Johnson v Firth

Prelude to the settlement conference

1. Reference has been made above to Mr Johnson's inquiry on 21 October 2016 as to whether a settlement date had been arranged, and his email of the same date anticipating (emphasis added) "a successful settlement in the near future". [17] On 30 November 2016, Mr Johnson was seen by Dr Pierides for the insurer, who told him that he was assessed at 20% whole person impairment. On 1 December 2016, Firths wrote to GIO seeking confirmation that there would be no issue that Mr Johnson exceeded the threshold, and stating "Once that concession is made it should be possible to resolve the matter by negotiation and we look forward to hearing from you in that regard." That confirmation was given by telephone on 5 December 2016, when arrangements for an informal settlement conference were also discussed, with a range of dates between 13 December 2016 and 23 December 2016 being offered. Mr Firth informed Mr Johnson of these developments in a telephone conversation that day, in the course of which aspects of his damages claim were also discussed, including that non-economic loss was in the range $200,000 to $250,000. On the morning of 6 December 2016, Firths telephoned GIO and an informal settlement conference was appointed for 13 December 2016 at Firths' offices. Mr Firth then sent a letter to Mr Johnson, relevantly as follows: "We confirm that, in accordance with your instructions, we have made arrangements for an informal settlement conference to take place in your matter in our office on Tuesday, 13 December 2016 … … The best idea would be to try and come up with a figure that you would be happy to accept clear in your hand. Please note that I am not asking you what your claim is worth; that is a different question; just what you would like. … We'll tell you if we think your figure is achievable or not."
2. Mr Johnson responded that he would like $700,000 clear, and that he did not think that he would settle for less than $600,000 clear. [18] Mr Firth replied: "I would have to say that in light of your instructions I think there is virtually no chance that your case will settle next week. The reason I say that is because I don't think there is any chance the opposition will offer you as much as you want. However we will of course try and get them up as high as we possibly can. Ultimately it will be up to you to decide whether or not you accept their best offer or not."
3. Later that day, Mr Johnson asked Mr Firth what he expected the insurer's offer would be. Mr Firth told him it "won't be as much as you were hoping for", and that he was concerned that he was so desperate for money that he would take any offer presented; he also expressed doubts as to the authenticity of a letter which Mr Johnson had provided, ostensibly from a prospective employer Total Personnel, confirming an offer of employment said to have been made before the accident.
4. At 9.01am on 7 December 2016, Firths sent an email to Mr Johnson: "I am hoping to get what you want but realistically, given what they know, I don't think it's likely that they will be prepared to offer you that much. … Ultimately it will be your decision as to whether or not you accept any offer of settlement made to you by the opposition."
5. Mr Johnson replied at 9.32am, thanking Mr Firth for the response but stating that he was "highly disappointed" by his choice of words, in particular the suggestion that "I'm desperate for money and that I will take any offer that is presented." A file note made by another solicitor at Firths on 7 December 2016 of a conversation with Mr Johnson at 9.40am that day recorded (emphasis added): [19] "I asked him if he is able to go back to truck driving. He said he couldn't do that. The seats in the truck are spring loaded and that is no good for his back. He cannot sit for long periods without getting pain in his back. He says his back is still causing him a lot of pain but it's not getting any worse. His GP told him he probably couldn't go back to truck driving for another 5 years. He said he would get a letter from his GP to that effect. I asked what type of employment could he do. He said he doesn't know. He's not dumb and you never know what's out there. He wants to get back to work. He has difficulty sitting/standing for long periods and cannot bend over and touch his toes. … He said he is extremely upset with how Stephen spoke to him yesterday. He told him the letter from his employer was fraudulent. [I said] it looked dodgy - … He was also upset that Stephen told him he bets he takes the first offer GIO makes him because he is desperate. Ben said if he doesn't settle he's going to go to another solicitor. He said he also wants an itemised bill when the matter has settled."
6. At 11.34am, Mr Firth replied to Mr Johnson's 9.32am email (emphasis added): "I acknowledge receipt of your email dated 7 December 2016 and I am glad I have been able to restore your confidence. I apologise if you found my choice of words confronting but I think you would have to agree there was a proper basis for them. However, having said that, I am reassured by your statements that you will not throw your case away just because you are desperate for money. I understand that your finances are very tight. Indeed I have helped you out with loans totalling $4,500 already. If necessary, if I thought it would stop you from taking less than you should, I would be prepared to consider further advances to help tide you over until the matter could be finalised. In this regard I want you to be aware that if your matter does not settle at the upcoming settlement conference on 13 December 2016 that is by no means the end of the world. There will be other opportunities to settle further down the track and if the matter cannot be settled an independent assessor at the Claims Assessment and Resolution Service will determine how much compensation they should have to pay you. As you know I am still working my way through your matter in order to enable me to advise you on what I think is a reasonable figure for your claim and just as soon as I have had a chance to finalise everything I will advise you further in that regard. However the main point for present purposes is that if you are prepared to wait and not just take what they are offering you next Tuesday you may find that we can do even better for you further down the track. As a matter of fact I find this happens quite a lot in cases for clients."
7. A postscript confirmed Mr Firth's reservations about the authenticity of the letter from Total Personnel.
8. Late on 7 December 2016, Mr Johnson requested that he be advised of a rough figure that he could hope for if he were to settle. On Thursday 8 December 2016, at 10.19am, Mr Johnson asked for a further loan of $2,000 "[n]ow its [sic] so close to settled" (emphasis added), saying that he was anxious to "jump on a plane … and go stay with a mate up in qld" for a few days, for his safety and welfare. [20] He pressed his request at 11.28am (emphasis added): [21] "Can you plz find out if steven will do that advance so i can make arrangements please, and if so send me the form i have to sign via email .. im 99.9% certain it will settle on tuesday"
9. Mr Firth endorsed on a hard copy of that email: [22] "How can he so certain when he doesn't know what they are going to offer unless, as I thought all along, he is just going to take whatever they are offering"
10. At 11.54am, Mr Firth responded that he could not provide a figure as requested at that stage: "At this stage I am still a long way from being able to give you that advice. Ever since the matter was set down for a settlement conference myself and my staff and have been working around the clock to prepare your claim for that conference. Whilst we have received some of the information we need there is still much more that has to come in before I could give you a reliable advice on the value of your claim."
11. He observed that Mr Johnson's driving disqualifications, criminal record, and the possibility of future imprisonment (as a result of an outstanding break and enter charge) were relevant to the claim for lost earning capacity, and that he had not yet received a copy of the report of Dr Pierides, who had examined Mr Johnson for the insurer on 30 November 2016. [23] The letter included: "Given that the job through Total Personnel was going to be driving trucks your disqualification from driving is highly relevant to your claim for past economic loss."
12. It continued: "In addition to all the above, as part of the preparation for the settlement conference, I have completely reviewed all the medical material I have on your case. However, at this stage I am still waiting receipt of the report of Dr Peridies [sic] who you saw for the opposition recently. I believe his report will be very important and I want to review it before I finalise my advice to you. I have requested it from them several times now and have been told that I should have it before very long. Just as soon as I do I will send you a copy together with relevant comments."
13. The letter concluded: [24] "Whilst I appreciate that you have not been entirely happy with some of my methods please understand they have all been designed to stiffen your resolve so that you don't just buckle and give in to the insurance company. My methods may have seemed hard to you at the time but in the long run I believe they will serve you well because already it does seem to me as if you are prepared to take a much strong line."
14. At 11.56am, Mr Firth replied to Mr Johnson's request for another loan, stating that he was sympathetic, but concerned, and continued: [25] "I would also just caution you that there is no guarantee that your matter will in fact settle next Tuesday. Your email seems to assume that this is a foregone conclusion. As I have tried to warn you, they may not offer you as much as you want. I would not want to see you in a position where you felt compelled to cave in to the insurance company just to get the case over and done with. As I have said previously I do not like to see my clients settle for less than they should because of financial pressures. In the past I have been prepared to assist my clients in that position to tide them over until the case can be settled for a satisfactory amount."
15. At 12:12pm, Mr Johnson replied in an email which asserted that the job with Total Personnel was not going to be a driving job but as an "offsider"; that he was undertaking the "merit program" and had been told there was little chance that he would go to gaol; that he would contact Damir at Total Personnel and have a confirmatory letter concerning the offer of employment sent through; and that he was in a dangerous situation (due to threats, said to be instigated by his ex-partner). The email included the following sentence, which assumes importance in his case: [26] "If your [sic] not sure if the case will be ready by next tuesday, best we postpone the hearing then."
16. However it also included this passage (emphasis added): "You verified i am above the level i need to be, and helping me out of this situation would really restore my faith in you guys. I apologise for any miscommunication in the past, i have spoken to other solicitors who will gladly take my file and are willing to help me but i don't really want to do that..but im in a dangerous situation atm and i have to do whatever it takes to remove myself from that..i hope you understand..i will let you know by the end of the week what decision i have made. thanks"
17. In the course of the day, the insurer formally conceded that Mr Johnson's whole person impairment was greater than 10%, and thus above the threshold for non-economic loss. At 12:21pm, Mr Firth sent an email to Mr Johnson advising him of this and adding: [27] "It also clears the way for settlement discussions and I confirm that a settlement conference has been arranged for next Tuesday 13 December 2016. Ordinarily I would have liked a little more time to prepare the matter but given the circumstances I felt compelled to take the first available date. … I hope to be in a position to give you further advice about what I believe can reasonably be claimed in your matter and will get back to you in that regard just as soon as I can."
18. At 12:46pm, Mr Firth sent Mr Johnson an email confirming that his staff had spoken to Damir of Total Personnel, who had confirmed in part Mr Johnson's instructions, but that the job on offer had been as a truckdriver, not an offsider.
19. At 1:06pm, having received Dr Pierides' assessment that Mr Johnson had a 20% whole person impairment, Mr Firth sent a letter to Mr Johnson containing his advice "as to the amount the other side is likely to offer you at the settlement conference." Mr Firth confirmed that he had advised Mr Johnson that his claim for non-economic loss should be in the range of $200,000 to $250,000, but that the insurer would likely only allow "$150,000 and certainly no more than $200,000"; nothing for past loss of earnings because Mr Johnson was disqualified from driving; a buffer of $50,000 and no more than $100,000 on account of loss of future earning capacity; nothing for past gratuitous care; and $2,000 or $3,000 for future medical expenses. The letter continued (emphasis added): [28] "Ultimately the important thing to remember above everything else is that if you are not happy with what they are offering then you do not have to take it. Obviously I will advise you about what I think you should do with any offer they make but at the end of the day it will be entirely up to you to decide whether or not you wish to accept their offer. … Another thing I should mention is that in serious cases like yours it is my usual practice to qualify an independent doctor on your side. Unfortunately there has been insufficient time to do that before the settlement conference however, if the matter does not settle, this is something we will arrange for you. A favourable opinion from an independent specialist has been known to change an insurer's position on settlement. This is one reason why I have been at pains to advise you not to feel compelled just to accept whatever they offer you on Tuesday."
20. At 12.59pm, desperate for another loan, Mr Johnson made an offer - which Mr Firth rebuffed - to make a statutory declaration committing to remain with Firths until the proceedings were completed.
21. Later that day, Mr Firth informed Mr Johnson that he had now received a report from his general practitioner Dr Tran: [29] "Also, as you can see, he is only prepared to say that you would be unfit to return to work as a truck driver for at least another six months. You had rather thought that the period was going to be two years. However, the report is better than the opinion expressed by Dr Pierides for the insurance company that essentially you would be fit to return to normal duties with lifting restrictions in the next two months. … With this report and the report of Dr Pierides we are starting to get a clearer picture on what we may be able to claim for loss of future earning capacity."
22. Mr Firth also informed Mr Johnson: "As previously advised, if your matter does not settle at the settlement conference next Tuesday, we will obtain a medico-legal report for you and also a report from Dr Darwish. … Normally I would obtain such reports before a settlement conference but in your case there just hasn't been time as the conference was arranged on less than a week's notice."

The settlement conference

1. The settlement conference took place on 13 December 2016. The course of negotiations was documented in contemporaneous file notes of Firths, and in a letter sent by Mr Firth to Mr Johnson the following day, which his Honour accepted as an accurate record. [30] Mr Johnson had indicated that he was looking for $350,000 clear to him in hand, and Mr Firth advised him that in order to achieve that result they would need a settlement of at least $500,000 all inclusive. The insurer made an opening offer of $150,000 inclusive of costs, which Mr Firth countered with an offer to accept $750,000 plus costs. Offers were thereafter exchanged, and ultimately the highest offer made by the insurer was $400,000 inclusive of costs. Mr Firth made a final offer of $600,000 inclusive of costs, which was not accepted. Mr Johnson said that he wanted to accept the offer of $400,000, because of the financial pressure he was under, but Mr Firth advised him against that course, because he anticipated that a better offer would be made in the next week or so. [31] When Mr Johnson remained inclined to accept the offer, because of his financial circumstances, Mr Firth offered to lend him a further $5,000 to help tide him over the Christmas period. On that basis, Mr Johnson accepted Mr Firth's advice not to accept the last offer made at the conference.
2. On the morning of 14 December 2016, Mr Firth sent Mr Johnson a letter summarising what had happened: [32] "I confirm that you indicated you were looking for a figure of $350,000 clear to you in the hand. I confirm that I advised you that in order to achieve that we would need to achieve a settlement of at least $500,000 all inclusive. … 5. They then made a final offer of $400,000 all inclusive and we put an offer back to them of $600,000 all inclusive and that is where the conference ended. Obviously if you were to accept their offer of $400,000 you would not receive $350,000 clear and in fact you would probably only receive $250,000. Despite this you were inclined to accept their offer because you are under considerable financial stress at the moment. … You were still inclined to take their offer because of your desperate need for funds over Christmas and so to help you and to try and take some of the pressure off I agreed to lend you another $5,000 to help tide you over the Christmas period. This takes the total I have lent you to $11,500. On this basis you were prepared to follow my advice to let the offer go. … I note it is your intention to get back to truck driving work just as soon as you are eligible to receive your licence back in January of next year."
3. In the course of 14 December 2016, as Mr Firth had anticipated, the insurer made a further offer, of $475,000, inclusive of costs. Mr Firth spoke to Mr Johnson, who said "I think we should take that"; but Mr Firth suggested countering with $525,000, with a view to settling at $500,000 inclusive; Mr Johnson agreed. Mr Firth then wrote to Mr Johnson, advising of the increased offer, and that: "You might recall that at the settlement conference the day before, when I advised you against accepting their offer of $400,000 inclusive, this was the very thing I indicated to you that I hoped would happen within the next week or so. I confirm that once again you wanted to accept this offer but in the end agreed with my suggestion to go back to them with a counter offer of $525,000 all inclusive. This I have done. Just as soon as I hear back from them I will be in touch with you again. I confirm that my strategy is to hopefully get them up to $500,000 all inclusive. I confirm that if I can I have promised you the sum of $350,000 clear to you in the hand."
4. As Mr Firth had predicted, the insurer made a "final offer" of $500,000 inclusive of costs. Mr Firth's diary note records that he advised Mr Johnson that "if he proceeded further he could get more", about the preclusion period, that he would receive $350,000 in the hand, and that he should take his time to think about it. In a follow-up letter of the same date, Mr Firth advised Mr Johnson: [33] "I also confirm that I have advised you that if the matter were to proceed to a hearing at CARS it is quite possible that you could be awarded more than this but it is also possible that you could be awarded less. Much will depend on developments between now and the hearing at CARS and in particular how you go in your return to the work force."
5. The letter noted: "I confirm that you are inclined to accept the offer but are going to give the matter some thought and get back to me."
6. Later that day, Mr Johnson instructed Mr Firth to accept the offer: "Take that offer. 100%. 100 million%"
7. So instructed, Mr Firth accepted the offer. He wrote to Mr Johnson reporting and enclosing authorities.
8. On 21 December 2016, Mr Johnson executed a written "Authority to Settle", in which he authorised Firths to settle his claim for $500,000 all inclusive, on the basis of advice that he should receive $350,000 clear in the hand, and that: "I understand that I do not have to settle my claim and have the option of continuing with my claim."

Since the settlement conference

1. Also on 21 December 2016, Firths agreed to advance Mr Johnson a further $10,000. On 9 January 2017, Mr Johnson sent an email to Mr Firth, requesting a further advance and stating: [34] "As you know I get my licence back in a few days, I am planning on buying myself a new car, and a prime mover so I can work as a subcontractor truck driver, I have already picked out the car and truck I want"
2. Firths advanced a further $5,000; and on 18 January 2017, yet a further $22,000, to purchase, among other things, a car, and to apply for licences to drive "multi-combination" trucks, trucks carrying "dangerous goods", and confined space forklifts, in circumstances where Mr Johnson again told Mr Firth that "I now have a licence and a job". On 19 January 2017, his general practitioner Dr Tran certified that Mr Johnson was "medically fit to return to full occupational duties from tomorrow". [35] He received the balance of the settlement sum, amounting to $329,209.32 (after deduction of the further advance of $22,000) on 23 January 2017.
3. Since December 2016, Mr Johnson has sought no treatment in relation to his injuries. [36] In respect of the criminal proceedings against him, Mr Johnson was ultimately convicted in December 2019 and sentenced on 23 March 2020 to a term of imprisonment.

Breach of Duty (Appeal Grounds 1, 2, 3, 4, 5; Contention 1)

1. The trial judge found that Firths did not breach their duty of care, because they conducted the claim "in a manner which would be widely accepted in Australia, and in New South Wales as competent and professional" for the purposes of (NSW) Civil Liability Act 2002, s 5O. [37] In so doing, his Honour accepted the expert opinion of Mr Thomas Goudkamp, relied on by Firths, in preference to that of Dr Paul Wholohan, who was qualified on behalf of Mr Johnson.
2. By a Notice of Contention, the respondents contend, in effect, that in circumstances where s 5O(1) was pleaded in their defence, and irrationality was not pleaded in any reply, nor was it put to Mr Goudkamp, nor otherwise advanced, that his opinion was irrational, the respondents could not be held liable in negligence. I do not accept this contention. A defence under s 5O is not sustained merely by having a professional witness endorse a defendant's conduct as "widely accepted by peer professional opinion as competent professional practice". This contention conflates the question of irrationality of the professional practice (which is what s 5O(2) is directed to) with irrationality of the evidence. An expert opinion may be rejected on many grounds other than that it is irrational. As Leeming JA observed in South Western Sydney Local Health District v Gould: [38] "One may disagree with the correctness of the evidence of a witness without regarding it as irrational, a point noted by Basten JA in Sparks v Hobson, Gray v Hobson [2018] NSWCA 29 at [89]. In hundreds of trials each day in Australia, courts reject the evidence of witnesses for reasons which fall short of considering their evidence to be irrational."
3. His Honour added: [39] "The test posed by s 5O(2) is not a substitute for rejecting evidence admitted without objection on the basis that it fails to comply with the exception to the opinion rule now found in s 79 of the Evidence Act 1995 (NSW). Nor is it applicable when an expert opinion is dependent upon making good particular assumptions, which are not established on the evidence."
4. One of the many reasons, apart from irrationality, that an opinion expressed in terms of s 5O(1) may not survive is, as Leeming JA pointed out, that the assumptions underlying it are not established. [40]
5. Mr Johnson's case was that his claim was allowed to be settled prematurely, when it had not been properly investigated and Firths had not advised him what his case was in fact potentially worth (as distinct from what the insurer might offer), at a substantial undervalue. Reduced to its essence, the complaint was that Firths should not have permitted the settlement conference to proceed when it did, but should have obtained further medical (neurological) opinion, which would likely have revealed more serious impairment, and in any event should not have settled until they had been able to form and express an opinion as to what the claim was worth if it proceeded to assessment.
6. Mr Goudkamp agreed, and it was not in dispute, that a fundamental aspect of the role and duty of a solicitor acting for a claimant in such a matter is to advise their client as to what they would likely receive on CARS assessment. For Mr Johnson, it was complained that Firths never did this. However, whether in the circumstances proceeding to a settlement conference, and ultimately settling the matter, involved departure from competent professional practice requires that regard be had to whole of the circumstances, including the stage the proceedings had reached, the instructions of the client, and the advice that was in fact given.
7. The proceedings were at an early stage. In particular, medico-legal opinions had not been obtained on behalf of Mr Johnson. Firths explained to Mr Johnson that ordinarily they would have liked more time to prepare the matter, including to qualify an independent specialist, and that an opinion from a specialist might influence the outcome favourably to him. It was explained that while normally such a report would be obtained before a settlement conference, in this case there had not been time, given that the conference had been arranged at short notice. Thus it was made clear to Mr Johnson that he might improve his position by waiting.
8. The trial judge found that the timing of the settlement conference was driven by Mr Johnson's desire for an early settlement, given his desperate financial circumstances. In various different ways, grounds 1, 2, 3, and 4(a) impugned that conclusion. The appellant places great weight on the sentence in Mr Johnson's 8 December 2016 email, "if your [sic] not sure if the case will be ready by next tuesday, best we postpone the hearing then". The appellant also complains that the trial judge did not address his submission that the conclusions and inferences for which Mr Johnson contends - that he was not the driving force for settlement and was happy for the conference to be deferred - may more comfortably be drawn given that Mr Firth did not give evidence to explain why they should not. It is said that his Honour's conclusion was contrary to the tenor of the correspondence.
9. However, the sentence in the 12:12pm email of 8 December 2016 must be seen in the context of the other exchanges on that day and the previous day, the events of 13 and 14 December 2016, and the whole of the correspondence commencing from 21 October 2016. This includes his instructions (recorded in Mr Firth's email of 6 December 2016, and presumably given in their telephone conversation the preceding day) to arrange an informal settlement conference, and that the earliest available date was accepted because of the circumstances - which self-evidently were Mr Johnson's dire financial position - and Mr Firth's repeated advice to the effect that he should not "throw away" his case for the sake of an early settlement. The urgency of a settlement from Mr Johnson's perspective emerges from his own correspondence, his inquiries (on 21 October 2016) about a date for settlement, his repeated requests for loans, his expressed high degree of confidence that the matter would settle, and his threats to take his instructions elsewhere if it did not. Mr Johnson conceded that he was "desperate" to get money as soon as he could. [41] Other than the solitary sentence in the 8 December 2016 email, there is nothing to indicate that he wanted to have the settlement conference deferred: in particular, he himself gave no evidence that he wished to defer it. Although he gave evidence - which is impossible to reconcile with Firths' letter of 8 December 2016 - that he had no idea how the damages were calculated, he gave none to suggest that he was an unwilling or reluctant participant in the conference, or that he was not keen for it to proceed. His failure to give such evidence is at least as eloquent as Mr Firth's absence. There was no error in his Honour's conclusion to the effect that Mr Johnson wanted a settlement as quickly as possible, and so instructed Firths.
10. Grounds 4(b), 4(c), and 5 complain in substance that his Honour erroneously failed to find that Firths failed to advise Mr Johnson what his claim was worth, and that this constituted a negligent departure from proper professional practice.
11. Before the conference, Mr Johnson had some indication from Firths, in their 7 December 2016 advice, [42] of the value of his case. While that advice was expressed to be as "to the amount the other side is likely to offer you at the settlement conference", and not in terms as to what the case was worth upon ultimate assessment, it contained substantial elements of the latter: in particular, Mr Johnson was told that Mr Firth's opinion was that his claim for non-economic loss should be in the range of $200,000 to $250,000, but that the insurer would probably only allow $150,000 and certainly no more than $200,000. That must be seen in the context that Mr Johnson had started from a position where he wanted $700,000, or at least $600,000, inclusive. The general tenor of Firths' advice was that the insurer would offer less than the true value of the claim. The whole of the correspondence, and the conduct of the negotiations, is redolent with Mr Firth doing what he could, even at the risk of alienating his client, to strengthen his resolve, so that he would not merely accept whatever was offered and "throw away his case". If the client instructed him to accept an offer which was unreasonably low, that would have called for strong advice; but as explained later, the offer was well within the range. When asked whether he would have advised Mr Johnson to accept the final offer, Mr Goudkamp said, "knowing what I know now about his past … and what happened since the accident, I'd advise him to take it." [43] That evidence was not challenged.
12. The appellant argued that, having regard to Mr Johnson's instructions that he was doubtful about his capacity to return to work, Dr Tran's opinion that he would not work for "at least another six months", and that Dr Pierides who gave a more optimistic opinion for the insurer was "a notoriously unsympathetic medico-legal practitioner", Firths should have obtained a report from Dr Darwish, or qualified a medico-legal specialist. Against that has to be weighed the instructions recorded in Firths' 14 December 2016 letter that Mr Johnson was planning on returning to work as soon as he was eligible to regain his licence in January 2017, and that it had been explained to him that a report from a specialist might be beneficial and would ordinarily be obtained before a settlement conference, but that time had not permitted this. Also to be factored in is the likelihood that between the time of the settlement conference and an assessment (which it was accepted would have taken place in about June 2017), the insurer would have learned of Mr Johnson's criminal record and drug addiction, which would have adversely impacted his claim, particularly in respect of lost earning capacity. Mr Goudkamp gave evidence that it may be prudent to attempt to settle a case "early" (that is, to "strike while the iron is hot") where there is a risk that the recoverable damages might be adversely affected "by subsequent events and subsequent knowledge." [44] This was such a case, because of the risk that the insurer would learn more about Mr Johnson's employment history, drug addiction, and criminal record. [45] The appellant's expert Mr Wholohan also accepted that this was a valid concern. [46]
13. Before the informal settlement conference, Mr Firth had advised Mr Johnson that he did not have to settle at the conference; that there would be other opportunities for settlement; that he may be able to do better further down the track; and that his ordinary practice was to obtain medico-legal reports before a settlement conference, and that a favourable opinion might increase the outcome. Mr Johnson was well apprised that if the matter proceeded, he might well obtain more, though he might also obtain less. He acknowledged in the authority to settle of 21 December 2016 that he did not have to accept the offer. The closing submissions on his behalf to the trial judge included that he understood that his case "may have greater value" if prepared further.
14. Having regard to all those considerations, in my view no error has been shown in his Honour's conclusion that in permitting the matter to be settled as and when it was, Firths did not depart from competent professional practice. It is plain that Mr Johnson desired a quick settlement, and that Mr Firth did his utmost to discourage him from doing so at a serious undervalue. While ordinarily it is prudent practice for advice to be given before a settlement conference as to the compensation likely to be recoverable upon assessment, in the context of the urgency with which this conference was arranged and conducted at an early stage of proceedings, Mr Johnson's dire financial circumstances and desire for an early settlement, the advice that a medico-legal opinion had not been obtained because of the urgency, but that if obtained it might improve his position, the advice as to quantum that was given in Firths' 8 December 2016 letter, the repeated counselling of Mr Johnson by Mr Firth against "throwing away" his case (to the point of alienating him and also offering to provide a further loan if necessary), the clear advice that he did not have to accept any offer and might (but also might not) improve his position by waiting, the risk that the insurer might learn of matters adverse to his claim, and (importantly) the circumstance that the offer ultimately accepted was (as explained below) far from being so unreasonable as to require a warning against acceptance, it was not imprudent to proceed with the settlement conference, nor to fail to advise against acceptance of the final offer made the following day - notwithstanding that Mr Johnson had indicated in passing in his 8 December 2016 email that the settlement conference could be postponed if necessary.

Causation (Appeal Grounds 6, 7)

1. The trial judge found that Mr Johnson had not established that any negligence on the part of Firths had caused him loss. [47]
2. In this case, the question of what would have eventuated had Mr Johnson been properly advised (assuming that he was not) involves three elements, the first two of which are closely related: 1. what would he probably have received upon CARS assessment if the matter was not settled; 2. what advice should he have been given; and 3. would he have taken the offer, regardless of advice that he might recover (much) more on CARS assessment.
3. Dr Wholohan gave evidence that Mr Johnson's claim was worth about $740,000 plus costs, comprising $250,000 for non-economic loss, $30,000 for past medical expenses, $25,000 for future medical expenses, $30,000 past economic loss (calculated as $550 per week for 104 weeks, discounted by 50% for the fact that he was not working at the date of the accident), $332,775 future economic loss (calculated as $500 per week for 27 years, discounted by 15% for vicissitudes), $36,605 lost superannuation, $10,920 for past gratuitous assistance, and $25,000 for future domestic assistance.
4. Mr Goudkamp gave evidence that the range of compensation which Mr Johnson might have recovered on assessment was from $350,000 plus regulated costs of $25,000 (low range), $450,000 plus costs (medium range), to $540,000 plus costs (high range). In cross-examination he accepted that a buffer of $50,000 for future economic loss was low; [48] his resting position after cross-examination was that he would allow a buffer in the order of about $150,000 for future economic loss, and between $175,000 and $200,000 for non-economic loss. [49] For past care, he proposed $8,000 (low range), $11,000 (mid-range), and $15,000 (top range); for future care, $25,000, $35,000, and $50,000; and for future medical expenses, $25,000, $30,000, and $35,000. [50] Those midrange figures total $76,000, and when added to non-economic loss of $200,000 and future economic loss of $150,000, amount to $426,000, plus costs - his mid-range figure of $450,000 inclusive of costs therefore included an additional $24,000.
5. The significant difference between the experts was their assumptions as to earning capacity. The trial judge preferred Mr Goudkamp's opinion, for the reason that "Dr Wholohan's assumptions as to past and future loss took insufficient account of whether Mr. Johnson's repeated driving disqualifications, drug addiction and criminal history would have militated against the exercise of his earning capacity had he remained uninjured." [51]
6. Ground 6 complained in substance that his Honour erred in assessing the damages which Mr Johnson would likely have recovered in his claim, and Ground 7 that his Honour gave inadequate reasons for preferring the evidence of Mr Goudkamp to that of Dr Wholohan. The appellant submitted that the evidence established that he had the capacity to earn in the vicinity of $1,200 to $1,300 nett per week, and that his Honour failed to allow for the evidence that the putative employer had offered work other than as a truck driver.
7. However, although Mr Johnson had instructed Firths that he had been offered work starting in June 2016, and that such work was as an offsider and not as a driver, the prospective employer Mr Damir, when followed-up by Mr Firth, said that the work was for a truck driver; [52] thus it was not work as an offsider that could be performed without a driving licence. Moreover, his recent employment history did not support such a capacity; over the three years before the accident he had earned about $320 nett per week on average. Dr Wholohan had proceeded on an incorrect assumption that the income of $32,000 disclosed in his 2015 return was attributable to personal exertion earnings, when, but for about $500, it was substantially comprised of Centrelink and superannuation payments. [53] Further, in January 2017, Mr Johnson was certified by his general practitioner Dr Tran as fit to return to full occupational duties, casting doubt on the viability of any claim for lost earning capacity thereafter. For those reasons, his Honour was entitled to prefer Mr Goudkamp's more conservative assessment of Mr Johnson's earning capacity. The reason expressed by his Honour, as quoted above, was commendably concise, but wholly sufficient.
8. Accordingly, no error has been shown in his Honour's preference for Mr Goudkamp's opinion that the likely value of Mr Johnson's claim was between $375,000 inclusive and $565,000 inclusive, with the mid-range being $475,000 inclusive of costs. The actual settlement of $500,000 inclusive of costs was, therefore, superior to the mid-range in his assessment.
9. It follows that the insurer's final offer, which Mr Johnson accepted, far from being one that was so insufficient that he ought to have been warned against accepting it, was one in respect of which proper advice to Mr Johnson would have been that it was well within the range of potential outcomes and perhaps slightly better than the middle of the range, and that while he might obtain more at assessment, he might also receive less, but that his solicitor/client costs would increase, so that the nett amount to him in hand would reduce commensurately.
10. So advised, Mr Johnson would have accepted the offer. But in my opinion, even if he had been advised that he might well obtain much more by waiting for an assessment, it would have made no difference: he would still have accepted the best offer Mr Firth was able to extract in the short term. There is a very strong inference that even if he had been advised that he might obtain $700,000 plus costs upon assessment in another six months, he would have accepted whatever was on offer. His attitude was informed by his precarious financial circumstances, and the risk that information adverse to him would become known to the insurer before assessment. In circumstances where his starting position had been $700,000 plus costs and he thought he would not settle for less than $600,000 plus costs, he was on 8 December 2016 "99.9% certain it will settle on tuesday". Only by offering him further financial support to tide him over Christmas was Mr Firth able to dissuade him from accepting the insurer's offer at the settlement conference. When the insurer reverted with a further offer the following morning, Mr Johnson wished to accept it, but Mr Firth dissuaded him again, on the basis that a counteroffer would be made. When that counteroffer produced a further offer assuring Mr Johnson of $350,000 clear, his instructions were "Take that offer. 100%. 100 million%". Advice that he might obtain a substantially greater amount on CARS assessment more than six months later would not have dissuaded Mr Johnson from accepting that offer.
11. No error has been shown, therefore, in his Honour's conclusion that Mr Johnson did not establish that any negligence on Firths' part caused him loss. On the evidence which the trial judge accepted and was entitled to accept, had the matter proceeded to assessment, he would probably have recovered in the order of $475,000 inclusive of costs; he in fact recovered $500,000. Moreover, properly advised as to the value of his claim, he would have accepted the insurer's final offer. And even if advised that his case might prove to be worth substantially more than the offer, he would still have done so.

Conclusion

1. It follows that no error has been established in his Honour's conclusion that Firths were not shown to have acted otherwise than in accordance with competent professional practice, and that even if they had, no departure from such practice occasioned Mr Johnson any loss.
2. I propose that the appeal be dismissed, with costs.

Endnotes

1. Mr Johnson also sued Firths for $6506.10 being interest charged to him by Firths on a number of loans made to him in the course of the proceedings. Firths admitted liability and judgment was given for Mr Johnson for that sum. It is not the subject of any appeal and requires no further consideration.
2. Tcpt, 2 March 2020, pp 14(1)-(15), 17(23)-(45).
3. Johnson v Firth (District Court (NSW), Curtis ADCJ, 17 July 2020, unrep) at [10] ("Primary judgment").
4. Primary judgment at [40].
5. Primary judgment at [39].
6. Tcpt, 2 March 2020, p 19(1)-(4).
7. Primary judgment at [6].
8. Tcpt, 2 March 2020, pp 94(24)-(30), 95(21)-(23); Tcpt, 3 March 2020, p 128(8)-(9).
9. Primary judgment at [6].
10. Primary judgment at [6].
11. Primary judgment at [7].
12. Primary judgment at [8].
13. Primary judgment at [9].
14. Primary judgment at [11].
15. Primary judgment at [11].
16. Tcpt, 4 March 2020, p 154(47)-(50); Primary judgment at [12].
17. Above at [14].
18. Primary judgment at [15].
19. Primary judgment at [17].
20. Primary judgment at [19].
21. Primary judgment at [22].
22. Primary judgment at [23].
23. Primary judgment at [21].
24. Primary judgment at [21].
25. Primary judgment at [24].
26. Primary judgment at [26].
27. Primary judgment at [25].
28. Primary judgment at [27].
29. Primary judgment at [28].
30. Primary judgment at [29].
31. Tcpt, 4 March 2020, p 226(35)-(38).
32. Primary judgment at [29].
33. Primary judgment at [34].
34. Primary judgment at [30].
35. Primary judgment at [41].
36. Tcpt, 2 March 2020, p 30(49)-(50).
37. Primary judgment at [47]-[48].
38. (2018) 97 NSWLR 513 at 531 [84] (Leeming JA; Basten JA and Meagher JA agreeing); [2018] NSWCA 69 ("Gould").
39. Gould at 532 [87] (Leeming JA; Basten JA and Meagher JA agreeing).
40. Gould at 535 [103] (Leeming JA; Basten JA and Meagher JA agreeing).
41. Tcpt, 3 March 2020, p 125(46)-(48).
42. Above at [37]-[38].
43. Tcpt, 1 June 2020, p 342(1)-(5).
44. Tcpt, 1 June 2020, p 360(1)-(23).
45. Tcpt, 1 June 2020, pp 351(13)-(26), 352(8)-(35), 353(6)-(32), 356(39)-357(27), 357(47)-358(28).
46. Tcpt, 1 June 2020, p 359(42)-(46).
47. Primary judgment at [53].
48. Tcpt, 1 June 2020, p 322(16)-(21).
49. Tcpt, 1 June 2020, p 338(3)-(12).
50. Tcpt, 1 June 2020, p 339(12)-(16).
51. Primary judgment at [48].
52. Primary judgment at [5].
53. Tcpt, 1 June 2020, pp 356(39)-357(8). 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. Decision last updated: 01 October 2021