Shield Contractors Pty Ltd v McGill
[1997] QCA 359
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Shield Contractors Pty Ltd v McGill[1997] QCA 359
Shield Contractors Pty Ltd v McGill[1997] QCA 359
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
BrisbaneAppeal No.4632 of 1996
[Shield Contractors P/L v. McGill]
BETWEEN:
SHIELD CONTRACTORS PTY LTD
ACN 010 128 293
(Defendant) Appellant
AND:
JOHN NICOL McGILL
(Plaintiff) Respondent
Davies JA
Demack J
Mackenzie J
Judgment delivered 21 October 1997
Judgment of the Court
APPEAL ALLOWED. JUDGMENT OF TRIAL DIVISION SET ASIDE WITH COSTS TO BE TAXED. MATTER IS REMITTED TO TRIAL DIVISION FOR RETRIAL, LIMITED TO QUANTUM.
CATCHWORDS: DAMAGES - Quantum assessment - medical evidence concerning causation of personal injuries - positional vertigo - whether social security benefits should continue to be disregarded in assessment - whether pretrial economic loss should be reduced by amount of social security benefits paid for calculation of interest.
EVIDENCE - Trial Judge’s approach to and weight of uncontested medical evidence - failure to cross-examine on material issue - whether open to trial judge to accept evidence in doctor’s report tendered at trial over unequivocal opposed evidence of another doctor who was called but not cross-examined on the material causation issue - whether positional vertigo was injury related or a benign condition.
Counsel: Mr SC Williams QC with him Mr LT Barnes for the appellant
Mr FW Redmond for the respondent
Solicitors: McCullough Robertson for the appellant
Berck & Associates, formerly Berck McKenzie, for the respondent
Hearing date: 27 June 1997
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Brisbane Appeal No. 4632 of 1996
Before Davies JA
Demack J
Mackenzie J
[Shield Contractors P/L v. McGill]
BETWEEN:
SHIELD CONTRACTORS PTY LTD
ACN 010 128 293
(Defendant) Appellant
AND:
JOHN NICOL McGILL
(Plaintiff) Respondent
REASONS FOR JUDGMENT - THE COURT
Judgment delivered 21 October 1997
This is an appeal against aspects of assessment of damages in an action for negligence, liability and contribution having been agreed upon during the trial. The three matters in issue are:
- the treatment of Workers’ Compensation Board payments and Department of Society Security receipts for the purposes of calculation of interest on past economic loss;
- the trial judge’s treatment of uncontested evidence of Dr Cameron with respect to the plaintiff’s complaint of positional vertigo, and;
- the assessment of the economic components of the damages.
It is convenient to deal with the second matter in issue first. The respective stances of the parties are set out in the following passage from the learned trial judge’s reasons for judgment:
“The case for the plaintiff is that he suffered an injury in the area of his cervical spine and shoulder which rendered him virtually unemployable and greatly reduced his physical capacity to enjoy life.
The defendant’s case is that the plaintiff suffered only a minor strain which activated a previously quiescent degenerative neck condition and the resulting symptoms which in any event would have developed shortly thereafter had been greatly exaggerated with the object of inflating damages.”
One disputed aspect of the respondent’s condition was whether the vertigo of which he complained for the first time within days of the accident was caused by the accident or whether it was unrelated to it. Unfortunately the learned trial judge was faced with a situation which was far from satisfactory with regard to the evidence on the subject.
The respondent had consulted Dr Baillie about a week after the accident. Dr Baillie’s reports and those of other medical practitioners for the respondent were tendered under s. 92 of the Evidence Act 1977 without the respondent being put to proof of admissibility under s. 92. In the passage of the transcript in which the admission of the statements was discussed, the learned trial judge was led to believe that the makers of the statements were not available to give evidence. The appellant’s counsel said that he believed that the respondent’s witnesses were “effectively ... unavailable to call”. The learned trial judge accepted in his reasons that they were unable to be called and took it that the reports were admitted without any admission as to weight.
Dr Baillie noted in his first report of 23 April 1990 that the vertigo was first experienced five days after the accident. A provisional diagnosis of cervical vertigo was made. In his report dated 30 July 1990 he said that the vertigo was confirmed as positional vertigo by a neurologist, Dr Staples, at Princess Alexandra Hospital. Dr Baillie wrote “This vertigo has been associated in the literature with cervical disfunction (i.e. cervical vertigo)”. Dr Staples was not called nor was there any written report from him. Dr Baillie’s report refers to his own provisional diagnosis of cervical vertigo. There is nothing in Dr Baillie’s reports establishing that Dr Staples’ diagnosis of positional vertigo had explored the question of causation. The statement that there is an association of positional vertigo with cervical disfunction in the literature at best establishes that there may be a relationship in some cases between the two factors. Therefore the basis in his evidence for concluding that the vertigo and the injury were causally related is tenuous.
Dr Cameron gave evidence for the appellant. He examined the respondent on 12 June 1990 and concluded that the episodes of vertigo represented benign positional vertigo. He said “I cannot relate these to any effects of the injury sustained while moving pipes. I think the occurrence is purely coincidental”.
He examined the respondent again on 26 July 1995 and concluded “The occurrence of benign positional vertigo seven days after this injury is in no way related to the injury”. When Dr Cameron was called to give evidence, he identified, in accordance with the usual practice in the Trial Division, copies of his reports and confirmed that he held the opinions in them. Notwithstanding the explicitly expressed opinion that the respondent’s vertigo was not related to the injury, counsel for the respondent did not cross-examine him on the matter. No satisfactory reason was given for the failure to cross-examine Dr Cameron on this issue which was of considerable importance.
Faced with the state of the evidence the learned trial judge approached it on the basis that he should look at the content of the reports of both doctors in the context of the evidence given by the plaintiff and determine on the balance of probabilities whether the positional vertigo which the respondent developed for the first time within a few days of his injury was a result of the injury he suffered, as Dr Baillie thought, or whether the development of the condition was “purely coincidental” as Dr Cameron thought. He said he was unpersuaded that he should prefer Dr Cameron’s opinion simply because he had not been examined on the content of his report. The learned trial judge in two separate comments referred to the failure to get Dr Cameron to elaborate on the relationship between the vertigo and the injury in evidence-in-chief.
In a matter of this kind the primary responsibility for challenging an opinion by a medical practitioner who has confirmed in oral evidence that the contents of his report represent his opinion lies on the party challenging the opinion. This is especially so in this case where opposing opinions were on the one hand, from a medical practitioner who described himself as a part-time general practitioner whose main interest was palliative care and who had previous anaesthetics experience and a long history in pain management and, on the other, a consultant neurologist. Further Dr Baillie’s “provisional diagnosis” in his first report was of cervical vertigo. The reported confirmation by Dr Staples was of “positional vertigo” and Dr Baillie’s second report says no more than that positional vertigo has been associated in the literature with “cervical disfunction (i.e. cervical vertigo)”. Without further elaboration (since neither doctor gave evidence), the evidence of Dr Baillie is not, in the face of specialist opinion that the vertigo is not related to the injury, an attractive basis for finding on the balance of probabilities that the vertigo was caused by the accident.
It is true that the learned trial judge preferred the evidence of an orthopaedic surgeon over the evidence of Dr Cameron and another orthopaedic surgeon as to the orthopaedic content of the respondent’s disability. Such finding, based on a consideration of the verbal evidence of the three doctors, does not affect the separate and distinct question of whether it was open to the learned trial judge to accept that the passages referred to in the reports of Dr Baillie provided a basis for preferring his view over the unequivocal and directly opposed evidence of Dr Cameron which counsel for the respondent chose not to challenge. Having regard to the usual practice in cases of this kind it was not incumbent on counsel for the appellant to elaborate on the unequivocal statement in Dr Cameron’s reports once he had confirmed in evidence that it remained his opinion at the time he gave his oral evidence.
Because of the deficiencies in the conduct of the case the learned trial judge was left in a difficult position. Failure to cross-examine upon a witness’ evidence on a material issue does not require such evidence to be accepted as a matter of law, but a finding based on rejection of such evidence invites close scrutiny of the process of reasoning leading to such a finding (see, eg Ellis v. Wallsend District Hospital (1989) 17 NSWLR 553, 586-7). There is no reason to think that Dr Cameron’s evidence was inherently incredible or unconvincing (Precision Plastics Pty Ltd v. Demir (1975) 132 CLR 362, 370-371; Bulstrode v. Trimble [1970] VR 840, 849).
The nature of the evidence in the report of Dr Baillie supporting the contrary view required due analysis. His reports consist of a provisional diagnosis of a condition of positional vertigo, an assertion that another medical practitioner had made a diagnosis expressed in different terms and a statement that an association could be found in the literature of a link between that condition and cervical disfunction, which he then equated with cervical injury.
In view of the lack of further elaboration of the process of causation and the untested nature of the evidence it was necessary to ensure, especially in a case which was ultimately resolved on the temporal proximity of the injury and the first complaint, that the fact that the evidence of Dr Cameron was unchallenged was given due weight. The references in the learned trial judge’s reasons to the fact that the appellant’s counsel did not have Dr Cameron elaborate in examination-in-chief on his opinion that the accident and the vertigo were not causally connected suggest that such consideration was given weight in reaching the contrary conclusion. Having regard to the usual and accepted practice in cases of this kind the appellant’s counsel had discharged his function by having Dr Cameron verify that the reports represented his current opinion. It was then the function of counsel for the respondent to challenge any aspects of his evidence which were in issue.
To require the opposite is tantamount to placing an unwarranted obligation on the appellant to establish positively that the accident did not cause the vertigo rather than requiring the respondent to discharge the onus of proving that there was a causal connection. Having regard to the circumstances to which reference has been made, the trial miscarried.
The appeal must therefore be allowed. While it is regrettable to have to do so, in my opinion the issue of quantum must be retried. The medical evidence concerning the cause of the respondent’s vertigo is central to the issue of quantum and it would be unjust in the circumstances which have led to the appeal being allowed to substitute an assessment based on the inadequately presented evidence at trial.
Since the issue must be retried it is neither necessary nor desirable to give further consideration to the complaints about the quantum of damages except those raised in ground 8((a) above). Since the question whether an amount of social security benefits paid during the pre-trial period should be left out of account when interest on past economic loss is calculated was argued in this case in conjunction with the same point in Schelker and McCool v. Vandenberg (App. 9412/1996; Court of Appeal, 1 October 1997, unreported) and because there appears to be no settled practice in the Trial Division in respect of it, it is appropriate to deal with that issue.
The issue in this appeal arose because at trial the appellant contended that workers’ compensation payments to the respondent and his receipt of payments from the Department of Social Security should be taken into account for the purpose of calculating interest on past economic loss. According to a notice from the Department of Social Security, the respondent commenced receiving social security payments on 25 May 1991. On that basis, for the early part of the period when such payments were being received, the benefit would have been an invalid pension. From 12 November 1991 onwards, the disability support pension replaced the invalid pension. The learned trial judge did not take such sums into account by reducing the sum upon which interest was calculated. It was conceded by the respondent that an oversight had been made in failing to allow for receipt of payment of workers’ compensation benefits in calculating the interest (Haines v. Bendall (1991) 172 CLR 60; Camm v. Salter [1992] 2 Qd.R 342).
With regard to the payments made by the Department of Social Security, Thomas J., with whom Mackenzie J. agreed, expressed the view in Camm v. Salter that the notion that an invalid pension was conferred on the plaintiff not only independently of the existence in him of a right of redress against others, but also so that it might be enjoyed by him even though he enforced such a right, was now difficult to discern, having regard to changes to the legislation with respect to social security benefits. National Insurance Co of New Zealand Ltd v. Espagne (1961) 105 CLR 569 and Redding v. Lee (1983) 151 CLR 117, which were decided before significant changes to the legislation in 1986 and 1991, establish that the test whether advantages of this kind received by a plaintiff are to be disregarded requires the court to consider the nature of the benefit which the defendant seeks to set off against damages, and to enquire whether the person or body supplying the benefit intended that the plaintiff should enjoy it in addition to whatever damages he might recover from the defendant. In Redding v. Lee it was held that payments of invalid pension granted for permanent incapacity should be disregarded in the assessment of damages and that payments of unemployment benefit should be brought into account in making such assessment.
Under the Social Security Act 1991 (Cth) the receipt of compensation, of which an award of damages for loss of earnings or lost capacity to earn is one example, may affect current or future social security payments. Part 3.14 of the Social Security Act 1991 (Cth) now includes a number of provisions the rationale of which seems to be that receipt of damages for loss of earning capacity is regarded as a replacement for living expenses and that the receipt of social security payments in respect of a period in respect of which damages for loss of earning capacity have been recovered may result in “double dipping”. Accordingly a person may be subject to a “preclusion period” during which no social security payment is payable after receipt of damages or to an obligation to repay to the Department of Social Security a sum called a “recoverable amount”. The measures are intended to take into account that there is a period in respect of which the person has received damages for economic loss as well as social security payments. Similar provisions existed in the Social Security Act 1947 after 1 May 1987 in respect of payments of damages for loss of earnings.
The operation of the Social Security Act in this regard depends on a number of factors including the domestic situation of the person recovering compensation, what form of social security benefit he was enjoying, and whether “special circumstances” exist to mitigate the effects of general policy of the Act. It requires no more detailed analysis than that above to say that, in the assessment of damages for past economic loss, the fact that social security benefits have been received should continue to be disregarded. In the present case, subject to the qualifications referred to above, the respondent is liable, according to the document placed before us, to repay up to $29,962.80 to the Department, although the precise amount was undetermined at the time of trial. There is no legislative intent and no other reason in principle why the tortfeasor should be relieved of the obligation to pay damages equivalent to the amount of social security payments. There is nothing in evidence in the case to indicate that the respondent is likely to be compensated twice in respect of economic loss if an amount equivalent to social security payments made is not deducted from the component of damages for past economic loss.
The question whether the payment of social security benefits should be taken into account in calculating interest raises a separate set of issues. The provisions relating to recovery by the Department of a sum calculated by reference to disability support pension or preclusion of a person from receipt of benefits for a period if damages are recovered are relevant in this context. So is the concept that interest on damages is recoverable because the injured person has been held out of moneys which would have been received but for the wrong done.
Under the Social Security system operating at material times, “permanent incapacity for work” was one of the requirements for an invalid pension and continuing inability to work, as defined in the Act, is a factor to be taken into account in determining eligibility for an invalid pension or a disability support pension. The respondent’s payments included both, to which we will refer as “the social security benefits”. The emphasis on this and the capacity to recover an equivalent sum or to preclude a person who has received both the social security benefits and damages for loss of economic capacity from enjoying the pension for a period points to the conclusion that the benefits are viewed as a substitute for earnings, at least to the extent of the pension. Counsel also relied on the absence of any provision for the Department to recover interest on the sum to be repaid in support of the argument that the whole amount of the pension should be left out of the sum upon which interest was calculated.
In our opinion, there is no reason in principle why interest should be allowed on damages for past economic loss to the full extent of the award. The sum of pretrial economic loss should have been reduced by the amount of the social security benefits paid to the respondent for the purpose of calculating interest.
The order of the court is that the appeal be allowed. The judgment of the Trial Division is set aside with costs to be taxed. The matter is remitted to the Trial Division for retrial, limited to the issue of quantum.