Was any part of the Settlement Sum damages or compensation for personal injury or wrong, and if so what part?
89 The remaining question is whether some part of the outlay for the Sapphire Beach property was protected money. Mr Shephard contends for a finding that it was, and he seeks an order pursuant to s 116(4) that he be paid so much of the proceeds of sale of that property as can fairly be attributed to that protected money.
90 The trustee contended that Mr Shephard could not show that any part of the Settlement Sum was damages or compensation for personal injury or wrong. He noted, and I accept, that no provision of the Settlement Deed expressly identified any amount to be paid to Mr Shephard by way of damages for personal injury, and that it referred only to "various allegations" made in the proceedings which were denied.
91 First, he submitted that the personal injury claims in the proceedings should not be separated out from the claims based in property rights. I do not agree. The claims for assault were distinctly pleaded and particularised, based on different facts to the claims based on property rights, supported by different evidence to the property-based claims and, were the proceedings extant, they would be capable of being severed from those claims. As Dixon J explained in Journeaux at 721, whether a proceeding relevantly seeks damages or compensation for personal injury or wrong requires an assessment of "whether the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property". Mr Shephard's claims for damages for personal injury meet that test.
92 The trustee submitted that Mr Shephard suffered his personal injuries in the context of the property dispute concerning access to irrigation lines controlled by Chiquita, and that the claims were therefore not "without reference to his property rights" in accordance with the test in Journeaux. I do not agree. While the alleged assaults occurred against the backdrop of a dispute about property rights, in my view they are not properly to be seen as referable to or consequential upon that dispute. Mr Shephard alleged, amongst other things, that he was unlawfully assaulted by being struck and punched, being deliberately driven at in a motor vehicle, being deliberately struck by a motor vehicle, and being thrown headfirst from the back of a truck. Such unlawful conduct must be seen as separate to the property-based claims and "without reference to property rights". I note that if Mr Shephard made out his assault claims he would succeed in those claims regardless of the result in the property-based claims.
93 Second, the trustee contended that:
(a) the claims for damages for personal injury were strenuously denied by the defendants to the proceedings;
(b) the defendants to those claims argued that the physical actions they took in relation to Mr Shephard were reasonable in the circumstances to protect Chiquita's property rights and their own physical safety; and
(c) there was no hearing in relation to the claim for damages for personal injury and no judgement regarding causation, liability or quantum.
In a related submission the trustee argued that for the Court to decide that Mr Shephard was entitled to a payment for the claimed personal injuries would require a hearing of the 1999 and 2001 proceedings, and the material before the Court did not allow the Court to make a decision on those claims.
94 Third, the trustee submitted that the Settlement Deed was a fundamental obstacle to Mr Shephard succeeding under s 116(4) because there was nothing in that document to support his contention that the monies constituted damages for personal injury. The trustee also argued that the rights of action in the 1999 and 2001 proceedings were extinguished by the Settlement Deed and any pre-existing claim for damages for personal injury had "lost its character in the amorphous unapportioned manner in which the settlement of numerous commercial claims was realised".
95 I accept that the fact that the claims were denied by the defendants and never determined by a court is relevant, but it cannot be determinative. Section 116(4) involves a decision, on the balance of probabilities, as to whether an outlay made to acquire property was in part exempt money and in part other money. Damages or compensation for personal injury or wrong is one category of exempt money and throughout Australia such claims are commonly settled without admission of liability. I do not accept that a claim for damages for personal injury must be determined by a Court before any monies received in settlement of the claim can be viewed as protected money in an application under s 116(4).
96 Where a proceeding involved mixed causes of action and the settlement was not apportioned between those causes of action, there are obvious difficulties for a court in reaching a view as to whether any part (and if so what part) of the settlement related to the personal claims of the bankrupt. However, I do not accept that reaching a view as to what monies can fairly be attributed to a claim of personal injury or wrong necessitates hearing that claim. The Court must decide by reference to the pleadings and any other relevant document (including the terms of settlement) whether the settled proceeding included distinct personal claims and whether a portion of the settlement monies related to those claims.
97 The lack of apportionment in the Settlement Deed makes the Court's task under s 116(4) difficult but in my view the evidence indicates that part of the settlement related to Mr Shephard's personal injury claim. In Biggin & Co Ltd v Permanite [1951] 1 KB 422 at 438 Devlin J stated:
It is only that where precise evidence is obtainable the court naturally expects to have it. Where it is not the court must do the best it can.
This passage was cited with approval by the Full Federal Court in Enzed Holdings v Wynthea (1984) 57 ALR 167 at 183 (Sheppard, Morling and Wilcox JJ). Their Honours said, in dicta:
The principle is clear. If the court finds damage has occurred it must do its best to quantify the loss even if a degree of speculation and guesswork is involved.
98 In JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237 at 241 Brooking J reviewed the relevant authorities and said:
It is often said that the amount of the damage must be proved with certainty, but this only means as much "certainty" as is reasonable in the circumstances: Ratcliffe v Evans [1892] 2 QB 524 at 532-3. Where precise evidence is obtainable, the court naturally expects to have it; where it is not, the court must do the best it can: Biggin and Co Ltd v Permanite [1951] 1 KB 422, at 438; Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83 per Mason CJ and Dawson J. The nature of the damage may be such that the assessment of damages will really be a matter of guesswork, as in the well-known case of Chaplin v Hicks [1911] 2 KB 786, where the plaintiff had lost a chance of winning an engagement as an actress as a prize. So damages will be assessed for the wrongful detention of a racehorse even though it may be necessary to guess at the amount: Wilson v Matthews [1913] VLR 224… But while in some cases guesswork may be permissible in assessing damages, in others it is not.
His Honour continued at 243:
There is no rigid dividing line between cases in which guesswork is permissible in assessing damages and cases in which it is not. The borderline between guesswork and rational assessment is itself indistinct, as is the line between evidence that is "precise" (the Permanite Case dictum) and evidence that is not. In Enzed Holdings v Wynthea (1985) 57 ALR 167, at 182-3…the Full Federal Court thought the case to be one in which precise evidence of the loss was not obtainable, so that if the trial judge found that the plaintiffs had suffered some loss he must do his best to quantify the loss even if "a degree of speculation and guesswork" was involved.
99 The cases to which I have referred concerned the Court's task in assessing damages which is not the task before me, however in Mark Bain Constructions Pty Ltd v Avis; Mark Bain Constructions Pty Ltd v Barnscape Pty Ltd [2012] QCA 100 at [134] the Queensland Court of Appeal considered how to "dissect" a settlement of proceedings that was inclusive of claims, interest and costs. The settlement terms did not apportion the settlement monies between those elements. Fraser JA, with Chesterman JA and Fryberg J agreeing, said:
The "undissected" nature of the settlement between [the relevant parties in that case] makes that task difficult, but the settled rule is that mere difficulty in estimating a loss does not relieve the Court from the responsibility of making the best estimate it can [and there cited The Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83, per Mason CJ and Dawson J, 102 per Brennan J and 105 per Deane J.]
I respectfully agree, and I have taken this approach.
100 Fourth, the trustee argued that Mr Shephard was asking the Court to look outside the Settlement Deed to determine what the parties' intentions should have been in the circumstances. He argued that this subverted established principles of common law which provide that the best evidence of the parties' intention is to be found in the agreement itself. I do not accept this. The Settlement Deed is silent in relation to apportionment but in the circumstances there was no requirement for the parties to record any apportionment. In my view the Settlement Deed, read in that context, does not support the trustee's construction. Having regard to the pleadings, other relevant documents including the parties' position papers for the mediation, and the email advice of Mr Maurice QC I consider that for the purpose of s 116(4) an apportionment is appropriate.
101 Fifth, the trustee contended that (even if the allegations of assault were made out) Mr Shephard's claimed injuries were de minimis and his damages claim would have been of no or negligible value. I do not agree. While Mr Shephard's claimed injuries were not serious or permanent I do not consider they were de minimis.
102 I am satisfied that Mr Shephard's claims for damages for personal injury had a value at the time of settlement and it is more likely than not that the Settlement Sum included an amount representing the value of those claims. I now turn to consider, on the balance of probabilities, what amount of the Settlement Sum related to the personal injury claims.
103 The proceedings alleged that Mr Shephard was assaulted on nine occasions over a six year period including by being struck and punched, driven at by a motor vehicle, driven at and struck by a motorcycle and being thrown headfirst from the back of a truck. He required medical attention by his local GP on five occasions for multiple bruises, multiple grazes, a painful left shoulder, painful ribs, bruising over his spine and multiple scratches. Dr Williams' report showed that Mr Shephard's injuries were not serious or permanent. Any claim Mr Shephard had for medical and like expenses was negligible, he was not incapacitated for work, he made no claim for economic loss, and he did not claim that he suffered any continuing disability in his latest particulars. Mr Shephard's claims were primarily for general damages for pain and suffering. While Mr Shephard avoided serious injury the alleged assaults are likely to have been distressing, and there were nine alleged assaults in total.
104 Mr Shephard also alleged that, amongst other things, the assaults made him angry and distressed, gave him feelings of powerlessness and inadequacy and either aggravated his depression or caused him depression, but I put little store in these claims for the reasons I have given.
105 It is trite that a plaintiff who has been injured by the conduct of another will be awarded such a sum of money as will, as nearly as possible, put him in the same position as if he had not sustained the injuries: Todorovic and Another v Waller (1981) 150 CLR 402; [1981] HCA 72 (Gibbs CJ and Wilson J).
106 It is likely that the parties' assessments of the personal injury claims would have been discounted to take account of the risk that the claims would not succeed. The defendants' defences point to difficulties in some of the allegations of assault. They defended the claims on the basis, amongst others, that Mr Shephard's actions in interfering with Chiquita's irrigation system were in defiance of a court injunction, that Chiquita had the benefit of an easement over Mr Shephard's property and that it was entitled to protect its property from damage at Mr Shephard's hands and from his interference, provided it used reasonable force. The defendants denied the allegations of assault and in relation to some of the incidents they corroborated each other's accounts. However, some of the assault claims would have been an oath on oath contest between Mr Shephard and a defendant, for example Mr Shephard's allegations that on two occasions Mr Gourlay drove his vehicle at him on a public thoroughfare. If it were established that Mr Gourlay had done so, there could be no defence to that claim.
107 It is significant that the pleadings, Mr Shephard's position paper for the mediation, and his QC's email advice show that the proceedings primarily concerned his property-based claims, and that in their position paper the defendants took the position that the nub of the proceedings was the property-based claims, and that the assault claims were minor in quantum and weak on liability.
108 While there is little doubt in my mind that some of the Settlement Sum related to Mr Shephard's personal injury claim, there is no precise evidence of the apportionment of damages between the personal and the property-based claims in the proceedings. The task involves a degree of speculation, but taking into account the matters I have canvassed in my view the parties would have put the personal injury component of the Settlement Sum at about $15,000. This represents the best estimate I can make of the parties' assessment of general damages for pain and suffering in respect of nine alleged assaults over six years, which occasioned minor and impermanent physical injuries and some distress and upset, taking into account risks on liability.