Perham v Connolly[2003] QSC 467

SUPREME COURT OF QUEENSLAND

1. ATKINSON J:  In the early hours of the morning of 1 September 1994, an horrific motor vehicle accident occurred in West Street, Toowoomba.  A car which had been travelling at very high speed hit a lamp post on a straight road.  Inside the car were four young people.  The driver died on impact.  A young female passenger had her legs severed from her body and died shortly after impact.  Two other young people survived the accident but suffered terrible injuries. 

2. The plaintiff, Craig Perham, who was 31 years old at the time, was one of the first people to arrive on the scene of the accident. As a result of his experiences in the aftermath of the accident, he claimed that he suffered symptoms consistent with post-traumatic stress disorder. He subsequently consulted the defendant who is a solicitor practising in Toowoomba with a view to commencing civil action against the driver of the motor vehicle for negligently causing him injury in the form of PTSD.

3. Certain steps were required to be taken pursuant to the Motor Accident Insurance Act 1994 (the “MAI Act”) before such an action could be commenced.  These steps were not taken and Mr Perham alleged in this action that as a result he suffered the loss of the opportunity to successfully sue the driver of the motor vehicle.  This action necessarily involves not only the question of whether or not the solicitor was negligent but also what loss, if any, was caused by any such negligence.^[1]  The determination of the second question involves a consideration of what were the plaintiff’s prospects of success in an action against the driver and the likely quantum of his claim against the driver. 

Mr Perham’s account of the accident and its effect on him

4. Mr Perham said he had been working until two or three in the morning at his French-polishing business and was driving home along West Street. He called in to see a friend, Amy McTaggert, when he saw that her lights were on. They were drinking coffee and chatting when they heard a loud crash which sounded like it had happened just outside the house. The power in the house went out so they walked to the footpath at West Street to see what had happened. When they saw nothing, Mr Perham and Ms McTaggert got into his utility and travelled about 1,500 to 2,000 yards where they saw a car on the footpath which had hit a lamp post. The car was facing in the opposite direction from the way in which traffic would flow on that side of the road, and the telegraph pole was embedded within the car. He gave an account of what he said then happened.

5. Mr Perham said that because of the presence of the car and glass on the road, and because he had noticed that the engine of the car was starting to burn, he parked his utility in the middle of the road and put on the hazard lights. Ms McTaggert then yelled out to him that there were people in the car. Mr Perham at first noticed two people in the car. He checked the passenger side but the doors and windows were closed and there was no way of entering the car from that side. He then went to the driver’s side and saw a young man hanging out the back door tangled up in his seatbelt with his legs underneath the driver’s seat of the car. He said that two men were trying to pull the passenger out but he was jammed in position. Mr Perham crawled inside the car and unhooked the seatbelt. At this time he could see that there was a small fire in the engine. After the young man was rescued from the car, he was carried about five or six yards from the motor vehicle.

6. Mr Perham said that he went back to the car where he saw a young woman in the front passenger seat. He said he got into the car and unlocked the seatbelt. She was moaning and he promised he would not leave her there. He could see that the gearbox had gone through the floor and her legs had been ripped or pushed away. He was unable to move the gearbox because of its heat. The young woman then died. Mr Perham put his arms under her shoulders and pulled. Her legs tore off as he pulled her out of the car. He felt what he thought at the time was hot oil spraying all over him but realised later that it was her blood. He put her shoulders out of the hole at the side of the car to the person standing on the other side. They picked her up and carried her out about five or seven feet from the car. As they lay her on the footpath, the car exploded. He knew at that stage that the driver was still in the car but that he was already dead. Mr Perham had looked at the driver when he got into the car to rescue the girl and saw that his body had been destroyed.

7. Mr Perham said that he then asked the young man they had rescued about how many were in the car and he said that there were four. He then noticed a girl underneath a tree. He could see her feet sticking out from underneath a fence. He concluded she must have been thrown from the car at the time of the accident.

8. Mr Perham said he was extremely angry and agitated. He went straight home, had a shower, dressed and went back to work. Before he showered, he noticed he was covered in blood and flesh.

9. He went to work and stayed there for 48 hours. He then came home and started crying. He continued to cry for a day and a half, feeling physically sick and vomiting and feeling intense emotional pain. In his words, he described himself as feeling “lost” with “no purpose, no understanding”. He felt that he wanted nothing to do with the human race again. He sought help at the psychiatric ward at the hospital but was not admitted. He suffered from stomach cramps, headaches and vomiting. There is a detailed record of his presentation to the Toowoomba Hospital on 3 September 1994. His story at the hospital was consistent with the evidence he gave at trial.

10. He then returned to work but had great difficulties. He was unable to leave the office or any place where he felt safe. He did not want to get involved and could not concentrate on his work. He easily lost his temper at employees in the workshop, and if a piece of work had gone wrong. Two or three weeks after the accident he went out night-clubbing with friends. They scaled a wall of a building in the centre of Toowoomba and broke into the building. He pleaded guilty to breaking and entering, was convicted and placed on probation.

11. At the end of two or three weeks he told the partners in his business to “get stuffed” and he was admitted to a psychiatric ward where he stayed for two weeks. He felt, in his words, that he just “wanted to die”. In the two weeks before he was admitted to the psychiatric ward, he used marijuana, ‘speed’ and alcohol to try to deal with the pain he was feeling. He had some difficulty in sleeping and had terrible nightmares about himself being in the car as it exploded, or of his holding the girl in his arms and realising she was dead and then her eyes opening and looking at him.

Mr Perham’s contact with solicitors

12. While he was in the Toowoomba Base Hospital, or soon after his discharge, he saw Mr Griffiths, from the office of the defendant (“Connolly’s). Mr Perham’s evidence-in-chief was that he saw a solicitor called Jeff Collins but he readily conceded in cross-examination that in fact the name of the person he saw was Damien Griffiths. I accept that this was an honest mistake about the name. Mr Griffiths told Mr Perham that he had a claim for compensation against the third party insurer of the driver of the motor vehicle as he was the first on the scene of the accident.

13. The initial instructions were taken on 28 December 1994. With regard to fees, Mr Griffiths told Mr Perham that as a result of his discussions with his principal, Mr Connolly, and someone in Brisbane, fees would be “taken as a retainer from the win”. Mr Griffiths said, “No win, no fee”. Mr Connolly denied such a fee arrangement but did not call Mr Griffiths to dispute the conversation with Mr Perham. No written retainer was entered into. In those circumstances, I am not prepared to reject Mr Perham’s account of the oral retainer agreement.

14. The solicitor’s file shows that on 29 December 1994, Mr Griffiths asked a private investigator, Mr Bob Veivers, to make urgent inquiries in respect of the motor vehicle accident. On 3 January 1995, Mr Veivers advised the date and time of the accident, the registration number of the motor vehicle involved and the name and address of its owner. On the same date, as shown by the solicitor’s trust account, $14.60 was paid for a Transport Department records request.

15. By 5 January 1995, Mr Connolly had engaged a psychologist, Mr Michael Fox, to report, as on that date he sent a copy of a statement from a witness at the scene, Stephanie Lester, to Mr Fox. Ms Lester said in that statement that after the accident happened, she went outside her house to see what was happening and saw an elderly gentleman pulling people out of the car. She also saw a young man who had been thrown from the car and had hit a brick garden fence and was being attended to by a nurse. She also saw a couple at the scene. The male member of the couple went to assist the elderly gentleman, who it can safely be assumed was Clive Brumpton, whose evidence I will refer to later. The two men managed to get one of the girls out of the car. By the time the ambulance arrived, she said that there were about 25 people out on the street just watching. The driver was still in the car when it exploded.

16. The solicitors’ preparation for litigation continued. On 13 January 1995, the solicitors made a Freedom of Information application with regard to documentation concerning the relevant motor vehicle accident. They also sought relevant articles from the Toowoomba Chronicle.  On 16 January 1995, Mr Griffiths gave notice pursuant to s 34 of the MAI Act to VACC Insurance Co Ltd (“VACC”), the third party insurer of the motor vehicle.

17. On 20 January 1995, the Townsville Hospital reported to Connollys that Mr Perham had PTSD as a result of the motor vehicle accident.

18. Freemans Loss Adjustors (“Freemans”) wrote to the defendant on 23 January 1995 on behalf of VACC . They informed the defendant that they were satisfied that the s 34 notice complied and enclosed a s 37 claim form for execution by the plaintiff and return to Freemans. Freemans said that their preliminary investigations had commenced and when in a position to advise the insurer as to liability they would communicate with the defendant again. They confirmed that it was the intention of VACC to settle personal injury claims promptly where liability is not in issue to avoid unnecessary litigation. They also noted the defendant’s advice that the solicitors would forward to Freemans a photograph of Mr Perham and a copy of a newspaper extract. That was done on 24 January 1995.

19. On 2 February 1995, the defendant sent a letter to the psychologist, Mr Fox, enclosing a copy of a report received from the Toowoomba Base Hospital with copies of admission and discharge notes in relation to Mr Perham’s hospitalisation and said that they looked forward to receiving his re-assessment of Mr Perham’s mental health in due course.

20. On 6 February 1995, Mr Fox sent a report to Mr Connolly after interviewing Mr Perham on 4 and 5 January 1995. Mr Perham’s account of his background as given to Mr Fox shows a deal of exaggeration. He boasted that his father was on the Board of Directors of a major company listed on the stock exchange, Fletchers, and that he was a successful businessman. He said that for three years he was a New Zealand boxing champion and that he excelled in soccer and was selected for the New Zealand under 17 team. He described symptoms that Mr Fox thought were consistent with the symptoms of PTSD. Mr Perham said he had become involved in drugs and criminal behaviour and was no longer working. Mr Fox expressed some scepticism that such a dramatic change could happen solely as a result of his exposure to the motor vehicle accident. However, the validity scales on the MMPI psychological test which he completed were all within acceptable limits.

21. When cross-examined about these matters at the trial Mr Perham said he had no recollection of telling Mr Fox that his father was on the Board of Directors of a major company. He had no adequate explanation for this statement which he admitted was untrue.

22. On 7 February 1995, the defendant sent a copy of a statement they had taken from Mr Perham for him to review and amend where necessary. On 10 February, an amended statement was sent to Mr Perham. He was asked to sign it. He was also sent a photocopy of a report received from Mr Fox on 6 February 1995. Further correspondence from the defendant followed seeking information about Mr Perham’s financial affairs and other potential witnesses.

23. Mr Perham admitted under cross-examination that he wrongly told Mr Connolly in February 1995 that Amy McTaggert had committed suicide. He said he was given this information by a police officer but subsequently discovered that it was Ms McTaggert’s brother who had committed suicide and not Ms McTaggert. Again, this explanation was unsatisfactory and untrue.

24. On 21 March 1995, Mr Connolly sent a letter to Ms McTaggert with a copy of a statement by her. She contacted the solicitors and told them that she did not want to get involved. When cross-examined about this she said that she still felt the same way – that she did not want to remember what had happened that night. She refused to answer questions about her drug usage at the time, but explained that she was very upset at the time because two people very close to her, her brother and the father of her young daughter, had both committed suicide at around that time. She was unwilling to give evidence about her own drug usage at the time of the accident, or that of Mr Perham.

25. On 4 April 1995, Mr Connolly wrote to Mr Perham saying that he was preparing a brief to counsel to advise in relation to the prospects of success and quantum of his claim and asked for $1,000 to be put into his trust account for payment of counsel’s fees on completion of the advice.

26. Only three days later, on 7 April 1995, Mr Connolly again wrote to Mr Perham, on this occasion, seeking $2,000 to be put into his trust account for anticipated costs and disbursements as well as counsel’s fees. Mr Connolly said, inter alia:

“We are unable to continue on your behalf in connection with the above matter unless proper arrangements are made for our costs and barrister’s fees and we take no responsibility for any prejudice you may suffer from any delay in giving any notices under the Motor Accident Insurance Act”.

This was contrary to the retainer agreement that had been entered into.  The defendant could not unilaterally withdraw from that contract.

27. On 18 April 1995, $250 was received from Mr Perham and deposited into Connolly’s trust account.

28. The defendant continued to act for the plaintiff. On 28 July 1995, the defendant received notification that it was entitled to a number of documents as a result of the Freedom of Information application which had been made on 13 January 1995. The defendant sent a cheque for these to the Queensland Police Service on 31 July 1995, and on 4 August 1995, the documents were provided by the Queensland Police Service.

29. The police reports confirmed that there had been a single vehicle traffic incident on West Street, Toowoomba at about 3.40 am on the morning of Thursday, 1 September 1994. The vehicle, which was a Ford sedan registration number 303-CLO driven by Wayne Anthony Cochrane, crashed into a power pole on the western side of West Street. When the police arrived the vehicle was on fire and there were two injured passengers and a deceased passenger away from the vehicle. A deceased person was still trapped in the burning vehicle. The police report said that an inspection had revealed that the vehicle had been travelling backwards when it struck the power pole. The first contact had been in the area of the rear driver’s side door and the force of the impact had driven the power pole through the vehicle up to and very near to the dashboard. The interior of the vehicle had been burnt out but the fuel tank had remained intact. As the police arrived, the injured passengers were being ferried to hospital. The police took a number of photographs some of which were in evidence.

30. The police reports disclosed that the two persons who had died were Wayne Cochrane, the driver, and Kathleen Stranger who was described as the rear driver’s side passenger. A number of witnesses were identified including Kathryn Watts; two police officers, Constables Cunningham and Kruck; Clive Brumpton, who said that with another person, he was able to get the deceased female out of the rear driver’s side seat before the vehicle caught fire; Ruth Hobby, who was a passenger in the rear passenger seat who had no memory of the actual incident occurring; and Daniel Duggan, the front seat passenger who said that Mr Cochrane sped up to 180 kilometres per hour and then braked and lost control of the vehicle. The vehicle then developed a fish-tail motion and slid around in an anti-clockwise direction before it hit the power pole.

31. The police also enclosed statements from the witnesses referred to. Kathryn Watts saw that the accident had happened and alerted the police but did not attend the actual accident site. Ms Hobby’s statement was to the effect that she was sitting in the back of the car, on the passenger side, and that Ms Stranger was sitting beside her behind the driver. Clive Brumpton gave a statement. He also gave evidence at the trial. I will return to his evidence in due course.

32. The police also disclosed a police notebook which mentioned Mr Perham’s name and address and some details taken from him at the accident site. In addition, the police officer had written the names Amy McTaggert, Clive Brumpton, Malcolm Shoesmith and Kathryn Watts.

33. Mr Cochrane is shown in the post-mortem report which was sent with the police reports as having died from massive crushing injury to the body with incineration and multiple major bone fractures. Kathleen Stranger is shown as having died from “fracture dislocation cervical spine and major injuries to head, chest, lower limbs and haemorrhage”. Daniel Duggan, who was in the front passenger seat, suffered a broken right fibia, right femur, right ulna and radius, right humerus, right clavicle and cuts and abrasions to his head and face. Ms Hobby received a broken humerus and collarbone, lacerations to the back of the head and minor cuts and abrasions.

34. On 1 September 1995, Mr Perham paid a further $750 into the defendant’s trust account. A client file opening sheet was not signed by Mr Perham until 3 October 1995.

35. The next activity by the defendant, as revealed by his file, was a letter on 16 January 1996 to Ms McTaggert referring to a telephone conversation on 6 April 1995 noting that she did not want her statement used in relation to Mr Perham’s claim but advising her that it was essential that the defendant receive her signed statement in order to have some corroboration that Mr Perham was present at the scene of the accident and participated in the rescue of the accident victims. Two copies of her statement were enclosed. On the same date, the defendant wrote to Mr Brumpton enclosing a passport photograph of Mr Perham and a copy of the statement that Mr Brumpton gave to police asking Mr Brumpton if he could confirm whether he recalled that Mr Perham was present at the accident and to briefly indicate the part he took in the rescue.

36. On 14 February 1996, Mr Connolly wrote to Mr Perham at his Toowoomba address enclosing an account for work done to date of which $1,316.15 was said to be still owing and requesting an additional payment of $1,000 on account of payment for counsel’s fees to advise as to prospects of success and quantum of damages. The letter said that the solicitors would not be held responsible for any prejudice caused by any delay to take any necessary steps on Mr Perham’s behalf.

37. On 4 March 1996, $215.65 was received in the defendant’s bank account from the plaintiff.

38. On 21 August 1996, solicitors acting for Mr Fox demanded payment of a sum owing to him of $585. The bill to Mr Fox was paid on 18 October 1996 with apologies because the defendant said he had been unable to make further contact with Mr Perham who was still being detained by the mental health system in Townsville.

39. Mr Connolly gave evidence that Mr Perham told him during a telephone call on 29 August 1996 that Ms McTaggert did not want to get involved because Mr Perham had been to her house in the early hours of the morning when the accident occurred “for a drug deal that went bad”. I accept that that was what Mr Connolly was told by Mr Perham.

40. On 19 March 1997, Mr Perham wrote to Mr Connolly from Townsville saying:

“I am writing regarding my personal Injury claim.  I would like to know how things are going since our last phone call when I was in Mancare.

You asked me about paying money to Michael N Fox, you also spoke of Amy Taggert [sic] and I told you the reasons why she had said what she said.

You also told me of an eyewitness who confirmed I was there. 

I’m also asking if you have any information on the police taking my name.

If you need any more assistance please let me know.  Or money to pay Mr Fox”.

41. In response, on 7 April 1997, Mr Connolly told Mr Perham that he was unable to provide any more legal advice until his outstanding account of $1,901.15 was paid. He also said that there were “many issues involving your matter which we are quite keen to resolve”. This in turn drew a response from Mr Perham who said that his account of what occurred had been clear from the beginning. He reminded Mr Connolly that he had a “no win, no fee” arrangement.

42. Mr Perham became bankrupt on 22 May 1998. The defendant lodged a proof of debt in the plaintiff’s bankruptcy in an amount of $2,735.29 which claimed for legal services provided between 28 December 1994 and 26 June 2000. In his evidence, Mr Connolly swore that his firm ceased acting for Mr Perham in April 1997.

Negligence of the solicitor

43. Section 37 of the Motor Accident Insurance Act 1994 sets out the procedures that must be undertaken before an action can be commenced in court for damages for personal injury.  It provides:

“Notice of accident claim

37.(1)Before bringing an action in a court for damages for personal injury arising out of a motor vehicle accident, a claimant must give written notice of the motor vehicle accident claim to the insurer or 1 of the insurers, against which the action is to be brought –

(a)containing a statement of the information required under a regulation; and

(b)authorising the insurer to have access to records and sources of information relevant to the claim specified under a regulation; and

(c)accompanied by the documents required under a regulation.

(2)The notice must be given –

(a)if it is to be given to the Nominal Defendant because the motor vehicle can not be identified – within 3 months after the motor vehicle accident; or

(b)in any other case – within the period ending on the earlier of the following dates –

(i)9 months after the motor vehicle accident or, if symptoms of the injury are not immediately apparent, the first appearance of symptoms of the injury;

(ii)1 month after the claimant first consults a lawyer about the possibility of making a claim.

(3)If notice of a motor vehicle accident claim is not given within the time fixed by this section, the obligation to give the notice continues and a reasonable excuse for the delay must be given in the notice or by separate notice to the insurer but, if a motor vehicle can not be identified and the notice is not given to the Nominal Defendant within 9 months after the motor vehicle accident, the claim against the Nominal Defendant is barred.

(4)If  2 or more motor vehicles are involved in the motor vehicle accident, the insurer to which notice is given under subsection (1) must, within 7 days after receiving it, give a copy of the notice to any other insurer of a motor vehicle involved in the motor vehicle accident.”

44. On 23 January 1995, the insurer, VACC had sent to the defendant a claim form for giving notice under s 37. Such claim was required to be made one month after Mr Perham had consulted a lawyer – that is by 28 January 1995. There is a possibility of extension of time if there is a reasonable excuse for the delay. Although a draft was prepared, no s 37 notice was sent.

45. Neither the need to send a s 37 notice nor the failure to send it was ever discussed with Mr Perham by anyone from the defendant’s firm of solicitors. Mr Connolly was concerned about whether or not Mr Perham had a legitimate claim but did not put his mind as to whether or not a s 37 notice should be sent and certainly did not advert to the need to send such notice even nine months after the accident. He continued to act for Mr Perham and take payments from him even though he had not sent a timely s 37 notice. When Mr Connolly warned Mr Perham on 14 February 1996, that the solicitors would not be held liable to be caused by any delay in taking necessary steps, the time for giving a s 37 notice had long since passed. Indeed, the three year period within which a personal injury action must be commenced was allowed to pass without any mention.

46. The defendant’s legal representatives did not address the question of negligence in their submissions. There was no positive case put forward on their behalf that the solicitor was not negligent and it appears clear beyond argument that he was; the question is whether that negligence was the cause of any loss. It would only be the cause of loss if the plaintiff lost the chance of being successful in an action which he could have taken in negligence against the driver of the motor vehicle had it not been for the negligent failure of the defendant’s solicitor to give the appropriate notices and commence an action.

Liability for nervous shock

47. The plaintiff’s claim is not for any physical injury said to be suffered but for the psychiatric injury of PTSD or “nervous shock” as it has come to be known at common law.^[2]  If he in fact has suffered from PTSD as a result of being a rescuer after the motor vehicle accident of 1 September 1994, then there is little doubt that he had a good cause of action against the driver whose negligence caused the accident.

48. The law relating to nervous shock has developed and been refined in Australia since the seminal decision of Chester v Waverley Corporation.^[3]   The decision was important, not for the majority judgments, but for the persuasive dissent of Evatt J.  The facts of that case were simple and tragic.  The plaintiff was the mother of a seven year old child who drowned in a deep trench which the defendant council had constructed in a street.  The trench had become almost filled with water and at one point was 7 feet deep.  It was not fenced off so as to prevent the approach of children to the edge of the deep water.  The council had caused a considerable quantity of sand to be placed at the edges of the trench and the irresistible combination of sand and water brought the children in the neighbourhood to play at the site of the pool.^[4]

49. The plaintiff and other members of the child’s family went to search for him and sometime later that day she was present when the body of her son was recovered from the water filled trench. She sustained severe nervous and mental shock and ill health. The majority held that the defendant, in such a situation, owed no duty of care to the plaintiff. Latham CJ held that such damage (that is, nervous shock) resulting from a mother seeing the dead body of her child could not be regarded as “within the reasonable anticipation of the defendant”. He said that a reasonable person could not perceive that the negligence of the defendant towards a child would so affect a mother. His honour opined:^[5]

“Death is not an infrequent event, and even violent and distressing deaths are not uncommon.  It is, however, not a common experience of mankind that the spectacle, even the sudden and distressing death of a child, produces any consequence of more than a temporary nature in the case of bystanders or even of close relatives who see the body after death has taken place”.

50. Rich J lamented the development of law of tort to what he described as its “present amorphous condition”. He said:^[6]

“For the so-called development seems to consist in a departure from the settled standards for the purpose of giving to plaintiffs causes of action unbelievable to a previous generation of lawyers.  Defendants appear to have fallen entirely out of favour”.

51. Starke J agreed with the Chief Justice that the shock suffered by the mother was not within the ordinary range of human experience and was therefore so remote from the actual omission of the council in opening or guarding the trench that no reasonable person ought to or would foresee or contemplate the injury to the appellant.

52. Evatt J, on the other hand, held that the circumstances did give rise to liability in the defendant and that the case should have been left to the jury at first instance. His Honour reached this conclusion by careful attention to the facts of the case. He clearly understood the social circumstances of working parents whose children played in the street. His Honour showed empathy for the circumstances in which the plaintiff found herself, referring to poetry and other literature about the anxiety caused by the search for a lost child. His Honour referred to the basic principles of liability for negligence in Donoghue v Stevenson and examined the history of the common law in England, Australia and the United States, as well as academic literature and the statutory law.  The judgment, whilst in dissent, was considerably more learned and influential than those of the majority.

53. Statutory law reform followed in New South Wales. The Law Reform (Miscellaneous Provisions) Act 1944 extended liability to cover injury arising from nervous or mental shock caused to other persons whenever a person was killed, injured or put in peril through another negligence, but limited it to the person’s parent or spouse.  Other members of the person’s family could recover if the death, injury or peril happened within their sight and hearing.  Other States and Territories, but not Queensland, introduced similar law reform.^[7] 

54. Since the decision in Chester v Waverley Corporation, there have been significant developments in the common law related to damages for nervous shock.  As Gibbs CJ said in Jaensch v Coffey^[8], the law “limped on with cautious steps”^[9] and “the old and irrational limitations on the right to recover damages for an injury of this kind have one by one been removed”.^[10] The difficulty which has been faced by the courts is the need to avoid indeterminate liability for an indeterminate number of people from the consequences of the negligence of another.  But the limitations put forward by the majority in Chester v Waverley Corporation were comprehensively rejected. 

55. In Jaensch v Coffey^[11], Brennan J stated the principle of liability which generally applies to cases of the type in question in case.  His Honour said:

“When a plaintiff suffers a psychiatric illness induced by his perception of the physical consequences of the defendant’s breach of a duty of care owed to a third person, he is not likely to have difficulty in proving the defendant’s breach of any relevant duty of care owed to him”.

In modern times, even direct perception of an incident or its aftermath is not in all cases a necessary aspect of a claim for damages for negligently inflicted psychiatric injury.^[12]

Injury to Mr Perham

56. Mr Perham described continuing symptoms of PTSD after he first consulted the defendant. His evidence was as follows. When he was released from hospital, Mr Perham moved to a new flat because, as he expressed it, his old flat was too near to where the accident had occurred and he didn’t want to live in that area. After his release from hospital, he said that he continued to have nightmares and flashback images of the taste, the smell and the feelings that would take him back to the scene of the accident and feeling as if he was there. This happened two or three times a week. He took a position with the Endeavour Foundation teaching handicapped people how to polish furniture. He found that job relatively easy to cope with because there was no pressure. He found he was quite unable to go back to a position where he was under pressure because of his emotional volatility. He made less money at the Endeavour Foundation because it is a charity.

57. However, during that year, he bottled up his feelings about the car accident. He received some counselling from the Australian Marriage Council. He stopped taking prescribed drugs and was not drinking or taking other drugs. He and his fiancée, Jamie Wakefield, then moved to Lismore to be closer to her parents. He also went to Lismore to get away from Toowoomba where the accident had happened. His relationship with his fiancée had deteriorated very badly because he did not trust anyone and because of his emotional volatility. He still suffered from physical symptoms such as vomiting and frequent panic attacks causing cold sweats, nausea, migraine and anger. At that time, he tried some french-polishing and did some cash in hand work.

58. At the end of 1995, Mr Perham separated from Ms Wakefield. He started having suicidal thoughts. He continued to have nightmares about being in the car when it exploded and began to think that he was supposed to die in the car, that he would be better off dead and not facing all the pain and trauma he had to deal with. He left Lismore and moved to Townsville where his brother lived because he wanted to be near a member of his family. He said he felt the need for that because he did not have any answers in his life. He was going around in circles after what had happened and did not know what to do with himself. His work in Lismore had only been irregular because he would find that when he was polishing, certain smells from the chemicals would put him right back into the events of 1 September 1994.

59. About a year or so after the accident, he believed he had recovered sufficiently to go back to work but two or three times a week he wanted nothing to do with the world. At the Endeavour Foundation, if he was having a bad day they did not care, but he was unable to hold down another job outside that environment.

60. When he moved to Townsville, he got a job spray painting trucks but said he was unable to hold down the job because of the pressure that he felt under. He started drinking heavily again, drinking four or five large bottles of full strength beer a day either to help him get to sleep or to change his mood to make him a little more happy or easy going. In Townsville, he started using marijuana every second or third day, as well as drinking every day. He said he was taking marijuana because it blocked his dreams so he could wake up in the morning without any nightmares about the car accident. He used marijuana for about two to three months in Townsville. He was admitted to psychiatric care in Townsville on one occasion from 16 to 28 March 1996 because of his self-perceived drug and alcohol problem. However, he was told that he was suffering from post-traumatic stress disorder.

61. After his release from the psychiatric unit in Townsville, he went into the Salvation Army Rehabilitation Centre known as ManCare for a six month residential programme. It was then that he met his second wife, Bettina. They were married for a couple of years before she left him.

62. He then moved to Bundaberg where he was employed French-polishing and tomato picking on a casual basis. He thought he would be able to continue with casual work if he was able to get the right counselling and get himself sorted out but he was unable to hold down a full-time job because some days he was unable to face the world.

63. After living in Bundaberg for about eight months, he moved to Redcliffe about Easter 2002. He said that he had improved a lot since the accident, particularly in the past couple of years. He has worked doing casual contract cleaning at Woolworths. His mood swings at work, however, have made it difficult for him to continue in employment. He continues to have nightmares of cars blowing up and of the girl’s voice. He has flashbacks of the smell of the petrol, the sight of blood causes an over-reaction and he still suffers from panic attacks once or twice a week. His flashbacks occur two or three times a month. He still suffers from a confused memory of events other than the motor vehicle accident. If his story were accepted, then Mr Perham suffered a significant compensable loss as a result of the post-traumatic stress disorder suffered.

64. Mr Perham relied on a report by the eminent forensic psychiatrist, Dr Donald Grant, in support of his claim. Dr Grant examined Mr Perham on 28 November 2001. Mr Perham gave an account of the motor vehicle accident which was broadly consistent with the evidence he gave at the trial of this matter. Dr Grant related the symptoms described by Mr Perham after the accident. He has suffered from terrible nightmares, nocturnal bedwetting and prolonged flashbacks. All of those symptoms have decreased in frequency and intensity since the accident.

65. In addition, Dr Grant reported on the emotional, relationship and employment problems Mr Perham has experienced since the accident. Mr Perham recommenced using alcohol and illicit drugs and had been unable to settle in one place.

66. Dr Grant said that Mr Perham had first contacted the psychiatric services about 10 days after the accident. He had been admitted to the Toowoomba Base Hospital and the Townsville psychiatric unit where he was referred for further rehabilitation for alcohol and drug related problems. He had quite extensive contact with the Mental Health Services on the Sunshine Coast and there was at least one suicide attempt by overdose about nine months before Dr Grant had seen him.

67. Mr Perham described his current symptoms to Dr Grant as continuing nightmares, ongoing flashbacks, irritability, startle response and uncertainty. When he saw Dr Grant he was using alcohol and marijuana heavily. Mr Perham told Dr Grant that he had used oral “speed” occasionally before the accident but used it more heavily and intravenously after the accident. He also told Dr Grant that he experimented with heroin on five occasions after the accident and used LSD and ecstasy in Townsville in the period after the accident. When he was cross-examined about this at the trial, Mr Perham was unable to remember saying that nor to explain why he had said it.

68. Mr Perham told Dr Grant about his criminal history in New Zealand in his late teens and early 20s. Mr Perham’s account of his family history was that his mother, of whom he has loving memories, died when he was aged nine. His father was a retired crane driver and fish and chip shop owner. He said he had a poor relationship with his father who was an aggressive man who had some involvement “with the mafia”. He is the youngest of six boys and he has only intermittent contact with his brothers.

69. Mr Perham told Dr Grant that when he left school he started an apprenticeship as a painter which he didn’t finish. He then took up sand blasting and spray painting and eventually gained an apprenticeship as a french polisher. Since then, he has worked either as a french polisher or as a spray painter. He left New Zealand and came to Australia at the age of 23 with his de facto wife but they separated and she returned to New Zealand. He went back to New Zealand and she came back to Australia with him and they married at the age of 25. Later, she returned to New Zealand with their two children. Mr Perham travelled and worked in various parts of Australia over the years including Wollongong, Townsville, Geelong, Sydney and Mt Isa before he ended up in Toowoomba prior to the accident. He has subsequently lived in Lismore, Townsville, the Sunshine Coast and Bundaberg.

70. On mental status examination, Dr Grant said that Mr Perham’s style of history-giving did not appear to be in any way deliberately withholding or uncooperative but may in fact have reflected some anxiety or reluctance to talk about the accident. Dr Grant said that Mr Perham had shown a range of psychological and emotional symptoms which together satisfied the diagnostic criteria for PTSD as follows:

“1)Mr Perham was exposed to a traumatic event in which he was confronted with an accident that involved death and serious injury of four people.  His response at the time was one of intense horror.

2) This traumatic event has been persistently re-experienced through recurrent and intrusive distressing recollections of the event, recurrent distressing dreams of the event, and flashback experiences as if the traumatic event was recurring.  He has had intense psychological distress and physiological reactivity upon exposure to internal or external cues that resemble aspects of the traumatic event.

3)Mr Perham has had persistent avoidance of stimuli associated with the trauma and numbing of general responsiveness.  He has made strenuous efforts to avoid thoughts or conversations associated with the trauma, and activities that arouse recollections of the trauma.  There are some memory blanks in terms of aspects of his memory of the trauma (e.g. the face of the driver).  He has shown a markedly diminished interest in significant activities with a sense of detachment and estrangement from others.  He has demonstrated a restricted range of affect in that he has felt unable to have really loving feelings towards others.  He has a sense of foreshortened future, particularly in terms of his career and relationships.

4)Mr Perham has demonstrated symptoms of increased arousal as indicated by difficulty in falling and staying asleep, irritability and outbursts of anger, difficulty concentrating, and an exaggerated startle response.

5)The duration of the disturbance has been more than one month.”

71. Dr Grant said that Mr Perham’s disturbance had caused clinically significant distress and impairment in social and occupational functioning and because of its chronic nature he would describe Mr Perham’s disorder as moderately severe. Dr Grant said that Mr Perham was vulnerable prior to experiencing the accident with some evidence of personality dysfunction and substance abuse and so was more susceptible to PTSD.^[13]

72. Dr Grant said that his prognosis was guarded and that Mr Perham was likely to have long term symptoms of PTSD although these would gradually reduce in severity. He was of the opinion that Mr Perham would benefit from some further psychotherapeutic input and recommended approximately 20 sessions of psychiatric treatment over the following 12 months costing approximately $170 per session. He believed that Mr Perham would also benefit from further drug and alcohol rehabilitation and counselling.

73. On cross-examination, Dr Grant said that a person who merely witnessed the aftermath of the accident in question might develop symptoms of PTSD. However, in Mr Perham’s case a detailed history was given of his actions at the scene and his nightmares and flashbacks of those actions and experiences. Dr Grant said his account was very convincing in quite subtle ways. If, however, his account of those actions and experiences was untrue, then Dr Grant said it would throw grave doubt on the diagnosis of PTSD. Although he might experience nightmares if he was not actually involved in the rescue, he would not have experienced the flashbacks he said he had experienced.

74. Mr Morton for the defendant cross-examined Dr Grant about the possibility of Mr Perham’s having a condition known as pseudologia phantasica, which is defined in the psychiatric literature^[14] as a type of lying in which a person appears to believe in the reality of his or her fantasies and acts on them.  While he did not directly ask Dr Grant if this was an alternative diagnosis, he suggested as much.  Referring to that condition, Mr Morton concluded his cross-examination by asking, “And if this man was not a rescuer, but a mere bystander at the scene of the accident, that’s likely to be the case here?”  Dr Grant replied, “Well, it’s likely that what he’s doing is exaggerating his involvement or some sort of reason of that kind.”  Mr Perham admitted under cross-examination that he was prepared to lie “if it gets [him] where [he] want[s] to get to”, but denied he would lie in court because of the penalties for perjury.  It is crucial therefore to determine whether or not the account he gave of his involvement in the rescue was true. 

Evidence of Other Witnesses

75. Evidence was given by Senior Constable Graham Kruck who was on 1 September 1994 a constable of police stationed at Toowoomba. He and his partner were on patrol in the Toowoomba area when they were called to the scene of the accident which was six to eight kilometres away. They sped to the scene of the accident and were the first of the emergency services on the scene. Senior Constable Kruck recorded the material in his police notebook to which reference has already been made as it was received by Mr Perham’s solicitor as a result of his Freedom of Information application. Senior Constable Kruck had mentioned in his notebook the name of Craig Perham and then wrote down what Mr Perham told him which was, “Dragged the girl out of car and girl off fence. And guy off footpath”. Beneath that he wrote Ms McTaggert’s name and then the name of Mr Brumpton who told Senior Constable Kruck, “Heard smash, pulled girl without legs out of car, saw driver and couldn’t get to him”. He then recorded the name of other witnesses including Malcolm Shoesmith.

76. Senior Constable Kruck’s memories of the night were extremely vivid. He said that in the 10 and a half years he has now been in the police service this was still the worst accident scene he has been to. He was visibly affected even while giving his evidence. Mr Perham was the first person that Senior Constable Kruck spoke to. He was near or with the girl on the footpath who was still alive. It appeared to Senior Constable Kruck as though Mr Perham had been helping or comforting her. Senior Constable Kruck did not notice any blood on flesh or Mr Perham which contradicted Mr Perham’s evidence that he found himself covered in blood when he got home that night.

77. Amy McTaggert also gave evidence of what occurred in the early hours of 1 September 1994. She was a very reluctant witness. Like Mr Perham, she described hearing the brakes and the impact, and the lights going off at her house and how they both went to the scene of the accident. She said they were the first to arrive. They went to the footpath where the car was and she saw people still inside the car which had crashed into a telephone pole. She said she saw Mr Perham open the front passenger side door. A young man “half fell out” and then Mr Perham pulled him from the car. Mr Perham said the car was going to catch fire and told her to move him away from the car. She moved him about five metres away.

78. Ms McTaggert said that Mr Perham then opened the back door to free a girl trapped in the back. He yelled at another man to help him and they pulled her out. Ms McTaggert said she had no legs and “she just died there when they pulled her out of the car”. Ms McTaggert said she gave her name to the police before she left but did not wish to speak to anybody about what she had seen. I accept that she had extremely unpleasant memories of that night but she was a most unsatisfactory witness. Her story differed from Mr Perham’s as to the position of the male and female passengers although it supported his story that he assisted in the rescue.

79. Evidence led by the defendant threw further doubt on Mr Perham’s story.

Criminal History

80. Mr Perham’s criminal history shows a much more serious criminal and therefore anti-social history than he had been prepared to admit to any of the medical experts who took his history. He was first convicted in New Zealand in 1978 at the age of 15 of aiding a theft under $100. On 30 December 1980 he was convicted of threatening words and fined $50. On 11 June 1981 he was convicted on consuming liquor in a public place; on 28 April 1982 he was convicted on wilful damage and on 22 July 1982 was consuming liquor in a public place. He was put on one year’s probation. On 23 July 1982 he was convicted of burglary by night and again given one year’s probation. On 29 October 1982 he was convicted of burglary of property under $100 by night and given three months ‘corrective training’. On 20 June 1983 he was convicted of another offence of burglary and given six months imprisonment and one year’s probation. He was also convicted on the same date of unlawfully taking a motor vehicle. On 27 July 1983 he was convicted of receiving property and on 26 February 1984 of offensive behaviour. On 6 May 1984 he was convicted of the theft of property.

81. In December 1985 he was convicted of false pretences in Australia and stealing as a servant. On 24 April 1986 he was convicted in Australia of assault occasioning bodily harm. He was not involved in any other criminal offending before the accident on 1 September 1994.

82. Mr Perham’s medical records prior to the accident show a more serious drug problem than he had been prepared to admit. On 24 July 1991 he was admitted to the Langton Centre in Sydney for two weeks. He was admitted with opiate dependence and was noted as also suffering from scabies. Under cross-examination Mr Perham asserted that he untruthfully told the clinic that he was a user of heroin and other intravenous drugs so that he could “get his wife and children back at the time.” He said that the needle marks in his elbow noted in his admission form were faked by him so he could get into the clinic. This seemed quite unlikely. The history given by him is consistent with the reality of a poly-drug abuser.

83. The clinical notes at discharge show that Mr Perham stated that he wanted to stay off drugs and find his wife and two children who had left him. The notes reported that he was a poly-drug user, mainly of opiates, cannabis and benzodiazepines. However it said that he was scared of needles and other people administered his drugs. He had done well and eventually left to attend a Wollongong crisis centre to take part in their rehabilitation program.

84. However on 25 June 1992 he was admitted to the Langton Centre for a second time where he stayed until 2 July 1992. The principal diagnosis was multiple drug dependence. The clinical notes on discharge said that he had a history of multiple drug dependence but had abstained from heroin and benzodiazepine for 11 months. For the month before admission he had been using five grams of marijuana daily ‘to block memories’. On both admissions, he spoke about the violence meted out to him by his father. A mention is made in the notes about “incest” but I am satisfied from Mr Perham’s response when this was put to him in cross-examination that he did not consider himself to be a victim of incest. However, I am also satisfied that he did complain of familial physical and some sexual abuse.

85. The level of drug use revealed in the records of the Langton Centre, if correct, suggests a very high risk of relapse into substance abuse particularly at times of stress. A relapse is likely to produce difficulties in personal relationships and maintaining stable work. However, his previous drug use and troubled background would also make Mr Perham more vulnerable to PTSD.

86. On 24 June 2002, Mr Perham was examined for the defendant by Dr Martin Nothling, a psychiatrist. Dr Nothling in his report dated 11 July 2002 referred to Mr Perham’s history of relationships. The report then refers to Mr Perham’s work record. Mr Perham told Dr Nothling that he had used cannabis from the age of 21 and had last used it in 1998-1999. Before that he used to use it on weekends and at parties. He also told Dr Nothling that after the motor vehicle accident he used cannabis daily for a year and used it heavily. He told Dr Nothling that he had never used ‘speed’ and prior to the motor vehicle accident and only used it in tablet form following the motor vehicle accident. However he ceased using it in 1996 in Townsville. He denied ever using intravenous drugs or any other illegal drugs. This was not of course consistent with the history of his admission to the Langton Centre. He admitted under cross-examination that what he had told Dr Nothling about his drug use was not true. He said it had nothing to do with the motor vehicle accident and therefore he didn’t find it necessary to reveal it to Dr Nothling. He also failed to tell Dr Nothling about his criminal record in New Zealand. Dr Nothling commented adversely on that in a second report dated 13 November 2002.

87. Dr Nothling concluded that Mr Perham was an unreliable historian. He did this on the basis of a comparison with the various versions of events that Mr Perham had given to medical facilities over many years, and Mr Perham’s failure to agree to a urine drug screen and a full blood examination. Dr Grant thought his problem was more likely to be polysubstance abuse which had deteriorated over the years. He said that it was not a feature of PTSD that the sufferer would exhibit anti-social personality traits. He also said that it was not a feature of PTSD to suffer from substance abuse but I prefer Dr Grant’s view that someone who suffers from PTSD is quite likely to use or abuse alcohol or drugs as a result. Dr Nothling conceded in cross-examination that while alcohol abuse was not a diagnostic feature of PTSD as defined by DSM-IV-TR, substance abuse is an associated disorder.

88. There is no doubt that there are inconsistencies in the various accounts Mr Perham has given both of his drug usage and his criminal record. The evidence of other eyewitnesses threw doubt on the veracity of his account of his actions at the scene of the accident.

89. Malcolm Shoesmith gave evidence that he was in Toowoomba staying with his mother at the time the accident occurred on 1 September 1994. He was in bed asleep when he heard a loud crash, went to the front door and saw the car up against the power pole. He saw that the car was on fire and there were people around the car. He walked down to the car and saw a person trying to pull somebody out of the vehicle. That person asked for assistance and he assisted him to pull a girl who was trapped in the back seat behind the driver. When they got her out they noticed that both legs had been amputated below the knee. There was no blood coming out and Mr Shoesmith found that she was dead. Mr Shoesmith was, at that time, an ambulance officer and had been for some 15 or 16 years. He was calm and because of his training and experience, not particularly affected by the accident.

90. Mr Shoesmith then noticed a man out of the motor vehicle. The man told Mr Shoesmith that there were four people in the car. Mr Shoesmith said he got several bystanders to help him shift that man very carefully further away from the car. He found a young woman, who was also out of the car, and they shifted her a little bit further away and then Mr Shoesmith stayed with her. The gentleman who helped him take the deceased girl out of the car was older than him. Mr Shoesmith thought he was over 50. Mr Shoesmith was unable to recognise the people who had helped him shift the other two survivors.

91. On cross-examination, Mr Shoesmith frankly agreed that his memory of the night was affected by the fact that he was, at that time, going through a fairly traumatic time as his father was terminally ill. He was, however, an honest, disinterested and, in my view, reliable witness.

92. Mr Brumpton gave evidence of his recollection of the night that the accident took place. He was asleep when he heard the screeching of tyres and a heavy bang that woke him up. He thought something had hit the house and he ran into his niece’s room where she was screaming. From the front door he saw a car which had crashed into a power pole with a lot of smoke coming out of it. He saw that the power lines had fallen down. He raced over to the car and could not see anybody in it. He saw no people around the car. He said he then saw a man lying on the footpath where he had been thrown out of the car who yelled at him, “Get the driver out, get the driver out, he’s still in there”.

93. Mr Brumpton said he had noticed a couple of injured people hanging out the back door of the car so he went back to the car. He also noticed an injured girl lying in the garden with her head hanging down over a short brick wall. He saw a young woman hanging out of the car, still in her seat belt, in the back seat behind the driver. He saw that it was impossible to get the driver out and felt his pulse and that he had none. Mr Brumpton said he was aware that a car had pulled up across the street. Another person assisted him to get the girl out of the car and put her down on the footpath a few metres away from the burning car so that she would not get burnt. He was not sure of the identity of the person who helped him. However, it was clear from Mr Shoesmith’s evidence that it was Mr Shoesmith who helped Mr Brumpton.

94. Mr Brumpton was in Toowoomba at the time recuperating after the Moura Mine disaster. In cross-examination, Mr Brumpton emphatically denied that there was anyone else there when he arrived on the scene. He did, however, admit that he did not see the young man on the footpath thrown out of the car and he was unable to say from his own knowledge how he had come to be on the footpath.

95. Both Mr Brumpton and Mr Shoesmith were truthful and reliable witnesses. They were the two men who had rescued the young woman whose legs were amputated from the rear driver’s side seat. Contrary to Mr Perham’s evidence, she was not in the front passenger seat and Mr Perham was not involved in her rescue.

Economic loss

96. Brian Roediger gave evidence as to Mr Perham’s involvement in the french polishing business prior to the accident. Mr Roediger employed Mr Perham as a french polisher on a casual basis and then he went into business with Mr Roediger and his partner in a three-way partnership. The business name, Toowoomba Colonial Furniture Restorations, was registered. Mr Perham found well set up larger premises for them and operations moved there for about 12 months. Mr Roediger was in charge of the furniture business while Mr Perham was in charge of the restoration and french polishing. Although there was some disagreement between Mr Roedigier’s evidence and Mr Perham’s as to what work the french polishing business had done, Mr Roediger conceded that there were a number of big jobs done including the Industrial Relations Court and some work at the Supreme Court. In addition, some samples were done for the Brisbane Casino but that job was not taken up. Mr Roediger thought that the architect involved would be too much trouble. Although Mr Perham exaggerated the financial benefit he received prior to the accident, and the number of big jobs undertaken, there was no doubt that giving up his business at Toowoomba Colonial Furniture Restorations caused him loss. He had however an erratic work history before the accident, never staying in one place for an extended period.

Conclusion

97. The plaintiff in this case was not at the scene of the accident. He did, however, hear it and rush to the scene. He was not a mere passer-by. He went to the scene, he did some things to help, but as the evidence of Mr Brumpton and Mr Shoesmith shows conclusively, he did not actually assist in rescuing anyone from the vehicle.

98. This would not necessarily have been decisive in denying the liability of the negligent car driver if it were not for the fact that Mr Perham’s description of his symptoms of PTSD included purported flashbacks of rescuing people from the burning vehicle. As that did not happen, his description of his symptoms must have been false. As Dr Grant said, a person can have nightmares about things that did not happen, but they cannot have flashbacks or distressing recollections of events that did not occur.

99. While the plaintiff has succeeded in proving that the defendant solicitor was negligent, that is not the end of the matter. The plaintiff must also show that this negligence has caused him loss. What the plaintiff must show he lost was the prospect of a successful action, an action in which he would have been successful either through court decision or by settlement with the defendant. It is this loss of chance which must be valued in this case because that is the quantum of the plaintiff’s loss.^[15]

100. There are, as have been pointed out, many difficulties in the plaintiff’s case. His account of his actions at the scene was untrue, although there is no doubt that he did attend the scene of an horrific accident. There is a question whether the extent of Mr Perham’s present suffering is related to the accident and its aftermath, or to his pre-existing drug problems and personality disorder. There is a question as to the extent of his loss of income-earning capacity both because of the question of how stable he would have been in employment in any event and questions about the accuracy of his alleged earnings prior to his injury. However, the most serious difficulty the plaintiff faces is that he purports to suffer symptoms on which the diagnosis of PTSD was based which are symptoms from which he cannot and did not suffer. Without those symptoms, there is no reliable diagnosis of PTSD. In other words, I could not conclude on the evidence led at the trial that Mr Perham suffered from PTSD as a result of the negligence of the driver of the motor vehicle.

101. In the circumstances, Mr Perham had no prospect of succeeding in an action in negligence against the driver of the motor vehicle and has therefore suffered no loss of chance. While Mr Connolly was undoubtedly negligent, his negligence has not been the cause of any loss. Judgment should be entered for the defendant.