Diamond v Simpson (No 1)

[2003] NSWCA 67

NEW SOUTH WALES COURT OF APPEAL

CITATION:      Diamond v Simpson (No 1) [2003]  NSWCA 67

FILE NUMBER(S):
40962/01

HEARING DATE(S):               25/11/02; 26/11/02; 27/11/02; 28/11/02

JUDGMENT DATE: 07/04/2003

PARTIES:
Robert Diamond (Appellant)
Calandre Simpson by her Tutor William Charles Simpson (1st Respondent)
Trustees of the Sisters of St Joseph (2nd Respondent)

JUDGMENT OF:       Stein JA Ipp JA Young CJ in Eq   

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S):          12791/87

LOWER COURT JUDICIAL OFFICER:     Whealy J

COUNSEL:
P L G Brereton SC and I Butcher (Appellant)
D F Jackson QC, L A Levy SC and Ms J L Lonergan (1st Respondent)
P Hall QC and S Woods (2nd Respondent)

SOLICITORS:
Blake Dawson Waldron (Appellant)
Turtons (1st Respondent)
Makinson & d'Apice (2nd Respondent)

CATCHWORDS:
DAMAGES- The approach to be adopted in determining an appeal from an assessment of damages in a personal injuries action- Relevance of an award being particularly high- Claims for gratuitous services rendered by a publicly or privately funded charitable institution- Application of principle of proportionality and reasonableness to various heads of damages. (D)

LEGISLATION CITED:

DECISION:
1.  Appeal allowed
2.  Order of Whealy J set aside except as to costs
3.  In lieu, verdict for the first respondent for $10,998,692
4.  Order that the first respondent repay to the appellant any sum already received over and above the amount referred to in order 3 plus interest at the court rate from the date of payment
5.  Order that the cross appeal be dismissed with costs
6.  Stand over the question of costs of the appeal to 9.15 am on 9 April 2003.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40962/01
SC 12791/87

STEIN JA
IPP JA
YOUNG CJ IN EQ

Monday 7 April 2003

ROBERT DIAMOND v CALANDRE SIMPSON by her Tutor WILLIAM CHARLES SIMPSON & 1 OR (NO 1)

FACTS
As a consequence of the appellant’s negligence during the delivery of the first respondent, the first respondent is severely disabled by athetoid cerebral palsy. All of the first respondent’s physical activities are affected by her disability. She therefore brought proceedings for damages against the appellant and the second respondent. Whealy J awarded total damages of $14,202,042, which was broken down into numerous heads of damages. The appellant, in this appeal, challenged various heads of damages. The first respondent also cross appealed against the disallowance of an amount claimed for a fund manager.

FINDINGS
The approach adopted by the Court of Appeal in determining the appeal (being an appeal from an assessment of damages in a personal injuries action) is that laid down in Harper v Bangalow Motors (unreported, NSWCA, 24 July 1990). The size of the aggregate sum awarded was very large and it was questioned whether its size should play any roled in the determination of the appropriateness of the total sum awarded. The mere fact, however, that the total award might be particularly high does not warrant an appellate court interfering with it: Pettersen v Bacha (1995) 21 MVR 71 at 72 (per Handley JA); Government Insurance Office of New South Wales v Mackie (1990) Aust Torts Reports 81-053 at 68,209.

The Court of Appeal dealt separately with each of the heads of damages challenged.

In relation to past and future loss of earning capacity, interest and superannuation, the trial judge awarded $50,880 for past loss of earning capacity, $15,860 interest on past lost earnings and $720,169 for future loss of earning capacity. His Honour also awarded $2,100 for past loss of employer-funded superannuation and $87,700 for future loss of employer-funded superannuation, and allowed the sum of $5,000 as the value of the loss of future long service leave entitlements. The Court of Appeal found that the figures arrived at by the trial judge were well within the range available and should not be interfered with.

With regard to future gratuitous services, the trial judge allowed $25,000: $10,000 for short term gratuitous services necessitated by the plaintiff’s transition from living at home to independent living, nil for long term gratuitous services arising from the plaintiff’s inability to speak, and $15,000 for a continuous life long need for family and friends to receive instructions in the use of the plaintiff’s communication equipment etc. The Court of Appeal brought the total sum back to $10,000 by deleting the allowance of $15,000, because after the transition period from living at home to independent living, the employment of a case manager should mean that there is no need for further instruction of family and friends. 

In relation to future attendant care, the trial judge allowed $6,518,098, which included the provision of managed care for a quarter of each year. The Court of Appeal reduced this figure to $4,933,800 finding that the provision to the first respondent of a case manager means that there is no requirement for managed care. The Court of Appeal considered the effect of this reduction on the provision of a case manager, and increased the amount to be awarded for a case manager by $180,906. With regard to home building costs, the trial judge allowed for $159,963 and $42,359 for costs of modification to her parents’ Vaucluse home and to their Palm Beach holiday accommodation respectively. The Court of Appeal found that the trial judge had imposed an unreasonable cost upon the appellant and that the likely benefits of home modifications to the first respondent were out of proportion to the cost of modifications visited upon the appellant. Therefore, the respective sums were both reduced to nil.

The Court of Appeal upheld the trial judge’s award of $390,606 for additional home maintenance, despite the fact that that this figure included certain matters which were not claimed to be additional in the evidence. In relation to therapeutic aids, appliances and equipment, the trial judge allowed $472,980. This included $84,340 for a Pathfinder and Zygo head pointer, the subject of the appellant’s challenge under this head of damage. The appellant submitted that an alternative head pointer was adequate and cheaper, and it was unreasonable for his Honour to have chosen the more expensive product. The Court of Appeal dismissed this ground of appeal, stating that the trial judge was entitled to accept the expert’s evidence that this particular head pointer was the better alternative for the plaintiff, as it was a superior product with more functions and features.

His Honour allowed $292,679 for the provision of computer equipment and a traineeship. The appellant submitted that some of the costs of computer equipment ($51,951) should not have been allowed, as these were not additional costs arising from the plaintiff’s injuries. The Court of Appeal dismissed this ground of appeal. The trial judge allowed $171,628 for a special education teacher to assist the plaintiff for five years. The appellant contended that no allowance should have been made. The Court of Appeal held that his Honour overestimated the respondent’s loss of earnings for this five-year period of education, and accordingly deducted the sum allowed by $13,000. The trial judge allowed the sum of $330,000 for additional vacation costs for the plaintiff and two carers. This figure represented local and overseas holidays for 50 years. The Court of Appeal reduced this figure to $200,000.

In relation to the provision of medical and allied professional services to the first respondent from the Spastic Centre for New South Wales (for which the Spastic Centre subsequently sent invoices to the first respondent to be paid if she successfully received damages), Whealy J allowed a sum of $614,752. His Honour held that the appellant was required to pay damages, on a Griffiths v Kerkemeyer (1977) 139 CLR 161 basis, to the first respondent based on the Spastic Centre’s charges (albeit that the first respondent had no legal obligation to pay the Spastic Centre). In doing so, his Honour extended the Griffiths v Kerkemeyer doctrine to therapeutic services provided free of charge by a charitable organisation.

The Court of Appeal held that the trial judge erred in so extending the Griffiths v Kerkemeyer doctrine. Griffiths v Kerkeymeyer claims are anomalous and exceptional and courts should be reluctant to extend the doctrine to new categories of claims. Claims for gratuitous services rendered by a friend or relative fall into a separate, identifiable category of claims, that can properly be described as Griffiths v Kerkemeyer claims. Claims for gratuitous services rendered by a publicly or privately funded charitable institution are not payable by the wrongdoer merely on the ground that the injured person has established a need for the services in question. The injured person’s entitlement to such claims will depend upon an application of the principles expressed in National Insurance Company of New Zealand Limited v Espagne (1961) 105 CLR 569.

In the opinion of the Court of Appeal, the benefit of the services received from the Spastic Centre was conferred on the first respondent independently of any right of redress she might have against others. Accordingly, on the Espagne approach, the services provided by the Spastic Centre constitute subventions given out of benevolence with the intention that no payment was to be made for them by the first respondent. Thus, it is not possible to say (as Whealy J found) that the Spastic Centre did not intend the market costs of its services to reduce the first respondent’s ordinary entitlement to damages. Thus, the Court of Appeal set aside the awards made in respect of the Spastic Centre.

The Court of Appeal dismissed the cross appeal against the trial judge’s disallowance of an amount claimed for a fund manager.

ORDERS

1. Appeal allowed.

2. Order of Whealy J set aside except as to costs.

3. In lieu, verdict for the first respondent for $10,998,692.

4. Order that the first respondent repay to the appellant any sum already received over and above the amount referred to in order 3 plus interest at the court rate from the date of payment.

5. Order that the cross appeal be dismissed with costs.

6. Stand over the question of costs of the appeal to 9.15 am on 9 April 2003.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40962/01
SC 12791/87

STEIN JA
IPP JA
YOUNG CJ IN EQ

Monday 7 April 2003

ROBERT DIAMOND v CALANDRE SIMPSON by her Tutor WILLIAM CHARLES SIMPSON & 1 OR (NO 1)

Judgment

1. THE COURT: 

   The claims and cross claim, the judgment, the appeal and the cross appeal

2. Calandre Simpson (the first respondent) was born on 5 July 1979.  She was injured during the birth process.  The appellant (Dr Diamond) was the attending obstetrician.  The second respondents (the Trustees of the Sisters of St Joseph) were responsible for managing and controlling the hospital where the first respondent was born.  Several years later, the first respondent brought proceedings against the appellant and the second respondent claiming damages for the injuries she had sustained. 

3. Prior to the trial, the appellant admitted:

   “[The first respondent’s] cerebral palsy is caused by his negligence in the manner, timing and circumstances of his use of forceps and negligence of the [second respondent]”.

4. On 5 November 2001 Whealy J gave judgment in favour of the first respondent against the appellant. The first respondent had, by then, withdrawn her claim against the second respondent.  At that stage, there were two principal issues before the learned Judge.  The first principal issue was the amount of damages to which the first respondent was entitled.  The second principal issue concerned a cross claim for contribution brought by the appellant against the second respondent.

5. Whealy J assessed damages in the sum of $14,202,042.  He granted judgment in favour of the first respondent against the appellant in this sum.  He dismissed the appellant’s claim for contribution against the second respondent.

6. The appellant appealed, challenging the assessment of damages and also the dismissal of his cross claim for contribution.  At the conclusion of argument on the assessment of damages issue, the appeal was adjourned to a date to be arranged for the further hearing of the appeal in regard to the cross claim.  These reasons relate only to the appeal against the assessment of damages.

7. Since birth the first respondent has been severely disabled by athetoid cerebral palsy.  This is a rare type of cerebral palsy characterised by changing tone and abnormal movements induced by attempts at normal movement or maintaining posture.  The change in muscle tone and the uncontrolled movements affect all the first respondent’s physical activities and severely impair all physical function.

8. In a report dated 5 July 1994, Helen Figgis, a physiotherapist, stated:

   “Calandre has fluctuating tone from low to high, especially evident when excited, distressed or on exertion in attempting a task.  This change in muscle tone, as well as uncontrolled movement, affects all activities, severely limiting function”.

   Janet Crowe, an occupational therapist, stated in a report dated 30 June 1995:

   “Calandre is able to roll, crawl reciprocally, come to sitting both sides and balance in kneeling for a short time on the floor. She is able to sit in a chair for short periods before losing her balance …

   Calandre walks with the facilitation of one person behind, or on level ground, in a forward leaning walker.”

   Ms Crowe noted:

   “Other therapists report that Calandre’s upper limb function is influenced by the fluctuating tone, total patterns of flexions/extension movement and associated reactions in her hands and mouth.  This includes teeth grinding, tongue thrusting, jaw extension and, at times, poor saliva control.  Grasp and release is gross and poorly controlled.  The right upper limb being worse than the left.

   Calandre’s preferred hand is the left.  She is able to isolate her left thumb when her splade hand is supported on a flat surface.  With her hand in this position she is able to use her communication board and drive her powered wheelchair.  She chooses to have her right arm held down in a cuff on her tray to provide stability when seated.  This facilitates more functional use of her left hand.”

9. Ms Sturgess, an orthoptist, in an undated report, stated:

   “Calandre cannot look upwards, past the midline and has difficulties moving her eyes across to each side (especially a problem to the left).  All objects of interest should be presented below the midline, and from her right side, then placed slightly to the left, as this is the position she finds most comfortable”.

10. The athetoid cerebral palsy has severely affected the first respondent’s speech.  A speech pathologist, Ms Judi Cowdery, in a report dated 4 July 1994, noted:

    “She has some gross word approximations for example, ‘hi’, ‘Mum’ but does not have functional speech to support her communication needs.  She uses a reliable yes/no response, nodding or shaking her head.  She currently uses a voice output communication aid, a ‘LightTalker’ with a Words Strategy program installed to provide vocabulary.  The messages generated are then spoken using synthesised speech.  Cally uses a combination of the pre-stored vocabulary and spelling to form messages.  In addition she has a backup symbol board system …”

    Communicating with the first respondent is time consuming and requires infinite patience.

11. The first respondent’s hearing is within normal limits and, importantly, she is a person of normal intelligence.  Her predicament is overwhelming.  Whealy J succinctly observed that apart from her inability to control her physical movements “she is unable to speak, is confined to a wheelchair and is totally dependent on others for all her needs.”

12. The damages of $14,202,042 awarded by his Honour were made up as follows:

Head of Damages	Trial Judge	Appellant's contention
1	General damages	390,000	390,000
2	Interest on past general damages ($100,000)	87,087	87,087
3	Past loss of earnings	50,880	46,995
4	Interest on past lost earnings	15,860	14,408
5	Future loss of earning capacity	720,169	569,200
6	Past loss of employer-funded superannuation	2,100	2,100
7	Future loss of employer-funded superannuation	84,700	73,641
8	Long service leave	5,000	NIL
9	Past gratuitous services	119,730	119,730
10	Interest on past gratuitous services	310,880	310,880
11	Future gratuitous services	25,000	NIL
12	Future attendant care	6,518,098	4,111,500
13	Home building and architectural costs	502,322	300,000
14	Hydrotherapy pool	95,467	95,467
15	Home maintenance and running costs	390,606	294,205
16	Therapeutic aids, appliances and equipment	427,980	343,640
17	Maintenance on aids, appliances and equipment	25,916	25,916
18	Computer	292,679	231,928
19	Educational tutoring	171,628	NIL
20	Motor vehicle	161,623	161,623
21	Future medical treatment	125,564	125,564
22	Future paramedical costs	476,625	476,625
23	Future pharmaceutical costs	16,569	16,569
24	Additional vacation costs	330,000	80,338
27	Case manager	361,812	361,812
29	Out-of-pocket expenses	1,103,452	488,700
30	Interest on paid out-of-pocket expenses	1,335,296	510,411
31	Funds management charges	55,000	55,000
TOTAL	14,202,042	9,293,339

1. The heads of damage challenged in this appeal are past loss of earnings, interest on past lost earnings, future loss of earning capacity, future loss of employer-funded superannuation, long service leave, future gratuitous services, future attendant care, home building and architectural costs, home maintenance and running costs, therapeutic aids, appliances and equipment, computer, educational tutoring, additional vacation costs, out-of-pocket expenses (the Spastic Centre claim) and interest on paid out-of-pocket expenses.  These are items 3 to 5, 7 and 8, 11 to 13, 15 and 16, 18 and 19, 24, and 29 and 30 in the table of damages set out above. Items 27 and 31 are also collaterally affected.

2. The first respondent also cross appealed against the disallowance of the whole amount claimed for a fund manager.  The amount of this claim was not quantified.  Although Whealy J awarded the first respondent $55,000 in respect of funds management costs (item 31 in the table of damages), he found that the first respondent was not entitled to damages for engaging a funds manager at the appellant's expense.

   Approach of an appellate court to an appeal against the assessment of damages

3. The task of an appellate court in determining an appeal from an assessment of damages in a personal injuries action has been discussed on many occasions.  In the well-known decision of Moran v McMahon (1985) 3 NSWLR 700, Priestley JA carefully examined the relevant High Court decisions and decisions in this State. To the cases to which his Honour referred, we would add Government Insurance Office of New South Wales v Cox (1976) 51 ALJR 559. Since then the issue has been discussed in this State in Burden v Rath (1986) Aust Torts Reports 80-050, Fuller v Galvin (unreported, NSWCA, 7 April 1995), Joyce vGeelan [2001] NSWCA 29 and Rajcoomar v Darocha [2001] NSWCA 30. Elsewhere, consideration has been given to the topic by the Queensland Full Court in Calder v Boyne [1991] 1 Qd R 325, the ACT Full Court in Sherwood v Guneser (1992) 110 FLR 459 and a five judge Full Federal Court in Fry v McGufficke (unreported, FCA, 26 November 1998). It is unnecessary to refer in any detail to these authorities, however, as both the appellant and the first respondent agreed (and this Court accepts) the principles are accurately and conveniently expressed by Clarke JA in Harper v Bangalow Motors (unreported, NSWCA, 24 July 1990).

1. In Harper v Bangalow Motors Clarke JA, after referring to remarks made by Lord Wright in Davies v Powell DuffrynAssociated Collieries Limited [1942] AC 601 and Lord Diplock in delivering the judgment of the Privy Council in Paul v Rendell (1981) 55 ALJR 371, said:

   “What one draws from these statements is that the intuitive nature of, and the speculation involved in, awards of damages make it inappropriate to apply the principles applicable in an appeal from a finding of fact.  Of course there may be determinations which involve little, or no, speculation.  For instance, the success of a claim for past loss of earnings (and I use that expression as a convenient way of describing the impairment of past earning capacity) may depend, in essence, upon the resolution of a disputed issue of fact.  Such as whether the plaintiff is truthful in his assertion of incapacity.  Similarly the resolution of a claim for damages in respect of a permanent impairment of earning capacity may depend substantially on a finding on incapacity.  At the other end of the scale there are cases in which the trial judge will be required to reach a conclusion based on a high degree of speculation.  In these cases the choice accorded to the trial judge must lie within a wide range and, in my opinion, the decision which reflects that choice can only be reversed in accordance with the test in Miller.

   Obviously that test is not to be applied automatically to all elements, economic and non-economic, of the claim for damages.  Whether that test is applied in respect of claims for economic loss will depend upon the facts of the given case.  If the assessment is based essentially on factual determinations then no reason would appear to me why the Warren rule should not apply.  Such a case would be one in which the allowance of a particular medical expense depended upon a determination whether the expense was payable in respect of the tortiously affected injury – the result depending upon the factual determination whether a causal link between the tort and the medical condition in respect of which the expense had been incurred had been established.  If, however, the decision reflects a degree of judicial prophesy or speculation then I think that Miller must apply”.

2. His Honour’s reference to the approach in Miller was to the view expressed by Dixon CJ and Kitto J in Miller v Jennings (1954) 92 CLR 190 (at 196) that:

   “[T]he appellate court must be convinced that the judge acted on a wrong principle or that the amount awarded was so extremely small as to make it, in its judgment, an entirely erroneous estimate of the damage to which the party is entitled”.

3. We shall apply the principles so expressed.

   The size of the aggregate sum awarded

4. The aggregate sum awarded is undoubtedly very large.  The question arises whether its size should play any part the determination of the appropriateness of the total sum awarded.

5. It is now settled that, although the total amount of damages appropriate to be awarded is the ultimate question to be decided, the component items have to be separately considered.  As Lord Fraser said in delivering the judgment of the Privy Council in Lai WeeLian v Singapore Bus Service (1978) Ltd [1984] 1 AC 729 at 735

   “They are the necessary parts which make up the whole, and the only proper way of deciding whether the global award is too low or too high is by assessing the separate items and arriving at a fair total”.

   See also Gamser v Nominal Defendant (1977) 136 CLR 145 at 149; Paul v Rendell at 376 to 377. There have been several expressions of opinion in this Court to the same effect. It is sufficient to refer again to the judgment of Clarke JA in Harper v Bangalow Motors.

6. In Sharman v Evans (1977) 138 CLR 563 Gibbs and Stephen JJ at 585 noted that the total amount awarded in that case was said to have been “the largest yet made for personal injuries in Australia”. The plaintiff had been injured in a motor car accident at the age of 20, had suffered very serious injuries including brain stem damage and had been rendered a quadriplegic. The overall award involved several components or heads of damage. Gibbs and Stephen JJ, after discussing in detail some of those heads, said (at 589):

   “We have carried out the detailed examination of the factors constituting an appropriate award of damages in order to equip ourselves to determine whether the judge erred in his conclusion on the total amount of damages appropriate to be awarded.  We bear in mind that this is the ultimate question to be decided and that the trial judge had a wide discretion.  We have therefore adopted in the process the maximum figures which on the evidence in this case could be accepted under each head of damages.  It does not follow that these amounts are those which we would have adopted in the first instance.  When the approach we have thought appropriate in the circumstances of this case is adopted in order to test the award and when consequently maximum figures under each head are taken there is of course no room for a further allowance whereby the verdict could be sustained as one within permissible limits.  It would be otherwise if less than maximum figures were taken under each head, that is to say, if a court on appeal were to form its own estimate of the appropriate, rather than the maximum, amount of damages under each head”.

   Applying this approach, their Honours determined that the total amount of the verdict was too high and that it was necessary for them to determine a proper amount.

7. It is in this sense, at least, that the aggregate amount does become relevant.  The approach adopted by Gibbs and Stephen JJ in Sharman vEvans is one way in which an appellate court might utilise the overall sum awarded in a process of assessing whether there has been appealable error.  That is, where the court determines the maximum amount that could be awarded under each head and, on comparing the aggregate sum so arrived at with the total sum in fact awarded, it appears that the latter exceeds the former, it will be established that the total amount of the verdict is too high.

8. It is difficult to apply this approach in the present case as several of the heads of damage assessed by Whealy J are not under challenge and the Court is not in a position to say whether the amounts not subject to challenge are the maximum amounts that could have been awarded.   Nevertheless, the rationale underlying the quoted remarks of Gibbs CJ and Stephen J in Sharman v Evans has to be borne in mind, at least as a last reality check when assessing, according to the principles expressed in Harper v Bangalow Motors, whether error has occurred.

9. Where the damages award is particularly high, and is made up of several components - the majority of which are based on discretionary considerations - there is considerable room for individual choice in regard to a multitude of factors.  There is authority that in such a case the Court will only interfere in the award if the substitution of an appropriate award for the particular item would make a substantial alteration in the total award:  Lia Wee Lian v Singapore Bus Service (1978) Ltd at 735, Elford v FAI GeneralInsurance Company Limited [1994] 1 Qd R 258 (CA), Mt Isa Mines Limited v Peachey (unreported, Supreme Court of Queensland (CA), 1 December 1998); State Government Insurance Commission v Hitchcock (unreported, Full Court, Supreme Court of Western Australia, 11 March 1997); Lawson v Flavel [2001] WASCA 272; Nunn v Hardcastle [2001] WASCA 428.

10. The mere fact, however, that the total award might be particularly high does not warrant an appellate court interfering with it; Pettersen v Bacha (1995) 21 MVR 71 at 72 (per Handley JA) and Government Insurance Office of NewSouth Wales v Mackie (1990) Aust Torts Reports 81-053 at 68, 209. In the latter case Clarke JA said that it would be “quite wrong” for the Court to award less than fair compensation simply because the resulting judgment would be very large.

    “The size of the damages may raise a question whether the community can continue to afford to pay damages of the order assessed in this case but, if so, that is not a question which directly concerns the Court.

    As I have said the task of the Court is to apply the appropriate legal principles and to determine the appeal upon its view of the correctness of his Honour’s assessments and, in the event of a re-assessment, what is fair and reasonable compensation in all the circumstances”.

    Past and future loss of earning capacity, interest and superannuation – items 3, 4, 5 and 7

11. His Honour awarded the first respondent $50,880 for past loss of earning capacity (item 3), $15,860 interest on past lost earnings (item 4), and $720,169 for future loss of earning capacity (item 5).  His Honour also awarded $2,100 for past loss of employer-funded superannuation (item 6 and not in dispute) and $84,700 for future loss of employer-funded superannuation (item 7).

12. According to the submission of counsel for the appellant the single issue in dispute under these heads of damage is whether his Honour erred in adopting the category of average weekly earnings for all adults (male and female).  The appellant submitted that his Honour should have adopted the average weekly earnings (AWE) for all adult females.  In money terms, the difference is around $80 per week or a little over $4,000 per annum.  This flows through to each of the items of damage in dispute under the above heads of damage.

13. In approaching this issue the Court will apply the principles discussed earlier in paras 15 to 18 of the Court’s reasons for judgment.  This essentially means that the appellant must convince the Court that the trial judge acted on a wrong principle or the estimate of damage was an entirely erroneous one, see Harper v Bangalow Motors and Miller v Jennings.

14. With regard to Calandre’s loss of earning capacity, the starting point is that the appellant accepts that her future earning capacity has been completely destroyed with the result that she has no residual earning capacity [para 338].  His Honour concluded that the appropriate and most proximate rate to apply was the full time adult rate and not the AWE for full time adult females.

15. On the way to this conclusion Whealy J made a number of relevant findings of fact.  We summarise some of them by reference to the judgment.

16. Prior to the consideration of loss of earning capacity, and when considering whether the plaintiff would have been likely to have undertaken tertiary education, his Honour observed [at 331]:

    “… there is sufficient material to satisfy me that there is a higher possibility that the plaintiff had a capacity for, at the very least, average prospects so far as future earnings are concerned.  Indeed, she had quite probably a realistic possibility of becoming a high earner”.

17. Counsel for the plaintiff contended before his Honour that she would, if uninjured, have become a successful lawyer.  His Honour rejected this submission, but in doing so, made some important findings.  For example:

    “… her father is a highly successful professional, indeed described in the evidence and submissions as “a workaholic”.  Her mother, Gail Simpson, is a redoubtable woman of significant determination, perseverance and aptitude.  These aspect [sic] of the family’s situation are countervailing considerations in the context of the submissions made by the defendant regarding the plaintiff’s sisters”. [346]

    “Calandre’s personal characteristics certainly support the proposition that she would have become at least an average earner, and quite possibly a higher than average earner.  They do not, however, enable me to predict with any really positive persuasion that she would probably have gone into a legal career”. [348]

    “Calandre Simpson is a young lady of considerable drive and determination.  She has average intelligence.  There seems no basis, in my opinion, for excluding the possibility that she may have gone on to become a high earner in the workforce.  It is possible that she may have gone on to a tertiary education and there is some support for that proposition in her own character and the background of her father especially.  There is, however, very little else to support the possibility and I am not satisfied overall that any real possibility of a legal career based on tertiary education has been established as likely”. [354]

18. Clearly Whealy J recognised that it was a possibility that Calandre may have undertaken tertiary education.  Indeed, there were a number of possibilities that her career could have taken.  However, because she was injured at birth, very little could be known or even guessed regarding her likely career path had she not sustained injuries during the birth.

19. His Honour continued [at 358]:

    “The best I have been able to do is to determine that she would have most likely developed into and become a person who would have undertaken and succeeded at a business career which probably would have put her in at least an average earning position and, quite possibly, a better than average earning position.  The mere fact that little is known, and that a degree of guesswork is involved, is not sufficient to condemn the plaintiff to an unjustified average category.  The facts which are known about the plaintiff include the positive personal characteristics I have already described such as her drive and determination.  There are as well her personality, intelligence and lively humour. In addition there is her father’s successful professional background as a dentist and his obvious capacity for hard work.  There are, as well, her mother’s qualities of determination and perseverance and aptitude.  Contrary to the defendant’s submissions, I do not see the plaintiff’s socio-economic ground [sic] as a negative factor in the circumstances of this case. Rather given the range of other factors I have mentioned, the plaintiff’s background gives me an assurance that she was likely to have done well in her business career.  I have little doubt that she would have married and had children but I am prepared to accept as quite a likely possibility, indeed a probability, that the plaintiff would have maintained a business career notwithstanding marriage and the burdens of parenthood”.

20. His Honour stated emphatically that he had no hesitation in rejecting the category of AWE for adult females suggested by the appellant.  His Honour said that this was too low a yardstick for the plaintiff [360] because it included all the lesser rates for part-time earnings and casual earnings for intermittent female workers “absent a specific degree of ambition”. 

21. The Judge stated that if the rate contended for by the appellant were to be chosen, it would be necessary to make an adjustment to reflect “the particular level of earning capacity I have found Calandre is likely to have achieved” [361].

22. Whealy J concluded that on balance, the most appropriate rate was the full time adult rate, which comprised both men and women.  This category was the most convenient because it required no further adjustment.  His Honour added:

    “Importantly, the selection of this rate enables the court to take into account the very real possibility that the plaintiff may have become a high income earner in the pursuit of a business career” [362].

23. Counsel for the appellant submitted that there was no evidence before his Honour to suggest that any category other than AWE for adult females was appropriate.  His Honour’s reference to a “business career” was vague and provided no guarantee of above AWE.  In any event, a possible business career offered no justification for moving from the AWE female rate to the all-adult rate.  Moreover, the performance of the plaintiff’s siblings provided no guide to the possibility of above AWE earnings. 

24. Two further points were emphasised by Mr Brereton.  First, the use of average rather than median rates in the AWE females category allowed for the prospect of higher than average income, see Rosniak v GIO (1997) 41 NSWLR 608 at 627–628 and, if his Honour considered that the plaintiff’s prospects were better than average, he should have adjusted the AWE female rate rather than adopted the AWE all adults category.

25. At the trial, the appellant sought to portray the development and experience of the plaintiff’s sisters as indicative of the likely career path of the plaintiff. His Honour considered this submission and concluded that it must be rejected as “too glib a prophecy to glean from the experience of the sisters”. The siblings’ development and experience could not be separated from the family circumstances, which were overwhelmed by the ordeals arising from Calandre’s disability [330]. If Calandre had not been injured at birth, it was possible that the lives of the family members might have taken a different course. In any event, the two younger sisters, Chloe 16 years and Jade 19 years, were both too young to draw any adverse conclusions against the plaintiff.

26. The first respondent contended that the evidence concerning each of Calandre’s sisters provided a very thin basis to counter the view that his Honour formed of the plaintiff.  Mr Jackson pointed to the advantage that his Honour had in assessing the plaintiff at first hand.

27. It is plain to us that Whealy J considered the development and experience of the siblings of the plaintiff.  He balanced that evidence with the other evidence.  As against this, he had the positive experiences of the father and mother referred to by his Honour in para [346] of the judgment.

28. In essence the appellant complains that his Honour did not give the evidence concerning Calandre’s sisters more weight in the balance. This is an inadequate basis for a submission alleging an error in principle.

29. As mentioned above, the appellant is critical of his Honour’s findings regarding the possibility of the plaintiff earning higher than average earnings from a business career.  There can be no suggestion that Whealy J’s findings that the plaintiff had many positive personal characteristics including her considerable drive and determination, insight and intelligence, were not properly open on the evidence.  Nor could it be said that his Honour was not entitled to find that there was sufficient evidence to satisfy him that there was a higher possibility that the plaintiff had the capacity of at least average prospects and probably a realistic possibility of becoming a high earner.

30. Having considered the “very real possibility” that the plaintiff would have become a high-income earner, which would probably put her in a better than average earning position, his Honour was left with two possibilities.  He could adopt AWE females full-time as the most appropriate category but make an adjustment upwards to take account of the chance of higher than average earnings and his positive assessment of the plaintiff’s likely future economic capacity.

31. Alternatively, he could adopt the AWE for all adults as best reflecting his assessment of the possibilities for the plaintiff.

32. It seems to us impossible to conclude that his Honour erred in principle in selecting the higher category.  After all, it includes both adult female workers, as well as adult male workers.  His Honour found that the choice before the court was between the AWE full-time adults category and that for adult females [361]. Even if he chose the latter, it would still be necessary to adjust it to reflect his views of the plaintiff’s likely level of earning capacity. In the end, his Honour concluded that the most proximate rate was that for full-time adults. His Honour stated that this rate best reflected the “very real possibility that the plaintiff may have become a high-income earner”.

33. We are unable to conclude that in adopting the AWE for all adults, his Honour committed an error of principle by selecting the wrong class or category of employees.  He was clearly appraised of the fact that the AWE adult female category included higher than average female earnings. Further, we are unable to conclude that, given his Honour’s singular advantage, there was a misapprehension of the facts.  Indeed, the findings of fact made were available on the evidence and open.  It cannot be said that the result arrived at by his Honour was other than well within the available range.

1. As a result, these grounds of appeal must be rejected.

   Long Service Leave – Item 8

2. His Honour allowed the sum of $5,000 as the value of the loss of future long service leave (LSL) entitlements.  The appellant submitted that no allowance should have been made.  Three arguments were advanced.  First, long service leave is not an additional earning capacity.  Secondly, to award the additional component of LSL would be to doubly compensate the plaintiff.  Thirdly, the award involved the speculative assumption that the plaintiff would have remained in the same employment.

3. The Long Service Leave Act 1955 provides a statutory entitlement to leave calculated at 2 months for the first 10 years and thereafter, one month for each 5 years of service. While the intention is to provide an employee with time off work during which the employee continues to receive ordinary pay, it is often not enjoyed in this way. As his Honour observed, it is not uncommon for employees to take LSL on termination of their employment in cash.

4. It seems to us that his Honour was correct to say that the legislation did provide an entitlement of value which was additional to loss of future earning capacity.  To this extent, it is difficult to see how it can be said that the award of $5,000 made by his Honour amounted to double compensation.  It was not included in the calculation of loss of earning capacity.

5. As we understand the entitlements to LSL under the legislation, it is not strictly limited to the one employer but can, in certain circumstances, include LSL earned with successive employers.  Also, in the public sector, continuous employment can be with a number of different departments or agencies.

6. His Honour acknowledged that a degree of speculation was involved in the award but nonetheless considered that there was sufficient evidence to warrant his valuation of the lost chance of LSL to the plaintiff as a real prospect.  It was not a very low chance as the appellant asserts.  It had a value which the plaintiff had lost the chance of receiving.

7. The claim itself was modest.  It involved an assessment of the monetary value of LSL entitlements over a total working life of 43 years.  This yielded a sum slightly less than $23,000, discounted for present day values to $6,448.  Whealy J then applied a 15% discount for vicissitudes yielding $5,481.  He then further discounted this figure to $5,000 to allow for the event of time out of the workforce on account of child rearing.

8. It is implicit in his Honour’s approach to the assessment of this aspect of the claim that he saw LSL as a thing of value and as a legitimate chance which the plaintiff had lost.  He valued that lost chance at $5,000.  It is very difficult to say that his Honour‘s ultimate figure was not within the range available and we are of the opinion that the award should not be interfered with.

   Future Gratuitous Services – Item 11

9. The plaintiff claimed $186,329.00 representing the value of probable future gratuitous services.  This claim was split into three elements, viz:

   A.           short term gratuitous services necessitated by the plaintiff's transition from living at home to independent living $11,206;

   B.           long term gratuitous services arising from the plaintiff's inability to speak $129,038;

   C.           a continuous lifelong need for family and friends to receive instructions in the use of the plaintiff's communication equipment etc $44,284.

10. The trial judge allowed $25,000 - $10,000 under head A;  nil under head B and $15,000 under head C.  The appellant argues that none of these amounts should have been allowed.

11. The basal point made by Mr Brereton was that under item 12 his Honour allowed for an extremely generous regime and in addition, under item 27, allowed $371,812 for a case manager on the basis of two hours per week for life.  If such an allowance for a case manager is made, Mr Brereton puts there is absolutely no need to make an award for extra mothering.  The case manager will do just this and item 27 provides full compensation.

12. Furthermore, Mr Brereton puts that as Calandre is to have full-time care, instruction of non-carers in the use of equipment is not reasonably necessary.

13. Mr Jackson replies by saying that his Honour approached the head of claim with a considerable degree of caution and sense of moderation and reasonableness and allowed only $25,000 of the much larger amount claimed.  He says the evidence showed that the transition period was one fraught with difficulty, that mothers in Mrs Simpson's position tend to be less trusting of outside carers than case managers, that load would in fact fall back on family members and the small allowance made by his Honour was reasonable.

14. We would consider that the solution is somewhere between the two.  We agree with Mr Jackson that some allowance should be made for the transition period, but we also agree with Mr Brereton that the sum allowed for the case manager overlaps to some extent the claim for gratuitous services.

15. As regards the $10,000 claim, the case manager is only employed for 2-3 hours a week and the carers will be busy with more physical tasks than monitoring Calandre's transition to independent living.  When we give full weight to his Honour's discretion, the amount under A should stand.

16. Accordingly, we would reduce his Honour's sum by deleting the allowance of $15,000.  This is because after the transition period the employment of a case manager should mean that there is no need for further instruction of family and friends.

17. Thus the amount allowed under Item 11 should be brought back to $10,000 in total.

    Future Attendant Care - Item 12

18. This is a much more substantial claim.

19. The plaintiff claimed $7,024.63 per week or $9,627,255.40.  The learned Judge allowed $6,518,098.  This figure was reached by taking a figure of $4,756 per week at 3% over the plaintiff's remaining life expectancy of 50.67 years which gave a multiplier of 1370.5.  The $4,756 was found by the Judge as being $4,000 per week for referred care on the basis of two 12 hour shifts for three-quarters of a year which in effect meant $3,000 per week and $1,756 per week for the remaining quarter year for managed care.

20. The appellant says a proper amount is $4,111,500.

21. His Honour defined the difference between referred care and managed care at [512] of his reasons, namely that managed care entails that the agency is contracted to supply staff so that it employs, pays, trains and cares for the staff members who form the team charged with the client's care.  On the other hand, referred care is when the agency selects appropriate carers, charges a placement fee and a contract of employment is drawn up between the carer and the client directly.  It should be noted that referred care costs less but there is no difference in the quality of the care.

22. Mr Brereton submitted that:

    "His Honour rightly accepted that it was not necessary for the court to 'prescribe' a particular care regime for the remainder of Calandre's life.  Realistically, it is likely that, in the future as in the past, those care regimes will change. … The best that can be aspired to is an overall assessment of what her reasonable needs for care will be and how they can reasonably – not ideally – be satisfied.  Having regard to the range of options from the house couple rates of roughly $3,500 per week, the single live-in carer rates of $2,500 per week, and the circumstance that care is available in the market for less than $1,000 per week, a generous assessment of the cost of a reasonable care regime for the first respondent for life is $3,000 per week.  For life, this produces … $4,111,500."

23. The principal challenges to his Honour's assessment were:

    (a)          His Honour passed beyond what was reasonable care in the type of care he provided for the first respondent;  and

    (b)          He over-estimated the cost of care.

24. Before dealing with these two matters in some detail, we should summarise what his Honour said at [520]-[522] of his reasons.  He noted that counsel for the appellant made three major submissions:

    (a)          that it is not necessary for the Court to "prescribe" a particular care regime for the remainder of Calandre's life;

    (b)          that long term care arrangements are frequently negotiated privately at rates below those charged agencies;  and

    (c)          that the authorities require damages to be assessed with considerations of reasonableness and proportionality and in particular the Judge must address what is required to meet the plaintiff's "reasonable requirements" and not her "ideal requirements".

    His Honour said he clearly upheld points (a) and (c), but he had some reservations about point (b).

25. Mr Brereton puts that his Honour's repeated references to what the plaintiff would prefer is really introducing unnecessary material as plaintiffs will always prefer to take the most expensive option, but that what was required was reasonable provision.  What, he asks, is the real difference between a 24 hour carer and two 12 hour carers?

26. His Honour seemed to answer that by saying that there is a risk of fatigue when one has a series of 24 shifts, the conditions of work are less than optimal and accordingly, less conducive to the best people applying for the work as was evident from evidence given by one principal of an agency that where there is a 24 hour shift there is a high turnover of carers.

27. As indicated earlier, we will apply the principles expressed by Clarke JA in Harper v Bangalow Motors and consider whether the Judge acted on wrong principle.

28. Mr Jackson says, quite simply, that it was open for his Honour on the evidence to assess damages for future attendant care at $4,756 per week.  His assessment was based on demonstrated medical need and from the only practical evidence of the cost of shift arrangement from Mrs Blackman.  When making his assessment his Honour expressly acknowledged the appellant's general arguments (a), (b) and (c).  Furthermore his Honour expressly discarded the material that suggested a 24 hour shift was appropriate, and gave reasons for so doing.

29. Mr Brereton strongly put that his Honour should have merely made provision for a house couple at a cost of $3,000 per week.

30. His Honour seriously considered this option, but rejected it in [488]-[489] and [491] where he said:

    "While appreciating that there is much in this evidence to recommend the engagement of a House Couple, there are significant aspects that militate against its applicability in this case.  Several experts have commented upon its flaws.  Ms French and Dr Kennedy-Gould both gave evidence that in their experience House Couple arrangements have not worked successfully for any period of time (French T322, Kennedy-Gould T379).  Often, for example, the people attracted to this employment include people who are looking for a refuge themselves through economic necessity, and often one member of the house couple would have had experience in the care industry and the other might not have (T379).  The intensity of a live-in relationship between carers and client, in the circumstances where a high level of care is required to be provided by them, and the difficulties associated with situations where one of the carers becomes sick, or where the couple leave the employment render the impact of this care arrangement to be more negative than positive (T323).

    However the most significant and telling factor against the suitability of this care regime is that its availability is extremely uncertain.

    …

    The questionable availability of this type of care, and the uncertainty of its longevity, even if availability difficulties are surmounted, renders this alternative inappropriate in a practical sense.  It remains a possibility but it would be unwise, in my view, to base a care regime around it."

31. Mr Brereton puts that the Judge misread the evidence in the passage we have quoted from [489], but we do not accept that proposition.

32. His Honour was quite within his mandate to reject this option.

33. Mr Brereton's next proposition was that his Honour should have preferred a 24 hour shift regime.  However his Honour duly considered this and rejected it making a choice that was open to him on the evidence.

34. Thus, we should not disturb the Judge's view that it was appropriate, fair and reasonable to allow the plaintiff carers on the basis of two 12 hour shifts.

35. However, the allowance of a quarter of the year at managed care rate is difficult to defend in view of the fact that in item 27 his Honour allowed $361,812 for a case manager, a finding which is not challenged on appeal.  A function of the case manager is to keep his or her eye on the whole of the care programme.  His Honour at [827] accepted the evidence of Mr Kennedy Gould that the case manager is a person who must constantly be in contact with Calandre to know what is going on, to know what her perceptions were and her views in relation to the care programme, to be in contact with the family, to make sure their views were receiving proper weight, and to ensure that Calandre did not become isolated within her own care programme.  As his Honour said in [827], the case manager has significant duties not only in relation to the patient but also to the carers and to members of the family.

36. The principal difference between referred care and managed care is that with one the agency is responsible for the carer, whereas in the other, it is merely a job placement agency.  As there is a case manager, there was no warrant in our view, to award to the plaintiff as well the managed care rate for 25% of the year.  The case manager will undertake the tasks that would otherwise be performed by managed care.  Thus, where there is a case manager, there is no requirement for managed care.

37. Accordingly, in our view the figure of $4,756 per week should be reduced to $4,000 per week.

38. However, we must be careful to watch the effect of that reduction on other items.  The Judge limited the case manager to 2 hours per week on the basis of there being managed care for 3 months per year.  Once the award is based on referred care, the amount to be awarded for a case manager should be adjusted.

39. We believe that in making the reduction in item 12, there should be a counterbalancing adjustment to item 27 to allow for 3 hours per week for a case manager.  This adjustment is noted later under the appropriate heading vide para 193.

40. Mr Brereton's submitted the figures from Dial an Angel should not have been accepted by his Honour.  He said that such evidence was contrary to the strong evidence that most of the time people can obtain good carers privately at considerably less than those rates has caused us some concern.  However, the conclusion we reach is that the finding was well within his Honour's range of possible findings.

41. However, we do consider that the matters raised by Mr Brereton as to private arrangements being able to be obtained at a much cheaper rate, coupled with the admitted possibility or stronger that at some stage in those 50.67 years Calandre may elect to have some other form of care, mean that far from adding a factor for managed care, his Honour should have discounted the $4,000 per week by some factor for contingency.  This is clearly justified when one sees that indeed the Simpsons did in fact obtain much cheaper care for a large number of years even though they were more than adequately taking care of Calandre.

42. Taking a 10% figure for contingency and thus working on a figure of $3,600 per week, this would produce a verdict figure for this item of $4,933,800.  That is a reduction of $1,584,298.

    Home building costs – Item 13

43. The appellant accepted that Calandre should be allowed the reasonable cost of a home, either purpose built or modified to enable her to live independently.  His Honour costed this at $300,000, [530].  This component of the award is not appealed.

44. In addition, the plaintiff sought $159,963 as the cost of modifications to her parents’ home in Vaucluse, where she had resided for much of her life. Also claimed by the plaintiff was the cost of alterations to holiday accommodation owned by her parents at Palm Beach ($42,359) and at Thredbo ($86,646).  His Honour allowed the claim with regard to Vaucluse and Palm Beach but disallowed Thredbo.

45. The appellant submitted that the allowances for Vaucluse and Palm Beach were unreasonable and disproportionate.  Mr Brereton submitted that it is unreasonable to require the appellant to pay for modifications to the family home, where the plaintiff will no longer primarily reside, or to the family weekender at Palm Beach, since the benefits derived by the plaintiff did not justify the expense of the alterations being borne by the appellant.

46. Dealing with the proposed modifications to the Vaucluse home, his Honour noted that the plaintiff claimed that she would be an occasional visitor to her parents’ home and stay overnight.  The present living quarters for Calandre at Vaucluse were uncomfortable and cramped.  The proposals included the elimination of steps and the installation of a passenger lift.  Also, the construction of two new en-suites, for Calandre’s room and to a carer’s room.  At trial the appellant argued that the alterations would merely increase her accessibility to the family home.  This increased amenity was at a cost to the appellant which could not be justified and was unreasonable.

47. His Honour’s conclusion was that [at 535]:

    “There can be no doubt that it is reasonable for the plaintiff assuming she has moved into her own independent home, to visit her parents and family from time to time and indeed, to reside there from time to time.  There may well be occasions, arising from health concerns or medical treatment, which will require that Calandre return to the family home for extended periods.  Her quarters at Vaucluse are uncomfortably cramped, poorly designed and badly laid out. They may have been barely adequate for her as a little girl, but they are no longer adequate.  In my view, this part of the plaintiff’s claim is established and goes well beyond mere amenity or convenience.  In the scheme of things the amount involved is both proportional and reasonable”.

48. Turning to the Palm Beach weekender, although the family had holidayed at Christmas time in other accommodation at Palm Beach since Calandre was about two years old, it had only been acquired about five years before the trial.  The Palm Beach house had been used only on occasional weekends over the past five years and was rented out over the peak Christmas period.  Averaged out the family stayed about two weeks each year.  For that reason, the only modification carried out was the installation of a ramp.

49. Calandre intimated in her evidence that she would use the Palm Beach home more if it were modified to enable her to circulate independently.

50. The proposed modifications would permit the first respondent to use the ground floor.  They include the renovation of her en-suite, new ramps at the entry, ramps in the lobby and from the living areas to the beach, and a raised floor to allow access to the bedroom and living areas.

51. Again, the appellant argued at trial that the proposed alterations were not justified.  Calandre was able to use the house and the modifications would do no more than increase its amenity for her.  The expense was unreasonable and should not be borne by the appellant.

52. His Honour concluded [at 548] that:

    “The claim of $42,359 is in my opinion not unreasonable.  Although close to the line, it is my view that the plaintiff should be allowed the costs of these comparatively minor changes to her parents’ home at Palm Beach”.

53. Notwithstanding this conclusion, his Honour declined to allow the cost of the proposed modifications to Thredbo.  His Honour accepted the appellant’s submission that Calandre was unlikely to use Thredbo with much frequency in the future and that the benefit in amenity to the plaintiff did not justify the additional costs being paid for by the appellant [554 – 555].

54. With regard to the modifications to the family home it must be recalled that Calandre has resided there for much of her life.  Accepting that her accommodation is cramped and badly designed, it is difficult to understand why at least some of the work now proposed had not been done before.  There is little doubt that the parents of the plaintiff could afford it.  If the family home were to continue to be the plaintiff’s primary residence, there is no doubt that it would be reasonable to impose the cost of modification on the appellant.  That however is not the case as the plaintiff will have her own independent living accommodation paid for by the appellant.  Moreover, Calandre will still be able to use the Vaucluse house on her visits to her parents.

1. In Kars, Toohey, McHugh, Gummow and Kirby JJ (at 371) referred to Griffiths vKerkemeyer as “an exceptional development which departed from the compensatory principle in its pure form”.  Their Honours discussed damages for gratuitous services on the basis that it was “an anomaly”.  The inference from these observations is that the Griffiths vKerkemeyer rule will not readily be extended and courts should be reluctant to apply it to a new category of claims. 

2. In Grincelis v House (2000) 201 CLR 321 Kirby J (who dissented in the result) expressed serious doubts as to the Griffiths v Kerkemeyer doctrine.  His Honour said:

   “Having, in Griffiths v Kerkemeyer, embraced the principle that an injured plaintiff is entitled to recover damages for his or her needs met by the provision of gratuitous services by family or friends, this Court was set upon a path that has repeatedly demonstrated the ‘anomalies’, ‘artificiality’ and even ‘absurdities’ of the ‘novel legal doctrine’ which it adopted in substitution for its own earlier stated opinion”.

   The reference to “its own earlier stated opinion” was to that expressed in Blundell v Musgrave. 

   Callinan J (who also dissented in the result) also expressed criticisms of Griffiths vKerkemeyer and indicated a clear preference for Blundell v Musgrave.

3. These remarks reinforce the observations made in Kars which, we have noted, lead to the inference that Griffiths vKerkemeyer should be strictly confined in its application. 

4. Drawing the foregoing together, we conclude:

   (a)Griffiths v Kerkemeyer claims are anomalous and exceptional and courts should be reluctant to extend the Griffiths v Kerkemeyer approach to new categories of claims.

   (b)Claims for gratuitous services rendered by a friend or relative fall into a separate, identifiable, category of claims.  It is only claims of this kind that can properly be described as Griffiths v Kerkemeyer claims. 

   (c)Claims for gratuitous services rendered by a publicly or privately funded charitable institution will not be payable by the wrongdoer merely on the ground that the injured person has established a need for the services in question.  The injured person’s entitlement to such claims will depend upon an application of the principles expressed in Espagne.

5. The conclusions so expressed are consistent with the following remarks of Professor Luntz in his work Assessment of Damages for Person Injury and Death (4th ed) at para 4.24:

   “On the principle adopted in Griffiths v Kerkemeyer the plaintiff is prima facie entitled to damages for the reasonable cost of medical and hospital treatment once the need for such treatment is shown; it then becomes a question of whether the defendant is entitled to credit if the actual cost is not met by the plaintiff personally, but by public funds.  However, the courts have never looked at the question in this way and have generally proceeded on the basis that Griffiths v Kerkemeyer is not relevant to the issue of recovery of damages for hospital expenses”.

6. It is now necessary to examine the character and purpose of the financial benefit that the first respondent received from the Spastic Centre. 

7. In our opinion, the benefit of the services was conferred on the first respondent independently of any right of redress she might have against others.  The benefit was conferred on her irrespective of whether she intended to or did enforce any such right.  In the light of the factual findings made by Whealy J, the conduct of the Spastic Centre in sending letters to the first respondent and her family claming various sums for services rendered does not lead to an inference to the contrary.  While it was open to the Spastic Centre to require the first respondent to agree to pay its charges, it simply did not do so.  It provided its services entirely free of charge without imposing even a contingent obligation on the part of the first respondent to pay for them. 

8. Accordingly, on the Espagne approach, the services provided by the Spastic Centre constitute subventions given out of benevolence with the intention that no payment was to be made for them by the first respondent. 

9. On the basis of the intention found in the preceding paragraph we do not think it possible to say (as Whealy J found) that the Spastic Centre did not intend the market costs of its services to reduce the first respondent’s ordinary entitlement to damages.  The reality is that the Spastic Centre intended to provide the services free of charge, irrespective of any action that the first respondent might bring against the appellant.  The Spastic Centre did not apply its mind to the question whether the costs of its services would reduce the first respondent’s ordinary entitlement to damages.  It intended to assist the first respondent by a free provision of services.  Its motives were solely charitable and benevolent.  It is to be inferred that it did not intend, therefore, that its services were to be in addition to and not in diminution of any claim for damages that the first respondent might have.

10. There are other matters of which account must be taken.

11. In our opinion, the Spastic Centre stands in a position, as regards the community at large, akin to that of a public hospital (see Gibbs J in Griffiths v Kerkemeyer at 169). We therefore do not agree, with respect, with Whealy J that the Spastic Centre was not an appropriate institution to be saddled with the ultimate loss. The fact is that it was content to provide the services free of charge without giving any thought to “the ultimate loss”. The Centre was merely fulfilling its charitable objective.

12. By inference, the Spastic Centre derives its resources from donations or other subventions or grants (whether public or private).  As such, it forms part of the community’s loss distribution mechanisms.  Again, in this sense, it is an institution bearing some similarity to a public hospital.  We are unable to conclude that it would be inappropriate for the Spastic Centre to bear the ultimate loss.

13. We differ from Whealy J in that we see no doubling up should the loss be borne by the Spastic Centre.  As the services were provided free of charge, the first respondent did not bear that loss. 

14. There are plainly differences between free or cheaper hospital, medical, nursing and related services provided by the State (through the public hospital system) and free or cheaper services of a like kind provided by a public or private charity.  Nevertheless, those differences are far narrower than the differences between charitable hospital, medical, nursing and related services provided by a charitable institution set up for that purpose and services of a like kind provided by the family or friends of an injured person. 

15. The Spastic Centre, for instance, was set up with the specific object of providing certain medical, nursing and ancillary services.  In providing those services to the first respondent it fulfilled its raison d’etre.  Thus, the position of the Spastic Centre differed in principle from that of family or friends who provide private gratuitous services to an injured person.  Firstly, the Spastic Centre provided services as part of its primary object.  In contrast, nursing and related services provided by family or friends usually involve a sacrifice on their part.  Secondly, the Spastic Centre provided services to the first respondent as part of its object of providing services to a wide category of injured persons who form part of the general public.  In contrast, nursing and related services provided by family or friends are directed solely to the injured person and not part of a function of providing assistance to a segment of the public.

16. Accordingly, we would uphold the appellant’s appeal insofar as it relates to the claim for the costs of the Spastic Centre.  We would set aside the award made in this respect.

17. It follows, that the appellant’s appeal against the award in respect of interest on the head of damage relating to the charges made by the Spastic Centre should also be upheld and the award made in that respect should be set aside.

18. The adjustment that is thus necessary is to reduce Item 29 by $614,752 and Item 30 by what we calculate using the formula adopted by his Honour to be $824,884.

    Funds Management Charges and Cross Appeal – Item 31

19. His Honour applied Nominal Defendant v Gardikiotis(1996) 186 CLR 49, 54-55. If the defendant's negligence results in the plaintiff being so physically incapacitated that she is unable to manage day to day tasks, she is entitled to the cost of someone doing that for her, that expense being just as much a product of the defendant's negligence as is the disability. However, where funds management is needed merely from the size of the award of damages and the exercise of a choice as to how to invest those damages, this is not a recoverable expense.

20. At [856], his Honour concluded that the plaintiff's "disabilities are not such as to prevent her from managing and making decisions regarding her own financial affairs".  He continued:

    "I regret to say that I am unable to accede to the plaintiff's argument that the possibility of 'exploitation' by carers is an adequate basis for allowing funds management.  The carers are there to attend to the plaintiff's needs arising out of her disabilities.  The case manager is there to supervise the carers and to otherwise address the plaintiff's needs."

21. However, his Honour did allow $55,000 to cover the need of tuition and training for the plaintiff in relation to financial management, and in compensating her for the expenses in carrying out a number of financial functions that she might otherwise have been able to do but for the injury.

22. His Honour said that it was plainly sensible for the first respondent to engage a fund manager, but that should not be at the defendant's expense.

23. The appellant considers that that is an appropriate method of disposing of this head of claim.

24. The cross appellant, on the other hand, says that her need for funds management is founded upon a combination of her functional physical disabilities and her vulnerability to error and exploitation.  She cannot speak, she cannot write without electro-mechanical aids.  Her communication difficulties are significant, she tires easily.  These are gross afflictions, which, combined with her arithmetical deficits, her lack of exposure to the general world and vulnerability to exploitation, effectively prevent her from handling and managing her financial affairs.

25. It was a fine matter for judgment as to which side of the line the expense of a fund manager fell.  His Honour decided that it fell on the defendant's side of the line and when one remembers that it was common ground that Calandre is not intellectually incapacitated, it was well within his Honour's mandate to make the decision.  It is largely, as Wood CJ at CL pointed out in RTA v Palmer[2001] NSWSC 846 [542], a matter of common sense. Here, unlike the plaintiff in Palmer, there are no intellectual disabilities.  Vulnerability to exploitation is always a risk for people with a lot of money, but this risk is to a large extent covered in the instant case by the case manager.  Although there is a real distinction between the function of a case manager and a funds manager, a case manager is in as good a position as any to guard against exploitation.

26. Accordingly, in our view the cross appeal should be dismissed.

27. Thus in summary, the following adjustments should be made to the amount found by his Honour:

    Items 3, 4, 5 and 7.  No change.

    Item 8.  No change.

    Item 11.  Reduce by $15,000.

    Item 12.  Reduce by $1,584,298.

    Item 13.  Reduce by $202,322.

    Item 15.  No change.

    Item 16.  No change.

    Item 18.  No change.

    Item 19.  Reduce by $13,000.

    Item 24.  Reduce by $130,000.

    Item 27.  Increase by $180,906.

    Item 29.  Reduce by $614,752.

    Item 30.  Reduce by $824,884.

    Item 31.  No change.

28. As to the costs of the appeal, we indicated to counsel when giving notice of the time of handing down of these reasons that we would consider the question of costs of the appeal at 9.15 on Wednesday 9 April 2003.  The question as to whether a certificate should be granted under the Suitors Fund Act should be considered at the same time.

29. If there is any adjustment to be made in the verdict because of alleged mathematical error such adjustment should be considered at the same time.

30. We remind counsel that we have requested that the parties file and provide each of the Judges with a copy of an outline of submissions as to costs in not more than one page by 4 pm on 8 April.  If there is any argument as to the mathematical accuracy of the figures in paragraph 255, a note of the adjustments that it is alleged should be made should accompany that outline.

31. Accordingly the orders are as follows:

    1.            Appeal allowed.

    2.            Order of Whealy J set aside except as to costs.

    3.            In lieu, verdict for the first respondent for $10,998,692.

    4.Order that the first respondent repay to the appellant any sum already received over and above the amount referred to in order 3 plus interest at the court rate from date of payment.

    5.            Order that cross appeal be dismissed with costs.

    6.Stand over the question of costs of the appeal to 9.15 am on 9 April 2003.

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LAST UPDATED:               07/04/2003