New South Wales Supreme Court CITATION : Donaghy v Wentworth Area Health Service [No 2] [2003] NSWSC 814 HEARING DATE(S) : 25/08/03 JUDGMENT DATE : 18 September 2003 JUDGMENT OF : Shaw J DECISION : (1) Order an interim payment of damages to the plaintiff in the sum of $75,000; (2) Costs of application to be costs in the cause. CATCHWORDS : Practice and Procedure - interlocutory issue - whether interim payment of damages should be ordered - applicable principles LEGISLATION CITED : Supreme Court Act 1970 s 76E CASES CITED : Frellsen v Crosswood Pty Ltd (1992) 15 MVR 343; Schott Kem Ltd v Bentley [1991] 1 QB 61; PARTIES : Carolyn Annette Donaghy - Plaintiff Wentworth Area Health Service - Defendant FILE NUMBER(S) : SC 20012/01 COUNSEL : A McSpedden - Plaintiff F Doak - Defendant SOLICITORS : Bell & Partners Solicitors - Plaintiff Turks Legal - Defendant IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Shaw J DATE 20012 of 2001 Carolyn Annette Donaghy (Plaintiff) v Wentworth Area Health Service (Defendant) [No 2] JUDGMENT 1 Shaw J: This is a notice of motion by which the plaintiff seeks an interim payment of damages of $75,000 pursuant to s 76E of the Supreme Court Act 1970. 2 The section provides: 76E Court may order interim payments (1) In any proceedings for the recovery of damages, the Court may, in accordance with this section, order a defendant in the proceedings to make one or more payments to the plaintiff of part of the damages sought to be recovered in the proceedings. (2) The Court may make such an order against a defendant on the application of the plaintiff at any stage of the proceedings. (3) The Court may make such an order if: (a) the defendant has admitted liability, or (b) the plaintiff has obtained judgment against the defendant for damages to be assessed, or (c) the Court is satisfied that, if the action proceeded to trial, the plaintiff would obtain judgment for substantial damages against the defendant. (4) The Court may not make such an order if the defendant satisfies the Court that: (a) the defendant is not insured in respect of the risk giving rise to the plaintiff's claim for the recovery of damages, and (b) the defendant is not a public authority, and (c) the defendant would, having regard to the defendant's means and resources, suffer undue hardship if such a payment were to be made. (5) The Court may order a defendant to make one or more payments of such amounts as it thinks just but not exceeding a reasonable proportion of the damages which in the opinion of the Court are likely to be recovered by the plaintiff. (6) In estimating those damages, the Court is to take into account any relevant contributory negligence or any cross-claims on which the defendant may be entitled to rely. 3 The continuation of the plaintiff's substantive claim is scheduled to occur before this Court on 7 October 2003. 4 Nonetheless, the plaintiff submits that it is just that some amount of the damages sought be paid on an interim basis. 5 Section 76E of the Supreme Court Act is plainly intended to allow the alleviation of circumstances affecting a plaintiff pending the final determination of the case. 6 One of the circumstances in which this Court may make such an order is where the defendant has admitted liability (s 76E(3)(a)); alternatively, another pre-requisite for the grant of relief under this section is where pursuant to s 76E(3)(c): the Court is satisfied that, if the action proceeded to trial, the plaintiff would obtain judgment for substantial damages against the defendant. 7 In my opinion, there is a proper foundation for the making of an interim order for damages in the discretion of the court. It was common ground between the plaintiff and the defendant that the matter was essentially discretionary and there was no contest about the sub-stratum of fact that underlies the plaintiff's application for interim relief. 8 The Court is prohibited from making an order, having regard to s 76E(4), where the defendant is not insured in respect of the risk; where the defendant is not a public authority; and where the defendant would, having regard to means and resources, suffer undue hardship if a payment was to be made. 9 These are cumulative requirements and it is not contended by the defendant that all or any of them are met. Plainly, the defendant is insured. Equally clearly, the defendant is a public authority, and it could not be argued that the means and resources of the defendant preclude it from paying an interim amount of $75,000 to the plaintiff. Accordingly, no defence has been mounted pursuant to s 76E(4) of the Act. 10 The discretionary power of the Court to order an interim payment of damages is crystallised in s 76E which articulates the criterion as being an amount which is 'just' but not exceeding: a reasonable proportion of the damages which, in the opinion of the Court, are likely to be recovered by the plaintiff. 11 These are the statutory provisions to be applied in the current matter. 12 The starting point of the case is the assertion by the plaintiff that in the sixteenth week of her pregnancy at her workplace at Nepean Hospital, she fell on a floor that had just been mopped. As a result she had a large discharge of amniotic fluid which lead to her being transferred to the maternity ward. The result, as asserted by the plaintiff, was a six week premature birth by caesarean section with post-delivery vaginal bleeding and other medical consequences including, some two years later, a hysterectomy, and significant depressive illness. 13 During the trial which commenced before me on 16 June 2003, senior counsel for the defendant made formal and express admissions on behalf of the defendant to the effect that a breach of the duty of care on the part of the defendant resulted in some damage to the plaintiff, and that the rupture of the plaintiff's foetal membranes were a result of her falling. 14 There was some argument as to whether those admissions could be withdrawn, but that application was not pressed by the defendant. 15 In the absence of an admission of liability and where there is an application for an interim award of damages, the plaintiff will need to persuade the court on a civil burden of proof that it is appropriate that such an order should be made: Frellsen v Crosswood (1992) 15 MVR 343 per Sully J at 347 [23] – [24]). 16 In the present case it seems that there are the requisite admissions of liability and that therefore the 'high burden' of proof need not be overcome. Even if I am wrong about that, it seems to me that on reviewing all the evidence before the Court, both in the substantive matter thus far and in these interlocutory proceedings, it is demonstrated that there is a likelihood that the plaintiff is likely to succeed in achieving a verdict, according to her estimates of somewhere between $2-3 million. The Court has not yet heard the evidence of the defendant, but as I understand the case for the defendant, aside from a question of causation, most of that evidence will go to the appropriate quantum of damages. 17 If I am correct in forming the view that the defendant has admitted liability or that I am satisfied that the plaintiff would be likely to obtain substantial damages from the defendant, then the question arises as to how the discretion ought to be exercised to determine whether an interim award should be granted. 18 I conclude that the plaintiff has a prima facie case of substance and that it is open to the Court to award an amount not exceeding a 'reasonable proportion' of the damages likely to be recovered. 19 Whilst the defendant in these proceedings argued that no such relief should be granted, I did not detect any argument that the sum of $75,000 was one which exceeded a 'reasonable proportion' of the damages likely to be recovered in the verdict following the trial, if the plaintiff is successful. It was accepted by the plaintiff that the sum claimed was somewhat (and perhaps necessarily) arbitrary but nonetheless was a moderate amount below any likely verdict. In these circumstances I am inclined to accept the quantum proposed by the plaintiff as being reasonable in the circumstances. 20 An active question before me was whether there needs to be some evidence that the plaintiff has special circumstances of need or hardship which would warrant the grant of interim relief. 21 Mr McSpedden, counsel for the plaintiff, contends that there is no such pre-requisite standing in the way of an order for interim damages. 22 Having regard to the text of s 76E(6) it does not seem to me that the question of 'need' for the interim amount is any absolute burden, though it may bear upon the exercise of discretion. Cases can be contemplated in which there is no necessity for an interim award because of the means or affluence of the plaintiff. I would emphase these factors go to the exercise of discretion rather than amounting to any barrier to the grant of relief. These conclusions are supported by the judgment of Sully J in Frellsen v Crosword Pty Ltd (1992) 15 MVR 343 where his Honour posed the question (at 346): To what extent must a claimant for an interim payment order demonstrate actual need as a pre-condition of the exercise in his favour of the discretionary power to make such an order? 23 His Honour relied upon a number of English cases, including and in particular, Schott Kem Ltd v Bentley [1991] 1 QB 61 per Neill LJ who said, in relation to English provisions, which were considered to be in pari materia with the NSW legislation: I am not satisfied, however, that there is any restriction implicit in the Rules which prevents an interim payment order being made in the absence of evidence of need or prejudice. 24 Sully J added (at 348): In my opinion the views of Neill LJ ought to be preferred in the proper construction of the NSW legislation. It is true that the second reading speech of the Attorney General gives colour to the notions of hardship and need as justifying the enactment of the proposed interim payment provisions; but it is equally true the provisions in fact enacted do not include, as they could easily have done, a positive requirement for a plaintiff/claimant to demonstrate actual need or hardship or prejudice of some other kind. 25 In any event, the plaintiff contends, in the alternative, that there is a case for interim payment based on need. It is the uncontested evidence that since June 2002 there has been a significant deterioration in the plaintiff's psychological condition which has required her husband to provide a great level of care and assistance to her. The plaintiff's husband is a police officer who has exhausted his leave entitlements but has been granted leave without pay to care for his wife. There is evidence before the Court of the need for the plaintiff to have cleaning services in the house. Mr Donaghy says that it is 'essential' that he provide the plaintiff with 'additional physical and psychological support' and that he wants to be with her in the period leading up to the end of the hearing 'to assist her needs and provide companionship and support'. The Court has seen Mrs Donaghy give evidence and has previously noted that her depressive illness has effects that require adoption of different procedures in the trial: [2003] NSWSC 533. However, it is not only the assertions of the plaintiff's husband which support a claim for personal care. The evidence put before the Court on the notice of motion includes the opinion of an occupational therapist, Heather Tchan, to the effect that between 2003 – 2009 and in particular whilst the daughter of Mrs Donaghy finishes primary school, the plaintiff will require care specified in the report. It is said that: She will require continued psychological support from her husband and professionals… 26 Something in the order of 50 hours of care in each week is suggested. Again, I emphasise that this material is uncontested in the present application. Moreover, a clinical psychologist, Dr Jane Selby, offered an opinion in June 2003, that: If we are to keep some hope about [the plaintiff's] progress, especially in this period before her next court appearance, it is important that changes should not erode her precarious overall progress nor accelerate a decline. In particular, the current home help arrangements need to be maintained in order to prevent further deterioration at this critical time. The arrangements are also crucial in enabling [her husband] to return to work. 27 In all of these circumstances it seems to me that the defendant has taken a responsible role in submitting that it is entirely within the discretion of the Court whether an interim award of some payment ought to be made. It has raised no obstructive barriers to the making of such an award, though it has put appropriate submissions opposing the exercise of discretion. 28 In my opinion, there is a need for the plaintiff to receive, during the conduct of the litigation, not only cleaning services, but ongoing attention and assitance by her husband. If he needs to take unpaid leave from the Police Service then some financial assistance would be necessary in order to obviate a situation which would be oppressive and unfair to the plaintiff. 29 I would, in the exercise of my discretion, order an interim payment of damages to the plaintiff in the sum of $75,000. The costs of this application should be costs in the cause. ******* Last Modified: 09/22/2003 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.