Anabella Aguis (by her tutor Gail Margaret Chalmers) v Southern Sydney Area Health Service

CATCHWORDS : Practice and procedure - whether separation of issues of liability and quantification of damages should be ordered - relevant principles Coenen v Payne [1974] 2 All ER 1109; Idoport Pty Ltd v National Australia Bank [2000] NSWSC 1215; CASES CITED : Murphy v Chow [2003] NSWSC 303; Perre v Arpand Pty Ltd (1999) 198 CLR 180; Richard v Rahilly [2002] NSWSC 943; Tepko Pty Ltd v The Waterboard (2001) 206 CLR 1 PARTIES : Anabella Arguis - Plaintiff Southern Sydney Area Health Service - Defendant FILE NUMBER(S) : SC 20386/02 COUNSEL : P See - Plaintiff J Sandford - Defendant SOLICITORS : Teakle Ormsby Conn Lawyers - Plaintiff Frances Allpress Solicitor - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20386 of 2002 Anabella Aguis by her tutor Gail Margaret Chalmers (Plaintiff)

JUDGMENT 1 Shaw J: This is a notice of motion filed by the plaintiff seeking an order that the issues of liability and quantum in this matter be heard separately. 2 The amended statement of claim filed by the plaintiff on 15 November 2002 alleges that the defendant had the care, control and management of St George Hospital at Kogarah and that the plaintiff's mother attended the anti-natal clinic at that hospital during her pregnancy in 2000-2001 and that there was a contract between the defendant, the plaintiff and the plaintiff's mother that the defendant would provide treatment to the plaintiff and the plaintiff's mother regarding her birth. 3 It is further said that it was an implied term of that contract that the defendant would use all necessary care to the plaintiff and the plaintiff's mother. 4 It is alleged that on 19 April 2001 the plaintiff was born but at that birth suffered injuries including right shoulder dystocia - Erb's palsy. It is said that this injury was caused by the defendant's negligence and that negligence was a breach of contract on the part of the defendant. 5 The plaintiff is presently about two and a half years old. Counsel for the plaintiff asserts that it is difficult at this time to determine with precision the extent of her injuries, assuming negligence or contractual breach can be proved against the defendant. 6 The evidence before the Court tendered on the notice of motion indicates that, at birth, on 19 April 2001, the plaintiff suffered an injury to her right arm. There was an operation performed in October 2001 to remove tendons to the plaintiff's legs and graft them into her right arm to improve function. The uncontested evidence is that the plaintiff has undergone extensive therapy at Westmead Hospital and performs exercise with her mother. Evidence has been admitted, as would otherwise be axiomatic, that the plaintiff is unable to express her feelings with respect to the problems she faces in relation to her right arm. 7 It is in these circumstances that the Court must decide whether the questions of liability against the defendant, and consequently quantum of damage, should be bifurcated. 8 The prima facie position is that in an action brought in this Court, all issues should be resolved at the one time with a view to giving effect to the spirit and intention of the Supreme Court Rules to facilitate an expeditious resolution of the proceeding. 9 Notwithstanding the ordinary principle, it is the case that it is not infrequent in cases involving personal injury or professional negligence for the determination of liability to be adjudicated prior to a subsequent proceedings, in the absence of resolution between the parties to determine a quantum of damages. 10 This is often a convenient course, because if there is no liability then the defendant is saved the cost and expense of dealing with evidence of and submissions on the level of damage. On the other hand, a finding of liability in favour of the plaintiff may encourage productive settlement discussions or some form of alternative dispute resolution. 11 What principles should the Court apply in exercising a discretion as to whether the issues of liability and damage should be separated? 12 One interesting judgment is that of the English Court of Appeal in Coenen v Payne [1974] 2 All ER 1109. That was a case in which a veterinary surgeon was injured in a motor vehicle collision. It was an action for damages in negligence in which the plaintiff alleged loss of earning both for a specified period of three months and in the future. The primary judge refused an application to deal separately with the question of liability and damage. However, the Court of Appeal overturned the trial judge's decision and determined that, having regard to the time and expense involved in trying the issue of damages, the case was a proper one for separate trials. Lord Denning, MR, acknowledged that the normal method was to try both issues at the same time (at 1011-1012). However, the Master of the Rolls said (at 1112): In future the courts should be more ready to grant separate trials than they used to do. The normal practice should still be that liability and damages should be heard together but the courts should be ready to order separate trials wherever it is just and convenient to do so. 13 Stamp LJ distinguished earlier cases which applied the procedural power of severance only in exceptional cases (see, for example, Jessel MR in Piercey v Young (1880) 15 Ch D 475 at 480 and Emma Silver Mining Co v Grant (1879) 11 Ch D 918 at 927) saying that (at 1113): …I cannot accept that the remarks of Jessel MR were directed in the least degree to cases where what was sought to be dealt with as two separate issues were liability and the ascertainment of quantum of damages. What he was speaking of, I think, was a process by which one issue of facts is to be tried in advance of another issue of fact both of which have to be determined in favour of the plaintiff before he can get judgment for damages at all. 14 Stevenson LJ said (at 1114): If the court thinks it just and convenient to order separate trials for separate issues or to give judgment for damages to be assessed by another court the court should do so without treating ancient decisions as limiting its powers. In a personal injuries case the courts will not depart from the normal practice except for good reason… 15 In Idoport Pty Ltd v National Australia Bank Ltd and Ors [2000] NSWSC 1215, Einstein J helpfully crystallised the relevant principles in these terms at [7]: Without examining specific cases in relation to the power conferred on the Court in Part 31, Rule 2, I proceed on the basis of the following principles:

(1) The power of the Court to order the separate determination of an issue is a discretionary power which must be exercised judicially, but cannot otherwise be fettered: Dunstan v Simmie & Co Pty Ltd [1978] VR 699 at 670 per Young CJ and Jenkinson J. (2) In exercising the power under Part 31, Rule 2, the Court is now enjoined to give effect to the overriding purpose of the Supreme Court Rules ; namely to facilitate the just, quick and cheap resolution of the real issues in the proceedings and cannot be stated in a more confined way: Part 1, Rule 3 (1), (2) Supreme Court Rules . (3) The Court begins with the proposition that it is ordinarily appropriate that all issues in a proceeding should be disposed of at the one time: Tallglen v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141 per Giles CJ in Comm D, Hadid v Australis Media Ltd (unreported, Supreme Court of NSW, 29 March 1996 per Rolfe J). Accordingly, it is for the party who wishes to have a question separately determined to show that it is desirable for that to occur. (4) Without being exhaustive, the separate determination of an issue may prove to be an appropriate procedure in at least the following sets of circumstances:

(a) where the resolution of that separate issue will have the effect of resolving the entirety of the litigious controversies or of substantially narrowing the field of litigious controversy : CBS Productions Pty Ltd v O'Neil [1985] 1 NSWLR 601 at 606 per Kirby P, Dunstan v Simmie & Co Pty Ltd (supra, at 671 per Young CJ and Jenkinson J); (b) where the resolution of that separate issue carries with it a strong prospect that the parties will thereafter be able to resolve their dispute themselves and thus avoid further litigation: Tallglen v Pay TV Holdings (supra, at 141 - 142 per Giles CJ in Comm D); (c) where there is a clear demarcation between that issue and all other issues in the case, including issues going to the credit of witnesses: CBS Productions Pty Ltd v O'Neil (supra, at 606 per Kirby P), Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Rajski v Carson (1988) 15 NSWLR 84 at 88 per Kirby P and Hope JA. (5) Conversely, the separate determination of an issue will rarely be an appropriate procedure where:

(a) there are intertwined issues of fact or law between the separated question and the other questions such that the determination of the separate question will not have any substantial effect upon the width of the field of litigious controversy or the prospect of the settlement of the balance of the litigation: Law Society of NSW v Bruce (unreported, Supreme Court of NSW, 23 April 1996, per Rolfe J), Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J). (b) where there is a commonality of witnesses and issues of credit as between the separate issue and other issues in the case which will or may necessitate a ruling on the credit of one or more of the common witness, thus possibly precluding that same judicial officer from again dealing with the matters going to the credit of the common witness in accordance with the decision of the Court of Appeal in Australian National Industries Ltd v Spedley Securities Ltd (in liq ) (1992) 26 NSWLR 441 : Story of Sydney Pty Ltd v Ling (unreported, Supreme Court of NSW 15 November 1994, per Rolfe J), Century Medical v THLD [2000] NSWSC 5; (unreported, Supreme Court of NSW, 3 February 2000, per Rolfe J). (c) there is a possibility that the resolution of the separate issue will not finally determine the issue but will merely result in an appeal from that decision in relation to that separate issue, creating a multiplicity of proceedings, interruption to the court and undesirable fragmentation of the proceedings: Story of Sydney Pty Ltd v Ling (supra), Century Medical v THLD (supra). (6) The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings as anticipated, but often has the reverse effect, merely causing added delay and expense to the resolution of the litigation. Thus, before an issue is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings: Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Parramatta Stadium Trust v Civil and Civic Pty Ltd (supra), Century Medical v THLD (supra). 16 In applying these principles to the facts of a particular case Studdert J declined to order a separation of issues stating that there would not be a sufficient saving of time and the plaintiff would have to give evidence twice, as would medical practitioners: Murphy v Chow [2003] NSWSC 303. 17 On the other hand, in Richard v Rahilly [2002] NSWSC 943 Newman AJ considered the questions of expense and convenience and ordered a separation of the issues notwithstanding that some of the expert reports overlapped on issues of liability and quantum. His Honour observed that this is the case in most common law actions for personal injuries. However, his Honour observed that the degree of overlapping was not of such an order that the court could conclude the defendant had discharged its burden to show that the order should not be granted. 18 I also have in mind the cautionary remarks of judgments of the High Court in relation to the inconvenience that can occur when isolating separate questions in proceedings at first instance: see Perre v Arpand Pty Limited (1999) 198 CLR 180 at [436] per Callinan J; Tepko Pty Ltd v The Waterboard (2001) 206 CLR 1 at [168] - [170] per Kirby and Callinan JJ; and at [52] per Gaudron J. 19 This question of procedure involves a discretion focused upon the facts and circumstances of a particular case, but bearing in mind the principles which I have endeavoured to summarise. 20 The thrust of the defendant's opposition to the orders sought is that there is an absence of an adequate evidentiary foundation to justify making the orders. It is true that the only evidence tendered consists of a solicitor's affidavit, and it is true also that certain portions of that affidavit were not admitted on the basis that they expressed views not within the expertise of a solicitor. There is no specialist medical evidence that has been tendered. 21 Nevertheless, some aspects of the case seem to be self-evident. First, it is clear that the plaintiff is incapable, at her present age, of giving evidence as to problems she may be having as a result of the injury. Secondly, I think it is reasonably plain that the plaintiff and her legal advisers have a difficulty in assessing the extent of damage at this time and the elapse of some period of time before an attempt by this Court to quantify damages, if any, would be conducive to the interests of justice to both parties. Furthermore, it is an obvious point that if the plaintiff is unable to establish liability then the defendant is saved the costs of dealing with a hearing as to quantum. 22 In these circumstances, I think it is more appropriate for the question of liability to be severed. The question of quantum of damages may prove to be academic, but if not it can be dealt with at a later date. The usual rule is frequently departed from in cases of this kind and I am unable to see any real prejudice flowing to the defendant as a result of this course. 23 Accordingly, I make the order sought in the notice of motion that the issues be severed. It is agreed that costs should be costs in the cause.

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