New South Wales Supreme Court CITATION : McKenzie v Downing [2008] NSWSC 69 HEARING DATE(S) : 5 February 2008 JUDGMENT DATE : 15 February 2008 JURISDICTION : Common Law JUDGMENT OF : Harrison AsJ DECISION : (1) Pursuant to Rule 28.2 of the Uniform Civil Procedure Rules the question of liability be determined separately and prior to the issue of quantum (2) Costs are reserved. CATCHWORDS : Separate determination - liability LEGISLATION CITED : Uniform Civil Procedure Rules CATEGORY : Procedural and other rulings ABB Engineering Construction Pty Limited v Freight Rail Corp [1999] NSWSC 1037 Admiral Pty Ltd v Leighton Contractors Pty Ltd [2005] NSWSC 1105 Dunstan v Simmie Co Pty Ltd [1978] VR 669 Idoport Pty Limited v National Bank Ltd [2000] NSWSC 1215 CASES CITED : Integral Home Loans Pty Ltd & Anor v Interstar Wholesale Finance Pty Ltd & Anor [2006] NSWSC 1464 Perre v Apand Pty Limited (1999) 198 CLR 180 Pioneer Park Pty Limited v ANZ Banking Group Limited [2005] NSWSC 832 State of New South Wales v Lepore (2003) 212 CLR 511 Tepko Pty Limited v Water Board (2001) 206 CLR 1 Tyrrell v The Owners Corporation Strata Scheme 40022 [2007] NSWCA 8 PARTIES : Matthew Forbes McKenzie (Plaintiff) Graham Downing (Defendant) FILE NUMBER(S) : SC 20066/05 COUNSEL : Mr P Beale (Plaintiff) Mr J Poulos QC with Mr D M Wilson ( Defendant) SOLICITORS : CMC Lawyers (Plaintiff) Abbott Tout (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ASSOCIATE JUSTICE HARRISON FRIDAY, 15 FEBRUARY 2008 20066/2005 - MATTHEW FORBES McKENZIE v GRAHAM DOWNING JUDGMENT (Separate determination - liability) 1 HER HONOUR: By notice of motion filed 22 July 2005, the plaintiff seeks an order that the question of liability be tried prior to the question of quantum. The plaintiff is Matthew Forbes McKenzie. The plaintiff relied on his affidavit sworn 28 June 2007, the affidavit of his father David McKenzie sworn 28 June 2007 and four affidavits of Mark Capolupo sworn 21 July 2005, 19 April 2007, 5 June 2007 and 4 February 2008. The defendant is Graham Stewart Downing. All deponents were cross examined. The defendant did not rely upon any affidavit evidence and opposes this application. 2 The plaintiff pleads that on 2 June 2002 he was driving a motor vehicle travelling along Minmi Road, Maryland in the State of New South Wales. The plaintiff alleges that the defendant's vehicle crossed the centre lines onto the plaintiff's side of the road and collided into his (the plaintiff's) vehicle. The defendant denies negligence and pleads contributory negligence which includes an allegation of failure to wear a seat belt. 3 The central issue to be determined on liability is whether the plaintiff crossed the centre line onto the incorrect side of the road so as avoid the defendant's oncoming vehicle. Determination of separate question 4 Rule 28.2 of the Uniform Civil Procedure Rules 2005 states: "28.2 Order for decision The court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings." (Rule 28.2. is in terms identical to the former Part 31 rule 2(a) of the Supreme Court Rules 1970) 5 There are a number of authorities on this topic which include Tepko Pty Limited v Water Board (2001) 206 CLR 1; Perre v Apand Pty Limited (1999) 198 CLR 180 at [436]; State of New South Wales v Lepore (2003) 212 CLR 511 at [187]; Dunstan v Simmie Co Pty Ltd [1978] VR 669 at 671.30; and per Rolfe J in ABB Engineering Construction Pty Limited v Freight Rail Corp [1999] NSWSC 1037. In Idoport Pty Limited v National Bank Ltd [2000] NSWSC 1215, Einstein J at [7]-[8] helpfully provides a compendium of cases upon this topic, which I need not reproduce here. 6 In Tepko, Kirby and Callinan JJ cautioned against the severing of issues by the court. Their Honours stated (at [168] – [171]): "…we should not leave this case without making four comments. Both Mason P and Fitzgerald JA were critical of the course of limiting the issues to be tried that the primary judge adopted. In Perre v Apand Pty Ltd attention was drawn to difficulties that can be caused when that course is adopted. In light of the experience in this case, what was there said should be restated with emphasis. The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap. The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the courts, rather than the parties', interests. Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided. Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question. The fourth of our comments is related to evidence compiled, committed to writing and filed in advance of the hearing. Parties frequently, either together or separately, compile "books of documents". Although most of these have the potential to be admitted in evidence, often they are defective in form. Many of them are often irrelevant, or their significance is either not recognised or adverted to during the hearing. Their status, as in the case of the letter written by Mr Rhodes, can be ambiguous. Discrimination and economy should be exercised by those who prepare cases in which documentary evidence is likely to be extensive and important. Those who conduct such cases should ensure that what is actually in evidence, and its relevance and significance, are clearly identified." [Footnotes omitted] 7 In Pioneer Park Pty Limited v ANZ Banking Group Limited [2005] NSWSC 832 (cited in Admiral Pty Ltd v Leighton Contractors Pty Ltd [2005] NSWSC 1105 at [19] per Barrett J), Einstein J rejected an application for separation of liability and quantum. His Honour's reasons cited (at [7]) as "far and away the most significant factor" the fact that the evidence of a plaintiff was likely to be critical both as to liability and as to damages/quantum in a number of ways. Additionally, expert evidence which both parties anticipated putting on in relation to liability was also material to any assessment of loss or damage. Einstein J stated: "It is envisaged that the same experts would be used relating to those issues both as to liability and as to quantum. Certainly, the same or very similar expertise is required and there is obviously a substantial overlap in the … [material] … the experts will need to review for the purpose of addressing the liability issues on the one hand, and the quantification issues on the other. It is obviously illogical and inefficient for the experts to engage in that exercise on two different occasions." [8] 8 Sections 56, 57, 58 and 60 of the Civil Procedure Act relevantly provide: "56 Overriding purpose (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. … 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. … 58 Court to follow dictates of justice (1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: (i) any order for the amendment of a document, and (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature, and (iv) any direction under Division 2, and (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case. 60 Proportionality of costs In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute." 9 In Integral Home Loans Pty Ltd & Anor v Interstar Wholesale Finance Pty Ltd & Anor [2006] NSWSC 1464, Brereton J considered at [6]: "While much has been said against the resolution of separate questions in Courts of high authority, nonetheless, since the (NSW) Civil Procedure Act 2005, it is my view that the Court should take a more interventionist role in identifying and separating important issues which can resolve significant parts of the litigation expeditiously." See also Tyrrell v The Owners Corporation Strata Scheme 40022 [2007] NSWCA 8. 10 I respectfully agree with these comments made by Brereton J. The case on liability 11 The defendant submitted that the credibility of the plaintiff would be a very significant factor in the determination of liability and that the court will need to choose between the plaintiff and defendant's versions of events. The defendant wishes to cross examine the plaintiff as to his credibility relating to both liability and damages. The areas of cross examination will include such topics as, versions of the accident provided by the plaintiff and complaints of symptoms made to various treating and other doctors. The defendant also wishes to cross examine liability witnesses who may ordinarily be called only in the damages case, such as family members, as to versions of the accident provided by the plaintiff. To some extent this has already been done. 12 The approach taken by senior counsel on this application was to cross examine all of the deponents and to some extent this has already been done. The focus of the cross examination at the hearing of this mention was whether or not the plaintiff's memory of the accident was genuine or had he adopted his father's deductive reasoning as to what must have occurred. For the purposes of this application it is undesirable that I record any observations I made concerning demeanour and credibility of the plaintiff and his father, other than to say that, in my view, it was not obvious that the plaintiff's memory had been affected in the manner submitted by the defendant. I accept that the plaintiff's father was critical of the police investigation of the accident but whether his view is justified remains a matter for trial. Two days after the accident the plaintiff's father took photographs, copies of which are available - see MFI-1. So far as I am aware the police officer who carried out the investigation will be available to give evidence. 13 There is now a transcript available of both the plaintiff and his father's evidence on this topic, which will provide some material for the defendant's counsel for further, cross examination of them at trial. As I previously stated considerable amount of the evidence on the issue of liability has now been given. 14 The plaintiff was 18 years of age at the time of the accident. The police report summary of collision report dated 2 August 2002 (Ex A) described the accident as follows: "AT 3.20PM ON SUN 2.6.02. MATTHEW MCKENZIE DID DRIVE DAIHATSU CHARAGE XXX-XXX EAST ALONG MINMI RD, MARYLAND, NEAR BISHOP TYRRELL COLLEGE, DID TRAVEL ONTO EAST BOUND TRAFFIC LANE AND INTO THE PATH OF EAST BOUND VEHICLE, NO. XXX-XXX BEING DRIVE BY MR GRAHAM STEWART. ALL PARTIES CONVEYED TO JOHN HUNTER HOSPITAL BY AMBULANCE…." 15 On 8 November 2002 the plaintiff was interviewed a police officer while he was in John Hunter hospital. The following exchange took place. ""At 3.20pm on Sunday the 2 June, 2002, I had my parents Charade xxx-xxx. I was at home, we ran out of concrete. I was driving towards Wallsend on Minmi Road, near the school I was going 60kph, I noticed a four wheel drive travelling towards me, he was starting to come over the double lines, I thought he was going to have a head on collision so I turned right to avoid a collision, but he collided into the passengers side of my car." Question. "Did he actually come onto your side of the road?" Answer. "Yes." Question. "Whereabouts on the road did the two vehicles collide?" Answer. "In the middle of the road."" (Ex B) 16 The police also took a statement from the defendant (undated). The defendant said: "I was driving West on Minmi Road, Fletcher, at about 50kph. I was near the college, a white car coming towards me, it appeared to be going fairly quick, he then went sideways and crashed into the front of my car." 17 Ms Christine Riley was a passenger in the defendant's vehicle. Her memory is blank and she is unable to supply any information – see Ex B. 18 The plaintiff's claim form to the insurer was completed by the plaintiff's father. The description of the accident is as follows: "Whilst travelling along Minmi Rd I notice a vehicle approaching on the opposite side of road. As we came closer to each other the other didn't follow the curve around and appeared to cross the centre lines to my side of the road. I had nowhere else to go other than to turn right sharply as to avoid a head on collision. However the 4x4 WD still hit me on the left hand side of vehicle." 19 A diagram accompanies the description. The plaintiff's father says the source of that description provided in the claim form emanated from his son, the plaintiff. 20 The plaintiff gave evidence that he has a clear recollection of driving along the road on the day of the accident. There was no water nor anything slippery on the road. He is not sure whether there was any gravel on the road. He remembers it as if it just happened yesterday (t 10). The plaintiff explained in cross examination that if he did not elect to move to the other side of the road he would have hit some trees. 21 It appears that there were no eye-witnesses to the accident, but there is a witness who was apparently travelling just behind the plaintiff's car. It seems that the witness did not actually see the accident because his vision was obscured due to the bend in the road. There is another witness who came onto the scene immediately after the accident had occurred. She apparently made observations as to the position of the cars. 22 It is not in dispute that the plaintiff suffered severe injuries following the accident. He was hospitalised for a period of six months and was unconscious and in ICU for some considerable period of time. He allegedly suffered traumatic brain injury; fracture of the right femur, with consequent valgus deformity of the right knee with hyperextension changes, chondromalacia patellae, and 20 degree external rotation deformity in left hip posture; healed fracture of the left proximal humerus, with consequent restriction in the range of movement of the left shoulder; healed fractures in the pelvis, with bilateral leg pain; critical care polyneuropathy, and as a consequence has severe bilateral ankle weakness and marked bilateral leg dysaesthesia; serious abdominal injuries; and extensive skin grafting and abdominal herniation. 23 So far as the brain injury is concerned, Dr Buckley rehabilitation specialist (report 01/12/2007), says that the plaintiff has a traumatic brain injury and to ascertain the extent of it, a forensic neurological assessment and MRI scan of the brain are required. As I understand it, the medical evidence consists of the hospital records and the report of Dr Buckley. It appears that they may have had the plaintiff examined by one or two specialists. 24 The plaintiff's solicitor Mark Capolupo says that he has had discussions with the plaintiff's parents who informed him that they are not in a position to fund the costs of litigation in these proceedings. Mr Capolupo believes that the plaintiff will be unable to properly fund a case on quantum unless he is successful in obtaining litigation funding. His firm of solicitors are prepared to fund the case on quantum but are not prepared to fund the plaintiff's case on liability. The solicitors are prepared to fund the plaintiff's case if liability is determined before quantum. 25 Prior to the accident, the plaintiff was employed as a labourer doing lawns and laying turf (t 5.26). He was fit and healthy. There is no evidence that the plaintiff had any pre-existing medical or psychological conditions or injuries. 26 The plaintiff gave evidence that he is currently undertaking unpaid light work on a casual basis on behalf of the House with no Steps. He works three days per week for six hours at a time. He receives approximately $34 on a fortnightly basis, being an allowance for travel and meals. He has been involved with the House with no Steps for approximately 18 months to 2 years. He also receives a disability pension from Centrelink. He continues to live with his parents on a full time basis and will remain there for the foreseeable future. He pays $20-$25 per week board. He says that his current financial situation is such that he would be unable to fund the preparation of his case. 27 The plaintiff's father David McKenzie gave evidence that he is not in a position financially to fund any such proceedings and that he has been advised by his son's solicitors that to prepare the case fully would cost somewhere in the vicinity of $50,000 to $60,000. At the hearing of this motion, much time was devoted to ascertaining the cost of obtaining medical reports and the necessity for each report. Overall, I accept that the sum of $30,000 is not an unreasonable figure, which reflects costs of the plaintiff obtaining medical reports on the issue of quantum. 28 The plaintiff's parents own their property at Fletcher. It is a four bedroom home and worth approximately $460,000. It is subject to a $90,000 mortgage. The mortgage was originally $70,000 in 2001. It has subsequently been increased and the plaintiff's parents are having difficulty meeting the repayments. 29 The plaintiff's father had an accident in November 2006 when he fell off a ladder. He is not receiving any compensation and is unlikely to do so as he was painting at a relative's premises when his accident occurred. He is re-consulting his specialist next week with a view to being advised as to whether an operation on his knee will be necessary. If he has to undergo an operation he will need at least six to eight weeks to recuperate. He had worked as an electrician on a casual basis through Manpower. For 12 months preceding his accident he had been working five days per week earning $1,249 gross per week. His wife earns $200 per week working 24 hours per week as a school tuckshop supervisor. The plaintiff's parents own two cars of little marketable value. The plaintiff's father gave evidence that the family is having difficulty coping financially. Their savings are exhausted. The plaintiff's father is concerned about his future working life. He is also very worried that he will not be able to keep a roof over their heads and the detrimental affect that would have upon his son, the plaintiff. It must be remembered that it is the plaintiff who had the accident and it is the plaintiff's case, not his parents. I am satisfied that it is likely that the plaintiff will be shut out of litigation if he has to pay for the preparation of his whole case. I also accept, should it be necessary to do so, that his parents are not in a financial position to finance the preparation of his case. 30 The defendant submitted that should a separate hearing on liability be conducted and a finding made in favour of the plaintiff, the liability decision would be interlocutory in nature, pending the determination of damages. The defendant would then require leave from the Court of Appeal in order to proceed and this would well be refused pending a determination of damages and as a result, any perceived savings in costs by conducting a separate hearing on liability would be lost. I accept that if the plaintiff succeeds and no or little reduction is made for contributory negligence, the defendant may decide to seek and obtain leave to appeal or otherwise will also be obliged to await the outcome of the damages hearing. I have also taken into account that if there is no appeal, the damages claim may settle without the necessity of a court hearing. The liability claim may take three days of court time. If no agreement is reached in relation to the plaintiff's injuries, the damages claim could take at least two weeks of court time. 31 The defendant further submitted that if the plaintiff succeeded on liability then he would be entitled to expect the defendant's insurer to meet his past and ongoing expenses, which may be considerable. This would be unfairly prejudicial, in circumstances where the conduct of the proceedings could be delayed while the question of damages is determined and the defendant would have no real prospect of recovering from the plaintiff those expenses paid, in the event of a successful appeal. 32 I have taken all of these matters into account. It is my view that there is utility and economy in hearing the liability question separately. In the exercise of my discretion, the interest of justice favours the separate determination of liability particularly where it is likely that the plaintiff will be shut out of this litigation should it not occur. 33 I make an order pursuant to Rule 28.2 of the Uniform Civil Procedure Rule that the question of liability be determined separately and prior to the issue of quantum. Costs are reserved. The Court orders (1) that pursuant to Rule 28.2 of the Uniform Civil Procedure Rules the question of liability be determined separately and prior to the issue of quantum. (2) Costs are reserved. ********** 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. 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