O'Rourke v Johnston

"The landlord agrees: 12.1 to make sure the residential premises are reasonably clean and fit to live in; and 12.2 to keep the premises in reasonable repair, considering the age of, the amount of rent paid for and the prospective life of the premises."

For the reasons I have already given, it was not established that even if there had been a breach of this clause, that such a breach was causative of the plaintiff's injuries.

But even if the landlords had been made aware of a non-functioning fluorescent light on the patio, I would not be satisfied that any failure to repair the light by the landlords amounted to a breach of the lease. As submitted by their counsel, the imperative of sub-clause 12.1, which is based on s 25(1) of the Residential Tenancies Act 1987, is directed at cleanliness, and there is no reference to safety. And, a non-functioning fluorescent light would not, in my view, render premises into a state of unreasonable repair. Furthermore, the lease provided a mechanism for urgent repairs at the instance of the tenants, including any fault that caused the premises to be unsafe, for which the landlords agreed to make payment (see Clause 17).

The next submission was that the statutory scheme created by the Residential Tenancies Act 1987 was intended to protect the right of tenants to live in premises fit for habitation, with the duty to repair imposed on landlords. The landlords' duty to the tenants remained personal to them as required by the legislation. The appointment of managing agents "as a conduit" to discharge their obligations did not allow them to "escape" their obligations by "delegating it out". The contention was, therefore, that the landlords' obligations were non-delegable:

"It could not have been intended that if as alleged, Dowling did not perform its function as property manager they could wash their hands under principles applying to independent contractors. That construction would defeat the purpose of the scheme."

But it is not the law that a landlord owes a tenant a non-delegable duty of care: Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; (1997) 188 CLR 313. Nor do I see any basis for a non-delegable duty somehow to be imposed upon the landlords in contract.

Nor is it the law that in the circumstances of this case that the landlords are vicariously liable for any breach of any duty owed by the managing agent owed to the plaintiff. As was submitted by their counsel, his is not a case where the agent stood in the shoes of the principal: Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19.

Having found that none of the defendants is liable to the plaintiff, each of the cross-claims fails.

Assuming, however, success on the plaintiff's part, it would be necessary in the first instance to determine the claim by Dowling Real Estate as the managing agent for contractual indemnity from the landlord defendants. Reliance was placed on Clause 8.1 of the Management Agency Agreement (Exhibit K), which provides:

"The (Landlords) will keep the (Agent) indemnified against all actions, claims and demands brought against, and all costs, losses and liabilities incurred by the (Agent) in the course of or arising from the exercise or performance of the (Agent's) authorities or duties under this Agreement."

It was submitted for Dowling Real Estate that the ordinary and natural meaning of the words in the clause are such as to entitle it to an indemnity from the landlord defendants in respect of any liability to the plaintiff. In my view, however, Clause 8.1 is indistinguishable from the clause under consideration in Erect Safe Scaffolding (Australia) Pty Limited v Sutton [2008] NSWCA 114 at [6]. In my view, any liability attaching to the managing agent would only arise through its failure to perform its obligations under the Management Agency Agreement, not in the course of or arising from its exercise or performance of its authorities or duties. Accordingly, any such liability would fall outside the operation of the indemnity clause.

The claim for contractual indemnity having failed, it is necessary to consider whether the cross-claim against the landlords would also fail on general principles. For the reasons I have already given, if the plaintiff had succeeded, it could only be on the basis of a breach of duty by the managing agent, there having been no breach of contract by the landlords, and no liability on their part either pursuant to a non-delegable or the principle of vicarious liability. In those circumstances, there would be no basis for any contribution on their part to the managing agent.

Conversely, for the same reasons, if the landlords were to be held liable under the principle of vicarious liability, they would be entitled to a 100% contribution from the managing agents. If they were to be held liable for breach of a non-delegable duty, or for a breach of the lease, I would assess any contribution required from them to the managing agent at 10%.

Here, however, the cross-claims fail because the plaintiff has failed in the substantive claim, and judgment should be entered in favour of the respective cross-defendants. The usual order in those circumstances is that the costs should follow the event: Lever v Goldsby [1964-5] NSWR 1833.

Notwithstanding the findings I have made on liability I am required to provide an assessment of the damages I would award to the plaintiff in the event of a verdict in his favour. That the plaintiff suffered significant injuries is undoubted. In my view, however, some aspects of the consequences of those injuries were exaggerated.

Any damages to be awarded fall to be determined and assessed under the general law as modified by the Civil Liability Act 2002.

The plaintiff was born on 13 May 1966 and is now 43 years old. At the time of the accident he was 41. It is not disputed that as a result of his fall he sustained a serious pilon type fracture to the right ankle, involving a comminuted fracture of the lower quarter of the tibia and a transverse fracture of the fibular, involving extension into the articular surface, requiring an open reduction and an internal surgical fixation procedure involving screw-plate fixation. As a result of this injury he was immobile for a significant period and non-weight bearing for some 16 weeks. He was unable to return to work until January 2008, but since then has performed his normal duties as a butcher.

I find that he also sustained a rotator cuff soft tissue injury of the right shoulder, and continues to suffer tendonitis with bursitis, which is productive of symptoms of discomfort. That may be so, but having regard to the video surveillance film of the plaintiff at work, it cannot be accepted that there is any restriction of movement or other significant ongoing disability in the shoulder. Nor am I satisfied that there will be a need for future surgery to repair a torn rotator cuff.

There was an allegation of an injury to the lumbar spine, but I did not take that to be pressed as something productive of continuing symptoms or disabilities. In any event I am satisfied that it isn't.

The plaintiff also asserts an ongoing psychological condition categorised as an adjustment disorder with depressed mood. He claims that his injuries and their consequences have resulted in reduced motivation and energy levels, an increased consumption of alcohol, and even the use of marijuana to cope with the pain he suffers. It may be accepted that the plaintiff has suffered depression, but I prefer the medical opinion tendered on behalf of the defendants on this issue, specifically that of Dr A White to the effect that the plaintiff does not suffer from any psychiatric disorder as a result of his accident.

The main dispute so far as the assessment of damages is concerned relates to the onset of osteoarthritis in the right ankle and the effect that will have on the plaintiff's future earning capacity and the need for future commercial assistance. There is also a claim that future ankle surgery will be required.

The preponderance of the medical evidence supports the plaintiff's contention that he will suffer from the early onset of osteoarthritis that will seriously impact on his long-term mobility and ability to weight bear. That he has a disability in the ankle was borne out by the video surveillance film which demonstrates that he suffers from a limp which is more marked at the end of a day of prolonged standing and walking.

I do not accept, however, that he will ultimately become totally incapacitated for any form of gainful employment, or require major commercial assistance in relation to his domestic situation, or suffer the major interference to his activities of daily living for which he contends.

The plaintiff claims past out-of-pocket expenses totalling $7,740.00 (Exhibit M). The arithmetic was agreed. I am satisfied that the claim is reasonable and I would have allowed it.

Turning to the future, the plaintiff makes various claims for future medical expenses, as detailed in his Statement of Particulars, consisting of ongoing medication, medical treatment, physiotherapy and travel for medical purposes. In addition he seeks damages for the cost of probable future surgery, orthotics, vocational rehabilitation, occupational therapy, cognitive behavioural therapy, counselling, gym membership and programs such as the "Active Maintenance Program", and the "Back to Life Programme" at Westmead Hospital.

The claim is excessive even if his complaints were to be given full weight, which in my view they should not. There are also elements of duplication. I would make the following allowances in respect of future out-of-pocket expenses:

Removal of the internal fixation devices $ 5,000.00 Orthotics $ 5,000.00 Analgesic medication and anti-inflammatories $ 10,000.00 Additional visits to a general practitioner $ 10,000.00 Orthopaedic treatment $ 10,000.00 Physiotherapy $ 10,000.00 Additional travel $ 5,000.00 Arthrodesis or ankle joint replacement $ 30,000.00 Buffer for miscellaneous expenses $ 15,000.00 Total $100,000.00

The plaintiff claims economic loss for the past and for the future. There is no doubt that he has lost earnings by reason of his injuries, and that his future earning capacity is permanently diminished, at least from a physical perspective. The dispute is as to the extent of the loss and diminution.

The defendants concede past economic loss for the 20 weeks he was off work at $11,400.00, which exceeds the plaintiff's claim as detailed in the Statement of Particulars.

Taking account of lost superannuation, I would allow a sum of $12,700.00 for past economic loss.

The claim particularised in respect of future economic loss amounts to over $200,000.00. This is predicated on the assumption that he will probably cease work at the age of 55, a proposition that I have rejected. In my view the plaintiff has sustained a general diminution in his earning capacity which is unlikely to sound in any actual loss for the next 15 years, but which is to be compensated on the basis of a buffer against him being at a disadvantage on the open labour market. I am satisfied, however, that beyond that period his earning capacity will gradually deteriorate due to the onset of osteoarthritic changes, such that he will not be able to engage in full-time heavy work involving prolonged standing, including work as a butcher. He will not, however, be totally incapacitated, and will retain a significant degree of earning capacity, which I assess at 50%.

I am satisfied that the following assumptions about the plaintiff's future earning capacity accord with his most likely future circumstances but for his injury: he would have worked till the age of 67 in the same or similar employment, at a similar level of base wage: s 13(1) of the Civil Liability Act 2002.

The amount of the award of damages for future economic loss that would have been sustained by the plaintiff would in the ordinary course be adjusted by reference to a possibility that the events concerned might have occurred but for his injury: s 13(2) of the Civil Liability Act 2002. There should, therefore, be a 15% reduction for vicissitudes.

Having regard to these considerations, I would allow a rounded up amount of $85,000.00 for future economic loss on the following basis:

A buffer for the next 15 years, taking into account a reduction for vicissitudes: $25,000.00.

A 50% loss deferred for 15 years, calculated on the basis of present nett weekly earnings, for the final years of the plaintiff's working life until retirement at the age of 67, and taking into account a reduction for vicissitudes: $50,000.00.

An allowance for future loss of superannuation: $8,250.00.

The plaintiff makes a claim for care and assistance in the past and as to the future. In my view the plaintiff does not satisfy the threshold requirement for an award of damages for past domestic assistance.

For the future, a buffer is appropriate to compensate the plaintiff for the heavier domestic tasks he would otherwise have undertaken but will be precluded from doing so in later life by reason of the impact of osteoarthritic changes. The award reflects the cost of commercial assistance at present rates. I allow an amount of $10,000.00 for the future.

In the Statement of Particulars, the plaintiff made a claim for some $26,000.00 for future equipment. In my view the plaintiff is unlikely to require most of the items specified, if any, but I allow a buffer against the need for items to assist him in later life by reason of the impact of osteoarthritic changes.

I allow an amount of $5,000.00 for future equipment and aids.

The final head of damages to be considered and assessed is non-economic loss. Counsel for the plaintiff submitted that the severity of the non-economic loss as a proportion of a most extreme case should be assessed in a range between 30% to 35%.

In my assessment the appropriate proportion is 30%. That produces a statutory amount of $108,905.00: s 16(3) of the Civil Liability Act 2002.

The calculations as to the damages are set out in the Table below. The table sets out the total amounts for each individual head of damages as I would find them, in summary form, together with the total damages assessed.

Table Heads of Damage Amount Past out-of-pocket expenses $ 7,740.00 Future medical and pharmaceutical expenses $100,000.00 Past economic loss (including superannuation) $ 12,700.00 Future economic loss (including superannuation) $ 85,000.00 Past care Nil Future care $ 10,000.00 Future equipment and aids $ 5,000.00 Non-economic loss $108,905.00 Total damages $329,345.00

Orders for costs are to be made in accordance with r 42.1 and r 42.2 of the UCPR, unless some other order or orders are appropriate. There is nothing before me, at this point, to indicate that some other order is appropriate, but I will reserve leave to either party to apply in that regard.

There will, therefore, be verdicts for the defendants.

I direct the entry of judgment for the defendants against the plaintiff.

I direct the entry of judgment for the cross-defendants on the cross-claims.

I order the plaintiff to pay the defendant's costs, on the ordinary basis.

I order the cross-claimants to pay the costs of the respective cross-defendants, on the ordinary basis.

I give leave to the parties to apply for some other costs order or orders provided any such application is notified to the other party and the court within 7 days, in writing, specifying the order sought.

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