Leitch & Ors v Reynolds

CATCHWORDS: TORT - NEGLIGENCE - Solicitors' failure to pursue plaintiff's cause of action for failed surgical treatment against his medical professionals leading to limitation period being exceeded with further delay resulting in limitation period not being extended - DAMAGES for loss of benefit of cause of action - Measure of damages when x-rays said to be indispensable to success of action - Whether instead discount of cause of action to take account of reduced prospects of success from lost x-rays should have been greater than 55% - Damages for economic loss and for vexation and distress.

Evidence Act s63, s136 LEGISLATION CITED: Limitations Act 1977 (NSW)

Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1 Baltic Shipping Company v Dillon (1993) 176 CLR 344 Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307 Commonwealth of Australia v Amann Aviation Pty Limited (1991) 174 CLR 64 Cowra Shire Council v Trudgett [2004] NSWCA 9 Johnson v Australian Casualty Company Limited (1992) 7 Anz Ins Cases 61-109 Johnson v Perez (1988) 166 CLR 351 CASES CITED: Kitchen v Royal Air Force Association [1958] 1 WLR 563 Luxton v Vines (1952) 85 CLR 352 Nikolau v Pasavas Phillips & Co (No. 2) (1989) 166 CLR 394 Phillips v Bisley (Court of Appeal, unreported, 18 February 1997) Purkess v Crittenden [1965] 114 CLR 164 Roach v Page No 11 [2003] NSWSC 907 Walmsley v Cosentino [2001] NSWCA 403 Young v Coupe & Ors [2004] NSWSC 546

Robert Royce LEITCH, James Paul HASSON & Andrew Peter DENT t/as Leitch Hasson Dent (Appellants) PARTIES: Dean William REYNOLDS (Respondent)

D DAVIES, SC/ J M SANDFORD (Appellants) COUNSEL: M L WILLIAMS, SC/ A PORTHOUSE (Respondent)

Yeldham & Associates (Appellants) SOLICITORS: George West (Respondent)

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40802/04 DC 8295/02

SANTOW JA YOUNG CJ in Eq CAMPBELL AJA

5 AUGUST 2005 Robert Royce LEITCH & Ors ( trading as Leitch Hasson Dent) v Dean William REYNOLDS Judgment 1 SANTOW JA: INTRODUCTION This appeal concerns the proper principles governing whether and to what extent a plaintiff can recover damages when it is contended that the negligence of his solicitors denied him the opportunity of successfully pursuing a cause of action in tort against a third person. Mr Dean Reynolds (the plaintiff and present respondent) successfully contended that he had lost the benefit of such a cause of action in negligence against his treating medical professionals in respect of a failed course of surgical treatment to his left leg. His solicitors, the appellants, accept that they failed diligently to prosecute his claim, allowing it to become statute-barred. They also accept that they then failed for some six years to pursue a Notice of Motion applying for an extension of time under the Limitations Act 1977 (NSW). The trial judge, Sidis DCJ, concluded that the appellants' admitted negligence had lost Mr Reynolds the benefit of his cause of action against his treating doctors. However, the trial judge discounted the value of that cause of action by 55%, so as to take account of reduced prospects of success. 2 The appellant solicitors seek to challenge that determination in three ways. First, they contend that the respondent had no prospect of success in the action against his medical professionals. They argue that, even had the appellant solicitors pursued the respondent's claim in timely fashion within the limitation period, or within a time when extension of the limitation period would have been possible, the claim would have failed. They contend the claim would have yielded nothing, either by way of compromise or court order. This argument is primarily based on the unavailability of x-rays, said by the appellants to be indispensable to success of the action. The trial judge concluded to the contrary. 3 Second, the appellant solicitors contend in the alternative that even if the respondent's original claim could have succeeded or been successfully compromised, contrary to their primary submission, it should have been discounted by a much larger percentage than the 55% allowed by the trial judge. The percentage they contend for is 80%. They rely particularly on the fact that the medical professional's solicitors, when making each of two offers of compromise, did so offering only that each side pay their own costs, with nothing for the claim. The trial judge rejected that argument at trial, pointing out that both offers were made well after the limitation period had passed. 4 Third, the appellant solicitors attack the quantum of the damages awarded on various other grounds.

SALIENT FACTS 5 The factual matrix of this case is basically uncontroversial. 6 Mr Reynolds was born on 1 March 1969. He was injured, in a motorcycle accident on 6 October 1985, when he was 16 years old. As a result of the accident, he was admitted to the Prince of Wales Hospital for the treatment of a fractured left tibia and fibula. Mr Reynolds was treated in hospital by a closed reduction of the fractures, intended to unite the fractures successfully, together with wedging procedures of the plaster designed to correct the angulation of the bone. The precise mechanics of these procedures was described by Dr Ellis, one of the expert witnesses in the case: "Wedging is a procedure where a cast is partially divided transversely opposite the fracture line and opposite the point of the angulation. The cast is then opened to a degree calculated to be enough to correct the angulation of the bone. Small wedges are then inserted to maintain that exact angle and the plaster is reconstituted." 7 Three such wedging procedures were performed on Mr Reynolds on 21, 22 and 24 October 1985. After being discharged from hospital on 30 October 1985, Mr Reynolds was treated as an outpatient in the Fracture Clinic, and underwent further wedging procedures from October 1985 to February 1986. At least seven such procedures were performed in total. 8 These wedging procedures did not have the desired effect, and on 28 February 1986 Mr Reynolds underwent a tibial osteotomy, bone graft and insertion of a plate in his leg (a treatment sometimes referred to in short as "internal fixation"). The surgery was performed by Dr Powell, an orthopaedic registrar at the hospital, because the senior surgeon who had been scheduled to perform it became unavailable. After the tibial osteotomy, it became apparent that Mr Reynolds had been left with a left leg which was bent at an angle and which resulted in pain and restriction of movement. 9 Throughout his treatment, numerous x-rays were taken of Mr Reynolds leg. He was given some on his first discharge on 30 October 1985, but gave them to one of the doctors at the hospital on his readmission in February 1986. He did not get them back on his second discharge. These x-rays have not been able to be located since, and it appeared, from the evidence that it was the usual Hospital practice to destroy such records three years after the latest x-ray. 10 Well after the expiry of that three years, on 31 July 1992, Mr Reynolds consulted Messrs Leitch, Hasson & Dent ('the Solicitors') for legal advice in respect to any legal rights he may have against the hospital and doctors who treated him. 11 Some seven months later, on 1 March 1993, the limitations period expired for Mr Reynolds to be able to make a claim against the hospital and doctors. 12 On 30 August 1993, the Solicitors filed a Statement of Claim in the Supreme Court against Eastern Area Health Service and Dr Powell ('the medical defendants') together with a Notice of Motion for an extension of time under the Limitation Act. A further Notice of Motion for an extension of time was filed on 16 November 1993. Thereafter, the proceedings having been transferred to the District Court on 9 December 1998, a further Notice of Motion was filed in the District Court on 3 December 1999. The three Notices of Motion were ultimately heard together by Judge Naughton on 17 December 1999. 13 In the intervening years, the Solicitors had arranged for Mr Reynolds to be examined by various medico-legal practitioners: (a) Dr David Bornstein examined Mr Reynolds on 24 July 1996, and provided the Solicitors with a report dated 12 August 1996, and a further report on 15 October 1996. It was not until 3 March 1996, that this latter report was served upon the solicitor for the medical defendant. A further report of Dr Bornstein was obtained on 15 December 1999; (b) In mid 1997, Dr James Ellis provided another report to the Solicitors, dated 15 June 1997; (c) Also in mid 1997, Dr Claffey examined Mr Reynolds on 16 July 1997 at the request of the solicitors; (d) In mid 1998, Dr David Roebuck provided two medico-legal reports dated 4 August 1998 to the Solicitors. Dr Roebuck subsequently provided further reports to the Solicitors, dated 1 December 1998 and 31 March 1999. These later reports of Dr Roebuck were subsequently served on the medical defendants' solicitor on 3 December 1999. 14 It is noteworthy that during this period, the solicitor acting for the medical defendants (Ms Greenland) made two offers to settle the proceedings on her client's behalf. Both offers were made in 1998 well after the filing of the statement of claim (itself outside the limitations period) and the application for an extension of time. The first offer of compromise, of about 23 January 1998, was made on the basis that there be a verdict in favour of the defendants with all parties to pay their own costs. The second offer of compromise, of 3 June 1998, was made on a similar basis. 15 It can be seen from this history that the claim was not prosecuted with any real vigour until some 7½ years after Mr Reynolds first contacted the solicitors, and some six years since the Solicitors first became aware of the limitations issue, and filed the motion to extend time. In those circumstances it was hardly surprising that Naughton DCJ declined to extend time and dismissed the proceedings on 17 December 1999. A relevant matter considered by Naughton DCJ in relation to refusing to extend time was that the lapse of time had meant that the x-rays taken of Mr Reynolds' leg between 1985 and 1986 had been lost or destroyed. 16 Given this unsatisfactory outcome, Mr Reynolds sought advice from new solicitors. On 8 December 2002, they filed on his behalf a Statement of Claim in the District Court alleging that Messrs Leitch Hasson Dent had been negligent in the conduct of his case against the medical defendants, and in relation to their retainer generally. 17 In their Notice of Grounds of Defence, the Solicitors admitted negligence in failing to institute proceedings prior to the expiration of the limitation period. They also admitted certain matters of fact in a document which later became Exhibit 1 in the proceedings, namely that: (a) They did not instruct a medical expert prior to 1 March 1993 (the expiry date of the limitation period) but only in mid 1997; (b) They did not cause the Application for Extension of Time under the Limitations Act to be prosecuted prior to 17 December 1999; (c) The earliest expert report obtained by them was that of Dr Bornstein dated 15 October 1996. (d) No x-ray film in respect of Mr Reynolds' admission to Prince of Wales Hospital between 6 October 1985 and 8 March 1986 was obtained by them. 18 Judge Sidis upheld the claim, and awarded damages in the sum of $450,005.00, against which the Solicitors now appeal.

The Findings of the Trial Judge 19 Because of the extensive grounds of appeal set forth in the Notice of Appeal, it is necessary to recount in some detail the basis for the trial judge's decision, which lucidly and comprehensively deals with the issues before her. First the trial judge carefully set forth the evidence before her. Then she engaged in the two-step inquiry mandated by the authorities; namely; (a) was there a compensable loss and (b) what was the value of that loss?

The evidence 20 The trial judge had before her the Solicitors' file in Mr Reynolds' case. She held that from the file it was evident that the defendants were "aware of the difficulty in securing expert opinion to support the plaintiff's case": ([30], Red, 19K). That as will appear below was a significant finding. 21 The trial judge set out the findings of the medical experts, made in each case without the benefit of the x-ray films. The trial judge found that the x-ray films would have assisted in addressing the following questions: "(1) the condition of the growth plate and its proximity to the fracture site, this being a significant feature having regard to the age of the plaintiff; (2) the decision to undertake the wedging procedures rather than internal fixation (3) the decision to continue wedging procedures at the fracture clinic; (4) whether the surgery in February 1986 had been correctly or negligently performed; (5) whether the complexities of the fracture were such that Dr Powell in February 1986 was insufficiently experienced to undertake the surgery which he performed on the plaintiff's leg. (6) whether the plaintiff was prematurely discharged from the Hospital in October 1985 and after the surgery In February 1986 in the light of the fact that mal-alignment of the fracture continued." ([39], Red, 21H-R) 22 Expert reports were received from Drs Ellis, Claffey, Cummine, Bornstein and Roebuck. 23 The trial judge recorded Dr Ellis' opinion in his report dated 15 June 1997 that although transverse fractures sometimes need internal fixation, in the absence of more precise detail, the information that he had seen was so inconclusive that a successful case for Mr Reynolds was most unlikely: ([43], Red, 22K-L). 24 The trial judge then recorded Dr Claffey's "firm opinion that open reduction and internal fixation would have been against accepted principles of orthopaedic practice in the initial treatment of the plaintiff" and that the delay in determining that the closed reduction had failed was not excessive: ([44], Red, 22P-T). Dr Claffey's ultimate conclusion, as recorded by the trial judge was that "although the result for the plaintiff has been less than ideal, there was no evidence of negligence or mismanagement or of departure from normal orthopaedic standards." ([44], Red, 22V). The judge noted that Dr Claffey also considered that he could not state without viewing the original x-ray films whether wedging should have satisfactorily realigned the fracture in Mr Reynolds' case. 25 Dr Cummine's evidence from his further report of 11 July 2003, as recorded by the trial judge, was that "in the absence of the x-rays, it would be all but impossible to find a surgeon negligent for the management of an injury such as this, which is well recognised as being difficult to restore anatomy [sic], either closed or open." 26 The trial judge then recorded Dr Bornstein's evidence in his report of 15 October 1996, who also made clear that his comments were to be read against the background that "it would be absolutely essential to have access to the original x-ray films, although the reports alone were better than nothing.": ([46], Red, 23M). Further, Dr Bornstein qualified his comments by noting that having regard to Mr Reynolds' age at the time there would have been pressure to avoid internal fixation for fear of damaging the growth plate and causing growth problems in his leg. The trial judge then recorded Dr Bornstein's opinion, albeit to be read against that background. This included the opinion that seven wedging procedures were excessive, as it should be obvious after three or four such procedures that the fracture could not be held in a cast: ([46], Red, 23S-T). Dr Bornstein's ultimate conclusion was that although no definite opinion could be provided because of the number of variables "on the face of it there is a deficiency in this gentleman's original treatment." ([47], Red, 24E-F). The trial judge noted that Dr Bornstein had reiterated that the absence of x-rays affected the certainty of any conclusion in a further report, dated 15 December 1999: ([48], Red, 24H). 27 The last expert was Dr Roebuck, who provided a preliminary report of 4 August 1998, an interim report of 1 December 1998, and a report of 13 December 1999. The trial judge's treatment of Dr Roebuck is particularly significant, as it forms the basis of a number of the grounds of appeal now pressed by the Solicitors. According to the trial judge, in his interim report, Dr Roebuck acknowledged that he would need to see the original x-rays before a more solid conclusion could be reached, although he believed he had a fair indication of Mr Reynolds' treatment from the information otherwise available: ([50], Red, 24M-O). In particular, Dr Roebuck stated that it was possible to conclude without the benefit of the x-rays, that internal fixation should have been performed earlier while the x-rays if available would have enabled him to state what would have been the ideal time to perform it: ([50], Red, 24T-V). The trial judge recorded that Dr Roebuck drew an inference that what was a clearly unstable fracture had been left unattended for four to five months whilst many attempts at reduction by closed means had been unsuccessful: ([50], Red, 24R). Dr Roebuck's conclusion in that interim report was expressed in the following terms, which the trial judge excerpted ([50], Red, 25C-D): "[Mr Reynolds] now has a clearly significant disabled leg and it appears that this could have been prevented. This man was discharged from hospital with a clearly unstable unreduced fracture and in my opinion this was asking for trouble ." [emphasis added] 28 The trial judge then recorded Dr Roebuck's firmer opinions, expressed in his last report, in which he went so far as to opine that repeated attempts at wedging procedures contributes significantly to union of bone being delayed, or not occurring. Dr Roebuck again acknowledged that the original x-rays would give a clear indication of the optimum time for performance of open reduction and internal fixation, and without them it was necessary to draw "an inference as to probability rather than certainty": ([51], Red, 25E-J). I interpolate here that the drawing of inferences is precisely what courts do; we do not thereby deal in certainties or exact proof. The trial judge then stated ([51], Red, 25J-K): "However, Dr Roebuck was prepared, to state quite definitely that the plaintiff should have been treated earlier and internal fixation performed prior to the development of non-union" 29 This was a highly significant finding, as it transpired.

Was there a compensable loss? 30 Having dealt with the evidence, the trial judge turned to consider liability. As previously stated, the Solicitors admitted negligence. The first question therefore was whether Mr Reynolds had suffered any relevant loss caused by that negligence. The principles of law applicable are well established. 31 In Johnson v Perez (1988) 166 CLR 351 Brennan J described this as the first stage in the inquiry, or the trial within the trial, to be conducted in cases of this sort: "When a plaintiff loses his original cause of action by the negligence of his solicitor, what is the extent of his loss? He has lost the monetary compensation for his personal injuries which he would have received at the time when he would have received it but for the solicitor's negligence. That being the extent of the plaintiff's loss, a court which seeks to put him back in the "same position" must assess, as best it can, whether or not the cause of action would have yielded a judgment or a settlement and, if so, how much the plaintiff would have received and when. It may be necessary to conduct a trial within a trial to determine what the cause of action would have produced. That is what the cause of action was worth to the plaintiff. It has been said that, when a plaintiff loses a cause of action, the court should determine its value by estimating, if need be, the plaintiff's prospects of success in the original action: Kitchen v Royal Air Force Association ." (at 371-2) 32 In Kitchen v Royal Air Force Association [1958] 1 WLR 563, Lord Evershed, MR stated that although the answer to the question was obvious when it is clear that the plaintiff would either have succeeded or failed in the original action, in cases where it is uncertain as to whether the plaintiff would have succeeded the court should take the following approach: "In my judgment, what the court has to do (assuming that the plaintiff has established negligence) in such a case as the present, is to determine what the plaintiff has by that negligence lost. The question is, has the plaintiff lost some right of value, some chose in action of reality and substance? In such a case, it may be that its value is not easy to determine, but it is the duty of the court to determine that value as best it can." (at 575) 33 This principle was accepted by the majority of the High Court in Johnson v Perez (supra) (Wilson, Toohey and Gaudron JJ at 363-4, Brennan J at 371-2, and Dawson J at 390). 34 Furthermore, as this Court (Mason P, with whom Meagher JA and Dunford AJA agreed) has stated in Phillips v Bisley (Court of Appeal, unreported, 18 February 1997), in a passage equally applicable to the present case: "In Johnson and other recent cases, the High Court has emphasised that the court's duty in cases such as the present is to value the plaintiff's lost chance: see also Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 354, 362. The lost chance has value even if the court reviewing the facts with 20:20 hindsight assesses the plaintiff's prospects at less than 50 per cent: Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 119; Allied Maples Group Ltd v Simmons & Simmons [1995] 4 All ER 907 at 916, 928. This is because the plaintiff may have lost, through the lawyer's negligence, the prospect of a favourable settlement offer.

The critical issue, not clearly addressed in the cases, is how to distinguish between the derisory or "nuisance value" offer which Lord Evershed MR in Kitchen would disregard, and the situation where a case has sufficient "prospects" for the court trying the negligence claim to be able to say that the plaintiff would have been likely to have attracted a valuable offer of settlement (even if worth considerably less than 100% of the plaintiff's actual loss): cf Yeoman's Executrix v Ferries (1967) SLT 332.

Difficult and elusive though the distinction may be, the court trying the issue of the lawyer's negligence must proceed on the evidence before it. This involves considering the factors mentioned in the passage quoted from Nikolaou [Nikolaou v Papasavas Phillips & Co (1988) 166 CLR 394], including "the evidence that would or should have been available to the plaintiff at that time" (emphasis added). It also involves looking at the likely response of the other party or parties in the lost proceedings (ie those which would, but for the lawyer's negligence, have been prosecuted in a timely way). Among other things this requires the court trying the negligence claim to make due allowance for the fact that a less than well informed or overly cautious lawyer for the defendant faced with a claim in the lost proceedings might have made a valuable settlement offer. But what the trial judge cannot do, in my opinion, is shut his or her eyes to the evidence showing the information that was known to or was reasonably obtainable by all litigants in the lost proceedings pointing towards an objective assessment of the plaintiff's prospects of success in the lost action." 35 The ultimate question formulated by the trial judge to be answered on the balance of probabilities was this: "what were the prospects that the plaintiff would have secured, either a verdict in contested proceedings or an offer of settlement in compromise of his claim" against the medical defendants: ([58], Red, 28S-U). Although the trial judge did not expressly say so at this point, it is clear that this test was drawn from the judgment of Brennan J in Johnson v Perez (supra). 36 The trial judge held that in answering this hypothetical question she was entitled to consider the medical defendants' approach to settlement of the claim in the circumstances where the claim depended heavily upon the assessment of competing expert evidence: ([58], Red, 28U-29C). 37 In upholding the claim, the trial judge had made a number of factual findings based upon the available hospital records. This was in order to assess Mr Reynolds' prospects of success in the original action against the medical defendants. First the trial judge found that "although the evidence suggested a possibility that the x-ray films could have still have been retained in the hospital records in 1992, it did not extend that possibility to a probability.": ([54], Red, 26O-P). The significance of this finding was twofold. 38 First the trial judge held that it was inappropriate to draw the inference that the x-ray films would have been produced had the Solicitors instantly issued subpoenae for their production, upon being instructed: ([54], Red, 26R-S). That is to say, had the usual Hospital practice been followed, the x-rays would have been destroyed by then, being well after three years. That leaves a possibility only, of their production, and then only in the unlikely event that, despite the practice, any x-rays had been retained. It was therefore not proven that the absence of these records was caused by the negligence of the Solicitors. 39 Second, but equally significantly for Mr Reynolds' case against the Solicitors was the fact that a court hearing the matter or experts preparing reports for litigation would have been in the very same position in which the solicitors in fact were. That is to say, even if the solicitors had not been negligent, the court would have had to contend with the absence of the x-ray records, and base its opinion on experts who also did not have the advantage of being able to give "a definitive answer" (see [57], Red, 27V). As with many proceedings, the court would have to labour towards a conclusion on the balance of probabilities with incomplete information. 40 The trial judge then set out a number of facts which she considered, were established by such of the Hospital records as were available: ([55], Red, 26V-27J). No issue is taken as to the correctness of these findings of fact, and I set them out below: "(1) The plaintiff suffered, a fracture of the upper tibia and fibula close to the knee on the left leg. (2) The fracture was complicated by comminution, angulation, flakes of bone and overlapping of fragments. (3) No reference is made in the medical notes to the growth plate either as to its position or condition. (4) During the plaintiff's first admission to Hospital not less than three attempts were made to correct the angulation of the fracture by the wedging procedures. (5) The fracture remained unstable at the time of the plaintiff's discharge from Hospital on 30 October 1985, the plaintiff's evidence being that he was able to feel the bones moving within the plaster cast. (6) Treatment in the fracture clinic after discharge involved at least four further wedging procedures. The fracture remained unstable. (7) The senior surgeon, Dr Stephen, who had been scheduled to undertake the open reduction of the fracture in February 1986, became unavailable. (8) The procedure performed by Dr Powell, then an orthopaedic registrar, was unsuccessful in correcting the angulation." 41 The trial judge then noted (at [56], Red, 27L-S) that the evidence in the claim did not address in detail a number of issues which arose from it, namely: "(a) the extent to which inadequate supervision was undertaken of the treatment provided in the fracture clinic; (b) the reason that Dr Stephen became unavailable in February 1986; (c) The extent of the supervision of Dr Powell when he stepped into Dr Stephen's position to perform the surgery. " 42 The trial judge found that all the medical experts stated that the x-ray films were "vital to a definitive answer" as to whether an earlier attempt at internal fixation of the fracture would have achieved a better outcome from Mr Reynolds: ([57], Red, 27V). Given that all the medical practitioners were in the same position, the trial judge made findings as to their opinion in terms of that question. In the case of Drs Bornstein and Roebuck, the trial judge found that they were prepared to state that the delay (in carrying out an internal fixation) was clearly excessive in the face of a clearly unstable fracture that did not respond to repeated attempts at closed reduction. In the case of Drs Ellis and Cummine, the trial judge found that they declined to express an opinion on the issue of medical negligence without the opportunity to see x-ray films. The trial judge found that only Dr Claffey was prepared to state that the delay was not excessive. 43 In terms of Mr Reynolds prospects of success in a litigated action, the trial judge found that the although he was not certain of a successful outcome, it could not be said that he would certainly have failed either: ([59], Red, 29E-G. This was on the basis that the evidence established that the body of medical opinion obtained by Mr Reynolds himself was divided on the relevant question. Included amongst the reports of those representing Mr Reynolds were the reports commissioned from Drs Ellis and Claffey who were (as set out above) respectively neutral and adverse to Mr Reynolds' case against the medical defendants. The trial judge reasoned that in an adversarial context it was unlikely that those representing Mr Reynolds would have made available the reports of Drs Ellis and Claffey to the defendants or the Court, since those expert opinions were not favourable to Mr Reynolds. 44 Based upon that reasoning, the trial judge seems to have concluded that a Court considering Mr Reynolds' case against the medical defendants would have had before it the remaining reports of Drs Roebuck and Bornstein (who were favourable, the former emphatically so) and the report of Dr Cummine who declined to express an opinion in the absence of the x-rays. By contrast, the Court would not have had the reports of Drs Ellis and Claffey. The trial judge also held there was evidence suggestive, albeit not conclusive, of a failure of supervision in the fracture clinic: ([59], Red, 29L). In those circumstances, the trial judge held there was a reasonable prospect, going beyond a far-fetched possibility, that once all that evidence had been placed before it - though I interpolate also with any opinion to the contrary from the medical defendants' experts - a Court would have been persuaded to accept Dr Roebuck's view that discharging Mr Reynolds with a clearly unstable fracture was "asking for trouble": ([59], Red, 29O-Q). I observe that this conclusion did not depend on the x-rays. Therefore, on the hypothesis that the matter went to a litigated outcome, the trial judge was prepared to find that "there was some prospect that the plaintiff would have succeeded in his claim": ([59], Red, 30J). 45 The trial judge also considered Mr Reynolds' prospects of obtaining a negotiated settlement from the medical defendants. As previously mentioned, her Honour found that it was unlikely that the reports of Drs Ellis and Claffey would have been made available to those defendants. Evidence was given before the trial judge by Ms Greenland, the solicitor on the record for the medical defendants in the actual proceedings lodged out of time on behalf of Mr Reynolds. The trial judge recorded that Ms Greenland gave evidence that as a matter of fact she was unable to place any assessment on the plaintiff's case because of the absence of evidence. The trial judge did not consider that the actual offers of compromise made by Ms Greenland (which involved costs only) were relevant to the hypothetical question which she had to answer. In the judge's view, contrary to express assertions by Ms Greenland herself, those offers were made "in the circumstances of the very limited prospects of success of the plaintiff's application for an extension of time to bring his medical negligence claim." [59], Red, 29V-30C) and could not be used to infer the attitude that the medical defendants would have taken to settlement if there had been no negligence. 46 Hence, the judge concluded, first, that "there was some prospect that, had they been dealing with the action in 1992 or 1993, in the absence of the complications of the limitations issues, the defendants would have undertaken a reasoned assessment of the risk that the views of the experts supporting the plaintiff's claim would have been accepted". Second, the judge concluded that "having undertaken this exercise, there was a prospect that the defendants would have offered to settle the claim on a basis more attractive than that offered in 1998": [59], Red, 30H-M) 47 Given this conclusion that Mr Reynolds' cause of action had some prospects of success, either at trial or by way of negotiated settlement, the trial judge proceeded to answer in the affirmative the question, whether Mr Reynolds lost anything of value. She said: "I find that the negligence of the defendants in these proceedings deprived the plaintiff of the opportunity of securing compensation by way of court assessment or by compromise." ([60], Red, 30O-Q). Thus Mr Reynolds did lose something of value.

What was the value of the lost cause of action? 48 Having concluded that the lost cause of action had some value, it was necessary for the trial judge to determine what its value was. After setting out the principles to which I have previously referred, from Johnson v Perez, Kitchen and Phillips v Bisley, the trial judge formulated for herself the second step in the inquiry in these terms: "The authorities clearly point to the approach of determining what the likely outcome in damages for the plaintiff would have been had the original action proceeded to trial and applying to the figure so determined a discount to take account of the realistic prospect that such an outcome would have been achieved.": ([61], Red, 32B-D) 49 On this approach the first stage in determining the value of the lost cause of action was to determine the likely outcome in damages had Mr Reynolds proceeded against the medical defendants. Ultimately the judge assessed this at a total of $683,500 as explained below: General damages $100,000 Past economic loss $140,000 Loss of earning capacity (incl 25% discount) $433,500 Future medical expenses $ 10,000 TOTAL $683,500 50 The notional date of the award of those damages (or settlement) was agreed at 1 March 1998. 51 The trial judge dealt, in a manner not necessary to detail, with the necessary deduction of social security benefits received. This and the interest calculation were to be made prior to the discount being applied: ([64], Red, 34U-35F). 52 On the question of the discount to take into account the realistic prospect of achieving such an outcome, the trial judge simply said: "… having regard to the uncertainties of the plaintiff's original action which have already been addressed in these reasons, I propose to apply a discount of 55% to reach a figure at which it is probable that a compromise settlement would have been accepted." ([64], Red, 35G-I)

As will appear below, this passage has been seized upon by the appellant solicitors as demonstrating error. 53 Lastly, on the plaintiff's application, the trial judge awarded a sum of $5,000 by way of damages for vexation and distress. 54 Since there is a substantial appeal as to damages, it is necessary to set out the basis upon which the judge proceeded in assessing the relevant heads of damage. 55 The judge first set out Mr Reynolds' own evidence as to his current condition ([62], Red, 32I-V): "(1) He currently spends his days mostly sitting. He is required, to lie down for two hours each day with his legs straight out in front of him and that on some days he does not leave his house. (2) For exercise he rides a bicycle or walks on soft sand to maintain muscle strength. Occasionally he walks to the shops. (3) He has received no further medical treatment notwithstanding his complaints of constant disability. He limits the use of pain killing medication because of side-effects. (4) The extent of the limp from which he suffers varies in its degree. His limping gait places pressure on his right knee which now causes him constant considerable pain. (5) As regards employment he has not tried to find work since he ceased working on the bus shelters. He denied that he would be able to drive trucks notwithstanding that he had done this for a short period in the past. (6) He currently receives a disability pension of $540 per fortnight. He was unable to explain why Centrelink records suggested that he had been receiving less than this amount after July 1999." 56 The trial judge found that after examining Mr Reynolds on 16 July 1997, Dr Claffey reported complaints consistent with that evidence, and observed muscle wasting, scarring, valgus and laxity of the left knee and irritability of both patelloformal (knee) joints: ([62], Red, 32-33C). The trial judge stated Dr Claffey as being of the opinion that "the plaintiff was not fit for active heavy work involving rough or uneven ground, repeated bending, climbing and heavy lifting but he was fit for light work.": ([62], Red, 33E-F). The trial judge recorded near identical conclusions reached by Dr Bornstein, and said that Dr Roebuck's conclusions were essentially identical: ([62], Red, 33K-L). 57 According to the judge, Dr Cummine's report as at May 2003 described Mr Reynolds as having "been left with significant wasting of the left thigh and the left calf and a persisting deformity with some insufficiency of the anterior cruciate ligament" ([62], Red, 33H-I). The judge stated that Dr Bornstein reported the same features, together with bilateral problems in his knees, which he thought would almost certainly develop into osteoarthritis within 10 years: ([62], Red, 33J-K). 58 The trial judge assessed the general damages component at $100,000 stating that she was taking into account the young age of Mr Reynolds at the time of the injury. Since he was young, the trial judge found that he is faced with a long period of disability, with a deteriorating condition of both his knees (essentially accepting what he recorded as Dr Bornstein's view): ([63], Red, 33Q). 59 The trial judge stated that her assessment of income loss took into account a number of factors ([63], Red, 33V-X): (1) Mr Reynolds' limited education; (2) Mr Reynolds' evidence that he encountered difficulty in returning to study to improve his prospects of securing employment; (3) The fact that the employment in which Mr Reynolds has engaged has been limited by his disabilities. The judge accepted that Mr Reynolds "has some residual income earning capacity of a very limited nature which, realistically, will afford him little by way of prospects for employment." ([63], Red, 34D). This finding, as the judge's recording of the evidence demonstrates, was effectively an inference drawn from the medical opinions expressed by Drs Claffey, Bornstein and Roebuck. 60 In terms of medical expenses, the trial judge accepted submissions on behalf of Mr Reynolds that a cushion be allowed, and awarded $10,000 in this respect. This was because no figure was provided for past medical expenses. Moreover, the judge accepted Dr Bornstein's opinion that the condition of Mr Reynolds' knees will "inevitably deteriorate as a result of his altered, gait" and that "it is therefore probable that treatment will be required, to address this situation in the future": ([63], Red, 34J-M). 61 Finally, the trial judge awarded damages for vexation and distress of $5,000 because Mr Reynolds had been deprived the opportunity of confronting, in particular, Dr Powell in the course of the original action; following Walmsley v Cosentino [2001] NSWCA 403 and Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1: ([65], Red, 36B-K).

ISSUES ON APPEAL 62 The Notice of Appeal filed on behalf of the Solicitors was extensive, containing some 22 grounds of appeal challenging the trial judge's decision both as to liability and as to the quantum of damages. 63 Despite the extensiveness of the Notice of Appeal, there were really only four broad issues under which the numerous grounds fell. I summarise these below in what seems to me to be a logical order: (1) Whether the reports of Dr Roebuck should have been accepted into evidence and/or relied on to conclude that Mr Reynolds' original action against the medical defendants had some prospects of success (Grounds 1-7); (2) Whether the judge erred, in failing to quantify Mr Reynolds' prospects of success in the original action (this essentially focussing on the form of expression by the trial judge in formulating the discount in terms of a figure "at which it is probable that a compromise settlement would have been accepted"), and whether the trial judge erred, in assessing damages on the basis of a settlement (Grounds 8-16); (4) Whether the trial judge erred, in applying a 55% discount on the full value of the plaintiff's claim as found - a short point which effectively contends that even if the judge was correct on everything else, the discount should have been 80% (Ground 17). (5) Whether the trial judge's award of damages was excessive, and/or unsupported by the evidence (Grounds 18-22); 64 Rather than setting out each and every ground of appeal, it is convenient to elaborate on them seriatim in the course of the disposition of the appeal. It is convenient to deal with (1) and (2) together.

DISPOSITION OF THE APPEAL Reports of Dr Roebuck and Mr Reynolds' prospects of success - (grounds 1-7) and, failure to quantify Mr Reynolds' prospects of success save in formulating the discount in terms of a figure " at which it is probable that a compromise settlement would have been accepted " (grounds 8-16). 65 The appellants' essential complaint is that because at the time the matter came to trial Dr Roebuck died, the trial judge should have limited the use of his evidence, by reason of the inability to cross-examine him, as unfairly prejudicial under s136 of the Evidence Act. Instead, the trial judge relied heavily on Dr Roebuck's view "that discharging the plaintiff from the hospital with a clearly unstable, unreduced fracture was asking for trouble". 66 The appellants' complaint appears to embody these elements: (a) Dr Roebuck having died was not available for cross-examination; (b) Despite the trial judge deciding to admit the reports but that she would bear in mind that Dr Roebuck had not been cross-examined and that his opinions had not been tested when it came to assessing the evidence, did in fact rely substantially on his opinion in the manner described. (c) That opinion differed markedly from Dr Ellis, Dr Claffey and Dr Cummine, and differed from Dr Bornstein because of the way he qualified his conclusions, and (d) The trial judge gave no reason for her view about Dr Roebuck's evidence. 67 It is said that that view "infected the whole of the judgment both as to whether the plaintiff would have succeeded at all and, if so, what his chances were of succeeding". 68 Finally, it is submitted that if the trial judge "had dealt appropriately with Dr Roebuck's report she would not have been satisfied that the respondent could have succeeded against the Medical Defendants"; see Orange, 15-16. 69 There are several matters which need to be considered in assessing this set of appeal grounds. 70 First, had the appellants acted without their negligent delay and brought the action within the limitation period, Dr Roebuck would have been alive at that time and been available for cross-examination. Thus any prejudice from inability to cross-examine was the direct result of the appellants' own negligence so that such prejudice as there was could hardly be described in terms of s136 of the Evidence Act as "unfair". That consideration clearly distinguishes Young v Coupe & Ors [2004] NSWSC 546 [20] per White J. 71 Moreover, the observations of Sperling J in Roach v Page No 11 [2003] NSWSC 907 at [74] must be born in mind: "(f) However, where hearsay evidence is admissible under an exception to the hearsay rule because of the unavailability of the maker of the representation, there is a special reason for not disallowing the evidence or limiting its use on the ground that the evidence cannot be tested by cross-examination. That is because the legislature has made the evidence admissible notwithstanding that consideration." 72 As the respondent pointed out in its written submissions, the evidence of Dr Roebuck was admissible under s63 of the Evidence Act as Dr Roebuck was a person who was not available to give evidence about an asserted fact because he had died; that Act specifically allowed his evidence to be admissible notwithstanding this. 73 Moreover, in assessing relative prejudice, as the trial judge was well aware from her reasons declining to limit the use of Dr Roebuck's evidence, not to admit that evidence would have caused considerable prejudice to the plaintiff. 74 However, as emerged in argument, the real gravamen of the appellants' complaint is that the trial judge, entitled as she may have been to admit the report, failed to take into account what was said to be conflicting evidence from Drs Ellis, Claffey, Cummine and, though to a lesser extent, Bornstein, the latter because of the way he qualified his conclusions. 75 Here, it is important to bear in mind that the point of departure between Dr Roebuck's opinion on the one hand and Drs Ellis, Claffey and Cummine on the other was the view that the latter three doctors held that an opinion could not be expressed in the absence of the 1985 and 1986 x-rays. However, albeit this was a fact that Dr Roebuck was aware of dealing as he did with the absence of x-rays in his report of 13 December 1999 where he stated: "As to the lack of original x-rays the absence of these would affect the certainty of any conclusion because they would have a clear indication of the optimum time for the performance of open reduction/internal fixation. Without the x-rays one is forced to draw an inference as to probability rather than a certainty." 76 It will be apparent when one looks at the evidence from the other doctors that the difference between them (putting aside Dr Roebuck) was that they found the absence of x-rays precluded expressing an opinion, or at any rate an informed one. The respondents correctly pointed out that what would be in issue in the hypothetical trial of the medical practitioners was not whether an opinion could be expressed with certainty in the scientific sense. Rather it was whether, in terms of legal proof on the basis of balance of probabilities, it could be shown that Mr Reynolds' physical disabilities from his injured leg was caused by a negligent failure in the carrying out of treatment by the medical practitioners at the time. One needs to bear in mind that, as was pointed out by Mason P in Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307 at 317 that the law accommodates a degree of imprecision in these matters. It does so by adopting a "robust and pragmatic approach" to proof of causation, so that "the inability to call lay or expert evidence that shows the precise way in which something has happened is not fatal". Moreover, given the absence of x-rays, the facts as to the state of Mr Reynolds' fracture at the time of treatment would be "particularly within the knowledge" of the defendants such that "slight evidence may suffice to persuade the trier of facts that liability has been sheeted home to a defendant". 77 That said, it is instructive to turn to the actual evidence of the various documents. This is conveniently and fairly summarised in the appellants' written submissions. To quote Dr Bornstein: "Unfortunately none of the early x-rays are available.

The rest of my comments must be read against the background, that it would be absolutely essential for one to have access to the sequence of the original films and reports really are not sufficient , although in the absence of anything else they will be better than nothing.

A number of factors need to be taken into consideration. This boy was 15 years old at the time and probably would of (sic) had the upper epiphyseal plate opened. Under the circumstances there would be a certain measure of pressure to avoid internal fixation if at all possible for fear of damaging the growth plate and thereby causing growth problems in the leg.

On the other hand there comes a point in time where one decides that the fracture is to (sic) unstable to hold in a plaster cast and that there is no real choice other than to operate. I think that seven manipulations of this description is excessive. I think that after the third or fourth it should become reasonably obvious that the fracture was unstable and could not be held in a plaster cast. At that point in time internal fixation probably should have been carried out.

You will notice that I have never seen x-rays including of his current state . It is therefore difficult for me to be certain as to precisely the position of the bones even at this time, but clearly a measure of expertise could and should be demanded in a young fit adult in a major teaching hospital and there is a reasonable expectation that in a simple fracture that anatomical realignment should be achieved by internal fixation. That comment would be qualified if there were a high degree of comminution when it is often not possible to accurately reduce all fragments .

There thus, at least on the face of it, appears to have been a lapse of judgment on the part of the treating doctors at the time. ...

There are thus a number of variables here of which I do not have definitive answers and therefore can not give a definitive opinion .

With that background it can be said that on the face of it there is a deficiency in this gentleman's origin (sic) treatment." [emphasis added] 78 The emphasised passages comparing Dr Bornstein's reports to Dr Roebuck's report demonstrate a degree of consistency. Both come to accept that whilst the lack of the x-ray films affects the certainty of any conclusion even Dr Bornstein accepts that the reports are better than nothing. Thus he was able to express the opinion that seven working procedures were excessive, as it should be obvious after three or four such procedures that the fracture could not be held in a cast. He concluded that although no definite opinion could be provided because of the number of variables, "on the face of it there is a deficiency in this gentleman's original treatment" albeit that the absence of x-rays affected the certainty of any conclusion. 79 Turning to Dr Ellis, he concluded that it was not possible to give an informed opinion about this particular fracture "and in particular its relation to the epiphyseal plate without more particular reports of the x-rays or inspection of the x-rays" (Blue 1, 221L). He stated that one very critical factor was the state of the epiphyseal plate. If it was involved in the fracture or the fracture treatment it would possibly have made a great deal of difference to the shape of the tibia. He added that in the absence of more precise detail the information that he had was so inconclusive that a successful case was most unlikely (Blue 1, 221X-222E). 80 Dr Claffey said that without viewing the original films he could not state whether wedging should have re-aligned the fracture satisfactorily (Blue 1, 225U-V). He said that it would have been against all accepted principles of orthopaedic practice to have treated the fracture with open reduction and internal fixation on the first occasion (Blue 1, 225X). He said it was a matter of judgment as to when one accepts that closed reduction has failed to hold a fracture in satisfactory alignment (Blue 1, 226F). He goes on to opine that "At that stage open reduction and internal fixation is certainly indicated and is then the treatment of choice". He did not consider that the four-month period before this was done in February 1986 was an excessive amount of time, particularly in view of the patient's age and the risk of interfering with the patient's growth line if an open reduction was formed (Blue 1, 226H-I). He thought there was no evidence of negligence or mismanagement and no departure from normal accepted orthopaedic standards. 81 Dr Cummine (Blue 1, 248-255) stated that he suspected there were particular reasons why the doctors involved did not have recourse to open reduction and internal fixation at an earlier point. He did not think a period of 4½ months before an internal fixation was carried out was unusual (Blue 1, 252V, 253V-254F). 82 In his further report of 11 July 2003 (Blue 1, 256-7) he said that in the absence of x-rays it would be all but impossible to find a surgeon negligent for the management of an injury such as the plaintiff had, when it was well recognised as being difficult to restore the anatomy by either open or closed means (Blue 1, 257K). He said that there was a reasonable line of thought that such fractures should be allowed to unite and if there was a residual deformity then one would proceed to an osteotomy to regain alignment. 83 One may readily accept that the evidence therefore from Drs Ellis, Claffey and Cummine was adverse to the plaintiff, each declining in the absence of x-rays to express an opinion favourable to the plaintiff and indeed expressing an opinion adverse to the plaintiff based on the limited information available. That said, and putting aside that the three doctors appear at times to confuse scientific certainty with the "robust and pragmatic approach" to proof of causation, the plaintiff would likely not have relied upon any of these doctors, though no doubt the defendants in the hypothetical proceedings might have found opinions to like effect. But more importantly, the trial judge had before her evidence from Dr Roebuck and Dr Bornstein albeit qualified in the latter case as I have explained. That evidence in my opinion justified her concluding that the plaintiff's prospects of success could be properly assessed at 45%. It is not of any moment that she expressed herself at one point in terms of the figure "at which it is probable that a compromise settlement would have been accepted" (Red, 35H). Clearly the trial judge properly posed the relevant question in terms of the plaintiff's prospects of success in the original action, whether by way of the likelihood of proceeding to a successful verdict or earlier attracting a valuable ultimate settlement. The fact that the only offers of settlement were on a costs recovery basis is nothing to the point, given that those offers were at a time when the limitation period had so long past that the prospects of extension, reasonably viewed, were zero. So indeed the outcome on that score bore out.

Conclusion 84 It follows that I consider there was no appellable error either in the trial judge's treatment of the reports of Dr Roebuck as bearing upon Mr Reynolds' prospects of success nor in the discount which was attributed to those prospects, or in its formulation by reference to the figure at which a compromise settlement would have been accepted, in the latter case when viewed in the full context of the trial judge's reasoning.

The 55% Discount - Ground (17) 85 It follows from what I have said earlier that I do not consider that there was any appellable error demonstrated in the trial judge's assessment of the discount at 55% rather than the higher discount of 80% pressed by the appellants. I consider in particular that the 55% discount adequately accommodated the difficulties for the plaintiff from the absence of x-rays. One may here take into account that it was not impossible that some x-rays may have surfaced as well as the proper approach to proof of causation as calling for a "robust and pragmatic approach". This is more especially where evidence is no longer available through no fault of the plaintiff and where, if anyone still recalled the x-ray results it was the defendant doctors. They were aware of the facts and could be subjected to cross-examination, based upon the written reports. 86 That the discount indicated a less than 50% chance of success is not fatal, as was explained by Deane J in the Commonwealth of Australia v Amann Aviation Pty Limited (1991) 174 CLR 64 at 119: "Thus, for example, a plaintiff whose action against a third party has become statute-barred by reason of a defendant solicitor's breach of contract may recover damages by reference to the court's assessment of what the chance of success in the action against the third party would have been even though that assessment is 50% or less." 87 A powerful consideration is the uncontradicted evidence of the respondent that the fracture was unstable and moving around within the plaster cast for the five months between 5 October 1985 and 28 February 1986. That was corroborated also by the available clinical notes. Even in the absence of the x-rays, as the evidence of Dr Roebuck and Dr Bornstein indicated, it is possible to draw the inference that there was excessive delay in performing the tibia osteotomy. That inference was based on evidence which was more than "mere conjecture or surmise"; compare Luxton v Vines (1952) 85 CLR 352 per Dixon, Kitto and Fullager JJ at 358. Moreover, to the degree the opinions of Drs Roebuck and Bornstein fell short of certainty and recognising the possibility that contrary opinion might have been accepted concerning the appropriateness of continuing with the wedging procedures rather than incurring the risks of internal fixation, that possibility was fairly accommodated by the large 55% discount.

Excessive damages - grounds 18-22) 88 The appellants challenge damages in four respects, under a revised Form 61B. In summary those items challenged are as follows: (a) General damages where the judgment quantum is $100,000 and the appellants' quantum $60,000-$80,000; (b) Economic loss, where in respect of past economic loss the judgment quantum is $140,000 and the appellants' quantum $85,712 whilst in respect of future economic loss the judgment quantum is $433,500 whereas the appellants' quantum is submitted in the alternative as $150,000 or, adopting two-thirds of net Average Weekly Earnings for adult males in New South Wales as at 1 March 1998 (approximately $360 per week with a 5% multiplier for 36 years to age 65 and discounted by 40% to reflect ordinary vicissitudes and the respondent's residual earning capacity) this yields an appellants' quantum of $249,739; (c) For future medical expenses, the judgment quantum is $10,000 and the appellants' quantum nil; (d) For damages for vexation and stress of $5,000 the appellants' quantum is nil. 89 The overall effect of the appellants' preferred schedule of damages under its first alternative is to substitute $65,056 to $72,344.60 for the judgment quantum of $450,005 (allowing for interest on the altered figures); see p2 of the revised Form 61B. If, however, its second alternative is adopted based on Average Weekly Earnings for adult males in New South Wales, with a 40% discount to reflect the respondent's residual earning capacity, then the appellants' judgment quantum would reduce from $450,005 to a range of $100,689.88 to $107,979.57; see p3 of the revised Form 61B.

General Damages 90 The appellants contend that the award was excessive. This is on the basis that the trial judge assessed this amount on the basis of a notional trial date of 1 March 1998 (Red, 33T). However, the compromise settlement that she found would have been entered into was one that would have been entered into 1992 or 1993 (Red, 30H and 35H). Accordingly, the appellants contend that if $100,000 was the appropriate figure in 1998, that was an excessive figure to have been included in the compromise in 1992 or 1993. 91 I do not consider that contention has any validity. Clearly it was correct to view the matter at 1 March 1998, given that that was the date adopted by the parties as a probable date of court assessment or settlement. One might reasonably assume that a compromise would more likely occur at the time the proceedings were brought. 92 More significantly, however, the appellants contend that, when the most favourable assessment of the respondent is that he has suffered a 30% permanent loss of efficient use of the left leg (Dr Roebuck (Blue 1, 237K) and Dr Claffey (Blue 1, 225H)) it is submitted that a figure of $100,000 is well outside the range of appropriate verdicts. Moreover, it is submitted that the respondent did not prove that all of the disabilities he suffered arose from the medical treatment rather than the bike accident that led to the injuries. To quote from the appellants' written submissions (Orange, 23): 42. …. "Dr Cummine in his report of 2 May 2003 (Blue, 248-255) says that it was predominantly the motor bike accident that has caused his condition (Blue, Vol 1,2541). Some support for that comes from the report of Dr Roebuck of 4 August 1998 (Blue, Vol 1 236-237) where he finds the plaintiff has a 15% loss of efficient use of the right leg (Blue, Vol 1 237K). Although one particular of negligence against the Medical Defendants referred to the right leg (Red, 4Q) no case was presented in relation to the right leg. In particular, none of the medical reports made any reference to treatment provided in relation to the right leg. The Respondent's written submissions in the court below refer only to the treatment of the left leg. Indeed paragraph 16 of those submissions stated expressly that the medical issue concerned the management of the plaintiff's fractured leg (ie the left leg).

43. Her Honour appears to have awarded the general damages in respect of all of the problems that the plaintiff has (Red, 32G-33S). Indeed, Her Honour specifically makes reference to the deteriorating condition of "both of his knees" (Red, 33Q). It is clear that she took into account the position with his other leg when assessing the damages." 93 To this however there are several answers. First, the trial judge stated that she was taking into account the young age of Mr Reynolds at the time of the injury. This meant that he would be faced with a long period of disability, with a deteriorating condition of both his knees (Red, 33Q at [63]). Mr Reynolds had limited education so not only would his income loss be greater but also is supportive of a substantial figure for damages. Essentially he would be severely constrained by his injury from any form of manual labour. At Red, 32 [62] the trial judge describes the current condition of Mr Reynolds so as to bring out the deleterious effect of his injury: "(1) He currently spends his days mostly sitting. He is required to lie down for two hours each day with his legs straight out in front of him and that on some days he does not leave the house.

(2) For exercise he rides a bicycle or walks on soft sand to maintain muscle strength. Occasionally he walks to the shops.

(3) He has received no further medical treatment notwithstanding his complaints of constant disability. He limits the use of pain killing medication because of side-effects.

(4) The extent of the limp from which he suffers varies in its degree. His limping gait places pressure on his right knee which now causes him constant considerable pain." 94 This is compared to his position as attested to by Dr Roebuck that "had his fracture been internally fixed earlier at that age of 16 he should have ended up with a good leg" (Report of 1 December 1998). The court accepted that evidence and was entitled to do so. 95 Evidence summarised in (4) quoted above demonstrates the connection between disputed treatment of his left knee and the effect on his right knee for his resultant limping gait, brought about by the pressure thereby placed on it. That in turn brings to bear the special rule relating to a pre-existing medical condition in Purkess v Crittenden [1965] 114 CLR 164 at 168 namely: "We understand that case to proceed upon the basis that where a plaintiff has, by direct or circumstantial evidence, made out a prima facie case that incapacity has resulted from the defendant's negligence, the onus of adducing evidence that his incapacity is wholly or partly the result of some pre-existing condition or that incapacity, either total or partial, would, in any event, have resulted from a pre-existing condition, rests upon the defendant. In other words, in the absence of such evidence the plaintiff, if his evidence be accepted, will be entitled to succeed on the issue of damages and no issue will arise as to the existence of any pre-existing abnormality or its prospective results, or as to the relationship of any such abnormality to the disabilities of which he complains at the trial." 96 I should add that the trial judge's summation is supported by what is said by Dr Roebuck at Blue 1, 236): "He has an ache in the left lower leg and left knee and trouble with the right knee because he has to use it because of his left knee problem and left leg problem makes him favour the left leg and overuse the right leg." 97 When finally it is noted that at trial the defendant itself submitted a range of $60,000 to $80,000 (Black, 145A) it could hardly be said in the circumstances that $100,000 was outside the discretionary range.

Economic Loss - past and future 98 It is clear that though the trial judge did not expressly state her basis for assessing the past economic loss of $140,000, the derivation of that clearly involves acceptance of the schedule submitted on behalf of Mr Reynolds during the course of submissions; see Black, 135 quoted below. "2.1 Past · 6/10/85 - 30/6/94 Cushion for diminution of earning capacity SAY $50,000 · 1/7/94 - 1/3/98 (186 weeks @ $500 pw = $93,000 $140,000 " 99 That same schedule provided for a cushion for lost future earning capacity in the amount of $490,000. For this the trial judge substituted $433,500, as against the submitted $490,000, the difference being explicable by the trial judge increasing the figure for vicissitudes and residual earning capacity from 15% to 25%. I quote below that portion of the plaintiff's submission. "2.2 Future $500 per week x MR:1156.2 = $578,000 Less vicissitudes of 15% = 490,000 $490,000 " 100 Taking first the past lost earning capacity, a period from 6/10/85 to 30/6/94 was evidently chosen as a cut-off point. This was to cover the period from the original accident to approximately the time that Mr Reynolds was able to return to work. That was six to twelve months after he underwent internal fixation by Dr Waller on 17 December 1993, when according to his evidence, he then commenced work for a builder installing bus shelters for some six months earning between $300 and $700 per week. The earlier date of 6 October 1985 corresponds to when Mr Reynolds was first injured in the motorcycle accident and commenced his treatment by way of closed reduction of the fractures followed by wedging procedures. 101 While it is true the evidence concerning Mr Roebuck's work history was fairly limited, I nonetheless consider that there was sufficient basis for the trial judge to make the estimate she did. That evidence is conveniently summarised by the appellants in their written submission as follows: "50. … His evidence [as to work history after leaving school and prior to the accident] was that he was: 'Selling flowers on the weekends, that was basically it, and I was helping a band with their stuff on a couple of nights a week.' (Black, 32H-I) When asked if he was paid for those jobs he said: 'The flowers was just on the weekends and the other one was just more or less helping friends and they were helping me out with whatever, with what they could, when they had it good.' (Black, 32O-P)

51. As to (c) notwithstanding the difficulties with his legs, the Plaintiff had a number of jobs after the accident and the medical treatment. He worked at St Vincent's Hospital as a theatre attendant full time for about 9 months earning approximately $370 per week (Black, 21E-0). He then worked as a truck driver delivering mainly computer paper but he gave no evidence of how much he was earning in that job (Black, 21P-22F).

52. He then worked at Coogee Randwick RSL Club doing cleaning, some bar work, some pool work and attending poker machines for a period of two years on a casual basis (Black, 22G-Q). Again, no evidence was given of his earnings." 102 While the appellants in their oral submissions commented that it was not clear whether his St Vincent's earnings were net or gross, I would be prepared to accept that more likely those earnings were gross. 103 To that evidence should be added that following a Notice to Produce, all that was relevantly produced were two assessments from the Australian Tax Office of 1991 and 1992 and documents from Centrelink showing what payments had been made. It can be taken that in the financial year 1991 Mr Reynolds received $3,708 from Centrelink and had net income after tax for that year of $7,903. As the appellants put in submissions, that meant Mr Reynolds' income from other sources was about $4,000 or $80 a week; see submission on appeal T, 90.52-.54. 104 The following year, 1992, the same procedures were followed and Mr Reynolds was shown as earning an average weekly income from other sources of $154 a week. 105 The appellants in their written submissions appeared to take issue particularly with the figure of $500 per week of lost earning capacity, as they do for the same $500 per week in relation to future earning capacity. In the appellants' written submissions it is said that no justification has been given for the figure of $500 per week either in the submissions by the respondent in the court below or in the judgment. The appellants emphasise that "average weekly earnings between May and August 1994 were $549.20 gross and $429.23 net. Average weekly earnings for February to May 1998 were $9,609.60 gross and $9463.24 net"; appellants' written submissions at Orange, 24. 106 However, these average weekly earnings were, as the respondent states, average earnings for total employees in New South Wales, thus including juveniles, females and males, in turn differentiated between what are termed "Ordinary Time Earnings" and "Total Earnings". 107 The respondent submits that the figures relied upon by the appellants are not figures that have any relevance to the respondent. The submission goes on to contend that "the average weekly earnings relevant to this respondent are the 'Full Time Adult Male Total Earnings''". The respondent's supplementary written submissions of 12 April 2005 go on to point out that for the periods in question the relevant earnings were: · May - August 1994 $730 pw gross $576.96 net · February - May 1998 $850 pw gross $613.53 net 108 The respondent points out that the trial judge assessed past loss from 1 July 1994 on the basis of $500 per week (Red, 34F, Black, 135F-K), being a figure significantly less than the above average weekly earnings. The appellants, defendants before the trial judge, pointed out in their written submissions that "the plaintiff had already left school at the time of his injuries and was unlikely to obtain a Higher School Certificate or other academic qualification. Notwithstanding his injuries and disabilities he demonstrated sufficient initiative to purchase a truck and work as a self-employed truck driver for some period of time." 109 I would accept the respondent's submissions both so far as past economic loss is concerned and future economic loss. There the same $500 per week is adopted as the cushion but in the latter case with a discount of 25% to take account of the respondent's limited residual income earning capacity. That produces the figure for future economic loss of $433,500 calculated as above. In particular, I do not consider that the figures allowed by the trial judge were outside an acceptable range, or that the evidence before the trial judge was insufficient for her to make a determination as she did. As to the latter, the observations of Palmer J in Cowra Shire Council v Trudgett [2004] NSWCA 9 at [21] are in point, subject to what I say below: "[21] As observed by Moffitt P in J K Kealley v Jones [1979] 1 NSWLR 723, at 734-735, there are cases in which evidence of prospective earnings which, it is claimed, would have been achieved but for the injury, may actually distract from, rather than aid in, the quantification of loss. This is especially so where the plaintiff is a young person who has a number of possible careers open at the time of the accident. Evidence of what other people in those careers are capable of earning creates not only a false but a complex and confusing picture when, in essence, "the task of assessing damages in personal injury cases should be kept as simple as possible": per Anderson J in Jongen v CSR Ltd (1992) Aust Torts Reports 61,706 at 61,713.

[22] In such cases, the assessment of future economic loss is necessarily far more in the nature of pure guesswork or speculation than estimation in any real sense of the word, as many judges have observed: see eg Jones v Schiffmann (1971) 124 CLR 303, at 308 per Menzies J; Paul v Rendell (1981) 55 ALJR 371, at 376 (P C); Linsell v Robson [1976] 1 NSWLR 249, at 259 per Mahoney JA; Foster v Tyne and Wear County Council [1986] 1 All ER 567, at 570 per Lloyd LJ; and see the discussion of the authorities in State of New South Wales v Moss (2000) 54 NSWLR 536, at 551-559 per Heydon JA." 110 That said, I consider that the basis for assessing future economic loss has to have some reasonable basis of justification; it does so here, as I explain. Thus I would agree with the respondent's submissions that the respondent was required to prove economic loss in circumstances where there was an absence of records and the passage of an extraordinary period of time, to which the appellants' own negligence had contributed. All the trial judge in this matter could do was to approach damages with the "broad brush approach" recommended by Wilson, Dawson, Toohey and Gaudron JJ in Nikolau v Pasavas Phillips & Co (No. 2) (1989) 166 CLR 394 at 404, even if the figure of $500 per week be something in the nature of "guess work or speculation" as acknowledged in Trudgett. I agree with the respondent's submissions that $500 per week is justifiable on the basis that even with a significant injury, the respondent was able to work earning $370 per week at St Vincent's Hospital albeit for a limited period. There was a similar limited period of work as a self-employed truck driver doing casual work, as well as his later work installing bus shelters where he said his earnings varied between $300 to $400 per week some weeks and $600 to $700 per week other weeks.

Future medical expenses 111 Dr Bornstein was of the opinion that the respondent would develop osteoarthritis in both knees, probably within the next ten years (Blue 1, 211N). While he said nothing about any treatment that could or should be given for such osteoarthritis and while Dr Cummine who had seen three sets of x-rays of a contrary opinion that post traumatic osteoarthritis would occur (Blue 1, 254P). I do not consider that the trial judge was appellably in error in making this allowance, again applying the broad-brush approach.

Damages for vexation and distress 112 On this the appellants' written submissions fasten on the fact that Mr Reynolds had given evidence to the following effect: "Q. Just go back to the Notices of Motion - you told us that Mr Hasson told you the Judge wouldn't grant the extension of time, how did you feel when you received that advice?

HER HONOUR: Q. Pretty, sorry I didn't hear you? A. I was pretty disappointed that the, yeah I wasn't expecting it at all.

PORTHOUSE: Q. Why did you feel disappointed - what were you disappointed about? A. I would just, I wanted to have my day in Court with Dr Powell.

Q. Why was that important to you? A. Because there, the, the whole thing was a shmozzles and the truth would have had to come out.

Q. Do you still feel that way? A. Yeah." (Black, 27W-28 I)

"Q. You said you would rather have gone to Court against Dr Powell but you didn't quite finish that sentence - were you going to say something else? A. I just wanted to have my day in Court with Dr Powell like, so.

Q. How do you feel about not being able to do that? A. Pretty disappointed." (Black 30Q-T) 113 The appellants contend that this evidence does not justify an award, on the basis not only because merely being disappointed is insufficient but also that vexation must be related to the tortious act or omission complained of and not to the ensuing litigation; see Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1 at 37. 114 The short answer to this contention is that not only is it well-settled that a claim for damages for inconvenience, mental distress and upset caused by breach of contract is available (see Johnson v Australian Casualty Company Limited (1992) 7 Anz Ins Cases 61-109 per McDonald J and the cases cited by him). In the present circumstances the vexation and distress was directly referable to dismissal of the application for extension, itself necessitated by the negligence of the solicitors and their grossly dilatory conduct. I would have had no hesitation in awarding damages for vexation and distress in the circumstances; cf Walmsley v Cosentino [2001] NSWCA 403 where the New South Wales Court of Appeal approved an award of damages for distress against a solicitor in accordance with the principles stated in Baltic Shipping Company v Dillon (1993) 176 CLR 344.

Conclusion 115 I do not consider that there is any basis for disturbing the trial judge's award of damages.

OVERALL CONCLUSION AND ORDERS 116 The appellants in my view have failed in all their grounds of appeal and should have costs awarded against them. Accordingly, I propose orders as follows: (1) Appeal dismissed. (2) The appellants to pay the respondent's costs. 117 YOUNG CJ in Eq: I agree with Santow JA. 118 CAMPBELL AJA: I agree with Santow JA. **********

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