Stevanovic v Stjelja & Ors [1999] NSWSC 29

New South Wales Supreme Court CITATION : Stevanovic v Stjelja & Ors [1999] NSWSC 29 CURRENT JURISDICTION : Common Law Division FILE NUMBER(S) : 16978/85; 14256/95; 20548/95 HEARING DATE(S) : 05/05/1998 - 08/05/1998 JUDGMENT DATE : 10 February 1999

Zivadin Stevanovic (plaintiff) PARTIES : Milan Stjelja, Zoran Stjelja, Ross Sterritt & Babic Milorad (defendants in 16978/85) NSW Insurance Ministerial Corp (defendant in 14256/95) FAI General Insurance Co Ltd (defendant in 20548/95) JUDGMENT OF : Hidden J

D. Wheelahan QC/ F. Fletcher (plaintiff) COUNSEL : P. H. Greenwood SC (defendant '1') A. Quinlivan (defendant '2') R. Tonner (defendant '3') Taylor & Scott (plaintiff) SOLICITORS : Dunhill Madden Butler (defendant '1') Booth Mather Blackmore (defendant '2') Moray & Agnew (defendant '3') CATCHWORDS : Damages - no question of principle Motor Accidents Act ACTS CITED : 1988 Motor Vehicles (Third Party Insurance) Act 1942 DECISION : Judgment for plaintiff in each case

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THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

HIDDEN J

Wednesday 10 February 1999

16978 of 1985 - Zivadin Stevanovic v Milan Stjelja & 3 Ors 14256 of 1995 - Zivadin Stevanovic v NSW Insurance Ministerial Corporation 20548 of 1995 - Zivadin Stevanovic v FAI General Insurance Co Ltd

Reasons for judgment

1 HIS HONOUR: The plaintiff, Zivadin Stevanovic, is a most unfortunate man. He was injured in three unrelated accidents between 1985 and 1989. He has commenced proceedings for damages in relation to each of them and the three cases have been heard together. Liability is admitted in all of them. The only matters I must determine are the measure of his damages and the extent of the responsibility of each of the three defendants for them. Background 2 The plaintiff was born in Yugoslavia on 2 November 1947. In the early 1960's he trained as a carpenter and joiner and, apart from one and a half years engaged in national service in the Yugoslav army, he worked at that trade until 1970. In June of that year, at the age of 22, he migrated to Australia. 3 Over the next fifteen years he had a variety of jobs in various parts of Australia, mostly in his chosen trade and most of them for periods only of months. On three occasions during that period he travelled to Yugoslavia to visit his family and on another occasion he holidayed briefly in the United States. On one of the visits to Yugoslavia he ended up staying three and a half years because he formed a relationship with a lady. However, that relationship did not endure and he returned to Australia alone. 4 In January 1983 he commenced a relationship with Ms Milena Bucalina. That relationship is still on foot, although it is part of the plaintiff's case that it has been adversely affected by his injuries. 5 In March 1985 he began work as a carpenter with a firm known as 'Mick's Formwork', the proprietors of which were Milan Stjelja and three others, the defendants in the first action. Prior to the accident which gave rise to that action he had enjoyed good health. First Accident (Stevanovic v Stjelja & Ors: 16978/85) 6 On 24 July 1985, as an employee of Mick's Formwork, the plaintiff was engaged in stripping some plywood formwork from concrete steps in the cellar of the RSL club in George Street, Sydney. To gain access to the top of the formwork he climbed an aluminium ladder. In the course of his knocking some of the formwork down, the bottom of the ladder slipped and he fell to the floor in a sitting position. He landed on his buttocks and his right hand and felt "strong pain" in his lower back, right hand and right leg. 7 On the day of the accident the plaintiff saw Dr Graeme MacDougall, a general practitioner, who noted tenderness and marked muscle spasm in the lumbar area. He prescribed medication and arranged for massage treatment. Upon review on 9 August 1985 he found that the plaintiff had not improved, and arranged for him to see an orthopaedic specialist, Dr David Sonnabend. 8 On 29 August 1985 the plaintiff consulted Dr Mark Marinkovich, a general practitioner who spoke his native tongue, and he remained under his care for some years thereafter. To Dr Marinkovich he complained of low back pain, radiating to his buttocks and sometimes to the thoracic spine and neck, together with pain in his right wrist and both knees. He said that he could not stand, walk or sit for long periods and that various bodily movements were restricted. 9 Before he saw Dr Sonnabend the plaintiff was involved in the second accident. Second Accident (Stevanovic v New South Wales Ministerial Insurance Corporation: 12456/95) 10 In the early evening of 9 September 1985 the plaintiff was driving in the Cabramatta area, proceeding slowly while looking for a parking spot, when his vehicle was struck from behind by another vehicle. He described the impact as "enormous", and said that he felt pain in his lower back, his neck, his left knee and both wrists. 11 Shortly after the accident the plaintiff saw Dr MacDougall and Dr Sonnabend, and in December 1985 he again consulted Dr Marinkovich, who referred him to Dr John Bannister, orthopaedic surgeon. It is significant that to none of these doctors did he complain of back pain as a result of the second accident. However, he did complain of the other injuries, together with headaches, and it is clear that he suffered a significant whiplash type injury. All doctors noted a limited range of movement in his neck and shoulders, and Dr Bannister reported that x-rays disclosed degenerative changes in the cervical spine. 12 In February 1986 the plaintiff came under the care of Dr Robert Smith, an orthopaedic surgeon specialising in lower back pain, upon referral by Dr Marinkovich. Dr Smith saw him a number of times between then and July 1989, when the third accident occurred. Over that period he complained of lower back pain, which was constant and moderate but which became worse, sometimes severe, after activity. He complained also of pain and numbness in his legs and significant restriction of movement. A Fentanyl assessment in December 1986 confirmed that there was an organic basis for these complaints, as did an MRI in January 1987. Again, the history given by the plaintiff to Dr Smith appears to have attributed his back condition entirely to the first accident, and the doctor gave evidence that this was consistent with his clinical observations. 13 Dr Smith used various forms of treatment, to no avail. In October 1986 the plaintiff was admitted to hospital for three weeks of traction. In May 1987 he was again admitted to hospital for a discogram and Discase injection. 14 In a report to Dr Marinkovich of January 1987, Dr Smith observed that the plaintiff was "really making no progress…" In a medico-legal report of that same month, Dr Marinkovich himself wrote: Despite long and intensive treatment, the patient's condition has not improved at all, as a matter of fact it has worsened to some extent. During the course of his treatment, the patient developed anxiety and depression some time in August 1986. He was therefore prescribed with tranquillisers and anti-depressants which gave good results. 15 In 1992 Dr Smith reported that the Discase injection was "not associated with any lasting improvement". He added that the situation "remained unchanged through '88 and '89". Back classes, also, brought about no improvement. 16 Treatment of the plaintiff's neck was maintained by Dr Bannister. In September 1987 he had him admitted to hospital for traction for one week. In a report of January 1986 to Dr Marinkovich, Dr Bannister concluded that the plaintiff had "soft tissue injuries to his neck which will take some time to settle". This conveys that, all things being equal, he could expect recovery from that condition in time. 17 This was how things stood at the time of the third accident in July 1989. Third Accident (Stevanovic v FAI General Insurance Co Ltd: 20548/95) 18 On 19 July 1989 the plaintiff was a passenger in a motor vehicle travelling in the kerbside lane on Pittwater Road, Warriewood. A vehicle travelling in the opposite direction lost control, crossed several lanes of traffic, and collided head on with the vehicle in which the plaintiff was travelling. 19 The plaintiff said that he felt "enormous pain" in his neck. He also felt pain in his left knee, which struck the dashboard, and in his hands, apparently because he seized what is colloquially known as a "holy mackerel" handle on the dashboard immediately before the impact. 20 Again, the plaintiff's evidence was that his back pain increased after this accident, but this also is not borne out by the contemporaneous medical material. It seems that he made no such complaint at Mona Vale hospital, where he was taken on the day of the accident. He later saw Dr William Koch at Frenchs Forest, but his own evidence was that he told that doctor only about his neck and his left knee. He again saw Dr Marinkovich but made no complaint about his back. Nor did he in a motor accident personal injury claim form, which was completed towards the end of 1989. 21 There is no doubt, however, that this accident exacerbated the plaintiff's neck condition. In October 1989, he underwent upper body thermography, which suggested to Dr Bannister "a reasonable prognosis". Nevertheless, the doctor considered that he had "a poor prognosis for early recovery", although he expected further improvement "in the long term". When he reviewed the plaintiff in January 1992, Dr Bannister reported that he "has severe symptoms in his neck which will be slow to resolve". In September 1992 the plaintiff consulted another general practitioner, Dr Joseph Nicholas, who reported that his neck symptoms might have resolved over five to seven years after the second accident but that the third accident would "add to this". 22 The plaintiff's back problems continued unabated. In February 1991 Dr Smith performed a spinal fusion, a procedure which he had recommended earlier but which the plaintiff had been reluctant to undergo. He was in hospital for three weeks and, upon his discharge, suffered considerable pain and needed crutches for about three months. In July 1991 Dr Smith reported that his pain was improving and he was walking without support. However, in a report of September 1991, the doctor recorded that his walking had improved but that he was experiencing more pain than he had been before the operation. He observed that his lumbar movements were "moderately limited with spasm but no skew". He added, "I am at a loss to know where to go from here…" Continuing Disabilities 23 The plaintiff's evidence was that he continued to experience lower back pain, radiating primarily to his right leg, with resultant restriction of movement. For some time he had been exercising by swimming, but could only manage about one lap. However, he could obtain some relief, albeit not lasting, from a hot water spa at Lightning Ridge. He first visited the spa in 1992, staying for five weeks on that occasion, and he returned there once in each of the following three years. Unfortunately, he could not afford to continue these trips. 24 He said that the condition of his neck remained unchanged, with pain radiating up the sides of his neck and into his shoulders and right arm. He was still suffering associated headaches, although they were not constant but would "come and go". 25 The plaintiff's evidence is borne out by the medical reports. In a report of August 1996, Dr Marinkovich said of him, "Over the last 8 years his symptomatology and clinical picture remained more or less unchanged with noticeable deterioration of his back condition." He observed that depression was secondary to his injuries generally, and added that the advance of "osteospondylitic changes, speeded up by mechanical derangements" arising from the accidents, could be faster than had been anticipated. Dr Nicholas, in a report of August 1994, considered him prone "to more rapid degenerative spondylitic changes in his lumbar and cervical spine". 26 In 1996 the plaintiff came under the care of Dr Grahame Mahoney, orthopaedic specialist, who reviewed his condition generally. In a report of August 1997, he wrote: Mr Stevanovic complains of persisting symptoms referrable to cervical strain in association with degenerate changes with nerve root irritation affecting the upper limbs, the headaches of which he complains being referred from the neck.… He has also developed symptoms referrable to a low lumbar disc lesion with nerve root irritation affecting the lower limbs … It is reasonable that he does have persisting symptoms and it is unlikely that his present symptoms will improve to any great extent. 27 In oral evidence, Dr Mahoney expressed no surprise that the spinal fusion had not improved the plaintiff's condition. He said that he did not favour the procedure which, in his experience, had a very low success rate. 28 Effectively, the plaintiff has not worked at all since the first accident. I shall turn to the question of his employment capacity in a moment. His evidence of the effect of the accidents upon his lifestyle in other respects is much as one would expect. He said that he tried to keep himself busy during the day by repairing items of furniture but for the most part he read or watched TV. He was sometimes bored and generally unhappy. His relationship with Ms Bucalina, which had been good, deteriorated to a point which he described as a "disaster". In 1986 they separated for some years, although there were periods of reconciliation. One of those periods led to the birth of their son in May 1987. Eventually, they resumed co-habitation and were together at the time of the hearing. However, the relationship was not as it had been before the first accident. Non Economic Loss 29 Counsel for the defendants in all three actions tendered their own medical reports, some of which expressed the opinion that the extent and significance of the plaintiff's injuries were less than he would have me believe. However, in final addresses counsel for the defendants placed very little reliance upon these reports. I found the plaintiff to be a frank witness, whose testimony of his suffering over the years was not exaggerated. I do not understand counsel for the defendants to have submitted to the contrary. Subject to one matter, to which I shall refer, I also believe that he gave an accurate account of the symptoms he experienced after each of the three accidents. 30 It is clear, then, that the plaintiff has suffered injuries which have caused him serious and enduring pain and disability. They have had, and will continue to have, a grave effect upon his life, physically and emotionally. He was thirty-seven years old at the time of the first accident and was fifty at the time of the hearing. Accordingly, his injuries have bedevilled his mature years and will deprive him of much of the enjoyment of later life. 31 The real area of dispute is the extent to which the defendants in the three actions are answerable for his condition. It is convenient to refer to the defendants in the first action, the proprietors of Mick's Formwork, as the first defendants; the defendant in the second action, NSW Insurance Ministerial Corporation, as the second defendant; and the defendant in the third action, FAI General Insurance, as the third defendant. It was suggested from the bar table that I should assess the award for non-economic loss globally, and then apportion it between the various defendants so as to recognise the extent of their responsibility for it. There is some merit in this approach, but it is complicated by the fact that damages for the first and second accidents (in 1985) must be assessed in accordance with common law principles, whereas damages in respect of the third accident (in 1989) are governed by the Motor Accidents Act 1988. 32 I have referred earlier to the plaintiff's evidence to the effect that each of the second and third accidents aggravated his back condition. Later medical reports expressed that view, based upon the same history provided by the plaintiff in recent years. No doubt, his evidence about this is honest but I am satisfied that it is mistaken. It is not surprising that, many years after these events, his recollection of the symptoms attributable to each accident might be faulty. As I have said, there was no complaint of increased back pain in the history he provided to various doctors near to the time of each of those two accidents. In the light of the whole of the evidence, my conclusion is that his back condition is referable entirely to the first accident. 33 This is not to deny the significance of the two later accidents. As counsel for the plaintiff put it in address, "… the subsequent events added disabilities to an already disabled man." The major effect of the second accident was a serious neck condition which, left undisturbed, would have taken some years to resolve. There are x-ray reports in evidence which suggest degenerative changes in the cervical spine prior to the third accident. Nevertheless, on the evidence as a whole, I conclude that the result of that accident was to render his neck condition permanent. 34 As observed, the assessment of damages for the third accident is governed by s79 of the Motor Accidents Act. Section 79(1), as it stood in 1989, permits an award of damages for non-economic loss only if I am satisfied that that accident significantly impaired the plaintiff's ability to lead a normal life. This must be determined in the light of his condition at the time of the hearing: Matthews v Dean (1990) 11 MVR 455, England v Van Donk (Court of Appeal, unreported, 5 December 1997). I am so satisfied. 35 In arriving at my assessment I have had regard to the plaintiff's present condition, whilst bearing in mind that I must determine the extent of the various defendants' responsibility for it and that the amount to be awarded against the third defendant is governed by the Act. Undoubtedly, the plaintiff's back problem is the most serious aspect of his condition and the first defendants face a considerably higher assessment than the others. Against them I would award $100,000. Against the second defendant I would award $40,000. As to the third defendant, I consider that the plaintiff is entitled to 16% of the maximum amount under s79(3) of the Act. For present purposes, that maximum is $250,000, 16% of which is $40,000. After a deduction of $20,500 in accordance with s79(5), the resultant figure is $19,500. 36 I consider that half the amount awarded against the first defendants is referable to the past and should attract interest at the usual rate of 2%. The awards against the second and third defendants do not attract interest: as to the second defendant, by s35D(1) of the Motor Vehicles (Third Party Insurance) Act 1942; and as against the third defendant, by s73(3) of the Motor Accidents Act. Loss of Earnings 37 Early in these reasons I sketched the plaintiff's work history. Counsel for the first defendants described it as "peripatetic", but I do not consider that to be a fair assessment of it. As his own counsel observed, for most of that time he was living a bachelor's life, free to leave a job and travel if he wished to do so. What is clear is that he never had any difficulty obtaining work. More importantly, in 1983 he came under the maturing influence of his relationship with Ms Bucalina. I accept his evidence that, by 1985, he had aspirations to start his own business and no intention of retiring early. I consider that, but for his injuries, he would have remained in constant employment as a carpenter throughout a normal working life. Accordingly, I do not propose to discount his award for past loss of wages for vicissitudes and the award for future wage loss should be discounted on that basis by the usual 15%. 38 I referred earlier to the plaintiff's evidence that he was able to do some household work involving his carpentry skills, such as the repair of items of furniture. Of course, carpentry involves bending, lifting and prolonged standing and it is clear that his back condition precluded these activities, and continues to do so. In addition, his neck condition has made it difficult for him to look up or turn around. He explained in evidence that his trade sometimes requires movements of that kind, for example, when driving nails into a ceiling. 39 In 1986 he tried to resume work with Mick's Formwork and applied for jobs with two other carpenters but, because of his condition, he was unsuccessful. Later in that year he undertook some work for Mr Yugoslav Djukanovic, fixing skirting boards and architraves and hanging doors. Not surprisingly, he could not manage these tasks because of his disabilities and he was unable to continue. Carpentry is the only trade for which he is qualified. The question of his teaching that trade was raised, but I accept his evidence (and that of Mr Djukanovic) that teaching necessarily involves practical demonstration of skills, which would be hampered by his physical limitations. 40 I am satisfied that the plaintiff's injuries prevented him from re-entering the workforce and that, given his age and continuing disabilities, there is no prospect of his doing so in the future. A number of the defendants' medical reports expressed the view that he is capable of work involving light duties, but there is simply no evidence of employment of that kind which might be available to him. I find the views of doctors whose reports were tendered in his case to be more realistic. Dr Nicholas in a report of August 1994 said of him, "In terms of prognosis, this man is permanently unfit to work as a carpenter and would not be able to cope with most occupations." In a report of August 1996, Dr Marinkovich declared him "permanently unfit for work." In August 1997 Dr Mahoney said of the plaintiff, "I would consider him unfit for work and would not suggest he resume the workforce." He was also seen for medico-legal purposes by Dr John Roarty, orthopaedic surgeon, who reported in July 1996: …he would be unfit to do his previous work as a carpenter or unfit to do any work requiring any heavy labour, particularly bending and lifting, or any agility on his cervical and lumbar spines or work requiring rotational strains. He is therefore very restricted in the labour market and would have great difficulty in finding any other alternative work. 41 The question which must then be determined is which of the defendants must bear responsibility for the plaintiff's inability to work, past and future. I am satisfied that it is the first defendants. It is true that his neck condition creates added difficulties in carrying out his accustomed tasks. Nevertheless, in the light of the plaintiff's evidence and the medical material, it is clear that his back condition put paid to any prospect of re-employment. I have held that the first defendants are solely responsible for that condition. I accept the submission of counsel for the second defendant that, at the time of the second accident, the plaintiff had no income earning capacity: cf Jobling v Associated Dairies Limited [1982] AC 794 per Lord Keith of Kinkel at 815-6; Wynn v NSW Insurance Ministerial Corporation (1995) 70 ALJR 147 in the joint judgment at 154. Obviously, the same is true at the time of the third accident. 42 As to past loss of earnings, counsel for the plaintiff and for the first defendants both provided schedules. The first defendants' schedule is based on award rates. The plaintiff's amended schedule, part of exhibit C, is based upon the plaintiff's actual earnings between May and July 1995, increased proportionately to increases in the National Building and Trades Construction Award and the Building Tradesmen (State) Construction Award. In my view, the plaintiff's schedule more fairly represents his actual loss and it is that approach which should be adopted. 43 The plaintiff is entitled to interest on the amount assessed for past loss of earnings, after deducting Workers' Compensation and Department of Social Security payments he has received. His counsel also provided a schedule of interest rates, derived from Schedule J to the Supreme Court Rules, over the relevant period. From that schedule it is accepted that the appropriate rate is 7.3%. There is a Fox v Wood claim upon which I was not addressed, and which I assume not to be in dispute. 44 Future loss of earnings should also be assessed on the basis of the plaintiff's schedule. The amount should be discounted by the usual 3% and by a further 15% for vicissitudes. On economic loss generally, the parties may wish to bring the figures up to date as some months have passed since the hearing. Gratuitous Services 45 Against the first defendants only, the plaintiff claims for gratuitous services rendered to him by Ms Bucalina and her mother for six months after his discharge from hospital following his spinal fusion. The claim is for forty hours per week at the rate of average weekly earnings of $500. Counsel for the first defendants did not dispute the weekly rate of $500. He acknowledged that some services had been rendered in the first three months, although he queried the extent of them. He submitted that the evidence did not establish any such services after that period. 46 On this matter the plaintiff gave some brief evidence, which was not tested in cross-examination. Neither Ms Bucalina nor her mother was called. That evidence establishes that he was afforded a good deal of care during the first three months, and I consider the estimate of forty hours per week as reasonable. However, it is very imprecise about the level of care thereafter and provides no adequate basis upon which it could be assessed. I would allow an award for gratuitous services for three months at the rate of $500 per week. That award also should attract interest at 7.3%. Out of Pocket Expenses 47 Accepting that the plaintiff's back condition is wholly the responsibility of the defendants, the agreed figure for out of pocket expenses in their case is $23,568. For the second defendant, the agreed figure is $3,951. As to the third defendant, I find that the expenditure set out in a hand-written schedule was justified. On that basis, the agreed figure is $4,452. Whether the third defendant seeks any contribution from the second defendant in respect of that amount is not a matter upon which their counsel addressed me, but I will hear submissions about it if need be. Short Minutes 48 I request the parties to bring in short minutes to give effect to my reasons and, if necessary, I shall hear argument on costs. Counsel should not hesitate to inform me if I have made any technical or procedural error or have failed to deal with any matter in dispute.