GOVERNMENT INSURANCE OFFICE OF NSW v ABOUSHADI

COUNSEL : A: R F Sutherland R: J D Hislop QC and I McGillicuddy SOLICITORS : A: Turner Whelan R: Somerville & Co CATCHWORDS : Negligence - personal injury - post traumatic stress disorder - causation - principles - second tort would have caused injury but damage greater because of aggravation of earlier tortious injury - avoidance of double compensation Fishlock v Plumber [1950] SASR 176 CASES CITED: State Government Insurance Commission v Oakley (1990) Aust Torts Rep 81-003 Faulkner v Keffalinos (1971) 45 ALJR 80 Boncristiano v Lohmann [1998] 4 VR 82 DECISION : Dismissed with costs

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v Bilal ABOUSHADI

1 MASON P: The respondent commenced working for the State Rail Authority in 1975. By 1981 he had become a conductor and corridor attendant on the inter-urban trains. 2 On 31 July 1985 there was a level crossing collision at Bredbo due to the admitted negligence of the appellant's insured. The respondent suffered post traumatic stress disorder as a result of witnessing the collision and its horrendous aftermath. People were killed, a child was dying, and other passengers in a motor vehicle were screaming with pain and fear. The respondent was thirty-four at the time. 3 The impact of these events upon the respondent was immediate, severe and continuing. Treatment and counselling by his general practitioner did little or nothing to relieve the symptoms of anxiety and depression, which included insomnia and nightmares. The respondent had waking and sleeping visions of dead and dying people. There were many days off work in the months which followed. 4 The respondent's domestic situation was somewhat fragile at the time. His wife, Leah, had two children of her own. The couple had a son (Benny) who was born in August 1986. The respondent had commenced a spiral into depression and heavy drinking. Leah's death from cancer in July 1987 had an obvious impact upon his ability to cope. Among other things, it removed an effective grief counsellor from this psychiatrically damaged man. 5 Comparatively minor events, including watching television news, would trigger vivid and distressing recollections of the accident. In April 1988 there was another level crossing accident (at Tarago) involving a train on which the respondent was working. There were no injuries, but the mere reporting of the incident by the train guard greatly upset the respondent. Because his reaction was out of proportion, it was properly viewed by his treating doctors as evidence of the continuing post traumatic stress disorder stemming from the 1985 accident. The learned trial judge (Wright ADCJ) so held. 6 In the first three years after the 1985 accident, the respondent took the medication prescribed for him. But he mixed it with heavy drinking and marijuana use. There were occasions when he was "too drunk to wake up" and on these days he failed to attend work or arrived late. 7 In 1989 the respondent travelled to Lebanon and married his present wife, Houda. They returned to Australia in 1990 and he went back to work on the trains. But heavy drinking, drug use and the symptoms of the depressive illness continued, despite prescribed drugs. 8 I pause at this stage to examine the medical evidence. It is recounted in the judgment (RB 49-57). His Honour generally accepted the evidence of the respondent's doctors, especially Dr Morse, a consultant psychiatrist. Dr Morse was of the opinion that the respondent's sleep disturbances, his alcohol and drug dependence and the depression itself were due to the 1985 accident, reinforced by subsequent events, feelings of low self esteem, lack of self confidence, and feelings of despair and helplessness. 9 Dr Morse considered that the psychiatric problems arising from the 1985 accident were the major cause of the respondent's ongoing depression and were likely to persist for the rest of the respondent's life. In the doctor's view, the respondent's failure to tackle his condition effectively was itself a consequence of the devastating illness. 10 Based on this and other evidence, the primary judge concluded that the 1985 accident caused significant psychiatric damage to the respondent which rendered him prone to recurrence of the symptoms I have recounted. The 1988 incident was simply or largely an incident of that kind. 11 The doctors called by the appellant did not support the respondent's case to a similar degree, but his Honour was entitled to prefer the evidence of Dr Morse and to reach the conclusions he did as to the psychiatric injury and the appellant's responsibility for causing it. With some qualification, the judge accepted the respondent as a witness of truth. He was corroborated by the evidence of his second wife and of a work mate, Mr Stewart. 12 In December 1991 there was a third level crossing accident, this time near Parkes. People were killed or injured in the motor vehicle and on the train. The respondent assisted with the rescue of the injured. The next day he attended his general practitioner, Dr Hourani. In the latter's words, the accident had "revived his previous memory and added more new elements of anxiety and depression". The respondent was referred to a consulting psychiatrist, Dr Ali, who made a firm diagnosis of post traumatic stress disorder stemming from the 1985 accident. 13 Subsequent counselling and treatment had little effect. The respondent would stay off alcohol and drugs for a time, then relapse. He went to hospital for treatment, including detoxification, in 1994 and 1996. It is hardly surprising that his condition affected his working life as well as his personal and family life. Nor is it surprising that his Honour concluded that it was probable that the respondent would not be able to keep his SRA job indefinitely. The judge held that it was probable that the job would be lost within four years after date of judgment. 14 With these preliminaries I turn to the three broad grounds of appeal, which are confined to quantum of damages.

Failure to take proper account of the proceedings arising out of the 1991 accident 15 In 1993 the respondent commenced proceedings in the District Court against CIC Insurance Ltd, the insurer of the motor vehicle whose driver's admitted negligence caused the 1991 accident near Parkes. The respondent had sued for damages for nervous shock and post traumatic stress disorder stemming from this accident. These proceedings were originally in tandem with the present action, but were settled in 1997 on the basis of a verdict of $146,000 inclusive of costs. The defendant in those proceedings was authorised to make various classes of deductions from the verdict (see BB 205). 16 The present appellant argued at trial that this verdict should be offset entirely against the damages otherwise payable in consequence of the 1985 accident. Reliance was placed upon Kempsey District Hospital v Thackham (1995) 36 NSWLR 492 (Thackham). 17 The primary judge rejected this submission. He held, correctly in my view, that there was no relevant statutory implication against double compensation. The issue was to be determined according to common law principles. His Honour cited Luntz, Assessment of Damages for Personal Injury and Death 3rd ed, par 2.5.2 and Fishlock v Plumber [1950] SASR 176. He paraphrased the common law principle as follows: Where further injury to a plaintiff results from a subsequent incidence [sic] of negligence, which would not have been sustained had he not been in the physical or mental state caused by the defendant's negligence, the added damages [sic] is directly linked to the original catastrophe, whereas if the injury … would have resulted from the subsequent negligent act, had the plaintiff been in normal condition of bodily health, but the damage sustained is greater because of the injured state, the extra damage, but only extra damage, is sufficiently connected.

18 The judge then applied this principle to the facts. He held that any damage caused by the incident at Tarago in 1988 occurred only because of the predisposition stemming from the effect of the 1985 accident; whereas the incident at Parkes in 1991 would have been likely to have caused damage had the respondent been in his normal condition at the time, although the damage sustained by him was greater because of his prior injured state. 19 On this basis, the appellant was held liable only for the extra damage stemming from the 1991 incident that was due to the respondent's previously injured condition. 20 Applying these principles to the medical and other evidence, the judge concluded that slightly less than two-thirds of the damage occurring and manifesting itself after 1991 was attributable to the 1985 accident. He held that the 1985 accident had had a significant impact on the respondent and that, despite the Parkes incident of 1991, the respondent's condition since that date had been largely as a result of the traumatic effects of the 1985 incident. 21 I detect no error in this approach to the difficult task of disentangling the traumatic impact of the two major accidents. It was clearly open to his Honour to find that the earlier accident had itself caused the psychiatric condition which would have and did in fact continue after 1991, notwithstanding that the 1991 accident both re-enlivened and exacerbated the earlier condition. 22 His Honour correctly applied Fishlock v Plumber, a case which (with others cited) was said by Malcolm CJ in State Government Insurance Commission v Oakley (1990) Aust Torts Rep ¶81-003 at 67,577 to be authority for the first two of the following three propositions: (1) where the further injury results from a subsequent accident, which would not have occurred had the plaintiff not been in the physical condition caused by the defendant's negligence, the added damage should be treated as caused by that negligence; (2) where the further injury results from a subsequent accident, which would have occurred had the plaintiff been in normal health, but the damage sustained is greater because of aggravation of the earlier injury, the additional damage resulting from the aggravated injury should be treated as caused by the defendant's negligence; and (3) where the further injury results from a subsequent accident which would have occurred had the plaintiff been in normal health and the damage sustained include no element of aggravation of the earlier injury, the subsequent accident and further injury should be regarded as causally independent of the first.

See also Faulkner v Keffalinos (1971) 45 ALJR 80 at 85, Neall v Watson (1960) 34 ALJR 364 at 367, Jefferies v Roads and Traffic Authority of NSW (28 November 1997, NSW Court of Appeal, unreported), Bridge Printery Pty Ltd v Mestre [1999] NSWCA 342 at [16]. 23 The appellant submitted that these principles do not apply to a situation (like the present) where the second incident (here, the 1991 accident) was itself tortious. It was submitted that, in those circumstances, the second tortfeasor takes the victim as he or she is found. So be it. But the question at issue is the extent of liability of the first tortfeasor in a situation where the continuing adverse impact of the first tort is discernible. It is not the law that the commission of a second tort, affecting an already vulnerable plaintiff, by itself puts an end to the liability of the defendant responsible for the first tort. In Faulkner, Windeyer J said (at 85): There is I think a critical distinction between a supervening happening that prevents a particular damage occurring as a result of the tort and a supervening happening that causes the harm caused by the tort to have added gravity. In the first class of case the supervening event diminishes the damages which flow from the tort: in the second class it merely adds to them, so that the tortfeasor responsible for the first accident remains liable for the harm he caused, which is not merged in the combined result of his wrongdoing and the later event. The distinction is not always either easily made or preserved.

See also Jobling v Associated Dairies Ltd [1982] AC 794 at 815.

24 In my view the trial judge correctly approached the task of determining the extent of the appellant's legal responsibility which its insured inflicted upon the respondent. 25 The appellant advanced an alternative submission, albeit one that at times tended to elide with the former submission. The appellant submitted that all, or alternatively some, of the money actually received by the respondent pursuant to the settlement of the proceedings arising out of the 1991 accident, represented compensation paid with respect to the 1985 tort. 26 The relevant principle is not in doubt. In Boncristiano v Lohmann [1998] 4 VR 82 at 89, Winneke P referred to the "rule against double compensation" which he summarised in the following terms: The law, which now embraces equity, will not permit a plaintiff, whatever procedural device is used, to recover more than the damages which have been suffered, no matter what the cause of action upon which he proceeds against the various defendants.

See also Castellan v Electric Power Transmission Pty Ltd (1967) 69 SR(NSW) 159 at 176, 187-8; Farrow Finance Company Ltd (in Liq) v ANZ Executors and Trustee Company Ltd [1998] 1 VR 50 at 79; Re Wakim; Ex parte McNally [1999] HCA 27 at [147]; CSR Ltd v D'Arcy [1999] NSWCA 216. This principle has been applied in the workers compensation/damages field (see Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR (NSW) 120, Thackham ). 27 Boncristiano was a case in which there were "concurrent" or "overlapping" claims for damages arising out of a building dispute. The owners had sued the builders and the local shire, alleging deficiencies in relation to the weatherboard cladding and foundations of a house. By way of defence, the builders alleged that the owners were estopped by an earlier compromise from making their claims. In consequence, the owners joined as further defendants the solicitors who had advised them in respect of the compromise. Before trial, the owners settled their claim against the solicitors for $5,000 and this sum was actually paid to them. The trial judge awarded the owners $7,600 against the builders for rectification work plus $1750 general damages. However, he held that $3,000 of the settlement sum of $5,000 paid by the solicitors should be deducted from the damages. (He had not been asked to offset the full $5,000.) 28 The challenge to this component of the damages award was rejected by the Victorian Court of Appeal. Winneke P (with whom Charles JA and Batt JA concurred) cited the English Court of Appeal decision in Townsend v Stone Toms & Partners (1984) 27 BLR 26. The facts were similar to Boncristiano in the sense that there were concurrent or overlapping claims in respect of the same total damage sustained by a building owner. The claim against one of the persons liable was settled by acceptance of a payment into court. The Court held that the owner should be required to give credit for the sum received. The relevant principle was stated by Oliver LJ (at 38) as being that: … where a plaintiff with concurrent claims against two persons has actually recovered all or part of his loss from another, that recovery goes in diminution of the damages which will be awarded against the defendant. (emphasis added)

29 Winneke P cited this passage from Townsend and applied it to the facts in Boncristiano. He emphasised (at 89) that the fundamental question was whether the claims against the various defendants were "concurrent" in the sense that the relief sought was the same. 30 The President then addressed an argument that the trial judge was in no position to call upon the owners to bring to account a portion of the settlement sum paid by the solicitors because there was nothing in the material before him which could have enabled him to find out what, if any, portion of the settlement sum was attributable to the satisfaction of the substance of the owners' claim as distinct from a claim, say, for the costs of that claim. Winneke P held that "the fact of payment" raised against the owners a presumption that the amount of the settlement was offered and accepted in satisfaction of the concurrent claim made by the owners against the solicitors and the builders. 31 The principle against double recovery is a broad one. However, there is a distinction between Boncristiano and the present case. Boncristiano involved concurrent or overlapping claims in respect of the same total damage sustained by a building owner. Here, by contrast, the liability of the successive tortfeasors was separate, arising in the one case in 1985 and in the other in 1991. 32 The question then arises whether the appellant made good its contention that all or alternatively some of the moneys received under the compromised verdict can be treated as received in relation to the loss stemming from the 1985 tort as it manifested itself after 1991. 33 I would reject the appellant's submission that the settlement of the action against the 1991 tortfeasor was intended to compensate the respondent for all loss after 5 December 1991. No doubt the respondent's claims against the two insurers overlapped to a considerable degree with respect to damage occurring post 1991. But non sequitur that the 1991 tortfeasor was concerned with anything other than its own exposure to damages stemming from the 1991 tort (see Wilson v Peisley (1976) 50 ALJR 207 at 209, Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485 at 498-9). 34 In my view the appellant has demonstrated no more than a possibly generous attitude taken by the 1991 tortfeasor to the issues tendered in those proceedings, including the issues of causation and economic loss. This does not mean that money paid under the settlement was intended to or had the effect of diminishing the respondent's post 1991 losses stemming from the 1985 tort.

Excessive award of general damages 35 The trial judge awarded $65,000 general damages. In doing so, he did not overlook the impact of the respondent's personal circumstances for which the appellant bore no responsibility (ie principally the death of the respondent's first wife), nor did he lump all responsibility after 1991 upon the shoulders of the appellant. General damages were assessed having regard to the whole of the damage suffered between 31 July 1985 and 4 December 1991 and sixty per cent of the non-economic loss suffered and to be suffered thereafter. 36 The appellant disputes the finding that the alcohol and marijuana abuses and their sequelae were relevantly caused by the 1985 accident. But this finding was clearly open in the light of Dr Morse's evidence. In my view, it was clearly correct, having regard to the respondent's history immediately following the 1985 accident, the acceptance of the respondent as a witness of credit, and the acceptance of the corroborating evidence from the respondent's second wife and his work mate Mr Stewart. 37 The impact of the 1985 accident upon the respondent was significant and permanent. The primary judge described the accident as causing a great deal of pain, stress, anxiety and depression and having a dramatic effect on his life and lifestyle and continuing into the future. The psychiatric illness was found to be genuine. Its impact upon the respondent was and continues to be very significant because of its material contribution to his depression, alcoholism and drug abuse with the consequences stemming therefrom. 38 An award of $65,000 for general damages was not excessive.

Excessive award of damages for impairment of future earning capacity 39 At the time of trial, the respondent was still employed by the SRA. Wright ADCJ held that the respondent was unfit for his position and that he would probably lose it within four years. Damages for impairment of future earning capacity were assessed accordingly, with due allowance being made for retained earning capacity. His Honour took into account the ability of the respondent to do some work and his capacity to earn money driving his taxi and in other forms of employment. However, he properly gave effect to the findings that the alcohol and drug dependent condition would have a continuing impact upon earning capacity. 40 Taking these and other considerations into account, including the possibility of alternative employment, but the potential limitations upon it, the trial judge concluded that the 1985 accident had caused a loss of slightly less than one-quarter of the overall capacity to earn. Applying this finding to the evidence, he concluded that damages for loss of future earning capacity should be assessed on the basis of a loss of approximately $150 net per week. Having done this, there was a larger than usual allowance for vicissitudes (twenty-five per cent), having regard to all of the circumstances including the effects of the 1985 and 1991 accidents. This resulted in an award of $56,000 for impairment of future earning capacity. 41 In its written submissions, the appellant challenged the trial judge's approach. Some of that challenge repeated the submissions concerning the impact of the 1991 accident. I have already addressed those matters. 42 The appellant sought to dispute the conclusion that the respondent would be likely to lose his job within four years. In my view the trial judge did not err in this prediction of the probable future impact of the continuing psychiatric problem upon the respondent's present employment. His Honour was entitled to have regard to the view which he formed about the extent of the continuing illness. There was evidence to show that the respondent's work history had been quite erratic. Employment in the public sector is not a haven for the incompetent. There was evidence that the SRA, which no longer enjoys the privileges of a monopolist, was undergoing significant organisational changes. 43 The respondent was entitled to be compensated with respect to the diminution of his capacity to earn by personal exertion, to the extent that this sounded in money (cf Graham v Baker (1961) 106 CLR 340). The appellant was critical of the fact that the respondent did not produce material relating to his earnings as a taxi driver in addition to his ordinary employment as a railway conductor. But the trial judge was in a position to make an assessment of the impact of the respondent's condition upon his capacity generally to obtain and retain gainful employment. 44 Confirmation that the assessment of $56,000 damages for impairment of future earning capacity was within an appropriate range comes from comparing this award with the suggestion by the appellant's counsel at trial that damages in the nature of a cushion in the order of $40,000 to $50,000 would be appropriate if it were found that there was a possibility that the respondent would lose his job with the SRA (Black AB 392, 447). The trial judge found that there was more than a possibility. 45 The appeal should be dismissed with costs. 46 MEAGHER JA: I agree with Mason P. 47 BARR AJA: I agree with Mason P. *************

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