Brandon v Commonwealth of Australia

In the light of the Respondent's knowledge prior to 22 October 1985 of the generation on ships such as the Stalwart of Hydrogen Sulphide its effects and lethal consequences the Respondent failed to put into place operational procedures to be followed in the event of an outbreak of Hydrogen Sulphide gas on board the Stalwart so as to ensure that personnel were not adversely affected by the escape of such gas.

In the light of the Respondent's knowledge prior to 22 October 1985 of the generation on ships such as the Stalwart of Hydrogen Sulphide its effects and lethal consequences the Respondent failed to put into place operational standing orders to ensure that procedures were in place to prevent the escape of Hydrogen Sulphide from the environments in which it was generated.

In the light of the Respondent's knowledge prior to 22 October 1985 of the generation on ships such as the Stalwart of Hydrogen Sulphide its effects and lethal consequences the Respondent failed to equip the Stalwart with devices which its personnel could use to promptly and accurately detect any escape and concentration of Hydrogen Sulphide from the environments in which it was generated.

In the light of the Respondent's knowledge prior to 22 October 1985 of the generation on ships such as the Stalwart of Hydrogen Sulphide its effects and lethal consequences the Respondent failed to put into place a system which prevented the pumping device used for the transfer of sullage to be used for the pumping of bilge water that accumulated in the stern gland compartment.

The Respondent knew prior to 22 October 1985 that if it refitted the stern gland with a rotary seal then this would eliminate the accumulation of bilge water and it would also eliminate the need to pump the accumulated water out from the bilge areas. In light of this knowledge the Respondent failed to refit the stern gland with a rotary seal notwithstanding that the fitting of such a seal to the stern gland had been specified as part of the Stalwart's refit prior to 22 October 1985 and the provision of which would have been relatively inexpensive.

In the light of the Respondent's knowledge prior to 22 October 1985 of the generation on ships such as the Stalwart of Hydrogen Sulphide its effects and lethal consequences the Respondent failed to fit the pumping device used by the personnel on the Stalwart to pump sullage and which the Respondent knew was being used to pump bilge water, with a screw down non[-]return valve which would have prevented the escape of Hydrogen Sulphide from the environment in which it was generated. The provision of a screw down non-return valve would have been relatively inexpensive.

In the light of the Respondent's knowledge prior to 22 October 1985 of the effect upon personnel of traumatic events and in the light of the Respondent's knowledge of the trauma to which the Applicant was exposed to [sic] on 22 October 1985 the Respondent failed to diagnose, treat and diminish the effects of Post Traumatic Stress Disorder on the Applicant and as a consequence of such failure the Applicant's condition developed into a chronic condition."

Each of the applicants also wishes to amend his pleading so as to claim aggravated damages in reliance on those same particulars. The Commonwealth opposes leave being given to make the amendments sought. 6 Leave to amend should be given unless such an order would occasion injustice to the Commonwealth: Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146. The Commonwealth submits that the allegations in the proposed amendments do not disclose an arguable claim for exemplary or aggravated damages but that, if they do, it may be prejudiced if the amendment is allowed. Before turning to the evidence on the motion, it is convenient to consider the nature of the additional damages which the applicants now seek to claim. 7 There is a distinction between aggravated and exemplary damages. In Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 at 149 Windeyer J described the difference as being: "that aggravated damages are given to compensate the plaintiff when the harm done to him by a wrongful act was aggravated by the manner in which the act was done: exemplary damages, on the other hand, are intended to punish the defendant, and presumably to serve one or more of the objects of punishment - moral retribution or deterrence."

8 That statement was referred to with evident approval by Gleeson CJ, McHugh, Gummow and Hayne JJ in Gray v Motor Accident Commission (1998) 196 CLR 1 at 4. That case acknowledged that exemplary damages were available where a plaintiff claimed damages for negligence rather than some intentional wrong. The power to award exemplary damages was explained by the majority. They said: "Exemplary damages are awarded rarely. They recognise and punish fault, but not every finding of fault warrants their award. Something more must be found. (at 6) …

Because the kinds of case in which exemplary damages might be awarded are so varied, it may be doubted whether a single formula adequately describes the boundaries of the field in which they may properly be awarded. Nevertheless, the phrase adopted by Knox CJ in Whitfeld v De Lauret & Co Ltd (1920) 29 CLR 71 at 77 of 'conscious wrongdoing in contumelious disregard of another's rights' describes at least the greater part of the relevant field.

In considering whether to award exemplary damages, the first, if not the principal, focus of the enquiry is upon the wrongdoer, not upon the party who was wronged. (The reaction of the party who is wronged to high-handed or deliberate conduct may well be a reason for awarding aggravated damages in further compensation for the wrong done. But it is not ordinarily relevant to whether exemplary damages should be allowed.) The party wronged is entitled to whatever compensatory damages the law allows (including, if appropriate, aggravated damages). By hypothesis then, the party wronged will receive just compensation for the wrong that is suffered. If exemplary damages are awarded, they will be paid in addition to compensatory damages and, in that sense, will be a windfall in the hands of the party who was wronged." (at 7, footnotes omitted)

9 Their Honours emphasized (at 9) that the remedy of exemplary damages is "exceptional in the sense that it arises (chiefly, if not exclusively) in cases of conscious wrongdoing in contumelious disregard of the plaintiff's rights". They said (at 9-10): "... exemplary damages could not properly be awarded in a case of alleged negligence in which there was no conscious wrongdoing by the defendant. Ordinarily, then, questions of exemplary damages will not arise in most negligence cases be they motor accident or other kinds of case. But there can be cases, framed in negligence, in which the defendant can be shown to have acted consciously in contumelious disregard of the rights of the plaintiff or persons in the position of the plaintiff. Cases of an employer's failure to provide a safe system of work for employees in which it is demonstrated that the employer, well knowing of an extreme danger thus created, persisted in employing the unsafe system might, perhaps, be of that latter kind." (footnotes omitted) 10 The majority in Gray balked at describing exemplary damages as a "discretionary" remedy, but they were in no doubt (at 12) that "the conduct of the wrongdoer" is central to the inquiry whether to award such damages. In that case the tortfeasor had been convicted and punished for a criminal offence in respect of the act which gave rise to the plaintiff's claim, and the majority held that by virtue of that fact exemplary damages may not be awarded. That conclusion rested on two matters of principle: satisfaction of the punitive and deterrent purposes of an award of exemplary damages and considerations of double punishment. 11 I can now turn to the evidence on the motion. As I have remarked in earlier interlocutory judgments in these matters, there is no doubt that the gas leak on HMAS Stalwart on the day in question was an horrific incident as a result of which three sailors died and many others were seriously injured in very distressing circumstances. The report of the Naval Board of Inquiry dated 22 November 1985 was once more received in evidence on the present motion. The applicants also tendered certain documents that were in evidence in proceedings brought against the Commonwealth arising out of the same incident which were heard in this Court by Foster J in 1991. These were copies of the literature referred to in a chemist's statement enclosed with the Board of Inquiry report, a 14 page summary of that report and a report dated 9 May 1986 to the coroner from Dr Dennis Kerr, a staff specialist in anaesthetic and intensive care at Prince Henry Hospital. The applicants tendered two new reports attributing symptoms and signs of nausea, headaches, tingling and eye irritation to exposure to hydrogen sulphide. These were made by Dr Graham Hall, a physician specializing in occupational medicine, and Dr GA Starmer, a researcher in psychopharmacology. 12 Medico-legal reports were tendered in respect of Mr Rock from Dr Alex Gilandas, a clinical psychologist, and Dr Jonathon Phillips, a consultant psychiatrist. Dr Gilandas reported on his neuropsychological assessment of Mr Rock and purported to opine, inter alia, that the Commonwealth would have been sufficiently informed about post traumatic stress disorder ("PTSD") to diagnose such a condition "following the accident on 22 October 1985". Dr Phillips considered that that incident was the "sentinel event in triggering" Mr Rock's various psychological symptoms. He said that the Navy's psychiatric examination of Mr Rock after the incident was "not adequate". Dr Phillips thought that Mr Rock's "substantive psychological symptoms should have been identified and treated". He referred to the "duty of care owed by the Navy (circa 1985) to sailors suffering psychological impairment". 13 This medical evidence (which was apparently served upon the Commonwealth) was not specifically the subject of complaint in the affidavit of the solicitor, Con Ktenas, which was read by the Commonwealth in opposition to the present motion. Mr Ktenas did single out, as a source of possible prejudice, evidence which the applicants apparently proposed to adduce from Thomas Davies, a marine engineer. Mr Davies, who is also a retired Naval officer, prepared a report about the accident aboard HMAS Stalwart on 22 October 1985. He referred to earlier incidents in 1981 and 1984 involving the release of toxic gas aboard three other Navy vessels. Mr Davies expressed his opinion that "blatant disregard for promulgated procedures" contributed to the accident. Significantly, he said that "such disregard seems to have been sanctioned by senior officers of the Marine Engineering Department onboard HMAS Stalwart in October 1985". Mr Davies addressed, and commented in some detail on, the allegations raised in paragraphs 1-7 of the particulars proposed by way of amendment. He said that he was not qualified to comment on paragraph 8. 14 Two other proceedings against the Commonwealth arising out of the accident on HMAS Stalwart are on the docket of another Judge (Tamberlin J) in this Registry of the Court. They are NG 808 of 1998 brought by Ellis Mundraby and NG 809 of 1998 brought by David Mark Lewis. In each of those cases the applicant claims in his amended statement of claim exemplary and aggravated damages by particulars which are identical with those the subject of the present motion. After the hearing of this motion and whilst it stood for judgment, the Commonwealth applied in the Mundraby and Lewis matters for an order under O 11 r 16 of the Federal Court Rules striking out the particulars relied upon by each of them to establish exemplary and aggravated damages. Tamberlin J refused the applications. Over objection by the Commonwealth as to relevance, I permitted the applicants in the present proceedings to re-open their case on the motion so as to tender the relevant pleadings, notices of motion and orders in the Mundraby and Lewis matters. Further, I have now been informed that those matters are fixed for trial in June this year. 15 Eight affidavits of William Szekely, the applicants' solicitor, were read in support of the motion for leave to amend. Annexed or exhibited to those affidavits were most of the documents, whose contents I have described above. Voluminous correspondence between the parties' solicitors was also annexed to Mr Szekely's affidavits. The Commonwealth requested further and better particulars of the allegations in paragraphs 1-8 relied on by the applicants to establish the claims for exemplary and aggravated damages. The applicants furnished some further particulars, although they said that several requests related to matters of evidence and that better particulars would be provided once the records of the Board of Inquiry had been disclosed to them. I see no point in setting out all the further particulars provided. However, for reasons which I shall come to, it is necessary to note the terms of the request and reply "with respect to paragraph 8". So far as Mr Rock was concerned, the respondent requested that the applicants: "22. Identify with precision the way in which the Commonwealth failed to:- (a) diagnose; (b) treat; and (c) diminish the affects [sic] of [PTSD]. 23. Identify with precision how it is alleged that failure to: (a) diagnose; (b) treat; and (c) diminish the affects [sic] of PTSD led to the plaintiff's condition developing into a chronic condition." 16 The applicants replied that: "22. (a) The Defendant failed to diagnose the [PTSD] from which the Plaintiff suffers, until about 3 July 1992.

(b) treat properly or at all the Plaintiff after the incident on board HMAS Stalwart when the Defendant knew that the Plaintiff had suffered a trauma and knew causes and effects of treatment of Post Traumatic Stress Disorder, until about 3 July 1992.

23. (a) The Plaintiff relies upon the answer to item 22 above. Further, the Defendant failed to take heed of symptoms exhibited by the Plaintiff which the Defendant was aware were symptoms of PTSD as set out in DSMIII and DSMIV having regard to the Defendant's knowledge of Hydrogen Sulphide (H2S) and the Defendant's knowledge of the likely effects of [sic] personnel such as those aboard HMAS Stalwart when confronted with a distressing event involving loss of life of other personnel in traumatic circumstances. The Defendants failed to put in place any regime that would allow any proper assessment of the likely effects upon the Plaintiff of such events and further, that the Defendant exposed the Plaintiff to circumstances that gave rise to the PTSD suffered by the Plaintiff, becoming chronic.

(b) The plaintiff relies upon (a) above in that no effective treatment was embarked upon until about 3 July 1992.

(c) By reason of the Defendant's failure as particularized in (a) and (b) above,

By the time that the Defendant diagnosed and sought to treat the Plaintiff, the plaintiff's condition was chronic and not amenable to treatments."

17 The applicants submit that the allegations in paragraphs 1-7 of the proposed particulars cover the same subject matter as the particulars of negligence in their statement of claim. Indeed, they go so far as to submit that those very particulars of negligence, if established, could "prima facie give rise to a claim for both exemplary and aggravated damages". Resting, as those particulars of negligence do, on critical findings in the report of the Board of Inquiry published in 1985, it is said that the Commonwealth has been aware of such allegations since at least 1986 when they were first raised in claims against the Commonwealth by other members of HMAS Stalwart's company. Accordingly, the applicants submit, the Commonwealth cannot now be prejudiced by the facts and matters being relied on also to establish the claims for exemplary and aggravated damages. 18 The Commonwealth, in effect, accepts those submissions up to a point. It says that paragraphs 1-7 merely provide further and better particulars of the alleged negligence. The Commonwealth submits, however, that those particulars, if established, would not ground an award of exemplary or aggravated damages. There is no allegation of "contumelious" conduct or of "conscious wrongdoing". Findings in such terms will be necessary to award exemplary damages. Nor is there an allegation of "high-handed or deliberate conduct" made such as could sustain an award of aggravated damages. 19 In my opinion, the Commonwealth's pleading points have a good deal of validity. However, the object of particulars must be steadily borne in mind. In the present context that means the Commonwealth must be made aware of the nature of the case it is called upon to meet. Having regard to the interlocutory attention these cases have received, the Commonwealth can be in no doubt that the applicants must contend for findings of the kind I have mentioned. If such findings are not made, the relief that the applicants now wish to claim could not be granted: Trend Management Ltd v Borg (1996) 40 NSWLR 500. 20 It may be something of a stretch for the applicants to invite the necessary inferences to be drawn based on the facts and matters alleged in the proposed paragraphs 1-7, but that is what they will have to do. Mr Ktenas said that no claim for such damages had been made in 25 other cases that he has handled arising out of the toxic gas incident on HMAS Stalwart. The conditions on that vessel may require investigation. It may be that this could extend, as the Commonwealth submits, to the ship's design, commissioning and sea-trialing and, of course, to refits after each of the applicants joined the ship's company. The availability of witnesses and documents after such a long time may well be a problem. But such matters will primarily be a problem for the applicants. They will bear the onus of showing that the Commonwealth has acted consciously in contumelious disregard of their rights. For example, the assumptions in the report of Mr Davies must be made out by the applicants. The applicants will have to serve on the Commonwealth, in due course, statements of evidence of their intended witnesses, and I do not consider that the Commonwealth will relevantly be at an unfair disadvantage in dealing with these matters, notwithstanding the passage of time since 1985. Further, these same kinds of questions will have to be considered in the matters before Tamberlin J. 21 The Commonwealth submits, correctly it should be said, that no evidence has been given on behalf of the applicants explaining the reason for the delay in claiming exemplary and aggravated damages. However, I think it is plain enough that the indulgence now sought results, following a change in counsel, from "the application to the case of fresh legal minds who perceived an important new point": see Queensland v JL Holdings Pty Ltd per Kirby J at 170. Whilst the award of exemplary damages is rare, the applicants' cases are not unarguable and, in my opinion, they should have an opportunity to press their claims. I am not confident that the same can be said in respect of the claim for aggravated damages but, since the same facts and matters are to be relied on, I think that this claim may also be pursued on that basis. I also take into account, in the exercise of the large discretion whether to permit the amendment, the fact that the earlier trial dates were vacated on the Commonwealth's application because it was faced with these very claims. The applicants have accordingly paid a high price so that they may pursue them. I am not satisfied that the Commonwealth will be occasioned injustice by the amendment sought in paragraphs 1-7, and I shall allow the statements of claim to be amended so as to insert those particulars in support of the claims for additional damages. 22 However, paragraph 8 stands in an entirely different position. The Commonwealth submits that these particulars are misconceived. The relevant breach of duty is that which is alleged to have occurred on 22 October 1985. There is no allegation of a duty on the part of the Commonwealth to diagnose and treat the applicants. That is certainly not a normal incident of an employer/employee relationship. The particulars (as is made clear by the further and better particulars in Mr Rock's case set out above) impugn conduct of the Commonwealth occurring well after 22 October 1985, yet the applicants' causes of action are not based on wrongful acts or omissions after that date. This is not a case based on an employer's breach of duty over a period of time, such as a plaintiff employee may have in relation to harmful exposure to asbestos or to noise. The applicants submit that paragraph 8 alleges subsequent conduct that may be taken into account in aggravation of compensatory damages in the same way as conduct of a defendant occurring after the publication in a libel case: Mirror Newspapers Ltd v Fitzpatrick [1984] 1 NSWLR 643 per Samuels JA at 653. Be that as it may and whatever the scope in defamation cases for the reception of evidence of a tortfeasor's subsequent conduct as exacerbating the consequences of the original publication, Windeyer J's statement approved by the majority in Gray is clear: aggravated damages relate to "the manner in which the [wrongful] act was done". The allegations in respect of the applicants' diagnosis and treatment do not relate to the manner in which the relevant duty of care was allegedly breached. Dr Phillips erects a different duty of care in one of his reports, but this is not the duty of care pleaded by the applicants. 23 Since the Commonwealth has admitted breaching the pleaded duty of care, it may be expected that each of the trials will be concerned with the issue of alleged damage suffered by the applicants, the so-called gist of negligence. It may well be that their injuries have been aggravated by the medical treatment they have subsequently received, but this will hardly relieve the Commonwealth of responsibility in circumstances where it provided the treatment. Questions of causation and remoteness at trial ought not to be complicated by entirely pointless distractions about whether diagnosis and treatment was insulting or reprehensible. To take Mr Rock's case by way of example, the allegation that his PTSD went undiagnosed for nearly seven years shows how such irrelevant considerations would have the capacity needlessly to lengthen his trial on an issue of central importance, namely, what damage he did suffer as a consequence of the incident aboard HMAS Stalwart. 24 I note that in the Mundraby and Lewis matters Tamberlin J did not strike out allegations identical with those in paragraph 8. His Honour said that he did not read that paragraph as pleading a fresh cause of action. I respectfully agree although, in my view, it certainly hints at other causes of action. Nonetheless, I am of the view that paragraph 8 is embarrassing and raises irrelevant considerations. Such an amendment would be futile and calculated to waste time and money, both in preparation for trial and at trial. Leave will not be given to make that amendment. 25 Save for the question of costs, that disposes of the applicants' motion to amend the particulars in their statements of claim. There remain pending a motion of the applicants for discovery and a motion of the respondent to set aside a subpoena. The motions are related, and I gather that the documents in dispute have now been produced for use in the Mundraby and Lewis matters. The sensible solution would seem to be for the parties to obtain consent orders in one or both of those matters giving leave to use the documents for the purpose of these proceedings. 26 So far as costs of the present motion are concerned, my inclination is to order that the costs of this motion be part of each party's costs of the claim for exemplary and aggravated damages. The Commonwealth has admitted its breach of the pleaded duty of care, and facts antedating that breach now only need to be agitated because of this new claim by the applicants, which is calculated to lengthen the trials. (Of course, evidence was always going to be required about each applicant's personal circumstances prior to the accident.) It may be fairly expected that each applicant will recover a verdict. Only the quantum of damages will be in dispute. The costs of this new claim should be able to be discretely dealt with, if necessary. As the parties requested when I reserved my decision on the motion, I shall give them an opportunity to be heard on the question of costs. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam.

Counsel for the applicants: DT Kennedy SC with EG Romaniuk and ACM Iulano

Solicitors for the applicants: Szekely & Associates

Counsel for the respondent: CC Branson QC with GPF Rundle and Sabine Thode

Solicitor for the respondent: Australian Government Solicitor

Dates of hearing: 6 April, 11 October, 5 December 2000