Government Insurance Office of New South Wales v Maher, Angela Marie

GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES v. MAHER (1981) 55 FLR 187
Damages - Evidence
(1981) 1 ANZ Insurance Cases 60-441

COURT

FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
Fox A.C.J.(1), Blackburn(1), Sheppard(1) JJ.

CATCHWORDS

Damages - Assessment of - Widowed respondent remarried while appeal pending against damages awarded in her favour - Appellant claimed damages excessive - Whether appellant may adduce respondent's recent remarriage as new evidence - Compensation (Fatal Injuries) Ordinance 1968 (A.C.T.) - Federal Court of Australia Act 1976 (Cth), s. 27 - Federal Court Rules, O. 52, r. 36.

Evidence - Admissibility of new evidence - Widowed respondent remarried while appeal pending against damages awarded in her favour - Appellant claimed damages excessive - whether appellant may adduce respondent's recent remarriage as new evidence - Federal Court of Australia Act 1976 (Cth), s. 27 - Federal Court Rules, O. 52, r. 36.

HEADNOTE

The respondent's husband was killed in a motor accident. The respondent sued the appellant for damages and recovered a judgment in her favour in the Supreme Court of the Australian Capital Territory in October 1980. In Deceber 1980, while this appeal was pending, the respondent remarried. The appellant claimed in its appeal to the Federal Court of Australia that the damages awarded were excessive and sought to adduce the fact of the respondent's recent remarriage as evidence additional to the evidence which was before the trial judge.

Held, per curiam, that the court has jurisdiction to admit the new evidence of the respondenths recent remarriage and that the appeal should be allowed.

Mulholland v. Mitchell, (1971) AC 666; McCann v. Sheppard, (1973) 1 WLR 540; Hollebone v. Greenwood (1968), 71 SR (NSW) 424, applied.

Curwen v. James, (1963) 1 WLR 748, considered.

Murphy v. Stone-Wallwork (Charlton) Ltd., (1969) 1 WLR 1023, referred to.

Damages - Assessment of - Widowed respondent remarried while appeal pending against damages awarded in her favour - Appellant claimed damages excessive - Whether appellant may adduce respondent's recent remarriage as new evidence - Compensation (Fatal Injuries) Ordinance 1968 (A.C.T.) - Federal Court of Australia Act 1976 (Cth), s. 27 - Federal Court Rules, O. 52, r. 36.

Evidence - Admissibility of new evidence - Widowed respondent remarried while appeal pending against damages awarded in her favour - Appellant claimed damages excessive - whether appellant may adduce respondent's recent remarriage as new evidence - Federal Court of Australia Act 1976 (Cth), s.27 - Federal Court Rules, O. 52, r. 36.

HEADNOTE

The respondent's husband was killed in a motor accident. The respondent sued the appellant for damages and recovered a judgment in her favour in the Supreme Court of the Australian Capital Territory in October 1980. In December 1980, while this appeal was pending, the respondent remarried. The appellant claimed in its appeal to the Federal Court of Australia that the damages awarded were excessive and sought to adduce the fact of the respondent's recent remarriage as evidence additional to the evidence which was before the trial judge.

Held, per curiam, that the court has jurisdiction to admit the new evidence of the respondent's recent remarriage and that the appeal should be allowed.

Mulholland v. Mitchell, (1971) AC 666; McCann v. Sheppard, (1973) 1 WLR 540; Hollebone v. Greenwood (1968), 71 SR (NSW) 424, applied.

Curwen v. James, (1963) 1 WLR 748, considered.

Murphy v. Stone-Wallwork (Charlton) Ltd., (1969) 1 WLR 1023, referred to.

HEARING

Canberra, 1981, June 9-10. #DATE 10:6:1981

M. B. Grove Q.C. and K. E. Walsh, for the appellant.

P. D. Kennedy-Smith, for the respondent.

Cur. adv. vult.

Solicitors for the appellant: Crossin & Co.

Solicitors for the respondent: Abbott Tout Creer & Wilkinson.

E. F. FROHLICH

JUDGE1

JUNE 10

Fox A.C.J. delivered the following written judgment of the court.

The judgment which I am about to deliver is the judgment of the court. (at p188)

This is an appeal from a judgment of the Supreme Court of the Australian Capital Territory of Connor J. in which the respondent recovered the sum of $132,600. The action was one in which the respondent sued the appellant pursuant to the provisions of the Compensation (Fatal Injuries) Ordinance 1968 (A.C.T.). In these proceedings the appellant claims that the damages awarded were excessive. (at p188)
The respondent was the widow of one Francis John Maher who was killed in a motor accident on 5th May, 1978. The appellant admitted liability so that the only question for the learned trial judge was the amount of damages which the respondent was entitled to recover. (at p188)
The action was brought by the respondent for the benefit of herself and also for that of a child of the marriage. Jean Rachel Maher. There were in fact two children of the marriage. The other was killed in the accident in which her father died. (at p188)
Judgment was delivered on 31st October, 1980. The deceased had been born on 1st August, 1946. He was thus almost thirty-two years of age at the date of his death. The respondent was born on 10th March, 1950. She was twenty-eight years of age at the date of her husband's death, and thirty years and seven months old at the date of judgment. She and the deceased had been married on 16th December, 1972. He was then twenty-six and she was twenty-two. The surviving daughter was born on 2nd January, 1974. She was four years old when her father died and almost seven years old at the date of judgment. (at p188)
His Honour decided that there should be awarded to the respondent, for the benefit of the child, the sum of $25,000. He made the usual order for the payment into court and investment of that sum until the child attained the age of eighteen years. No submission was made by the appellant that that sum should be disturbed. There was a submission by the respondent that it should be somewhat increased. With that submission we shall deal later. (at p188)
The amount awarded by his Honour to the respondent for her own loss was the sum of $107,600. Included in that sum was the sum of $15,200 awarded in respect of the respondent's loss down to the date of judgment. The component of the award for the respondent's future loss of financial support is thus $92,400. That amount was arrived at in the following way. His Honour took as a starting point a figure of $120,000 which represented, after making an allowance for the usual contingencies, the respondent's loss of support down to the time of the expected retirement of the deceased at the age of sixty-five. In arriving at this figure, his Honour relied upon actuarial evidence which used a discount rate of six per cent per annum. There is no cross appeal or notice of contention and no challenge was made by either party to his Honour's approach in this respect. (at p189)
In addition to the sum of $120,000, his Honour allowed a further $12,000 in respect of the loss to the respondent of support after the retirement of the deceased from superannuation receipts. That gave a total figure of $132,000. His Honour discounted that figure by thirty per cent in order to allow for the respondent's revived capacity to remarry as a result of her husband's death. It is convenient to set out what his Honour said about this matter, not only because it indicates his approach, but also because it states the evidence concerning it and avoids the necessity of referring otherwise to that evidence. His Honour said: "The remaining question is the amount I should allow for the plaintiff's revived capacity to remarry as a result of her husband's death. The plaintiff was also a victim in the accident in which her husband was killed. She suffered two broken ribs and a broken right clavicle, but her principle injury consisted of very serious damage to cervical vertebra which has caused neck pain and limitation of movement. She also suffered a severe reactive depressive illness. In the opinion of the neuro-surgeon who gave evidence she is not employable. In about August 1979, while attending hospital for her depressive illness, she began to receive a great deal of support from a fellow patient, a married man with two children who was separated from his wife. In anticipation of a settlement of her personal injuries claim the plaintiff over-reached herself financially and purchased a house in December 1978. Her companion was in similar financial difficulties. He was supporting his family and trying to sell his house. As a solution initially to their financial problems he moved into the plaintiff's house. After a few months they began to live together as man and wife and are still doing so. They have a joint bank account into which he pays his salary, less an amount of eighty dollars which he pays for maintenance of his two children. He is a class 8 officer in the third division of the public service, and is thus earning virtually the same salary as the deceased would have been earning today. The plaintiff said that proceedings for the dissolution of his marriage are due to come before the Family Court next month. He was not called as a witness, from which I infer that in the estimation of the plaintiff's legal advisers, his evidence on balance would not have advanced the plaintiff's case. The plaintiff said she was uncertain about the relationship and that she felt unable to make a decision. She did not appear to dislike her companion and indeed entertained feelings of friendship towards him. She agreed that he was kind both to her and her daughter. In August 1980 she had received a settlement of her personal injury claim and both before and since then she had been contributing to her companion's financial affairs as much as he had been contributing to hers.
"It would be easy enough to dispose of this issue with what might be regarded as a degree of healthy cynicism simply by saying that they were living together as man and wife, they had a joint bank account, his marriage was about to be dissolved and this all pointed strongly to marriage as the next step. Be that as it may, the plaintiff had succeeded in conveying some of her doubts to me. At the moment there is a status quo which she has not sought to disturb. Indeed to have done so shortly before the trial would probably have been seen as a pre-trial forensic ploy. But I think she is to some degree uncertain about her future with her present companion. It is plainly enough on the cards that she will marry him or form some permanent liaison with him in the future: but I do not think it is by any means certain. Looking solely at what she has done it seems more probable than not. Listening to what she says the probability tends to recede. She agrees - and in any event it is plain from the facts - that she has no objection to remarriage as a matter of principle to the right man at the right time. It is simply a question of whether her present companion is the right man. I surmise that when she settles down after the present litigation is over, he will turn out to be the right man. In all circumstances, I propose to make a reduction of thirty per cent or $39,600, for the plaintiff's revived right to remarry. I will therefore award her $92,400 for the future." (at p190)
The challenge which the appellant makes to the award of $92,400 is based upon evidence additional to that which was before his Honour. The additional evidence establishes that the respondent married the man mentioned by his Honour, a Mr. Brown, on 13th December, 1980, that is, a little over six weeks after judgment was delivered. It is the appellant's submission that it follows that the reduction of thirty per cent "for capacity to remarry" is clearly inadequate. (at p190)
Objection was taken to the admissibility of the evidence about remarriage but we decided to admit it. We said that we would give our reasons for doing so when delivering judgment. That is the first matter with which we deal. (at p190)
We were referred to a number of English cases as to the principle which should be applied. In Curwen v. James (1963) 1 WLR 748 the defendant sought leave to lead evidence that a plaintiff in proceedings for damages under fatal accidents legislation had remarried. The evidence was that the remarriage had occurred within the time limited for appeal from the judgment at first instance. The Court of Appeal decided that the evidence should be admitted. Harman L.J. said: "Why should we, when we know that the lady has married, pretend that we do not know it and assess the damages, as we are assessing them anew here, on the footing that she may or may not marry? As we know the truth we are not bound to believe in a fiction (1963) 1 WLR, at p 754 ". Pearson L.J., as he then was, said that he felt anxiety about the question because the normal rate in accident cases was that the sum of damages falls to be assessed once and for all at the time of the hearing. He said that if further evidence as to new events were too easily admitted, there would be no finality in litigation. However, he thought that the case under consideration was ". . . comparatively easy case, because the new event (the remarriage) occurred within a short time after the hearing and within the time limited for serving the notice of appeal" (1963) 1 WLR, at p 755. His Lordship made it clear that it was only to such a case that he was directing his attention and that he did not propose to say what the position would be if remarriage had occurred at some later time. (at p191)
In Mulholland v. Mitchell (1971) AC 666 a plaintiff in a personal injuries case recovered damages at first instance upon the basis that he would be able to return home from hospital to be nursed by his wife. After the trial the plaintiff returned home, but within a few weeks it became clear that it was impossible for him to continue there and he was moved to a suitable nursing home. Greater expense was involved than would have been the case if the plaintiff could have been nursed at home. The Court of Appeal admitted evidence of the need for the plaintiff to go to a nursing home and of the greater expense which was involved. The House of Lords refused to interfere with the exercise of its discretion. Lord Wilberforce referred to a number of earlier authorities, including Curwen v. James, and another decision to which Lord Pearson had been a party - Murphy v. Stone-Wallwork (Charlton) Ltd. (1969) 1 WLR 1023. His Lordship continued: "These cases are useful as instances, but they cannot be generalised into a formula. I do not think that, in the end, much more can usefully be said than, in the words of my noble and learned friend, Lord Pearson, that the matter is one of discretion and degree (Murphy's case). Negatively, fresh evidence ought not to be admitted when it bears upon matters falling within the field or area of uncertainty, in which the trial judge's estimate has previously been made. Positively, it may be admitted if some basic assumptions, common to both sides, have clearly been falsified by subsequent events, particularly if this has happened by the act of the defendant. Positively, too, it may be expected that courts will allow fresh evidence when to refuse it would affront common sense, or a sense of justice. All these are only non-exhaustive indications; the application of them, and their like, must be left to the Court of Appeal. The exceptional character of cases in which fresh evidence is allowed is fully recognised by that court" (1971) AC, at pp 679-680. (at p191)
In the same case, Lord Pearson said: "In the present case, notice of appeal was duly given, and, before the time for hearing of the appeal had come, events happened which very materially falsified the expectations on which the judge had assessed the damages relating to the cost of nursing services. The expectations were that the plaintiff would be able to live at home for a number of years if nursing services were provided for him at his home, and that, if eventually he had to go to a nursing home, a general nursing home would be suitable. There is now evidence which shows, or is said to show, not only that he cannot be kept at home but also that he needs specialist care at a pyschiatric nursing home, and that the difference in cost over a long period of years will be very substantial. In my opinion, the situation in the present case can be regarded as exceptional, and it cannot be said that the discretion was wrongly exercised when leave was given for the further evidence to be adduced.
"This is not a case of application being made after the time for appealing has expired. In such a case the end of litigation has been definitely reached, subject only to the court's power to extend the time. In such a case a very strict rule should be applied: Murphy v. Stone-Wallwork (Charlton) Ltd. (1969) 1 WLR, at pp 1028, 1031 " (1971) AC, at pp 681-682. (at p192)
Thus, Lord Pearson had extended the view that he had expressed in Curwen v. James so as to include events occuring beyond the time limited for appeal. That same view was adopted by the Court of Appeal in McCann v. Sheppard (1973) 1 WLR 540 where Lord Denning M.R. said: "But if a notice of appeal has been entered in time - and pending the appeal, a supervening event occurs such as to falsify a previous assessment - then the court will be more ready to admit the fresh evidence because, until the appeal is heard and determined, the proceedings are still pending" (1973) 1 WLR, at p 546. (at p192)
The relevant provisions of the Federal Court of Australia Act 1976 (Cth), and of the rules thereunder, are s. 27 and O. 52, r.36; these provisions are such as to make the English authorities to which we have referred apposite here. Counsel for the respondent did not submit otherwise. (at p192)
We were referred to a number of Australian cases dealing with admissibility of new or fresh evidence, but none of these bears upon the problem which arose in this case. Counsel for the respondent did not submit that they led to any different position. In those circumstances, we thought that the principles that should be applied were those laid down Mulholland v. Mitchell and McCann v. Sheppard. Clearly he had jurisdiction to admit the evidence. (at p192)
The evidence of the respondent's relationship with Mr. Brown provided an assumption upon which his Honour had proceeded but which, in the language of the authorities, was falsified by the respondent's remarriage shortly after the judgment appealed from. The remarriage occurred whilst this appeal was pending. In all the circumstances, we considered that the evidence of remarriage should be admitted in order that damages might be assessed taking the remarriage into account. (at p193)
As a consequence of our decision, the respondent was granted leave to read an affidavit sworn by Mr. Brown. No objection to any part of the affidavit was taken by counsel for the appellant. He did not seek to cross-examine. (at p193)
Mr. Brown and the deceased were of comparable age, Mr. Brown having been born on 23rd September, 1945. He obtained his Leaving Certificate. On leaving school he entered the Commonwealth Public Service and is now employed as a clerk class 8 in the third division in the Department of Trade and Resources in Canberra. In this respect, he is also to be compared with the deceased who by now would also have been a clerk class 8 in the public service. He was a clerk class 7 at the time of his death, and but for his death, would soon have been a clerk class 8. (at p193)
Mr. Brown does not believe that he himself has any prospect of advancement in his present position, nor any increase in his income other than normal national wage or similar increases. He has held his present position since July 1974. The deceased, on the other hand, would seem to have had some prospects of further promotion. A letter from the Department of the Capital Territory mentions his rapid advancement during his public service career from a clerk class 1 to a clerk class 7 in a little under four years. There were no adverse comments on his personal file, and he was said to be a capable and diligent officer. Additionally, Mr. Brown mentions that the deceased was studying for an applied science degree at the Canberra College of Advanced Education. If he had obtained such a degree it is likely that his prospects of promotion would have been enhanced. Prospects of promotion are not something with which his Honour dealt in his judgment. He went no further than to find that the deceased would have become a clerk class 8. However, we are of opinion, on the basis of what is in the letter from the department, and of what might have come out of the deceased's studies at the College of Advanced Education, that he had better prospects for promotion than does Mr. Brown. It is impossible to put any figure upon that conclusion, but it is a matter to be borne in mind when the damages are being re-assessed. (at p193)

In his affidavit, Mr. Brown gave evidence that he had first been married on 13th July, 1968. There are two children of the marriage, aged almost ten and eight years respectively. The children's mother has custody of them, but Mr. Brown has access each afternoon and on each alternate weekend. He pays maintenance which, in total, amounts to forty dollars per week. Mr. Brown is in good general health, although his parents died at a somewhat early age. (at p193)
Mr. Brown mentioned some matters concerning the health of the respondent and of their life together. We do not accept for a moment that, even if this evidence is accepted at its face value, it shows any likelihood that there will be a breakdown in the marriage. Mr. Brown said it was the respondent's wish to have a further child, but he was opposed to her doing so because of the state of her physical and mental health. (at p194)
Guidance as to the way a problem such as this should be approached is provided in the judgment of Sugerman A.P. in Hollebone v. Greenwood (1968) 71 SR (NSW) 424 , with which Holmes J.A. and Hardie A.J.A. agreed, where his Honour said: "Having referred at some length to the authorities which have been cited to us, I shall state my conclusions from them. When a widow remarries, or is likely to remarry, the question for the purposes of assessing damages under the Compensation to Relatives Act is whether and to what extent she and the dependent children are likely to be as well of in a pecuniary sense as a result of the remarriage as they were under their dependency upon their deceased husband and father. This question is not answered by pointing merely to the legal obligations to maintain which flow from the remarriage and stating that they will now stand in the place of the dependency which has been lost. It is not sufficiently answered even by showing that the earnings of the second husband are equal to or greater than those of the first husband. All the ups and downs of life must be allowed for. The second husband may be an invalid or may turn out to be an alcoholic. He may be perfectly able to work but unwilling to perform his obligation, whether it be legal or moral, to support his wife and stepchildren properly. He may die shortly after the remarriage or there may be separation and divorce and the wife may have some good reason for not pursuing her right to maintenance. It may indeed be the wife's fault, or the result of faults on both sides, that the second marriage does not turn out successfully . . . .
"Where the widow has actually remarried before trial it is not a matter of indulging presumptions at all. The court then has the facts before it and cannot close its eyes to them. It must come to a conclusion on the basis of the known facts and the probabilities as to the future as they are to be assessed in the light of those known facts. This may be a difficult task but it is one which must nonetheless be performed; it differs, if at all, only in degree of difficulty from the tasks which are ordinarily imposed upon courts and juries in personal injury cases. The onus of proof of matters in reduction of the prima facie measure of damages rests upon the defendant (Curwen's case (1963) 1 WLR 748 and Mead v. Clarke, Chapman & Co. Ltd. (1956) 1 WLR 76 )" (1968) 71 SR (NSW), at pp 430-431. (at p194)
We respectfully adopt what his Honour has said. This is plainly not a case where the respondent's financial loss arising as the result of the death of her first husband should be regarded as at an end from the date of her remarriage. The two husbands are comparable in age and current earning capacity, but there are significant dissimiliarities. There is, firstly, the distinct possibility that the deceased would have reached a substantially more senior position in the public service than will Mr. Brown; secondly, Mr. Brown will need to maintain the children of his first marriage probably until they are eighteen years of age, and perhaps for longer. The amount which he will have to pay for their maintenance may, in relative terms, increase beyond the forty dollars per week at present payable and it is much less likely that it will be decreased. He is no doubt put to further expense for the children during the periods of access which he has. There are many contingencies. (at p195)
The task is a difficult one but we have reached the conclusion that justice will be done if the discount of thirty per cent provided by his Honour for the contingency of remarriage becomes seventy per cent, not upon the basis that it is an allowance for the prospect that the respondent's capacity to remarry might revive, but that it will achieve a situation which will fairly compensate as a result of the death of her first husband, taking into account the fact that she has remarried. (at p195)
The major element in this computation is the fact of Mr. Brown's obligations towards his children of his first marriage which reduces the amount he can provide for the support of the respondent. With this a number of other contingencies also have to be taken into account, and some of these we have already mentioned. (at p195)
It follows that the amount awarded for the benefit of the respondent herself should be reduced to $54,800. The remaining question is whether the sum of $25,000 awarded for the benefit of the child, Jean Rachel Maher, should be increased. Counsel for the respondent submitted that it should because, as we understand his argument, the amount available for her benefit will, in the events which have happened, now be greater. We have given that submission consideration, but we are satisfied that it should be rejected. (at p195)
In the result, the amount of the judgment will be reduced to the sum of $79,800. The order made by his Honour in relation to the payment into court and investment of the sum of $25,000 for the benefit of the surviving child of the marriage will remain. (at p195)
In the result, the appeal is allowed, with costs. The amount of the judgment below is reduced to $79,800, of which $54,800 is for the benefit of the respondent and $25,000 for the benefit of the child, Jean Rachel Maher. (at p195)

ORDER

The order of the court is that the appeal be allowed, with costs, the judgment below be varied to substitute the amount of $79,800, and that $25,000 of that amount be set aside, as ordered below, for the benefit of the child, Jean Rachel Maher.

[1981] FCA 101

10 JUNE 1981