Chaina v Presbyterian Church [2014] NSWSC 518 | Case summary

Chaina v Presbyterian Church [2014] NSWSC 518 | Case summary | Zoe

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Table of Contents Para No. Introduction [1] Nathan's death on the hike [6] The aftermath of Nathan's death [22] The pleaded per quod claim [28] The course of the proceedings [30] The issues [66] Deluxe and Proton [69] Matters of credit [101] (1) Mr Chaina [101] (a) His qualifications [110] (b) The names he used [131] (c) The accident in Ashfield [140] (d) The manuals [146] (e) Inconsistent answers [169] (f) The application to St George Bank [172] (g) Other matters [175] (2) Mrs Chaina [180] (a) Her qualifications [180] (b) Her husband's qualifications [185] (c) The 2000 R & D Application [187] (d) The 2004 tender [194] (e) Other matters [202] Nervous shock [212] (1) Pre-October 1999 [222] (a) Mrs Chaina [222] (b) Mr Chaina [250] (2) Post-October 1999 [289] (a) Dr Wever's assessment [289] (b) Dr Skinner [305] (i) Mrs Chaina [305] (ii) Mr Chaina [314] (c) Dr Milton [329] (i) Mrs Chaina [334] (ii) Mr Chaina [337] (d) Dr Phillips [339] (i) Mrs Chaina [344] (ii) Mr Chaina [361] Continuing psychiatric illness? [377] (a) Mrs Chaina [385] (b) Mr Chaina [398] The financial position of the business [460] (a) Payments to creditors [469] (b) Complaints about the Company [475] The proposed launch [503] The evidence of Professor Dowling [521] Mr Dunbar's evidence [569] Superior products [576] The Lithgow premises [581] The formulae [590] The per quod claim [623] The existing business [633] Damages [658] (1) Non-economic loss [658] (a) Mr Chaina [658] (b) Mrs Chaina [661] (2) Economic loss [662] (3) Out-of-pocket expenses [685] (i) Medical costs of Dr Wever (Particulars para 14 (2)) [697] (ii) Michelle Rogers' personal training costs (Particulars para 14(4)) [701] (iii) Out of pocket expenses of Mrs Chaina (Particulars para 19(1) [704] (iv) Out of pocket expenses for Mr Chaina (Particulars para 14(1)) [713] (v) Costs associated with land and building at Glengarry (Particulars para 27) (two bundles) [717] (vi) Funeral and associated costs (Particulars para 22) [722] (vii) Medical costs of Dr Wever for Mrs Chaina (particulars para 19(2)) [727] (viii) Catering at the inquest and the trip to Edinburgh (particulars para 26 - in part) [729] (4) Costs incurred by Proton [735] (a) Hiring substitute employees (particulars para [44]) [735] (i) John Childs [736] (ii) Kain Childs [740] (iii) David Redfern [741] (b) Extra consultancy expenses (Particulars para 45) [744] (i) Dr S W Li [745] (ii) Dr Ross Griffith [748] (iii) Nigel Dique [755] (iv) Ray Palmer [764] (v) Hugh Grimm [767] (vi) Milward Doran [771] (5) Costs of coronial inquest (Particulars para [25]) [777] (6) Other heads of damage [797] (a) Sale of properties (Particulars para 21) [797] (b) Loss of value of shares (Particulars para 28) [809] Conclusion [813]

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Nathan's death on the hike 6The hike was a parent-child hike conducted as part of the outdoor education program at the Glengarry Campus. Matthew Chaina, the First Plaintiff, was a pupil at the Glengarry Campus. The hike for the group of students of which Matthew was a part was due to take place on the weekend of 23 and 24 October 1999. The hike traversed the Yarrunga Creek catchment area which contained Yarrunga Creek and its tributaries. The hike route crossed Yarrunga Creek and its tributaries several times. 7Mr and Mrs Chaina informed Mr Peter Morgan, the master in charge of the Glengarry Campus, that the weekend of 23 and 24 October 1999 was not a suitable one for Mr Chaina to attend the hike with Matthew. They requested that Matthew be permitted to undertake the hike on another weekend when Mr Chaina was available. However, that request was refused. Mr Morgan requested that either Nathan or Jean-Pierre attend the hike in place of George. Natahn was selected to accompany Matthew. Because Nathan was only 15 years old this was contrary to the College's own guidelines. 8October 1999 was a wet month in the Yarrunga Creek catchment although that catchment area had a very high annual volume of rainfall and it was prone to flash flooding. The weather reports in advance of the weekend of 23 and 24 October forecast rain for the weekend in that area. 9Matthew and Nathan were in the company of another pupil, David Andrews and his father David Andrews Snr. They were taken from the Glengarry Campus to the beginning of the hike route at about 9am on 23 October 1999. At 10:48am on that day the Bureau of Meteorology issued a flood alert which warned of a risk of moderate to heavy rainfall and minor to moderate flooding along coastal rivers including creeks which those participating in the hike could be expected to encounter. 10At about 1:15pm on 23 October the group left a lunch spot (on the southern side of Yarrunga Creek) to walk to a designated overnight camp site on the northern side. They crossed to the north side of Yarrunga Creek but could not find the camp. 11At about 4:12pm on 23 October the Bureau of Meteorology issued a severe weather advice for the region including Yarrunga Creek warning that heavy rainfall and possible flash flooding were expected in the area overnight and that people should keep away from creeks as they might be swept away. 12The group in which Matthew and Nathan were walking did not arrive at the campsite by 7:00pm on 23 October 1999 and that became known to Mr Morgan and others. 13At 10.11pm on 23 October 1999 the Bureau of Meteorology issued a severe weather advice for the region including Yarrunga Creek warning that heavy rainfall and possible flash flooding was expected in the area overnight and that people should keep away from creeks as they might be swept away. 14A similar warning was issued by the Bureau of Meteorology at about 4am on 24 October 1999. 15In the evening of 23 October and the morning of 24 October Yarrunga Creek catchment received over 300 millimetres of rain. The creek and its tributaries flooded. At about 5am on 24 October the camp began to flood and Mr Morgan instructed those present to pack and be ready to move. By 7:30am they had abandoned the camp leaving no message for Matthew's group. At about the same time Mr Morgan asked one of his subordinates to conduct a search for Matthew's group. Up to that time there had been no notification to any of the authorities including the police, National Parks and Wildlife and emergency services. 16At 8:00am Matthew's group arrived at the camp but, finding no one or no word there, they left to try to find Mr Morgan and the main group of hikers, or to head towards Griffith's farm. 17At about 11:30am the group approached a flooded tributary at Yarrunga Creek which was split into two forks. Each fork had a log crossing. All members of the group successfully crossed the first log crossing but as Nathan was attempting to traverse the second log crossing he was swept away by a wave of floodwater and drowned. Matthew observed all of this happen and heard Nathan call out to him before he finally disappeared. 18Matthew's group was eventually found at about 1:00pm on 24 October. It was only at 2:40pm when another of Mr Morgan's subordinates was informed that Nathan had been lost in the water that triple 0 was dialled. 19Mr Garrett first informed Mr Chaina that Nathan was missing at 3:56pm. He was, at that time, working at the laundry of Wangaratta Hospital. At about 4:23pm, in response to a telephone enquiry by George Chaina, Mr Garrett informed him that Nathan had been separated by water but that he did not know if Nathan had been washed away. 20Mr Chaina said that he was unable to obtain any more information from the School. Accordingly, he flew back to Sydney by chartered aircraft and drove to Glengarry. He arrived at the Glengarry Campus at about 6:00pm and Mrs Chaina arrived at about 8:00pm. 21Nathan's body was found at about 10:55am on 25 October by the Illawarra Rescue Squad.

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The aftermath of Nathan's death 22A large funeral was held at St Mary's Cathedral, Sydney on 29 October 1999. 23An organisation called Solution Focussed Counselling was engaged to assist the Chaina family with their loss and grief. However, that firm ceased their involvement with the family because Mr Chaina's nephew, Danny Arraj who was a lawyer, wrote to them on 11 November 1999 requiring them to sign a confidentiality agreement. The letter (Exhibit 196) acquired some significance in the case as part of the Defendant's claim that the present proceedings have been pursued by the Plaintiffs for motives of vengeance, retribution and punishment of the School. 24The letter relevantly says: We confirm that we re quest your services for the purpose of assisting generally with the investigation into the claim against Scots College beginning at the Moreton National Park on Friday, 12 November 1999. ... We further confirm that all observations, reports, notes, memoranda or any other documentation produced or reported by you in relation to this matter is subject to legal professional privilege. The letter went on to require Solution Focussed Counselling to sign a Deed of Confidentiality which made confidentially and other matters a condition of the provision of their services to the Chainas. The Confidentiality Agreement defined its "Purpose" as being "the investigation of the claim against Scots College". Not unnaturally, Solution Focussed Counselling ceased to be involved. 25The investigation at Moreton National Park was a retracing of what were thought to be the route taken by Nathan, Matthew and the Andrews. Mr Chaina arranged for the walk to be filmed by Arrow Films. This was said to be for Mrs Chaina's benefit because she could not attend. 26An autopsy was conducted in either late October or early November 1999 (so much is evident from Barker Gosling's account - part of Exhibit MMM). The report was not in evidence but there was sufficient other evidence in the present proceedings to conclude that the cause of death was found to be drowning. Mr Chaina did not accept that finding. He said that he obtained an order for Nathan's body to be exhumed (although the body was never buried but kept in a vault) so that a further autopsy could be conducted by a forensic pathologist Mr Chaina had brought over from Cyprus, a Dr Matsakis. Mr Chaina considered that Nathan did not die from drowning but from hypothermia. 27The inquest appears to have commenced in about April 2000 and concluded in about September 2001. There was scant evidence about the course of the hearing by the Coroner but it is clear that an issue at the inquest was the cause of Nathan's death because of Mr Chaina's own view about that matter. Mr and Mrs Chaina had retained Barker Gosling and Mr Garling SC (as his Honour then was) in November 1999. Subsequently, Mr and Mrs Chaina retained Mallesons to act for them at the inquest. The report of the Coroner was not in evidence.

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The pleaded per quod claim 28The per quod claim brought by the Fourth and Fifth Plaintiffs is pleaded in this way: [82] Proton supplies chemical specialty products and systems to the industrial laundry, food processing, food service, health care, hospitality and general industry sectors. Deluxe is a company which holds and develops property and provides finance to the companies owned by the second and third plaintiffs including Proton. [83] The second and third plaintiffs are, and at all times since 28 June 1993 have been, the sole directors and shareholders of Proton. [84] The second and third plaintiffs are, and at all times since 2 December 1986 have been, the sole directors of Deluxe. The third plaintiff is the owner of all but two shares in Deluxe, the remaining shares being held by the second plaintiff and by Joseph Chaina. [85] At all times from 28 June 1993 to date, the second and third plaintiffs have been key employees of Proton and Deluxe, with their personal skills and services being essential to the companies' business success. Particulars The second plaintiff was the production and marketing manager of Proton and Deluxe, and was responsible for research and development, production, and sales. The third plaintiff was the finance and administration manager of Proton and Deluxe and was responsible for all of its accounts, paperwork and payments, budgets and forecasts. [86] By reason of the injuries to the second and third plaintiffs, Proton and Deluxe have lost the benefit of their services as principals, directors and managers of their businesses and have suffered loss per quod servitium amisit. Particulars of Loss Proton has suffered a general decline in business and profits and a reduction in future projected income, as a result of the inability of the second and third plaintiffs to devote their time and personal skills to the business, causing the loss of several customers. Deluxe has suffered a decline in income as a result of the inability of the second and third plaintiff's to devote their time and personal skills to the business, and has had to sell assets as a result. At the time of the injury, Proton had plans to launch several new liquid and powder variants of detergent concentrates with active enzyme. Because of the injuries to the second plaintiff, Proton has been unable to further develop or market the products. Because of the injury to the second plaintiff, Proton has not expanded sales of its "Victory" detergent, launched in early 1999. Prior to October 1999, Proton had completed the development of micro-enzymes technology products, to enhance laundry performance and reduce environmental impacts. Proton and Deluxe have been unable to further research and market this product due to the ill-health of the second plaintiff. In 1999, Proton had developed a guest amenities range (shampoo, conditioner, gel) for hotels, intending to market it through its subsidiary, Jean-Pierre Cosmetics Pty Ltd. The products have never been marketed, because of the second plaintiff's inability to focus on marketing. Prior to the injuries, Proton purchased premises at Lithgow to establish a research and development and training centre, and to lease out part for redevelopment. The site has not been used or redeveloped due to the inability of the second and third plaintiffs to oversee the project. By reason of the third plaintiff's ill-health, Proton has incurred extra bookkeeping expenses. 29The matter was expanded upon in the Statement of Particulars filed on 24 September 2012 where the following appeared: [36] Many of the responsibilities performed by the Second Plaintiff were only able to be performed by the Second Plaintiff. Particulars In his position as the Production and Marketing Manager of Proton and Deluxe, the Second Plaintiff was responsible for research and development, formulating new products, as well as the on-site maintenance of products and equipment formulated and designed by the Second Plaintiff. The Second Plaintiff was also responsible for sales and had direct contact with Proton's clients to help problem-solve technical issues and design tailored products to suit clients' general and specific needs. The Second Plaintiff's intimate knowledge of the products and equipment, as well as his scientific expertise and experience, was a key reason that clients provided their business to Proton. [37] In or around June 1993, a fire destroyed Deluxe's manufacturing plant at Enfield ("the Fire"). The damage caused by the Fire resulted in a reduction in Deluxe's business. Particulars The fire destroyed the plant and manufacturing equipment, the research facility, trading stock, business records (including client lists and financial documentation, and intellectual property including documentation), formulations and specifications of the raw materials used at that time. As a result of the damage caused by the Fire, Deluxe was not able to maintain some contracts and as a result these customers took their business elsewhere. [38] Following the Fire, the Second and Third Plaintiffs proposed to relaunch their business in order to recapture and then improve on the market share that Deluxe had held prior to the Fire. Particulars The existing industrial products were reformulated in preparation for a re-launch into the industrial market ("the Industrial Re-launch") and a number of new product formulas were created by the Plaintiffs in preparation for a launch into the domestic market ("the Domestic Launch"). Proton was created as an entity to facilitate the Industrial Re-launch and the Domestic Launch, with Deluxe moving to its current role as a holding company and finance provider. The following product lines were already being sold by Proton as at October 1999: 1. Challenger Range - targeting industrial laundry clients; 2. Classic Range - targeting commercial housekeeping and kitchen clients; and 3. Quantum Range - targeting food processing clients. The following product lines were to be incorporated into Proton's Industrial Re-launch: 1. Vision Range - targeting housekeeping departments of hotels, hospitals, nursing homes and similar institutions; 2. Spectrum Range - a range of kitchen products targeting hotels, hospitals, restaurants and function centre kitchens; 3. Quantum Range - which was separated into six further categories; Quantum Food Processing, Quantum Dairy, Quantum Abattoir, Quantum Poultry, Quantum Brewery and Quantum Metal Treatment; 4. Orbital Range - floor care products; 5. Challenger Range - targeting large industrial and commercial laundry operations; 6. Challenger Plus Range - which incorporated enzyme technology and targeted large industrial and commercial laundry operations; 7. Victory One Shot - targeting motels and small industrial and commercial laundries; and 8. A guest amenities range for hotels. The following product lines were to be incorporated by Proton in the Domestic Launch: 1. Powder Laundry Detergents; 2. Liquid Laundry Detergents; 3. Automatic Dishwashing; 4. Hand Dishwashing; 5. General Household Cleaners; 6 Toiletries, cosmetic and personal products; and 7. Shampoos and Conditioners. Copies of the formulas developed by the Second Plaintiff have been provided to the Defendants. [39] By reason of the injuries sustained by the Second and Third Plaintiffs resulting from the death of Nathan Chaina, Proton and Deluxe have been deprived of the services of the Second and Third Plaintiffs resulting in Proton and Deluxe suffering loss and damage per quod servitium amisit. Particulars Following the death of Nathan Chaina, the Second Plaintiff has suffered from, and continues to suffer from the injuries and disabilities as outlined in paragraph 4. As outlined in paragraphs 35 and 36, the Second Plaintiff was responsible for a number of key roles within Proton and Deluxe and due to the injuries sustained by the Second Plaintiff following the death of Nathan Chaina, the Second Plaintiff has been unable to work in these roles. Following the death of Nathan Chaina, the Third Plaintiff has suffered from, and continues to suffer from the injuries and disabilities as outlined in paragraph 9. As outlined in paragraph 35, the Third Plaintiff was responsible for a number of key roles within Proton and Deluxe and, due to the difficulties sustained by the Third Plaintiff following the death of Nathan Chaina, the Third Plaintiff has been unable to work in these roles. [40] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Proton was unable to proceed with the Industrial Re-launch or the Domestic Launch. Particulars As particularised in paragraphs 35 and 36, the Second and Third Plaintiffs had key roles in Proton that they were unable to maintain as a result of the injuries they have sustained. The product lines particularised at paragraph 38 contained a variety of new technologies which had been formulated personally by the Second Plaintiff and was previously known only to him. Proton was therefore not able to proceed with the further development of the product lines identified at paragraph 38 without the input of the Second Plaintiff. By reason of the injuries sustained by the Second Plaintiff outlined at paragraph 4, Proton has not been able to expand sales of its established "Victory" detergent line, launched in early 1999. In 1999, Proton had developed a guest amenities range for hotels, which were intended to be marketed through its subsidiary, Jean-Pierre Cosmetics Pty Ltd. The products have never been launched because of the injuries suffered by the Second Plaintiff. Particulars of Damages owed to the Fourth Plaintiff Loss of Profits [41] By reason of the Defendants' breach of the duly of care owed to the Second and Third Plaintiffs, Proton has suffered from loss of profits. Particulars As particularised in paragraphs 35 and 36, the Second and Third Plaintiffs had key roles in Proton that they were unable to maintain as a result of the injuries they have sustained. The loss of the Second and Third Plaintiffs' services has resulted in a substantial decline in Proton's existing business that was in operation as of 1999. Accordingly, Proton claims loss of profits relating to the existing business from 1999 to 30 June 2011 as calculated by the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012, and totalling not less than $3,180,484. Furthermore, Proton claims interest on the loss of profits in the amount of $3,725,087 as calculated in the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012. Loss of Chance for the Industrial Re-launch [42] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Proton has suffered from loss of chance in relation to the inability to proceed with the Industrial Re-launch. Particulars As particularised at paragraph 40, Proton was unable to proceed with the Industrial Re-launch. Accordingly, Proton claims the loss of chance as calculated by the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012, totalling not less than $19,639,031 for the Industrial Re-launch. Furthermore, Proton claims interest on the loss of chance in the amount of $23,001,879 as calculated in the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012. Loss of Chance for the Domestic Launch. [43] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Proton has suffered from loss of chance in respect of its inability to proceed with the Domestic Launch. Particulars As particularised at paragraph 40, Proton was unable to proceed with the Domestic Launch. Accordingly, Proton claims the loss of chance as calculated by the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012, totalling not less than $30,882,873 for the Domestic Launch. Furthermore, Proton claims interest on the loss of chance in the amount of $36,171,037 as calculated in the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012. Costs of hiring substitute employees [44] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Proton has suffered loss resulting from hiring substitute employees in an attempt to mitigate damage to Proton. Particulars By reason of the Second Plaintiffs injuries, Proton has incurred the following extra expenses in attempting to retain employees of a similar level of skill and expertise to the Second Plaintiff: 1. John Childs $11,736.15 2. David Redfern $22,303.88 3. Kane Childs $3,384.45 Total $37,424.48 Costs of book-keeping and consultancy expenses [45] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Proton has suffered costs associated with additional book keeping and consultancy services in an attempt to mitigate damage to Proton. Particulars By reason of the Third Plaintiffs injuries, Proton has incurred extra consultancy expenses from the following consultants: 1. Dr S W Li $6,732 2. Dr Arpad Phillips $4,140 3. Ross Griffith $170,277.90 4. Media Focus Global (Nigel Dique) $60,937.10 5. Ray Palmer $205,760 6. Hugh Grimm $5,253.50 7. Milward Doran $147,453.84 8. Alex Roudenko $243,700 Total $844,254.34 By reason of the Third Plaintiffs injuries, Proton has incurred extra book-keeping expenses from Ms Lilly Sukkar, totalling not less than $503,118.01. Particulars of Damage to the Fifth Plaintiff [46] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Deluxe has suffered from loss of profits. Particulars As particularised in paragraphs 35 and 36 of this Statement, the Second and Third Plaintiffs had key roles in Proton and Deluxe that they were unable to maintain as a result of the injuries they have sustained. The loss of the Second and Third Plaintiffs' services to Proton and Deluxe has resulted in the property located at 19 Broadhurst Rd Ingleburn, which was held by Deluxe, having to be sold. The premature sale of this property has resulted in a loss of profits to Deluxe. Accordingly, Deluxe claims loss of profits as calculated by the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012, and totalling not less than $350,000.

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The course of the proceedings 30It is necessary to say something about the long history of the proceedings and the way the hearing unfolded. This is chiefly because the Plaintiffs commenced to act for themselves in the middle of the hearing. Thereafter, the Plaintiffs made numerous complaints on many occasions about the way the proceedings had been conducted both before and since the hearing commenced, especially in relation to evidence which was not led or had been rejected. The Plaintiffs also complained that the Defendant had deliberately delayed the proceedings. 31Since the proceedings commenced in 2002 the Plaintiffs have been represented by six or more firms of solicitors and many more barristers, both senior and juniour counsel. Ultimately, the Plaintiffs ceased to have any lawyers acting for them and conducted the proceedings themselves. It was never explained why this was so (and probably did not need to be explained) but it gave rise to some considerable problems for the conduct of the case. 32I was informed on a number of occasions that one or more of the firms who had acted retained some of the Plaintiffs' documents, including original statements and/or reports. No application was made to me pursuant to s 728 Legal Profession Act 2004 (NSW) or otherwise in relation to such documents although such an application was foreshadowed though not pursued after the first tranche of the hearing concluded. 33Decisions that had been taken by one or more of the lawyers who acted appeared on some occasions to have been taken without regard to earlier decisions made by other lawyers. Lawyers, especially counsel, who were engaged during 2013 appeared not to be fully briefed, including about prior decisions made in the proceedings. The Plaintiffs, when acting for themselves, did not want to be bound by decisions taken by their previous legal representatives. 34There was, of course, the difficulty arising from the fact that the Plaintiffs were required to present their case with little knowledge or understanding of court procedure and practice, or the rules of evidence. Even if this had been a confined and straightforward case it would have required the Court to provide some assistance to the Plaintiffs. For a case of this size and complexity it made the hearing of the case at times very difficult. It was necessary for me to endeavour to explain procedures and rules of evidence to the Plaintiffs on many occasions, and often the same point over and over again. 35The assistance that the Court and the Plaintiffs received from the lawyers acting for the Defendant, both solicitors and counsel, in that regard must be acknowledged. Copies of documents were willingly provided to the Plaintiffs on numerous occasions when they did not have them available. No complaint was made about the allowances I made for the Plaintiffs being unrepresented and unfamiliar with the legal process. On many occasions the Plaintiffs' requested adjournments for short periods or days to consider and/or prepare matters, and these were never resisted by those acting for the Defendant despite frequent personal abuse being directed to them and their client, and their motives impugned by Mr Chaina. 36Up until August 2009 the Plaintiffs put their case forward on the basis that Mr Chaina was a qualified scientist with a degree in Science and a tertiary qualification in Business. In that regard his evidence was the basis for the assertions in the Plaintiffs' case that he had developed a number of product ranges which were superior to anything else on the market at the time in 1999. 37After being pressed for some time by the Defendant's lawyers for proof of Mr Chaina's qualifications Mr Chaina finally admitted in August 2009 that he did not have the qualifications that he had claimed. This led to a complete re-shaping of the Plaintiffs' case. The detail of this is contained in the judgment of Hoeben J (as his Honour then was), the judge then case-managing the proceedings, in Chaina v The Presbyterian Church (NSW) Property Trust (No 3) [2009] NSWSC 1243. I set out the relevant passages in Chaina v The Presbyterian Church (NSW) Property Trust (No 16) [2013] NSWSC 1494 at [136]. 38In short, this admission resulted in the Plaintiffs retaining five chemical experts to attest to the quality of the products Mr Chaina claimed to have developed. Other experts, particularly in the marketing and financial area, had previously provided reports on the market share that the product ranges might achieve and the consequential level of sales that would be made based upon the assumption of the superiority of the products. That assumption was made by reason of Mr Chaina's evidence to that effect in the Statements he had provided. The subsequently obtained reports from the chemical experts in turn resulted in a significant development in the case in a manner that will be explained a little later. 39The admission by Mr Chaina also brought about another change in the way the case was presented. As Hoeben J noted Chaina (No 3) at [26], the Plaintiffs, instead of relying simply on Mr Chaina's evidence, wanted to rely on the observations of approximately 40 laypersons regarding the products. It was suggested that the Plaintiffs would be calling up to 140 witnesses in total. Both by reason of the extra lay evidence and the expert chemical evidence the scope of the case was considerably expanded. 40On 6 June 2012 Hoeben J made two significant directions: 9. Plaintiffs are to identify with precision the witness statements which are to be tendered by them at the hearing commencing 4 March 2013 on or before 4pm 27 July 2012. 10. Plaintiffs are to make any further concession in accordance with the Defendants' Schedules of Objections as to admissibility in relation to the witness statements of George and Rita Chaina and the lay witnesses on or before 4pm 27 July 2012. 41On 27 July 2012 Berrigan Doube (then the solicitors for the Plaintiffs) wrote to Curwoods (the Defendant's solicitors) listing the statements to be tendered at the hearing. The list identified 38 lay witnesses apart from Mr and Mrs Chaina. Hoeben J had also directed that by 19 October 2012 the Plaintiffs were to notify the Defendant of the order of lay witnesses. This was done by a letter of Berrigan Doube to Curwoods of 26 October 2012. Apart from Mr and Mrs Chaina 35 of those witnesses were identified. 42At some time, pursuant to order 10 made by Hoeben J, the Plaintiffs indicated portions of the lay statements, including those of Mr and Mrs Chaina, that were not to be read. 43At the time I commenced to case-manage the proceedings in November 2012 the Plaintiffs' counsel briefed by Berrigan Doube were David Baran and Luke Fermanis. An application was made by the Defendant under s 192A Evidence Act 1995 (NSW) to rule on the objections to evidence of the lay witnesses that had not been conceded by the Plaintiffs. I delivered judgment on that application on 7 December 2012: Chaina v The Presbyterian Church (NSW) Property Trust (No 6) [2012] NSWSC 1476. A significant aspect of that judgment was my ruling that the evidence by laypersons of their opinion of one or more of the products was not admissible. 44The Defendant thereafter made a further application under s 192A with regard to the Statements of Mr and Mrs Chaina. I delivered two judgments in that regard: Chaina v The Presbyterian Church (NSW) Property Trust (No. 7) [2013] NSWSC 139 and Chaina v The Presbyterian Church (NSW) Property Trust (No 8)[2012] NSWSC 187. A significant aspect of those two judgments was my determination that it had not been demonstrated that George Chaina was an expert. Evidence that I regarded as expert opinion by him was rejected but with leave for its reinstatement if it was later shown that he had sufficient experience to be regarded as an expert despite a lack of formal qualifications. 45During 2012 the matter had been fixed for hearing on 4 March 2013 for what was regarded as the first tranche of the hearing. It was thought that a period of six weeks would be sufficient to deal with the lay evidence including the evidence of Mr and Mrs Chaina. Shortly before the commencement of the hearing Mr Maconachie QC and Mr Sharpe of Counsel were briefed in place of Messrs Baran and Fermanis. 46The first tranche of the case was taken up entirely with the evidence, principally cross-examination, of Mr and Mrs Chaina. Some significant things happened during that tranche of the hearing where Mr Maconachie QC and Mr Sharpe appeared. First, what was tendered as the evidence in chief of Mr and Mrs Chaina was only the text of the various Statements signed by them between 2005 and 2012. The annexures to these statements were never tendered as the transcript makes clear. In the case of Mr Chaina's Statement of 8 February 2010 (Exhibit C1) the annexures, in any event, bore no relationship to what appeared in the text of the Statement. The Plaintiffs' solicitors subsequently provided a schedule cross-referencing paragraphs of the Statement to the documents that were annexed, in case reference to them was needed. 47Secondly, despite my rulings that rejected expert opinion evidence from Mr Chaina in his Statements no attempt was made by counsel representing the Plaintiffs to have that evidence re-admitted nor to have Mr Chaina accepted as an expert witness. Significantly, on the second day of the hearing, and after the various Statements of Mr Chaina were tendered subject to the rulings I had made, Mr Maconachie tendered a new Statement of Mr Chaina which became Exhibit E. No attempt was made in that Statement to advance Mr Chaina's case as an expert witness. Nor was any attempt made in re-examination to do so, notwithstanding a concerted attack on Mr Chaina in cross-examination in relation to his claimed qualifications, experience and his credit generally. 48On 8 April 2013 (the 3rd last day of the first tranche) Mr Maconachie said this (T 1440): Neither Mr Sharpe nor I will be in the case after Friday lunchtime for reasons that are of no concern to anybody except myself, Mr Sharpe, our instructing solicitors and Mr and Mrs Chaina. ... There is another and very important aspect of the case on which some work has been done, and I might say not only by myself and Mr Sharpe but by the second and third plaintiffs, and that is revisiting an application to revisit some of the evidence in statements that has been ruled inadmissible by your Honour. It's a bigger task than I thought it would be. It will require an examination of not only that evidence and the manner in which the second and third plaintiffs have been cross-examined, but also your Honour's reasons, the submissions that were put forward in support of evidence, and the like, and also some of the interlocutory steps that were had before, amongst others and principally, Hoeben J. It's highly unlikely, though I hoped that I would be able to deal with it by today, that it would be able to be dealt with even by Friday. And the second and third plaintiffs see it as a very important aspect of the case; and I agree with them. Accordingly, even though, in the best of all possible worlds, it would be preferable to have that dealt with before the end of this week, first, the job is larger than I hoped it would be and, secondly, and I think more importantly, someone else, some other people, some other barristers, will have the obligation of putting the case forward after Friday. They should have the opportunity, and the second and third plaintiffs and the corporate plaintiffs should have the opportunity, of those people putting their stamp, as it were, upon that lay evidence and any application to revisit your Honour's rulings, having regard to the way in which Mr Stitt - and I make no criticism, of course - has cross-examined the second and third plaintiffs. No specific reference was made then or thereafter to the matter of Mr Chaina's expertise. 49Between the end of the first tranche of hearing and the commencement of the second tranche on 15 July 2013 the Plaintiffs' counsel ceased their involvement. Thereafter, their solicitors also ceased to act, although I had earlier been told that they would continue to act notwithstanding the end of Mr Maconachie's and Mr Sharpe's involvement. Between the two tranches two firms of solicitors came onto and went off the record. (It was at this time that an application under s 728 LPA was foreshadowed but not pursued.) The first firm was Blackstone Waterhouse. The second was Champion Legal. Each firm retained counsel. 50On 6 May 2013 I made the following directions by consent: i. That the Plaintiffs are to file and serve a schedule by witness name, statement date and paragraph number of the evidence in relation to any advance rulings made by the Court on 7 December 2012 which they now seek to be reversed, such schedule to be filed and served on or before 31 May 2013. ii. That the Plaintiffs are to notify the Defendant of any witness listed in the Plaintiffs' proposed order of witnesses contained in the letter dated 26 October 2012 from Berrigan Doube to Curwoods Lawyers upon whom they no longer rely upon on or before 31 May 2013, iii. That the Plaintiffs provide to the Defendant a list of the order of call of their proposed expert witnesses on or before 31 May 2013. 51These directions were not complied with. At a Directions Hearing on 7 June 2013 I was informed that Blackstone Waterhouse were ceasing to act. I made the following directions (inter alia): 4. Plaintiffs to file and serve a Schedule detailing particular parts of the evidence which was rejected in accordance with Davies J's judgment of 7 December 2012 and to state the legal basis for its reinstatement - such Schedule to be filed and served by 21 June 2013. 5. Defendant to provide the Court with response to that Schedule by 5 July 2013. 6. Plaintiffs to file and serve a Second Schedule re all lay witnesses that they wish to call, identifying what factual matters each of those witnesses is being called to prove - such Schedule to be filed and served by 28 June 2013. 52At a Directions Hearing on 21 June 2013 Mr Glissan QC and Mr G B Evans of Counsel announced their appearance. They were briefed by Champion Legal. The Schedule, due by 21 June, had not been served. I made the following directions (inter alia): 3. The plaintiffs file and serve a schedule by 28 June 2013 of those parts of the evidence rejected by Justice Davies in his judgment of 7 December 2012 which they seek to have restored and in each case set out the legal basis on which they seek to do so. 4. The plaintiff are to file and serve a schedule, by 5 July 2013 of the lay witnesses they intend to call, identifying all factual matters which are sought to be proven by such witnesses. 5. The defendant is to respond to the schedule in order 2 by 12 July 2013, identifying which factual matters are in issue. 53The Schedule of lay witnesses whom the Plaintiffs intended to call was served on 5 July 2013. It consisted of 20 witnesses. The last two on the list were Michael Jerogin and Paul Robinson. These persons were not on the lists provided by Berrigan Doube referred to at [41] above. I considered that it was inappropriate to allow new legal representatives to re-visit decisions which had been taken earlier and upon which the Defendant had relied. Their inclusion was, in any event, inconsistent with the second order I made on 6 May 2013 ([50] above). Accordingly, I disallowed their evidence. 54Overall, this Schedule did not comply with the order made on 21 June 2013 in that it did not "identify all factual matters which are sought to be proven by such witnesses". On 10 July 2013 Hoeben J released the Defendant from the obligation to respond to the Schedule and noted that junior counsel for the Plaintiffs would attempt to provide an amended Schedule that complied with the order. 55No Schedule in accordance with order 3 made on 21 June 2013 ([52] above) was ever served. 56The second tranche resumed on 15 July. On that day Mr Glissan QC appeared as a matter of courtesy to say that his and Mr Evans' instructions had been withdrawn. In addition, I was informed that the solicitors retained had been terminated. The Plaintiffs thereafter (except for one discrete period that I will mention) conducted the proceedings themselves. They asked for, and were granted permission for, four different McKenzie friends from time to time. One of these persons was their son Jean-Pierre, the Fourth Plaintiff, who was on the roll as an Australian lawyer but who had ceased to hold a practising certificate. 57At the conclusion of the lay evidence and the evidence of the psychiatrists (except Dr Phillips who was then unavailable) an application was made by the Defendant for a hearing pursuant to s 192A Evidence Act in respect of the Plaintiffs' expert evidence (not including the psychiatric evidence). I heard that application and gave judgment where I determined that some but not all of the Plaintiffs' expert evidence should be rejected: Chaina v The Presbyterian Church (NSW) Property Trust (No. 13) [2013] NSWSC 1057. 58Thereafter, Mr Humphreys, an accountant retained by the Plaintiffs, was cross-examined, followed by evidence in reply from four witnesses. Matters leading up to the evidence in reply are set out in my judgment in Chaina v The Presbyterian Church (NSW) Property Trust & Ors (No. 15) [2013] 1178. 59Mr Chaina then commenced to give evidence in reply but the first question put to him by Mrs Chaina concerning Exhibit 47 was objected to and rejected on the basis that Mr Maconachie had re-examined Mr Chaina on that document. Mrs Chaina then asked for, and was granted, time overnight to consider what other evidence in reply she would lead from Mr Chaina. In the events which happened, no evidence in reply was given by either Mr or Mrs Chaina. 60On 26 August I asked the parties to give consideration to the future conduct of the case in the light of my judgment in Chaina (No 13). The consideration arose particularly because, as I noted in that judgment, argument had not been addressed to a number of reports from experts other than those whose reports I had rejected. It was necessary to determine at some point what reports, or parts of the reports, survived the determinations in Chaina (No 13). 61On Tuesday 3 September the Defendant filed in court a Notice of Motion which was ultimately dealt with in my judgment in Chaina v The Presbyterian Church (NSW) Property Trust (No. 16) [2013] 1494. The Defendant asked that this motion be heard before the second tranche concluded so that the parties would know what experts would be giving evidence in the third tranche, by then fixed for five to six weeks commencing 8 October 2013. The Plaintiffs said that they might wish to file their own motion to enable their experts to recast their reports. I indicated a desire to hear the Defendant's motion at the end of the following week. 62On 9 September 2013, just before Dr Phillips was due to give evidence, Mr Dawson of counsel appeared for the Plaintiffs. He said he had been briefed to provide a "roadmap as to what their options might be from this point forward". He asked for a period of "four to eight weeks" for the Plaintiffs to consider the Defendant's motion. In the circumstances I determined that the Defendant's motion would be heard on the first day of the third tranche, 8 October. Any motion by the Plaintiffs arising from Chaina (No 13) was to be filed and served by 2 October and would also be heard on that date. 63On 8 October and thereafter Mr Dawson appeared for the Plaintiffs to argue both motions. That took place on 8, 9, 14, 15 and 16 October. I gave judgment on 25 October: Chaina (No 16). Apart from appearing to argue the costs of the motions on 30 October 2013 Mr Dawson then ceased to appear for the Plaintiffs and they continued to conduct the case themselves. 64In Chaina (No 16) I determined in substance that the claim in respect to the re-launch of the industrial products should go forward but I re-affirmed my determination in Chaina (No 13) that the claim in respect of the launch of the domestic products should not. However, that did not mean that matters concerning the domestic launch were necessarily irrelevant to a consideration of the likelihood of the industrial products re-launch being successful. My determination was not that the domestic launch would not have proceeded in any event but only that the Plaintiffs could not make a claim in respect of their inability to proceed with it, if that was otherwise established. 65Finally, it should be noted that I was informed by the Plaintiffs at the time of final addresses that they had been assisted by three persons, apparently law students, with the preparation of the Plaintiffs' written submissions. Those written submissions were helpful in enabling me to understand more clearly the way the Plaintiffs put their case. I was also considerably assisted by the Defendant's written and oral submissions.

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The per quod amisit servitium causes of action 5. The Plaintiffs Proton and Deluxe (the Fourth and Fifth Plaintiffs respectively) sue the Defendant per quod amisit servitium in relation to the injuries and disabilities of George and Rita Chaina (the Second and Third Plaintiffs). 6. The Defendant's Further Amended Defence to the Amended Statement of Claim filed in 2006 puts in issue the causes of action including their availability as a matter of fact and as a matter of law and quantum. 7. As provided by Tame v NSW (2002) 211 CLR 137 at [193], Proton and Deluxe must at least establish that George and Rita Chaina suffer from a recognisable psychiatric injury caused by the conduct of the Defendant. Further, depending upon the applicability of the CLA, Proton and Deluxe may in fact have to establish George and Rita Chaina suffer from a recognised psychiatric injury. 8. In particular the issues are: (a) Whether George Chaina and Rita Chaina were "servants" of Proton for the purposes of the causes of action. (b) Whether George and Rita Chaina were "servants" of Deluxe for the purposes of the cause of action. (c) The cause, nature and extent of George Chaina's and Rita Chaina's alleged injuries and disabilities, if any. (d) Whether the death: (i) caused the alleged injuries and/or disabilities; (ii) accelerated pre-existing conditions; (iii) exacerbated pre-existing conditions. (e) What was the mental and physical state of George and Rita Chaina pre-death? In particular, whether their existing condition if any would have occurred in any event despite the death. (f) What is the current and future mental and physical states of George and Rita Chaina? (g) Whether Proton has suffered a recoverable loss of the kinds alleged, namely: (i) loss of profits from Proton's existing business, (ii) a loss of opportunity to relaunch Proton's industrial business with new products and (iii) a loss of opportunity to launch a new domestic business with new products or is it limited to claims for additional wages and expenses (and if so in what amount) paid out by reason of the injuries and disabilities, if any, of George and Rita Chaina. (h) Whether Deluxe has suffered a recoverable loss of the kind alleged, namely: (i) Deluxe's damages for the alleged early sale of a property (which the Defendant says is too remote) or is it limited its claims (sic), if any, for additional wages and expenses (and if so in what amount) paid out by reason of the injuries and disabilities, if any, of George and Rita Chaina. 9. In particular, in regard to the claims of losses of profits and loss of a chance the issues include, inter alia: (a) The expertise and skills of George Chaina including his alleged professional qualifications and work history and, in particular, whether he was a skilled chemist/chemical engineer. Similarly Rita Chaina's expertise and skills are in issue. (b) Whether at the relevant time the Plaintiffs had the alleged formulae of the products which constitute the basis of the claim for damages. (c) Whether at the relevant time the Plaintiffs had the alleged products which constitute the basis of the claim for damages. (d) Whether the alleged products had the asserted qualities and performance characteristics. (e) What would have been the costs of manufacture of the subject products in the quantities alleged by the Plaintiffs? (f) Whether the Plaintiffs had adequate plant and equipment or could have obtained adequate plant and equipment to test, manufacture, package and distribute all of the alleged products including whether Lithgow was a suitable site for such activities. (g) Whether the Plaintiffs had or would have had sufficient employees to conduct the necessary manufacturing and distributing processes. (h) Whether the alleged markets existed including the willingness of retail outlets including Coles and Woolworths and other retailers or users of domestic and industrial products to purchase the products in question in the volumes alleged. (i) Whether the Plaintiffs would have achieved the market shares as alleged in both the relevant industrial and domestic markets. (j) The extent of the distribution and marketing costs which would have been necessary in order to achieve such market shares. (k) The time periods over which such alleged market shares would or could have been achieved. (I) The availability and necessity for finance sufficient to facilitate and permit the launch, manufacture and distribution of the relevant industrial and domestic products to achieve such market shares. (m) The reaction of competitors in order to protect their existing market shares against the intrusion of the Plaintiffs' products. (n) The impact of government regulation particularly in regard to the domestic products but also in relation to the sites, plant and equipment and whether such regulation would have prevented the launch or sale of all or any of such alleged products. 10. Further, the Defendant alleges that Proton and Deluxe have failed to mitigate their losses, if any. 11. Whether it was reasonably foreseeable by the Defendant that the Second and Third Plaintiffs were irreplaceable by the Corporate Plaintiffs (Barclay v Penberthy). 12. Quantum generally, particularly whether the claimed losses fall within the principles of Barclay v Penberthy [2012] HCA 40. 13. Whether the claim for loss of value of the shares in the Corporate Plaintiff by either of the Second and Third Plaintiffs is recoverable (see Gould v Vaggelas). 68Quite clearly, some of the sub-paragraphs of paragraph 9 have fallen away as a result of my decisions in Chaina (No. 13) and Chaina (No. 16).

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Deluxe and Proton 69This section outlines an historical summary of the corporate Plaintiffs which was provided by Mr Chaina in his statement of 2 September 2005 (exhibit A1) supplemented by some other material. This Statement of 2 September 2005 was made before Mr Chaina's acknowledgement that he had no qualifications as he had asserted. Because there are very serious concerns about Mr Chaina's credit (discussed in the next section of this judgment), I am not making findings of fact in relation to this summary. It is provided to give a general background to the position of the Plaintiffs at the time of Nathan's death. The detail of it may not be accurate but any such inaccuracy does not significantly impinge on the outcome of the case. 70Deluxe was founded in 1982 to develop products for a number of markets including the industrial cleaning market with particular emphasis on laundry and hospitality, and the food processing, dairy, abattoir and poultry markets. Sales commenced in approximately 1984. (In a document entitled "Deluxe Chemicals Pty Ltd, A Company Profile of 1993, it was said that the company had been founded by Mr and Mrs Chaina in 1978. In Mr Chaina's Statement dated 8 February 2012 he said that he set up the company in 1984. He also said that he met Mrs Chaina in the early 1980s. 71In about 1985 Deluxe purchased a three storey factory at Enfield to produce products which at that time included detergents and disinfectants. Mr Chaina set up a research and control laboratory, a liquid manufacturing plant and a powder plant. 72In the late 1980s or early 1990s he developed a manufacturing procedure and safety procedure, as well as procedures for quality control, testing of raw materials and finished product. 73In about late 1992 Mr Chaina redesigned the plant at the Enfield factory to meet increased customer demands. The redesign incorporated apparatus specifically designed for manufacturing cleaning products containing enzymes. 74In 1987 Deluxe bought a vacant block of land at 19 Broadhurst Road, Ingleburn. 75In the late 1980s Mr Chaina, with the assistance of his wife, wrote a number of manuals for both internal and client training use including a manual for the training of laundry personnel, a manual describing procedures for determining laundry performance and productivity, a house keeping training manual for the training of hotel personnel and a manual to train food processing personnel. 76In June 1993 a fire destroyed Deluxe's manufacturing plant in Enfield. It destroyed plant and equipment, the trading stock, business records including most of the financial records and intellectual property including documentation formulations and specifications to each raw material. It should be noted that in his Statement of 8 February 2010 Mr Chaina said that prior to the fire there was a burglary at the plant at Enfield where all of the computers and financial records were stolen. 77An insurance dispute arose in relation to the fire and proceedings were commenced in this Court with allegations of fraud and arson being made against the insured. These proceedings ultimately settled. The fire and the proceedings took a toll on both Mr and Mrs Chaina's health but the business continued and expanded somewhat in the years following the fire. 78Within a couple of months of the fire Deluxe leased a factory in the same street at Enfield. It was from these premises that the manufacture of products and their distribution were undertaken. Approximately 12 months after the fire Deluxe leased a factory at Payten Avenue, Roselands where production continued until about September 1999 when Deluxe moved to a larger rented factory at Broadhurst Street, Ingleburn. Its relationship to the property Deluxe had purchased at 19 Broadhurst Road nor what this latter property was used for were not explained. 79Between 1993 and 1995 Mr Chaina was able to reconstruct some of the product formulations and procedures. 80The financial records show that the busioness traded under Deluxe until the fire. From 1994 to 1998 it traded under another of the Chainas' companies, Jean Pierre Cosmetics Pty Ltd, and from 1998 it traded under the name Proton Technology. There was no explanation for the change to Jean Pierre but the change to Proton was a contentious issue in the case to which I will return later. 81The Plaintiffs claim that Deluxe had a number of significant clients with substantial laundries. These included a number of leading hotels, laundries, hospitals and the Northern Territory Linen Service. Total Care entered into a contract with Proton in 1996 to 1997 and renewed that contract in 1999 for a further six years. 82In 1998 Deluxe brought the former TAFE college at Lithgow located on the corner of Mort and Cook Streets. Mr Chaina intended to set up a research laboratory there as well as a facility where Deluxe could conduct training for industrial laundry, food and beverage, hospitality and food processing personnel. 83Also in 1998 Mr Chaina located a property at 18-20 Donald Street, Lithgow as a site for a large manufacturing plant. The property was said to be particularly suitable as it had a spray tower with a large amount of auxiliary equipment as well as a rail link connected to the premises. 84Between 1984 and 1993 Mr Chaina claims to have developed, and Deluxe launched, several new product ranges for the industrial laundry, kitchen, housekeeping and food processing markets, including: (a) Challenger System for the industrial laundry market; (b) Challenger Plus System (the Enzyme System) also for the industrial laundry market; (c) Classic range of products for commercial housekeeping; (d) Quantum range of products for food processing; (e) Jean Pierre Cosmetics range of guest amenities; and (f) Nappiwash. 85 After the fire from 1993 to October 1999 Deluxe continued to supply Challenger System and Challenger Plus System products. Commercial housekeeping products were also supplied in this period but, progressively, under the name 'Vision' rather than 'Classic'. Food processing products were supplied under 'Quantum'. The 'Jean-Pierre' products were not supplied after about 1996. The Nappiwash product did not continue after the fire. From about mid 1999 Proton commenced supplying floor cleaning products under the name 'Orbital' and car cleaning products under the name 'Classic'. In about 1998 Proton commenced supplying food and beverage cleaning products under the 'Spectrum' name. 86The Plaintiffs claim that in order to recapture Deluxe's market share lost after the fire and to acquire an increased market share, Mr Chaina proposed a major relaunch of the industrial business. He said that by October 1999 he was almost ready to relaunch the industrial business. 87Additonally, after the fire Mr Chaina decided to take steps to supply the domestic market with a full range of laundry and other household cleaning products. In the period 1995 to 1999 he formulated a number of cleaning products for use in the domestic market. 88He said that by October 1999 he had purchased a number of items of equipment necessary to produce domestic products. That equipment was located at the Ingleburn site. 89In about October 1995 Deluxe engaged Creative Campaigns Pty Ltd to assist with the marketing strategy for the relaunch of the industrial business. In about mid 1999 Danny Arraj was engaged to assist in the domestic product launch. 90In about October 1998 Proton retained Mr Rodger Morton of Morton Design to design a new corporate identity and branding for Proton as well as labelling and packaging. The Plaintiffs say that by mid 1999 the corporate and product image had been developed. 91In about August 1999 Proton hired Professor Ross Griffith, an expert in textiles, to assess and endorse the domestic products and to help with launching the products by being part of the advertising campaign. 92In about September 1999 Mr and Mrs Chaina consulted Mr Derick Frere, a former director of Saatchi & Saatchi, who was responsible for marketing Sanatorium products, to help in launching Proton's products. Mr Chaina's proposal was to advertise with a comprehensive full national launch with significant levels of television advertising. 93Mr Chaina appointed Mr Arraj to assist him in capital fundraising. In about August or September 1999 Mr and Mrs Chaina prepared a document called "Investment Opportunity" which was a document about the company and its range of products, and how the Plaintiffs planned to launch them, for the purpose of capital raising. 94To help source the funds contact was made with Arthur Andersen. However, that firm was not prepared to sign a confidentiality agreement so those discussions went no further. 95Thereafter, Mr Chaina instructed Mr Arraj to contact Price Waterhouse Coopers and the John Hewson Group. Price Waterhouse Coopers first identified the Pratt Group as a potential investor but Mr Chaina said that the Pratt Group was unacceptable to him because he was aware of the government's concerns about environmental problems caused by cardboard and plastic waste disposal, a matter related to the Pratt Group's core business. Mr Chaina said that Price Waterhouse Coopers were continuing to identify sources of funding in October 1999. 96In about September 1999 Mr Arraj contacted the John Hewson Group and requested a meeting. However, the Plaintiffs' presentation to them never eventuated because of Nathan's death. 97A further difficulty ensued in about 2001 because there was said to be a break-in at the Lithgow premises. It was said that certain things were stolen during the break-in, including records and papers of Mr Chaina that would otherwise have been used to support the present claims. 98Because the main claims of Deluxe and Proton were based on the proposed launch of the industrial and domestic products the outcome of the per quod claims relied to a significant extent on acceptance of the evidence of Mr Chaina. It is necessary, therefore, to form a view about his honesty and reliability. 99However, before doing so it is necessary to mention a few other matters. The case was opened on the basis that Mr Chaina had between 1989 and 1992 developed a laundry detergent formulation that enabled two types of enzymes to be stabilised in liquid form for extended periods. That seemed to be the basis of the development of the business by Deluxe in that period. There was a redesign of Deluxe's plant at Enfield with some $200,000 being spent on it. The business was expanding, staff increasing and its business opportunities increased. 100Mr Chaina claimed that in the period 1995 to 1999 he developed a number of formulae which were to be used to create new products that were to form the basis of the new launch of the company intended for early 2000 had there not been the intervention of the tragedy involving Nathan.

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(1) Mr Chaina 101For the reasons which follow I found the evidence of Mr Chaina to be very unreliable. I cannot and do not accept him as a witness of truth and even where I consider he was trying to tell the truth, his evidence cannot be relied upon unless corroborated by objective evidence. 102There is great deal of material to be considered in this regard. Mr Chaina was cross-examined over a three week period. He found it difficult to answer questions either by agreeing, disagreeing or saying that he could not remember or did not know (most of the cross-examiner's questions would have allowed for those answers). He frequently insisted on providing explanations or justifications for his actions or inactions. On many occasions he would at first deny what was put to him or suggest that his wife should be asked about it but, when pressed, would ultimately agree with what was being put. 103Almost every day he needed to have extra breaks out of the witness box, some of which appeared to be genuine, although on a few occasions the need seemed to arise because of difficulties he was under being required to answer particular questions. He frequently asked for questions to be repeated, saying that he was having difficulties concentrating. However, on many occasions the lack of concentration appeared to arise from the fact that he was trying to think ahead in respect of the cross-examiner's questions or because he was trying to think of how something might be explained when it was inevitably put to him. 104He had a fixed and almost delusional view about himself, his own abilities and expertise and about the success and reputation of his companies in the face of strong evidence to the contrary. As it transpired some of this was consistent with psychiatric diagnoses made by all of the psychiatrists who assessed him. 105This impression was re-affirmed throughout the time that the Plaintiffs were unrepresented. Once Mr Chaina had a belief about some matter it was almost impossible to shift, alter or modify that belief. For example, he seemed to think that if a document was "in discovery" (as he called it) it was in evidence. My repeated statements made to him to the contrary never altered that belief. He did not accept that Hoeben J made the costs order against him in 2009 because the whole basis of the Plaintiffs' case changed as a result of his acknowledgement that he had no qualifications. 106During the course of the Plaintiffs' submissions Mrs Chaina said this about Mr Chaina's false assertions of his qualifications (T 4225): And sometimes when you say to yourself, I - you know, if I say to myself I've got blond hair, blond hair, maybe after 20 years you start to believe you have got blond hair. You know. And maybe that's - that - I'm not trying to - but I just feel that sometimes when you say something you start to believe it if you say it often enough and everybody else around you starts to believe it. To the extent that Mr Chaina was not being deliberately dishonest in his evidence, that statement of Mrs Chaina's seems to provide an explanation for most of the remainder of his evidence. Indeed, the statement seems to explain a good deal of Mrs Chaina's evidence also. 107I regret to say, however, that generally I found Mr Chaina to be dishonest. He said whatever he believed would help him to win this case and obtain very substantial damages. This was at least partly motivated by his desire for vengeance against the Defendant. I accept that in some respects he has come to believe that certain things are true when that is not the case. This is particularly so in relation to his health history and his abilities as a chemist. Whatever the explanation, his evidence was entirely unreliable. 108It should also be noted that on a large number of occasions during the first tranche of the hearing Senior Counsel for the Plaintiffs requested the granting of certificates under s 128 Evidence Act to both Mr and Mrs Chaina in respect to aspects of their evidence. I agreed to those requests. 109I now turn to consider individual matters regarding Mr Chaina.

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(a) His qualifications 110These proceedings commenced in 2002. Mr Chaina's first statement was dated 2 September 2005. In it he claimed to have a Bachelor of Science from the University of New South Wales completed in 1972. He also claimed to have completed a Business and Marketing Course at the Institute of Technology in 1975. Both of these matters were entirely false as Mr Chaina admitted. They were lies that he had perpetuated, as he said, for about 40 years. 111Mr Chaina also claimed to have worked as a scientific analyst at the University of New South Wales at its Schools of Organic Chemistry, Textiles, Ceramics, Food and Technology and Metallurgy. When it was put to him that this was false he answered in a way that became familiar during his cross-examination: "yes and no". The reason he wished to maintain that it was not entirely untrue was, he said, because he was doing some consulting for a client with or at the University of New South Wales. He claimed to have worked at the University in that consulting capacity. 112He also said in his statement of 2 September 2005: During 1969 and 1970 while I was studying for my Bachelor of Science, I was a research chemist assisting the chief chemist for Vegetable Oils Pty Ltd which was a manufacturer of margarine and other food products. He admitted that that was a lie in two respects. First, he was not studying for a Bachelor of Science. Secondly, he was not a research chemist assisting the chief chemist for Vegetable Oils. His explanation for saying these things was that it was part of a marketing tool. In truth, he was simply a laboratory assistant assisting the chief chemist. 113These lies concerning his qualifications and experience were part of his sworn evidence in proceedings before this Court when he made a claim on the insurance policy in respect of the 1993 fire. 114In addition, Mr Chaina put forward a Curriculum Vitae which contained other statements that he admitted were false. First, the Curriculum Vitae said under the heading "Professional Experience" that he worked at Proctor & Gamble between 1974 and 1981. He admitted that that was false. Secondly, it asserted that he was a member of the Chemical Institution from 1970 to 1980. He admitted that that was false. Thirdly, it asserted that he was the laboratory manager at Burroughs Wellcome Ltd between 1973 and 1974. That statement was false. Fourthly, it asserted that he was the laboratory manager at Nabalco Ltd between 1971 and 1973. That statement was false. 115He claimed that Proctor & Gamble had cherry-picked him to go to work for them in New York. He admitted that this was also a lie but said that he lied because he was trying to market himself. He said that when he came back from New York he was engaged lecturing at the University. That, he admitted, was also false. 116Although he said that the purpose of the lies he told about his qualifications and experience was for marketing, not only were some of these lies contained in affidavits in court proceedings but were told to psychiatrists who examined him for the purposes of these proceedings. Accordingly, he compounded the lies by giving false motivations for them. 117He admitted telling a number of lies to Dr Waters, a psychiatrist who had been retained by the Plaintiffs. (Dr Waters was ultimately not relied upon by the Plaintiffs.) These were largely the lies mentioned above concerning his qualifications and work history. It was put to Mr Chaina that he told lies to Dr Waters for the purposes of trying to improve the claim for damages. He denied that proposition and said he was too traumatised for that even to enter his mind. I do not believe him when he says that. On many occasions he resorted to the statement that he was too traumatised after the death of his son to be able to do things, or remember things, or think clearly about things. There is no doubt that he was traumatised but it is also clear that Mr Chaina's conduct demonstrated clearly that he was not too traumatised to be able to do many things, including conduct large amounts of litigation and conduct his own business. 118He claimed in the witness box that he had come to the view that telling lies was not to his advantage,. He had come to that view as a result of being questioned about the lies he had told on the first day that he was in the witness box. Nothing in his evidence gave me any justification for thinking that he had come to a realisation that telling lies was not to his advantage. In fact, the impression I gained was that he would say anything to improve the claim he was making. 119The statements about his qualifications had been relied upon and put forward by him on many occasions over the years including in other Court proceedings. For example, in proceedings the Plaintiffs brought against their former solicitors, Mallesons Stephen Jaques, Mr Chaina claimed not only to have the two qualifications mentioned from UNSW and the Institute of Technology but also another "Formal Qualification" being "CSIRO training, Atomic Absorbtion Technology, University of Melbourne. He admitted that that was false. 120In proceedings involving Central Coast Area Health Service Mr Chaina swore an affidavit for Deluxe where he again said that he had a Bachelor of Science (Applied Chemistry) degree. He said this was to market himself (T625-626). He told the lie because he thought it would be to his advantage (T627). 121It seems apparent that by reason of the false qualifications he obtained employment with various companies, employment that clearly would not have been obtained had the true position been disclosed. Nevertheless, the fact that he worked in some positions enabled him to acquire knowledge and a measure of expertise in relation to chemical products. 122The qualifications lie was further perpetuated because when the Defendant's solicitors requested proof of his qualifications he instructed his then solicitors, McLachlan Thorpe, to write to the Defendant's solicitors saying that the qualifications had been burnt in the factory fire in 1993. 123Although Mr Chaina denied that he told these lies about his qualifications and experience for financial advantage I do not believe him. He gave various explanations for falsifying his qualifications, the chief of which was that it was a marketing tool, that they were white lies from which no one was hurt, and because he considers that he is as well, or better, qualified than a person with those formal qualifications. 124I do not accept that financial advantage was not part of his motivation for telling these lies because he included the lies in two particular documents that were put forward specifically for the purpose of obtaining a financial advantage. The first of these was a document called "Investment Opportunity Proton Technology" (Ex 2). Its purpose, as he agreed, was for inviting potential investors to invest in Proton Technology Pty Ltd. It was not dated but its reference to an intention to market domestic products means that its provenance is in the 1995 - 1999 period. 125Mr Chaina endeavoured to distance himself from this document by saying he had nothing to do with it and that it was not prepared by him. When it was pointed out to him that the document said "prepared by George and Rita Chaina" he said it was prepared by his wife and a person called Roger Morton. However, he also agreed that he, Mr Chaina, provided the information that went into the document. His attempts in that regard to distance himself from the document did him no credit. Although he agreed that it was wrong to tell lies in the prospectus he said that it was part of marketing the company, that the lies were white lies and that all the investors were interested in was the end product and not his qualifications. 126The second document was an application to the government for a Research and Development grant dated 22 October 1998 (Ex 3). He said that he understood that the application was made by him and his companies for the purpose of obtaining money. 127When he was pressed as to why he swore false evidence that he was a scientific analyst at the University of New South Wales he was not able to offer a reason. Nonetheless, when he was asked if he could identify any other purpose than to assist and give financial benefit to Deluxe in the proceedings arising out of the fire in this Court, he said that he could not (at 292). 128His only real explanation for why he perpetuated the lie about his qualifications in sworn evidence to courts at various times appeared to be that it was something that he had been doing for a long period of time and he would have looked stupid if he then admitted to the lie. Even if such an explanation were to be accepted it does not absolve Mr Chaina's cavalier attitude towards his obligations to tell the truth to this Court. This attitude persisted through the fire proceedings as well as in sworn evidence given in these lengthy proceedings. This conduct means that all aspects of his current evidence must be scrutinised very carefully. Although he constantly professed to me when he was in the witness box that he was telling the truth and the whole truth there is nothing to suggest that this statement was any more reliable than the other statements that had been falsely made on oath. 129When Mr Chaina met with representatives of UNSW to make a special case for his son Matthew to be admitted to the University he told the University representatives that he was a science graduate of that university. The following exchange then occurred: Q. Mr Chaina, what I want to put to you is, not only will you lie to the Court under oath, but you will lie in circumstances where you think it will advance your position? A. I am not lying to the Court. I feel very, very hurt when you say that to me. I am telling your Honour the truth. Q. Mr Chaina-- A. I may sound like I am telling lies, but I am not, I am not because I am on heavy medication and I am all over the place. That doesn't make me a liar. I am not lying. I am telling His Honour the truth, nothing but the truth. 130The seriousness of these lies was that the whole of the per quod claims was based on Mr Chaina having these qualifications, until in 2009 his then counsel, Alan Sullivan QC, announced to the Court that the claims in that regard were false. As a result, the foundation of the case was changed to rely on what Mr Chaina claimed was the expertise that he had acquired over a long period working in various capacities with companies that produced similar chemical products to those that Proton and Deluxe were said to produce, together with the evidence of appropriately qualified experts.

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(b) The names he used 131The Second Plaintiff was born Pierre Ayoub. He said that he changed his name after the divorce from his first wife because of problems he was having in relation to her. He chose the name George Chaina because it was similar to the name of his wife's brother. Mrs Chaina's brother's name was George Chaina-Azar. Mr Chaina denied that he ever used the name George Chaina-Azar. 132It appears that he continued to use both names (Pierre Ayoub and George Chaina) interchangeably at least until he formally changed his name by deed poll in 1994. One reason he offered for the use of both names was that he did not wish to upset his mother by letting her know that he had changed his name from Pierre Ayoub. 133Subsequently, he said that there were a few reasons for the change of his name. The primary one would have been his ex-wife. However, he also gave evidence in the proceedings in this Court involving the fire before Hunter J that he changed his first name to George because Pierre was not a very common name. 134When Mr Chaina was first asked if he would use the name George Chaina or Pierre Ayoub as at 1994 depending on whether it suited his purpose, he denied it on two occasions (T577-578). When I asked him the question for the third time he agreed that he did and then further agreed to the matter when it was put by Mr Stitt (T578). In this regard there was evidence of his swearing an affidavit in the name of Pierre Ayoub when he sued Gibson Solicitors (Ex 68). 135When he was asked if, after first changing his name, he ever used the name George Chaina-Azar, he denied it. However, in the document prepared for Deluxe in relation to a proposed a chemical and coatings partnership with Palmer Tube Mills dated 3 September 1993 (Ex 9) this statement appeared: Deluxe Chemicals is a fully Australian owned company founded in 1978 by the Directors Rita and George Chaina-Azar, supplying chemical products to a large number of industries including... Mr Chaina denied writing that or putting it forward on behalf of Deluxe. He said the company Deluxe had previously been called Chaina-Azar. The two directors of Deluxe were in fact Mr and Mrs Chaina, the second and third Plaintiffs. 136A tax invoice from Jardine Lloyd Thompson in respect of an insurance policy for the Hopetoun Avenue, Vaucluse property in January 2002 showed that the names of the insured were Rita and George Chaina-Azar (exhibit 11). 137In addition, a letter from AEI Insurance Brokers to Arraj Lawyers of 15 September 2000 in relation to a claim under a motor vehicle insurance referred to Mr Chaina as George Chaina-Azar (exhibit 13). 138Documents from ASIC concerning Proton, Jean Pierre Cosmetics and Deluxe all show that Mr Chaina was using the name George Chaina-Azar up until 1997. 139His evidence about not using the name George Chaina-Azar was dishonest. He did use such a name. He did use his old name of Pierre Ayoub when it suited him. The fact that he used two names interchangeably, that he twice denied doing so but then admitted to it, and that he also used a third name despite denying that he did so, certainly raises questions that have not been answered. It is not suggested that these matters impact in the present proceedings otherwise than as matters affecting Mr Chain's credit. They do, however, provide a further strong reason to hold that Mr Chaina's evidence cannot be independently relied upon.

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(c) The accident in Ashfield 140Mr Chaina was involved in a car accident in Milton Street Ashfield in April 2001. The accident involved the front of his vehicle coming into contact with the rear of another car. Mr Chaina was not able to say if he ran into the other car or whether it reversed into him. 141He first claimed not to have shown the other driver his licence because he was reluctant to give him his address on the basis that the other driver was a violent man. However, he later admitted that he did not have a licence to give him because he was an unlicensed driver. When first asked if he was an unlicensed driver he said that he could not remember but possibly that he was. A little later on he agreed without qualification that he was an unlicensed driver. 142He also claimed not to be able to recall whether the police attended at the scene of the accident. Mr Chaina claimed not to be able to remember what he said to the police, but said on two occasions that if he did not have a licence at the time he would have told them that he did not have one. He later admitted that he did not tell the police that he was unlicensed because he thought he would be prosecuted on the basis that he already had a number of convictions. Ultimately, when he agreed that he had not told the police that he did not have a licence, he said that what he did in that regard was very, very wrong. 143Mr Chaina said that he rang Danny Arraj to come to the scene of the accident to get him out of the difficulty he was in, that is, being an unlicensed driver. 144The evidence about this accident is a good example of the way Mr Chaina tried on many occasions to avoid answering questions and telling the truth. The evidence is this (T 208ff): Q. Mr Chaina, the police were called, were they not? You surely remember the police were called, Mr Chaina? A. Well, I didn't call the police. Q. I know you didn't call the police but you know that the police were called to the scene? A. No, no, I didn't know that, no. ... Q. You were asked by the driver of the other vehicle to produce your licence, do you remember that? A. Yes. Q. The other driver was a man called David Sefton, do you remember that? A. No, I don't. Q. But he asked you to produce your driver's licence after you ran into his car and you refused? A. Yes. ... Q. You refused to produce your licence and you refused to tell him your name? A. No, no. I had given my name, and I don't remember-- Q. No, Mr Chaina, you refused to give him your name and you said that your solicitor was on the way; do you remember that? A. Yes. Q. Yes. And the solicitor that was on the way was Danny Arraj, wasn't it? A. Yes. Q. And when the police arrived, Mr Arraj would not tell them your name, would he? OBJECTION ... Q. Before Mr Arraj arrived, you actually left the scene of the accident, didn't you? A. Yes, because the man was getting aggressive, your Honour, and aggressive, and he wanted to-- Q. Mr Chaina, you wouldn't provide him either with your name or with your licence details and you left the scene of the accident? A. No, that's not correct. I, yes, did not show him my licence, but I did give him my name and my contact number. I am reluctant to give my address because he was a violent man. Q. Mr Chaina, the police attended the accident and, while they were still at the site of the accident, Mr Arraj turned up at the scene driving a red Saab; do you remember that? And you were with him; do you remember that? A. No, I don't recall that. Q. And do you remember that Mr Arraj spoke to the police and said that he was a principal of Arraj Lawyers? OBJECTION MACONACHIE: First, it's two question, and, secondly it's hearsay. STITT: I will withdraw it. Q. Do you remember Mr Arraj spoke to the police? You were there, Mr Chaina. Do you remember that Mr Arraj-- A. No, because the accident was not serious. I give him my detail, and-- Q. Mr Chaina, do you remember Mr Arraj-- A. I don't remember, no, no. Q. You don't remember? A. I don't remember. Q. And do you remember that the name that was given as the driver of the vehicle responsible was George Acer? OBJECTION STITT Q. A-C-E-R. Do you remember that was the name that was given? A. No. OBJECTION ... STITT: I will put it another way. Q. Did you tell Mr Arraj to tell the police that your name was George Acer, A-C-E-R? A. No. *Q. Do you know that the police were informed by Mr Arraj that the driver of your vehicle was George Acer? OBJECTION ... QUESTION MARKED * READ BACK WITNESS: No. STITT Q. Did you tell Mr Arraj to convey to the police officers investigating this accident that your name was George Acer? A. I don't remember that. Q. Did you tell Mr Arraj that he should convey to the investigating police officers that your name was George Acer? A. I don't remember it. Q. Well, do you deny it? OBJECTION HIS HONOUR: If he doesn't remember, Mr Stitt, I don't think we can advance it. STITT Q. Were you concerned to conceal your identity from the police as a result of this accident? A. I don't - I don't quite understand the question. Q. Were you concerned to conceal or hide your identity from the police as a result of this accident? A. Not hide my identity, no. I-- Q. Well, did you think that by not telling them your name and producing your driver's licence, you might go some way towards hiding your identity? A. Sorry, could you repeat that again, please? Q. Yes. Did you think that by not providing your name or driver's licence, you would be able to hide your identity? A. No; because I did give my name to the driver and I wanted to go because he was violent. Q. Mr-- A. He wanted my licence, as well. Q. Mr Chaina, you did not produce your licence to the driver or to the police, did you? A. I didn't see the police, but I - I refused to give him the licence. But I didn't have the licence. Q. I'm sorry, you didn't have a licence? A. No. Q. What, you were an unlicensed driver; is that the position? A. Well, I can't remember. Possibly, yes. Q. Possibly. A. Possibly, but I can-- Q. And is that the reason that you didn't want the police to know who you were? A. No, the police, because the police rang me-- Q. Please. Is that the reason that you didn't want the police to know who you were, because you were an unlicensed driver? A. No, that's not correct. I-- Q. Well, you just said to his Honour-- A. Yes. Q. --that the reason you didn't produce your licence was because you didn't have one; is that true? A. Yes, true. Q. Does that mean that you were an unlicensed driver? A. Yes. Q. And does that mean the reason that you didn't give the police your details was because you were afraid you would be prosecuted? A. No, I did - I gave the driver my name and my phone number. Q. Mr Chaina-- HIS HONOUR: No, Mr Chaina. You are being asked about what you told the police or what you didn't tell the police. STITT Q. I will put it to you again, Mr Chaina. A. Sure. Q. The reason that you didn't tell the police that you were an unlicensed driver and identify yourself was because you thought you would be prosecuted? A. Well, there are three questions here. I - I can't remember it. Q. I will ask you again. The reason that you didn't tell the police that you were unlicensed or give them your identity was because you thought you would be prosecuted? A. Yes. Q. Yes. And you didn't want to be prosecuted, did you, because you already had a criminal record? A. Well, I-- Q. Isn't that the truth? A. I am not a criminal, your Honour, I-- Q. You knew that you had an existing criminal record? A. Well, I don't - don't agree that I'm a criminal. The criminal record-- Q. That's not the question I'm asking you. A. Yes. Q. I'm asking you, did you not want to be prosecuted because you had an existing criminal record? A. No; because I could produce my licence. I gave them my number. I said, "I'm insured. I'll pay you." Yes, but he became violent. HIS HONOUR Q. You were being asked about something different. Listen to Mr Stitt. A. Sure, sure. STITT Q. Mr Chaina, you knew, as at the date of this accident, that you had an existing criminal record, did you not, with the police? A. Their records, but I don't regard them as criminal record, because I'm not a criminal. Q. Mr Chaina, that's not the question. You knew that the police have a criminal record on you, do you not? A. I do know, yes, that I could have record, but I'm not a criminal. It happened - some incident happened 30, 40 years ago. HIS HONOUR Q. Mr Chaina, it's not being put to you that you are a criminal. You are being asked about having a criminal record; do you understand that? A. Well, no, I don't, your Honour, because I-- Q. You know what a criminal record is, don't you? A. No. I mean, only people who kill somebody or drugs or something is a criminal. I'm not in that calibre, so how can I be criminal? HIS HONOUR: Over to you, Mr Stitt. STITT Q. Mr Chaina, at the time of this accident in 2001 you knew the following things. One, you didn't have a licence and you were not licensed; correct? A. Yes. Q. Two, you knew that you had run into the back of the car in front and were liable? A. But I can't remember the-- Q. You knew that you were liable there because you had run into the car in front? You knew that? You knew that, Mr Chaina, didn't you? A. No. I can't remember, if he run into me. Q. It was quite a serious accident? A. No, I resent that. It wasn't a serious accident. It was not a serious accident. Q. Mr Chaina-- A. And the law that require you to wait for the police, the law say exchange - exchange part, and then go. And if it was my fault, I pay. But I can't recall if he reverse into me or I ran into him. But it was not a serious accident. Q. Mr Chaina, you were concerned that you would be prosecuted and that's why you got your nephew, Danny Arraj, to come? A. Yes. Q. And you wanted Danny Arraj to get you out of the difficulty that you were then in? A. Yes. Q. And the difficulty that you recognised was that if you were prosecuted, you already had an existing criminal record? A. Well, I don't accept I have a criminal record. I have a record. Q. Mr Chaina, you can rest assured that I will take you very shortly to your criminal record. I'm asking you about your knowledge. You knew that you had a criminal record? A. Yes; but not the definition as a "criminal". Q. I'm not splitting hairs with you, Mr Chaina. You knew you had a criminal record? A. I did have a police record, but not a criminal record. Q. But what you did was to get your nephew to get you out of trouble by using a false name? A. I don't remember using a false name. ... 145Mr Arraj said that he had no recollection of any involvement in attending a motor vehicle accident that George Chaina had been involved in at Ashfield on 16 April 2001. This was despite Mr Chaina's evidence that Mr Arraj had arrived after being telephoned by Mr Chaina for the purpose of assisting him since he was unlicensed at the time of the accident and faced possible prosecution for that. Mr Arraj's failure to recollect was also in the face of detailed information in the COPS report that contained a correct description of Mr Arraj's car including the number plate (as he conceded), his address and his business card. The telephone number on the business card was Proton's telephone number at the time. Mr Arraj's lack of recall appeared to be entirely genuine but the material in the COPS report was so sufficiently detailed about Mr Arraj's involvement that I must conclude that he was present as that material suggested. The address on the business card was agreed by Mr Arraj to be an address at which his firm had carried on business.

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(d) The manuals 146In his first Statement of 2 September 2005 Mr Chaina said this: 19. In the late 1980s I, with the assistance of Rita, wrote a number of manuals (which were for both internal and client training use) including the following: (a) A manual for the training of the laundry manager, production manager, supervisor, personnel, wash, ironing personnel, receiving and dispatch personnel, and storing personnel (in sorting, washing, water chemistry, chemical use, safety, washer extractor, continuous batch washers). (b) A manual describing procedures for determining laundry performance and productivity, and measurement of linen damage, both chemical and mechanical, I also wrote computer programs designed for specific clients' needs. The computer programs were tailored for specific customer requirements, machine and laundry type. (c) A housekeeping training manual for the training of hotel personnel from room division manager to housekeeper to maintain optimum hygiene without causing damage to bathroom accessories such as marble, granite, porcelain and metal, and to control mildew. (d) A manual to train food processing personnel such as the plant manager, production manager, supervisors, operators and laboratory staff on how to control hygiene in mixing vessels, effluent treatment, how to keep the conveyor lubricated, cleaning the heat exchanger and the use of chemicals in the plant. 147Mr Chaina first said in his oral evidence that those manuals were destroyed in the 1993 fire, but said subsequently that they must have been taken in the burglary (T 780 and 783). In his February 2005 Statement he then said this: 72 In the period 1993 to October 1999 I also rewrote the training manuals referred to above. Included at GC2, Tab 27 are copies of the rewritten manuals. 148What was attached were documents with Proton Technology's logo and Proton's address at Moorlands Road Ingleburn. Proton moved to that address in October 1999. The manuals consisted of more than 350 pages divided into 5 sections. Part of the manuals became Exhibit 122. 149The evidence disclosed that these manuals had been plagiarised from an American textbook "Textile Laundering Technology" by Charles L Riggs and Joseph Sherrill. Extracts from that book were tendered (Ex 98). I was taken at some length to the manuals and the extracts from the textbook. Very large portions of the manuals have been lifted, word for word, from the textbook. There can be no doubt that this was deliberate plagiarism. 150Mr Chaina, when shown the manuals that he referred to in his Statement and annexed, denied that they were the manuals that he had rewritten and kept insisting that they must have been prepared by Graham Jowsey because he was said to have done training on Proton's behalf (T785 - 791 & 799). Mr Chaina had asserted that Mr Jowsey was training on Proton's behalf in June 2000 and 2001 (T799-800). Mr Chaina said that he never asked Mr Jowsey to prepare any training manuals (T813). Why Mr Jowsey would have prepared them if not asked to do so was never explained. 151Mr Chaina was taken to Mr Jowsey's affidavit where he said that since the death of Nathan he had very little contact with Mr Chaina and no contact at all with Mrs Chaina. Despite that Mr Chaina was not prepared to eliminate Mr Jowsey (T801). Although Mr Jowsey had prepared an affidavit for the proceedings the Plaintiffs did not call him to give evidence regarding the preparation of the manuals or otherwise. 152One reason Mr Chaina said that they were not his manuals was because in the first page of his manuals he drew what he described as a pie (ie, a pie chart) divided into mechanical, temperature, chemical and time (T787). He was then taken to such a pie chart on page 589 of the manuals shown but he said that was not his pie chart because his did not have the dots that were on it. 153Because the manuals, disavowed by Mr Chaina, had the Ingleburn address on the top of them, they could only have been prepared from September/October 1999 onwards because that was when Proton moved to the Ingleburn address (T804). 154Mr Chaina suggested also that either Mr Jowsey or Lily Sukkar could explain the matter although he said he was not asserting that Ms Sukkar wrote the manuals. As I have said the Plaintiffs did not call Mr Jowsey to do so. 155Ms Sukkar said that she had prepared the cover for what became Exhibit 122 but did not have any input into the training manual itself. She said the manual was given to Proton's customers, was used by Mr Chaina for training, and was used to advance Proton's business. 156It is necessary at this point to refer to Mrs Chaina's evidence about the manuals. 157In the tender bid for government work dated 1 March 2000 (exhibit 123), a document signed by Mrs Chaina, paragraph 6.24.3 says "refer to training manual attached". Mrs Chaina said that the training manual would have been their training manuals. One was in fact not attached. 158She was also shown a bundle of documents including the tenderer's bid by Proton in 2004 signed by both Mr and Mrs Chaina (exhibit 126). That document contained on page 169 this statement: The following covers of Proton's training manuals have been provided as a summary of the headings covered during the training sessions. The full manuals are very extensive and have not been included in this tender for ease of handling. 159What were attached were the front covers of the same manuals that Mr Chaina had annexed to his first Statement but subsequently disavowed as Proton's training manuals. The only difference was that these front covers contained the Mort Street, Lithgow address whereas those attached to Mr Chaina's statement had the Ingleburn address. According to Lily Sukkar all the files and company documents were moved to Mort St in late 2001 but apparently before a break-in at those premises in October 2001. 160Mrs Chaina agreed that the documents represented by the covers in this bid must have been prepared after 2002 and that they were prepared for Proton (T1380). 161She denied that they were Proton's training manuals. She agreed that what was contained in them was the same as the American textbook. Her explanation was that some unknown person put Proton Technology's name on the document which was the copy of the American textbook. She said she was not sure who that person could be. The manuals attached to the bid were put in by mistake (T1385). 162She agreed that she had been sitting in Court all the time that Mr Chaina gave evidence and heard his evidence that exhibit 122 (the same training manuals) were not training manuals that he prepared (T1383). She agreed that she could not find Proton's training manuals but said there were about ten of them. She said she had found a few and given them to her lawyers (T1387). 163The only relevant documents were MFI 48, 49 and 50. She said MFI 48 was a training manual, as was MFI 50 but MFI 49 was simply a wash process chart. MFI 50 (which became exhibit 128) had "Deluxe" as its heading with a reference to 4 - 6 Gould Street, Enfield. Deluxe operated from that address from 1985 until the fire in 1993. Mrs Chaina agreed that this document must have been prepared before the fire (T1391). On the other hand, Mr Chaina said it was prepared at a later time (see at T1221). When it was put to Mr Chaina that in 1995 (when he said the document was produced) the company was not operating from 4 - 6 Gould Street, he said that they had some old letterhead in their Brisbane and Melbourne offices which they used (T1231). 164A little further in the cross-examination Mrs Chaina accepted that somebody in Proton's office put the Proton logo, address and layout on the copy of the American book but she did not know who it was (T1398). However, when I drew her attention to the fact that the covers of the manuals in the 2004 tenderer's bid had the Lithgow address whereas those attached to Mr Chaina's first statement had the Ingleburn address, she agreed that on two separate occasions the Proton letterhead was attached to the documents. She also said that she thought it was Lily Sukkar who had done it (T1403). 165In my opinion both Mr and Mrs Chaina are lying about the training manuals. What they put forward as Proton's training manuals were plagiarised from the American textbook. From the time Mr Chaina attached those manuals to his statement in February 2005 until he was confronted in the witness box, they were the manuals said to have been written by him. I do not accept that that was a mistake. When one sees that it was the same documents that were put forward to the State government as part of the tenderer's bid, and that Mrs Chaina was present in Court when she heard Mr Chaina disavow them, and the fact that no other manuals of any seriousness have been produced, the only conclusion must be that they have put forward the plagiarised American book as their own manuals. 166On balance, and bearing in mind the Briginshaw principle, I find that one or other of Mr and Mrs Chaina (and most likely Mr Chaina) plagiarised the American book. Even if Mr and Mrs Chaina did not themselves engage in the plagiarism I do not accept that they did not know about it. Mr Chaina said that he was the only person who could write the manual. They were both prepared to put these manuals forward, as if they were their own, both to the State government to become a successful tenderer, and to this Court to persuade it that Proton and Mr Chaina had the necessary skill and expertise in support of their claim that there would have been a successful launch of their products. 167The conduct surrounding the manuals is a further indication, in Mr Chaina's case, that he is prepared to do and say anything to achieve whatever ends he has in mind. In relation to this case, the end is the damages he claims arising from the death of Nathan. It demonstrates, in Mrs Chaina's case, that she is prepared to be complicit in her husband's dishonesty. In Mr Chaina's case, the matter is made worse by his attempts to assert falsely that Mr Jowsey was somehow involved in the plagiarism. It is one thing to lie about one's own acts - it is something else entirely to bear false witness against a blameless person. 168This finding also detrimentally affects any assessment of Mr Chaina's ability to have formulated superior or unique products that would result in a successful launch, and obtaining the market share claimed. If it was necessary to plagiarise technical and scientific information (that was what was contained in the manuals) there must be a serious doubt that Mr Chaina possesses the expertise that he asserts.

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(e) Inconsistent answers 169On many occasions Mr Chaina would give inconsistent answers. He would first deny something or say he could not recollect it and when pressed he would agree with what was being put. Sometimes it was the reverse. He was asked whether he had ever described his company as a small company and whether that was accurate. He at first said yes and then said no (T425 - 426). He was asked if the company had become an unreliable supplier after the fire. He first said no and then agreed that it had (T431). 170A further instance of Mr Chaina's obfuscating is to be found when he was asked about the autopsy conducted by Dr Carla on the deceased as follows: Q. Mr Chaina, you did not accept the findings of the government pathologist, Dr Carla, did you? You personally did not accept those findings? A. Is referring to Dr Carla, the one he supervise the autopsy of my son, which is the -- Q. Look, it's a simple question: you did not accept the findings of Dr Carla, did you? A. But I want to make sure that we talking about the same - which Dr Carla you are referring to, please? Q. Well, there was only one Dr Carla and that was the government pathologist. And did not accept his findings, did you? A. I don't recall that. It was a different job. They have butchered my son and -- Q. Mr Chaina A. -- and found the wrong things. HIS HONOUR Q. Mr Chaina, please, that's not an answer to the question. A. Sorry, Mr Stitt. Can you-- STITT Q. It's a very simple question, Mr Chaina. A. Well, to me it's a very, very sensitive and difficult-- Q. I understand that. But I want to get through this as quickly as I can, and if you answer my questions I won't take a long time over it; do you I understand that? A. Yes. Q. Well, please answer my questions. You did not accept the findings of Dr Carla, did you? A. That's - that's not correct. Q. You arranged for your own pathologist to be retained, a Dr Matsakis, did you not? A. Not my - not personally. I was assisted by the people that - I think it was Danny Arraj who arranged it. Q. But Dr Matsakis was somebody from overseas, was he not? A. Yes. Q. And he was retained and brought to Australia to challenge the findings of Dr Carla; isn't that so? A. All I can remember, that-- Q. Mr Chaina-- A. --what happened to my son, because-- Q. Mr Chaina-- A. --the school-- HIS HONOUR Q. Mr Chaina, that's not an answer to the question. A. Sure. Can you - I'm sorry, I forgot what you asked me. STITT Q. Dr Matsakis was retained to challenge the findings of Dr Carla, and that was at your request? A. No. Q. Well, what part of it don't you agree with? Dr Matsakis was retained, was he not? A. Yes. Q. And he was retained at your request? A. Yes. Q. And he came from overseas, did he not? A. Yes. Q. And he prepared a report for the Coroner at your request? A. Only to find out what happened to my son, because I couldn't-- Q. At your request, he prepared a report for the Coroner? A. Yes. Yes, yes. 171Mr Chaina denied that he was the person giving the instructions for the inquest and denied that he was actively engaged in the preparation for the conduct of that inquest (T753, 756 & 757). He accepted, however, that there were many meetings held at his house and that he attended those meetings for the purpose of giving instructions (T756-757).

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(g) Other matters 175Mr and Mrs Chaina retained a firm called Solution Focussed Counselling in October 1999. The firm was to provide counselling services for the family following the events of October 1999. Mr Chaina agreed that they provided the psychological assistance and grief counselling. The following evidence was then given: Q. And then you wouldn't pay for them, would you? A. (No verbal answer). Q. Mr Chaina, you wouldn't pay for them, would you? A. I don't remember the circumstances. Q. Mr Chaina, you know perfectly well that you did not pay the counsellors that provided those counselling and grieving services for you? You didn't pay, did you? A. In - in - in that time, I wasn't able to function. All my-- HIS HONOUR Q. Mr Chaina, did you pay them? A. I don't recall because I don't pay - this is normally done by other at that time, other people like my lawyers took over. Q. So you don't whether-- A. I don't remember. Q. --whether you paid? A. I don't remember. STITT Q. Mr Chaina, not only did you not pay but they had to sue you and your wife in the Court to get the money, didn't they? A. Yes. 176This was another example of Mr Chaina providing inconsistent evidence when asked the same question more than once. It is clear that the counselling firm did sue for their money (exhibit 57 - tab 42) and I consider that Mr Chaina's evidence that he did not remember not paying them was not truthful. 177The solicitors acting for Solution Focussed Counselling were Crisp & Associates. On 12 October 2000 they wrote to Mr Chaina complaining (inter alia) about what was said to be unfounded accusations and allegations he made against the writer of the letter and staff members. The details were set out in the letter (exhibit 121). 178Mr Chaina claimed not to remember that he abused the solicitors or acted aggressively towards them (T1169). I do not believe him. I consider the letter provides contemporaneous evidence of the matters. It is difficult to understand why the solicitor would have written in those terms if something close to what was asserted had not happened. 179He claimed to have paid Dr Wever for his services (T1173) and that he had observed his wife giving a cheque to Dr Wever (T1174 & T1176). It was suggested that he still had owing some $348,000 to Dr Wever (T1174). Mr Chaina said that he did not know if he owed Dr Wever any money (T 1175). Dr Wever said, and I accept, that he was still owed approximately $340,000 by the Chainas. It is inconceivable that Mr Chaina would not know that he owed Dr Wever a large sum of money even if he did not know the precise amount. Mr Chaina's evidence about money owing to Dr Wever was false.

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(c) The 2000 R & D Application 187In a further R & D grant application made in August 2000 (Exhibit 139) signed by Mrs Chaina, it inaccurately stated that Professor Rodgers and Professor Hibbert were each being paid $25,000 to be consultants. It also wrongly said that Emeritus Professor Ross Griffith was on a current full-time annual salary of $120,000. In fact he was being paid on a consultancy basis, as Mrs Chaina admitted, but she said it would have been for about that amount. 188The application also said that she was on a current full-time annual salary of $120,000, which she admitted was not correct. 189The application said that Mrs Chaina built her first business into one of the three leading pharmacies in Sydney. She said that was not correct, although she regarded it as being in the top nine. 190The application described Deluxe as having a $10 million turnover. She admitted that that was not true. In 1993 she said it was around $2 million. Financial documents show that the turnover of the companies was never more than $1.7m. 191The application claimed that Mr Chaina took Deluxe "to a market leadership position, commanding for example 70% of the NSW industrial laundry chemical supply business and servicing some 90% of leading hotels throughout NSW by 1993". Those percentages were wildly exaggerated and must have been known to Mrs Chaina as being false. 192The application made reference to Mr Chaina managing up to 70 personnel at the peak of Deluxe Chemicals' activity. She said she though 70 might be a bit too high. They had 25 full-time staff and quite a number of part-time staff. 193As to the number of employees, in his Statement of 2 September 2005 Mr Chaina said (at para 39) that at October 1999 Proton's employees, apart from him and Rita, consisted of 3 in office administration and accounts, 2 factory employees and 1 truck driver. In his Statement of 25 September 2006 (at para 12) Mr Chaina said that he was wrong. As at October 1999, apart from him and Rita, Proton's employees consisted of 1 person in office administration and accounts (presumably Lily Sukkar), 1 factory employee (plant operation and packaging) and 1 truck driver.

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(e) Other matters 202Mrs Chaina initially denied that there was a policy that income declared was less than that actually received (T1434). Then she agreed that before 1993 there was a policy that cash sales were sometimes not brought to account. She admitted that she was not recording all cash sales or bringing them into the company's accounts at the time of the fire litigation and that she knew that the failure to record those cash sales properly would have an effect on the gross profit margins. She also admitted that such a failure to record certain cash sales would have the effect of deceiving the Tax Commissioner. She agreed that at the time she did not see anything wrong with conducting the business in that way. 203Mrs Chaina admitted that $80,000 was owed in sales tax by October 1992 and by 1994 the Commissioner for Taxation was claiming a further $162,000 against Deluxe (T1447 - 1449). 204She said that the company did have a policy of not paying creditors until they were pressed to do so (T1450). She denied that this was a policy that was followed after 1999. 205Exhibit 27 (letter to Think Tank Group Pty Ltd dated 18 November 2010) refers to Proton and the Chainas not lodging company and personal tax returns "due to the fact that we have had an ongoing court case battle with Scots College". The letter goes on to say: On receipt of the settlement which is imminent, we will bring Proton Technology Pty Ltd and our personal taxes into order. 206The only reasonable inference that can be drawn from that letter is that the tax returns were deliberately not prepared so that the true position would not have to be disclosed to the Court in the present litigation. This is a matter which reflects poorly on the credit of both Mr and Mrs Chaina. 207Mrs Chaina admitted that the statements in Exhibit 27, that she and her husband each had personal income of $100,000 per year, were not true and correct and that she knew they were not true and correct at the time they were made. She supposed that she knowingly made the false representations for the purpose of getting a financial benefit (T1459). 208These matters do not show Mrs Chaina in a good light. They show that she is prepared to deal lightly with the truth when there is a potential benefit to be gained. 209This tender document and the R & D Application in 2000 have significance beyond matters of credit contained within them. The representations in them concerning Mr and Mrs Chaina's capacity to work in 2000 and 2004 are not consistent with the present claims of total or near-total incapacity from the time of Nathan's death in October 1999. If the representations in those documents are true they will seriously impact on the present claims. If they are false Mr and Mrs Chaina's credit is seriously affected in relation to the evidence they have given in these proceedings. Their falsity suggests that they both do not tell the truth in order to gain a financial advantage. That goes to the heart of the present claims. 210The result is that in most cases I cannot accept Mrs Chaina's evidence unless it is corroborated. The most significant exception to that conclusion concerns whether she knew of Mr Chaina's lack of formal qualifications. I have already determined that she did not know and that he deceived her also in that regard. 211These credit findings in relation to Mr and Mrs Chaina are significant for most of the pertinent issues in this case, including their pre- and post-1999 psychiatric conditions, the manner in which they operated the companies before and after 1999, their abilities to work and function after 1999 and the likelihood that there would have been a successful re-launch of their industrial products.

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Nervous shock 212There is no liability to pay damages for pure mental harm resulting from negligence unless the harm consists of a recognised psychiatric illness: s 31 Civil Liability Act 2002 (NSW). The distinction between mere mental distress and psychiatric illness was discussed by Hayne J in Tame v New South Wales; Annetts v Australian Stations Pty Limited [2002] HCA 35; (2002) 211 CLR 317 at [287] - [294]. 213It is necessary, first, to consider Mr and Mrs Chaina's psychiatric and emotional position before Nathan's death. This is because it is the Plaintiffs' assertion that Mr and Mrs Chaina's present conditions have resulted from Nathan's death and matters associated with it. The Defendant's submission is that any psychiatric illnesses now suffered by Mr and Mrs Chaina were present before Nathan's death. 214Dr Margaret Hislop had been Mrs Chaina's, and to a lesser extent Mr Chaina's, general practitioner for a number of years prior to Nathan's death. In addition Dr Chris Wever, a psychiatrist, had been treating Mrs Chaina since 30 June 1997. He had also seen Mr Chaina on one occasion (14 February 1998) before Nathan's death. 215Dr Hislop was not, surprisingly, called by the Plaintiffs to give evidence. The Plaintiffs realised the significance of her evidence because during the cross-examination of the psychiatrist Dr Phillips, Mr Chaina said that he might need to call Dr Hislop in reply (T 2792). Dr Phillips, the medico-legal psychiatrist called by the Plaintiffs, considered Dr Hislop's diagnosis to be of significance. If it were necessary I could infer, pursuant to the principle in Jones v Dunkel, that her evidence would not have assisted the Plaintiffs. However, her records, notes and reports have been considered by all of the psychiatrists who gave evidence, and sufficient information is contained in the various reports of those psychiatrists to give a clear picture of the pre-accident condition of both Mr and Mrs Chaina. This information is both from Dr Hislop's records, from other medical records and from the other psychiatric reports tendered. Some of Dr Hislop's documents were exhibits in the proceedings. 216Dr Skinner (a psychiatrist retained by the Defendant) and Dr Phillips had both seen Mr and Mrs Chaina a number of times over a number of years. Dr Milton (another psychiatrist retained by the Defendant) did not examine Mr and Mrs Chaina but provided his opinion based on documentary material. Dr Skinner and Dr Phillips saw the same material and their final opinions were based also on what they drew from that material. The three psychiatrists gave evidence before me. I found them all to be very helpful and to be doing their best to assist me. This was especially the case with Dr Phillips who had been retained by the Plaintiffs. 217It was not feasible to have the psychiatrists give concurrent evidence. This was chiefly because Dr Phillips was confronted with the documentary material at a very late stage in the proceedings. This material had been available since before the hearing began but it had apparently never been provided to Dr Phillips by the Plaintiffs or their lawyers. 218Dr Phillips also had put to him in cross-examination some material of which he had hitherto been unaware, although why this was so was not explained - the material formed part of what could have been provided to him by the Plaintiffs or their lawyers. All of this material required him to modify his opinions to the detriment of Mr and Mrs Chaina. He did so in an entirely appropriate way, absolutely in accord with what the Expert Witness Code requires. 219Not surprisingly, there were some differences of opinion amongst these psychiatrists but also a great deal of unanimity of assessment and diagnosis. I will indicate when discussing the evidence of each whose evidence I prefer where there was disagreement of opinion. 220The Defendant mounted a sustained attack on Dr Wever, challenging his honesty, integrity and professional competence. The Defendant was well justified in doing so, since all of the other psychiatrists including Dr Phillips were critical of Dr Wever's treatment of the Plaintiffs. Further, there are clear inconsistencies in Dr Wever's reports prepared for the purpose of these proceedings when compared with what is contained in the pre-accident reports. Nevertheless, the Defendant does not submit that Dr Wever's reports that pre-date Nathan's death do not accurately demonstrate the extent of Mr and Mrs Chaina's mental conditions prior to Nathan's death. In fact, the Defendant submits that they do. 221It is necessary to set out the pre-October 1999 material at some length.

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(a) Mrs Chaina 222On 13 October 1994 Dr Hislop wrote this letter to "To whom it may concern". It is of relevance to both Mr and Mrs Chaina: Rita has been attending this surgery since 1988. On the 24th March 1994 she presented with lethargy, thirst, difficulty with concentration etc. She was extremely stressed with problems related to her business failure. After examining her I took some blood for testing which showed a blood sugar of 19.4 (normal range being 3.6 - 8). Follow up blood tests confirmed diabetes. She was referred to Michael Hooper Endocrinologist at Concord hospital. She has been taking oral medication and measuring her blood sugars regularly, but her sugars are not in the normal range yet. I last saw Rita on the 28th September 1994 when she was still very stressed and tired, having problems sleeping at night and concentrating, and it would be detrimental to her health to attend court on the 20th October 1994. I am unable at this stage to say when her condition will improve. I saw George Chaina on the 16th May 1994 after he had been discharged from Concord Hospital following an episode of chest and arm pain associated with shortness of breath. Numerous investigations were performed and these were normal. This attack was put down to stress and panic attacks. He was treated by Dr. Christine Jenkins - Respiratory Physician. George had another attack of shortness of breath and chest pain on the 8th June 1994 and was admitted to Concord Hospital until 14th June 1994. During this admission an Echo test showed Mitral Stenosis. When I saw him on the 15th June 1994 he was very stressed and depressed and he was treated with medication but this upset him. I saw him on the 3rd August 1994 when he was still unwell and he was seen by a Psychiatrist who recommended he be admitted to hospital but George refused. He was seen by Dr Paul Roy - Cardiologist at St Vincents on the 28 August 1994. He thought he was suffering from mild Mitral Stenosis associated with atrial enlargement. He commenced him on medication. Mr Chaina had a further episode of chest pain and was in Concord Hospital in late September. Mr Chaina is still very stressed and depressed and medication to treat his depression is yet to improve his condition. Attendance at court could well bring on a panic attack associated with shortness of breath and chest pain. It is difficult to say when George's condition will improve it may be a matter of weeks or even months. (emphasis added) 223Dr Hislop also wrote a letter to Allen, Allen & Helmsley in relation to the legal proceedings arising out of the fire in 1993. The letter bears the date "27th March 1195" but it was agreed by all that the date it was written was 27 March 1995. The letter said this: Rita has been attending this surgery since 1988. On the 24th March 1994 she presented with lethargy, thirst, difficulty with concentrating etc. She was extremely stressed with problems related to her business fire. After examining her, I took some blood for testing which showed a blood sugar of 19.4 (normal range being 3.6 - 8). Follow up blood tests confirmed diabetes. She was referred to Michael Hooper - Endocrinologist at Conord Hospital. She has been taking oral medication and measuring her blood sugars regularly, but her sugars are not in the normal range yet. Rita has been suffering symptoms related to stress for the last 12-18 months - lethargy, difficulty sleeping and concentrating etc. this has been complicated by problems with her husband's health - he has a heart problem and has had numerous admissions to hospital in the last 10-12 months. Rita has only lived and breathed this case for the last 12-18 months and this has caused great stress to her. This has increased recently now that the hearing is taking place. Her sugars have been a lot higher than usual despite increasing medication. On the 20th March 1995 Rita suffered an acute Anxiety/Panic attack in court. She became light headed, dizzy and experienced sweating and palpitations. She has had a couple of further attacks since. I am unable to predict the future and say whether she will have further attacks but the stress of court is likely to bring them on again. I am unable to say when her stress will settle but definitely not before this case is concluded. 224In her report of 25 February 2013 (Exhibit 190F) Dr Skinner recorded this: 68. ...In December 1996 Mrs Chaina again saw Dr Hislop. Dr Hislop wrote "feeling terrible, lots of stress - family, husband, business". She was depressed, was not sleeping, not exercising and not coping. Dr Hislop prescribed the anti-depressant Aropax (paroxetine) 20mg daily. 225On 24 March 1997 Dr Hislop recorded an hour long consultation with Mrs Chaina. Mrs Chaina presented with two black eyes, a bloody nose, pain and tenderness in the cervical spine, all a result of an assault by Mr Chaina on her. Dr Hislop noted increased marital stress. I shall make further reference to this assault later. I mention it at this point to assist in an understanding of the material which follows. 226Dr Hislop again prescribed Aropax and referred Mrs Chaina to Dr Wever on 16 May 1997. 227On 30 June 1997 Dr Wever wrote to Dr Hislop in these terms: Thank you for referring this family for assessment and treatment. Though the referred patient was identified as Jean-Pierre it would appear that all three boys Nathan, Matthew and Jean-Pierre were experiencing significant difficulties at the present time. Furthermore mother Rita was also under significant stress because of the family problems. It would appear that the whole family is suffering from tensions between father George and mother Rita. In fact they separated in March for a few days due to alleged domestic violence at home. The marital problems have been occurring for at least twelve months but probably longer. Mother reports that her husband George has morbid jealousy and has accused her on several times of being unfaithful. She denies any extra marital affairs and feels that her husband is extremely paranoid about these matters. Furthermore there has been significant conflict between father and the three boys and all boys indicated that father was verbally and at times physically assaultive of them. Of note in the family history there is a history of paranoid illness on the father's side. There was also a significant loss recently with the death of a grandmother twelve months ago and paternal aunt having been ill for the last six months. All three boys presented as large boys for their age who were reasonably academic though Nathan was thought to be the brightest. All were good at football and had recently changed schools from St Patrick's to Scots. Mother herself seemed to be extremely upset and distressed frequently crying when she was interviewed alone. At this stage I felt that mother was most likely to be the identified patient as she was certainly suffering from depression. It would seem that mother is staying with father because of them owning a joint business together and advise (sic) that she has got from her own family to stay with her husband for the welfare of the three boys. I discussed some of these matters with mother alone and I indicated that I was concerned at the risk of the pathological jealousy of father perhaps causing significant problems for mother. I explored some of these issues with mother and mother indicated she understood that there maybe future risk of domestic violence towards her from her husband. It should be noted that father refused to come to the session and I suggested to Rita that she invite father to the next session together. I felt that the current family was under extreme stress because of the marital difficulties. All three boys were performing reasonably well in their day to day activities and coping with the difficulties as best they could. Jean-Pierre's apathy and depression could be explained by the family dynamics rather then any major depressive illness within himself. Certainly mother appeared to be more depressed then her older son. I feel from the history given that George certainly is likely to be suffering from pathological jealousy which is a difficult problem to treat and one that places Rita at some risk. I have suggested further appointment for Jean-Pierre prior to him leaving to go down to the Kangaroo Valley. I have also suggested to Rita that perhaps some marital therapy maybe appropriate at this stage. I will keep you informed of there progress. (emphasis added) 228Dr Wever wrote again to Dr Hislop on 18 February 1998 in respect of a consultation on 14 February 1998. This was the only time that Mr Chaina saw Dr Wever prior to the tragedy. Dr Wever's evidence was that Mr Chaina refused to attend at any other consultations because he considered it to be a waste of time. I interviewed Mr and Mrs Chaina on the 13 February 1998. Since I corresponded with you last they have had a separation and now have reunited with mother insisting on family work if the family is to stay together. I have organised to meet with the family on a regular basis to try and do some family work. It would appear that this ongoing marital problem has severely affected the functioning of all three boys and I feel that the only way of changing the behaviour of the boys, particularly Matthew is through some family work rather than individual work. It was encouraging that father attended this session with his wife and certainly there appeared to be some compromise on his part with was hopeful. I will keep you informed of there (sic) progress. 229Dr Wever agreed that the ongoing marital problems were severely affecting Mrs Chaina as well as the boys. 230Dr Wever said that at that time he made a diagnosis that Mr Chaina was suffering from paranoid personality disorder or a paranoid illness. He found that Mr Chaina was morbidly jealous of his wife, that he was a paranoid personality, that he was physically aggressive and that Mrs Chaina was at risk. Dr Wever's diagnosis of paranoid personality disorder was supported by the other psychiatrists in the proceedings. 231Dr Wever found that Mrs Chaina was suffering from depression and that he believed that she was at future risk of domestic violence from Mr Chaina. 232He wrote again to Dr Hislop on 23 March 1998 as follows: I am conducting some marital therapy for Mr and Mrs Chaina. The situation is rather grim I am afraid. Mr Chaina is convinced that his wife has had an affair which I think is an extremely unlikely event and as a result to that their relationship has deteriorated significantly. It would appear that both members of this partnership are extremely unhappy with the marriage and I doubt whether I can make much headway unless they change their stance on a number of issues. I will continue to see them on a fortnightly basis but the sessions have been extremely hard going and rather acrimonious. I do have some fears that Mr Chaina may not be able to control his aggression but previously I have warned Mrs Chaina on safety issues and the need for her to put her safety first. 233Dr Wever agreed that Mr Chaina's conviction that Mrs Chaina was having an affair was an indication of paranoid personality. He agreed that it was a classic clinical sign of a paranoid personality in a marital situation. 234On 6 April 1998 Dr Wever wrote again to Dr Hislop in these terms: I reviewed Mrs Chaina on the 03 April 1998 She came alone without her husband as her husband felt that the marital therapy was a waste of time. I am concerned about her mental state as she is extremely depressed but is reluctant to start any anti-depressants She is currently deciding whether to stay in this marriage or perhaps leave and this is causing her a great deal of anguish. I am concerned about her health and have organised to see her on a fortnightly basis. (emphasis added) 235Dr Wever agreed that the statement that Mrs Chaina was extremely depressed was accurate. He also agreed that by this time Mr Chaina had exhibited classic signs of paranoid personality one of which signs was a fear of psychiatrists and a view that psychiatric therapy was a waste of time. 236On 23 June 1998 Dr Wever wrote again to Dr Hislop in these terms: Mrs Chaina saw me on the 22 June 1998. The major issue is the ongoing difficult marriage between herself and her husband. It appears that Mrs Chaina is caught in a situation where she wishes to leave the marriage but a fear that she would not be financially independent because of her husband's tenacity about material possessions and her safety concerns about herself and her family making it hard for her to leave. It appears that if Mrs Chaina left the marriage Mr Chaina may well become spiteful and try to deprive her of any of the family assets. Furthermore she fears that she may be at risk in terms of her physical well being as Mr Chaina has made threats. I advised Mrs Chaina of the danger of the current situation and that she need (sic) to be concerned about her own safety and seek appropriate protection if she felt in danger. I feel that the current situation will continue and that currently Mr and Mrs Chaina will not be compliant to any marital work. In the meantime I have suggested that Mrs Chaina continue to see me on a fortnightly basis as I am concerned about her level of depression though on the day that I saw her her mood was quite good with no features of major depression which I had noted in our previous session with her children. Mrs Chaina agreed to ongoing supportive psychotherapy and I will keep you informed of further developments. (emphasis added) 237Dr Wever was asked about the reference to Mr Chaina's tenacity about material possessions and agreed that that was also a clinical sign of a paranoid personality. 238Dr Wever was asked about the reference to Mrs Chaina fearing that she might be at risk in terms of her physical wellbeing because Mr Chaina had made threats. He seemed reluctant to agree that these threats and fears concerned her physical safety. In my opinion the proper inference to be drawn from the letter is that those fears and threats did concern Mrs Chaina's physical wellbeing. His letter of 23 March 1998 (at [232]) supports that inference. 239Dr Wever wrote again on 7 September 1998 to Dr Hislop as follows: I reviewed Mrs Chaina on the 04 September 1998 shortly after you had seen her. I am pleased that you had prescribed the anti-depressant as certainly she does appear to be extremely depressed at present. I have asked her not to make any major life decisions while her mood is so low and for her to concentrate on pleasant events and organising herself so that she feels a little bit more in control. I have asked to see her on a fortnightly basis and will keep you informed of her progress. (emphasis added) 240Dr Wever agreed that he knew by that stage that Dr Hislop had prescribed for her the antidepressant Cipramil. He agreed also that in the history he obtained through these consultations he learned that Mrs Chaina was having difficulty with concentration and memory, difficulty sleeping, she was tired, depressed, that she had lots of stress and that she could not perform in a normal way. 241Dr Wever wrote to Dr Hislop on 30 April 1999 in these terms: I reviewed Mrs Chaina on the 29 April 1999. She appeared extremely despondent and the precipitant to this appeared to be the wedding of her step-daughter. This caused some major conflict between her husband and herself. She is continuing to be rather stuck in a situation of being unhappy in a marriage and unwilling to move out of the family situation. She is looking at trying to open a pharmacy and make herself financially independent from him so that she can more easily distance herself from him. She continues with the Cipramil 20mg mane. 242Dr Wever agreed that Mrs Chaina had told him she was thinking of opening a pharmacy to make herself financially independent and that was because of the conflict with Mr Chaina. 243Dr Wever wrote to Dr Hislop on 4 August 1999 as follows: I reviewed Mrs Chaina on the 4 August 1999. She has become somewhat despondent as she feels that her husband is still controlling her behaviour because of her involvement in their business. She is interested in opening up a pharmacy which appears to give her some interest and she stated that she felt good when pursuing this business venture. I discussed these issues with her and she has agreed that perhaps distancing herself from her husband's work and following her own career path by opening a pharmacy may be the next step to help her improve her mood. She states that her husband is treating her reasonably well apart from dealings with business. I will continue to see her on a monthly basis. 244Dr Wever agreed that Mrs Chaina had been complaining about her husband controlling her behaviour on prior occasions. He agreed that controlling behaviour was one of the features of a paranoid personality disorder. 245Dr Wever wrote to Dr Hislop again on 7 September 1999 in these terms: I reviewed Mrs Chaina on the 7 September 1999. She described having more insight of how depressed she was over the last little while and certainly she was very resentful of the time that has been wasted due to the depression and inactivity. There has been a major development in terms of the business in that there is a deadline for her company's business to pay its tax which has not been paid over the last three years. She requested that I write a letter that she has been depressed which I will do. (emphasis added) 246Dr Wever said that he was told by Mrs Chaina that there had been a failure to comply with the obligation to lodge tax returns for at least three years and it was in respect of that matter that he was asked to write a letter to the Taxation Department. He wrote such a letter date 7 September 1999 in these terms: I have been Mrs Chaina's treating psychiatrist since early 1998 She is a woman with severe depression of a long standing nature which has been chronic and poorly responsive to treatment. I understand that she has had difficulties in organising herself in preparing a tax return and certainly I feel that the depressive illness has a significant part to play in her inability to do this. Sufferers of depression often have difficulty in performing day to day tasks and frequently do not have the energy to see a task through once they start. I certainly feel that this may have been the case with Mrs Chaina. If any further information is required please feel free to contact me on 97430122. (emphasis added) 247Dr Wever agreed that everything he had said in the letter was true. 248The evidence also discloses that Mrs Chaina had, for many years prior to Nathan's death, suffered from obesity and diabetes. She underwent gastric banding surgery. These matters are only relevant as co-morbidities that impacted upon her mental condition both before and after Nathan's death. 249All of this material demonstrates that Mrs Chaina had longstanding psychiatric conditions which persisted with greater or less intensity until at least the month before Nathan's death.

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(b) Mr Chaina 250Mr Chaina claimed that because of the events of October 1999 he has become a much more aggressive person and very much angrier than he had ever experienced in his life. He said he was not like that before. He denied that he ever was, or has now become, a violent person. However, he said that if someone does the wrong thing by him he will defend himself and especially his family. Nevertheless, he agreed that he possibly made violent threats against people with whom he was in dispute as a result of his anger prior to October 1999 (T301). 251There was evidence of a number of incidents that should be noted. 252First, his criminal history shows that he was convicted of assault and placed on a 12 month good behaviour bond at Penrith Court in May 1973. Mr Chaina denied knowing anything about that matter. It may be accepted that it was a long time ago but it is relevant because of subsequent events. 253Secondly, he had an altercation with a security guard at a petrol station in August 1982. It was suggested to him that he assaulted the security guard by pulling him out of his car and stealing his pistol. He denied that he had done that but agreed that he had been charged with assault and stealing property arising from the incident. He said the charges were false and that when the matter went to court he was cleared. However, he agreed that he was put on an 18 month good behaviour bond and the record of the court confirmed that to be the case. 254Thirdly, he assaulted his wife in March 1997. He denied that he did so and denied that she presented at the doctor's surgery with two black eyes (T368). He claimed only to have backhanded her in the mouth. He claimed it was because she verbally abused him. Mrs Chaina confirmed the assault, the two black eyes and the bleeding nose. Dr Hislop's notes confirm, at least, that Mrs Chaina presented with such injuries. 255Mr Chaina did admit, however, to accusing her of having an affair at the time. He would not accept that the accusation was wrongful (T372). He did not want to attend counselling with Dr Wever because there were no problems and no issues. He did not believe there was anything wrong (T372 & T374). 256I accept Mrs Chaina's evidence in this regard. Mr Chaina's denials are an example either of his thinking being out of touch with reality or of deliberate dishonesty. 257Fourthly, there was said to be an incident in 1993 where Mr Chaina abused a person from ICI whom he claimed stole a drum from Deluxe's premises and abused some of Deluxe's staff (T510 - 515, exhibits 49 & 50). Although Nicholas Winkler Solicitors wrote letters on Mr Chaina's behalf to ICI about the matter, including statements that Mr Chaina strongly denied having made threats against a Mr Higginson, Mr Chaina denied that he consulted or instructed Mr Winkler about the matter (T519). It is noted also that Mr Winkler wrote a letter to Deluxe "Att: Mr George Chaina" saying "As discussed in conference" (exhibit 52). 258Mr Chaina said that the reference to the denial by Mr Chaina of the threats did not mean that he personally instructed the solicitor. Rather, the "office manager" instructed Mrs Chaina who then instructed Mr Winkler. The office manager is said to have got the information from Mr Chaina. That explanation seems so unlikely as not to be believable. It is hard to understand why, if Mrs Chaina was providing the instructions, Mr Chaina did not discuss the matter directly with her rather than having it passed on through the office manager. 259Mr Chaina agreed that he abused the ICI representative but denied threatening him. Nevertheless, the contemporaneous documents demonstrate that ICI reported Mr Chaina to Burwood police. 260Fifthly, there was the incident about the repossession of his Mercedes Benz motor car in September 1994. It was put to him that he defaulted in the payments for the loan he took out to buy the Mercedes Benz and a repossession agent turned up at his property at 77 Nicholson Street, Strathfield with a tow truck to take the Mercedes Benz away. It was suggested to him that he became so aggressive that the police became involved. He denied having any recollection of any of this. The report from the repossession agents (Exhibit 120) included an allegation of assault by Mr Chaina on the agent and aggression displayed towards the police who turned up. 261I do not accept Mr Chaina's evidence that he had no recollection of this incident. It is not the sort of incident that a person would ordinarily forget. Even if there had not been an altercation with the agent and the involvement of the police, an attempt by a company to repossess a person's motor vehicle by towing it away from their home when the person was present would not be the sort of event that would not be remembered by the owner of the motor vehicle. 262Sixthly, there was some evidence of threats and some aggression towards Mr Don Smith, the Director, Building and Environmental Services at Strathfield Municipal Council in September 1995 concerning contamination at the premises at 4-6 Gould Street, Enfield (Exhibit 119). Mr Chaina said he did not remember making a threat but, interestingly, added the following statement: And I don't threaten people for just for the sake of it. (T1160) 263When it was also put to him that he threatened to take the Director and the Council to Court he said that he did not remember it, but, If I did say that, there must be reason, either spreading - everybody (sic). (T1160) 264I infer from these incidents that Mr Chaina was, prior to Nathan's death, a combative and aggressive man who would, at times resort to violence. It is likely that this was associated with his Paranoid Personality Disorder, a condition that all of the psychiatrists agreed that he suffered from. Both Dr Milton and Dr Wever said that this is a lifelong condition whose aetiology is probably genetic. It particularly manifested itself prior to Nathan's death in Mr Chaina's false belief that Mrs Chaina was having an affair. 265In addition, medical records show that Mr Chaina had attended Concord hospital on 12 occasions up to February 1995 suffering from anxiety and/or panic attacks. Mr Chaina believed, despite medical advice to the contrary, that he had a mitral valve problem. 266On 24 March 1994 Dr Hislop wrote that Mr Chaina still suffered from lots of stress over a court case. He was getting panic attacks and hyperventilating (Dr Skinner, report of 25 February 2013, para 55). 267In May 1994 Mr Chaina saw Dr Hislop. He complained of panic attacks, dizziness and was very stressed. In that month Dr Hislop prescribed an antidepressant called Anafranil. In August 1994 this was changed to Fluoxetine 20mg daily and in November 1994 the dose was increased to 40mg daily (Dr Skinner, paras 56 and 57). 268On 9 May 1994 Mr Chaina was taken to Concord Hospital by ambulance complaining of chest pain. At that time he was having problems with the insurance from the factory fire. He had a lot of stress over nine months more in the previous two weeks. 269He attended again on 13 May 1994 anxious, feeling short of breath and obese. 270On 8 June 1994 he was admitted to Concord Hospital complaining of shortness of breath and chest pain. He was said to live a stressful lifestyle although he said that doctors had brainwashed him into thinking that his problem was due to stress. When the doctor saw him his condition was stable and the doctor did not feel the need to call a specialist. He was not weighed but Mrs Chaina said that he weighed about 112kg. Mr Chaina refused to accept the diagnosis offered or the fact that there may have been a heavy psychosomatic component with anxiety and over-interpretation of symptoms (Dr Skinner, paras 58-60). 271In June 1994 Dr Hislop noted that Mr Chaina was depressed. In October 1994 she considered that he was very stressed and depressed and that the antidepressant drug prescribed, Prozac, had not yet been effective. 272By reason of the references to Mr Chaina being prescribed anti-depressants, it should be noted at this point that when Dr Phillips was being cross-examined the following exchange occurred with Mr Chaina: Q. Could I turn, please, to your report on George Chaina, which is now exhibit QQ1? Again, you set forth the difficulties with which you were confronted in preparing this report. And, again, I'm not being critical, but you've set out there those, perhaps, hurdles over which you had to come in order to prepare this report? A. Yes. I think it's in very similar words to the words I used with Mrs Chaina. Q. Yes. But in the methodology that you have set forth on page 2, paragraph 4, you describe the weight which you have given to the reports of Dr Wever, the reports of Dr Skinner, and the less weight that you give to the report of Dr Milton. That's set forth in the bullet points in paragraph 4, is it not? A. Yes, it is. Q. The reason that you gave less weight to Dr Wever we have already explored and there's no purpose to be gained in going over that again. But-- SECOND PLAINTIFF: Your Honour, I-- HIS HONOUR: Yes, Mr Chaina? SECOND PLAINTIFF: Sorry, your Honour, I'm not trying to give anybody a hard time, but I'm not clear that the question he's asking about - somebody was - what's troubling me is that exactly what was - what he was referring before about my wife. Now, he's applying the same thing to Dr Phillips about me, and I don't think Dr Phillips it's fair on him he's sort of confusing the issue. HIS HONOUR: Mr Chaina, are you making the same objection as you made before to me? SECOND PLAINTIFF: No, your Honour, no. This is the last question that he said about, I think-- HIS HONOUR: What Mr Stitt did was simply draw Dr Phillips' attention to what is contained on page 2 and on whose reports he placed weight and so on. SECOND PLAINTIFF: Yeah; but my - my report differ from my wife. I mean-- HIS HONOUR: Yes. But Mr Stitt has directed Dr Phillips' attention to the report about you on page 2. SECOND PLAINTIFF: Yes. HIS HONOUR: And he's just asked him questions about the weight Dr Phillips placed on Dr Skinner and Dr Wever and Dr Milton. SECOND PLAINTIFF: Sure. HIS HONOUR: What's the unfairness there? SECOND PLAINTIFF: Well, my wife - I mean, they are - I mean, my - I mean, I live with this lady for 30 year. I know what she take. She may have taken some she may have had, but I have never taken any - what do you call it? HIS HONOUR: Antidepressants. SECOND PLAINTIFF: Antidepressant before the tragedy, your Honour, nobody (scil. never). HIS HONOUR: Mr Stitt did not suggest in that question that you were, Mr Chaina. SECOND PLAINTIFF: Sorry, that's why I came like a - he's saying - well, he's based the opinion that I was on depression (sic) before, but I never. (emphasis added) 273These statements of Mr Chaina were simply untrue as the evidence recounted at [267] and [271] makes clear. I cannot accept that Mr Chaina has simply forgotten that he was prescribed two different anti-depressants (Prozac and Fluoxetine being the same drug) including one where the dosage was increased. This is just one more reason that I cannot rely on anything Mr Chaina says. 274Dr Christine Jenkins saw Mr Chaina several times in about 1994. She treated him under the name Pierre Ayoub. She took a history that Mr Chaina had not worked since he first developed the problems which had commenced in early May 1994. Mr Chaina told Dr Jenkins that he had been irascible, volatile and anxious. He had been under major work pressure in the previous 12 months. Dr Jenkins thought the episodes of chest pain and breathlessness of which he complained were due to panic attacks and referred him to Dr Michael McGrath, a psychiatrist. She wrote to Dr Hislop, to this effect, on 22 July 1994 (Report of Dr Skinner of 6 September 2004). 275Dr Paul Roy wrote that Mr Chaina had been attending his practice since 29 August 1994. He noted that Mr Chaina had had 12 admissions to Concord Hospital and his health was deteriorating. Nothing could be found that would explain his chest pain and it would appear that the extreme stress he was under with court proceedings was taking its toll. He was unable to sleep, woke at night with severe chest pain, tachycardia and anxiety (Report of Dr Skinner of 6 September 2004). 276Mr Chaina saw Dr McGrath in August 1994 suffering from anxiety which Dr McGrath considered was "massive anxiety with panic attacks". Mr Chaina said that his family relationships had suffered as a consequence of his condition. Dr McGrath suspected that Mr Chaina's level of anxiety was very high before the fire but since then had decompensated into a state of massive anxiety with panic attacks. Dr McGrath recommended that Mr Chaina should be hospitalised and arranged an admission at St John of God Hospital at Burwood. However, Mr Chaina did not accept the recommendation. 277There was evidence that a symptom of Paranoid Personality Disorder is a suspicion of psychiatrists. Dr Skinner considered that Dr McGrath's advice about admission to hospital was an indication of a significant psychiatric problem because it could not be treated with Mr Chaina as an out-patient. 278On 13 October 1994 Dr Hislop wrote that when she saw Mr Chaina on 3 August 1994 he was unwell. She also noted the recommendation and refusal for the admission to St John of God Hospital. Mr Chaina was still very stressed and depressed and medication to treat his depression was yet to improve it. 279On 15 February 1995 Dr Roy reviewed Mr Chaina. Dr Roy said: He is under a lot of pressure with the court case coming up next week and this is certainly causing him a lot of distress in terms of his health. I am sure that his multiple admissions to Concord relate to the stress he is under with the court case. 280Dr Roy noted that Mr Chaina had visited Concord Hospital on 12 occasions until that point. He noted that Mr Chaina remained overweight at 108kgs. 281On 8 December 1995 Dr Roy saw Mr Chaina again for the first time in almost 12 months. He was complaining again of left chest pain unrelated to exertion. He was still 108kgs. Dr Roy said his physical signs of mitral stenosis were minimal and he was sure that it did not relate to Mr Chaina's current symptoms. 282On 19 December 1996 Dr Roy noted that Mr Chaina had been admitted by Casualty with chest pain. Dr Roy organised an angiogram. It disclosed a "very small gradient across the mitral valve (less than 5mmHg) something that had been known from the echocardiogram for some time. His left ventricle contracts normally. His coronary arteries were perfectly normal and his main pulmonary artery pressure was normal". 283Dr Roy concluded that he had trivial mitral stenosis and normal coronaries. There was no cardiac cause for his chest pain (exhibit 182). 284On 14 February 1998 Mr Chaina saw Dr Wever. Dr Wever made a diagnosis that Mr Chaina suffered from paranoid delusional disorder. 285All of this material indicates, and I find, that Mr Chaina also suffered from longstanding psychiatric conditions that are relevant to the claims now made as a result of the death of Nathan. 286Mr Chaina also claims that, by reason of Nathan's death, his weight has increased and his consumption of alcohol has increased. In relation to his weight I accept the analysis of contemporaneous documents carried out by Dr Milton which demonstrates that Mr Chaina's weight has fluctuated within a range that is almost identical for the periods before and after Nathan's death. In particular, his weight last measured before Nathan's death was 131 kg on 14 September 1999. On 31 October 2012 (the date of the last measurement) it was 118kg. From 11 May 1994 to 31 October 2012 it has varied from as low as 108kg to as high as 138kg with peaks and troughs before and after Nathan's death 287I also accept Dr Milton's analysis of Mr Chaina's Gamma GT readings. Gamma GT is an enzyme whose level in the blood rise with increased alcohol intake, the upper acceptable level being 35 or 50 (depending on the laboratory). The readings varied between 43 and 99. Most of the readings were taken after Nathan's death but all but one of the 43 readings post-dated Nathan's death. Dr Milton's conclusion, which I accept, was that Mr Chaina drank a little excessively before Nathan's death and continued to drink a little excessively after it. Dr Milton said, and I accept, that Mr Chaina's claim that he drank more heavily after the death to "stop the pain" or because he was depressed is not supported by the objective data. 288What must be determined, therefore, is the mental state of each of Mr and Mrs Chaina after Nathan's death and whether any mental harm they suffered resulted from the Defendant's breach of duty.

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(a) Dr Wever's assessment 289Although Dr Wever's reports which pre-date Nathan's death provide useful and reliableinformation about Mrs Chaina's, and to a lesser extent Mr Chaina's, condition the same cannot be said about the reports he prepared for the purpose of these proceedings. He has demonstrated that he became an advocate for the Plaintiffs, he treated them inappropriately, he did not behave as a professional psychiatrist ought to have, and his post 1999 reports at the least are misleading and at worst dishonest. 290In his report of 26 August 2003 (Exhibit X1) he said this: There was no evidence prior to Nathan Chaina's death that she had any biological symptoms of a Major Depression such as disturbed sleep pattern, slowness in thinking or other feature of psychomotor retardation.... Subsequent to her son's death Mrs Chaina has become extremely depressed. 291In his report of 11 April 2005 (Exhibit X2) he said this: 9.2 There was no evidence prior to Nathan Chaina's death that she had any biological symptoms of a Major Depression such as disturbed sleep pattern, slowness in thinking or other feature of psychomotor retardation....I did not feel that she had symptoms for a diagnosis of Major Depression but fulfilled diagnosis of Adjustment Disorder with mixed anxiety and depression symptoms.... 12. Diagnosis prior to Nathan Chaina's death: Initially I made a diagnosis of Adjustment Disorder with mixed anxiety and depressed mood. I do not feel that she had symptoms of a Major Depression prior to the death of Nathan... 15.1.2 ... Assumptions that Dr Skinner makes that she had pre-existing depression which was present prior to Nathan's death is something with which I disagree. 292In his report of 27 July 2012 (Exhibit X4) at paragraph 6.5 he repeated what appears at [291] in the first sentence of his paragraph 9.2. 293Those opinions are to be compared with what Dr Wever had said in the passages extracted at [227], [234], [236], [239], [245] and [246]. 294After some initial resistance, Dr Wever accepted that what was contained in paragraph 9.2 of his report of 11 April 2005 was different from what had been included in the letter to the Taxation Office at [246], and he said that the report of 11 April 2005 (exhibit X2) may have understated her depression prior to Nathan's death. Judged by his other contemporaneous comments set out in his pre-October 1999 reports that statement was itself a considerable understatement. 295Dr Wever would not accept that he lied either to the Tax Office or in his report of 11 April 2005. He said that he might have understated the position in the medical report. He agreed that the way he expressed matters "perhaps" represented the true position but he said the comparison between her position before and after the tragedy was huge. Despite what he had said in a number of reports to Dr Hislop, and in his evidence, he insisted that she had depression before the tragedy but that it was not severe. 296As far as Mr Chaina is concerned, Dr Wever acknowledged in his report of 11 April 2005 (Exhibit Y2) that Mr Chaina had pre-existing psychiatric difficulties particularly in the time following the fire in 1993 with features of paranoid personality disorder. He said Mr Chaina may also have had panic attacks. 297However, his diagnosis of his condition after October 1999 was:

Panic Disorder.
Major Depression
Post-Traumatic Stress Disorder - Chronic
Alcohol abuse
Paranoid Personality Disorder. He considered Mr Chaina's current level of functioning (as at 2005) was 20% of what he described as his pre-morbid state. 298Dr Wever wrote a letter on 5 April 2000 addressed to "To whom it may concern". It was a letter seeking that Mr and Mrs Chaina be excused from attending to the litigation in the Rushton matter for a period of six months because of their involvement in the coronial enquiry concerning Nathan. The letter concluded by saying: In my medical opinion due to their loss and psychological health they would be medically unfit to do so for a further six months. 299Matters were put to Dr Wever suggesting that this letter was misleading because Mr and Mrs Chaina were medically fit to attend and participate in the inquest. I do not see that the letter was misleading in that regard at all. It can be accepted that the inquest would have been all-consuming for them and would have imposed emotional and psychological strains that would have made it difficult for them to attend to other litigation. 300However, on 2 November 2000 Dr Wever provided a further letter to the same intent to Danny Arraj who was acting for Mr and Mrs Chaina in the Rushton litigation. The letter was provided, no doubt, so that an application could be made to the Court in the Rushton matter for it to be adjourned for another six months. The letter said this: I am the treating psychiatrist for both Rita & George Chaina. They lost their middle son Nathan in October 1999 and both have suffered serious psychological difficulties since that time. Currently Rita Chaina suffers severe Depression and Panic Disorder and continuous problems with unresolved grief. Mr George Chaina similarly has unresolved grief issues and has developed a severe anxiety disorder with frequent panic attacks. Currently both Mr & Mrs Chaina are receiving medication and weekly psychotherapy. At present I feel that they are not in a fit state to give evidence in such an important matter and that they would be unable to do so for a further six months. I say this period of time as I have continued to see both Mr & Mrs Chaina on a weekly basis and the symptoms have not improved over- the last six months and I feel that further intensive work and medication is required before these symptoms improve enough for them to be able lo handle such a stressful situation. I spoke with Mrs Chaina on the 7 November 2000 and she was quite happy for me to release these details to you so that you can act appropriately in regard to the matter of the hearing on the 20 November 2000 in relation to Deluxe Chemicals Ply Limited ats Edward Rushton Pty Limited. If further information is required please feel free to fax me on 97430717. 301Dr Wever agreed that he made no mention of the fact that Mr and Mrs Chaina were able to participate in the coronial inquest. He accepted only that the matter was misleading in that they could do one thing but not both, although he did not mention the coronial inquest. If this had been the first letter written by him intended to go to the Rushton solicitors or to the Court it might have been misleading in the way suggested by the Defendant. However, it may reasonably be inferred that the prior letter had been provided either to the Rushton solicitors or to the Court or both to ensure that relevant parties were apprised of the fact that Mr and Mrs Chaina had been involved in the coronial inquest. Indeed, it may be, that it was provided to continue to justify what was sought in the letter of 2 November 2000. Whether that was the reason Dr Wever did not mention the coronial inquest in this letter was not identified. I consider that he might have been a little more frank in what he said in the letter but the matter is of low significance when assessing his credibility. It shows only, I think, that Dr Wever as the treating psychiatrist was endeavouring to protect Mr and Mrs Chaina as far as possible. 302Overall, I consider that Dr Wever adopted a fairly casual and somewhat careless approach to his obligations as the treating psychiatrist and with regard to related matters. Some of these matters were these: (1) He did not obtain a further referral from Dr Hislop after the initial referral, saying that he believed that it was an indefinite one when confronted with it. Dr Wever admitted that the referral was not indefinite (T2172); (2) Although he knew that the Mr and Mrs Chaina ceased to retain Dr Hislop as their GP in 2001 and went to another GP in Rose Bay after that time, he did not ensure that he had a referral from the new GP nor did he ever report, at least in writing, to that GP over the whole time that he continued to treat the Chainas. He agreed that this was an error and agreed that it was a serious breach of his professional obligations not to notify the new GP of what he was doing with the Chainas (T2173); (3) He continued to claim Medicare benefits on the basis of Dr Hislop being the GP and the referring doctor long after she had ceased to be the Chainas' GP. He agreed that this also was an error but he blamed his secretary; (4) He said in his affidavit, sworn in relation to some Victorian Family Court proceedings that he had been treating the Chainas for 11 years when it was, in fact, longer. His explanation was that he did it hurriedly and did not really have time to check on the correct dates. Despite that, his affidavit said that he had read the medical reports and that what was contained in them was true and correct; (5) What Dr Wever said in his affidavit to the Family Court on 13 December 2010 was not accurate. He said this: The strain of this has adversely affected the mental health of each of them. I have observed this in particular owing to the fact that the state of the panic symptoms and claustrophobia is such that I treat George and Rita through visits to their home rather than at my office. It has proven to be the only way that my therapy of them can take place. That statement was not accurate for the reason that Dr Wever was treating the Chainas at home because Mr Chaina had asked him to do so. Like a number of statements that Dr Wever made it was at best a half truth but nevertheless misleading. (6) There are matters I discussed above concerning what was said in his reports before Nathan's death and the inconsistent statements afterwards. The statements in the reports for these proceedings showed either extreme carelessness or a reckless disregard of the truth. His explanations about what appeared in paragraphs 9.2 and 15.1.2 of his report of 11 April 2005 were entirely unconvincing. (7) Whilst Mr Chaina was being cross-examined Dr Wever was speaking to him approximately twice a week. He even prepared a report for the Plaintiffs' then solicitors, at their request, commenting on the way Mr Chaina gave his eveidence by reason of his medication and his psychiatric condition. This was completely inappropriate. Dr Wever knew that he was to be called a witness in the case. The dubious ethical behaviour of the Plaintiffs' solicitors in this regard speaks for itself. (8) His treatment approach and methods were strongly criticised by all of the other psychiatrists in the case including Dr Phillips. It is apparent that he has become far too close to Mr and Mrs Chaina so that his objectivity has been lost. This has resulted in his becoming an advocate for the Chainas, particularly demonstrated by the letters he was prepared to write and the affidavit he was prepared to sign to the Family Court to excuse their behaviour in any given circumstance. 303The result of all of this is that I regard his evidence in relation to reports he has written for the Chainas since Nathan's death as generally unreliable. His current evidence about their pre-1999 condition is also entirely unreliable. There can be no doubt, for he himself admitted it, that he has tried to support the Chainas as much as he could from the tragedy. He did not accept, and I do not find, that he would do anything in that regard, but he has certainly failed on a number of occasions to give the whole picture when endeavouring to assist them. In the absence of any satisfactory explanation for the clear contrast between the statements in his pre- and post-tragedy reports I am left with the clear impression that Dr Wever has not been honest in what he wrote about Mr and Mrs Chaina following Nathan's death. 304It is, therefore, necessary to turn to the other psychiatrists who have examined Mr and Mrs Chaina.

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(i) Mrs Chaina 305In June 2003 and September 2004 when Dr Skinner first saw Mrs Chaina, and had limited material available, she diagnosed Mrs Chaina as having a depressive illness and an adjustment disorder with depressed mood (chronic). Her psychological condition was outside the boundaries of normal grief because it was complicated by family problems including Mr Chaina's psychiatric disorder, presumably the Paranoid Personality Disorder. However, Dr Skinner thought that Mrs Chaina was not suffering from a psychiatric illness that would prevent her working. She thought that Mrs Chaina's return to work, running the pharmacy, had been beneficial for her. Dr Skinner noted in her report of 6 September 2004 (Exhibit 190B) that Mrs Chaina reported being able to cope in her professional role as a pharmacist. 306Dr Skinner prepared a further report on 8 March 2005 (Exhibit 190C). She had been provided with some assumptions by the Defendant's solicitors but also medical records of Dr Hislop. She concluded as follows: In the light of the further information contained in the statement of assumptions, and after reviewing the clinical records of Dr Hislop, I realise that Mrs Chaina has a previous history of depression and her present condition is a continuation of the pre-existing disorder. I have changed my opinion in the respect that I now consider, given additional information and reviewing the medical file, that the depression from which Mrs Chaina suffers is a continuation of a depressive illness that has been present for many years, rather than an adjustment disorder or a grief reaction. 307Dr Skinner was provided with further materials including Dr Wever's pre-October 1999 reports. She also re-examined Mrs Chaina on 23 January 2007 and provided a further report dated 30 July 2007 (Exhibit 190E). She diagnosed Mrs Chaina as suffering from Major Depression and Panic Disorder. She was asked this question by the Defendant's solicitors: Adopting the counter-factual assumption that the death of Nathan Chaina did not occur on 24 October 1999, was the pre-existing state of any of the family members such that re-occurrence and/or deterioration in their condition would have occurred? Please set out any such likely deterioration. 308In response Dr Skinner said this: Mrs Chaina suffered recurrent depression from 1997 to 1999, not controlled by medication and supportive therapy. This was in the context of ongoing marital problems and concern about the welfare of her sons. She was trying to become more independent so that she could separate from her husband at a later time when her sons were more capable of being more independent. ... If she had remained with George, the conflicts and problems would have continued. The relationship would have remained hostile. It is likely that at some future time he would again accuse her of having affairs. Mrs Chaina would probably have suffered chronic or recurrent depression, and her psychiatric conditions would have adversely affected her ability to work effectively in a large business corporation. ... Mrs Chaina's condition has deteriorated since I saw her in 2004, principally because of the family situation with continuing conflicts and problems. The opinions expressed in my previous reports are unchanged. 309Dr Skinner's final report was dated 21 February 2013 (Exhibit 190F). She reviewed a large number of documents and saw Mrs Chaina again on 22 January 2013. Dr Skinner's diagnosis was this: 164. Mrs Rita Chaina is suffering from Major Depression characterised by depressed mood, tearfulness, insomnia, and lack of motivation. Major Depression is a recognised psychiatric illness. ... 166 I do not agree with Dr Wever that Mrs Chaina suffers from post traumatic stress disorder. I agree with Dr Phillips that it is important to seek diagnostic economy. It is reasonable to accept Mrs Chaina's symptoms of panic attacks and post traumatic stress disorder as part of her depressive illness. 310Dr Skinner then discussed the effect Nathan's death had on Mrs Chaina. She said: 188. ...The death of Nathan was sudden and unexpected. Mrs Chaina suffered emotional trauma when she was informed that her sons were missing, and more severe emotional trauma when she learned that Nathan had died. ... 192 In the period immediately following the death, Mrs Chaina suffered an extreme grief reaction to the point that she was reportedly "paralysed" and found it extremely difficult to communicate. She suffered severe depressive symptoms and was unable to function. ... 222 As Mrs Chaina had suffered from Major Depression prior to the death of her son Nathan, she would have been vulnerable to suffer a recurrence at some time in the future, especially under conditions of personal stress. The condition had not resolved in September 1999, so it is possible that she might have continued to suffer chronic depression if the death had not occurred. 223 I do not consider that the death of Nathan Chaina accelerated the pre-existing condition. I believe that the death of Nathan Chaina caused a severe bereavement reaction, intense grief that was overwhelming and persisted for at least a year and possible (sic) longer. 311These conclusions appear to me to establish that, although Mrs Chaina's pre-existing depression prior to Nathan's death had not resolved it was Nathan's death that resulted in a recurrence of it. That recurrence, in the way described by Dr Skinner, was the suffering by Mrs Chaina of a recognised psychiatric illness and it resulted from Nathan's death. That finds support from her statement that Nathan's death caused a severe bereavement reaction and intense grief that was overwhelming. 312Dr Skinner accepts that Mrs Chaina suffers symptoms of post traumatic stress disorder but says they form part of her depressive illness. I understood her answer (at T 2229.46) in that light as meaning that Mrs Chaina did not suffer from post traumatic stress disorder. 313Dr Skinner thought that it was only possible that Mrs Chaina would have continued to suffer depression even if Nathan's death had not occurred. In those circumstances, where she undoubtedly did suffer depression in the form of an intense grief reaction after Nathan's death it must be held, on the balance of probabilities, that the depression she suffered resulted from Nathan's death.

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(ii) Mr Chaina 314Dr Skinner agreed with Dr Wever and also with Dr Waters (a psychiatrist who had seen Mr and Mrs Chaina and provided reports but whom the Chainas decided not to rely upon as part of their case) that Mr Chaina suffers from an underlying paranoid personality disorder. This is an Axis II diagnosis and is the principal diagnosis for Mr Chaina because that personality style determines his responses to situations and his behaviour. He has displayed paranoid jealousy also known as morbid jealousy. 315Personality disorder is a recognised psychiatric diagnosis. In the World Health Organisation's International Classification of Diseases - ICD10 behavioural disorders, including personality disorder, are defined as ingrained patterns indicated by inflexible and disabling responses that significantly differ from how the average person in the culture perceives, thinks and feels particularly in relation to others. 316In relation to this disorder, Dr Skinner said in her report of 29 February 2013 (Exhibit 189G): It is characterized by at least three of the following: 1. Excessive sensitivity to setbacks and rebuffs; 2. Tendency to bear grudges persistently, i.e. refusal to forgive insults and injuries or slights; 3. Suspiciousness and a pervasive tendency to distort experience by misconstruing the neutral or friendly actions of others as hostile or contemptuous; 4. A combative and tenacious sense of personal rights out of keeping with the actual situation; 5. Recurrent suspicions, without justification, regarding sexual fidelity of spouse or sexual partner; 6. Tendency to experience excessive self-importance, manifest in a persistent self-referential attitude; 7. Preoccupation with unsubstantiated "conspiratorial" explanations of events both immediate to the patient and in the world at large. 200. Persons who have paranoid personality traits have difficulty with trust and find it difficult to establish trusting relationships. They also have difficulty in determining the boundaries of trust when they are able to establish relationships, as their expectations are unrealistic and the persons with whom they have relationships are unable to meet their expectations, leading the paranoid person to believe that his initial suspicions were well founded. When there are differences of opinion, the underlying distrust and rage often become manifest. This, at least in part, accounts for Mr Chaina's problems in his relationships with his sons and his daughter. 201. The following examples of incidents occurring before October 1999 show features of paranoid personality disorder: a) Mr Chaina has displayed paranoid jealousy, as is apparent from the correspondence between Dr Wever and Dr Hislop in 1998 and 1999, and more recently in his clinical records of 2012. b) The Chaina family's initial presentation to Dr Wever in 1997 occurred in the context of problems with domestic violence and paranoid jealousy. Dr Wever wrote that Mathew was modelling on his father's behaviour. [Comment: Mr Chaina had displayed aggressive behaviour within his family and paranoid jealousy towards his wife.] c) In 1994 Mr Chaina behaved aggressively when he was treated at Concord Hospital late at night. He complained about a wide range of problems including the ambulance, doctors, nurses and the length of stay. He was angry because the specialist was not called immediately at night and demanded to see a medical administrator. [Comment: This incident illustrates Mr Chaina's sense of personal rights and sense of entitlement out of keeping with the situation, and feelings of self-importance, expecting to see the most senior person immediately. These features are consistent with paranoid personality disorder.] d) In 1994 Mr Chaina told Dr McGrath that he was highly successful and his flourishing business had looked like becoming international before the 1993 fire. [Comment: This example again shows Mr Chaina's need to present as an important and successful person.] e) Mr Chaina spoke in denigrating terms of Dr Jenkins, the respiratory physician, as he did not accept her diagnosis of anxiety/panic attack. [This example demonstrates the angry reaction of Mr Chaina when a person disagrees with his own opinion, especially as in this case when he did not want a diagnosis of a psychiatric/psychological condition. Mr Chaina had described the doctor as "a baboon" when he saw me previously.] f) I note Mr Chaina's police record as discussed above. [The aggression and combativeness shown in the record is consistent with a diagnosis of paranoid personality disorder.] g) There were complaints of Mr Chaina's threatening behaviour prior to 1999, as discussed above. [These complaints are consistent with a diagnosis of paranoid personality disorder.] h) I have set out a brief summary of some of the litigation commenced by Mr Chaina between 1992 and 1999. [Comment: The large number of claims, nature of the claims and the fact that many of them were resolved against Mr Chaina and his companies is consistent with his sense of entitlement and combativeness, features of paranoid personality disorder.] 317The matter referred in Dr Skinner's paragraph 201 (d) above is of considerable significance for the assessment of Mr Chaina in this case. In fact, the business had a turnover of a little over $1.7 at the highest, and I agree with Dr Skinner that it seems unlikely that a business employing 30 people (as the Plaintiffs maintained at some points in the trial but probably, in fact, far fewer) was one that looked like becoming international. The evidence referred to at [193] concerning the number of employees in fact employed considerably strengthens this conclusion. 318Coupled with Mr Chaina's persistant and longterm lying concerning his formal qualifications, it demonstrates that his beliefs about his abilities and how the business would have performed had it not been for the tragedy cannot be accepted at face value. Rather, they are the product of his paranoid personality disorder because of his need to present himself, and matters with which he is connected, as important and successful (Dr Skinner report 25 February 2013, paras 199-201). 319Dr Skinner also noted that the diagnosis of anxiety with panic attacks in relation to Mr Chaina was present prior to the death of Nathan. She said it was supported by the diagnosis made when Mr Chaina attended Concord Hospital including by Dr Roy and Dr McGrath. 320Dr Skinner noted that Mr Chaina had been working on a number of legal matters and had been peripherally involved in the management of his business, giving instructions to employees and at times travelling to Dubbo and Canberra to consult and advise. She accepted that at the moment he is fully occupied with the legal proceedings and would not be able to work in his business. However, she said that Mr Chaina is capable of working in the position he had previously occupied in his business or in a similar position for which he is qualified and suited. 321Dr Skinner notes that the treatment provided by Dr Wever has been ineffective. Certainly, Dr Wever accepts that the psychiatric conditions of the members of the Chaina family had not improved. He claims success by way of containment, in that those persons have not become any worse. It may be inferred that he agrees with Mrs Chaina's assessment that if it had not been for his treatment perhaps one or both of her two remaining sons would have committed suicide. It should be noted that the prevention of, or fear about, suicide is not mentioned in Dr Wever's post-1999 reports. However, Dr Skinner thought that there had been a decline in Mr Chaina's psychiatric health since the death of Nathan and his symptoms had continued to worsen. He had become more paranoid and his relationship with his wife had deteriorated. Dr Wever agreed that Mr Chaina has become worse. 322Dr Skinner said that panic disorder was a condition that usually responded well to treatment in a motivated person. If symptoms of panic disorder continued with Mr Chaina he could be referred to a psychologist for six sessions of cognitive behaviour therapy. Estimated costs of treatment would be $1800 for the sessions of cognitive behavioural therapy. A psychiatric consultation for review of medication and preparation of treatment plan would cost approximately $400 and there would be cost of $3000 for follow up psychiatric consultations. Assuming Mr Chaina continued to take Aripiprazole 15mg daily and Venlafixine 225mg daily the cost would be $2540 per year for the Aripiprazole and $1080 a year for the Venlafixine. 323Dr Skinner agreed with Dr Wever and Dr Phillips that Mr Chaina's prognosis was poor with respect to the possibility for change. It was unlikely that his underlying personality would change hence his responses to situations and his behaviour are unlikely to change. Paranoid Personality Disorder is treatment resistant. 324Dr Skinner said that the usual course of Paranoid Personality Disorder is for deterioration, with gradual social withdrawal or living alone, as the person alienates friends and family over time. Deterioration in functioning with age may be caused by increased paranoid thoughts and behaviour as the person undergoes the inevitable decline in senses, balance and motor functioning, leaving him or her feeling more vulnerable. Persons affected by paranoid jealousy often become more jealous in older age, placing the spouse or partner at greater risk. 325Dr Skinner said that had Nathan's death not occurred Mr Chaina would probably have continued to operate his business as he had before. His panic disorder was aggravated by the death of Nathan and he suffered an increase in anxiety symptoms and panic attacks in the first and second years following the death. Dr Skinner thought that the deterioration in the marriage relationship was accelerated by Nathan's death and Mr Chaina's emotional and behavioural reaction to the death. Nathan's death had probably accelerated the deterioration in the relationship between Matthew and Mr Chaina. The Paranoid Personality Disorder was an underlying condition and was not caused or accelerated by the death of Nathan. 326Dr Skinner's conclusion about what might have been the position had Nathan's death not occurred and the launch had gone ahead as Mr Chaina claimed it would have was this: 251. Mr Chaina has limited formal education and his personality would limit his ability to manage an expanded number of employees. He has a strong sense of entitlement and a strong need to feel that he is in control. When he feels threatened, the response is anger, which might be extreme. He would be likely to blame others for mistakes. Because of his need to feel important and in control, he would find it very difficult to cope with criticism, and it is likely that he would have difficulty managing staff with tertiary education employed as middle managers. His dealings with insurance agents and solicitors, as discussed above demonstrate his difficulties with communication and professional relationships. 327Dr Skinner concluded her report by saying: 253. Because of the tendency of Mr Chaina to fabricate his history, his tendency to lie in his original statement of claim and in providing a history, his criminal record and paranoid personality traits, the possibility of malingered symptoms and fabricated statements must be considered. 328Dr Skinner, accordingly, provides some support for aggravation resulting from Nathan's death to Mr Chaina's panic disorder and anxiety. She certainly does not see Mr Chaina's present condition as having been caused by Nathan's death.

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(c) Dr Milton 329Dr Milton was not asked to examine Mr and Mrs Chaina and he did not do so. Rather, he was provided with an extensive number of documents (those which were provided to Dr Skinner and subsequently to Dr Phillips) and asked for comments on them in the light of the claims made by Mr and Mrs Chaina. He was asked some specific questions concerning his assessment of Mr and Mrs Chaina's psychiatric conditions both before and after Nathan's death. He was also asked to comment on the reports of the other psychiatrists who gave evidence or who, in Dr Waters' case, it was thought would give evidence. 330The Plaintiffs were very critical of the fact that Dr Milton had not been asked to examine them and submitted that his opinions were not as valuable as those of the psychiatrists who had examined them. 331There are both advantages and disadvantages in a psychiatrist carrying out the task Dr Milton was asked to perform. In the present circumstances I consider that the disadvantages were relatively minor bearing in mind that the Plaintiffs would be providing him with a history of events commencing 20 years or more previously (when the documents first record medical and psychiatric complaints) and when the particular events sued on occurred some 13 to 14 years earlier. In many respects any account given by the Plaintiffs of matters such as their reactions or state of mind or feelings at any given time would at best (even if they were honestly endeavouring to remember accurately) be corrupted by time and at worst would be biased in favour of the claim they are making. As will be seen below, the point is highlighted particularly by Dr Phillips who was deceived by what Mr Chaina told him about his pre-October 1999 health. 332Possibly the only benefit to the psychiatrist in that regard would be to compare what he was being told with contemporaneous material. I acknowledge, however, that face to face engagement with Mr and Mrs Chaina might have been enlightening to a psychiatrist, as it has been to me, but even more so because of the psychiatrist's training and experience. Certainly, Dr Phillips, despite his deception by Mr Chaina, could still see such an advantage. 333I do not consider that I should have any less regard to Dr Milton's opinion than to the opinions of the other psychiatrists but I bear in mind that he had not seen them before coming to court to give evidence.

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(d) Dr Phillips 339As I have noted, Dr Jonathon Phillips was retained by the Plaintiffs as a medico-legal expert. He provided three reports in respect of each of the Plaintiffs. The reports in respect of George Chaina were dated 3 May 2006, 26 July 2012 and 28 August 2013. The reports in respect of Rita Chaina were dated 25 May 2006, 27 July 2012 and 28 August 2013. 340The reports of 28 August 2013 came about in circumstances where it had been raised by the Defendant that Dr Phillips appeared not to have had made available to him the documents contained in MFI 61. These were the documents that had been referred to in some detail by both Dr Skinner in her reports of 25 February 2013 and, particularly, Dr Milton in his report of 13 June 2013. 341Dr Phillips was due to give evidence during the second tranche of hearing in August 2013 but the Plaintiffs said that he was away overseas. Upon his return, when informed of the nature of the material contained in MFI 61, he sought and was given access to the material and time to prepare further reports. Those reports were particularly significant in relation to the modifications he made of his opinion regarding Mr Chaina. 342Nevertheless, it transpired during the course of cross-examination that he did not see the file of Dr Hislop's clinical notes, nor the reports of Dr Skinner dated 2 June 2003, 30 July 2007 and 25 February 2013, nor the later report of Dr Milton in respect of Mr Chaina dated 13 June 2013. Dr Phillips had seen the earlier report of Dr Milton dated 25 February 2013. The only differences between Dr Milton's two reports were omission in the later report of certain matters in Mr Chaina's history that I had excluded from evidence after his earlier report was prepared. Although, for the reasons which follow, Dr Phillips' evidence in his reports of 28 August 2013 and his oral evidence should largely be accepted, the significant qualification is that he did not have available to him the material that I have identified above. However, there was no disadvantage for any opinion of Dr Phillips for his not having seen Dr Milton's later report. 343I found Dr Phillips to be a helpful witness who was prepared to make appropriate concessions when matters were put to him by Mr Stitt. In no sense did I have the impression Dr Phillips was doing otherwise when endeavouring to assist the Court in giving an honest assessment of Mr and Mrs Chaina.

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(i) Mrs Chaina 344In the report of 25 May 2006, prepared after seeing Mrs Chaina on 24 February 2006, Dr Phillips noted that Mrs Chaina said that she had enjoyed reasonable health before the time of Nathan's death. She did say that she personally felt depressed in the difficult period after the factory fire in 1993. She also mentioned the problems at about the time of her separation from Mr Chaina. 345Dr Phillips had available two reports of Dr Wever in relation to Mrs Chaina being the reports of 26 August 2003 and 11 April 2005. Dr Phillips referred to what Dr Wever misleadingly said in his report of 26 August 2003 where he noted that although Mrs Chaina had experienced "significant stressors" prior to Nathan's death because of "family difficulties", prior to Nathan's death she showed no evidence of any biological symptoms of a major depression and that her son's death precipitated a marked change in her mental state. 346When Dr Phillips expressed his opinion in the report of 25 May 2006 he accepted that her mental health had deteriorated at least by 1993 and again by 1997 and he said he did not doubt that she probably developed symptoms within the depression spectrum at those times. He went on to say: This was acknowledged also by Dr Wever who had personal contact with the Plaintiff from 30 June 1997, but he highlighted that the Plaintiff did not develop biological symptoms of a major depressive disorder until the period which followed Nathan's desk. As far as I can clarify the matter, the Plaintiff had, on at least two occasions, been faced with significant stressors prior to Nathan's death and she probably developed symptoms of an adjustment disorder at those times. Dr Wever did not feel that it was necessary to keep treating the Plaintiff, this suggesting to me that she had made reasonable progress and was probably free of psychological symptoms in the period before Nathan's death. (Emphasis added) 347Dr Phillips thought that she had been left vulnerable to further stress- related psychological problems by the matters that preceded Nathan's death. Dr Phillips concluded: I can state firmly that Mrs Chaina had pre-existing but subsequently quiescent psychopathology prior to Nathan's death. ... The only connection between the Plaintiff's now chronic severe pathology and her earlier problems is through her probable vulnerability caused by the earlier adverse psychological experiences. 348In his second report of 27 July 2012 Dr Phillips said that he maintained his diagnosis of major depressive disorder. When he saw Mrs Chaina on 24 July 2012 she completed the Beck Depression Inventory II where her score at 42 placed her within the range for severe depression. She also completed the Beck Anxiety Inventory scoring 39 which placed her in the range for concern. 349Dr Phillips again placed weight on what Dr Wever had said in his reports that he did not think that Mrs Chaina developed biological symptoms of a "major depressive" (sic) until the period following Nathan's death. He thought Mrs Chaina's Major Depressive Disorder was treatment resistant, although he did not think there had been a worsening of symptoms in the long term. 350In that report Dr Phillips said that she was locked in a state of pathological grief, that her quality of life would remain extremely poor and that she would never return to gainful employment. This contrasts with what Dr Phillips had said in his earlier report when discussing Mrs Chaina's purchase of the pharmacy in Double Bay. Although she then told Dr Phillips that she found it difficult to settle into her new job, she also told him that she believed she had built up her skills and that the pharmacy had given her a degree of focus in her life. She maintained though that she lacked efficiency in various work related activities, particularly bookwork. 351When he prepared his report of 28 August 2013 (Exhibit QQ2) Dr Phillips decided that he could not rely on Dr Wever's reports because the accuracy, reliability and objectivity of those reports and his clinical notes were questionable, given that he was so heavily invested in the treatment of several members of the family as well as having blurred the boundaries between therapist and guest and because he had become an advocate for members of the family. In cross-examination Dr Phillips accepted that, prior to this happening, and before Nathan's death, Dr Wever's notes and observations were still relevant to be considered. 352When he discussed Dr Skinner's reports Dr Phillips said this: [21] Dr Skinner's opinion regarding Mrs Chaina suffering from a depressive disorder in 1997 to 2000 is at odds with Dr Milton's summary of Dr Hislop's clinical file regarding the Plaintiff in those years. Dr Milton did not at any time record Dr Hislop as using the word depression. The Plaintiff's symptoms were recorded by Dr Hislop as being stress related, physical and psycho-physiological in type. 353It was at this point that Dr Phillips' omission to read Dr Hislop's clinical notes was of significance. He agreed in his oral evidence that Dr Hislop was of significant importance in the diagnosis of Mrs Chaina's condition prior to Nathan's death. He agreed that where Dr Hislop had used the word "depressed" in her clinical notes of 30 December 1996 and prescribed Aropax that it was more probable than not that Aropax was prescribed to deal with depression and that Dr Hislop had diagnosed Mrs Chaina as being depressed. 354He further agreed that where Dr Hislop had used the word "depressed" on 16 July 1998 and September 1998 and prescribed Cipramil that those matters would indicate that Mrs Chaina was clinically depressed requiring that anti-depressant. He further accepted that when she was re-prescribed Cipramil in December 1998 she was most probably suffering from depression. This exchange then followed: Q. So the basis in your report upon which you assert that Mrs Chaina was not suffering from a depressive disorder pre October 1999 seems not in fact to be correct assume for a moment that what I have put to you is accurate in respect of Dr Hislop's clinical notes? A. On the materials that you have put to me, I believe I can state reasonably confidently that, in addition to the various problems which I outlined in my report, that Mrs Chaina suffered depressive symptoms at least from time to time and possibly continuously. Q. Pre October 1999? A. Yes. 355Dr Phillips also agreed that he would be prepared to give some weight to Dr Wever's opinions in the period prior to October 1999 in terms of history, notes, diagnosis and reporting. He accepted from looking at exhibits 157 to 165 that Dr Wever had been treating Mrs Chaina for depression. He also agreed, on the basis of the material that had been told to him and shown to him, that the opinion he expressed in his report of 25 May 2006 that Mrs Chaina was probably free of psychological symptoms before Nathan's death was probably not correct. 356In the light of that concession, which I consider was properly made by Dr Phillips, his opinion expressed in a number of paragraphs in his report of 28 August 2013 must now be rejected. Those paragraphs are 21, 79, 83, 84 and 108. 357Nevertheless, Dr Phillips said this in that 2013 report: 33. The most likely scenario, in my opinion, is that Mrs Chaina, in response to the overwhelming stress of hearing about Nathan's death, suffered a material worsening of her already fragile mental health status. ... 71. To put matters in perspective , I accept without reservation that Mrs Chaina had at various times prior to Nathan's death experienced depression spectrum symptoms and anxiety spectrum symptoms, and probably psycho-physiological symptoms also (including non-cardiac chest pain).... 72. Importantly, Mrs Chaina failed to successfully negotiate the grieving process following Nathan's death which, at the very least, led to an exacerbation and/or extension of pre-existing psychological problems, with this having been sufficient for the plaintiff to meet diagnostic criteria for a DSM-IV-TR major depressive disorder, and noting this to be a recognisable and diagnosable mental health disorder. Again, at the very least the overwhelming psychological stressor of Nathan's death has made a material contribution to the plaintiff's mental health problems, both in the months/years following the event, but continuing at the present time 358I do not think that these conclusions are weakened by the rejection of the paragraphs earlier mentioned, although I think the better conclusion in paragraph 72 is the latter one, namely, that Nathan's death has made a material contribution to Mrs Chaina's mental health problems. My strong impression from Dr Phillips' 2013 report, tempered by his oral evidence, is that, despite her earlier psychiatric problems Nathan's death resulted in Mrs Chaina sustaining further or renewed or exacerbated psychiatric injury. 359The Defendant submitted that exacerbation of a pre-existing condition does not arise for consideration because in their pleadings the Plaintiffs do not plead any question of exacerbation of a pre-existing mental condition. The Defendant is correct that the Amended Statement of Claim pleads only that the Second and Third Plaintiffs suffered nervous shock as a result of the Defendant's breach of duty. However, in the Defendant's Statement of Issues in Dispute dated 11 April 2013 (agreed by the Plaintiffs on 11 April 2013) this appears: 3. The issue in dispute is whether George and Rita Chaina suffer from the existence of a recognisable psychiatric illness casued by the negligence of the Defendant (see s 31 CLA). 4. In particular:- (a) The cause, nature and extent of George and Rita Chaina's alleged injuries and disabilities, if any. (b) Whether the death:- (i) caused the alleged injuries and disabilities; (ii) accelerated pre-existing conditions; (iii) exacerbated pre-existing conditions. 360In those circumstances there is clearly an issue between the parties concerning whether Nathan's death accelerated or exacerbated pre-existing mental illnesses. Even if these issues had not been put forward I would have considered that the psychiatric evidence on both sides squarely raised the issue of exacerbation. It would have been artificial to have ignored it and not consistent with s 56 Civil Procedure Act 2005 (NSW) in dealing with the "real issues", which may include matters which arise on the evidence during a case. If the Plaintiffs had sought to amend their Amended Statement of Claim to plead exacerbation there would have been no basis for such amendment not to have been granted.

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(ii) Mr Chaina 361Dr Phillips saw Mr Chaina on 27 February and 11 March 2006 for the purpose of preparing his first report. Apart from obtaining a history from Mr Chaina the material that Dr Phillips had was the following: (1) Reports of Dr Wever of 25 August 2003, 10 March 2005 and 11 April 2005; (2) Reports of Dr Skinner dated 6 September 2004 and 8 March 2005 together with the letters of instructions and schedule of assumptions sent to her; (3) The report of Professor Hall dated 25 May 2004 together with the letters of instructions and schedule of assumptions provided to him. 362It is apparent from reading Dr Phillips' report that he relied heavily on Dr Wever's reports for a number of matters. For example, he relied on Dr Wever's assessment that Mr Chaina had put on approximately 33kgs in weight from the time of Nathan's death until around the time of Dr Wever's report of August 2003. Further, he referred to Dr Wever's opinion in his report of 11 April 2005 that Mr Chaina had pre-morbid psychiatric difficulties with features of paranoid personality in the context of the court case following the 1993 fire. He then referred to Dr Wever saying that Mr Chaina returned to satisfactory function after spending 50 days in the witness box. 363By reason of the documentary material that Dr Phillips had available to him he concluded that Mr Chaina had provided an incomplete history for a number of matters in his past including his earlier domestic arrangements, his numerous attendances and admissions to hospital, his numerous visits to cardiologists and his earlier contact with Dr Wever. Dr Phillips also said that Mr Chaina may have provided a rather too favourable impression of the relationship with his children prior to Nathan's death. 364Dr Phillips thought it more likely than not that Mr Chaina had a number of psychological problems prior to Nathan's death, although Mr Chaina did not highlight those matters in the two consultations with Dr Phillips. Dr Phillips thought Mr Chaina may have longstanding paranoid personality traits, if not a paranoid personality disorder, and thought it almost certain that he had experienced anxiety spectrum symptoms and possibly depression spectrum symptoms following the factory fire in 1993 and during the period of litigation which followed. 365Dr Phillips' assessment was that Mr Chaina, in 2006, suffered from a major depressive order, post-traumatic stress disorder and an alcohol dependence disorder. He thought they were treatment-resistant disorders and that his prognosis was extremely poor. He thought Mr Chaina was then unfit to return to his business interests or alternative employment and that he would remain unemployable in the future. 366In relation to Mr Chaina's pre-existing psychological problems, in his report of 3 April 2006 Dr Phillips said this: However, on the information currently available to me, I believe Mr Chaina had made a reasonable recovery from his earlier psychological symptoms by 1999. Dr Phillips agreed that that statement was largely but not entirely based on what Mr Chaina had told him at that time. 367He saw Mr Chaina again on 24 July 2012. It does not appear that Dr Phillips had any additional documentary material at the time of this consultation. Dr Phillips asked Mr Chaina to complete the Beck Depression Inventory II on which he scored 55, placing him in the upper range for severe depression, and the Beck Anxiety Inventory where he scored 40, placing him within the range for potential concern. 368Dr Phillips said that from the point of view of diagnostic economy Mr Chaina suffered from a major depressive order (single episode, moderate/severe, chronic, non-psychotic) and had significant co-existing psychological and psychophysiological symptoms of anxiety and more specific traumatically-induced anxiety symptoms. He said that Mr Chaina had treatment resistant pathology. He considered that the conclusion of litigation would remove one ongoing stressor. He thought his long-term prognosis was extremely poor and might worsen. He said it was always wise in the medico-legal context to try to determine whether a person has given a self-serving history or has feigned symptoms. Dr Phillips did not think that either applied in Mr Chaina's case. 369By the time Dr Phillips came to write his report of 28 August 2013 (Exhibit QQ1) he said that he needed to modify his previously held opinion about Mr Chaina. He relevantly said this: [105] The additional documents confirms strongly that Mr Chaina had provided me with a rather self serving history and, in particular, he appears to have downplayed important facts from his past. I was unaware, following my two earlier consultations with the Plaintiff, that he had a history of confirmed anti-social behaviour (principally earlier in his life), that he had been involved in multiple episodes of litigation, and that he had lied and/or obfuscated important matters relating to the years before Nathan's death. Further, there is a consensus among the psychiatrists who assessed the Plaintiff that he has experienced longstanding paranoid personality traits, which I now accept are of sufficient intensity and chronicity to suggest a paranoid personality disorder - DSM - IV - TR301.0. 370Dr Phillips said, nevertheless, that following Nathan's death Mr Chaina experienced an exacerbation/extension/worsening of his depression spectrum symptoms and that he continued with hazardous drinking. He went on to say: [112] I am not able, in retrospect, to give any accurate account of Mr Chaina's psychopathology prior to Nathan's death. Taking all available materials into consideration, and noting comments made by Dr Hislop, I accept that the Plaintiff had suffered symptoms of a chronically paranoid type, that he had at various times significant mood related symptoms, and that he drank in a hazardous manner. I am not able to state, however, that he had a diagnosable major depressive disorder before Nathan's death. 371Dr Phillips thought that Mr Chaina continued to have a Major Depressive Disorder. He said his longer term recovery would be affected by the process of litigation but he did not foresee Mr Chaina functioning successfully in the future across the major domains of his life. He said that he did not believe Mr Chaina would be able to revitalise his business nor undertake any similar business in the future and more probably than not he would remain unemployed. 372In his oral evidence he accepted that if a person was proven to be capable of higher level cognitive functions it was unlikely that the person would have an incapacitating mental illness. Such a person may have a mental illness but the issue was the level of incapacity. 373The Defendant challenged Dr Phillips' view that Mr Chaina's problems had worsened as a result of Nathan's death. It was put to him on more than one occasion that if he was unable to state the nature and extent of the pre-existing condition it would not be possible to say that he had worsened. Dr Phillips did not agree with the proposition and, although it has a superficially logical appeal, Dr Phillips' resistance to accepting it appeared to me to be entirely reasonable. The assessment of a person's psychiatric problems is not a precise nor a mathematical exercise. As Dr Phillips said, he had done his best to say what his view of Mr Chaina was before Nathan's death and to contrast that with his assessment of Mr Chaina after Nathan's death by reference to his reported symptoms and other objective material that threw light on Mr Chaina's capacity, or lack of it, for ordinary living and working. 374Dr Phillips' conclusion in his oral evidence was this (T 2817): He developed, in my view, a significant broader group of symptoms - some of which previously existed, I don't doubt that - but he developed a much broader group of symptoms. The process of grief failed in the second stage. He has not come out of the second stage. Rather than resolving pining, he has been left with what I think I can comfortably diagnose as a major depressive disorder of a chronic type. And this particular disorder is now well beyond the two-year timeframe for grief, and it's a pervasive, continuing, destructive, immobilising disorder. 375I consider that Dr Phillips' criticism of Dr Skinner in failing to assess Mr Chaina's reaction to Nathan's death in any detail is justified. Dr Phillips' opinion that Mr Chaina experienced two shocks at around the time of Nathan's death accords with general human experience. He was first told, when at some distance from the problem, that two of his sons were missing. Then, when present near the site of the hike, he was informed that Nathan was dead. Any parent would be seriously affected by both those pieces of information. Dr Phillips goes on to opine that by reason of Mr Chaina's paranoid personality disorder he was likely to have had greater difficulty in dealing with grief and resolving it than most people would be able to do. 376In my opinion, Dr Phillips's conclusions and those of Dr Milton are not dissimilar in respect of Mr Chaina at least for the two years following Nathan's death. They justify a conclusion that Mr Chaina suffered a recognised psychiatric illness as a result of Nathan's death.

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Continuing psychiatric illness? 377The next matter which must be determined is how long did the psychiatric illnesses resulting from Nathan's death endure for each of Mr and Mrs Chaina. It is in this context that the Defendant's assertion that the Plaintiffs' motive for this litigation is vengeance coupled with the allegation of malingering, particularly on Mr Chaina's part, is most relevant. 378The Defendant has made much of a submission that Mr Chaina is and has been motivated by vengeance in his approach to the present proceedings. The Defendant says that from the outset Mr Chaina's motive is to punish the School for what happened. 379Certainly, the Plaintiffs retained lawyers at the very outset, within days of Nathan's death. Other persons retained to assist the Plaintiffs, such as Solution Focused Counselling, were required to sign confidentiality agreements. There is much other evidence to support the fact that Mr Chaina, in particular, wishes to punish the School and everyone associated with it. Mr Chaina told Dr Skinner that he wanted to see the School closed, although at other times he said it was the Glengarry campus that he wanted closed. He told Dr Phillips that he felt like killing some of the teachers at the school whom he thought were responsible for Nathan's death. 380In her report of 21 February 2013 (Exhibit 190F) Dr Skinner noted from the clinical records of Dr Wever that in October 2007 Mrs Chaina told Dr Wever that the Plaintiffs would not settle the proceedings on a lesser amount than they wish because of principle. She stated this was a form of revenge, they felt that the school had not suffered while they had been destroyed as a family and the process had been extremely unfair. 381It seems to me that the relevance of the Plaintiffs' motive in bringing the proceedings is whether it casts any light on the honesty of Mr and Mrs Chaina in the evidence they have given and particularly, as Dr Skinner noted, to the issue of whether Mr and Mrs Chaina are malingering. I have already determined, without the need to consider this issue of motive, that neither Mr nor Mrs Chaina is a reliable witness. In many respects Mr Chaina is not an honest person. Further, the issue of malingering is also bound up with issues of causation because of both Mr and Mrs Chaina's pre-existing psychiatric conditions. 382I note, first, this evidence given at the outset of Mrs Chaina's cross-examination: Q. Mrs Chaina, is it your case claiming damages against my client that after October 1999, thereafter, you and your husband were not able to carry on normal commercial activities with your business? A. Yes. Q. And is it part of your case that, as a result of the events of October 1999, that situation has never recovered? A. Yes. Q. And you want his Honour to award you damages on the basis that because your business has not prospered, you should be compensated? A. Yes. Q. And the way in which your business did not prosper was because neither you nor your husband were able to run the business; is that right? A. Yes. Q. So that after October 1999, you were not capable or able to run the business and its associated activities? A. Yes. Q. And you were quite clear about that in your mind? There is no doubt about it? Am I putting it to you fairly? A. Yes. Q. *I take it then that because of these disabilities, neither you nor your husband has sought to expand the business because you have been unable to do so? A. Sorry, can I just have that read again? STITT: Could the question be read, please? QUESTION MARKED * READ BACK WITNESS: Yes. STITT Q. And it would be quite wrong, would it, for me to suggest that in fact shortly after the events of October 1999, you and your husband sought to expand your business significantly; would that be quite wrong? A. That - that would be wrong. Q. Wrong. And is it your position - I withdraw that. Is it part of your case that neither you nor your husband have ever recovered sufficiently to run your business? A. That's correct. 383Mr Chaina gave this evidence (T 73): Q. And do you also assert to his Honour that since October 1999, that is after October 1999, your emotional and mental state is such that you have not been able to concentrate on commercial matters and have therefore not been able to run your business; is that what you assert? A. Yes. 384He also gave this evidence (at T732): Q. Mr Chaina, just so we are clear as to what it is exactly you are saying, is it part of your case that you assert that as a result of the events of October 1999 and thereafter that you were unable to participate in activities which required you to either concentrate or to conduct your commercial affairs; is that your case? A. Yes. But there are other - my question -

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(a) Mrs Chaina 385When Dr Skinner saw Mrs Chaina in May 2003 she said that Mrs Chaina was suffering from a depressive illness, adjustment disorder with depressed mood. However, she said that she was not suffering from a psychiatric illness that would prevent her from working. Dr Skinner reaffirmed that opinion after examining Mrs Chaina again in July 2004. 386When Dr Skinner saw Mrs Chaina again in January 2007 she thought Mrs Chaina was suffering from Major Depression and Panic Disorder. She thought Mrs Chaina's condition had deteriorated since 2004 "principally because of the family situation with continuing conflicts and problems". 387Having reviewed all of the documents and re-examined Mrs Chaina in January 2013, Dr Skinner thought that Mrs Chaina's psychological reaction to Nathan's death persisted for at least a year and possibly longer. She thought Mrs Chaina dealt gradually with her grief but suffered depression in the context of the marital situation. Since she had been at home with Mr Chaina and no longer working since 2009 the depression had been aggravated. 388On 30 April 1999 Dr Wever wrote to Dr Hislop saying this: She is looking at trying to open a pharmacy and make herself financially independent from [Mr Chaina] so that she can more easily distance herself from him. 389On 4 August 1999 De Wever wrote again to Dr Hislop about the proposed pharmacy. I have set this letter out earlier in a different context but will do so again: She has become somewhat despondent as she feels that her husband is still controlling her behaviour because of her involvement in their business. She is interested in opening up a pharmacy which appears to give her some interest and she stated that she felt good when pursuing this business venture. I discussed these issues with her and she has agreed that perhaps distancing herself from her husband's work and following her own career path by opening a pharmacy may be the next step to help her improve her mood. She states that her husband is treating her reasonably well apart from dealings with business. 390Mrs Chaina purchased a pharmacy in Double Bay in May 2000 taking possession of it in August 2000. She then operated it with some assistance until she sold it in 2009. 391I have already mentioned that when she saw Dr Phillips in 2006 Mrs Chaina said that running the pharmacy had built up her skills and that it had given her a degree of focus in her life. I note also Dr Skinner's opinion (at 305] above) that Mrs Chaina's return to work had been beneficial for her. 392This is to be contrasted with Mrs Chaina's oral evidence which sought to play down her involvement both in purchasing the pharmacy and running it. The impression Mrs Chaina created in her oral evidence was that the pharmacy limped along with her minimal involvement and that she derived little, if any benefit, from running it. I reject her evidence in that regard. I consider her statements to Dr Phillips represent the true position and that Dr Skinner's impression was the correct one. It may be noted that she did not sell the pharmacy until 2009 and she ran it, as the registered pharmacist, without coming under notice to any regulatory body governing pharmacists. 393This provides good support for Dr Skinner's view that, although Mrs Chaina suffered from psychiatric problems they were not such as to prevent her working. I accept that opinion of Dr Skinner. I also accept Dr Skinner's opinion that Mrs Chaina's condition deteriorated over the years because of ongoing problems within the family, principally her relationship with Mr Chaina. That was a pre-existing problem which existed up to the time of Nathan's death, as the two letters of Dr Wever to Dr Hislop, set out above at [388] and [389], attest. I accept, nevertheless, that to the extent Mr Chaina's psychiatric problems were worsened by Nathan's death Mr Chaina's condition impacted upon Mrs Chaina in a more pronounced way than had been previously been the position. This was Dr Skinner's view as noted at [308] above. 394It is difficult to know if Mrs Chaina is deliberately malingering. I think she has sought to paint a bleak picture of her life since Nathan's death, overlooking quite how bad things were before his death, and ignoring what she was able to achieve since his death. She has not been honest in some matters to which I have drawn attention. To some extent I think she has come to believe the picture she now paints of life before and after Nathan's death. 395Because Mr and Mrs Chaina have been representing themselves from the commencement of the second tranche of the hearing it has been necessary for me to deal and interact with both of them on almost every day of the subsequent hearing. On a number of occasions Mrs Chaina broke down when particular matters were raised. I do not think she was feigning distress. The impression I had was a woman who was world weary. However, I also observed the way she ran the case and dealt with Mr Chaina. She was, on many occasions, capable of being very focussed and organised in the way the case was run. 396Mrs Chaina continues to suffer from psychiatric problems as the psychiatrists have described. Many of those problems are not the result of Nathan's death but were pre-existing conditions and conditions made worse by her relationship to Mr Chaina. The distinct impression I had was that she would have been pleased if these proceedings could have been brought to an end some time ago but she has felt the need to go on supporting Mr Chaina in his uncompromising pursuit of them in the way he has pursued them. I gained that impression from some throw-away remarks she made in court from time to time and from her demeanour when problems arose in the conduct of the proceedings. These present proceedings seem to me to be prolonging her problems as Dr Phillips appears to accept. I consider that she has been capable of working, at least independently of Mr Chaina, since August 2000 when she began to run the pharmacy. 397However, other matters suggest that she was also capable of working with Mr Chaina in the Plaintiff companies' business since August 2000 and perhaps earlier. These matters derive from contemporaneous documents prepared by either or both of Mr and Mrs Chaina in relation to the business. I shall discuss this further below.

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(b) Mr Chaina 398I have already noted Dr Milton's opinion that Mr Chaina's depression and anxiety relating to Nathan's death ceased by 2001. All of the psychiatrists are agreed that Mr Chaina's paranoid personality disorder was continuing but that it was not caused by Nathan's death. Dr Phillips considered that Mr Chaina continued to have a Major Depressive Disorder which would continue indefinitely. Dr Phillips did agree that he was dependent on Mr Chaina's word for his view that Mr Chaina was not improving. 399There are some matters which suggest that Mr Chaina is far more capable of doing things than the impression he has sought to create of a man completely destroyed by his son's death and unable to focus on anything other than what he sees as the justice which will come from the end of these proceedings. A number of these matters also throw light on Mrs Chaina's capacity to work and focus on matters other than Nathan's death. 400On 28 March 2000 Proton submitted a Tender to the NSW Department of Public Works and Services for laundry service products (Exhibit 123). The covering letter was signed by Mrs Chaina. She said that the information in relation to the products in the Tender came from Mr Chaina. The Tender document and annexures ran to hundreds of pages, the majority of which consisted of technical information about the products. It is clear from Mrs Chaina's cross-examination that she prepared the answers for many of the questions that need to be answered for the purpose of the Tender. She did not suggest that someone else, apart from her and Mr Chaina, prepared the Tender. The Tender was successful with Proton being given a three year contract. 401Further, when questioned about what was said in that tender bid dealing with compliance with ISO 9001, ISO 9002 and ISO 9003 Mrs Chaina said that although Proton was never certified under ISO 9001 they were working towards certification under ISO 9002. That suggestion seems entirely inconsistent with their inability to engage in ordinary commercial activities associated with their business. 402I set out earlier Mrs Chaina's evidence where she agreed that it would be wrong to suggest that shortly after Nathan's death they sought to expand the business significantly. Both the Tender itself and the working towards certification under ISO 9002 suggest that they did seek to expand the business significantly. 403In July 2000 Mr and Mrs Chaina went to an auction by Gray Eisdell Timms in Alexandria where they bid for various items of electronic and other equipment. The equipment was business equipment and I infer its intended use was in Proton's business. Mr Chaina claimed not to remember the auction but Exhibit 95 was a letter Mrs Chaina wrote to the auctioneers asserting that the Chainas were the highest bidders for a number of items that must have been knocked down to other bidders. The letter threatened legal proceedings. 404In August 2000 Jean Pierre Cosmetics commenced proceedings against the ANA Hotel in regard to a dispute that had been going on for many years. Although Mr Chaina agreed that the proceedings were commenced, he said that in 2000 he was not able to think or do anything and, thus, it must have been someone else who made the decision to commence the proceedings. He did, however, swear an affidavit in the proceedings concerning matters associated with the contract with the ANA Hotel and related conversations that he had had with Mr Hawken. He also related conversations that he said he had had with his wife in relation to the matter. 405On 28 August 2000 Mr Chaina wrote to Ray Jarvis, an insurance broker, regarding a number of claims outstanding in regard to his property at Vaucluse (Exhibit 55). He complained about assessments of damage carried out in 1998. In this two page letter he wrote that the family had suffered a personal tragedy in October 1999 and they put everything on hold. He said, "it wasn't until about 4 to 5 weeks ago we were able to come to grips with other issues." 406Mr Chaina said that this letter was written by Nigel Dique. Nigel Dique gave evidence that he prepared the letter and he said it took about three hours to put it together. He said the information in it came from Mr Chaina. That apparently included the information that Mr Chaina was able to come to grips with issues other than Nathan's death about four to five weeks earlier. 407In his Statement of 8 February 2010 (Exhibit C1) Mr Chaina made reference to a trial of his Victory One Shot at Long Bay Gaol in 1999. He then said: I had not further involvement with the Department of Corrective Services until mid to late 2000. John Childs, then the Manager of Total Care and Ross Griffith took me to a meeting with a Senior Corrective Services Officer at the Total Care premises in Canberra. ... Ross Griffith made an oral presentation to this person principally in relation to the Victory Product but also dealing with the Spectrum and Vision products. Mr Chaina's Statement then makes reference to a telephone call where he discussed negotiating a contract with Corrective Services. 408Proton had made application for and Research & Development Grant in October 1998 (Exhibit 3). It was unsuccessful. In about October 2000 a further Application was made (Exhibit 139). Mrs Chaina gave evidence that the bulk of the work that went into its preparation was by Dr Griffith but accepted that both she and Mr Chaina also had input into it. Certainly, the description given of both Mr and Mrs Chaina in it does not suggest other than that they were fully functional within Proton in the roles described in some detail. 409Of Mrs Chaina the document said (in part): She retains finance control in Proton Technology Pty Ltd, supervising office staff and accounts, and working with the company's accountants, Neil A Honan and Associates. She will provide specific expertise in microbiological testing in future research and development. 410Of Mr Chaina it said (in part): Recently awarded the NSW contract for the supply of industrial laundry chemicals and systems. Mr Chaina has principal responsibility for marketing. ...[H]e also has responsibility for production at Proton Technology. 411Dr Griffith said that a lot of the information in the Application came from Mr and Mrs Chaina. He said that he believed that what was said in it about Mr and Mrs Chaina was accurate. He went on to say (at T 1674): A. In the year 2000 when I composed this document, I believed that they had a business that was working, was active and that they had the wherewithal to see it run into the future. Q. Yes. So it would be quite wrong to suggest that at 2000, each of these two people were so disabled that they were unable to perform the functions that you have just identified? A. I don't believe I ever made that statement or made that claim. ... Q. ... Do you not agree that what I have just put to you in this document here is entirely inconsistent with the proposition that they were such disabled persons? A. At this time, I believed and have reported on what I believe was a - was happening and was possible for these two people, that they had a company, they had plans for its expansion, they had won a New South Wales Government contract, we had by that time made an installation in one of the State's laundries and were seeking business elsewhere. I had no reason at that time to believe that this company could not progress. STITT Q. And you had no reason to believe that Mr Chaina could not operate this company, did you? A. At that time, no. Q. And you had no reason to believe that, at that time, Mrs Chaina could not operate that company? A. No. 412In paragraph 24 of his affidavit of 27 February 2007 (Exhibit P1) Dr Griffith said this: In April 2000 I was invited by George to take a role in Proton, initially to understand some of the general aspects if its current operation, and then more specifically to understand the progress the company had made in the application of enzyme technology to cleaning processes, notably laundry. I also got involved in the service of laundry installations that were using Proton chemicals. It was quicjkly apparent to me that there was a good deal of technical expertise behinf the the broad range of prodcusts and applications of Proton products, and that George had full command of the knowledge necessary to cover all aspects of the use of chemicals, their controlled delivery to washing machines, and their impact on washing performance, necessary for the effective and efficient conduct of commercial and industrial laundries. 413Dr Griffith also gave evidence that Mr and Mrs Chaina were present and participated in a presentation to the NSW Contracts Board in 2000. 414I accept all of this evidence of Dr Griffith. 415In January 2001 Mr Chaina purchased land at Glenquarry to build a chapel where Nathan's body would be placed. A claim in respect of the cost involved is made in these proceedings. Mr Chaina became involved in litigation with the builder. In those proceedings he swore a 79 paragraph affidavit which detailed his account of the dispute (Exhibit 96). Mr Chaina claimed that Mr Dique prepared the affidavit and that it took months to prepare. Mr Dique did not give any evidence about this. The material in the affidavit shows clearly that Mr Chaina must at least have provided the information contained in it. 416David Redfern gave evidence in his affidavit of 6 July 2006 that he had engaged in dealings with Mr Chaina since 1997. Mr Redfern worked as an account manager at Huntsman Corporation from 1997 to 2000. That company supplied chemicals to the Plaintiff companies. He had discussions with Mr Chaina once or twice every few months from 1997 to October 1999 about chemicals and problems that Huntsman's chemicals could solve. The frequency of conversations increased over that period. 417Mr Redfern said that he first heard about Nathan's death from Lily Sukkar in October 1999. He then said: 18. In the period after October 1999 to July 2001, I continued to have regular discussions with Mr Chaina. I received more calls from Mr Chaina than I had received previously an and during the converstaions we continued to discuss possible solutions to cleaning problems encountered by Mr Chaina and his clients involving the use of new surfactants and chemicals using new technology. 418Mr Redfern also gave evidence that he was employed in July 2001 by Mr Chaina as National Marketing Manager for eight weeks and thereafter as Service and Programming Consultant until March 2002. He related an incident that occurred in his first eight weeks where ALSCO had a problem. Mr Redfern attended with Mr Chaina at ALSCO's premises at Alexandria, during which Mr Chaina successfully made recommendations to solve the problem, which arose as a result of ingrained metal ions from the overuse of caustic. 419However, Mr Redfern referred in his affidavit and a subsequent Statement to difficulties he had with Mr Chaina during his employment that, on their face, provided some support for the claim that Mr Chaina makes of his inability to work. 420I thought Mr Redfern was a good witness endeavouring to tell the truth. 421Since Nathan's death Mr and Mrs Chaina and/or their companies have been involved in 38 separate pieces of litigation. Some of these cases had commenced before Nathan's death but the bulk of them commenced after Nathan's death. In addition, the Plaintiffs had been involved in 30 other cases which commenced and concluded before Nathan's death. I mention the matters that pre-date Nathan's death partly to show that the Plaintiffs are no strangers to litigation. 422Many of the cases both before and after Nathan's death resulted from the failure of the Plaintiffs to pay accounts. Indeed, during the 1990s there was a policy of not paying accounts until the last minute, with some not being paid prior to proceedings being instituted by the creditors. 423Seven of these cases were proceedings taken by the Plaintiffs. In seven other cases the Plaintiffs made claims against various parties but the matters did not result in proceedings being commenced. As Exhibit 57 makes clear most, if not all, of these cases involved Mr and Mrs Chaina retaining solicitors and providing instructions to them. In some cases lengthy affidavits were sworn by Mr Chaina. 424Exhibit 67 is a 100 paragraph affidavit sworn by Mr Chaina on 5 November 2002 in proceedings which Deluxe Chemicals had taken against Central Coast Area health Service and others. It is an affidavit in reply to eight deponents. Mr Dique said that he helped to prepare the affidavit. He obtained the information in it from Mr Chaina. When asked how long that took he said "several hours". I can take judicial notice of the fact that a solicitor would certainly have taken several hours to obtain the information in that affidavit from a deponent not under any disability. Mr Dique's evidence only reinforces the view I have that Mr Chaina was well able to focus on matters when he wanted to do so. Further, to have provided the answers in that affidavit to the other deponents, he would have to have read carefully and understood their affidavits. They are lengthy and detailed (Exhibits 71 to 77). 425Exhibit 68 was a letter of instructions from Mr Chaina to Gilbert and Tobin who were acting from Deluxe in the same proceedings. Again, Mr Dique said that he wrote the letter, having obtained the information from Mr Chaina. 426Dr Milton drew attention to two file notes of Danny Arraj who was acting for the Plaintiffs in various litigation. One was a four page filenote in about January 2001 of a discussion with Mr Chaina in the litigation involving Brambles. Dr Milton commented: Such a discussion is intellectually and emotionally demanding. Mr Chaina was able to participate in it consistent with him having normal cognition and emotion. 427The second was a file note in March 2001 of Mr Chaina's instructions not to attend an arbitration, seek judgment, make a new application and seek the costs of the last arbitration. Dr Milton commented: Mr Chaina appears to have considered the issues carefully and then supplied definite instructions, which suggest normal thinking and organisation, inconsistent with him suffering an incapacitating mental illness. 428Similarly Dr Skinner noted a number of letters and notes of telephone calls involving Mr Chaina relating to litigation and similar matters that he was involved in. She concluded: 181. Throughout the file there were letters and emails showing intelligent and considered thought processes that would have required good concentration and cognitive functioning. 429In July 2001 Mr Chaina travelled with his son Matthew on a school excursion to Scotland. Whilst it is understandable that Mr Chaina would have wanted to accompany Matthew in the light of Nathan's tragic death, I note Dr Milton's opinion that it is not consistent with someone who was deeply depressed. Dr Milton also noted that Dr Wever made no note of the trip in his clinical notes, something Dr Milton would have expected if Mr Chaina had been depressed at the time. 430On the second of five days of addresses, being the second day on which the Plaintiffs were addressing, Mrs Chaina handed up what was described as Volume 10 of the Court Book. It contained a large number of invoices and receipts. In response to a question I asked, Mrs Chaina said that she wanted to rely on all of those documents. That folder was ultimately marked as MFI 104. I said at the time that I would receive the folder of documents but would not mark it as an exhibit. I said I would have a look at what was in it so that I could understand submissions addressed to it particularly by the Defendant. The folder was only identified for, and provided to, the Defendant on the day it was handed to me. 431I examined these documents overnight and on 18 December 2013 I raised with the parties, in particular, the documents behind Tab 30 which were various costs when Mr Chaina went with Matthew to Scotland. I suggested that the level of expenditure and the places of the expenditure might be thought to indicate that Mr Chaina did not by that stage suffer from depression. 432On 19 December 2013 the Defendant made submissions about the documents in MFI 104. In particular the Defendant drew attention to the documents behind Tab 30 and made reference to the limited cross-examination conducted about the trip Mr Chaina made to Scotland. It was limited because the Defendant was not aware of the claim for the expenses behind Tab 30. 433Subsequently, the Plaintiffs sought to withdraw the tender of the documents behind Tab 30 and tendered instead the document that was first marked MFI 107 and which (as will be seen later) I have now marked as Exhibit MMM. Because of the late tender of bundles of documents such as MFI 104 and 107 I said that I would rule on the admissibility of those documents in the final judgment. Many of the documents ultimately tendered and marked as MFI 107 duplicated the documents in MFI 104. However, the documents behind Tab 30 in MFI 104 did not appear in MFI 107. It is necessary to decide if they should form part of the evidence in the proceedings. 434In my opinion, those documents should be admitted as evidence in the proceedings because they provide useful evidence about Mr Chaina's condition at the time he travelled to Scotland with Matthew and, for that matter, immediately afterwards. 435Relevant entries on the credit card statements in that regard appear to me to be these: 7 July 2001 Prince of India Pitlochry $355.69 7 July 2001 James Pringle Inverness $397.80 9 July 2001 The Disney Store Edinburgh $39.47 9 July 2001 Birthday/ 079 Edinburgh $42.23 9 July 2001 John Trotter & Co Edinburgh $412.16 9 July 2001 Hector Russell Kil Edinburgh $501.33 10 July 2001 Argyll & Sterling $283.88 15 July 2001 Lamont Sporrans Vraemar $266.71 17 July 2001 The Head Gardener London $181.12 18 July 2001 Tower of London $257.56 19 July 2001 Cards Galore London $198.03 19 July 2001 The Beatles Store London $399.05 20 July 2001 Fancy That London $391.47 20 July 2001 Virgin Retail Ltd Piccadilly $80.90 11 July 2001 Kinloch Anderson $14,774.64 12 July 2001 The Crown Jewels Shop Edinburgh $149.53 16 July 2001 Harrods London $184.92 16 July 2001 Harrods London $1,234.71 16 July 2001 Harrods London $1,194.74 16 July 2001 Harrods London $673.40 16 July 2001 Harrods London $255.90 16 July 2001 Harrods London $850.50 16 July 2001 Gant London $241.82 16 July 2001 Dixons Edinburgh Airpor (Rita) $554.74 17 July 2001 Gant London $64.86 17 July 2001 The Big Bus Company London $60.73 18 July 2001 Bally Shoes London $3,042.22 19 July 2001 Sondos Photo Vision London $1,107.46 20 July 2001 Ermenegildo Zegna London $1,853.67 20 July 2001 Harrods London $936.23 20 July 2001 Harrods London $289.04 20 July 2001 Harrods London $908.04 20 July 2001 Emporio Armani London $2,616.21 20 July 2001 Le Collezioni London $814.93 20 July 2001 Bally Shoes London $339.92 20 July 2001 Bally Shoes London $488.09

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436The credit cards also show dining out at a number of restaurants in Sydney both immediately before and immediately after the trip to Scotland. They also show heavy spending on accommodation and department stores immediately before and immediately after the trip. 437All of this is quite inconsistent with the picture Mr and Mrs Chaina have sought to paint of themselves for the whole period after Nathan's death but especially in 2001. 438The documents behind Tab 30 in MFI 104 will be marked as Exhibit NNN in the proceedings. 439I referred at [194] above to Proton lodging a tender document with the NSW Department of Commerce in December 2004. In the Company Profile attached to this tender document the following appeared: Our staff work closely with our clients and suppliers at a personal level. It is our philosophy to know our associates well, to understand their requirements and how they would prefer to achieve them. We then meet their needs in a professional manner with immediacy of action, attention to detail and most importantly, with complete integrity. 440In answer to question 15.10 "Other comments on capacity or ability to perform the Standing Offer agreement" the document said this: ...We have the ability, knowledge and expertise to outperform the multinational competitors. 441Mrs Chaina said in evidence that these statements were not inconsistent with her and Mr Chaina's assertion that they were unable to work in the business. She said she needed to explain why. The explanation given in re-examination was this: That the knowledge was there between George, myself - and the knowledge was - can be passed on to the others. Mr West has the knowledge because he's worked for us for many years. Ross Griffiths - Professor Ross Griffiths (sic) obtained a lot of the knowledge that was passed on to him. Jean-Pierre has been able to do the programming for the machines from a very, very young age. 442I do not accept this explanation because the Application said nothing to that effect. Rather, it held out Mr and Mrs Chaina as being able to perform the roles described. The answer to question 15.10 reinforces that view. 443If that explanation was correct, and the Plaintiffs were misrepresenting the truth in the Application, it would suggest that Mr and Mrs Chaina were not essential employees for the Plaintiff companies to be able to continue to carry on business as before. That would be significant for the per quod claim. 444In April 2006 Proton was involved in the installation of a continuous batch washer at Capital Linen in Canberra. Dr Griffith swore an affidavit on 4 February 2009 on behalf of Proton in proceedings brought against Proton by Knight Equipment Pty Ltd, those proceedings concerning the installation at Capital Linen in Canberra. Dr Griffith said this: [7] About the end of April 2006 George contacted me and we had a conversation to the following effect: George said: Capital Linen have advised that they will soon be taking delivery of their new continuous batch washer (CBW), and have also ordered a small CBW. I will need you to help with the installation which I expect to be at the end of May. I said: I can be available around that time but I would like some notice of the actual date of installation. George said: We will need to go down to Canberra before the machines arrive to begin removing the existing chemical delivery system. I said: Please give me as much notice of the dates as you can. [8] To the best of my recollection, I attended the laundry on 20th and 21st May 2006. Preliminary plans were made for the installation, including plotting the route for laying chemical tubing to the new machines. I also disconnected the chemical delivery lines to several Washer Extractors which were being replaced by the new 5 chamber CBW and removed the attendant chemical delivery lines back to the chemical storage room. Installation of the 2 new machines was to commence on Friday 26th May 2006, at the completion of the day shift. [9] On or about 24th May 2006, George and I visited several suppliers to collect parts and equipment needed for the installation. When we called at Knight premises, a conversation involving a Knight representative took place to the following effect: George said: or this installation, we are required to inject our chemicals in diluted form, and thus need manifolds. There will be up to 4 chemicals injected into each manifold, and the manifolds will be mounted in the chemical room which is some 50 metres from the CBWs. We will use the same peristaltic pumps as usual, but need to prevent any back flow of water through the pumps and into the chemical tanks. Knight man said: Our standard manifolds will suit. We have check valves which will prevent backflow of water. The distance is not a problem -the same pumps are doing that distance now. George said: We need to get the chemicals to the machine early in the cycle, say within 10 to 30 seconds. Will the flow of water through the manifold be sufficient to meet that time requirement? Knight man said: That will easily be achieved through a 12 mm tube. The pressure reducing valve should be set to about 25 to 30 psi. The check valves can easily handle that pressure. This is not such a peculiar installation. We do this sort of thing fairly regularly. George proceeded into the office where I believe discussion regarding an order, pricing etc took place. [10] On or about 25 May 2006, George rang me and we had a conversation to the following effect: George said: Alex Roudenko and I are going to Knight to collect the pumps and other equipment for the Capital Linen installation. I would like you, to meet us there this evening so we can load the gear ready to take to Canberra tonight so that we can be in the laundry first thing tomorrow. I said: I am not too keen on driving to Canberra tonight. If we must go, I can be at Knight about 7.00 pm. We will need to load quickly so that we can be in Canberra at a reasonable hour. Please give me the address again. [11] When I arrived at Knight's premises at Smithfield, New South Wales at approximately 7pm, George and Alex were already there, and numerous items of equipment were laid out on benches and a Knight representative was working on the completion of electrical connections within some peristaltic pump boxes. I observed that a number of flush manifolds were among the items on the benches. [12] When the Knight representative temporarily left the room, George and I had a brief conversation to the following effect: George said: You know it is a requirement of the laundry, dictated by the machinery supplier, that all chemicals be fed to the CBWs from flush manifolds. I have advised Knight that the manifolds will be mounted some 50 - 55 metres from the washing machines. I am concerned that the peristaltic pumps will be able to overcome the pressure of the flush water in the manifold into which they will be injecting chemicals. I have further advised Knight that check valves will be required to prevent water from flowing back through the pumps to the chemical storage containers. I have also told them that the rate of chemical delivery from the pumps must be sufficient to ensure delivery to the machines within the 90 to 120 second cycle of the machine. Knight have told me that the equipment laid out on the benches will meet the requirements of this installation. I would like you to confirm with the technician here now that this is the correct equipment. I said: I will ask for clarification and confirmation. Why is Senking (the CBW manufacturer) requiring manifolds? Proton does not normally use them. And why have we only been told at the last minute? George said: Apparently the Capital Board have demanded a long term warranty from the machine manufacturer, and they have imposed the condition of delivering diluted chemicals to the machine. Management have only recently been made aware of this decision. [13] ... [14] The components were counted and checked against Proton's requirements and loaded into my station wagon. The next morning George, Alex and I drove to Capital Linen in Canberra and began installation of the chemical delivery system early the next day. [15] I was present during the installation of the chemical delivery system for a total of 7 days. I was present on 26 - 29 May 2006 inclusive, 31 May 2006, and 1-2 June 2006 inclusive. I returned on 8 June 2006,15 June 2006 and 22 June 2006 for repairs, maintenance and programming. [16] The installation of the chemical delivery system involved two tunnel washers. [17] The installation process involved systematically: (a) dismantling and replacing one old tunnel washer and several washer extractors with two (2) new tunnel washers (CBWs), one with 16 chambers and the other with 5 chambers. The physical placement and assembly of the machines was carried out by the machine suppliers; (b) dismantling and replacing the old peristaltic pumps with new ones supplied by Knight; (c) fitting copper lines to deliver water to the chemical room, and the flush manifolds in particular; (d) running chemical feed lines from the supply tanks (6) to the peristaltic pumps; the peristaltic pumps to the manifolds; and the manifolds to the washing machines; (e) carrying out electrical work; (f) assembling Knight equipment and electronics in accordance with instructions and specifications; (g) programming the 2 CBWs for the correct delivery of chemicals for each separate washing program. Proton was only responsible for the installing and programming of the chemical delivery system in accordance with the specifications provided by Capital Linen (tasks b, d, part f, and g above). Capital Linen provided an electrician and plumber for tasks c and part f. [18] On or about 27 May 2006 Alex and I spent most of the day assembling equipment and working with the plumber and electrician to prepare the chemical dispensing equipment. This included installing the tubing, copper lines, programming, assembling the Knight equipment. [19] On or about 27 May 2006 I recall that Paul was telephoned in New Zealand regarding problems with some of the Knight electronic control circuits. I did not speak with Paul at this time. [20] On or about 27 May 2006 I recall that we had some problems with the motors in that they were not the same speed, that is, revolutions per minute. I recall that George contacted Knight to rectify the issue. [21] On or about 28 May 2006 Alex and I continued with our preparation, assembling and programming of the Knight equipment. [22] The assembly and installation of the chemical dispensing equipment provided by Knight continued on 29 May 2006. [23] On or about 31 May 2006 Paul attended the premises of Capital Linen. George, Alex and I were present installing and testing the Knight equipment. I recall having a brief conversation with Paul to the following effect: I said: I am concerned that we are not getting chemical to the machines as early in the machine cycle as I would like. Can we increase the inlet water pressure? We are also having leakage problems with the check valves. Paul said: The inlet pressure should not be set above 30 psi. 25 is preferable. So far as the check valves are concerned, you may be over-tightening them in the manifold. They have been used by us for years and should do the job. [24] The installation was finalised, and final testing carried out, on 2 June 2006. Both CBWs were fully functioning. [25] On or about 7 June 2006 George phoned me and we had a conversation to the following effect: George said: We need to go back to Canberra. There are a few programming issues, and some problems with the delivery system. Are you available tomorrow? I said: I can go tomorrow. Let's make an early start. I will pick you up at 6.00 am. [26] On or about 8 June 2006 I contacted George after I inspected the chemical dispensing system installed at Capital Linen. We had a conversation to the following effect: I said: Some of the check valves are leaking. George said: Replace all leaking valves, and any suspect ones. There are also some problems with a couple of programs in the small CBW. I said: OK. I will attend to both. [27] On 15 June 2006 I returned to the Capital Linen premises with George to carry out further programming and we found the following: (a) peristaltic pump tubes ballooning; (b) broken, leaking and/or inactive check valves. After consultation with and instructions from George, I replaced several pump tubes and check valves. 445However, when Dr Griffith swore his affidavit of 27 February 2007 in the present proceedings he gave this account of the same matter: [36] In late May 2006 Capital Linen, a pre existing customer of Proton, requested that Proton install two continuous batch washers and two washer\extractors at its facility in Canberra. Given that Proton was familiar with and already servicing Capital Linen laundry I expected that the installation would take no longer than 3 to 4 days. [37] Although there were some complicating factors in the installation including a very short time frame of notification and planning, due to George's lack of decisiveness and difficulty in communicating with me and others involved in the installation, the installation took 15 days to complete. [38] Notwithstanding the complicating factors in the installation, in my prior experience George would have not only quickly and decisively come to grips with demands of the installation, but had a detailed vision of the necessities of the installation. This decisiveness was sadly lacking in Canberra. Further, George found it very difficult to communicate with me, and others involved in the installation, his specific requirements. From my observations in working with George on this installation, there is no doubt that George has not lost his knowledge of the specific demands of particular laundry situations, but he seems to have lost his ability to concentrate on the job at hand and to direct the operation with authority. [39] On most days during the installation, George disappeared for hours at a time. I believe he returned to the hotel and slept for several hours each day. On other occasions I found him asleep in the room we had established as an office. He took some considerable time to re focus on the job at hand. He was not expected, and did not engage in, any of the physical work, but we were reliant on his instructions, and these were rarely clearly enunciated. [40] In brief, during the 15 days that I spent at Canberra with George I observed: (a) an inability or unwillingness to undertake any of the physical work of the installation. (b) uncertainty with respect to some aspects of new technology we encountered. (c) inability to sustain concentration for the completion of intellectual tasks for which only he could provide specific input. (d) unfair and often irrational impatience with the workforce with respect to skills and pace of work. (e) nervousness with respect to the final outcome which lead to uncertain directions or unwillingness to make decisions. (f) unfair, rude and unprofessional treatment of his own staff. (g) unwitting and antagonistic treatment of other laundry and contractor staff. 446This description bore little resemblance to what Dr Griffith said in the other proceedings. When it was suggested to Dr Griffith that the two accounts given were completely inconsistent Dr Griffith denied any inconsistency and became defensive and somewhat aggressive in the way he answered questions put to him concerning the inconsistencies. For that and other reasons I consider that Dr Griffith was not an objective witness on whom I could rely. It also diminished the impact of evidence he gave purportedly based on his qualifications and expertise. 447I have carefully considered the accounts given in the two affidavits. The detail of the conversations given in the affidavit in the Knight Equipment proceedings causes me to conclude, on balance, that it is closer to the truth than the account given in the affidavit in these proceedings. 448 Nor can the lengthy Statements made by Mr and Mrs Chaina in these proceedings be overlooked. Of course they were prepared by lawyers acting for the Plaintiffs at any given time, but the detail contained in them must largely have come from Mr and Mrs Chaina. The size of these Statements is apparent from a perusal of Chaina (No 7) and Chaina (No 8). 449I have also had regard to what appears in Dr Milton's report on pages 52 to 64 and his assessment of how Mr and Mrs Chaina were able to deal with business and other matters.

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450Mr Chaina certainly continues to have psychiatric problems and they appear to have worsened as time has passed. This is partly attributable to his paranoid personality disorder which the psychiatrists consider worsens as the person gets older. I do not accept, however, that Mr Chaina has been totally incapacitated from work since Nathan's death. 451Although Dr Milton was of the opinion that the anxiety and depression suffered by Mr Chaina lasted until some time during 2001 he does not suggest that Mr Chaina was totally incapacitated. The matters which I have referred to above also point strongly to Mr Chaina's not being totally incapacitated during that period. I accept that he had assistance from people like Dr Griffith, Lily Sukkar, Alex Roudenko and some other persons on a more short term basis. But he was still involved. The financial results of Proton for the years immediately following Nathan's death (discussed below) point to a similar conclusion. 452There can also be little doubt but that psychiatric matters unrelated to Nathan's death impinged on his capacity to work. 453Taking a generous view towards Mr Chaina I consider that, on average, over the period from Nathan's death until June 2001 Mr Chaina was incapacitated to the extent of 50% arising from Nathan's death. 454I accept that Mr Chaina continues to suffer some degree of mental harm arising from Nathan's death since June 2001. This mental harm amounts to a minor proportion of the psychiatric injury that he continues to suffer. The majority of his present condition arises from his pre-October 1999 psychiatric conditions exacerbated by the prolongation of this litigation. He has not been incapacitated for work from June 2001 as a result of Nathan's death. 455Further, the matters arising from the two Tenders in March 2000 ([406] above) and December 2004 ([194] above) and the August 2000 R & D Application ([187] above) suggest that, not only was Mrs Chaina capable of working in her pharmacy but was also capable of working with Mr Chaina in the Plaintiff companies' business. On that basis I consider that over the period from Nathan's death until August 2000 Mrs Chaina was, on average, 75% incapacitated as a result of Nathan's death. 456Mrs Chaina continues to suffer from psychiatric conditions as discussed earlier. The only psychiatrist who considered that her continuing depression and anxiety resulted from Nathan's death was Dr Phillips. However, that opinion was expressed before he accepted that the weight of evidence from Dr Hislop and Dr Wever (in his pre-October 1999 reports) demonstrated that Mrs Chaina suffered from depression before and right up until Nathan's death. His acceptance of this position considerably weakens his opinion about the cause of her continuing psychiatric problems. 457In my opinion the views of Dr Skinner and Dr Milton are to be preferred. The principal cause of Mrs Chaina's present depression is her pre-existing depressive illness fuelled by Mr Chaina's own problems, the difficulties in their relationship and the ongoing litigation. No doubt Nathan's death continues to contribute to a small extent but the exacerbation it created largely subsided by no later than 2001 and probably earlier. Mrs Chaina has not been prevented from working as a result of Nathan's death since August 2000. That is not to say that Mrs Chaina does not suffer from ongoing grief as a result of Nathan's death but that grief is not a recognised psychiatric illness. 458In reaching these conclusions about both Mr and Mrs Chaina I have also had regard to Proton's financial statements for the years following Nathan's death which are discussed below. 459It is now necessary to examine the history of the business with particular regard to its position in the years before and immediately after the tragedy.

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463There are two (and possibly three) other versions of some of these figures. It appears three different firms of accountants prepared accounts and/or tax returns for the companies, N A Honan, Burford and Associates, and Bentleys. Tax returns were prepared well in arrears of the relevant years. The figures for years prior to the fire in 1993 are said to be reconstructed accounts because significant documents perished in the fire. Nevertheless, it is not seriously suggested by the Plaintiffs that the above figures, particularly the sales figures, which do not vary much or at all in the different sets of accounts, do not approximately represent the level of business the companies were achieving. 464The significant increases in expenses that appear to have caused the net loss in June 2002 related to consultant's fees (up from $61,382 to $71,936), insurance (up from $59,546 to $87,080), legal costs (up from $13,043 to $77,793), salaries (up from $174,950 to $209,143) and travelling expenses (up from $24,646 to $51,266). 465For the year 2003 the two significant increases were for insurance (up from $87,080 to $151,243) and legal costs (up from $77,793 to $241,917). Both salaries and consultant's fees fell. The reasonable inference is that Proton paid legal expenses associated with the inquest and these proceedings. 466The conclusion in relation to Proton must be that it was business as usual at least until the year ended 30 June 2002. Sales were slightly down in that year but the downturn in profit is largely explicable by the increase in the expenses mentioned. The material is certainly not consistent with a business that came to a grinding halt because the two moving figures, Mr and Mrs Chaina, were not able to work despite Mr Chaina's evidence in that regard (T353). 467If it is correct that Mr and Mrs Chaina were essential to Proton's efficient functioning these results tend to suggest that Mr and Mrs Chaina were making a useful, and possibly their usual, contribution to bringing about those results. If they were not doing so, that is something to be considered, as mentioned earlier, when examining the Plaintiff companies' per quod claims. No explanation has been put forward by the Plaintiffs to explain the results achieved by the companies for the financial years ended 2000 to 2003 in the face of their claims that they could not work and that the companies were completely dependent upon them. 468 What the figures show is that, even making allowance for the set back caused by the fire in 1993, the business never had sales exceeding $1.75 million and never made a net profit of more than $375,000. The expectations of the Plaintiffs about what they could achieve with the launch and re-launch in 2000 must be considered in the light of this history.

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(a) Payments to creditors 469Further, the way the companies operated in the years before Nathan's death does not provide optimism about what Mr and Mrs Chaina say was likely to accrue to them as a result of the launch and re-launch. 470Mr Chaina agreed that in 1992 and thereafter the business had a considerable cash flow problem. That led to it entering into a factoring agreement with Heller Factoring in September 1992. Although Mr Chaina at first denied operating the business on the basis of deferring payments owed to creditors whenever it was possible, he agreed a short time later that that was what was done. He agreed that creditors would often sue for outstanding debts, that sometimes judgments were entered against the companies, and that by the time of the fire there were many creditors who were owed a lot of money. He agreed that the same policy existed in 2001 (T 667). 471Although Mr Chaina tried to suggest that these problems all post-dated the 1993 fire, the material in Exhibit 57 shows that a significant number of proceedings for debt were taken against Deluxe prior to the fire. 472In February 1995 the Deputy Commissioner of Taxation had taken proceedings against Deluxe claiming more than $174,000 owing in sales tax. Some of the tax had been owed from October 1992. 473Mr Chaina was asked about a letter from the Trafalgar Group of Companies dated 4 February 1994 where Deluxe's assets were being seized to pay a judgment debt. He accepted what the letter asserted, namely that by the date of the fire the debt claimed was already seven months overdue. 474There was evidence of a number of occasions when the bailiff came to levy execution because of the failure of Deluxe, Proton and Mr Chain himself to pay judgment debts (Exhibits 78 to 83). On a number of occasions Mr Chaina was asked if he remembered the bailiff coming to issue execution against the company's property but he claimed not to remember any such occasion. It is, quite frankly, unbelievable that a person would not remember that the bailiff came to execute against the company's property. Even if it was a frequent occurrence that would mean it would be likely to be remembered. If it was a rare occurrence it would be even more likely to be remembered. I consider that Mr Chaina was being deliberately dishonest in his denials of remembering about the bailiff.

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(b) Complaints about the Company 475The Defendant produced a number of written complaints about the Plaintiff companies. They were shown to Mr Chaina. His initial approach was to acknowledge that there were problems after the fire that had been caused by the fire. For example, he blamed the fire for the complaint received from Mr Tudehope at the Regent, Sydney (exhibit 33) dated 19 August 1993. However, an examination of the letter shows that the complaints were nothing to do with the fire but that they actually concerned intrinsic problems with the goods supplied. 476The letter said relevantly: It appears from your facsimile that you are making every effort to overcome some of the problems at the laundry in regards to chemical consumption and rewash. George, it must be stressed that the rewash problems could have been avoided had the change to wash formulas been implemented in June as requested. The letter concluded by saying: I do hope there will be no further cause to stretch our business relationship in the future. 477In relation to the complaint by Mr Tudehope at the Regent, two letters were written by Deluxe through Alex Roudenko, said to be the General Manager (Exhibits 45 and 46). Both letters went out over the name of Mr Chaina. Neither of the letters makes any reference to the fire at Deluxe's premises in June 1993. The first letter attempted to explain the delays because of a problem that a Mr Kelvin Ingerson, a contractor welder to Deluxe, had experienced. The second letter purported to be an explanation of problems that had been identified at the laundry when someone from Deluxe visited. 478It was put to Mr Chaina that nowhere in the letter was the fire put forward as an explanation for the problems that the Regent Hotel experienced. Mr Chaina said he did not agree with that. Plainly, there was nothing in the letters about the fire. Mr Chaina then said that the customer was notinterested in the supplier's problems. That did not sit easily, of course, with the excuse offered concerning Mr Ingerson. He also denied that the following statement was true: "and were not able to replace Kelvin with another tradesman since he had all the parts required to complete the project in his possession". He kept insisting that the parts had been in the factory that had burnt down. 479This was another example of Mr Chaina's evidence being given in the face of what was clearly demonstrated in objective material. 480On 13 November 1992 David Hawken, the Purchasing Manager at the ANA Hotel, wrote to Mrs Chaina as follows: Firstly, Rita I wish to express how happy I have been with the finished product so far received. However, I am extremely unhappy with the continued delays we have experienced in obtaining the finished product for our Guest Rooms. No one seems to know when the goods are going to be dispatched, let alone arrive on site. It is not only extremely frustrating but also proving to be very time consuming to obtain reliable information. I appreciate you have some teething problems, however, I would expect greater communication within your company structure. Repeatedly, I have attempted to contact either yourself or George only to be told you are "not available". This is NOT what I wish to hear. I would appreciate your urgent attention to these matters. Thanking you in anticipation. 481He wrote again on 2 June 1993 in these terms: Dear Mrs Chaina I am writing to formerly advise of the immense displeasure the ANA Hotel Sydney has experienced with your companies performance to date. Your inability to supply this hotel with its complete amenity range in its new format is totally unacceptable. The implementation of the guest amenity bottled range, without the anti tamperproof sticker will, given your latest delivery schedule, be delayed three (3) weeks. This, coupled with tardiness, to reply to delivery schedule requests and the lack of communication from your company raises serious questions about the long term relationship between Jean Pierre Cosmetics and ANA Hotel Sydney. Without a firm commitment by Jean Pierre Cosmetics to ensure this current situation does not continue, the ANA Hotel Sydney will reserve the right to source an alternative product elsewhere at any given time. 482Mr Chaina refused to accept that Deluxe or Jean Pierre Cosmetics had done the wrong thing and when asked if complaints had a detrimental effect on the Plaintiff's business reputation he gave the extraordinary answer: If we did the wrong things, yes, but we never did the wrong things. (T438) 483He then wanted to suggest that the complaint was only about the cosmetics and not about other matters that the Plaintiffs were involved with at the ANA Hotel. Then he wanted to suggest that it was just Mr Hawken who was the problem at the ANA Hotel while the other people Mr Chaina dealt with were quite satisfied with the Plaintiffs. Despite the terms of the letter of 2 June 1993 he claimed that the ANA Hotel were not serious, despite the fact that the complaint ultimately led to litigation. He described the complaints as "teething problems". 484It seems that these "teething problems" did not go away because Jean Pierre Cosmetics Pty Ltd commenced proceedings on 7 August 2000 against Lilyvale Hotel Pty Ltd which was the company that operated the ANA Hotel. 485In the litigation with ANA it emerged that a letter had been written to Mrs Chaina on 13 November 1992 saying (inter alia): I am extremely unhappy with the continued delays we have experienced in obtaining the finished product for our guest rooms. Despite the terms of that letter Mr Chaina insisted that it did not indicate unhappiness with the company's performance. This is a further indication of why it is unsafe to rely on Mr Chaina's assessment of how the company was performing. 486On 10 May 1994 Red Lion Laundries, a company that Mr Chaina said was an important customer, wrote claiming a lack of action after the Plaintiffs had initially displayed such enthusiasm to secure the business. The letter went on to say: George, I do appreciate the plant fire in June last year, must have caused considerable turmoil in your business activity, as well as personal stress and strain to yourself. Recognising these difficulties, we have been tolerant of service problems arising. It is however, now some 12 months since the fire occurred - surely adequate time to reconstruct and re-establish your customer service standards. Would you please advise me urgently regarding the current situation. Our ordering procedure is designed to eliminate the possibility of chemical shortage arising - something we cannot tolerate further in the future. As I mentioned at the outset, it has been a long and valued association, certainly one I would hate to see end... 487Mr Chaina said he could not remember either the letter or any complaint from Red Lion. 488On 8 July 1999 Pinnacle Apartment Hotel in the ACT sent a fax to Proton saying: Please note both of our above properties will no longer be using your chemicals. I would appreciate your advices regarding the removal of your equipment. (Exhibit 34) 489Mr Chaina denied that there was any complaint from this company before October 1999 and denied that this was a notice of termination. He said that Exhibit 34 was a request to remove the equipment, but neither was it a termination nor were they unhappy with Proton's performance. 490A letter from the Department of Health and Community Services in the Northern Territory dated 25 August 1993 (Exhibit 38) complained that Gove Hospital received a drum of Formula 2 which was only one third full. On the same day a fax went from the Department to the Plaintiffs referring to earlier faxes of 18 and 20 August with regard to service visits and the receipt of drums of Formula 2, 3 and 4 that were overdue. Mr Chaina first blamed the transport company and then the fire saying that they were still in disarray from the fire. 491On 15 November 1996 (Exhibit 48) the Operations Manager of the Royal Darwin Hospital complained that on occasions linen removed from a supposedly completed wash program was smelly. The letter also complained that all liquor was not eliminated from the cycle, that they had yet to be provided with copies of wash programs, that there was concern that clinical injection rates were not checked at the machines and that there was a problem with stocks of Formulas 2, 4 and 5. The letter said that the Operations Manager was not convinced that Deluxe was honouring its level of customer service claimed in the tender offer and that unless immediate and satisfactory resolution of the problems could be effected he intended to refer the matter to the Department's Contracts Manager for further action. 492Mr Chaina did not accept that the letter was asserting Deluxe was not performing in accordance with its contract. He did not accept that the Department was unhappy because he said: They were very happy with it. Extremely happy. ... Extremely happy with it. 493This is a further example of the unreality of Mr Chaina's evidence. 494There were three other faxes from the NT Department of Health and Community Services on 25 February 1997, 28 February 1997 and 28 May 1997 (Exhibits 40, 41 and 42). The first said that problems have been ongoing and that visits by service staff had been spasmodic. It referred to the fact that Trevor Webb had asked for dosage rates in October 1995, Mr O'Farrell (the author of the fax) asked again in November 1996 and they still had nothing. 495The fax of 28 February 1997 referred to a fax apparently sent by Mr Chaina on 27 February. The fax of 28 February said that Mr O'Farrell had left messages that had not had any returned call. He asked to be rung at 9:00am on 3 March. A handwritten note on the fax says "Have not been contacted 15:15 hours 3/3/97". The fax of 28 May 1997 from Mr O'Farrell said this: I have repeatedly requested information on what actually takes place during each wash cycle (program). To date I have received nothing. My predecessor requested dosage rates back in October 95; still nothing. This information is vital if we are to run an economic and efficient laundry. My laundry coordinator must know how much of each chemical is used against what is being used. 496Mr Chaina's response to that last fax was that the information was not vital and he denied that they were complaining that a satisfactory service was not being provided. 497On 23 December 1997 Jetz Commercial Laundry, another customer, sent a fax complaining about short delivery in a number of drums of product. A credit was requested. The fax went on to say that the company was not happy with Mr Chaina's fax regarding the ph level of the cooling pit. It concluded by saying: I feel these inconsistencies are causing an erosion of trust in you and your company and placing the contract with you at risk. 498Mr Chaina did not remember this complaint or the fax. His first response to the second complaint was to ask what the cooling pit had to do with Proton. He then accepted that he may have given some advice about the ph level of the cooling pit but he did not recall it (Exhibit 39). 499Although he agreed that after the fire in 1993 the company had great difficulty in servicing clients' needs and that they lost contracts he would not initially agree that there were a lot of unhappy customers after the fire (T483). Subsequently, he agreed that after the fire a lot of customers were complaining (T499-500). 500It was suggested to Mr Chaina that the reason they commenced trading in the name of Proton in 1998 was because by that stage Deluxe had no goodwill attached to it. This was because of its policy of paying creditors and the fact that it had been sued to judgment so many times. It was also said to be due to all the unhappy customers. Mr Chaina denied that this was so and said that Deluxe had a remarkable reputation in the market (T670). He said they were a highly respected company (T672). 501I do not think it is necessary to reach a view about why the Plaintiffs commenced to trade and market under Proton rather than Deluxe or Jean Pierre Cosmetics. What is clear from the foregoing is that the way Mr and Mrs Chaina conducted the business of the Plaintiff companies was likely to mean that there would always be problems, some serious, in any revamped business. In saying that, I do not overlook the fact that any business is bound to have some dissatisfied customers. I accept that the Plaintiffs had a number of satisfied customers, but a number of those mentioned above were big customers whose dissatisfaction was likely to have become known within similar markets such as the hospitality and health industries. These were some of the significant markets that the industrial re-launch was hoping to acquire. 502The foregoing also emphasises how little regard I can have for Mr Chaina's assessment of his business, how his business was viewed and what his business practices were. Any assessment of the likely outcome of the re-launch of the industrial products must take into account the objective evidence of the past business and the way in which the Chainas conducted that business.

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The proposed launch 503In his Statement of 8 February 2010 Mr Chaina sets out the work he claims he had been doing from 1995 to 1999 in formulating new products and in carrying out work in preparation for the launch which he claimed was to occur. In the light of my assessment of Mr Chaina's credibility I cannot accept the detail of what he has sworn to in this regard. There is certainly an issue as to what formulae were in existence during that period, a matter that will be discussed later. 504Mr Chaina's evidence about this period also contained beliefs he had about what had been achieved by him and the companies up to that point and what he would achieve. I bear in mind Dr Phillips' opinion that Mr Chaina had over-valued ideas and beliefs arising principally from his paranoid personality disorder. I consider also that Mr Chaina, and Mrs Chaina to a lesser extent, have exaggerated the stage to which matters had progressed by the time of Nathan's death in relation to the launch. One good example of this relates to finance for the launch. 505Although Mrs Chaina maintained from the Bar table during the conduct of the case by her that finance was only being sought for the domestic launch, with the industrial re-launch being financed by Deluxe itself, the evidence does not appear to bear this out. In a document prepared in 1999 seeking finance, and put out under Proton's name called "Investment Opportunity" (Exhibit 2) the following appears: Proton Technology Pty Ltd is looking to secure investment capital needed to proceed with the launch of an innovative range of domestic and industrial cleaning products. 506Similarly, in his Statement of 8 February 2010 Mr Chaina speaks about discussions he had with Mr Arraj about sourcing finance for the "product launches". It is also clear from Mr Chaina's evidence in cross-examination that the finance was being sought in respect of both the domestic launch and the industrial re-launch (see at T 674-678). Mr Chaina said that the amount sought and needed was between $25 and $50 million. 507There is, in fact, no evidence that finance was ever organised. Mr Chaina's Statement of 8 February 2010 refers to two meetings at Price Waterhouse Coopers, the firm that Mr Arraj had arranged to assist with the finance. He said that he was advised by Mr Arraj that AMP was not interested but PWC had two potential investors. One of these was the Pratt Group whom Mr Chaina rejected, he said, on environmental grounds. The other investor was not identified in the evidence. Mr Chaina said that there was a further meeting at PWC but he did not remember the content of the meeting. 508This approach to PWC followed an approach to Arthur Andersen. Mr Chaina subsequently refused to deal with them because, he said, they would not sign a Confidentially Agreement. Mr Chaina agreed that Arthur Andersen had asked for financial statements of Proton but these were not provided "because we have terminated their services". He would not accept the proposition that the financial statements were not provided because they did not demonstrate a favourable financial position. 509The material in his earlier Statement of 2 September 2005 (Exhibit A1) differed slightly. It certainly made reference to his reasons for not continuing to deal with Arthur Andersen and for refusing to deal with the Pratt Group. However, he said two things in that Statement that do not appear in the later Statement. First, he said "Pricewaterhouse Coopers were continuing to identify sources of funding in October 1999. Secondly, he said that he contacted the John Hewson Group in September 1999 but said that did not go ahead because of Nathan's death. 510In relation to the first matter mentioned, what Mr Chaina did not disclose was that on 15 September 1999 PWC wrote to Mr Arraj (Exhibit 89) setting out comments they had received from potential investors and PWC's own views based on those and other enquiries. The comments and opinion were all negative. There was no other evidence about PWC's involvement. I do not accept Mr Chaina's evidence that PWC was continuing to identify sources of funding for three reasons. First, I do not accept uncorroborated evidence from Mr Chaina for reasons earlier given. Secondly, the statement of PWC's continuing involvement does not appear in the Statement which was served after Mr Chaina confessed to his ongoing dishonesty that permeated his pre-2009 evidence. Thirdly, Mr Arraj, who made a detailed Statement about fund-raising, says nothing about PWC continuing to identify finance sources. 511Mrs Chaina was not prepared to accept that the letter from Price Waterhouse Coopers to Danny Arraj of September 1999 brought to an end PWC's involvement in endeavouring to find finance or investors. She insisted that PWC were confident they could get the capital (T1537). She denied that they moved on to the John Hewson company after the letter from PWC (T1538). That was significantly different evidence from that given by Mr Chaina. 512Even if her evidence is accepted in both respects the position is that as at October 1999 no finance was available. Nor is there any material to show that it was likely to become available in the near future. 513Both the Amended Statement of Claim and the Statement of Particulars filed September 2012 said that Deluxe was the company that provided finance to the other companies in the group. Even if it was proposed that the industrial re-launch was to be financed by Deluxe (contrary to what I have found), there was almost no evidence that even touched on this matter. The financial statements of Deluxe for the year ending 1999 showed that its current assets totalled $2,051,732. Of that amount $1,872,565 consisted of unsecured loans, but there was no further evidence about those loans. The balance was said to be cash of $179, 167. By June 2000 the cash had dropped to $6,376 and the unsecured loans were $1,938,365. 514There was no evidence of how much was needed for the industrial re-launch alone but the evidence, such as it was, provides no basis for inferring that Deluxe was in any financial position to finance that launch. 515The Plaintiffs submitted that the report from Ms Cartwright at Pitcher Partners (Exhibit ZZ) demonstrated that the profits of the industrial re-launch were expected to be in such amounts that outside funding would not be needed. Rather, the industrial re-launch would be cashflow positive from the start. 516Ms Cartwright set out matters in paragraph 122 of her statement that she said she noted from the statements of Mr and Mrs Chaina in relation to the planned relaunch of the industrial products. These matters were: 122 From the statements of George and Rita Chaina I note the following specific activities in relation to this planned relaunch of the industrial products: ● George developed a number of unique new products and reformulated all the products. ● George continued R&D activities at the rented factory and in a smaller facility at the home. ● George prepared new manual safety data sheets, technical data sheets, OHS posters and other written material in relation to each product. ● George rewrote the training manuals. ● A new packaging strategy was developed, to enter the market with 2 and 5 litre containers (as compared to 20 and 25 litre containers used by competitors) - would give market edge to Proton as there would be less risk of injury from lifting, easier to transport, handle and store and more environmentally friendly as there would be less packaging to dispose of. ● Advertising to find agents to represent Proton in each state was undertaken ● Mr Rodger Morton of Morton Design had been engaged to design a new corporate identity and branding for Proton, as well as labelling and packaging. ● In about June 1999 negotiations were entered into between Proton and Hobart for Proton to become a distributor of Hobart equipment and with Kimberley Clark, ABC and Bower Scott with a view to becoming a distributor of paper products ● The new Victory One Shot product was ready to be marketed, having been successfully trialled at a number of sites. ● A search for a suitable building in which to establish a production facility with greater capacity was conducted and the property at Donald Street, Lithgow eventually identified. ● Discussions were had with government advisors and the mayor of Lithgow in relation to incentives for establishing the business in Lithgow. 517In addition, Ms Cartwright noted that the Plaintiffs had been close to finalising plans to relaunch the industrial products business. This matter and the matters listed in the paragraph above must be regarded as the assumptions, or some of them, upon which Ms Cartwright provided her opinion. 518The Defendant identified three of the matters listed which it said had not been established by the evidence. Those matters were that Mr Chaina had rewritten the training manuals, that there had been negotiations between Proton on the one hand and Hobart, Kimberley Clark, ABC and Bower Scott on the other, and that the new Victory One Shot was ready to be marketed. Those matters have not been established by the Plaintiffs. That undermines, to some extent, Ms Cartwright's conclusions. 519In addition, and significantly, for this section of her report Ms Cartwright has assumed the correctness of the projected sales figures for the years 2000 to 2016 set out at paragraph 51 of the report of Professor Dowling. 520 It is necessary at this point to say something about Professor Dowling's evidence.

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The evidence of Professor Dowling 521His report was dated 4 August 2006. Professor Dowling noted that his opinion had been sought on the following issues: (a) The likely annual sales revenue that would have been achieved by Proton Technology had it proceeded with its proposed business expansion in the industrial market up to the year 2016; (b) The equivalent market share represented by these sales estimates; (c) The likely lost sales revenue up until 2005. 522A very considerable difficulty for the Plaintiffs in their reliance upon Professor Dowling's report is the fact that Professor Dowling himself relied upon a number of significant documents that are not in evidence in the proceedings. They are not in evidence either because they were rejected when sought to be tendered or because they were never tendered in the first place. For example, Professor Dowling made it clear in paragraph 13 of his report that the primary sources of evidence in the formative and recovery stages of Proton (which he indicated meant collectively from 1982 to 1999) were the Statements of George and Rita Chaina together with the exhibits marked GC1, GC2, GC3 and RC1 as well as the sales figures reconstructed by Dormer and Co. Although a number of documents in exhibits GC1, GC2, GC3 and RC1 to those statements have been put into evidence by the Defendant because of reliance upon them by Mr Dunbar (the Defendant's marketing expert), many of the other documents in those exhibits are not in evidence. 523Further, the only Statements made by George and Rita Chaina at the time Professor Dowling provided his report were the Statement of George Chaina of 2 September 2005 (Exhibit A1) and the Statement of Rita Chaina of 16 August 2005 (Exhibit K1). Although Professor Dowling provided a supplementary report in 2012 where he commented briefly on the report of Dr Van Dyke no attempt was made in that supplementary report to have any regard to the subsequent Statements of George and Rita Chaina. (The supplementary report is now dated 23 September 2013 only because it had not earlier been dated and signed, and is now exhibit AAA2.) It should be noted, in particular, that the supplementary report does not even suggest that Professor Dowling was aware of how the nature of the proceedings had been greatly altered after 2009 when Mr Chaina admitted to a lack of qualifications. Professor Dowling's stating in his report that the reputation of George Chaina is an important asset seems to highlight Professor Dowling's apparent unawareness of Mr Chaina's actual reputation. He had believed Mr Chaina to be a well qualified chemist with a reasonably distinguished CV when he made that statement in his report. 524Secondly, there was a heavy emphasis placed by Professor Dowling upon an affidavit of Michael Jerogan and an affidavit of John West sworn in the fire proceedings when discussing the formative stage of the corporate Plaintiffs. Neither of those affidavits is in evidence. 525Thirdly, it is apparent that Professor Dowling was somewhat reliant upon the number of large and small customers contained in customer lists prepared by the Plaintiffs which were not in evidence (see paragraphs 35-38 of Professor Dowling's report). 526Fourthly, there is an assumption by Professor Dowling that the industrial products were functionally superior products compared with those of competitors even if it is accepted, as Professor Dowling asserts, that service and value for money are also significant considerations. I discussed this in Chaina (No 16). I shall refer to this again a little later. For reasons which I gave in Chaina (No. 13) the evidence of Dr Van Dyke, although laudatory of the Plaintiffs' products, does not identify them as functionally superior. In addition to the various categories of products I set out in Chaina No.13 at [103] I accept the Defendant's analysis in their submissions at paragraph 10.5. There is some overlap with my analysis. 527Finally, when Professor Dowling came to give his evidence, I formed the distinct view that, despite his adoption of the Expert Witness Code, he did not in fact see that his paramount duty was to the Court, but rather that he was in fact an advocate for the Plaintiffs. To explain this in part a small digression is necessary. 528It had always been my intention that the experts in their appropriate fields should meet in conclave to prepare a joint report and thereafter give their evidence concurrently. However, two things about the way that the case developed brought me to the view that the experts should simply give their evidence concurrently without having met to prepare a joint report. 529The first reason for that was that the Plaintiffs ceased to be represented by lawyers in the matter. That gave rise to practical difficulties about agreeing on the issues that should be put to the experts for inclusion in a joint report. It would at least have involved an interlocutory hearing where I determined what those issues should be. That would have been possible had it not been for the s 192A application that I heard in August 2013, (where I rejected Professor Dowling's Report), followed by the Plaintiffs' Notice of Motion of October 2013 asking for the reinstatement of (inter alia) that report. 530That Motion and the time taken to prepare the judgment resulted in half of the final tranche of six weeks hearing being lost. Due to this delay there was the distinct possibility that the expert evidence generally would not have been completed at the end of the third tranche of hearing, had there been a delay to determine the issues that should go to the experts in conclave and thereafter for the preparation by the experts of a joint report. I took the view that the efficient use of Court time, and the most expeditious way of completing the evidence, was simply to have the experts give their evidence concurrently so that at the least there could be an exchange of views and opinions by those experts as a result of questions asked. 531From the outset Professor Dowling was unhappy with this approach and said so immediately after I had finished explaining the process of concurrent evidence to him and to Mr Dunbar. He told me that he considered the process seemed quite contrived. Indeed, the view I formed after that time was that Professor Dowling attempted to hijack the process. 532Further unsatisfactory exchanges occurred whilst Mr Stitt QC was asking him questions as follows (T3471): STITT: Thank you. The report sets out clearly the analysis upon which your opinion is based, does it not? WITNESS DOWLING: Yes. STITT: And that analysis has at its heart a theory of marketing, is that so? WITNESS DOWLING: What do you mean by a theory of marketing? STITT: Is not your report based upon a theory of marketing? WITNESS DOWLING: There is no such thing as a theory of marketing. STITT: But did you not in fact inform the models which you prepared on a basis of a theory? WITNESS DOWLING: The reasoning is outlined in my report and it is outlined in a number of places. STITT: I understand that but - WITNESS DOWLING: Let me take to you where those places are. STITT: I'm asking you - WITNESS DOWLING: Paragraph 17, Marketing Principles. And later on in the report there is a section in paragraph 40. STITT: We can - WITNESS DOWLING: And later on - STITT: Please, professor - WITNESS DOWLING: No, no. Just - HIS HONOUR: Professor Dowling, I don't think it is necessary for you to list all the - WITNESS DOWLING: Alright. But your Honour, what I was trying to forewarn earlier on - HIS HONOUR: Professor Dowling, I'm sorry. I govern the process here. You may not like it but it's going to take place in the way I suggested - WITNESS DOWLING: Well, we - HIS HONOUR: Your role is to answer questions that are put to you. WITNESS DOWLING: Yes. And my role is to answer them in a fashion that I hope will help the court. HIS HONOUR: I will ultimately be the decider of that. STITT: Do you deny that the report is based on a theoretical application of principle? WITNESS DOWLING: As stated in the report. STITT: Thank you, but could you answer my question? WITNESS DOWLING: I have. 533Again, a little later, the following occurred (T3474): STITT: But if in fact those figures are wrong would it not cause you to alter your opinion? WITNESS DOWLING: If those figures were wrong what it would cause me to do is to move the probability estimates on the table in paragraph 50 across the bottom would be, if those figures are wrong it would cause me to change those probability estimates. STITT: I'm sorry, which figure is this? WITNESS DOWLING: This is paragraph 50. I'm just double checking. Paragraph 50. The scenario growth rates. The last column, Probability. In the copy I'm looking at it's in bold. In your copy it might not be. Let me check. Yes it's in bold. HIS HONOUR: Page 25. WITNESS DOWLING: Page 25. Your Honour, there's a fundamental principle HIS HONOUR: Professor Dowling, you are just there to answer questions, please. WITNESS DOWLING: I thought I was here to help the court, your Honour. HIS HONOUR: Yes, and you will do that principally by answering Mr Stitt's questions. WITNESS DOWLING: Well, not the way he is asking them, your Honour. HIS HONOUR: Professor Dowling, I would be grateful if you would observe what I asked you to do. WITNESS DOWLING: All right, your Honour. You can probably realise my frustration. STITT: But the probability of growth rate is based on the historical figure, is it not? WITNESS DOWLING: Yes. And as you said if I was not to rely, if I was to be told or if it was to be demonstrated that they were not as accurate as I assumed when they were given to me, then the way to accommodate that is to either move from one scenario to another or to adjust those possibilities. The whole report was designed to have flexibility. STITT: But flexibility is a meaningless concept in this scenario because what is sought to be done is to look at what has happened in the past and to predict what is likely to happen in the future, is it not? WITNESS DOWLING: You don't understand the essential nature of the methodology. As I said earlier, there are three languages in this courtroom. One is the language of evidence which we have been, we spent the first hour on and the rules of evidence. Another is the language of chemistry and another is the language of business. And estimating economic loss. STITT: If we could come back to your report. Please look at page 7. Under the heading Marketing Principles and over the page, page 8. You make this statement: "Competition among suppliers in industrial markets is based primarily on the functional superiority and value for money of their products and a service component." Is that so? WITNESS DOWLING: "Often accompanies this mix". STITT: So there are three elements which you say are relevant to the prediction as to what is likely to happen in the future with competitors? WITNESS DOWLING: Mr Stitt, I was in the courtroom when Mr Dawson walked the court through this. HIS HONOUR: Professor Dowling, that could not possibly be an answer to Mr Stitt's questions. WITNESS DOWLING: All right. Mr Stitt, the fundamental nature STITT: Please, could you answer my question? WITNESS DOWLING: I am Mr Stitt, if you would listen. STITT: I'm asking you this question WITNESS DOWLING: The fundamental nature is the thing called the customer value proposition which is mentioned a number of times in the report. And the customer value proposition is described in there in terms of STITT: No, please could you answer my question? WITNESS DOWLING: Would you please stop interrupting? I'm trying to. HIS HONOUR: Professor Dowling, you were asked were there three elements there. WITNESS DOWLING: Yes. In that paragraph there are. HIS HONOUR: Well, that's all the answer needs to be. WITNESS DOWLING: It is not, your Honour. Mr Stitt is doing what he did in his original approach. Trying to pick individual assumptions and throw the whole report out and my position is that the report must be read as a whole around its methodology. HIS HONOUR: Professor Dowling, if you continue to refuse to answer Mr Stitt's questions I will be able to place very little weight on your evidence and your report. WITNESS DOWLING: Okay, your Honour. Well, we'll play in a black and white world as opposed to a pinstripe world or a grey world. 534That was a very offensive comment from a person determined to enforce his way of giving evidence on the cross-examiner, who was asking a perfectly legitimate question, and on the Court. 535Two other exchanges demonstrate to my mind quite clearly that Professor Dowling was an advocate for the Plaintiffs. They occurred after I had admonished Professor Dowling for his comments and approach to answering questions, and reminded him of his duty to the Court and the way it was to be performed. 536At one point when I was seeking clarification about questions being asked by Mrs Chaina the following exchange occurred (at T 3525): HIS HONOUR: But Mrs Chaina, a number of these questions I'm just wondering what they go to in the case. So what if Ecolab lost some clients to Deluxe. What does that prove in terms of what you have to show in this case? THIRD PLAINTIFF: Your Honour, in the report Mr Dunbar says that we were insignificant, we were a nuisance competitor, that no-one had heard of us. HIS HONOUR: I don't think he says that. He says Deluxe was recognised by its competition for doing things. WITNESS DOWLING: Your Honour, I can't put my foot on it but I can if you need me to but in other parts of Mr Dunbar report that I read he proposes that Proton were actually quite a small player. HIS HONOUR: Yes, he certainly says that. WITNESS DOWLING: He infers that they would primarily focus on the smaller accounts in the market, and I think what Mrs Chaina is trying to do is to say when Deluxe has picked off some of the major hotels and the biggest laundry in New South Wales and Mr Dunbar is unaware of that, that possibly Proton was actually quite competitive 537At a later stage in the proceedings when Mrs Chaina was cross-examining Mr Dunbar Professor Dowling asked if he could cross-examine Mr Dunbar on Mrs Chaina's behalf. That was a fairly strong indication that Professor Dowling was acting as an advocate for the Plaintiffs rather than endeavouring to assist the Court. 538For all those reasons Professor Dowling's evidence was of very limited usefulness. Nevertheless, for completeness I should set it out and comment upon it. 539Professor Dowling estimated Proton's market share in 1999 was approximately 0.3%. He said the approach he had adopted was to produce forecasts around the likely growth rate of the three sectors of the Australian economy that most closely resembled Proton's customers, namely, property and business services, accommodation and restaurants, and health and community services, and the actual growth of Proton prior to Nathan's death in 1999. The average growth rate for the three sectors mentioned was 4.1% and the actual growth rate of Proton's sales from 1995/1996 to 1998/1999 was 24% per annum. 540Professor Dowling said that at 1999 Proton was a small business whose survival relied on defending its "key account" customers. He said George Chaina played a key role. One way for the company to grow would be to add one or two new key account customers each year. That approach had a natural limit, namely the limited time available to George Chaina, unless Proton engaged and retained more senior marketing and customer service representatives. I note in passing that neither Mr nor Mrs Chaina mentioned doing this in their evidence. 541Professor Dowling thought that the growth spurts from 1996 to 1999 and 1999 to 2001 indicated the latent growth potential of the business. It was his opinion, however, that George Chaina would need the help of a business development consultant, a good accountant and an infusion of more resources to achieve those goals. He thought it was reasonable to assume that Proton could have scaled up its operations to be a much bigger company than it was in 1999. 542Professor Dowling described four different business scenarios and used as his base that at 1999 Proton was a business with annual sales of $1.5 million. The four scenarios were these: (1) Business plan target (68% maximum growth); (2) High success (46% maximum growth); (3) Moderate success (24% maximum growth); and (4) Poor/damaging implementation (minus 5% minimum growth). 543Professor Dowling went on to say that because the different factors that he describes in his book "The Art and Science of Marketing" (Oxford University Press, 2004), being the four Ps and the three Cs, are more extensive than the business plan prepared by Proton he used them as his template for identifying the key factors that will drive Proton's growth. The four Ps are product (including service), promotion, price and place of distribution. The three Cs are capabilities, competitors and customers. I drew attention in Chaina (No. 13) and Chaina (No. 16) to the references to functionally superior products in the first column headed "Product". I consider, as mentioned in these judgments and earlier in this judgment, that one assumption Professor Dowling made when dealing with these various factors was that the products were functionally superior products. 544Professor Dowling then sets out the four scenarios which may be summarised as follows. 545Scenario one is based on circumstances where implementation of the growth strategy is plagued by a significant problem with any of the factors identified in a column of the table labelled "Product" in paragraph 45 of the report. The assumption here is that there would be a decline in sales of 5% for three years, followed by no further decline and thereafter the sales would increase at the industry rate of 4.1%. 546Scenario two is based on circumstances where Proton's initiatives met with moderate success as a result of the product and promotion elements described in the table being largely in place. Professor Dowling thought that the growth rate of Proton of 24% during the 1996 to 1999 period provided credence for that as the maximum growth rate in this scenario. 547Scenario three is based on circumstances where all of the factors in the four Ps and three Cs are in place but perhaps because of competitive reactions, such as more aggressive marketing, it is not achieving the level of impact as quickly as the Plaintiffs hoped. A maximum growth rate of 46% is used as an intermediate point between the moderate growth in scenario two and the planned outcome of 68% in the business plan. 548Scenario four is based on the circumstances that the Plaintiffs expected to achieve in their business plan. 549Professor Dowling then provided a probability weighted average growth for each year based on those four scenarios. He also assessed the probability of each scenario as follows: Scenario One - 5% Scenario Two - 45% Scenario Three - 30% Scenario Four - 20% 550Professor Dowling thought that scenario four would be quite difficult for Proton to achieve. 551Using the probability weighted average growth in each year and commencing with the 1999 year with sales assumed at $1.5 million produced the following table. The last column represents the difference between the most likely sales projected in the first column compared with the actual sales achieved in the second column. Year Most likely Sales Actual Sales* ($ million) Most Likely ($ million) Estimated Lost Sales ($) 2000 1.8,2 1.596 million 225,750 2001 2.36 1.676 684,077 2002 3.26 1.272 1,983,726 2003 4.50 0.988 3,511,414 2004 6.23 0.781 5,446,414 2005 7.88 0.711 7,173,217 2006 9.98 2007 12.64 2008 15.47 2009 18.24 2010 20.74 2011 22.65 2012 23.80 2013 25.01 2014 26.28 2015 27.61 2016 29.01

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On this basis the most likely losses to the end of the 2005 financial year were said to be $19.825 million. 552Professor Dowling also concluded that the market share of Proton by 2016 was likely to be 3.26%. This was an interesting contrast with Professor Dowling's reluctance to answer questions in terms of the market share as demonstrated in this exchange (T3493): STITT: Professor Dowling, would you agree that if there was a loss of sales by [scil. to?] a competitor that that would reflect in a loss of market share? WITNESS DOWLING: Thank you Mr Stitt. This the question I've been hoping. Market share is a tricky construct. If the market is growing faster than a business's sales, their sales can be growing and their market share can be falling at the same time. So I was trying to suggest before that if we move away from the notion of market share and just focus on sales, we get a much cleaner estimate of what's going on. I think the real focal point is Proton sales going up or down not so much the market share, because the market share is a two part problem. It's a ratio of the sales of a specific company to the current size of the market and both things move simultaneously. STITT: Can I get this clear. You're saying that it is an impermissible or unreliable indicator to rely on market share? WITNESS DOWLING: No. What I'm saying is you've got to allow two variables to move simultaneously and we don't need to do that in this courtroom. If we just focus on sales, whether the sales are going up and down and Mr Dunbar's comments would be equally applicable, if their sales grew fast enough and got to a quantum big enough then Ecolab and other players in the marketplace would notice and react, and it wouldn't matter really what Proton's market share was. It would be that headline sales estimate that would be the thing, much easier to see and much easier to react to. HIS HONOUR: But if the market was fixed and did not grow, then what we've been talking about in a new person obtaining market share would be a relevant enquiry? WITNESS DOWLING: But the market is not fixed. HIS HONOUR: No, but I'm saying if the market was fixed that would be a relevant enquiry. WITNESS DOWLING: Yes because you've now only got one variable moving. HIS HONOUR: But you say because the market is expanding that's not the appropriate indicator or concern rather it's the sales. WITNESS DOWLING: Yes. Because Proton's sales could be going up but the market share going down at exactly the same time. So if Mr Stitt moves to sales we're fine. 553There are some other difficulties, apart from those mentioned already, with Professor Dowling's reports and his estimates. Although he was reluctant to agree that he was suggesting there were three elements to the prediction as to what was likely to happen in the future with the company, in the passage set out at [526] above, he eventually agreed that that was so. One of them was the quality of the product itself, which, as I have noted, Professor Dowling assumed to be superior. That assumption was not borne out if what the product does and achieves is considered in isolation. I discussed this in Chaina (No 13). 554In Chaina (No 16) at [44] to [47] I said that the issue of service, which was said to be bound up with product superiority needed to be determined when all the evidence was in. That is, it was inappropriate to reject Professor Dowling's report on a summary basis by reason only of my assessment of product superiority per se. It is necessary, therefore, to condsider the second element being service. 555Professor Dowling relied heavily, in this regard, on an affidavit he had from Mr West. This was an affidavit sworn by Mr West in 1994 for the proceedings brought by Deluxe against the insurer arising out of the 1993 fire. That affidavit was not evidence in the present proceedings. Even if it had been, the evidence about Deluxe's service levels at that time was of minimal usefulness given its remoteness in time from the period of the proposed launch and the years immediately preceding. Further, Professor Dowling does not seem to have been provided with the evidence in the present proceedings of problems experienced by important and significant clients of Deluxe. If he had been, Professor Dowling could not properly have described the business as "a culture of innovation that included superior service and high performance products". In fact, Professor Dowling said that he assumed the level of service was positive. 556No additional evidence was put forward on the service element although the Plaintiffs did argue on the motion that resulted in Chaina (No 16) that service was a factual matter that should not be decided until all of the evidence was put forward and submissions made. The only evidence that had earlier been put forward did not support the assumption made By Professor Dowling about this element in his assessment. I am not persuanded on the evidence that the level of service provided by Proton resulted in the products being functionally superior as professor Dowling assumed. 557The third element concerned value for money. Professor Dowling agreed that before it could be determined whether a product was value for money it would be necessary to know the price of the product, and he agreed that he had no information about the price at which the products were to be sold. This was the same difficulty which caused me to reject the second report of Dr Richardt in Chaina v Presbyterian Church (NSW) Property Trust (No. 22) [2013] NSWSC 1707. Professor Dowling agreed, after some reluctance, that it was impossible to make an assessment whether a product gives value to a customer if he did not know the price of the product or the price of the competitor's product. 558Not only did Professor Dowling not know essential matters to assess value for money but no evidence was given in the proceedings about it. This was a serious shortcoming in the evidence because there was nothing upon which it could be concluded, regardless of the quality of the product, that it would be competitive in price. 559The Plaintiffs had sought to tender a report of Dr Peter Richardt dated 9 August 2012. This report purported to set out the cost of producing each of the hundreds of products listed in the schedule to that report. The report was rejected by me for the reasons set out in Chaina v Presbyterian Church (NSW) Property Trust (No 23) [2013] NSWSC 1675. There was no other evidence of the cost of production of products nor evidence of the likely cost of sales. Indeed, there was not even evidence of the price of competitors' products so that it could be ascertained if the Plaintiffs' products would be competitive in price. 560As noted in Chaina (No 23) this evidence was not required for the analysis Ms Cartwright carried out. However, to the extent that she was reliant on Professor Dowling's report as to the amount of market share that would be obtained, her conclusions are not made out because Professor Dowling fails to make out one of his essential requirements, namely that the Plaintiffs' products would provide value for money as Professor Dow,ling explained that term. 561The difficulties that I have mentioned relating to Professor Dowling's report mean that I can place no weight at all on his assessment of market share which he believes Proton would have achieved as result of the launch. In turn, that means that I cannot accept Ms Cartwright's figures derived from that market share. This has the result that there is no evidence that Deluxe could have financed the re-launch of the industrial products from the profits that would be made and from the cashflow it would achieve. 562There were other difficulties in accepting Ms Cartwright's conclusions. 563First, she came to understand after she had prepared her report, and a few weeks before she gave her evidence, that there were other versions of the tax returns and financial statements which had been provided to her. Those other versions contained discrepancies with the material supplied to her to prepare her report. Whilst she accepted that she prepared her report on the assumptions contained in the documents initially provided to her, she was not able to say which of the versions of the tax returns and financial statements was correct. She did not consider it necessary to amend her report or what was later provided to her. 564Nevertheless, she agreed that the difference between the 1996 accounts for Jean Pierre Cosmetics provided to her for the purposes of preparing her report was substantially inconsistent with those prepared subsequently by Burford and Associates. Similarly, she agreed the difference in the 1997 statements for Jean Pierre Cosmetics was considerable. 565She also agreed that if there were cash sales in the pre-1993 period (as Mrs Chaina had agreed in her cross-examination) the trading figures upon which Ms Cartwright relied would be thrown into doubt. 566The result is that the evidence fails to show that the Plaintiffs would have been able to finance the industrial re-launch at the time they claim it would have proceeded. Nor is there any evidence that at any time thereafter finance would have been available to enable the re-launch to proceed. 567In those circumstances the industrial re-launch would not have taken place in 2000 as the Plaintiffs claim. Nor is there any evidence to demonstrate that it would have taken place at any time up to the time in 2001 when I have held that Nathan's death ceased to be the matter which precluded Mr and Mrs Chaina from working in the company as they had prior to October 1999. 568There is, therefore, no opportunity or chance which has been lost by the Plaintiffs.

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Mr Dunbar's evidence 569There are additional reasons that the industrial re-launch would not have taken place as the Plaintiffs claim. A convenient summary of these is to be found in the evidence of Bruce Dunbar. 570Mr Dunbar qualified as a Marine Mechanical Engineer but worked as an engineer and managing director of three firms which produced pharmaceutical products, cleaning, personal grooming and industrial speciality cleaning products. From 1979 to 1990 he was Managing Director of Ecolab in Australia. Ecolab was, and still is, the largest company in the world involved in the manufacture and marketing of industrial speciality cleaning products and systems to the hospitality, health care, food and beverage, pest elimination, water treatment, laundry and textile care markets. 571The Plaintiffs were critical of Mr Dunbar's expertise especially on the basis that he ceased to work for Ecolab in 1990 because the matters the subject of the present claim concerned chiefly the period towards the end of the 1990s. The Plaintiffs also submitted that Mr Dunbar's experience was with a large multi-national company and that he did not have expertise in relation to small players in the industry such as Deluxe or Proton. 572Although Mr Dunbar was viewing the matter from the perspective of a very large company in the industry I am entirely satisfied that his experience was such that he was an expert to comment on the industry as a whole. I am also entirely satisfied that he knew the industry very well and knew sufficient about Deluxe, and was in a good position to provide an opinion on the likely success of one of the smaller players seeking to expand their market share. 573I have not overlooked the dates Mr Dunbar worked at Ecolab. It should be noted, however, that since he left Ecolab in 1990 Mr Dunbar has provided staff recruitment services to the industrial specialty products cleaning industry, particularly Ecolab and Jasol. Further, Mr Dunbar has remained in touch with senior management personnel within companies operating in the industry and he has a current knowledge of the latest technology and competitive forces that are in play in the market. In any event, there was no evidence to suggest that there had been any significant change within the industry that rendered his knowledge and experience gained in those years irrelevant for the matters on which he was asked to express an opinion. 574Mr Dunbar gave concurrent evidence with Professor Dowling. In sharp contrast to Professor Dowling, Mr Dunbar was a helpful and measured witness who I thought was doing his best to assist the Court. 575In his first report dated 20 December 2012 (Exhibit 218) Mr Dunbar said this: 50. Based on my experience in the market, a company seeking to develop a powerful presence in the industrial cleaning market would have to demonstrate to prospective industrial customers that they had at least, fulfilled all of the following criteria: (i) A product range that was demonstrably superior to the products they were currently using. This proof of superiority would be based on documented evidence of success including product trials and demonstrations against competitive products. (ii) A fully trained internal, sales and marketing organisation capable of providing a specialised level of service into each major sector as identified in Table 01. (iii) A technical and laboratory support facility to provide technical advice for product performance related issues in the field with the capacity to respond on a 24/7 basis. (iv) Major customers in the international hotel, health and aged care, food processing, commercial laundry, water treatment and restaurant industries are notoriously difficult to convince to change suppliers. The risk of a poor result is not worth considering as it can inevitably lead to downtime for the company or even worse. Major customers comprise more than 80% of the total market and will usually opt to use the services of a substantial, reputable and reliable organisation with which they have developed a solid working relationship. Their decisions are not primarily based on price. Results and service are the controlling factors and the ability to adapt to this environment is a key element in achieving success. (v) The financial resources and logistical support to sustain the organisation whilst it endeavoured to make inroads into the market. Progress is usually very slow and results are gained after a lengthy process of the company proving itself as a reliable supplier. (vi) The ability to constantly introduce new and improved products and systems across all elements of the market.

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Superior products 576Professor Dowling agreed that all of those points had validity but he thought that Mr Dunbar had overstated the position in that the points made were at the higher end of what was needed. As an example, he did not think proof of superiority of products would necessarily need to be documented. A potential customer might be satisfied after a demonstration without there being documentary proof that the product was superior. 577In the course of her cross-examination of Mr Dunbar, Mrs Chaina put to him (although without any reference to point (iv) above) that once a company had an account it was not easily lost. Mr Dunbar, unsurprisingly, agreed with that and said a company seeking the account would have to demonstrate some positive reason for changing because of the logistics involved in replacing equipment with a new supplier. 578That point served to echo what Professor Dowling had said about the need for a company to show a superior product, superior service and value for money. I have discussed these matters earlier and concluded that the Plaintiffs did not establish these matters. 579I accept also what Mr Dunbar has said in paragraph 50 of his report although I can accept Professor Dowling's criticism, at least, of point (i) that in all cases it may not be necessary to show documented evidence of success in terms of trials. To the extent that the launch in 2000 was to be based upon the 1999 Business Plan (Exhibit 134) I accept Mr Dunbar's criticisms of what was contained in it (at Para 125 of his report and Table 07). Those criticisms can be seen when Mr Dunbar was being asked in cross-examination about the Business Plan (at T 3611): My overall view of the business plan was that it lacked substance and it lacked detail and the sorts of things that you are quoting to me are simply just words and dates. There is no strategy, no sales volumes, no detail to support them. 580The evidence did not suggest that the Plaintiffs could demonstrate the matters identified in points (ii), (iii) and (v) of Mr Dunbar's paragraph 50.

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The Lithgow premises 581The Plaintiffs had purchased premises in Mort Street, Lithgow in mid to late 1998. The intention was to use the premises as a research and development facility and as a conference venue. Although Mr Chaina claims to have identified a second property in Lithgow in Donald Street in 1998 for use as the manufacturing facility and, despite having been sent a contract for sale of the property in September 1999, the Plaintiffs had not by the time of Nathan's death entered into the contract to purchase it. 582Mr Dunbar inspected the two premises at Lithgow in March 2009. His description of the Mort St property which has been used by the Plaintiffs, perhaps as a laboratory Mr Dunbar thought, cast it in a very negative light. He described a ramshackle, leaking building with old equipment stored in a haphazard fashion. He said the current design of the building coupled with its condition would not have made it suitable for the intended purpose. It would have needed to be completely renovated or a new building built on the site. He said local approval for use of the facility would be needed, a matter which he thought would have been difficult to obtain. 583In relation to the Donald Street premises, Mr Dunbar thought that none of the equipment in it was suitable for what the Plaintiffs proposed. He thought that its only worth was a building with walls, a roof and a floor. He thought Lithgow was not an ideal site for the manufacturing plant. 584I accept Mr Dunbar's evidence in his first Statement at paragraphs 270ff and paragraphs 757ff and in his Statement of 19 February 2013 (Exhibit 220) where he deals with the shortcomings of the Lithgow premises and equipment for the production levels the Plaintiffs were asserting. Those shortcomings were also identified by Dr Bruce McDonald, a research chemist retained by the Defendant, in his report of 21 December 2012 (Exhibit 222). 585Since Donald Street had not even been purchased by the time of Nathan's death it is difficult to see how it could have been in a state of readiness to commence manufacturing for a launch proposed for the following year. In any event, there were a number of certification and approval matters which needed to be initiated and completed. These matters were identified by Dr McDonald at paragraph 29 of his report. 586The highest the Plaintiffs' evidence reached on the state of the buildings was evidence from Dr Griffith that the Plaintiffs were successful in obtaining a government contract and Mr Dunbar's agreement that to get such a contract the contractor's building could not be in a state of disrepair. This evidence is by no means sufficient to answer Mr Dunbar's and Dr McDonald's evidence concerning the state of the buildings. 587It was always open to the Plaintiffs to prove by admissible evidence that they had the necessary approvals and certification referred to in Dr McDonald's evidence. They did not do so. It was raised at an early stage in the cross-examination of Mr Chaina. I infer that any such evidence would not have assisted the Plaintiffs in this regard. The Plaintiffs have not satisfied me that the premises were suitable for them to manufacture their proposed products, nor that it would have been lawful for them to be used to do so. 588I have already referred to the extent of Deluxe's finances in the years immediately preceding the proposed launch. Proton's position provides no support for the Plaintiffs having "the financial resources and logistical support to sustain the organisation whilst it endeavoured to make inroads into the market" (Mr Dunbar's point (v) above). Its financial statements for the year ending June 1999 show current assets as $341,643 with $272,706 being trade debtors. Overall, Proton had net assets of $103,567. The position was almost unchanged for the following financial year. 589These matters demonstrate that, on the balance of probabilities, there was not an opportunity or chance which the Plaintiffs lost even if the absence of finance for the launch is ignored.

[55]

The formulae 590A further considerable difficulty for the Plaintiffs concerns the formulae for the products which are said to have formed part of the proposed industrial re-launch. The Defendant submits that these formulae did not exist in 1999 but have been created since that time for the purpose of these proceedings. 591Some background is necessary. 592Mr Chaina had asserted in his Statement of 2 September 2005 that between 1995 and 1999 he had developed a number of unique new products and reformulated all of the products the companies had previously sold. At the hearing this assertion was rejected by me as a conclusion but it had earlier provided the basis for an application to Hoeben J that the Plaintiffs disclose these formulae because they formed the basis of the Plaintiff companies' claim for economic loss. 593In Chaina v The Presbyterian Church (NSW) Property Trust [2008] NSWSC 290 Hoeben J said: [86] It follows that the defendants have persuaded me that it is reasonable and necessary that they have access to the formulae and methods of manufacture of the new and reformulated products. It therefore follows that the defendants are entitled to the orders which they seek. 594Further argument was heard and then in Chaina v The Presbyterian Church (NSW) Property Trust (No 2) [2008] NSWSC 1056 Hoeben J made these orders: (1) The second, fourth and fifth plaintiffs are to provide to the defendants by their solicitors Messrs Curwoods Lawyers a copy of the following documents by 2008. (a) Any document in their possession referring to the chemical formulae and the method of manufacture of each new and reformulated product as at October 1999 which is the subject of the fourth and fifth plaintiffs' claim ("the products"); and (b) A document setting out the chemical formulae and the method of manufacture of each of the products, including the weight and volume of each component or ingredient and the order of addition of each. If trade names are used, their chemical name is to be provided to enable correct identification. (emphasis added) 595What became Exhibit 102 was produced in purported compliance with that order. Mr Chaina called them R & D formulae, short for Research and Development. As can be seen, the handwritten formulae in Exhibit 102 are in code. That resulted in a further application to Hoeben J who, on 18 November 2008, ordered that the Defendant was to make a limited request for additional information about the formulae. 596The reply to the further request said in part (Exhibit H): 1. The formula documentation represents many years of research undertaken by Mr Chaina. When Mr Chaina created the formulas he had no intention of disclosing the documentation, nor would he have known that more than 15 years later the documentation would be subject to scrutiny by independent experts. Accordingly, the documents were not designed as a training manual. ... 4. Whilst the ingredients set out in the formula documents were those identified by Mr Chaina at the time the laboratory formula was created, the ingredients ultimately used for the finished product would be subject to the cost and availability of the respective ingredients. Accordingly, the finished product would utilise the ingredients identified or comparable ingredients that were available at the relevant time. 597On 8 May 2009, having heard further argument concerning the Plaintiffs' failure to comply with orders about the provision of documents, Hoeben J made this order (inter alia): (3) Within 28 days the plaintiffs are to give formal discovery of documents in the following classes: (a) Documents referring to the chemical formulae and method of manufacture of each new and reformulated product as at October 1999 which is the subject of the fourth and fifth plaintiffs' claim. (emphasis added 598On 10 September 2009 what were said to be the typed translation of the handwritten formulae were provided (Exhibits 103 and 104). 599When Dr McDonald examined the formulae for the industrial products in Exhibit 104 he identified 18 chemicals that he said were either not marketed, not manufactured or had not been given a NICNAS registration in 1999. In Dr McDonald's opinion that fact meant that Mr Chaina's formulae cannot have been authentic. 600Dr McDonald also identified a number of discrepancies between the handwritten formulae and the typed ones relating to chemicals used in one but not the other and between percentages of particular chemicals used in one and what was used in the other. Exhibit 237 clearly demonstrates how the typed formula in any given case (on the bottom half of the page and also found in Exhibit 104) differs from the handwritten formula (top of the page - now typed, and also found in Exhibit 102). In fact, as Dr McDonald said, the typed formulae were not the same formulae as the originally handwritten ones. Mr Chaina maintained, however, that the two were identical (T926). 601Exhibit 105 was a table of products asserted not to have been available at the time the R & D formulae (Exhibit 102) were written with references to the specific formulae in which they were included. 602Mr Chaina had a number of responses to the suggestions that certain chemicals in his formulae were not available in Australia in 1999. He first asserted that they were available. Then he said that he used the equivalent (see for example T862). Finally, he said limited amounts (up to 1 tonne) of foreign products were obtainable and available in Australia before they were date marked or given CAS numbers or NICNAS registration (T883). Mr Chaina was definite in saying that it was not the case that if a chemical was not given a CAS number it could not be used (T882). He was asked if the CAS number was only given to chemicals and not to trade names but he insisted that NICNAS used both. On a number of occasions he was asked to distinguish use and registration but he would not do so, in a way that caused me to think he was deliberately avoiding the question (T883-884). 603Indeed, Mr Chaina's behaviour during the whole of the time he was being cross-examined about the formulae led me to the firm conclusion that he was endeavouring to avoid answering questions by pretending not to understand, by asking for questions to be repeated, by insisting on knowing, quite irrelevantly, whether Mr Stitt was asking about the typed formula of the R & D formula or the manufacturing formula and by constantly trying to provide explanations in the face of a number of reminders by me that he should simply answer the questions. 604At one point the following exchange occurred: Q. Mr Chaina, can we agree that the formulation of the domestic laundry powder which you put forward initially and then put forward subsequently differ in significant respects? MACONACHIE: Your Honour, I object unless "initially" and "subsequently" are identified by reference to the exhibits. It is terribly, terribly confusing. 605The transcript then records this: STITT Q. Mr Chaina, so that you are not confused, when I speak of the initial formula I am asking you about the one that you produced to this Court first and when I am speaking about the subsequent formula I am speaking about the one that you produced to this Court second in July 2009? A. Yes, but I am not happy with that interpretation, your Honour. I would rather say the R&D or manufacturing because my brain don't comprehend. That is the only way I comprehend, R&D or manufacturing. Will you be kind-- Q. But, Mr Chaina, they should be identical? A. I don't - that word - I am weak in the English language, I would rather use the terminology that I am acquainted to, R&D and manufacturing HIS HONOUR Q. Mr Chaina, you will have to try to accommodate yourself to the terminology that Mr Stitt uses because he is the cross-examiner. I think you understand that when he refers to the first formulation he is talking about the one on your left and when he refers to the subsequent one he is talking about the one on your right; do you understand that? A. Yeah, well, now you told me I know because "subsequent", I don't understand this word. It is not a word I use-- Q. You don't understand the word "subsequent"? A. No. 606I do not believe Mr Chaina's statement that he did not understand the word "subsequent". On that day the word had been used in questions by Mr Stitt on more than 14 occasions with reference to the earlier provision of the R & D formula and the later provision of the manufacturing formula. On no occasion did Mr Chaina indicate that he did not understand what was meant by the word but rather, he answered the question showing that he had a full understanding of it. 607Mr Chaina has not produced any documents in the form of laboratory notes or otherwise showing the background to and the basis on which the formulae were written. He claimed that most of the information was in his head. He had had some scrap papers and some laboratory notes but they were stolen in a burglary. It must reasonably be assumed that the burglary was a second burglary that took place, this time, at the Lithgow premises in October 2001 as he said in his Statement of 8 February 2010 (paragraph 326). 608Mr Chaina's explanation about using equivalent chemicals was this. When he came to prepare Exhibits 103 and 104 in 2008/2009 from Exhibit 102 certain pre-2000 chemicals that he alleged were included in Exhibit 102 were no longer available in 2008/2009. He denied that the use of an equivalent meant that the formula or the product it created was not the same as the original formulation. He did accept, in some cases, that what was substituted was not the same substance as what had been specified in Exhibit 102 but he said their functionality was the same. Mr Chaina appeared to use the term "equivalent" as meaning that the chemical was similar in functionality. 609He produced a document which became Exhibit J entitled List of Raw Materials in Dispute. This document purported to be the identification of what was in fact specified in Exhibit 102, albeit in Mr Chaina's code and not using the trade names there set out, together with the trade name of equivalent chemicals in each case specified in Exhibits 103 and 104. Objection was taken to this document being admitted into evidence chiefly because Mr Chaina was not an expert witness and the issue was one on which the experts should provide any opinion. I admitted it on the following basis (at T 1272): HIS HONOUR: Mr Stitt, I must say, the ideal course would have been if Mr Chaina and/or his expert had responded to what Dr Macdonald had said in his report, but I am inclined to think that this is the most efficient way of proceeding now, to permit him to tender this document to say factually that he used these products. Ultimately it will be for the experts to say whether they are equivalent and whether they were available pre-99. ... I am prepared to admit it. As I made clear in argument, I think it is factual evidence, should have been provided earlier on, but I don't think that the defendants are prejudiced. It is ultimately an expert question about whether these products were available and whether they are equivalents. 610I also gave leave for Dr McDonald to give consideration to the matters in Exhibit J as well as Mr Chaina's evidence on the point and prepare a further report. That report was dated 5 June 2013 and became Exhibit 224. 611Dr McDonald makes these points in that report: (a)What Mr Chaina describes as "equivalents" will almost certainly not have the same chemical structure, will most likely vary in performance and could have a vastly different cost; (b)With the exception of methane sulphonic acid the compounds listed in Exhibit J are not simple chemicals with a known chemical structure or undisclosed mixtures of chemicals. This is because chemical manufacturers sell their products under a trade name rather than a chemical name to protect their formulae and intellectual property; (c)In column 2 of Exhibit J Mr Chaina claims to have used a wide variety of "equivalents" but has not specified what chemicals he used and in what formulations they were used; (d)Mr Chaina claims to have researched and developed approximately 400 products in the Industrial, Domestic and Personal Care markets from 1995 to 1999. That equates to the development and testing of a product, ready to market, every 4 days approximately. Dr McDonald (who used to work at Ecolab) said that Ecolab's consumer division had as a project the task of "identifying, researching, developing, testing and launching one new product each year, if possible. Dr McDonald considered Mr Chaina's claim in this regard was absurd. 612In the first instance, it may be noted that Exhibits 103 and 104 did not comply with Hoeben J's orders because they were not the formulae "as at October 1999". Both Dr McDonald and Dr Van Dyke agreed that that was so. Insofar as Mr Chaina has altered the formulae that he claimed to have formulated and written in 1995 to 1999 he has created the issue that calls into question the authenticity of the formulae in Exhibit 102. 613Dr Van Dyke said that although the formulae were not the same, in that different chemicals were specified, the formulae in Exhibits 103 and 104 performed the same job as the corresponding formula in Exhibit 102. That left open, as Dr McDonald pointed out, any variation in cost between the originally specified chemical and its "equivalent". 614The Plaintiffs drew attention to statements in the reports of Sam Daniel (Exhibit JJJ) and Dafta Pty Limited (Exhibit KKK) which referred to samples being available of some of the chemicals that had either not been patented or did not have NICNAS registration. Both Dr McDonald and Dr Van Dyke agreed that sample quantities of some of those chemicals could be obtained for laboratory or formulation purposes but the amount would not be sufficient to permit production of the product of which the chemical was a constituent part. I reject, therefore Mr Chaina's evidence that up to 1 tonne could be ordered and obtained without registration. 615The only evidence that Exhibit 102 was prepared at various times between 1995 and 1999 is Mr Chaina's evidence. There are no documents which provide any support for that assertion. Both Dr McDonald and Dr Van Dyke said that they would have expected to see a paper trail by someone developing and formulating a product, even if the paper trail was minimal. For reasons I have given, I cannot accept Mr Chaina's uncorroborated evidence about so crucial a matter. 616Hoeben J's order was clear. What was to be provided was a translation of Mr Chaina's coded formulae. What was provided (Exhibits 103 and 104) was demonstrably not such a translation. This was because chemicals referred to were either not in existence, had no NICNAS approval or because amounts of constituent chemicals in any given formula in Exhibits 103 and 104 did not equate to the same proportions as appear in the corresponding formula in Exhibit 102. 617Additonally, there is no evidence detailing which of the chemicals listed in the second column of Exhibit J were in fact used by Mr Chaina in any of the formulae in Exhibit 102. Furthermore, I accept Dr McDonald's evidence that it would not have been possible in any practical sense for Mr Chaina to have identified, researched, developed and tested approximately 400 different formulae in that period. 618Accordingly, the Plaintiffs do not establish that the formulae in Exhibit 102 are authentic, in the sense that they were written between 1995 and 1999. I note in that regard that, although Mr Chaina asserted in his Statement of 8 February 2010 that Proton was conducting trials of a number of ranges of the new products, Mrs Chaina said in her Statement of 16 August 2005 (Exhibit K1): As at October 1999, Proton was trialling a new product called Victory One Shot... As at October 1999, a pilot program was occurring with the product being used in the Sails Resort in Port Macquarie, the Park Hyatt at the Rocks and the Heritage Motel in Canberra. The product is still being sold by Proton. Mrs Chaina gave no other evidence of product trials at that time. 619Since it was only samples of the disputed chemicals that may have been available it is clear that these chemicals were not available in sufficient quantities to enable production and manufacture of the products to which the formulae related. Accordingly, even if the formulae were in existence in 1999 the Plaintiffs could not have produced commercial quantities of the products containing those particular chemicals. 620I cannot be satisfied, therefore, that the Plaintiffs were in a position to manufacture the products represented by the formulae in Exhibits 103 and 104. It must not be overlooked that what was tested by the chemical experts after 2009 were the formulae contained in those two exhibits. Those formulae have not been shown to be what was in existence in 1999. The appraisal of those formulae by the chemical experts was of products not shown to have been available in 1999. The best opinion for the Plaintiffs from that testing is based on Dr Van Dyke's assertion that the product did the same job as a product made from the pre-1999 formula in any given case. However, even that opinion is undercut by the fact that there is no evidence about what particular equivalent chemicals Mr Chaina employed in his alleged pre-1999 formulae. 621In my opinion, the failure to show that finance from any source, including Deluxe, was available, the evidence with regard to the Lithgow premises, and the failure to prove that there were in 1999 the formulae to manufacture the products all demonstrate that there would not have been a re-launch of the industrial products on 2000 or thereafter. There was no chance or opportunity which the Plaintiff companies lost. 622Even if the Plaintiff companies had re-launched the industrial products there is no credible evidence of what market share, nor level of sales, would have been achieved as a result of the launch. It is not sufficient to say that the Court must "do the best it can": Paino v Paino (2008) 40 Fam LR 96 and McCrohon v Harith [2010] NSWCA 67. As Sackar J said in Sydney Attractions Group Pty Ltd v Schulman (No. 2) [2013] 1153 at [49] such a principle does not apply where there is a paucity of evidence which it was in the power of the plaintiff to supply; and see also [122] to [124]. Again, Stevenson J said in BestCare Foods Ltd v Origin Energy LPG Ltd (formerly Boral Gas (NSW) Pty Ltd) [2013] NSWSC 1287 at [47]: But there must be a basis in the evidence for me to arrive at a figure for the lost opportunity. What I cannot do is take a stab in the dark; "justice does not dictate that in such a case, a figure should be plucked out of the air" (Troulis v Vamvoukakis [1998] NSWCA 237 at [29] per Gleeson CJ).

[56]

The per quod claim 623In Barclay v Penberthy [2012] HCA 40; (2012) 246 CLR 258 the High Court set out the following principles in relation to the damages recoverable in a per quod claim: [56] The basic proposition is that stated in Attorney-General v Wilson and Horton Ltd. After a full consideration of Quince, Perpetual and Scott, Richmond J said that "as the wrong done to the master is [an] interference with his right to the services of his servant, the damages recoverable should be measured exclusively by the consequences which follow from that interference", and "should not be widened to include all consequences which follow merely from the fact that the servant was injured". [57] In the last edition of McGregor on Damages to deal with the matter it was said that the basic measure of damages "should be the market value of the services, which will generally be calculated by the price of a substitute less the wages which the master is no longer required to pay to the injured servant" (emphasis added). In its written submissions, Nautronix challenges that statement, but, subject to what appears below, it should be accepted. [58] If the employer employs numerous staff which can take up the duties of the injured employee, the prima facie measure of the employer's loss may be any extra payments by way of overtime and the like which the employer has to make to secure the performance of these additional duties. Where a replacement employee has to be engaged, but this is achieved on terms more favourable to the employer, no loss will have been suffered. If it were possible to engage a substitute, at or as near as practicable to the level of skill of the injured employee, but this is not done by the employer, then the employer fails to mitigate the loss. The essential point is that like any plaintiff the employer is obliged to take reasonable steps to mitigate the loss occasioned by the defendant's interference with the provision of services by the injured employee. ... [60] In Genereux v Peterson Howell & Heather (Canada) Ltd, the Ontario Court of Appeal considered the measure of damages to be awarded to a solicitor, a sole practitioner, for the loss of the services of a law clerk injured as a result of the negligent operation of a motor vehicle for which the defendants were liable. The law clerk was the wife of the solicitor and received no remuneration for her work in the office. The law clerk had attended to conveyancing and estate matters and the solicitor had attended mainly to litigious matters. After the injury to the law clerk, the solicitor engaged staff to perform her duties but referred some litigious matters to other firms. The solicitor recovered the wages of the substitute employees but not the loss of profit on matters he had referred on to other firms. Kelly JA said: "My conclusion is that while the Canadian cases have extended the action per quod to situations other than that of the loss of service of a domestic or menial servant, they have observed caution in dealing with the scope of the recoverable damages and have disapproved any extension of the basis of assessing the amount recoverable beyond the actual value of the services lost." That passage should be accepted as applicable in Australia. [61] Particular difficulties may arise where the plaintiff is a "one-man company", controlled by the injured party. The better view is that, even here, the measure of damages does not include a loss of profits suffered by the company. This is so unless the plaintiff satisfies the court that the loss is attributable to the loss of services and no other likely cause has been identified. 624The Plaintiffs argue that the present case falls within the exception referred to in Barclay v Penberthy at [61] because Mr Chaina was the key scientific mind and the key entrepreneurial mind behind the corporate Plaintiffs. The Plaintiffs argue, therefore, that Proton is entitled to claim the loss of profits it expects to have made as a result of the relaunch of the industrial products by reason of Mr Chaina's inability to do the work for the companies that he formerly did. 625The Plaintiffs' claim in this regard fails as a result of the factual findings which I have already made. Those matters may be summarised as follows: (1) The incapacity of Mr Chaina was only partly contributed to by Nathan's death. In any event, his inability to work as a result of Nathan's death did not extend beyond the middle of 2001; (2) The proposed industrial relaunch would not have taken place because the Plaintiffs did not have the financial wherewithal in place to enable the relaunch to proceed, they had no suitable premises in which to manufacture the products and I do not accept that the products now put forward had been formulated at the relevant time by Mr Chaina; (3) There is no evidence of what profits would have been made in any event. 626Further, I do not accept in any event that Mr Chaina was irreplaceable as the Plaintiffs now suggest. It is necessary in this regard to refer to the tender document lodged with the NSW Department of Commerce in December 2004 and Mrs Chaina's explanation of the statements in them suggesting that both she and Mr Chaina were in a position to provide the full knowledge, service and expertise to operate the companies. Either they were in the position to provide that contribution as the document suggested or Mr Chaina's knowledge was able to be employed by those who had worked for the companies such as Mr West and Dr Griffith in the way that Mrs Chaina asserted. 627Indeed, there is nothing in the evidence to suggest that a substitute or substitutes for Mr Chaina could not be found. It is only the uncorroborated assertions of Mr and Mrs Chaina that Mr Chaina's contribution was unique in this regard. In that way, it cannot be said that Proton's loss was only attributable to its loss of Mr Chaina's services. This matter is closely aligned with the obligation referred to in Barclay v Penberthy at [58] to find a substitute employee by way of mitigation. 628To make out any case based upon the exception in [61] of Barclay v Penberthy I would have expected the Plaintiffs to lead expert evidence to show that it would not have been possible, or at least very difficult, to find any person with the knowledge and skills of Mr Chaina to take over the work that he would otherwise have perfomed for Proton. No attempt was made, for example, to adduce this evidence from such persons as Dr Griffith, Mr Redfern or Dr Van Dyke. Whether I should infer that such evidence was not available is doubtful, but the position that remains is that there is no evidence that Mr Chaina was unique in that regard apart from his own assertions. For reasons I have given, including those which reject him as an expert, I decline to accept his assertions. 629Finally, even if it was shown that Mr Chaina made a unique contribution which would otherwise bring the position of Proton within the Barclay v Penberthy exception so as to allow a loss of profits, there is a general obligation to mitigate the loss. That could have been achieved in the present case by a sale of the business together with the formulae or with the sale of the formulae alone. No satisfactory explanation has been provided about why either of those courses could not have been adopted. Mr Chaina strenuously denied that he ever intended to use the formulae again at the conclusion of the proceedings. He could not give any explanation why he could not and should not have attempted to sell the formulae so as to mitigate Proton's loss. 630The reasons offered in the Plaintiff's written submissions for the failure to sell the formulae were that in the immediate aftermath of Nathan's death Mr Chaina was in no state to explain his formulae for sale and without a full paper trail the formulae would be incomprehensible without his explanation. The Plaintiffs submitted further that even if the formulae had been properly presented, because of constant adjustments to changing chemical availabilities and supplies of different activities and concentrations, they had little value without the chemical mind behind them to make the adjustments as required. 631Although Mr Chaina gave evidence of the first of these reasons there was no evidence about the second. As to his asserted inability immediately after Nathan's death, that assertion is not borne out by evidence to which I have referred earlier showing Mr Chaina's continued involvement with the company. The second reason contains the assumption that no one else was capable of doing what Mr Chaina did and could do. For reasons given earlier that assumption is not made out. 632Accordingly, the Plaintiffs do not bring themselves within the exception referred to in Barclay v Penberthy and have not mitigated any loss that has otherwise been sustained.

[57]

The existing business 633The claim based on a loss of profits for the existing business of Proton, on the assumption that the launches did not go ahead, must be seen as an alternative and a fallback claim. In many respects such a claim is difficult to justify because the thrust of the Plaintiffs' case is that there was to be no continuing business as such. Rather, a new domestic business was being launched and the existing industrial business was being entirely re-formulated. 634The best evidence about this is to be found in Mr Chaina's Statement of 8 February 2010 where he says this: 119. After the fire in June 1993, Deluxe in very limited quantities continued to supply its Challenger, Classic and Quantum products to existing customers. ...The focus however at this time was the formulation of the new industrial and domestic ranges. For this reason, I did not take steps to re-establish a capacity to manufacture the Challenger Plus system, nor did we pursue the Nappy Wash product or the Quantum range. Similarly, the Jean-Pierre Cosmetic range was not re-established after the fire. 635In addition, Mrs Chaina said in her Statement of 29 January 2010 (Exhibit L1): 45. Over the years between 1993 and 1999, we continued to operate and run the business as best we could. ... By 1999, we had managed to build Deluxe's business up again, but not to the level that it had been at the time of the fire. By that time, the focus was upon the product launch and re-launch. ... 48. Between 1995 and 1999, our efforts were concentrated on the domestic product launch and the industrial product re-launch and therefore we did not spend much time trying to build up the business as it had been prior to the fire. We did, however, achieve some success in building up that business in that customers did come to us. 49. ...I would estimate that overall we had about one third of the number of customers that Deluxe had had in 1993 prior to the fire. 636There is inconsistency in Mr Chaina's Statements and between those Statements as well as the Statement of Particulars filed in September 2012 concerning what products continued to be manufactured and sold by Proton in the years immediately preceding Nathan's death. For example, paragraph 42 of his Statement of 2 September 2005 Mr Chaina says that Challenger Plus products continued to be supplied between 1993 and October 1999. That should be compared with paragraph 119 of his Statement of 8 February 2010 (set out above) where he says that he did not take steps to manufacture the Challenger Plus system. The Statement of Particulars is different again. There are other inconsistencies. These were never cleared up in the evidence. 637The Plaintiffs rely on the Report of Pitcher Partners (Deborah Cartwright) of 31 August 2012 (Exhibit ZZ) in support of this alternative claim. Somewhat surprisingly, in the face of the evidence I have referred to above, Ms Cartwright said this: 92. If the proposed relaunch of the industrial products and the launch of the new domestic product range is ignored at this stage, it could reasonably be assumed that the business being carried on by Proton was already in a growth phase, as evidenced by the continuing increase in turnover and profitability between 1996 and 1999, and that but for the impact of the Death of Nathan due to the Accident, this growth would have been expected to continue. 638Nevertheless, the increase in sales and profitability from at least June 1997 to June 2001 does provide some support for Ms Cartwright's conclusion. Indeed, that increase might be thought to cast some doubt on the evidence of Mr and Mrs Chaina in that regard. 639Ms Cartwright's approach to her calculation of loss based on an increase in sales of the existing business relies on an IBIS report "Soap and Other Detergent Manufacturing in Australia" from May 2002. She has calculated this loss commencing in the financial year ending June 2002 because it is only from that time that Proton showed a downturn in both sales and profit. 640Ms Cartwright agreed that she used the historical figures because she was given to understand that many of the industrial products proposed to be sold after 1999 were the same products as those being sold before that time. In fact, she said, she understood that "a lot of the products were the same", with only some slight changes and some changes to the packaging. She agreed that if they were all new products she would not have the information in relation to cost of production nor of the margins that would be obtainable on sale with the result that the historical cost of sales would have no relevance. 641In any event, I have earlier determined that both Mr and Mrs Chaina were not incapacitated from work by reason of Nathan's death from no later than the middle of 2001. On that basis, any downturn in sales and profit of Proton from that time did not result from Nathan's death. Further, there is nothing to suggest, on the basis of the Mr and Mrs Chaina's evidence, that the existing business of Proton was not prospering as best it could until the end of June 2001, given their stated intentions about what was to happen with regard to the proposed launches. 642No evidence has been given to explain why Proton continued to produce the results it did until June 2001 and thereafter decline. The Plaintiffs submitted that the explanation was that the companies had multi-year contracts. There was only evidence of one such contract that overlapped that period. The Plaintiffs further submitted that [a]lso in business can also come later in patterns because some items are set in motion earlier and the effect on the profit and loss sheets do not come till later, such as relocation of business. Putting aside the relocation of the business which I do not understand in this context, whilst I understand and can accept the thrust of that submission as a general principle, there was simply no evidence to support it from either the Chainas or from their experts Mr Humphries and Ms Cartwright. 643The Defendant suggested that the commencement of proceedings cannot be overlooked here. This relates to the submissions that Mr and Mrs Chaina, but especially Mr Chaina, are malingering. However, the proceedings did not commence until October 2002. There was already a downturn in sales and profits for the June 2002 year, although profit is a very unreliable indicator given the inconsistencies in the financial reports prepared by different firms of accountants and the payment by Proton, whether justifiably or not, of large amounts of legal fees. 644Moreover, there can be little doubt that Mr Chaina intended to sue the Defendant from a very early time after Nathan's death - see, for example, Mr Arraj's letter to Solution Focussed Counselling date 11 November 1999 (Exhibit 196). I reject entirely Mr Arraj's evidence that when he used the phrase "the claim against Scots College" he was referring to the inquest and I reject his subsequent explanation that it was a reference to possible criminal proceedings. I do not consider that Mr Arraj was telling the truth when he gave those answers. It is regrettable that he appeared to place his loyalty to the Plaintiffs above his duty to the Court. 645I am entirely satisfied that Mr Chaina intended to make a claim against the School from the outset. There was no doubt a delay in instituting the proceedings until after the Coroner's findings were handed down. It is an entirely common practice for persons to use evidence given at a Coronial inquest as a basis for deciding whether or not to commence proceedings or to use the inquest as a means of obtaining evidence. Whether that is an appropriate procedure to follow is another matter. 646Because I am satisfied that Mr Chaina always intended to bring proceedings against the School there is no evidence that enables me to find that a deliberate downturn in Proton's business was engineered by the Plaintiffs from 2002 for the purpose of maximising recovery in these proceedings. 647The Plaintiffs also relied on a report of Robin Humphreys, a chartered accountant, dated 31 August 2012 in relation to the existing business. Mr Humphreys had prepared three reports. The first dated 18 September 2006 (Exhibit LL1) concerned the economic loss of Mr and Mrs Chaina. The second report related to Proton's losses. In Chaina (No. 13) I ruled that that report was not to be admitted into evidence because of its reliance on the superiority assumption of the Plaintiffs' products. The Third Report dated 31 August 2012 (Exhibit LL2) (prepared before Chaina No.13) provided some further material updating both earlier reports. Evidence that related to the rejected report was excluded from the third report. 648However, Mr Humphrey provided a valuation of the existing business at 24 October 1999. There was debate at the time Mr Humphreys gave evidence about the relevance of this valuation. The Defendant submitted that the value of the business was not an issue in the case. The Plaintiffs submitted that it was relevant as being related to the maintainable earnings of Proton. I said that I would rule on the matter in my final judgment. 649In my opinion the evidence of valuation is irrelevant. The Plaintiffs do not put their case on a loss of value of Proton basis whether for drawing conclusions about maintainable earnings or otherwise. They argue that Proton's sales and profit dropped because of the incapacity of Mr and Mrs Chaina. I confirm my rejection of the whole of Section 6 of this report which chiefly updates material from the rejected report. I also reject on page 5 the whole of paragraph 4.2 B and C. The remainder of the report deals with the economic loss of Mr and Mrs Chaina. I will deal with that presently. Mr Humphreys, therefore, does not provide any evidence relating to losses associated with the existing business. 650For the reasons I have given, Proton is not entitled to recover for losses associated with the existing business except in one limited sense with which I will now discuss. 651I have held that Mr and Mrs Chaina were unable to work for a relatively short period of time following Nathan's death as a result of his death. In that time there is evidence that three persons were engaged to carry out some of the work that would otherwise have been done by Mr Chaina during that period, that is, up until June 2001. Those persons were Dr Griffith, Nigel Dique and David Redfern. Claims are made for other persons who were engaged at various times. However, for reasons which follow when I discuss specific claims for damages recovery is not allowed for their services. 652It seems to me that the per quod principle is engaged in relation to those persons. The prima facie measure of damages is the additional cost of retaining their services in substitution for the services that would have been provided by Mr Chaina to Proton. There is no evidence that any person was engaged to take over the work that Mrs Chaina had performed. It seems likely that that burden fell upon Lily Sukkar but there is no direct evidence of that nor is any claim made for additional salary paid to her if that was in fact the case. 653The precise basis for the claim made by Deluxe (the Fifth Defendant) has not been articulated. In the Amended Statement of Claim Deluxe and Proton are simply linked as Plaintiffs in the per quod claim. In the Statement of Issues paragraph 8(h) says: Whether Deluxe has suffered a recoverable loss of the kind alleged, namely: (i) Deluxe's damages for the alleged early sale of a property (which the Defendant says is too remote) or is it limited its claims (sic), if any, for additional wages and expenses (and if so in what amount) paid out by reason of the injuries and disabilities, if any, of George and Rita Chaina. 654In paragraph 247 of the Pitcher Partners report of 31 August 2012 Ms Cartwright refers to Deluxe selling the property in Broadhurst Road, Ingleburn in April 2000. There was no evidence from Mr and Mrs Chaina about the sale of this property. 655As to the possible alternative basis for a claim by Deluxe in relation to additional wages and expenses the financial reports suggest that it was only Proton that paid wages or salaries in respect of the business. That is at least consistent with the evidence which suggested that after Proton's incorporation and takeover of the business Deluxe was simply a holding company. 656The claim by the Fifth Plaintiff fails entirely. 657It is now necessary to consider what damages are recoverable by Mr and Mrs Chaina.

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(2) Economic loss 662Ms Cartwright prepared a report dated 31 August 2012. The report calculated the damages on a number of different heads. Two of these were past and future economic loss of Mr and Mrs Chaina 663The calculation of the loss of earnings for Mr and Mrs Chaina were based on an analysis of their personal income tax returns for the five years to 30 June 1999. 664Ms Cartwright's approach was to take the salary that each of Mr and Mrs Chaina received for the 1999 year ($50,000 for George Chaina and $25,457 for Rita Chaina) and to increase that salary by the inflation rate for the years 1999 to 2011 to obtain a figure for each year. She then deducted what each were shown to have received in their tax returns for the years 2000 to 2011 and described that amount as residual earning capacity. 665On that basis the past economic loss (calculated to 30 June 2011) was $446,418 for George Chaina and $194,141 for Rita Chaina. 666The figures for the future were then based upon discounting the weekly net earnings for the 2011 tax year for each of Mr and Mrs Chaina. Those weekly earnings for Mr Chaina were said to be $1,087 and for Mrs Chaina a figure of $614. Discounted at 5% and allowing 15% for vicissitudes provided a range, depending on whether retirement was taken at 65, 70 or 75, of $213,903 to $512,813 for Mr Chaina and $231,905 to $358,015 for Mrs Chaina. 667Superannuation figures were calculated on those amounts both for the past and the future. 668The Plaintiffs engaged a second expert accountant, Robin Humphreys, to provide his opinion on the same matters. Mr Humphreys adopted a different approach from Ms Cartwright. 669Rather than looking to the salaries that had been paid to Mr and Mrs Chaina Mr Humphreys had regard to what he asserted a small business proprietor (Mr Chaina) and an office manager (Mrs Chaina) would be likely to earn based on salary survey information published by AIM. Three groups were mentioned earning approximately $181,000, $172,000 and $120,000. The last amount appears the most relevant being "for companies with a turnover of less than $3 million". 670Mr Humphreys said it was reasonable to assume that a small business proprietor would expect to earn a premium over and above the average earnings to compensate for their dual roles of owner and manager, for the risks of being self-employed and for the long hours worked. Based on what Mr Humphreys understood Mr Chaina did in the company and the hours he worked he said it was reasonable to assume that Mr Chaina's earning capacity but for the accident would have been in the order of $180,00 before tax. 671In relation to Mrs Chaina the surveyed material suggested figures of around $70,000 for an administration manager. Applying the approach to a premium for a small business proprietor Mr Humphreys thought Mrs Chania's earning capacity, but for the accident, was in the order of $100,000. 672Mr Humphreys then calculated past and future loss of income based upon these figures in the ordinary way by applying (for the future) a discount of 5% and deducting 15% for vicissitudes. Mr Humphreys noted amounts paid to Mr and Mrs Chaina up to and including the 2004 tax year. He thereafter assumed no residual earning capacity for Mr Chaina after 2004 and for Mrs Chaina after 2006. 673His figures for the future were for alternatively on the basis of retirement at 65, 70 and 75. 674It is to be noted that the assumptions Mr Humphreys worked on in relation to Mrs Chaina were that she was the finance and administration manager, was responsible for all of its accounts, paperwork and payments, budgets and forecasts and included microbiological testing. He understood that she worked 50 hours per week. 675There is some doubt about whether these assumptions were established on the evidence. In her Statement of 16 August 2005 (Exhibit K1) Mrs Chaina said: 13. I was Deluxe's finance director, financial controller and business manager. As such I had responsibility for the cash flow, budget and forecasts, accounts payable and receivable, general office and administrative management including company correspondence, the conduct of the sales representatives, and human resources. I facilitated the entertainment and social contact with our business associates including suppliers and customers. I worked late into the night and on the weekends with George. 676However, in her Statement of 4 February 2010 (Exhibit O1) Lily Sukkar said: 12. By the early 1990s, I had been elevated to the position of office manager at Deluxe. My role had expanded to include planning production, training new employees, processing accounts, preparing company proposals, general letter writing, stock control, distribution of stock and a limited amount of laboratory work. ... 677There is an uneasy tension between those two roles that was not resolved in the evidence. It is certainly not clear what Mr Humphreys knew of Ms Sukkar's position as office manager and of her responsibilities. There is no evidence that Mrs Chaina worked 50 hours per week although her assertion, if accepted, might suggest she worked long hours. 678Mr Humphreys noted that Mr and Mrs Chaina's income tax returns showed that they received substantial dividends from 1997 to 2001 and interest subsequently. He said, however, that he had ignored these sums when calculating loss of earnings. 679I do not find Mr Humphreys' approach to the economic loss a satisfactory one. There is evidence of what Mr and Mrs Chaina were being paid. It is contained in their tax returns. In AMP General Insurance Ltd v Kull [2005] NSWCA 442 Hodgson JA (with whom Santow JA agreed) said: [75] The onus is squarely on a plaintiff to prove economic loss, and the information concerning economic loss and documents relevant to it are within the knowledge and possession of the plaintiff, so the lack of clarity on such matters is primarily the responsibility of the plaintiff. 680Hodgson JA also apparently approved by what was said in Giorginis v Kastrati (1988) 49 SASR 371 at 375-6, per von Doussa J as follows: But cases where the damages are, by the nature of the loss, difficult to calculate, are to be distinguished from cases, like the present, where precise calculation is rendered impossible, and even broad assessment difficult, not by the nature of the loss, but by a paucity of evidence where it is clear that it lies within the power of the plaintiff to produce business and taxation records usually maintained by people in employment or business or other evidence which could clarify the extent of his income. Where the plaintiff gives evidence that his income tax returns do not disclose the full extent of his earnings, a court will scrutinise the plaintiff's evidence with special care. The want of honest compliance with the taxation laws is a matter that will reflect adversely on the plaintiffs credit and may lead to the rejection of his evidence as untrustworthy, at least about his earnings. In such a case the plaintiff has only himself to blame if damages are assessed in line with the pre-accident income actually disclosed to the revenue authority. However, where the fact of the receipt of other income is proved, then, in my view, the plaintiff is entitled to have that exercise of his earning capacity brought to account, although subject to reduction for the income tax which should have been paid, and subject to the question whether the plaintiff would have continued to exercise that capacity had he been required to pay tax on the additional income: ... A court should not, generally speaking, make a finding favourable to the plaintiff in a personal injury case that his income is otherwise than he has disclosed to the revenue authority unless the plaintiff admits the non-disclosure. A fortiori, such a finding should not be made where the plaintiff denies that he has failed to properly disclose his income. Unless the plaintiff admits the falsity of his income tax returns the court should not speculate in his favour, for example that his pre-accident earnings were probably higher than he has disclosed. Rather, the court should adopt the income figures actually disclosed and base the assessment of damages on them. Again, if this results in a low assessment, that is the consequence of the plaintiff adhering to the accuracy of his income tax returns. 681Mr and Mrs Chaina have not lodged their tax returns for the years prior to the commencement of these proceedings. However, the unlodged tax returns were tendered by the Plaintiffs. If they have understated the true position then they only have themselves to blame. There is scant other evidence about their earnings. One such piece of evidence is Exhibit 27, a self-certification of their income by Mr and Mrs Chaina to Think Tank Group for the purpose of obtaining a loan in 2010. I do not consider it is reliable and is too distant in time from the subject of the enquiry. 682I consider that the approach adopted by Ms Cartwright is to be preferred. It is based upon the actual earnings of Mr and Mrs Chaina in the year before Nathan's death and thereafter increased by the rate of inflation. 683The issue of the age to which Mr and Mrs Chaina would have worked does not need to be resolved - there was no evidence about it. I have found that they were not incapacitated for work after 2001. 684Taking Ms Cartwright's figures Mr Chaina has a past wage loss for two years totalling $104,591. In addition he has lost superannuation entitlements for those two years totalling $7,852. Mrs Chaina's past wage loss is $48,927 ($53,251 - $4,324 earnings from the pharmacy). Her superannuation entitlements total $3,998.

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(3) Out-of-pocket expenses 685From a procedural point of view, the issue of out-of-pocket expenses was the most problematic in the case. Long after the evidence had been completed the Plaintiffs sought, for the first time, to tender a large number of documents which were said to be invoices and receipts that demonstrated expenses incurred by the Plaintiffs. The tender arose when the Plaintiffs commenced their submissions and made reference to expenses they had incurred. When I asked where the evidence for these expenses was Mrs Chaina told me that she would obtain them. 686This matter had been raised at an earlier time when the Plaintiffs were represented by Mr Dawson of counsel. It arose in the context of a report from Pitcher Partners by Deborah Cartwright (Exhibit ZZ). On pages 3, 4 and 5 of Ms Cartwright's report in the section headed "Executive Summary" there was a list of out of pocket expenses prefaced by these words: I have been instructed to include the following heads of damage in my report. I have been provided with this information by Berrigan Doube and have had no involvement in its preparation. The out of pocket expenses totalled almost $8.8 million. 687The following exchange took place at T 2865: HIS HONOUR: I must say, Mr Dawson, I didn't quite understand this list of heads of damage on pages 3, 4 and 5 of Miss Cartwright's report. She says she's been instructed to include them. But I'm not quite sure where it goes. The material would have to be proved otherwise, wouldn't it? DAWSON: By way of assumptions, yes, your Honour, I accept that. HIS HONOUR: Assumptions or actual evidence from Mr and Mrs Chaina about each of those matters. DAWSON: Yes. HIS HONOUR: That is, how much the funeral cost, and so on? DAWSON: Exactly. But, your Honour, those are matters which can be the subject of documentary evidence, presumably, tendered in the case. 688In addition, in Chaina (No 16) I set out at [267] the extract from Ms Cartwright's Executive Summary reproduced at [679] above and said at [269]: It goes without saying that unless there is proof that these amounts have been paid and that they are causally related (as a matter of law) to the breach of duty by the Defendant they will not be recoverable. At the present time the table on pages 3 - 5 represents a convenient summary of what appears to be the Plaintiffs' claim. I do not consider that the table is proof of those matters but I will not reject it at this stage. 689Despite that, no evidence was tendered until the second day of the Plaintiffs' submissions (18 December 2013) when Mrs Chaina handed me a folder as a result of my enquiry about the evidence to support the Plaintiffs' submissions. She said that this contained the receipts she wanted to rely upon. That folder was simply marked MFI 104. 690Mrs Chaina also handed me another folder which contained accounts for a business called MilwardDoran (a business which Mrs Chaina said helped her sell the Double Bay Pharmacy), accounts for Dr Griffith, accounts for Alex Roudenko, the general ledger of Proton for the period 7 July 1999 to 30 June 2002 and two letters from Dr Wever written in August 2012 concerning Mr and Mrs Chaina's need for ongoing medication and the costs of it. This bundle was marked MFI 105. 691The Defendant objected to the Plaintiffs being given leave to re-open their case at this late stage of the proceedings. Apart from any other reason, Mr Stitt said that he would have wanted to cross-examine the Plaintiffs about some of the documents. Given the content of some of the documents in MFI 104 and 105 I readily accept without question that that would have been so. 692Mrs Chaina informed me that she would go through the documents in those folders that night to identify what invoices related to what claims. When this had not been done by the last day scheduled for submissions I gave indicative rulings about the documents contained in those folders so that the parties could address me about them. Then, on the last afternoon of the hearing (also the last day of term), Mrs Chaina tendered a further bundle of documents which she said had been cross-referenced to the Statement of Particulars filed on 24 September 2012. Some, but not all, of these documents were documents in respect of which I had given indicative rulings. This bundle was marked MFI 107. 693The Defendant, with almost no prior notice of the documents contained in MFI 107, made some brief submissions with regard to their admissibility. Generally, the Defendant opposed the tender of the documents because of the lateness of the tender which involved prejudice in that any cross-examination concerning the documents was no longer possible. The parties had been advised on a number of occasions that the hearing had to conclude on 20 December 2012 which was the last day of term and the 65th hearing day of the matter. 694To avoid appointing a further hearing day I said that I intended to publish a further interlocutory judgment concerning the admissibility of the documents contained in MFIs 104, 105 and 107. Upon reflection the better course seems to me to be that I should rule in this judgment which of those documents is admitted. 695It is necessary to say that, had the Plaintiffs been legally represented when these documents were tendered I would have rejected the tender on the basis that it was long past any time for evidence to be given in the case, and because of the self-evident prejudice to the Defendant. Although the Plaintiffs are not legally represented this late tender is not consistent with the obligations of the Plaintiffs under s 56(3) Civil Procedure Act 1995 (NSW). Nevertheless, in a considerable indulgence to the Plaintiffs because they are unrepresented I will consider each of the documents and will not reject them simply because of the late stage the proceedings had reached. 696Subject to one category of documents contained in MFI 104, it is only necessary for me to rule on the material in MFI 107 because that is said by the Plaintiffs to be the final material they wish to rely on in support of their claim for out of pocket expenses. The grouping of expenses below follows the bundles put together by the Plaintiffs that comprise MFI 107. I have attempted to relate them to paragraph numbers in the Statement of Particulars filed 24 September 2012.

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(iii) Out of pocket expenses of Mrs Chaina (Particulars para 19(1) 704The claim here is for $82,256.90. 705The bundle of documents in relation to this include fees for psychiatric consultations with Dr Wever, fees for Solution Focussed Counselling Centre and claims for a number of different medications prescribed by various doctors but chiefly Dr Hislop and Dr Wever. 706In relation to the fees paid to Dr Wever these commence on 24 March 2000 and go through to 6 November 2012. The claim is not for $600 per consultation but for the amount of the Medicare benefit paid for each of the consultations. 707Although Dr Wever agreed that he was not entitled to the Medicare benefits he received from the fees he charged to Mr and Mrs Chaina because he did not have a proper referral for the period after October 1999 that should not determine whether or not Mrs Chaina is entitled to recover the costs claimed in respect of Dr Wever. 708On the view I have taken that Mrs Chaina was 75% incapacitated as a result of Nathan's death until August 2000 and that by the middle of 2001 the causal relationship between Nathan's death and her psychiatric condition had largely subsided, I consider that it is appropriate that she should be entitled to 75% of the costs claimed in respect of the consultation with Dr Wever until and including 25 August 2000 and thereafter should receive 25% of those costs until 2 July 2001 (25% being an average over the period). 709For the first period the fees total $3,161.60. 75% equals $2,371.20. The second period fees total $11,437.45. 25% of that figure is $2,859.36. Mrs Chaina is entitled, therefore, to $5,231 for Dr Wever's fees. 710The fees for solution focussed counselling total $7,200.00. Mrs Chaina claims $3,600.00. Although the invoices make reference to bereavement counselling for the whole family including Jean-Pierre and Matthew I consider that the amount of $3,600 should be allowed. 711The provenance of the list of medication and charges is not established but I have reasonably inferred that it is a print-out obtained from the Pharmaceutical Benefits Scheme. Significantly, the schedule commences on 21 February 2001 and finishes on 26 November 2009. In the light of my findings Mrs Chaina should not be entitled to the cost of any of these drugs after 1 July 2001. 712The only drug for which a claim is made in that period is Cipramil. That is an anti-depressant. The result is that she is entitled to $131 for that period.

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part) 729The logic of connecting these two matters is not apparent. Indeed, there is no claim made in the Particulars for catering costs associated with the inquest. The amounts claimed total $2,600 and are for lunch, morning tea and assorted finger food for ten guests per day at the inquest. There is no basis upon which these amounts are recoverable. 730Paragraph 26 of the Statement of Particulars says this: On recommendation of Dr Wever, the Second and Third Plaintiffs took their son Matthew on a trip with the Pipes Band of Scotland as part of the ongoing rehabilitation plan for Matthew. The cost of this trip is claimed by the Second and Third Plaintiffs, totalling not less than $28,172,28. 731The amount now claimed by the Plaintiffs is in the sum of $15,713.25. 732There was no evidence that anyone other than Mr Chaina accompanied Matthew to Scotland and the invoice from the Flight Centre shows only one return business class airfare. There was no evidence that Dr Wever had recommended that Mr Chaina accompany Matthew as part of Matthew's ongoing rehabilitation. In fact, Dr Wever's evidence (at T2041) was this: A. He went to Scotland because he thought it was important to accompany Mathew because he was fearful -- Further, when Dr Wever was being cross-examined about an affidavit he swore in 2012 for the Family Court in Melbourne saying that Mr and Mrs Chaina were prevented from travelling by aeroplane. The following exchange occurred: Q. Did you have regard to the fact that George Chaina had travelled by aircraft from Sydney to Scotland in two thousand and-- A. One. Q. 2001? A. Yes. That was 10 years before. Over 10 years ago. Q. But you have never mentioned anywhere in any of your clinical notes any references to Mr Chaina undertaking that journey, have you? A. I - I may not have. I can't remember. Q. Well, you can take it from me - but you are free to check it - that nowhere in your clinical notes or in your reports have you ever made reference to the fact that George Chaina went on this trip to Scotland with the Scots College? A. I would have to read all my reports to see whether that is true or not. But I will take your word for that, Mr Stitt. Dr Wever had not said anything about it in his reports. 733Whilst it might have been understandable that Mr Chaina wanted to accompany Matthew on the trip to Scotland that does not mean that it is an expense for which the Defendant is liable. Further, and noting that the Particulars claim that the trip was part of Matthew's rehabilitation, it could reasonably be expected that if it was necessary for that purpose for Mr Chaina to accompany Matthew that would form part of the damages claimed by Matthew and compromised in any settlement made between Matthew and the Defendant. These damages would be in the nature of damages for personal care that might be gratuitously provided in many cases but which in some, such as this, might involve expenditure on the part of the carer. 734I do not consider that the damages are recoverable in the present proceedings.

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(ii) Dr Ross Griffith 748The claim is for $168,167.90. This total does not include the amounts Dr Griffith makes in respect of his involvement in the coronial inquest. 749Dr Griffith's evidence was that he was approached by Mr Chaina in August 1999 and retained as a consultant by Proton shortly afterwards. His expertise is in Textile engineering and technology. He was engaged in relation to the laundering of fabrics and clothing. 750After Nathan's death he became very involved with the Chainas in relation to the inquest. However, he performed a number of functions within Proton's business. For example, he was involved in the preparation of the application for a Commonwealth research grant. He gave evidence that he accompanied Mr and Mrs Chaina and assisted them with a number of presentations to assist in the marketing of Proton. 751I have commented unfavourably about the reliability of Dr Griffith's evidence earlier in this judgment. He is clearly close to Mr and Mrs Chaina and is strongly supportive of them and the claims that they make. Nevertheless, It is clear that he performed a number of significant roles in the business and has assisted them in keeping it going. He gave evidence that he believed that all of his accounts had been paid by the Plaintiffs. I accept that evidence. 752I do not consider that the Defendant is prejudiced by my assessment of the claim made for his consultancy fees despite the late production of his accounts. The issue of his consultancy work was clearly raised in his Statements. He was cross-examined about specific tasks that he carried out for the Plaintiffs. Mr Chaina made repeated reference to Dr Griffith's involvement with the Plaintiffs when he gave his evidence. 753I consider that it is appropriate to make an allowance for the consultancy fees charged by Dr Griffith during the period from Nathan's death up until the end of June 2001. This was the time I have held that Mr Chaina ceased to be incapacitated for work as a result of Nathan's death. However, the Plaintiffs should not recover the whole of his fees. He had already been engaged at the time of Nathan's death because of his expertise. He would, no doubt, have continued to provide his services in his areas of expertise even if Nathan had not died. However, I accept that his role expanded to other areas during the 18 months or so following Nathan's death. 754The total of Dr Griffith's fees from Nathan's death until 30 June 2011 is $69,322.50. There was scant evidence of quite how much extra work Dr Griffith undertook because of the indisposition of Mr and Mrs Chaina. Doing the best I can, an allowance of approximately half of his fees should be made. I allow $35,000.

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(iii) Nigel Dique 755The claim is for $58,854.10. 756Mr Dique is a freelance public relations consultant who carries on business variously through a company called Media Focus Pty Ltd and a business name Media Focus Global. Mr Dique came to know Mr and Mrs Chaina perhaps 30 years ago. The contact between them was initially social but then Mr Dique did some work for Mr Chaina of a public relations nature. 757Mr Dique was only called to give evidence in reply. He did not prepare a statement. Mrs Chaina had considerable difficulty leading evidence from him, a lot of which went well beyond evidence in reply. Mr Dique clearly carried out a lot of work for the Plaintiffs which had little to do with Mr Dique's occupation as a public relations consultant. As best I could glean from his evidence in chief he said that he assisted Mr Chaina in writing some letters, obtaining material to form the basis of affidavits in the multitude of litigation in which the Plaintiffs were engaged, drove him to, and attended with him at, meetings with various people and organisations and also assisted Lily Sukkar with a NSW government tender. I do not think it would be unfair to describe a lot of what he was doing as hand-holding. 758It emerged in cross-examination that in the period immediately after Nathan's death, and in the first half of 2000, Mr Dique was dealing with the media on the Plaintiffs' behalf. So, his account for 31 May 2000 charges $1040 for Media Monitors (broadcast summary) and press clips. His account for 30 June 2000 charges $1200 for Media Monitors (radio transcripts and video clips). His account for 31 May 2001 charges $1386 for "PR activities during month of May; attend Nowra, Sydney. Regular liaison with media, arrange monitoring service" 759His account for 30 June 2001 charges $896.50 for "PR watching for June (4 hrs) Monitoring and clip service (Media Monitors) for May and June". His account for 30 September 2001 charges $550 for "Liaise media, manage media coverage of findings. Follow up with media". Charges of $544.50 and $1468 were made for similar matters in October 2001 and January 2002 respectively. Exactly what Mr Dique was doing in his dealings with the media was difficult to fathom because he was very evasive when cross-examined about the matter. He seemed very reluctant to concede that he was dealing with the media on behalf of the Chainas and would not explain the work for which he charged. 760Nor was there any explanation from Mr and Mrs Chaina. One would have to wonder why grief-stricken parents were paying someone to monitor and liaise with the media for them. It does not seem at all appropriate that these charges should be recoverable from the Defendant. 761The remainder of Mr Dique's accounts are opaque for the work he has done. They describe such general matters as "preparation of statements and correspondence" and simply refer to various hours engaged in that work. For example, on four days in April 2000 he charged for 31 hours of doing just that. In March 2000 he charged for 54.30 hours over eight days. 762I can accept that he may have assisted Mr Chaina with correspondence and with preparing responses to affidavits in the various pieces of litigation although why that would not have been done by the solicitors that were engaged by the Chainas was not explained. It is appropriate to allow a small amount of the fees he apparently charged for this work up to 30 June 2001. However, there should not be recovery for work claimed to have been done for the coronial inquest since solicitors had been engaged by the Plaintiffs and an allowance will be made for them. 763The relevant invoices appear to be dated 31 January, 31 March, 30 April, 31 May, 30 June, 31 July, 31 August, 30 November all in 2000 and 31 January 2001. They total $11,965 but it is apparent from some that they contain charges for media matters. A generous allowance to the Plaintiffs, which I make, is $9,000.

[83]

(5) Costs of coronial inquest (Particulars para [25]) 777The claim is for the sum of $531,820.41. That sum includes the costs of solicitor and counsel, transcript, the fees of Professor Griffith and an airfare for a Mr G Davidson to and from New Zealand. 778There is scant authority in relation to whether persons entitled to make a claim in respect of someone's death are entitled to costs incurred in relation to a coronial inquest. 779In Cremona v Roads and Traffic Authority [2000] NSWSC 735 the deceased was a doctor who was killed in a motor vehicle accident. His widow bought a claim under the Compensation to Relatives Act for damages arising from his death. 780The principal judgment of Dowd J was given on 20 June 2000 (Cremona v Roads and Traffic Authority [2000] NSWSC 556. His Honour stood over certain matters relating to damages for further submissions. The judgment on 25 July 2000 was the judgment in relation to the further submissions on particular heads of damage. A number of issues relating to costs were also raised. One of those was in relation to the Plaintiff's costs of the coronial inquest into the death of the deceased. The Plaintiff sought an order that they be paid by the Defendant. 781It was in that context that Dowd J said this: [43] In the nature of these proceedings, there being two potential defendants many of the issues relating to the question of liability which at that stage was still in issue and examined in the Coroners Inquest. [44] The plaintiff incurred costs in the qualifying and obtaining a report from a pharmacologist and a pharmacokineticist. There are, in my view, particular facts and circumstances demonstrating special and unusual features justifying exercise of the courts discretion to award costs [45] The court has exercised a power to allow representation, indeed the defendant concedes that it is proper in certain circumstances that costs be awarded. In my view the circumstances here clearly warranted representation and was properly incurred. [46] I consider it was proper in the circumstances for the plaintiff to be represented in those proceedings. It would be quite extraordinary if she were not to have been represented. In the event I consider that the plaintiff should have her costs of being represented in the coroners inquest. The evidence obtained was used in the summary judgment. 782Although the RTA appealed against certain heads of damage found by Dowd J it does not appear that there was any appeal against the order that the Defendant should pay the costs incurred by the Plaintiff in being represented at the inquest - see Roads and Traffic Authority v Cremona [2001] NSWCA 338 and Raods andTraffic Authority v Cremona (No. 2) [2001] NSWCA 459. The absence of any appeal in relation to those costs was surprising because it does not appear that there was any prior authority on the point and, with all due respect to Dowd J, his reasons for ordering the Defendant to pay the costs of the Plaintiff at the inquest were sparse indeed. The amount of the costs was not identified but the inquest took place over at least four, and possibly more, days so they would have been reasonably considerable. 783The matter was considered in Roach v Home Office; Matthews v Home Office [2009] EWHC 312; [2010] QB 256. The decision in the two matters under appeal in that decision involved a construction of s 51 Supreme Court Act 1981 (UK) which provided: Subject to the provisions of this or any other enactment and to Rules of Court, the costs of and incidental to all proceedings in: (a) the civil division of the Court of Appeal; (b) the High Court; (c) any county court, shall be in the discretion of the Court. 784It is to be noted that s 51 of the UK Supreme Court Act gave the Court wide power in relation to "costs of and incidental to all proceedings". The judgment in Roach shows the importance of the word "incidental" that led Davis J to say at [48]: Costs of attendance at an inquest are not incapable of being recoverable as costs incidental to subsequent civil proceedings. 785The power to order costs in this Court is governed by s 98 Civil Procedure Act which relevantly provides: 98 Courts powers as to costs (1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. 786Although that section does not use the expression "of and incidental to all proceedings" the power to determine "to what extent costs are to be paid" seems to me to give as wide a power as that which is contained in the UK Act. 787In Roach the Home Office argued that the costs of one set of proceedings (the coronial inquest) are never recoverable as costs of and incidental to another set of proceedings (i.e. later civil proceedings). Davis J first rejected such a proposition because of the width of the wording of s 51 of the UK Act. He then went on to say this: [42] Mr Morgan's asserted rule gives rise to yet further difficulties. He accepted that, where a solicitor did not attend the inquest, such solicitor, on behalf of his client, might well be able to claim as costs incidental to civil proceedings - and at all events was not precluded in principle from claiming-the costs of the solicitor prior to commencement of proceedings of interviewing and obtaining relevant proofs of evidence from witnesses who had given evidence at the inquest. But if that is so, then - as Deputy Costs Judge Rowley noted - there seems no reason in sense or in logic why the costs of instead attending the inquest to note the evidence (and, it may be, also to assess the witnesses) should be incapable of being allowed as incidental costs. Indeed one can readily envisage that in many cases such a course may be cheaper, and more useful, than the cost of proofing such witnesses afterwards. To assert, therefore, as Mr Morgan did, that the inquest had "nothing to do" with the civil claim cannot, as a general proposition, be correct. It may be that can in some respects be said of the purpose of an inquest ("who? when? where? how?") taken on its own. No doubt too it can be said that an inquest would have occurred even if civil liability had been admitted prior to the inquest. But that tells one nothing conclusive where civil proceedings follow after an inquest and tells one nothing of the purpose or relevance of attendance at the inquest to the subsequent civil proceedings. The purpose of an inquest is not to be equated with the purpose (or relevance) of attendance at an inquest. 788A matter of some significance in Roach was the issue of the potential liability of a party arising out of an inquest. The relationship between costs incurred in the later civil proceedings and admissions of liability before or following the inquest were relevant considerations - see at [48] and [56]. 789Although Davis J found that purpose in attending the inquest cannot be the decisive factor in a decision about whether costs should be awarded of the inquest, it is nevertheless a consideration. 790As in Roach, I am of the opinion that costs of attendance at an inquest are not incapable of being recoverable as costs in subsequent civil proceedings. 791Two factors of significance in the present case that justify the awarding to the Plaintiffs some of their costs of attending the inquest are (1) a clear intention from the outset of bringing proceedings against the school arising out of Nathan's death and (2) the admission by the Defendant after the civil proceedings were commenced of a breach of duty on the part of the Defendant. Although the transcript of the inquest is not in evidence, and I declined to receive the reasons of the Coroner and his findings, it is a reasonable inference that the evidence which emerged at the inquest was of some relevance to the present proceedings and to the decision on the part of the Defendant to admit breach of duty. 792No basis has been shown for the Plaintiffs to recover fees charged by Professor Griffiths. Although the Plaintiffs say that Professor Griffiths was of assistance to them and in some respects was a go between, the fact is that the Plaintiffs had competent solicitors and both junior and senior counsel briefed by them to look after their interests at the inquest. There is no basis shown for fees the Plaintiffs chose to pay to Professor Griffiths to be recoverable from the Defendant. 793Nor is there any evidence concerning the account for air travel for Mr G Davidson. 794In coming to a view about what is an appropriate sum it is necessary for me to err on the conservative side. This is for a number of reasons. First, the material was produced at such a late stage in the proceedings (as I have indicated) that the Defendant has had no chance to consider it, make enquiries about it and cross-examine on it. Secondly, the Plaintiffs led no evidence to demonstrate how many hearing days were involved and what took place on those days. There was evidence that Mr Chaina did not accept the obvious explanation for Nathan's death and arranged for his own pathologist to be brought from overseas to conduct a further autopsy and (I assume) to give evidence. This, doubtless, prolonged the inquest. It is not appropriate that costs incurred by the Plaintiffs from those matters should be allowed. Thirdly, an issue may have arisen about the justification for having junior and senior counsel involved for the whole or a greater part of the inquest. Fourthly, costs should only be payable on the usual party-party basis and not on an indemnity basis. The claim is made on the latter basis with the whole of the costs appearing in the invoices tendered. 795In my opinion, it is appropriate to make an allowance for the costs of the inquest of $75,000. 796In the light of the above consideration MFI 107 should now be marked as Exhibit MMM in the proceedings.

[84]

(a) Sale of properties (Particulars para 21) 797Paragraph 21 of the Particulars reads as follows: [21] By reason of the Defendants' breach of the duty of care owed to the Third Plaintiff she has suffered loss due to the forced sale of properties leading to unfulfilled property investments. Particulars The loss of the Second and Third Plaintiffs' services to Proton and Deluxe has resulted in the property located at 77 Nicholson Street Strathfield, which was held by the Third Plaintiff, having to be sold. The premature sale of this property has resulted in damage to the Third Plaintiff. The Third Plaintiff claims a loss due to unfulfilled property investments/forced sale of the property as calculated by the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012, and totalling not less than $1,230,000. 798In section 6.1 of the Pitchers Partners report of 31 August 2012 Deborah Cartwright said this: 243. During the period since the Accident the Plaintiffs have sold two real estate properties in order to fund the various costs associated with the Accident and the Death of Nathan. I am instructed that but for the Accident they would not have sold these properties. As such the Plaintiffs have suffered a further loss in the difference between what they sold the properties for in earlier years and what the properties would be worth now. 244. Details of the losses suffered are as follows: Mrs Rita Chaina 245. Mrs Rita Chaina sold the property at 77 Nicholson Street Strathfield in November 2001 for a sales price of $1,235,000.1 have been provided with a copy of a report by Property Logic which values this property at $2,465,000 as at August 2012. I am instructed that this property was acquired before the introduction of capital gains tax by Mrs Rita Chaina and as such there is no capital gains tax payable on its disposal. The loss Mrs Rita Chaina has suffered as a result of being forced to sell the property in November 2001 as a result of the Accident is the difference between the current value of $2,465,000 and the price she sold it for of $1,235,000. 246. The loss is therefore $1,230,000. Deluxe Chemicals Pty Limited 247. Deluxe sold the property at 19 Boradhurst (sic) Road, Ingelburn in April 2000. for a saes price of $950,000. I have been provided with a copy of a report by Property Logic which values this property at $1,450,000 as at August 2012. This property was acquired after the introduction of capital gains tax by Deluxe and as such there is capital gains tax payable on its disposal. The loss Deluxe has suffered as a result of being forced to sell the property in April 2000 as a result of the Accident is the difference between the current value of $1,450,000 and the price the company sold it for of $950,000 net of CGT @ 30%. 248. The loss is therefore $500,000 before tax and $350,000 after tax. This loss is included in the calculation of the devaluation of the shares in Deluxe. 799When the Plaintiffs applied to reinstate the expert evidence which I rejected in Chaina (No. 13) the Defendant in its cross-application made submissions concerning the sale of these properties. The Defendant submitted that the loss claimed in relation to these properties was not recoverable as a matter of law because it was too remote, there was no evidence from the Plaintiffs as to why it was necessary to sell the property and in particular why Nathan's death necessitated the sale, and thirdly that there was no evidence of relevant values of the properties to justify the amounts claimed. 800In Chaina (No. 16) I said at [266] that whilst there was force in those submissions the question of whether the losses claimed had been made out should be determined when all of the evidence was complete and submissions had been made. In other words, I did not consider that it was appropriate to reject those claims on a summary basis when there might be factual matters outstanding, or the Plaintiffs had not had the opportunity to show the causal connection between those sales and Nathan's death. 801At the hearing of that Motion the Plaintiffs had sought to rely on a further report from Ms Cartwright which annexed valuations of the two properties. The valuations had not been carried out by Ms Cartwright (who was in any event not a valuer) but there was no evidence by way of affidavit or otherwise from the valuers concerned. My judgment in Chaina (No. 16) refused the Plaintiffs the right to rely on that supplementary report of Ms Cartwright. 802The only evidence given by the Plaintiffs in relation to the sale of these properties is found in paragraph 32 of Mrs Chaina's statement of 29 January 2010 (Exhibit L1) and paragraphs 346-347 of Mr Chaina's Statement of 8 February 2010 (Exhibit C1). Mr Chaina says in paragraph 32: We sold the Strathfield property in late 2001 and therefore could no longer use it as an office. We therefore transferred the documents from there to Mort Street. 803No reason was given for the sale, nor was any evidence given in relation to the value of the property. No evidence at all was given concerning the sale of the property in Broadhurst Road, Ingleburn. The only evidence about the Ingleburn property was in paragraph 38 of the same statement which disclosed that when in late 1998 the factory site in Gould Street, Enfield was sold the equipment stored on that site was transported to Broadhurst Road, Ingleburn. 804Mr Chaina said this in his Statement about the property in Nicholson Street, Strathfield: 346. In the years after the fire in 1993 all of the documents recording the research and development and testing undertaken by me was stored at our family home in Nicholson Street, Strathfield. That was a very large property and incorporated a number of storage areas and offices. When I moved the family to Vaucluse, Strathfield was used solely as an office for conferences, storage and meetings. The premises were heavily secured with back to base intruder and fire alarms. As I have indicated above, I had cause to obtain from Strathfield copies of certain of my test results relating to laundry and dishwashing products in 1999 in order to discuss those results with Professor Ross Griffith. The balance of the documents evidencing the testing and development work that I had undertaken in the preceding five years remained at Strathfield. 347. Following the death of Nathan in October 1999, I did not return to the Street, Strathfield property. When the property was subsequently sold, the sale was dealt with by Rita's brother, and I have little recollection of this, although I have no doubt that I was consulted in relation to the sale at the time. Lilly Sukkar was responsible for cleaning out all of the company records from Nicholson Street. She boxed all of the documents up and arranged for them to be transported for storage to the Mort Street, Lithgow premises. Also transported to Mort Street were a number of items of furniture such as the large boardroom table, wardrobes and a number of antique chandeliers and other antiques. I am not aware of what happened to the rest of the furniture. 805As with Mrs Chaina, Mr Chaina gave no evidence about the property in Broadhurst Road, Ingleburn. 806Neither Mr nor Mrs Chaina gave any oral evidence about the sale of those properties. 807What is contained in Ms Cartwright's report about the sale prices and the values of the properties can only be assumptions on which she has based her calculations. In the absence of factual evidence establishing those assumptions the whole of Ms Cartwright's evidence in paragraphs 243 to 248 falls away. 808These claims are disallowed.

[86]

Conclusion 813The result, in summary, is that both Mr and Mrs Chaina prove that they suffered mental harm by reason of the negligence of the Defendant. That mental harm had largely dissipated by about June 2001. Certainly, both of them were not prevented from working in their business after that time by reason of mental harm from Nathan's death. 814Any inability of Proton to engage in a relaunch of its industrial products was not caused by the Defendant's negligence. Proton, was for a relatively short period of time deprived of Mr and Mrs Chaina's services on a fulltime basis in operating the existing business. It is entitled to be compensated on the basis of the per quod principle for expenses thereby incurred. 815Deluxe establishes no claim. 816The damages to which Mr Chaina is entitled are as follows: (1)Non-economic loss $77,000 (2)Past economic loss $104,591 (3)Lost superannuation $7,852 (4)Out-of-pocket expenses $13,043 817The damages to which Mrs Chaina is entitled are as follows: (1)Non-economic loss $77,000 (2)Past economic loss $48,927 (3)Lost superannuation $3,998 (4)Out-of-pocket expenses $8,962 818The damages to which Mr and Mrs Chaina are jointly entitled, no evidence showing precisely who was liable for these expenses, are as follows: (1)Funeral and associated costs $20,000 (2)Coronial inquest $75,000 819The damages to which Proton is entitled are as follows: (1)Payments to Mr Dique $9,000 (2)Payments to Dr Griffith $35,000 (3)Payments to Mr Redfern $12,000 820The Plaintiffs claim interest on past economic loss, out-of-pocket expenses and other payments made in the past. I understood the Defendant to submit that if any award of damages was to be made it wished to address further on the recoverability of interest given the way the proceedings have been conducted, particularly the delays for which the Defendant says the Plaintiffs are responsible. 821In those circumstances I will not enter any judgments at the present time. I can indicate, however, in the light of my determinations summarised in the immediately preceding paragraphs the judgments I propose to enter, subject to any additions for interest are as follows: (1) Judgment for the Second Plaintiff for $202,486. (2) Judgment for the Third Plaintiff for $138,887. (3) Judgment for the Second and Third Plaintiffs jointly of $95,000. (4) Judgment for the Fourth Plaintiff of $56,000. (5) Judgment for the Defendant against the Fifth Plaintiff.

Chaina v Presbyterian Church

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