Guiney v Australand Holdings Ltd & Ors; Castlehaven Sales No 2

Guiney v Australand Holdings Ltd & Ors; Castlehaven Sales No 2 - [2008] NSWCA 44 - NSWCA 2007 case summary — Zoe

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... 8. When the First Defendant constructed and manufactured the said premises for the Third Defendant or otherwise the premises contained a defect in that from a vent or other location large quantities of water would enter into the roof of the premises and be deposited on the bathroom floor and elsewhere in times of rain. 11 The learned trial judge correctly rejected a claim under s75AD of the Trade Practices Act 1974 on the basis that the section applied to defective goods, not land. 12 While addressing this claim, his Honour made findings that are well-grounded in the evidence (see Black 45-6, 72, 77-8; Blue 13-16, 45) which are relevant to issues in this Court. They have not been the subject of a Notice of Contention. 13 The Judge accepted that the house was defective when built in that water that should have got away through the downpipe was able to get into the house. So much appears to be common ground in the appeal. The defect involved the flashing around a vent pipe passing through the roof. The defect may have become masked when the roof tiles were put in place, but it was still easily capable of being identified and readily capable of being fixed, as happened after the accident (see Red 58N-P, 59Y). The Judge found that any failure on the builder's part to have remedied the problem, after it had been notified, would probably have been negligent (Red 61). In a later costs judgment his Honour referred to evidence that the leak could have been caused as a result of faulty workmanship when the premises were built (Red 76). 14 The builder was nevertheless acquitted of negligence because it did not become aware of the problem until notified by the owner after the accident (Red 57-8). 15 The appellant submits that this reasoning about the primacy of notification overlooked a basis for liability in negligence stemming from the admissions on the pleadings as to the first respondent's role as builder and the nature of the defect. I agree. 16 It is well established that a person who negligently manufactures goods or builds a structure is liable for the tort of negligence if a consumer or user in reasonable contemplation suffers reasonably foreseeable personal injury in consequence (Voli v Inglewood Shire Council (1962) 110 CLR 74 at 85; Bryan v Maloney (1994) 182 CLR 609 at 622-3, 625-6; Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16, (2004) 216 CLR 515 at 532-3[28]-[29], 539[51], 544[66]). Voli shows that it matters not that the building is taken over on completion without anyone being aware of the defect (see 110 CLR 74 at 83). In my view, the appellant as a member of the immediate family of the first occupiers of the newly built home was within the scope of such a duty of care. 17 I am prepared to infer that the defect was the product of negligence. I agree with the trial judge's conclusion in this regard (Red 57). To the extent that the inference is contentious I would refer again to para 8 of the pleading and the finding as to the remediability of the problem once brought to the attention of the builder. 18 Accordingly, I would uphold the appeal on liability against the first respondent. The verdict recoverable by the appellant should be entered against all three respondents with costs (see Supreme Court Act 1970, s75A(10)). Of course, the appellant is not entitled to a double satisfaction. 19 This means that the second and third respondents' foreshadowed appeal against the Bullock order falls away. Their summons should be dismissed with no order as to costs.

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(ii) Economic loss 25 The injury was found to have rendered the appellant unfit for work as a beautician, for heavy work, or for the repetitive use of the left wrist (Red 69). 26 Past out of pocket expenses were agreed at $100. Future out of pocket expenses were allowed at $7,500. 27 The Judge made cushion awards of $10,000 for past economic loss and $30,000 for future economic loss. He referred to the fact that the appellant had "not worked" for 18 years prior to the accident and that she had two young children. The appellant was 43 at the time of the accident and 47 at the time of the trial. When injured, she had two children aged four and one. By the time of trial she had three children whose ages ranged from eight to two. 28 Shortly before the accident appellant had enrolled in a course to advance her skills in the beauty industry. She said that she intended to establish her own business and that, if that did not work out, she would have obtained employment in that field. 29 The appellant conceded that the likelihood of the wrist problem becoming symptomatic at some stage meant that a greater than usual discount for vicissitudes was appropriate. Thirty percent was suggested. But, subject to this, she submitted that the Judge erred in awarding only "buffer" sums as distinct from damages assessed at the rate of $200 per week for past and future losses. She accepted the appropriateness of past damages covering 4.25 years being awarded for only 2.5 years, thereby allowing for periods of unpaid maternity leave and the likelihood of her business taking time to generate significant profits. 30 The appellant submits that the evidentiary onus of segregating the impact of the previous injury from that of the tortious injury rested upon the respondents. This is true, but I detect no error in the judge's approach to a difficult assessment exercise and in his conclusions in that regard. At the end of the day, compensation could only be awarded with respect to such disability causative of economic loss as stemmed from the negligence found against the respondents. 31 The appellant next points to a factual error that, in her submission, infected the approach to economic loss. The judge stated that the appellant "had not worked for eighteen years prior to this accident". As indicated, the appellant had given evidence that she had more recently performed secretarial duties for her parents' cleaning business and had also worked in her husband's art gallery. From time to time she did makeup work for weddings and other special occasions. No evidence was led as to the remuneration earned in these various roles. 32 If, which I doubt, the judge overlooked this evidence, no material error ensued. The judge was focusing upon the claim for economic loss as it had been framed. It had been pitched as a claim referable to lost earnings from a planned new business venture in the beauty industry, alternatively employment in that field. Confirmation that this was the focus of attention emerges from the following passage in the reasons (Red 69): So I am now faced with this problem. Eighteen years out of work, young children, what was she intending to do? She was intending to do a course, and she wanted to do some work. Would she have got work? If so, what would it have paid, how long would it have lasted, would her previous injury have come against her and stopped her from working, or would she have just continued on earning income for the next eighteen years having done this course? It is an extremely difficult assessment. 33 The appellant was gearing herself up to return to regular work in the paid workforce, but the likelihood that she would have done so were it not for the injury, and done so profitably, needed to be assessed against the background of her history of paid work in her chosen field. Other factors, including her age and the demands of an expanding family of young children were also required to be brought to account. 34 As indicated, the evidence does not reveal the extent to which the secretarial work, the assistance in the husband's art gallery and the casual makeup work done for weddings and other special occasions entailed payment. Furthermore, the appellant's capacity to continue secretarial duties for her parents' business and to work from time to time in her husband's art gallery was not shown to have been impaired by the fall that led to these proceedings. The Judge found that the appellant was not fit for all the work of a beautician, nor for "heavy work or repetitive use of her left wrist". 35 It was argued at trial on behalf of the appellant that the Judge should award her $200 per week. His Honour was not prepared to assess the case on that basis because he said to do so would be to totally overcompensate the appellant. His Honour explained this by saying: … I have to build into this that there are two reasons why the plaintiff may not be working, one from the fall some years ago, one from this fall. I have to build into it that she may not have got a job, as I set out earlier, or she may have got a job quite quickly. 36 In my opinion, the rejection of the claim for economic loss as it was framed, and the preference for assessment on a "cushion" basis was open to the primary judge having regard to the facts and the mandate of s13 of the Civil Liability Act 2002. 37 I would therefore reject the challenges to the award of economic loss.

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(iii) Domestic assistance 38 In the Statement of Claim the appellant claimed damages for domestic assistance because of her difficulties in attending to household tasks and child care. She intended to rely upon Sullivan v Gordon [1999] NSWCA 338, (1999) 47 NSWLR 319 in regard to the latter aspect of the claim. Sullivan v Gordon would have allowed domestic assistance damages to extend to the wider incapacity to care for her children. 39 The trial took place on 1 and 2 May 2006, that is after the High Court decision in CSR Ltd v Eddy [2005] HCA 64, (2005) 226 CLR 1 which had been handed down on 21 October 2005 and which had overruled Sullivan v Gordon. 40 The award that was made confined itself to an assessment of the impairment of the appellant's capacity to care for herself, as distinct from her children. In approaching the matter this way, the Judge followed the submissions of counsel and the common law as it stood when judgment was reserved on 2 May 2006. His Honour had been told that a draft bill to restore Sullivan v Gordon damages was "kicking around" (Black 168), but nothing more was done to address any wider claim for domestic assistance damages. 41 Judge Garling published his reasons on 7 July 2006 and entered verdicts accordingly. He heard argument about costs and addressed that matter on 18 August 2006. Formal orders were made on 25 October 2006. 42 On 20 June 2006 s15B of the Civil Liability Act 2002 commenced. This was before the reasons were published and the verdicts entered. The transitional provision inserted into Part 8 of Schedule 1 stipulated that s15B extended to civil liability arising before its commencement, except for proceedings that were finally determined before that commencement (see cl23(2)). The relevant effect of s15B was to restore Sullivan v Gordon damages for loss of capacity to provide domestic services but only with regard to the appellant's children at the time the claim arose. In other words, the appellant became entitled to domestic care damages extending to the impairment of her capacity to care for her two older children. 43 Regrettably, no one thought to draw this matter to the attention of the Judge or to amend the submissions framing the claim when judgment was reserved. It would appear that counsel representing the appellant at trial did not appreciate the retrospective operation of s15B and its capacity to apply to the instant proceedings which were not "finally determined" when s15B commenced. 44 The appellant submits that s15B would have enabled her claim for future domestic care damages to pass the statutory threshold in s15(3) of that Act. 45 The respondent submits that, had the matter been raised before judgment, the respondent would have asked for the matter to be relisted for the calling of further evidence and the making of further submissions. 46 The appellant responds by pointing to evidence led in the trial about the effect of the injury on her capacity to carry out domestic duties generally (Black 17, 49). Her husband also testified that, before the accident, the appellant did the cleaning, washing and ironing and cooking for the household. He took over these tasks after the accident. In the first nine months he was spending 6 or 7 hours a day doing household activities he had not previously done. Eventually the appellant resumed some cooking. She also attempted cleaning tasks, which had to be finished by her husband. Mr Guiney gave evidence that he spent a minimum of 30 hours per week performing tasks he did not do before the accident (Black 47-9). 47 The trial judge awarded $15,000 for past domestic assistance, basing this on a finding that the appellant would have needed approximately six hours a week assistance for herself for about 12 months. 48 As to the future, the judge found that the appellant would need three hours assistance a week as a result of the injury. Since, however, this did not overcome the threshold of six hours per week for a period greater than six months (Civil Liability Act, s15(3)) there was no award for this component (Red 71-72). 49 It is clear that the Judge confined himself to an award for domestic assistance referable to the appellant's incapacity to care for herself. That is what he was asked to do. And, when addressing Mr Guiney's evidence his Honour said (Red 70N): She clearly required assistance from her husband. He assessed it at about thirty hours a week and he probably did thirty hours a week, but because they had young children the actual amount I could award to her could not be in that area, even though he might have done that sort of work. 50 I agree with Einstein J, whose reasons I have had the advantage of reading, that it would be unfair to the respondents for this Court to award damages referable to s15B given that they had no opportunity to address such a case by evidence and submissions at first instance. There may have been evidence from the appellant and her husband relevant to such a case, but the respondents lost their opportunity to test it fully when the matter proceeded to judgment without the claim having been pressed. 51 I am also of the view that a case for a new trial on this issue has not been established. This is not just a situation where the trial judge applied the wrong law because he or she did not have the correct principles drawn to attention. In an adversarial system the Judge had to address the claims that were before him. Here the parties conducted the case on the basis that the law was as declared in CSR. It was later altered by statute but at a time when an application to reopen the case might have been made. None was made and the case proceeded to judgment. A new trial would be necessary to address the matter afresh. 52 I am not stating that the principles in Eggins v Brooms Head Bowling & Recreational Club Ltd (1986) 5 NSWLR 521 apply directly to a change in the law effected by statute after judgment is reserved. Rather, the applicable principle is that the court has a discretion to order a new trial in the interests of justice. What is done or omitted to be done at (or after) the trial is an important consideration that will affect the exercise of the court's discretion (see Calin v The Greater Union Organisation Pty Ltd (1991) 173 CLR 33 at 39). There was ample opportunity to apply to reopen that was not done and in the exercise of the discretion it should not be allowed to be done now by way of a new trial. 53 The appellant submits, in the alternative, that the award of damages for past and future domestic assistance was flawed independently of the failure to apply s15B. 54 The Judge found that the appellant was entitled to domestic assistance damages on her own account because the injury to her left wrist incapacitated her in the performance of her normal housework (even though she is right handed). Her need was proved by the fact that she required the assistance of her husband. His Honour also accepted the evidence of Dr Conrad, who estimated a need of six hours per week in March 2005, to the evidence of Dr Stephenson (the doctor called by the builder) who would have allowed only three hours per week for assistance stemming from the wrist injury. 55 His Honour found that the need was for six hours per week assistance for the first 12 months after the injury and thereafter three hours per week, sometimes less (Red 71). 56 The appellant submits that, having accepted her husband's evidence that he was providing up to 30 hours per week additional domestic assistance after the accident, the judge erred in awarding past care damages on the basis of 6 hours, reducing to 3 hours per week. 57 I do not agree. The evidence of the doctors clearly addressed the extent of assistance for which compensation was being sought. It never rose beyond a need for 6 hours per week. Mr Guiney's evidence obviously extended to domestic work for the whole family during a critical period immediately after the accident, whereas the common law component is confined to the injured plaintiff's need for assistance for herself. In any event, the judge did not err in accepting the doctors' opinion as to the quantum of the need for assistance stemming from the injury. 58 The following orders should be made:

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106 Neither the appellant (nor any other party) sought to re-list the matter before the trial judge. Counsel for the appellant conceded that it was not until the submissions had been completed and s15B was reviewed that it was noticed that it had retrospective application. This mistake was the reason why it was not taken up with the trial judge. (T30:5) 107 The trial judge delivered judgment on 7 July 2006. The District Court proceedings were not 'finally determined' until 18 August 2006. The judgment in the District Court proceedings did not take effect until the date when the judgment was given (Part 36 Rule 4 UCPR). 108 No party considered approaching the trial judge on this issue after the Judgment had been given. 109 The appellant submitted that on what was a common mistake at least between the plaintiff and trial judge, the damages were determined on a wrong basis: T28:45. 110 If s15B damages were to be calculated, the amount to be awarded would be dependent on the appellant's circumstances at the time of the liability. As such, the damages are to be limited to the appellant's two older children born prior to the accident, with her husband not being regarded as a dependent under the Act. (T26:40) 111 The appellant's submission was that under the Sullivan v Gordon framework and s15B, there was a threshold that needed to be met - being that there was a reasonable expectation that, but for the injury to which the damages relate, the claimant would have provided the domestic services to her 2 older children for at least 6 hours per week for at least 6 consecutive months (s15B(c) of the Act). 112 It is necessary to recall that the trial judge found that the appellant was entitled to past domestic assistance damages because she had required more than 6 hours week of assistance for 12 months. The trial judge did not give her damages for any future domestic assistance because at the time of the trial she required 3 hours a week of care and that she might have required more when she had surgery on her wrist in the future, but that there was not enough evidence and so the appellant did not reach the necessary threshold. 113 Mr Williams (for the second and third respondents) submitted that if the appellant had wanted to take advantage of the favourable s15B introduction once it had been passed, it was incumbent on the appellant to go back to the trial judge and seek to re-list the matter prior to the delivery of the judgment to request an allowance for future domestic assistance damages. 114 The second and third respondents have submitted that their approach to the case would have differed in that, had the appellant (while the judgment was reserved) asserted that she sought to rely on the introduction of s15B, the second and third respondents would have recalled the parties and witnesses and asked for the matter to be re-listed to hear further evidence on that point. (T45) 115 In my view the issue is resolved in terms of considerations of natural justice, seen in terms of the forensic position: cf Calin v The Greater Union Organisation Pty Ltd (1991) 100 ALR 746 per Mason CJ, Deane, Toohey and Mc Hugh JJ [at 750]: "The Court's jurisdiction to order a new trial depends upon the demands of justice …what is done or omitted to be done at trial is an important consideration and will affect the exercise of the court's jurisdiction". 116 Plainly the respondents to the appeal would suffer procedural unfairness if this Court were to make the findings of fact on the issue because the respondents have not had the opportunity to put their case in full on this issue to allow a trial judge to make the relevant findings. 117 Nor is it appropriate to remit only the issue raised by section 15B to the trial judge for reconsideration. 118 The appellant should be restricted to her case presented at trial.

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