Supreme Court New South Wales Medium Neutral Citation: Patterson v Khalsa (No.3) [2013] NSWSC 1331 Hearing dates: 10/05/2013 Decision date: 27 September 2013 Jurisdiction: Common Law Before: Garling J Decision: (1) Judgment for the plaintiff in the sum of $6,606,583.00 (2) Defendant to pay the plaintiff's costs. Catchwords: DAMAGES - Tort - Personal injuries -Assessment of damages - Non-economic loss - statutory method of evaluation under s 16 of Civil Liability Act 2002 - when maximum damages may be awarded - No point of general principle. DAMAGES - Tort - Assessment of life expectancy - Use of prospective Actuarial Life Tables - No point of general principle. DAMAGES - Tort - Permanent disablement - Economic loss - Measure of damages available in respect of gratuitous services - No point of general principle. DAMAGES - Tort -whether a claim for funds management fee is appropriate - plaintiff has permanent disablement and moderate intellectual disability - inability to manage sums of money necessitates Funds Management - No point of general principle. Legislation Cited: Civil Liability Act 2002 Cases Cited: Ali v Nationwide News Pty Ltd [2008] NSWCA 183 Dell v Dalton [1991] NSWCA 76; (1991) 23 NSWLR 528 Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 Fabre v Arenales (1992) 27 NSWLR 437 Golden Eagle International Trading Pty Ltd v Jian [2007] HCA 15; (2007) 229 CLR 498 Griffith v Kerkemeyer [1977] HCA 44; (1997)139 CLR 161 Matthews v Dean [1990] Aust Torts Reports 81-037 Nominal Defendant v Gardikiotis [1996] HCA 53; (1996) 186 CLR 49 Patterson v Khalsa [2013] NSWSC 336 Southgate v Waterford (1990) 21 NSWLR 427 Category: Principal judgment Parties: Will Patterson (P) Akal Khalsa (D) Representation: Counsel: H Chiu (P) No appearance (D) Solicitors: Slater & Gordon (P) No appearance (D) File Number(s): 2009/297855 Judgment 1In 2009 the plaintiff, Will Patterson, commenced proceedings by his tutor, Jodie Latter, for damages for negligence against the defendant, Akal Khalsa. 2The proceedings concerned the plaintiff's birth at home on 21 October 2006. The defendant, Ms Khalsa, was engaged as an independent midwife to assist, and to be in attendance at the birth. The plaintiff claims that, as a result of Ms Khalsa's negligence, in recommending the home birth in the first place and, subsequently, in the negligent performance of her duties as a midwife, he suffered hypoxia during birth, and was left with cerebral palsy. 3On 22 March 2013, for the reasons which were then published, the Court ordered that there be judgment for the plaintiff, with damages to be assessed: Patterson v Khalsa [2013] NSWSC 336. 4Directions were given with respect to the process to enable damages to be assessed, and a hearing for the assessment of damages took place on 10 May 2013. 5This judgment deals with the assessment of the plaintiff's damages. The Birth 6According to the material tendered, the plaintiff's mother went into labour on the morning of 21 October 2006 at about 41 weeks gestation. 7When Ms Khalsa arrived at about 12 noon, the labour was strong, she detected foetal heart sounds of between 140 and 158 beats per minute. By 2pm, the plaintiff's mother was fully dilated and the plaintiff's head was high. 8Over the next four and a half hours, the birth was protracted and complex. The plaintiff's head descended slowly and, apparently, in a variety of positions. The plaintiff's head was delivered at 6pm, when thick meconium was noted. There was considerable difficulty releasing the plaintiff's shoulders, and eventually the plaintiff was born at 6.50pm. 9At birth the plaintiff was flat, and oxygen therapy was commenced. He was slow to breathe. An ambulance was called, and the plaintiff and his mother were transported by air ambulance to the Royal Hospital for Women. 10The plaintiff was admitted to the Neonatal Intensive Care Unit. He was noted to have a right Erb's palsy. He developed encephalopathy within 24 hours of birth, and upon imaging, changes were reported which were consistent with a diffuse hypoxic brain injury. The Plaintiff's Development 11On 3 November 2006, Dr Swapnil Shah, the neonatal Fellow at the Newborn Care Centre at Royal Hospital for Women, reported on the plaintiff. 12He said that, upon admission to the Neonatal Intensive Care Unit, the plaintiff was in respiratory distress, which was addressed by intubation. He said that the plaintiff was noted to have "...tonic posturing, which was followed by refractory generalised tonic clonic seizures". These seizures were treated by a mixture of drugs for the first three days. 13On the day after his birth, an electroencephalogram showed that the plaintiff was "... severely encephalopathic with diffuse cerebral inactivity". On the following day, a repeat EEG showed "... burst suppression pattern with electrographic seizures consistent with global encephalopathy". 14A later MRI of the plaintiff's brain showed a pattern of diffuse hypoxic injury with cortical and sub-cortical signal abnormalities. Upon discharge in late November, a neurological assessment of the plaintiff showed abnormalities including decreased movements of right upper limb and axial hypotonia. 15The plaintiff was reviewed by Dr Ian Andrews, a paediatric neurologist, when he was three months old. Dr Andrews' impression was recorded in these terms: "Will had a pretty rocky start, but has made good progress. I suspect he will face neurologic issues relating to the HIE [hypoxic ischaemic encephalopathy] but so far he has done extremely well. ... The right Erb's palsy has made good progress, and I expect it will continue to progress well and does not need any specific treatment." 16At six months of age, the plaintiff was a reviewed at the Growth & Development Clinic at Royal Hospital for Women by Dr Lee Sutton. Dr Sutton noted this: "He is still breastfeeding, and has just started solids. He is managing the solids well. He is having speech therapy, physiotherapy and occupational therapy at the Spastic Centre at Ryde, and they are pleased with his progress. ... Will has had no fits since the neonatal period. Will has a splint for his right hand." 17He recorded his impression in these terms: "Will is progressing with his fine and gross motor skills. It was nice to see him so vocal. He is appropriately placed, receiving therapy at the Spastic Centre." 18When the plaintiff was about 13 months old, he was again seen by Dr Andrews, the paediatric neurologist. Dr Andrews recorded his observations and conclusions in the following way: "He is now 13 months old. As you know, he experienced hypoxic ischaemic encephalopathy and right Erb's palsy in the perinatal period. The sequelae include cerebral palsy, microcephaly, language delay and residual right arm lower motor problems. There is a marked asymmetry between the right and left arm. He has antigravity movement at his right elbow, but his hand is largely held fisted with the thumb adducted. He picks up objects with his left hand and will bring them to the midline, but does not do this with his right. ... Impression: Will has a static encephalopathy with microcephaly related to his HIE. It is expected that development will slowly progress, however there will be significant issues, both cognitively and motor, which are expected to continue. ... In addition, Will has reduced function of his right arm. This is like a combination of both lower and upper motor unit function. ..." 19In 2008, at the Oral Health Services Centre at Westmead, it was noted that the plaintiff presented with low facial muscle tone resulting in drooling due to open mouth posture. It was noted that the plaintiff appeared to have delayed development of his feeding skills, and was showing an emerging pattern of solid food management. It was also noted that he presented with clinical signs that might indicate a poor swallow function and possible aspiration. 20In April 2008, the plaintiff was reviewed by Dr Waugh, a senior staff specialist in paediatric rehabilitation medicine at The Childrens' Hospital at Westmead. Dr Waugh gave this summary of the plaintiff's development: "Will has general low tone with mild dystonia of his right arm, and adduction of his right thumb. Will has no dynamic catch and normal joint ranges throughout. We explained that in HIE, difficulties with tone and motor movement control may only present at a later age, and Will needs to be monitored for this. ... Will shows some excellent non-verbal communication, but given his motor difficulties, it would be difficult to formally assess him. At around 4 or 5 years of age, when he has more reliable communication, his cognitive ability will be easier to assess. ... Will needs no specific intervention at this current time apart from the therapy he is receiving, but he does need hip surveillance." 21The plaintiff also came under the care and supervision of Dr Jayne Antony, a paediatric neurologist. 22In a report of 19 January 2009, Dr Antony recorded this: "Despite the worrisome microcephaly and other adverse factors to suggest hypoxic damage, he was quite alert, aware and very motivated. It was my impression that he probably had some acute upon chronic hypoxic ischemic brain injury, rather than just an acute hypoxic injury towards to the end of the labour. His MRI scan reports also indicated that it was more likely to involve a chronic hypoxic ischemic injury, rather than just an acute hypoxic brain injury. ... He had an MRI scan of the head on 20.11.08. That showed atrophy and high signal changes in the parasaggital and occipital regions, as well as both motor cortex regions, more marked on the left. There was mild atrophy of the thalami and wedge-shaped atrophy of the left cerebella hemisphere with subtle changes on the right. The left hemisphere was smaller than the right. The angiogram was normal, showing no evidence of abnormal cerebral circulation. The conclusion was that the scan was consistent with hypoxic injury in the newborn period." 23Dr Antony saw the plaintiff again on 22 June 2009, and reported on the following day that overall he was progressing well, especially with his communication. He was not able to pull himself up to stand, nor to walk. Dr Antony suspected that the plaintiff's head circumference was not increasing, but noted that it was not decreasing. She observed that he was being well cared for, and his management was appropriate. The Plaintiff at Present 24In 2012, the plaintiff, who by then was six years old, was referred by his solicitor to Dr Adam Scheinberg, a paediatric rehabilitation specialist. 25Dr Scheinberg conducted a physical examination of the plaintiff on 14 November 2012, and obtained a comprehensive history from the plaintiff's mother. 26From his physical examination, Dr Scheinberg expressed this view: "Will had evidence of quadriplegic cerebral palsy with mixed tone (dystonia affecting right upper limb and low tone affecting other limbs and trunk). He had full passive range of motion in his upper limbs and lower limbs, other than mild contracture in the muscles of his right hand. ..." 27Dr Scheinberg expressed this diagnosis: "Will has the diagnosis of: ● mixed tone quadriplegic cerebral palsy, low central tone and dystonia affecting right upper limb; ● microcephaly; ● mobility at gross motor function classification system (GMFCS) level IV; ● upper limb function at manual ability classification system (MACS) level II; ● epilepsy not requiring anti-epileptic medication; ● alternating bilateral squint; ● moderate intellectual disability; ● sialorrhoea (drooling); and ● functional independence significantly below able-bodied peers." 28Dr Scheinberg went on to discuss the plaintiff's prognosis. He concluded that the plaintiff's musculoskeletal deformity associated with his cerebral palsy would be likely to worsen over time with the result that the plaintiff was at risk of developing hip subluxation and scoliosis. 29He also considered that the plaintiff was unlikely to obtain any independent mobility skills beyond his current level, and that he would be required to use a wheelchair in most settings. He said that the plaintiff would need physical assistance from one or two people to assist in transfers; he said he thought the plaintiff would be physically capable of operating a power wheelchair. 30With respect to his intellectual capacity, Dr Scheinberg expressed this view: "In my opinion, Will has moderate intellectual disability. He will therefore require support with his learning throughout his childhood as well as physical assistance due to his cerebral palsy. He is likely to remain in a special school during his childhood, and once he reaches adulthood he may seek some daily vocational activity. Due to the combination of his intellectual disability and physical impairment, in my opinion it is highly unlikely that Will would ever be able to obtain paid employment." 31Dr Scheinberg concluded that the plaintiff had a 90 per cent chance of surviving to 15 years of age, and that if he did so, then his life expectancy would be in the range of 70 to 80 per cent of that of the general male population. 32Dr Scheinberg also set out in some detail his opinion as to what future treatment and care requirements the plaintiff would need. It is unnecessary to set them all out here. It is sufficient that I say that I accept entirely the future treatment and care requirements prescribed by Dr Scheinberg. 33Of particular importance, is Dr Scheinberg's opinion that the plaintiff will continue to need the full-time support of an attendant carer who does not require to be a registered nurse, but who should be trained in first aid because of an increased risk of the plaintiff having seizures. 34Finally, Dr Scheinberg concluded that the plaintiff would not be able to live independently as an adult, but would be required either to live in his parents' home, with any assistance being provided by his parents or attendant carers; to live in a group home sharing costs of care with a small number of similarly disabled adults; or else to live in his own home but with all care provided. Dr Scheinberg did not suggest that for medical reasons any one or other of these should be preferred. 35Dr Scheinberg has provided a short updated report dated 16 April 2013. The question posed for Dr Scheinberg's opinion was whether the plaintiff would be able to manage any funds received by him as a consequence of an award of compensation. 36Dr Scheinberg expressed this opinion: "Due to Will's significant intellectual disability, in my opinion he will be unable at any age to manage any significant sum of money that might be available as part of a medico-legal settlement. Any such settlement should in my opinion be managed for him by an appropriate financial institution. Although Will does have some ability to communicate his needs, those abilities will remain at the level of a young child. I suspect that managing even small amounts of money will always be difficult for Will, and he would be at risk of being taken advantage of by others. Therefore, he will require lifelong support in his daily activities, including managing his finances, paying bills or purchasing equipment or services." 37A report was also prepared by Ms Castle-Burton, a specialist occupational therapist. 38Ms Castle-Burton, based upon the detailed assessment made by Dr Scheinberg, expressed the opinion that the appropriate level of attendant care to be provided to the plaintiff, would cost $319,374.35 per annum. This is a sum of about $6,140 per week. Defendant's Position 39The defendant has elected not to take any further part in the defence of the plaintiff's claim. It was as a consequence of that decision that her defence was struck out on 23 March 2013, and judgment for the plaintiff was entered with damages to be assessed. 40Accordingly, the assessment of damages has proceeded without any challenge to the plaintiff's evidence on damages, either by cross-examination or the tender of contradictory evidence. 41Whilst it is not an absolute principle of law that a witness' evidence must be taken to be true if it is not the subject of cross-examination, in my view, in this case, in the absence of cross-examination then I ought accept all of the unchallenged evidence: Fabre v Arenales (1992) 27 NSWLR 437 at 451D per Mahoney JA (Priestley and Sheller JJA agreeing); Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 at 587C-588A per Samuels JA (Meagher JA agreeing); Ali v Nationwide News Pty Ltd [2008] NSWCA 183 at [112] per Tobias and McColl JJA 42There is nothing about the evidence which I have read which on its face is illogical or inherently inconsistent, nor is there any material in the expert opinions which suggests that the history or assumptions upon which those opinions are based, were incorrect or incomplete. I accept all of the evidence which has been tendered by the plaintiff, and I accept the description provided of the plaintiff's development, and his present condition which I have set out above. The assessment of damages will proceed on that basis. Assessment of Damages 43Any assessment of damages must occur in accordance with the provisions of Part 2 of the Civil Liability Act 2002. Non-Economic Loss 44Section 16 of the Civil Liability Act precludes an award for non-economic loss unless the severity of the non-economic loss "... is at least 15 per cent of a most extreme case". As well, the provisions of s 16 cap the maximum amount of damages that may be awarded for non-economic loss. Presently, that amount is $535,000. 45There are a number of features of the phrase "a most extreme case" which merit note. The first is that, as Grove J pointed out in Matthews v Dean [1990] Aust Torts Reports 81-037 at 68, 014, the use of the indefinite article "a" avoids any requirement to apply the superlative by imagining "the" most extreme case. 46The second is that in Dell v Dalton [1991] NSWCA 76; (1991) 23 NSWLR 528 at 533, Handley JA equated the word "most", in the phrase, with the word "very". He said that "most" did not mean "... in the greatest quantity, amount, measure, degree or number". 47The result of this is that there will be a class of cases that may be described as most extreme cases, even if it is possible to imagine another catastrophic injury which is far worse. Speaking generally, a person suffering from quadriplegia has generally been considered as falling into the class of a most extreme case: Southgate v Waterford (1990) 21 NSWLR 427 at 440. 48The plaintiff's injuries and disabilities in this case, all of which are consequential upon the defendant's negligence, include quadriplegia, cerebral palsy, intellectual disability and epilepsy although this does not presently require medication. 49I am well satisfied that the plaintiff's injuries and disabilities place him in the category of a most extreme case. Accordingly, I assess his non-economic loss as the maximum amount, and I would award $535,000 for this component of damages. 50As the plaintiff is now only six years old, and will suffer the vast majority of his incapacity, injuries and disabilities in the future, it is inappropriate in my view to award any amount of interest on that sum. Life Expectancy 51It is necessary to assess the plaintiff's life expectancy. This is necessarily an evaluative exercise which is always characterised by some imprecision. 52As earlier noted, Dr Scheinberg expressed the opinion that, due to his cerebral palsy, the plaintiff has a 90 per cent chance of survival to age 15, and thereafter he might expect to have a 70 to 80 per cent of normal life expectancy. 53In estimating the plaintiff's life expectancy, particularly having regard to his young age, it is appropriate to use the prospective Actuarial Life Tables: see Golden Eagle International Trading Pty Ltd v Jian [2007] HCA 15; (2007) 229 CLR 498. I regard it as highly likely that he will survive to the age of 15, and I find that he will do so. 54It is appropriate to take the mid-point of the life expectancy tables, and on that basis, and without applying any reduction for any injury or disability, a person's life expectancy from age six, is an additional 79.20 years of life. 55After applying the reduction expressed by Dr Scheinberg, I am satisfied that it is appropriate to find that the plaintiff has a further 59.4 years of life. This calculation is based on the life expectancy tables for a six year old. Since his current age is about six and a half years, then it is appropriate to reduce this marginally, and it is appropriate to calculate damages on the basis that the plaintiff has a further 59 years of life. Economic Loss 56I accept Dr Scheinberg's opinion that the plaintiff's earning capacity has been totally destroyed. 57The plaintiff initially claimed damages with respect to the loss of his future earning capacity on the basis of average weekly earnings from age 18 to 65 plus statutory long service leave and employer paid superannuation entitlements. 58As the plaintiff was born on 21 October 2006, and will reach 18 years of age in 2024, the plaintiff allows for a three year period of tertiary education and claims, appropriately, that he would have been unlikely to exercise his economic capacity until age 21, namely, in October 2027. He would then have a period of full time employment of 44 years. 59Although he would be entitled to claim the entirety of that period, the plaintiff's claim is for a period of employment of 40 years, from 21 to 61 years of age. 60The plaintiff claims a sum of $826.16 net per week for 40 years, deferred for 15 years until he is 21 years of age. This approach and these parameters are all appropriate. 61Applying the five per cent multipliers to those parameters, a total sum of representing the plaintiff's future lost earning capacity of $364,599 is arrived at. I allow a sum of $365,000 for lost future earning capacity. 62The plaintiff's calculation of the appropriate allowance having regard to this sum, to be made for the loss of the superannuation, which would have been paid for the benefit of the plaintiff, is $40,105. I accept that sum as being entirely reasonable. Past and Future Out of Pocket Expenses 63It is clear that the plaintiff's parents have incurred significant expenses on his behalf to date, and will continue to incur significant expenses on his behalf in the future. 64The plaintiff submits that, as the plaintiff's parents propose to meet such expenses, and will not require any repayment from him for such expenses, then he does not wish to press a claim for these expenses. In so doing, the plaintiff notes that the defendant is uninsured. 65In light of the fact that the plaintiff does not press a claim for these amounts, it would be inappropriate for the Court to make an award of those amounts. 66However, it is appropriate to note that the plaintiff is entitled to all reasonable past out-of-pocket expenses and a sum to represent his expenditure on future out-of-pocket expenses. With a person suffering from injuries and disabilities of the kind from which the plaintiff suffers, these out-of-pocket expenses can often be significant. 67Had the plaintiff pressed his claim for these amounts, I would have been prepared to have allowed them in full insofar as they were reasonable, and they were incurred, or else would be incurred, as a consequence of the injuries and disabilities from which the plaintiff suffers. Domestic and Attendant Care 68It is clear beyond argument, that the plaintiff requires a full-time attendant carer. 69To date, that full-time attendant care has been provided by his parents. In accordance with the principles in Griffith v Kerkemeyer [1977] HCA 44, (1997) 139 CLR 161, the plaintiff is entitled to a sum which would reflect the value of the gratuitously provided attendant care services. 70I would have been prepared, had the plaintiff pressed his claim for this, to have awarded an appropriate sum for such services. However, the plaintiff does not press such a claim, in light of the uninsured status of the defendant. 71In dealing with the future costs of domestic and attendant care, the plaintiff claims for the next six years to age twelve, an amount of six hours per day of additional care over and above what would reasonably be required for a child of that age. From age 13 years to 18 years, the plaintiff claims 12 hours per day of care over and above the amount of care that would ordinarily be required of a child of that age. For the balance of his life, that is to say from age 18 until age 61, the plaintiff claims 24 hours per day of care. 72I regard all of these claims as being entirely reasonable, and I would award the plaintiff the sum for damages which takes account of this entire claim at the rates described by Ms Castle-Burton. 73That sum is $4,247,311.00. I allow it as being a reasonable sum for this aspect of the plaintiff's future needs Funds Management 74The plaintiff claims the cost of future funds management. Having regard to his injuries and disabilities and, in particular, his moderate intellectual disability, and the opinion of Dr Scheinberg, which I accept, that the plaintiff would be unable to manage large sums of money, I am satisfied that the plaintiff is entitled, in accordance with the principles in the Nominal Defendant v Gardikiotis [1996] HCA 53; (1996) 186 CLR 49, to an appropriate sum for claims management. 75According to the report of Jane Campbell, a fund manager, a fair and reasonable amount to allow for the management of an invested fund of $5M for a period of fifty-five years is $1,419,177. I regard this as an appropriate sum to allow for this head of damage and I allow it in full. Total Assessed Damages 76I assess a reasonable award for the plaintiff's damages in the following way: Non-Economic Loss $535,000.00 Future Economic Loss $365,000.00 Future Superannuation Entitlement $40,105.00 Future Domestic and attendant care $4,247,311.00 Total $5,187,406.00 Funds Management Cost $1,419,177.00 Total: $6,606,583.00 Orders 77I make the following orders: (1)Judgment for the plaintiff in the sum of $6,606,583.00 (2)Defendant to pay the plaintiff's costs. ********** 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. Decision last updated: 27 September 2013