Judgment date: 7 September 2009
Sretenovic v Reed  NSWCA 280
Court of Appeal1
- The Court of Appeal significantly reduced the plaintiff's damages awarded at trial, in particular reducing the award for non-economic loss on the basis of a reduction from 35% to 20% of a most extreme case, notwithstanding the fact that the infant plaintiff received significant scarring from a dog bite and resulting psychiatric disabilities.
On 28 April 2005 the plaintiff who was 11 years old at the time was attacked by an unleashed dog belonging to the defendants.
The plaintiff, via his mother acting as his next friend, brought proceedings against the defendants to recover damages pursuant to s 25 of the Companion Animals Act 1998 (NSW). The defendants admitted liability at the outset of the trial. Accordingly the trial proceeded as an assessment of damages only.
District Court Decision
The trial judge, Judge Levy SC DCJ, noted that it was accepted that the plaintiff sustained ten lacerations and puncture wounds to his right forearm and a small puncture wound to the right knee. The trial judge found that the dog bites also caused the plaintiff to sustain dermatitis and itching of the right arm and led to the plaintiff putting on excess weight and leading an abnormal lifestyle. The trial judge however also accepted that "apart from having residual scarring from his dog bite wounds, the plaintiff has undergone a relatively uneventful physical recovery".
The trial judge noted that the main area of controversy was the claim of significant psychiatric disability. The plaintiff qualified Associate Professor Quadrio and the defendants qualified Dr Whan. The trial judge preferred Professor Quadrio's opinion, which the trial judge found was to the effect that the plaintiff was quite seriously affected by the injury and that his post-traumatic reaction was chronic rather than temporary. The trial judge found that the plaintiff had a more serious psychological condition, in the nature of major depression, and not the lesser picture that Dr Whan was describing in his initial analysis.
Despite the fact that trial counsel for the plaintiff only submitted that the plaintiff should be assessed at "at least 30%" of a most extreme case (the defendants' counsel contending for 18% - 20%), the trial judge assessed damages for non-economic loss at 35% of a most extreme case ($154,500).
In relation to the claim for future economic loss the trial judge found that the plaintiff's psychological symptoms would, on the balance of probabilities, impede his ability to obtain and maintain regular employment such that throughout his working life he would suffer a loss of earning capacity. The plaintiff's residual earning capacity was assessed at 30% of net average weekly earnings between the ages of 18 and 65 years, ie $288 net per week which, after allowing a 25% discount for contingencies but deferred for four years since the plaintiff was aged 14 years at the date of trial, resulted in an award for future economic loss of $170,923.
Court of Appeal Decision
The major grounds of the defendants' appeal concerned the damages awarded for non-economic loss and future economic loss.
In relation to non-economic loss McColl JA, who wrote the leading judgment and with whom Beazley JA agreed, confirmed the principle that unless it can be demonstrated that the trial judge has erred in the application of principle, in order to attract appellate review it will be necessary to show that the conclusion reached by the primary judge was "manifestly erroneous"; Ellis v Rantzo (t/as Rantzos Hairdressing)2. However McColl JA was satisfied that the trial judge made errors which were of such substance and that the conclusions reached by the trial judge were so manifestly erroneous, appellate review was justified. McColl JA held that 20% of a most extreme case was the appropriate assessment for non-economic loss.
In relation to the award for future economic loss McColl JA stated that the trial judge should have awarded a buffer as opposed to an ongoing weekly award. McColl JA referred to the case of Leichhardt Municipal Council v Montgomery 3 where Mason P opined that "a buffer or cushion award is usually reserved to the situation where there is a smallish risk that otherwise secure employment prospects may come to an end, in consequence of the tort-related injury, at some distant time in the future".
Having regard to the fact that the plaintiff suffers no physical limitations on his ability to work, that it is probable his psychological conditions will be ameliorated by treatment and that, even to the extent some aspect of his work life might be limited by the matters to which Professor Quadrio referred, her Honour found that that is not likely to be substantial and that the plaintiff's future earning capacity will not be substantially diminished. McColl JA found that an appropriate buffer, before the 25% discount for vicissitudes, was $50,000.
In reaching the above conclusions McColl JA made reference to the case of Strinic v Singh 4 which was also a case where the trial judge (who had extensive judicial experience in personal injury litigation) made findings of critical fact in which Beazley JA concluded were based on his own medical knowledge. In Strinic Beazley JA quoted Sir John Balcombe in the matter of Saunders v Adderley 5 who stated that:
"It is, of course, an error of law for a judge to make a finding of fact which there is no evidence to support, unless the matter is one of which the judge is entitled to take judicial notice."
McColl JA also quoted from the judgement of Ipp JA in the matter of Ohlstein bht Ohlstein v E & T Lloyd t/as Otford Farm Trail Rides 6 who stated that the risk to a young child in undertaking a guided horse ride and a child's ability to undertake the ride:
"... should not be determined by a personal judicial opinion, based on common knowledge and experience, that differs from the opinions expressed by experts ..."
McColl JA stated that the consequence in Strinic of the failure to afford procedural fairness was that the appellant was denied "his fundamental right to the determination of his claim based on the evidence". McColl JA went on to state that:
"Regrettably, in my view, the primary judge in this case appears either to have made findings of fact unsupported by evidence and/or (it matters not which) has applied his personal opinion concerning the respondent's present and future psychological condition."
McColl JA found that nowhere in Professor Quadrio's reports did she say that the plaintiff's depression might worsen as indicated by the primary judge nor did the reports support the primary judge's findings that the prospects of psychological treatment for the plaintiff were poor and had little prospect of succeeding. In her Honour's view there was no evidence to support the primary judge's conclusions that none of the plaintiff's psychological conditions would "recede or diminish" or indeed that his depression would worsen.
Her Honour further noted there was no evidence that the plaintiff was suffering from "major depression" from which there was little prospect of him recovering which was found by the primary judge.
Accordingly the defendant's appeal was allowed in respect of non-economic loss and future economic loss. The Court of Appeal did not interfere with the primary judge's award in respect of future treatment in the sum of $16,700.
This decision highlights the caution to be exercised by a trial judge in not making findings of fact where there is no evidence to support such a finding.
The decision should be of assistance to defendants in arguing for lower awards for non-economic loss before trial judges and may stem the trend of increased awards which of recent times the Court of Appeal has been disinclined to interfere with unless, as in this case the Court of Appeal considers the conclusion reached by the primary judge was "manifestly erroneous".
The decision also provides assistance to defendants in arguing for buffers for loss of earning capacity pursuant to s 13 of the Civil Liability Act, particularly in relation to children where there is no evidence to support that the plaintiff's condition will not be ameliorated by treatment and that the plaintiff's future earning capacity will be substantially diminished.
1 Beazley JA; McColl JA
2  NSWCA 266
3  NSWCA 432
4  NSWCA 15
5  1 WLR 884
6  NSWCA 226
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