New South Wales Supreme Court CITATION : Eldridge v Royal Alexandra Hospital for Children & anor [2008] NSWSC 886 HEARING DATE(S) : 18 August 2008 JUDGMENT DATE : 29 August 2008 JURISDICTION : Common Law JUDGMENT OF : Michael Grove J DECISION : Interim payment ordered for physically injured plaintiff; refused for derivative claimants. CATCHWORDS : DAMAGES - interim payments - proportion of likely assessment - not limited to fulfilling current needs - derivative claims - need to show more than probability of success LEGISLATION CITED : s 82 Civil Procedure Act 2005 CATEGORY : Procedural and other rulings Dimkovski v Ken's Painting and Decorating Services [1999] NSWSC 795 Frellsen v Crosswood Pty Limited, Sully J, unreported 18 February 1992 CASES CITED : Schott Kem Limited v Bentley [1991] 1 QB 61 Spencer v Australian Capital Territory [2007] NSWSC 303 Watts v Rake (1960) 108 CLR 158 PARTIES : Bryce ELDRIDGE by his tutor John ELDRIDGE, John ELDRIDGE and Jillian COULTON v The Royal Alexandra Hospital for Children and Hugh MARTIN FILE NUMBER(S) : SC 20504/2006 COUNSEL : R O'Keefe - Plaintiff/Applicant J M Sandford - Second Defendant Maurice Blackburn Cashman - Plaintiffs SOLICITORS : Frances Allpress - First Defendant TressCox Lawyers - Second Defendant IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION PROFESSIONAL NEGLIGENCE LIST MICHAEL GROVE J 29 August 2008 20504/2006 Bryce ELDRIDGE bht John ELDRIDGE & ORS v THE ROYAL ALEXANDRA HOSPITAL FOR CHILDREN & ANOR JUDGMENT 1 HIS HONOUR: Before the Court is a Notice of Motion seeking interim payments to each of the three plaintiffs pursuant to s 82 of the Civil Procedure Act 2005. The pleadings nominate two defendants but orders are sought only against the second defendant, Dr Martin. Subject to a partial concession in relation to the first plaintiff, the infant Bryce Eldridge, the making of orders is opposed. 2 Bryce was born on 12 October 2003. On 31 March 2005 he was admitted to hospital for the surgical removal of his left kidney, which had been compromised by the growth of tumours. Dr Martin performed the surgery, in the course of which it is alleged that the right renal artery was divided. By his pleading Dr Martin admitted that that artery was inadvertently occluded during the procedure and that as a result the right kidney was ischemic for about 45 minutes. He further admitted that he breached his duty of care to Bryce and that the breach caused the ischemic injury to the right kidney as a result of which the child suffered renal failure which has required dialysis, and in due course, a kidney transplant. 3 The second and third plaintiffs are Bryce's parents (Jillian Coulton and John Eldridge). In broad terms, each of them seeks damages derived from suffering nervous shock consequent upon negligently inflicted injury upon their son. Additionally, John Eldridge claims for the physical loss of one of his own kidneys which he donated for transplant to Bryce. 4 The notice of motion specifies the interim amounts sought being $200,000 for Bryce and $50,000 for each of his parents. The parents have subsequently divorced and John Eldridge has a new partner (Natalie) with whom he resides. The evidence identifies a new partner of Ms Coulton (Brad), however in her affidavit of 17 July 2008 she described herself as a single mother. I note in Dr Phillips' report of 1 May 2008 in reference to her "that she has formed a new relationship, but does not know what the future of the liaison might hold". 5 The partial concession earlier mentioned is to the effect that interim payment for Bryce was not opposed but the amount sought was contested. Counsel for the second defendant declined to specify any amount which would not be opposed. 6 For present purposes the relevant provisions within s 82 are: "82 (1) In any proceedings for the recovery of damages, the court may 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. …. (3) The court may not make such an order unless: (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 proceedings went to trial, the plaintiff would obtain judgment for substantial damages against the defendant. …. (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 that, in the court's opinion, are likely to be recovered by the plaintiff." 7 Exhibited correspondence between the solicitors reveals a stance on the part of the second defendant which counsel for the plaintiffs did not debate that, although breach of duty and damage occasioned thereby to Bryce are admitted, there is no admission of "liability". There is no interlocutory judgment and the applications were based on s 82 (3) (c). 8 As I understood the second defendant's submissions, the amount sought as interim payment for Bryce was contested on the basis that a significantly smaller sum would fulfil his needs up to trial; that insofar as there is power it should be exercised in respect of a reasonable proportion of damages likely to be recovered, the assessment of which should await an appropriate opportunity for the second defendant to investigate the heads of claim; that, given the joinder of the second defendant by amended statement of claim served in February 2008, discretion to order payment should be limited in its focus to expenses which are perceptibly non-controversial, and, that estimates of future needs should be excluded from any calculation. Reference was also made to available treatment pursuant to public hospital healthcare arrangements. 9 The extracts of the statute above quoted show that "need" is not a prescribed factor. It was conceded that demonstration of need was not a pre-condition to an order for interim payment but it was nevertheless a matter which should be taken into consideration. In support of this proposition I was referred to Frellsen v Crosswood Pty Limited, Sully J, unreported, 18 February 1992. That case dealt with now replaced but comparable New South Wales legislation. For guidance his Honour had looked at decisions in England where a faculty for ordering interim payment was vested by Rules of Court. He noted some lack of judicial unanimity in England but expressed preference for the views of Neill LJ in Schott Kem Limited v Bentley [1991] 1 QB 61 where, after reference to several dicta on the subject, his Lordship said (at page 74): "For my part I can see no basis for any further limitation on the jurisdiction of the court to order interim payments other than those set out in Order 29 itself. I would therefore reject the argument that it is necessary for Schott Kem to produce evidence of need or prejudice." 10 Sully J then went on to observe: "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 that the provisions in fact enacted do not include, as they could easily have done, a positive requirement that a claimant/plaintiff demonstrate actual need, or hardship, or prejudice of some other kind. No doubt the absence of any such need, hardship or prejudice in a particular case would be a very important factor to be taken into account in the exercise of what is an extremely, and no doubt deliberately, wide statutory discretion; but that does not warrant the reading into the provisions as actually enacted of a further pre-condition not inserted by the legislature." 11 To similar effect, the needs of a plaintiff were taken into account as a discretionary factor by Adams J in Dimkovski v Ken's Painting and Decorating Services [1999] NSWSC 795. In that case the plaintiff's intentions as to future expenditure were also taken into account. From the text of the judgment it might be inferred that the contest was as to amounts rather than whether focus should be limited to needs which would have to be fulfilled up to an estimated time of trial. 12 The approach in that case was in my view in harmony with what is now legislated in s 82 (5). The hypothetical sum of which a reasonable proportion may be ordered to be paid as interim damages are the damages "likely to be recovered" which expression does not convey any qualifications of the nature contended by the second defendant. It is therefore not directly relevant in the sense of providing some limiting factor that at the present time Bryce "needs no additional therapy over his current immuno-suppressive therapy and hypertensive medications". See the report of Dr Hodson of 13 August 2007 upon which the second defendant sought to rely. 13 I recognize that capacity to repay if required is potentially relevant – see Dimkovski – but, in the light of the content of the pleading admissions I would not consider this a matter of great weight in the case of Bryce. 14 It is, of course, not possible to assess Bryce's damages accurately at this point but I do not construe the requirement of proportion in s 82 (5) to demand arithmetical precision. Reference was made to the judgment of Brereton J in Spencer v Australian Capital Territory [2007] NSWSC 303 where his Honour pointed to the requirement in s 82 (3) (c) for a claimant to show that he would obtain substantial damages meaning that satisfaction is required that the plaintiff will succeed as distinct from showing that he will probably succeed. The construction of that part of the provision does not insert a similar requirement into the concept of damages "likely to be recovered" as expressed in s 82 (5), however, sub-section (3) as construed, will become germane to the applications by the parents. 15 At the hearing I upheld an objection to the tender of particulars pursuant to UCPR 15.12 as factual evidence of the allegations therein. There was no objection to my having reference to the document as conveniently articulating the allegations and considering the extent to which they may be supported by admitted material. 16 Once it is appreciated that the notional capital sum representing the damages likely to be recovered is not limited to amounts representing pre-trial needs and that the assessment of a reasonable proportion does not require determination of an unalterable arithmetical fraction, it is undeniable that $200,000 is a figure which on any view can be forecast to be considerably exceeded by an ultimate total assessment of damages for Bryce. It may be conceivable that not all of the ingredients in the particulars will be reflected in the award and also that some amounts may be assessed at less than what is claimed but, inevitably, there will be such an excess over $200,000 as to make that sum a reasonable proportion of what is likely to be recovered. 17 I turn to deal with the applications by the parents. There is no need to recapitulate the matters of approach above discussed 18 The filed particulars by Ms Coulton specify these injuries: "1. Adjustment disorder 2. Nervous shock 3. Severe emotional upset and distress." 19 The opinions of Dr Phillips unequivocally support the proposition that Ms Coulton sustained psychiatric injury which sounds in damages in accordance with well established authority. It is accepted that she (as did Mr Eldridge) attended a Dr Parmagiani for assessment on behalf of the second defendant but no report has been served. To the extent that it might become relevant I would infer that the content of his report would not assist the case being mounted on behalf of the second defendant. However, the second defendant seeks to rely upon the reports of another psychiatrist, Dr Lisa Brown. Dr Brown's reports are annexed to the affidavit of Leonie Beyers sworn 8 August 2008 which is silent about on whose behalf Dr Brown saw Ms Coulton but it seems to have been on behalf of the first defendant which is not a party to the present motion. Her earlier report is dated 8 October 2007 which pre-dates the joinder of the second defendant in February this year. 20 Inter alia, Dr Brown expressed the following observations and opinions concerning Ms Coulton: (Ms Coulton) "has probably experienced a normal adjustment reaction to events occurring in recent years, including son Bryce's diagnosis with a Wilm's tumour, his requirement for treatment, the subsequent surgical complications and an ensuing marital breakdown. Although Ms Coulton reported having developed anxiety symptoms regarding her son's health, such complaints have been considered as falling below the level of a diagnosable psychiatric disorder, particularly given the extent of her son's ill health in recent years." 21 Dr Brown stated further: "With respect of an enclosed Statement of Claim, a nervous shock related Dysthymic Disorder has not been concurred with, on the basis of a preference to consider Ms Coulton has experienced a distressed but normal adjustment reaction. Although she has experienced periods of feeling emotionally upset and distressed regarding her son's condition, her overall emotional reactions have not been considered excessive to the events which occurred. She would therefore not qualify for the alleged injuries of depression or anxiety at diagnosable levels and nor did she report any significant difficulty in sleeping unrelated to her son's disruptions to her sleeping patterns." 22 In a report of 10 March 2008 which made reference to that of Dr Phillips dated 17 December 2007 in particular, Dr Brown stated: "As to areas of agreement between the assessment reports provided by myself and by Dr Phillips, I would concur that there is a possibility that the plaintiff experienced an Adjustment Disorder with either anxiety or depressive symptoms in the earlier period following on from her son's medical complications. However, I would not concur with Dr Phillips that any such Adjustment Disorder diagnosis was more than fairly brief-lived and I would also not concur that the plaintiff developed a more chronic Dysthymic Disorder in mood. I would not dispute Dr Phillips' comments regarding the academic nature of distinguishing Adjustment Disorder with depression versus anxiety, however I would not confirm his confident opinion that the plaintiff has developed a more significant and chronic Depressive Disorder in recent years." 23 And later: "Because at that time she did not report any more severe or pervasive experience of depression, I would not concur with Dr Phillips' update report opinion that Ms Coulton continues to suffer from a Mood Disorder. The area of discrepancy in the diagnostic opinions appears to lie in the arena of Dr Phillips considering that the plaintiff's severity and quality of symptoms were more severe, versus the much less significant history of such complaints garnered in my own assessment of Ms Coulton. I would therefore not offer any change to my previous opinion, in terms of the plaintiff possibly having suffered from an Adjustment Disorder earlier on but with her symptoms having resolved with her son's improvement. I would continue to offer that she has more likely suffered a normal Adjustment Reaction throughout and I would not concur that she currently suffers from an ongoing Adjustment Disorder." 24 I have not refrained from reciting Dr Phillips' opinions and responses as an indication of preference for Dr Brown's opinions. All of the material has been put before me in document form. I have reproduced extracts of Dr Brown's reports to show that there are views which, if accepted, might defeat Ms Coulton's derivative claim. Even if I were to conclude that, on the documents, that was unlikely, it would leave me still without the ability to assess the damages likely to be recovered by Ms Coulton as between extremes of normal grief reaction and psychiatric injury. A preference for the latter would not enable any determination of whether resultant disability was permanent or whether it might resolve or deteriorate over some span of time. 25 Within Dr Brown's reports is mention of the history of marital breakdown. In summary, she opined that the "post nephrectomy difficulties" were likely to have "contributed to the remaining half causation of the marital breakdown". It will save repetition to observe that Dr Brown made a virtually identical assessment concerning Mr Eldridge. 26 Counsel for the claimants drew attention to Kavanagh v Akhtar (1998) 45 NSWLR 588 where it was held that there should be included in damages a component for marriage breakdown suffered by a plaintiff as causally connected with tort induced physical and psychiatric injury. Neither counsel addressed the question of whether the concept extends to a plaintiff such as Ms Coulton or Mr Eldridge whose action is derivative from physical injury to another. 27 In the absence of submissions, I would not seek to determine the issue and I will restrict myself to commenting that the possibility of recovering compensation for such a head of damage would necessarily in a "nervous shock" case depend upon a finding of psychiatric injury as distinct from normal grief or anxiety reaction. 28 The proof of damage is an essential ingredient of tort and the test postulated in Spencer that the claim will succeed as distinct from will probably succeed is applicable. I note that in the written submissions on behalf of the plaintiffs, the test articulated by Brereton J was cited and it was not submitted that I should depart from it. Whilst, limited to the documents, I would consider that Ms Coulton's claim will probably succeed I cannot, in the light of the conflict of views on an essential ingredient of tort between Dr Phillips and Dr Brown, find that the claim will succeed. 29 If I allow for the limited qualification of possibility of temporary disorder caused by Bryce's medical complications as Dr Brown mentioned in her report of 10 March 2008, part of which is extracted above, I cannot make an estimate of the likely damages on that view. The submissions for the plaintiff which reflected the itemization in the Particulars assumed that all of the claimed deficits were wholly tort-induced and I lack information to make an assessment on the alternative proposition. 30 Ms Coulton's affidavit refers to her desire to enrol Bryce for private tuition and speech therapy. The potential benefit of these to Bryce is evident. The interim payment of damages for Bryce himself provides a source for meeting the cost of such things although I appreciate that this may require some decision by the trustee. The affidavit also refers to financial stresses which Ms Coulton has been encountering and will encounter and I accept what she deposes in relation to these. It is a factor contributing limited weight against the claim for pre payment that the circumstances might suggest that, if required, repayment may be difficult. 31 However, for the above expressed reasons, I conclude that a claim for interim payment to Ms Coulton is not made out. 32 The particulars of injuries filed on behalf of John Eldridge are: "1. Major depressive disorder. 2. Nervous shock. 3. Severe emotional upset and distress." 33 I shall also need to refer to particular of disabilities numbered 5 which is: "5. The loss of one kidney (provided to the first plaintiff)." 34 The affidavit of Leonie Beyers above referenced also exhibits a report dated 9 October 2007 by Dr Brown concerning her examination of Mr Eldridge. 35 Again, in the evidence there is a conflict of opinion between Dr Brown and Dr Phillips who has also examined and reported on Mr Eldridge. However, as I read her report, Dr Brown accepts, at least as differential diagnosis, that Mr Eldridge had a diagnosable psychiatric response as distinct from normal anxiety reaction. She stated: "Based on the information provided by Mr Eldridge and on the documentation available to date, it is my opinion that this plaintiff may possibly have developed a mild Adjustment Disorder with depressed and anxious mood arising whilst son Bryce was undergoing dialysis treatment in the post-nephrectomy period. However, he may have alternatively experienced a distressed normal reaction for a man of an anxious temperamental style, in the context of him undergoing multiple moderately severe stressors related to his son's ill health and the subsequent marital breakdown." 36 In her report Dr Brown mentioned the absence of restraint upon Mr Eldridge's candidature as a live kidney donor to his son for psychological or psychiatric reasons as a circumstance supporting her opinion. I consider that there is force in Dr Phillips' comments about the lack of rationale disclosed therein but the debate cannot be determinative of the present issue. 37 What I have referred as a differential diagnosis by Dr Brown elevates the likelihood of Mr Eldridge being found to have suffered psychiatric injury but the remainder of contest in professional opinion still leaves the evidence falling short of being able to find that his claim will succeed in recovering likely substantial damages. In making that observation I exclude the physical trauma that Mr Eldridge underwent in donating his kidney to his son. 38 Concerning the latter, counsel candidly stated that, so far as he was aware, the claim was novel and no authority was able to be produced. At the time I commented that, in the absence of authority, a motion such as the present was not a suitable vehicle to seek to determine such an issue although one's sense of justice tended to suggest that damages should be recoverable. Again, given the opposition of the second defendant, it cannot be concluded that this ingredient of possible damage to complete the requirements for tort liability demonstrates that Mr Eldridge's claim will succeed as distinct from being likely to succeed. 39 Mr Eldridge's affidavit described his financial difficulties, his altered work pattern and his routine concerning care for Bryce. I accept this evidence but it does not alter the circumstances which inhibit the making of an interim payment. 40 In relation to both Ms Coulton and Mr Eldridge counsel pointed to calculations which I find comfortably demonstrate that, provided it is shown that each of them suffered nervous shock and causative losses, the likely damages to be recovered by each of them would be such as to render $50,000 a reasonable proportion thereof. The evidence on the motion does not enable a decision about the causative link between any psychiatric injury to the level which those calculations represent. In that conclusion, I have not overlooked authorities such as Watts v Rake (1960) 108 CLR 158 but the calculations assume causation which, if Dr Brown's views were to prevail, would either extinguish or considerably reduce any amount of damages. 41 I repeat that, as the applications must be determined "on the papers", the existence of the opinions of Dr Brown to the negative on the issue of the sustaining of nervous shock by the parents is, in my opinion, the isolated circumstance which prevents the "Spencer test" being fulfilled. Even if it be so regarded to the extent of Dr Brown's concessions to the opinions of Dr Phillips, the likely damages will be comparatively small. Of course, if Mr Eldridge succeeds in his claim for physical loss of his donated kidney, larger damages could be anticipated but the difficulty in dealing on an interim basis is above stated. 42 The orders which I will make reveal partial success by both sides. In any event the plaintiff should have the costs of the motion relating to Bryce. In my view, the costs relating to Ms Coulton and Mr Eldridge should follow the event of their demonstration of entitlement to substantial damages which the second defendant at present denies. The unity of action would operate to complicate achieving this. There should be no potential for the costs order to operate against the interests of Bryce. Taking the various considerations into account, I propose to order that costs be costs in the cause. 43 I make the following orders: 1. Pursuant to s 82 of the Civil Procedure Act , the second defendant is to pay into Court the sum of $200,000 as interim damages for the benefit of the plaintiff Bryce Eldridge. 2. The said sum is to be paid out to the Public Trustee to deal with for the benefit of Bryce Eldridge. 3. The costs of the motion are to be costs in the cause. ********** 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.