Category Archives: damages

Pure PTSD claims and the decision in Pel-Air: a body blow for plaintiffs

Whilst I realise that for most members of the public a juicy set of facts is far more compelling than even the most irresistibly cogent legal precept, I am often disappointed by the scarcity of legal context given in news stories these days. I did however come across one the other day that had enough of both to pique my interest.

 

It involves a man who has sued an airline alleging that he found the tip of a hypodermic needle in his inflight meal of butter chicken with cauli pea masala. The man alleges that he only discovered the needle once it was inside his mouth.

 

The story immediately brought to mind the quintessential and if true, makes the escargot in Donoghue seem like a delicacy by comparison.

 

Based on what was reported, it would seem that whilst the man may have sustained some physical injuries to the inside of his mouth, the focus of his damages claim will be in respect of alleged depression and post-traumatic stress.

 

The interesting bit of law came from a quote of what the man’s solicitor said, which was to the effect that the plaintiff is seeking damages under the Australian Consumer Law (ACL) and the Civil Aviation (Carrier’s Liability) Act, which for ease of reference I’ll give the somewhat unfortunate acronym of CACLA.

 

Negligence actions framed as a breach of the ACL provide a useful means of circumventing the various liability hurdles and damages caps contained in the Civil Liability Act 2002 and its cognate provisions in other states (cf: Nair-Smith v Perisher). For this reason, it has become a common cause of action where a contractual relationship exists between the relevant parties such as there would have been here.

 

Though not specified in the article, the implied term of due skill and care may be the go-to, or with respect to the supplier sub-contracted to prepare the meal (ie. the “manufacturer”, as defined in the ACL), which the article reports has also been sued, a breach of the statutory obligation to supply safe and/or merchantable goods.

 

There is a defence to that latter action if the manufacturer can show the alleged defect wasn’t there at the time of supply. The airline’s claim, also referred to in the article, that the meal went through a metal detector twice before it made it onto the plane may well assist both it and the supplier in this regard. Similar issues arose in a case called Effem Foods v Nicholls [2004] NSWCA 332 where a consumer was injured by a safety pin concealed within a chocolate bar.

 

The article’s lack of detail regarding that aspect of the claim (there’s that problem again) deems any further comment on this part of the claim otiose (such a judge’s word that I feel a little bit of an imposter in using it). But it’s the CACLA part of the claim that interested me more anyway. CACLA is applicable where a person sustains “bodily injury” whilst on an aircraft or during the course of embarking or disembarking.

 

It was no doubt a particularly appealing basis upon which to claim in the context of these facts because CACLA imposes strict liability, thereby removing the need for the claimant to prove negligence to complete his cause of action.

 

However, if a plaintiff claims for pure psychiatric injuries under CACLA, a decision of the NSW Court of Appeal handed down in March 2017 has now made things more difficult. In Pel-Air Aviation Pty Ltd v Casey [2017] NSWCA 32 the Court was asked to deal with the question of whether PTSD is a “bodily injury” as that term is understood by CACLA.

 

At this point I should say that the decision may also prove to be of some moment in the interpretation of other statutes incorporating those words, of which there are a few. Section 25 of the Companion Animals Act 1998 (NSW), which deals with the (strict) liability of dog owners for injuries caused by their pooches, is one that immediately comes to mind.

 

The plaintiff in Pel-Air was a passenger in a small plane that the pilot was forced to ‘ditch’ into the sea off Norfolk island due to bad weather. As a result, she spent about 90 minutes in the water, suffering multiple injuries including PTSD.

 

It is accepted law that where a physical injury and psychological injury are connected, this kind of psychiatric injury will meet the “bodily injury” requirement. Some of the plaintiff’s psychiatric injuries in Pel-Air fell into this category. However, for what is often termed “pure” psychiatric injury, such as the PTSD suffered by the plaintiff in Pel-Air something more would be required.

 

Nevertheless, at first instance, Justice Schmidt of the NSW Supreme Court determined that given the plaintiff’s PTSD had resulted in ongoing dysfunction that was “consistent with chemical changes in her brain and body and alterations in her brain’s neurotransmitter pathways, which [had] prevented a return to normal brain function”, this was enough for it to be properly categorised as a “bodily injury”.

 

On appeal, Justice Macfarlan (with whom Justices Ward and Gleeson agreed) undertook a detailed analysis of the evidence provided by the experts commissioned by each party and in particular, the joint document produced by them after they had ‘conclaved’, which read (quoted at judgment [21]):

 

“There is meta-analytic research evidence to suggest that in some persons suffering from PTSD or Generalised Anxiety Disorder can suffer from physical changes to specific areas on the brain [sic], [eg.] shrinkage of the hippocampus…[or] changes to the prefrontal areas of the brain… [However], the experts agree that there is no evidence available to them (i.e. imaging) that will prove that the plaintiff has structural changes to her brain.” [emphasis added]

 

His Honour then undertook an interesting review of the case authorities in the United Kingdom, the United States and Canada on the point, which were all highly relevant given that their legislation, in the same way as CACLA, includes the words “bodily injury”, as a result of them all having incorporating the unifying Montreal Convention into their domestic law.

 

Consistent with those authorities, the Court found that something more than malfunctioning or chemical change must to be shown for a claim to be made out in respect of pure psychiatric injury under CACLA. For example, structural or what his Honour referred to as “actual physical damage” (at [47]). It seems that a plaintiff alleging pure psychiatric injury under CACLA will now need brain imaging showing a change in brain architecture in order to succeed.

 

Excuse the pun, but to me this would seem like a bit of a body blow to what might otherwise be a rather straightforward statutory claim.

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Filed under Civil, Crime, damages, evidence, Negligence, statutory interpretation

Damages easy reference table

It is my experience that when a new brief comes in a lawyer’s natural tendency is to focus on liability rather than what damages actually flow from the relevant breach. Below is a neat little damages reference table I have prepared for a seminar I recently gave. It provides a summary of the kinds of issues to turn one’s mind to and where to seek some guidance.

Ultimately though, damages is a question of fact and the relevant principles only provide guideposts rather than binding rules of law.

Please excuse the formatting. It’s all that WordPress blogging allows.

Contract Tort Aust. Consumer Law Equity
The Standard …had the contract been performed …had the tort not occurred because of’: s236 ACL;

see also Marks v GIO (1998) 196 CLR 494

Discretionary –based on equitable principles
Causation ‘common sense’/ a (not the) cause 5D Civil Liab. Act (NSW) (CLA) 1.‘but for’ & 2.policy etc. ‘whether or not and why’

NB– CLA damages caps

Yes: ‘because of Yes –‘causal link’ b/w losses and breach

Nicholls v Wilson [2012] NSWCA 383 at [172]

Remoteness/foreseeability Hadley v Baxendale

1. Ordinary course

2. D knew the type of damage claimed  would result

‘not far fetched and fanciful’

cf: intentional torts (s3B CLA: Act doesn’t apply)

No N/A
Reliance

 

No No Yes No
Mitigation Plaintiff should act as a ‘reasonable and prudent person’ in mitigating the loss
Pure Economic Loss N/A Perre v Apand (1999) 198 CLR 180: D’s knowledge/P’s vulnerability Yes, not limited by remoteness (as long as causation satisfied) If necessary to properly compensate the plaintiff
Loss of chance/opportunity Court assesses degree of probability and adjusts accordingly: Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at 643 Contingencies relevant: Nicholls [181]
Exemplary Damages

 

No Common law: yes, ‘contumelious disregard’

CLA – not for personal injury (s21)

No No: compensatory not punitive

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The rule in…Hadley v Baxendale

This is the first in a series of “The Rule In…” postings. Judges and lawyers often use certain common law rules as a shorthand means of describing an essential legal principle. They will say something like “…well of course that would be governed by the rule in so-and-so” often referring to a case decided in the eighteen hundreds as if it was an old friend. There is a reason these cases are referred to in this way.

What is it?

A rule that determines whether or not a particular type of damages suffered as a result of a breach of contract are recoverable based on the concept of “remoteness”.

Why is it important?

The viability of litigation can often be determined by the amount of damages a party is likely to recover. Even though a party may have good prospects on the question of liability (ie- whether there was a breach of contract), the amount of total damages they can recover may be limited. For example, a large damages claim may include as a considerable proportion a claim for lost business profits resulting from the breach of contract. If the lost profits claim fails for being too remote, the litigation may end up being a waste of time, money and emotion.

The Rule

There are two limbs under either of which a party can claim losses:

  1. “in the usual course of things”: damage that would be a “not unlikely” result of a breach of the particular contract in question (eg. a contract for the supply of equipment which proves faulty causing lost profits as a result of an inability to use it); or
  2. because the defendant knew that a breach of contract would cause the plaintiff losses of the specific nature it is claiming (eg-if the plaintiff tells the defendant it will use the piece of equipment to enable it to service a new client which will double the size of its business, damages resulting from the loss of the new client’s business caused by the faulty equipment can be claimed, subject of course to any disclaimer in the supply contract).

The Case

The owners of a flour mill sued the tardy carrier of a broken crankshaft sent away for repair. The lost profits claimed were found not to be “in the usual course of things” because the carrier couldn’t have known that the lack of this piece of equipment would result in the mill being stopped. The mill may well have had a replacement crankshaft at hand.

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Filed under Civil, damages, The Rule In