Geagea v New South Wales Insurance Ministerial Corporation

LOWER COURT Supreme Court (Master) JURISDICTION : LOWER COURT 15305/1985 FILE NUMBER(S) : LOWER COURT Master Malpass JUDICIAL OFFICER :

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

85/15305 John Geagea v New South Wales Insurance Ministerial Corporation (formerly the Government Insurance Office of New South Wales)

JUDGMENT 1 The appellant was born on 28 May 1983. On 3 May 1985 he, along with other members of his family, was a passenger in a motor vehicle being driven by his father east in Elizabeth Drive, Mount Pritchard, when a vehicle being driven in the opposite direction by Mr Cosmidis crossed onto its incorrect side of the road and collided head on with the vehicle containing the appellant. As a result of injuries sustained by him in the collision the appellant was rendered paraplegic. Other members of his family were also seriously injured. 2 Mr Cosmidis was affected by alcohol at the time. His blood alcohol reading shortly after the accident was 0.170 as recorded in the certificate under the Motor Traffic Act 1909 section 4E. He was charged with four counts of culpable driving arising out of the incident and pleaded guilty to those charges. Sentence was deferred upon him entering a recognizance in the sum of $1 000 to be of good behaviour for three years, and he was disqualified from driving for five years. 3 On 21 August 1985 proceedings were commenced in this Court on behalf of the appellant to recover damages for the injuries sustained. The proceedings were brought against the Government Insurance Office of New South Wales as required by the Motor Vehicles (Third Party Insurance) Act 1942 ("the Act") section 14. 4 The form of the Statement of Claim by which the proceedings were commenced was unremarkable. Relevantly, paragraph 7 of the Statement of Claim claimed damages from the respondent pursuant to the provisions of the Act, and the final paragraph of the Statement of Claim stated, "The plaintiff claims damages together with interest thereon". There was no reference in the Statement of Claim to any claim for exemplary or aggravated damages, nor was there any reference to structured settlements or insurance bonds. 5 The respondent admitted liability on 30 October 1986. 6 On 21 August 2003, the appellant's solicitor filed a Statement of Particulars ("the statement") pursuant to Supreme Court Rules ("SCR"), Pt 33 r 8A. The statement contained paragraphs 11-14. In short, paragraph 11 called upon the respondent to enter into a structured settlement whereby it agreed to pay future outgoings and Griffiths v Kerkemeyer type compensation for the rest of the appellant's life; paragraph 12 called upon the respondent to enter into a structured settlement whereby it agreed to pay average weekly earnings (less taxation) to the appellant to age 65 or for as long as he lived up to that age; paragraph 13 provided that, in the event the respondent was not prepared to offer the appellant a structured settlement as sought in paragraphs 11 and/or 12, the appellant claimed the cost of an insurance bond or annuity to provide the benefits sought from the respondent in paragraphs 11 and/or 12 or alternatively wage and other losses indexed to future movements; paragraph 14 claimed aggravated and/or exemplary damages, and set out facts and matters relied upon to support such claims. 7 The respondent declined to enter into a structured settlement and on 21 October 2003 filed a Notice of Motion, in effect, seeking to strike out paragraphs 11-14 inclusive of the statement. 8 On 27 October 2003, the appellant filed a Notice of Motion seeking leave to amend the Statement of Claim to the form annexed to the Notice of Motion. Relevantly, the proposed amended Statement of Claim made no amendment to paragraph 7 of the original Statement of Claim. It amended the final paragraph of the original Statement of Claim to read, "The plaintiff claims damages including aggravated and exemplary damages together with interest thereon", and added after that paragraph the following: "Particulars of the facts and matters relied upon in the plaintiff's claims for aggravated and exemplary damages: a) The defendant's insured, Nicholas Cosmidis, drove his vehicle onto the incorrect side of the roadway and into a head on collision with the motor vehicle in which the plaintiff was travelling with his family. At the time the said Cosmidis had a blood alcohol reading of 0.190. A copy of the Police report is attached and marked "A". b) Such action by the said Cosmidis was high-handed and in contumelious disregard of the rights of the plaintiff and his family. c) The plaintiff was thus at aged 1 year 11 months rendered paraplegic and condemned to life in a wheelchair. In the same accident both his parents sustained multiple injuries and were hospitalised. d) The said Cosmidis on 8 May 1987 in the Penrith District Court pleaded guilty to four counts of culpable driving and the Crown dropped a PCA charge that had been brought against him. e) Neither the plaintiff nor his family are aware of any reason for the Crown to have dropped the PCA charge. f) The said Cosmidis was placed by the Court on a three year good behaviour bond in the amount of $1 000 and his driving licence was suspended for a total period of five years. g) The plaintiff's solicitor on 25 May 1987 wrote to the then Attorney-General Sheahan in relation to this sentence. A copy of that letter is attached hereto and marked "B". h) The said then Attorney-General Sheahan responded to that letter by correspondence to the plaintiff's then Parliamentary Representative, Mr P Rogan MP by letter dated 16 September 1987. A copy of that letter is attached hereto and marked "C". i) The foregoing matters, when added to the plaintiff's grave and permanent injury inflicted upon him in his infancy, have caused distress, upset and anger additional to the injury itself".

Exhibits A, B and C were attached to the proposed amended Statement of Claim. 9 The Notices of Motion were heard together by Master Malpass. On 30 March 2004, the Master gave judgment. He refused the application to amend the Statement of Claim and upheld the application to strike out paragraphs 11-14 of the statement. The appellant was ordered to pay the costs of each application. 10 The appellant has appealed from the judgment of the Master to a single judge pursuant to SCR Pt 60 r 10. In such an appeal, "…the single judge is now restricted in relation to his review of the Master's findings of fact and exercise of discretion in the same way as is any appellate court, as stated in Warren v Coombes (1979) 142 CLR 531, at p 551 and House v The King (1936) 55 CLR 499 at pp 504, 505" see Martin v Abbott Australasia Pty Ltd (1981) 2 NSWLR 430 at 433. 11 As Kirby P (with whom Meagher and Powell JJA agreed) said in Morrison v Judd (Court of Appeal, unreported, 10 October 1995) the appellate function was to be approached by the single judge appreciating that he was: "reviewing a discretionary decision of the primary decision maker which should not be disturbed unless it was shown to be wrong in some relevant respect - i.e, for failing to take into account a material consideration; for taking into account an immaterial consideration; for reaching a conclusion which was otherwise manifestly wrong; or for evidencing an error of principle...It is self evident that, in appeals of this character within the Supreme Court, it cannot have been Parliament's intention that one member of the Supreme Court (a single Judge) should simply substitute his or her opinion on a discretionary decision concerning a matter of practice for that earlier determined by another member of the Supreme Court (a Master). If this were the principle of appellate review, few cases would conclude at a Master. Every contested case where the party had "a long pocket" would be taken for redetermination by a Judge." 12 The SCR provide that an originating process shall state specifically the relief claimed by the plaintiff (Pt 7 r 1(1)); that the necessary particulars of any claim shall be given by the party pleading (Pt 16 r 1(1)) by setting them out in the pleading or in a separate document referred to in the pleading (Pt 16 r 6(1)); that out of pocket expenses are to be particularised (Pt 16 r 5) that the plaintiff shall, in the Statement of Claim, plead specifically any matter which, if not pleaded specifically, may take the defendant by surprise (Pt 15 r 13(1)). SCR Pt 7 r 1(4) requires exemplary damages and aggravated compensatory damages be specifically claimed in the originating process; SCR Pt 16 r 5A requires a party claiming exemplary damages give particulars of the facts and matters on which he or she relies to establish that claim. SCR Pt 16 r 5B provides similarly in respect of aggravated compensatory damages. At the time of the filing of the Statement of Claim each of these rules was in force in its present or a similar form, save that Pt 16 r 5B was added in 1988, at which time Pt 7 r 1(4) was amended to include aggravated compensatory damages. 13 The proceedings were conducted on the basis the appellant was required to specifically claim and particularise the claim for both exemplary and aggravated compensatory damages.

The Appellant's motion 14 The Master refused the application to amend [23]. He did so on the basis there were serious deficiencies in the particulars [24] and they fell well short of being adequate [26]. He referred particularly to the failure to provide separate particulars of the claim for exemplary damages and the claim for aggravated damages [25] and that a significant part of the material was irrelevant [28]. 15 I agree with the Master that the particulars were deficient. Mr Kelly, the solicitor for the appellant, submitted the claim was adequately particularised and, if it was not, it was for the respondent to seek further and better particulars. I do not accept that submission. Clearly there was an obligation upon the appellant to properly assert and particularise the claims for aggravated and exemplary damages in the Statement of Claim. The respondent had in fact sought further and better particulars (Exhibit 2), the response to which was unsatisfactory. 16 It may be another judicial officer would have exercised the discretion differently than the Master. It may be another judicial officer would have allowed the amendment subject to the particulars first being rectified. However, as Kirby P makes clear in Morrison v Judd, the question is not what another judicial officer might have done, but whether there was error in the actual exercise of the discretion by the Master. 17 In my opinion the exercise of discretion by the Master was open to him, particularly as there was no request by the appellant to rectify the particulars. In my opinion no error in the exercise of discretion has been demonstrated and I would uphold the Master's decision to refuse the application to amend. 18 The respondent submitted the Master's comments in paragraphs 30 - 32 of his judgment provide a second basis for the conclusion that the application to amend should be dismissed. 19 Paragraphs 30 - 32 are in the following terms: "30 The application to amend is brought about 18 years after the commencement of the proceedings. This is a very lengthy delay which is left unexplained. There will be presumptive prejudice. In the light of the inadequacy of the particulars, it is not really possible to make an assessment of actual prejudice. 31 For completeness, I observe it appears that Cosmidis remains available. Also, it appears that the member of the force who investigated the accident is available. 32 The plaintiff bears the onus of satisfying the court that the discretionary power to allow the proposed amendment should be exercised in his favour. I am not satisfied that such onus has been discharged." 20 Whilst the comments in [32] lend some support to the respondent's submission, it would be inconsistent with the Master's comments at [29] to regard the comments in paragraphs [30] - [32] as providing a separate basis upon which the Master reached his conclusion. I interpret [32] as relating to the exercise of discretion referred to in [29]. 21 However, if paragraphs [30] - [32] were to be regarded as providing a separate basis for the Master's conclusion I would uphold the conclusion on that basis. The discretion is a broad one. No explanation has been proffered for the inordinate delay which occurred between the commencement of the proceedings and the notification of an intention to claim aggravated and exemplary damages. Such delay gives rise to presumed prejudice (even in the absence of actual prejudice). In these circumstances it was open to the Master to conclude the respondent should not be put to the difficulty and expense of investigating the circumstances of the matter and defending the new claims at this late stage, particularly as the appellant's prospects of success on those claims were poor or non-existent - see Hunter Area Health Service v Marchlewski (2000) 51 NSWLR 268; Gray v Motor Accident Commission (1998) 196 CLR 1.

The Respondent's motion 22 SCR Pt 33 r 8A applies to personal injury actions in the Common Law Division. It requires the service by the plaintiff upon the other parties of a statement specifying certain particulars as a prerequisite to the filing of a notice to set the proceedings down for trial. As the Master correctly held, "The rule operates in the context of what is alleged in the Statement of Claim. It is contemplated that the particulars so furnished are the particulars of what is alleged in the Statement of Claim. It is not intended that it be used as a vehicle to avoid making necessary amendments to the Statement of Claim" [35] 23 The Master treated the respondent's motion as one to strike out paragraphs 11-14 of the statement pursuant to SCR Pt 65 r 5. 24 SCR Pt 65 r 5 states, "The Court may order to be struck out of any document any matter which is scandalous, frivolous, vexatious, irrelevant or otherwise oppressive". 25 The Master found:

a) It was common ground the Court had no power to order a structured settlement in the absence of agreement by the parties. As there was no such agreement, the retention of paragraphs 11 and 12 of the statement lacked utility [40].

b) Paragraph 13 of the statement informed the respondent of a head of damage which the appellant proposed to claim at the trial. Such claim should have been specifically pleaded in the Statement of Claim [49]-[50].

c) Paragraph 14 was not pleaded in the Statement of Claim and an application to amend the Statement of Claim to include such matter had been unsuccessful [51]. 26 The Master's findings referred to in paragraph 25 a) and c) are clearly correct. 27 The claim advanced in paragraph 13 of the statement was one which Mr Kelly explained in his submissions to the Master as follows (T 26/50): "In other words, if you are postulating $100 000 worth of loss based upon what can only be the most general of assessments that the worker has another 20 years to live, then to just apply the discount rate and produce a capital sum is one thing; but to provide for the purchase of an insurance bond to enable that payment to be made as long as the worker shall, in fact, live, be it more or less than 20 years, is a different matter, and that is the argument the plaintiff proposes to advance at trial." 28 Such a claim is contrary to the settled approach to the assessment of damages in this Court. Damages are assessed at the date of judgment once and for all - Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 at 292. Evidence as to the likely course of inflation, or of possible future changes in rates of wages or of prices, is inadmissible. The discount rate is intended to make the appropriate allowance for inflation, for future changes in rates of wages generally or of prices, and for tax (either actual or notional) upon income from investment of the sum awarded. No further allowance should be made for these matters - Todorovic v Waller (1981) 150 CLR 402 at 409. Section 35B of the Act confirms the application of the settled approach to claims thereunder. Paragraph 7 of the Statement of Claim confirms that the damages are claimed pursuant to the provisions of the Act. 29 I agree with the Master that if such a claim is to be pursued it is necessary it be pleaded and particularised in the Statement of Claim. The Rules so require (SCR Pt 7 r 1(1), Pt 15 r 13, Pt 16 r 1, Pt 16 r 5). I am unable to accept the argument advanced by Mr Kelly that this claim was not required to be asserted or particularised in the Statement of Claim as it was merely an element of out of pocket expenses. 30 The Master held that paragraphs 11-14 inclusive of the statement should be struck out in the exercise of the discretion conferred by SCR Pt 65 r 5 [55]. He said, "Statements served pursuant to Pt 33 r 8A should comply with its requirements. They should not be used for other than their intended purpose (such as advancing claims that are not pleaded in the Statement of Claim). In this case, a substantial body of material is involved. The striking out of the relevant part of the statement has utility in that it confines the document to relevant material." [54] 31 In my opinion, no error in the Master's exercise of his discretion has been demonstrated, and I would uphold the Master's decision in respect of the respondent's Notice of Motion. 32 I note, for completeness, the Master rejected the tender by the appellant of certain documents. These comprised, in short, a report of Ms Campbell dated 28 January 2004 which provided information as to structured settlements, annuities and taxation, and correspondence between the appellant's solicitors and the NSW Treasurer seeking a structured settlement. The Master rejected the tender of these documents, inter alia, on the grounds of relevance [39]. In my opinion he was correct to do so. Even if admitted, the content of such documents would not have impacted upon the conclusions reached by the Master.

33 The appeal is dismissed. The appellant is to pay the respondent's costs of the appeal. **********

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