Lila Foxall (by her tutor Robert Foxall) v Kristy Carter

1. [1]

   The issue is whether liability be heard and determined separately and in advance of the issue of quantum, pursuant to rr 28.2 or 29.4 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’), or alternatively s 61 of the Civil Procedure Act 2005 (NSW) (‘CPA’).

2. [2]

   By notice of motion filed 22 November 2022 (‘Motion’), the defendant reads the affidavits of Holly Angela Turner affirmed on 22 November 2022 (‘Turner Affidavit 1’) and on 2 March 2022 (‘Turner Affidavit 2’). The plaintiffs rely on Wendy Hunt’s affidavit, sworn on 21 February 2023 (‘Hunt Affidavit’).

3. [3]

   The defendant seeks an order that the question of liability be heard and determined separately and in advance of the balance of questions, which relate to quantum, pursuant to rr 28.2 or 29.4 of the UCPR, or alternatively s 61 of the CPA. The plaintiff opposes the orders sought.

4. [4]

   The first plaintiff is Lila Foxall (by her Tutor Robert Foxall), the second plaintiff is the plaintiff’s mother, Suzanne Foxall, and the defendant is Kristy Carter. For convenience I shall refer to the first plaintiff as the plaintiff in this judgment, except where the second plaintiff is specifically referred to. D Hooke SC and D-L Del Monte appeared for the first and second plaintiffs. N. Polin SC and N. Simone appeared for the defendant. The parties relied upon a court book comprising of two volumes.

5. [5]

   Background

6. [6]

   The defendant provided horse-riding lessons at a property located at Robinson Road in Mudgee, New South Wales.

7. [7]

   The plaintiff, then aged nine years and eight months, participated in four horse-riding lessons with the defendant.

8. [8]

   On 26 September 2017, during the fourth lesson, the plaintiff rode a horse named Smokey. She fell off the horse, suffering catastrophic injuries. The horse bolted when it was carrying the plaintiff along a stock route. It is the plaintiffs' case that she was inexperienced for the trail ride; the horse the defendant gave the plaintiff to ride was inappropriate for the plaintiff's level of riding experience and the defendant ought to be liable to the plaintiffs for negligence, breach of contract and breaches of the Australian Consumer Laws (WHA, [7]-[18]).

9. [9]

   The plaintiff, by her tutor, now 15 years old, brings a claim for damages relating to the incident. The second plaintiff, the plaintiff’s mother, alleges having suffered mental harm because of the incident.

10. [10]

    The plaintiff has no memory of the accident, so will not be giving evidence at trial. Both the second plaintiff, Ms Foxall, and the defendant have prepared and served the evidentiary statements.

11. [11]

    At [76], [77] and [82] of her evidentiary statement filed 14 April 2022, Ms Foxall deposes:

12. [12]

    The defendant in her evidentiary statement at [49](e), deposed:

13. [13]

    As to whether the defendant actually did or did not say what the plaintiff’s mother alleges will involve credit assessments of the statements by the trial judge.

14. [14]

    In oral submissions, counsel for the defendant stated that the defendant may elect not to tender Dr McLean’s report at trial.

15. [15]

    Equine consultant, Steven Jefferys, stated in his expert opinion, at [20]:

16. [16]

    Ms Karen Owen concluded at [39]-[40] of her report that:

17. [17]

    Sections 56 and 61 of the CPA relevantly reads:

18. [18]

    …

19. [19]

    Rules 28.2 and 29.4 of the UCPR read:

20. [20]

    The principles applicable to an application for the separate determination of a question, in advance of others, were summarised by Hallen AsJ (as his Honour then was) in Southwell v Bennett [2010] NSWSC 1372 at [15] and were recently restated by Lonergan J in Loretta Craig & Ors v Anthony Johnson & Ors [2020] NSWSC 430 at [26], as follows:

The application

1. [21]

   In the defendant’s view, the question of liability will require a hearing of five to eight days.

2. [22]

   On 4 July 2022, the plaintiffs served their liability evidence comprising an expert report of Ms Owens, an evidentiary statement of the second plaintiff, and seven lay witness statements: (Turner Affidavit 1 [33]).

3. [23]

   The defendant has served her liability evidence, comprising an expert report of Mr Jeffreys, an expert report of Dr McLean, an evidentiary and supplementary evidentiary statement, and seven lay witness statements: (Turner Affidavit 1 [35]-[37]).

4. [24]

   The issue of liability is ready for determination. There is an issue regarding legal professional privilege in relation to the earlier reports of Dr McLean. He is an expert in equine science. The privilege argument is listed for hearing on 27 July 2023. In oral evidence, the plaintiff’s counsel submitted that depending on the outcome, the plaintiff may then wish to obtain a report in the field of equine science. Both parties have served expert reports of experienced horse-riders.

5. [25]

   The defendant does not intend to serve any further liability evidence: (Turner Affidavit 1 [39]).

6. [26]

   The time for the service of lay and expert liability evidence has expired.

7. [27]

   The defendant served its expert liability evidence on 10 and 28 October 2022: (Turner Affidavit 1 [37]). To the extent the plaintiffs intend to serve a ‘reply’ report from Ms Owens in relation to that evidence, the defendant would not object to it, if filed promptly: (Turner Affidavit 1 [34]; Turner Affidavit 2 [15]).

8. [28]

   The defendant has not received notice of a date by which the plaintiffs intend serve any ‘reply’ report. The assertion is that the plaintiffs are unable to do so in circumstances where draft versions of Dr McLean’s report exist (Hunt Affidavit [32]).

9. [29]

   The defendant intends to call the following witnesses:

10. [30]

    The plaintiff appears to rely on evidence from the following witnesses:

11. [31]

    Questions rising for consideration as regards liability will be distinct and separate to questions relating to quantum. The relevant matters in dispute in relation to each are set out in a statement of issues in dispute filed on 14 November 2022.

12. [32]

    The plaintiff appears to have no clear memory of the incident: (Turner Affidavit 1 [45]; ann. A, p 11). Given that circumstance, it is unsurprising that the plaintiffs have not served a statement from the plaintiff. As the plaintiff will not be giving evidence on liability, importantly, the plaintiff’s credit and its relevance to questions of quantum does not rise for consideration: see eg Nettlelon v Rondeau [2013] NSWSC 1321 [23]; Binge-Grose by her tutor Binge v State of New South Wales [2016] NSWSC 1228 [7].

13. [33]

    The scope of evidence to be adduced from liability witnesses, lay and expert is almost entirely relevant to the questions of liability only, as distinct to questions relevant to quantum. The witnesses excepted from that proposition would be the second plaintiff and Robert Foxall, whose evidence largely goes to quantum issues, although it is accepted that there is some cross-over. Save for those two witnesses, there is minimal, if any, material relevance that liability witnesses would have to questions of quantum.

14. [34]

    The upshot of the clear delineation between liability and quantum, both in terms of the questions raised under each banner and the witnesses that would be required to be called, is demonstrative that separation of the two questions will not result in divergent findings on key factual matters or duplication of preparation time and court time: see eg Thomas v Oakley [2003] NSWSC 1033 [25]-[26].

15. [35]

    The evidence to be adduced from lay witnesses is mostly recollection evidence.

16. [36]

    Evident enough from the nature and circumstances of the incident, crucial questions surrounding liability issues, such as the circumstances in which Smokey shied and in which the plaintiff fell, can only be answered by the recollections of relevant witnesses. This is not a documentary case.

17. [37]

    The corrosive effect of the passage of time on the quality of justice, as witnesses’ memories become affected by the passage of time is well-known: see eg Moubarak by his tutor Coorey v Holt (2019) 100 NSWLR 218 [77]-[80] citing, Watson v Foxman (1995) 49 NSWLR 315, 318-319 (McLelland CJ in Eq) and McHugh J in each of Herron v McGregor (1986) 6 NSWLR 246, 253-255, Longman v R (1989) 168 CLR 79, 107-8 and Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, 551.

18. [38]

    Noting the effluxion of time (the incident occurred five and a half years ago), there exists a real risk of the impoverishment of relevant evidence, should this matter not proceed promptly to a hearing on the question of liability.

Quantum

1. [39]

   The questions of quantum of the claims made by each of the first and second plaintiffs are not ready for determination. This is agreed by the parties: (Turner Affidavit 1 [24], [31]; Hunt Affidavit [4]).

2. [40]

   Questions of quantum will not be ready for some time, for two reasons:

3. [41]

   As to the plaintiff’s condition, it is acknowledged that Professor Spira, neurologist, and Ms Morris, occupational therapist, express views which in some respects doubt the plaintiff’s recovery prospects: (Hunt Affidavit [35], [37]).

4. [42]

   Notably, however, each of Professor Spira and Ms Morris, together with the plaintiff’s rehabilitation consultant, express views which suggest that there may yet be steps in recovery to be made, based on small gains which appear to have been made already by the plaintiff: (Turner Affidavit 1 [15]-[17]).

5. [43]

   No doubt it is for that reason that the statement of particulars filed by the plaintiffs on 14 October 2021, and which has not been amended or updated since, does not particularise with any reasonable degree of specificity the heads of loss which are claimed and, in some part, relies on “estimates” to be provided in “due course”: (Turner Affidavit 1 [23]).

6. [44]

   Where the plaintiff’s damages claim is incapable of accurate assessment, whether due to her age, the time it will take for her medical condition to stabilise or other factors, it is be appropriate to proceed to determine liability only in advance of quantum: see eg Binge-Grose by her tutor Binge v State of New South Wales [2016] NSWSC 1228 at [7].

7. [45]

   Notwithstanding the order made on 18 November 2021 that the plaintiffs notify the defendant of medico-legal expert specialities by 26 November 2021, it was not until recently (and after the Motion had been filed) that the plaintiffs expressed the intention to qualify, in addition to Professor Spira and Ms Morris, seven more experts (Hunt Affidavit [43]):

8. [46]

   Evidently, the parties are some significant length of time away from each having served reports, in chief, in reply or following conclaves or joint reports. The defendant’s estimate is that the plaintiffs and the defendant will each require a period of some 12 months each to qualify experts, carry out the necessary medical examinations and produce the relevant expert evidence: (Turner Affidavit 2 [18]). If the history of the matter is any form of a predictive measure, it may well be much longer than that.

9. [47]

   The upshot is that a trial as to both questions of liability and quantum is unlikely to occur before late 2025 or early 2026, which is eight years or more from the date of the incident.

10. [48]

    There are other factors which warrant the Court’s exercise of its discretion at this time.

11. [49]

    Given the parties are ready on liability, and evidently not well-advanced as regards to quantum, the timing of a separate trial on liability has the potential to cause a significant saving of costs.

12. [50]

    The significance of this factor is demonstrated by the number of experts which will need to be qualified by both parties and the quantum issues which call for determination.

13. [51]

    On that basis, it is likely that the length of any trial on the question of quantum is better measured in weeks than days.

14. [52]

    Where the defendant is successful on liability, those costs relating to quantum may be avoided entirely by both parties.

15. [53]

    Where the plaintiff is successful on liability, and accordingly the issues in dispute between the parties will have been significantly narrowed, the prospects of resolution by way of an agreement as to quantum prior to any trial on the question of quantum are increased, such that the costs of a further trial would be avoided by both parties: (Turner Affidavit 1 [46]).

16. [54]

    The stress and consternation of lengthy and financially significant litigation are hardships borne by all parties, especially, as in this matter, where the underlying events themselves are traumatic. The defendant, a 38-year-old mother living in a country town in which she encounters the plaintiffs during her daily life and who bears the financial risk of personal exposure should judgment be entered against her, faces such hardships: (Turner Affidavit 1 [40]-[41]; Turner Affidavit 2 [19]). The profound effect of those hardships cannot be underestimated and the opportunity to curb them should not be undervalued. The defendant seeks the early determination of liability on that basis.

17. [55]

    In summary, senior counsel for the defendant contends that the following considerations give effect to s 56 of the CPA and weigh in favour of the Court’s exercise of its discretion to grant a separate trial:

18. [56]

    There are no good reasons warranting separate determinations. The liability question is not ready to proceed. The plaintiff's injuries are catastrophic. The available medical evidence makes plain that the plaintiff's injuries will not materially change and may be assessed. The liability and quantum questions can be heard together.

19. [57]

    Further, at the time of the accident the defendant held a limited policy of insurance. That policy has a limited indemnity of $10,000,000, which is understood to include all costs, disbursements, and other incidental expenses: (Hunt Affidavit: [20], [62]; Turner Affidavit 2 [19] and [20]). It was because of the defendant’s limited liability that the defendant’s previous solicitors expressed an intention to settle the plaintiff’s matter early: (Hunt Affidavit [20]).

20. [58]

    The separate determinations of these matters will substantially exhaust that indemnity and may reduce the plaintiffs’ ability to satisfy any judgments against the defendant.

21. [59]

    The defendant’s delay in seeking sperate determinations ought to also bear relevantly on this application. Ms Hunt sets out the relevant chronology of events. The statement of claim was filed on 16 April 2021. The defendant consented to court orders for the filing of the defence and the exchange of evidence until on or about 16 October 2022, when the prospect of this application was raised. The delay, while plainly forensic, undermines the expedition with which the defendant now seeks to attend to this matter.

22. [60]

    The default position is that all questions should be determined at one time. The relief the defendant seeks is exceptional and unwarranted for the following reasons.

23. [61]

    Contrary to the defendant's assertion in the written submissions, the liability question is not ready for determination.

24. [62]

    The plaintiff has served a liability report by Ms Karen Owen (Turner 1 [33](a)). Ms Owen has practical horse-riding experience but is not an equine expert.

25. [63]

    Opposite Ms Owens is Mr Jeffreys for the defendant (WHA, pp 13-28).

26. [64]

    The defendant has also served a report by an equine expert, Dr McLean dated 25 October 2022 (WHA, pp 29- 69).

27. [65]

    Dr McLean's report is controversial (WHA, [4], [19]-[33]; pp 70-76). Dr McLean has prepared seven reports between 19 May 2018 and 25 October 2022 (WHA, pp 75-76). The defendant claims privilege over the first 6 reports. As previously stated, that privilege claim is yet to be determined.

28. [66]

    In his last report, Dr McLean assessed that Lila should be labelled as a beginner to intermediate rider for a nine-year-old. Dr McLean found that Kristy Carter was adequately qualified and instructed the plaintiff correctly. The plaintiff was equipped with appropriate riding gear. Smokey was a suitable horse for the purpose of providing horse-riding lessons to a nine-year-old child. The stock route Ms Carter chose was suitable for the plaintiff and Smokey’s response to the overhanging trees was not something Ms Carter could have anticipated.

29. [67]

    The plaintiffs propose obtaining a report from an equine expert in response to Dr McLean’s opinion. That can be done without much delay, but the plaintiffs should be entitled to know Dr McLean’s opinion. The existence of six reports preceding Dr McLean’s final report suggests his path of reasoning has changed. This reasoning should be exposed before the plaintiffs commit to the substantial cost of a report in reply.

30. [68]

    The plaintiff has served medico-legal reports by Professor Spira, neurologist, dated 26 March 2021 (WHA, pp 77-83), and Ms Morris, occupational therapist, dated 13 August 2021 (WHA, pp 84-151).

31. [69]

    It is Professor Spira's opinion that the plaintiff is unlikely to make any further significant recovery at this late stage; she has no capacity to live independently and there is no treatment available that will improve the plaintiff’s capabilities significantly from their current level (WHA, [35]).

32. [70]

    Ms Morris says that any small gains the plaintiff may make will not alter her future care needs from 24 hours each day, 7 days each week (WHA, [37]).

33. [71]

    In the circumstances, it is unnecessary for the parties to wait for the plaintiff to attain her majority. The plaintiff's injuries are so significant, and her deficits so gross that her current state will not materially alter.

34. [72]

    With appropriate expert medico-legal evidence, the plaintiff’s damages claim is entirely capable of assessment and determination. To this end, Ms Hunt says that the further medico-legal expert evidence required (WHA, [43]) can conceivably be obtained within five months (WHA, [44]). Ms Hunt, with the benefit of her many decades of litigation experience, says the defendant can conceivably obtain evidence in reply within 10 to 12 months (WHA, [44]). If the parties act diligently, which no doubt they will, obtaining this necessary evidence can reasonably be achieved between now and when the hearing date is allocated.

35. [73]

    Further, and contrary to the defendant’s assertions, Ms Hunt estimates, and counsel supports the position that the hearing of the liability question only will take three weeks, and the hearing of all issues will take five weeks (WHA, [44]).

36. [74]

    Finally, the parties obtaining medico-legal evidence will also facilitate alternative dispute resolution (‘ADR’) and increase the prospects of a resolution of all issues. The course the defendant proposes substantially limits the parties’ ability to resolve all questions and only promotes a contested liability hearing.

37. [75]

    The second plaintiff has served a psychiatric report in support of her claim for damages (WHA, [46]). Save for a functional and vocational assessment report, which can be obtained within two months (WHA, [47]), the second plaintiff's quantum case is ready to proceed.

38. [76]

    The plaintiff is grossly impaired. The second plaintiff, who is psychiatrically injured, is shouldering the burden of caring for the plaintiff whilst also labouring under her own psychiatric difficulties. Even though the plaintiff’s mother is shouldering the burden of caring for the plaintiff, it appears that she and her husband are in agreement to a separate trial on liability.

39. [77]

    The inconvenience to the defendant of having this matter extant pales in comparison to the daily burden on the plaintiffs.

40. [78]

    Further, the defendant assumes that a determination of the liability question will resolve that issue. This position ignores the prospect of a delayed judgment, or an appeal, and thereafter the further delay in obtaining medico-legal and other evidence and the determination of the quantum question.

41. [79]

    There are no good reasons for the separate determination of the liability and quantum questions.

42. [80]

    The defendant has substantially delayed bringing this application.

43. [81]

    The plaintiff's injuries are capable of assessment, and it has only been because of the defendant's failure to comply with court orders and to arrange for the plaintiff to be medically examined that the quantum question has been delayed.

44. [82]

    The defendant has a limited indemnity. The longer these matters carry on for, the more money the parties will exhaust in legal fees and the less likely the plaintiffs are to realise recovery of any verdicts they obtain against the defendant.

45. [83]

    The separate determination of the liability and quantum questions will also frustrate the parties’ ability to engage meaningfully in ADR and to resolve all matters. The trajectory the defendant proposes is forcing a formal determination of the liability issue and frustrating any possibility for compromise and settlement.

46. [84]

    With a proper timetable for the exchange of evidence, all issues can be reasonably determined together, cheaply, quickly, and efficiently.

47. [85]

    On any view, this is a tragic case.

48. [86]

    I accept that generally all questions of fact and law should be determined at one time. The discretionary power to order a separate determination is a departure from the rule. It is recognised that question should be approached with caution, while it appears as a chimerical course of action.

49. [87]

    The High Court in Tepko Pty Ltd v Water Board (2001) 260 CLR 1; [2001] HCA 19, held at [168]:

50. [88]

    In Perre v Apand Pty Ltd (1999) 198 CLR 180; [1999] HCA 36, Gleeson CJ stated at [7]-[8]:

51. [89]

    Both the plaintiff’s mother and the defendant have been psychiatrically traumatised from the incident. It is the plaintiff’s mother who is burdened with providing her daughter with extensive care, yet she opposes a separate trial on liability.

52. [90]

    The defendant has not yet obtained medical reports but is arranging to do so. The plaintiff has some outstanding medico-legal reports, but they can be obtained in about five months. The defendant’s medical reports will take longer, maybe about 12 months.

53. [91]

    There is also the issue of privilege over the six prior reports over the plaintiff’s equine expert. This issue is to be heard in July 2023. The result of this decision may lead to the plaintiff having to obtain an equine expert’s report.

54. [92]

    The issue of liability is hotly disputed. The prior conversation or conversations between the plaintiff’s mother and the defendant are at odds, this means that their credibility is seriously in issue. The plaintiff’s mother will have to be called as a witness to both liability and quantum while it appears that a separate trial on liability would save about 12 months in court time. I have taken into account that a trial on both liability and quantum is likely to take place eight years after the incident.

55. [93]

    As to the potential saving of hearing time, the plaintiff estimates a trial on liability will only take 10 days. Whereas, the plaintiff’s trial on both issues is estimated at five weeks, three weeks of that time being taken up by liability evidence.

56. [94]

    It is difficult to predict whether there will be an appeal if liability is heard first. Hence, I cannot say with any certainty that the separate determination will result in the saving of costs and time. The separate liability trial favours the plaintiff. It seems to me that the defendant will need to obtain medico-legal reports in order to be in a position to settle a substantial payment of damages. The plaintiffs are aware that the defendant has limited indemnity cover and nevertheless they have decided to elect to have only the one trial.

57. [95]

    Taking these factors into account, it is my view that I should make an order that the defendant’s application for a separate trial on liability is refused.

58. [96]

    Costs are discretionary. Costs normally follow the event. The defendant is to pay the plaintiffs’ costs.

    1. (1)

       The defendant’s notice of motion filed 22 November 2022 is dismissed.

    2. (2)

       The defendant is to pay the plaintiffs’ costs.