Pel-Air Aviation Pty Ltd v Casey

Court of Appeal (NSW)|2016-11-22|Before: Macfarlan JA, Ward JA, Gleeson JA

rld Airlines Inc 34 NY 2d 385 (1974) Seltsam Pty Ltd v Ghaleb (2005) 3 DDCR 1; [2005] NSWCA 208 Tasman Capital Pty Ltd v Sinclair (2008) 75 NSWLR 1; [2008] NSWCA 248 T C Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd (1963) 180 CLR 130; [1963] HCA 57 Watts v Rake (1960) 108 CLR 158; [1960] HCA 58 Weaver v Delta Airlines Inc 56 F Supp 2d 1190 (1999) Wilson v Peisley (1975) 50 ALJR 207 Texts Cited: H Luntz, Assessment of Damages for Personal Injury and Death, (4th ed 2002, LexisNexis) Category: Principal judgment Parties: Pel-Air Aviation Pty Ltd (Appellant) Karen Casey by her manager the National Australia Trustee Ltd (Respondent) Representation: Counsel: J E Sexton SC / D Lloyd (Appellant) R S McIlwaine SC / G R Graham (Respondent)

Solicitors: GSG Legal (Appellant) Everett Evans (Respondent) File Number(s): CA 2015/171223 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Common Law Citation: [2015] NSWSC 566 Date of Decision: 15 May 2015 Before: Schmidt J File Number(s): SC 2010/385262; 2011/46508

HEADNOTE [This headnote is not to be read as part of the judgment] In November 2009 Ms Karen Casey, the respondent, was a nurse employed by Care Flight (NSW). She travelled on a small aircraft to Samoa to evacuate a patient and her husband to Melbourne. The aircraft was scheduled to refuel at Norfolk Island on the return journey but bad weather prevented the pilot landing, as a result of which he ditched the aircraft in the sea. All six of the persons on board were rescued after spending about 90 minutes in the water. The experience was terrifying for Ms Casey. As a result of the incident Ms Casey suffered significant physical injuries, including spinal injuries and an injury to her right knee. In addition, Ms Casey suffered post-traumatic stress disorder ("PTSD"), a major depressive disorder and an anxiety disorder, and also developed a complex pain syndrome. These injuries, conditions and syndrome have been severely debilitating, precluding Ms Casey from working and seriously affecting her quality of life. Ms Casey brought District Court proceedings against Pel-Air, claiming damages. After the proceedings were transferred to the Supreme Court, judgment was entered in favour of Ms Casey in the sum of $4,877,604: [2015] NSWSC 566 and [2016] NSWSC 212. On appeal, the issues were as follows: (1) Whether the primary judge erred in concluding that Ms Casey's PTSD constituted a "bodily injury" as the term is used in the 1999 Montreal Convention relating to International Carriage by Air ("the Montreal Convention"), which has been incorporated into Australian law. (2) Whether the primary judge otherwise erred in the award of damages that she made to Ms Casey in respect of non-economic loss, past and present care and treatment expenses. (3) Whether, if the effects of Ms Casey's PTSD were excluded from consideration in the assessment of damages, the evidence justified an award for the costs of funds management. (4) By cross-appeal, Ms Casey challenged the primary judge's judgment of 11 March 2016 limiting Ms Casey's recovery of the estimated costs of funds management to $515,173, calculated by reference to NSW Trustee rates: [2016] NSWSC 212. Ms Casey claimed that she should be able to recover an amount of $872,000, calculated by reference to the rates of National Australia Trustee Limited ("NAT"), which Ms Casey had appointed as her manager. Held, allowing Pel-Air's appeal and allowing Ms Casey's cross appeal (per Macfarlan JA, with Ward and Gleeson JJA agreeing): (1) The expression "bodily injury" connotes damage to a person's body, including damage to a person's brain. If the evidence in a particular case demonstrates that there has been physical damage to part or parts of the brain, "bodily injury" will have been proved. Whilst the expert evidence justified a conclusion that Ms Casey's brain was malfunctioning as a result of biochemical changes, there was no evidence that her brain had physically changed. Thus the changes to Ms Casey's brain resulting from PTSD did not amount to "bodily injuries" as that term is used in the Montreal Convention: [46]-[47], [51]-[53]. American Airlines Inc v Georgeopoulos (No 2) [1998] NSWCA 273; Kotsambasis v Singapore Airlines Ltd (1997) 42 NSWLR 110 referred to. Morris v KLM Royal Dutch Airlines; King v Bristow Helicopters Ltd [2002] 2 AC 628 and American authorities referred to. (2) The primary judge made contingent findings to the effect that if her Honour were wrong in concluding that Ms Casey's PTSD was a "bodily injury", Ms Casey's damages would be reduced by identified percentages. There was no error in these findings: [60]-[61], [65]. (3) The evidence established that, even if Ms Casey did not suffer from PTSD, she would nevertheless require funds management. Recovery of the costs of it was accordingly allowed. Onus of proof where loss partly caused by an injury for which the defendant does not bear legal responsibility discussed: [89]-[92]. Seltsam Pty Ltd v Ghaleb (2005) 3 DDCR 1; [2005] NSWCA 208 and other authorities referred to. (4) To limit Ms Casey's recovery of the estimated costs of funds management to an amount calculated by reference to NSW Trustee rates, Pel-Air needed to show that Ms Casey's decision, through her tutor, to appoint National Australia Trustee Limited was so unreasonable that it could not be regarded as a consequence of Ms Casey's injuries. This could not be achieved simply by proving that NSW Trustee was a cheaper alternative. As the evidence established that the decision to appoint National Australia Trustee as Funds Manager was a reasonable one, Ms Casey could recover damages for the costs of funds management calculated by reference to its rates. Discussion of the principles relevant to the recovery of out-of-pocket expenses; [102], [105]-[108]. Gray v Richard (2014) 253 CLR 660; [2014] HCA 40 referred to.

Judgment

MACFARLAN JA: In November 2009 Ms Karen Casey, the respondent, was a nurse employed by Care Flight (NSW). She travelled on a small aircraft to Samoa with a doctor, Dr David Helm, to evacuate a patient and her husband, and return them to Melbourne. The aircraft was scheduled to refuel at Norfolk Island on the return journey but bad weather prevented the pilot landing, as a result of which he ditched the aircraft in the sea. All six of the persons on board survived the landing and were rescued after spending about 90 minutes in the water off Norfolk Island. The experience was terrifying for Ms Casey, as no doubt it was for the other persons on board.
Ms Casey suffered significant physical injuries, including spinal injuries and an injury to her right knee. In addition, Ms Casey came to suffer from the following three psychiatric conditions: 1. Post-traumatic stress disorder ("PTSD"). 2. A major depressive disorder. 3. An anxiety disorder. Ms Casey also developed a complex pain syndrome as a result of the crash.
These injuries, conditions and syndrome have been severely debilitating, precluding Ms Casey from working and seriously affecting her quality of life.
Both Ms Casey and Dr Helm brought District Court proceedings against Pel-Air, claiming damages. The proceedings were transferred to the Common Law Division of the Supreme Court and determined by Schmidt J by judgments dated 15 May 2015 ([2015] NSWSC 566) and 11 March 2016 ([2016] NSWSC 212). Judgment was entered in favour of Ms Casey in the sum of $4,877,604. It was also entered in favour of Dr Helm but his proceedings are not the subject of an appeal.
The first issue on Pel-Air's appeal is whether the primary judge erred in concluding that Ms Casey's PTSD constituted a "bodily injury". Ms Casey may only recover damages for that type of injury by reason of the 1999 Montreal Convention relating to International Carriage by Air ("the Montreal Convention"). The Civil Aviation (Carriers' Liability) Act 1959 (Cth) incorporated that Convention into Australian law.
Whilst the restriction of damages to those related to "bodily injury" is a significant one, the Montreal Convention and its predecessor, the Warsaw Convention of 1929, imposed a strict liability on air carriers, removing the need for claimants to prove negligence to complete their causes of action. The terms of the Convention therefore represented a compromise between the interests of claimants and air carriers.
The second issue is whether the primary judge otherwise erred in the award of damages that she made to Ms Casey in respect of non-economic loss, past and present care and treatment expenses. In a number of respects, the determination of this issue turns on the effect of excluding the consequences of Ms Casey's PTSD from the assessment of damages, if that condition is held not to constitute a "bodily injury".
I shall deal with these issues in turn.

WHETHER PTSD IS A "BODILY INJURY"

Section 9B of the Civil Aviation (Carriers' Liability) Act gives the Montreal Convention the force of law in Australia. Section 9E stipulates that a carrier's liability as set out in the Convention is in substitution for any civil liability the carrier may have under any other law.
Article 17(1) of the Convention is in the following terms: "The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking" (emphasis added).
At first instance Pel-Air accepted that Ms Casey's physical injuries constituted "bodily injury" for the purposes of Article 17 and that the mental harm that she suffered, other than her PTSD, was also properly so characterised. It did this because the evidence indicated that Ms Casey's physical injuries were at least in part a cause of Ms Casey's major depressive and anxiety disorders, and pain syndrome (Judgment [17] and [18]). It maintained this concession on appeal.
As the characteristics of the mental conditions from which Ms Casey suffers were not clearly identified in the evidence (other than in respect of PTSD), the Court was largely left to proceed upon the basis that they had the characteristics suggested by their names.
In relation to PTSD, Dr Jonathan Phillips, a psychiatrist called by Pel-Air to give expert evidence, provided the following description of the manner in which Ms Casey's symptoms accorded with the criteria for a PTSD diagnosis: "For purposes of verification, Ms Casey meets criterion A (1) for post traumatic disorder (she directly experienced an extremely traumatic situation); criterion A (2) (she witnessed others experience a similar situation); criterion B (1) (she has recurrent, involuntary painful memories of the traumatic event; criterion B (2) (she has dreams with content linked to the traumatic event); criterion B (3) (she has flashback experiences); criterion B (4) (she overacts to cues linked with the traumatic event); criterion C (1) (she tries to avoid distressing memories and thoughts); criterion C (2) (she has persistent negative expectations about herself); criterion D (3) (she has a persistent negative emotional state which has failed to respond to treatment); criterion D (6) (she has a sense of detachment from others); criterion D (7) (she has a persisting inability to experience positive emotions); criterion E (3) (she is hypervigilant); criterion E (5) (she has difficulties with concentration compared to the past); criterion F (her disturbance exceeds one month in duration); criterion G (the disturbance causes clinically significant distress/impairment across major domains of her life); criterion H (the disturbance is not attributable to the psychological effects of a substance, or will be explained adequately as being secondary to a problem of pain)."
Following a review of Australian, English and United States case authorities, the primary judge concluded that "a diagnosis of PTSD does not exclude the possibility that evidence in a particular case may establish that a person has suffered a bodily injury compensable under the Montreal Convention" and that the evidence before her established "that the PTSD which Ms Casey suffers and for which she has also been unsuccessfully treated, is consequent on damage to her brain and to other parts of her bodily processes, which have had the result that her brain is no longer capable of functioning normally" ([109]).
Later, her Honour said: "142 The evidence established that not only the functioning of parts of Ms Casey's body, but the functioning of her brain and other bodily processes necessary for her brain's normal functioning, were damaged in ways which resulted in her developing a complex pain disorder and various psychiatric conditions. She has not been able to recover from the damage done to her body and brain and has lost their normal functioning, in a variety of ways. Because of the nature of those injuries and the pain and other problems which they continue to cause, she has never been able to recover her health. … 145 Ms Casey's failure to respond to the treatment she has received for both PTSD and her other psychiatric conditions, is consistent with Ms Casey having suffered organic damage to her brain and other parts of her body on which its normal functioning depends. That is also consistent with her recovery from her PTSD having been precluded by the damage which helped cause that disorder. … 233 … The ongoing dysfunction of Ms Casey's brain, despite pharmacological and other treatment designed to treat all three conditions, is … consistent with chemical changes in her brain and body and alterations in her brain's neurotransmitter pathways, which have prevented a return to normal brain function, despite intensive treatment. As Lord Hobhouse discussed in King, this was treatment directed at a physical condition, which can be reversed or alleviated by physical means."
On appeal, Pel-Air submitted first that the case authorities did not justify a conclusion that any change in bodily condition or function was sufficient to constitute "bodily injury" within the meaning of the Convention and secondly that, if her Honour's judgment involved a conclusion that the evidence before her indicated that Ms Casey's PTSD was the manifestation of some damage to her body, that conclusion was erroneous.
As to the second submission, Pel-Air recognised that the primary judgment may be open to the construction that her Honour considered Ms Casey's PTSD to have been caused (at least in part) by her physical injuries, as with her other mental conditions (for example at [144], [233]). On appeal however, Ms Casey accepted that the highest that the evidence rose in this respect was to postulate that physical injury may exacerbate a PTSD condition (Transcript pp 55-6), without suggesting that it did so in the present case. Ms Casey's submission that it should nevertheless be inferred that her physical injuries caused her PTSD should be rejected as there is no evidence to support such an inference. As a result, Pel-Air's second submission should be accepted.
I turn then to consider Pel-Air's first submission.

The evidence concerning Ms Casey's PTSD

In a report dated 5 April 2014 Dr Richa Rastogi, Ms Casey's treating psychiatrist, stated: "Although Post traumatic stress disorder has been considered as a neuropsychiatric disorder, numerous studies and evidence based research have confirmed that complex traumatic experiences cause chemical changes in the brain which result in structural changes in brain [sic] and toxic changes as evident by neurotransmitter balance changes and physical defects in brain [sic] similar to other physical chronic disease and conditions. Posttraumatic stress disorder presents with a constellation of physical symptoms and somatic features with psychiatric comorbidity. This places Posttraumatic stress disorder categorically in chronic physical disorders with significant physical and psychological impairment. It is important to recognise the physical changes that occur in Posttraumatic stress disorder [are] similar to any chronic physical disease which cause[s] toxic milieu and cell death and damage which is irreversible. The areas of the brain where such changes occur are the hippocampus, amygdala and prefrontal cortex."
Dr Rastogi participated in a psychiatric expert conclave with Dr Phillips. In their Joint Report, the experts agreed that Ms Casey had the following three psychiatric disorders: ● PTSD ● Co-Morbid major depressive disorder; and ● Generalised anxiety disorder.
In the Joint Report, the experts' answers to Questions 8 and 17 (that were posed to them by the plaintiff and defendant respectively) were as follows: "QUESTION 8 Given that Ms Casey was a high functioning nurse educator prior to the aircraft ditching, has that event caused an alteration in her brain functions to account for her subsequent functional impairment? Dr Phillips: Notes this is a theoretical question. He says that there should be no doubt that all three disorders can intermittently and chronically lead to functional impairment which by definition represents an alteration in a 'brain function'. (In that there are changed patterns of neurotransmitter activity known to exist in associating with all three disorders). Dr Rastogi: Agrees with Dr Phillips and says chronic stress leads to biochemical changes and subsequent functional impairment has been progressive, which demonstrates alteration in brain function. Joint answer: It was clarified and agreed by both experts that a reference to 'brain functions' is a reference to chemical changes in the brain. QUESTION 17 Have the plaintiff's psychological injuries resulted in any chemical or structural changes and/or physical defects in her brain? With regard to 'chemical' changes this has been discussed above in the plaintiff's questions (question 8). Dr Phillips: There is meta-analytic research evidence to suggest that in some persons suffering from PTSD or Generalised Anxiety Disorder can suffer from physical changes to specific areas of the brain [sic]. There is a shrinkage of the hippocampus. Also, but to somewhat a lesser degree, there is statistical evidence of changes in the prefrontal areas of the brain. Joint answer: The experts agree that there is no evidence available to them (i.e. imaging) that will prove that the plaintiff has structural changes to her brain. However this cannot be ruled out."
The experts gave oral evidence together, answering further questions. Questions 7 to 13 asked in essence whether PTSD was a manifestation of changes to chemical neurotransmitters or other features of the brain. Both experts indicated that they did not claim particular expertise in neuropharmacology but agreed that neurotransmitters played an important part in the functioning of the brain. Dr Phillips stated that "ultimately psychiatric disorders are mediated by brain malfunction and almost by definition brain malfunction is a chemical issue, in that the brain is effectively an electrochemical computer and it uses chemical pathways as a way of [one cell] communicating … with the next". Dr Phillips agreed that it was probably correct to say that if the brain's neurotransmitter chemicals "are malfunctioning that is going to cause an abnormality in the function of the brain".
Dr Rastogi said that she was not able to say whether "elevated or deficient neurotransmitters relate to permanent changes in the brain", but that she could say that "imbalance of neurotransmitters over a chronic period of time can impact function and lead to impairment which in turn may reflect some brain malfunctioning". Dr Phillips said that it was possible that "elevated or deficient levels of neurotransmitters lead to permanent changes in the brain" but that had not been proved to be the case. He said that there was "reasonably good evidence that abnormalities of neurotransmission and neurotransmitters will cause dysfunction in certain domains" of the brain. Both experts agreed that it was speculative to suggest that these abnormalities "might lead to changes in the architecture or the structure of the brain" The more definitive views expressed in Dr Rastogi's report (see [19] above) must be treated as qualified by her oral evidence.

The case authorities

There are two Australian cases to which reference should be made at the outset.
The first is Kotsambasis v Singapore Airlines Ltd (1997) 42 NSWLR 110 in which this Court considered Article 17 of the Warsaw Convention 1929, which was adopted into Australian law by the Civil Aviation (Carriers' Liability) Act 1959 (Cth). Article 17 of that Convention had a similar operation to Article 17(1) of the Montreal Convention in that it relevantly confined liability to damage resulting from "bodily injury" suffered by a passenger. In that case, an airline passenger suffered a severe fright as a result of an incident during a flight with the defendant airline. Meagher JA (with whom Powell and Stein JJA relevantly agreed) opined that "the adjective 'bodily' is a word of qualification or limitation" and that it was clear "that the draftsmen of the Convention did not intend to impose absolute liability in respect of all forms of injury" (at [114]). His Honour found that "the term 'bodily injury' was not intended to, and on a proper interpretation of the Convention does not, include purely psychological injury" (at [115]). Stein JA added that "where mental anguish follows and is caused by physical injury, recovery for both injuries is covered" by the Convention and that "if the psychological injury is proven to be a species of bodily injury, then it would constitute 'bodily injury' within the article" (at [121]).
In American Airlines Inc v Georgeopoulos (No 2) [1998] NSWCA 273 the plaintiffs had suffered "mild" PTSD as a result of an airline flight. The magistrate before whom their claims came found that they did not suffer any "structural alteration to bodily tissues or alteration in the function of an organ or neurochemical change or any other form of damage to tissues or organs".
Sheller JA (with whom Meagher JA and Beazley JA agreed) rejected the proposition that a carrier would be liable under Article 17 for any damage that, although caused by an air accident, was not a result of death or bodily injury (at [6]). His Honour continued: "In my respectful opinion, consistent with this it could not be suggested that if a passenger was shocked by the fear of imminent death in a plane crash and thereafter injured her hip in obeying a direction to move to the front of the aircraft, she would be able to recover for her mental injuries, but if she had not injured her hip, such recovery would have been denied. I think the US Supreme Court [in Eastern Airlines v Floyd], when it used the word 'accompanied', had in mind to leave open the question whether the carrier was liable for mental injuries, consequent upon physical injuries, or emotional shock which had resulted in organic damage such as a coronary thrombosis or stroke. I think Stein JA in Kotsambasis at 121 correctly delimited the ambit of recovery for psychic injury when he said 'where mental anguish follows and is caused by physical injury, recovery for both injuries is covered … Moreover, if the psychological injury is proven to be a species of bodily injury, then it would constitute 'bodily injury' within the article'. Mr Evatt accepted that the stress disorder was not the consequence of any physical injury. The appellant is not therefore liable under Article 17 for Mr and Mrs Georgeopoulos' nervous shock or mental distress."
I now turn to relevant American and English authorities.
In Rosman v Trans World Airlines Inc 34 NY 2d 385 (1974) the Court of Appeals of New York held that passengers in an airliner that had been hijacked were entitled to damages in respect of their "palpable, conspicuous physical injury" but not their "mental injury with no observable 'bodily' as distinguished from 'behavioural' manifestations" (at 397).
In Eastern Airlines, Inc v Floyd 499 US 530 (1991), passengers on an airline which narrowly avoided crashing claimed damages for mental distress. The United States Supreme Court concluded "that an air carrier cannot be held liable under Article 17 when an accident has not caused a passenger to suffer death, physical injury, or physical manifestation of injury". The Court expressly refrained from expressing a view as to whether passengers could recover for mental injuries that were accompanied by physical injuries as the passengers in that case did not allege physical injury or physical manifestation of injury ([1502]).
In Weaver v Delta Airlines Inc 56 F Supp 2d 1190 (1999) the United States District Court of Montana found that PTSD suffered by an airline passenger as a result of an emergency landing constituted "bodily injury" as referred to in the Warsaw Convention. The Court referred to "recent scientific research explaining that post-traumatic stress disorder evidences actual trauma to brain cells structures" (1192). This decision was followed at first instance in In re Air Crash at Little Rock, Arkansas on 1 June 1999 118 F Supp 2d 916 (2000) in which the judge relied upon evidence of research that had shown brain dysfunction in people with PTSD. The evidence in that case is referred to further below (at [42]) where the appeal decision which reversed it is discussed.
In the House of Lords decision in Morris v KLM Royal Dutch Airlines; King v Bristow Helicopters Ltd [2002] 2 AC 628, one claimant had developed PTSD after a forced helicopter landing and subsequently suffered a peptic ulcer disease, and the other suffered clinical depression after being indecently assaulted during a flight by a passenger in an adjoining seat. The claims relating to PTSD and clinical depression did not succeed as it was held that a psychiatric condition did not in itself constitute a "bodily injury" within Article 17 of the Warsaw Convention. However, the claimant who suffered the peptic ulcer disease was allowed to proceed to proof on that claim alone. Although the Law Lords agreed as to the outcome of the appeal, they differed in their views as to what is encompassed by the term "bodily injury".
Lord Hope (with whom Lords Mackay and Steyn agreed) concluded as follows: " … For the time being I would venture to suggest that one would expect an injury falling within the expression 'bodily injury' to be capable of being demonstrated by an examination of the body of the passenger, making the best use of the most sophisticated means that are now available. The Weaver and Air Crash at Little Rock, Arkansas [at first instance] cases, as I understand them, did not proceed on that kind of evidence. There was no evidence in either case that the passengers had suffered an injury to the brain that was capable of being demonstrated by means of an examination of the body of the passenger. The argument was that the PTSD itself constituted a manifestation of a physical injury. In my opinion evidence of the kind that was available in those cases is not enough to satisfy the test of showing that a psychiatric illness is or includes a 'bodily injury' for the purposes of article 17" ([126]). … "… there has been no attempt in either case to demonstrate that the passengers' depressive illnesses had a physical cause or origin. It would not be right to speculate as to whether, in view of the fact that a clinical diagnosis has been achieved in each case and that treatment has been prescribed for them, their illnesses could be shown to have had a physical origin which could be causally linked to the accident. That would have been a matter for proof. But there has been no offer to lead any such evidence. It is sufficient for the decision in these cases to say that it has not been shown that the mental injury which the passengers sustained falls within the scope of the expression 'bodily injury'" ([128]).
Lord Mackay agreed with Lord Hope and postulated a simple test: "[D]oes the evidence demonstrate injury to the body, including in that expression the brain, the central nervous system and all the other components of the body?" ([8]).
Lord Steyn contemplated the recovery of compensation for mental injury where it was caused by physical injury, and compensation for adverse physical symptoms (such as strokes, miscarriages or peptic ulcers) of mental injury, but not for the antecedent mental injury itself. He rejected the view that compensation for mental injury or illness was available to someone who suffered no physical injuries.
He accepted that "there is a physical connection between the illness of the mind and the body inasmuch as the central nervous system which includes the nervous tissue of the brain is involved" ([25]), but concluded that "at the time of the Warsaw Convention a line was drawn between bodily injury (that is, involving non fatal physical injury) and mental injury or illness" ([26]) which would not be maintained if Weaver were followed.
Lord Hobhouse took a wider view of what could constitute bodily injury. He concluded his discussion of the meaning of "bodily injury" as follows: "Thus, bodily injury simply and unambiguously means a change in some part or parts of the body of the passenger which is sufficiently serious to be described as an injury. It does not include mere emotional upset such as fear, distress, grief or mental anguish … A psychiatric illness may often be evidence of a bodily injury or the description of a condition which includes bodily injury. But the passenger must be prepared to prove this, not just prove a psychiatric illness without evidence of its significance for the existence of a bodily injury" ([143]).
In discussing the decisions in Weaver v Delta Airlines and Eastern Airlines Inc v Floyd, he stated: "The plaintiff [in Weaver] filed affidavits providing uncontradicted expert evidence that 'extreme stress causes actual physical brain damage, ie, physical destruction or atrophy of portions of the hippocampus of the brain'. 'The impact upon [the plaintiff] of the events which occurred on that flight was extreme and included biochemical reactions which had physical impacts upon her brain and neurological system.' She had thus presented evidence of 'physical injury' and was entitled to say that 'her diagnosed post-traumatic stress disorder arose from the physical changes in her brain brought on during the extreme stress of the emergency landing' … The judge therefore distinguished her case from 'Floyd and its progeny': she was relying upon 'an injury to her brain, and the only reasonable conclusion is that it is, in fact, a bodily injury' … It is hard to see any basis for disagreeing with the conclusion that, if the passenger can prove that his or her brain was damaged as a result of the accident, the passenger has suffered a bodily injury" ([175]).
He concluded that the decision in Weaver was wholly "unexceptionable" and "in line with the US law and the natural meaning of the words 'bodily injury'" (at [178]). In his view, both claimants however failed because they did not allege (or prove) that their psychiatric injuries reflected physical brain injuries ([183] and [184]).
Lord Nicholls agreed with Lord Hobhouse's analysis of the authorities. He rejected a submission based on Rosman that bodily injuries were confined to those which are "palpable and conspicuous" and continued: "The brain is part of the body. Injury to a passenger's brain is an injury to a passenger's body just as much as an injury to any other part of his body. Whether injury to a part of a person's body has occurred is, today as much as in 1929, essentially a question of medical evidence. It may be that, in the less advanced state of medical and scientific knowledge 70 years ago, psychiatric disorders would not have been related to physical impairment of the brain or nervous system. But even if that is so, this cannot be a good reason for now excluding this type of bodily injury, if proved by satisfactory evidence, from the scope of article 17. This does not mean that shock, anxiety, fear, distress, grief or other emotional disturbances will as such now fall within article 17. It is all a question of medical evidence. In Weaver v Delta Airlines Inc (1999) 56 F Supp 2d 1190 the uncontradicted medical evidence was that extreme stress could cause actual physical brain damage. The judge observed, at p 1192, that 'Fright alone is not compensable, but brain injury from fright is'" ([3]-[4]).
Three American cases, decided subsequent to Morris v KLM Airlines, require mention.
In In re Air Crash at Little Rock Arkansas, on June 1 1999 291 F 3d 503 (8th Cir 2002), (the first instance decision being referred to above at [31]), a passenger suffered both physical and mental injuries in an airline crash, the latter including PTSD. A psychiatrist testified, by reference to academic articles, that the hypothalamus and limbic systems in the brain function abnormally when people have PTSD. On appeal, the United States 8th Circuit Court of Appeals noted that the psychiatrist did not testify that these systems functioned abnormally in the plaintiff, rather he admitted that he had not performed tests that might have revealed such abnormalities, and "merely stated that [the plaintiff's] brain was not functioning normally as evidenced by lack of sleep and concentration, as well as … flashbacks" (at [507]). The Court held that "physical manifestation of mental injuries such as weight loss, sleeplessness or physical changes in the brain resulting from chronic PTSD are not compensable" under the Warsaw Convention (at 512). The Court accordingly disagreed with the lower court's finding that the passenger was entitled to be compensated for her mental injuries.
In Bobian v Czech Airlines 93 Fed Appx 406 (2004) airline passengers who had experienced terror when their aircraft flew into a hurricane claimed that they had PTSD which was "physically based in the neurochemical and neurophysiologic reactions in critical brain areas dedicated to emotional control and regulation" ([1]). They contended that chemical releases in times of extreme stress "physically damage and kill cells within the brain, resulting in physical destruction (atrophy) of portions of the hippocampus of the brain" (ibid).
The Third Circuit Court of Appeals rejected the claims on the basis that the claimants did not allege that they suffered "palpable, conspicuous physical injury" (see Rosman referred to at [29] above) and noted that in any event "none of the plaintiffs … brought forward cognizable evidence that his or her brain has changed physically from an earlier state" ([2]).
In Jane Doe v United Airlines Inc 160 Cal App 4th 1500 (2008) a minor, through her guardian, sought damages from an airline on the basis that she had been molested during an international airline flight and suffered PTSD as a consequence. Her psychologist gave evidence that "PTSD has a physical basis which includes alteration in brain chemistry, physiology and the neurologic[al] system" and that "scientific research had tied some of these symptoms to specific changes in the brain and nervous system" (at 1508). The Court of Appeal for the Second District, Division 4, California found that the claim did not raise a triable issue. The Court examined case authorities and concluded at 1511: "The majority rule, as disclosed by our survey of case authority, is that alterations in an individual's body and behavior intrinsically or characteristically associated with mental distress do not constitute bodily injury under the Warsaw Convention. This rule encompasses alterations or changes in an individual's brain and nervous system characteristically tied to PTSD. At bottom, the rule rests on the recognition that mental distress typically and regularly manifests itself in an individual's brain, nervous system, body and behavior. Accordingly, absent the rule, plaintiffs who suffer mental distress could avoid Floyd merely by pointing to changes in their body that characteristically constitute the physical manifestations of their form of distress. Under this rationale, Weaver, which does not comply with the majority rule, is wrongly decided. We find the rationale compelling, and thus follow the majority rule, rather than the vacated decision in Weaver."

Conclusions on the case authorities

The expression "bodily injury" connotes damage to a person's body, but there is no reason to regard this as excluding consideration of damage to a person's brain. Thus if the evidence in a particular case demonstrates that there has been a physical destruction of a part or parts of the brain, "bodily injury" will have been proved. This conclusion is consistent with this Court's decisions in Kotsambasis and American Airlines (see [25] and [26] above). It is also compatible even with the narrower view adopted by Lord Hope (with whom Lords Mackay and Steyn agreed) in Morris v KLM Airlines (see [33]-[36] above). Likewise it does not conflict with the American cases to which I have referred, although the suggestion in some of those cases that a "bodily injury" must be "palpable, conspicuous physical injury" (for example Bobian at [44] above) elevates the threshold to too high a level. It is sufficient if physical injury can be proved.
As will be apparent from my references above at ([19] to [23]) to the medical evidence in the present case, there was no proof here that Ms Casey's PTSD resulted from actual physical damage to her brain. However the more difficult question that arises is whether the biochemical changes in her brain, of which there is evidence in the present case (see [21] above), constitute "bodily injuries". My conclusion is that they do not.
The two relevant Australian cases (Kotsambasis and American Airlines) are silent on this issue. However in Morris v KLM, the majority of the members of the House of Lords (Lords Hope, Mackay and Steyn) held that such biochemical changes do not constitute "bodily injuries". Those Lords disapproved of the decision in Weaver and the first instance decision in Little Rock ([31] above). The former found for the plaintiff where there was evidence of "actual trauma to brain cells structures", which in fact went beyond the evidence in the present case. In the latter, the evidence referred to "brain dysfunction" which conforms more closely to the evidence in the present case. Lords Hope, Mackay and Steyn took the view that a relevant injury to the brain had to be "capable of being demonstrated by means of an examination of the body of the passenger" (at [33] above), and therefore the psychiatric injuries in both the cases before the House of Lords were not compensable.
Lords Nicholls and Hobhouse took a more benign view of the decision in Weaver and seemingly accepted it as authoritative. However this was a minority opinion.
The US Supreme Court decision in Eastern Airlines v Floyd did not determine the present question, but the more recent American decisions in Little Rock (on appeal), Bobian and Jane Doe (see [42]-[45] above) are against Ms Casey's claim. In Little Rock, evidence of abnormal brain functioning was found to be insufficient. In Bobian, claims were rejected because there was no evidence that the claimants' brains had "changed physically from an earlier state" and in Jane Doe, Weaver was treated as wrongly decided.
Consistent with these case authorities, I consider that it is insufficient for a claimant to prove that the function of his or her brain has changed or even that chemical changes have occurred in it. In the absence of compelling medical evidence to the contrary, such malfunctioning or chemical changes cannot fairly be described as "injuries" to the body. Moreover, importance must be attached to the adjective "bodily" as a limiting word. It clearly draws a distinction between bodily and mental injuries: mental injuries are covered only if they are a manifestation of physical injuries, or if they result from physical injuries (including physical injuries to the brain).

Conclusion as to whether Ms Casey's PTSD has been proved to be a "bodily injury"

The effect of the experts' evidence in this case was that whilst Ms Casey's PTSD might reflect physical (as distinct from chemical or other) changes that had occurred to her brain, there was no evidence before them that such changes had in fact occurred. Their evidence justified a conclusion that Ms Casey's brain was malfunctioning as a result of biochemical changes. However for the reasons that I have given above, such changes did not amount to "bodily injuries" within the meaning of that expression in the Montreal Convention.
It follows that the primary judge's conclusion that Ms Casey's PTSD was a "bodily injury" because normal functioning of her brain was impaired (see [15] above) was, in the absence of evidence of physical damage to the brain, erroneous.

MS CASEY'S DAMAGES

The primary judge made contingent findings concerning Ms Casey's claimed damages to the effect that if her Honour were wrong in concluding that Ms Casey's PTSD was a manifestation of a bodily injury, Ms Casey's damages would be reduced, but only to a limited extent. On its appeal, Pel-Air contended that larger reductions should be made in the event that her Honour's conclusion regarding Ms Casey's PTSD were incorrect. On the other hand, Ms Casey contended that the primary judge's actual award of damages was correct even if PTSD were to be disregarded.
Pel-Air also took other objections to the damages award, as described below.

Non-economic loss

Section 16 of the Civil Liability Act 2002 (NSW) applied to limit the damages recoverable by Ms Casey for non-economic loss. The primary judge assessed Ms Casey's non-economic loss as 80% of the "most extreme case" referred to in that section. Her Honour made a contingent finding that if, contrary to her view, PTSD were to be excluded from consideration, Ms Casey's loss should be assessed as 70% of the most extreme case. She explained that finding by saying that "[g]iven the nature of [Ms Casey's] injuries, her psychiatric conditions, the complex pain syndrome which she also suffers and their ongoing interaction and consequences, even if she was not suffering PTSD, her circumstances would not be considerably different" (Judgment [242]).
Whilst acknowledging that the impact of Ms Casey's PTSD was difficult to distinguish from that of her other disorders, Pel-Air submitted that "the PTSD was the most significant cause of her mental harm" (written submissions [45]). It relied upon Dr Phillips' evidence that Ms Casey's non-PTSD disorders are "more easily treated" and "have a better outcome", and submitted that the primary judge's contingent assessment of Ms Casey's loss as 70% of the most extreme case if PTSD were excluded should be reduced to 50%.
Dr Phillips however made it clear that the non-PTSD disorders would nevertheless "require a reasonably extensive and ongoing treatment". Dr Rastogi agreed, and added that Ms Casey's depressive disorder was "treatment resistant", a proposition with which Dr Phillips agreed. That evidence led to comments by both doctors as to the difficulty of untangling the effects of Ms Casey's various conditions. Dr Rastogi's view, which it was open to the primary judge to act on, was that the combination of the non-PTSD disorders suffered by Ms Casey "would affect [her] quality of life and … her capacity to work as well as engaging in leisurely activities, with or without the presence of PTSD" (emphasis added). Dr Rastogi's evidence was that the presence of PTSD would have little additional impact on Ms Casey's life.
A judge's assessment of the magnitude of a plaintiff's non-economic loss is an evaluative decision, akin to a discretionary judgment. Hence, to challenge it successfully a high barrier needs to be surmounted. Mason J described the applicable rule in Wilson v Peisley (1975) 50 ALJR 207 at 214 as follows: "The settled rule, then, is that an appellate court will not disturb a primary judge's award of damages for personal injury unless it is convinced that he has acted on a wrong principle of law or that he has misapprehended the facts or that the amount of damages awarded is so inordinately low or so inordinately high as to be a wholly erroneous estimate of the damage suffered." See also Nemeth v Westfield Shopping Centre Co Management Pty Ltd [2013] NSWCA 298 at [11] and ALDI Foods Pty Ltd v Young [2016] NSWCA 109 at [183].
In my view Pel-Air did not satisfy this demanding test. It did not identify any error of principle made by the primary judge or show that she misapprehended the facts. In light of the psychiatric evidence, which referred to the difficulty of disentangling Ms Casey's conditions, her Honour was entitled to conclude that without her PTSD condition Ms Casey's position would not be significantly better than it is. Her Honour's assessment of 10% as the difference was within the range of assessments that the evidence justified.
Ms Casey's challenge by her Notice of Contention to the contingent finding should also be rejected as the evidence justified the reduced percentage that her Honour held should be adopted in the event that Ms Casey's PTSD were not to be considered. It follows that the actual damages award cannot be sustained if PTSD is ignored: as the primary judge found, some reduction, albeit limited, is warranted. The evidence referred to at [57] above illustrates this.

Treatment expenses

The primary judge stated that if Ms Casey's PTSD were to be excluded from consideration, the damages of $491,915.93 to which Ms Casey would otherwise be entitled for past treatment costs should be reduced by 10%. Her Honour reached the same conclusion in respect of elements of the damages awarded for future treatment costs related to weekly group therapy, psychologist costs, psychiatrist costs and hospitalisation.
On appeal, Pel-Air objected to her Honour's percentage reductions that were contingent on the exclusion of PTSD, submitting that the discount should be 25% in respect of both past and the identified future out-of-pocket expenses. It also objected on an additional basis to the award for prospective hospitalisation expenses.

The percentage reduction warranted

When giving evidence jointly with Dr Phillips, Dr Rastogi said that the treatments for PTSD and "major depression anxiety" are much the same. Dr Phillips said that he did not "entirely" agree, although he accepted that both have a "core treatment program". He said that "additional treatment modalities" need to be considered in relation to PTSD. He concluded by referring to PTSD as requiring a "slightly different form of therapy" (emphasis added). Dr Rastogi maintained her view that the applicable treatments "remain very similar".
In light of this evidence, the primary judge's contingent findings of a 10% discount in relation to both past and the identified future treatment costs were well within the range of discounts open to her Honour. They were neither plainly too low nor plainly too high. The challenges by both Pel-Air and Ms Casey to those contingent findings should accordingly be rejected.

Hospitalisation

The primary judge accepted Ms Casey's claim for future hospitalisation costs. Those were calculated on the basis of an average of 1.5 admissions per year of 3.5 weeks average duration.
Contrary to Pel-Air's submissions on appeal, this claim was supported by Dr Rastogi's evidence given in the experts' Joint Report. Dr Rastogi said that Ms Casey had required hospitalisation two to three times each year for the past four years, with the average duration being three to four weeks. She added that "[i]n the future maybe the plaintiff will require 1 - 2 admissions per year given that in the past year the plaintiff has improved and not required as many admissions".
Pel-Air submitted that Dr Rastogi's evidence indicated that Ms Casey would at most require one to two admissions per year. That is not a fair reading of her evidence quoted above, which was to the effect that the two to three admissions per year for the past four years might reduce to one to two admissions per year in the future. An award on the basis of one to two admissions per year was a fair and conservative reflection of the evidence.
Pel-Air also complained that the primary judge had "no regard" to Dr Phillips' evidence that the hospital admissions were likely to be fewer. However it was open to the primary judge to prefer Dr Rastogi's evidence on this topic as Dr Rastogi was and is Ms Casey's treating doctor, and Dr Phillips had only examined Ms Casey once.
Moreover the primary judge's approach was supported by the written evidence of Dr Klug (who was qualified by Pel-Air but was not required to give oral evidence). On appeal, Pel-Air submitted that the primary judge was in error in having regard to Dr Klug's report as he did not give oral evidence. However, it was well open to Pel-Air to lead further evidence from Dr Klug if it thought that it was appropriate to do so. It not having done so, there was no reason for her Honour not to have regard to his report.
In these circumstances, Pel-Air's challenges to the primary judge's awards in respect of out-of-pocket expenses should be rejected.

Past care

In her judgment, the primary judge dealt in detail with the extensive gratuitous attendant care services that Ms Casey received from her mother (Ms De Brouwer), stepfather and her children Jemma and Jesse. Her Honour allowed the amount of $211,579 claimed by Ms Casey. This was based upon varying contributions by these family members over different periods of time. The amount claimed (and awarded) was less than that which Ms Inbal Luft (an occupational therapist called by Ms Casey to give expert evidence) indicated was reasonably necessary.
Pel-Air submitted that the evidence from Ms Casey and her family members regarding the provision of care was vague. However this was almost inevitably so in light of the fallibility of human memory as to the details of what occurs from day to day in a domestic setting. Contrary to Pel-Air's submissions, there was sufficient evidence to ground her Honour's findings as to what care was provided.
Pel-Air also submitted that there not only needed to be evidence of the time family members spent providing care to Ms Casey, but also medical evidence of the need for it. However, sufficient expert evidence was provided by Ms Luft's evidence, to which I have referred above.
Pel-Air further submitted that the primary judge erred in having regard to evidence of time spent in the provision of services that were confined to emotional support. Ms Casey's evidence, for example, described attendances on her by her mother which were "to comfort her in ways reasonably necessary for the alleviation of her pitiable conditions" (Judgment [318]). As well, Ms Luft noted that "much of the care provided has been emotional in nature". As her Honour said: "[Ms Casey] received ongoing assistance with domestic tasks which she undertook previously for herself and her family, as well as assistance which she herself required, to alleviate not only the serious physical consequences of her injuries and the pain which they caused her but also the consequences of the psychological conditions which she suffered" (Judgment [297]).
Bearing in mind the significant psychiatric aspects of Ms Casey's injuries, including depression, I see no reason why "attendant care services" as defined in s 15(1) of the Civil Liability Act is not capable of embracing the emotional support provided to her. Such support is at least within subparagraph (c) of s 15(1): "services that aim to alleviate the consequences of an injury". The lay, psychiatric and occupational therapy evidence provided the basis for a conclusion that such support was necessary and appropriate to be provided to Ms Casey to attempt to alleviate the effects of her non-PTSD psychiatric conditions and physical injuries.

Future care

The primary judge awarded damages of $793,247 in respect of future attendant care. The elements that are in issue on appeal are as follows.
First, her Honour allowed 3.5 hours per week for "self-care". "Self-care" referred in this context to assistance with Ms Casey's eating and health management. Pel-Air submitted that her Honour had mistakenly concluded that Ms Hammond, the occupational therapist called by Pel-Air, had allowed a substantial amount for self care in her assessment. Her Honour appears to have been mistaken in this respect (as a result of an error in Ms Casey's written submissions), leading to her Honour adopting an average figure of $242 representing the mid-point between Ms Luft's figure of $234 per week and Ms Hammond's supposed figure of $249 per week. The allowance of 3.5 hours per week ($234 per week in monetary terms) was justified in light of the extensive nature of Ms Casey's non-PTSD disorders and physical injuries, and the primary judge's general acceptance of Ms Luft's opinions about Ms Casey's care needs (which were also strongly supported by Dr Rastogi on page 4 of her report dated 20 May 2013). However the award of damages should be adjusted downwards to reflect the absence of justification for the higher figure of $242, which was based upon a mistaken reading of Ms Hammond's report.
Secondly, the primary judge made an award in respect of future domestic care based on a need of 6.7 hours per week. The award was supported by Ms Luft's evidence. It differs from Pel-Air's conceded weekly requirement of 4.7 hours, but this is an area where considerable subjectivity is involved in assessments. In my view, the primary judge did not make an obvious error in adopting a rate of 6.7 hours per week on the basis of Ms Luft's evidence. I consider 6.7 hours a week to be well within the range of rates that were reasonably open to her Honour bearing in mind the evidence, which she described in detail, of Ms Casey's serious disabilities.
Thirdly, the primary judge found that Ms Casey was entitled to damages for "assistance with leisure", assessed at the rate of two hours per week. This was supported by the psychiatrists' evidence that Ms Casey would be assisted by pursuing physical exercise. Pel-Air submitted on appeal that engaging in physical exercise was different to having someone motivating a plaintiff to do it. However Ms Casey's disabilities, both physical and psychiatric, rendered it well open to the primary judge to take the view that Ms Casey would not, and (to some extent at least) could not, be a self-starter who would maintain an exercise regime at an appropriate level without assistance.
Fourthly, the primary judge awarded damages to cover the costs of $30 per week for Ms Casey to maintain regular contact with a mental health worker (Judgment [324]). Dr Rastogi and Dr Phillips agreed on the desirability of such contact continuing to occur and Pel-Air did not identify any satisfactory reason for interfering with the judge's allowance in this respect.
Pel-Air submitted that Ms Casey did not demonstrate that she would in fact utilise commercial care if she received damages to pay for it (irrespective of whether a reasonable need for future care had been shown). Pel-Air relied upon evidence that Ms Casey had in the past been reluctant to accept commercial care and had felt embarrassed that she was unable "to do the chores". Pel-Air did not however suggest to this Court that it cross-examined Ms Casey to suggest that she would not in the future obtain commercial assistance if her family members were unable to provide it.
In my view, the evidence suggested that Ms Casey would be driven to obtain such assistance because of the nature and extent of her disabling conditions. The assistance that Ms Casey's mother and stepfather have been able to provide has understandably diminished over time due to their age, the former being 71 in 2014 and the latter being 80 at that time. Further, none of Ms Casey's adult children lives at home. As well, Ms Casey is divorced and there was no evidence to which this Court was referred of her being in a permanent or semi-permanent relationship with another person who could be expected to assume the role of her carer.
In these circumstances, I consider it probable that Ms Casey will in fact utilise the services that are the subject of the primary judge's future care award, even though she may be reluctant to do so.
For these reasons, Pel-Air's challenges to the primary judge's awards in respect of past and future care should be rejected. I add that Pel-Air did not contend that the conditions for recovery of damages for gratuitous attendant care services specified in s 15 of the Civil Liability Act were not satisfied.

Whether any award should have been made

It was not contended at first instance or on appeal that Ms Casey's condition, when considered on an unqualified basis, did not warrant an award for the costs of managing her damages (see Gray v Richard (2014) 253 CLR 660; [2014] HCA 40 at [4]) . Pel-Air however contended that if (as I have held) the effects of Ms Casey's PTSD are to be excluded from consideration, the evidence does not justify such an award. Although Pel-Air says that it raised the point at first instance, the primary judge did not make any contingent finding in relation to it.
In the experts' answer to Question 13 in the Joint Report, Dr Rastogi said that Ms Casey needed to have a tutor to manage her financial affairs because of "her current cognitive capacity, short term memory problems, concentration, her difficulty with making decisions and her impaired judgment". Dr Phillips said that a manager was required on the basis of Ms Casey's "severe mental health symptoms, cognitive disorder and problems associated with the severity of her pain". Elsewhere in the evidence Dr Rastogi said that Ms Casey's "impaired judgment and insight" rendered her incapable of managing her affairs.
Neither in the Joint Report nor elsewhere did the evidence indicate whether Ms Casey's need for a manager was attributable to her PTSD rather than her other conditions. The only evidence arguably relevant to this topic was the opinion expressed by Dr Phillips that Ms Casey's life and capacities would be improved, and her future requirements would be less, if she did not have PTSD as well as her other conditions.
In these circumstances, Pel-Air submits that no award should have been made for the costs of funds management because the onus was on Ms Casey to adduce evidence disentangling relevant causative factors and, as she did not do so, it is not possible to determine whether her non-PTSD conditions justified a funds management costs award. In this respect, Pel-Air relied on Seltsam Pty Ltd v Ghaleb (2005) 3 DDCR 1; [2005] NSWCA 208 which considered the High Court decisions in Watts v Rake (1960) 108 CLR 158; [1960] HCA 58 and Purkess v Crittenden (1965) 114 CLR 164; [1965] HCA 34.
The effect of those cases is that if a defendant wishes to contend that a plaintiff's condition has been caused by, or is in the future likely to be affected by, a matter for which the defendant is not responsible, the defendant bears an evidentiary onus to raise that issue. If that is done, it remains for the plaintiff to establish on the whole of the evidence that his or her condition is or will be attributable, in whole or in part, to the defendant's conduct.
In the present case, the question is whether a particular type of loss that the plaintiff alleges that she will suffer (the costs of funds management) will be attributable to causes for which Pel-Air is responsible (those other than PTSD) or to her PTSD for which, on my findings, Pel-Air is not legally responsible. Pel-Air has satisfied its evidentiary onus as there was before the Court clear evidence that Ms Casey's present, and likely future, physical and mental condition is partly attributable to PTSD. That leaves for determination, on the whole of the evidence, the question of whether Ms Casey has established that her non-PTSD disabilities necessitate her having funds management assistance.
The primary judge held that they did. Although her Honour did not specifically address the present argument, I do not consider Pel-Air to have demonstrated that her Honour's conclusion was erroneous.
The evidence to which I have referred at [87] above did not suggest that Ms Casey's impaired judgment and associated disabilities were attributable only to her PTSD. Rather, the inference from the evidence was, in my view, that they were attributable to her conditions generally. Dr Phillips' specific reference to "the severity of [Ms Casey's] pain" emphasises this, as does Dr Rastogi's oral evidence that, with chronic pain of the type which Ms Casey suffers, "comes a lot of physical changes, specially [sic] she has long-term issues with insomnia, her concentration memory is significantly impaired because of chronic sleep problems". Further, in a report of 20 January 2013, Dr Robin Fitzsimons (a neurologist), referred to the possibility of cognitive skills being impaired as a result of depressive illness, and said that depressive illness "can certainly result in impaired concentration".
Pel-Air submitted, however, that it was assisted by the answer to Question 20 set out in the psychiatric experts' Joint Report. Relevantly, Question 20 asked whether, upon the assumption that PTSD was excluded from consideration, "the plaintiff [would] require any assistance because of her psychological injuries with funds management?". The joint answer was "No, the Plaintiff and her mother have managed so far and her family has also provided assistance over this period with funds management".
This evidence is not in my view determinative of the present issue as the experts' answer assumed that Ms Casey's family members, particularly her mother, would continue to be available to assist her. However, for the reasons given at [83] above, that is not a sound assumption. Moreover the experts were in no position to assess the adequacy of the funds management that had occurred thus far. As a result, the answer did not address, at least not satisfactorily, the issue of whether of Ms Casey had, and was likely to have in the future, the mental capabilities to manage her funds on her own.
This view is fortified by consideration of the experts' separate answers to Question 13 in the Joint Report. This asked whether Ms Casey was "unable to manage her own affairs" such that she required the appointment of a tutor to do so. The relevant parts of the answers are set out in [87] above. A comparison of the experts' answers to Questions 13 and 20 (see [94] above) does not suggest that they regarded the exclusion of PTSD from consideration as of critical significance. If they had regarded this as critical, it is unlikely that they would have omitted to say so.
For these reasons, Pel-Air did not in my opinion establish that the primary judge erred in making an award in respect of Ms Casey's costs of funds management.

The quantum of the fund management costs award

By cross-appeal, Ms Casey challenged the primary judge's judgment of 11 March 2016 limiting Ms Casey's recovery of the estimated costs of funds management to $515,173, calculated by reference to NSW Trustee rates ([2016] NSWSC 212). Her Honour rejected Ms Casey's claim for an amount of $872,000, calculated by reference to the rates of National Australia Trustee Limited ("NAT"), which Ms Casey had appointed as her manager.
Matters noted by her Honour that are of present relevance are as follows: 1. Orders had previously been made by Lindsay J, on the application of Ms Casey's mother as her tutor, appointing NAT as her manager. 2. NAT's appointment and role was expressed to be subject to the oversight and control of NSW Trustee. 3. Evidence was led before Schmidt J as to the fees charged by NSW Trustee, the Perpetual Trustee Company Ltd and NAT. 4. There was no evidence led from Ms Casey's tutor as to her reasons for selecting NAT, but there was no suggestion that her decision was unreasonable. 5. There was no suggestion that NSW Trustee could not have managed Ms Casey's estate in her best interests, at considerably lesser costs. It followed, her Honour held, that its appointment "would also have been a reasonable one" ([14]). 6. Mr Navakas, a certified financial planner, was called to give evidence. He met with Ms Casey and her mother four or five times before the funds were invested and once afterwards. His firm provides "financial advice support and funds management skill set for National Australia Trustees, including fund management recommendations" ([18]).
Her Honour concluded: "27 In my view a simple, unexplained preference for a more expensive manager, without more, when there is no question that the NSW Trustee could also be appointed by the Court and that it could also properly perform the work Ms Casey requires, cannot be a just basis upon which the calculation of this head of damage can rest."
In her submissions on appeal, Ms Casey noted the following additional matters: 1. The orders made by Lindsay J expressly made NAT's appointment conditional on NSW Trustee's authorisation of it to assume management of Ms Casey's estate. 2. In her affidavit in evidence before Lindsay J, Ms Casey's tutor said that NAT had provided her with a comparison between the fees that would be charged by it and the fees of NSW Trustee.
Damages are awarded to compensate a plaintiff for costs that have or will be incurred as a result of the defendant's conduct. Only reasonable costs are recoverable (H Luntz, Assessment of Damages for Personal Injury and Death, (4th ed 2002, LexisNexis) at [4.2.3]).
Subject to any relevance of the evidence that NSW Trustee's fees were lower than those of NAT, in my view the following evidence supported the conclusion that NAT's appointment and the fees it charged for that appointment were reasonable: 1. The appointment was approved by Lindsay J. 2. The appointment was authorised by NSW Trustee in accordance with the terms of Lindsay J's orders. 3. Ms Casey's tutor decided to make the appointment after a number of discussions with a certified financial planner. 4. There was no evidence that NAT's rates were inconsistent with market rates or those of any institution other than NSW Trustee.
Indeed, the primary judge expressly stated that "there was no suggestion that the decision to appoint National Australia Trustees as manager was unreasonable" (Judgment [8]).
In my view these matters created a strong prima facie case for recoverability at NAT rates. For Pel-Air to have that recovery denied, it would in my view needed to have shown that Ms Casey's failure, through her tutor, to choose the cheaper alternative (NSW Trustee) rendered her decision to appoint NAT "so unreasonable … that it could not be regarded, as a matter of common sense, as a consequence of [Ms Casey's] injury" (Gray v Richard at [47]).
As Ms Casey proved a prima facie case of causative connection with Pel-Air's conduct and reasonableness of the expense, the onus was on Pel-Air to prove that Ms Casey failed to mitigate her loss by appointing NAT rather than NSW Trustee (as to the onus of proof in relation to mitigation of loss, see for example T C Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd (1963) 180 CLR 130 at 138; [1963] HCA 57 at [9]-[10] and Tasman Capital Pty Ltd v Sinclair (2008) 75 NSWLR 1; [2008] NSWCA 248 at [57]). This could not be achieved simply by proving that there was a cheaper alternative to the course taken by Ms Casey, particularly when the appointment of a manager would be likely to create a long-term relationship in which its expertise in producing returns and securing the safety of capital, as well as in maintenance of a satisfactory working relationship, would loom large. In the same way, a claim for the cost of a medical operation will not be defeated merely because it has been proved that a particular operation could have been performed more cheaply elsewhere or by another practitioner (Luntz, [4.2.3]).
It was open to Pel-Air to explore Ms Casey's tutor's reasons for appointing NAT in cross-examination or to adduce evidence of market rates. However it chose not to do either, with the result that it failed to counter the prima facie case made against it. As in Gray v Richards, there was no evidence that NAT's fees were "outside the market" (at [48]) and reliance simply on a disparity between the rates of the appointed trustee and those of NSW Trustee did not suffice (at [49]).
For these reasons, the cross-appeal should be allowed and damages increased to compensate Ms Casey for her prospective costs of $872,000 in respect of funds management.

ORDERS

I propose the following orders: 1. Appeal allowed. 2. Cross-appeal allowed. 3. Set aside the judgment and orders numbered (1), (2) and (3) made below on 21 March 2016 and the costs order made below on 19 April 2016. 4. Direct the parties to lodge and serve, in accordance with the following timetable, written submissions not exceeding five pages in length quantifying the amount of the judgment to be entered in favour of Ms Casey in conformity with these reasons for judgment and dealing with issues as to costs: (i) Ms Casey's submissions within seven days of the date of this judgment. (ii) Pel-Air's submissions within a further seven days. (iii) Ms Casey's submissions in reply within a further seven days.
WARD JA: I agree with Macfarlan JA.
GLEESON JA: I agree with Macfarlan JA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 March 2017

Air ("the Montreal Convention"). The Civil Aviation (Carriers' Liability) Act 1959(Cth)

At a glance

Court

Decision date

Before

Source

Judgment (21 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (18)