FAI Allianz Insurance Ltd v Lang
[2004] NSWCA 413
•16 November 2004
CITATION: FAI ALLIANZ INSURANCE LTD v LANG [2004] NSWCA 413 HEARING DATE(S): 10/09/2004 JUDGMENT DATE:
16 November 2004JUDGMENT OF: Santow JA at 1; Bryson JA at 2; Young CJ in Eq at 40 DECISION: Appeal dismissed with costs [39] CATCHWORDS: Damages - personal injury - not affected by Motor Accidents Act 1988 - review of awards of damages for: future economic loss where finding on life expectancy, with consideration of 15% discount for vicissitudes in view of intercurrent adverse health conditions: Home Care where evidence about services actually provided was unclear and damages were based on expert evidence of needs, not on actual care - Held, no error in assessment. LEGISLATION CITED: Motor Accidents Act 1988 (NSW) s.72
Motor Accident Insurance Act 1994 (Queensland) s.55D
Supreme Court Rules 1970 Pt.51 r.40 and Pt.51AA r.25BCASES CITED: Blundell v. Musgrave (1956) 96 CLR 73
Chung v. Anderson [2004] NSWCA 321
Graham v. Baker (1961) 106 CLR 340
Griffiths v Kerkemeyer (1977) 139 CLR 161
John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503
Malec v JC Hutton Pty Limited (1990) 169 CLR 638
Matchan v Lyons [2003] NSWCA 384
Morgan v. Gibson (unreported, NSWCA, 6 June 1997)
Nominal Defendant (NSW) v Gardikiotis (1994) 19 MVR 307
Roads & Traffic Authority of NSW v Lolomanaia (2001) 34 MVR 249
Sharman v Evans (1977) 138 CLR 563
State of New South Wales v. Moss (2000) 54 NSWLR 536
Sullivan v. Gordon (1999) 47 NSWLR 319
Van Gervan v Fenton (1992) 175 CLR 327
Wynn v New South Wales Insurance Ministerial Corporation (1995) 184 CLR 485PARTIES :
FAI Allianz Insurance Limited - Appellant
Debbie Marie Lang - RespondentFILE NUMBER(S): CA 40004/2004 COUNSEL: S. Campbell SC and A. Capelin - Appellant
J.M. Ireland QC and R. Foord - RespondentSOLICITORS: TL Lawyers - Appellant
Quirk Davidson & Easdown (city agent: Turner Whelan) - Respondent
LOWER COURTJURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 4147/2003 LOWER COURT
JUDICIAL OFFICER :ANDREW ADCJ
40004 of 2004
TUESDAY 16 NOVEMBER 2004SANTOW JA
BRYSON JA
YOUNG CJ in Eq
1 SANTOW JA: I agree with Bryson JA.
2 BRYSON JA: The appellant FAI Allianz, which was the defendant in the District Court, appeals against judgment for $838,782.86 given by his Honour Acting Judge Andrew in the District Court at Sydney on 11 December 2003 in favour of the respondent Debbie Marie Lang, the plaintiff. Mrs Lang suffered very severe personal injuries in a motor accident on 4 July 2000 in a motorcar travelling westerly on the Gore Highway in Queensland driven by her late husband Barry Lang, who was killed in the accident. The appellant was sued as insurer of the vehicle, and admitted liability; the hearing before Andrew ADCJ related only to the assessment of damages. In the appeal the appellant filed a Schedule of Damages in accordance with Pt.51 r.40 and Pt.51AA r.25B of the Supreme Court Rules 1970 which indicates (in bold) the parts of the Trial Judge’s assessment under challenge:
SCHEDULE OF DAMAGES
(Form 61B – Pt.51 r.40, Pt.51Aar.25B)
$
$1. PAST ECONOMIC LOSS 2. INTEREST ON PAST ECONOMIC LOSS 3. GENERAL DAMAGES 4. INTEREST ON GENERAL DAMAGES 5. FUTURE ECONOMIC LOSS 6. OUT OF POCKET EXPENSES
6.1 Past
6.2 Future
26,885.00
26,885.008. GRIFFITH V KERKEMEYER/PAID CARE
8.1 Up to 18 March 2002
8.2 19 March 2002 to 11 December 2003
8.3 Interest
8.4 Next 14 years
8.5 Years 14-22
8.6 Future for life expectancy
45,714.00
15,630.00
274,961.00
100,318.00
N/A
11,147.50
2,210.00
N/A
N/A
82,568.64TOTAL $838,782.86 $395,497.58
3 In the Notice of Appeal and the appellant’s written submissions only two items in the Schedule of Damages were challenged: Item 5 Future Economic Loss and Item 8 Griffith v. Kerkemeyer / Paid Care. The appellant contended that the Trial Judge erred in the determination of Mrs Lang’s life expectancy, and in the allowance for vicissitudes.
4 The injuries and disabilities suffered by Mrs Lang were set out in the findings of the Trial Judge’s judgment (Red 19, 20 and 21) and can be summarised as follows. The vehicle overturned and Mrs Lang’s left arm was trapped under it. She was extricated by emergency services and taken to hospital. After some days she found herself in the Intensive Care Unit at Princess Alexandra Hospital Brisbane. Her hospital treatment included theatre treatment for dressings and debridement, and a significant skin graft using tissue from her right arm and thigh performed on or before 2 September 2000. A fixation device was applied to immobilise her left arm, with pins inserted in the bone. On 16 September 2000 she was transferred to Dubbo Hospital, still with the fixation device on her arm. She had pelvic fractures. She received rehabilitation at Dubbo Base Hospital for about three weeks, and was then transferred to Wellington Hospital on 5 October 2000. An infection developed at the site of fixation of the device, which was removed on 8 November 2000. X-ray on 15 December 2000 established that there had been non-union of fractured bones in her left arm. She was discharged from the hospital on 18 December 2000, but readmitted on 27 December 2000 with lung infection and a collapsed lung as a result of two falls from her wheel chair while showering unassisted. She was again discharged from the Wellington Hospital on 12 January 2001. Consultant Orthopaedic Surgeon Dr Hughes’ report showed that her injuries involved pelvis, left facial and orbit fractures, and a closed compound fracture of the left distal humerus. At a review in October 2002 Dr Hughes reported no further recovery in Mrs Lang’s left upper limb function; she has effectively a functionless left upper limb. She has purchased a scooter and an electric bed to assist her with mobility. She no longer lives in Wellington but lives in Dubbo.
5 It was accepted by the appellant’s doctors that Mrs Lang had suffered: multiple fractures of the hips and pelvis, left facial and orbit fractures, nerve damage to the left arm, flexion deformity of the fingers of her left hand with clawing and a tendency for deformity of the fingers to increase. She has extensive scarring of the legs and arms and permanent impairment of her pelvis, and the fractures of the hips and pelvis are causing ongoing problems. She has some post-traumatic anxiety and depression. She also suffered rib fractures, and has frontal headaches which can last up to two to three days. She sleeps irregularly because of pain and complains of deterioration in her memory and ability to sustain concentration.
6 Mrs Lang has significant pre-existing and intercurrent adverse conditions of health which must be brought under consideration when assessing damages caused by the further severe injuries which she suffered on 4 July 2000. Pre-existing conditions referred to in the judgment of the Trial Judge (Red 17-18) are these. Mrs Lang was born on 2 September 1956 and was almost 43 years of age at the time of injury and 47 at the time of trial. Mrs Lang was diagnosed as a type 2 diabetic in 1976, and she demonstrated a number of significant health problems intercurrent with the effects of the further injuries, including obesity and diabetes mellitus. She suffered from some minor coronary artery disease, and her obesity and diabetes control predisposed her to acceleration of coronary artery disease, and complications of vascular damage, heart attack, stroke and severe circulation problems. Although these pre-existing conditions existed the Trial Judge accepted that Mrs Lang has essentially normal coronary arteries and blood pressure, no signs of renal damage, and her diabetes is well controlled. She also has underactive thyroid, but her diabetes and underactive thyroid are no hindrance to normal activities for a person of her age.
7 The Trial Judge reviewed medical opinions in evidence relating to Mrs Lang’s life expectancy. Doctor Slezak, whose evidence was tendered by the appellant, placed Mrs Lang’s life expectancy at around 65. Doctor Hammill, whose evidence was tendered by Mrs Lang, was of the view that her life expectancy was to age 70 at least. The Trial Judge, after careful review of this evidence and of appraisal of matters relevant to life expectancy, assessed Mrs Lang’s life expectancy as being to age 70. His Honour said that this finding was based on the evidence of Dr Hammill, although it does not exactly accord with Dr Hammill’s expressed opinion. This finding was criticised in oral submissions by Senior Counsel for the appellant, in which he contended that there was an error of principle as the Trial Judge treated the question of life expectancy, which of its very nature has to be hypothetical, as being something that could be determined as a matter of certainty.
8 On a reasonable understanding, given the nature of any assessment about a person’s life expectancy, a determination on life expectancy could not be understood to be a determination as a matter of certainty. A Court assessing damages is under an obligation to come to a finding and adopt some integer for calculations to which life expectancy is relevant. The Trial Judge reached his finding after a careful review of the evidence of which no criticism in detail was offered, and his Honour reached a conclusion of his own not based on uncritical acceptance of either body of evidence. In my opinion there is no reason to think that the finding was wrong, or that the Trial Judge treated the question as being something that could be determined as a matter of certainty. In my opinion the Trial Judge’s approach of making a finding about the life expectancy was not contrary to anything established in Malec v J C Hutton Pty Limited (1990) 169 CLR 638.
9 When making an assessment of damages in relation to Future Economic Loss the Trial Judge’s assessment is to be understood from passages in the judgment dealing with Past Economic Loss (Red 23, Schedule of Damages Items 1 and 2), the conclusion on which is not challenged, and further reasons dealing with Future Economic Loss (Red 24-25). Mrs Lang had various employments earlier in life. Her late husband was injured in 1983 and from then on received an invalid pension. Before Mr Lang’s injury Mrs Lang was working as a part-time cook for the Wellington Hospital. After his injury she took care of Mr Lang and received a Carer’s Allowance, which of course ceased when her husband died. Her opportunity to work was limited because of the need to care for her husband and two young children; if she earned more than $100 a week her Carer’s Allowance would be reduced. However she did work part-time, at times cooking or doing housemaid work at hotels, and for some six and a half years in the 1990s she conducted a children’s day care. From 1998 to 1999 she worked for a cleaning contractor Mr King, who had a school-cleaning contract in Wellington. She also sometimes worked packing shelves at a supermarket. Her average earnings in the six month prior to her injury were approximately $100 per week, and her school cleaning employment by Mr King was the major contribution to her earnings.
10 In dealing with her Future Economic Loss the Trial Judge found (Red 34) that Mrs Lang now has no practical prospect of exercising any earning capacity. His Honour stated the basis of this finding by reference to passages in medical reports of six different doctors whose opinions supported the finding, in most cases completely and in other cases substantially. Senior Counsel for the appellant pointed to evidence which showed that since her injury Mrs Lang has undertaken and completed a six-months computer course at a Technical College, and contended that this demonstrated the possibility that she could have undertaken some part-time office work in Dubbo. It was further contended that she had the ability to use a computer and to do data entry work, and that it was not unrealistic to suppose that she might find some type of work in a community-based or governmental organisation where her disability would not be a bar to her employment.
11 The submission was put with an assumption that a suitable job was available. There is no evidence that such a position is in fact available. In my view the Trial Judge’s finding about Mrs Lang’s not having earning capacity is soundly based on medical evidence and on a realistic general understanding of the employment market in relation to Mrs Lang’s disability. In my opinion the significance of her undertaking computer training is that it indicates a generally positive approach to employment and the need for skills, which are significant when addressing the probabilities about what she would have done about employment and earnings if she had not been injured. Plainly she has lost all her earning capacity. The damages flowing from that loss has to be assessed on the supposition of comparing her present entire lack of earning capacity with the earning capacity she would have had if she had not been injured, but all other events, including the death of her husband, had happened as they actually did happen.
12 The Trial Judge’s assessment of Future Economic Loss was expressed as follows (Red 24-25):
- … she was working on a part-time basis only. She was restricted in what she could earn due in part to her husband’s disability so that her pre-accident capacity was exercised to a limited degree. Her background and work history show that she had a substantial earning capacity. I would award the sum of $200 per week net as a fair measure of her loss of earning capacity occasioned by virtue of the injuries she suffered. Assuming her working life to age 65 means a further 18 years at $200 per week net, less 15 per cent vicissitudes, which is calculated as 18 years at $200 per week net times multiplier 625 times 85 per cent equals $106,250 which are awarded for future economic loss.
13 The allowance of $200 per week is net of income tax, assuming gross earnings in the order of $225 per week. $200 per week is about twice the earnings of $100 per week Mrs Lang made by working about 7½ hours per week before her injury while caring for her husband. The Trial Judge found that earnings at this rate would continue until age 65. Senior Counsel for the appellant contended to the effect that the assessment of $200 per week was an error. It was said that the figure was plucked out of the air and was not supported by the evidence which showed that in the pre-accident phase her earnings averaged about $100 per week, as the Trial Judge found; and $100 was adopted for the assessment of economic loss up to the trial. It was contended that the Trial Judge acted in an arbitrary way in taking the pre-accident earnings of about $100 but then moving to $200 per week for the assessment for Future Economic Loss; it was contended that the arbitrary element in the assessment betrayed an error in method. Counsel pointed out, referring to Graham v. Baker (1961) 106 CLR 340 and to Malec v JC Hutton Pty Limited , that it was necessary (as indeed it is) to assess damages on the basis that the impairment of earning capacity sounds in damages only to the extent that there actually is an economic loss, meaning that Mrs Lang’s earning capacity of $100 per week should actually have been used. It was also contended that in assessing damages for loss of future earning capacity a percentage discount related to the degree of probability of Mrs Lang’s having engaged in employment should have been allowed, as in Malec v J C Hutton Pty Limited at 643.
14 I do not accept these contentions. It is necessary to adhere to the hypothesis that Mrs Lang herself was uninjured, although all other events happened as they actually did, including the death of her husband, and the end of her caring responsibilities and of her Carer’s Allowance. Given her earlier history of part-time employment, even though she faced significant difficulties and alternative claims on her time and attention, I regard the facts as presenting a sound basis for the view that if not injured she would have found part-time employment of kinds she had had in the past, including school cleaning, work as a cook and a housemaid, child care or in some other way. Mrs Lang’s previous work history shows that, in her hypothetical future working career, she would not have been limited to school cleaning employment, and the hypothesis that she would have found part-time employment of a similar nature totalling in the order of 15 hours per week is readily acceptable. She is a person of some enterprise, and the Trial Judge was not in a position simply to make no finding just because it is extremely difficult to make an accurate assessment. The Trial Judge’s assessment of her earning capacity on the basis of her earning $200 a week, about twice her average part-time earnings while her husband was alive but approximately equal to the total of her part-time earnings and her Carer’s Allowance at that time, is modest and realistic, and in no way excessive.
15 The Trial Judge in calculating damages for Future Economic Loss adopted a discount of 15 per cent for vicissitudes of life. His Honour did not make any other allowance related to the degree of probability of Mrs Lang’s having engaged in employment: it should be understood that the Trial Judge regarded any element of contingency as sufficiently dealt with by the 15 per cent allowance. Senior Counsel for the appellant contended that this discount was inadequate and that the appropriate rate to adopt should be 25 per cent. Counsel contended that given the evidence in relation to Mrs Lang’s intercurrent medical conditions, particularly her diabetes and the effect that that was going to have upon her as a real possibility in the future, the allowance for vicissitudes should be greater than that normally adopted. It was contended that the evidence showed and it should have been found that the effects of Mrs Lang’s intercurrent medical conditions would be more or less insidious and likely to overtake her before she reached the usual retirement age.
16 In support of this contention counsel referred to the evidence of Dr Hammill who made the estimate that her life expectancy would be 70 at least. A passage in his evidence (Black 107) was referred to in support of the submission. For clarity I think I should begin a little earlier at Black 106:
Q. And she has been an insulin dependent diabetic then for fourteen years?
A. Yes.
Q. And that she is still significantly obese—
A. Yes.
Q. – you would have to say that even with insulin medication, she is at very significant risk of early morbidity?
A. The way that –obesity itself is not a huge factor in terms of life expectancy, it’s to the effects of obesity and that would include cholesterol and blood pressure and smoking and other factors so I believe that her other risk factors of cholesterol and blood pressure are sort of well controlled at the moment and that to me would reduce the effect of obesity on her life expectancy, but it still is a small factor.
Q. When you’re talking about the cholesterol and blood pressure you’re talking about the cardiovascular with obesity?
A. That’s right.
Q. What about the diabetic risks, are they enhanced by her obesity?
A. To a slight extent. The dose of insulin would vary according to her weight but again usually we can manage that by adjusting treatment.
Q. Even with management it’s likely that she will have an earlier demise than a person who’s not a type two diabetic?
A. Yes I think so yes.
Q. And it’s also likely is it not that her early demise may be preceded by significant complications of the disease is that so?
A. A. Her demise presumably would be a vascular complication of her diabetes yes.
Q. Which might well result in for a number of years before an early death, in significant dependence upon others for household chores and the like?
A. If she had severe – if she had a stroke or severe disease in the legs then that may reduce her capabilities further yes.
Q. And those things are in truth significant risk factors are they not?
A. They are for a diabetic yes.
Q. You’ve said in your report to the solicitors that you’d regard an insulin dependent diabetic’s longevity as thirty years from the date of going on insulin treatment is that right?
A I don’t know that I would necessarily – did I say that?
Q. Perhaps you said at least –
A. I don’t know that I – I’ve got plenty of diabetics who have been going for over fifty years on insulin. I don’t believe that’s true if I’ve said that.
CAMPBELL: It’s exhibit A your Honour.
Q. Perhaps if I could pt this to you Dr Hammill, that what you said in your report, and I’m not trying to trick you, can I just read it to you?
A. Mm.
Q. You said her diabetic tablets started around 1987 and the reasonable expectation a lady like Debbie would be that her life expectancy would be at least thirty years from the onset of using insulin. In other words I would estimate her life expectancy to be seventy at least?
A. Yes
Q. That’s an opinion you adhere to I assume?Q. Remember writing that?
A. Yes.
A. Yes.
17 In my opinion this passage does not support the view that Mrs Lang’s exposure to adverse vicissitudes, during the period taken into account as the remainder of her working life until she reaches age 65, is significantly worse than that of the population at large.
18 The Trial Judge adopted the conventional 15 per cent without discussion or articulation of reasons. This is the usual course. The range of contingencies and vicissitudes allowed for by the conventional allowance of 15 per cent is very wide; it is an expedient and approximate resolution of many imponderables, and the difficulty of producing a justification for any greater or lower figure in a particular case tells strongly against departing from the conventional figure. The allowance of a 15 per cent discount for vicissitudes appears to have the approval, or to escape the disapproval, of the High Court in Wynn v New South Wales Insurance Ministerial Corporation (1995) 184 CLR 485; see Dawson, Toohey, Gaudron and Gummow JJ at 497 to 499, where their Honours, after noting some difficulties of assessing vicissitudes and referring to earlier authorities, said “Even so, the practice in New South Wales is to proceed on the basis that a 15 per cent discount is generally appropriate, subject to adjustment up or down to take account of the plaintiff’s particular circumstances.” See also Sullivan v. Gordon (1999) 47 NSWLR 319 at 338 (Beazley JA); State of New South Wales v. Moss (2000) 54 NSWLR 536 at 544-545 [32, 33] (Mason P) and at 563 [100] Heydon JA; and Chung v. Anderson [2004] NSWCA 321 at [80-81] (McColl JA) and particularly at [81] where McColl JA said: “An assessment of the allowance which should be made for vicissitudes is a quintessentially impressionistic exercise.”
19 In Sharman v Evans (1977) 138 CLR 563 at 587 Gibbs and Stephen JJ said:
- “Before we express our conclusion on the question whether the amount of general damages awarded was excessive, there are two matters to which brief reference should be made. The first concerns what is commonly described as the vicissitudes of life. Once a probable life expectancy is determined these enter not at all into the assessment of future hospital expenses or the conventional amount for shortening of life expectancy but are significant in the case of loss of earning capacity”
See too Nominal Defendant (NSW) v Gardikiotis (1994) 19 MVR 307 at 312 (Meagher JA).
20 The passage cited from Sharman v Evans shows that if a reliable assessment of life expectancy can be made, it is appropriate to make it and to form conclusions about losses which are to occur in the future around it. Indeed no substantial reason why this should not be appropriate was put forward, but it was suggested that to do so was contrary to the holdings in Malec v J C Hutton Pty Limited; in my opinion there is nothing in Malec v J C Hutton Pty Limited which is adverse to making this approach.
21 The period of exposure to vicissitudes affecting employment was not, as it sometimes is, the whole of Mrs Lang’s lifetime, but only her working life to age 65. A 15 per cent discount for vicissitudes is a conventional discount in relation to calculations of future losses by reference to a normal life expectancy. Where the actual life expectancy established is less than the statistically normal period, the incidence of a 15 per cent conventional discount in relation to that reduced life expectancy is heavier than it would otherwise be, as a limited life span brings with it limited exposure to vicissitudes. The evidence and findings relating to Mrs Lang demonstrate that, as with other people, she is exposed to vicissitudes; in some respects more clearly recognisable than for many other people. As there is no reasoned basis in the Trial Judge’s judgment for adopting 15 per cent as the discount, there cannot be a reasoned basis for adopting any particular variation upwards or downwards to allow for any identifiable exposure to vicissitudes. Where there is some discernible additional exposure, it is not possible to produce a reasoned basis for a conclusion that the discount should be increased by 3 per cent, or by 30 per cent. A reasoned answer is not available. The process of adjustment is one of poorly informed impression, anomalous in a purportedly closely reasoned process of assessment of damages. The adverse elements in Mrs Lang’s personal health as it would be if she had not been injured appear to me to exemplify the kind of vicissitudes which are conventionally allowed for, and the evidence including that of Dr Hammill, and the findings elsewhere in the judgment about her state of health, do not to my mind furnish a basis for departing from the conventional figure, or for establishing some other figure as the appropriate allowance for vicissitudes.
22 In my opinion no ground has been found upon which the Trial Judge’s assessment of Item 5 Future Economic Loss should be disturbed.
23 I now turn to damages in relation to Item 8 Griffith v. Kerkemeyer / Paid Care. (I will refer to this head of damages as home care services). As the accident in which Mrs Lang was injured occurred in Queensland, the law of Queensland applies to the ascertainment of the appellant’s liability; see John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 544 [102] in which Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said:
- The lex loci delicti should be applied by courts in Australia as the law governing all questions of substance to be determined in a proceeding arising from an intranational tort. And laws that bear upon the existence, extent or enforceability of remedies, rights and obligations should be characterised as substantive and not as procedural laws.
At [100] their Honours said:
- …all questions about the kinds of damage, or amount of damages that may be recovered, would likewise be treated as substantive issues governed by the lex loci delicti .
No submission suggested that there is any material difference between the Common Law of Queensland and the law of New South Wales where it applies unaffected by Statute. I mention these matters to record that we were not asked to give them any consideration, and I have not done so. Argument proceeded at all times on the assumption that the relevant law for the assessment of damages is the Common Law of New South Wales, or does not differ from it. There appears to be acceptance that the limitations on recovery of damages for home care services provided by s.72 of the Motor Accidents Act 1988 (NSW) are not applicable. The law of Queensland limits damages for home care services; see Motor Accident Insurance Act 1994 (Queensland) s.55D, but for the reasons mentioned above the limitation would have no operation in this case.
24 In dealing with home care services the Trial Judge said (Red 27):
- I consider the level of care required will continue as above, but that [Mrs Lang] will require increased care as she gets weaker. Future care is therefore assessed in two periods: A. 27 November 2003 to [31] December 2017, 14 years times 529.3 times $519.48 equals $274,961. B. 1 January 2018 to 31 December 2026, a period of eight years, I accept as appropriate the details of assistance required as attendant care one hour per week at $25.60 per hour, personal care 8.75 hours per week at $26.50 per hour. Domestic care 11.5 hours per week at $24 per hour, outdoor maintenance 2.5 hours per week at $28 per hour. That is a total of $603.48 per week, calculated for the period as eight years, multiply 345.6 times $603.48 deferred for 15 years, .481 is a total of $100,318. The total award for future care is $375,279.
25 The calculations were based on and almost entirely derived from the report (Black 376) and amended report (Black 409) of Heather Tchan, Occupational Therapist, tendered by Mrs Lang (Exhibit E). Ms Tchan made an assessment of Mrs Lang’s domestic and attendant care assistance needs, and divided the assessment into three parts, first from the Wellington Hospital discharge on 18 December 2000 to 18 March 2002 (which was a period during which Mrs Lang received help from community nurses), next from 19 March 2002 to 31 December 2017 (when Mrs Lang will be 60 years of age), and a third period of ongoing care from 1 January 2018 until Mrs Lang attains the age of 85.67 years, which Ms Tchan regarded as her life expectancy. The third period was explained by Ms Tchan as “Ongoing care when she gets weaker and experiences circulatory difficulties and maybe skin breakdown,” and additional attendant care will have to be provided for. The Trial Judge did not follow this pattern exactly. His Honour calculated the first period from 18 December 2000 to the conclusion of the trial, that is 26 November 2003. His Honour also did not have regard to upwards revisions in the amended report of 10 March 2003 of the estimate to the total cost of weekly care, and treated the third period as closing on 31 December 2026, giving effect to the finding about life expectancy at the age of 70.
26 Ms Tchan gave tables which outlined her estimates of the care required by Mrs Lang. The Trial Judge accepted Ms Tchan’s views about the care required, with respect to the number of hours per week for various classes of care, including attendant care, low intensity personal care, domestic services and outdoor maintenance. Although Ms Tchan gave some details in her reports about her sources of information, she did not explain these estimates of care by reference to anything established as the actual care which has been given to Mrs Lang by her son, her late mother and her carer, Mr Gillard.
27 Observations by Senior Counsel for the appellant showed that Ms Tchan’s estimates do not actually accord with evidence that was given by Mrs Lang and Mr Gillard, about the care which has actually been given and the time which it has taken. Counsel further contended that it was a significant error of principle that the Trial Judge relied on allowances as to time and cost taken from the reports of Ms Tchan as the assumptions made in the reports did not accord with the evidence first as to Mrs Lang’s actual needs and secondly with the level of assistance actually provided to her. This submission was supported by reference to a passage in the judgment of Meagher JA (with which Mason P agreed) in Morgan v. Gibson (unreported, NSWCA, 6 June 1997). I set out several passages from that judgment:
- The matter fell to be determined pursuant to the provisions of the Motor Accidents Act 1988 (“the Act”). Her Honour awarded a substantial sum reflecting the serious injuries sustained by the respondent. Damages were awarded pursuant to s72 of the Act, which section modifies the common law principle for which the case of Griffiths v Kerkemeyer (1977) 139 CLR 161 is best known.
Meagher JA set out s72 of the Motor Accidents Act 1988 and some contentions made on appeal and went on:
… S72 makes it quite clear that, once the relevant “need” is established, it is the number of hours of work actually performed for the plaintiff that is used to measure the damages awardable. Because the respondent is not entitled to the cost of assistance which she would have in any event received, it is the number of hours of assistance that she requires to perform that part of the gardening which she would have performed herself for which she is compensated, provided that assistance is actually provided. It is nonsense to suggest that, because others may also derive a benefit, the respondent’s inability to perform the gardening she used to perform, is in some way a “need” which must be discounted. If the contrary were accepted, the basis of the principle would no longer be “need”, but “need” less “benefit to others”.It is settled law that the basis of a Griffiths v Kerkemeyer claim is the need of the plaintiff for those services to be provided, irrespective of whether that need is or may be productive of financial loss: Van Gervan v Fenton (1992) 175 CLR 327 at 333. Significantly, that case also rejected previous authority to the effect that domestic services which would have been provided in any event (for example, as an ordinary incident of the family relationship) were to be discounted. S72(3) has the clear effect of reinstating that previous authority, in line with the other provisions of the section limiting the amount of damages awardable by making applicable various caps, thresholds and deductions. However, the section does not operate to change the nature or basis of an award as settled in Van Gervan v Fenton.
I have added emphasis to the passage to which the appellant’s Senior Counsel referred. Earlier passages in the judgment of Meagher JA make it quite clear, and it is in my view altogether clear in principle, that the passage which I have emphasised states the law as established by s72, and that the law is different from the Common Law established by Griffiths v Kerkemeyer (1977) 139 CLR 161 and Van Gervan v Fenton (1992) 175 CLR 327. The Common Law operates in situations where s72 does not operate, under which need for services is a loss to be compensated irrespective of whether that need is or may be productive of financial loss.
28 Although the three judgments delivered in Griffiths v. Kerkemeyer are not uniform in the reasons expressed, they are uniform in the decision reached. From these judgments, together with Van Gervan v. Fenton, it can be understood that the loss for which damages are awarded is incurring the need for services, and is not incurring an obligation to pay for the services, which was necessary in the previous state of the law under Blundell v. Musgrave (1956) 96 CLR 73. In Van Gervan v. Fenton at 331 to 333 Mason CJ Toohey and McHugh JJ addressed the principle applicable, reviewed earlier case law including the various views expressed in Griffiths v. Kerkemeyer, and said:
Although the judgment of Gibbs J in Griffiths has frequently been cited as though it contained the ratio decidendi of Griffiths[ See Johnson v Kelemic [1979] FLC 90-657; Kovac v Kovac [1982] 1 NSWLR 656; Maiward v Doyle [1983] WAR 210; Carrick v Commonwealth of Australia [1983] 2 QdR 365], it was a dissenting judgment on the point of principle. Significantly, in Nguyen [ (1990) 169 CLR, at 262], Dawson, Toohey and McHugh JJ interpreted Griffiths as holding that “the plaintiff’s loss… was represented by [his] need”.Thus, the important difference between the judgment of Gibbs J and the judgments of Stephen and Mason JJ in Griffiths is that, while Stephen and Mason JJ were of the opinion that the plaintiff’s damages are to be calculated by the need for the services, Gibbs J thought that that was a necessary but not a sufficient condition of liability. In the opinion of Gibbs J [ Griffiths (1977) 139 CLR, at 168] the satisfaction of the need is not sufficient unless the need “is or may be productive of financial loss”. But to add this requirement is to go as close as is possible to treating the claim as a claim for special damages. Yet the Griffiths v Kerkemeyer doctrine was only made possible by rejecting the established common law rule that, in an action for damages for tort, the reasonable cost of services required as the result of the tort is a claim for special damages and can only be recovered if the plaintiff has a legal (or perhaps a moral or social) obligation to pay for them [ Blundell (1956) 96 CLR, at 79-80, 92.]. As Stephen J pointed out in Griffiths[ (1977) 139 CLR, at 179], the principle laid down in Donnelly “deprives of all substantive significance the distinction between special and general damages: if a plaintiff’s accident-caused need is the loss to be compensated, the reasonable cost of satisfying that need being only a means of quantifying the damages to be awarded, the distinction between these two kinds of damages becomes unreal”.
- Consequently, it should now be accepted that the true basis of a Griffiths v Kerkemeyer claim is the need of the plaintiff for those services provided for him or her and that the plaintiff does not have to show, as Gibbs J held, that the need “is or may be productive of financial loss”.
29 I have not seen an explicit address in any judgment in the High Court to the question whether damages are recoverable in respect of home care services which the injured person will need in the future irrespective of whether the injured person actually intends to obtain the home care services, or irrespective of its being shown that notwithstanding that the injured person has a need for the services, he or she will not obtain them. The need for services and the reasonable costs of those services determine the quantum of damages; it is enough that the need exists, and it is not necessary to show that the reasonable cost was or will be actually incurred, legally or as a moral or social obligation. It follows in principle that if a need for services exists, the damages are not altered or diminished if the injured person leaves the need unsatisfied and goes without the services. As in other parts of the law of damages, it is not a condition of entitlement to damages that the injured person actually intends to use damages when recovered to make up the loss for which damages are awarded.
30 Formulations of principle given elsewhere in judgments in the High Court seem to support this view. In Griffiths v. Kerkemeyer Stephen J said at 179:
- Another consequence of the adoption of this approach is that in this particular area of the law it deprives of all substantive significance the distinction between special and general damages: if a plaintiff’s accident-caused need is the loss to be compensated, the reasonable cost of satisfying that need being only a means of quantifying the damages to be awarded, the distinction between these two kinds of damages becomes unreal.
The concept of the loss as an accident-caused need was important for his Honour’s conclusion that it was not essential that a liability to pay for the need be incurred. Mason J said at 193:
- Enough has been said in the cases which have been decided more recently to indicate that the old view based on the proposition that a plaintiff is not entitled to recover from the defendant the services provided to him unless he can show that he is under a legal liability to pay for them, is no longer acceptable. That view proceeded upon the footing that the relevant loss was the legal liability to pay for the service. It is now recognized that the true loss is the loss of capacity which occasions the need for the service. In consequence the existence of a legal liability to pay is not the dominant consideration.
31 Within the concept expressed by their Honours, the need for services is the loss; and in principle the need is the same whether or not the need is satisfied. This view was authoritatively established by Van Gervan v. Fenton. The judgment of Gibbs J in Griffiths v. Kerkemeyer reaches a similar conclusion but does not support this view.
32 In the present case, the nature of care which has been given to Mrs Lang and the time it has taken are difficult to interpret and could not be carried to precision without detailed findings, which the Trial Judge did not make. To make such findings it would be necessary to come to conclusions about matters on which the evidence particularly of Mr Gillard may produce different effects at different places. There are no detailed findings in the judgment about what care is actually required, in terms of the hours of care, classes of care and cost, and the only material upon which the findings made could be supported is the expert evidence of Ms Tchan, which was admitted without objection and without cross-examination. I find it difficult to see any other way in which care for a long future period could be proved other than by expert evidence of the nature of that given by Ms Tchan. Analysis of evidence and factual findings based on the evidence of Mrs Lang and Mr Gillard about what has actually happened up to the present do little to give an indication of needs over a long future in which deteriorating health conditions are contemplated. The need for care will exist during a long future and what Mr Gillard has done is not the measure of future events; he may not always be available to take part in future events, but the need will continue.
33 Submissions by Senior Counsel for the appellant directed to showing, by analysis of the evidence, that the evidence about the services actually provided was difficult to understand and did not support Ms Tchan’s estimate were, it must be said, little to the point. In my understanding there was nothing for the Trial Judge to go on other than Ms Tchan’s evidence. There were some other references in expert evidence, but nowhere were estimates of future needs and costs carried to detail. In the state of the evidence upon which the Trial Judge was required to adjudicate, I see little else his Honour could have done than to rely upon Ms Tchan’s evidence. In my opinion the Trial Judge acted on the correct basis.
34 Senior Counsel for the appellant also contended there was a doubling up effect in respect of past services, as the cost of services provided by Home Care Service of New South Wales was allowed as part of agreed past out-of-pocket expenses. Invoices from Home Care Service in evidence (Exhibit 4, Black 177, Blue 174-200) make charges for 29 four-weekly periods from 27 January 2001 to 19 April 2002; the charges vary, are not often over $40 per month, and the total amount involved appears to be in the order of $1,000 or $1,250. It seems that the parties calculated the total agreed out-of-pocket expenses during the hearing and included the total in the figure of $19,921 (Black 189 Y). In a calculation under s72 of the Motor Accidents Act 1988 only the amount actually expended would be allowed, but in a calculation of damages under the Common Law the amount to be recovered is calculated on the reasonable cost of the needed services, and if the injured person is able to get the services for nothing, or for less than their reasonable cost, the advantage remains with the injured person.
35 The double counting element arises in large part from the appellant’s having agreed to the inclusion of this item in the agreed past out-of-pocket expenses. The amount involved is in the context of Mrs Lang’s claim minimal, and its correction should not in my view attract appellate intervention. Essentially these submissions made a claim for the application of s72 in a case to which it does not apply. Observations critical of the evidence about whether assistance was provided to Ms Lang by her son, or by her mother during her mother’s lifetime, have no force for the relevant assessment of loss.
36 Senior Counsel for the appellant further contended that the Trial Judge was in error in that he failed to distinguish between a need which is a result of injuries and the give and take of personal relationships. Senior counsel referred to Roads & Traffic Authority of NSW v Lolomanaia (2001) 34 MVR 249 at 255 [45], [46] and [47] and to Matchan v Lyons [2003] NSWCA 384 at [4] where Hodgson JA adhered to his earlier observations. Roads and Traffic Authority v Lolomanaia is not a case to which s72 of the Motor Accidents Act 1988 applied; s72 applied in Matchan v Lyons in which Hodgson JA said:
- In my opinion, there should be no compensation in respect of domestic care that is given as part of the fair give and take of family life, although there may be compensation for the contingency that care may not be given this way in the future.
37 In my view care which would have been given and would continue to be to the injured person, whether or not that person had been injured, as part of the fair give and take of family life does not fall within VanGervan v Fenton; there has been no loss of the services and there is no occasion to award damages for any loss.
38 Ms Tchan did not give oral evidence, and was not cross-examined by Senior Counsel for the appellant at all; so no cross-examination examined whether any part of the services contemplated by Ms Tchan should in fact be disregarded as services which were already available and would have been available under the fair give and take of family life. It is difficult to make a coherent picture of what would have been available under the fair give and take of family life in Mrs Lang’s circumstances, in the absence of detailed examination in the evidence. Some care services were provided to Mrs Lang by her mother at some times after her injury, but her mother died before the hearing. Some care services were provided for Mrs Lang before the hearing by Mr Gillard, and these services continue, but Mr Gillard was not a member of the same household as Mrs Lang before her injury. There is no clear basis on which to identify services and suppliers of services as services which were otherwise available and would have continued notwithstanding Mrs Lang’s injury. In the absence of detailed address to these subjects in the evidence there should in my opinion be no appellate intervention.
39 In my opinion no substantial ground has been shown for concluding that the assessment of damages was wrong in any way which should attract appellate intervention. The Court of Appeal should order:
Appeal dismissed with costs.
40 YOUNG CJ in Eq: I also agree with Bryson JA.
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