New South Wales Court of Appeal CITATION : Pirillo v Telstra Corporation Ltd [1999] NSWCA 463 FILE NUMBER(S) : CA 40153/99 HEARING DATE(S) : 23 November 1999 JUDGMENT DATE : 16 December 1999 PARTIES : Guiseppe Pirillo v Telstra Corporation Ltd JUDGMENT OF : Priestley JA at 1; Brownie AJA at 32 LOWER COURT JURISDICTION : District Court LOWER COURT FILE NUMBER(S) : DC 171/98 LOWER COURT JUDICIAL OFFICER : His Honour Judge Delaney COUNSEL : Appellant - I.D. Cullen, E. Gramelis Respondent - H. Shore SOLICITORS : Appellant - Stanger & Clarke, Newcastle Respondent - Sparke Helmore, Newcastle CATCHWORDS : Assessment of damages for personal injury DECISION : New trial limited to damages THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40153/99 DC 171/98 PRIESTLEY JA BROWNIE AJA Thursday, 16 December 1999 PIRILLO v TELSTRA CORPORATION LIMITED ASSESSMENT OF DAMAGES FOR PERSONAL INJURY - one aspect of damage not taken into account by trial judge - appeal court takes view that aspect should have been taken into account and of sufficient significance to warrant setting aside of judgment and reassessment of claims - appeal court not in position to reassess - new trial ordered. ORDERS 1. Judgment as to quantum set aside. 2. New trial to be held limited to damages. 3. Respondent to bear appellant's costs of appeal. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40153/99 DC 171/98 PRIESTLEY JA BROWNIE AJA Thursday, 16 December 1999 PIRILLO v TELSTRA CORPORATION LIMITED 1 PRIESTLEY JA: Mr Pirillo as plaintiff brought an action in the District Court against Telstra Corporation Limited as defendant. His statement of claim was filed on 20 April 1998. In it he alleged that the defendant had constructed a pit in the footpath of Horsley Drive, Smithfield and that the pit had been covered with a wooden board over a defective metal plate. He further claimed that on 11 March 1997 when walking upon the wooden board it gave way without warning so that he fell into the pit and suffered injury. 2 When the case came on for hearing before his Honour Judge Delaney on 5 February 1999 the defendant admitted liability. The trial judge then asked the plaintiff's counsel what issues remained. The answer was that they were the extent of general damages, pain and suffering and the past and future economic loss. 3 Both at the time of the accident and the trial the plaintiff was self-employed as a tow truck driver. A principal part of his economic loss claim was that his ability to conduct his tow truck business was significantly impaired as a result of the accident. 4 The plaintiff's case was that when the board covering the Telstra manhole gave way his left leg went down into the hole, his left elbow was hit and he felt pain around his back and right knee, and, on the following day in his left elbow, neck and left shoulder. In support of his case written reports from six medical practitioners were tendered. Some of these reported more than once. From Dr Machart for example, an orthopaedic surgeon, who, although not the plaintiff's first treating doctor, appears to have undertaken the principal management of the treatment of the plaintiff's shoulder, there were five reports and two certificates. The defendant tendered two reports from Dr Ireland, a consulting orthopaedic surgeon. None of the medical practitioners was required to give oral evidence. 5 In the course of his review of the evidence, the trial judge said that he accepted that the plaintiff had "as a result of his fall a number of injuries to which he generally deposed". Specifically, he accepted that the plaintiff had injured his right knee, his left hip, his back and neck, and as well had an injury to his left arm which was the most serious of his injuries. He said the real issue in the case was whether or not the plaintiff had any serious problem with his knee. After consideration of the medical evidence relating to the knee, the judge commented that although the plaintiff " generally tried to give his evidence in a straightforward manner, I think that he has exaggerated his symptoms in that regard, and I do not accept that he has the extent of disability in his right knee as he has deposed. Indeed in some respects, when one looks at the evidence of the plaintiff, there is certainly a suggestion that he has tended to overstate the effect of the neck, headaches, and knee problem. This may well be because of the fact that he has had some significant difficulties with his shoulder and he has tended to concentrate, perhaps, a little more than other wise would be the case, on the nature and extent of his problems. Nevertheless I accept that he has the problems that he has with his shoulder, and that he may even need some assistance so far as his ulnar nerve is concerned. " 6 These were the only remarks made by the judge which were critical of the acceptability of the plaintiff's evidence. They were temperately expressed and not particularly unfavourable to the plaintiff, but undoubtedly led the judge to the conclusion that the effect on the plaintiff of his injuries was less serious than the plaintiff claimed. 7 Immediately after the passage set out in par 5, the trial judge continued by dealing with a particular matter on which the plaintiff relied and in respect of which the trial judge held against him. Because this passage became the of focus of the principal submissions in the appeal I set it out in full: " Mr Cullen, on behalf of the plaintiff, submitted that I should be satisfied that he has a number of other problems. He referred to the fact that the plaintiff had been referred to Dr Leslie. Dr Leslie provided a report of 2 September 1998. It is necessary for me to refer to that report because of the allegations made. The plaintiff was referred to Dr Leslie by Dr Machart. Dr Leslie obtained a history of the plaintiff's fall in March of 1997. He obtained a history of problems with the left shoulder and pains emanating from his neck to the left scapula and down the left arm and sometimes into the hand. He noted that the plaintiff's shoulder appeared to be fixed with recent arthroscopic surgery but that he still had symptoms in the neck, scapula and arm. Dr Leslie noted that on examination, to his mind, there was no obvious muscle wasting. This is somewhat at odds with other observations. He noted, however, that when the plaintiff had his arms above his head there was a clamping down of both radial pulses. He said this could occur in normal people but it is not necessarily pathological. He thought, nevertheless, that on all the evidence he had a thoracic outlet compression. This was reinforced by the fact that a cervical spine and CAT scan of the thoracic spine show abnormality. Dr Leslie, however, does not appear to have ever been asked for any evidence of a causal connection between that thoracic outlet compression and the accident. Accordingly, notwithstanding the fact that the plaintiff had the injuries which I find he has, I am not satisfied on the balance of probabilities that the condition referred to by Dr Leslie was causally connected to this accident and I make no allowance for it in considering either his claim for general damages, or his claim for past and future economic loss. " 8 It seems clear that the trial judge's only reason for not accepting this part of the plaintiff's claim was his opinion about causality. He did not question the accuracy of Dr Leslie's diagnosis, nor does that seem to have been in issue at the trial. 9 Once he had disposed of this part of the plaintiff's claim, the judge immediately proceeded to deal with general damages: " All in all, having accepted the degree of his problems as I do, I think it is appropriate to assess general damages for the plaintiff in the sum of $45,000 ." 10 Next, the trial judge went on to deal with what he said was the biggest part of the plaintiff's claim, which related to future treatment and economic loss. Nothing in the judge's discussion of these matters was critical of the plaintiff's credibility. Stated very broadly, the principal adverse findings made by the trial judge in this part of his reasons were that he was not satisfied that any significant pathology remained in the plaintiff's knee other than some pain and discomfort particularly on kneeling and that accounting evidence called to support the plaintiff's claims for economic loss was unsatisfactory. The trial judge was satisfied however that the plaintiff's earning capacity had been reduced and that he had a permanent loss of part of the use of his arm. He concluded that he should allow an amount of $50,000 for future economic loss as a cushion. He allowed for past economic loss an amount of $20,000 for substitute labour. He allowed $7,000 for loss of business opportunity and agreed out of pocket expenses of $24,158. These amounts, together with interest, totalled $156,765. Judgment was accordingly given for that amount, with costs. 11 In his notice of appeal the plaintiff raised a number of matters. The first was that the trial judge was wrong in finding that the plaintiff's condition of thoracic outlet compression or traumatic cervical rib syndrome was not on the balance of probabilities causally connected to the accident. The next was that his Honour had been in error in not accepting the plaintiff's evidence concerning his right knee. It was submitted that in light of the documentary materials, the way the case was conducted and the plaintiff's evidence itself, there was no basis for the judge to have made his mildly sceptical observations. There were then grounds of appeal about what was said to be the inadequacy of the sum awarded for general damages, the amount of $50,000 assessed as a cushion for future loss of earning capacity, for future treatment costs and the calculation of interest on past economic loss. 12 The court heard detailed argument about the first head of the appeal. The court is of opinion that that argument should be upheld. 13 The reasons can be explained primarily by reference to the reports of Dr Machart and the report of Dr Leslie. 14 In a report dated 22 September 1998 Dr Machart recorded that he first saw the plaintiff on 13 June 1997. It is apparent from his narration in the report of 22 September 1998 that in his first examination of the plaintiff he was concerned (inter alia) to see whether there was a connection between the plaintiff's then condition and the accident of 11 March 1997. Dr Machart gave particular attention to the condition of the plaintiff's left shoulder. His initial opinion was that the plaintiff had instability secondary to labral tear or a detachment and he recommended MRI. He reviewed the MRI on 27 June 1997. It showed "SLAP lesion". Dr Machart recommended arthroscopic repair. 15 The plaintiff did not have the arthroscopic repair immediately. 16 Dr Machart examined him again on 5 June 1998. Dr Machart's findings at that stage were as follows: " He had pain in a rather wide ranging area of his left arm and this included the base of the neck, the parascapular region, the trapezial ridge, the point of the elbow as well down the arm and forearm towards the wrist. There was no evidence of muscle wasting and his ulnar nerve at the elbow was not tender. I noted that there was obliteration of the radial pulse with the abducted and external rotated and I thought that this represented cervical rib syndrome symptom. At this stage I recommended arthroscopic repair of the 'SLAP' lesion and further review by a vascular surgeon with regards to his cervical rib. " (Blue AB 12) 17 The arthroscopic repair to the shoulder was carried out on 17 June 1998 by Dr Machart. Dr Machart examined the plaintiff in review of the shoulder operation on 25 August 1998. At that time the shoulder had healed. The review he had recommended by a vascular surgeon was carried out by Dr G. Leslie on 2 September 1998. Dr Leslie's letter-report of the same day was as follows: " Thank you for asking me to see Mr Pirillo who is a rather difficult diagnostic problem. I note he fell into a manhole in March of '97. He has had considerable problems with his left shoulder and also with pains emanating from his neck to the left scapula and down the left arm and sometimes into the hand. His shoulder appears to have been fixed with recent arthroscopic surgery but he still has symptoms in the neck, scapula and arm. These are most marked when using his arm. On examination today there is no obvious muscle wasting, however with his arms above his head there is a clamping down of both radial pulses. This can occur in normal people and is not necessary pathological. There is no real tenderness over his brachial plexus but he does get pain in the arm when exercising above his head. I feel all in all he has evidence of thoracic outlet compression. This is reinforced by the fact that his cervical spine and CAT Scan of the thoracic spine shows in abnormality. He wishes something done about this as he is unable to work with the present symptoms. I have explained to him that decompression of the thoracic outlet would involve excision of scalenus anterior and scalenus medius muscles and sometimes removal of the first rib. this should get a 50% improvement in symptoms. I have asked him not to make a decision on this but to think about it and I will have further talk with him in a couple of weeks time. I will communicate with you after I see him next. " (It was agreed in the course of the appeal hearing that the word " in " at the end of the third paragraph of the letter was meant to be " no ".) 18 In a report dated 22 September 1998, from which I have taken some of the foregoing history, Dr Machart began with a description of what happened to the plaintiff when the manhole covering gave way beneath him and of the symptoms he had suffered then and since. After narrating the course of medical treatment from then on, he ended as follows: " SUMMARY : This gentleman had traumatic detachment of the capsule of the left shoulder and the biceps tendon. He had undergone surgical repair. There was evidence of tear of the medial meniscus which is still pending review and traumatic cervical rib pathology for which he had seen Dr Greg Leslie and was also referred to Dr Michael Stephen. We have organised for preliminary MRI scan to determine the pathology of his knee but if this is confirmed then arthroscopic evaluation of the knee will be necessary. TREATMENT : It is likely that arthroscopic evaluation of the knee will be necessary and I understand that surgical decompression of the cervical rib syndrome has been recommended by Dr Greg Leslie. I enclose a copy of the details of surgical costing for arthroscopy as we have provided for the patient. I have no information about costing of treatment of traumatic cervical rib syndrome and I suggest that you contact Dr Greg Leslie with regards to this aspect of his treatment. PROGNOSIS : This, at present, is not certain as he is still undergoing treatment. At present he could realistically only work in a sedentary capacity and this may entail loss of earning capacity. As to whether this will be permanent is at present uncertain. " 19 In November 1998 Dr Machart carried out an arthroscopy on the plaintiff's right knee. 20 In his last report before the hearing, Dr Machart brought the history of examination and treatment up to date (letter dated 27 January 1999, Blue AB 15-17). Under the heading "PROGRESS" he mentioned that he had sent the plaintiff "to Dr Greg Leslie for a vascular consultation in relation to the possibility of traumatic thoracic outlet syndrome complicating his left shoulder picture". He also said that his most recent examination of the plaintiff was on 24 December 1998. There was then a swelling around the patellar ligament of the right knee. 21 Under the heading "SUMMARY" Dr Machart said the plaintiff had sustained traumatic detachment of the capsule of the left shoulder and biceps tendon for which he had undergone surgical repair "... and probably traumatic cervical rib pathology for which he was seeing Dr Greg Leslie and Dr Michael Stephen". 22 Under the heading "FUTURE TREATMENT" he said, inter alia, that "Other surgeons were evaluating the cervical rib" and he could not comment on the likelihood of surgical intervention. He also noted that there was probably 5-10% chance of osteoarthritis of the right knee in the distant future. 23 When the history and opinions set out in Dr Machart's various reports are considered in sequence and in their full context, it seems to me that there can be little doubt that his statement in his letter of 27 January 1999 that the plaintiff probably had traumatic cervical rib pathology was an opinion that that pathology was probably the result of the accident on 11 March 1997. This is something not taken into account by the trial judge in the passage, critical to this point in the appeal, that I have set out in par 7. Upon my reading of Dr Machart's reports, they clearly provided evidence connecting the thoracic outlet compression with the accident. The result of the trial judge's not taking this into account was that he did not give full consideration to an aspect of the plaintiff's case which was, at least arguably, quite an important part of the case. 24 There seems to me to be a broader reason for coming to this conclusion on this aspect of the case. In the part of Dr Machart's report of 22 September 1998 set out in par 15, in which he noted that it was after his examination of the plaintiff of 5 June 1998 that he recommended review by a vascular surgeon (who became Dr Leslie), it seems clear that in the course of considering the symptoms which he thought were consequences of the plaintiff's accident he thought there were some that were not fully explained by his diagnosis before that examination and that he formed the tentative view that they could be explained by what he called cervical rib syndrome. Thus, when seeking Dr Leslie's opinion on the matter, it was in a context where he was sending the plaintiff to Dr Leslie for a further opinion on symptoms he was attributing to the accident. It seems to me that Dr Leslie's report of 2 September 1998 was written on the same basis. The second paragraph of that report referred to the plaintiff's problems following upon his falling into the manhole and the remainder of the report seems to me to be talking about thoracic outlet compression as the proper diagnosis of some of the symptoms following upon the fall. The reports of Dr Machart and Dr Leslie appear to me to be much more readily understandable on the footing that they were dealing with the consequences of the accident than upon the footing assumed by the trial judge that there was no evidence before him of any evidence of a causal connection between the thoracic outlet compression (which the judge accepted existed) and the accident. 25 As against this, counsel for the respondent contended for a different reading of the reports. He submitted that they did not give any basis for the view that the symptoms discussed were caused by the accident. For the reasons already indicated I do not agree with that submission. Counsel also sought to submit that it did not sufficiently appear from the reports that the cervical rib syndrome of which Dr Machart spoke (mostly although not always) was the same as the thoracic outlet compression diagnosed by Dr Leslie. This submission was supported by a reference to its having been mentioned elsewhere in the medical reports that the plaintiff had no cervical rib. 26 I agree with counsel's submission to the extent that there were some verbal differences in the way in which the two doctors described the condition from which they thought the plaintiff was suffering. However, as a matter of substance, I think that when all of Dr Machart's reports are read together with that of Dr Leslie, the proper conclusion is that the symptoms in respect of which Dr Machart was seeking Dr Leslie's opinion, and which Dr Machart referred to as cervical rib syndrome, were the same symptoms as those in respect of which Dr Leslie expressed his opinion that there was evidence that the plaintiff had thoracic outlet compression. Thus, I am comfortably satisfied that when in his summary in his letter of 27 January 1999 Dr Machart said the plaintiff was probably suffering from traumatic cervical rib pathology for which he was seeing Dr Greg Leslie, he was talking about the same subject matter about which Dr Leslie had reported to him by use of the words "thoracic outlet compression". 27 My conclusion therefore is that the judge was in error in not taking into account in assessing what damages should be awarded to the plaintiff the probability that the plaintiff was suffering from thoracic outlet compression as a result of the accident. 28 This is an unfortunate conclusion in one sense, because it is not clear on the trial judge's findings precisely how much significance he would have attached in terms of damages to the thoracic outlet compression if he had assessed damages on the basis that the thoracic outlet compression was probably caused by the accident. I say unfortunate, because although I am not clear on what further amount in the way of damages should be attributed to the thoracic compression syndrome head, it does seem to me that it is probably significant, yet I have no way that I can see of coming to any confident conclusion about an amount, the result of this being that, since in my view the ground of appeal is a good one requiring that the judgment must be set aside, I do not see how it is possible to escape the ordering of a new trial. This conclusion is influenced by the further difficulty that the trial judge seems generally to have accepted the plaintiff, but thought he gave his evidence with some elements of exaggeration. I find it difficult to see how this factual finding could be taken into account in any satisfactory way should this court undertake the reassessment of damages. Even if the factual findings were to be set aside as the appellant's counsel submits pursuant to the second principal ground of appeal, I would find assessment difficult in the absence of any opportunity of forming a view about the appellant for myself. 29 I therefore agree with the submission by counsel for the respondent that if the court upholds the first ground of appeal, (as in my opinion it should), there should be a new trial (limited to damages). Having reached this conclusion, there is in my view no utility in dealing with the appellant's further grounds of appeal - they could result (in light of my opinion on the first ground) in no order more favourable to the appellant than for a new trial. 30 Counsel for the respondent argued that the submissions put by the appellant went outside the grounds in the notice of appeal and to the extent that they did, should not, for various reasons, be entertained by the court. In reaching my conclusions I have confined myself only to considering arguments by the appellant's counsel which were indisputably confined within the grounds of appeal. 31 In my opinion the trial judge's judgment as to quantum, but not his order for costs, should be set aside, and a new trial ordered, limited to damages; the respondent should bear the appellant's costs of the appeal. 32 BROWNIE AJA: I agree with Priestley JA. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.