JANET M. GILCHRIST & ORS. v. THE ESTATE OF THE LATE SARA ALEXANDER TAYLOR [2004] NSWCA 476

Court of Appeal (NSW)|2004-12-21|Before: Mason P, Beazley JA, Giles JA, Sperling J

CITATION : JANET M. GILCHRIST & ORS. v. THE ESTATE OF THE LATE SARA ALEXANDER TAYLOR [2004] NSWCA 476 HEARING DATE(S) : 13/12/2004; 14/12/2004 JUDGMENT DATE : 21 December 2004

JUDGMENT OF : Mason P; Beazley JA; Giles JA DECISION : 1. Dismiss the notice of motion to adduce further evidence.; 2 Summons for Leave to Appeal dismissed.; 3. The claimants are to pay the respondent's costs.

CATCHWORDS : JUDGMENT - Consent judgment - Death of plaintiff - Whether defendant entitled to a reduction in the amount of damages payable where plaintiff dies shortly after the date of consent judgment. - APPEAL - Supreme Court Act 1970 (NSW), s.75A - Construction - Appeal to the Court of Appeal is by way of re-hearing - Discretion to admit further evidence - Power conferred by s.75A is to be construed in the appellate context - Importance of public interest in finality of litigation. LEGISLATION CITED : Supreme Court Act 1970 (NSW) Supreme Court Rules 1970 (NSW) Doherty v. Liverpool District Council (1991) 22 NSWLR 284 CASES CITED : McCann v. Sheppard [1973] 1 WLR 540 Mulholland v. Mitchell [1971] AC 666 Public Trustee; Saroukas (decd) v. Sutherland Shire Council (1992) Aust Torts Reports 81-149 PARTIES : Janet M. Gilchrist, Adrian Lowe and the Greater Murray Health Service (Claimants) The Estae of the lata Sara Alexander Taylor (Opponent) FILE NUMBER(S) : CA 40412/2003 COUNSEL : P. Brereton SC (Claimant) B. Walker SC/L. McCallum (Opponent) SOLICITORS : Blake Dawson Waldron (Claimant) Marshall Sheehan & Associates (Opponent)

LOWER COURT Supreme Court JURISDICTION : LOWER COURT SC20391/1999 FILE NUMBER(S) : LOWER COURT Sperling J JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40412/03

MASON P BEAZLEY JA GILES JA

21 December 2004 JANET M. GILCHRIST & ORS. v. THE ESTATE OF THE LATE SARA ALEXANDER TAYLOR

The claimants treated the opponent after she was hit in the head by a golf ball just prior to her 12th birthday. The opponent brought proceedings claiming that the claimants had been negligent in relation to their advice and treatment of her injuries. The claim settled without admission of liability in the sum of $2.5 million plus costs. The opponent died 4 weeks after the date of the consent judgment. The claimants sought leave to appeal the judgment in favour of the opponent be set aside and that the matter be remitted to the Common Law Division to proceed to trial. HELD per curiam:

(i) Damages for personal injury are awarded by way of lump sum on a once and for all basis and, as a general rule, once fixed, are not revised to take subsequent developments into account: Doherty v Liverpool District Council (1991) 22 NSWLR 284 .

(ii) Pursuant to s.75A of the Supreme Court Act , an appeal to the Court of Appeal is by way of re-hearing thereby empowering the Court to reassess damages on the basis of current facts. However, the power conferred by s.75A is to be construed in the appellate context which includes the general public interest in the finality of litigation and the nature of the action: Doherty v Liverpool District Council (1991) 22 NSWLR 284 ; McCann v Sheppard [1973] 1 WLR 540 distinguished.

(iii) In the absence of evidence that, in the negotiation of the Terms of Settlement, the claimants did not understand the conceptual basis underlying the use of life tables or that they were ignorant of the possibility that the opponent may have an early death due to a variety of causes, leave must be refused. ORDERS 1. Dismiss the notice of motion to adduce further evidence.

The claimants are to pay the respondent's costs. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40412/03

MASON P BEAZLEY JA GILES JA

21 December 2004 JANET M. GILCHRIST & ORS. v. THE ESTATE OF THE LATE SARA ALEXANDER TAYLOR Judgment 1 THE COURT: On 25 April 1987, Sara Taylor (the plaintiff) who was then almost 12 years of age, sustained an injury when she was hit in the head by a golf ball struck by her brother. The children were, at the time of the accident, at home on the country property owned by their father. On the same day the first claimant (Dr. Gilchrist) was consulted in respect of the plaintiff's injury and between 27 and 29 April 1987, the second claimant (Dr. Lowe) was consulted and carried out operative treatment on her at the Wagga Wagga Base Hospital, operated by the third claimant (the Greater Murray Health Service). Following treatment, it was alleged that amongst other things, she was left with a significant neurological deficit and suffered from frequent severe epileptic seizures and spontaneous uncontrolled grande mal epileptic seizures. 2 In 1999, the plaintiff commenced proceedings against her father and against the claimants. She claimed her father had been negligent in relation to her brother's hitting of the golf ball and claimed she had received negligent advice and treatment from the claimants. 3 Subsequently the proceedings against her father were discontinued. The proceedings against the claimants were proceeded with and were set down for hearing for 10 days commencing on 4 November 2002. Prior to that, on 31 October 2002, the claim was settled, without admission of liability in the sum of $2.5 million plus costs. At that time, the settlement was provisional, subject to obtaining certain confirmations from the provisional liquidator of United Medical Protection, the medical insurers for the first and second claimants. That confirmation was forthcoming and on 20 December 2002, Terms of Settlement were filed in the Registry of the Supreme Court. The Terms of Settlement were not entered at that time as orders of the Court. This appears to have been an oversight and was not noticed until during the course of the hearing before this Court. The matter was rectified, with the consent of the Opponent, by order made under Pt 40 r.3. The Court ordered that the orders take effect as at 20 December 2002. 4 On 21 January 2003, the plaintiff died following an epileptic seizure. Subsequently, her mother, as executrix of her estate was substituted as plaintiff in the proceedings and is the opponent on the Summons for Leave to Appeal. Shortly prior to the date of death, portion of the settlement moneys ($2 million) were paid on behalf of Drs. Gilchrist and Lowe to Sara Taylor's solicitors. After her death, the balance of the settlement moneys ($500,000.00) agreed to be paid by the Greater Murray Health Service were paid and are held by the estate's solicitors pending the outcome of these proceedings. 5 On 3 February 2003, the claimants filed a Notice of Appeal seeking orders that the judgment in favour of the plaintiff be set aside and that the proceedings be remitted to the Common Law Division to proceed to trial. The grounds of appeal were that the orders embodied in the Terms of Settlement were made on the basis of a fundamental mistake that the plaintiff would live for an appreciable period following the judgment and would benefit from it (Ground 1). It was contended that that assumption had been falsified by her death (Ground 2) and that in the circumstances the damages were thereby, manifestly excessive (Ground 3). Those grounds of appeal formed the basis of the argument that was advanced in this Court. 6 Under s.101(2)(c) of the Supreme Court Act an appeal does not lie in respect of a judgment or order made by consent except by leave of the Court of Appeal. Accordingly, the appeal was incompetent. That matter was also rectified and the Claimants obtained an extension of time in which to file an Ordinary Summons for Leave to Appeal. Subject to that procedural error, the matter proceeded on the agreed basis that the relevant steps to invoke the Court's appellate jurisdiction were made within time. 7 The matter has now proceeded before this Court by way of a combined hearing of the Ordinary Summons for Leave to Appeal with the intent that if leave is granted the Court would determine the appeal at the same time without the need for additional argument.

Issues on the appeal 8 The claimants argued that the Court should set aside the consent order for the reasons embodied in the grounds of appeal. They did not rely upon any principle of mistake to attack the contractual basis underlying the consent orders.

Evidence sought to be adduced on the appeal 9 The claimants sought leave to adduce further evidence on the appeal, by way of affidavit evidence of Ms Bylhouser, the solicitor with the conduct of the matter on the part of the claimants, Mr M. McHugh, junior counsel for the claimants and Ms Tully, solicitor, who, we infer, had the day to day carriage of the matter for the claimants. Ms Bylhouser's evidence referred to the settlement of the matter and annexed the Terms of Settlement. She deposed to having been informed of the death of the plaintiff. Mr McHugh had prepared a detailed memorandum of quantum of damages for the purposes of the settlement negotiations which were annexed to his affidavit. Ms Tully's affidavit annexed the autopsy report and related documents. She also gave evidence to which I will refer shortly. The evidence was read, subject to the Court determining, as part of its consideration of the matter, whether it would allow the further evidence to be adduced. Notwithstanding our conclusion on the summons for leave to appeal, it is convenient at this point to refer in brief detail to the evidence of Mr McHugh and Ms Tully.

10 In his memorandum on quantum, Mr McHugh, junior counsel for the claimants, provided a detailed assessment of the various components of the plaintiff's damages claim. His memorandum reveals that the plaintiff had provided particulars of most aspects of her claim which totalled approximately $6.5 million. Junior counsel made an assessment on behalf of the claimants of those components which ranged between $1.7 million and $3.2 million. It is immediately apparent that the claim was settled in about the mid-range of the assessment made on behalf of the claimants. It is also apparent from the memorandum of quantum that the consent judgment included significant provision for future losses including future economic loss, future care and assistance and future medical costs. 11 In making his assessments in respect of future losses, as well as his assessment of general damages, Mr McHugh relied on the Australian Life Tables 1998 - 2000 which specified the life expectancy of a female aged 27.5 (the plaintiff's age at the date of the assessment) to be 55.4 years. These tables were more generous than the life expectancy upon which the plaintiff's claims had been calculated, which had been based upon a life expectancy of 47.5 years. Nothing however, for present purposes, turns on that. 12 Mr McHugh applied a discount of 20% for vicissitudes. This was slightly higher than the conventional discount of 15%. In his memorandum, he explained the use of the higher discount on the basis that the plaintiff lived in the country where employment opportunities were more limited and because she may have had a period out of the work force whilst having children. 13 Ms Tully, in her affidavit of 26 November 2004, annexed the autopsy report. She also referred to Mr McHugh's memorandum of quantum. She observed that in that memorandum no provision had been made for a discount for life expectancy. She then said: "The evidence therefore shows an intention to settle the claim on the basis of a full life expectancy, whereas the plaintiff died the day following receipt of the settlement moneys and if this had been known, no allowance would have been made for damages for future needs. If it had been known that the life expectancy would be 1 day following receipt of the settlement moneys, there would have been a very different settlement sum."

Principles to be applied 14 The issue before the Court is not one which commonly arises, although it is not novel. A similar issue arose for consideration in Doherty v. Liverpool District Council (1991) 22 NSWLR 284. In that case, there had been a jury trial in which the plaintiff had been awarded substantial damages, including for future losses. The Court accepted that in the jury's assessment of damages it would properly have assumed a substantial life expectancy. The Court also knew that, in the charge to the jury, the trial judge had directed the jury to take into account certain contingencies, including that the plaintiff might not live until retirement age. The plaintiff lodged an appeal challenging the award of damages. Approximately 3 months after the filing of the appeal (and about 4 months after the jury verdict), the plaintiff died. The defendant became aware of the plaintiff's death a few days prior to the commencement of the hearing of the appeal. It thereupon sought leave to file a Notice of Cross-Appeal in which it argued that in the circumstances, the damages awarded to the plaintiff were excessive as they must have been based, in a large part, upon an estimate of his future life expectancy which, as events had happened, was erroneous. 15 Gleeson CJ, Meagher and Handley JJA agreeing, stated, at 292: "The principles to be applied to the resolution of this problem are to be derived from three sources. First, a consideration of the nature of the process that was involved in the assessment of the plaintiff's damages at the trial; secondly, a consideration of the nature of the process that is involved in the determination of an appeal from the result at first instance; thirdly, an examination and application of the relevant statutory provisions relating to the admissibility of fresh evidence upon an appeal. In addition, there are general discretionary considerations to be borne in mind." 16 Gleeson CJ then proceeded to consider each of those aspects. For present purposes, it is sufficient to refer in brief terms to those principles. 17 First, his Honour pointed out that damages for personal injury are awarded by way of a lump sum on a once and for all basis, and, as a general rule, once fixed, are not revised to take subsequent developments into account that might otherwise cause the damages to be increased or decreased. 18 Secondly, an appeal to the Court of Appeal is by way of re-hearing pursuant to s.75A. Under that section, the Court itself has power to reassess damages and if it does so, it would proceed on the basis of current facts. However, as Gleeson CJ pointed out, the power conferred on the Court by s.75A is to be construed in the context that the Court is hearing an appeal and not a re-trial. His Honour noted, at p.294, that if s.75A was construed out of context, it would be given a more extreme operation than was properly the case. He observed: "No one has ever contended that routine quantum appeals should all begin with the tender of evidence bringing up to date the state of information as to the plaintiff's medical condition." 19 His Honour continued at p.295, that for the same reason, the principles according to which the appellate court exercised its discretion to admit or reject evidence are based upon the appellant context in which the discretion operates. That includes the general public interest in the finality of litigation. His Honour also considered that the nature of the litigation the subject of the appeal might also be a relevant discretionary factor to take into account. 20 Gleeson J concluded, in a passage which, because it is directly relevant to the outcome of this matter, I will quote in full: "In the present case, the principle in favour of the finality of litigation is relevant, but not as weighty as it might be in other circumstances. … What appears to me to be of more importance is the nature of the action, involving as it did the awarding once and for all of a lump sum based upon the facts known at the trial, coupled with the circumstance that the relevant event which occurred following the trial was the realisation of a specific contingency (the untimely death of the plaintiff who was already in middle age) which the jury were specifically instructed to allow for and in respect of which they were told to make a discount from their assessment of damages. It is true that this a case where the plaintiff's death occurred a relevantly short time after trial, although outside the time for appeal and cross-appeal, and also that the amount involved in this question is relevantly significant. These are proper matters to be taken into account, but they do not outweigh the factors mentioned." (emphasis added) 21 His Honour rejected the sentiment expressed by Lord Denning in McCann v. Sheppard [1973] 1 WLR 540, adopting what Lord Wilberforce had said in Mulholland v. Mitchell [1971] AC 666 at 680, that it "would affront commonsense" if, in a case involving similar circumstances, the Court shut its eyes to the fact of death shortly after trial. 22 A like problem arose in Public Trustee v. Sutherland Shire Council (1992) Aust Torts Reports 81-149. In that case the Court had heard an appeal brought by a plaintiff against an award of damages. The Council had cross-appealed on liability. After the appeal and cross-appeal had been heard, and before judgment had been delivered, the plaintiff died. The defendant made application for fresh evidence to prove the death of the deceased with a view to having the damages, that would otherwise be payable, reduced. Gleeson CJ, Priestley and Handley JJA agreeing, referred to Doherty and said that had the issue of damages arisen, his Honour would have regarded Doherty as different, although not distinguishable from the case with which he was then dealing and would have considered that the outcome would have been the same as in Doherty. 23 In this case, there were two matters material to settlement that are relevant to the Court's determination, including on the question of leave. First, liability was always in issue. Secondly, the settlement sum, to the extent that it involved the calculation of future losses, contained two premises. The first was that the plaintiff would have a particular life expectancy based upon the life tables. Implicit in the calculation of the life expectancy in those tables is that some people live longer and some live shorter periods of time. Some may live for very short periods. The second was the discount for vicissitudes. One vicissitude or contingency of life is that a person may not survive to an old age but might die young. Here the contingency was fulfilled. 24 Significantly, there was no evidence that the claimants or their legal advisers did not understand the conceptual basis underlying the use of life tables or the nature of the discount for vicissitudes. Nor was there any evidence that the claimants or their solicitors believed that the plaintiff would live to the average age of a female aged 27.5 years or that they were ignorant of a possibility that she would have an early death due to a variety of causes unassociated with the accident. Further, the claimants or their solicitors did not contend that the epileptic event that caused the plaintiff's death was unrelated to the accident or that death from such an event was unforeseeable. 25 The absence of such evidence, is, in our opinion, important to the exercise of the Court's discretion in determining whether to grant leave. There was no evidence that the claimants made a mistake in relation to the assessment of damages or the matters they took into account for the purpose of arriving at a sum at which they were prepared to settle the claim. Indeed, the claimants eschewed any reliance on mistake. The gravamen of their application for leave to appeal, therefore, is that one of the contingencies upon which the settlement was based occurred before the expiry of the appeal period. Accordingly, although there are some differences between the facts of this case and the facts of Doherty, those differences do not affect the principles to be applied, nor in this case, would those differences give rise to a different result. Indeed, this case, which was the result of a fully negotiated settlement, is arguably a stronger case for the exercise of the discretion against the grant of leave.

26 In our opinion, given the authority of Doherty in this Court and the absence of any evidence of the type to which I have referred, leave to appeal should be refused. In reaching this conclusion two further comments should be made. First, we have not overlooked the detailed argument and reference to authority made by senior counsel for the claimants. However, much of the authority upon which he relied is discussed in Doherty and it is not necessary, for the purposes of considering the application for leave to appeal, to extensively analyse those cases afresh. 27 Secondly, we have referred to the affidavit evidence relied upon by the claimants. That evidence, although read, was not, at the time, formally admitted into evidence. The material in the affidavits consisted of matters that the Court could deduce or assume for the purposes of the preliminary question whether leave to appeal should be granted. For example, the plaintiff's mother, as executrix of the plaintiff's estate, had been substituted for the plaintiff. The Court also knew, from the Terms of Settlement, which became the Orders from which the claimants were seeking leave to appeal, both the settlement amount and the fact that liability was in issue. It was also appropriate for the Court to infer, in accordance with principle, that any assessment of damages would have taken into account a life expectancy based on life tables and a discount for vicissitudes. 28 Accordingly, even had leave been granted and the affidavit evidence admitted, given the absence of the evidence to which we have referred, the evidence would not have affected the outcome of the appeal. However, as we propose that leave be refused, then leave to read the affidavits should also be refused. 29 We make one final comment. Given that the claimants did not rely upon a mistake vitiating the underlying settlement, if the appeal were allowed, the question may still have remained as to the position of that settlement. However, it is unnecessary to enter upon this.

30 Having regard to the foregoing, we would propose the following orders:

Dismiss the notice of motion to adduce further evidence.

The claimants are to pay the respondent's costs.

Last Modified: 12/21/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

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