Barber v Kylow Pty Ltd

CATCHWORDS : PRACTICE & PROCEDURE - application by plaintiff for interim payment from second defendant pursuant to s 82(3)(c) Civil Procedure Act 2005 - plaintiff severely injured when the forks of his bike collapsed - whether if proceedings went to trial the plaintiff would obtain judgment for substantial damages against second defendant - quantum of interim payment - order made - where application by second defendant for preliminary order for contribution or indemnity against first defendant and/or first cross claimant with respect to interim payment - order refused

Civil Procedure Act 2005 LEGISLATION CITED : Trade Practices Act 1974 (Cth) Civil Liability Act 2002

Forster v Hunter New England Area Health Service [2010] NSWCA 106 CASES CITED : Hardwick v McSwiney (No 3) [2010] NSWSC 3 Power Technologies Pty Ltd v Energy Australia [2010] NSWCA 107

Ben Barber by his tutor Justine Tennille Barber (Plaintiff) Kylow Pty Ltd t/as Rod Martin Cycles (First Defendant/ Second Cross Claimant) Southcott Pty Ltd (Second Defendant/First Cross Claimant) PARTIES : Felt Gesellschaft Mit Beschrankter Haftung (First Cross Defendant/Third Cross Claimant) Sanfa Bicycle Industrial Co Ltd (First Cross Defendant to the Third Cross Claim) SR Suntour Inc (Second Cross Defendant to the Third Cross Claim)

A J Black with P Kerr (Plaintiff) COUNSEL : R J Cheney (First Defendant) P S Jones (Second Defendant) J C Sheller (First Cross Defendant)

Stacks/Goudkamp Lawyers (Plaintiff) SOLICITORS : Lee & Lyons (First Defendant) Ebsworth Lawyers (Second Defendant) Maddocks (First Cross Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

2008/289409 Ben Barber bht Justine Tennille Barber v Kylow Pty Ltd t/as Rod Martin Cycles & Ors

JUDGMENT 1 HIS HONOUR: On 19 August 2005 the plaintiff, who had just turned 15, was cycling with friends in Bensville Park, when the forks of his bike collapsed. He was severely injured, sustaining very serious head injuries and brain damage. He continues to suffer from a profound intellectual disability and is subject to behavioural disturbances. 2 He commenced these proceedings, which are due to be heard on 6 September 2010. In the meantime, he has applied by notice of motion filed on 25 March 2010, for an interim payment pursuant to s 82(3)(c) of the Civil Procedure Act 2005. That relief is only sought from the second defendant, which has itself applied by notice of motion filed on 9 June 2010, seeking what amounts to an interim order for contribution or indemnity against the first defendant and/or the first cross defendant in respect of any payment it may be ordered to make to the plaintiff at this stage. 3 Section 82 is in the following relevant terms: " 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.

(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

(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." 4 The principles touching the plaintiff's application were recently considered by the Court of Appeal in Forster v Hunter New England Area Health Service [2010] NSWCA 106. See also Hardwick v McSwiney (No 3) [2010] NSWSC 3. For the purposes only of the present application it is not contested by the second defendant that I can be satisfied, if the proceedings went to trial, the plaintiff would obtain judgment for substantial damages against the second defendant. The issue in contest was therefore limited to the quantum of the interim payment and the extent to which, if at all, the first defendant and/or the first cross defendant could be required to contribute to it. Background 5 The application is based in effect upon the need of the plaintiff's parents for respite from their role as the plaintiff's primary carers pending the hearing and a final determination of all issues in the proceedings. At present they are said to be suffering from extreme carer fatigue and to be in need of some relief from the demands of providing almost full time care for their son. 6 The plaintiff relies upon a report of Anna Castle-Burton dated 24 February 2010. Ms Castle-Burton is an occupational therapist. In her report she notes the following: "It is obvious based on interview with [the plaintiff's mother] that they are in crisis and suffering extreme carer fatigue and in need of immediate respite care arrangements for Ben.

I continue to recommend that Ben requires 24-hour care and support per day provided by a PCA level 3. However, in order to provide the family with immediate respite care I propose that a commercial carer (PCA level 3) is engaged immediately to be present to provide the constant care, supervision and support that Ben needs immediately following his TTW program during the week through to his bedtime. This is 2.00pm through to having him settled in bed and asleep for the night which is likely 10.00pm Monday to Friday. His family are prepared to be present in the home overnight as Ben generally does not require attendance during the evening, but cannot be left alone overnight.

On the weekend and any day that he does not have TTW, such as during holidays, Ben requires care from 7.00am when he first awakes until 10.00pm, therefore providing respite care to the family for all of his waking hours.

I recommend that one weekend a month his parents require 24-hour respite care enabling them the opportunity to go away and have respite from Ben, away from the family home." 7 Ms Castle-Burton has calculated the annual cost of respite care of the type that she has recommended as approximately $198,000. The second defendant does not contest this calculation arithmetically but does dispute the extent of the need to provide the underlying respite carer relief that is recommended. Liability 8 The plaintiff relies upon the expert opinion of John L Gray, a metallurgist, and his report dated June 2008. The first defendant has served a report from Dr Alan Keith Hellier dated 10 December 2009. The second defendant arranged for the plaintiff's bicycle to be examined or inspected on more than one occasion but has so far not served the plaintiff with any report from an expert on the question of its liability. 9 The plaintiff alleges, among other things, that the second defendant imported the bicycle and is liable as its deemed manufacturer pursuant to s 74A(4) of the Trade Practices Act 1974 (Cth). That section provides relevantly as follows: " 74A (4) If: (a) goods are imported into Australia by a corporation that was not the manufacturer of the goods; and

(b) at the time of the importation the manufacturer of the goods does not have a place of business in Australia;

the corporation shall be deemed, for the purposes of this Division, to have manufactured the goods." 10 The plaintiff claims that the second defendant is liable to him pursuant to various sections of that Act, including s 74B, s 74D, s 75AC and s 75AD, because the bicycle was not reasonably suitable for use as a general mountain bike, was not of merchantable quality and was defective. The plaintiff also alleges that the second defendant was negligent because it failed to inspect the bicycle to ensure its structural integrity before sale and failed to undertake tests to check the structural integrity of its components. 11 Mr Gray formed the following conclusions: "6.1 At the time of the accident in question, the front RHS of the fork crown fractured as a direct result of the presence of a casting defect.

Once the front RHS of the fork crown had fractured, the front LHS fork will have been subjected to extremely high and abnormally orientated forces such that it subsequently fractured almost instantly.

6.2 The casting defect was present in the fork crown when the bicycle was first purchased.

6.3 The casting defect would not have been visible at the time that the bicycle was purchased.

6.4 In my opinion, it is most likely that any pre ride inspection by Benjamin Barber on the day of the accident would have failed to detect any evidence of the cracking in question." 12 Dr Hellier agreed with Mr Gray's opinion in all respects. Damages 13 Fiona Petersen prepared a neuropsychological report dated 12 February 2009 concerning the plaintiff. She is a clinical neuropsychologist with the paediatric brain injury rehabilitation team at the John Hunter Children's Hospital. Her summary is in these terms: "Ben sustained a very severe traumatic brain injury in 2005 and has significant disability as a consequence of that injury. He presents with very significant difficulties in attention regulation, working memory, memory, speed of processing and executive functions, such as planning, organising, self-monitoring, self-regulation, and emotional control. These cognitive limitations have very significant impact upon his daily living skills. His relative strengths upon formal testing include auditory attention span (or remembering information for a very short period of time) and some of his visuospatial processing skills. Sadly, when these skills are required for more complicated tasks, Ben struggles on the task due to his executive difficulties." 14 Ms Petersen went on to recommend that the plaintiff requires extensive support from his family for basic tasks such as managing personal hygiene and using public transport. She observed that it will be important for his family to monitor what she described as carer fatigue and to access support from carer organisations or brain injury organisations when required. 15 Associate Professor Arthur Shores provided a report dated 24 July 2009 at the request of the defendants. He is also a clinical neuropsychologist. Professor Shores concluded, among other things, that the plaintiff's vocational capacity is extremely limited and that it is unlikely that he will ever hold down work in the open labour market. He did not consider that any further significant progress was likely. He said that the plaintiff would never be able to manage his finances or his affairs. 16 The defendants have pleaded that the plaintiff was participating in a dangerous recreational activity within the meaning of Division 5 of the Civil Liability Act 2002 and that his injuries, loss and damage arose solely as a consequence of that activity. The dangerous recreational activity relied upon is particularised as engaging in down hill mountain bike riding and seeking to engage in airborne jumps [sic] in the course of doing so. The second defendant also alleges that in those circumstances, the plaintiff's loss and damage were the materialisation of an inherent risk within the meaning of s 5I of the Civil Liability Act. The defendants also allege that the plaintiff contributed to his loss and damage by reason of his own fault and contributory negligence, both at general law and within the meaning of s 74AN of the Trade Practices Act. The same particulars are given as for dangerous recreational activity. Conclusions on s 82(3)(c) 17 In all of these circumstances, including the approach quite properly taken by the second defendant, I am comfortably satisfied that, if the proceedings went to trial, the plaintiff would on the balance of probabilities obtain judgment for substantial damages against the second defendant. Further considerations 18 The plaintiff has required constant supervision since his accident. His parents have almost exclusively provided this. They receive limited respite carer assistance provided by local authorities amounting to two hours per day two days per week during the week. As his primary carers, therefore, the plaintiff's parents are under severe emotional and physical strain and are also suffering financial difficulties because of the time that is needed for them to be at home rather than fully engaging in paid employment. 19 The plaintiff's father said this in his statement dated 31 March 2009: "I am concerned about Ben's future and the future of our family. It is heartbreaking, stressful, exhausting and often distressing to cope with Ben's change of personality and the need this change created for our constant supervision and assistance. I am now on Zoloft to assist me to cope better with the situation. I am constantly worried about Ben and what his future holds and whether he will be well looked after if we are unable to look after him for some reason." 20 Ms Castle-Burton also reported the following in her 11 March 2009 report: "Mrs Barber reported that Ben's behavioural changes have been the most difficult to have them deal with due to the constant and serious nature of many of his behaviours.

She described his behaviours as including obsessiveness, constant interruptions, abnormal sexual behaviour, intrusiveness and the constant need to provide supervision and support. Mrs Barber reported that Ben is constantly interruptive and talks non stop at all times. She reported that this is difficult for the family to deal with as he is constantly interrupting any conversation, even whether he is involved in it or not. She reported that when she is at home with him on his own he is constantly talking to her and interrupting her when she is trying to talk on the phone or to another person. She reported that he doesn't settle to any activity and constantly interrupts whatever she is doing. Therefore she finds it difficult to get anything done.

She reported being exhausted by the constant nature of Ben's behaviour …" 21 Mrs Barber is also taking anti-depressant medication. 22 In January 2009, the plaintiff started a Transition to Work (TTW) course run by Job Centre Australia. It is a two-year programme for people with disabilities designed to provide them with sufficient skills to enable them to enter the workforce. It seems clear that the plaintiff is not suited to that course by reason of the severe nature of his disabilities. The course is conducted at Gosford during weekdays. The plaintiff goes there on the bus leaving at 8.00am. He is met at the other end and taken to the course. The course finishes at 2.00pm and the return bus to his home leaves Gosford at 3.00pm. The course organisers have been able to keep the plaintiff at the course premises until 2.45pm so that this is possible. Sometimes these arrangements fail and the plaintiff has become lost or his whereabouts have been unknown. 23 A letter dated 7 June 2010 from Nicki Lihou from Job Centre Australia reinforces the fact that the plaintiff cannot be trained to enter the workforce and that the TTW course is unsuitable for him in the circumstances. The very clear inference is that the plaintiff's time at TTW must be considered to be limited and that he is very charitably being kept on as a service to Mr and Mrs Barber who would otherwise have to rearrange their affairs, even more than they have, if they had to be available to care for the plaintiff when he would otherwise have been at the course. 24 Mrs Barber usually works casual shifts at Strandbags at Woy Woy one day a week from noon to 2.00pm plus either 9.00am to 4.00pm or 1.00pm to 8.00pm on Thursdays. Last financial year she earned about $8,600. Mr Barber is employed at Brian Hilton Motor Group at North Gosford. He works from 8.00am until 5.30pm six days per week. Thursday is his usual day off. He also gets one weekend each month off work so that he can care for the plaintiff. 25 Both Mr and Mrs Barber gave evidence in the form of detailed affidavits dealing with their own condition as full time carers and the enervating and gruelling daily routine of having to perform that role while supporting their family at the same time. Neither was cross-examined and it goes without saying that at least at the margins of generality there is no dispute about what they have described or about the effect that it has had upon them. The plaintiff's case includes a claim for the costs of future care for the plaintiff at commercial rates for the rest of his life. Although formulated as a claim to provide the plaintiff's parents with respite from their role as his carers, it is in fact a claim for an interim payment of the plaintiff's anticipated damages under this head. 26 The hearing is now only 11 weeks away. The plaintiff's calculations based upon a twelve month assessment should be modified so as to relate only to the period up to the hearing. There is a very great prospect that the plaintiff will soon be unable to attend the TTW course. I am disposed to proceed upon the assumption that he will soon be asked to cease attending. The consequences for his parents would then be both obvious and dire. 27 The plaintiff's need for care is principally during waking hours, notionally between 7.00am and 10.00pm or 105 hours per week. Calculated at the rate of $40 per hour, the cost of care for 11 weeks would amount to $46,200. Without descending into the detail of the plaintiff's expert's own calculations concerning the cost of providing weekend overnight care on a once-monthly basis, the additional cost of such care for two nights or 16 hours for three months at $40 per hour would amount to an additional $1920. Those sums together come to $48,120. I consider that an interim payment of that order is appropriate in this case. In forming that view I note that none of the matters referred to in s 82(4) of the Civil Procedure Act applies. The first defendant/ first cross defendant 28 The second defendant's notice of motion sought an order in these terms: "1. In the event that the plaintiff succeeds in his notice of motion dated 24 March 2010 for interim relief under s 82 of the Civil Procedure Act 2005 against the second defendant …the second defendant be indemnified or alternatively, contribution be ordered from the first defendant and/or the first cross defendant on such terms as this honourable Court deems to be just and equitable." 29 The first defendant is the retail bicycle business operator that traded as Ron Martin Cycles, which sold the bicycle to the plaintiff's mother on 4 March 2005. The second defendant has filed the first cross claim against the first cross defendant. The first cross defendant is a German company that carried on the business by itself and through various agents and subcontractors of designing, manufacturing, fabricating and assembling bicycles and mountain bicycles for wholesale distribution and export. The second defendant and the first cross defendant are said to be parties to a contract for the importation and wholesale distribution of these bicycles under the brand name or trademark "Felt". It is alleged that the plaintiff's bicycle was one of these. The second defendant alleges that it has the benefit of a contractual indemnity from the first cross defendant that will respond to any liability that the second defendant may be found to have to the plaintiff. 30 Both the first defendant and the first cross defendant contend that there is no scope within s 82 of the Civil Procedure Act for the second defendant to obtain what amounts to a preliminary contribution from another defendant or cross defendant with respect to any interim payment that the second defendant may have been ordered to pay to the plaintiff. The second defendant has submitted that the source for the Court's power to make such an order is to be found in s 82(6), at least to the extent that the second cross defendant has filed a cross claim against the first cross defendant. The second defendant has not filed a cross claim against the first defendant although the first defendant has filed a cross claim against the second defendant. The second defendant does not have the benefit of any indemnity from the first defendant of the type it claims to have from the first cross defendant. The first cross defendant has cross claimed against two other parties who have yet to be served and who have for that reason taken no part in these proceedings so far. 31 The plaintiff is not a party to the second defendant's motion but has submitted that s 82(6) does not permit the Court to take into account a cross claim against any party other than the plaintiff. He submitted that it was intended to take account of the possibility or probability that the quantum of a cross claim against a plaintiff would be a relevant and perhaps even a critical matter to take into account for the purpose of the s 82(3)(c) exercise. It was in this respect in a similar category to contributory negligence considered for the same purposes. 32 Counsel for the first cross defendant referred me to Power Technologies Pty Ltd v Energy Australia [2010] NSWCA 107 at [107] - [108] as follows: " Interim Payments

[107] So far I have not referred to Part 6 Div 5 of the CP Act , which neither party mentioned it in their submissions. Section 82(1) of the CP Act provides that in any proceedings for the recovery of damages, the Court (or Tribunal) may order a defendant in the proceedings to make one or more payments to the plaintiff as part of the damages sought to be recovered in the proceedings. An order can be made only in the application of a plaintiff and only against a defendant: s 82(2). However, ' plaintiff ' includes cross-claimant and ' defendant ' includes cross-defendant: s 3.

[108] The limitations on the making of an order for interim payment are such that Part 6 Div 5 is unlikely to be a suitable mechanism for giving effect to an apportionment determination. In particular, the Tribunal is not to make an order for interim payments unless satisfied that if the proceedings went to trial, the plaintiff/cross-claimant would obtain judgment for ' substantial damages ' against the defendant/cross-defendant: s 82(3)(c)." 33 It seems to me that there is much that remains to be explored in the issues to be determined upon the various cross claims. There is no cross claim against the first defendant. The suggestion, even though made in a different context to the present dispute, that the "limitations on the making of an order for interim payment are such that Part 6 Div 5 is unlikely to be a suitable mechanism for giving effect to an apportionment determination" is to my mind sufficiently clear and sufficiently persuasive to govern the approach that I should take at this stage to the second defendant's motion. Orders 34 Accordingly I make the following orders: 1. Order that pursuant to s 82(1) of the Civil Procedure Act 2005 the second defendant pay $48,120 to the plaintiff as part of the damages sought to be recovered in the proceedings.

2. Order that the costs of the plaintiff's motion against the second defendant be the costs in the cause.

3. Dismiss the second defendant's notice of motion against the first defendant and the first cross defendant.

4. Order that the costs of the second defendant's notice of motion be the first defendant's and the first cross defendant's costs in the cause.

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