Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Ridolfi v Hammond [2012] NSWCA 3
• Hearing dates: 22, 23 September 2011
• Decision date: 23 February 2012
• Before: Beazley JA at 1; Campbell JA at 2; Sackville AJA at 3

Decision

1. Appeal allowed.

2. Set aside orders 1, 2 and 3 made by Gibb DCJ on 12 March 2010.

3. Direct the appellant on or before 1 March 2012 to file written submissions, not exceeding ten pages in length, addressing the following issues:

(a) whether the appellant agrees with the figure of $17,500 in respect of past loss of earnings and, if not, the figure that is proposed;

(b) the quantum of damages for loss of future earning capacity, calculated in accordance with this judgment;

(c) the amounts, if any, that should be awarded by way of damages in respect of past and future attendant care services (including the question of whether the threshold requirements of s 128(3) of the MAC Act are satisfied); and

(d) costs.

4. Direct the respondent, on or before 12 March 2012, to file and serve written submissions, not exceeding ten pages in length, in reply.

5. The respondent, if otherwise qualified, to have a certificate under the Suitors Fund Act 1951.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: DAMAGES - motor vehicle accident - pre-existing degenerative spinal condition - whether primary Judge correct to find that the consequences of the pre-existing condition would have "subsumed" the consequences of the accident within eight years - whether primary Judge correct to find no causal relationship between accident and further degeneration of spinal condition.
• Legislation Cited: Civil Liability Act 2002; Civil Liability Legislation Amendment Act 2008; Motor Accidents Compensation Act 1999
• Cases Cited: Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; 239 CLR 420; Graham v Baker [1961] HCA 48; 106 CLR 340; Insurance Australia Ltd v Helou [2008] NSWCA 240; 51 MVR 414; Malec v JC Hutton Pty Ltd [1990] HCA 20; 169 CLR 638; March v E & MH Stramare Pty Ltd [1991] HCA 12; 171 CLR 506; Purkess v Crittenden [1965] HCA 34; 114 CLR 164; Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208; Shorey v PT Ltd [2003] HCA 27; 77 ALJR 1104; Sretenovic v Reed [2009] NSWCA 208; Varga v Galea [2011] NSWCA 76; Watts v Rake [1960] HCA 58; 108 CLR 158; Zanner v Zanner [2010] NSWCA 343
• Category: Principal judgment
• Parties: George Ridolfi (Appellant); Lisa-Maree Hammond (Respondent)
• Representation: Counsel: Ms S Norton SC and Ms M Fraser (Appellant); Mr R Bartlett SC and Mr W Fitzsimmons (Respondent); Solicitors: Brydens Law Office (Appellant); Sparke Helmore Lawyers (Respondent)
• File Number(s): 2010/81646

Decision under appeal

• Jurisdiction: 9101
• Date of Decision: 2010-03-12 00:00:00
• Before: Gibb DCJ
• File Number(s): 2010/81646

Judgment

1 BEAZLEY JA : I agree with Sackville AJA.

2 CAMPBELL JA : I agree with Sackville AJA.

3 SACKVILLE AJA : This is an appeal from a judgment of a Judge of the District Court (Gibb DCJ) awarding the appellant (the plaintiff in the District Court proceedings) damages of $126,512.30 in respect of injuries sustained by him in a motor vehicle accident. Her Honour delivered judgment on 12 March 2010.

4 The accident occurred as long ago as 28 August 2000. A car driven by the respondent (the defendant in the District Court) ran at high speed into the rear of the appellant's stationary vehicle. The collision occurred on the Castlereagh Highway, about 30 kilometres from Lithgow. Not surprisingly, liability was admitted and the only issue at trial was the assessment of damages.

5 It was common ground at the trial that under the provisions of the Motor Accidents Compensation Act 1999 (" MAC Act ") the appellant was not entitled to damages for non-economic loss as his degree of impairment did not exceed the threshold. Thus the appellant sought damages only in respect of past and future out of pocket expenses; past and future economic loss; and past and future domestic assistance (or attendant care services).

6 The essential question at trial was whether the injuries sustained by the appellant in the accident were the cause of any of the continuing disabilities from which he suffered before and at the trial and which impaired his earning capacity. The respondent's case included the contention that the appellant's underlying progressive neurological condition, which predated the accident, would have caused the appellant to experience much the same disabilities in any event. The primary Judge accepted this contention, finding that:

"the underlying neurological condition subsumed any relevant consequence of the motor vehicle accident by the time of Dr Farey's last examination on 25 November 2008...".

Dr Farey is an orthopaedic and trauma surgeon who assessed the appellant on a number of occasions between 17 October 2001 and 25 November 2008.

7 The primary Judge awarded the appellant damages of $126,512.30, comprising the following heads:

	$
Past economic loss	100,000.00
Past out of pocket expenses	21,512.30
Future out of pocket expenses	5,000.00
	126,512.30

The damages for past economic loss were awarded in respect of the appellant's loss of earnings from the date of the accident (28 August 2000) until the date her Honour found that the appellant's underlying neurological condition had subsumed the consequences of the accident (25 November 2008).

PRELIMINARY OBSERVATIONS

8 Resolving the appellant's claim has not been a smooth process. His statement of claim was filed on 27 May 2004, nearly four years after the accident. The hearing did not commence until 27 January 2009, nearly five years after the statement of claim was filed.

9 Despite the apparently confined issues, the trial occupied a total of ten hearing days, of which three were taken up with final submissions. The first three days of the trial were separated from the last seven by a period of nearly ten months. The postponement of the trial was to allow the appellant to undertake surgery for his condition as recommended by Dr Farey and others. In the event, the appellant decided not to undergo the surgery and the second part of the trial took place in November 2009.

10 At the trial, a very large number of reports were admitted into evidence from a variety of treating and assessing doctors. Five medical practitioners gave oral evidence and were cross-examined. A chronological summary of the medical reports prepared for the appeal came to 94 pages. It is unlikely that the multiplicity of reports and duplication of medical evidence (a matter on which the primary Judge commented) facilitated resolution of the critical issue in the case, namely whether the injuries sustained in the accident contributed to the appellant's incapacity for work up to the date of the trial and for the future.

11 The primary Judge delivered judgment on 12 March 2010. The judgment comprises 79 single spaced pages, with no internal paragraph numbering. The extensive quotations appearing throughout the judgment are reproduced in very small typeface.

12 I am conscious that it is not easy for judges - trial or appellate - to state reasons concisely. Few judges can claim unqualified success in that regard and I do not make that claim for myself. I am also conscious that, as is often the case in modern litigation, her Honour had a good deal of material to consider and synthesise, albeit in relation to confined issues. Sometimes very lengthy judgments are unavoidable or at least justifiable.

13 Nonetheless, with all respect to the primary Judge, it must be said that her Honour's judgment is not only unnecessarily long, but difficult to follow. There is no chronological account of relevant events or of the significant medical reports. It is not until the 25 th page that the appellant's contentions at the trial are detailed. Without this information, the relevance of the material in the previous 24 pages in the judgment is not apparent. The judgment contains much superfluous or irrelevant material and a good deal of repetition. As a result of these characteristics, as the argument on appeal demonstrated, the reasoning of the primary Judge on some issues is not clear.

14 A judgment in this form creates difficulties on an appeal for both the parties and the appellate court. Issues become harder to identify and much time may be devoted to understanding and presenting in digestible form the findings of fact, the reasoning of the court and the evidence on which it is based. The appellate judgment takes longer to prepare and the judgment itself is lengthier than if the issues and findings had been laid out more clearly. Costs of the appeal in such circumstances are inevitably increased.

15 A further point should be noted. Her Honour characterised the appellant as a " dreadful witness " and a " dreadful historian ". She was certainly entitled to reject the appellant's evidence (or some of it). But it is difficult to reconcile her characterisation of the appellant's evidence with later, more thoughtful, observations in the judgment. Her Honour acknowledged that:

"To some extent I find that the [appellant's] exaggeration and inconsistency reflects [his] perception of himself as an invalid rather than conscious and deliberate deception. " (Emphasis added.)

Her Honour also said that:

"There are many and complex reasons for the [appellant's] unreliability. The [appellant] suffers from some significant medical problems, some of which may well have affected his evidence and presentation ... His psychiatric problems (however caused) are relevant. Nonetheless, on occasion, there was a degree of lack of frankness on the plaintiff's presentation and testimony. Equally, on occasion he accepted frankly that he had certain capacities and made appropriate concessions, quickly and freely ." (Emphasis added.)

16 Sometimes it is appropriate and indeed necessary for trial judges to be critical - perhaps extremely critical - of the evidence or conduct of parties or witnesses. A judgment on these matters must be exercised and there is room for disagreement between reasonable observers as to the circumstances in which disapproval should be expressed and the manner in which it is expressed. But in my respectful opinion, having regard to the primary Judge's later observations, the disparaging characterisation of the appellant's evidence was not warranted.

BACKGROUND

The Appellant's History

17 The appellant was born in Italy in 1963 and came to Australia in 1972. His family settled in Mendooran, about 70 kilometres from Dubbo. He obtained the Higher School Certificate and attended Technical College, although he did not complete the course.

18 After some time in Brisbane, the appellant returned to Mendooran in 1984 and studied accountancy by correspondence. He later worked in a variety of jobs in Sydney, including a period as a self-employed painter.

19 In about 1997, the appellant returned to Mendooran, where his sister owned a hotel. At about that time, according to his evidence, the appellant agreed with his sister that he would assist in running the hotel as a bed and breakfast venture and improving the property in readiness for sale. He claimed that he was to receive one half of the sale price (the price was expected to be about $720,000) and $500 net per week for the work done. Although the appellant's evidence is not entirely clear on the point, apparently the weekly sum was to be paid when the hotel was sold.

Pre Accident Medical History

20 In late 1997, the appellant consulted a general practitioner about right- sided neck pain. He was referred to an orthopaedic surgeon, Dr Kalnins, whom he saw on 9 December 1997. Dr Kalnins reported that the appellant had been complaining of right-sided neck pain for approximately one year. Because of a " significant neurological finding ", Dr Kalnins referred the appellant to Dr Presgrave, a neurologist and a neurophysiologist. Dr Presgrave saw the appellant on 11 December 1997. He reported on 18 December 1997 that the studies he had undertaken were consistent with " neurogenic thoracic outlet syndrome ". There was a co-existing cervical spondylosis (non-inflammatory and degenerative disease of the spine).

21 A cervical spine X-ray performed on the appellant on 18 December 1997 showed that there was degenerative disc disease from C3 to C7, together with unco and paravertebral joint degeneration at all levels. Foraminal narrowing was also reported, as was a prominent cervical rib on the right.

22 On 22 January 1998, Dr Presgrave recorded that X-rays of the appellant had confirmed the presence of a large right cervical rib and mild to moderate spondylosis. Dr Presgrave recommended surgery for the thoracic outlet syndrome.

23 Dr Presgrave referred the appellant to a vascular surgeon, Professor Harris, who ordered a Magnetic Resonance Imaging (" MRI ") of the spine. This was carried out on 9 March 1998 by Dr Shatz at the Royal Prince Alfred Hospital. The MRI scan itself was not in evidence. However, Dr Schatz's report stated as follows:

"At C3/4, there is a right posterolateral bony ridge and disc herniation causing canal stenosis and compression of the right side of the cord. There appears to be some ill-defined increased signal intensity in the cord at this level. No significant abnormality is seen at C4/5 or C5/6.

At C6/7, there is a posterior disc herniation slightly asymmetric to the right, causing significant canal stenosis and again some compression of the right side of the cord. ...

Conclusion :

There are degenerative changes of the mid cervical spine. At C3/4 and at C6/7 there are posterior and right posterolateral disc herniations causing canal stenosis and cord compression at both levels."

(" Stenosis " refers to the narrowing of a hollow or tubular organ. " Herniation " refers to the process of formation of a hernia or protrusion).

24 At Professor Harris' suggestion, the appellant was referred by Dr Presgrave to a neurological surgeon, Dr McGee-Collett, who saw the appellant on 12 May 1998. Dr McGee-Collett reported to Dr Presgrave that the X-rays demonstrated a congenitally narrowed cervical canal with critical stenosis at C3/4 and C6/7. He continued as follows:

"I doubt very much from the clinical perspective whether his current problem is the result of spinal cord compression in the absence of other signs of radiculopathy or myelopathy. Whilst he might deteriorate from the point of view of his cervical spine in the future he certainly does not need cervical spine surgery at present...."

Dr McGee-Collett expressed the hope that surgery for the " presumed brachial plexus compression syndrome around the first rib " would be carried out by Professor Harris. (" Radiculopathy " is a diseased condition of the roots of nerves; " myelopathy " is a diseased condition of the spinal cord.)

25 The surgery was performed on 25 June 1998. The procedure involved resectioning of the cervical rib. In due course, the symptoms attributable to the cervical rib subsided.

26 On 6 August 1998, Dr Presgrave recorded that the appellant had

"moderately brisk lower limb reflexes, although they [were] not pathologically exaggerated".

Dr Presgrave thought that the appellant needed to be observed in relation to his cervical canal stenosis which was the reason for the moderately brisk reflexes. There was a reasonable likelihood that surgical management of this condition would be required " sometime in the future ".

27 On 9 February 1999, Dr Presgrave recorded that the appellant was experiencing increasing pain radiating to the left side of the neck and to the limbs. The appellant was also complaining of lumbar pain. The upper limb reflexes and knee jerks were said to have remained moderately brisk and plantar responses were flexor. Dr Presgrave suspected that the increase in neck pain was related to the cervical canal stenosis rather than to the cervical rib (which had been the subject of the operation eight months earlier).

28 On 30 March 1999, the last time Dr Presgrave saw the appellant, he recorded that the lumbar X-rays showed some mild degenerative changes. The lower limb reflexes were still quite brisk, but there was no spasticity and the plantar responses were flexor. The appellant still needed to be watched in relation to the cervical canal stenosis which was the cause of the lower limb hyper-reflexia.

The Accident and its Aftermath

29 When the accident occurred on 28 August 2000, the appellant was aged 36. He had pulled his Ford station wagon to the side of the Castlereagh Highway when it was hit by the other vehicle which was travelling at high speed. The appellant's vehicle was propelled into a ditch. The appellant was wearing a seat belt and was thrown forward and then backwards. He lost consciousness for a few seconds. As he was unable to open the door of his vehicle, he had to climb out the window in order to free himself.

30 The appellant and his mother (who was also in the vehicle) were taken by ambulance to Lithgow Hospital. The patient report prepared by the attending ambulance officer recorded that the appellant was touching his cervical spine and complaining of neck pain radiating to his right shoulder.

31 An X-ray conducted shortly after his admission to Lithgow Hospital showed no obvious fracture and no obvious disc narrowing. There was a limitation of neck extension, probably due to muscular spasm. A CT scan conducted the following day revealed a fracture of the left C2 lateral mass. The appellant was discharged from Lithgow Hospital on 29 August 2000.

32 On 30 August 2000, the appellant consulted Dr Kovach at the Hurlstone Park Medical Centre. According to a report prepared by Dr Costa of that practice on 13 December 2000, the appellant complained of neck pain radiating to the head and shoulders and " pins and needles " over the back of his neck. Between 30 August 2000 and 13 December 2000, Dr Costa saw the appellant on numerous occasions.

33 It appears that immediately after consulting Dr Kovach on 30 August 2000, the appellant was admitted to Concord Hospital for review and remained there until discharged on 1 September 2000. The hospital notes record that the appellant complained of a pinprick like sensation that episodically affected the left and right C2 nerve distribution. No other sensory deficits were detected on examination, but the appellant complained of a stiff neck. A CT scan conducted on 1 September 2000 did not identify any fracture in C1 to C3.

34 An MRI conducted on 31 October 2000, revealed the presence of significant spinal canal stenosis extending from C3 to C7. Spinal cord compression was present at C3-C4 and C6-C7. At C3-C4 there was significant impingement on the cord and " a little oedema or myelomalacia in the cord just below the level of the disc space ". At C6-C7 there was marked canal stenosis due to a broad based posterior disc protrusion. (Myelomalacia is a pathological softening of the spinal cord.)

35 Dr Costa, an occupational health consultant, saw the appellant on five separate occasions between 4 and 27 September 2000 and on several occasions subsequently. Dr Costa's report dated 13 December 2000 recorded that the appellant was in a lot of pain in early September 2000, mostly in the neck, shoulders and upper limbs. When reviewed on 25 and 27 September 2000, the appellant was complaining of a sore neck, numbness in the back of the neck and soreness from prolonged standing. Similar complaints were made in October and November 2000. Dr Costa considered at that time that a return to work was unlikely in the near future.

36 In his report of 13 December 2000, Dr Costa described the appellant's condition as follows:

"He did suffer rather severe injuries following an MVA in August, 2000 including to the head and the neck and the upper limbs, the chest and thoraco lumbar spine as well as nervous shock and it seems to have been a high speed accident.

He suffered an injury to the head and the neck and he was referred more recently to the clinical psychologist for pain and stress management and for further evaluation of the head injury.

It was at first felt that he suffered a fracture of the cervical spine but this was not confirmed subsequently. His injuries however are quite severe including chronic whiplash and aggravation of underlying degenerate and unstable neck with multiple disc disease and canal stenosis from C3 to C7 and the canal is markedly compromised at C3/4 and C6/7 where there is cord impingement and spinal cord oedema/myelomalacia. His neck is very bad, very stiff neck which has been slow to improve with significant symptoms in both upper limbs probably referred from the neck.

There is also foraminal stenosis with nerve root impingement present i.e. he has a quite severe condition of the neck and he is probably best for review by a neurosurgeon at this stage.

He also suffered more widespread injuries of the chest and the thoraco lumbar spine and the latter will probably require further investigation in the near future if his symptoms do not improve.

There is Post Traumatic Anxiety which is being perpetuated by his ongoing physical symptoms."

37 Dr Park, a neurologist, saw the appellant on 14 November 2000. Dr Park recorded that the MRI conducted on 31 October 2000 showed significant disc problems, mainly at C3/4 and C6/7 " causing significant narrowing of the canal and also causing mild compression ". On clinical examination, triceps and lower limb reflexes were brisk. Dr Park concluded that:

"Although signs are subtle there is probably mild cervical cord compression (brisk reflexes in tricep, fingers and lower limbs)."

38 Dr Farey saw the appellant on 9 October 2001. He reported on 17 October 2001 that the appellant displayed hyperreflexia, particularly on the left side. The MRI scan taken on 31 October 2000 had revealed the presence of significant spinal canal stenosis extending from C3 to C7. Spinal compression was present at C3-4 and C6-7 and " subtle myelomalacia was present at both these levels ". The spinal cord compression was secondary to osteophyte formation and a small disc protrusion at C3-C4, while at C6-C7 the spinal cord compression was secondary to posterior osteophyte formation. An MRI scan taken on 19 February 2001 revealed spinal cord compression maximal at the C3-C4 level, with slight myelomalacia distal to the disc space. Serious spinal cord compression was present at C6-C7. Dr Farey reported that the appellant experienced constant neck pain localised to the left side of his cervical spine, with the pain radiating to his left arm, forearm and hand. His symptoms were exacerbated by standing, walking and driving for lengthy periods.

39 In recounting the appellant's history, Dr Farey observed in his report of 17 October 2001 that multi-level degenerative disc disease had certainly pre-dated the accident. He continued as follows:

"At the time of review by myself the only sign of spinal cord compression was that of hyperreflexia in the left upper and lower limbs. It is certainly possible that the changes of myelomalacia or spinal cord oedema could have been produced by the motor vehicle accident. Equally they could have been present as a result of spinal cord compression due to the pre-existing advanced degenerative disc disease and congenitally narrow canal. This is particularly so as Mr Ridolfi did not develop any paraesthesia in his upper limb for a period of two months following his accident. The changes present in the spinal cord on the MRI scan are frequently asymptomatic for a significant period of time prior to the onset of symptoms.

I am in agreement ... with respect to the need for surgical intervention. Patients who have documented spinal cord compression and symptoms of spinal cord compression will develop a progressive increase in their symptoms with the passage of time if the spinal cord compression is not relieved. This may lead to progressive neurological deficit and impairment of hand function and the ability to walk. As a general rule, apart from neck pain, this is a painless condition producing fine motor dysfunction in the hands, unsteadiness of gait, numbness, paraesthesia and subjective weakness in the limbs. Mr Ridolfi has evidence of diffuse degenerative disease and diffuse narrowing of the spinal canal. As such the best operation is either laminoplasty or laminectomy extending from C3 to C7. ... in addition to laminectomy, an instrumented spinal fusion extending from C3 to C7 with the fixation contoured into lordosis would provide relief from the anterior spinal cord compression...". (Emphasis added.)

40 In a report prepared on 14 October 2002, Dr Presgrave (who last saw the appellant on 13 March 1999) gave the following prognosis for the appellant:

"[The appellant] also had cervical canal stenosis which at the time of last review was causing neck pain but was not associated with clinical radiculopathy or myelopathy. It is possible that the latter might have become symptomatic with the passage of time or for example, in the event of cervical injury."

Earlier in this report, Dr Presgrave recorded that when he had physically examined the appellant his " tendon reflexes were normal and there were no sensory abnormalities ".

41 Dr Farey prepared a further report on 7 January 2003, based on a review of the appellant's history. He recorded that the first MRI conducted on 9 March 1998 revealed the presence of cord compression at the C3-C4 and C6-C7 levels, but there was " no evidence of myelomalacia ". The second MRI scan of 31 October 2000 had confirmed the presence of myelomalacia due to spinal cord damage at the C3-C4 and C6-C7 levels. Dr Farey gave his prognosis as follows:

"The likely prognosis, even without the said motor vehicle accident of 28 th August 2000, was for [the appellant] to develop symptoms and signs of spinal cord compression in the long term. ... The exact timing of onset of symptoms is unpredictable but patients who have spinal cord compression will eventually develop symptoms and deterioration of neurological function. [The appellant] has developed hyperreflexia in the left upper limb and left lower limb which is consistent with early spinal cord compression. There was no clinical evidence of spinal cord injury immediately following the accident and [the appellant] did not develop symptoms of paraesthesia for a period of 2 months following his accident. In my opinion, apart from producing neck pain, the motor vehicle accident of 28 th August 2000 has not altered the outcome of his condition. I consider that the motor vehicle accident has caused an exacerbation of the underlying cervical spondylosis producing neck pain. There is no doubt that [the appellant] had cervical spondylosis prior to his accident."

42 Dr Buckley, a consultant physician in rehabilitation medicine, prepared a series of reports on dealing with the appellant's condition. In his report of 3 May 2003, he noted points of agreement with Dr Farey, but disagreed with Dr Farey in relating to the onset of the cervical spine impairment to the accident:

"Dr Farey allows this possibility but prefers the explanation of natural progression of pre existing spinal canal stenosis due to osteoarthritic change in the cervical spine.

However, in my opinion, the coincidence of the development of neurological signs, with exacerbation of osteoarthritic change of the cervical spine is too great for the events to be unrelated. There is agreement that the osteoarthritic change was exacerbated by the accident, and the neurological signs developed within approximately two months of the motor vehicle accident. In my opinion an accident of the severity described (vehicle going off the road into a ditch, and doors jammed,) coupled with the early onset of neck pain in the presence of osteoarthritic change, is sufficient reason to believe that the onset of spinal cord signs was in fact caused by that motor vehicle accident's exacerbation of the osteoarthritis in the cervical spine." (Emphasis added.)

43 Dr Farey's report of 23 February 2009, on which the primary Judge placed considerable reliance, described the appellant's symptoms and disabilities at the time of Dr Farey's last consultation on 25 November 2008, as follows:

"[The appellant] complained of frontal headache. He also continues to experience constant pain related to the cervical spine. He localises his pain to the left side and the pain radiated to the left shoulder and distally to the thumb and index finger. The pain in his upper limb was present most of the time. He reported that his symptoms were exacerbated by standing, walking, car travel and during any activity which involved rotation of his cervical spine. He also reported dizziness with left sided rotation. He was able to partially relieve his symptoms by wearing a soft collar. He described intermittent electric shock like sensations in his left upper limb radiating to the hand without similar symptoms in the right upper limb. He complained of chronic numbness in relation to his left hand and in particular to the thumb and index finger. He complained of weakness particularly with respect to grip involving his left hand. He also described impairment of fine motor function in his hands. He had difficulty doing up buttons and he dropped small objects. He had not developed disturbance of gait particularly when initiating ambulation after a period of rest. He described intermittent paraesthesia in both upper limbs. He also complained of constant low back pain without lower limb radicular pain ... [The appellant] stated that he was very depressed by his overall situation.

...

[The appellant] stated that he had significant disability as a result of his condition. He had not been able to work in any capacity. He reported difficulty with the activities of daily living. In particular he had limited standing, walking and sitting tolerance with his tolerance being no greater than 20 minutes for any of these activities. He also reported difficulty lifting and bending. ...

[The appellant] also reported difficulty performing home duties. He stated that he spent most of his time in a recliner chair. He continues to live with his sister who undertook household duties including making beds, cooking and cleaning ...".

44 Under the heading " Apportionment of Disability ", Dr Farey said the following:

"There is no doubt that [the appellant] had pre-existing cervical spondylosis. In my opinion the accident has rendered him symptomatic. A Magnetic Resonance Imaging study performed on 9 March 1998 for investigation of right upper limb symptoms revealed the presence of congenital narrowing of the spinal canal and a degree of spinal cord compression art the C3/4 and C6/7 levels. It was also reported that there appeared to be some ill defined increased signal intensity in the cord at the C3/4 level ... No comment was made regarding the presence of myelomalacia at the C6/7 levels. In my opinion there has been progression of the changes in subsequent MRI scans performed following this scan. From my observations, I have no doubt that the patient has had a significant deterioration of his condition since my initial assessment some of which is due to the delay in determination of liability. I would apportion the disability and need for ongoing treatment including surgery, non operative treatment and supportive care to be 65% due to the accident and 35% due to pre-existing cervical spondylosis and congenital narrowing of the spinal canal."

45 In a later report of 16 November 2009, Dr Farey said the following:

"In my report of 23 February 2009 I stated that I would apportion the disability need for ongoing treatment including surgery, non operative treatment and supportive care to be 65% due to the accident and 35% due to pre existing cervical spondylosis and congenital narrowing of the spinal canal. By this I mean that the delay in determination of this case has led to progressive changes of myelopathy in this patient. The court system must take some responsibility for this as it has now been nine years since the accident and the case has yet to be determined. Unfortunately this has led to a progression of the myelopathy with increased symptoms and increased signs as outlines in my report.

The natural history of cervical spondylotic myelopathy is one of progression of changes including increased symptoms and neurological deficit. Seventy five percent of patients with this condition experience episodic worsening, twenty percent experience a steady progression of their symptoms and five percent have a rapid progression of their symptoms ... Data presented at the Cervical Spine research Society in December 2008 regarding this condition revealed that duration of myelopathy symptoms for more than six months leads to negative treatment outcomes ...

It is clear from my review of the patient that there has been a deterioration of his condition which is in accordance with the natural history of this condition. Unfortunately the delay in determination of this case and the non compliance with my initial recommendation of early surgical intervention has led to a deterioration of the patient's condition and his long term prognosis even with surgery. More correctly I should state that I would apportion the disability need for ongoing treatment including surgery, non operative treatment and supportive care to be sixty-five percent due to the delay in determination of this case and thirty-five percent due to pre-existing cervical spondylosis and congenital narrowing of the spinal canal. There is no doubt that his prognosis has been adversely affected by the prolonged delay in settlement of the claim, the reasons for which have not been disclosed to me."

The Appellant's Post-Accident History

46 It appears that after his discharge from Concord Hospital, the appellant went to live with his sister who had moved to Sydney. Except for a short time when he returned to Mendooran in an unsuccessful effort to restart the business, the appellant thereafter lived with his family in Sydney.

47 Apart from the short period in Mendooran, it appears that the appellant has not worked since the accident. He commenced receiving a disability pension in 2004 and was in receipt of that pension at the trial.

PRIMARY JUDGMENT

48 According to the primary Judge, the appellant presented three alternative cases at trial. The " highest and best case " was that the motor vehicle accident precipitated, aggravated or rendered symptomatic the progressive neurological condition known as myelomalacia. Her Honour described this as " Case A ".

49 Case A proceeded on the basis that, although the appellant had a congenitally stenosed spinal cord before the accident, there were no signs of myelomalacia prior to October 2000. On Case A, the most likely cause of the onset of myelomalacia was a whiplash injury sustained by the appellant in the accident.

50 " Case B " was that the accident had exacerbated the appellant's pre-existing cervical spondylosis. Consequently, the previously asymptomatic spondylosis had been rendered symptomatic, producing permanent effects in terms of pain. On Case B, there had been no aggravation of the underlying neurological condition in terms of the canal stenosis and the development of myelomalacia.

51 " Case C " was that the appellant had suffered only a short term whiplash without spondylosis. It was common ground at the trial the appellant at least suffered short term muscle strain and neck pain. The primary Judge found that the appellant's minimal injury was the short term whiplash which was likely to have an effect for about 12 months.

52 The primary Judge rejected Case A. She did so in part because the appellant had exhibited signs of neurological deficit before the accident. She placed considerable weight on Dr Presgrave's opinion in August 1998 that there was a reasonable likelihood that the appellant might require surgical management of his condition at some time in the future.

53 Her Honour also stated that Dr Presgrave's report of 14 October 2002 " contained a fundamental error in its starting assumptions ". In particular, the statement that on examination the tendon reflexes were normal and there were no sensory abnormalities was inconsistent with Dr Presgrave's identification of brisk reflexes in the lower limbs in August 1998 and in the upper limbs in February 1999. In her Honour's view, Dr Farey was correct to say (as he did in his oral evidence) that Dr Presgrove's 2002 report rested on a false premise.

54 Her Honour also relied on what she found to be a period of some two months between the motor vehicle accident and the manifestation of the appellant's neurological symptoms. She accepted what she described as " reliable specialist medical opinion ", in particular Dr Farey's opinion, that the gap was " fatal to the existence of any causal nexus " between the accident and any neurological injury or impairment. The medical opinion was reinforced by the appellant's ability immediately after the accident to climb out of his vehicle.

55 In her Honour's view, the onset of significant neurological signs two months after the accident reflected the unrelated and " natural " development of the appellant's pre-existing neurological condition. There was therefore no causal relationship between the accident and the appellant's neurological condition after the accident.

56 In the context of discussing Case A, the primary Judge found that over the years many treating doctors and some of the medico-legal specialists had recommended that the appellant have surgery to address his neurological condition. One of the neurosurgeons, who examined the appellant in January 2001 (Dr Bentivoglio), described the surgery as " decompressive surgical laminectomy, which is an extensive procedure for a 37 year old male ".

57 Dr Farey, in his report of 23 February 2009, repeated his recommendation that the appellant should undergo surgery for his spinal cord condition. Dr Farey described the required surgery as follows:

"[The appellant] should undergo C3 to C7 laminectomy, stabilisation and fusion for his condition. He would also require foraminotomies particularly at the C5/6 level as he clearly has evidence of C6 radiculopathy on the left side and there is associated foraminal stenosis. The rationale for the surgery is the following. [The appellant] has pre-existing congenital narrowing of the spinal canal with superimposed degenerative change. This has led to compression of the spinal cord. There is also retrolisthesis or posterior displacement of the C3 vertebral body on the C4 vertebral body as a consequence of the degenerative disc disease. This is a significant deformity and causes spinal cord compression in many patients. Failure to address this will lead to persistence of the instability and dynamic spinal cord compression even in the presence of laminectomy. [The appellant] has also developed very mild kyphosis which can be corrected with extension of the spine. Kyphosis is also a cause of anterior spinal cord compression. Consequently in addition to the laminectomy, the patient will require stabilisation and fusion with contouring of the spine to a degree of lordosis to relive the anterior spinal cord compression and also produce stability. The surgery is likely to relieve some but not all of the neurological symptoms and in particular is likely to relieve the upper limb radicular symptoms which he experiences. However he may have some impairment of hand function and some residual numbness in his hand as a result of the intrinsic damage within the spinal cord at both the C3/4 and C6/7 levels (myelomalacia). The surgery is unlikely to completely relieve the patient's neck pain but some improvement would be expected with immobilisation of the degenerate segments and correction of the instability at the C3/4 level."

58 As I have noted, the trial was adjourned after three hearing days to enable the appellant to undergo the recommended surgery. However, on 13 March 2009, the appellant's solicitor informed the primary Judge that the appellant had decided not to go ahead with the procedure. In his later evidence, the appellant explained his decision on the ground that his treating neurosurgeon (Dr McKechnie) had warned that there would be more pain after the operation and that the surgery was " very dangerous ", carrying with it the risk of spinal cord bleeding leading to paralysis.

59 The primary Judge appeared to be very critical of the appellant's decision. She acknowledged that it was " his decision ... and his right ". Rather oddly, she said that in view of the appellant's general unreliability as a witness, she would place little weight on his evidence (by which she seems to have meant his reasons for not having surgery). But there was no evidence to the contrary and, in the end, her Honour seems to have accepted the appellant's evidence as to the subjective reasons why he had decided not to have surgery.

60 The primary Judge observed that the appellant's " failure to have surgery comes at a price in both this litigation and in life ". Later she said that " responsibility for failure to have surgery lies at the [appellant's] feet because the surgery is not had by the [appellant's] own decision ". In making these observations, her Honour appears to have been unmoved by Dr Farey's evidence as to the risks of the surgery:

"Q. And I take it that as neck surgery goes that's a fairly substantial undertaking?

A. Very, its about three hours worth of surgery to do that.

Q. And in fusing the neck, whilst you may alleviate the spinal cord pressure, does it in turn create a different issue which is you're placing increased wear and tear on the discs above and below the area where you've fused?

A. That is also correct.

Q. So there's a trade-off for having the spinal cord relieved which is you are going to place greater pressure on immediately adjacent discs to the fusion site?

A. That's correct, but if you don't fuse him in this situation, see symptoms of spinal cord compression are both produced by a static compression but also a dynamic compression with every neck movement, and at the C3/4 level it actually has, instead of the vertebral bodies being lined up exactly, he actually has a shift backwards of C3 on C4, that is the worst type of spinal cord compression you can have, and unless you stabilise that [and] realign the spine then, if you just do a simple laminectomy the patient will actually get worse.

Q. I understand the explanation--

A. So that's a trade-off, but only about 10% of people long term have to have further surgery, following a procedure like that.

Q. By that you mean further surgery to the adjacent discs where over time they've sustained damage as a consequence of the fusion?

A. Yes, but also if you look at the natural history, if you keep on taking x-rays of patients as they age, whether you have a spinal fusion or not you'll get degeneration in all of those discs.

Q. But if you've stiffened out by fusing three or four discs together, you're placing much greater strain on the adjoining points than a normal spine --

A. That's absolutely correct.

Q. I think the point I'm making, and see if you agree with it as I endeavour to put it in lay terms, is that there is a price you pay for the fusion which is a higher probability of increased degeneration in the adjacent discs to the fusion site?

A. Yes. But that's better than being paralysed.

Q. I accept it's a price that might be worth paying, but it is nonetheless a price extracted for the relief of the spinal cord?

A. Yes it is."

61 Dr Cummine, an orthopaedic surgeon called by the respondent, was even more sceptical about surgery for cervical myelopathy which he said had not yet been shown to be beneficial. In his cross-examination he agreed that surgery could create deterioration in the discs not directly affected by the operation and that, while fusion might help in one area, it creates potential problems in other areas. Dr Cummine also said that he would not be at all critical of the appellant if he was reluctant to undertake the surgery that other doctors had recommended. The primary Judge appears also to have been unmoved by Dr Cummine's evidence on this point.

62 The primary Judge accepted the appellant's Case B, despite finding that the appellant had not accurately reported his pre-accident history to some of the doctors who assessed his condition after the accident. In particular, her Honour noted that the appellant had relied on Dr Farey's opinion to support his contention that the accident exacerbated his pre-existing spondylosis. In her Honour's view, Dr Farey had expressed his opinion on the basis of a mistaken belief, induced by the appellant's inaccurate recounting of his medical history, that the pre-existing cervical spondylosis had not caused the appellant significant neck pain prior to the accident. The primary Judge found, consistently with the contemporaneous reports of Dr Presgrave, that the appellant had in fact complained of neck pain in 1998 and 1999. Accordingly, Dr Farey's assumption that the appellant's condition was asymptomatic before the accident was undermined.

63 Nonetheless, according to her Honour, it did not follow that the appellant's pain had not been exacerbated by the injuries sustained in the accident. She accepted that the appellant's actions and complaints had changed after the accident and that his symptoms had worsened after the accident. Indeed, so much had been conceded by the appellant.

64 The primary Judge considered that the appellant's claim to have suffered continuing disabilities as a result of the accident was complicated by the likely progression of his pre-existing condition. Her Honour said that the complexity had been encapsulated by Dr Farey's opinion, expressed in October 2004:

"[t]hat regardless of the exacerbation of underlying cervical spondylosis caused by the motor vehicle accident [the appellant] would have been eventually rendered unfit for his pre-injury duties in any event because of spinal cord compression. This condition is a progressive condition. Apart from neck pain, it is generally a painless condition presenting with fine motor impairment in the hands, unsteadiness of gait, possible numbness in the fingertips of both hands and subjective weakness. The natural history of his condition is one of slow progression with increasing neurological deficit when untreated."

65 Her Honour summarised her conclusions as follows:

" . In 1998-1999, the [appellant] had, and complained, about neck and back pain; although the [respondent's] act aggravated that existing ailment, and (any) associated incapacity, in the sense contemplated in Watts v Rake [(1960) 108 CLR 158] and Purkess v Crittenden [(1965) 114 CLR 164].

. The [appellant] has now, and had before the accident, significant vulnerability; but his condition has deteriorated significantly over the years by natural progression of an underlying neurological condition that has no causal nexus with the motor vehicle accident, which supervening happening has, in the circumstances, prevented a particular damage, here economic loss, occurring as a result of the tort."

66 The primary Judge appeared to accept that the authorities cast the burden on the respondent to disentangle the consequences of the aggravation of an existing condition from those consequences that would have ensued in any event from the deterioration of a pre-existing condition. She found that:

"To the extent that any onus falls upon the [respondent], that is discharged fully on the evidence as to the plaintiff's condition since he last was examined by Dr Farey, in November 2008 .... In the period between Dr Farey's examination in 2004 and 2008, there is a shading to grey in the evidence which is determinable only with the relatively blunt instrument of the onus.

That condition had deteriorated by November 2008 to the point that it had overwhelmed the consequences of the motor vehicle accident . It is quite possible that that had occurred sometime before November 2008; but an element of speculation attends the when [sic] in any such analysis.

...

It is not possible to nominate the date on which this occurred with any precision. Allowing an error margin in the [appellant's] favour, which may involve some unjustifiable inflation of his claim in this context, I find that the underlying neurological condition subsumed any relevant consequence of the motor vehicle accident by the time of Dr Farey's last examination on 25 November 2008, effectively 8 years after the motor vehicle accident. Thereafter the supervening happening prevents loss or damage occurring that sounds in economic loss, including care services." (Emphasis added.)

67 The primary Judge noted the comments made by Dr Farey, in his report of 23 February 2009 under the heading "Apportionment of Disability " (extracted at [44] above). Her Honour also quoted Dr Farey's comments in his subsequent report of 16 November 2009 (extracted at [45] above.)

68 Her Honour observed that the force of Dr Farey's criticism was muted by the fact that the refusal to have surgery was the appellant's decision and was not the consequence of a " Dickensian process ". She added this somewhat puzzling observation:

"The application of Dr Farey's criticism to the fact of the [appellant's] decision not to have surgery transmogrifies Dr Farey's assessment into 65% due to the plaintiff's failure to have surgery and 35% due to pre existing cervical spondylosis and congenital narrowing of the spinal canal."

69 The primary Judge approached the appellant's claim for loss of earning capacity on the basis that the accident produced consequences for the appellant's earning capacity over a closed period of about eight years. Her Honour considered that calculation of the appellant's loss was complicated by his " patchy to non-existent " employment history, inconsistencies in the information he gave to doctors, constraints on his physical capacity by reason of pre-existing conditions and the potentially catastrophic consequences of even mild trauma. She rejected what she understood to be the appellant's evidence that he had earned about $26,000 net from his work at Mendooran in each of the two financial years prior to the accident. Instead her Honour found that the appellant's earning capacity was a total of $34,724 over the five year period from 1 July 1995 to 30 June 2000, inclusive of social security payments (that is, $6,944.80 per annum). Her Honour also found that if there was an opportunity to make a profit in the development and sale of the business, it was " a possibility so very slim that is wraithlike in its dimensions ".

70 According to the primary Judge, the parties were ultimately agreed that it was possible only to quantify damages for past economic loss " as a lump sum or 'buffer' ". Her Honour took as the basis for calculation one third of average weekly earnings for roughly eight years. This produced a figure of $100,000 as a " rough and ready ... cushion " for past economic loss.

71 The appellant's claim for future economic loss failed because his circumstances were the same as they would have been had the accident not occurred. Her Honour found that the appellant would have made the same decision not to have surgery, regardless of the accident.

72 The primary Judge found that the appellant's need for past domestic assistance did not meet the threshold test set by the MAC Act 1999. Since any need for future care was attributable to the appellant's neurological condition, rather than the accident, his claim in respect of future commercial care also had to be rejected.

73 Her Honour awarded $31,925 in respect of past out of pocket expenses, from which $10,413 in payments made by the respondent under the Motor Accidents Compensation Act 1999 had to be deducted. A further allowance of $5000 was made for future out of pocket expenses.

SUBMISSIONS

Appellant's Submissions

74 Ms Norton SC, who appeared with Ms Fraser for the appellant, challenged the primary Judge's finding that the appellant's underlying neurological condition subsumed the consequences of the accident no later than 25 November 2008. She submitted that her Honour should have found that the accident triggered a deterioration in the appellant's neurological condition and thus materially contributed to his inability to undertake any gainful employment. Specifically she submitted that the primary Judge should have found that as a result of the accident the appellant suffered:

• increased spinal cord compression;
• myelomalacia;
• myelopathy; and
• neck pain.

75 Ms Norton submitted that the primary Judge had been wrong to find that the appellant's post-accident neurological signs did not manifest themselves for at least two months (this finding being the basis for her Honour's conclusion that the appellant's post accident neurological symptoms were unconnected with the consequences of the accident). She submitted that the ambulance and hospital records suggested that in the immediate aftermath of the accident the appellant experienced symptoms indicative of neurological damage inflicted as a direct result of the accident. Ms Norton particularly relied on a notation in Concord Hospital's records recording that on 30 August 2000, two days after the accident, the appellant had experienced episodic pinprick sensations.

76 Ms Norton recognised that Dr Farey's opinion as to the appellant's pre-accident condition played an important point in the primary Judge's findings. Dr Farey, on the basis of clinical notes and reports of treating doctors, considered that the appellant was already suffering from spinal cord compression prior to the accident and was experiencing symptoms associated with that congenital condition. On this basis, Dr Farey opined that the likely prognosis for the appellant, independently of the accident, was for a progressive increase in his symptoms and in the extent of neurological deficit. Ms Norton submitted that the Honour should have found that before the accident the appellant did not:

• suffer spinal cord compression;
• have clinically observable signs of myelomalacia or cervical myelopathy; and
• experience pain in the neck or elsewhere that materially interfered with the appellant's work activities or daily living.

77 Finally, Ms Norton submitted that, as her Honour accepted, the accident clearly had contributed to symptoms experienced by the appellant. The respondent had not demonstrated that the post-accident deterioration in the appellant's condition was unassociated with the consequences of the accident. She stressed that even Dr Farey (in his report of 23 February 2009) had attributed 65% of the appellant's disability and need for ongoing care to the accident and only 35% to his pre-existing cervical spondylosis and congenital narrowing of the spinal canal. There was simply no basis for a finding that, so far as the appellant's earning capacity was concerned, the consequences of the accident had been entirely spent by November 2008.

78 The appellant's written submissions challenged the award of damages for past economic loss on the ground that it was " manifestly too low ". The submissions accepted that the appellant had failed to demonstrate that the appellant was likely to earn average weekly earnings. It was put that the years between the accident (when the appellant was 36) and the trial (when he was 47) would have been the most productive of his life. Accordingly, an award assessed on the basis of an earning capacity of $12,121 per annum did not adequately reflect his capacity to obtain remunerative employment. A figure of $500 per week was suggested as the appropriate starting point.

79 It was further submitted that if the appellant succeeded on the medical issues, he was entitled to an award for future economic loss, based on a likely working life of another 20 years after the trial. It was suggested that an award calculated on the basis of $500 per week net for 20 years, discounted by 20 per cent, would be an appropriate award of damages for loss of future earning capacity.

80 The appellant submitted that the rejection of his claim for future loss was made on the basis that any need for future care was related to his congenital neurological condition and was unrelated to the accident. It followed that if that basis were found to be incorrect, the appellant would be entitled to damages in respect of his future need for attendant care services. The appellant's written submissions proposed that damages should be calculated on the basis that the appellant had a life expectancy of 38 years and would require 10 hours care per week at $40 per hour.

81 The appellant further submitted that her Honour erred in finding that the appellant's need for past domestic assistance failed to satisfy the threshold imposed by s 128 of the MAC Act. Ms Norton invited the Court to award damages under this head.

Respondent's Submissions

82 In substance, Mr Bartlett SC, who appeared with Mr Fitzsimmons for the respondent, supported the findings made and conclusions reached by the primary Judge. I refer later to some additional submissions advanced by Mr Bartlett.

REASONING

Principles and Relevant Statutory Provisions

Causation

83 If a plaintiff proves that he was incapacitated as a result of the injuries he sustained in an accident, he or she is entitled to damages in respect of the incapacity. The plaintiff's entitlement to damages is not reduced because he or she had a pre-existing condition which made the consequences of the accident more severe than if that condition had not been present: Watts v Rake [1960] HCA 58; 108 CLR 158, at 160, per Dixon CJ; Shorey v PT Ltd [2003] HCA 27; 77 ALJR 1104, at 1111 [44], per Kirby J.

84 The issue of causation is determined in accordance with the principles laid down by s 5D of the Civil Liability Act 2002 (" CL Act "): see s 3B(1)(a), (2)(a).. Section 5D relevantly provides as follows:

"(1) A determination that negligence caused particular harm comprises the following elements:

(a) that the negligence was a necessary condition of the occurrence of the harm ( factual causation ), and

(b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused ( scope of liability ).

(2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.

(3) ...

(4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party."

In determining liability for negligence, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation.

85 In Varga v Galea [2011] NSWCA 76, McColl JA (with whom Beazley JA and Handley AJA agreed) observed (at [9]) that s 5D(1) requires:

"the application of the 'but for' test of causation: Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; (2009) 239 CLR 420 (at [45]). The statutory content of s 5D, and the extent of any continuity with the common law, awaits judicial elucidation: Zanner v Zanner [2010] NSWCA 343 (at [11]) per Allsop P (Young JA agreeing). At common law, causation is a question of fact, to be approached in a commonsense manner, in which the 'but for' test plays an important role: March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 (at 5l5 - 546) per Mason CJ (Toohey and Gaudron JJ agreeing)."

Independent Supervening Incapacity

86 Where the plaintiff establishes a prima facie case that the incapacity has resulted from the injuries sustained in the accident, the defendant has the burden of adducing evidence to show that the incapacity would have come about independently of the accident, for example by reason of a pre-existing degenerative condition: Purkess v Crittenden [1965] HCA 34; 114 CLR 164, at 167-168, per Barwick CJ, Kitto and Taylor JJ (with whom Windeyer J agreed). However, the burden of proving on the balance of probabilities that the incapacity was caused by the accident always rests on the plaintiff: Purkess v Crittenden , at 168.

87 The principles stated in Watts v Rake and Purkess v Crittenden now must be understood in the light of the principles stated in Malec v JC Hutton Pty Ltd [1990] HCA 20; 169 CLR 638. These principles were summarised by Ipp JA (with whom Mason P agreed) in Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208, at [103]:

"(a) In the assessment of damages, the law takes account of hypothetical situations of the past, future effects of physical injury or degeneration, and the chance of future or hypothetical events occurring.

(b) The court must form an estimate of the likelihood that the alleged hypothetical past situation would have occurred.

(c) The court must form an estimate of the likelihood of the possibility of alleged future events occurring.

(d) These matters require an evaluation of possibilities and are to be distinguished from events that are alleged to have actually occurred in the past, which must be proved on a balance of probabilities."

88 Ipp JA explained (at [104]-[107]) that:

"104 ... Malec has an important bearing, for example, on the way in which a court must determine whether a defendant has discharged the 'disentangling' evidentiary burden on it of showing that part of the plaintiff's condition was traceable to causes other than the accident and that, had there been no accident, the plaintiff would have suffered disability from his pre-existing condition.

105 Where a defendant alleges that the plaintiff suffered from a pre-existing condition, the evidential onus as explained in Watts v Rake and Purkess v Crittenden remains on the defendant and must be discharged by it. Nevertheless, to the extent that the issues involve hypothetical situations of the past, future effects of physical injury or degeneration, and the chance of future or hypothetical events occurring, the exercise of "disentanglement" discussed in those cases is more easily achieved. That is because the court is required to evaluate possibilities in these situations - not proof on a balance of probabilities.

106 Without intending to give an exhaustive list of possibilities, it may be that, had the defendant's negligent act not occurred, a pre-existing condition might have given rise to the possibility that the plaintiff's enjoyment of life and ability to work would have been reduced and to a susceptibility to further injury; in addition, other causes entirely unrelated to the defendant's negligent act might have contributed to the plaintiff's ultimate condition.

107 Appropriate allowances must be made for these contingencies. A proper assessment of damages requires the making of a judgment as to the economic and other consequences which might have been caused by a worsening of a pre-existing condition, had the plaintiff not been injured by the defendant's negligence. A pre-existing condition proved to have possible ongoing harmful consequences (capable of reasonable definition) to the plaintiff, even without any negligent conduct on the part of the defendant, cannot be disregarded in arriving at proper compensation."

See also Insurance Australia Ltd v Helou [2008] NSWCA 240; 51 MVR 414, at 421-423 [51]-[56], per Campbell JA (with whom Allsop P and Bell JA agreed); Varga v Galea [2011] NSWCA 76, at [51]-[52], per McColl JA (with whom Beazley JA and Handley AJA agreed).

Future Economic Loss

89 In dealing with a claim for future economic loss, a court must have regard to s 126 of the MAC Act, which provides as follows:

"(1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant's most likely future circumstances but for the injury.

(2) When a court determines the amount of any such award of damages it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events might have occurred but for the injury.

(3) If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted."

Attendant Care Services

90 Section 128 of the MAC Act imposes restrictions on the award of compensation for attendant care services. It relevantly provides as follows:

"(1) Compensation, included in an award of damages, for the value of attendant care services:

(a) which have been or are to be provided by another person to the person in whose favour the award is made, and

(b) for which the person in whose favour the award is made has not paid and is not liable to pay,

must not exceed the amount determined in accordance with this section.

(2) No compensation is to be awarded if the services would have been provided to the person even if the person had not been injured by the motor accident.

(3) Further, no compensation is to be awarded unless the services are provided (or to be provided):

(a) for at least 6 hours per week, and

(b) for a period of at least 6 consecutive months."

Section 128(3) was inserted by the Civil Liability Legislation Amendment Act 2008. However, the amendment applies to liability arising and proceedings commenced before the 2008 Act came into force: MAC Act, Sch 5, Part 7, cl 34.

Factual Issues

The Appellant's Unwillingness to Undergo Surgery

91 There was much discussion in argument as to the precise basis on which the primary Judge reached the conclusion that the consequences of the accident had been overtaken by the progression of the appellant's degenerative condition no later than 25 November 2008. In particular, attention was directed to the significance of her Honour's repeated references to the failure of the appellant to undergo the surgery recommended by Dr Farey and other doctors.

92 Despite her Honour's forthright criticism of the appellant's decision not to undergo surgery for his congenital condition, I do not think that she intended to find that the appellant's decision was unreasonable and, for that reason, ended any causal relationship that otherwise existed between the accident and the appellant's incapacity for work in November 2008. Nor do I think that her Honour was intending to convey that the appellant, by declining to undertake the surgery, was solely responsible thereafter for his deteriorating condition.

93 If her Honour had intended to make such findings I think that they would have been vulnerable to challenge. It is one thing for doctors to recommend major surgery to arrest a progressive condition. It is quite another to characterise a refusal to undergo the surgery as unreasonable, particularly when the medical evidence demonstrates that the surgery not only carries significant inherent risks but that it may produce serious complications later on.

94 The key finding made by the primary Judge was that the appellant's pre-existing congenital spinal cord compression, in the absence of surgical intervention, would inevitably progress to the point where he would be unable to work. As I have noted, that point, in her Honour's view, was reached no later than 25 November 2008. As I read the judgment, her Honour considered that the appellant's unwillingness to undergo corrective surgery to be relevant because this was the only opportunity for him to halt the otherwise inevitable decline in his physical condition and in his capacity for gainful employment.

95 Since the appellant's attitude to surgery was known at the trial, her Honour did not think it necessary to assess the chances that corrective surgery would check the deterioration in the appellant's condition (although she seemed to think that the chances were high, despite the risks). She approached the question of the likely deterioration in the appellant's underlying condition on the basis that the appellant was not prepared to undergo the recommended surgery. Interpreted in this way, I do not think that her reasoning on this issue discloses error.

Misinterpretation of Dr Presgrave's Report

96 In support of the appellant's challenge to the finding that he experienced symptoms associated with spinal cord compression before the accident, Ms Norton submitted that both the primary Judge and Dr Farey (on whose opinion her Honour relied) misinterpreted Dr Presgrave's report of 14 October 2002. It will be recalled that her Honour gave that report little weight because it contained a " fundamental error ". The error was said to be Dr Presgrave's statement in the report that on examination the appellant's " tendon reflexes were normal and there were no sensory abnormalities ".

97 The primary Judge considered that Dr Presgrave had overlooked his own earlier reports in which he had identified brisk reflexes in the appellant's lower limbs in August 1999 and in the appellant's upper limbs in February 1999. Dr Farey in his oral evidence at first said that there was a " variance " between Dr Presgrave's two earlier reports and the statement in the October 2002 report. Later in his evidence, in response to a leading question from her Honour, Dr Farey accepted the suggestion that Dr Presgrave's 2002 report rested on a " false premise ".

98 It is clear that both her Honour and Dr Farey misunderstood the relationship between Dr Presgrave's 2002 report and his earlier reports relating to his clinical examinations of the appellant. The words in the 2002 report said to constitute a " fundamental error " were in fact taken verbatim from Dr Presgrave's report of 11 December 1997. In the absence of any cross-examination of Dr Presgrave (who was not called to give oral evidence), there is no reason to doubt that his report of 11 December 1997 accurately recorded that at that stage the appellant was not experiencing sensory disturbance and did not display any briskness in his reflexes. The section of the October 2002 report in which Dr Presgrave quoted from his 1997 report was dealing with the appellant's condition in December 1997, not (as her Honour apparently assumed) his condition at the time of the later examinations.

99 Dr Presgrave referred to the appellant's brisk reflexes in his report of 6 August 1998. In that report, he noted that the appellant's lower limb reflexes were moderately brisk but they were " not pathologically exaggerated ". Dr Presgrave attributed the moderately brisk reflexes to the cervical canal stenosis and observed that there was a reasonable likelihood that he might require surgical intervention at some unspecified time in the future. The only recommendation made by Dr Presgrave at that time in relation to the appellant's physical activities was that he should not do sustained heavy lifting.

100 In his report of 9 February 1999, Dr Presgrave again noted that the appellant was displaying moderately brisk upper limb reflexes and knee jerks. He assessed the appellant's neck pain as related more to the canal stenosis than to the cervical rib (later dealt with by surgery). On 30 March 1999, Dr Presgrave again noted that the lower limb reflexes were " quite brisk " but that there was no spasticity and plantar responses were flexor.

101 Dr Presgrave clearly had his earlier reports before him when he prepared his 14 October 2002 report and was aware that in 1998 and 1999 he had recorded the appellant's moderately brisk reflexes. Nonetheless, he expressed the view that the appellant's cervical canal stenosis was not associated with clinical radiculopathy (diseased condition of nerve roots) or myelopathy (diseased condition of the spinal cord). He thought that it was possible that the canal stenosis might have become symptomatic with the passage of time or in the event of cervical injury.

102 The primary Judge was not justified in rejecting Dr Presgrave's 2002 report on the ground that it was affected by a fundamental error. The report was not affected by any such error and it was not inconsistent with Dr Presgrave's earlier reports. Since Dr Presgrave was the appellant's treating neurologist prior to the accident, the views expressed in his report must carry considerable weight, particularly in the absence of any direct challenge to his opinion.

Was Compression Present Prior to the Accident?

103 Dr Presgrave's October 2002 report suggests that he had not detected signs of myelomalacia when he last examined the appellant in November 1999. His report did not specifically consider whether by that time there was compression of the spinal canal, although he recorded the existence of canal stenosis. The moderately brisk reflexes observed by Dr Presgrave were consistent with some degree of compression, but the presence of such reflexes is not necessarily decisive. This point was made in a report dated 19 June 2009 by Dr Cummine, who explained that:

"Brisk reflexes on their own do not constitute a diagnosis of upper motor neurone compromise, although they may suggest it. This is because the briskness of human reflexes varies widely from patient to patient."

104 However, there is objective evidence supporting the finding that the appellant was experiencing not only canal stenosis but some compression of the spinal cord prior to the accident. The report of the MRI conducted on 9 March 2008, well over two years before the accident, recorded compression on the right side of the spinal cord at both the C3-C4 and C6-C7 levels. Unfortunately, as I have noted, the MRI scan itself was not in evidence, so that the doctors preparing later reports did not have the advantage of scrutinising the scan itself. Nonetheless, there was no suggestion that Dr Schatz wrongly interpreted the scan. Later medical reports, for example those of Dr Farey and Dr Cummine, accepted the MRI report as accurate.

105 Thus her Honour's finding that spinal cord compression was present as recorded in the MRI report of 9 March 2000 cannot be disturbed.

Was Myelomalacia Present Before the Accident?

106 The question of whether myelomalacia was present before the accident involves reference to the March 1998 MRI report. It noted " some ill-defined increased signal intensity in the cord [at the C3-C4 level]", but did not state that myelomalacia was present.

107 Medical opinion differed as to whether the MRI report was to be interpreted as revealing myelomalacia. Dr Cummine, for example, noted that the MRI report made no mention of myelomalacia, but thought that the ill-defined increased signal intensity at C3-C4 might have indicated that myelomalacia, but he did not reach a definite conclusion. Dr Farey's opinion was that the MRI report was of little assistance in resolving the question in the absence of a CT scan.

108 Her Honour adverted to the various medical opinions, but made no specific finding on the point. However, her Honour appears to have endorsed Dr Farey's view that the MRI report does not help either way.

109 It is clear that by 31 October 2000, when an MRI scan of the appellant's cervical spine was conducted, a little oedema or myelomalacia was present at the C3-C4 level. In the absence of a finding by the primary Judge that myelomalacia was present at the date of the accident or a notice of contention seeking such a finding, the appeal should be approached on the basis that there was no observable indication of myelomalacia immediately before the accident. This appears to have been the view of Dr Presgrave, the treating neurologist at the time. The contrary opinions expressed by doctors long after the relevant time and on the basis of incomplete information is insufficient to warrant rejecting this assessment.

110 It follows that, in determining whether the appellant has demonstrated error in the primary Judge's analysis, the appellant must be taken to have established on the balance of probabilities that, although spinal cord compression was present at the time of the accident, there was no clinically observable evidence of myelomalacia. The appellant has also established on the balance of probabilities that myelomalacia was present at the time the MRI scan was conducted on 31 October 2000, two months after the accident.

Did the Degenerative Condition Cause Pain Before the Accident?

111 A finding that canal stenosis and compression were present before the accident does not necessarily mean that at that stage the appellant was experiencing pain from his congenital conditions. Equally, the absence of clinically observable myelomalacia does not rule out the presence of pain attributable to those conditions.

112 Dr Presgrave opined in his February 1999 report that the increased pain experienced by the appellant in his neck related more to the canal stenosis than to the cervical rib (which was the subject of the later operation). The appellant's neck pain was still present in March 1999, when Dr Presgrave last saw him, although the report of 31 March 1999 seems to suggest that the pain may have stabilised to the point where the appellant could reduce or stop his pain medication.

113 The clinical evidence is not all one way. Dr McGee-Collett, a neurological surgeon who saw the appellant on 12 May 1998, noted that the appellant's major problem was discomfort in the neck and right arm and weakness of the intrinsic muscles of the right hand. Dr McGee-Collett doubted:

"very much from the clinical perspective whether [the appellant's] current problem is the result of spinal cord compression in the absence of other signs of radiculopathy or myelomalacia."

Dr McGee-Collett concluded that the appellant did not require cervical spine surgery " at present ", but thought that surgery for the cervical rib should be performed.

114 The evidence, although by no means clear, justifies the primary Judge's finding that by the date of the accident (over two years after Dr McGee-Collett examined him) the canal stenosis and compression of the appellant's spinal cord had generated some pain independently of any other condition such as spondylosis. However, the level of pain experienced by the appellant did not incapacitate him for work, provided that heavy lifting was not involved.

The Immediate Effect of the Accident

115 The appellant contended that the ambulance report and the Concord Hospital notes justified a finding that the accident caused immediate damage to the appellant's spine producing symptoms recorded in the ambulance and hospital notes. Ms Norton relied on the report of a pinprick sensation in the hospital notes and the appellant's complaints of neck stiffness and numbness and of disequilibrium. She submitted that these symptoms were indicative of neurological damage directly and immediately attributable to the injuries sustained by the appellant in the accident.

116 As Mr Bartlett pointed out, doctors who were fully aware of the immediate post-accident symptoms experienced by the appellant did not consider that they indicated neurological abnormalities caused by the accident. Dr Cummine, in his report of 19 June 2009, meticulously recorded the appellant's post-accident symptoms. In his opinion, however, the appellant was " minimally symptomatic " and, despite multiple examinations by numerous doctors over five days:

"there were trivial neurological symptoms confined to the neck and the distribution of C2 and no objective neurological abnormalities."

Dr Cummine adhered to this opinion in his cross-examination.

117 Dr Farey made it clear in his cross-examination that he had examined the hospital records and ambulance report before concluding that there had been no immediate development of neurological signs in the immediate post-accident phase. Not only was his conclusion not challenged by the cross-examiner, but the cross-examination appears implicitly to have accepted the conclusion.

118 The appellant has therefore not made good his challenge to the views expressed by Dr Cummine and Dr Farey as to the immediate impact of the accident on his spinal cord. That does not mean, however, that there was no causal relationship between the accident and the appellant's continuing disabilities. Nor does the failure of the challenge mean that any disabilities caused by the accident would necessarily have been subsumed by the normal progression of the appellant's underlying condition, specifically the canal stenosis and compression of the spinal cord.

Causation

Unchallenged Findings

119 There is no challenge to the primary Judge's finding that the appellant's Case C had been made out: that is, the accident caused a short term whiplash injury, the effects of which continued for about 12 months.

120 More importantly, there is no challenge to the primary Judge's finding that the appellant's Case B had been made out: that is, the accident exacerbated the pre-existing cervical spondylosis and caused a significant increase in the pain experienced by the appellant on an ongoing basis.

121 In determining the appellant's claim for loss of earning capacity, the primary Judge found that the exacerbation of the underlying cervical spondylosis had rendered the appellant as totally incapacitated for work for a " closed period " of eight years (from the date of the accident on 28 August 2000 until Dr Farey's last examination on 25 November 2008). Had her Honour not found that the consequences of the accident were subsumed by the natural progression of the appellant's compressed spinal cord condition, presumably she would have found that the appellant continued to be incapacitated for work and the accident was a substantial cause of that continuing incapacity.

Did the Accident Cause a Deterioration in the Degenerative Spinal Cord Condition?

122 The primary Judge rejected the appellant's Case A (that the accident caused or at least accelerated the onset of myelomalacia). Insofar as her Honour rejected Case A because Dr Presgrave's report of 14 October 2002 contained a fundamental error, her Honour herself was in error.

123 However, her Honour also found that the gap of two months between the accident and the onset of discernible neurological signs was fatal to the existence of a causal nexus between the accident and any neurological impairment. For the reasons I have given, the appellant has not made good his challenge to the finding that he did not experience significant neurological symptoms during that two month period. That finding effectively rules out the appellant's case that he sustained a significant and immediately symptomatic injury to the spinal cord as the result of the accident, which hastened the onset of myelomalacia and other symptoms of the degenerative condition.

124 There is, however, another basis on which the appellant asserts that the accident was a necessary condition of the subsequent deterioration in his degenerative condition. As I have explained, although spinal cord compression was present before the accident, there was no clinically observable evidence of myelomalacia. Yet by 31 October 2000, two months after the accident, an MRI revealed that myelomalacia was present.

125 The evidence indicates that the appellant's pre-existing condition (spinal cord compression producing some pain, but not observable signs of myelomalacia) was likely to lead to deterioration of neurological function " in the long term " (to use Dr Farey's expression in his report of 7 January 2003). It is important to appreciate that, although Dr Farey did not accept that the accident caused the appellant to suffer immediate significant spinal cord damage, he did not rule out that the accident contributed to the onset of myelomalacia or spinal cord oedema.

126 Dr Farey repeatedly expressed the following opinions in his various reports:

• the accident had exacerbated the appellant's underlying cervical spondylosis and had increased the appellant's neck pain;
• the spinal cord compression was not due to the accident and, in the absence of surgery, the appellant would ultimately suffer irreversible neurological impairment; and
• the need for spinal cord decompression was unrelated to the accident because the appellant did not develop neurological symptoms for at least two months after the accident.

127 In his report of 17 October 2001, Dr Farey said that it was:

"certainly possible that the changes of myelomalacia or spinal cord oedema could have been produced by the motor vehicle accident."

He also said in that report that:

" [e]qually they could have been present as a result of spinal cord compression due to the pre-existing advanced degenerative disc disease and congenitally narrow canal...". (Emphasis added.)

128 When Dr Farey prepared his report of 17 October 2001, he was under the impression that prior to the accident the appellant's spinal cord compression was asymptomatic. But by the time he gave oral evidence in November 2009 he had seen Dr Presgrave's reports which indicated that some symptoms had been present. Nonetheless, Dr Farey's evidence in cross-examination was to much the same effect as his 2001 report:

"Q. Then there's a second issue which is in terms of the neurological impact but as you say there's no, for example, there's no immediate severing of the spinal cord that would produce the immediate paraplegia or quadriplegia?

A. Yes.

Q. There's no immediate signs of radiculopathy that would be indicative of an immediate blunt trauma?

A. No.

Q. But is there not the possibility, and I'll do this in terms of my original analogy and then attempt to put medical labels back on it. That there have been more cracks put into the vase that make it likely to break sooner in terms of the weakening of the disc?

A. Well if you go back to your original analogy where you said, you know, this is going to rupture and put more pressure on the spinal cord, if you look at the MRI scans, the sealed MRI scans there has - that has not occurred and what we are in fact describing over these last eight or nine years is the natural history of this condition.

Q. An accident of this nature will place stress upon the discs will it not?

A. Yes.

Q. And that can be quite substantial stress.

A. Yes they can.

Q. That's stress with the potential to cause immediately visible damage?

A. Yes.

Q. And it's a stress with the potential to cause damage in the nature of weakening that doesn't show up on the radiology ?

A. That's correct .

Q. The radiology measures the outcome of the rupture not the weakening prior to the tear or the rupture ?

A. That's correct .

Q. I think the point you've just made is that there's still no obvious tear or rupture, they're just bulging more than they used to, is that right?

A. No, I didn't make that assumption, no.

Q. Sorry, I'm not asking for an assumption, having looked at them what is it that you see?

A. No I didn't see any increase in the - with the passage of time I didn't see any increase in the degree of spinal cord compression, what I found is that there's an increase in the myelomalacia there. Was that due to the accident? You can't say. Was it there beforehand? You can't say. What you can say is that the patient didn't have a significant spinal cord injury because he didn't have any neurological symptoms for two months . I used to treat spinal cord injuries day and in and day out at Royal North Shore Hospital, I've seen many of these and they come in profoundly affected in this case.

Q. But you also, don't you, see people who've come in with significant neurological symptoms who've had a cough or a sneeze that has been the final trigger--

A. Yes.

Q. -- where the edeology [sic: aetiology] may have been laid some substantial period of time earlier?

A. Yes but--

....

A. But in that case when you do the MRI scan you usually find something like an acute disc protrusion or, or other, other things for it like a cough or a sneeze, that's a different matter.

Q. But is it not the case that you can't eliminate that here because we don't have the CT scan and we're relying simply on MRI scans?

A. There, there is certainly a degree of spurring, what you can't say is the degree of what that shadow is, whether there's an acute disc protrusion there or not. Looking at that - I think most of it's actually spurring.

Q. Let me suggest to you that there has been, as a consequence of this traumatic accident, not only a rendering of great degree of - of either from unsymptomatic to symptomatic or of a greater degree of symptomatology the that there has also been a contribution to the long term deterioration. Do you agree or disagree with that?

A. I can't, I can't tell you that there has been a long term deterioration of spinal cord function as a result of the injury. All I can say is that with the passage of time, and I'm not sure why this case is going some eight or nine years later, I don't know, right, but with that passage of time that's lead to a deterioration of his function which should have been dealt with a long time ago.

Q. One of your positions is that he was deteriorating over time?

A. That's an absolute fact and there's objective evidence both on the MRI scan and my clinical examination for that.

Q. And let me suggest to you that that process of deterioration has been advanced by the trauma sustained in the motor vehicle accident?

A. I can't--

OBJECTION. HOW MANY TIMES DOES MY FRIEND WANT TO PUT THE SAME PROPOSITION AND GET THE SAME ANSWER

WITNESS

A. I can't say that your Honour."

129 In re-examination, a leading question elicited the following response:

"Q. Doctor in terms of the comment that you made about that there's been effectively an increase in his symptoms as a consequence of the motor vehicle accident, that answer I take it is dependant upon an assumption as being correct, the history that he gave you that is pre and post accident neck position, is that fair?

A. That's a fair comment."

The re-examination did not explore what Dr Farey's position would have been if there had been modest pre-accident pain attributable to the spinal cord compression.

130 Dr Cummine found it difficult to express a view as to the causal relationship between the accident and the deterioration of the appellant's condition. In his cross-examination, the following exchange occurred:

"Q. Do you agree with Dr Matheson [another consultant neurosurgeon], at least on the basis of your review of the materials, that it's possible that some of the changes of myelomalacia were precipitated by this accident?

A. I think it's remotely possible.

Q. And is it possible that the natural progression of the underlying condition has been aggravated by structural weakening of the discs in turn caused by trauma?

A. Yes.

Q. And that is an acceleration that would not necessarily show immediate signs in hospital, correct?

A. Yes.

Q. And that is an acceleration that would be consistent with somebody making no complaints of pain in the 12 months preceding the accident but increasing complaints of pain after the accident?

A. Possibly.

Q. That bears a strong temporal connection doesn't it?

A. Yes."

131 In re-examination, he was asked to elaborate:

"Q. ... The other alternative proposition and I hope I'm encompassing it as best I can is the suggestion that an accident such as this could give rise to a weakening of the disc. That is a weakening that may not be apparent on radiology and that that weakening of the disc gives rise to a particular susceptibility for subsequent injury. Do you understand?

A. I do.

...

Q. And I think you agreed that that was a possibility, I think the proposition was put on the basis of a possibility and you said yes?

A. Correct.

Q. Can I then deal with the probabilities. I take what you say it's a medical possibility that that sort of thing can happen.

A. [Yes].

Q. What about when we're dealing with probabilities in terms of that chain, so to speak, of events or causes starting with the possible weakening of a disc which may not necessarily be apparent which gives rise to further degeneration and further injury. Do you understand?

A. I do.

Q, What can you say about that in medical terms as to the likelihood of that occurring?

A. It's a proposition that cannot be proven even today the response of a disc to trauma is the development of physical tears within its structure. The degenerate [sic] process has exactly the same pathology. It is impossible to know unless you examined a person a microsecond before trauma and a microsecond after and before there was no fissure even of the smallest length in the disc and immediately after it was there . It is just not possible. It can only remain a theoretical possibility. We know the disc can be physically torn, that's observed commonly when a neck dislocates. You can see part of the disc attached to one vertebra and part's on the other but once you start postulating micro tears that only the most sophisticated investigation is going to identify, it's just not being done . It just remains a physical exercise.

Q. If we then deal with [the appellant] himself in terms of his underlying condition, degenerative condition and the progression of that condition to whatever extent it's progressed is there any way of saying that as of today anything from this accident has contributed to his present condition?

A. I don't think so.

Q. Why is that?

A. The only symptoms that he had were of neck pain and that pain was broadly in a muscular distribution thought to resemble C2 nerve distribution but as said earlier unconvincing. Collateral evidence at the time suggests this was not a particularly major pain. During acute disc prolapses, so a frank tear and then a piece comes apart people are usually in fairly excruciating pain. It can be of instantaneous onset similar to a trauma but the sort of description of pain is quite grossly disabling. The contemporaneous documents in relation to this man did not suggest that at all. Much more like a mild soft tissue injury involving muscle possible ligament but not suggestive of sufficient force to disrupt margin of a disc."

132 I interpret this evidence as reflecting Dr Cummine's view that a causal relationship between the accident and the deterioration in the appellant's condition could not be proved in the absence of an observable trauma such as the rupture of a disc. However, he did not say that the accident probably did not contribute materially to the deterioration. His penultimate answer is to the effect that a causal relationship could not be demonstrated because of the similarity between the pathology of the degenerative process and that of the response of a disc to trauma.

133 The evidence establishes the following:

• the appellant was injured in an accident in which a vehicle ran at high speed into his stationary vehicle;
• the accident aggravated the appellant's pre-existing spondylosis and significantly exacerbated the symptoms of that condition;
• at the time of the accident, the appellant's existing condition of spinal cord compression, although producing a modest level of pain, had not developed to the point where myelomalacia had been observed;
• at that stage, the appellant's condition had been thought likely to warrant intervention, but only in the long term;
• Dr Presgrave's reports of 9 February 1999 and 30 March 1999 indicated that there was no clinical evidence of progression of the cervical canal stenosis;
• the accident was of a kind that placed stress on the discs within the appellant's spine;
• Dr Farey and Dr Cummine agreed that, even if the accident did not result in immediately observable damage to the spinal cord, it could weaken the spinal cord in ways that could not readily be detected;
• within a short time after the accident an MRI scan revealed myelomalacia to be present;
• Dr Buckley's opinion was that there was a causal relationship between the accident and the post-accident progression of the appellant's degenerative spinal condition;
• neither Dr Farey nor Dr Cummine could say that the appellant had not developed physical tears within the disc structure as a consequence of the accident; and
• the appellant's symptoms increased very significantly over the period from 2000 to 2008 (although not necessarily out of line with the natural progression of the condition).

134 The primary Judge rejected the opinion of Dr Buckley as to the relationship between the accident and the onset of spinal cord signs. Her Honour did so largely because, in her view, Dr Buckley incorrectly assumed that Dr Farey had agreed that:

"the present signs of spinal cord impairment were probably not present at the time that [the appellant] had previous surgery or in the period immediately leading up to the accident".

135 It is not clear why her Honour regarded the assumption as incorrect. Dr Buckley had before him Dr Farey's reports of 17 October 2001 and 7 January 2003. The latter referred to the MRI of 9 March 1998, the presence of spinal cord compression at the C3-C4 and C6-C7 levels and the absence at that stage of evidence of myelomalacia. The more likely interpretation of Dr Buckley's reference to " the present signs of spinal impairment " is that he intended to refer to the onset of myelomalacia after the accident and other signs of deterioration in the appellant's degenerative condition.

136 Dr Buckley gave oral evidence but was not cross-examined. It was therefore never put to him on behalf of the respondent that his report should be interpreted as her Honour did. Given that this interpretation does not seem to be what Dr Buckley intended to convey, I do not think that he misunderstood the appellant's pre-accident history.

137 The primary Judge also indicated that she thought that Dr Buckley lacked expertise in " this very specialist discipline ". While Dr Buckley is not a neurologist, his curriculum vitae showed that he had extensive experience in neurological rehabilitation and, specifically, with spinal injuries and neurological impairment. The respondent did not take up the opportunity to test his expertise in relation to his opinion that there was a causal relationship between the accident and the appellant's post-accident disabilities associated with his degenerative condition.

138 On this evidence, it seems to me that the proper finding, on the balance of probabilities, is that the appellant sustained stress injuries to his spinal cord which, although not creating spinal cord compression, materially contributed to the exacerbation of that condition. The evidence of Dr Farey and Dr Cummine did not contradict this conclusion. On the contrary, Dr Farey accepted that there was an equal probability of the myelomalacia and oedema being caused by the accident or being the result of the pre-existing degenerative disc disease independently of the accident. Dr Cummine accepted that it was not possible to determine clinically whether the accident caused fissures in the disc that contributed to the onset of myelomalacia.

139 In supplementary written submissions, the respondent contended that it had never been the appellant's case at trial that Dr Farey's reports constituted an admission as to the contribution of the accident to the appellant's cervical canal stenosis. The respondent submitted that had the appellant raised this issue, further evidence might have been adduced from Dr Farey. However, Dr Farey's reports were tendered at the trial by the respondent. The reports formed part of the evidence in the case. It was not incumbent on the appellant to cross-examine Dr Farey with a view to showing that his reports meant what they said. If the respondent's representatives wished to adduce evidence from Dr Farey qualifying what he had said in his reports, they could have done so.

140 For these reasons the primary Judge, although correctly finding that the accident did not cause damage to the spine of a kind that produced immediate symptoms, should have found that the appellant's injuries contributed to an exacerbation of his pre-existing degenerative condition associated with spinal cord compression.

Were the Consequences of the Accident Subsumed by the Progression of the Degenerative Condition?

141 The primary Judge's finding that by November 2008 the appellant's pre-existing degenerative spinal condition had " overwhelmed the consequences of the motor vehicle accident ", appears to have been a finding made on the balance of probabilities. In other words, she treated the progress of the degenerative condition by November 2008 as an event which actually occurred (to be determined on the balance of probabilities) rather than as a hypothetical past situation (to be assessed by reference to possibilities and probabilities).

142 There are two difficulties with her Honour's finding. The first is that her Honour proceeded on the basis that there was no causal relationship between the accident and the deterioration in the appellant's degenerative spinal condition. As I have explained, I think that her Honour should have found that the accident materially contributed to that deterioration.

143 The second is that the " subsuming " finding is not easy to reconcile with Dr Farey's opinion, expressed in his reports of 23 February 2009 and 16 November 2009, that only 35 per cent of the appellant's need for ongoing treatment (including surgery, non-operative treatment and supportive care) was attributable to his pre-existing cervical spondylosis and canal stenosis. Dr Farey apportioned 65 per cent of responsibility for the appellant's disability to the consequences of the accident.

144 The primary Judge dealt with Dr Farey's opinion by finding that the proportion of responsibility attributed by Dr Farey to the consequences of the accident should instead be attributed to the appellant's refusal to undertake surgery, rather than to the accident. The basis for this approach to Dr Farey's attribution of responsibility is unclear. As I have explained, I do not understand her Honour to have found that the appellant's unwillingness to undertake surgery broke the chain of causation that otherwise existed between the accident and the exacerbation of the appellant's cervical spondylosis. (As I have noted, if her Honour intended to make such a finding I doubt that it can stand with the medical evidence demonstrating the risks of such extensive surgery.)

145 Mr Bartlett submitted that her Honour had interpreted Dr Farey's apportionment of responsibility as resting on the appellant's failure to have the recommended operation. According to Mr Bartlett, Dr Farey was of the view that if the operation had been performed when it should have been, the appellant would not have suffered any continuing disability as a result of the accident. I do not interpret Dr Farey's observations in this way and he appears not to have been asked in his oral evidence to clarify his position.

146 In any event, although Dr Farey fervently advocated surgical intervention, he never suggested that surgery could have cured or arrested all consequences of the exacerbation of the appellant's cervical spondylosis. In his report of 23 February 2009, Dr Farey explained the rationale for the proposed surgery as the need to address the pre-existing congenital narrowing of the spinal canal with superimposed degenerative change producing compression of the spinal cord. He did not say that the rationale was to address the exacerbation of the appellant's spondylosis. Nor did he indicate that surgery would relieve all symptoms of the spondylosis, in particular the neck pain. In his view, surgery was unlikely to completely relieve the appellant's neck pain, although Dr Farey expected some improvement with immobilisation of the degenerate segments and correction of instability at the C3-C4 level.

147 In my opinion, the evidence is inconsistent with the finding that the pre-existing degenerative condition had subsumed the consequences of the accident no later than 25 November 2008. Her Honour should have found that the appellant had established that at the date of the trial he continued to suffer from the consequences of the accident, namely exacerbation of his spondylosis and accelerated symptoms associated with his degenerative condition (canal stenosis and compression of the spinal column).

Loss of Earning Capacity in the Future

148 These conclusions do not mean that the appellant is entitled to damages for loss of earning capacity on the basis that, had the accident not occurred, he would have been capable of working until normal retirement age. Section 126(2) of the MAC Act requires the Court, assessing damages for future economic loss, to adjust damages by reference to the percentage possibility that the appellant would have become incapacitated in any event. The statutory requirement is consistent with the approach laid down by this Court in Seltsam v Ghaleb .

149 There is little doubt that the appellant's pre-existing degenerative condition would have deteriorated over time, independently of the consequences of the accident, probably to the point where ultimately it would have rendered him totally incapacitated for work. However, the rate at which the deterioration would occur is a matter of considerable uncertainty. On the evidence, it is not possible to determine with any degree of precision the rate of likely deterioration of the appellant's pre-existing degenerative condition had the accident not occurred.

150 Dr Presgrave, the appellant's treating neurologist prior to the accident, said in 1999 that there was no clinical evidence of progression in the appellant's condition and did not put any time frame on the likely rate of deterioration. Dr Farey, in his report of 17 October 2001, stated that patients with documented spinal cord compression and associated symptoms " will develop a progressive increase in their symptoms with the passage of time if the ... compression is not relieved ". He also said that this " may lead to progressive neurological deficit and impairment of hand function and reliability to walk ". In his report of 7 January 2003, Dr Farey said that the likely prognosis for the appellant, independently of the accident, was that he would " develop symptoms and signs of spinal cord compression in the long term ".

151 In circumstances where the likely progression of a degenerative disease is uncertain, the court must do the best it can to comply with the requirements of s 13(2) of the CL Act and to assess the probabilities and possibilities. In this case I think that the most appropriate course, in assessing damages for the appellant's loss of earning capacity in the future, is to increase the allowance for the vicissitudes of life from the customary 15 per cent to 40 per cent. This percentage figure, in my view, reflects a realistic assessment of the chance that over time the appellant's earning capacity would have been reduced or lost altogether by reason of the progression of his degenerative condition.

Assessment of the Appellant's Earning Capacity

152 The primary Judge correctly pointed out that compensation for loss of earning capacity is awarded because diminution in the plaintiff's earning capacity is or may be productive of financial loss: Graham v Baker [1961] HCA 48; 106 CLR 340, at 347, per Dixon CJ, Kitto and Taylor JJ. It is for the plaintiff to prove the loss for which compensation is claimed: Sretonovic v Reed [2009] NSWCA 280, at [80], per McColl JA (with whom Beazley JA agreed).

153 Her Honour's award for past loss of earnings was not generous. Nonetheless, it was based on the appellant's taxation records from the 1995-1996 to 1997-1998 years, which showed that his taxable income had never exceeded $11,488 per annum (approximately $221 per week gross). Her Honour rejected the appellant's evidence as to his earnings from the work he undertook at Mendooran in the two years prior to the accident and concluded that his earnings were effectively nil during that period.

154 Ms Norton criticised the primary Judge on the ground that she had misconstrued the appellant's evidence. According to Ms Norton, her Honour mistakenly thought that the appellant claimed to have actually been paid $500 per week while at Mendooran (a claim she rejected, partly because the appellant had not recorded any such payments in his tax returns), whereas his evidence was that he would be paid an amount calculated at $500 net per week once the Hotel was sold. In fact, the appellant's evidence is unclear. At one point, he described the arrangement with his sister as entitling him to " back-pay " for his work, but at another he agreed that he had already been reimbursed at the rate of $500 net per week for his work.

155 Even if the primary Judge misunderstood the appellant's evidence, it does not materially advance his case. As her Honour found, by the date of the trial the Hotel had still not been sold and there appeared to be no prospect of a sale as a bed and breakfast business. Thus, on Ms Norton's interpretation of the appellant's evidence, he would not have been entitled to any of the " back-pay " said to have been due to him.

156 The primary Judge awarded a " buffer " of $100,000 for past economic loss, in respect of the claimed period of approximately eight years ending on 25 November 2008. This reflected an assessment of the appellant's pre-accident earning capacity as approximately one third of average net weekly earnings, or $256 net per week. (Her Honour calculated average net weekly earnings over the relevant period as about $770 net per week.) While not generous, I do not think that this award has been shown to be wrong.

157 However, on the findings that I consider should be made, the appellant is entitled to damages for loss of earnings for the period 15 November 2008 until the date of judgment (12 March 2010). On my calculations, subject to correction, this amounts to $17,553 or, in round figures, $17,500.

158 It also follows from the findings that I consider should be made that the appellant is entitled to damages for future economic loss. The damages should be assessed on the basis that the appellant's earning capacity was $256 net per week, but that the award should allow for a 40% discount for vicissitudes.

Attendant Care Services

159 As the appellant submitted, the finding that the accident materially contributed to the deterioration in the appellant's degenerative neurological condition undercuts the primary Judge's finding that the appellant's need for future care is wholly unrelated to the accident. However, the parties' written submissions only touched briefly on the question of what consequences should follow. The oral submissions did not carry matters any further.

160 In my opinion, this Court is not in a position, without further assistance, to determine on the available material whether the appellant satisfies the threshold test laid down by s 128 of the MAC Act and, if so, the appropriate award of damages in respect of future attendant care services.

161 I think it appropriate to give the parties the opportunity to make further submissions as to the award of damages (if any) that should be made in respect of future attendant care services and the basis for doing so.

162 I propose that the same approach be taken in relation to damages for past attendant care services, for much the same reasons.

CONCLUSIONS

163 In summary, I have concluded that:

(i) the primary Judge was in error in finding that the accident did not materially contribute to the deterioration in the appellant's degenerative spinal cord condition;

(ii) the primary Judge was in error in finding that the consequences of the accident were subsumed no later than 25 November 2008 by the progression of the appellant's degenerative condition;

(iii) in addition to the damages awarded by the primary Judge, the appellant is entitled to damages for loss of earnings for the period from 25 November 2008 until 12 March 2010 on the basis identified [157] above (amounting, on my calculations, to $17,500);

(iv) the appellant is entitled to damages for loss of future earning capacity, assessed on the basis that his earning capacity at 12 March 2010 was $256 net per week, but the assessment should allow 40 per cent for the vicissitudes of life; and

(v) the parties should make further submissions on the question of damages for past and future attendant care services.

164 The orders I propose are as follows:

1. Appeal allowed.

2. Set aside orders 1, 2 and 3 made by Gibb DCJ on 12 March 2010.

3. Direct the appellant on or before 1 March 2012 to file written submissions, not exceeding ten pages in length, addressing the following issues:

(a) whether the appellant agrees with the figure of $17,500 in respect of past loss of earnings and, if not, the figure that is proposed;

(b) the quantum of damages for loss of future earning capacity, calculated in accordance with the reasoning in this judgment;

(c) the amounts, (if any), that should be awarded by way of damages in respect of past and future attendant care services (including the question of whether the threshold requirements of s 128(3) of the MAC Act are satisfied); and

(d) costs.

4. Direct the respondent, on or before 12 March 2012, to file and serve written submissions, not exceeding ten pages in length, in reply.

5. The respondent, if otherwise qualified, to have a certificate under the Suitors Fund Act 1951.

165 If the parties are able to agree on some or all of the issues that I have identified, they should record their agreement in the submissions to be filed by 1 March 2012.

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Decision last updated: 23 February 2012