Skea v Nrma Insurance Ltd & the Nominal Defendant [2003] ACTSC 59 (29 July 2003)

Last Updated: 15 August 2003

DOROTHY VESNA SKEA v NRMA INSURANCE LIMITED

and THE NOMINAL DEFENDANT c/o NRMA INSURANCE LIMITED

[2003] ACTSC 59 (29 July 2003)

NEGLIGENCE - psychiatric injury - distinction between injury flowing from perception of accident and injury flowing from long-term care of injured spouse.

DAMAGES - personal injury - assessment - no issue of principle.

Jaensch v Coffey [1984] HCA 52; (1984) 155 CLR 549

Tame v New South Wales [2002] HCA 35; (2002) 191 ALR 449

Griffiths v Kerkemeyer [1977] HCA 45; (1977) 139 CLR 161

No SC 123 of 2002

Judge: Connolly J

Supreme Court of the ACT

Date: 29 July 2003

IN THE SUPREME COURT OF THE )

) No SC 123 of 2002

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: DOROTHY VESNA SKEA

Plaintiff

AND: NRMA INSURANCE LIMITED

ABN 11 000 016 722

First Defendant

AND: THE NOMINAL DEFENDANT

c/o NRMA INSRUANCE LIMITED

ABN 11 000 016 722

Second Defendant

ORDER

Judge: Connolly J

Date: 29 July 2003

Place: Canberra

THE COURT ORDERS THAT:

1. The action against the second defendant be dismissed.

2. There be judgment for the plaintiff against the first defendant in the sum of $215,341.70 with costs.

1. This is a claim for damages for personal injury for nervous shock sustained by the plaintiff when she attended the scene of a motor vehicle accident in which her husband and two of her children were seriously injured. The motor vehicle accident occurred at around midday on 11 January 1995 on the Sutton Road in the Australian Capital Territory. The pleadings allege that the accident occurred when the vehicle, a Land Rover, which was owned by Skea Holdings Pty Ltd and insured by the first defendant suffered a steering failure. Skea Holdings Pty Ltd was deregistered in 1997, and the action is brought against the insurer.

2. The plaintiff alleges that Skea Holdings Pty Ltd was negligent in failing to properly maintain the vehicle. There was some evidence by way of a report from Senior Constable Emerton, who as well as being a police officer, is a trained mechanic, that there was a mechanical failure in the steering arm which "may have contributed to the cause of the collision" (exhibit B). While this evidence does not reach a high level, there was no contrary evidence and counsel for the defendant insurer, Mr Black, said that he did not wish to be heard on the question of liability. It seems to me that on this basis it is appropriate to make a finding of liability against the first defendant. The second defendant was apparently joined when there was some doubt as to the insurance status of the vehicle, and Mr Parker, for the plaintiff, made it clear that the action was proceeding against the first defendant. It is appropriate that the action against the second defendant be dismissed.

3. The plaintiff and her husband had for some years operated a business which built kit homes. This business was originally a partnership, but by the time of the accident it had been operated under a corporate structure for some time by Skea Holdings Pty Ltd, a company of which the plaintiff was a director. The plaintiff was actively involved with her husband in the business. She was involved in the sales and management areas while her husband was involved in the design and construction aspects of the business. On the day of the accident she was, as usual, at work at their office in Fyshwick.

4. She says that at around noon, as she was attending to some prospective clients, she was called to the phone and an unidentified male told her that there had been a motor vehicle accident on the Sutton road involving her husband. Her husband then came on the line, in a distressed state, and confirmed that there had been an accident, and that he had been hurt. He said that he did not know where the two children who had been in the vehicle with him were, and she says that he said he feared that they could be dead. The plaintiff immediately left the office and drove to the scene of the accident.

5. The family lived near Wamboin in New South Wales, and Sutton Road was their normal route to Canberra. The plaintiff says that as she proceeded along Sutton Road she was stopped by a policeman, and after persuading him that she was the wife and mother of the persons involved in the accident she was allowed through. She observed the Land Rover extensively damaged, as appears from photographs tendered as exhibit D, by the side of the road, and what seemed to be a large number of police, ambulance and fire officers about the scene.

6. The plaintiff found her daughter, who was badly injured and was being attended to by ambulance officers. She then located her husband, who was also badly injured and being attended to by paramedics. She says that he was very concerned about the children, and she was able to reassure him that their daughter was alive and was being assisted. She did not then know where her son was. She says that she then looked about and saw her son lying still and appeared to be lifeless. He was being attended to by paramedics. She was told that he was alive but seriously injured. Her family was taken to Woden Valley Hospital (as it was then known) Emergency Department in two ambulances, and she accompanied the ambulance supervisor to the hospital, where she attended in the emergency room while they were stabilised and then sent to operating theatres and appropriate wards.

7. Her husband, daughter and son all required extensive hospital treatment, during which time she attended the hospital daily. They then had extensive convalescence at home. Her son has recovered well, and was able to return to independent living soon after the accident. Her daughter had a longer period of recovery, but has now married and moved out of the family home. Her husband received extensive head injuries, and has suffered significant damage to his cognitive functions, and has required extensive care from the plaintiff. She says that both her husband and her daughter displayed marked personality changes after the accident, which contributed to ongoing tensions at home and she bore the brunt as primary carer.

8. The plaintiff says that she became increasingly stressed over the years following the accident. She was in regular attendance at the family's general practitioner, Dr M Cross of Bungendore, taking her husband and daughter for treatment. In May 1996 Dr Cross formally diagnosed the plaintiff with "reactive depression, consequent on the critical incidents and changes in her life as a result of the motor vehicle accident of January 11, 1995". In her report of June 1996, Dr Cross, in addition to providing this diagnosis, said that while the formal diagnosis and commencement of treatment occurred in May 1996, "it had been in evidence for the previous year or more, but Mrs Skea was in strong denial".

9. The plaintiff has also received treatment from Dr B White, consultant psychiatrist, who has diagnosed Major Depressive Disorder and associated Post Traumatic Stress Disorder.

10. She has been examined by Dr M Duke, consultant psychiatrist, for the defendant, who disagrees with the diagnosis of Post Traumatic Stress Disorder, and makes a diagnosis of Dysthymia, which is consistent with a diagnosis of major reactive depression.

11. There is no question on the medical evidence tendered in both the plaintiff's and the defendant's case that the plaintiff has sustained quite severe psychiatric injury following the motor vehicle accident, and the defendant acknowledges that it will be liable in damages to the extent that the psychiatric condition is attributable to the nervous shock caused by her exposure to the accident scene and its immediate aftermath.

12. The law relating to liability for nervous shock has developed as medical science has advanced our understanding of the impact of trauma on the mind. It was originally held that a person must actually witness an accident in order to recover damages in this form of action, but it has been clear in Australia, at least since Jaensch v Coffey [1984] HCA 52; (1984) 155 CLR 549, that a plaintiff exposed to the consequences of the tort, but who did not witness the actual accident may recover damages.

13. However, it remains the case that the liability is limited to the psychiatric harm caused by the immediate "shock" of the accident, and that this is to be distinguished from the long term impact of living with a seriously injured partner or child. As Brennan J stated in Jaensch v Coffey at 565:

A plaintiff may recover only if the psychiatric illness is the result of physical injury negligently inflicted on him by the defendant or if it is induced by "shock". Psychiatric illness caused in other ways attracts no damages, though it is reasonably foreseeable that psychiatric illness might be a consequence of the defendant's carelessness. The spouse who has been worn down by caring for a tortiously injured husband or wife and who suffers psychiatric illness as a result goes without compensation; a parent made distraught by the wayward conduct of a brain-damaged child and who suffers psychiatric illness as a result has no claim against the tortfeasor liable to the child.

14. A similar point was made by Deane J, who after stating (at 606) that:

a person who has suffered reasonably foreseeable psychiatric injury as the result of contemporaneous observation at the scene of the accident is within the area in which the common law accepts that the requirement of proximity is satisfied,

continued:

On the other hand, it would seem reasonably clear that the requisite duty relationship will not, on the present state of the law, exist in a case where mere psychiatric injury results from subsequent contact, away from the scene of the accident and its aftermath, with a person suffering from the effects of the accident. An example of psychiatric injury suffered as a result of such post-accident contact is that which may result from the contact involved in the nursing or care of a close relative during a period subsequent to immediate post-accident treatment.

It seems to me, and it was not argued to the contrary, that this remains the law.

15. In Tame v New South Wales [2002] HCA 35; (2002) 191 ALR 449, Gleeson CJ said at [18]:

I agree with Gummow and Kirby JJ that the common law of Australia should not, and does not, limit liability for damages for psychiatric injury to cases where the injury is caused by a sudden shock, or to cases where a plaintiff has directly perceived a distressing phenomenon or its immediate aftermath.

16. These remarks do not, it seems to me, go so far (even if expressly joined by a majority) as to overrule the distinction drawn in Jaensch v Coffey between the impact of the accident, and the long-term impact of caring for a tortiously injured partner or child.

17. The real issue for determination in this case is thus to seek to distinguish the extent to which the plaintiff's acknowledged substantial psychiatric disability is due to the direct impact of the accident, which the defendant acknowledges is compensable, from the extent that it is a consequence of her ongoing role as a care giver for her severely injured husband and children. This is clearly relevant to her claim for general damages as well as economic loss. The plaintiff was a partner in the business, and then a director, and I accept her evidence that up until the accident she had played an active role in the business, and had previously been an employee in other building enterprises. Since the accident the business has folded, and she has been unable to obtain other work. Again, the question for determination is to what extent was this a direct consequence of the accident-related psychiatric illness, and to what extent was this a consequence of the indirect non compensable psychiatric consequences of her role as a carer, as well as the carer role itself? To the extent that she has been a full-time carer for her seriously injured husband, this would be reflected in an award of damages pursuant to the principles in Griffiths v Kerkemeyer [1977] HCA 45; (1977) 139 CLR 161, in his claim for damages.

18. The plaintiff has attempted to return to the workforce by way of a business supplying cladding for buildings, but I accept her evidence that this has not been particularly successful to date, and has not involved substantial hours of activity.

19. The medical evidence is consistent in acknowledging that her present condition has been caused by the combination of the direct effect of the accident and the ongoing stress of caring for her family. Her general practitioner in first making the diagnosis described her reactive depression as being "consequent on the critical incidents and changes in her life as a result of the motor vehicle accident". Dr White in his first report of June 1997 made the diagnosis of Major Depressive Disorder and associated Post Traumatic Stress Disorder "brought on by the effect of witnessing the aftermath of the accident", but in his later report of December 2002 he as ascribed the condition to "the effect of witnessing the aftermath of the accident, and since then due to the stresses of her husband's condition". This is consistent with the opinion of the psychologist, Ms P Allingham, who also reported in the plaintiff's case in June 1996 (exhibit C) that she was suffering from "a reactive depression occasioned by the accident to members of her family and subsequent losses and fatigue".

20. The medical experts do not seek in their various reports to quantify the extent to which each factor has contributed to the plaintiff's ongoing difficulties. It is apparent, however, that the ongoing stresses of caring for a significantly injured husband as well as the other family members, has been of great significance. In his December 2002 report Dr White said that "her condition continues to be exacerbated by Ernest's continuing problems. The prognosis therefore is that she is likely to suffer some degree of depression while his condition persists. He is very dependant on her although he makes efforts ...." This is consistent with his most recent report, where he says that her initial condition "continues to be aggravated by exposure to reminders".

21. I note that although Dr Cross, in her report of June 1996, made an original prognosis for a full recovery as being excellent, the subsequent specialist reports have stated that the continuing care for her husband and family has indicated that the condition will persist so long as her husband continues to require care and assistance, which seems to be indefinite.

22. In relation to general damages, while it is clear that the accident and its aftermath have had a devastating effect on the plaintiff's life, her compensable injury must be limited to the direct consequence of observing the accident scene and its immediate consequences, and not the ongoing impact of the care provided to her family. Clearly if the entirety of her condition were compensable it would suggest an award of general damages at the upper range for psychiatric disorder, but the evidence before me is that the original condition has been aggravated and continues to be exacerbated by the burden of care and ongoing reminders of the accident. In relation to the compensable claim, being the immediate impact, I would award general damages in the sum of $40,000, attributing the bulk of this, $30,000, to the past for the purposes of interest, on the basis that the original prognosis, albeit from the general practitioner, was for full recovery, while the later reports indicate that the ongoing difficulties are a consequence of, and will continue so long as the plaintiff remains burdened with the ongoing care role. This generates interest in the sum of $5,125, making a total award of $45,125.

23. This finding must also translate into the economic loss claim. There are some further difficulties here in relation to the precise nature of the plaintiff's pre-accident earnings. Although the claim is for ongoing full past and future loss in the order of $550 a week, the best tax records available show an after tax earnings for the tax year ending in June 1994 at $340 per week. The real issue, however, is not the rate of an ongoing loss claim, but the impact the psychiatric consequences of observing the aftermath of the accident has had on her earnings as opposed to the consequences of being the ongoing full-time carer.

24. The family business was brought to an end by the accident, but the plaintiff's prior work history is such that she clearly would have been able to obtain remunerative employment in the building industry had her health, and her responsibility as a carer, permitted. I would accept that there was a total loss of economic capacity for a period after the accident, but it seems to me that the direct accident related impact of this has diminished over time, and that at present her employability is affected predominantly by the ongoing responsibility as a carer, and the psychiatric consequences of the ongoing responsibilities as a carer. Mr Black conceded that there was still probably a degree of ongoing economic loss.

25. This type of analysis necessarily, it seems to me, and this was acknowledged by Mr Parker, leads to a global award for economic loss, which should be considered inclusive of superannuation type losses. In relation to the past, I am not satisfied that her economic loss since the accident has been solely due to the compensable psychiatric condition, as opposed to the burden of being a full-time carer and the psychiatric consequences of such care. I award the sum of $75,000, generating interest of $32,000, making a total of $107,000. For the future, I am of the view that her ongoing difficulties are predominantly due to the burden of her role as a full-time carer, and the consequences of this in aggravating the original condition, and I am not satisfied that the claim for ongoing full-time loss of earnings is made out. I would award the sum of $50,000 in respect of future economic loss.

26. Out-of-pocket expenses were claimed in the sum of $6,216.70 in relation to care from Dr White and Dr Cross. Although her condition to date has, I have found, been a combination of direct compensable injury and non-compensable psychiatric injury, I am satisfied that she would have needed attention to the, albeit diminishing, original condition, and it is appropriate to award this full sum. There is also a very substantial claim for $25,032.70 for remedial massage from a massage therapist, Mr B Murray, who has reported in exhibit C that he has been treating her for muscular tension. His report is dated December 2001, and indicates that he has been providing this treatment for 21 months, that is from about March 2000, over five years after the accident. The only medical support for this treatment is a note from Dr White to Mr Murray saying, "Thank you for attending Dorothy for therapeutic massage to help reduce her muscle spasm and tension related to Major Depressive Disorder". In his June 2003 report, Dr White refers to an ongoing need for medication and periodic psychiatric review, but does not refer to massage as a psychiatric need.

27. It seems to me that this type of treatment, absent clear medical evidence as to the need and relation to the original compensable condition, and commencing five years after the accident when the original condition would, on my findings, be receding in severity and the ongoing drain of the role of the caregiver would be in the forefront of her difficulties, cannot be seen as an accident related necessary expense, and I do not make any award to cover this expense.

28. It is clear that there will be a degree of ongoing need for medication, and care, although this will be predominantly now due to the ongoing difficulties rather than the original accident, and I award a buffer against future care and medication in the sum of $7,000.

29. In summary, the amounts awarded under each of the heads of damages are as follows:

General damages $ 40,000.00

Interest $ 5,125.00

Past economic loss $ 75,000.00

Interest $ 32,000.00

Future economic loss $ 50,000.00

Past out-of-pocket expenses $ 6,216.70

Future out-of-pocket expenses $ 7,000.00

30. This amounts to a total award of $215,341.70, and I order that there be judgment for the plaintiff against the first defendant for that amount with costs.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Connolly.

Associate:

Date: 29 July 2003

Counsel for the plaintiff: Mr G Parker

Solicitor for the plaintiff: Colquhoun Murphy

Counsel for the defendants: Mr AJ Black

Solicitor for the defendants: Abbott Tout

Date of hearing: 23 June 2003

Date of judgment: 29 July 2003