Cowland v Telkesi No. Scgrg-99-881
[2000] SASC 156
•14 June 2000
COWLAND v TELKESI
[2000] SASC 156
Full Court: Doyle CJ, Debelle & Nyland JJ.
DOYLE CJ. The plaintiff issued proceedings in the District Court claiming damages pursuant to s 19 and s 20 of the Wrongs Act 1936 (SA). The damages were claimed for the loss, as a result of the death of the plaintiff's husband, of the financial support she might reasonably have expected from her husband but for his death.
The defendant admitted liability. A District Court Judge assessed the damages.
The defendant appeals against the assessment. Two points were argued on appeal. First, that this is a case in which the damages should have been reduced by reference to income earned by the plaintiff after the death of her husband. At the time of her husband's death the plaintiff worked part-time. In the period between his death and trial she had increased her earnings, and was working more and earning more than she had at the time of her husband's death. In the alternative, the defendant submits that the award was in any event excessive. The defendant submits that the judge made insufficient allowance for the fact that with the passage of time, and as the financial circumstances of the plaintiff and the deceased improved, the deceased might have or would have spent more of his earnings on himself, and applied less of his earnings to the benefit of the plaintiff.
The first submission raises a point of principle. The second submission involves no more than the application of well established principles to the facts.
The Facts and the Judge's Findings
There was no challenge to the judge's findings of fact. Nor was there a challenge to any aspect of the assessment of damages, other than the aspects already identified. For that reason I propose to confine my statement of the facts to those facts relevant to the matters argued.
The plaintiff was 35 years old when her husband died in August 1995. He was then 41 years old. They had been married almost seventeen years. The plaintiff's evidence, which the judge wholly accepted, was that her husband believed that it was his role to support his wife, and while she did not entirely agree with that, she respected her husband's wishes and did not seek paid employment after they married. At the time of the marriage the plaintiff had just begun a university course, which she abandoned. However, in 1991 the plaintiff took up some accounting studies. In 1993 she undertook some part-time work that apparently utilised the skills she was acquiring. Her evidence was that this was the result of a discussion with her husband in which she said that she would be at a loss were he to die, and that she wanted to get some work that would put to use the qualifications she was acquiring. If she waited to do this until he had died or retired, she might be too old to get work, and would have no reasonable means to support herself.
The result was that when her husband died the plaintiff was already engaged in part-time work to a limited extent. In the last financial year before her husband's death she earned gross earnings of $14,060. The judge made a specific finding that, but for her husband's death, the plaintiff would have continued to work part-time to about the same extent as she was working at the time of his death. It is relevant to note that the couple had no children, and were unable to have children.
After her husband's death the plaintiff's earnings increased. In the year ending 30 June 1997 she had a taxable income of $19,525, and in the year ending 30 June 1998 a taxable income of $27,638. It is apparent that this is a result of the plaintiff increasing the amount of time in employment. As to that, the judge made a specific finding that these additional earnings were a response by the plaintiff to her husband's death, and to her need for income to support herself and, partly, another man with whom she had become friendly.
As to the deceased, the judge found that he would have continued to work indefinitely, much as he had done prior to his death. The judge made findings as to the earnings of the deceased, as to the amount he expended on himself and as to the amount of those earnings applied for the benefit of the plaintiff. It is not necessary to go into the details. It suffices to say that the judge made a further finding that, but for the death of the husband, the plaintiff and her husband would have continued to organise their lives in the same way as things were at the time of death. The judge, in effect, found that the extent of the financial support provided by the deceased to the plaintiff would not have altered during the marriage, by reason of earnings made by the plaintiff. I take this to mean that the financial support received by the plaintiff from the deceased would not have diminished because of money earned by her, as a result of part-time employment, during the continuation of the marriage. However, the judge did make an allowance for the "small possibility" that the deceased's needs might have increased over time, which again I take to mean that the judge made a slight reduction in the damages on the basis that the deceased might have spent more of his earnings on himself.
The result of this was that the judge assessed damages by reference to the extent of the financial benefit being received by the plaintiff at the time of death, subject to a small allowance for the possibility of the husband spending more on himself over time, and without making any reduction in the damages by reference to the increased earnings made by the plaintiff after her husband's death. Damages were assessed at $249,750.
The Impact of the Plaintiff's Earnings on the Assessment of Damages
The principles to be applied in this area are well established. I confine myself to the principles relevant to the claim for loss of expected pecuniary benefits. In Ruby v Marsh (1975) 132 CLR 642 Barwick CJ said at 647:-
"But, quite clearly, the damages, the right to which the statute gives, are to compensate for the loss by death of the financial support reasonably expected to have been given by the deceased, had he continued to live. Thus the situation in relation to that financial support, or to its expectation as at the date of death, will be definitive of the loss which has been suffered. It is the financial potential of the continued life and support of the deceased which must be assessed."
The reasons of Gibbs J are to a like effect (at 657):-
"To assess the damages, it is necessary to value the expectation, prospect or chance of pecuniary benefit of which the dependant has been deprived: see Davies v Taylor [1974] AC 207 at pp212-213, 214, 223."
However, it is necessary to do more than make an assessment of the value of the pecuniary benefit likely to flow from the deceased to the plaintiff. As Fullagar J and Kitto J said in Lincoln v Gravil (1954) 94 CLR 430 at 441:-
"... the measure of the damages which the plaintiff is to recover for her own benefit is the amount of her net pecuniary loss, ascertained on a balance of the losses and gains accruing to her by reason of the death."
See also Public Trustee v Zoanetti (1945) 70 CLR 266 at 276-277 Dixon J.
The starting point for the District Court Judge was to identify the pecuniary benefit that the plaintiff derived from her husband at the time of his death, and then to make an assessment, ultimately expressed as a lump sum, of the pecuniary benefit reasonably to be expected to be received by her over her lifetime, but for the death of her husband. The next step was to identify and to allow for pecuniary benefits to the plaintiff resulting from her husband’s death. Whatever the difficulties of that process, and whatever its imprecision, it is one routinely undertaken by the courts.
Income earned by the plaintiff at the time of her husband's death, and the prospect of the plaintiff earning income in later years had her husband lived, may be relevant to this process. As Jacobs J said in Burley v Trewartha (1976) 13 SASR 514 at 515 the calculation of the damages involves an estimation of what the deceased might have contributed financially to his widow:-
“... the prospect of the plaintiff's future earnings would not appear to be relevant, as such, although there may be cases (and this is not such a case), where the prospect of such earnings may help to support the finding that the deceased's own contributions, for one reason or another, might have tended to diminish."
The same point was made by Samuels JA in Dominish v Astill [1979] 2 NSWLR 368 at 387-388, referring to the relevance of a widow's employment to the assessment of the damages. He said:-
"Her employment during marriage, and her attitude to and capacity for employment outside the home are all relevant factors in assessing the extent of her dependency. Earnings during marriage do not necessarily affect the amount or duration of the widow's notional loss of support. In this respect, they are distinguished from the effects of actual or prospective death or remarriage. Death terminates the period of lost support; and remarriage concerns both period and extent. But the support which a wife derives from her husband during marriage may be, in fact, affected by the amount of her own earnings. The basis of the widow's claim is what she got during marriage, and would have been likely to get had the husband survived. A husband may provide support for his wife, for which she may claim after his death, even though during marriage, she earned more than he did. The amount of past support is not subject to any reduction merely because the wife worked while the husband was alive. None the less, the wife's own earnings would normally have some bearing upon the amount of the husband's contribution; and they provide evidence against which the plausibility of the claim made may be checked."
See also Reynolds JA at 374C and Mahoney JA at 397B-C.
As these passages indicate, the income earned by the plaintiff through her own exertions at the time of her husband's death, and the prospect of her continuing to earn income had her husband not died, were relevant to the assessment of damages. They were relevant at least to the extent that they led to the conclusion that the plaintiff's husband might, by reason of those earnings, have reduced the amount of financial support that he otherwise would have provided to his wife. But in the present case the Judge considered this matter. His finding, which I have summarised above, was that the financial support provided by the deceased to the plaintiff would not have altered during the marriage by reason of earnings made by the plaintiff. This may seem a generous finding, but it is one that was open to him on the evidence, and no satisfactory basis was established for disturbing the finding. For that reason, the second point argued on appeal fails. The finding that the deceased would have maintained the level of financial support provided to his wife at the time of his death, even though she continued to earn income from part-time work, is a sufficient basis for the assessment of damages that the judge made. It cannot be said that the judge was obliged to find that the financial benefits provided by the deceased to his wife would have diminished, to any significant extent, with the passage of time. Accordingly, the submission based upon the point identified by Jacobs J and Samuels JA must be rejected.
But the main argument by Mr Walsh QC, counsel for the appellant, is that there was a more significant error made by the judge. Mr Walsh points to the fact that during the marriage the plaintiff was constrained, by her deference to her husband's wishes, not to exercise her earning capacity at all initially, and to the full later in the marriage. Mr Walsh submits that as a result of the husband's death the plaintiff is now free of that constraint. She is now free to exercise her earning capacity to the full, and the evidence indicates that she proposes to do so. Mr Walsh submits that during the marriage the plaintiff was not free to exercise her earning capacity to the full. Now she is. Accordingly, Mr Walsh submits, the financial benefit attributable to the plaintiff's ability and freedom to exercise her earning capacity to the full is a benefit or advantage or gain that accrues to the plaintiff by reason of her husband's death, and so must be set off against the loss flowing from the loss of her husband's financial support. He submits that this is required in the application of the principle stated by Fullagar J and Kitto J in Lincolnv Gravil (1954) 94 CLR 430.
In other words, Mr Walsh submits that the plaintiff's exercise of her earning capacity after her husband's death, or at the least the increased exercise of that earning capacity and the increased earnings, is a benefit available to the plaintiff by reason of her husband's death.
The relevance of a widow's earning capacity to the assessment of the loss resulting from the death of her husband was considered by the High Court in Carroll v Purcell (1961) 107 CLR 73. The reasons of Dixon CJ, Kitto, Taylor and Windeyer JJ are often cited in this connection. The court there emphatically rejected the proposition that the death of a spouse results in a revived earning capacity in the other spouse to undertake employment. As the majority said, the ability or capacity to work was always there: at 79. They drew a clear distinction between the proposition that the death of one spouse results in a revived capacity in the other to marry, and the proposition that the death of one spouse results in a revived capacity in the other to undertake gainful employment. In the course of rejecting the submission identified by me, their Honours said (at 79-80):-
"But the respondent contends that, in the case of a widow who is capable of engaging in gainful employment, widowhood brings with it an advantage of pecuniary value in as much as it affords an increased opportunity to engage in such employment. This may be of some interest as a theoretical proposition but of what importance or relevance is it in everyday affairs? Many wives, either with or without children, engage in employment during the subsistence of the marriage. Is no deduction to be made where the plaintiff widow is to be found in this category and yet a deduction is to be made where the plaintiff, during her marriage, chooses to do no more than attend to the requirements of her household? The proposition is that some deduction should be made in the latter case because the death of her husband has placed the plaintiff in a position in which she is free to seek employment. It assumes, of course, that, in such a case, she was not free during the marriage to engage in employment. But this is to confuse choice with lack of freedom. ... So far as the present case is concerned it is obvious that nothing more appeared than, that 'in order to make ends meet', the plaintiff placed her children in a boarding school and then sought and obtained employment. These things might have been done during her married life and there was no basis upon which it was legitimate to submit to the jury the question whether the plaintiff obtained any advantage of the character in question as the result of her husband's death."
Their Honours contemplated the possibility of "some exceptional cases" in which the death of a spouse might be regarded as in some way resulting in an advantage to the widow of pecuniary value, referable to her earning capacity, but they said it was difficult to see how that would occur and did not identify any such case.
In his submissions Mr Walsh fastened on the judge's finding to the effect that during the marriage the plaintiff was not free to engage in employment, at least full time employment, because she deferred to her husband's wishes. He said that this was a case in which, in terms of the reasons of the majority of the High Court in Carroll during the marriage the plaintiff lacked the freedom to engage in employment, and was not exercising a choice not to engage in employment. After her husband's death she had the freedom to engage in employment, or at least to do so to the full. For that reason he submits that the gain thereby resulting is to be offset against the loss of support that she could have expected to receive from her husband.
It may be that Carroll is essentially a decision on its facts, but it has been treated as laying down a general principle to be applied in the assessment of damages in cases like the present one. As Clarke JA said in Halvorsen Boats Pty Ltd v Robinson (1993) 31 NSWLR 1 at 11:-
"Although it is possible to regard Carroll as a decision on its particular facts, the decision has been accepted as laying down the proposition that a widow's freedom to work was not a benefit resulting from her husband's death. Carroll does not, however, support the proposition that a widow's earnings or capacity to work are irrelevant to any assessment of the damages."
I have already dealt with the impact of the widow's earnings on the extent of her dependency upon her husband. I am now dealing with the broader issue.
The reasons of the majority of the High Court in Carroll were similarly understood by the Court of Appeal of New South Wales in Dominish v Astill [1979] 2 NSWLR 368 at 374 Reynolds JA, at 387-388 Samuels JA, and at 396 Mahoney JA.
In the present case the death of the plaintiff's husband did not affect her actual ability or capacity, or perhaps her potential, to earn income. She had the same skills and abilities and the same openings for employment, after the death as she had before. The death of the plaintiff's husband did remove the restraint which had previously existed upon her exercising her capacity to the full, as a result of her deference to her husband's wishes.
Despite that fact, I find it difficult to see how, consistently with Carroll and other cases that have applied it, the defendant's argument can be accepted. The argument rests largely on the allusion by the majority in Carroll to the possibility of exceptional cases, and to the distinction that they drew in the passage cited between a woman who does not work during marriage through choice, and one who is not free to work. Indeed, Mr Walsh seemed to acknowledge that his argument would not apply to a woman who chose to devote herself entirely to caring for her husband, and that it applies only to one who is in effect required by her husband to do that.
I am not satisfied, first of all, that it is correct to say that the plaintiff was not free during the marriage to exercise her earning capacity to the full if she so chose. It seems to me that it can readily be said that it was the choice of the plaintiff to act as her husband wished. While she did not entirely agree with his attitude, there is no indication that she was inclined to resist him. I do not consider that it is right to say that she was not free to work during the marriage. In any marriage many things are organised by mutual agreement, in which the parties consider the wishes and interests of each other. One should not too readily attribute the result of such matters solely to the will of one party to the marriage. The fact that later in the marriage the plaintiff and her husband agreed that she should work part-time suggests also that Mr Walsh's description of her as not free or able to work as she wished during the marriage is not correct. The stark contrast between the situation of choice and freedom, referred to by the High Court, seems too simplistic to me to apply to a case like the present one. Indeed, the circumstances of the present case suggest to me that had the need arisen during the course of the marriage, the plaintiff would have exercised her earning capacity more fully and that her husband would have been content for her to do so. For those reasons, I am inclined to think that the submission for the defendant fails on the facts.
But in any event a woman who chooses to commit herself wholly to the care of her husband is, in my opinion, in no different position in relation to the assessment of damages from a woman whose husband expects or perhaps even requires that of her. Neither is, in one sense, free during marriage to exercise her earning capacity. The former is not free because she believes that she should devote herself to the family. The latter is not free because she does not wish to be in conflict with her husband. If no deduction is to be made in the case for the former woman, by reference to earnings made after the death of her husband, why should such a deduction be made in the case of the latter woman? Categorising the situation of the relevant woman as one that is the result of choice or demand seems irrelevant to me.
As the majority of the High Court said in Carroll, there may be an exceptional case in which the death of a husband results in a gain to the wife referable to her ability to earn income after the death. But this is not such a case. In my view it is simply a case in which a woman who had a demonstrated earning capacity before the death of her husband has, in response to the exigencies of her situation, exercised that earning capacity more fully after the death of her husband. She did not exercise that earning capacity more fully prior to his death because she chose not to do so, as a result of mutual agreement with her husband. It cannot be said that the death of her husband in any realistic sense gave rise to a capacity to earn income that she did not have before his death. In my opinion the submissions by the defendant should be rejected.
Conclusions
The point of principle advanced by the appellant should be rejected, as should the submission based upon the findings of the judge and the manner in which he went about the relevant aspect of the assessment. The appeal should be dismissed.
DEBELLE J. I agree with the substance of the reasons of the Chief Justice. I too would dismiss the appeal.
NYLAND J. I agree that the appeal should be dismissed for the reasons expressed by the Chief Justice.
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