year old girls leaning lightly against it caused it to fall? 2. If so, was that because the Builder had not constructed the staircase - that is the top railing - in a safe and workmanlike manner? 3. If so, is the Builder liable for not foreseeing that an accident like this could occur? 4. If the top rail was loose - for whatever reason - is the Owner liable for not checking its condition to ensure it was safe for people such as the Plaintiff [first respondent] to lean against in these circumstances? In other words was its instability such as would have been revealed by inspection that a reasonable Owner ought to have undertaken? 5. Is the Tenant liable on the same grounds as the Owner (in 4)? Alternatively, is the Tenant liable because she was aware, or ought to have been aware, that the rail had become loose because of damage caused during the course of the tenancy - by being bumped or otherwise loosened, or, maybe even dislodged and replaced? As his Honour remarked, the condition of the staircase and, in particular, the top railing, was central to the conflict. He noted the difficulty of resolving that conflict in the absence of any expert examination within a short time of the accident occurring. All parties to the proceedings called expert evidence regarding the condition of the railing and staircase. However, none had examined 4 UNREPORTED JUDGMENTS the site until many years after the accident and none of them could state authoritatively how, or how often, the rail had been re-attached to the staircase. Viney DCJ found, and it is a finding that is unchallenged, that the first respondent plaintiff and her cousin were honest and truthful witnesses. He accepted their evidence that they had 'leaned back lightly against the rail and it gave way almost immediately'. [AB 898] After reviewing the evidence his Honour concluded that sole liability for the accident lay with the builder. He was satisfied that, on the balance of probabilities, the railing was loose because it had not been properly attached when the staircase was built. His Honour could find no evidential basis on which to conclude that the railing had been damaged by some novus actus. Nor was there any evidence that the owner or tenant knew, or should have known, that the railing was dangerous, nor should any such inference be drawn. Further, his Honour was satisfied that no duty of care lay with the tenant as lessee to know, or take steps to be aware, of any defect in the building. APPEAL The notice of appeal raises two issues of particular significance: 1.Whether the judge failed to apply the inferences available when considering the question of a novus actus. 2. Whether the judge failed to apply the inferences available as against the tenant in the light of her failure to give or call evidence. Understandably, counsel for the appellant does not challenge his Honour's findings with regard to the first respondent's credibility, nor the finding that the railing gave way under light pressure with the two ends giving way simultaneously. The appellant argues that if the railing came away under only light pressure, then it must have been obvious to anyone using the staircase that the railing was not properly fixed. It is glaringly improbable, the argument runs, that if the defect occurred during construction of the staircase, it would have gone unnoticed for two years. There must have been some novus actus that intervened and weakened the railing. Whilst acknowledging the absence of any positive evidence of a novus actus, Mr Barry argues that the inference must be strong that the damage to the railing occurred in the intervening period between construction of the stairway and the accident. Since the tenant and her family were the major users of the staircase, the inference is that the tenant was responsible for the damage. That inference, it is said, is strengthened by the failure of the tenant to testify at trial. The speculation of a novus actus included the allegation that the railing was bumped or weakened by the movement of furniture in or out of the flat or that the tenant had removed and re-attached the railing prior to the accident. There was, however, no evidence that would justify an inference that any such event had occurred. The evidence that the tenant painted the landing, re-attached the railing after the accident, maintained the premises as a condition of her tenancy or used it for sunbaking and to house her plants is insufficient to support an inference that the railing was damaged by some novus actus. None of the expert evidence called lent weight to the allegation. In my view, the conclusion drawn by Viney DCJ that he could find no basis for concluding that the staircase or railing had been damaged by some novus actus was one which was open on the evidence before the Court. URJ MITCHELL v FISHER (Stein JA) 5 Mr Barry submits that the failure of the tenant to give evidence is not a neutral matter. She is a party to the proceedings and the occupier of the flat adjacent to the railing. As the main user of the stairway she was in the best position to know what had been done to the stairway after it was built. Her failure to testily, when coupled with the inferences available from the way in which the accident occurred, produces an inference, he suggests, that the damage to the railing occurred at her hand or direction. I do not agree. A party is only required to explain or contradict something where evidence is given of facts requiring an answer (see Jones v Dunkel (1959-60) 101 CLR 298). The appellant disclaims any reliance on Jones v Dunkel but submits that the failure of the tenant to give evidence raised a strong inference against her. However, there was no onus on the tenant, in the absence of any evidence suggesting a novus actus, to give evidence in the negative. It may also be noted that the tenant was never a defendant but only a third party. The failure of the third respondent to testify is not sufficient, in my view, to support an inference that the railing was damaged by some intervening event. It would be no more than mere speculation. The appeal should be dismissed with costs. CROSS-APPEAL The cross-appellant (plaintiff) challenges the decision of Viney DCJ in regard to the quantum of damages. The award made by his Honour was $40,000 for general damages (which included an unspecified component for future medical expenses), $6,000 for past economic loss, $30,000 for future economic loss and a sum for out of pocket expenses. GENERAL DAMAGES The plaintiff submits that his Honour failed to take sufficient account of the uncontradicted evidence of Dr Bracken, one of two orthopaedic specialists who gave evidence at the hearing, that the plaintiff could expect to suffer a significant increase in back pain in ten to fifteen years time and this would further restrict her capacity to work and require regular ongoing treatment. The amounts awarded for general damages and for future economic loss, it is argued, were manifestly inadequate and His Honour failed to award any sum for the cost of future medical expenses. In considering this head of damage, Viney DCJ commented on the difficulty of estimating the amount of ongoing treatment the plaintiff might require. He noted the evidence of Dr Bracken that as a result of progressive disc degeneration the plaintiff would, in ten to fifteen years, require regular physiotherapy treatment eight to ten times a year on a continuing basis. He also noted that she faced the prospect of arthritic complications later in life and would require analgesics for pain relief on a regular basis to manage her back pain. Concluding that any assessment must be arbitrary, he proposed incorporating into the award for general damages a component for possible future medical expenses. As noted, he did not specify what proportion of the $40,000 awarded for general damages was for future medical expenses. The plaintiff was 15 years old at the time of the accident and 23 years old at the time of the hearing before Viney DCJ. She has a life expectancy into her mid to late 70's. According to Dr Bracken's estimate, she will require the treatment to which he refers, at least by the age of 38. At that time she will still have a substantial part of her working and non-working life before her. At the time of the 6 UNREPORTED JUDGMENTS hearing a standard physiotherapy consultation cost $38. If the plaintiff requires physiotherapy 8-10 times a year for up to forty years and analgesics on a regular basis, then $10,000 is probably a fairly conservative allowance for future medical expenses. It follows that his Honour's award for general damages, absent the component for future medical expenses, was probably approximately $30,000. It seems to me that, taking into account the course of the plaintiff's injuries, her continuing and likely permanent disabilities and the consequent loss of enjoyment of life, the sum of $30,000 is manifestly outside the discretionary range. For my part, I would assess general damages at $50,000 clear of future medical expenses, which ought preferably be dealt with as a separate head of damage. FUTURE ECONOMIC LOSS At the time of the accident the plaintiff was working as a check-out operator and shelf-packer at Jewels supermarket. She was unable to return to that work after the accident in September 1987. Between 1988 and 1990 she worked in a number of occupations but each time was forced to resign as a result of problems with her back. Between 1990 and 1996 she chose to remain out of the paid work force while caring for her child. His Honour was impressed by the efforts the plaintiff had made to find work before her child was born and with her plans to re-enter the work force. In his view, her ability to find suitable employment was reduced by her injuries and would make her an unreliable employee as she would, in all likelihood, require time off work periodically and would be at risk of being dismissed from employment that is otherwise suitable. The plaintiff had submitted that the amount of future economic loss should be calculated by allowing her $150 per week based on her probable earnings at Jewel for 36 years until her 60" birthday. That approach produces a figure of $173,430 using the 3% Tables. Allowing 15% discount for exigencies of life, that figure is reduced to $147,416. His Honour rejected this approach. In his view, there were too many imponderables in the plaintiffs future working life to approach the claim on a mathematical basis. Rather, he opted for awarding a lump sum of $30,000 in the nature of a cushion. The plaintiff's educational opportunities were limited and the type of work that will probably be available to her in the future is likely to be similar to the kind of work she has done in the past. It is the kind of work which very often requires standing, lifting and bending - the very activities that will cause her the most difficulty. Given that it is likely that her disabilities will increase with time, it does not seem to be an adequate approach to the question of her future economic loss to simply provide a cushion of $30,000. It seems to me to be an unreasonable result. However, his Honour was right to conclude that there were too many imponderables to be able to follow a conventional approach. Notwithstanding, I am certain that the $30,000 awarded as a cushion is a manifestly inadequate sum. Doing the best I can with the evidence, I would allow a cushion of $50,000. FUTURE MEDICAL EXPENSES There is also the issue of future medical expenses. Preferably, these should not have been included within general damages. The plaintiff, on the evidence, was clearly entitled to an award for future medical expenses. His Honour was obviously of that view. Allowance of a nominal amount of $10 per week for the balance of the plaintiff's life and applying the 3% Tables, would produce a figure URJ MITCHELL v FISHER (Stein JA) 7 of around $13,600. In my opinion, a proper allowance would be $10,000 and this is probably what his Honour had in mind. DISPOSITION OF THE APPEAL AND CROSS-APPEAL It is noted that no submission is made in relation to his Honour's award of interest. In addition to the dismissal of the appeal, I would propose that the cross-appeal be allowed with costs and the verdict for the plaintiff be set aside. In lieu thereof, I would substitute a verdict for the plaintiff in the sum of $117,285.15 plus interest. This is made up as follows: General damages $50,000.00 Past economic loss 6,000.00 Future economic loss 50,000.00 Future medical expenses 10,000.00 Out of pocket expenses 1,285.15 Total $117.285.15 For whatever reason, the appeal book did not include a minute of the order of the District Court. It may be that none was taken out. His Honour dealt with interest as follows: I will ask counsel to assist in determining the appropriate orders for disposal of the proceeding concerning the other parties, and to calculate the interest payable and what orders for costs should be made. (Interest on damages - proportion of General Damages for the future - $20,000) [AB 910] However, we do not know what his Honour allowed for interest on the $20,000. It may be that there is no need to adjust the award of interest or that the parties may agree on the amount. I would propose that the court delay entering a fresh verdict for the plaintiff until the parties have had the opportunity to make written submissions as to the proper award of interest. This should be done within 14 days so that the appeal may be finalised. As it stands, the court does not know the amount of the verdict found by the trial judge. Such a situation should not occur and appeals should not be fixed for hearing unless a minute of the order appealed against is included in the appeal book. Subject to the determination of the question of Interest and the sum of the substituted verdict to be entered, the following orders should be made: 1. Appeal dismissed with costs. 2. Cross-appeal allowed. 3. The appellant is to pay the first respondent's costs of the cross-appeal. 4. Verdict for the first respondent (plaintiff) be set aside. Counsel for the appellant: C T Barry QC Solicitors for the appellant: McPhee Kelshaw Counsel for the first respondent/cross-appellant: J W Ingram Solicitors for the first respondent/cross-appellant: Maurice May & Co Counsel for the second respondent: I F Butcher Solicitors for the second respondent: Grahame W Howe & Co 8 UNREPORTED JUDGMENTS Counsel for the third respondent: G Curtin Solicitors for the third respondent: Henry Davis York & Co