King v Greater Murray Area Health Service & Anor

CATCHWORDS : Appeal from Costs Review Panel - "personal injury damages" and recovery of legal costs

Civil Liability Act 2002 (NSW) - ss 3, 9 (repealed), 11A LEGISLATION CITED : Civil Liability Amendment (Personal Responsibility) Act 2002 Number 92 Legal Profession Act 1987 (NSW) - s 198C & D Legal Profession Act 2004 (NSW) - ss 384, 385

CASES CITED : Jaensch v Coffey (1984) 155 CLR 549 State of New South Wales v Ibbett (2005) 65 NSWLR 168

Benjamin William King - Plaintiff PARTIES : Greater Murray Area Health Service - First Defendant Rodney Carman - Second Defendant

Mr B Dooley - Plaintiff COUNSEL : Mr R Weinstein - First Defendant Ms G Mahoney - Second Defendant

SOLICITORS : Adams Leyland - Plaintiff Frances Allpress - First Defendant

LOWER COURT JUDICIAL OFFICER : MJ Dyson & C Boyd-Boland

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

15681/2006 - BENJAMIN WILLIAM KING v GREATER MURRAY AREA HEALTH SERVICE & ANOR

JUDGMENT (Appeal from Costs Review Panel - "personal injury damages" and recovery of legal costs) 1 HER HONOUR: The issue in this appeal is whether legal costs in relation to awards for damages for intentional torts were limited by virtue of s 198 of the Legal Profession Act 1987 (NSW). 2 By summons filed 13 November 2006, the plaintiff seeks, firstly, an order granting leave to appeal the Review Panel decision in a Costs Assessment Supreme Court notice of decision (number 2005/00001624) being given and effective on 3 October 2006; secondly an order granting an extension of time in which to issue this summons to appeal; and finally, an order setting aside the Review Panel decision and restoring the assessment of assessor JL Sharpe of 12 January 2006. 3 The plaintiff is Benjamin William King. The first defendant is Greater Murray Area Health Service, which is responsible for Albury Base hospital. The second defendant is Rodney Carman, a nurse who was employed by the hospital.

Grounds of Appeal 4 The grounds of appeal are, firstly, that the appeal is brought pursuant to ss 384 and 385 of the Legal Profession Act 2004 (NSW) (LPA 2004); secondly, that the Costs Review Panel erred in determining that the definition of "personal injury" under s 198D of the Legal Profession Act 1987 (NSW) (LPA 1987) included the plaintiff's claim in his District Court proceedings and/or in the alternative, the judgment obtained on behalf of the plaintiff in his District Court proceedings; thirdly, that the Review Panel failed to limit the definition of "personal injury" for the purpose of s 198D of the LPA 1987 by the exclusions provided in the operation of the Civil Liability Act 2002 (NSW) (CLA) including s 11A and s 3B; fourthly, the Review Panel erred in finding that the plaintiff was only entitled to costs in the total amount of $15,788.32; and fifthly, the Review Panel erred in finding that the plaintiff's costs were limited by the "cap on fees" provided by s 198D of the LPA 1987. 5 The plaintiff's appeal relies on ss 384 and 385 of the LPA 2004. It is common ground that this appeal involves a matter of law.

Extension of time to lodge the appeal 6 On 13 September 2006, the Review Panel handed down its decision. The plaintiff's solicitor did not receive it until 3 October 2006. On 13 November 2006, this summons was filed. This summons was filed 10 days out of time. The explanation for delay is that the plaintiff originally commenced proceedings in the Court of Appeal in error. There is no prejudice caused by the delay. It is my view that an extension of time to lodge the appeal should be granted and I do so. 7 I shall refer firstly, to the decision of His Honour Judge Naughton DCJ; secondly, the relevant statutory provisions; thirdly, the costs assessor's decision and finally, the Costs Review Panel's decision. 8 The defendants were the subject of a claim for damages by the plaintiff, who claimed he was the subject of assault and battery while a patient in the care of the defendants. The proceedings were heard over seven days in the District Court by Naughton DCJ. Judgment was entered in the District Court in favour of the plaintiff in the sum of $10,000 against each defendant. 9 On 2 December 2005, Mr John Sharpe, a costs assessor, assessed the party and party costs. He assessed a fair and reasonable amount of costs for the plaintiff at $81,932.05 to be paid by the defendants. 10 On 13 September 2006, a Costs Review Panel constituted by costs assessors Clifford Boyd-Boland and Michael John Dyson set aside the determination of the costs assessor and assessed costs at $15,788.32. The dispute between the parties involves the interpretation of s 198D of the LPA 1987. The relevant provisions of the LPA 1987 and CLA have since been repealed.

The District Court proceedings 11 On 9 November 2004, Naughton DCJ handed down judgment. At the outset Naughton DCJ stated that the plaintiff's claim was one for personal injury. It arose out of alleged assault and battery of the plaintiff while a patient in an isolation room within the intensive care unit at Albury Base hospital. It was alleged that on several occasions between 19 August 1999 and 16 September 1999 the second defendant (Carman) slapped the plaintiff, and that on one occasion he left a chemical fluid bag, with fluid in it, on the plaintiff's face without making any attempt to remove it. Carman was a male registered nurse employed by the hospital. 12 The plaintiff's case against Carman was framed both in trespass to the person, and in negligence for alleged breach of duty "to ensure that reasonable care was taken to safeguard the physical and mental wellbeing of the plaintiff whilst he was a patient at the said hospital." The intentional torts that were pleaded were assault and battery. 13 The claim against the hospital was framed in negligence and vicarious liability for the intentional torts committed by Carman. Senior Counsel for the plaintiff in final submissions stated that if the plaintiff succeeded in his claim based on alleged assault and battery against Carman and his claim based on vicarious liability against the hospital, for those causes of action the plaintiff would not require the trial Judge to consider the negligence claims. The plaintiff did not make any claim for past or future economic loss, but limited his claim for non economic loss to psychiatric damage together with aggravated and exemplary damages. 14 His Honour recorded: "Because the statement of claim was filed before 6 December 2002 several amendments to the Civil Liability Act 2002 which came into force on that date do not apply to the plaintiff's claim. A copy of the Act in the form agreed by all counsel to be in force for the purposes of this case became Exhibit "4A". Section 9 (2) (a) of the Act excludes from operation Part 2 of the Act ("Personal injury damages", ss 10-22), awards of damages for assault and battery. Damages for those causes of action are therefore at large." 15 Naughton DCJ found that on at least four or five occasions between 29 August 1999 and 8 September 1999, including on 31 August 1999, Carman assaulted and battered the plaintiff by slapping him on the wrist and face, but none of the hits were productive of any physical damage. 16 In relation to the liability of the hospital, His Honour stated "that Carman's (somewhat minor) assaults and batteries upon the plaintiff were so connected with his job of caring for the plaintiff, who was Carman's own designated ICU patient, that the assaults and batteries are to be regarded as modes, although improper modes, of doing his job." Thus, both Carman and the hospital were held to be jointly and severally liable. 17 In so far as damages were concerned His Honour found that the plaintiff suffered short term humiliation, insult, anguish, fear and anxiety, and loss of self respect and that they were minor in extent but deserving of compensation. As previously stated, general damages of $10,000 were awarded to the plaintiff against both defendants. His Honour declined to award aggravated or exemplary damages. 18 While Naughton DCJ at the outset of his judgment referred to the plaintiff's claim as being one of personal injury, I do not take it that His Honour meant to say that the damages fell within the definition "personal injury damages" under the CLA.

The provisions of the Legal Profession Act 1987 19 Sections 198C and D of the LPA 1987 provided: "198C Interpretation and application (1) In this Division: defendant means a person against whom a claim for personal injury damages is or may be made. party means plaintiff or defendant. personal injury damages has the same meaning as in the Civil Liability Act 2002. plaintiff means a person who makes or is entitled to make a claim for personal injury damages. (2) This Division does not apply to the following costs: (a) costs payable to an applicant for compensation under Part 2 of the Victims Support and Rehabilitation Act 1996 in respect of the application for compensation, (b) costs for legal services provided in respect of a claim under the Motor Accidents Act 1988 and Motor Accidents Compensation Act 1999 , (c) costs for legal services provided in respect of a claim for work injury damages (as defined in the Workplace Injury Management and Workers Compensation Act 1998 ), (d) costs for legal services provided in respect of a claim for damages in proceedings of the kind referred to in section 11 (Claims for damages for dust diseases etc to be brought under this Act) of the Dust Diseases Tribunal Act 1989 . 198D Maximum costs fixed for claims up to $100,000

(1) If the amount recovered on a claim for personal injury damages does not exceed $100,000, the maximum costs for legal services provided to a party in connection with the claim are fixed as follows: (a) in the case of legal services provided to a plaintiff maximum costs are fixed at 20% of the amount recovered or $10,000, whichever is greater,

(b) in the case of legal services provided to a defendant maximum costs are fixed at 20% of the amount sought to be recovered by the plaintiff or $10,000, whichever is greater. (2) The regulations may prescribe an amount to replace the amount of $100,000 or $10,000 in subsection (1) and may prescribe a percentage to replace the percentage of 20% in subsection (1). When such a replacement amount or percentage is prescribed, it applies for the purposes of subsection (1) in place of the amount or percentage that it replaces.

(3) The regulations may contain provisions of a savings or transitional nature consequent on the making of regulations under this section.

(4) When the maximum costs for legal services provided to a party are fixed by this Division the following provisions apply (subject to sections 198E-198G): (a) a solicitor or barrister is not entitled to be paid or recover for those legal services an amount that exceeds those maximum costs,

(b) a court or tribunal cannot order the payment by another party to the claim of costs in respect of those legal services in an amount that exceeds that maximum,

(c) in assessing the amount of those costs that is a fair and reasonable amount, a costs assessor cannot determine an amount that exceeds the maximum set by this section. (5) ...

(6) If proceedings are commenced on a claim, the amount sought to be recovered by the plaintiff is taken to be the amount sought to be proved by the plaintiff at the hearing of the claim.

(7) Maximum costs fixed by this section apply despite regulations under section 196 (1) (a2) fixing those costs." 20 The plaintiff submitted that his damage resulted from a cause of action based on trespass to the person, in assault and battery which is an intentional tort. The plaintiff alleged that by definition, the proceedings were not for personal injury damages and that s 198D of the LPA 1987 did not apply. The defendants submitted that the plaintiff's action was clearly a claim of damages for personal injury and that s 198D of the LPA 1987 was applicable.

The Costs Assessor's decision 21 On 2 December 2005, the Costs Assessor in his written reasons stated: "s.198D of the 1987 Act, defines "personal injury damages" as having the same meaning as it has in has (sic) in Part 2 of the Civil Liability Act 2002. S11A of the Civil Liability Act 2002 specifically excludes from the operation of the Civil Liability Act 2002, any of the types of matters referred to in s.3B of the Civil Liability Act 2002, which in turn specifically excludes [s.3B(1)(a)] "civil liability in respect of an intentional act that is done with intent to cause injury…". I have reached the conclusion that the provisions of s198D of the 1987 Act, do not apply to the present proceedings." 22 The CLA commenced on 20 March 2002. The Act is divided into Parts. Parts 1 and 2 are relevant here. Part 1 is headed "Preliminary" and comprises of eight sections. Part 2 of the Act is headed "Personal injury damages". There are four divisions contained in Part 2. They are headed "Preliminary", "Fixing damages for economic loss", "Fixing damages for non-economic loss (general damages)" and "other matters". Part 2 is concerned with the assessment of damages. It is in this Part that the caps on various heads of damage are set out. 23 Part 2 of the CLA in which section 9 (now repealed) was contained read, in part: "9 Application of Part

(1) This Part applies to and in respect of an award of personal injury damages, except an award that is excluded from the operation of this Part.

(2) The following awards of damages are excluded from the operation of this Part: (a) an award where the fault concerned is an intentional act that is done with intent to cause injury or death or that is sexual assault or other sexual misconduct…" (3) This Part extends to an award of personal injury damages even if the damages are recovered in an action for breach of contract or in any other action. " 24 Section 3, which is contained in Part 1 "Preliminary" defined personal injury damages and read: " personal injury damages means damages that relate to the death of or injury to a person caused by the fault of another person." 25 The plaintiff submitted that intentional torts are removed from the definition of personal injury damages by s11A which states:

(1) This Part applies to and in respect of an award of personal injury damages, except an award that is excluded from the operation of this Part by section 3B."

The decision of the Costs Review Panel 26 On 13 September 2006, the Costs Review Panel gave written reasons. It relevantly stated that s 9 of the CLA did not make any mention of costs but simply referred to an award of personal injury damages. The Costs Review Panel said that in fact the limitation on costs comes not from the Civil Liability Act but from the Legal Profession Act in force at that time namely the LPA 1987, Division 5B headed "Maximum Costs in Personal Injury Damages Matters". 27 At the relevant time, personal injury damages had the same meaning as s 3 of the CLA. 28 That definition of personal injury damages as enacted was omitted from the Civil Liability Amendment (Personal Responsibility) Act 2002 ("the Amending Act") and the following definition of personal injury damages inserted as Section 11 of the CLA. 29 Part 2 of that Act originally contained ss 9 and 10, but both of those sections were repealed on 6 December 2002 and s 11 came into operation. Sections 9 and 10 of the Act were the sections which applied at the time of filing the statement of claim. 30 Section 3B lists a number of intentional torts. The plaintiff submitted that removing intentional torts from application of a Part entitled "Personal Injury Damages", defined by later amendments to the Act removes intentional torts from the definition of personal injury damages, and accordingly, ss 198C and 198D have no application in a cause of action of this nature. Section 198C of the LPA 1987 defines "personal injury damages" as having the same meaning as in the CLA. It does not define personal injury damages as having the same meaning as that contained in Part 2 of the CLA. 31 It is my view that the reasoning of the Costs Review Panel is correct. Section 9(2) does not remove intentional torts from the definition of "personal injury damages" but excludes intentional torts "from the operation of this Part". This Part is the part that applies to and in respect of an award of personal injury damages. The definition of "personal injury damages" that had application is the general definition contained in s 3 of the CLA. That is, personal injury damages are those damages that relate to the death or injury to a person caused by the fault of another person. It is that definition that applied to ss 198C and D of the LPA 1987. 32 The plaintiff further submitted that, as the plaintiff's case is framed in trespass to the person, and as the case against the first defendant is for the vicarious liability for acts of the second defendant, that the damages cannot have been personal injury damages as the damages were not for an impairment of a person's physical or mental condition. This is not the correct test to be applied, as the words "impairment of a person's physical or mental condition" were included in a subsequent version of the CLA. At the relevant time personal injury damages were defined in the CLA as "damages that relate to the death of or injury to a person caused by the fault of another person". The definition of "injury" in the Act included "psychological or psychiatric injury". 33 Naughton DCJ at page 24 of his judgment stated:

"The plaintiff's case was put on the basis of psychological damage done to a psychologically damaged person who was peculiarly susceptible to further psychological damage." 34 The psychological injury fell within the definition of "personal injury damages". 35 The plaintiff submitted that His Honour limited the plaintiff's claim for non-economic loss to psychiatric damage together with aggravated and exemplary damages (which were subsequently dismissed). The plaintiff referred to the test in Jaensch v Coffey (1984) 155 CLR 549, and stated that Naughton DCJ specifically rejected the evidence that the plaintiff had suffered from a diagnosable psychiatric injury. The plaintiff therefore submitted that His Honour could not have awarded damages in respect of a mental impairment. 36 The first defendant submitted that the claim was with respect to the plaintiff's mental condition. 37 The second defendant referred to State of New South Wales v Ibbett (2005) 65 NSWLR 168, which concerned an interpretation of provisions of the current version of the CLA. The Court of Appeal held that the definition of "injury" in s 11 of the current CLA did not apply to the meaning of s 3B(1)(a) of the CLA (which is the equivalent of s 9 of the former Act). The facts in Ibbett were that the State had been found vicariously liable for assault and trespass to land as a result of the conduct of two police officers. An issue on appeal was whether aggravated and exemplary damages were available on each cause of action. 38 The structure of the current Act is such that the definition of "Injury" applied only to that "Part" of the Act, whereas in the former Act, the definition of "Injury" applied to the whole of the Act. The Court of Appeal therefore concluded that "injury", not being defined in that Part of the statute, should be given its natural and ordinary meaning. 39 Spigelman CJ and Basten JA in Ibbett clarified this statement by stating that the concept of injury would not be restricted to, although it would include, personal injury (see Basten JA at [218]). Ipp JA went further, stating, at [124]-[125]: "In my view, anxiety and distress would be an 'impairment' of a person's mental condition in accordance with the ordinary meaning of 'impairment', as the word is used in s 11. In my opinion, irrespective of whether the ordinary meaning of the word is attributed to 'injury', or whether it is given the meaning defined in s 11, the word is wide enough to encompass anxiety and stress." 40 It is my view that the plaintiff's damages were personal injury damages. The definition of "personal injury damages" in the CLA at the relevant time applied to the whole Act, which partly distinguishes it from Ibbett. The definition of "injury" at the relevant time included "psychological or psychiatric injury", upon which the plaintiff's claim was based. Even if the correct definition of "injury" is defined by giving it its natural and ordinary meaning, in light of the decision of Ibbett, injury is a word wide enough to encompass anxiety, stress and other impairments of a person's mental condition. The result is that the appeal fails.

41 The decision of the Costs Review Panel is correct. There is no error of law. The appeal is dismissed. The decision of the Costs Review Panel dated 13 September 2006 is affirmed. The summons filed 13 November 2006 is dismissed. 42 Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendants' costs as agreed or assessed.

(1) An extension of time to lodge the appeal is granted to the plaintiff.

(3) The decision of the Costs Review Panel dated 13 September 2006 is affirmed.

(4) The summons filed 13 November 2006 is dismissed.

(5) The plaintiff is to pay the defendants' costs as agreed or assessed. **********

23/08/2007 - Year of judgment changed from 2006 to 2007 - Paragraph(s) Header

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