Commonwealth of Australia v Elliott

Court of Appeal (NSW)|2004-07-16|Before: Giles JA, Hodgson JA, Tobias JA, Foster AJ

CITATION : Commonwealth of Australia v Elliott [2004] NSWCA 360 revised - 5/11/2004 HEARING DATE(S) : 16 July 2004 JUDGMENT DATE : 8 October 2004

JUDGMENT OF : Giles JA at 1; Hodgson JA at 90; Tobias JA at 91 DECISION : (1) Appeal allowed in part; (2) Set aside the judgment for the plaintiff against the defendant in the sum of $1,448,271.67; (3) In lieu thereof, judgment for the plaintiff against the defendant for such sum as the parties shall advise the Registrar as a result of their calculations in accordance with these reasons, such advce to be given within 14 days; (4) Liberty to apply in the event of disagreement over calculation of the substituted judgment, application to be made in the first instance by telephone to the Associate of Giles JA; (5) No order as to the costs of the appeal.

CATCHWORDS : Negligence - injury to knee - increased risk from directed task - whether causation could be found - causation properly found - damages - whether pre-existing condition- question of fact - judge misapprehended evidence - increased susceptability to injury - reconciliation of Watts v Rake and Malec v J C Hutton Pty Ltd - need for greater allowance for contingencies - differential allowances - allowances increased. D Bennett v Minister of Community Welfare (1992) 176 CLR 408; Betts v Whittingslowe (1947) 71 CLR 649; Chappell v Hart (1998) 195 CLR 232; E M Baldwin & Son Pty Ltd v Plane (1999) Aust Torts Rep 81-499; Cook On Gas Products Pty Ltd v Kelly (1998) 29 MVR 415; Groves v The Commonwealth (1982) 150 CLR 113; Malec v J C Hutton Pty Ltd (1990) 169 CLR 638; CASES CITED : Naxakis v Western General Hospital (1999) 197 CLR 269; Overland Sydney Pty Ltd v Piatti (1992) Aust Torts Reps 81-191; Purkess v Crittenden (1965) 114 CLR 164; Seltsam Pty Ltd v McGuinness (2000) 49 NSWLR 262; Watts v Rake (1960) 108 CLR 158; Waverley v Bloom (1999) Aust Torts Rep 81-517; Wilson v Peisley (1975) 50 ALJR 207; Wyong Shire Council v Shirt (1980) 146 CLR 40. PARTIES : Commonwealth of Australia - Appellant Craig Andrew Elliott - Respondent FILE NUMBER(S) : CA 41195/03 COUNSEL : R E Williams QC & B Skinner - Appellant H Shore SC - Respondent SOLICITORS : Australian Government Solicitor, Sydney - Appellant Thomas & Company, Sydney - Respondent

LOWER COURT Supreme Court - Common Law Division JURISDICTION : LOWER COURT SC 20467/99 FILE NUMBER(S) : LOWER COURT Foster AJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41195/03 SC 20467/99

GILES JA HODGSON JA TOBIAS JA

Friday 8 October 2004 COMMONWEALTH OF AUSTRALIA v ELLIOTT Judgment 1 GILES JA: The respondent injured his left knee on 25 February 1987 during recruit training in the Australian Army. Foster AJ held that the appellant was liable to the respondent in negligence and awarded damages of $1,448,271.67. The appellant appealed on liability and the quantum of damages.

The respondent's injury 2 The respondent was born on 16 July 1969. He was brought up in Ballarat, with conventional schooling to the Higher School Certificate in 1986. He was a keen sportsman, engaging in football, cricket (indoor and outdoor), basketball, volley ball, tennis, swimming and cycling. He had some problems with his left knee, to which I will later refer, beginning with an injury in 1980. The judge described him as a strongly built, fit, young man. 3 The respondent entered the Australian Army as a recruit on 11 February 1987. He was sent to the Kapooka Army Base near Wagga Wagga. Amongst other activities, recruits underwent physical training intended to bring them in graduated stages to a level of physical fitness, bodily strength and general agility sufficient to undertake military tasks which became increasingly demanding and difficult. At the end of the physical training they had to pass a test, described in the evidence as "the Challenge", in order to move from the recruit phase into further army training. 4 The judge described the constituents of the training programme - "They involved work in the gymnasium, including exercises such as sit-ups and push-ups, rope climbing, cross country running over dirt tracks, squad drill and laid down bitumen surfaces, and running in formation, which could involve sudden stopping with rear ranks bumping into those in front, occasioning some falls, until, presumably, control was learnt. There was also endurance training which involved marching and proceeding at double time, in army boots, greens and webbing. All of the physical training was not conducted in this gear. When boots were not worn, ordinary rubber soled running shoes were used." 5 One of the training areas was a hill known as "the moguls". The judge said - "It consisted of a set of flat terraces leading to relatively steep, short inclines, followed by another terrace and another such incline until the top of the hill was reached. It was a grassed area. Running up and down it was part of recruit physical training, such running being conducted in formation. Although expert evidence was admitted in the case to this effect, I am satisfied on a consideration of the description of the area that, as a matter of common sense, the abrupt changes from flat surface to incline surface, would involve obvious risks of slipping, on the part of persons running up and down the hill. In fact particular care and a reasonably high level of agility on the part of a runner would be required to retain footing and prevent falling. Nevertheless, it cannot be, nor was it, asserted, that it was an inappropriate area for the training of recruits in bodily control and agility and for the general toughening of their limbs and weight bearing joints for the difficult training challenges ahead and for the required levels of physical fitness and agility of infantry soldiers." 6 On 25 February 1987 the respondent's squad of recruits was marched to the gymnasium for physical training under the supervision of the then Sergeant Hoile. Mr Hoile had been a physical training instructor at Kapooka since mid-1984, and had been engaged in physical training until he left the army in 1994 and thereafter until he gave evidence. The judge found it "reasonable to regard him as being, then and now, an expert in physical training". 7 The recruits were wearing shorts and t-shirts and running shoes. Mr Hoile trained the recruits in physical exercises such as sit-ups, push-ups and rope climbing. The respondent gave evidence that this was reasonably tiring, and the judge found that he "had not reached the stage in his physical strengthening, that he did not experience, to some extent at least, fatigue in the legs occasioned by the physical exercises he was required to undertake". 8 Because other members of the squad were misbehaving, as a disciplinary measure at the end of the training session Mr Hoile ordered the recruits to run up and down the moguls eight times as fast as they could. The squad of thirty recruits did so "as one great big mob". Sprinklers had been playing on the moguls, and the grass over which they ran was still wet. The respondent had run up and down the moguls twice, and was running up for the third time. About half way up his left foot slipped on one of the inclines, sliding backwards beneath him and precipitating him forwards in a twisting motion. A skid mark was left in the wet grass. The respondent's knee was injured, he could not carry on running, and he was sent for medical attention.

Liability 9 The appellant did not dispute that it owed the respondent a duty of care (see Groves v The Commonwealth (1982) 150 CLR 113), or that the duty was to take reasonable care to avoid foreseeable risk of injury to the respondent. 10 The risk of injury in the rigorous training programme was foreseeable. Indeed, that there might be injury was emphasised by the appellant as a matter going to whether the respondent's injury occurred in circumstances of lack of reasonable care, it being said that it was necessary for recruits to undertake activities with risk of injury in order to become effective soldiers. The issues on appeal were breach of duty and causation, with a side issue of admissibility of expert evidence. 11 The judge said, speaking of evidence given by Mr Hoile - "18 He said, in evidence, that he made regular use of the moguls for training purposes, a couple of times per week. He said 'I ran them up and down the moguls in all conditions. Whether it was hot, dry, raining, in winter, summer, it didn't matter.' He further said that no recruit had suffered injury in one of his lessons, apart from the plaintiff, 'running up or down or over the moguls'. There had, however, been many spills in his lessons, normally when recruits were running down the hill but that there were no injuries 'because it was a grass surface'. He said that the running of a platoon up and down the hill was performed in an orderly manner in ranks and that the fact that sprinklers operated on the grass area in the summer months did not deter him from using it as a training area. He did not have any specific recollection as to the watering on the day of the accident. He agreed, however, that wet grass was slippery and more particularly so when a person was travelling fast over it, with changes in incline, and in situations where visibility was obscured 'with the eighty legs'. He also agreed that running shoes would be less able to cope with slippery conditions than football boots or the like and that running of the type undertaken by the platoon on the day of the accident on wet grass produced a situation where 'it would have been quite foreseeable that somebody might slip … and that if somebody slipped, depending upon how awkwardly or otherwise they fell, they might be injured'. These particular damages [sic: ?dangers] were emphasised in the report of Dr Neil Adams, Ergonomist, whose evidence I accept. 19 Mr Hoile rejected the suggestion that, as the plaintiff had alleged, he would have imposed a 'punishment' on the recruit platoon but stated that it would not be unusual to impose an additional training task at the end of an allotted period, if he felt that 'their training wasn't up to standard in that period'. This was 'instructor's licence if we thought it was required' and the additional task could come from 'a wide range of activities'. He accepted that he could readily have chosen, on the day in question, running along the road as an additional task to be imposed upon the platoon at the end of the session and that there was no necessity for them to be run up and down the hill. Again, Dr Adams' evidence indicates, as does common sense, that this would have been a proper and reasonable alternative course to have taken. 20 As to the plaintiff's assertion that the platoon was required to run up and down the hill eight times, Mr Hoile was quite adamant that he would not give such an order 'in that time in training', meaning that it would have been 'unsuitable, having regard to their level of training' and 'something that they shouldn't be asked to do'. 21 Mr Hoile was not in a position to, and did not in fact, deny that he had commanded the platoon to perform the task asserted by Mr Elliott. I formed a favourable impression of Mr Elliott as a witness and I accept his evidence in this regard. Accordingly, I determine the question of liability in this case on the basis that, at least as a disciplinary measure, Mr Hoile ordered the recruits, at the end of the physical training session, to perform the additional task of running up and down the moguls, in conditions where the grass was both wet and long, eight times." 12 It followed from these findings first, that Mr Hoile ordered the recruits to run up and down the moguls eight times; secondly, that although running up and down the moguls was part of the training programme it was not appropriate at the stage of physical fitness of the recruits at that time for them to be required to run up and down the moguls eight times; thirdly, that there was appreciated an increased risk of injury if the recruits were required to do so; and fourthly, that whether as a disciplinary measure or otherwise a reasonable and less risky alternative of running along the road was available. 13 The judge then said - "22 Another factual question presents itself. Had this platoon of recruits ever previously run up and down the moguls in any conditions? Was the running of the moguls, in fact, part of the ordinary toughening program in the first three weeks of physical training? I have come to the conclusion, on the balance of probabilities, that it was not so included. In the first place, the plaintiff, although remembering seeing recruits running on the hill, does not remember doing this himself before the day of his accident. Mr Hoile, although giving evidence of extensive use of the hill for training purposes, does not say that he used it for recruits who were only in their third week of training. His evidence, to which I have referred above, suggests the contrary. Moreover, the plaintiff was questioned very closely in cross-examination as to the training activities in which he had engaged prior to his accident, with very specific training exercises being suggested to him. It was never suggested that those exercises involved running up and down the moguls. Clearly, having regard to what I regard as their purpose built contours with rapidly changing levels, they presented particular difficulties, particular physical challenges and particular dangers of injury. I conclude that they were not normally used before recruits had achieved a degree of physical strengthening and control not achieved in the first three weeks of training. Moreover, when they were used, it was on the basis that the running was conducted in an orderly fashion, not in an uncontrolled mob." 14 This amounted to a finding that it was not appropriate at the stage of physical fitness of the recruits at that time for them to be required to run as a squad up and down the moguls at all, let alone eight times, again because of the increased risk of injury if they were required to do so. 15 After referring to the calculus of the well-known passage in the judgment of Mason J in Wyong Shire Council v Shirt (1980) 146 CLR 40, the judge then concluded - "24 In this case I find that there was a risk of significant magnitude that a person in the position of the plaintiff, with his perceived level of training and fitness could slip, fall and injure himself in the course of the commanded activity. This risk was also unnecessary. The activity was not part of ordinary training at the plaintiff's level, so that the risk was not an ordinary incident of his training. Although it was not unreasonable that an additional task should be imposed as a disciplinary measure, it was unreasonable to choose this particular task. It increased both the risk of injury and the probability of its occurrence. Furthermore, the same result could have been achieved, namely the reasonable assertion of authority, by requiring the run on flat dry ground. There would have been no difficulty or inconvenience involved in taking such a course. In my view, it was not reasonable to require the plaintiff to run as a member of what appears to have been an uncontrolled mob, up and down this wet and slippery hill several times at a fast speed in ordinary rubber-soled shoes. 25 In my opinion, the plaintiff has succeeded in establishing that the Army committed a breach of its admitted duty of care to him, which breach occasioned him physical injury. Accordingly, I find liability established in his favour and turn to the question of damages." 16 The breach of duty found did not offend the necessity for recruits to undertake activities with risk of injury in order to become effective soldiers. It turned upon exposure of the respondent to unreasonable risk of injury, unreasonable because at that early stage in his training his physical fitness was inadequate for the exercise and the risk of injury was thereby increased. 17 The appellant submitted that the judge's conclusion was substantially based on evidence of Mr Hoile which did not in truth support it. It said that Mr Hoile's evidence that he would not have ordered the recruits to run up and down the moguls eight times, because that was "unsuitable, having regard to their level of training" and "something they shouldn't be asked to do", focussed on the eight times, and did not mean unsuitability to run up and down the moguls at all. The appellant said that the respondent had been injured as he ran up the moguls for the third time, and that if the eight times was removed from consideration it was not unreasonable, on the Wyong Shire Council v Shirt calculus, for it to require the plaintiff to run on wet grass on an inclined surface. 18 This was in truth a causation argument, masquerading as an argument going to breach of duty. In any event, I do not think that the judge's conclusion was tied back to the eight times. He found, on the balance of probabilities, that the moguls were not normally used before recruits had achieved a degree of physical strengthening and control not achieved in the first three weeks of training. This finding was open on the evidence, and although the appellant took mild exception to it should not be disturbed. Taken with Mr Hoile's evidence that the level of training of the recruits made it unsuitable for them to be ordered to run up and down the moguls eight times, the judge found that it was unreasonable to send them up and down the moguls at that early stage of their training because it unnecessarily increased the risk of injury and the probability of its occurrence. In my opinion, the challenge to the finding of breach of the duty of care has not been made out. 19 The appellant then submitted that, if there was the breach of the duty of care, it had not been shown that the respondent was injured because of inadequacy in physical fitness, or otherwise because of his level of training. No more had been shown, it was said, than that the respondent was injured at a time and place at which he would not have been but for Mr Hoile's order to run up and down the moguls, and his injury was the result of an ordinary slip which he or any other soldier could have encountered when fully trained and at the peak of physical fitness. 20 This causation of injury on 25 February 1987, as distinct from causation of all the respondent's problems with his knee, does not seem to have been in issue at the trial. I do not think the appellant's submission should be accepted. 21 The respondent's slip was not an ordinary slip. It was a slip by a recruit of inadequate physical fitness for the exercise he had been ordered to undertake, whereby the risk of injury through slipping was increased. In addition, the recruits were required to run up and down the moguls at the end of the reasonably tiring training session in the gymnasium and, as I have noted, the judge accepted that the respondent would have been to some extent fatigued at the end of the session. 22 In Betts v Whittingslowe (1947) 71 CLR 637 at 649 Dixon J said, in relation to a statutory duty, that "[t]he breach of duty coupled with an accident of the kind that might thereby be caused is enough to justify an inference, in the absence of any sufficient reason to the contrary, that in fact the accident did occur owing to the act or omission amounting to the breach … ". 23 Dixon J's statement has been applied also in cases of breach of common law duty, and it was said of a common law duty by Gaudron J in Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 420-21 that "generally speaking, if an injury occurs within an area of foreseeable risk, then in the absence of evidence that the breach had no effect, or that the injury would have occurred even if the duty had been performed, it will be taken that the breach of the common law duty caused or materially contributed to the injury". The approach in these observations has been endorsed in Chappell v Hart (1998) 195 CLR 232 at [10], [34], [68], [93] and Naxakis v Western General Hospital (1999) 197 CLR 269 at [31], [76], [127]. 24 In matters of causation, as was said by Fitzgerald AJA in EM Baldwin & Son Pty Ltd v Plane (1999) Aust Torts Rep 81-499 at 65,639 "[a]ll relevant circumstances, including an increase in the risk to the plaintiff from the defendant's breach of duty and the character and sequence of events, must be considered in deciding whether a defendant's breach of duty which is a possible cause of the plaintiff's damage probably materially contributed to that damage. Circumstances are relevant for this purpose if they assist in establishing or strengthening a causal connection between the defendant's breach of duty and the plaintiff's damages according to expert opinion or by the application of logic, common sense or experience." 25 I do not suggest that breach of duty whereby the risk of injury to the respondent through slipping was increased necessarily mean that the injury was caused by the breach of duty. It must be shown that the risk "eventuated", see Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 278-80. In accordance with the principles identified above, however, causation could be found: see for example, outside the epidemiology cases, Cook On Gas Products Pty Ltd v Kelly (1998) 29 MVR 415 (absence of warning cones entitled a finding of causation when pedestrian hit head on protruding tailgate of truck) and The Council of the Municipality of Waverley v Bloom (1999) Aust Torts Rep 81-517 (absence of beach inspector entitled a finding of causation when surfer struck by surfboard). 26 The respondent's slip was an accident of the kind which might have been, even was likely to have been, caused by the inadequacy of his physical fitness for the exercise, particularly when he was to some extent fatigued, and there was no sufficient reason to conclude that he would in any event have slipped. In my opinion, the judge's implicit finding of causation was well open, and was correct. 27 The side issue was the admissibility of reports of Dr Neil Adams and Mr Colin Simpson. They purported to be expert reports. There may have been some expert evidence, for example concerning the coefficient of friction of wet grass, but both reports appear to have travelled beyond admissible evidence within their authors' expertise. 28 The appellant acknowledged that Mr Simpson's evidence did not identifiably "flow through to the judgment", and that while the judge said that he accepted the evidence of Dr Adams ([18] set out above) his Honour's references to that evidence ([18] and [19] set out above) were only as adjuncts to conclusions otherwise reached. It did not need Dr Adams to say that wet grass is slippery and injury might come from an awkward fall. The appellant submitted that the judge's observation that it was "unreasonable to choose this particular task" ([24] set out above) could be traced back to a part of Dr Adams' report in which he described "reasonable preventative actions", including that the recruits could have been required to run along the road rather than up and down the moguls. It suggested that the judge had erroneously received evidence of the application of a legal standard. It otherwise frankly said that it was "very hard to point in terms to the judgment and say it's contaminated in some way by the evidence that either of the experts gave". 29 The judge noted Mr Hoile's acceptance that he could have required the recruits to run along the road rather than up and down the moguls. This was linked with Dr Adams' evidence and with common sense ([19] set out above). I do not think the judge relied on Dr Adams' opinion for what was reasonable in this respect. In my view, his Honour arrived at his own conclusion upon reasonableness, while noting what Dr Adams had said. It is not necessary to parse the reports for what was admissible and what was not. Even if the reports should not have been fully admitted, I do not think it has been shown that "some substantial wrong or miscarriage has been thereby occasioned": Supreme Court Rules Pt 51 r 23(1).

Damages 30 The respondent had fluctuating but significant problems with his left knee in the years after 1987. He had much pain and occasions when the knee gave way. The knee was further damaged, and by the end of 2000 a "new knee" was forecast. His employment was affected. He underwent at least eight arthroscopies, and a number of other procedures, and was treated or assessed by a great many treating or medico-legal doctors. There was considerable contention at the trial over the medical basis for the respondent's problems with his knee and over the part played by the injury of 25 February 1987. In the manner the appeal was conducted, it is not necessary to go to the detail found in the judge's comprehensive reasons. 31 At the commencement of his consideration of damages the judge stated the positions of the parties - "27 It is the plaintiff's contention that the problems with his left knee and their consequences, in respect of his loss of ordinary enjoyment of life, disability, and financial loss, are the result of the injury, in respect of which he sues. It is the defendant's contention that the effect of that injury was relatively short-lived and that the plaintiff's problems stem from an earlier injury for which it has no liability." 32 In due course the judge stated his conclusions - "121 I do not find it necessary to reach any concluded view in relation to the precise cause of the problem with the plaintiff's anterior cruciate ligament as I am satisfied, on the basis of the plaintiff's evidence and of the objective history of his continuous need for medical and physiotherapeutic treatment from the 1987 accident that he had an unstable, vulnerable and generally painful knee from that time onwards and that this condition was caused in large part by the development of chondromalacia patella which was directly related to that accident. The effect of the condition was compounded by the repeated occurrence of reflex sympathetic dystrophy which occurred after the commencement of arthroscopy. … 123 It was the respondent's [sic] case that the chondromalacia was attributable to the 1980 incident. However, there was no sign of it in the arthroscopic examinations in 1987 and 1988. I am satisfied that its origin was in the trauma of the 1987 accident. As I have already found, I am satisfied that that accident was the effective cause of the plaintiff's problems. 124 In so far as damage to the plaintiff's knee was occasioned by the various later falls, I am satisfied that the damage was causally related to injury inflicted by the Army accident. 125 In these circumstances, I find that there has been no break in the chain of causation between the 1987 injury and the disabilities, losses and expenses incurred by the plaintiff since that occasion. I turn then to the calculation of the quantum of the plaintiff's damages." 33 The earlier finding that the 1987 accident "was the effective cause of the plaintiff's problems" was - "51 The third possibility, of chondromalacia patella having developed as a result of the 1980 incident and having progressed to the point of occasioning serious disability to the plaintiff was espoused by Dr Coolican. Dr Coolican was qualified on behalf of the defendant and had not conducted any treatment or performed any operations in relation to the plaintiff's knee. I think that, in approaching his opinion, he has given too little weight to the apparent severity of the 1987 injury. I prefer the evidence of Mr Khan who operated upon the plaintiff's knee in 1993 and found that the condition of chondromalacia behind the left patella was very severe and, in his view, was a major contributor to the plaintiff's problems. He gave consideration to the 1980 incident and the other occasions, to which I have referred, when the plaintiff's left knee apparently troubled him before the accident in the Army. He also considered the reports of Drs Beetham and Carter. He gave oral evidence in the case and I formed the view that he was a reliable witness. His opinion was that, on the probabilities, the plaintiff had fully recovered from the 1980 accident before 1987 and that the chondromalacia was attributable to the Army accident alone. This was also the opinion of Dr Beetham in a report given in April 1992. Quite apart from common sense considerations to which I have referred above, I consider that the weight of medical evidence favours the view that the plaintiff's problems stem from his accident in the Army and not from any previous injuries or incidents." 34 In the appeal the parties accepted the judge's finding that the medical basis for the respondent's problems with his knee was the development of chondromalacia patella and consequential reflex sympathetic dystrophy. Chondromalacia patella (chondromalacia) is a condition of the patello-femoral joint involving softening of the lining of the knee-cap. The change in the lining can bring pain and affect the stability of the knee. The condition can be brought about, or exacerbated, by trauma to the knee. 35 The appellant said that the judge had not captured its position entirely correctly, in that its case had not been that the respondent's problems were attributable to the injury in 1980 and that the 1987 injury had but a short-lived effect. It said that its position had been, and still was, that the respondent's chondromalacia was a condition probably constitutional in origin, first manifesting itself at the time of the injury in 1980 and developing thereafter, to which the 1987 injury contributed by exacerbating the condition and to some extent making the knee worse. The appellant acknowledged that, assuming liability, it was responsible in damages for the exacerbation of the respondent's problems with his knee, but submitted that the judge erred in attributing the chondromalacia entirely to the 1987 injury and failing to recognise it as a condition which in all probability would have brought knee problems to the respondent quite apart from the 1987 injury and had in fact done so prior to that injury. 36 The appellant purported to found its submission on the words of Barwick CJ in Wilson v Peisley (1975) 50 ALJR 207 at 209, in which an accident precipitated a rare psychosomatic disease to which the plaintiff was pre-disposed and his Honour said of the condition that - " … being something not caused by the appellant and pregnant of psychological damage to her in the future in the ordinary course of her life [it] must be placed in the scales when deciding what sum should be awarded for what the appellant had caused. The trauma of the accident for which the appellant was responsible no doubt made a present reality of that which was ever a real possibility. Thus, whilst the appellant must pay for bringing out that condition, what he must pay must, in my opinion, justly reflect the fact that that condition was not merely latent in the respondent but that events, not of an unusual or unlikely kind, could and might in the ordinary course of life have evoked that condition had not the appellant's negligence intervened. The judge included this possibility in the vicissitudes of life which he was bound to bring to account in connection with the assessment of economic loss." 37 Barwick CJ was referring to the possibility that the condition would have been brought out quite apart from the accident. The appellant went beyond Barwick CJ's words, however, because it said that the condition of chondromalacia had in fact become manifest and had developed prior to the injury of 25 February 1987. As its argument was put, the emphasis was on the development of the condition prior to the 1987 injury, whereby the respondent already had a compromised knee at the time of the injury for which it was responsible. 38 For the present I will not further consider the consequences of a finding that the chondromalacia was not attributable entirely to the 1987 injury, but had an earlier development. 39 The appellant argued that at the heart of the judge's error was his Honour's preference, in his [51] set out above, for the opinion of Mr Michael Khan over that of Dr Miles Coolican. Both were orthopaedic surgeons. 40 It should be noted that the preferred opinion was not the only basis stated for the judge's conclusion that the chondromalacia was "attributable to the Army accident alone". The judge referred in [51] to the opinion of Mr Beetham and to "the common sense considerations to which I have referred above". The common sense considerations were expressed by the judge - "48 Moreover, the evidence of the plaintiff and his mother clearly indicates that after recovery from the previous injury he was able to undertake all manner of sporting activities without significant problems in the knee. In contradistinction, the plaintiff's slipping injury in 1987 clearly traumatised his knee joint to a significant extent. The complaints of pain were severe and covered, apparently, all aspects of the knee. Indeed, the effects were so severe that he was never able to resume training despite his strong desire for an Army career. He spent a considerable period of time in hospital and, before discharge from the Army, he submitted to arthroscopic examinations of the knee which, clearly, would not have been undertaken in the absence of his continual severe pain and disability. Common sense would appear to indicate that the Army injury was no mere exacerbation of an earlier condition but was a new and significant injury." 41 As well, in stating his conclusions ([123] set out above) the judge said that there was "no sign of [chondromalacia] in the arthroscopic examinations of 1987 and 1988", and early in his reasons said - "47 Support for the defendant's position was sought to be gained from the findings of the Army doctor at his medical examination, which findings were said to be consistent with the early development of arthritic changes in the patello-femoral joint and in the knee cap. I am satisfied, however, that these matters were fully investigated by Dr Carter, who found no signs of any such problems and, indeed, as already indicated, found no reason for concern about the plaintiff's left knee." 42 The appellant's argument addressed the opinions of Mr Beetham and Mr Carter, the common sense considerations and the significance of the 1987 and 1988 arthroscopies. But the appellant concentrated on the opinion of Mr Khan, contending that, properly understood, the evidence of Mr Khan in fact gave support to chondromalacia affecting the knee prior to the 1987 injury. 43 Some background is necessary, again without the necessity to go into all matters in the judge's reasons. 44 I have referred earlier to injuries to the respondent's knee during his schooling. He twisted his knee in May 1980 playing basketball. He was referred to Mr Ronald Beetham, orthopaedic surgeon, and was treated by Mr Beetham and his partner Mr William Carter. The knee was put in a plaster splint, and in due course appeared to have fully recovered. He twisted the knee again in May 1981. He went to the family GP, Dr Hemmings. The knee was bandaged and the respondent was on crutches for a week, and again in due course appeared to have recovered: Dr Hemmings' notes recorded "OK now". In May 1984 he fell down some steps, and a little later fell when alighting from a glider, and had pain in the knee. He saw Mr Carter again. In May 1985 he twisted the knee again playing cricket (May seems to have been a dangerous month). There was what was described as a "flare-up of pain" in July 1986, for which he saw Dr Hemmings. 45 In September 1986 the plaintiff was examined by an army doctor, Dr Ross Cook, in relation to his application to join the army. Dr Cook's examination included noting slight crepitus and lateral movement in the left patella. The plaintiff was referred to Mr Carter, who found "questionably some slight tenderness on the medial aspect of the patella", but that the patello-femoral mechanism was stable. Mr Carter thought that his examination was "without concern", and that there was no barrier against the respondent's acceptance for the army. 46 After the injury of 25 February 1987 Mr Warwick Huntsdale, orthopaedic surgeon, performed an arthroscopy on 18 March 1987. He reported that the left knee was "quite normal". On 21 July 1987 Mr Michael Shannon, surgeon, performed another arthroscopy. His report identified some abnormal matters, but none said to be indicative of chondromalacia. On 21 April 1998 Mr John Nelson, orthopaedic surgeon, performed another arthroscopy. He reported "no significant abnormality". 47 Mr Beetham provided a report dated 4 July 1988. He noted the 1980 injury and treatment and that the respondent had returned to full activity and considered himself recovered. He ended the report - "It would seem to me on reviewing these notes, that this young man at that time had a medial ligament strain of his left knee, from which he appeared to have recovered fully. On the available evidence, I would have thought that he should not have had any more problems with his left knee." 48 This report said nothing of the later injuries, including the 1987 injury, and from its ending it seems Mr Beetham was not told of them. 49 In April 1992 the respondent was examined by Mr Beetham. In a report dated 15 April 1992 Mr Beetham said that the respondent had "signs and x-ray confirmation of patello-femoral osteoarthritis", but that he thought that the respondent had "recovered well from the 1980 incident" and that the present condition of his knee "relates particularly to the incident at the time of his fall on the 27.2.87 [sic]". The only injuries to which Mr Beetham referred were the 1980 injury and the 1987 injury. 50 Mr Kahn first examined the respondent in December 1992, on complaint of intermittent locking of the knee. He was given a history of injury to the knee in February 1997 and that thereafter it had started to lock up and had become painful. He saw the respondent again on a number of later occasions, including after a fall in August 1993 ascribed to the condition of the knee. In a report dated 15 October 1993 Mr Khan attributed the respondent's condition to a tear of the medial meniscus at the time of the injury of February 1987, and said that the August 1993 injury had "considerably further aggravated the pre-existing relatively quiescent condition of laterally sub-luxating patella in his left knee". 51 Then on 4 November 1993 Mr Khan performed an arthroscopy. In a report of that date he said he found a recent tear and "fairly advanced changes of chondromalacia". He performed a chondroplasty and shaved an affected segment of the patella. In a further report dated 25 November 1993 Mr Khan said, referring to the arthroscopy - "I am pleased that I did this, as the arthroscopy revealed that he had a recent flap tear of the articular surface of the patella in the superior aspect, lying transversely. It appears to be due to the trauma described by him. The rest of the patella revealed fairly extensive but early changes of chondromalacia, with Grade 1 softening of the articular cartilage, which was oedematous and in places about to break down." 52 Mr Khan provided a detailed report dated 30 December 1994, in which he said - "The articular lining of the patella was slightly oedematous and soft to touch on probing indicating fairly extensive area of Grade I-II chondromalacia patellae. Post traumatic flap of the articular cartilage was found in the superior aspect of the patella which required excision and shaving. … OPINION … I have taken note of the past history of an injury to his left knee at the age of twelve, but apparently he had made a good recovery from this and, later on, he was fit enough to join the Australian Army. The details of his injury to the knee in the Army have already been described in my previous report. It appears that he has had a problem with his left knee which was related to post-traumatic chondromalacia patellae. At operation, confirmation of fairly extensive softening of the articular cartilage of the patella was noted, thus confirming the diagnosis. A chondroplasty of the patella was required to excise a torn flap of the articular cartilage at the arthroscopic procedure performed by me on his left knee on 4.11.1993. … There is no doubt that the injury on 4th August, 1993, has contributed to exacerbation of pain in his left knee, as a result of pre-existing chondromalacia patellae." 53 Against this background, I come to what was presented as a divergence of opinion between Dr Coolican and Mr Khan. 54 Dr Coolican provided a detailed report dated 27 September 2001. His opinion in his report was relevantly - "1. What is the present problem Mr Elliott is suffering from left knee pain largely arising from the patello-femoral joint. This has been the predominant problem with his knee since his original injury in 1980, and is typified by his complaint of insecurity jumping up and down off trucks which he complained of in 1987. 2. What is the cause of his present problem There are multiple causes of Mr Elliott's patello-femoral pain. He probably has an inherited tendency to develop osteoarthritis as shown by his father suffering from both gout and osteoarthritis. These conditions are multi-factorial but are inherited. In addition, Mr Elliott has had multiple injuries to his left knee, the first when playing basketball in 1980. He twisted the knee and was casted for 17 days for a presumed medical collateral ligament injury under the care of Dr Ronald Beetham. Subsequent medical reports describe the injury being associated with a loud crack and Dr Beetham's diagnosis appears to have changed from a medial ligament injury to a medial upper tibial growth plate injury. It is possible that neither of these diagnoses are correct and that Mr Elliott injured his anterior cruciate ligament in the index injury in May 1980. However, the injury to the anterior cruciate, if any did occur, was minor as most orthopaedic surgeons that he saw felt the knee was stable or with very slight laxity. Other injuries that may have contributed to his current state include an undiagnosed injury when he alighted from a glider at Laverton in 1984 and a fall down some stairs at school in September 1984. In addition, Mr Elliott slipped on some wet grass in February 1987 and fell down some stairs in August 1993. In October 1996 he may have suffered a medial subluxation of the left patella and there are other incidents referred to in a report of Dr Andrew Byrne dated 30.6.2000 that occurred in 1992, 1995 and 1997. It is not possible to say what proportion any of these injuries share in the patient's ongoing symptoms. It is also possible that the 'injuries' that have been described constitute not so much further damage being done to the knee but examples of the irritable patello-femoral joint not tolerating the bumps and falls that are part of an active life. One must point out that in all the falls that have been described none were reported as injuring other parts of the body, for example the wrist and hand which would have reflexively been used to break a fall. He has also undergone multiple surgical procedures including debridement of the patella with a power shaver which removes articular cartilage, albeit abnormal. … It is my opinion, based on the above, that Mr Elliott has been suffering from patello-femoral pain and eventually patello-femoral arthritis. This began in 1980 and his knee was clearly not normal when he joined the Army in 1987." 55 Dr Coolican maintained in cross-examination the opinion that the respondent "has a tendency to develop articular surface damage in his knee", that his knee "did not tolerate the bumps and bruises that are part of everyday life in childhood", and that his problems had existed since 1980. He said, in context referring to the 1980 injury and the 1987 injury, "I have made it clear once and I will say it again that it is not possible for me to say that one incident or the other incident necessarily caused his pain". 56 Neither in his report nor in his oral evidence did Dr Coolican refer as such to chondromalacia. In the report he noted only that in the arthroscopy performed by Mr Khan there was "found patellar wear which was debrided … ". There was no reference to this in the cross-examination, which gave much attention to cruciate ligament or meniscal damage as causes of the respondent's problems. Counsel for the appellant stated in the appeal that references in the report to symptoms related to the patello-femoral joint, to lateral patellar facet wear, and in the passage earlier set out to pain arising from the patello-femoral joint and an irritable patello-femoral joint, were to chondromalacia, and that chondromalacia was within the description of arthritic changes. Counsel for the respondent did not contest this, but the evidence did not clearly relate Dr Coolican's expressions of his opinion to the condition. Dr Coolican did not more specifically comment on Mr Khan's observed chondromalacia, or explain the mechanism of the contributions made by the various injuries to the respondent's then disabilities. 57 In his report of 30 December 1994 Mr Khan had appeared to ascribe the chondromalacia to trauma in the injury of 25 February 1987, although less than directly and without specifically excluding prior existence of the condition. In his oral evidence he said, with reference to the report of 30 December 1994 - "Q. You refer there to post traumatic chondromalacia may be something that arises from trauma [sic]? A. Yes, yes. Q. In your view does it arise from trauma in this man's case? A. Yes, I did [sic]. Q. The trauma, in your view, is that it arose from [sic], what was that? A. He was doing it during the course of his career in the Australian Army. He was, I think, running on the grass up an incline. Q. And that's the incident that you were referring to as the trauma? A. And he slipped there and slipping would have caused damage to the kneecap, indirectly." 58 This still did not specifically exclude prior existence of the condition. Mr Khan provided some explanation of how chondromalacia could develop. His explanation appeared to accept that it was a progressive condition which would settle down and flare up. 59 After describing that abnormal movement could cause "some softening and change in the lining of the knee cap, the inner lining", being the condition of chondromalacia, Mr Khan said - "Q. What relation can that condition have to pain as experienced by the person who has that condition? A. Well, your Honour, the condition of chondromalacia is common in younger people because they are much more active and if they have this sort of slight abdominal [sic: ?abnormal] movement and it can come on quite quietly and then start to get painful, and the reason the pain comes is that some changes occur in the lining of the knee which is sometimes in the earlier stages not visible to the naked eye and the knee linings starts to swell up and fuse in the joint. The kneecap itself does not have any nerve itself. (Asked for the question to be repeated but it was not forthcoming.) WILLIAMS: The court reporter missed a lot of the answer. HIS HONOUR: Q. We have to record what you say for the purpose of the transcript of your evidence. I am going to have to ask you to give that explanation again. Choose your own words again. Would you give it slowly so we can get it down. A. Yes, sir. The condition of chondromalacia we are talking about, it is the condition which means "chondro" means cartilage, that is the lining of the cartilage, "malacia" means softening of the lining of the kneecap. Now, it can occur in different stages. The change can occur prompt [sic], it may not be visible, then it starts, the lining of the cartilage swells some and that contains some fluid and it releases some chemicals which are called kinis, and those - they are painful producing chemicals and they cause anterially pain and some doctors they prefer to call the diagnosis empty knee pain because they say that softening of the cartilage is not a diagnosis." 60 In answer to the judge, Mr Khan said - "HIS HONOUR: Q. Doctor, how long does it take for the condition of chondromalacia patella to develop after trauma to the inside of the kneecap? A. It depends on the force, your Honour. If they take the surface off, that's the lining is gone then part of the lining of the kneecap, the patient will develop straight away the symptoms. If just the bruising of the lining it can just slowly get worse. Q. So, it relates to the significance, or size, of the original trauma, does it? A. Yes, size of the trauma. It can be a direct trauma or indirect. You can knock the knee directly and have damaged the articular of the surface without having a fracture. The other one is, you twist the knee while walking on it, running and bending, and that can just like happens. People who play basketball, that can happen that way. Q. Are there individual differences as to the onset of this particular problem? A. Yes, yes. Sporting young children, young adults and people, when they get it they settle quicker. They take about 6, 8 weeks treatment and generally get better with exercise programs which balances the muscle, and about 80 per cent of them come good. Then the rest, probably they have more trauma, their body is structurally different. They are in the wrong age group. They are getting a bit older and the healing power of the cartilage is not as good, they take time." 61 Mr Khan also said -

"Q. And as time goes by and the joint continues to be used may some degeneration take place or further degeneration? A. Well, the condition of chondromalacia progress is with the time [sic: ?progresses with time]. If it is exposed to same sort of injuries, that is if the kneecap keeps clicking out, the person has more injuries, that can lead to further deterioration." 62 When asked about change in gait from chondromalacia, Mr Khan said - "A. Yes. When it depends on the degree of chondromalacia and what state it is in, acute pain, you can have chondromalacia and it might have settled down and may not give you any problem. He is asymptomatic if leading a quiet existence. If he is active then the condition can flare up. He can walk with bent knee gait, slight flexed knee, and slight limb [sic: limp] on the side, because full extension causes the upper part of that upper kneecap to touch the chondro and commonly it is the upper half of the medial side that's affected." 63 In cross-examination Mr Khan was referred to medical literature, and agreed that chondromalacia could result from overuse during athletic activity, from disuse following prolonged immobilisation, and from direct injury such as a blow to the patella from a car dashboard or an old patella fracture. He agreed that its treatment was difficult "because of the multiple causes and the general irreversibility of this degenerative process". 64 Mr Khan was then taken to the respondent's pre-army history. He agreed that the 1980 injury was the respondent's most traumatic injury. He agreed that slight crepitus and lateral movement of the left patella were "classic of chondromalacia": it will be recalled that these were found by Dr Cook in 1986. 65 The cross-examination continued - "Q. Accepting the age of the young man involved at the time his knee was certainly not normal by the time he joined the Army, was it? A. Well, he seemed to be asymptomatic by then. He was 18. Q. Well it's just, Doctor, take your time over this, but that's just not the picture clinically of a normal knee, is it? A. No, he had a few knocks, yes. Q. But it's more than a few knocks. That sort of picture that's painted in the clinical records together with the notes taken by the examining doctor does not suggest a normal knee, does it? A. No, not at the time, yes. … Q. Assuming, again, that the history that I have given you is correct, and having regard to what we discussed arising out of the literature, it's likely, is it not, if you make those assumptions, and have regard to the nature of chondromalacia and it's degenerative nature, that the chondromalacia was kicked off, if I can use an inelegant expression in 1980, and that what we have seen since then is the result of the developing, or degenerative process, working it's way, as it does, in people who suffer from it? A. Can I explain my way, my answer to what you are saying? Q. You must Doctor explain your way, because that's the way we get the best understanding? A. From what I understand these injuries in 1980 and '81 he certainly, no doubt that he had a bad injury then and he had a few more injuries, I think, and as a result of this main injury we are talking about he was found by the doctors to have damaged the medial cruciate ligament. He had some laxity. He had swelling. All these things have been recorded and he had crepitus in the knee. What we are not aware of is whether he recovered from it or not. All I can tell you is that, yes, I agree with you that he could have been clicking the knee out since then, may be. I'm not sure. Q. See, Doctor, you consider this please. See, on the basis of what you put to you at the beginning when I read to you from the literature --- A. Yes. Q. --- isn't the picture, assuming the accuracy of the history I put to you, isn't the picture of this man's history from 1980 classic of a diagnosis of the commencement of the degenerative process of chondromalacia in this young man in 1980? A. He could have had chondromalacia in 1980 but the trauma of the injury in 1987 produced direct flap lesion- He had a little flap off the cartilage which looked like there was of a traumatic type." 66 Mr Khan was then taken to his report of 25 November 1993, and agreed that the flap off the cartilage was the tear to which he referred in that report and was a recent tear occurring in August 1993. 67 The cross-examination continued - "WILLIAMS: Q. Doctor, I think I have just got two short matters. Do you agree with the proposition that this condition, chondromalacia, is often associated with patients with a family history of osteoarthritis? A. May be, I am not sure about that. Q. I have got to put two propositions to put to you. You have already agreed with the proposition that the condition is degenerative in nature, correct? A. Not only degenerative. Q. It can be? A. It can be. Q. It is often degenerative in nature? A. No, not often. There is a lot of people come in with osteoarthritis. Q. Perhaps I'll put the rest of this, and we will get to the point. If the process is degenerative in nature, that results in the knee being progressively more unable to withstand use and insult than a normal knee, it would usually manage without difficulty, doesn't it? A. Yes. Q. Thank you. If the condition is caused by trauma, doctor, and the patient continues to sustain knee injuries or knee complaints in circumstances where one wouldn't expect it, the capacity of the knee to withstand the normal insults of life diminishes, doesn't it? A. Does it mean that the knee is not A grade compared to the normal knee, is that what it means [sic]. Q. Yes? A. With chondromalacia the knee is not. Q. It is not unusual for chondromalacia to be diagnosed in young people, is it? A. It is not uncommon, yes. Q. Often associated with athletic young people? A. Yes. Q. Some of the time the diagnosis comes about as a result of trauma, doesn't it? A. Yes, sometimes. Q. But not all? A. No, many girls get, females more. Q. Without necessarily presenting with a history of trauma? A. Not necessarily, but athletics, so you know they are active. Q. Doctor, some of the time in your experience, I suggest, are you able to identify a traumatic component to the diagnosis by probing the history of the patient? A. Yes. Q. And that even comes about for two reasons. First of all sometimes the traumatic incident might predate the onset of symptoms by a long period of time, months sometimes? A. Yes, that is true. Q. And sometimes the particular trauma that might be implicated by the on set of chondromalacia might be relatively mild? A. Yes. Q. It all depends? A. Can I talk a minute. The chondromalacia can lie dormant and it may not cause any symptoms, and if you see that kneecap with the eyes, it may even look reasonably normal and the reason is that the person has probably learned to live with their limitations and knocks exposed to the traumas, but still if that person performs more active things it can become painful again. Q. And it is typical of the nature of this disease, if we can call it that, that it does lie as you say essentially a-symptomatic for periods of time, then when something specific happens, whether trauma or stress, it will flair up? A. Yes, but it can aggravate, make it worse. Q. It can flair up? A. You can have mild tendency for knee cap slipping out. It is not a disease, an expression telling you this, you can have injury. Q. I am sorry about the word, use of disease, but at the end of the day each time from, by the very nature of the problem once there is an onset of it, each time there is an insult to the knee there is a potential for the condition to become progressively worse, potentially worse. A. If it is there, depending on the spread of the disease. Q. That is because the injured compartment that the potential femoral compartment when insults occur will shed debris and particles within the compartment? A. Yes, when it is active it does that." 68 In re-examination Mr Khan said - "SHORE: Q. At your arthroscopy you saw indication of chondromalacia in form of the oedema? A. Yes. Q. Recorded by grade 1 to 2? A. Grade 1 to 2, yes. Q. Doctor, of what significance would it be that in the arthroscopies conducted by Dr Shannon in 1987 and Dr Huntsdale in 1987 there was no reference at all to any occasion to chondromalacia. Would that be of any assistance to you whether it first came on in [sic] after the '87 incident in the army? A. It wasn't as severe, probably earlier on. Q. The chronology February '87 injury in the army. You have been told about the earlier incident in 1980. I would ask you to assume that the plaintiff after 1980 had resumed active sport, was playing cricket, indoor cricket, football and had been selected for a representative team in indoor cricket, and that he and his mother would say that throughout that time they simply cannot recall any such incident as is recorded in the notes of Dr Hemmings, that is not to say that didn't take place, "If it was significant we would have remembered that". I would ask you to assume at examination involving the assumption you were asked to make about slight crepitus, and movement of the left patella was noted by an army medical officer and in consequence Dr Carter was called upon to examine and express his opinion. I would ask you to assume that the incident took place in February '87 and that in the two weeks before that the plaintiff had been actively involved in shuttle runs, short runs, sprinting, running formation, a 2.4 kilometre endurance training circuit running and agility over the first two weeks until this incident occurred, he had no problems whatsoever. I also want you to assume that after the incident in February there was an initial arthroscopy by Dr Huntsdale that makes no reference to any chondromalacia being present, and I ask you to assume later in the same year, May, June, Dr Shannon conducted his arthroscopy again, making no reference to the symptoms of chondromalacia. What significance are those matters to the opinion you expressed in your report, that in your view the chondromalacia was traumatic and brought about by the incident in the army in 1987? … SHORE: Q. Could you answer that question, doctor? A. I think he was probably recovered from the previous injury when he went to the army, and after the injury he did have some problems with the kneecap and subsequent injury when I saw him and that is what you are seeing. Q. You were asked some questions by my learned friend about findings in 1997 and you were you say something that might relate to other falls and things that may have occurred in the meantime [sic]? A. Indeed. Q. That is your view? A. That is my view." 69 I have set these passages out at some length, because they are important to the appellant's challenge to the judge's preference for the opinion of Mr Khan over that of Dr Coolican. The appellant said that, on a proper reading of his evidence, Mr Khan agreed that chondromalacia was an ongoing condition likely to have been initiated in 1980 and to have progressed with successive trauma, so that while the 1987 injury was amongst the contributors to the respondent's incapacities it was not the sole cause. It said that although in re-examination Mr Khan considered that the respondent "had probably recovered from the previous injury when he went to the army", that being taken up the by the judge in [51] of his reasons earlier set out, by recovery Mr Khan meant that the condition was lying dormant and not causing any symptoms. It said that Mr Khan's evidence was consistent with the 1987 injury causing the condition to flair up again, and aggravating it, but that the judge was in error in finding that the condition was "attributable to the Army accident alone". 70 In my opinion, the appellant is correct. Mr Khan still did not specifically exclude prior existence of the condition. In my view he accepted that it may have existed prior to the 1987 injury, at one point saying that the respondent "could have had chondromalacia in 1980", at another that he "seemed to be asymptomatic" by 1987. Read as a whole, in particular in the light of his explanation of progressive deterioration with successive traumas between which the condition may be asymptomatic, as applied to young athletic persons, his explicit acceptance that as at 1987 the respondent would not have had a normal knee meant that the knee was affected by the condition. 71 The central element of the appellant's challenge has been made good; with respect, the judge was led into a failure properly to appreciate the evidence of Mr Khan. But it is necessary also to consider the opinions of Mr Beetham and Mr Carter, the common sense considerations and the significance of the 1987 and 1988 arthroscopies. 72 The appellant submitted that Mr Beetham had come to his opinion on an incomplete history, in that the respondent "didn't recover in 1980 at all in terms of there being no further incidents. There were six." Mr Beetham does not seem to have had a history of the later injuries. For the opinions in his reports of 4 July 1998 and 15 April 1992 he did not have the benefit of Mr Khan's observation of chondromalacia, and while he provided a later report dated 1 April 1997 which referred to the arthroscopy performed by Mr Khan he mentioned only the observed tear of the medial meniscus. His statement that the respondent "recovered well from the 1980 incident", whereby he related the condition of the knee "particularly to the incident at the time of his fall on 27.2.97 [sic]", did not address the significance of a series of injuries to earlier development of chondromalacia, and is consistent with asymptomatic chondromalacia as at February 1987. It does not provide a good independent foundation for the condition being "attributable to the Army accident alone". 73 The opinion of Mr Carter, through his investigation in late 1986, was consistent with dormant chondromalacia, as were the beliefs of the respondent and his mother underlying the common sense view taken by the judge. The 1987 injury was correctly seen as a new and significant injury, but it could still be an exacerbation of an existing condition of chondromalacia. To determine whether or not it was required careful examination of the medical evidence. 74 The 1987 and 1988 arthroscopies may be of more significance. The appellant referred to Dr Coolican's evidence that "the diagnosis of patello-femoral pain is very difficult to make", which as I have indicated it equated with chondromalaica, and to Mr Khan's evidence that chondromalacia is "sometimes in the earlier stages not visible to the naked eye" and "may not be visible". I do not think Dr Coolican was directing his mind to observation upon arthroscopy. The chondromalacia observed in November 1993 was described at one point as "fairly advanced changes", but more fully as "fairly extensive but early changes". Observation in 1993 left plenty of time for development of the condition as a result of the injury of 25 February 1987, and if the 1980 injury had initiated its manifestation and it had developed through the subsequent schoolboy injuries, it does not seem that it would be correctly described as in its early stages in 1987 and 1988. The judge was entitled to give weight to a comparison between the chondromalacia observed in November 1993 and the absence of observed chondromalacia in no less than three arthroscopies in 1987 and 1988. 75 Nonetheless, the comparison was not of determinative weight. Dr Coolican referred to improvements in technology: he was not taxed with the comparison, but observed in passing that he did not understand "why nothing was found" in the early arthroscopies - it is not clear that he had chondromalacia in mind. Mr Khan was directly asked whether no observation of chondromalacia in the 1987 and 1988 arthroscopies would be "of any assistance to you whether it first came on in [sic] after the '87 incident in the army". His answer was that "[i]t wasn't as severe, probably earlier on". In short, he accepted that it could have been present but unobserved in an arthroscopy. 76 In my respectful view, on an assessment of the matters to which I have referred, the judge has been shown to have been in error in attributing the chondromalacia entirely to the 1987 injury. On the probabilities, the condition had been initiated in 1980 and had developed, in the manner described by Mr Khan, with the subsequent traumas, and the respondent's knee was not a normal knee as at February 1987. 77 What are the consequences? 78 The appellant had to take the respondent as it found him. If the respondent's incapacity following the 1987 injury is the greater because he did not then have a normal knee, the appellant remains liable in damages for the full extent of that incapacity. 79 The appellant was nonetheless not liable in damages for such of the respondent's incapacity as was wholly or partly the result of the pre-existing chondromalacia or would in any event have resulted from the pre-existing chondromalacia. For this, however, the appellant bore the evidential burden spoken of in Watts v Rake (1960) 108 CLR 158, in which Dixon CJ referred (at 160) to the "presumptio hominis in the plaintiff's favour which any tribunal of fact should insist that the defendant should overcome" and continued - "If the disabilities of the plaintiff can be disentangled and one or more traced to causes in which the injuries he sustained through the accident play no part, it is the defendant who should be required to do the disentangling and to exclude the operation of the accident as a contributory cause. If it be the case that at some future date the plaintiff would in any event have reached his present pitiable state, the defendant should be called upon to prove that satisfactorily and moreover to show the period at the close of which it would have occurred." 80 In Purkess v Crittenden (1965) 114 CLR 164 it was made plain that Dixon CJ was referring only to an evidential burden: it was said (at 168) - "We understand that case to proceed upon the basis that where a plaintiff has, by direct or circumstantial evidence, made out a prima facie case that incapacity has resulted from the defendant's negligence, the onus of adducing evidence that his incapacity is wholly or partly the result of some pre-existing condition or that incapacity, either total or partial, would, in any event, have resulted from a pre-existing condition, rests upon the defendant. In other words, in the absence of such evidence the plaintiff, if his evidence be accepted, will be entitled to succeed on the issue of damages and no issue will arise as to the existence of any pre-existing abnormality or its prospective results, or as to the relationship of any such abnormality to the disabilities of which he complains at the trial. It was, we think, with the character and quality of the evidence required to displace a plaintiff's prima facie case that Watts v. Rake was essentially concerned. It was, in effect, pointed out that it is not enough for the defendant merely to suggest the existence of a progressive pre-existing condition in the plaintiff or a relationship between any such condition and the plaintiff's present incapacity. On the contrary it was stressed that both the pre-existing condition and its future probable effects or its actual relationship to that incapacity must be the subject of evidence (i.e. either substantive evidence in the defendant's case or evidence extracted by cross-examination in the plaintiff's case) which, if accepted, would establish with some reasonable measure of precision, what the pre-existing condition was and what its future effects, both as to their nature and their future development and progress, were likely to be." 81 This must be reconciled with an allowance for contingencies, including the contingencies of accident and ill health, in the assessment of damages (see now the principles discussed in Malec v J C Hutton Pty Ltd (1990) 169 CLR 638). If a contingency is known to be greater than normal, that should be taken into account. Applied to allowing for contingencies, the appellant's evidential burden required that it lead evidence capable of establishing the respondent's pre-existing condition and that its ordinary progression and impact may have brought or may yet bring his incapacity. Thus in Wilson v Peisley Barwick CJ said (at 209) that there was no Watts v Rake question because "[t]he existence of pre-existing condition and of its propensity for harm to the plaintiff was fully made out". 82 On any view, the exacerbation of the respondent's chondromalacia in the 1987 injury must have been significant. The respondent was functioning adequately as at February 1987, to the extent that Mr Carter cleared him for entry into the army and he had withstood some weeks of initial training. The appellant accepted that it was a serious exacerbation. The appellant did not lead evidence from which it could be found that the respondent's incapacity was in fact wholly or partly the result of the 1980 injury, or of any particular injury. On the contrary, Dr Coolican was adamant that the contributions of the injuries could not be determined. 83 In my opinion, however, in accordance with the Malec v J C Hutton Pty Ltd principles the chondromalacia should have been taken into account in the allowance for contingencies. The respondent was subject to the ordinary risk of slipping. But from the explanation of the condition given by Mr Khan, the respondent ran a greater risk than most that a slip or slips injuring his knee would bring incapacity, as the slip on 25 February 1987 did. Although Dr Coolican could not determine the contributions of the various injuries to the respondent's incapacity, that an injury such as the 1987 injury could contribute was not in question. The contingency that he might have slipped, or would do so, with injury creating incapacity because he was at greater risk than most, had to be recognized in arriving at his damages. 84 The judge assessed the damages - general damages $150,000.00 interest on general damages $22,500.00 past economic loss $300,000.00 interest on past wage loss $29,308.00 future economic loss $460,000.00 long service leave entitlement $5,689.00 interest on long service leave entitlement $3,156.00 loss of superannuation benefits $70,000.00 Fox v Wood $58,776.00 past domestic assistance $50,000.00 future domestic assistance $32,000.00 out-of-pocket expenses $166,842.67 future out-of-pocket expenses $100,000.00 $ 1,448,271.67

85 The judge made allowances effectively of 10 per cent for contingencies in relation to past economic loss and of 15 per cent for contingencies in relation to future economic loss. He did not make an allowance for contingencies in relation to any other component of the damages. 86 The appellant did not put submissions as to how any increased allowance for contingencies should be given effect. The contingency of a knee injury bringing incapacity because of the respondent's greater susceptibility would not operate equally in relation to all the components of the damages. Differential operation is illustrated by Overland Sydney Pty Ltd v Piatti (1992) Aust Torts Reps 81-191. In that case a whiplash injury led to a profound psychiatric condition, but an increased allowance for the plaintiff's vulnerable personality was made. The trial judge increased the allowance from the conventional 15 per cent to 30 per cent in relation to future economic loss. It was held that an allowance should also have been made in relation to general damages, future domestic assistance and "future treatment", and that the allowance should be 7.5 per cent. Kirby P said of the suggested across the board 15 per cent - "Whilst this was a beguiling mathematical solution to the problem which the appellant had pointed out, I do not believe that it follows logically. It is by no means certain that, had the respondent never been injured in the subject accident but suffered trauma otherwise, she would have had the same profound disabilities necessitating such significant household services, future treatment and dislocation of her life sounding in general damages. Thus, a person with an underlying vulnerable personality, as found, might suffer serious dislocation by another, separate and different trauma. But she might not need the same intensive household services and future treatment which Whealy ADCJ found were necessitated by the subject accident and its consequences. Whereas the risk of losing employment in the future required a deduction for the additional vicissitudes identified in the other heads of future claim, it did not require precisely the same deduction." 87 I make no pretence of precision. The respondent's risk increased with time. As to past economic loss, past domestic assistance and past out-of-pocket expenses, which covered a greater period than usual, the allowance should be increased by 10 per cent and applied to all three, so as to become and be 20 per cent. As to general damages, future domestic assistance and future out-of-pocket expenses it should be 25 per cent. As to future economic loss it should be increased by 20 per cent to 35 per cent. Other items will need consequential adjustment, and the parties no doubt can do the calculations. 88 The appellant has succeeded, but only in part. In my opinion, there should be no order for the costs of the appeal, so that the appellant and the respondent each pay their own costs. The judge's costs order should not be disturbed. 89 I propose the following orders -

Set aside the judgment for the plaintiff against the defendant in the sum of $1,448,271.67.

In lieu thereof, judgment for the plaintiff against the defendant for such sum as the parties shall advise the Registrar as a result of their calculations in accordance with these reasons, such advice to be given within 14 days.

Liberty to apply in the event of disagreement over calculation of the substituted judgment sum, application to be made in the first instance by telephone to the Associate of Giles JA.

No order as to the costs of the appeal. 90 HODGSON JA: I agree with Giles JA. 91 TOBIAS JA: I agree with Giles JA. **********

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Judgment (17 paragraphs)

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Cases Cited (13)