South Western Sydney Local Health District v Sorbello

1. [1]

   MACFARLAN JA: I agree with Simpson JA.

2. [2]

   MEAGHER JA: I agree with Simpson JA.

3. [3]

   SIMPSON JA: By Statement of Claim filed in the Supreme Court on 4 April 2011, the respondent (Ms Rosemary Sorbello) claimed damages for personal injury (“nervous shock”) suffered by her as a result of the negligence of the appellant (the South Western Sydney Local Health District, formerly known as the South Western Sydney Local Health Network). The appellant admitted liability, and Ms Sorbello’s claim proceeded before Schmidt J (“the primary judge”) in the Common Law Division as an assessment of damages. Damages fell to be assessed under the Civil Liability Act 2002 (NSW), of which ss 13, 29, 30, 31 and 33 were specifically relevant.

4. [4]

   On 24 June 2016 the primary judge delivered judgment, stating her findings relevant to the quantification of damages: Sorbello v South Western Sydney Local Health Network; Sultan v South Western Sydney Local Health Network [2016] NSWSC 863. The “Sultan” referred to is Ms Sorbello’s former husband, who also brought proceedings. Those proceedings are not material to this appeal.

5. [5]

   The primary judge directed the parties to prepare orders, in accordance with her reasons and findings of fact. This they did on 27 September 2016. On that date, in accordance with the findings, judgment was entered for Ms Sorbello in the sum of $1,278,459. The terms of the judgment show that damages were awarded, inter alia, under the following heads and in the amounts shown:

6. [6]

   The appellant now appeals against the judgment, asserting error in a number of respects. It has not (at least in these proceedings) appealed against the damages awarded to Mr Sultan.

Factual background

1. [7]

   On 24 September 2008 Ms Sorbello gave birth at the Bankstown Hospital to a son, Joseph. Joseph was born with profound disabilities, such that his life expectancy is significantly shortened, and he will require lifetime care. At four months he was diagnosed as suffering from cerebral palsy, and this diagnosis was communicated to Ms Sorbello.

2. [8]

   Proceedings against the appellant were taken on behalf of Joseph, and were resolved by terms of settlement approved by Button J shortly before Ms Sorbello’s proceedings were listed for hearing. Although there was in evidence before the primary judge a “confidential exhibit” which was said to be “the consent judgment in the proceedings in which Joseph was the plaintiff” and although that document was said to have been contained in an envelope held in the Registry of this Court, it did not form part of these proceedings. Senior counsel for the appellant said no more than that he relied on it (not having seen it), and that “if it does become material I’ll invite your Honour[s] to look at the confidential exhibit”. The Court was not pressed to do so by either party, and the terms of settlement in Joseph’s matter played no part in the appeal. No detail of the settlement of those proceedings was before this Court. Senior counsel for Ms Sorbello told the primary judge that the settlement contained an element of compromise “to guard against the vicissitudes of litigation that was not insignificant”.

3. [9]

   None of the above was in issue. Nor was it in issue that Joseph’s disabilities were caused by the breach of duty of care owed to him by employees of the appellant at Bankstown Hospital, for which the appellant was vicariously liable. Also not in issue was that, as a further consequence of the breaches of duty of care, Ms Sorbello suffered “nervous shock” or, to use the language of the Civil Liability Act, “mental harm” such as to entitle her to an award of damages: see ss 30, 31 and 32 of the Civil Liability Act. Put briefly, by s 31, damages may not be awarded for “pure mental harm” unless the harm consists of a recognised psychiatric illness. It was accepted that Ms Sorbello suffered from such an illness. What was in issue was the extent of the psychiatric illness suffered by her, its consequences and sequelae, and the appropriate measure of damages to compensate her for that condition. The contest at first instance focussed upon, but was not entirely limited to, the extent to which Ms Sorbello’s psychiatric illness diminished her earning capacity, both past and ongoing, and her need for treatment, past and ongoing.

4. [10]

   For three years prior to Joseph’s birth, Ms Sorbello had been employed by Electrolux, in an administrative position of some responsibility. The hours of work suited her, and she was happy in her employment. She took maternity leave for Joseph’s birth, and intended to return to work after 12 months. She was unable to do so because the care Joseph required imposed significant demands upon her. Her employer declined her request to extend her maternity leave. She said, in her evidentiary statement:

5. [11]

   Joseph’s condition also created strain in the marriage. Ms Sorbello and Mr Sultan separated in January 2011. Ms Sorbello’s mother converted a garage at her home into a “granny flat” that accommodated Ms Sorbello and Joseph.

6. [12]

   In June 2013, Ms Sorbello remarried, but that marriage also failed.

7. [13]

   In 2014 Joseph started school, but has a lot of time off because of illness.

8. [14]

   Ms Sorbello attributed the fact that she doubted her capacity to return to work to her concern about Joseph, her need to be at home with him during periods of illness, and to be available to attend the school if Joseph needs her. She has difficulty concentrating, and is forgetful. She said:

The evidence

1. [15]

   Having regard to the relatively limited nature of the issues in the appeal, I will confine my reference to the evidence to that which is material to those issues.

2. [16]

   The hearing before the primary judge commenced on 30 May 2016. Evidence was given by Ms Sorbello, in the first instance, by statement, supplemented by some oral evidence in chief and cross-examination. A number of psychiatric and psychological reports were in evidence. These were reports of Dr Peter Klug and Dr Stephen Allnutt (both psychiatrists, qualified for medico-legal purposes on behalf of Ms Sorbello), Ms Rafaela Luca (a registered psychologist similarly qualified), Dr James Bodel (an orthopaedic surgeon, also qualified on behalf of Ms Sorbello) and Dr Lisa Brown (a psychiatrist qualified on behalf of the appellant). In addition, there were in evidence some medical records from the Bankstown Hospital and clinical notes of an organisation called “Essential of Wellbeing”.

3. [17]

   On 5 May 2016 (a little over three weeks before the hearing) a “teleconference conclave” took place, involving Dr Allnutt, Dr Brown and Ms Luca. Dr Klug did not participate. A record or report of the results of that conclave was in evidence. Drs Allnutt and Brown and Ms Luca gave concurrent evidence in the trial. Initially, apparently because he did not participate in the conclave, objection was taken to the admission of Dr Klug’s report. He was made available for cross-examination and his report was admitted into evidence. Senior counsel for the appellant then indicated that he did not wish to exercise his right to cross-examine.

4. [18]

   In addition to the evidence already mentioned, evidence in statement form was given by Ms Carmel Ghamrawi, and Ms Marie Carpinato (respectively, Ms Sorbello’s sister and mother).

5. [19]

   The issue between the parties was as to the extent of Ms Sorbello’s psychiatric illness and its consequences, particularly in relation to her earning capacity and the quantification of non-economic loss.

6. [20]

   The evidence disclosed that each of the medical practitioners examined Ms Sorbello, and provided a detailed report (in the case of Dr Brown, reports). Having regard to the arguments advanced on the appeal, it is convenient to refer to the reports in chronological order of the assessments to which they relate.

7. [21]

   The first psychiatric assessment of Ms Sorbello was conducted by Dr Brown on 28 August 2012. In a report dated 3 September 2012, after setting out a lengthy history, Dr Brown diagnosed:

8. [22]

   Under the heading “Causation”, Dr Brown noted:

9. [23]

   In recounting the history, Dr Brown expressly noted that Ms Sorbello “did not report any experience of panic anxiety complaints”.

10. [24]

    The next psychiatrist to assess Ms Sorbello was Dr Klug, on 14 January 2014. Dr Klug began his report by noting that he had, on an earlier occasion, assessed Ms Sorbello, in relation to a motor vehicle accident in which she had been injured in 2004. He said that in 2004 he assessed her:

11. [25]

    In his 2014 assessment, Dr Klug said:

12. [26]

    Dr Klug’s report was referred by the solicitors acting for the appellant to Dr Brown for comment. Dr Brown did “not concur” with Dr Klug’s suggestion that Ms Sorbello was predisposed to a deterioration in her psychiatric status as a result of Joseph’s condition, pointing to her ability to drive, to enjoy a good relationship with her partner, to socialise when able to do so, and to having lost “a significant amount of weight”. She wrote:

13. [27]

    In August 2014 Ms Sorbello returned for further examination by Dr Brown. On this occasion Dr Brown reported, under the heading “PROVISIONAL DIAGNOSIS AND OPINION” as follows:

14. [28]

    Under the sub-heading “Causation”, Dr Brown went on to say:

15. [29]

    Dr Allnutt assessed Ms Sorbello on 4 December 2015 and reported on 22 December of that year. He, too, took a lengthy history, and concluded:

16. [30]

    Dr Bodel, the orthopaedic surgeon, reported with respect to back and neck symptoms suffered by Ms Sorbello. He attributed the symptoms to the heavy nature of the work that she undertakes in caring for Joseph, and therefore gave a “guarded” prognosis. He anticipated that, as Joseph ages and becomes heavier, Ms Sorbello will experience increasing discomfort and associated disability.

17. [31]

    The psychologist, Ms Luca, carried out an assessment of Ms Sorbello over three one-hour sessions within a two week timeframe, and reported on 24 March 2015. She described symptoms of “[g]eneralised anxiety including … avoidant behaviour e.g. socially, occasional anxiety/panic attacks, at times physical manifestations of anxiety such as excess sweating, increased heart rate and breathing rate …”. She also observed “Depressed mood”, “Disrupted sleep”, “Poor self esteem” and “Sense of grief and loss”.

18. [32]

    The report prepared following the “conclave” of Drs Allnutt and Brown and Ms Luca exposed the areas of disagreement: these related to the appropriate diagnosis, its cause, treatment, and Ms Sorbello’s work capacity, particularly into the future.

19. [33]

    All experts (including Dr Brown) agreed that Ms Sorbello suffered from “a persistent depressive disorder”. Ms Luca noted “associated anxiety” and Dr Allnutt noted “intermittent panic attacks”. Dr Brown disagreed with each of these, repeating (as she had said in her 2012 report) that she had not, on that or the later assessment, “elicited a significant history of either generalised or panic anxiety type complaints”.

20. [34]

    With respect to the cause of her condition, Dr Allnutt and Ms Luca agreed that:

21. [35]

    Dr Brown’s opinion in this respect is a little difficult to follow, but it appears that she considered that Ms Sorbello “[had] come to a better acceptance of Joseph’s disabilities” and that “this factor” (that is, Joseph’s disabilities) was less significant than she had thought in 2012. (This appears to be a reflection of Dr Brown’s theory of causation expressed in her third report, set out above.)

22. [36]

    Dr Allnutt considered Ms Sorbello to be partially incapacitated for work, but capable of part-time work. Ms Luca thought that she “may have partial capacity to work” but that this would require frequent review.

23. [37]

    Dr Brown again disagreed. She concluded that any impediment to Ms Sorbello working (full-time) was a result of “practical issues related to Joseph’s need for care”, rather than as a result of her symptoms.

24. [38]

    All of these differences were explored in the concurrent oral evidence.

25. [39]

    Ms Sorbello’s statement was made on 3 May 2016. It was largely devoted to the circumstances of Joseph’s birth, and his condition thereafter. She gave an account of numerous medical appointments, consultations and interventions. In October 2009 (when Joseph was about 1 year old) he began having seizures, and this has continued. On a number of occasions he had to be taken by ambulance to hospital. It is plain that Ms Sorbello took on the vast bulk of his care, with little help from Mr Sultan. She said that she and her husband both seemed to change after Joseph’s birth, and, in January 2011, the marriage came to an end.

26. [40]

    She said:

27. [41]

    She gave additional evidence in the trial. She said that she had only broken sleep, an average of six hours a night. She worried about something happening to Joseph. She had feelings of guilt about not doing enough for him. She said:

28. [42]

    She said she had difficulty expressing her feelings, but when she was alone:

29. [43]

    She gave evidence of feelings of anxiety, although she conceded that she had not complained to her general practitioner of depression. She said that that was because:

30. [44]

    She did not agree that her feelings of anxiety would decrease if she had carers in her home to assist with Joseph.

31. [45]

    She said that she had attempted some “online studying” but that her concentration was poor. She did not think that she could undertake, for example, a TAFE course.

32. [46]

    It was put to her that there was nothing about her psychiatric state that prevented her from returning to work, but that the fact that she did not do so was a matter of her choice. She disagreed, adding:

33. [47]

    In re-examination she was asked about her anxiety levels, and answered:

34. [48]

    It was made plain at trial and on appeal that there were no credit issues affecting acceptance of Ms Sorbello’s evidence.

The relevant statutory provisions

1. [49]

   By s 16 of the Civil Liability Act, no damages may be awarded for non-economic loss unless the severity of the non-economic loss is at least 15 per cent of a most extreme case. Thereafter, the section sets out a table allocating the quantum of damages that may be awarded, depending upon the severity of the non-economic loss.

2. [50]

   Section 13 of the Civil Liability Act provides:

The primary judgment

1. [51]

   The primary judge reviewed in some detail the psychiatric and psychological evidence, which she considered in the context of the other evidence, documentary and oral. Ultimately, she preferred the opinions of Dr Allnutt and Ms Luca, and rejected that of Dr Brown, who, she considered, under-appreciated the magnitude of Ms Sorbello’s injury; she was satisfied that:

2. [52]

   She gave extensive reasons for this conclusion, based, not only on the evidence of Dr Allnutt and Ms Luca, but on the evidence of the circumstances of Ms Sorbello’s life, as revealed by the lay evidence. She considered that that evidence shed considerable light on the nature and extent of Ms Sorbello’s psychiatric condition, and that the psychiatric condition was such as to preclude Ms Sorbello from working.

3. [53]

   The primary judge then turned her attention to the question of economic loss. She said:

4. [54]

   There was no issue that Ms Sorbello met the s 16 threshold for an award of non-economic loss. The issue was as to quantification. The competing contentions for the quantification of Ms Sorbello’s non-economic loss were 30 per cent (on behalf of the appellant) and 40 per cent (on behalf of Ms Sorbello). The primary judge assessed the non-economic loss at 35 per cent of a most extreme case. With respect to economic loss, the primary judge noted the contention made on behalf of the appellant that Ms Sorbello retained a capacity to work, at least on a part-time basis. Her decision not to take employment was, it was submitted, a matter of choice on her part, with the result that the income foregone as a result of that choice was not compensable. Her Honour rejected that contention. She found that, to the date of trial, Ms Sorbello had no capacity to exploit whatever residual earning capacity she retained.

5. [55]

   As to future economic loss, the primary judge noted that there was no issue that, but for her psychiatric condition, Ms Sorbello would have returned to her former full-time employment at the expiration of her maternity leave. She accepted the expert evidence that, with treatment and support (and with the settlement of Joseph’s claim, and consequent accessibility to funds for commercial assistance), Ms Sorbello could “probably work part-time”. That, she considered, was unlikely to materialise for another 18 months. She assessed Ms Sorbello’s working capacity then to be no more than 50 per cent. She then considered the realistic prospects of Ms Sorbello exploiting that capacity, and concluded that those prospects were, effectively, non-existent.

6. [56]

   She determined that damages for future economic loss should be assessed on the basis that Ms Sorbello would not be able to exploit any residual earning capacity before retirement age – that is, that notwithstanding a possible working capacity, she had no realistic earning capacity.

The grounds of appeal

1. [57]

   The grounds of appeal as pleaded specify the awards of damages made in respect of non-economic loss and past and future economic loss as the areas of challenge. Essentially two bases were identified for the challenges. The first was the acceptance by the primary judge of the opinions of Dr Allnutt and Ms Luca in preference to those of Dr Brown. The second concerned the approach taken by the primary judge to the assessment of Ms Sorbello’s residual earning capacity. It was an error, it was asserted, for her Honour to cast an onus on the appellant to establish what employment remains open to Ms Sorbello. It was also strongly contended that the primary judge erroneously failed to undertake the exercise set out in Malec v J C Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20.

Disposition

1. [58]

   The primary judge had to select between the competing opinions of three psychiatrists and one psychologist. The only reason advanced for the proposition that she ought to have preferred the evidence of Dr Brown was that Dr Brown had seen Ms Sorbello twice over a two year period, while Dr Klug, Ms Luca and Dr Allnutt saw her only once each. (In fact, Ms Luca had undertaken her assessment over three sessions, but in a two week time frame.)

2. [59]

   This is, in my opinion, a superficial basis upon which to expect a judge at first instance to exercise judgment in relation to conflicting opinions of experts.

3. [60]

   Before embarking on that question, however, it is necessary to identify the area of dispute between the experts. In fact, lay reading of the reports discloses relatively little difference between the opinions (as to the nature and degree of the condition, distinct from causation) of Drs Allnutt and Brown. When pressed, senior counsel for the appellant identified the difference as “only in relation to the additional diagnosis of anxiety”. In his oral evidence, Dr Allnutt said that the anxiety would be likely to recur each time there was “a traumatic event” involving Joseph.

4. [61]

   The argument overlooks Dr Klug’s diagnosis (not mentioned by the primary judge in this context) of “chronic adjustment disorder with mixed features of anxiety and depression”, and Ms Luca’s record of Ms Sorbello’s symptoms as including “generalised anxiety”. The weight of expert opinion was therefore in accord with Dr Allnut’s assessment.

5. [62]

   There was another difference of opinion, concerning the cause of Ms Sorbello’s condition. Dr Brown alone found the cause to be related to circumstances other than Joseph’s disabilities and to lie in matrimonial breakdown, and “an underlying vulnerability to depression” which she attributed to “personality and relationship issues”.

6. [63]

   The objective evidence did not support the proposition that Ms Sorbello had an underlying susceptibility or vulnerability. It established that, following a traumatic event (a motor vehicle accident) in 2004, she had a temporary (six months) episode of depression and excessive alcohol consumption from which she had recovered. No medical practitioner other than Dr Brown detected any underlying susceptibility, and it was not put to Dr Allnut or Ms Luca in the hearing of the concurrent evidence.

7. [64]

   Criticism was made of the primary judge, because she said:

8. [65]

   The criticism is ill founded. It is the function of a trial judge to assess evidence, including that of experts, using whatever tools are available in the circumstances. Although the primary judge observed the experts in conclave, the assessment of demeanour of expert witnesses is seldom an appropriate basis upon which expert evidence is to be evaluated. Rather, it was appropriate for the primary judge, in exercising her function, to consider how the expert evidence sat with the oral evidence of Ms Sorbello (and other witnesses). Further, the submission has nothing to say about how a trial judge is to choose between competing and conflicting opinions. Her Honour was obliged to exercise her judicial function, and entitled to accept the opinions of Dr Allnutt and Ms Luca in preference to those of Dr Brown, and no basis has been established for departing from her assessment.

9. [66]

   Moreover, that assessment has the advantage of according with a realistic evaluation. Dr Brown’s opinion centred largely upon her assessment that Ms Sorbello had sufficient resilience to overcome the profound impact upon her life brought about by Joseph’s disabilities, but not the impact on her life brought about by other stressors such as her marriage breakdown. Dr Brown did not elaborate on this reasoning, and it is not otherwise supported by the evidence. Dr Brown did mention that Ms Sorbello had suffered a previous episode of depression, and excessive alcohol consumption, following the motor vehicle accident before Joseph’s birth. What she did not acknowledge was the evidence that Ms Sorbello had recovered from this episode – demonstrating the very resilience to “other stressors” to which Dr Brown referred. In magnitude, none of those stressors remotely approached the level or the permanence of stress imposed upon her by Joseph’s birth and disabilities.

10. [67]

    I would reject the ground of appeal that asserts error on the part of the primary judge in accepting Dr Allnutt’s opinion in preference to that of Dr Brown.

11. [68]

    Two propositions appear to have been made, both at first instance and on appeal, on behalf of the appellant. The first was that Ms Sorbello’s decision not to take employment arose as a matter of choice by her, not attributable to her acknowledged psychiatric condition (however classified). The primary judge rejected that, based on the psychiatric evidence that she accepted. For reasons given above, no error is shown in that approach.

12. [69]

    The second proposition was that error was shown because the primary judge cast an onus upon the appellant to prove that Ms Sorbello was capable of working, and what work was likely to be available to her.

13. [70]

    In this context, significant reliance was placed upon the decision of the High Court in Malec. That reliance was misconceived. Malec involved a claim brought by a plaintiff who had contracted a disease as a result of the defendant’s negligence. The plaintiff then developed a spinal condition which was a possible sequelae of the disease, and a neurotic illness. The Court of Appeal in Queensland held that the neurotic condition was caused by depression induced by the disease. However, the court concluded that it was likely that the plaintiff would have suffered a similar neurotic condition even without exposure to the disease. It was in this context that the High Court developed the formula upon which the appellant relied. That was stated as follows (at p 643):

14. [71]

    That is entirely unrelated to the present case. Notwithstanding Dr Brown’s finding of an “underlying vulnerability”, it was no part of the appellant’s case at trial or on appeal that there was a chance that Ms Sorbello would, even without the appellant’s negligence, have developed a psychiatric illness that would have disabled her from working. It was found by the primary judge, and not challenged, that Ms Sorbello suffers from a debilitating psychiatric condition that renders her fit only to work part-time. The issue is not whether she would have come, or been likely to come, to that point absent the appellant’s negligence. That the appellant’s negligence is the cause of her condition is established. The process required for the assessment of a chance as set out in Malec is entirely irrelevant to the present case. In the ordinary case, the possibility that some cause other than the defendant’s negligence might have affected the plaintiff’s earning capacity is catered for by the conventional allowance that is made for “vicissitudes”. That was the appropriate approach in this case.

15. [72]

    What is now in issue is the extent, if any, to which Ms Sorbello can exploit such working capacity as she has. It is important to note the distinction between “working capacity” and “earning capacity”. The terms are not co-extensive. “Earning capacity” recognises the realities of the world of employment.

16. [73]

    In Nominal Defendant v Livaja [2011] NSWCA 121 this Court said:

17. [74]

    It has been accepted by this Court that, once a plaintiff has established a loss of earning capacity, the onus of demonstrating a failure to exercise any residual earning capacity lies on the defendant: Mead v Kearney [2012] NSWCA 215 at [16] and [25]. In Harold Luntz: Assessment of Damages for Personal Injury and Death, (4th ed 2002, Butterworths) at 118, the following is stated:

18. [75]

    In its written submissions, the appellant posed as the relevant questions to be answered in the assessment of damages “in respect of the likelihood of past and future eventuality”, the following:

19. [76]

    Those questions are simply answered, by reference to the findings of the primary judge. But for her injury, Ms Sorbello would have returned to the full-time workforce 12 months after Joseph’s birth. She was unable to do so. While she retained some capacity for work, her prospects of exploiting that capacity were essentially non-existent. That was the effect of the findings of the primary judge, and it is not, in this appeal, contended that the evidence established an earning capacity. The complaint that is made is that the judge erroneously put the burden of proving earning capacity onto the defendant. There is no substance in that ground of appeal.

20. [77]

    It formed no part of the appellant’s argument that the evidence established one form of employment which Ms Sorbello is capable of undertaking. That is the care of Joseph. What the evidence does not establish is that Joseph is in a position to employ his mother as his carer, and to pay for her services.

21. [78]

    That raises for consideration Ground 6 as pleaded in the Notice of Appeal. That ground is framed as follows:

22. [79]

    The premise upon which this ground is founded was not clearly articulated. The mere fact that an award of damages in favour of Joseph was made is insufficient to warrant any reduction in the award to be made to Ms Sorbello. The evidence did not disclose the amount of the award made in Joseph’s favour. It did not disclose the makeup, or breakdown, of the heads of damage by which it was calculated. It did not disclose the extent of the discount applied to what would have been regarded as a “full value” award of damages. It did not disclose that any component (more realistically, the quantum of any component) was attributable to future care. Assuming that it did include a component for Joseph’s future attendant care, it did not disclose whether it was calculated on the basis that the services would be rendered gratuitously (see Civil Liability Act, s 15) or at commercial rates.

23. [80]

    In the absence of such evidence it would have been erroneous to have taken into account, by way of reduction of Ms Sorbello’s damages, a postulated fact that Joseph had been placed in a position to provide employment to Ms Sorbello.

24. [81]

    Ground 6 of the appeal should be rejected.

25. [82]

    Ground 1 of the appeal also complained of the assessment of non-economic loss. As indicated above, the appellant contended that Ms Sorbello’s claim represented 30 per cent of a most extreme case; on behalf of Ms Sorbello it was contended that the proper assessment was 40 per cent.

26. [83]

    The only argument advanced in support of this ground also relied upon the decision of the primary judge to accept the medical opinion of Dr Allnutt in preference to that of Dr Brown. In those circumstances the ground should be rejected, for the reasons given above.

27. [84]

    The orders I propose are: