Joukhador v Donnelly

COUNSEL : Appellant: B Donovan QC/ C P Locke Respondent: R Tonner/ E Romaniuk SOLICITORS : Appellant: L W Williams & Associates Respondent: Moray & Agnew CATCHWORDS : Damages; Motor vehicle accident; past and future economic loss; non economic loss; test of probabilities versus test of possibilities ACTS CITED : Suitor's Fund Act 1951 (NSW) Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 CASES CITED: Medlin v State Government Insurance Commission (1995) 182 CLR 1 Younie v Martini (unreported, New South Wales Court of Appeal, 21 March 1995) DECISION : Appeal allowed

The appellant was injured in a motor vehicle accident in 1993 (the 1993 accident). This was at least the third accident he had been involved in, in the previous seven to eight years. Prior to the 1993 accident, he was diagnosed as suffering from a personality disorder and depression. The trial judge found that in the 1993 accident the appellant sustained fresh injuries as well as aggravating pre-existing injuries. Her Honour assessed for non-economic loss on the basis of twenty-eight per cent of a most extreme case. However, her Honour held that the appellant's work capacity had not been affected and made no award for past or future economic loss. Her Honour awarded the appellant damages for out-of-pocket (medical) expenses, but disallowed the claim for future out-of-pocket expenses on the basis there was no evidence of the cost of such expenses. She also disallowed the claim for future operative treatment on the basis the appellant was unlikely to undergo such treatment. The appellants submitted that the trial judge erred in failing to make such awards. The appellant further submitted that her Honour applied the wrong test in determining the entitlement to damages. It was submitted her Honour applied a test of probabilities, rather than a test of possibilities.

(i)Her Honour's finding that the appellant was unlikely to seek work or that his capacity to work had not been impaired with inconsistent with her finding that his non-economic loss should be assessed at twenty-eight per cent of a most serious case and that the appellant still suffered pain that was sometimes incapacitating.

(ii) Her Honour's finding that the appellant was not entitled to an award of economic loss also failed to have regard to her other finding that the appellant's rehabilitation was compounded by his pre-existing mental and emotional condition. Her Honour should have considered the effect his pre-existing mental and emotional condition had on his work capacity having regard to his physical injuries caused by the accident.

(iii) Her Honour did not properly apply the test enunciated in Malec v J C Hutton (1990) 169 CLR 638 and Medlin v State Government Insurance Commission (1995) 182 CLR 1. Her Honour failed to assess the possibility that at some time in the next thirty five years the appellant's incapacitating pain would have lessened and his psychiatric condition would be sufficiently controlled to permit him to seek work.

(iv) Her Honour should have made allowance for the appellant's future medical expenses considering her findings that he regularly takes painkillers.

(v) There were two impediments to this Court re-assessing damages for itself: the appellant's credibility was seriously in issue; and her Honour failed to identify the medical evidence she preferred. Accordingly, the matter should be remitted for a new trial on damages.

(iii) The matter to be remitted for a new trial on damages.

(iv) The respondent to pay the costs of the appeal, but to have, if qualified, a certificate under the Suitor's Fund Act 1951 (NSW). THE SUPREME COURT

1 MEAGHER JA: I agree with Beazley JA. 2 BEAZLEY JA: The appellant was injured in a motor vehicle accident on 30 July 1993 (the 1993 accident). The trial judge found the appellant's personal injuries to be "28% of a most extreme case". That resulted in an award of damages in the sum of $64,500. However, the trial judge held that the appellant's work capacity had not been affected. Accordingly, she made no award for past or future economic loss. Her Honour also disallowed the appellant's claim for future medical expenses, although she awarded $14,892 for past out-of-pocket (medical) expenses. The appellant submitted that the trial judge's failure to award damages for past and future economic loss and for future medical expenses was inconsistent with her award of general damages and, further, that her Honour erroneously applied a "test of probabilities" in determining the appellant's entitlement to damages in respect of these matters, rather than a test based on possibilities: see Malec v J C Hutton Pty Ltd (1990) 169 CLR 638; Medlin v State Government Insurance Commission (1995) 182 CLR 1; Younie v Martini (unreported, New South Wales Court of Appeal, 21 March 1995). 3 At the hearing of the appeal, the respondent sought and was granted leave to file a cross-appeal challenging her Honour's award of non-economic loss as excessive.

Finding as to Injury and Non-economic Loss 4 The appellant was born on 30 January 1969. He was twenty four at the date of accident and twenty nine at the date of trial. The 1993 accident was at least the third motor vehicle accident and possibly the fourth in which the appellant had been involved over the previous seven to eight years. 5 In earlier accidents the appellant had sustained neck and back injuries and had suffered from nausea, dizziness, headaches, shoulder and arm problems, and chest and knee injuries. Prior to the 1993 accident, he had also been diagnosed as suffering from a personality disorder and depression. 6 The trial judge held that in the 1993 accident, the appellant sustained fresh injuries as well as aggravating pre-existing injuries. She said: "There is … considerable medical evidence that [the appellant] sustained injuries in the 1993 accident and that he continues to experience pain as a result." 7 Her Honour found that: "His injuries included cervical musculo-ligamentous injury, injuries to his shoulders, abdomen, back and [chest] and an aggravation or exacerbation of a pre-existing injury to his spine." (emphasis added) 8 It is not clear whether her Honour intended to convey that there were other physical injuries which the appellant sustained. She also found that: "Mr Joukhador's psychological or psychiatric condition predated the 1993 accident. It was not caused by the accident. He was depressed in 1990 and Dr Maguire noted that his present condition resembles that reported by Dr Yanoun in 1990. Nonetheless, Mr Joukhador's physical injuries have compounded his mental and emotional condition, and that in turn has complicated his rehabilitation."

9 The appellant was not entitled to damages for non-economic loss under the Motor Accidents Act 1988 (NSW) unless his ability to lead a normal life was, at the date of trial, significantly impaired by the injuries received in the 1993 accident. In determining that the appellant was entitled to non-economic loss her Honour found that he "was injured", and that there was "evidence that [he] does suffer pain (sometimes to the point that he is incapacitated) whether as a result of functional overlay or physiological factors as at the date of trial". Her Honour was "satisfied that the evidence shows that his normal life was significantly impaired as at the date of trial", and thereby entitled to damages for non-economic loss.

Medical Evidence 10 The whole of the medical evidence was given by way of the tender of reports. In all thirty nine medical reports from twenty documents were tendered. There were also hospital notes, a vocational assessment report containing two separate reports and medical literature. The medical reports were often conflicting and were given by doctors in different specialties. Sometimes, a doctor changed his opinion from one report to another. It is unproductive to review all of this evidence. however, reference needs to be made to some of it. 11 The appellant had been under the care of his general practitioner Dr Malek after the 1991 accident. He saw him the day after the 1993 accident. In August 1993 an x-ray of the spine showed minimal disc narrowing at L4/5 (the site of the 1991 injury). In October 1993 the CT scan confirmed a lateral disc herniation at L5/S1 (which had been normal after the 1991 accident). There was a right side thecal sac compression, perithecal fat displacement and apparent compression of the L5 nerve root within the latent recess and exit foramen, as well as some S1 nerve root compression. There was marked L5/S1 disc injury with lateral disc herniation and definite nerve root compression of both the L5 and S1 nerves, although the L3/4 and L4/5 disc spaces were normally defined. 12 The injury at the L5/S1 level was confirmed by a further CT scan in 1994 conducted by Dr Besser, neurosurgeon. Dr Besser reported that the scan showed a psoterolateral disc herniation at L5/S1 impinging on the right S1 nerve root. Dr Besser considered this explained the appellant's right side symptoms but not his left. 13 The appellant underwent other diagnostic testing and there were differences in interpretation by various doctors consulted or retained by the appellant and respondent. Significantly, however, Dr Somerville, retained by the respondent, who was initially dismissive of the appellant's complaints, conceded in 1995 that the appellant: "does have an L5-S1 disc protrusion, and it is difficult to deny that this could be due to the accident of 1993, and I would assume that this is the consequence of it. having said that however, I am unable to explain his bilateral impairment of straight leg raising in the face of normal ankle reflexes, and the possibility that there may be heavy functional overlay cannot easily be dismissed. I assume that the reason for his slowness in replying to my questions was continuing depression, so with this superadded psychiatric element, it is perhaps difficult to give an accurate assessment of his present disabilities and future prognosis, bound up as these questions are with his emotional health. From the physical point of view however, I consider that this protrusion is such that he would not be suitable to perform heavy duties but should be capable of working in less demanding and sedentary positions . I do not think it likely that he will be left with any longterm sequel to the motor vehicle accident of 1993 except for his inability to perform heavy lifting, and as stated, I feel that his psychiatric health has a marked bearing upon his prognosis. He appears presently, from the neurological point of view, to be fit for any type of work which does not involve heavy lifting." 14 Dr Somerville later significantly resiled from this position after MR scans were performed in 1996. 15 Likewise, Dr Champion (who was retained by the appellant) stated that his earlier assessment of a L5/S1 disc protrusion was not reasonable after viewing the MR scan, but that: "the C5-6 and C6-7 intervertebral disc protrusions may have been aggravated by the accident and significant interverebral disc lesion are not required to explain chronic post injury pain disorder. However, he concluded that: 'The lumbar spine disorder is a post injury chronic pain syndrome as otherwise described and we have to rely on the clinical interpretation as presented. The apparent absence of significant pathology does not substantially reduce the significance and severity of his disorder.'"

16 Dr Champion was also of the opinion that the "severity of the initial pain is one of the important predictors of a bad outcome and [the appellant] did indeed apparently experience really severe initial pain". 17 Professor Gye (retained by the respondent) agreed with Dr Champion as to the importance of a clinical assessment of a patient's disability. 18 Dr Clayton (an appellant's doctor) considered the appellant "has very genuine mechanical back pain but his range of movement is not too significantly impaired". 19 The balance of the respondent's orthopaedic and other medical evidence relating to the appellant's physical injuries was for the most part to the effect that the appellant had only suffered minor soft tissue injuries, which should have resolved at least "within months" of the accident, and that his continuing symptomatology was related to a psychological overlay. 20 I have referred to some only of the medical evidence dealing with the appellant's physical disability. Her Honour referred to it in detail. However, her Honour did not state which medical evidence, relating to the appellant's physical injuries, she preferred. However, her finding of significant impairment as at the date of trial and her assessment of twenty eight per cent of a worst case for the purposes of assessment of non-economic loss, reveals the seriousness with which her Honour viewed the appellant's injuries. The finding itself, however, provides little assistance in determining what evidence she preferred because of the wide variation in the reports of the medical witnesses and the change in the opinion of some of those witnesses.

Findings as to Work Incapacity and Economic Loss 21 Her Honour's failure to state expressly which medical evidence she preferred raises considerable difficulties in determining whether her Honour erred in finding the appellant suffered no compensable economic loss. 22 The appellant had not been in paid employment since 1988. His work history prior to that was limited to "erratic and brief periods of employment". Immediately prior to the 1993 accident, he had been performing some voluntary work at the Lebanese Welfare Centre for a few hours three to five days per week. He did not return to any form of work at the Centre after the 1993 accident. 23 There was evidence that the appellant had applied for a full-time position with the Alminia Charitable Association at the Canterbury Bankstown Arabic Welfare Centre in June/July 1993. There was also written evidence tendered that he would have been offered the position had he been able to accept it. The salary was $32,000 per annum. Her Honour considered that the appellant had a different understanding of the position than that referred to in the documentary evidence from the Arabic Welfare Centre. Her Honour also noted a discrepancy in the time the appellant was supposed to have applied for the position and the date of the accident. Because of these discrepancies her Honour was not satisfied that there was "any likelihood that [the appellant] would have been appointed [to] a position of Youth Development Officer, regardless of the 1993 accident". 24 The appellant's physical and work capacity and his psychological orientation to work was assessed by the Vocational Capacity Centre Pty Ltd. Pamela Johnston, physiotherapist, in assessing his work capacity said: "there was no objective restriction that prevent[ed] Mr Joukhador from performing a wide variety of work of which he was capable … .. clerical, sales, machine operating, driving and related activities …"

25 Her Honour stated that this view was similar to that of the respondent's doctors. 26 It appears that her Honour accepted these views as she was: "..not satisfied that Mr Joukhador's capacity to work is impaired. He is not disposed to seek work. I find that the reasons for this are not related to the 1993 accident." 27 She added: "I am not satisfied that Mr Joukhador is likely to seek work of any type, or that he had shown any interest in seeking work of any type for some years before the 1993 accident." 28 Leaving aside the second part of her Honour's finding - that she was not satisfied that the appellant was likely to seek work - her Honour's finding that she was not satisfied that the appellant's work capacity was not impaired raises a number of problems. Firstly, I am of the opinion that prima facie, it is inconsistent with a finding of twenty-eight per cent of a most serious case. The argument put against this was that the appellant's case on economic loss related to sedentary work and that on the evidence accepted by her Honour, he was not incapacitated for such work. I consider that to be a too simplistic approach, both to the medical evidence and her Honour's overall findings. In particular, as her Honour found, the appellant still suffers from pain which is sometimes incapacitating. She made that finding in a context where the appellant was not doing any work at all. Incapacitating pain can impair economic capacity, howsoever a person might be likely to exercise the capacity. 29 In addition, her Honour's presumed acceptance of the vocational assessment also overlooked the appellant's medical evidence, such as that of Dr Clayton, to which I have referred earlier. Her Honour needed, in my opinion, to explain how she came to accept the vocational assessment report, without having regard to other material in the case, which she had not rejected, and perhaps had implicitly accepted. 30 The finding that the appellant was not entitled to an award of economic loss also fails to pay regard to her finding that the appellant's "physical injuries have compounded his mental and emotional condition, and that in turn has complicated his rehabilitation". Having made that finding early in her judgment, her Honour was required to consider what effect the appellant's pre-existing psychological condition had on his earning capacity. She did not do so. 31 For these reasons alone, I consider that her Honour erred in finding that the appellant was not entitled to an award of damages for non-economic loss.

Application of the Wrong Test 32 It was further submitted that her Honour, in determining the appellant's entitlement to non-economic loss, applied the wrong test. It was submitted that the error was contained in the following passages: "In Younie v Martini the Court of Appeal concluded that the effect of Medlin v the State Government Insurance Commission and Malec v J C Hutton Pty Ltd was that the courts are bound to award something for future economic loss where the plaintiff demonstrates some loss of earning capacity unless it can be seen very confidently that not withstanding the loss of capacity the plaintiff will not in fact suffer any damage of the future economic kind because of that lack of capacity."

and "I am not satisfied that the appellant is likely to seek work of any type, or that he had shown any interest in seeking work of any type for some years before the 1993 accident." (emphasis added) 33 In Malec, Deane, Gaudron and McHugh JJ stated at 643: "If the law is to take account of future hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high - 99.9 per cent - or very low - 0.1 per cent. But unless the chance is so low as to be regarded as speculative - say less than 1 per cent - or so high as to be practically certain - say over 99 per cent - the court will take that chance into account in assessing the damages … Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded." 34 In Medlin Deane, Dawson, Toohey and Gaudron JJ stated at 6: "For the purposes of the law of negligence, the question of whether the requisite causal connexion exists between a particular breach of duty and particular loss or damage is essentially one of fact to be resolved, on the probabilities, as a matter of commonsense and experience. And that remains so in a case such as the present where the question of the existence of the requisite causal connexion is complicated by the intervention of some act or decision of the plaintiff or a third party which constitutes a more immediate cause of loss or damage … The ultimate question must, however, always be whether, notwithstanding the intervention of subsequent decision, the defendant's wrongful act or omission is, as between the plaintiff and the defendant and as a matter of common sense and experience, properly to be seen as having caused the relevant loss or damage." 35 McHugh J stated at 18: "Damages can be awarded for loss of earning capacity, however, only to the extent that that loss produces or might produce financial loss. … In Mann v Ellburn the Full Court of South Australia preferred an approach that compensates the plaintiff to the extent that the loss of earning capacity has resulted in a loss of probable earnings and the loss of a chance to exploit any residual capacity that would probably not have been exploited even if the accident had not occurred. I see nothing wrong with that approach in most cases. It gives effect to the fundamental principle underlying the assessment of damages that a person is only compensated for what he or she has actually lost. But, as the judgments of the Supreme Court in this case show, it is an approach that can mislead a court in a case where the plaintiff continues in employment. It is always necessary to bear in mind as Bright J said in Mann that 'one first of all determines that there has been a loss of capacity, and then having regard to the establishment facts of the past and the probabilities of the future one determines that flow from the loss of capacity'." 36 I consider that the trial judge did not properly apply the test enunciated in Medlin and Malec relating to economic loss. Admittedly, the appellant had a poor work record. Indeed, it was almost non-existent. However, her Honour failed to assess the possibility that at some time in the next thirty five years or so his incapacitating pain would have lessened and his psychiatric condition would be sufficiently controlled to permit him to work and that he would have been sufficiently motivated to seek work. I also consider that her Honour's opinion as to the appellant's motivation was influenced by her focus on the vocational testing of the appellant's physical capacity, the results of which were not consistent with her Honour's findings in relation to non-economic loss, and, which I have already said, failed to take into account the impact of the appellant's psychological state on his physical rehabilitation. 37 I shall consider below what result should flow from her Honour's errors in relation to non-economic loss.

Failure to Make Any Provision for Future Medical Expenses 38 The appellant, in his evidence in chief at trial, stated that he suffers neck problems and headaches and takes several types of pain killers every day, including Dolobid and Panadeine Forte. 39 The medical evidence supported that the appellant had been prescribed a range of analgesic and anti-inflammatory medication since the accident, including additionally to Doloboid and Panadeine Forte, Naprosyn, Indocid and Endone, a potent narcotic analgesic. 40 The trial judge noted that there was "considerable medical evidence that Mr Joukhador sustained injuries in the 1993 accident and that he continues to experience pain as a result" and that the appellant "regularly takes a range of painkillers". However, she held that there was "no evidence as to Mr Joukhador's likely expenses on pharmaceuticals that would permit me to make any estimate of his further out of pocket expenses in this respect". 41 In my opinion, it was incumbent on her Honour to make an allowance for the cost of future medication. The appellant did not assist his own case by providing the cost of the medication. However, her Honour had some guidance as to cost from the amount claimed and allowed in the past. In those circumstances, she was required to make the best assessment she could on the limited evidence available to her. 42 There was also an issue as to whether the appellant might require surgery in the future. Save for the evidence of Dr Manian, the medical evidence was firmly against the need for surgery. The appellant said he was not keen to undergo surgery if there was no guarantee of it being successful. He also said that if his back deteriorated as it had previously he might consider surgery. Having regard to the medical evidence I do not consider her Honour erred in failing to make provision for this claim.

Re-assessment by This Court or New Trial 43 The question now arises whether this Court should assess the damages or whether the matter should be returned for a new trial. Whilst I am reluctant to return the matter for retrial, there are two significant impediments to this Court assessing the matter itself. Firstly, the appellant's credit was seriously in issue, making it difficult, if not impossible for this Court to proceed to any assessment itself. Secondly, her Honour failed to make clear findings in relation to the medical evidence and to the extent she did make findings or findings can be inferred, they are internally inconsistent. In my opinion, those two matters mean that this Court is not able to assess the matter, but that it should be remitted for a new trial.

Cross-Appeal 44 As it is not apparent what evidence her Honour relied upon in assessing the appellant's non-economic loss, it is not possible to determine whether her Honour's assessment of twenty-eight per cent of the most serious case was excessive. Accordingly, the cross-appeal should be dismissed. 45 I propose the following orders:

(iii) The matter to be remitted for a new trial on damages.

(iv) The respondent is to pay the costs of the appeal, but is to have, if qualified, a certificate under the Suitor's Fund Act 1951 (NSW).

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