Wiki v Atlantis Relocations (NSW) Pty Limited [2004] NSWCA 174

Reported Decision : 60 NSWLR 127

New South Wales Court of Appeal

CITATION : Wiki v Atlantis Relocations (NSW) Pty Limited [2004] NSWCA 174 revised - 6/07/2004 HEARING DATE(S) : 04/06/04 JUDGMENT DATE : 18 June 2004

JUDGMENT OF : Ipp JA at 1; Bryson JA at 92; Stein AJA at 96 DECISION : (1) The appeal is upheld (2) The order made by Newman AJ granting judgment in favour of the respondent in the sum of $290,139.35 is set aside (3) The order as to the costs of the trial remains the same (4) The matter is remitted to the Common Law Division of this Court for retrial (5) The respondent to pay the appellant's costs of the appeal (6) The respondent to have a certificate under the Suitors Fund Act 1951 (NSW), if otherwise entitled.

CATCHWORDS : COURTS AND JUDICIAL SYSTEM - Dispute between experts - Where expert evidence accepted on the basis that the particular expert was "impressive" and "eminent" - Judicial obligation to give reasons when deciding as between experts - Duty of judge to inform parties of matters within judge's personal knowledge when judge contemplates taking those matters into account - D LEGISLATION CITED : Suitors Fund Act 1951 (NSW) Abalos v Australian Postal Commission (1990) 171 CLR 167 Ahmedi v Ahmedi (1991) 23 NSWLR 288 Archibald v Byron Shire Council (2003) 129 LGERA 311 Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 Chambers v Jopling (1986) 7 NSWLR 1 Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Executive Director of Public Health v Lily Creek International Pty Ltd [2001] WASCA 410 Eckersley v Binnie (1988) 18 Con LR 1 Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377 Forbes v Selleys Pty Ltd [2004] NSWCA 149 Fox v Percy (2003) 197 ALR 201 CASES CITED : McDonald v Moore [2003] WASCA 21 Mifsud v Campbell (1991) 21 NSWLR 725 Mistral International Pty Ltd v Polstead Pty Ltd [2002] NSWCA 321 Moylan v The Nutrasweet Company [2000] NSWCA 337 Papadopoulos v New South Wales Insurance Ministerial Corporation [1999] NSWCA 116 Pledge v Roads and Traffic Authority (2004) 205 ALR 56 Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 Public Trustee v The Commonwealth (unreported, NSWCA, 20 December 1995) Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Wilsher v Essex Area Health Authority [1988] AC 1074 X and Y (by her tutor X) v Pal (1991) 23 NSWLR 26 PARTIES : Mitzi Wiki (Appellant) Atlantis Relocations (NSW) Pty Limited (Respondent) FILE NUMBER(S) : CA 40492/03 COUNSEL : G Barry Hall QC/F Stevens (Appellant) L King SC/P Sweeney (Respondent) SOLICITORS : RTW & Associates (Appellant) Grahame Goldberg Partners (Respondent)

LOWER COURT Supreme Court - Common Law Division JURISDICTION : LOWER COURT SC 20998/01 FILE NUMBER(S) : LOWER COURT Newman AJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40492/03 SC 20998/01

IPP JA BRYSON JA STEIN AJA

Friday 18 June 2004 MITZI WIKI v ATLANTIS RELOCATIONS (NSW) PTY LIMITED

FACTS The appellant injured her lower back while carrying out lifting work in the course of her employment with the respondent. The respondent admitted that these injuries were caused by its breach of a duty of care that it owed the appellant. These injuries were later aggravated by further work carried out for the respondent. Over time, the appellant's symptoms worsened, and some two years after the initial injury, she began to experience pain in the upper back. The appellant became depressed and stopped being gainfully employed. The appellant called a number of medical experts to give evidence at trial who were of the opinion, generally, that the pain in the appellant's upper back was caused by the strain to the lower back. The appellant also led evidence of a psychiatrist, Dr Roxanas, who was of the opinion that the appellant was suffering a depressive illness which was caused by her pain and disability. The respondent led evidence of experts who were of the opinion, generally, that the appellant had only sustained a strain to her lower back (and not disc injuries) and that the injuries to the upper back were not caused by her work. The respondent also led the evidence of another psychiatrist who was of an opinion different to that of Dr Roxanas. The trial judge, Newman AJ, found that the appellant had sustained a back strain, but had not proved that she had sustained certain disc injuries. His Honour held that the back strain caused the appellant "some incapacity" which probably prevented her carrying out normal work of the type she was performing when she was injured, and that this incapacity was "permanent". His Honour held that the appellant had not established that she suffered from a depressive illness. The only reasons given by the trial judge for preferring the respondent's witnesses were that he regarded one of them, Dr Dan, as a persuasive and impressive witness who was the most eminent of the experts called. Newman AJ assessed damages in the sum of $290,139.35. The appellant appealed against this judgment. HELD (per Ipp JA, Bryson JA and Stein AJA agreeing): 1. A miscarriage of justice can arise where what is and is not disclosed in a judge's reasons is a breach of the principle that justice must not only be done but must be seen to be done (Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430). 2. The extent of the duty to give reasons depends upon the circumstances of the individual case (Mifsund v Campbell (1991) 21 NSWLR 725). The proper administration of justice requires reasons to be given in a form that will enable the losing party to understand properly the grounds upon which the case was lost and that will not, effectively, frustrate the losing party's right of appeal (Public Service Board of NSW v Osmond (1986) 159 CLR 656). 3. In some disputes between experts, demeanour will be crucial. But, where the issue in dispute involves differences between expert witnesses that are capable of being resolved rationally by examination and analysis, and where the experts are properly qualified and none has been found to be dishonest, misleading, unduly partisan or otherwise unreliable, a decision based solely on demeanour will not provide the losing party with a satisfactory explanation for his or her lack of success. 4. It may be entirely appropriate for trial judges to rely on matters of credibility in determining disputes between experts. The advantages of the trial judge in this respect are crucial to the Court's decision on appeal (Fox v Percy (2003) 197 ALR 201; Pledge v Roads and Traffic Authority (2004) 205 ALR 56). Nevertheless where it is apparent from the judge's reasons that there is a failure to follow the precepts for resolving expert disputes, there is nothing that requires an appellate court to refrain from intervening. 5. Here, there were several bases upon which it was open to the trial judge to determine, on a rational basis, which body of expert evidence should be preferred. Instead, Newman AJ merely relied upon the "eminence" of a particular expert, Dr Dan, and his view that Dr Dan was "the most impressive witness". 6. In addition, there is a serious question as to how his Honour determined that Dr Dan was the "most eminent" of the medical practitioners called. At trial, there appears to have been no investigation as to the respective degrees of "eminence" of the doctors in question. If his Honour relied on facts known to him outside the evidence led at the trial, it was incumbent on him to inform the parties of the material to which he intended to have regard and to give them an opportunity to deal with it. His Honour's failure to do this was a further error. 7. Once it is accepted that the injury caused the appellant to suffer from pain and that pain was permanent, the opinion of another expert, Dr Roxanas, that the appellant suffered from a depressive illness as a result of her injuries, remains valid. His Honour therefore erred in treating his finding that no disc injuries were proved as having the effect that the appellant had failed to prove that the back strain and the consequent pain and permanent incapacity resulted in her suffering from psychological trauma.

ORDERS 1. The appeal is upheld. 2. The order made by Newman AJ granting judgment in favour of the respondent in the sum of $290,139.35 is set aside. 3. The order as to the costs of the trial remains the same. 4. The matter is remitted to the Common Law Division of this Court for retrial. 5. The respondent to pay the appellant's costs of the appeal. 6. The respondent to have a certificate under the Suitors Fund Act 1951 (NSW), if otherwise entitled.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40492/03 SC 20998/01

IPP JA BRYSON JA STEIN AJA

Friday 18 June 2004 MITZI WIKI v ATLANTIS RELOCATIONS (NSW) PTY LIMITED Judgment 1 IPP JA:

The issues in the appeal 2 This is an appeal against an assessment of damages for personal injuries in an action where liability was admitted. 3 The appellant injured her lower back while carrying out lifting work in the course of her employment with the respondent. The respondent admitted that the injuries so sustained were caused by its breach of a duty of care that it owed the appellant. The appellant's injuries were later aggravated by further work she carried out for the respondent. 4 Over time, the appellant's symptoms (pain and psychological changes) worsened and became more diffuse. Some two years after the initial injury she began to experience pain in the upper back. She became depressed and stopped being gainfully employed. She commenced proceedings against the respondent and the trial was heard by Newman AJ in the Common Law Division. 5 The principal issues were: (a) What precise physical injury the appellant sustained; in particular, whether it was permanent disc damage, or muscle strain. (b) Whether the symptoms in the upper back were caused by the respondent's breach of its duty of care. (c) Whether the appellant was suffering from psychological trauma; if so, whether the psychological trauma was caused by the injuries for which the respondent was responsible or by other matters for which the respondent was not liable. (d) What amount was to be awarded in respect of each head of damage claimed. 6 Newman AJ found that the appellant had not proved that she had sustained the disc injuries she claimed. He found, however, that the appellant had sustained a back strain. He held that the back strain caused her "some incapacity" and this probably prevented her "carrying out manual work of the type she was performing when she suffered injury". He held that this incapacity was "permanent". 7 Newman AJ assessed the appellant's damages in the sum of $290,139.35 and granted judgment in favour of the appellant in that amount. The findings of fact that he had made, however, resulted in the appellant's damages awarded for future out of pocket expenses, future economic loss, loss of superannuation benefits and non-economic loss being substantially lower than that claimed and in her claim for damages for gratuitous care being rejected entirely. 8 The appellant appeals against the judgment of Newman AJ. The grounds of appeal are many in number but, in the light of the conclusion to which I have come, it is sufficient to refer only to the argument that the reasons given by Newman AJ were inadequate and internally inconsistent. 9 Before discussing that argument, however, it is necessary to give a more detailed description of the background circumstances to the claim.

The appellant is injured and those injuries are aggravated 10 The appellant was aged 31 years when she was injured on 15 February 1998. She experienced back pain after carrying heavy weights while working on that day. Some four days later, she consulted a general practitioner, but continued to carry out her duties as an employee. Shortly thereafter, the pain increased and extended down her right leg. These symptoms caused her to go on sick leave. For the next two months, she did not work and was paid worker's compensation. 11 The appellant returned to work in April 1998. Her duties were changed to those of a project manager. Nevertheless, she continued to experience pain in her lower back and right leg. She was required to work long hours and to drive long distances. These activities aggravated her symptoms. From time to time, she saw her general practitioner, Dr Earl, and attended Ryde Hospital. 12 The appellant left the employ of the respondent in April 1999. She commenced working for another removalist company known as "Movers and Shakers". Again, she was employed as a project manager. She continued to suffer from back and leg pain and continued to consult Dr Earl and to attend Ryde Hospital. Eventually in July 1999, her pain had become so bad that she could not continue her duties at Movers and Shakers and she left their employ. 13 In 2000, she began to experience severe pain in her upper back, her symptoms worsened and became more diffuse. She became depressed. 14 She asserted at trial that she was unable to work at all because of the degree to which she was incapacitated from the injuries she received while working for the respondent. She also asserted that she was unable to care for herself and required the full time assistance of her de facto spouse.

The medical and other witnesses called at the trial 15 The appellant called two specialist medical practitioners, Dr Ellis and Dr Evans, to testify as to the injuries she sustained to her back. She called a psychiatrist, Dr Roxanas, to testify as to her mental condition. These medical practitioners gave oral evidence and were cross-examined. 16 The appellant gave evidence herself and called her de facto spouse (and full-time carer), his sister and two of her neighbours who testified as to the difficulties she experienced in her daily life and as to her mental state. 17 Newman AJ did not regard the appellant as a convincing witness, but did not comment on the credibility of the other four lay witnesses to whom I have referred. He made no direct reference to the credibility of the appellant's expert witnesses. 18 The respondent called a number of specialist medical practitioners who expressed views different to those of Drs Ellis and Evans and called a psychiatrist, Dr Revai, who differed from Dr Roxanas. 19 The evidence of several other medical practitioners was adduced by way of reports they had prepared. They did not give oral evidence and were not cross-examined.

The medical evidence 20 The appellant called Dr Ellis, a general surgeon who had been practising in Sydney for many years. In a report dated 15 November 1999, Dr Ellis said: "As a result of the work to which she was exposed while employed by [the respondent], [the appellant] has suffered musculo-ligamentous contusion, aggravation of degenerative change in her back with secondary effects in the right lower limb. It is likely that she has internal disc disruption and possibly a disc rupture in her lower lumbar spine."

He said that there was no evidence of psychosomatic illness. He was of the opinion that the appellant's injuries were consistent with the work which she had performed. He concluded that she was permanently unfit for heavy work. He suggested that an MRI examination be undertaken. 21 An MRI scan was then carried out and the radiologist concerned reported as follows: "Degenerate changes at the T11/12 disc with a small right paracentral disc protrusion. No significant central canal stenosis at this level. A small posterior central disc protrusion with annular tear at L4/5 level. Probable L5/S1 right paracentral annular tear with no significant disc protrusion but slight swelling of the right S1 nerve root." 22 Dr Ellis reported on 13 January 2000, after the MRI report had been received. He said that the findings in the MRI report confirmed his previous assessment of the appellant's injuries. 23 Dr Ellis dealt expressly with the late onset of pain (in 2000) in the appellant's upper back (thoracic spine). He expressed the opinion that that pain was caused by the injury she had sustained while working for the respondent. In the course of justifying this opinion, he explained that disability at a lower level in the spine is often followed by progressive problems at a higher level. In his oral testimony he was asked why this was so and replied: "Because of the rigidity, the muscle spasms and the immobility of the spine at a lower level, this affects the motion and the facilitation of movement at a higher level. It is not uncommon for patients to experience neck pain when the primary injury originally was in the lumbar region." 24 In the course of his cross-examination, Dr Ellis was shown a lumbar myelogram performed on 10 May 2000 on the appellant. He accepted that the myelogram showed the appellant's spine to be "relatively normal". He said, however: "Myelography doesn't look at dehydration of the discs. MRI examination is the only examination that looks at that. It is a superior examination, in my opinion, for finer estimates and finer detail of lumbar disc injury than a myelogram."

He expressed the opinion that the appellant was suffering from "internal disc desiccation or dehydration … at L4/5 discs and T11/12" and said that this condition was "symptomatic of her back pain". He did not consider that the myelogram result affected his ultimate conclusion. 25 Dr Ellis explained that there were other features of the appellant's condition that supported the opinion to which he had come. These included restriction of movement in the appellant's lower limbs and tenderness in the inter-spinous ligaments. He said that these findings were consistent with the radiological confirmation of damage to two discs. When it was put to him that the appellant was "having you on", he replied: "When one has been looking at patients in pain for more than 50 years it is not difficult to identify the patient who is in genuine pain." 26 Dr Ellis was shown a report by Dr Dan, a neurosurgeon who testified on behalf of the respondent. It was put to Dr Ellis by cross-examining counsel that Dr Dan considered that the MRI was "normal". Dr Ellis replied that Dr Dan's report was "in contra-distinction to the radiologist whose profession and speciality is to report". Dr Ellis did not agree with Dr Dan's interpretation of the MRI report. 27 Counsel for the respondent questioned Dr Ellis' expertise. Dr Ellis replied: "In my years of training I assisted my senior colleagues in operations on the back and I am an Honours graduate from Sydney University. I am a Fellow of the Royal College of Surgeons of England and Australasia. I took these exams and the curriculum and examination included orthopaedics."

Dr Ellis said that he had been looking at MRI scans "fairly constantly" since "MRI came into existence". 28 In summary, as Newman AJ stated, Dr Ellis' conclusions were as follows: "The [appellant] was suffering from an internal disc disruption at the T11/12 disc, a small right paracentral disc protrusion at this level causing thecal sac indentation. Furthermore that at the L4/5 level she had a posterio central disc protrusion and annual [sic – annular] tear at the L5/S1 level there were changes consistent with a right paracentral annual [sic – annular] tear with evidence of injury to the facet joints on each side at this level and evidence of compression injury to the right S1 nerve root. These disabilities have made her unfit for any form of heavy work." 29 Newman AJ correctly observed that Dr Ellis maintained his position "despite a searching cross-examination by counsel for the [respondent]". 30 The next witness called by the appellant was Dr Evans. Dr Evans had practised as a physician since 1964. He had been furnishing expert reports in relation to back injuries for 10 to 14 years. Dr Evans said that he had looked at several hundred MRI scans of the back and would profess to a "degree of competence" in this respect. 31 In a report dated 13 April 2000, Dr Evans said: "The circumferences of the right thigh and calf were each 1.0cm less than those of the left leg, suggesting slight wasting of the muscles of the right leg." 32 He referred to the MRI report and concluded: "[The appellant] has suffered relatively mild damage to the L4/5 and L5/S1 intervertebral disc. She thus experiences pain and stiffness in the low back as a direct result of the disc damage. She also experiences leg pain, most likely caused by irritation of the first sacral nerve roots, and being more troublesome in the right leg than the left. In support of this, there is slight wasting of the muscles of the right leg." 33 He went on to report: "She continues to experience pain in the back and legs. She has suffered from depression as a result of the pain, and is being treated for this. Probably as a result of the depression, there is now some evidence of over-reaction, and it is not likely that she is quite as incapacitated as she presents." 34 Dr Evans agreed with the radiologist's conclusions as to the MRI scan. He said that the slight wasting in the right leg was consistent with damage to the lower lumbar spine and to the nerve root. He also had found, when examining the appellant, that she had some flattening of normal lumbar lordosis and lower scoliosis. In oral evidence he explained the significance of this finding in these terms: "When a disc is damaged, the back tends to be [splinted] by the muscles around it. Hence, instead of having the normal curve, it tends to be flattened by the tightening of the muscles." 35 In cross-examination, Dr Evans stated that he had attributed some significance to the fact that "both the right thigh and calf were a bit small compared to the left and that was the side she complained of pain". He said that the measurements "were consistently different in the right thigh and right calf". He said he did not think it was correct to disregard this difference. It was put to him that another practitioner had found wasting earlier but that the wasting had disappeared some time after Dr Evans had seen the patient. Dr Evans said, nevertheless, that: "[T]he fact the wasting was there in the first place was supportive of a significant nerve lesion affecting the right leg."

He remarked: "I think if the nerve supply to the leg is damaged, I think one can have wasting anyway. This may be partly due to its use as might occur with a limp, perhaps, although this is a bit odd. If the wasting had gone – and I would like to measure it myself at the time – but the leg pain persisted, I don't think it means she no longer had pain in her leg resulting from nerve root irritation. People have leg pain with nerve root irritation without leg wasting." 36 Dr Evans expressed the view that, looking at the radiological films, a light area at the back of the L5 disc would be hard to explain other than on the basis of a tear of the annulus. 37 When, in cross-examination, the results of the myelogram performed on the appellant were put to Dr Evans, he said: "This weakens the case for the nerve root compression considerably. It means you couldn't possibly justify surgery for it. It even throws the whole matter of nerve root compression into doubt." 38 Newman AJ noted that Dr Evans expressed views not dissimilar to those of Dr Ellis and maintained those views in oral evidence. He pointed out: "Dr Evans maintained that leg wasting which he found on examination was indicative that the plaintiff was still incapacitated to a degree as a consequence of her work injury."

The approach of the trial judge and his reasoning 39 The respondent's case, as noted by his Honour, was that the appellant had not suffered disc damage. As the judge put it: "While there was no issue raised that the [appellant] had suffered an injury on 15 February 1998 and that it was not a significant injury, the [respondent's] case was that the effects of that injury had in all probability subsided well before the trial. The most significant difference between the medical evidence called by the [appellant] and that relied upon by the [respondent] involved an interpretation of the MRI scan of 8 December 1999. 40 Newman AJ referred to a number of medical practitioners called by the respondent who dealt with the MRI scan. I shall mention these. 41 Dr Innes-Brown, an orthopaedic surgeon, said that there was no causal relationship between the "mild early pathology" shown on the MRI scan and the work the appellant was doing in February 1998. Dr Innes-Brown attributed the appellant's symptoms to "slowly progressive age-related degenerative processes in her thoracic and lumbar spine." 42 Dr Christie, an occupational physician, expressed the opinion that the appellant had suffered a chronic low lumbar sprain from the work she performed after 15 February 1999. He found slight wasting in her right leg when he saw her on 10 September 2001. He was of the opinion that the nerve was being compressed at the facet joint. Nevertheless, he concluded: "I do not believe that there is any clinical evidence that [the appellant] has suffered a permanent injury to her lower back although the fact that low back pain has been present for more than three years makes a prognosis for a full recovery rather doubtful." 43 Later, in a report dated 22 August 2002, Dr Christie accepted the possibility that the appellant did have some nerve root involvement to the right leg, although he considered that the wasting of her right calf (previously observed by him) seemed to have recovered. He expressed the opinion that the pain and minor radiological changes to her lower thoracic spine may not have been due to occupational injury. 44 Then, Newman AJ turned to Dr Noel Dan. His Honour described Dr Dan as the "key witness" as to the appellant's physical condition called by the respondent. He said: "Dr Dan who is a neurosurgeon is the Clinical Associate Professor of Surgery within the University of Sydney. I do not believe that I am doing a disservice to the other medical practitioners involved in the matter when I describe Dr Dan as being the most eminent of them." 45 Dr Dan had stated in a report that the appellant had suffered a back strain but expressed the opinion therein that there were no organic grounds that explained her present condition. 46 Dr Dan gave oral evidence and was cross-examined. He said that the radiological material did not suggest any significant abnormality. He stated: "[T]here were features in some of them which were not strictly normal in the sense of radiology but, in the sense of being significant changes, I didn't think they showed any." 47 Dr Dan said that the myelogram was unequivocally normal. He said that the "bulge" at L4/5 was "not abnormal or pathological". He said that he had great difficulty in associating thoracic pain in early 2000 with the injury that took place some two years before. 48 Having recounted the evidence of the more important medical witnesses in summary form, Newman AJ said: "I found Dr Dan's evidence to be very persuasive. Not only was he the most eminent of the medical practitioners called (or whose reports were tendered) but he was in my view the most impressive witness whether lay or expert called in the case. Accepting as I do his evidence I find that the [appellant] has not established that she suffered the disc injuries at T11/12 and L5/S1 as claimed. Furthermore again based upon my acceptance of Dr Dan's evidence, I do not find that the [appellant] has established that she has suffered the pain and disability of which she complains." 49 His Honour then stated: "However, I do accept that the [appellant] did suffer a significant injury on 15 February 1998 and the effects of that injury were aggravated by her continuing to work as a packer. While, as I have said, I do not accept that the [appellant] suffered the disc injuries which she alleged, I do find that she suffered a back strain, the effects of which are still causing her some incapacity which probably prevent her carrying out manual work of the type she was performing when she suffered injury and that this incapacity is permanent. I come to this conclusion mainly because of Dr Evans' finding of leg wasting." 50 An important aspect of the appellant's claim was the psychological harm she contended she suffered in consequence of the respondent's negligence. I have mentioned that she relied in this regard on the evidence of her de facto spouse, his sister and two neighbours. Their evidence as to the personality change they noticed in the appellant after she had sustained her injuries was not, in substance, challenged. In addition, the appellant relied on the evidence of Dr Roxanas, the psychiatrist. Newman AJ said the following about Dr Roxanas' testimony: "Dr Roxanas deposed that the [appellant] was suffering from a depressive illness consequent upon the pain and disability she was suffering as a result of her physical injuries. In essence, it was Dr Roxanas' view that so long as the [appellant] was suffering from pain and disability from her physical injuries so consequently her depressive illness would continue." 51 In determining whether the appellant was suffering from psychological harm caused by the respondent's breach of duty, Newman AJ said: "As Dr Roxanas' evidence that the [appellant] was suffering from depression was dependent upon an acceptance that she was suffering pain of the type she complained of because of her physical disabilities I also do not find that the [appellant] has established that she suffers from the depression which he diagnosed." 52 Newman AJ went on to assess the appellant's damages in the sum of $290,139.35. That sum was heavily influenced by the judge's acceptance of the testimony of Dr Dan, in preference to that of the medical practitioners who testified on the appellant's behalf. 53 In deciding to accept the testimony of Dr Dan, Newman AJ did not analyse or examine the merits of the opinions expressed by Dr Ellis and Dr Evans. He merely relied on:

(a) The "very persuasive" quality of Dr Dan's evidence.

(b) His view that Dr Dan was the "most eminent" of the medical practitioners called (or whose reports were tendered).

(c) His view that Dr Dan was "the most impressive witness whether lay or expert called in the case". 54 These findings must be seen in the light of the fact that, as I have pointed out, his Honour made no credibility findings against any of the witnesses who testified relevantly on behalf of the appellant (save for the appellant herself). 55 Thus, apart from the question of the "eminence" of Dr Dan, the most important issue in the case was resolved solely by his Honour's subjective opinion as to which witness was regarded as the most "persuasive" and "impressive."

The judicial obligation to give reasons 56 A miscarriage of justice can arise where what is and is not disclosed in a judge's reasons is a breach of the principle that justice must not only be done but must be seen to be done: Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 431 (per Mason P). 57 As McHugh JA explained in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (at 279), one of the purposes served by a judicial decision is that: "[I]t enables the parties to see the extent to which their arguments have been understood and accepted as well as the basis of the judge's decision."

Accordingly, as McHugh JA said (at 278-279): "[A] judicial decision must be a reasoned decision arrived at by finding the relevant facts and then applying the relevant rules or principles. A decision which is made arbitrarily can not be a judicial decision; for the hallmark of a judicial decision is the quality of rationality". 58 In Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377 which was followed in Moylan v The Nutrasweet Company [2000] NSWCA 337, Henry LJ said (at 381-382) in regard to the general duty of a judge to give reasons for his or her decision (particularly in relation to expert evidence): "The duty is a function of due process, and therefore of justice. Its rationale has two principal aspects. The first is that fairness surely requires that the parties especially the losing party should be left in no doubt why they have won or lost. This is especially so since without reasons the losing party will not know … whether the court has misdirected itself, and thus whether he may have an available appeal on the substance of the case. The second is that a requirement to give reasons concentrates the mind; if it is fulfilled, the resulting decision is much more likely to be soundly based on the evidence than if it is not." 59 It is, of course, well settled that a judge does not need to refer to all the evidence in the proceedings or to indicate which of the evidence is accepted or rejected. The extent of the duty to give reasons depends upon the circumstances of the individual case: Mifsud v Campbell (1991) 21 NSWLR 725 at 728 (per Samuels JA, with whom Clarke JA and Hope AJA agreed). But it is not for nothing that in some bilingual countries the judgment of the court is given in the language of the unsuccessful party. The proper administration of justice requires reasons to be given in a form, firstly, that will enable the losing party to understand properly the grounds upon which the case was lost, and, secondly, that will not, effectively, frustrate the losing party's right of appeal: Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 666-667. 60 In some disputes between experts, demeanour will be crucial. This may occur where a witness has given dishonest or misleading evidence, or has become an advocate for a party, or where the evidence given is inherently unreliable for other reasons. Demeanour may also be crucial in other cases where the evidence is not so tainted. Situations may arise where, after due consideration of the reasoning of the differing views of the expert witnesses, the judge is simply unable to decide the issue otherwise than by impression and demeanour. Demeanour may also be crucial in situations of the kind described by Mahoney JA in Public Trustee v The Commonwealth (unreported, NSWCA, 20 December 1995) when making the following remarks: "[N]ot infrequently, the court may not be in a position to decide whether the facts on which the witness relies are true and may not be able to judge the scientific or professional accuracy of the principles … And where experts state different conclusions and rely for them upon facts which differ and principles which do not agree, it may not be able to form its conclusion by reference to those facts or those conclusions alone. When a judgment must be made between the facts and the principles advocated at the trial, the court may not be in a position to give objectively convincing reasons for its choice. It may, in the end, have to depend upon the impression which the witness has made."

Demeanour also often plays a partial role in a decision whether to prefer one expert over another. A judge may be persuaded by a combination of the material force of an expert's views together with the way in which the evidence was given. 61 But, where the issue in dispute involves differences between expert witnesses that are capable of being resolved rationally by examination and analysis, and where the experts are properly qualified and none has been found to be dishonest, or misleading, or unduly partisan, or otherwise unreliable, a decision based solely on demeanour will not provide the losing party with a satisfactory explanation for his or her lack of success. A justifiable grievance as to the way in which justice was administered will then arise. 62 In Moylan, Sheller JA (with whom Beazley JA and Giles JA agreed) referred to and adopted much of the reasoning of Henry LJ in Flannery. His Honour quoted the following remarks of Henry LJ (reported in Flannery at 381-382) with approval: "It is not a useful task to attempt to make absolute rules as to the requirement for the judge to give reasons. This is because issues are so infinitely various. For instance, when the court, in a case without documents depending on eye witness accounts is faced with two irreconcilable accounts, there may be little to say other than that the witnesses for one side were more credible … But with expert evidence, it should usually be possible to be more explicit in giving reasons: See Bingham LJ in Eckersley v Binnie (1988) 18 Con LR 1, 77-78: "In resolving conflicts of expert evidence, the judge remains the judge; he is not obliged to accept evidence simply because it comes from an illustrious source; he can take account of demonstrated partisanship and lack of objectivity. But, save where an expert is guilty of a deliberate attempt to mislead (as happens only very rarely), a coherent reasoned opinion expressed by a suitably qualified expert should be the subject of a coherent reasoned rebuttal, unless it can be discounted for other good reasons … '"

And: "[w]here the dispute involves something in the nature of an intellectual exchange, with reasons and analysis advanced on either side, the judge must enter into the issues canvassed before him and explain why he prefers one case over the other." 63 Sheller JA (at [64]) criticised the trial judge in Moylan for deciding the case virtually solely on the strength of the following remarks: "I have had the advantage not only of hearing the various witnesses give evidence but also of seeing the way in which they have reacted to the questions that they were asked. Having done so, I prefer the expert evidence that was given for the defendants to that which was given for the plaintiffs." 64 In Mistral International Pty Ltd v Polstead Pty Ltd [2002] NSWCA 321, in a judgment with which both Meagher and Beazley JJA agreed, Sheller JA again referred to Flannery and Eckersley v Binnie with approval and applied what had been said in those cases. In Archibald v Byron Shire Council (2003) 129 LGERA 311 Sheller JA (with whom Beazley JA agreed) adopted the same approach. His Honour said (at 323, [54]): "Where a dispute, such as this one, involves something in the nature of an intellectual exchange with reasons and analysis advanced on either side, the parties are entitled to have the judge enter into the issues canvassed before the court and to an explanation by the judge as to why the judge prefers one case over the other. This is particularly so where there is disputed expert evidence. In the present case, the parties were entitled to be told if Dr Button's estimates were to be accepted, on what basis they were to be accepted, in preference to those of Mr Loomes and Mr Thompson. This had to be done if the court was properly to perform the duty of stating with certainty the extent to which the respondent was entitled to rely upon continued use."

See also Papadopoulos v New South Wales Insurance Ministerial Corporation [1999] NSWCA 116 at [17] . 65 I would add that the approach in Flannery was followed in McDonald v Moore [2003] WASCA 21 (per Murray, Anderson and Templeman JJ) and by Wheeler J in the Executive Director of Public Health v Lily Creek International Pty Ltd [2001] WASCA 410. 66 In Ahmedi v Ahmedi (1991) 23 NSWLR 288, Clarke JA (with whom Handley JA agreed) said (at 299): "It has been contended that the principle which requires the Court to accord appropriate weight to the trial judge's assessment of the witnesses he has seen and heard does not apply in the case of expert witnesses. I do not think that the cases support the submission. In Chambers v Jobling (1986) 7 NSWLR 1, Mahoney JA concluded that the principle applied with appropriate limitations to the evidence of experts (at 25) … Although his Honour's judgment was a dissenting one, and to that extent his remarks must be regarded as obiter dicta, I find them persuasive particularly as they have been supported by later authority. In Abalos v Australian Postal Commission (1990) 171 CLR 167, for instance, the evidence of at least one of the witnesses was that of an expert. Again in Wilsher v Essex Area Health Authority [1988] AC 1074, Lord Bridge, clearly indicated that the general principles relating to the power of an appellate court to interfere with a trial judge's findings as to which witnesses should be accepted applied equally in the area of expert evidence. His Lordship said (at 1091): '… Where expert witnesses are radically at issue about complex technical questions within their own field and are examined and cross-examined at length about their conflicting theories, I believe that the judge's advantage in seeing them and hearing them is scarcely less important than when he has to resolve some conflict of primary fact between lay witnesses in purely mundane matters.' (See, also X and Y (by her tutor X) v Pal (1991) 23 NSWLR 26). Accepting as I do the principles laid down in those cases I do not think that it is open to this Court to decide that Phelan DCJ's conclusion on this aspect, which was clearly based upon his evaluation of the evidence of the expert witnesses and the facts which have already been mentioned, should be set aside and that the evidence of Dr Haik should have been preferred." 67 In Forbes v Selleys Pty Ltd [2004] NSWCA 149, Mason P (with whom Giles JA and McColl JA agreed) accepted, generally, that the principles governing appellate review of technical disputes do not differ from those governing "ordinary" factual disputes (and followed the majority in Ahmedi). 68 As I have explained, it may be entirely appropriate for trial judges to rely on matters of credibility in determining disputes between experts. Almost invariably the trial judge will have an advantage from having heard the totality of the evidence and the individual witnesses who testified at the trial. These are matters that are crucial to the Court's decision on appeal: Fox v Percy (2003) 197 ALR 201; Pledge v Roads and Traffic Authority (2004) 205 ALR 56. Nevertheless, where it is apparent from the judge's reasons that there has been a failure to follow the precepts to be adopted when resolving expert disputes as laid down in Soulemezis, Moylan and Flannery, there is nothing in Ahmedi that requires an appellate court to refrain from intervening.

Did the trial judge's reasons comply with the approach in Soulemezis , Flannery and Moylan ? 69 The present is not a case such as that described by Mahoney JA in the Public Trustee v The Commonwealth. Here, there were several bases upon which it was open to the trial judge to determine, on a rational basis, which body of expert evidence should be preferred. 70 One possible basis was that the physical signs apparent from the MRI scan, coupled with the evidence of wasting of the muscles in the appellant's leg, justified a finding in the appellant's favour. 71 On the other hand, the effect of the myelogram and the concessions made by Dr Evans in cross-examination were capable of leading the judge to the opposite conclusion. 72 The leg wasting was plainly regarded by some of the expert witnesses as a significant matter. Dr Dan made no reference to this matter in his evidence in chief. He was asked no questions about it in cross-examination. It might have been open to his Honour to apply the principle expressed by Handley JA in Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418, namely, that inferences should not be drawn in favour of a party that called a witness who could have given direct evidence when that party refrained from asking the crucial questions. 73 I mention these matters merely as examples of the kinds of reasoning that were open to the judge. There was nothing in the nature of the dispute that precluded a decision being made substantially through examination of the material, and rational analysis. Indeed, the absence of any adverse credibility finding concerning the appellant's experts and lay witnesses who testified as to her condition called for such an examination and analysis. But, the judge did not undertake such an exercise. Instead, his Honour merely relied on the "eminence" of Dr Dan, his view that Dr Dan was "the most impressive witness whether lay or expert called in the case" and the "persuasive" quality of Dr Dan's evidence. In my view, his Honour erred in this respect. 74 In addition, there is a serious question as to how his Honour determined that Dr Dan was "the most eminent of the medical practitioners called (or whose reports were tendered)". In particular, it is not clear whether his Honour was relying on his personal knowledge of the practitioners who testified (that is, outside the evidence that was led at the trial) or whether he was relying solely on the testimony before him. 75 It was pointed out on behalf of the appellant that the question of whether Dr Dan was more "eminent" than any of the other doctors was not a matter that was in issue at the trial. There appears to have been no investigation as to the respective degrees of "eminence" of the doctors in question. On that ground alone, it seems to me, it was inappropriate for any finding as to which of the witnesses was the "most eminent" to be made. 76 According to the written submissions filed on behalf of the respondent: "Knowledge of a medical practitioner's reputation so far as lawyers are concerned is a matter of experience or at least involves a degree of experience. Anybody practising regularly in personal injury work is well aware of the eminence of Dr Dan as a neurosurgeon and of the fact that spinal disorders are within the province of neurosurgery as well as orthopaedics. Dr Dan is widely known to be still in busy practice treating patients as well as doing medico-legal work and his evidence in this case established that he remained in active practice and was a clinical Associate Professor at the University of Sydney and had a continuing association with Concord Hospital … The trial judge was vastly experienced and could bring to account his knowledge as well as that specific evidence as to Dr Dan's eminence. In relation to a comparison of Dr Dan's standing with the standing of the other doctors involved in this case, again his Honour could bring to account his experience". 77 These submissions indicate an acceptance that the judge was relying on his personal knowledge of the witness, rather than on evidence led at the trial. If his Honour relied on facts known to him outside the evidence led at the trial, it was incumbent on him to inform the parties of the material to which he intended to have regard and to give them an opportunity to deal with it. This he did not do. In my view, this was a further error. 78 I now turn to the judge's rejection of the appellant's contention that she was suffering from depression caused by the respondent's breach of duty. 79 The judge found that Dr Roxanas' evidence that the appellant was suffering from depression "was dependent upon an acceptance that she was suffering pain of the type she complained of because of her physical disabilities". His Honour found that because the appellant had not established that "she suffered the disc injuries at T11/12 and L5/S1 as claimed" and that she had not established that "she has suffered the pain and disability of which she complains," she had not "established that she suffers from the depression which [Dr Roxanas] diagnosed." 80 As I have already said, however, his Honour found that the appellant "did suffer a significant injury on 15 February 1998 and the effects of that injury were aggravated by her continuing to work as a packer". While the judge did not accept that the appellant suffered the disc injuries which she alleged, he did find that "she suffered a back strain, the effects of which are still causing her some incapacity which probably prevent her carrying out manual work of the type she was performing when she suffered injury". His Honour also found that this incapacity was permanent. 81 In other words, the judge accepted that the injury of 15 February 1998 resulted in the appellant suffering from a back strain that, indeed, caused her to sustain permanent incapacity and pain. His Honour's finding that the appellant did not suffer from pain "of the type she complained of because of her physical disabilities" must be seen, therefore, as a finding that the appellant did not suffer pain from "disc injuries at T11/12 and L5/S1"; that being so because, on his Honour's finding, no such injuries were sustained. 82 Be that as it may, however, once it is accepted that the injury caused the appellant to suffer from pain and that pain was permanent, Dr Roxanas' opinion that the appellant was "suffering from a depressive illness consequent upon the pain and disability she was suffering as a result of her physical injuries" remains valid. As I have mentioned, the judge said: "In essence it was Dr Roxanas' view that so long as the [appellant] was suffering from pain and disability from her physical injuries so consequently her depressive illness would continue." 83 In the light of the finding by his Honour that the appellant continued to suffer, permanently, from incapacity and pain (brought about by the back strain caused by the accident), it must be accepted that, according to Dr Roxanas' opinion, she will continue, permanently, to be depressed. 84 Accordingly, the fact that the appellant might not have suffered permanent disc injuries is not a complete answer to the appellant's claim for loss caused by the psychological effects of the respondent's breach of duty. 85 I therefore conclude that his Honour erred in treating his finding that no disc injuries were proved as having the effect that the appellant had failed to prove that the back strain (and permanent incapacity and pain caused thereby) resulted in her suffering from psychological trauma.

Conclusion 86 In the light of the matters to which I have referred, I consider that the appeal should be upheld. 87 Credibility factors may play a significant part in determining the damages to which the appellant is properly entitled. For that reason this Court cannot determine the damages itself. 88 The respondent submitted that, were the appeal to succeed, the matter should be remitted for retrial only as to non-economic loss and damage for gratuitous care. In my view, however, the errors made by his Honour are capable of impinging on other heads of damage. 89 I would add that, during the trial, the judge discouraged counsel for the appellant from leading evidence as to the circumstances under which the appellant was injured and as to the way in which her injuries were exacerbated. This discouragement had an effect on the way in which the case of the appellant was presented. 90 Taking into account that there was a live issue as to whether the injuries to the appellant's upper back were caused by the respondent's breach of its duty of care, the way in which the appellant sustained her injuries might well have been relevant. In my view, the appellant should not have been discouraged from leading this evidence. This is an additional factor that leads me to propose that there should be an appeal on the quantum of damages, generally. 91 Accordingly, I propose the following orders: 1. The appeal is upheld. 2. The order made by Newman AJ granting judgment in favour of the respondent in the sum of $290,139.35 is set aside. 3. The order as to the costs of the trial remains the same. 4. The matter is remitted to the Common Law Division of this Court for retrial.

5. The respondent to pay the appellant's costs of the appeal. 6. The respondent to have a certificate under the Suitors Fund Act 1951 (NSW), if otherwise entitled. 92 BRYSON JA: I agree with Ipp JA. 93 His Honour has dealt comprehensively with the considerations which show that it is necessary to order a new trial. A new trial is not a remedy which should be granted readily, but it is necessary in the present case, as it could not be satisfactory for the damages to be assessed by the Court of Appeal on consideration solely of written records of the evidence of expert and lay witnesses. 94 I make particular reference to Ipp JA's treatment at paras [89] and [90] of the discouragement which the learned Trial Judge offered to the plaintiff's counsel. It should not be the practice, in claims for damages for personal injury where liability is admitted, to discourage or to exclude evidence of the event and circumstances in which the injury happened. In the present case it seems quite likely, in hindsight, that a description in evidence by the plaintiff of the event in which she was injured would have had some significance for the findings which were made. Admitted passages in pleadings can be a poor basis for decision where causation of some or all alleged sequelae falls to be decided in a contested assessment of damages. I have encountered similar discouragement from trial judges in the distant past, and if his Honour's intervention and discouragement are in accordance with some practice of trial judges, the practice ought to be reconsidered. 95 It is most unfortunate that there must be another hearing, after the parties have had and used one opportunity to present the evidence on which they wish the case to be decided. Before they go to trial again the parties should, in their own interests, consider fully whether there is any room for agreement, and whether mediation should be attempted. Each side is well informed about the other side's case, and this seems to favour the prospects of success at a mediation.

96 STEIN AJA: I agree with Ipp JA and with the additional remarks of Bryson JA. **********

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