LAWS1052 Extended Case Note

Case Note: Dean v Phung

Introduction
The case of Dean v Phung is one which clearly reveals the prevalence of judicial independence. On the surface it is a case which clarifies the rules governing consent in a medical context; it also reveals social issues regarding the balance of responsibility and risk between individuals and society. Furthermore, it raises questions about the validity of exemplary damages. This case note discusses the issues raised, judicial reasoning, and analyses the decision in the context of policy objectives in the Civil Liability Act.
Material facts and Procedural history
The chain of events which brought this case before the Court of Appeal began in 2001 when the appellant suffered minor injuries to his teeth while working. He was referred to the respondent, a dental surgeon. The respondent conducted extensive and unnecessary treatments over 53 consultations at a cost of $73,640 which was borne by the workplace insurer. The appellant litigated against the dentist in the Supreme Court for negligence and trespass to person, seeking exemplary damages.
However, the trial judge found in favour of the defendant who admitted liability for negligence only and applied the Civil Liability Act, awarding damages totalling $1,388,615.20 and no exemplary damages were given. This appeal was made with the admission that the dentist has committed an ‘intentional’ tort and thus the Act does not apply, leaving the court free to award exemplary damages.
Issues
The submissions by the appellant raised three issues which produced questions concerning the vitiation of consent and the award of exemplary damages. Whilst all judges ruled in favour of the appellant, MacFarlane JA disagreed on what vitiates medical consent.
One: Does the Civil Liability Act apply?
All judges agreed that s3B of the Civil Liability Act would be satisfied if the respondent did not believe at the time of the treatment that it was reasonably necessary. The appellant drew on the opinions of three experts, whereby ‘none of the experts could envisage circumstances in which a reasonably competent doctor would believe such irreversible treatment to be warranted’.1
As the respondent did not explain his conduct, the court was left to infer whether he was incompetent or had ulterior motives in conducting the treatment.
The judges inferred the latter, setting aside the trial judge’s findings.2 This conclusion was made on the balance of probabilities: the respondent admitted that his treatment was unnecessary and furthermore, experts held that the treatment could not have addressed Dean’s minor injuries.
Two: Can the respondent claim the defence of consent?
The judges concur that consent was vitiated in this case but they took different approaches to arrive at this conclusion. Basten JA approached the issue by examining case law in Australia and overseas and drawing from them four principles. Those of relevance include:
[If] it were demonstrated, objectively, that a procedure of the nature carried out was not capable of addressing the patient 's condition, there can have been no valid consent.
… although the conduct was objectively capable of constituting therapeutic treatment, if it were in fact undertaken solely for a non-therapeutic purpose not revealed to the patient, there will be no relevant consent. 3
Macfarlane JA, however, disagreed with Basten JA that unnecessary treatment presented as necessary nullifies consent, making consideration of the practitioner’s state of mind necessary.
Beazley JA agreed with Basten JA.

Three: Is the appellant entitled to exemplary damages?
As the Civil Liability Act was not applied, the court was able to grant exemplary damages at its discretion. In considering the award of exemplary damages, the judges analysed cases where exemplary damages were awarded and noted that the primary focus of consideration is ‘upon the wrongdoer’4 and that in this instance the purpose was punitive. The judges deemed $150,000 an appropriate sum.
Decision
The court decided in favour of the appellant and increased damages to $1,743,000. The ratio is that consent in the medical context can be vitiated if the treatment proposed is not appropriate in addressing the patient’s problem; or, if intent is taken into account, the primary motive of the proposed treatment is not made known to the patient. Furthermore, an important obiter to note is that the absence of malice does not prevent the plaintiff from receiving exemplary damages, so long as the conduct was ‘reprehensible, high-handed, outrageous or insulting’.5 In making the judgment, the judges undertook a liberal approach, prioritising the need for justice in society over economic considerations which will be discussed in the commentary.
Commentary
Civil Liability Act
The Civil Liability Act was implemented to address the insurance crisis caused by the growing volume of litigation and damages awarded to negligence claims and to reverse the shift in the balance of responsibility between society and the individual.6 The dramatic growth of the insurance sector from the 19th Century to the present reflects a shift in the placement of risk and responsibility for individual actions from the self to others.7 However, contemporaneous events, namely the liquidation of major insurance firms such as HIH Insurance, and escalating levels of litigation and damages led to calls for reform to the laws of negligence with the aim to stem rising insurance premiums by reducing the amount of damages awarded.8 Bob Carr argues that the ‘insurance crisis served to highlight just how far the law has shifted away from the concept of personal responsibility’.9 The 2002 Act encourages individuals to take responsibility for their own actions through measures such as limitations on damages for both economic and non-economic losses, as well as changes to law.
Noting the parliament’s aims in making the Civil Liability Act, the judgment in Dean v Phung is particularly interesting in that it omits consideration for the role of personal responsibility on the part of the appellant. One wonders why a reasonable person possessing sound faith in medical practitioners, having suffered only minor injuries, would not have sought a second opinion when the dentist recommended extensive and irreversible treatment. The fact that the judges did not address this demonstrates that they were not influenced by parliament’s goals of redressing the balance of responsibility in society. In this sense, this case exemplifies the doctrine of the judicial independence and the separation of powers, reflecting the common law’s ability to protect the rights of individuals.
On the other hand, the process through which parliament makes statutes takes into account the interests of majority groups within society and sets the scope for the judiciary to decide individual cases so that ideally, justice can be achieved on all scales. The legislature may make or amend any legislation - giving it power influence social attitudes and trends - so long as they dare not unconstitutional. Statute law is efficient in this sense because it addresses the needs of the majority, allowing for the legal system to evolve with society. With respect to the Civil Liability Act, parliament juggled the interests of the insurance sector, the public, and the health sector (although the boundaries are not always apparent). In some aspects, the interests of tort law contradict those of insurance, especially when insurance collectivises responsibility for risk and detracts from the retributive purpose of tort law with respect to damages.10 But whilst there must be compensation for plaintiffs, fewer damages would prevent the medical indemnity insurance from rising; hence avoiding the negative side-effects of the insurance crisis such as decreased health insurance coverage for employees, which benefits the public in general. Vines states that when ‘legal ideas about personal responsibility veer too far away from the community’s ideas the law may lose its legitimacy.’11; outlining the need for legislation to prioritise the needs of the majority.
Exemplary Damages
The breadth of cases for which exemplary damages could potentially be granted and the rarity of grants provides little guidance for judges on the situations which call for exemplary damages and the amount which should be awarded. In theory, exemplary damages can serve the purpose of general deterrence, punishment, and to demonstrate the court’s disapproval of the conduct in question.12 It is a mode of punishment where ‘criminal, regulatory and administrative sanctions are inadequate.’13 This applies in the present case.
Contrarily, there are significant problems with exemplary damages as a means to punish. The Ipp Panel argues that exemplary damages can often be an ‘undeserved windfall for the plaintiff’, which contradicts the goal of exemplary damages which is to punish the tortfeasor rather than provide additional compensation for the plaintiff.14 Furthermore, there is an excessive amount of judicial discretion involved in determining the sum of exemplary damages; resulting in amounts which are unpredictable and often too high.15 In response to the ‘underserved windfall’ issue, a possibility is to replace exemplary damages with an exemplary fine (borne personally by the tortfeasor) which serves the same punitive purpose. However, the State is not a party in private law and the issue of unpredictability persists. Alternatively, O’Malley points out that the ‘invention’ of demerit points and revocation of licences was more effective than fines in controlling the conduct of motorists.16 Perhaps the same principle could apply to cases such as the present one; where the dentist’s licence to practice could have been temporarily suspended. Therefore, this case underlines a significant imperfection in the law which is overlooked.
Conclusion
Dean v Phung reveals a hidden problem in the law of intentional torts with respect to exemplary damages - an inadequacy the common law system fails to address, not being widespread enough to catch the attention of the legislature, yet continuing to plague the administration of justice. It is a case which also highlights the importance of independence of the judiciary as a counterpart to legislative power through the ability of the judges to interpret the Civil Liability Act in such a way that it disregards the motives of the legislature at the time the Act was made. Therein lies the symbiosis between the legislature and judiciary, for they must work together for the good of individuals in society.

Bibliography
A. Articles / Books / Reports
O’Malley, Pat, ‘Fines, Risks and Damages: Money Sanctions and Justice in Control Societies’ (2010) 21 Current Issues in Criminal Justice 365
Purnell, John, ‘Tort does not pay: a guide to exemplary damages’, (2003) 58 Plaintiff 25
Vines, Prue, ‘Tort reform, insurance and responsibility’, (2002) 8 University of New South Wales Law Journal Forum 22
B. Cases
Dean v Phung[2012] NSWCA 223 (25 July 2012)
C. Legislation
Civil Liability Act 2002 (NSW)
D. Other
Civil Liability Amendment (Personal Responsibility) Bill 2002 (NSW)

Panel of Eminent Persons, Review of the Law of Negligence Final Report, 2 October 2002, Review of the Law of Negligence, , 225

Bibliography: A. Articles / Books / Reports O’Malley, Pat, ‘Fines, Risks and Damages: Money Sanctions and Justice in Control Societies’ (2010) 21 Current Issues in Criminal Justice 365 Purnell, John, ‘Tort does not pay: a guide to exemplary damages’, (2003) 58 Plaintiff 25 Vines, Prue, ‘Tort reform, insurance and responsibility’, (2002) 8 University of New South Wales Law Journal Forum 22 B. Cases Dean v Phung[2012] NSWCA 223 (25 July 2012)