Vogt v Mercer [2001] NSWCA 3 (23 February 2001)

Last Updated: 26 February 2001

NEW SOUTH WALES COURT OF APPEAL

CITATION: Vogt v Mercer [2001] NSWCA 3

FILE NUMBER(S):

40717/99

HEARING DATE(S): 30/01/2001

JUDGMENT DATE: 23/02/2001

PARTIES:

Terry Vogt v Helen Marjorie Mercer

JUDGMENT OF: Priestley JA Foster AJA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): 70192/97

LOWER COURT JUDICIAL OFFICER: Judge Sidis

COUNSEL:

H. Shore - Appellant

A. Fennell - Respondent

SOLICITORS:

Hunt & Hunt, Newcastle - Appellant

Orchiston Ranzetta Finney, Gosford - Respondent

CATCHWORDS:

Appeal against damages awarded in M.V.A. claim for personal injury- award fell outside ambit of exercise of judicial discretion - application to adduce fresh and further evidence - dispute concerning effect upon plaintiff of injuries sustained - result of 'functional overlay'.

LEGISLATION CITED:

Motor Accidents Act, 1988

DECISION:

I consider that the appeal fails. It should be dismissed with costs.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA40717 /99

DC70192/97

PRIESTLEY JA

FOSTER AJA

Friday, 23 February, 2001

Terry VOGT v Helen Marjorie MERCER

JUDGMENT

1 PRIESTLEY JA: I agree with Foster AJA.

2 FOSTER AJA: This is an appeal from a decision of her Honour Judge Sidis, given in the District Court at Gosford on 8 September 1999, in a motor vehicle accident claim for damages for personal injuries, in which the present appellant, Mr Vogt, was the defendant and the present respondent, Mrs Mercer, was the plaintiff. The accident occurred on 15 June 1996, liability was admitted and her Honour awarded damages to Mrs Mercer in the sum of $255,631.80.

3 Her Honour did not set out in her judgment the components of the sum awarded. However, it has been agreed, in the hearing of the appeal, that the amount awarded was calculated as follows:-

Non-economic loss: 35% of a most extreme case: $90,500.00

Loss of earning capacity: past and future: $60,000.00

Gratuitous care: Past: $20,777.40 $97,702.40

Future: $76,925.00

Out-of-pockets: Past: $ 2,429.40

Future: $ 5,000.00

TOTAL $255,631.80

4 It may be noted that the calculation of the sums awarded for gratuitous care involved the acceptance by her Honour that Mrs Mercer had demonstrated a need for care for seven hours per week at $15.30 per hour from 15 September 1996 and continuing. In the appeal it was submitted on behalf of the appellant that this level of care could not be justified on the evidence, a matter to which I shall return. In effect, challenge was made in the appeal to all aspects of the award except the allowance for out-of-pocket expenses. Additionally the appellant has made application to adduce fresh evidence. This application was heard with the appeal and will be the subject of decision later in these reasons. In the first place, however, it is desirable to set out some background facts.

5 Background

Mrs Mercer was born on 3 October 1945 and was aged 50 at the time of the accident and 53 at the date of her Honour's judgment. She had left school at age 15 without obtaining her Intermediate Certificate. She had worked for eight years as an assistant in a cake shop. In 1969 she married and, shortly thereafter, left work, being pregnant with her first child, who was born on 25 February 1970. Thereafter she had two more children born in 1974 and 1979 respectively. She separated from her husband in 1981. Before that she had worked intermittently as a spray painter. After the separation she did not work but received sole parent benefits. In 1995 she transferred from these benefits to unemployment benefits and sought work, her youngest child then being 16 years of age. She was not successful in obtaining work and, consequently, registered with the Commonwealth Employment Service and, through that organisation, undertook successfully a seven week kitchen hand course in fast food and bistro cooking. Thereafter, she made a number of job applications which, as required, were noted in a book provided by the service. These applications were not successful. At the time of the accident she remained unemployed, although still seeking employment in the area of her qualification.

6 Before the accident her health had been good. She had led an active life, playing tennis and attending dances. She was able to perform all her ordinary household work without assistance. In particular she experienced no problems in the area of her neck, shoulders or back.

7 At the time of the accident she was travelling as a front seat passenger in a car driven by Mr Vogt. They were close friends. Unfortunately, in the course of driving, he made a negligent right hand turn as a result of which there was a collision with another vehicle, the impact occurring adjacent to the position where Mrs Mercer was seated. It was a severe impact which resulted in her suffering, as her Honour found, a collapsed lung, fractured ribs 2 to 8 on her left side, a fractured collar bone on the left side and severe bruising to the left arm and shoulder. These injuries resulted in her admission to hospital for a period of nine days, during which her pneumothorax was treated by the insertion into the left side of her chest of an intercostal drain. When discharged from hospital she needed extensive assistance at home and was suffering significant pain and discomfort. The chest pains associated with her injuries resolved within a few months. However, it is the ongoing effect of her other injuries on her enjoyment of life, her ability to work and her need for assistance which was the subject of major dispute in the case before her Honour and in this appeal.

8 It was clearly established that at the time of the accident Mrs Mercer was already subject to significant arthritic degeneration in her neck which was not, before the accident, productive of symptoms.

9 The case at first instance and her Honour's decision

At the trial the major dispute between the parties concerned the effect upon the plaintiff of the injuries sustained in the accident. On her behalf it was asserted that she had sustained a high level of pain, suffering and disability which would continue into the future and seriously impinge upon her enjoyment of life and her earning capacity and would necessitate her being supplied with a high level of gratuitous assistance. She gave extensive evidence on these matters. She was cross-examined to suggest that she was exaggerating her level of disability and need. Witnesses, being her daughter and son and a friend gave evidence in support of her case. They were similarly cross-examined. In addition there was tendered a number of reports from medical practitioners to some of which reference will be made later. The appellant called no oral evidence but tendered a number of medical reports. There was no oral evidence from any medical practitioner.

10 Her Honour, of course, had the advantage of observing the witnesses in the course of their testimony. She was also able to observe the manner in which the respondent came to the witness box, entered it, occupied it, and left it. These observations assumed some significance in the case.

11 In her careful judgment she referred to the fact that the respondent's chest pains associated with the pneumothorax and her broken ribs had resolved within a few months but that the respondent complained of ongoing pain and discomfort in her neck, her left arm and shoulder and in her back. She noted that, according to the plaintiff, treatment prescribed by way of physiotherapy and hydrotherapy had not improved these conditions. Rather, it was claimed that there had been substantial deterioration since the accident.

12 She noted the respondent's complaints which she summarised as follows:-

"At the present time she complains that the clavicle is still painful and is particularly sore if it is bumped. There is a slight deformity in the clavicle at the site of the fracture. She complains of constant pain in her left shoulder and her left arm. Photographs tendered in evidence show a droop in the region of the left shoulder and the plaintiff carried her left arm across the front of her body at all times during the course of her evidence to the Court. She complained of pain in her neck, which sometimes extended across to her right shoulder and she complained of pain in her back which she said gave her discomfort at a point just above the belt line. The plaintiff complained of headaches and of a scar as a result of the drain which was demonstrated in a photograph."

13 Her Honour recorded her observations of the plaintiff in Court as follows:-

" In the course of giving her evidence the plaintiff walked very slowly into and out of the witness box. She slid her feet rather than lifting them in order to walk. The plaintiff needed to hold onto the railing to climb the four steps into the witness box and whilst giving evidence she stood and sat alternately. The plaintiff gave the impression, during the course of her evidence, that she was in significant pain and discomfort."

14 Her Honour reviewed the evidence relating to the plaintiff's need for assistance noting that "the plaintiff estimated that the time required was between two to three hours a day", similar estimates being given to the Court by Caroline and Scott, her children who rendered assistance to her.

15 After discussion of the lay evidence, her Honour said:-

"All in all, the picture presented by the plaintiff was one of considerable disability as a result of her injuries, in marked contrast to a person with no health problems and outgoing and active prior to the accident.

In addition to ceasing those prior activities, the plaintiff says that she is unable to work and she cannot drive. She said she can only do a very limited amount of her housework and she cannot cook except for very light meals because she cannot cut food.

The defendant's problem, and one which I share, is that the plaintiff's presentation is inconsistent with the medical evidence of the extent of her injury in the accident and with the disabilities that one might expect as a result of her injuries."

16 Her Honour then considered portions of the medical evidence, as given by various expert witnesses. She made particular reference to the reports of Associate Professor Jones, saying that "his conclusions appear to me to be well reasoned and to throw some light on the conundrum presented by the plaintiff's apparent condition." She noted his conclusion that "in addition to her physical impairment there was a psychological reaction to her perceptions of impairment with tension which was aggravating her neck and shoulder symptoms."

17 After some further summarising of the medical evidence, she indicated that there were "some considerable difficulties with this plaintiff's claim." She was satisfied, however, that the plaintiff, as a result of the injuries, suffered ongoing pain and discomfort in her left shoulder together with aggravation of a pre-existing degenerative condition of the cervical spine, which conditions were productive of intermittent pain and discomfort. She found no evidence of injury occasioned by the accident to the respondent's back "such as to cause her difficulty in walking." Similarly, she found no evidence of accident caused injury which could occasion Mrs Mercer difficulty in balancing.

18 As to the respondent's presentation of her difficulties, her Honour considered whether this was due to conscious exaggeration on her part or was "the result of a functional overlay leading to a heightened perception of her pain." She noted that the appellant had presented no videotape evidence of the plaintiff, "although suggestions were made to her which might have indicated that such material was available to the defendant." She noted that she accepted the evidence of Mr Sinfield as to his observations of the plaintiff one year after the accident. He was an independent witness who had known the plaintiff well before the accident but had not seen her until an accidental meeting at a shop. He had not recognised her at first. She looked older and unfit and shuffled when she was walking.

19 Her Honour concluded that the respondent's presentation of her difficulties was "more probably the result of functional overlay" but held that there was "clearly still some evidence of exaggeration of her condition." She considered, however, that "the functional overlay" had affected her "to a considerable degree, such that she qualified for an award of compensation for non-economic loss pursuant to s 79A of the Motor Accidents Act, 1988." Accordingly she made her award based upon 35% of a most extreme case.

20 Her Honour reviewed the evidence relating to the plaintiff's earning capacity and said "although I do not accept that the plaintiff would have been totally incapacitated by her injuries, there is the functional overlay which I have accepted and clearly, by reason of that, poor prospects of securing employment." As already indicated she awarded a round sum of $60,000 for loss of earning capacity. Her Honour did not provide any basis of calculation of this sum. In the course of argument, however, the Court was informed that the award represented a loss of approximately $145 per week from the date of the accident to normal retirement age.

21 Her Honour turned to the question of the claim for domestic assistance. She considered that the claim for three hours per day was overstated except in respect of the first three months after the respondent's return from hospital. Thereafter, she was prepared to allow one hour per day at the rate of $15.30 per hour. The rate has not been disputed in the appeal but the need for seven hours per week is contested. The figures accepted by her Honour produced the gratuitous assistance component of the verdict which has been set out above.

22 I turn now to consider the various attacks made by the appellant upon her Honour's judgment. Before coming to those which may correctly be described as points of appeal, it is necessary to consider the appellant's application to adduce fresh or further evidence.

23 Application to receive further evidence

The further evidence which the appellant sought to put before the Court was contained in two video films taken of the respondent after judgment had been given. The application was contested. I have already made reference to her Honour's remarks that certain questioning of the respondent was suggestive of the existence of video evidence which was not adduced in the case. The evidence produced to this Court in this application indicated that her Honour's summise was correct. Indeed the respondent had been the subject of many hours surveillance by investigators employed by the appellant. It was put by the appellant that the video footage obtained before the hearing was not introduced into evidence because it, basically, showed the plaintiff exhibiting the same sort of physical problems that she had demonstrated at the hearing. However, surveillance was continued after the hearing and a video film some twenty-six minutes in length was taken of the respondent on 13 December 1999 whilst she was shopping at a local Salvation Army shop. A further film was taken on 22 January 2000 in the course of four and a half hours surveillance of the respondent. This film was approximately ten seconds in length. Evidence before the Court in the application established that, from 19 February 1998 until 6 February 2000, approximately 174 hours of surveillance had been undertaken of the respondent. Some forty minutes of video film had been taken in March 1998 and forty-six minutes of film on 14 July 1999.

24 It was the submission of the appellant that the effect of the film taken on 13 December 1999 was such as to warrant a new trial of the proceedings on the basis that the respondent had consciously deceived the Court at the hearing as to the extent of her physical problems.

25 By agreement the Court viewed the whole of the film taken on 13 December 1999 and 22 January 2000. For purposes of comparison the Court also viewed portions of the film taken before the hearing, those portions being selected by agreement of counsel, on the basis that they provided a properly representative sample of the footage taken before the hearing.

26 The video of 13 December 1999 was not, of course, material in existence before the hearing. Questions of whether it could have been discovered by due diligence before the Court proceedings do not arise. Indeed, it is apparent that some 126 hours of surveillance before the hearing, during which it may be assumed that the respondent was secretly observed in a variety of situations, had not been productive of any evidence that the appellant thought worthwhile to produce in its case. Moreover, a further 48 hours surveillance after the hearing had produced only the one occasion when film was taken of activity on the part of the respondent regarded by the appellant as significantly assisting the claim that the respondent was deliberately fabricating her disabilities.

27 It may be noted that the pre-hearing films, although for the most part portraying the respondent experiencing similar difficulties to those shown in the hearing, did, on occasions, show her as having a greater freedom of movement, particularly in her left arm.

28 The usual test to be applied, when considering whether fresh evidence warrants the setting aside of a decision and the ordering of a new trial, is well known and need not be set out here.

29 Earlier authorities were reviewed by this Court in Kervan Trading Pty Ltd v Mercantile Mutual Insurance (Aust) Ltd (NSW Court of Appeal, unreported 14.12.2000). Consideration was given to statements of principle in Wollongong Corporation v Cowan [1955] HCA 16; (1955) 93 CLR 435 at 444-445 and Orr v Holmes (1948) 76 CLR at 640, 642 and also McDonald v McDonald [1965] HCA 45; (1965) 113 CLR 529. See, for example what was said by Barwick CJ at 532-533.

30 The appellant contended that the present case did not fall into the category dealt with by the authorities mentioned in the previous paragraph but rather in the category of cases of which Commonwealth Bank of Australia v Quade (1991) 170 CLR 134 is a leading example. About that category of case, the High Court said:

`... It is not necessary that the appellate court be persuaded ... that it is "almost certain" or "reasonably clear" that an opposite result would have been produced, the question whether the verdict should be set aside would almost inevitably be answered in the negative if it does not appear that there is at least a real possibility that that would have been so.' (at 143)

31 Although in my view this case falls into the category where the "almost certain" or "reasonably clear" test should be used, there is no need for me to decide that question, because, in my opinion, when I apply the "real possibility" test for which the appellant contends, it does not seem to me that it is satisfied by the further evidence the appellant has produced. I reach this conclusion after having viewed and considered the material. Undoubtedly the respondent is shown moving in a freer fashion than shown in the earlier videos and described in Court. In particular she was seen to walk about the shop without the shuffling gait previously demonstrated and to use her left arm to perform some movements. Also when considering articles on shelves and in containers in the shop, her neck movements were less restricted. The film showed her walking outside the shop for a short distance during which she proceeded at a reasonable speed without shuffling.

32 The film taken on 22 January 2000, however, although short, clearly showed the plaintiff walking and moving in the guarded and restricted way demonstrated in the pre-hearing film. Moreover the film taken in the Salvation Army shop did not, in my opinion, show the respondent as being totally free of restrictions. Indeed even after making some limited use of her left arm, it was to be observed that on a number of occasions she returned it to a stationary position across her body.

33 During the hearing the plaintiff was extensively cross-examined as to the extent of her disabilities. On several occasions she indicated that she had good days when her problems were reduced. She did not assert that she was always as bad as portrayed during the hearing. Consideration of these matters and the matters already referred to leave me quite unsatisfied that justice demands that the case be reheard. I would accordingly dismiss the application.

34 I should add that a further submission was made for the appellant to the effect that there was inconsistency between the decisions of this court in Warr v Santos [1973] 1 NSWLR 432 and the Kervan Trading case mentioned above. Leave was sought to argue that we should hold that Warr v Santos should no longer be followed. Again, although I do not agree with the inconsistency submission, there is no need to decide the point definitively, because assuming that the Quade test is the appropriate one, that being the most favourable one for the appellant, I am, as I have said above, of the opinion that the appellant's further evidence application should in any event fail. Accordingly in my view leave should not be granted. See also per Mahoney JA, Radnedge v G.I.O of N.S.W. (1987) 9 NSWLR 235, pp 249-253.

35 I turn then to the submissions of the appellant in the appeal itself.

36 The appeal

Consideration of the appeal must, of course, be approached on the basis that the fresh evidence is not available. In the absence of that evidence the appellant has raised a number of grounds. A number of them depend upon criticism of her Honour's findings of an ongoing "functional overlay" having a detrimental effect upon the respondent. In these circumstances it is convenient to consider this aspect of the appeal first.

37 In relation to her Honour's finding of a "functional overlay", it was asserted on behalf of the appellant that her Honour had improperly trespassed into the field of "diagnostician". Also it was said that in making this finding her Honour had failed to supply necessary reasons for the existence of the condition or for its ongoing nature. I am satisfied that these submissions should not succeed.

38 Whilst it is correct that no medical witness, in his or her report, used the expression "functional overlay", it is not unknown in the field of personal injuries litigation. It connotes a psychological reaction in the sufferer of personal injuries, which can have the effect of intensifying and prolonging their effect. I do not consider that her Honour entered into the diagnostic field when she used the term. In any event she, in effect, supplied the dictionary for it, by adopting, in the passage already quoted, the opinion of Professor Jones to the effect that psychological factors were adversely affecting the plaintiff's ability to cope with her injuries. Support for use of the concept can also be found in the report of Ms Edwards, the consultant psychologist who assessed the respondent. Whilst it might have been desirable that her Honour should have expanded upon the reasons she gave for her finding, I am satisfied that her reference to the opinion of Professor Jones sufficiently indicates the basis of her finding. Moreover she had indicated acceptance of the evidence of the respondent's children as to the ongoing effects of the respondent's injuries and, also, had emphasised her acceptance of the evidence of Mr Sinfield who had painted a quite explicit picture of the alteration in the respondent that he had observed some time after the accident. His description corroborated her ongoing problems of mobility. I should add that, in my view, it would be quite far-fetched to suggest that she constantly fabricated her problems in order to mislead her children and any person such as Mr Sinfield who might happen to observe her in a public place . I am satisfied that her Honour has sufficiently indicated the basis for her finding of "functional overlay" and for its ongoing nature. This ground of appeal must fail.

39 The appellant next challenges the judge's finding that non-economic loss should be assessed on the basis of 35% of a worst possible case. This challenge largely depended upon a favourable finding in respect of the appellant's submission with regard to the finding of "functional overlay". That finding stands and the 35% assessment must be considered in that context. For my own part, I would have found a lesser percentage. However, I am not prepared to hold that her Honour's finding exceeds the limit of a sound exercise of discretion. This ground also fails.

40 It was but faintly argued that her Honour placed too much weight upon the evidence of Mr Sinfield. It was asserted that she should not have seen it as being as corroborative of the plaintiff's case as she found it to be. I see no weight in this submission. Her Honour was clearly impressed with Mr Sinfield as a witness. Although the suggestion could be made that the respondent had, in effect, seen him coming on the occasion when they met and, having her case in mind, put on a fake display for his observation, there is no reason why her Honour should have accepted such a suggestion and, in my view, every reason why she would have rejected it. The same argument in relation to the corroborative evidence of the respondent's children should be rejected on the same grounds.

41 Objection was taken to the part of her Honour's judgment which dealt with the failure of the appellant to call the defendant, Mr Vogt. He was a close friend of the respondent and could have given evidence either in corroboration or refutation of her asserted disabilities. It is, in the circumstances, perhaps, reasonable that liability having been admitted, the defence should have decided not to call him. I am unable, however, having regard to the whole of the case, to attribute any real significance to her Honour's comments. In my view, it is quite unreasonable to suggest that her remarks in this regard were a significant, let lone determinative, feature of her judgment. In my opinion, this ground of appeal should also be rejected.

42 It was submitted by the appellant that, having regard to authorities such as Watts v Rake [1960] HCA 58; (1960) 108 CLR 158, Purkess v Crittenden [1965] HCA 34; (1965) 114 CLR 164 and Malec v J C Hutton Pty Limited [1990] HCA 20; (1990) 169 CLR 638, her Honour should have substantially reduced her award of damages because of the pre-existing arthritic condition of the respondent's neck. This question was, obviously, not explored at the trial and no submission was made to her Honour in this regard. The evidence in support of it, being a short reference in a report of Professor Jones, is slim. In my view, it is not open to the appellant to raise this matter on appeal. I reject this ground.

43 Similarly, an argument raised on appeal, namely that the respondent should have taken steps to mitigate her damage by adopting suggestions made in some of the medical reports for further treatment, does not appear to have been the subject of any submission to her Honour. There is, in any event, evidence that the appellant was not prepared to finance such treatments and that it was not financially possible for the respondent to undertake then. This ground should also be rejected.

44 The final matter raised by the appellant related to her Honour's award for future economic loss. I have already made some reference to this. This again, was an area in which opinions could obviously differ. The respondent was only aged 51 at the date of the accident. She was unemployed, but had taken steps towards the gaining of employment and appeared motivated to undertake it, if available. There was no precise evidence bearing upon the prospects of her being employed or her rate of earnings, were she to achieve employment. The amount awarded represented, as I have already mentioned, a figure of $145 per week which was considerably less than the figure for average weekly earnings. My own inclination, having regard to the whole of the evidence, would have been to award less than her Honour. However, I am quite unable to find that her Honour's award fell outside the ambit of the proper exercise of judicial discretion.

45 I have come to the same view in regard to the attack made upon her Honour's finding of the amount for gratuitous assistance. Although it is true that Professor Jones, whom her Honour regarded as a satisfactory witness, had given as his opinion that the respondent required assistance for only three hours per week, there was ample evidence in the case that the respondent needed and was supplied with considerably more assistance than this by her children. It was a matter for her Honour to weigh up the whole of the evidence. A claim had been made for at least three hours per day. I am quite unable to find that her Honour's allowance of one hour per day was a finding amenable to appellate intervention. I reject this ground of appeal.

46 In the result, I consider that the appeal fails. It should be dismissed with costs.

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LAST UPDATED: 23/02/2001