Supreme Court New South Wales Medium Neutral Citation: Zraika v Walsh (No 2) [2014] NSWSC 655 Hearing dates: 9 May 2014 Decision date: 23 May 2014 Before: Schmidt J Decision: 1. Pursuant to s 82 of the Civil Procedure Act the first and second defendants pay to the plaintiff the sum of $400,000 by way of an interim payment of the damages sought to be recovered in the proceedings. 2. That this interim payment be credited against any settlement or verdict obtained by the plaintiff against the first and second defendants and that it be repaid by the plaintiff if the proceedings against them are unsuccessful. The usual order as to costs is that they follow the event, which would be an order that the first and second defendants bear the costs of the motion as agreed or assessed. If the parties wish to be heard they should approach within 7 days, otherwise that will be the Court's order. Catchwords: PROCEDURE - notice of motion - order sought under s 82(1) of the Civil Procedure Act 2005 (NSW) against the first and second defendants for interim payment of part of the damages and to which plaintiff claims to be entitled - whether such an order should be entertained - medical causation in issue - no expert advice obtained by first and second defendants as yet - whether judgment for substantial damages would be obtained if proceedings go to trial - orders made Legislation Cited: Civil Procedure Act 2005 (NSW) Evidence Act 1995 (NSW) Motor Accidents Compensation Act 1999 (NSW) Cases Cited: Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Dang v Chea [2013] NSWCA 80; (2013) 63 MVA 240 Forster v Hunter New England Area Health Service [2010] NSWCA 106; (2010) NSWLR 495 Sargent v South Western Area Health Service [2010] NSWSC 1506 Category: Interlocutory applications Parties: Sharif Zraika by his tutor Halima Zraika (Plaintiff) Rebecca Jane Walsh (First Defendant) Joseph Bernard Walsh (Second Defendant) Roads and Maritime Services (Third Defendant) Bankstown City Council (Fourth Defendant) Ali Zraika (Fifth Defendant) Representation: Counsel: Mr D Higgs SC with T Boyd (Plaintiff) Mr D Newell (First, Second and Fifth Defendants) Solicitors: Kheir Lawyers (Plaintiff) McInnes Wilson Lawyers NSW (First and Second Defendants) File Number(s): 2011/52630 Publication restriction: None Judgment 1The plaintiff Sharif Zraika, a child, suffers from a form of cerebral palsy, which it is claimed was caused by an injury which he suffered in utero, during a car accident in November 2002. He now seeks an order under s 82(1) of the Civil Procedure Act 2005 (NSW) against the first and second defendants, for an interim payment of a part of the damages to which he claims to be entitled, in the sum of $500,000. 2The application is opposed. 3Section 82 provides: "82 Court may order interim payments (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. (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 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. (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 that, in the court's opinion, are likely to be recovered by the plaintiff. (6) In estimating those damages, the court is to take into account any relevant contributory negligence, and any cross-claims, on which the defendant may be entitled to rely. (7) The court may make an order under this section in proceedings for the recovery of damages to which Chapter 5 of the Motor Accidents Compensation Act 1999 applies, but only an order for one or more payments to be made to the plaintiff of part of the damages for economic loss sought to be recovered in the proceedings and only if the court is satisfied that the plaintiff would suffer financial hardship if such a payment were not made." 4Section 82(3)(c) requires a plaintiff to show that it is more probable than not that he or she will succeed at the trial in obtaining judgment for substantial damages (see Forster v Hunter New England Area Health Service [2010] NSWCA 106; (2010) 77 NSWLR 495). 5Proof of what must be established has to be approached in accordance with the requirements of s 140(2) of the Evidence Act 1995 (NSW), which imports the principles discussed in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, which require that the Court bear in mind the seriousness of what is alleged and their consequences, when determining whether the onus falling on the plaintiff has been met on the balance of probabilities. 6The proceedings were brought under the Motor Accidents Compensation Act 1999 (NSW) only in 2011, after leave was given by Rothman J, who concluded that there was little doubt that the defendant, Ms Walsh was at fault for the accident (see Sharif Zraika (by next friend Halima Zraika) v Rebecca Jane Walsh [2011] NSWSC 1569) and that in the circumstances there could no be contributory negligence (at [79]). The leave was given on condition that the proceedings also be brought against any other party nominated by the defendant and in respect of which an appropriate undertaking as to cost is given (at [82]). As a result, the proceedings were also brought against Roads and Maritime Services, Bankstown City Council. The matter is listed for hearing in June to determine, as between the defendants, responsibility for the car accident. 7The motion was supported by an affidavit sworn by Mr Porthouse, Mr Zraika's solicitor, to which were annexed reports of: * Dr Westphalen, a paediatrician, of 31 March 2003 and 15 December 2008. * Dr Webster, a paediatric neurologist, of 22 March 2010. * Dr Rosenbloom, a consultant paediatric neurologist, of 28 October 2008. * Dr Waugh, a senior staff specialist paediatric rehabilitation medicine, of 15 December 2008. * Dr Harbord, a paediatric neurologist, of October 2010 * Associate Professor Evans of 19 July 2013. * Dr Keenan of 31 July 2013. * Dr Buckley, a consultant physician in rehabilitation medicine, of 26 August 2013. * Associate Professor Scheinberg, a paediatric rehabilitation specialist, of 11 February 2014. * Ms Alach, an occupational therapist, of 22 July 2013. 8Dr Harbord's 2010 report was served in October 2010, Dr Rosenbloom's report in February 2011, Associate Professor Evans' report in July 2013 and Dr Keenan's in August 2013. 9Various opinions there expressed are supportive of Sharif's case. Dr Rosenbloom provided a provisional opinion in 2008, advising that Sharif's injury was either caused at the time of the accident, or was the result of a viral infection. He recommended further investigation, which was later pursued. 10Dr Harbord concluded in 2010 that Sharif has a dystonic/spastic quadriplegic form of cerebral palsy, with a severe intellectual disability and epilepsy, which in my opinion was caused but a hypoxic/ischaemic insult at 25 weeks gestation as a consequence of the motor vehicle accident. Antenatal ultrasounds were reviewed by a feto maternal specialist, who commented on the remarkable fall off in the rate of head growth compared to normal, which had been seen in the 7 week interval from the scan taken before the accident to that taken afterwards. Dr Harbord considered that to be consistent with a significant cerebral insult at 25 weeks gestation and that the patterns of brain injury seen in MRI scans were also consistent with such an insult. 11Associate Professor Scheinberg identified the possible causes of the fall off in the rate of head growth to be fetal compromise immediately after the accident, or congenital infection and the likely cause to be the accident. Other investigations excluded infection. Dr Keenan's opinion supported that conclusion. 12Dr Buckley assessed Sharif's care requirements in childhood and adulthood, including in relation to professional care and medical treatment, given his physical and intellectual limitations, which include no independent mobility, inability to lift his head in the prone position and inability to roll over, intermittent seizures, complete incontinence, inability to feed orally and to communicate with language. He concluded that Sharif's dependence is complete. He lives at home with his parents and three siblings aged four, six and eight. He attends a special school, but has no effective communication skills and will always be completely dependent upon the care of other people. His life expectancy has been assessed by Dr Scheinberg to be 25-28 additional years. 13Ms Alach identified equipment which Sharif requires immediately, including a wheelchair to replace the one he has outgrown and the cost of commercial care which he requires presently and in future. Should the making of an order be entertained? 14There was no issue between the parties that Sharif's parents are relevantly impecunious and that the prospect of recovery of anything paid to him is unlikely, if the first and second defendants succeed in resisting his claim on its merits. It was common ground that this was a factor relevant to be considered in determining whether the order sought should be made, and if so, on what terms. 15The application was resisted on the basis that it was premature and ought only to be determined, once the first and second defendants had a fair opportunity to obtain medical reports as to causation. 16The first and second defendants relied on an affidavit sworn by their solicitor, Mr Newell, to which was annexed the affidavit sworn by Mr Porthouse in February 2011, to support the leave application dealt with by Rothman J. Mr Newell deposed that medical causation was one of the most significant issues in the case, even though, it appears, the first and second defendants have as yet obtained no expert advice as to any basis upon which causation could be defended. 17While experts had been engaged, no reports have been commissioned by the first and second defendants from any expert. It was submitted there had been difficulties created by the nature of Sharif's condition, the extensive clinical records and the loss of certain CT scans which the experts engaged by Sharif had examined and that Mr Porthouse's affidavit explained the difficultly in identifying the appropriate experts. 18Mr Newell explained in his affidavit that he was still finalising the identification of appropriate medical specialists to provide an opinion and that his enquiries were ongoing. Once that was finalised he would need to seek the agreement of the other defendants to engage such specialists. Briefs for such experts were ready, but the first and second defendants had as yet no relevant expert evidence to lead. 19In Mr Porthouse's 2011 affidavit, he had deposed that a Mr Kheir had initially been retained to act for both Sharif and Mrs Zraika in 2002; that the insurer AAMI had denied liability for the accident in December 2003; in June 2004 the insurer Allianz took over management of the claim; a statement of claim was issued by Mrs Zraika in relation to the car accident against Ms Walsh and Mr Walsh in the District Court in December 2004; a notice of grounds of defence was filed in September 2005; and those proceedings were settled in July 2007; the claim in relation to Sharif was first pursued by a Motor Accident Personal Injury Claim Form in December 2003; counsel was instructed and advice received about the need to obtain expert opinions in July 2004; an expert, Dr McMaster-Fay was engaged in October 2004; despite pursuit of further information in March 2006 Dr McMaster-Fay was not prepared to say that there was any connection between the accident and Sharif's disability; in September 2006 an opinion was sought from Dr Molloy, who provided an opinion in February 2007 which did not support the claim; in July 2008 advice was received that Dr Rosenbloom (UK), Professor Stephenson (Scotland) and Professor Stanley (WA) should be consulted; Dr Rosenbloom's report was provided in October 2008; Dr Korda and Dr Westphalen were engaged in February 2009; Dr Korda could not say whether damage was caused to Sharif in the accident; after further investigations, Dr Wong was engaged in February 2010, but he was unable to assist. 20Mr Porthouse was instructed in July 2010. Dr Harbord was then engaged and provided a report in November 2010; that was the first time in the conduct of the matter that a medical expert had provided an opinion that Sharif's condition was caused by the motor vehicle accident and until then, it was not possible to certify that the plaintiff had reasonable prospects of success; the report was served on 24 November 2010, together with a proposed statement of claim; filing of the statement of was opposed; that was later dealt with by Rothman J. 21It was in those circumstances submitted that even though the first and second defendants had no expert reports to rely on, it was premature to determine the s 82 application, because they had not yet put on any medical evidence. 22I am satisfied that this submission must be rejected. 23An application under s 82 may be made "at any stage of the proceedings". The first and second defendants have long known the basis on which the case against them was pressed. The parties have put on evidence to support their respective cases as to the order sought under s 82. There has been no adjournment application, but still the first and second defendants urged that making any order should not yet be entertained, given the difficulty in obtaining expert advice for Sharif, outlined in Mr Porthouse's affidavit. 24I do not consider that these circumstances establish a proper or just basis for refusing to entertain this application. It must be resolved on the evidence which the parties have led, they each having had a fair opportunity to advance their respective cases on the s 82 application. What evidence would be led on the application was a matter for each of them to determine. 25While causation has been put in issue on the pleadings and it was submitted for the first and second defendants that Sharif had faced considerable difficulty in finding experts who supported his claim and would have problems in establishing that the conditions which he suffers were the result of the accident, the fact is that the only expert opinions in evidence support his case. 26The first and second defendants have long been on notice of the expert opinions on which the case against them is advanced, but still they led no medical evidence to resist the s 82 application. 27The first and second defendants' difficulties may be accepted, but do not alter the fact that the s 82 application must be resolved on the evidence which the parties have led. The only medical evidence before the Court are a number of opinions expressed by doctors whose qualifications to express them have not been challenged. They all support the making of the order sought. 28The first and second defendants have come to the hearing of the motion without advancing any opinion from any expert which disagrees with the opinions of those on whom Sharif's case rests. In the result, the evidence on which the defendants relied is not capable even of establishing that there will be any contest in relation to those opinions, at any future trial. 29Nor does the evidence establish that the defendants have not had a fair opportunity, if they wished, to lead expert evidence. The first and second defendants have prepared the information with which they wish to instruct experts they have approached, but have not sought opinions from any of them, despite knowing that this application was to be heard. 30In the result, I am satisfied that justice requires that the question of making the order sought must be determined and should not be deferred. 31That conclusion accords with the requirements of s 56 of the Civil Procedure Act, which requires the Court to exercise its discretion in accordance with the overriding purpose there specified "the just, quick and cheap resolution of the real issues in the proceedings". It also pays a proper regard to the provisions of s 57 and s 58 and the need to act in accordance with the dictates of justice. If the proceedings go to trial, would judgment for substantial damages be obtained? 32Section 82(3)(c) requires the Court to be satisfied that if the proceedings go to trial, the plaintiff would obtain judgment for substantial damages against the defendant, before an order is made and that any order made does not exceed a reasonable proportion of the damages Sharif is likely to recover (s 82(5)). 33The issues lying between the parties cannot be determined on the basis of any assumptions as to what the opinions of any expert who the defendants might engage in future to advise them will be. On the evidence as it stands, the defendants do not know whether any experts finally engaged will support the conclusions of the experts on whom Sharif's case rests, or whether they will disagree with them. 34Sargent v South Western Area Health Service [2010] NSWSC 1506 was another case where the defendant did not tender any expert medical opinion, or any other evidence to resist the application. In the result, Garling J was satisfied on the evidence led by the plaintiff, that the plaintiff would obtain judgment for substantial damages against the defendant if it went to trial (at [15]). 35In this case too, on the uncontested medical and other evidence led for Sharif, it must be concluded that the evidence well established that if the proceedings went to trial, he would obtain judgment for substantial damages against the defendants. What order should be made? 36What the first and second defendants' evidence at trial will be is not known, for the reasons I have explained. Given the nature of Sharif's injuries, however, that the damages he would be awarded if he succeeds would be substantial, was not in issue. His condition and what is involved for his parents, with increasing difficulty, in providing for his care at home where he lives with them, without any paid care and support or respite, establishes that Sharif is likely to have very considerable orders made in his favour in relation to the provision of both necessary equipment and substantial care over the course of his remaining lifetime, if he succeeds in establishing the disputed causation. 37Given his family's circumstances, it is apparent that he now has very considerable unmet needs. Those needs are growing and changing, including in relation to lifting and other assistance which requires two people, as well as with transportation. On the evidence, there is no question that Sharif's needs are costly and demanding for his family, as he is totally dependent on others, 24 hours per day. 38Even so, orders under s 82 must be approached with caution, given the possibility that a plaintiff may not succeed at trial. The defendants accepted that the orders finally pressed for Sharif in relation to equipment had been extracted from Ms Alach's report as being the equipment Sharif presently requires and reflecting her assessment of its cost, together with her estimate of the cost of the commercial care which she assessed he required for a one year period. 39The first and second defendants did not admit that the equipment was reasonable and necessary to meet Sharif's needs, that the actual cost was as Ms Alach had assessed, or even that commercial care was required on the basis she had assessed, in order to meet Sharif's needs. The first and second defendants did not lead any evidence to challenge Ms Alach's opinions and assessments, or require her for cross-examination, submitting rather that her assessment rested on the basis of what optimal, rather than reasonable equipment and care required. 40Given the nature of the equipment in issue, such as wheelchairs, wheelchair ramps, foam seating, shower and bath chairs, a bed and pressure relieving mattress, incontinence sheets and change tables, nursing and continence supplies, and lifting equipment, I am satisfied that the evidence establishes that the equipment is necessary. That conclusion rests on the nature of Sharif's condition, his changing needs, as he grows, the fact that he has outgrown certain existing equipment, and the need for him to be constantly lifted, whenever he is moved. It seems to me that the only equipment about which there could be any question is the wheelchair accessible vehicle costed by Ms Alach at some $90,000. 41Ms Alach's report explains that her costing proceeded on the basis of average, rather than actual cost and that much of the equipment required will have to be custom made, given Sharif's condition. It follows that the first and second defendants' submission that Ms Alach's costs had been approached on an optimal basis cannot be accepted. 42The first and second defendants relied on the observations in Dang v Chea [2013] NSWCA 80; (2013) 63 MVR at [38] - [41]: "38 The relevant test to be applied in considering the question of what damages ought be awarded to a plaintiff in a circumstance such as Mrs Chea found herself, is in Arthur Robinson (Grafton) Pty Ltd v Carter [1968] HCA 9; (1968) 122 CLR 649. In that decision, Barwick CJ held that the aim of an award of damages was not to fulfil the ideal requirements for an injured plaintiff, but rather the reasonable requirements. 39 In Chulcough v Holley (1968) 41 ALJR 336 Windeyer J said at 338: "A plaintiff is only entitled to be recouped for such reasonable expenses as will reasonably be incurred as a result of the accident. What these are must depend upon all the circumstances of the case - including the particular plaintiff's way of life, prospects in life, family circumstances and so forth. It does not follow that every expenditure which might be advantageous for a plaintiff as an alleviation of his or her situation or which could give him or her happiness or satisfaction must be provided for by the tortfeasor." 40 In Sharman v Evans [1977] HCA 8;(1977) 138 CLR 563, when considering the cost of providing nursing and medical care to a plaintiff, and what was reasonable in the circumstances, Gibbs and Stephen JJ said at 573: "The touchstone of reasonableness in the case of the cost of providing nursing and medical care for the plaintiff in the future is, no doubt, cost matched against health benefits to the plaintiff. If cost is very great and benefits to health slight or speculative the cost involving treatment will clearly be unreasonable, the more so if there is available an alternative and relatively inexpensive mode of treatment, affording equal or only slightly lesser benefits. When the factors are more evenly balanced no intuitive answer presents itself and the real difficulty of attempting to weigh against each other two incomparables, financial cost against relative health benefits to the plaintiff, becomes manifest." 41 This Court, in considering a similar issue, has identified as a further matter for consideration, the question of proportionate relationship. In McNeilly v Imbree [2007] NSWCA 156; (2007) 47 MVR 536, Basten JA (Beazley JA agreeing) said at [155]: "[A]n assessment of what is reasonable in the circumstances of a particular case, may well involve some consideration of the significance of the expenditure, as a proportion of the likely overall award, as well as the difficult assessment of the relationship between the additional proposed cost and the anticipated benefit." 43The first and second defendants submitted $100,000 was reasonable to meet equipment needs, excluding the vehicle, because Sharif's family has not had a wheelchair accessible vehicle to this point and there was no urgent need for one, having regard to the proximity of the hearing. 44The test under s 82 is not one of urgency. Given the nature of Sharif's condition and that he is now aged 10 years, it cannot sensibly be doubted that there is a reasonable need for a vehicle of the kind which Ms Alach has assessed, namely with rear platform hoist, particularly given his treatment and schooling needs, for which he has to be transported. 45On the evidence, I am satisfied that the order pressed in relation to equipment should be made reflecting as it does reflect Sharif's reasonable current needs. Costs of that equipment have not been assessed on an optimal basis and what is sought does reflect a reasonable proportion of the damages he is likely to recover. 46As to paid care, the defendants submitted that Ms Alach's estimate rested on the cost of full-time commercial care, which was not reasonable, given that his family had cared for him throughout his life without any assistance. It was reasonable for that to continue until the likely hearing date. 47Ms Alach assessed that at present Sharif receives disability related care from his parents, 24 hours a day, 7 days a week, often from both his parents, apart from periods such as when he attends school. This includes overnight care, which varies from active to inactive, depending on Sharif's ongoing seizures and the consequences of his other conditions. 48Ms Alach's calculations were made on the basis of full-time care during holidays, days off school, and weekends; less care during 120 school days, with some care to be provided by a combination of staff, at times by two staff, with some care to be provided by a registered nurse. 49I do accept that while Sharif's need for care other than that which his parents have been providing him is well established on the evidence, Ms Alach's calculation is an optimal one, which must be approached with some caution. It was not in issue that if orders are made and Sharif's case later fails, the likelihood of repayment to the first and second defendants is realistically almost non-existent. That is, apart perhaps, it seems to me, from the resale value of a wheelchair accessible vehicle. The money paid under the order will otherwise be spent on meeting Sharif's considerable needs for equipment and the care of external providers engaged to assist his parents caring for him during parts of the day and will largely not be recoverable. 50That obviously requires caution to be exercised in determining the order which should be made in Sharif's favour, at this stage of these proceedings. Further, the order made depends on satisfying that the amount ordered does not exceed a reasonable proportion of the damages likely to be recovered. 51In order to reach a conclusion about this, I asked the parties to confer as to what would be likely to be involved in a hearing on causation and damages and when that hearing might occur. The parties were unable to agree, even as to the length of the hearing, which, it seems, might be as long as two weeks, depending on what, finally, is in issue. 52It was the first and second defendant who sought the condition imposed on the leave granted by Rothman J, that the proceedings be pursued against the other defendants. The hearing has been delayed by the dispute between the defendants as to liability for the accident and the decision to resolve that issue separately. The result is that there is thus yet no hearing date fixed for the balance of the case. 53The first and second defendants urged the view that it was likely that a hearing on damages could take place in December 2014. That is difficult to see at the moment, given the Court's lists and the fact that the first and second defendants have not even engaged medical experts, even though on their case causation will be in issue and will be difficult to resolve, given the nature of Sharif's conditions and the divergence of medical opinions as to how such conditions can be caused. 54In the circumstances, it seems unlikely that the matter will be finalised this year, but probable, that final judgment will be given within the next 12 months. 55In all of those circumstances, I have concluded that I should make an order of $400,000. That balances all of the competing considerations which have to be taken into account on this application. That figure has regard to my conclusion on the evidence as it stands, that Sharif is likely to succeed and have a very substantial costs order made in his favour; to the cost of the equipment which is plainly now required for Sharif's care, which totals some $178,768.75; the balance provides a substantial sum to help meet his other established care requirements, having regard to the timeframe within which a decision might be arrived at in these proceedings; it takes into account that Ms Alach's calculations as to his current care requirements have been approached on an optimal basis, and also has regard to the significant risk that if Sharif's case does fail, the defendants will not have a very large part of the sum reimbursed to them. Orders 56For those reasons, I order that: 1. Pursuant to s 82 of the Civil Procedure Act the first and second defendants pay to the plaintiff the sum of $400,000 by way of an interim payment of the damages sought to be recovered in the proceedings. 2. That this interim payment be credited against any settlement or verdict obtained by the plaintiff against the first and second defendants and that it be repaid by the plaintiff if the proceedings against them are unsuccessful. 57The usual order as to costs is that they follow the event, which would be an order that the first and second defendants bear the costs of the motion as agreed or assessed. If the parties wish to be heard they should approach within 7 days, otherwise that will be the Court's order. ********** 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: 26 May 2014